Cleaning Industry – A Strategic Analysis of Asia Pacific Markets

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Frost & Sullivan analysis of the Asia Pacific Cleaning Industry Market.

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  • Cheapest and most reliable cleaning service in Singapore. Only Singapore Citizen/PR cleaning assistants. Takes less than a minute to book . Pay directly to the cleaner Visit http://www.yocancan.com for details
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    can I get a copy? melissa.goh@hotmail.com
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  • The presentation was great, can i have a copy.
    pls send to ivansam@orismith.com.my
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  • Thak you for the presentation. Very useful. Can I have a copy at: mrbibop@gmail.com?
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  • LEED – Leadership in Energy and Environmental Design
  • Cleaning Industry – A Strategic Analysis of Asia Pacific Markets

    1. 1. CLEANING SOLUTIONS EXPO December 2-4, 2009 | Suntec Singapore Cleaning Industry – A Strategic Analysis of Asia Pacific Markets Prepared & Presented by: Ranajay Dasgupta Environmental & Building Technologies Practice Frost & Sullivan, Kuala Lumpur
    2. 2. Agenda <ul><li>North American Cleaning Services market </li></ul><ul><li>Asia Pacific Facilities Management and Cleaning Services Markets </li></ul><ul><li>- Regional Overview </li></ul><ul><li>- Australia </li></ul><ul><li>- Indonesia </li></ul><ul><li>- Vietnam </li></ul><ul><li>Green Cleaning – Trends and Opportunities </li></ul>
    3. 3. Setting the Context Single Service Providers Integrated FM Service Providers Third Party Management Perceived Value to the Client Degree of Outsourcing Risk Sharing & Mutual Gain Lifetime Value to Client Value of Contract Number of Contracts Perceived value of FM Services to clients
    4. 4. Cleaning Industry North America Introduction All facilities need to be cleaned in order to meet health code requirements and create a favorable impression on visitors, making cleaning services very important to facility owners The intensifying need to reduce cost in a slowing economy The cleaning service industry is highly competitive, with a large number of regional and niche competitors and facility management companies Lack of available internal resources Increasing demand for automated ‘back office’ janitorial management Increasing trend to outsource Focus on core operations
    5. 5. Cleaning Industry North America Cleaning services revenues poised to grow at 10% Cleaning Services Market: Revenue Forecast (North America), 2005 - 2015 $6,298.1 million (2008) $13,797.7 million (2015) CAGR (2009-2015) = 10.3%
    6. 6. Cleaning Industry North America Competitive market with few well known large participants Cleaning Services Market: Competitive Structure (North America) Cleaning Services Market: Market Share Analysis by Revenues (North America), 2008 Number of Companies in the Market There are 5 to10 well-known national and multinational companies as well as a large number of small, privately owned companies competing in the North American janitorial services market Tiers of Competition This market is very competitive with the top three participants accounting for 45.1 percent of the market share. The rest of the market share is accounted for by a number of service providers. Competitive Factors <ul><li>Providing cost savings </li></ul><ul><li>Strong customer relationships </li></ul><ul><li>Geographic reach </li></ul><ul><li>Cost structure </li></ul><ul><li>Service quality </li></ul><ul><li>Experience </li></ul><ul><li>Reputation </li></ul>
    7. 7. Cleaning Industry Asia Pacific Markets Market Maturity Snapshot Market Maturity High Low Vietnam Singapore Australia Indonesia Malaysia
    8. 8. Facilities Management and Cleaning Services Australia Competitive Landscape $7.68 billion market in 2008, growing at a compounded annual growth rate of 7.0 percent from 2008 to 2011 FM Services Market: Competitive Structure (Australia) CB Richard Ellis, Colliers International, DTZ, Jones Lang LaSalle, Knight Frank Brookfield Multiplex Services, Downer EDI Limited, ISS Facility Services, Johnson Controls, Programmed Group Limited, Sodexo, Resolve FM, Spotless Group Limited, Transfield Services Limited Domestic single service providers <ul><li>Highly competitive and diverse market with strong international and domestic companies </li></ul><ul><li>Constant push for technological innovations </li></ul><ul><li>Aggressive pricing </li></ul><ul><li>Strong B2B marketing and branding strategies </li></ul>Tier III Tier II Tier I
