Summer Intern Report - SBD - Rahul Gupta - 11BM60055

The Industrial Cleaning in India
Profile 2009

Market Research on
Industrial Cleaning Sector in India

Prepared for

By

ACE GLOBAL PRIVATE LIMITED
NEW DELHI, INDIA

Copyright Ownership

The report/market research submitted by Ace Global Private Limited
is the exclusive proprietary right of Italian Trade Commission (ICE)
and will be for exclusive utilization by ICE office. This report shall not
be shared with any other clients in the form of part/sections of the
report without ICE’s prior approval.

Table of Contents

1. Introduction ............................................................................. 1
1.1 Objectives .................................................................................................................. 1
1.2 Coverage of the study................................................................................................ 1
1.3 Methodology ............................................................................................................. 1
1.3.1 Secondary research ........................................................................................... 1
1.3.2 Primary survey................................................................................................... 2
1.4 Draft Report............................................................................................................... 3

2. India – A Brief Profile and Economic Overview ......................... 4
2.1 Geography ................................................................................................................. 4
2.2 Demographics............................................................................................................ 5
2.3 Economic Demographics: .......................................................................................... 5
2.4 Macro-Economic Scenario......................................................................................... 5
2.4.1 Recent Economic performance and future outlook.........................................6
2.5 Business Environment and Policy Framework........................................................... 7
2.6 Currency .................................................................................................................... 7

3. Overview of Industrial Cleaning Sector in India ........................ 9
3.1 Equipment ............................................................................................................... 10
3.2 Consumables ........................................................................................................... 18
3.3 Tools & Accessories ................................................................................................. 20
3.4 Industry Growth Trends .......................................................................................... 22

4. Product Range........................................................................ 26

5. Production Overview ............................................................. 31
5.1 Equipment ............................................................................................................... 31
5.2 Consumables ........................................................................................................... 32
5.3 Tools and Accessories.............................................................................................. 33

6. External Trade........................................................................ 35
6.1 Imports .................................................................................................................... 35
6.1.1 Italy’s Share in Indian Imports ............................................................................. 37
6.2 Imports information compiled from primary survey .............................................. 38
6.3 Import Tariff ............................................................................................................ 42
6.4 Exports..................................................................................................................... 43

7. Channels for Marketing.......................................................... 44
7.1 Structure.................................................................................................................. 44
7.2 Distribution Network............................................................................................... 45
7.3 Market Segments .................................................................................................... 54

8. Employment in the Sector ...................................................... 57

9. Growth Trends ....................................................................... 59

10. Growth Drivers....................................................................... 61
10.1 Real Estate boom in India........................................................................................ 61
10.2 Facility Management Services ................................................................................. 62
10.3 Growth in end-use segments .................................................................................. 63
10.3.1 Health care segment............................................................................................ 63
10.3.2 Organised Retail .................................................................................................. 65
10.3.3 HORECA segment ................................................................................................ 66
10.3.4 IT and ITES sector................................................................................................. 67
10.3.5 Railways ............................................................................................................... 67
10.3.6 Urban Transportation .......................................................................................... 67
10.3.7 Municipal Authorities .......................................................................................... 68
10.4 Efforts by industry ................................................................................................... 68

11. Experiences/Perceptions about Italian equipment/ companies
70
11.1 Product range .......................................................................................................... 70
11.2 Quality ..................................................................................................................... 70
11.3 Price ......................................................................................................................... 70
11.4 Relationship with customers ................................................................................... 71

12. Interest in Tie-ups with Italian companies.............................. 72

13. Conclusions & Recommendations .......................................... 73
13.1 Conclusions.............................................................................................................. 73
13.1.1 Products with Potential ....................................................................................... 74
13.2 Recommendations - Strategy for Italian companies ............................................... 74
13.2.1 Business Structure Options ................................................................................. 74
13.2.2 Practical aspects of doing Business in India ........................................................ 76
13.2.3 Pathways for Market Entry.................................................................................. 76
• Business Development and Promotion ....................................................................... 76
• Business Models .......................................................................................................... 77
• Aggressive marketing for brand building .................................................................... 78
• Two pronged approach to sales and distribution: ...................................................... 78
• Value added services ................................................................................................... 78

Market Research on Cleaning Industry in India

1. Introduction

This report pertains to the market research on Industrial Cleaning Industry in India. The survey has
been sponsored by Italian Trade Commission, New Delhi, on behalf of AFIDAMP - the Italian
Association.

1.1 Objectives

The main objective of this study is to prepare an updated version of the Report on
Market Survey on Industrial Cleaning Machines / Equipment and Products in India,
which was originally prepared in 2006.

Accordingly, this updated report covers the following:
• The current state of the Industrial Cleaning Industry in India
• Principal factors driving the growth of the market, including trends in technology
and products being currently used in India
• Availability of equipment and products (Indian and Imported)
• External trade trends

1.2 Coverage of the study

This study covers cleaning equipment and related products used for professional
applications only. The following categories are covered in this study:
- equipment
- consumables
- tools & accessories

1.3 Methodology

1.3.1 Secondary research

The main sources of secondary information have been
- Economic Survey of India 2009
- Websites of companies
- Journals and publications of various industry bodies (current and past
issues)

Ace Global Private Limited, New Delhi, India 1


Clean & Hygiene Review (a bi-monthly publication of Hammer
Publisher Pvt. Ltd., Delhi)
Clean India Journal (a monthly publication of Virtual Info Systems
Pvt. Ltd., Mumbai)
Facility Management (quarterly publication of International
Facility Management Institute – India chapter)
- Imports and exports statistics from DGCIS, Govt. of India
- Catalogues of Indian manufacturing and marketing companies

1.3.2 Primary survey

A primary survey was carried out to assess the market size, growth trends in the
industrial cleaning sector in India. The primary survey also obtained feedback on
experience, awareness levels and perceptions with regard to foreign (especially
Italian) equipment and products for industrial cleaning.

The primary survey was carried out through personal interviews in all the important
locations for the Industrial cleaning sector, as summarized below:

Table 1.: Primary survey contacts
Number
Indian companies manufacturing and/or marketing industrial 25
cleaning equipment / consumables / tools & accessories
End users of industrial cleaning equipment/products, 12
including Service providers (Facilities Management
companies)
Industry bodies (including publishers of journals) 2
Total 39

A full list of names, addresses and contact numbers of companies/organizations met
during the primary survey, is enclosed as Annex 1.

It is pertinent to highlight here that although most of the respondents were
cooperative, some companies did not agree to meet the consultants while some
shared only part of the information. In such cases, effort has been made to compile
as much information as possible from secondary sources.



A larger database of industry players and other related organizations in the Industrial
cleaning sector in India is enclosed as Annex 2.

1.4 Draft Report

This Draft Report has been prepared based on the compilation and analysis of all information/data
collected through secondary and primary research.



2. India – A Brief Profile and Economic Overview

2.1 Geography

- Total area: 3.28 million sq km (of which land area is approx. 2.97 million sq.km.)
- Land boundaries: 14,103 km
o Border countries:
West: Pakistan 2,912 km
North: China 3,380 km, Nepal 1,690 km, Bhutan 605 km
East: Bangladesh 4,053 km, Myanmar (Burma) 1,463 km
- Coastline: 7,000 km, bordering the Indian Ocean (South), Arabian Sea (South West)
and Bay of Bengal (South East)
- 29 states and 6 union territories. Many of the states are larger than some of the
European countries, both in terms of area as well as population



2.2 Demographics

- Total Population: 1.17 billion, with overall growth rate of 1.548% per annum
- 31.5% of India’s people are under the age of 15
- 63.3% are between the ages of 15 and 64
- Major religions: Hindu 80.5%, Muslim 13.4%, Christian 2.3%, Sikh 1.9%
- Literacy: overall 59.5%; male: 70.2%; female: 48.3%
- National language – Hindi (spoken by about one-third of the population)
- 14 officially recognized regional languages - Bengali, Telugu, Marathi, Tamil, Urdu,
Gujarati, Malayalam, Kannada, Oriya, Punjabi, Assamese, Kashmiri, Sindhi, and
Sanskrit.
- English has associate level status in India and is widely used in business, as well as
everyday life

2.3 Economic Demographics:

- According to India’s premier economics research agency NCAER, the top of India’s
income pyramid has around 1.8 million homes with an annual income of Rs 1 million
and above. The second layer is 2.9 million homes, with an annual income of ranging
from Rs 0.5 million to 1 million.
- Most of these high income households are in urban areas. The total urban
population in India is close to 28%.
- The size of Indian middle class having sizeable household income is estimated to be
around 30 million.
- Top 6 most populated cities in India are Mumbai, New Delhi, Bangalore, Kolkata,
Chennai, and Hyderabad.
- Besides Delhi, the political capital of India, Mumbai is the commercial capital of
India; Chennai is one of most industrialized city of South India. Bangalore is
Information Technology hub of India.

2.4 Macro-Economic Scenario

- Indian Institute of Finance has projected the India’s Gross Domestic Product for
2009-10 to be US$ 1217.6 billion (at current prices).



- Share of Industry and Services in GDP is 25.8% and 57.3% respectively, as per 2008-
09 figures.
- Gross fiscal deficit has been on a declining trend since 2003 and reached a low of 2.7
% of GDP in 2007-08, but it is estimated to be 6% in 2008-09, largely due to liberal
government spending during the economic recession.
- Exports in 2007-08 were US $163.1 billion with growth rate of 29.2% over the
previous year. In 2008-09 exports stood at US $ 168.7 billion pegging a growth rate
of 3.4% on the back of global economic recession. Imports in 2007-08 were US $
251.7 billion with growth rate of 29.2% over previous year. In 2008-09 total imports
stood at US$ 287.8 billion with a growth rate of 14.3 %. Thus India is a net importer
with trade balance of US$ (-)119.1 billion in 2008-09.
- Principal imports are petroleum and oil goods, capital goods/machinery, gold &
silver, precious and semiprecious stones, electronic goods and chemicals
- Principal merchandise exports are textiles/clothing, gems & jewellery,
engineering goods, chemicals/ pharmaceuticals, agriculture products, and
leather goods.
- India had forex reserve of about US$ 309.7 billion in March 2008 and US$ 252.0
billion in April 2009. The total foreign investment inflows were US$ 63.8 billion in
2007-08, out of which FDI was US$ 34.4 billion. Inspite of the global economic
meltdown during the current fiscal, the total estimated FDI inflow in the country is
US$ 33.6 billion.

2.4.1 Recent Economic performance and future outlook

- The average growth rate of GDP of Indian economy has been 8.8% in the past five
years from 2003-04 to 2007-08. Under unprecedented global economic conditions in
2008-09 where many countries have registered negative growth rate Indian
economy is among the fastest growing, with growth rate for 2008-09 estimated
around 6.7%.
- Despite the slowdown, the investments have been buoyant growing at an
impressive rate. The ratio of fixed investment to GDP increased to 32.2% of GDP in
2008-09 from 31.6% in 2007-08.
- The per capita income in 2008-09 measured at constant prices of 1999-2000 was Rs
31,278. In 2007-08 this was Rs 29,901. The per capita consumption in 2008-09 was
Rs. 17,334 as against a level of Rs. 17,097 in 2007-08. There has been a decline in the
growth rate of per capita consumption from 6.9% in 2007-08 to 1.4% in 2008-09
largely due to the impact of economic recession.
- The importance of trade and external capital inflows are increasing in India. The
share of merchandise trade to GDP increased to over 35% in 2007-08 from 23.7% in
2003-04. If the trade in services is included, the trade ratio is 47% of GDP in 2007-08.



- The 11th plan targets 8-10% growth for Indian economy.

2.5 Business Environment and Policy Framework

- Since the economic liberalization in 1991, Indian economy has been fairly open and
has attracted business from all over the world. According to latest World Bank
report – ‘Doing Business with India 2009’, it is easier to do business in India now,
than it was three years ago.
- Ludhiana, a textile and export hub, is ranked as number one city according to ease of
doing business.
- Tax structure in India is increasingly becoming fair and liberal. The general rate of
basic excise duty, central states tax and VAT are being progressively reduced and
rationalized. All quantitative restrictions on the imports have been removed since
2001, barring few highly sensitive items.
- Through various multilateral and bilateral agreements India is reducing its import
tariffs to facilitate trade.
- The number of clearances before starting a business in India sometimes proves
deterrent to new players. Apart from the process is time taking and the bureaucratic
corruption is main hassle. The Global Enabling Trade Report 2008 by WEF ranked
India at a position of 71. China, India’s main competitor was at 48.
- Competition Commission of India and Investment Commission of India along with
various industrial associations like Federation of Indian Chambers of Commerce and
Industry (FICCI) and Confederation of Indian Industry (CII) have been instrumental in
educating and encouraging foreign players to start investing in Indian market.

2.6 Currency

The monetary unit of India is Indian Rupee (1 Indian Rupee = 100 paise). The
fluctuation in the exchange rate of Indian Rupee vis-a-vis US Dollar and Euro has
been summarized in the table below.

