Industrial Cleaning 2009

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

Ace Global Private Limited, New Delhi, India 1

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)



� 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

cleaning equipment / consumables / tools & accessories

25

End users of industrial cleaning equipment/products,

including Service providers (Facilities Management

companies)

12

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

2005

(Rs. million)

Sales Turnover

in 2008-09

(Rs. million)

Tier I companies

� Roots Multiclean 240 700

� Eureka Forbes 240 280

� Johnson Diversey 150-160 250-300



Sales Turnover in

2005

(Rs. million)

Sales Turnover

in 2008-09

(Rs. million)

� Man Machine Karcher 90-100 550

� Dulevo Commenced Indian

operations in 2008

205

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

as Industrial Spares)

30-40 60-70

� Charnock 10 40-50

� Nilfisk Commenced Indian

operations in 2007-

08

30

� 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 &

dry)

35% 35%

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

Multiclean

Eureka

Forbes

Johnson

Diversey

Man

Machine

Karcher

Dulevo TPS

Commercial 11% 19% 28% 21% 6%

Industrial 3% 12% 0% 2% 2%

Industrial

Fixed /

Vehicle

Mounted

0 0 0 0 0 47%

Vacuum

cleaners

Sub Total 14% 31% 28% 23% 8% 47%

Single disc machines 0% 4% 13% 0% 3% 0

Manual 13% 0 0 0 0

Ride On 10% 16% 22% 0 18% 5%

Sweepers

Road

sweepers

32% 0 0 23% 59% 48%

Sub Total 65% 16% 22% 23% 77% 53%

Walk

behind

20% 22% 22% 14% 6% 0

Ride on 6% 11% 13% 10% 4% 0

Scrubber

Driers

Sub Total 26% 33% 35% 34% 10% 0

Hot water 0 0 0 0 0 0

Cold water 3% 9% 4% 8% 1% 0

High

Pressure

Cleaners Sub Total 3% 9% 4% 8% 1% 0

100% 100% 100% 100% 100% 100%

B) Tier II & III companies (selected)

Equipment IPC

Western

Floors

Inventa

Cleantec

Charnoc

k

Aman Jags

Impex

Godrej &

Boyce

(Tennant)

Commercia

l

39% 14% 50% 14% 84% 0

Industrial 12% 0 0 0 0 0

Vacuum

cleaners

Sub Total 51% 14% 50% 14% 84% 0

Single disc machines 5% 4% 4% 4% 16% 0



Equipment IPC

Western

Floors

Inventa

Cleantec

Charnoc

k

Aman Jags

Impex

Godrej &

Boyce

(Tennant)

Manual 0 38% 0 38% 0 0

Ride On 0 13% 0 13% 0 69%

Sweepers

Sub Total 0 51% 0 51% 0 69%

Mechanise

d

0 0 0 0 0 0

Walk

Behind

24% 10% 24% 10% 0 12%

Ride on 10% 6% 6% 6% 0 19%

Scrubber

Driers

Sub Total 34% 16% 30% 16% 0% 31%

HOT

WATER

0 0 0 0 0

Cold water 10% 16% 8% 0 0 0

High

Pressure

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

(Nos.)

Price range

(per unit)



Manual sweepers 9000 Rs. 6000 –

10,000

Industrial sweepers

� walk behind type 200 Rs 100,000

Sweepers

(with/without

aspirator)

� ride on type 190 Rs. 0.7 – 1.5

million

Commercial and Professional 39,500 Rs.7,000 -25,000 Vacuum cleaners

(dry and

wet&dry)

Industrial Vacuum Cleaners 420 Rs. 70,000 -

125,000

Cold 8,450 Rs.5,000 –

40,000

High pressure

washers

Hot 1,500 Rs. 100,000 -

125,000

Single disc

machines

3,000 Rs. 30,000 -

70,000

Walk behind Scrubber Drier

2,665 Rs. 80,000 –

150,000

Scrubber Driers

Ride on Scrubber Drier

200 Rs.550,000 -

700,000

Large industrial vacuum

cleaners 7.5 KW to 200 KW

75 – 100 Rs. 4 million

(excluding the

price of vehicle)

High Value

Vehicle-mounted

Sweepers and

Vacuum Cleaners Sweepers 200 litres to 6500

litres

~ 200 Rs. 1 to 5 million

(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

Rs. Million

2008-09

Rs. Million

%



Cleaning

chemicals

1800 – 1900 5,000 – 5,500 ~78%

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

2005 (Rs. Million)

Total Sales Turnover

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

Gujarat

5 N.A.

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

(Rs. million)

Value 2008-09

(Rs. million)

Mops and mops holders 200-225 350-375



Trolleys 25-30 50-100

Window cleaning tools and

accessories

70-80 200-225

Floor cleaning tools 250-275 450-500

Others (brushes, pads, discs, wipers,

etc.)

100-150 250-300

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.

million)

Value 2008-09 (Rs. million)

Continental Hygiene

Concepts

80-100 150-200

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.

Growth Market size in 2005

(Rs. million)

Market size in

2008-09

(Rs. million) Overal

l

CAGR

Equipment 950 – 1,000 2,550 - 2,700 170% 39%

Consumables 2,700 – 2,900 6,500 – 7,000 141% 37%

Tools and

Accessories

650-750 1,300-1,500 100% 26%

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.