    9. 9. Facilities Management and Cleaning Services Australia Key Trends Observed An increase in acquisitions and joint venture/ alliance programs The push towards sustainable management and green buildings will drive the market for green cleaning Tempo Services Limited, Australia (Cleaning and Security) Arrix, Australia (Contract Cleaning) Tungsten Group, Australia <ul><li>Drive to transform government offices into green buildings </li></ul><ul><li>Green building rating tools has been introduced for new sectors such as education </li></ul><ul><li>“ Green” regulations and educational programs to build awareness </li></ul>
    10. 10. Facilities Management and Cleaning Services Indonesia Introduction Janitorial service is the most commonly outsourced operation among all facilities maintenance services The market is dominated by large international as well as small to medium local players There is an increasing trend to out-task cleaning operations by building owners and facility managers Cleaning companies are increasing their investment on technology Increase in demand is observed from commercial offices, hospitals and hotels
    11. 11. Facilities Management and Cleaning Services Indonesia Market Challenges and Drivers 1 – 2 years Opposition against outsourcing Preference to manage facilities in-house Price sensitive customers 3 – 4 years 5 – 7 years Abundance of local players and cheap foreign players Lack of good quality players to subcontract 1 – 2 years Presence of multinationals Building construction activity in cities Focus on managing only the core activities 3 – 4 years 5 – 7 years Increased focus on energy efficiency and resource conservation Inspection of buildings Challenges Drivers
    12. 12. Cleaning Industry Indonesia Competitive Landscape - Large Number of Diverse Industry Participants PT. Pro Tec Indonesia Cleaning chemicals, products and hygiene solutions Cleaning Service Providers & Facility Management Companies Top tier facility management service providers that select best possible cleaning vendors for their clients and manage the vendors Building management service providers that provide their own manpower for cleaning or subcontract to cleaning service providers Cleaning service providers that provide manpower for cleaning Bukit Mayana PT, Daya Cipta Wira Mandiri PT, Environmental Indokarya PT, Gagana Megah Utama PT Tier III Tier II Tier I
    13. 13. Facilities Management and Cleaning Services Indonesia End-user Analysis – Commercial office sector offers opportunities Significant office space will be added in Jakarta in 2009- 2011 from the on-going projects By 2011, 766,368 sq. m of office space will be added in Jakarta Central Business District (CBD) 214,874 sq. m of office space will be added in Jakarta outside CBD in the period 2009-2011 <ul><li>Existing multinationals are expected to increase their operations in Indonesia and new multinationals will set up offices </li></ul><ul><li>Newer buildings are expected to be more technologically advanced </li></ul><ul><li>Level of professionalism in managing facilities is expected to increase </li></ul><ul><li>Tenants will expect good quality of service </li></ul>Good opportunities for facility management companies and cleaning service providers
    14. 14. Facilities Management and Cleaning Services Indonesia End-user Analysis – Other sectors that offer opportunities <ul><li>Companies in oil & gas and mining sectors, are increasingly outsourcing their facilities to facility management service providers </li></ul><ul><li>Rising concern about pollution and energy conservation is likely to further spur the demand for facility management services focusing on energy and waste management </li></ul>Industrial Retail <ul><li>New retail spaces are being added in both Jakarta and greater Jakarta. However, absorption rate will be slow in greater Jakarta area </li></ul><ul><li>Rental growth is expected to be