Table 2.: Exchange Rate trends
Year Exchange Rate*
2005 1US$ = Rs. 43.27 1 Euro = Rs. 58.44
2006 1US$ = Rs. 44.95 1 Euro = Rs. 54.50
2007 1US$ = Rs. 44.11 1 Euro = Rs. 59.10
2008 1US$ = Rs. 39.41 1 Euro = Rs. 57.85
2009 1US$ = Rs. 48.58 1 Euro = Rs. 67.12



Source: Assorted; * Exchange rates are based on the values in the first week of the
year



3. Overview of Industrial Cleaning Sector in India

Mechanised cleaning was introduced in India in late 1990’s, but is still in early stages of development,
considering the size and potential of the Indian market. Traditionally cleaning was not considered a
dignified profession and, till recently it was considered a menial job to be done by persons of lower
social echelons using their bare hands or rudimentary brooms. Majority of users still rely on the
traditional manual cleaning methods. Of late, however, the customers have begun to realize that
cleaning requires professional skills and mechanized equipment, besides more efficient, hygienic and
environment friendly products.

On the whole, the cleaning industry seems to be transforming from a labour-led industry to a
technology-led industry. Entry of multi-national companies into India, as well as globalisation of
Indian companies has been a major factor in this transformation. The standards are therefore bound
to get better. The facility owners have also realized the importance of good cleaning processes
employed in their premises. It is being increasingly recognised that a clean healthy work place does
increase the employee productivity and customer satisfaction, and any additional investment in
housekeeping will lead to higher dividends, in the long run.

The significant developments in the sector during the last three years are summarised below:
• The market in the last 3 years has seen high paced growth, with
mechanised cleaning being inducted in a variety of new applications.
• A large part of this growth has come from government / semi-government
entities like municipal corporations, railways, hospitals etc.
• A lot of new infrastructure like Metros Rail Stations, shopping malls /
multiplexes, upgraded and new airports, new IT / ITES / Residential
Complexes have come in the market in the last 3 years leading to increased
use of mechanized cleaning equipment and tools.
• The industrial sector, which includes companies in infrastructure, steel,
cement, ports etc., have also contributed significantly towards the growth of
the market.
• Many new international players have entered the market which includes
companies like Comac, Nilfisk (direct presence), Tennant, and Dulevo. Many
manufacturers from China have appointed distributors in India.
• Along with the equipment suppliers, the number and reach of service
providers has also grown significantly. Many housekeeping / facility
management companies have achieved more than 100% growth over the last
3 – 4 years.



The overall industrial cleaning sector has been subdivided into the following three categories:

- Equipment
o Sweepers (with/without aspirator).
o Vacuum cleaners (dry and wet & dry).
o Carpet cleaners (upright machines and injection extractors)
o High pressure washers (hot & cold)
o Steam cleaners
o Single disc machines
o Scrubber driers

- Consumables
o Cleaning chemicals (for wash rooms, Kitchen hygiene, Floor cleaning,
Carpet cleaning, Odour control, window cleaning, etc.)
o Tissues

- Tools and Accessories
o Mops and mops holders, including Multi-purpose Trolleys (including
wringer buckets)
o Window cleaning tools & accessories
o Other Floor cleaning tools (brushes, pads, discs, wipers etc.)

3.1 Equipment

3.1.1 Overall Market Size

The size of the market for industrial cleaning equipment in India is estimated to be about Rs. 2.55
billion to 2.70 billion in 2008-09, as per details below. This does not include the market for high value
vehicle mounted equipment (vacuum cleaners and sweepers), which is estimated at Rs. 1 billion in
2008-09.

Table 3.: Market for Industrial Cleaning Equipment (company wise value of sales)
Sales Turnover in Sales Turnover
2005 in 2008-09
(Rs. million) (Rs. million)
Tier I companies
Roots Multiclean 240 700
Eureka Forbes 240 280
Johnson Diversey 150-160 250-300



Sales Turnover in Sales Turnover
2005 in 2008-09
Man Machine Karcher 90-100 550
Dulevo Commenced Indian 205
operations in 2008
Sub-total 780 – 800 1,985 - 2,035
Tier II companies
IPC Western Floors 60-70 73
Technoclean Equipments ** 60-70
Inventa Cleantec (earlier known 30-40 60-70
as Industrial Spares)
Charnock 10 40-50
Nilfisk Commenced Indian 30
operations in 2007-
08
Soma Specialities 25 15
Innovative 20 30
Delstar 15 30
R V Industries 12 25
Dynavac 10 20
Hafi Elektra 10 17
Aman Cleaning Equipments ** 20
Jags Impex ** 15
Bosch ** 30
Sub-total 140-150 450-500
Others
20-25 companies 30 – 50 125-150
Santoni, Godrej & Boyce
(Tennant), Rodak Swiss
Trademark, Magna Cleaning,
Continental Hygiene Concepts
etc. + imports from China
Total 950 – 1,000 2,550 - 2,700
** in 2005, these companies were included in Tier III



In the absence of any authentic industry data, the above estimate of market size has been arrived at
based on domestic sales figures reported by the leading players during the discussions. However,
there is a large variance in industry size estimates provided by each company, ranging from Rs. 2
billion to Rs. 3 billion. Further, there were also major differences in the sales figures claimed by
individual companies and those reported by other industry players, e.g. while Roots Multiclean
claimed sales of Rs. 700 million, their competitors place their sales at Rs. 400-500 million.

The industry is dominated by five Tier I companies with each having an estimated turnover of above
Rs. 200 million and which together account for about 75% of the market. The second tier companies,
about 15 in number, each having an estimated turnover of above Rs. 10 million, account for 18% of
the market, while the rest is shared between 20-25 small companies – tier III. Many of these tier III
companies are marketing low cost Chinese equipment as well as locally made machines. In the last
few years, companies like Aman Cleaning, Jags Impex and Bosch have reported higher sales and are
now listed under Tier II.

The above market size estimate for industrial cleaning equipment includes spares and consumable
parts, which are an integral part of the equipment, such as motors, brushes, discs/abrasives,
squeegees, filters, gaskets, hoses etc. These spares and consumable parts are generally marketed by
the same companies that market the equipment, and account for about 10-12% of the annual sales.

During the last few years, there have been a few significant new entrants in the industrial cleaning
equipment market like Nilfisk Advance and Dulevo.
• Nilfisk-Advance has recently set up their base in Mumbai, India. While, earlier the
entire Nilfisk range of equipment was marketed in India by Eureka Forbes, now
Nilfisk Advance India has directly entered the market, with Eureka Forbes
continuing to market a part of the range.
• Dulevo India started operations in India in 2008 as a subsidiary of Dulevo
International SpA, Italy, a renowned name since 1976 in the field of industrial
and road sweeping & cleaning equipments. Dulevo International already has a
presence in over 60 countries.
• RGS Impianti, Italy has started marketing their products in India through RGS
Vacuum Systems based in Bangalore. The company has launched their range of 3
phase industrial vacuum cleaners and single phase industrial vacuum cleaners.
The company is also studying the Indian market and may start manufacture in
India.

High Value Vehicle-mounted Sweepers and Vacuum Cleaners

In addition to the conventional cleaning equipment, there is also a significant and
growing market in India for high value vehicle-mounted Sweepers and Vacuum
Cleaners for various applications such as road cleaning, airports, etc.



The market size for high value mounted Sweepers and Vacuum Cleaners is estimated to be about Rs.
1 billion. Delhi based TPS Infrastructure Ltd. is the leading supplier of these types of equipment,
claiming 80% share of the market with a turnover of about Rs. 800 million.

A small company Guru Nanak Engineering Works in Ludhiana has also started
manufacture of mounted sweepers, mostly for Government departments and
expects to sell 35-40 machines per year.

3.1.2 Market for different types of industrial cleaning equipment

By value
The overall market composition for industrial cleaning equipment is summarised
below. Vacuum Cleaners (dry and wet & dry types) are the most widely used
industrial cleaning equipment in India, followed by Sweepers and Scrubber Driers,
together constituting almost two-thirds of the market by value. As can be seen in the
table, there is no major change in the composition of the market since 2005.

Table 4.: Composition of market for Industrial Cleaning equipment - by value
Share in 2005 Share in 2008-09
Sweepers 15-20% 17%
Vacuum cleaners (dry and wet & 35% 35%
dry)
High pressure washers 10-12% 10%
Single disc machines 10% 7%
Scrubber Driers 15-20% 22%
Carpet cleaners 5% Included in Vacuum
cleaners
Steam cleaners 1-2% 2%
Others 3-5% 7%
Source: Primary survey by Ace Global

The sales composition of the leading companies is provided in the table below. Vacuum cleaners form
an important category for all companies, though to a varying degree. However, scrubber driers are
most important for Roots Multiclean, while vacuum cleaners and sweepers are important for Eureka
Forbes. Some companies which are marketing only one type of equipment are not included in the
Table (e.g. Nilfisk Advance - road sweepers, Hafi Industrial vacuum cleaners and Bosch Cold washer
high pressure cleaners)



Table5.: Company-wise Sales break-up (% by value)
A) Tier I companies
Equipment Roots Eureka Johnson Man Dulevo TPS
Multiclean Forbes Diversey Machine
Karcher
Vacuum Commercial 11% 19% 28% 21% 6%
cleaners Industrial 3% 12% 0% 2% 2%
Industrial 0 0 0 0 0 47%
Fixed /
Vehicle
Mounted
Sub Total 14% 31% 28% 23% 8% 47%
Single disc machines 0% 4% 13% 0% 3% 0
Sweepers Manual 13% 0 0 0 0
Ride On 10% 16% 22% 0 18% 5%
Road 32% 0 0 23% 59% 48%
sweepers
Sub Total 65% 16% 22% 23% 77% 53%
Scrubber Walk 20% 22% 22% 14% 6% 0
Driers behind
Ride on 6% 11% 13% 10% 4% 0
Sub Total 26% 33% 35% 34% 10% 0
High Hot water 0 0 0 0 0 0
Pressure Cold water 3% 9% 4% 8% 1% 0
Cleaners Sub Total 3% 9% 4% 8% 1% 0
100% 100% 100% 100% 100% 100%

B) Tier II & III companies (selected)
Equipment IPC Inventa Charnoc Aman Jags Godrej &
Western Cleantec k Impex Boyce
Floors (Tennant)
Vacuum Commercia 39% 14% 50% 14% 84% 0
cleaners l
Industrial 12% 0 0 0 0 0
Sub Total 51% 14% 50% 14% 84% 0
Single disc machines 5% 4% 4% 4% 16% 0



Equipment IPC Inventa Charnoc Aman Jags Godrej &
Western Cleantec k Impex Boyce
Floors (Tennant)
Sweepers Manual 0 38% 0 38% 0 0
Ride On 0 13% 0 13% 0 69%
Sub Total 0 51% 0 51% 0 69%
Scrubber Mechanise 0 0 0 0 0 0
Driers d
Walk 24% 10% 24% 10% 0 12%
Behind
Ride on 10% 6% 6% 6% 0 19%
Sub Total 34% 16% 30% 16% 0% 31%
HOT 0 0 0 0 0
High WATER
Pressure Cold water 10% 16% 8% 0 0 0
Cleaners Sub Total 10% 16% 8% 16% 0% 0%
Total 100% 100% 100% 100% 100% 100%

By volume

The market size for different types of industrial cleaning equipment, in terms of
volume of sales, is difficult to estimate due to the wide range of models within each
type of equipment, suited for different applications. For example, Man Machine
offers several models of vacuum cleaners (including shoulder mounted model), with
air flow ranging from 44 litres/sec to 112 litres/sec. Similarly the company sells 9-10
different models of Scrubbers and Scrubber Driers, including walk-behind and ride-
on models.

However, based on feedback of equipment marketing companies as well as end users, the broad
market size by volume, is as in the table below, for the leading companies in each equipment
category. The wide variation in prices in some cases is due to availability of low-cost Chinese and
locally manufactured equipment.

Vacuum cleaners are by far the most commonly used equipment, in volume terms.

Table 6.: Composition of market for Industrial Cleaning equipment - by volume
Equipment Type Market size Price range
(Nos.) (per unit)



Sweepers Manual sweepers 9000 Rs. 6000 –
(with/without 10,000
aspirator) Industrial sweepers
walk behind type 200 Rs 100,000
ride on type 190 Rs. 0.7 – 1.5
million
Vacuum cleaners Commercial and Professional 39,500 Rs.7,000 -25,000
(dry and Industrial Vacuum Cleaners 420 Rs. 70,000 -
wet&dry) 125,000
High pressure Cold 8,450 Rs.5,000 –
washers 40,000
Hot 1,500 Rs. 100,000 -
125,000
Single disc 3,000 Rs. 30,000 -
machines 70,000
Scrubber Driers Walk behind Scrubber Drier 2,665 Rs. 80,000 –
150,000
Ride on Scrubber Drier 200 Rs.550,000 -
700,000
High Value Large industrial vacuum 75 – 100 Rs. 4 million
Vehicle-mounted cleaners 7.5 KW to 200 KW (excluding the
Sweepers and price of vehicle)
Vacuum Cleaners Sweepers 200 litres to 6500 ~ 200 Rs. 1 to 5 million
litres (excluding the
price of vehicle)

Recent new product introductions:
In the recent years, several foreign companies (including Italian) have entered the Indian market,
either by setting up Indian subsidiaries or through marketing tie-ups with importers and distributors.
Some of these as well as Indian companies have launched new products. An indicative list of
companies and their products launched in India, is given below:
• Roots Multiclean – EZE Clean and dry mops, RM series floor stripper, sealer
and floor finish, Dry Foam carpet cleaning system, Minuteman MPV31 wide
area vacuum cleaner
• Cimel s.r.l Italy - automatic scrubber drier Turbolava 35 Facile
• Im.Ex.Serve Italy – IMEX Air Water high pressure Washer, IMEX-CxW
microfiber cloth wipe , IM.EX.SV13 Nebraska, a diesel steam car wash.



• Soma Specialty – Cyclotron Mini compact scrubbing machine, Desiderio Plus
steam cleaner from Capitani of Italy, Cyclon Max-75 special purpose machine
for restoration of stone floors, cyclone FP 240 flame proof floor cleaning
machine
• Dulevo India – 1300 Star sweeping machine, model S20/E Industrial Vacuum
Cleaner from Dulevo Italy,
• Inventa - Italian RCM S.p.A road sweeper for cement industry, Compact
scrubber/drier, smokeless Hot Water High Pressure Jet cleaning machine,
• Cilmas s.r.l Italy – Mirage Spinning 490 floor washer drier-Rainbow Cleaning
System manufactured by Rexair LLC, USA which can purify, deodorizer,
medicate and aromatize air in a room
• Lavorwash sps Italy – High pressure vacuum cleaners and auto scrubber drier
through Aman
• Lavorwash S.p.A FA-SA , Italy – Kappa & Kaiman range s of hot water high
pressure systems
• Hako & Roots Multiclean – Hakomatic B45 compact scrubber-drier, Hako
Citymaster 1200 street sweepers (about 50 supplied0, Hakomatic B 30
compact scrubber drier,
• Super Tech Equipment, Thane – SEW Series Vacuum Cleaners in 5 models
• Glutton of Lange Christian, Belgium – Self Propelled street sweeper
• Surie Polex – high speed floor polishers
• Taski - Swingo 1650 for floor cleaning, JFfit onboard dilution control system
that automatically feeds right amount of chemicals and Swingo 150 new ultra
compact scrubber, which is like a vacuum cleaner for entry into restricted
areas.
• Man Machine – Karcher CV 66/2 brush type vacuum cleaner, Karcher BR
30/4C, BD 60/95 RS Model step on scrubber drier
• Hefter Cleantech, Germany – Convert 82 convertible cleaning system for
scrubbing, grinding, burnishing and crystallizing.
• Nilfisk Advance – Alto Scrubtec 233 compact scrubber driers
• Johnson Diversey India – Trooper SD Plus scrubber with attached foam
generator, Alpha HP (a green seal certified multi-surface cleaner), New range
of industrial vacuum cleaners for industrial waste and soil
• Kam Avida – VT 650 Dual Sweep mounted sweepers from Johnston Sweepers,
UK.
• Tennant, USA – Green Machines through Godrej & Boyce



• Annovi Roberberi India – High pressure cleaners and pumps from Annovi
Roberberi Spa
• Bitimec International, US have launched its simple compact inexpensive and
cost effective power-brush Speedy Wash line for buses and trucks.
• Charnock – Ride on scrubber drier Vario from Numatic

3.2 Consumables

The market size for consumables used for industrial cleaning in 2008-09 is estimated at about Rs. 6.50
– 7.00 billion, representing an increase of about 140% over the 2005 level. Among the two
constituents of the segment, namely Cleaning Chemicals and Tissues, the share of cleaning chemicals
has increased from 66% in 2005 to 78% in 2008-09, which is in line with the trend of increasing use of
mechanised cleaning equipment for various applications.

The industry players have also pointed out that in the last few years, the share of organised players
has increased from 25% to about one-third of the market, as more end users now prefer to use high
quality consumables which are not only more efficient but also more suitable for use with cleaning
equipment, and therefore work out to be more cost effective.

3.2.1 Chemicals
As per discussions with some of the leading players, the market size for industrial cleaning chemicals
has grown from Rs. 1.8-1.9 billion in 2005 to about Rs. 5.0-5.5 billion, an increase of about three
times. The use of professional grade cleaning chemicals has increased substantially, although
according to the industry the use is still limited mainly to high end users in various segments like
HORECA, healthcare and commercial segments. Therefore, the demand is expected to increase
manifolds in the coming years, due to several factors, such as increasing demand for the industrial
cleaning equipment, increasing trend of cleaning services being outsourced to professional facilities
management companies, and increasing awareness for using more effective, efficient and
environment friendly products for cleaning applications.

3.2.2 Tissues
Tissues market (washroom tissue papers, facial tissues, paper towels/napkins etc.) is
estimated to be about Rs. 1.50 to 1.60 billion (up from Rs. 0.90-1.00 billion in 2005.
Kimberley Clark, the market leader holds about 30% share of the market by value.
Another leading company in the organised sector Pudumjee’s imports bulk rolls and
converts the same into retail packs at their works in Pune.

Table 7.: Composition of market for Industrial Cleaning Consumables - by value
2005 2008-09 %
Rs. Million Rs. Million



Cleaning 1800 – 1900 5,000 – 5,500 ~78%
chemicals
Tissues 900 – 1000 1,500 – 1,600 ~22%
Total 2,700 – 2,900 6,500 – 7,000
The company-wise sales of the organised sector players, are summarised below:

Table 8.: Company-wise sales of Chemicals and other cleaning products (organised
sector)
Total Sales Turnover Total Sales Turnover
2005 (Rs. Million) 2008-09 (Rs. Million)
Pudumjee 120 700
Kimberly Clark 50-60 600
Johnson Diversey 100 – 120 250-300
Schevaran Laboratories 80 160
Eureka Forbes (Ecolab) 40 75
Jade 30-40 N.A.
Origami 50 75
Haylide Chemicals 10-20 40-50
Rancher 10-15 N.A.
Hygiene Products of India 10 N.A.
Altret Performance Chemicals 5 N.A.
Gujarat
Naveen Polycon > 10
Others 125 – 150 250-300
Total (organised sector) 650 – 750 2,200 - 2,300

For Kimberley Clark, about 80% of the turnover comes from Tissue paper, while 20%
is contributed by other products like Wipers, Apparels & garments, Gloves, Eye
protection, soap/hand sanitizers, dispensers, air neutralizers, Paper napkins (locally
procured).

Some of the companies met during the research felt that the economic recession has
not impacted their sales much as they have maintained the quality and competitive
pricing of their products.




• Bio-Productions Ltd. / Stapro, UK - environment friendly cleaning products
and formulations through Charnock, Bangalore.
• Haylide Chemicals, Jabalpur – Sterix-A, advanced biodegradable cleaning
solution
• Henkel India – Pril degreasers, Renuzit brand car & air fresheners, super
odour neutralizers
• Jade – Auto Foam soap dispensers
• Mecserflex UK – Sagewash Sanitizer through Orange Care Solution Pvt. Ltd.
Bangalore
• Cole-Palmer India – IS formulated cleaning concentrate
• A R Enterprises, Delhi – Valorem Aerosol Dispensers
• Pudumji, Mumbai – Greenlime range of fragrances
• Hokwang , Taiwan – HK-RSD Auto Soap Dispenser
• DAGA Finmark India, Ahmedabad – Electroclean for electronic items like
computers, fax machines, photocopiers etc.
• Vinci Chem, Andhra Pradesh – Vinci Biomex, a European technology cleaning
solution.
• Quartz Home Care, New Delhi – Wizard floor cleaners

3.3 Tools & Accessories

The tools and accessories comprise of non-mechanised equipment used for manual
cleaning, categorised broadly as follows:
o Mops and mops holders
o Multi-purpose Trolleys (including wringer buckets)
o Window cleaning tools & accessories
o Floor cleaning tools
o Others (brushes, pads, discs, wipers etc.)

The total market for tools and accessories is estimated to be between Rs. 1.30 to 1.50 billion, of
which the share of unorganised sector is estimated to be around 65%, including sundry imports from
China, Hong Kong and Korea.

Table 9.: Composition of market for Industrial Cleaning Tools & Accessories - by value
Value 2005 Value 2008-09
Mops and mops holders 200-225 350-375



Trolleys 25-30 50-100
Window cleaning tools and 70-80 200-225
accessories
Floor cleaning tools 250-275 450-500
Others (brushes, pads, discs, wipers, 100-150 250-300
etc.)
Total 650-750 1,300-1,500

Almost all the organised sector players are marketing imported tools and accessories, except Roots
Multiclean, which manufactures some mops and wringer buckets/trolleys.

Table 10.: Company-wise sales of Tools & Accessories (organised sector)
Value 2005 (Rs. Value 2008-09 (Rs. million)
million)
Continental Hygiene 80-100 150-200
Concepts
Cradle Runways 35-40 100
Roots Multiclean 30-35 30-35
Unger 35 50-75
Johnson Diversey 20-25 40-50
Poona Brush 20 25
Man Machine Karcher 10-15 20-25
Bangalore Brushware 10 15
IPC Western Floor 5 6.5
J&B - N.A.
Inventa Cleantec - 2.5
Others 5-10 20-25
Total 200-250 450-550
Note: Aerial work platforms used for cleaning of windows and building facades, are multi-purpose
equipment also used for construction, repair & maintenance, painting etc. The leading company,
Cradle Runways Pvt. Ltd. reported sales of about R.s 35-40 million during 2005-06. In 2008-09, the
company received orders to the tune of 200-220 million and executed about half of the orders. It
expects to reach a target of Rs. 150 million during 2009-10.

• Brush Tech India – Welcome brand brushes for road and floor sweepers
• Corazzi Fibre S.r.l, Italy – Non woven abrasives through Ethos Corp, Mumbai



• Superclean Scandinavia AB, Sweden – Qleeno Quiet, a combi scrubber for
noise sensitive areas.

3.4 Industry Growth Trends

The industrial cleaning industry in India has seen accelerated growth in the last few years, registering
a CAGR of 34% per year, with the equipment segment growing at the fastest rate of 39% per year.

Market size in 2005 Market size in Growth
(Rs. million) 2008-09
Overal CAGR
(Rs. million)
l
Equipment 950 – 1,000 2,550 - 2,700 170% 39%
Consumables 2,700 – 2,900 6,500 – 7,000 141% 37%
Tools and 650-750 1,300-1,500 100% 26%
Accessories
Total 4,300 – 4,650 10,350 – 11,200 141% 34%

Consumables continue to account for a major share of the industrial cleaning market (63% by value)
as their use extends to applications where mechanised cleaning, using equipment and/or tools, has
not yet become common.



Market Composition, 2005 Market Composition, 2008-09

Tools
Tools
and
and
Access Equipm
Access Equip ories ent
ories ment 13% 24%
16% 22%

Consu Consu
mables mables
62% 63%

Market Size Growth

7000
6000
5000
Rs. million

4000
3000
2000
1000
0
Equipment Consumables Tools and Accessories

2005 2008-09

The above computed industry growth rates are also corroborated by the key industry players met
during the research. Most companies claim to have grown at a healthy rate of 20 to 40% per year
during the last three years. The overall industry has grown at an average of around 30% per year.
Further, there is near unanimity among industry players that the industrial cleaning sector is poised
for an even higher growth of 30%-40% in the coming years, given the healthy growth in most of the
end-use sectors.



The table below summarises the responses relating to past growth trends and the expected future
growth of the industry.

Table 11.: Rate of expansion/ growth of the sector in the last few years
Annual Growth rate (%)
Past (3-year Projected Growth
average)
Company Industry
Equipment
Roots Multiclean 15-20% 30-40% 45%
Eureka Forbes 20% 15% 35-40%
Johnson Diversey 50-60% 10-11% 15%
Man Machine 25% 25% 40-45%
IPC Western Floors 25-30% 25040% 30%
Inventa Cleantec 25% 40% 50%
Soma Specialities 30-40% 30-40%
Innovative 30% 100%
R V Industries 30%
Santoni 10-15% 20% >25%
Rodak Swiss 200% 20-30% 30%
Technoclean Equipments 40% 40%
Aman Cleaning Equipments 0 40-50% 50-60%
Magna Cleaning 30-40% 50%
Godrej 25%
TPS Infrastructure 100% 40% 40%
Guru Nanak engineering 15-20% 15 – 20 – 25%
works 20%
Consumables
Pudumjee 18-20% 18-20%
Schevaran Laboratories 20% 30%
Eureka Forbes 20% 15% 35-40%
Jade 15-20% 20%
Kimberly Clark 10-15% 10-15%%
Poona Brush 10% 20% >20%
Hygiene Products of India 40-50% 50-60%
Haylide Chemicals 200% 10-15% >15-20%



Naveen Polycon 10-15% 10% 20%
Tools & Accessories
Continental Hygiene 25% 50%
Products
Unger India 40% 40% 40%
J & B Industries 20% 20% 30-40%



4. Product Range

Most of the companies tend to carry all types of equipment, though the range in terms of number of models varies from company to company. The following
table summarises the product range offered by various companies, both imported as well as indigenous.