less than 5% in 2009. Developers are offering various deal sweeteners to attract tenants </li></ul><ul><li>The sector offers opportunities to cleaning and security service providers </li></ul>Healthcare <ul><li>The hotel market posted a positive growth in Jakarta, Surabaya and Bali. The market recovered in 2 nd quarter of 2009 after a drop in occupancy in most hotels in the first quarter </li></ul><ul><li>Similar to the healthcare sector, hotels offer potential opportunities to cleaning chemicals and products manufacturers as stringent cleaning standards are enforced </li></ul>Hotels <ul><li>Increasing trend to outsource cleaning operations is observed </li></ul><ul><li>Opportunities for cleaning chemicals and products manufacturers will grow as stringent regulations are enforced on chemicals used for cleaning </li></ul>
    15. 15. Facilities Management and Cleaning Services Indonesia Key trends observed Increasing pressure on the cleaning companies to reduce price Cleaning companies increasing the portfolio of their offerings Influx of Chinese companies in chemicals and equipments market Consumers still prefer cheap chemicals to keep housekeeping costs low Hospitals and Hotels are more geared towards adopting “Green Cleaning” compared to other sectors
    16. 16. Facilities Management and Cleaning Services Indonesia Porter’s Analysis <ul><li>Competition from large </li></ul><ul><li>international players </li></ul><ul><li>Abundant cheap local players </li></ul><ul><li>Pressure to cut price </li></ul><ul><li>due to difficult economic </li></ul><ul><li>environment </li></ul><ul><li>Easy to switch providers </li></ul><ul><li>Low bargaining power of </li></ul><ul><li>of suppliers of cleaning chemicals </li></ul><ul><li>High construction activity and </li></ul><ul><li>economic growth raising interest </li></ul><ul><li>Market potential attracting foreign players </li></ul><ul><li>Preference to keep cleaning in-house </li></ul>BARGANING POWER OF CUSTOMERS - HIGH COMPETITION - HIGH BARGAINING POWER OF SUPPLIERS - LOW THREAT OF SUBTITUTES - MEDIUM THREAT OF NEW ENTRANT - MEDIUM
    17. 17. Cleaning Industry Vietnam Introduction The market for cleaning or other facility services is at a very early stage of development Large domestic players lead in market share as international players struggle to increase their footprints The demand to outsource cleaning and other facility services will be driven by multinationals Increase in demand is expected from commercial offices and industrial sector The trend to outsource cleaning to professional service providers is low
    18. 18. Cleaning Industry Vietnam Market Challenges and Drivers 1 – 2 years Opposition against outsourcing Preference to manage facilities in-house Price sensitive customers 3 – 4 years 5 – 7 years Lack of professionalism and transparency in conducting business 1 – 2 years Presence of multinationals Building construction activity in cities Focus on managing only the core activities 3 – 4 years 5 – 7 years Rise in environmental concerns due to increase in pollution Abundance of small local players Challenges Drivers
    19. 19. Cleaning Industry Vietnam Local Players Dominate the Market Total market (2008) = $11.2 million Note: All figures are rounded; the base year is 2008. Source: Frost & Sullivan Pan Pacific Corp., $ 6.7 million, 60% HB Cleaning, $ 2.0 million, 18% Unicare, $ 0.9 million, 8% Others include Aden Services, Greenrose Services Co. Ltd, P. Dussman Vietnam Co. Ltd. , Hoan My Others, $ 1.6 million, 14% Cleaning Services Market: Company Market Share by Revenues (Vietnam), 2008 HB Cleaning
    20. 20. Cleaning Industry Vietnam End-user Analysis – Commercial office sector offers opportunities Commercial office space is expected to increase in Hanoi and HCMC in 2009-2011 In 2009, 197,760 sq. m of Grade A and Grade B office space will be added in Hanoi Grade A office space in HCMC is expected to increase by thrice in 2009-2011 and reach 500,000 sq m <ul><li>Government regulations are likely to encourage further FDI in this sector </li></ul><ul><li>Existing multinationals are expected to increase their operations in Vietnam and new multinationals will set up offices </li></ul><ul><li>Level of professionalism in managing facilities is expected to increase </li></ul><ul><li>Tenants will expect good quality of service </li></ul>Good opportunities for facility management companies and cleaning service providers