Table 12.: Product range of individual companies

a) Equipment
Sweepers Vacuum Carpet High Steam Single Scrubber Remarks
Cleaners Cleaners Pressure Cleaners Disc s / Driers
Dry Wet & Washers machine
Dry s
Roots Multiclean 80% of machines
will be
manufactured in-
house by 2010-
2011
Eureka Forbes
Johnson Diversey
Man Machine
Karcher



Dry s
Dulevo
IPC Western Floors
Technoclean
Equipments
Inventa Cleantec

Charnock
Soma Specialities

Innovative

Aman Cleaning
Equipments
Santoni
Godrej & Boyce
Rodak Swiss
Trademark
Hafi Elektra



Dry s
Magna Cleaning
Systems
Poona Brush
Company
Legend:
Imported Manufactured

b) Consumables
Wash Kitchen Floor Carpet Odour Other Tissue
room hygiene cleaning cleaning control chemicals paper
products products products products products
Pudumjee Hygiene Photography
& X-rays
Johnson Diversey
Kimberly Clark
Imported in
rolls and cut



Wash Kitchen Floor Carpet Odour Other Tissue
room hygiene cleaning cleaning control chemicals paper
products products products products products
to size
Schevaran
Eureka Forbes
(Ecolab)
Jade International
Origami
Altret Performance
Chemicals
Haylide Chemicals
Chemicals
for
photography
& X-rays
Rancher
Hygiene Products
Naveen Polycon
Roots Multiclean

c) Tools & Accessories



Mops and Trolleys Window cleaning Floor Others (brushes,
Mop tools & accessories cleaning tools pads, discs,
holders scrubbers, wipers,
hoses etc.)
Continental Hygiene
Concepts
Roots Multiclean
Unger India
Johnson Diversey
Eureka Forbes
Man Machine
IPC Western Floor
Charnock
Poona Brush
Bangalore Brushware
J & B Industries
Dulevo

Legend:
Imported Manufactured



5. Production Overview

5.1 Equipment

The industrial cleaning equipment market in India continues to be import driven. Only one of the five tier I
companies, Roots Multiclean has production facilities in India. On the other hand, many of the tier two
companies have production facilities, though with limited capacity and product range to supplement the
imported equipment marketed by them.

Roots Multiclean has a well-established manufacturing set up, with three factories in Coimbatore in Tamil
Nadu (south India). One of the factories is a 100% Export Oriented Unit, manufacturing a single model of
Floor Washer which is exported through Hako’s marketing network in Europe. Nearly 55-60% of the
company’s sales (by value) come from domestic production, while imported equipment account for 40-
45% of the sales. The company manufactures a range of equipment, based on technical know-how from
joint venture partner Hako, Germany. In 1999, the company also launched an indigenously designed Floor
Washing machine ‘Wizard’ which is also being exported through marketing tie-ups with world’s leading
companies such as Trovox, UK, Minutemen, USA, Nilfisk, and INB Hong Kong. In the recent years, the
company has added Single disc machines to their product range. In 2008, Roots Multiclean also signed a
collaboration agreement with Minuteman Power Bosch USA.

The indigenous production facilities for industrial cleaning equipment are summarised in the table below:

Table 13.: Producers of Industrial Cleaning Equipment
Name of Production range Production sites Foreign
company collaboration, if
any
Roots Scrubber Driers, 3 factories: Joint venture with
Multiclean Manual Sweepers, - Coimbatore (Tamil Hako Werke,
Ltd. Mini Floor Washer, Nadu) Germany
Single disc machines Minuteman Power
Bosch USA
(subsidiary of
Hako) since 2008
Inventa High pressure washers Noida (Uttar Pradesh) Italy for exclusive
Cleantec and steam cleaners, marketing



any
Manual sweepers
Soma Auto Scrubbers, back- Mumbai (Maharashtra)
Specialities pack vacuum cleaners,
carpet cleaners
Innovative Vacuum cleaners Mumbai (Maharashtra)
Magna High pressure washers Mumbai (Maharashtra) Assembly of
imported SKDs
Santoni All Faridabad (Haryana)
Hafi Elektra Vacuum cleaners for Pune (Maharashtra)
textile industry
Technoclean Single disc machines, Noida (Uttar Pradesh)
Equipments Scrubber driers
TPS Mounted sweepers, Bhiwadi (Rajasthan) & Wieland
Infrastructure Large mounted Ghaziabad (UP) Lufftenchnik
vacuum cleaners, Germany,
Compactors Stummer
Eurowaren,
Austria

Several other small companies, such as Guru Nanak Engineering Works, Ludhiana (mounted sweeping
machines), Aman Cleaning, R V Industries, Delstar, Dynavac, etc., also manufacture industrial cleaning
equipment with indigenous know-how.

5.2 Consumables

Table 14.: Producers of Chemicals and other cleaning products
any
Pudumjee Tissue papers Pune (Maharashtra)



any
Johnson Industrial cleaning Two factories
Diversey chemicals - Daman 85% of
production
- Nalagarh 15% of
production
Schevaran Industrial cleaning Mysore (Karnataka) Rochester
chemicals Midland, USA
(since 2006)
Kimberly – Tissue papers Pune (Maharashtra) Kimberly-Clark
Clark Worldwide
Altret Industrial cleaning Surat (Gujarat)
Performance chemicals
Chemicals
Haylide Industrial cleaning Jabalpur (Madhya
Chemicals chemicals Pradesh)
Poona Brush Brushes Pune (Maharashtra)

Bangalore Brushes Bangalore (Karnataka)
Brushware
Naveen Chemicals & Okhla (Delhi)
Polymers detergents

All leading companies claim to be using latest international technology where the emphasis is on low
toxicity and use of eco friendly & biodegradable raw materials, besides overall quality, and effectiveness.
Also products are multipurpose and user friendly.

Some companies also undertake contract manufacturing for equipment suppliers, such as Haylide
Chemicals for IPC Western Floors, which markets equipment from IPC Italy.

5.3 Tools and Accessories



Roots Multiclean is the only leading player producing trolleys, mops, wringer buckets at
their Coimbatore (Tamil Nadu) facility.

Poona Brush and Bangalore Brushware manufacture a wide range of brushes used for
industrial cleaning applications, as attachments to equipment as well as for manual
cleaning. Poona Brush has installed a CNC machine for manufacturing technical brushes.
The company imports all critical raw materials (bristle, fibres etc.) from Germany, Italy,
USA etc.

Cradle Runways produces window cleaning systems, but the major part of their
production is the cradle/trolley, which are multi-purpose equipment, used for a variety
of applications besides window/façade cleaning.

J & B Industries started with a factory in Delhi, and have recently set up a new
automated facility near Lucknow in UP for manufacturing Cleaning Brushes, Cleaning
Pad, Cleaning Sheet, Dishwasher Scrubber, Galvanized Iron Scrubber, Mops, Pot
Scrubber, Scouring Pad, Scrub Sponge & Stainless Steel Scrubbers under the brand name
“Super Brite”.



6. External Trade

6.1 Imports

Directorate General of Commercial Intelligence and Statistics (DGCIS), an organisation
under the Ministry of Commerce & Industry, Govt. of India, is the only official source of
import data in India. However, as reported earlier, in the Export-Import database
maintained by DGCIS, industrial cleaning equipment and products are not discernible as
distinct items, as most companies are importing cleaning equipment under a general HS
code 84798999, which refers to “Other machines and mechanical appliances having
individual functions not specified or included elsewhere in the Chapter 84” – please
refer table below. The import statistics under this code do not pertain only to
equipment for industrial cleaning applications, as they represent broad product
categories covering various applications. Further, all equipment and products used for
industrial cleaning are not necessarily included in these statistics as some importers use
other custom codes for similar products.

However, the import statistics reported in DGCIS data for some of the items of interest
is tabulated below. It is seen that China is emerging as a major supplier, mainly due to
more competitive prices. As an example in 2007-08, Italy exported 980 industrial
vacuum cleaners at US$ 3,980 each, while China supplied 14,640 machines under the
same category at an average price of US$ 1,230 each, which is less than one-tenth of the
average price of Italian equipment.

Table 15.: Imports of Cleaning Equipment
Custom code and Value (US$ million) Quantity (Nos.)
Description 2005 2006 2007- 2008- 2005 2006 2007 2008
-06 -07 08 09 -06 -07 -08 -09
(Apr- (Apr-
Dec) Dec)
84642000 - Grinding / 7.38 8.70 14.3 12.37 300 550 420 430
Polishing machines for
working stone etc.
84798950 - Car 0.18 0.22 0.26 0.95 120 50 60 -



Description 2005 2006 2007- 2008- 2005 2006 2007 2008
-06 -07 08 09 -06 -07 -08 -09
(Apr- (Apr-
Dec) Dec)
Washing and related
appliances
84798991 - Industrial 5.96 7.13 1.57 0 9,180 9,730 18,100 0
Vacuum Cleaners
85081000 - Vacuum 2.34 3.14 6.90 0 157570 222200 287360 0
Cleaners
85092000 - Floor 22.07 11.78 0.07 0 1780 70 320 0
polishers
84798999 - Other s 307 410 559 424 70,000 106,000 127,000 90,000

Table 16.: Imports of Consumables
Custom code and Value (US$ million) Quantity
Description 2005 2006 2007- 2008- 2005 2006 2007 2008
-06 -07 08 09 -06 -07 -08 -09
(Apr- (Apr-
Dec) Dec)
48025450 - Tissue 2.66 3.18 3.78 2.37 1266 1981 2217 1457
Paper (Kg)

33074900 - Other 0.76 0.91 1.19 1.02 286 230 243 220
Odoriferous preparations
used for de-odorizing room
(excluding agarbatti) (Kgs)

34029011 - Washing and 3.22 3.73 3.63 3.74 1083 1104 953 1331
cleaning preparations having
basis of soap other organic
surface active (synthetic
detergents) (Kg.)

34029019 - Other (synthetic) 4.91 5.49 6.26 4.05 1555 2578 2531 2021
detergents (Kg)

38084000 - Disinfectants 0.65 2.48 1.28 0 108 493 155 0
(Kgs)

Table 17.: Imports of Tools and Accessories



2005 2006 2007 2008 2005 2006 2007 2008
-06 -07 -08 -09 -06 -07 -08 -09
(Apr- (Apr-
Dec) Dec)
96035000 - Other 2.25 2.37 2.99 2.81 282 505 549 699
Brushes constituting parts
of machines, vehicles etc.
6805 - All types of 11.61 15.94 19.6 16.85 1606260 18434 248063 252622
Natural/artificial abrasive 60 0 0
powder etc. of textile
material or paper/ paper
board w/n cut to shape

6.1.1 Italy’s Share in Indian Imports
Italy is among the leading suppliers of industrial cleaning equipment and tools to India in almost
all the categories. However, in consumables, Italy’s share is much lower. As can be seen from
the table below, China and other Asian countries such as Korea, Japan, Singapore and Thailand
are also emerging as significant contenders for a share in the Indian market.

Table 18.: Italy’s Share in Imports
Custom code and Description Top exporting countries in
2007-08 (US$ million)
Equipment 84642000 - Grinding / Polishing machines Italy 4.63; China 3.31 ; Germany
for working stone etc. 3.19
84798950 - Car Washing and related USA 0.09 ; Korea 0.03; China 0.02;
appliances Italy0.01
84798991 - Industrial Vacuum Italy 0.39 ; China 0.18 ; Sweden
Cleaners 0.38 ; Denmark 0.27
85081000 - Vacuum Cleaners China 3.15 ; Italy 0..81 ; Germany
1.40 ; Singapore 0.23
85092000 - Floor polishers China 0.02 ; Switzerland 0.04 ;
Italy Nil
84798999 - Others Germany 77.34 ; Italy 77.33 ;
Korea 65.79 ; China 65.59
Consumable 48025450 - Tissue Paper China 0.92 ; Germany 0.55 ; Japan
s 0.55 ; Italy 0.01



Custom code and Description Top exporting countries in
2007-08 (US$ million)
33074900 - Other Odoriferous China0.44 ; Thailand 0.09 ;
preparations used for de-odorizing Vietnam 0.09 ; Italy 0.02
room (excluding agarbatti)
34029011 - Washing and cleaning USA 0.51 ; Germany 0.96 ;
preparations having basis of soap Singapore 0.70 ; Netherland 0.31 ;
other organic surface active (synthetic Italy 0.17
detergents)
34029019 - Other (synthetic) Switzerland 1.40 ; Germany 0.62 ;
detergents Thailand 2.13 ; UK 0.64 ; Italy 0.15
38084000 - Disinfectants China 0.51 ; UK 0.33 ; Japan 0.18 ;
Italy 0.16 ; Singapore 0
Tools & 96035000 - Other Brushes Germany 0.89 ; Italy 0.46 ; Japan
Accessories constituting parts of machines, 0.12 ; China 0.11
vehicles etc.

6.2 Imports information compiled from primary survey

As per information compiled from primary survey feedback, Italy and Germany are the main
sources of import of industrial cleaning equipment, tools & accessories. However, Italy is not an
important supply source for consumables, which are mainly being imported from USA, UK and
other European countries.

Table 19.: Company-wise Imports
a) Equipment
Share of Country Name of Remarks
imported of origin foreign
products in supplier
total sales
Roots 40-45% Germany Hako Werke Manufacture in India under
Multiclean GmbH license + marketing in India
and SAARC countries
USA Minuteman
Power Bosch



total sales
Italy SOTECO Wet and dry vacuum
cleaners
Italy Interpump Pumps
Eureka 100% Denmark Nilfisk
Forbes Advance
Johnson 100% Switzerland, Taski
Diversey Italy, USA
and China
Man 100% Germany Karcher
Machine
Western 100% Italy IP Cleaning
Floors S.P.A.
(Interpump
Group)
Charnock 100% UK Numatic
International
Rodak 100% Switzerland Perlis Assembly of CKD and
Marketing
Innovative 50% Italy Fiorentini srl
Godrej & 100% USA Tennant
Boyce Mfg.
Continental 75% Italy IPC Ready
Hygiene System,
Concepts Floor
Dulevo India 100% Italy Dulevo s.p.a
Nilfisk- 100% World wide Nilfisk
Advance India advance
RGS Vacuum 100% Italy RGS Impianti
Systems



total sales
Inventa Italy RCM S.p.A Road sweeper for cement
industry, Compact
scrubber/drier, smokeless
Hot Water High Pressure Jet
cleaning machine
Aman Italy Lavorwash
S.p.A FA-SA

b) Consumables
Share of Country Name of Product range Remarks
products supplier
in total
sales
Pudumjee 100% UK Waterbury’s Wash room Using
Hygiene Vectair and odour dispensers
control from Italy
products
Johnson 10-15% Sweden SCA Tork brand of Distribution
Diversey Hygiene tissues, hand in India, Sri
Products wash and room Lanka,
fresheners Maldives,
Bangladesh,
Nepal and
Bhutan
Schevaran Neg. USA and UK Various Dosing Pumps
Laboratories and Diluters
Eureka 100% Germany Ecolab
Forbes
Jade 100% USA, UK Technical
International Concepts



Share of Country Name of Product range Remarks
products supplier
in total
sales
Kimberly- 100% USA Kimberly- Tissue jumbo Conversion
Clark Clark rolls into retail
Worldwide packs done
in India
Charnock UK Bio- cleaning
Productions products and
Ltd. (part of formulations
Stapro, UK)

c) Tools & Accessories
Share of Country Name of Product range
products supplier
in total
sales
Continental 75% UK TC
Hygiene The Bentfield
Concepts Netherlands
Roots 40-45% Italy TTS Compact Janitorial Trolleys
Multiclean
Man 100% Italy Euro Mop Various tools & accessories
Machine China Trolleys, mops etc.
Unger India 100% USA, UNGER Brushes, Mops/Wringers,
Germany, Global Trolleys & Carousels,
UK, France Washers & Squeegees,
Charnock 100% UK Numatic Trolleys, mops/wringers,
International carousals, glass cleaning
eqpt.
Western 100% Italy IP Cleaning Trolleys, mops/wringers,
Floor glass cleaning eqpt.



Share of Country Name of Product range
products supplier
in total
sales
Poona Brush 5% USA Dupont Bristles
Germany Hahl Diamond Abrasive
filaments
Italy Hollow car washer fibre
Mexico Natural fibre for tile floor
cleaning

6.3 Import Tariff

Import tariffs in India consist of following elements:
Basic Customs Duty - the border tariff as defined under WTO;
Countervailing Duty (CVD) - being the equivalent of the excise duty on equivalent
goods manufactured in India;
Special CVD - being the equivalent of the VAT on equivalent goods manufactured in
India;
Education Cess (EC) - a surcharge on the duties, imposed for a public cause
(education)

As per the present import policy, the total effective import tariffs applicable for 2008-
09, for the items of interest to this study, are summarised below.

Table 20.: Import tariff applicable for 2007-08
Total import tariff
Equipment 31.011% to
34.130%
Consumables 29.275% to
34.130%
Tools & 31.011% to
Accessories 34.130%



6.4 Exports

Roots Multiclean is the only major exporter of industrial cleaning equipment, with exports accounting for
nearly 50% of their sales. The company exports floor cleaning machine and equipment to the leading
markets of the world including USA, Europe, Australia, Japan, Far East, South America and several other
advanced countries. RMCL’s joint venture partner Hako uses RMCL as a production hub for worldwide
sales of selected machines, such as Hakomatic Scrubber Drier E 350. Also RMCL’s indigenously designed
and manufactured machines (WIZARD floor washer) are marketed in Europe by Hako.

In high value cleaning equipment, TPS Infrastructure currently exports equipment
accounting for about 5-7 % of their sales. However, the company is targeting to increase
their exports to 30% of sales in the next 2-3 years.

Exports of consumables, tools and accessories from India are negligible. , except for cleaning brushes.
Johnson Diversey and Schevaran Laboratories are exporting a part of their production of cleaning
chemicals. Poona Brush Company indicated exports of industrial cleaning brushes, mostly to Indonesia,
China and Korea and is currently negotiating with a British importer.

J & B Industries indicated that their products are finding acceptance in the overseas
markets such as Saudi Arab, South Africa, Australia and Pakistan.



7. Channels for Marketing

7.1 Structure

The most common marketing model adopted by companies in the industrial cleaning sector is a 2-tier
structure, comprising of direct sales by the companies through their own offices and staff, and through
dealers.

The leading companies rely more on direct sales through their own network of offices in
important locations, the obvious advantage being that this allows them to not only have
a firsthand feel of the market, but also ensures after sales service support to the
customers, which is a very important differentiator from the customers’ point of view.

For medium-sized and smaller companies, it is not feasible to set up and maintain own
sales and service facilities in all locations, necessitating a greater reliance on dealers to
expand their geographical spread.

Table 21.: Mode of Sales
Company Name Mode of sales
Direct Through Dealers/ Distributors
Equipment
Roots Multiclean 60% 40%
Eureka Forbes 50% 50%
Johnson Diversey 80% 20%
Man Machine 90% 10%
IPC Western Floor 10% 90%
Inventa Cleantec 50- 30-50%
70%
Soma Specialities 60% 40%
Innovative 100% -
R V Industries 100% -
Santoni 75% 25%



Company Name Mode of sales
Direct Through Dealers/ Distributors
Charnock 20% 80%
Hafi Elektra 50% 50%
Godrej 100% -
Rodak 100% -
Magna 100% -
TPS Infrastructure 80% 20%
Consumables
Pudumjee 40% 60%
Schevaran Laboratories 20% 80%
Eureka Forbes 50% 50%
Jade 60- 30-40%
70%
Kimberly Clark 20% 80%
Altret Performance 10- 85-90%
Chemicals 15%
Poona Brush 100% -
Haylide Chemicals 10% 90% (most of the sales offices closed)
Naveen Polycon 30% 70%
Tools & Accessories
Unger India - 100%
Western Floor 20% 80%
J & B Industries 100% Nil at present, but likely to increase in
future

7.2 Distribution Network

The marketing network of leading companies is summarised in the tables below. Almost
all the top companies have a pan India presence either through their own offices or
through dealers. The market leader, Roots Multiclean, is headquartered in south India



and also has an extensive network of own sales and service offices all over south India.
However in other regions, the company has set up offices in major locations, and relies
more on sales through dealers.

Some smaller companies, like Santoni, have consciously decided not to spread nationally
as they do not have the resources to provide adequate after sales support to dealers
and customers. Another company, Haylide Chemicals, which had a network of own
marketing offices have now closed down most of their offices. Western Floor and
Charnock have adopted the strategy of entering into marketing tie-ups with other
companies selling non-competing range of industrial cleaning products. This gives them
access to the distribution network of their partners, but logistically they deal with a
single entity.



Table 22.: Marketing & Distribution Network

A) Equipment
Regional presence
North South West East
Roots Own Delhi Coimbatore, Madurai, Mumbai, Goa, Vapi Kolkata
Multiclean offices Cochin, Chennai,
Mysore, Trivandrum,
Bangalore, Hosur,
Secunderabad
Dealers Chandigarh, Jaipur, Bangalore, Tirupathi, Vadodara, Assam, Imphal,
Gorakhpur, Rishikesh, Vishakhapatnam Ahmedabad, Vapi, Bhuvaneshwar, Ranchi,
Varanasi, Bhopal & Pune, Nagpur, Indore Jamshedpur
Satna
Eureka Own offices Delhi, Jaipur Bangalore (head Mumbai Kolkata
Forbes Ltd. office), Chennai
(Corporate Dealers Delhi, Chandigarh, Bangalore, Chennai, Mumbai, Indore, Kolkata, Guwahati
Care Division) Srinagar, Jaipur, Hyderabad, Cochin, Vadodara, Goa, Pune,
Lucknow Pondicherry Aurangabad
Sales and Service network in 100 cities in all regions, through distributors/dealers
Johnson Own offices Gurgaon Bangalore, Chennai & Mumbai (Head Office) Kolkata
Diversey Hyderabad



Regional presence
Dealers 60 dealers all over India
Man Machine Own offices Noida (head office), Bangalore, Chennai Mumbai, Vadodara Kolkata
Karcher Punjab
Dealers 5 resident representatives and 18 dealerships all over India
IPC Western Own offices Delhi (head office)
Floor Dealers/Outlets Delhi, Ludhiana, Hyderabad, Chennai, Indore, Mumbai, Pune, Kolkata, Bhubaneshwar
Kanpur, Chandigarh Bangalore, Cochin, Nagpur, Durg
Inventa Own offices Noida (head office),
Cleantec Delhi
Dealers 20 dealers
Soma Own offices Mumbai (head office)
Specialities
Dealers > 20 dealers
Innovative Own offices Bangalore & Chennai Mumbai (head office),
Pune
Dealers Nil
Santoni Own offices Delhi (head office),
Faridabad
Dealers Chandigarh, Aligarh Hyderabad, Bangalore,
Chennai



Regional presence
Charnock Auto Own offices Delhi Bangalore (head office) Mumbai
Products Dealers Delhi, Noida, Bangalore, Hyderabad, Mumbai, Pune, Nasik Kolkata
Ludhiana, Kanpur Chennai, Cochin
Hafi Elektra Own offices Pune, Mumbai
Dealers Delhi
Rodak Swiss Own offices Nil Bangalore, Kottayam Goa (head office), Bilaspur
Trademark Pune, Mumbai,
Ahmedabad,
Dealers Nil
Technoclean Own offices Noida (head office)
Equipments
Dealers 2 dealers
Magna Own offices - Hyderabad Mumbai (head office),
Cleaning Surat
Dealers Kochi Baroda & Sholapur
Godrej & Own offices Delhi, Lucknow, Bangalore. Kochi, Mumbai (head office), Kolkata, Bhubaneshwar
Boyce Mfg. Chandigarh Hyderabad, Chennai. Pune, Ahmedabad,
Vishakhapatnam Indore
Dealers All India distribution network



Regional presence
TPS Own offices Delhi Chennai Mumbai Kolkata,
Infrastructure. Bhubaneshwar.
Jamshedpur
Dealers 12 in smaller cities All India

B) Consumables
Regional presence
Pudumjee Own Delhi Bangalore, Chennai Pune (head office),
offices Mumbai
Dealers 32 dealers
Johnson Own Gurgaon Bangalore, Chennai & Mumbai (Head Office) Kolkata
Diversey offices Hyderabad
Dealers 60 dealers /distributors all over India
Schevaran Own Mysore (head office)
Laboratories offices
Dealers 22 dealers
Eureka Own Delhi, Jaipur Bangalore (head office), Mumbai Kolkata
Forbes Ltd. offices Chennai



Regional presence
Dealers Delhi, Chandigarh, Bangalore, Chennai, Mumbai, Indore, Kolkata, Guwahati
Srinagar, Jaipur, Lucknow Hyderabad, Cochin, Vadodara, Goa, Pune,
Pondicherry Aurangabad
Sales and Service network in 100 cities in all regions, through distributors/dealers
Jade Own Delhi Mumbai (head office)
International offices
Dealers 40 dealers
Kimberly Own Pune (head office)
Clark offices
Dealers 32 dealers
Origami Own Bangalore (head office), Kolkata
offices Hyderabad, Coimbatore
Dealers Not available
Haylide Own - - Jabalpur -
Chemicals offices
Dealers 16 dealers
Naveen 6-7 distributors
Polycon

C) Tools & Accessories



Regional presence
Continental Own offices Delhi (head office) Bangalore, Chennai Mumbai
Hygiene Dealers > 25 dealers
Roots Own Delhi Coimbatore, Madurai, Mumbai, Goa, Vapi Kolkata
Multiclean Offices Cochin, Chennai,
Mysore, Trivandrum,
Bangalore, Hosur,
Secunderabad
Dealers Chandigarh, Jaipur, Bangalore, Tirupathi, Vadodara, Assam, Imphal,
Gorakhpur, Rishikesh, Vishakhapatnam Ahmedabad, Vapi, Bhuvaneshwar, Ranchi,
Varanasi, Bhopal & Pune, Nagpur, Indore Jamshedpur
Satna
Unger Own offices Gurgaon (head office) Bangalore, Chennai Mumbai, Vadodra Kolkata
India Dealers 35 dealers all over India
Johnson Own offices Gurgaon Bangalore, Chennai & Mumbai (Head Office) Kolkata
Diversey Hyderabad
Dealers 60 dealers /distributors all over India
Man Own offices Noida (head office), Bangalore, Chennai Mumbai, Vadodara Kolkata
Machine Punjab
India Dealers 5 resident representatives and 18 dealerships all over India
Own offices Delhi (head office)



Regional presence
IPC Own offices Delhi (head office)
Western
Floor
IPC Dealers/Outlets Delhi, Ludhiana,
Own offices Hyderabad, Chennai, Pune (head office)
Indore, Mumbai, Pune, Kolkata, Bhubaneshwar
Western Dealers Kanpur, Chandigarh Bangalore, Cochin, NilNagpur, Durg
Floor


7.3 Market Segments

The major end users industrial cleaning equipment and services are
- HORECA (hotels, restaurants and catering)
- Health & Hygiene (hospitals, nursing homes)
- Industry (shop-floor/machine cleaning, maintaining dust free environment, collection of
useful/valuable waste etc.)
- Commercial establishments (shopping complexes, cinema halls
- Government offices and infrastructure (roads, railways, airports etc.)