    21. 21. Cleaning Industry Vietnam End-user Analysis – Other sectors that offer opportunities Industrial Retail <ul><li>Urbanization, strong economic growth, and rise in disposable income of the expanding middle class are expected to drive the growth of modern retail in Vietnam </li></ul><ul><li>Future addition of retail space (in sq. m) in Hanoi is expected to be 41,625 (2009), 41,496 (2010), and 330,251 (2011) </li></ul><ul><li>The sector offers opportunities to cleaning and security service providers </li></ul>Others <ul><li>Market for cleaning service providers will grow in healthcare sectors as more and more hospitals start outsourcing cleaning operations </li></ul><ul><li>Ranked as the fifth attractive manufacturing investment destination among the emerging markets by PWC in 2008 ,Vietnam’s industrial sector is one of the key components driving the economy </li></ul><ul><li>Pollution is a major cause of concern, and it is expected that trend to outsource industrial cleaning will grow in the future </li></ul>
    22. 22. Cleaning Industry Vietnam Porter’s Analysis <ul><li>Competition from large </li></ul><ul><li>local players </li></ul><ul><li>Open tender process often not followed while choosing vendors </li></ul><ul><li>Abundant local players </li></ul><ul><li>Pressure to cut price </li></ul><ul><li>due to difficult economic </li></ul><ul><li>environment </li></ul><ul><li>Easy to switch providers </li></ul><ul><li>Low bargaining power of </li></ul><ul><li>of suppliers of cleaning chemicals </li></ul><ul><li>High construction activity and </li></ul><ul><li>economic growth raising interest </li></ul><ul><li>Property management providers present in Vietnam eying facility management market </li></ul><ul><li>High preference to keep cleaning in-house </li></ul>BARGANING POWER OF CUSTOMERS - HIGH COMPETITION - HIGH BARGAINING POWER OF SUPPLIERS - LOW THREAT OF SUBTITUTES - HIGH THREAT OF NEW ENTRANT - MEDIUM
    23. 23. GREEN CLEANING – TRENDS & OPPORTUNTIES
    24. 24. Green Cleaning What it is all about Green Products are those that reduce impacts on health and the environment when compared to similar products used for the same purpose. E.O. 13101 Green Cleaning includes all products, trainings, procedures and initiatives designed to protect health of occupants without harming the environment Green Cleaning is more than switching into a “green” cleaning product for a traditional product
    25. 25. Green Cleaning Green Cleaning entails a change of behavior and not just a change of cleaning products TRADITIONAL CLEANING GREEN CLEANING COST SINGLE SERVICE PEOPLE INTEGRATED SERVICES HEALTH APPEARANCE VENDOR-CUSTOMER JOINT EFFORT LITTLE CUSTOMER INVOLVEMENT
    26. 26. Green Cleaning “Green Cleaning” covers products beyond cleaning chemicals General purpose cleaners Glass Cleaners Carpet Spotters Bathroom Cleaners Cleaning chemicals are certified by independent and voluntary organizations that identify cleaning solutions that are environmentally preferable than other products that perform similar functions Thailand Korea Japan Taiwan China Canada US Singapore Toilet tissue with high recycled paper content Chlorine-free paper Touch-free dispensers Effective filtration Low power consumption Carpet industry approved Carpet extractors, Micro-fiber clothes and mops, Mats, Recycling bins…….. Australia
    27. 27. Green Cleaning Green label schemes are specifically designed for cleaning solutions Hong Kong <ul><li>All Purpose Cleaner (GL-003-005) </li></ul><ul><li>Biodegradability </li></ul><ul><li>Exclusion of certain chemicals, limits on certain chemicals and volatile organic compounds </li></ul><ul><li>Color pigments </li></ul><ul><li>Packaging requirements </li></ul>Floor Cleaner (GLS-013) Singapore Laundry Liquid Detergent (GLS-011) Hygiene Paper (GLS-002) Dishwashing Detergents (GLS-012) Australia The Australian Ecolabel program for cleaning solution Domestic (Household) Cleaning Window Cleaning Commercial Cleaning Industrial Cleaning