Traditionally, the end users have been direct buyers of cleaning equipment/products. However,
lately the cleaning tasks are being increasingly outsourced by the end users to housekeeping
contractors or facility management companies. As a result, the housekeeping contractors /
facility management companies have become important customers for the suppliers of
industrial cleaning equipment, chemicals and other products.

For some of the leading companies like Johnson Diversey, and Soma Specialities, the service
providers account for more than 50% of sales. Even in the case of other companies, the share is
increasing rapidly.

Although most of the companies cater to all the end use segments, there are cases where some
companies have a stronger presence is a particular area. The market leader Roots Multiclean,
which earlier focused mainly on the government segment, has widened its customer base to
cover almost all end use segments. Eureka Forbes’ forte is the commercial establishments
segment, while Johnson Diversey is focused on Service Providers.

The company wise sales break-up is summarised below.

Table 23.: Market structure/composition by end use segments
Company Service End Users
Provider HORECA Health Industr Comml. Govt. Others
s & y
Hygiene
Equipment

s & y
Hygiene
Roots Multiclean 15% 15% 20% 25% 20% 5%
Eureka Forbes 10% 20-25% 5% 20-25% 40%
Johnson Diversey 50% 17-20% 2-3% 4-5% 20% 2%
Man Machine 30% 30% 10% 8% 20% 2%
IPC Western 45% 10% 20% 10% 15%
Floor
Inventa Cleantec 20% 10% 10% 150% 5% 20%
Soma Specialities 90% 5% 5%
Aman Cleaning 10% 5% 25-30% 50% 5-10%
Technoclean 30% - 30% 30% 10%
R V Industries 100%
Innovative 30% 5-10% 5-10% 30% 5-10% 20%
Charnock 70% 30%
Rodak 80% 5% 15%
Aman Cleaning 5-8% Nil 25-30% 50-60%
Equipments
Hafi Elektra 10% 80-90%
TPS 5% Nil Nil Nil Nil 95%
Infrastructure
Consumables
Pudumjee 20% 30% 50%
Schevaran 40% 10% 40% 10%
Laboratories
Eureka Forbes 10% 20-25% 5% 20-25% 40%
Kimberly Clark 20-30% 10-15% 10-15% 30-40% 15-20%
Haylide 40-50% 20% 5% 20% 40- 20%
Chemicals 50%
Naveen Polycon 10% 50% 20% 10%
Tools &
Accessories
Poona Brush 90% 10%


s & y
Hygiene
Unger India 40 5-6 15-20 2
Bangalore 50% 10% 30% 5% 5%
Brushware
Charnock 70% 30%


8. Employment in the Sector

Most of the companies have total manpower strength in the range of 10 to 100 persons. Only very few companies
reported more than 100 employees. The company-wise employment is summarised in the table below.

Several companies did not wish to disclose the exact manpower strength. Even those which did, (please refer
figures in brackets in the table below), may not have indicated the correct number, as this is a highly sensitive
issue, due to implications with respect to statutory obligations and labour laws.

Table 24.: Employment in the Industrial Cleaning sector
No. of Machinery Consumables Tools & Accessories
employees manufacturers/Importers Manufacturers Manufacturers
/Importers /Importers
Up to 10 Nil Naveen Polycon Nil
10-100 Eureka Forbes (90), Man Schevaran Continental Hygiene
Machine Karcher, IPC Laboratories (75) (55)
Western Floor, Inventa Jade International Poona Brush (20)
Cleantec (70-75), Soma Kimberly Clark (250) Unger India (35)
Specialities (25), Aman Haylide Chemicals (90 J&B Industries (30-
Cleaning (25), Santoni, ) 40 in Delhi, 20-25 in
Charnock (35), R V Origami (25-30) new facility in UP
Industries (16), Magna with more
Cleaning, Rodak Swiss automation)
Trademark, Innovative
(60), Technoclean
Equipments, Guru Nanak
Engineering Works (15)
100-500 Roots Multiclean (300), Pudumjee Hygiene Nil
Johnson Diversey (150), (130) + contract labour
Godrej (120), TPS
Infrastructure (40
Graduate engineers, 45-
50 diploma holders, 100
workers, 80 indirect)

Further, it is common for companies to engage manpower on contractual basis, for functions such as security staff,
chauffeurs, maintenance and housekeeping and even sales staff. The number of contractual staff is normally not
included in the employee strength of the company.


This is also substantiated through the employment figures of housekeeping contractors and facility management
companies. The top 50-60 such companies have more than 1000 employees each, with first 10 companies having
between 5000 – 8000 employees each, with some companies having 15,000 to 25,000 employees.


9. Growth Trends

As illustrated by the growth in market size during the last three-four years, the industrial cleaning Sector in India
has been growing steadily at a healthy rate every year. However, industry players feel that still the size of the
industry is nowhere near its potential in a country of India’s size and diversity. As per estimates, the market for
industrial cleaning equipment alone is expected to grow to Rs. 10 billion in the not too distant future.

Some of the factors that have inhibited the growth of the sector are:
o Abundant availability of cheap labour. Majority of the potential users still have a mindset
that it is cheaper to employ labour for manual cleaning than to invest in sophisticated
machines. This has been accentuated by the lack of widespread awareness about the cost
effectiveness as well as superior functional performance achieved by using machines vis-à-
vis manual labour.
o Lack of training facilities for creating a pool of trained manpower for the development of
mechanised and professional cleaning industry: While companies seldom face any problems
in finding staff for their mainstream activity, they find it very difficult to source trained staff
for housekeeping work. As a result, they increasingly resort to outsourcing of housekeeping
staff. However, even the outsourced staff needs to be trained properly, particularly for
proper use of advanced equipment.
o Price is the single most important consideration in purchase decision of majority of buyers.
There have been several cases where marketing companies try to sell a model that fits into
the buyer’s budget rather than going by the technical requirements of the application for
which it is to be used. As a result, buyers end up with unsuitable machines, which do not
perform to their satisfaction. This lack of ethics puts a question mark in the minds of the
users, about the utility of cleaning equipment as a whole.
o Although the level of professional competence of the housekeeping/facility management
companies has improved considerably in the past few years, many of the companies/
contractors still lack proper knowledge of scientific cleaning. Their focus is mainly on
minimising the overall cost by employing cheap labour and using general purpose cleaning
chemicals/products rather than specialised ones.
o Imported cleaning machines do not work efficiently in Indian conditions. Suppliers should
take into account the following aspects while offering industrial cleaning machines for the
Indian market:
- The equipment are not always handled by trained manpower
- The machines need to be designed to work efficiently in high ambient temperatures
- The machines should be easy to maintain in-house, rather than requiring professional
support for routine maintenance


Another likely aspect of the growth of the industry, specifically for industrial cleaning chemicals, is the increase in
customer awareness of the long term benefits of professional cleaning products. This is already reflected in the
increasing share of organised sector from 25% in 2005 to 33-35% in 2008-09.


10. Growth Drivers

The consistent economic growth over the years has fuelled the economic boom in India. Inspite of the global
meltdown, India achieved a 6% GDP growth in 2008-09. De-regulation and opening up of the economy, coupled
with sound all round growth, India is seeing a flurry of activities in world-class infrastructure developments. Talent
availability in India is driving large multinational corporations to building world-class campuses of their own.

The manufacturing sector which has been growing at over 9% per year saw only a marginal dip in the growth rate
in 2008-09, when all developed economies of the world registered near-zero or even negative growth. Also the
infusion of foreign capital, new tie-ups and international players setting up businesses in India are helping the
service sector to grow even faster. This coupled with double digit growth in hospitality and IT industry, is opening
up new horizons for Industrial Cleaning sector in India.

10.1 Real Estate boom in India

The real estate sector saw a growth in demand by 15% in the second quarter of financial year
2009-10, after slowing down to 10% during the first quarter. Although, this is still way off the
35% to 40% growth witnessed in January to March 2008 in metros, the real estate sector is
expected to bounce back to the pre-recession growth levels soon.

The Indian commercial office space market saw 10 million sq ft of office space commitment
pan-India in top major IT cities, including Mumbai and Delhi. Of this, the bulk of the demand
(almost 70%) came in the second quarter. The supply of commercial properties is all set to
touch 55 million sq ft by December 2009, with an expected demand for 25 million sq ft during
the period.

The industry is confident that a number of commercial projects that were put on hold during
the past two years will be completed by the end of financial year 2009-10, to take advantage of
the rising demand. As for the residential market, a majority of developers were in a “wait-and-
watch mode” in Q1 2009-10 and are now beginning to resume construction work.

The growth of the real estate sector in India is also facilitated by increased/easy availability of
finance.

In all of India’s major cities, the real estate industry is experiencing a strong upswing. Mumbai
and Delhi (National Capital Region) represent the top tier of the market, being the
administrative and commercial capitals of India respectively. In Mumbai, the proposed release


of 5,500 acres1 salt-pan land for “development'’ is expected to provide a major boost to the
real estate sector. Bangalore, Chennai, Kolkata and Hyderabad make up the second tier.
Bangalore and Chennai have taken huge strides in the recent years. While Bangalore has
emerged as the hub of IT and ITES industry, Chennai is still the main commercial city of South
India, and is also the birthplace of organized retail in India.

Cities like Pune, Ahmedabad, Goa, Chandigarh, Jaipur, Ludhiana and Surat are also not far
behind. Just below these top cities are a number of cities such as Amritsar, Indore, Lucknow,
Kanpur, Coimbatore, Mysore, Mangalore and Vishakapatnam, which have growing populations,
growing economic prosperity and increasing levels of income.

The relaxed FDI rules for the real estate sector have attracted more foreign investors and real
estate in India. The investor friendly policies allow foreigners to own property, and dropped the
minimum size for housing estates built with foreign capital to 25 acres (10 hectares) from 100
acres (40 hectares). With this change in investment policies, the overseas firms can now put up
commercial buildings as long as the projects surpass 50,000 square meters (538,200 square
feet) of floor space.

10.2 Facility Management Services

Outsourcing of cleaning services to facilities management companies is on the rise, as owners
of buildings prefer to engage specialists for the job, so that they continue to focus on their core
operations.

As per present estimates, there are about 1,000 cleaning service providers in the country (up from 400-
450 in 2005), of which only about 10-15% are large players, having all India presence. Recession has had
little effect on the commercial cleaning sector, which is considered stable. The industry size was
estimated at Rs. 500 million (Euro 75 million) in 2008 and is growing steadily. New companies are
entering into this sector due to the increasing number of commercial buildings, office complexes, retail
shopping centres, industrial facilities, hotels, hospitals, and infrastructure projects. These demand
quality minded professionals regardless of economic conditions. These new entrants are corporates
offering the desired professional services in an organised way.

Several leading international players, such as ISS, Knight Frank, Groupe 4 etc., have already established a
sizeable presence in India, besides the home-grown companies like Vipul Facility Management, Clean
India Group and Nimbus Harbor.

1
1 acre = 4000 sq.mtrs.


Knight Frank India Pvt Ltd, part of the Knight Frank Global Network, provides a comprehensive range of
real estate related services covering residential, commercial, land, investments, hotels & leisure,
valuation, advisory services and facilities management. The above services are provided in India through
its offices in Mumbai, Gurgaon (Delhi), Bangalore, Pune, Hyderabad, Chennai & Chandigarh. Some of
their key clients in India includes: Deutsche Bank, HSBC, Maersk, Sony, SKF, Barclays Bank, British
Petroleum/Castrol, Tata Group, Novartis, Ingersoll-Rand, Fulford, and many high net worth private
individuals. A case study of services provided by the company to one of its clients Ansal Plaza, a large
mall cum shopping arcade in New Delhi is provided below:

Facility Management Services at Ansal Plaza, Delhi, by Knight Frank India

Types of cleaning services: Sweeping, Mopping, Dusting, Stain removing, Glass Panels cleaning, Marble
cleaning, Washroom cleaning.
Equipment deployed: Vacuum cleaning machine dry/wet ; Pressure Washing machine – Cold water,
Scrubbers, Driers, Drain Cleaning machine
Manpower: 2 executives, 3 supervisors and 42 workers - out sourced on contract basis but selected by
Knight Frank.

Nimbus Harbor, with its headquarters at Gurgaon and offices in Hyderabad, Bangalore, Chennai and
Mumbai provides integrated one stop facility management solution to a large number of organizations
in hospitality sector, malls/commercial buildings and residential complexes. In the NCR, Nimbus Harbor
provides these services to West Gate Malls in Delhi, Gurgaon and Noida and housing complexes in
Gurgaon.

Technoclean (India) Pvt. Ltd. of Clean India Group is the sister concern of Cradle Runways (India) that undertakes
facade cleaning and maintenance contracts for buildings having glass facades & structural glazing walls. The
company offers façade cleaning and maintenance contracts in over fifteen cities including Mumbai, Bangalore,
New Delhi, Kolkata, Chennai, Gurgaon, Ahmedabad, Pune, Hyderabad, Coimbatore, Kochi, Vizag, and Noida. Their
services include façade cleaning, mastic filling, signage changing, glass removal and fixing, beehive removal, high
rise horticulture, pressure washing and all other façade maintenance activities. In 2008-09, the company received
orders to the tune of Rs. 80 million and executed about Rs. 60 million worth of jobs. It expects to reach a target of
Rs. 100 million during 2009-10.

10.3 Growth in end-use segments

10.3.1 Health care segment

Healthcare is amongst the largest sectors in the Indian economy, in terms of revenue and
employment. In the last decade, Indian healthcare grew at a compounded annual rate of 16%.
In 2008 the estimated total value of the healthcare sector was about US$40 billion (Euros 27.78
billion). This translates to close to US$40 (Euros 27.78) per capita, or roughly 4% of GDP. By


2012, India’s healthcare sector is projected to grow to nearly US$ 75 billion (Euros 52.1 billion)
at a CAGR of 15%.

Source: India Healthcare Trends, 2008

The private sector accounts for more than 80% of total healthcare spending in India. State
governments and central government fund the public owned hospitals but their number is far
outgrown by the private, independent hospitals and health centres. The main responsibility for
public health spending lies with the state governments, which provide 80% of public funding.
The central government contributes another 15% mostly through national health programs.

The total number of hospitals in India is around 16,000. It is estimated that about 70% of all
hospitals and 40% of all hospital beds in the country are in private sector. In cities, there has
been a trend of corporatization of hospitals. Some of the leading private hospitals include
Apollo Hospital Enterprise Ltd (41 hospitals in various cities), Wockhardt Hospitals (12), Fortis
Healthcare (11), Max Healthcare, Manipal Group (20), and Care Hospitals. In the last few years,
most of the existing players have implemented/announced huge expansion plans and many
large companies with no prior presence in the sector, have committed large investments in
healthcare delivery.
To meet the growing needs of healthcare in India, the country needs additional investments to
the tune of US$ 50 billion (Euros 34.7 billion) annually for the next 20 years, according to
Confederation of Indian Industry (CII). More than 1 million hospital beds need to be added to
reach a ratio of 1.85 per thousand population at an investment of US$ 77.9 billion (Euros 54
billion) by 2012. According to India Healthcare Trends, 2008, country is going to need
additional 3.1 million beds by 2018 in addition to existing 1.1 million beds. This would raise the
bed to 1000 population ratio to 4.


10.3.2 Organised Retail

Domestic consumption market in India is estimated to grow approximately 7 to 8% every year,
with retail accounting for 60% of the overall segment. Of this organized retail is just 5-6% at
present, which is comparatively lower than other countries with emerging economies. In
developed countries organized retailing is the established way of selling consumer products.
Despite the low percentage, organized retailing in India has grown noticeably in the recent
years. Organized retail has indeed arrived in India and is projected to grow at 25-30 per cent
annually and triple in size from Euro 54.7 billion in 2004-05 to Euro 170.3 billion by 2010.

India is on the radar of the global retailers seeking entry into the Indian retail market. The
market is growing at a steady rate and accounts for around 10 percent of the country’s GDP.
The inherent attractiveness of this segment lures retail giants and investments are likely to sky
rocket with an estimate of Euro 0.31 – 0.39 billion in the next 2-3 years, and over Euro 3.13
billion by end of 2010. Indian retail market is considered to be the second largest in the world in
terms of growth potential.

The growth of the organized retail sector in India is primarily driven by India's young
population. With the influence of electronic media, urban consumer trends have spread across
the rural areas also. Other factors, like favorable income demographics, increasing population
of young people joining the workforce with considerably higher disposable income, have
unleashed new possibilities for retail growth even in the rural areas. Thus, 85% of the retail
boom which was focused only in the metros has started to infiltrate towards smaller cities and
towns. Tier-II cities are already receiving focused attention of retailers and the other smaller
towns and even villages are likely to join in the coming years. This is a positive trend, and the
contribution of these tier-II cities to total organized retailing sales is expected to grow to 20-
25%.

Professional cleaning is becoming a critical aspect of maintaining and enhancing the value of
malls / large stores and multiplexes. Outsourcing is the most preferred route to professional
cleaning, as the management can then concentrate on their core business without getting
involved in routine cleaning/maintenance issues.

Cleaning requirements in such retail formats range from floor maintenance, windows cleaning,
façade cleaning & maintenance, washroom & kitchen cleaning, carpet cleaning, cleaning of
roads and parking areas, etc.


10.3.3 HORECA segment

Hotel industry is one of the key segments expected to fuel the demand for cleaning services
and equipment in India. The hotel industry can be categorized as star rated hotels (5-star
hotels, 4-star and 3-star hotels), heritage hotels, and budget hotels. The demand for outsourced
cleaning services is largely driven by the star rated hotels. The star hotel industry is a
phenomenon of mainly urban India, with most of them concentrated in metros; tier-1 and tier-
2 cities; and tourists and heritage cities. These include metros like Delhi, Mumbai, Kolkata,
Chennai, Hyderabad, Bengaluru, Pune, and tourist cities like Jaipur, Agra, Goa, Shimla etc.

According to various research sources the total inventory of hotel rooms in India is presently
around 110,000 rooms across various segments. The premium segment of 5star-deluxe, 5-star
and 4-star hotels accounts for around 40% of total inventory.

The outlook for next 4-5 years has been very positive. At the all-India level, as many as 96,000
rooms are in the pipeline till 2012. About 40 new hotel brands are in various stages of planning
/ starting new hotels. According to a research by Knight & Frank, there are currently close to
40,000 rooms across the 5-star deluxe, 5-star, 4-star and heritage categories in planning or
under-construction in the 10 cities New Delhi (NCR2), Jaipur, Kolkata, Mumbai, Pune, Goa,
Bengaluru, Hyderabad, Chennai and Kochi. In NCR, the government’s tax holiday till 2013 for 4-
star, 3-star, and 2-star hotels will drive the additions. The Commonwealth Games of 2010 is the
major driver for the growth of hotel industry in NCR.

The hotel capacity scenario in India’s big cities till 2012 is given in the table below:

Table 25.Current and future status of the Hotel Inventory in India (premium category only)
City Present Room Inventory Additions till 2012
NCR (Comprising Delhi, Gurgaon, 10500 60003
NOIDA, Faridabad etc.)
Kolkata 1850 3700
Mumbai 9250 6000
Pune 1500 2600
Goa 3000 2500
Bengaluru (Bangalore) 3500 3300
Hyderabad 3700 8000

2
NCR – National Capital Region includes Delhi and selected contiguous areas in the adjoining states, such as
Gurgaon and Faridabad in Haryana, NOIDA in Uttar Pradesh etc.


City Present Room Inventory Additions till 2012
Chennai 3100 3700
Jaipur 3000 2500
Kochi 1000 1200
Total 40,400 39,500
Source: India Hotel Review 2008, Knight Frank

10.3.4 IT and ITES sector

In the financial year 2008-09, India maintained its status as the top global IT –BPO outsourcing
destination, as exports of Indian software and services touched US $ 40.8 billion. Last year’s
growth was significant in the light of various challenges, and the growth was a demonstration of
the industry’s ability to absorb nasty shocks including the US financial crisis, the rupee-dollar
ratio, increase in input costs and the resultant pressure on margins.

Despite the unprecedented economic downturn the industry is expected to witness sustainable
growth. Services and software segments are estimated to cross USD 1.2 trillion by 2012. This is
more than the 5.2 per cent growth expected in the total IT spending.

10.3.5 Railways

India has the world’s rail largest transportation systems under one management, Indian
Railways have 100,000 km track, 30,000 wagons, 75,000 passenger coaches, 9,000 locomotives
and thousands of stations. Railways Ministry has announced a massive expansion plan for
cleanliness and sanitation for trains and stations.

Southern Railways estimate that the passengers generate 14 cu.m. (21.6 tonnes) of garbage
daily. Planning garbage collection, track cleaning, platform sweeping, coach/ locomotive
washers etc and need scrubbers/flippers, vacuum operated sweeping machines, drain cleaners
and trolleys etc, along with tools, accessories and consumables

Kolkata Metropolitan Development Authority – Cleanliness drive for one of the world’s largest
stations at Howrah.

10.3.6 Urban Transportation


India has a road length of 3.3 million km, out of which 25 have been designated as National
Highways under National Highways Authority of India (NHAI). Guidelines have been laid down
By NHAI for maintenance and cleaning of roads. As these highways pass through congested
cities, semi urban and rural areas, it is impractical to do manual cleaning. This will need a large
number of industrial cleaning machines.

Many cities have inducted or are planning to induct high-cost imported high capacity buses in
their fleet, which will entail commensurate mechanised cleaning at the workshops for proper
upkeep. Delhi NCR and Mumbai are already in the process of constructing extensive metro rail
networks which incorporate mechanised cleaning equipment for coaches, platforms, tracks etc.

10.3.7 Municipal Authorities

In addition to the metro cities, the municipal authorities in other cities and towns are also
showing increasing awareness for maintaining cleanliness and hygiene which requires
upgradation of the present systems. Some examples are illustrated below:
Clean Kochi drive launched
Pune Cantonment Board acquired two Karcher ride-on-sweepers.
Lucknow city has launched a drive for sweeping roads at night and acquired Kam Avida
truck mounted suction sweeping machines.
The Delhi state government outsourcing the roads cleaning and maintenance work to a
private agency on a three-year contract.
Municipal Corporation of Chennai has engaged the French multi-national Onyx on a seven-
year contract for street sweeping, and handling of municipal waste. Onyx has inducted
state-of-the-art equipment and 2,300 workers for undertaking the job.

10.4 Efforts by industry

The leading players in Indian industrial cleaning industry (including facility management
companies) have formed an Association of Indian Cleaning Industry (AICI), with the objective
of promoting the interests of the industry. The association head quarter is in Mumbai with
regional chapters in the north, south and east. There has been a 20% increase in membership in
the last year. The association has taken several initiatives for development of the sector, like
the workshops conducted in Mumbai & Delhi on “Right Machinery Right Usage” and the “CEO
Summit 2008”. The association has also launched its website (http://www.aici.org.in/) to serve


as an interactive platform for sharing updates news, and views from both international and
Indian industry leaders.
International Facility Management Association (IFMA) - India Chapter
(http://www.ifmaindia.org/) was formed in 1990. The membership of the India Chapter has
grown from a handful to over 100+ members from across India. One of the significant initiatives
taken by IGMA has been to set up an International Facility Management Institute (IFMI), to
overcome the lack of trained and certified professionals in facility management to sustain the
large projects and campuses. The IFMA India Chapter also brings out a quarterly e-journal “FM
Update”. IFMA has also developed a certification methodology to meet the recognized need of
the facility management profession for a designation that would not only help FMs gain
additional credibility but also establish increased global recognition for the profession.


11. Experiences/Perceptions about Italian equipment/ companies

As mentioned in a previous section of this report, Italy has been one of the important sources
of imported industrial cleaning equipment being used in India. Even the companies not directly
involved in marketing or using Italian equipment have in one way or another been exposed to
the same. Summarised below are the experiences/perceptions about Italian equipment and
industry:

11.1 Product range

Italian companies offer a complete range of industrial cleaning equipment, though Italy is
better known as a source of small portable type machines. There are a large number of Italian
companies exporting industrial cleaning equipment, although there are only a few
manufacturers. Essentially, Italian companies specialise in technology for specific
components/sub-systems for cleaning equipment. For example, some companies specialise in
manufacturing vacuum motors, while some manufacture only body parts. Most of exporters
assemble the equipment by procuring components/sub-systems from the same sources. As a
result there is not much difference between equipment offered by different Italian companies.

11.2 Quality

The quality of Italian equipment is generally perceived as good value for money. Most of the
companies dealing in or using Italian equipment are satisfied with their performance. However
the equipment from Germany is considered of much better quality than Italian counterparts,
which in turn is considered of better and more consistent as compared to Chinese products.
However, some respondents feel that although Italian equipment are good in terms of design
and aesthetics, they are not very sturdy, which is an important requirement for performance in
India.

11.3 Price

Lower price, as compared to equipment from other European companies (Germany, UK,
Denmark etc.) is one of the main factors that makes Italian equipment readily acceptable in the
price sensitive Indian market.


Some companies, though, feel that lower prices of Italian equipment is on account of
compromise in quality, and therefore do not have a good image and perceived as ‘cheap’
alternatives to other European equipment. Further, lower prices offer only a temporary
advantage to Italian equipment suppliers. As and when new cheaper equipment becomes
available, for example from China, Italian share in Indian market will be threatened.

11.4 Relationship with customers

The more prevalent opinion about Italian equipment suppliers is that they do not provide
adequate technical back-up and after sales service support. There is a tendency to blame the
users rather rectifying the problem.

However, the Indian companies representing Italian companies generally feel they are good to
do business with, reliable and fulfil their business obligations. They also feel that Italian
companies are competitive, and ready to provide service support as required.

One of the companies also mentioned that it is difficult to get business visa for travelling to
Italy, which makes it difficult to do regular business with Italian companies.

Italian companies have better industrial policies and strong legal position as compared to
Chinese which is a closed society and cannot be sued in case of disputes.