    28. 28. Green Cleaning Cleaning Industry can help buildings earn green building certification LEED NC – LEED for New Construction LEED EB – LEED for Existing Buildings LEED CI - Commercial Interiors Cleaning industry can contribute 13+ credits for the Green Building certification Sustainable Sites Materials & Resources Indoor Environmental Quality Exterior cleaning etc. Eco-friendly cleaning materials etc. Entry mats, pest management, janitorial equipment Australia Singapore Hong Kong New Zealand South Korea Japan Malaysia Green Building Certification Tools
    29. 29. <ul><li>Green Buildings Market: Analysis by Country (Asia Pacific), 2009 </li></ul>Green Cleaning Green Buildings market poised to grow in Asia Pacific and offer opportunities in Green Cleaning market Market participation and stakeholders involvement Low - Leading Green Building markets in Asia Pacific region are South Korea, Australia and Singapore, due to both government support and market stakeholders’ commitment and efforts. Hong Kong has achieved similar positioning with slightly less number of government initiatives. - Japan and New Zealand have made progresses too, but in terms of market stakeholders’ involvement and government support they are behind from leading markets mentioned above - The market is at the initial stage of development. Rating systems and certification tools have been recently introduced. Government regulations, incentives and GB associations’ initiatives to promote GB Medium High High Medium Low Singapore Australia Hong Kong Japan South Korea New Zealand Malaysia Indonesia Source: Frost & Sullivan
    30. 30. Green Cleaning Relative attractiveness of various sectors for the green cleaning market <ul><li>Adoption Level of Green Cleaning across Various Sectors in Asia Pacific Markets </li></ul>LOW HIGH Residential Healthcare Hotel Public Buildings Educational Commercial Buildings Government buildings should comply to Green standards Drive to turn existing buildings into green Drive to turn existing buildings into green Residential sector has maximum number of green buildings Government buildings will be transformed into green buildings Commercial sector has the largest number of green buildings Key End-user Trends in Green Buildings in Asia Pacific Markets
    31. 31. Green Cleaning Strategic recommendation for industry participants Join Relevant Associations Participate in spreading awareness Educate customers Bundle service offerings Conduct Pilot Programs Identify potential clients <ul><li>Healthcare facilities </li></ul><ul><li>Public facilities </li></ul><ul><li>Environmental organizations </li></ul><ul><li>Corporate Headquarters </li></ul><ul><li>Green Building Councils </li></ul><ul><li>Green Hotel and Healthcare </li></ul><ul><li>Associations </li></ul><ul><li>End-user workshops </li></ul><ul><li>Seminars and conferences </li></ul><ul><li>White papers </li></ul><ul><li>Conduct a test program </li></ul><ul><li>and analyze the results </li></ul><ul><li>Bundle various cleaning </li></ul><ul><li>services to achieve a wider </li></ul><ul><li>reach within an organization </li></ul><ul><li>Offer consulting and advisory </li></ul><ul><li>services </li></ul><ul><li>Educate customers about </li></ul><ul><li>higher ROI of green products </li></ul><ul><li>Make customers aware that green cleaning is a holistic </li></ul><ul><li>approach and not just </li></ul><ul><li>buying green products </li></ul>
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    36. 36. Heating Ventilation & Air Conditioning HVAC Controls HVAC Equipment Chillers and Boilers Indoor Air Quality Commercial, Industrial and Utilities Demand Side Analysis Supply Side Analysis Fire and Life Safety Fire Suppression Systems Alarm Systems Fire Fighting Systems Fire Control Panels Building Automation and Controls Automation Controls Communication Protocols Intégration Power Line Carrier Communication Cable Management Systems Wireless Networking Power Over Ethernet Lighting Controls Switches & Sensors Lighting Control Panels Building Security Physical Security Security Services Access Controls Biometrics RFID Wireless Controls About Environment & Building Technologies Practice
    37. 37. THANK YOU www.frost.com Frost & Sullivan Environment & Building Technologies Practice (Asia Pacific) Suite E-080-15, Block E, Plaza Mont’ Kiara 2 Jalan Kiara, Mont’ Kiara 50480 Kuala Lumpur Telephone: 60 3 6204 5800

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