12. Interest in Tie-ups with Italian companies

Many of the organisations met during the research expressed interest in tie ups with Italian
companies. However, these expressions of interest may be the personal opinions of the
executives met during the primary survey, and cannot be construed as official positions of the
companies they represent. Interested Italian companies will need to discuss specific business
propositions with individual companies.

Specific areas of interest are listed below:
Naveen Polycon interested in collaboration/Joint venture for manufacture of chemicals
and detergents
J & B Industries are expanding their operations and are keen to collaborate with a
foreign company.
Cradle Runways are marketing products of a Brazilian company (Power Climber) but
may be interested in collaboration with Italian companies in the field.
Man Machine may go in for manufacture of cleaning agents with Italian collaboration.
There is also a scope for manufacture/marketing of water treatment plants, automatic
car/ bus/coach washing equipment.IPC Western interested only in case IPC is not having
the desired range of products to be distributed. Already discussing with IPC to transfer
technology to produce scrubber driers in India to get the competitive advantage of
manufacturing. Greatly interested in talking to Italian companies who can give tech
know for Road sweepers.
Haylide Chemical is importing most of their raw material from Europe, particularly
Germany. They would like to contact Italian companies to help in reducing the input
cost. Also they would like help in marketing their products abroad. The products are
made from latest international technology where the emphasis is on quality,
performance, low toxicity & using eco friendly & biodegradable raw materials.
Inventa Cleantec - Very much interested


13. Conclusions & Recommendations

13.1 Conclusions

The industrial cleaning sector in the last three years has seen high paced growth, with a CAGR
of 34% per year. Mechanised cleaning is being inducted in a variety of new applications. A
substantial part of this growth has come from government / semi-government entities like
municipal corporations, railways, hospitals etc. Major projects in infrastructure development
like Metros Rail networks, upgraded and new airports, new IT / ITES / Residential Complexes,
shopping malls / multiplexes, etc. have contributed to the increasing use of mechanised
cleaning equipment.

As the industry matures, and consumer awareness and expectations increase, the quantitative
growth the industry has been accompanied with a qualitative change in terms of higher
demand for equipment with higher performance levels. This has also resulted in increasing
professionalization of equipment suppliers as well as service providers (facility management
companies). Accordingly, the share of ‘organised sector’ players has increased at the expense of
smaller unorganised / informal enterprises. On the other hand the market has grown more in
volume terms than in value terms, indicating a drop in realization per machine, a fallout of
increasing competition in the sector.

The sector continues to be import led, as indigenous production base of equipment,
consumables and tools & accessories remains extremely limited, more due to lack of market
volumes rather than technical capability. Therefore, imports are and likely to remain the main
source of supply, till the Indian market reaches the threshold of viability for widespread
domestic production. China has strengthened its presence in the Indian market as a supplier of
industrial cleaning equipment and tools/accessories as their prices are atleast 40% lower than
those of European / Italian prices. The industry players feel that if the Chinese manufacturers
are able to improve the quality, there will be substantial loss of the market share of the
European companies in India. The strong Euro is also impacting the competitiveness of
European / Italian companies. In the last 3 years the exchange rate of Euro has moved from 1
euro = Rs. 55 to 1 euro = Rs.70.

Service providers (facility management / Housekeeping contracting companies) have emerged as the major buyers
of cleaning equipment and other related products as most of the large end users, particularly hotels, hospitals,
office complexes, malls etc, prefer to outsource their service requirements.


Italian equipment is generally perceived to be of lower quality vis-à-vis other European
equipment, but this is not necessarily a disadvantage in a price sensitive market like India. This
is corroborated by the fact that most of the companies expressed interest in
collaborations/joint ventures with Italian companies.

13.1.1 Products with Potential

Since a large share of the demand for cleaning equipment, consumables and tools/accessories is expected to
emanate from Government/Public sector infrastructure projects like highways, railways. metro rail, aviation,
power etc., high capacity equipment like vehicle mounted vacuum cleaners and road sweepers will be required in
ever increasing numbers and being high value products will be an attractive potential for Italian companies

In addition to the conventional products, there is also a growing demand for customised products for unique India-
specific equipment and cleaning solutions for applications such as:
Sports stadia being constructed for Commonwealth Games in 2010 and India’s bid for Olympics
in the next decade.
Religious shrines like Akshar Dham temple, Golden temple, Tirupathi, Mosques, Churches etc.
Cleaning of rivers and water channels (Ganga/Yamuna cleaning projects) and drainage/sewerage
cleaning.

In addition, the equipment flagged in the earlier study (in 2005) as having good potential in
India, continue to be relevant even now, and are therefore reproduced below:
• Steam cleaners for sterilization application in HORECA and health & hygiene sectors. At present these
machines find very limited use in India, that too mainly in industries for cleaning of greasy surfaces.
However, given the projected growth in the number of high-end hotels and hospitals in India, the use of
steam cleaners is expected to rise significantly, as these facilities strive to achieve international standards
in hygiene and cleanliness.
• Portable carpet cleaner with an inbuilt foam generator and scrubber. Such machines, if available in a
price band of Rs. 75,000-80,000 could be attractive for the HORECA sector.
• Single disc machines, already very popular due to their versatility, will have an increasing demand, as the
presence of facilities management companies/contractors increases.
• The demand for window and facade cleaning tools and accessories is likely to grow exponentially, given
the growing trend of high rise buildings for offices, hotels, commercial complexes etc.

13.2 Recommendations - Strategy for Italian companies

13.2.1 Business Structure Options

A foreign company can set up operations in India by incorporating a company under the
Companies Act, 1956, through setting up a private or a public company with limited liability,


which can be either Joint Ventures; or Wholly Owned Subsidiaries. A private limited structure
gives the most flexibility and involves fewer statutory requirements.

For registration and incorporation, an application has to be filed with Registrar of Companies
(ROC). Once a company has been duly registered and incorporated as an Indian company, it is
subject to Indian laws and regulations as applicable to other domestic Indian companies.

Foreign Companies can also set up their offices through unincorporated entities, which can
undertake only the permitted business activities, namely

− Liaison Office/Representative Office acts as a channel of communication between the foreign
company and the entities in India and collection of information about possible market
opportunities. Liaison office can not undertake any commercial activity directly or indirectly and
cannot, therefore, earn any income in India.

− Project Office is a temporary office in India for executing specific projects. Such offices can not
undertake or carry on any activity other than the activity relating to execution of the project.

− Branch Office is allowed for trading, professional or consultancy services, research, promoting
collaborations with Indian companies, representation as buying/selling agents in India etc. A
branch office is not allowed to carry out manufacturing but is permitted to subcontract these to
an Indian manufacturer.

Illustrative Business Costs
Euros Basis
Incorporation Costs 5000 - 6000 One time
Office rentals 250 to 300 per sq m 6 months advance (Interest free
per month deposit)
3 year lease
Interiors 250 – 300 per sq m
Work spaces 300 - 400 per seat
Residential Apartment 50 per sq m per 6 months advance (Interest free
rentals month unfurnished, deposit)
bare walls 3 year lease
Industrial land 30 - 60 per sq m Buy / 33 yr lease


Euros Basis
Staff, junior management 150 - 500 per month add 25% benefits
salary
Middle management 1000 – 2500 per Performance based
month
Top management 3000 +/ month Performance based
Vehicle lease (Toyota Corolla) 450 per month 15% advance
5 year lease

13.2.2 Practical aspects of doing Business in India

Italian companies planning to enter Indian market need to consider carefully the ‘need’ for a
local partner. In most activities, the government regulations allow a 100% foreign ownership.
Therefore a Country Manager may serve the purpose instead of having an Indian investor
partner. However, if a local partner is preferred, a due diligence review must be carried out,
before finalizing the tie-up.

Foreign entities can build-in sufficient safeguards to protect their legitimate business interests
in joint ventures. Some important issues arising in management control of joint ventures are
explained below:
− All verbal understandings must be formalized in writing, even for confidential agreements.
− Ensure a provision for right to exit from a contract and clear procedures and triggers for
termination and dispute resolution
− All intellectual property must remain the exclusive domain of the originator and only licensed to
the joint venture / local agent.

13.2.3 Pathways for Market Entry

• Business Development and Promotion
Given the increasing degree of competition in the Indian market, both from Indian and foreign
companies, particularly from low-cost countries, any new entrant in the sector needs to focus
on aggressive awareness building in India about company and product capabilities.

Some of the possible avenues for initial introduction in India, both for attaining visibility as well
as networking with end users in various segments are:

a. Clean India Pulire – 12-14 November 2009, Mumbai


An international event dedicated to cleaning sector. The targeted visitors at Clean India Pulire
are professionals from Hospitality Industry such as Hotel, Resorts, Restaurants, Clubs, Hospitals,
Government & Civic Authorities, Banks & financial Institutions, Amusement Parks, IT & BPO
Industries, Supermarkets / Malls/ Multiplexes, Educational Institutes, Large/Medium/Small
Manufacturing Companies, Automobile Industries etc. The exhibitors at Clean India Pulire
include companies/firms dealing in Cleaning Equipments & Products.

b. Hospitality International India
Hospitality International India showcases the recent developments in the hospitality
industry. Visitors at the Hospitality International India exhibition are food and beverage
suppliers and distributors, architects, interior designers, engineering consultants,
contractors; professionals from catering service establishments, catering and hospitality
colleges, restaurants, hotels, supermarkets, hospitals, airlines, sports & leisure clubs,
and cleaning service companies.

Exhibitors at the Hospitality International India are companies/firms dealing in
restaurant equipments, signage, food manufacturing or foodstuffs, spa & leisure
equipment, tableware, hotel furniture, kitchen appliances, food preparation equipment,
room service, front-of-house & back-of-house systems and IT services.

c. Events organized by apex bodies of relevant end use segments, such as Association of Indian
Cleaning Industry (AICI) and International Facility Management Association (IFMA) – India.

d. Contribution of technical articles and case studies in publications/journals in India
dedicated to the cleaning and hygiene industry, such as Clean & Hygiene Review, Clean
India Journal and Facility Management highlighting the new developments achieved by
the Italian industry. Also Italian companies could individually or collectively insert paid
advertisements in these publications.

• Business Models
The alternative business models are described briefly below for consideration of Italian
companies.
a. Indian Agent/Representative: Marketing of industrial cleaning equipment and other products in
India through an Indian agent/distributor, on commission basis. Ideal for small and medium
sized companies offering standard machinery models that can be used in a range of applications.
b. Technical Licensee: Licensing agreement with an Indian entity, for use of proprietary technology
within well defined parameters. Ideal for niche companies having proprietary technologies, who
can use this model for leveraging the manufacturing and marketing reach of established Indian
manufacturers. Technology fee up to US$ 2 million (Euros 1.39 million) and royalties up to 10%
require no prior approval from Government of India.


c. Manufacture: Setting up manufacturing facilities in India, either as a wholly owned subsidiary or
as a joint venture with appropriate management control. More suitable for larger Italian
companies, who can also use Indian operations as a supply hub for the Asian region.

• Aggressive marketing for brand building
a. Launching of products should be accompanied with aggressive marketing and promotion. Indian
representatives often do not have the financial resources to undertake a sustained campaign,
and therefore need to be supported by their principals.
b. Active involvement with Indian representatives in lobbying for prestigious and high value orders,
including presentations, live demonstrations, technical and commercial negotiations etc.
Typically large orders have a long gestation period, and many Indian companies simply do not
have the wherewithal to handle such requirements.

• Two pronged approach to sales and distribution:
a. Vertical integration, through tie-ups with large service providers (contracting / facility
management companies) would provide a captive market as well as national presence. Given
the trend of increasing share of service providers, a revenue-sharing or equipment leasing
arrangement between equipment supplier and service provider offers a clear synergy for both.
b. Direct selling to high end users like hotels, hospitals, embassies, public utilities etc., where
outsourcing of housekeeping is not very prevalent.

Some examples of strategic initiatives taken by Indian companies, which have brought or
are likely to bring rich dividends in the medium to long term, are:
Demonstration units: One of the companies (Jade International) installed complete
wash room equipment and cleaning system at the public conveniences at Mumbai
Central Railway station free of cost. Through this investment about Rs. 400,000, the
company hopes to gain through future orders, and high visibility, as Mumbai Central
station is one of the busiest in the country.
Several companies offer value added services like cleanliness audits, training of cleaning
staff, sharing of global best practices etc.
Some of the equipment producing/marketing companies also offer facility management
services (Eureka Forbes, Clean India Group)
One of the companies (Santoni Electric) offers a 10 year guarantee on its machines

• Value added services
a. One of the main constraints faced by the industry in India is the customers’ inability to
make large investments in auxiliary functional like cleaning. Options to reduce up-front
investment costs, such as hire-purchase scheme or tie-ups with banks/financial
institutions to offer the facility of payment in instalments, would be highly appreciated.
– Suppliers’ credit particularly for high value equipment


b. Provision of testing/measuring instruments for on-site demonstration of effectiveness
of the cleaning equipment and products, as per operational requirements, could be
another USP for Italian suppliers. This would not only provide comfort to the discerning
users, but also convert the users of non-scientific, and therefore ineffective, cleaning
methods.
c. Training of staff for proper use of equipment and products, for achieving maximum
efficiency as well as ensuring trouble free operation.


Summer Intern Report - SBD - Rahul Gupta - 11BM60055

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