Equip

ment

22%

Consu

mables

62%

Tools

and

Access

ories

16%

Market Composition, 2005

Equipm

ent

24%

Consu

mables

63%

Tools

and

Access

ories

13%

Market Composition, 2008-09

Market Size Growth

0

1000

2000

3000

4000

5000

6000

7000

Rs.

mil

lio

n

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

average)

Company Industry

Projected Growth

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

works

15-20% 15 –

20%

20 – 25%

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

Products

25% 50%

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

Vacuum

Cleaners

Sweepers

Dry Wet &

Dry

Carpet

Cleaners

High

Pressure

Washers

Steam

Cleaners

Single

Disc

machine

s

Scrubber

s / Driers

Remarks

Roots Multiclean � � � � � � � �

�

80% of machines

will be

manufactured in-

house by 2010-

2011

Eureka Forbes � � � � � � �

Johnson Diversey � � � � � � � �

Man Machine

Karcher

� � � � � � � �



Vacuum

Cleaners

Sweepers

Dry Wet &

Dry

Carpet

Cleaners

High

Pressure

Washers

Steam

Cleaners

Single

Disc

machine

s

Scrubber

s / Driers

Remarks

Dulevo � � � � � � �

IPC Western Floors � � � � � � � �

Technoclean

Equipments

� � � � �

Inventa Cleantec �

�

� � � �

�

� � �

Charnock � � � � � �

Soma Specialities �

�

�

�

� � � � � �

Innovative �

�

� � �

Aman Cleaning

Equipments

� � � � � � � �

Santoni � � � � � �

Godrej & Boyce � � �

Rodak Swiss

Trademark

� � � �

Hafi Elektra � � �



Vacuum

Cleaners

Sweepers

Dry Wet &

Dry

Carpet

Cleaners

High

Pressure

Washers

Steam

Cleaners

Single

Disc

machine

s

Scrubber

s / Driers

Remarks

Magna Cleaning

Systems

� � � � � �

Poona Brush

Company

�

Legend:

� Imported � Manufactured

b) Consumables

Wash

room

products

Kitchen

hygiene

products

Floor

cleaning

products

Carpet

cleaning

products

Odour

control

products

Other

chemicals

Tissue

paper

Pudumjee Hygiene � � Photography

& X-rays

�

Johnson Diversey � � � � � � �

Kimberly Clark � � � � �

Imported in

rolls and cut



Wash

room

products

Kitchen

hygiene

products

Floor

cleaning

products

Carpet

cleaning

products

Odour

control

products

Other

chemicals

Tissue

paper

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

Mop

holders

Trolleys Window cleaning

tools & accessories

Floor

cleaning tools

Others (brushes,

pads, discs,

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

company

Production range Production sites Foreign

collaboration, if

any

Roots

Multiclean

Ltd.

Scrubber Driers,

Manual Sweepers,

Mini Floor Washer,

Single disc machines

3 factories:

- Coimbatore (Tamil

Nadu)

Joint venture with

Hako Werke,

Germany

Minuteman Power

Bosch USA

(subsidiary of

Hako) since 2008

Inventa

Cleantec

High pressure washers

and steam cleaners,

Noida (Uttar Pradesh) Italy for exclusive

marketing



Name of

company


collaboration, if

any

Manual sweepers

Soma

Specialities

Auto Scrubbers, back-

pack vacuum cleaners,

carpet cleaners

Mumbai (Maharashtra)

Innovative Vacuum cleaners Mumbai (Maharashtra)

Magna High pressure washers Mumbai (Maharashtra) Assembly of

imported SKDs

Santoni All Faridabad (Haryana)

Hafi Elektra Vacuum cleaners for

textile industry

Pune (Maharashtra)

Technoclean

Equipments

Single disc machines,

Scrubber driers

Noida (Uttar Pradesh)

TPS

Infrastructure

Mounted sweepers,

Large mounted

vacuum cleaners,

Compactors

Bhiwadi (Rajasthan) &

Ghaziabad (UP)

Wieland

Lufftenchnik

Germany,

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

Name of

company


collaboration, if

any

Pudumjee Tissue papers Pune (Maharashtra)



Name of

company


collaboration, if

any

Johnson

Diversey

Industrial cleaning

chemicals

Two factories

- Daman 85% of

production

- Nalagarh 15% of

production

Schevaran Industrial cleaning

chemicals

Mysore (Karnataka) Rochester

Midland, USA

(since 2006)

Kimberly –

Clark

Tissue papers Pune (Maharashtra) Kimberly-Clark

Worldwide

Altret

Performance

Chemicals

Industrial cleaning

chemicals

Surat (Gujarat)

Haylide

Chemicals

Industrial cleaning

chemicals

Jabalpur (Madhya

Pradesh)

Poona Brush Brushes Pune (Maharashtra)

Bangalore

Brushware

Brushes Bangalore (Karnataka)

Naveen

Polymers

Chemicals &

detergents

Okhla (Delhi)

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

Value (US$ million) Quantity (Nos.) Custom code and

Description 2005

-06

2006

-07

2007-

08

2008-

09

(Apr-

Dec)

2005

-06

2006

-07

2007

-08

2008

-09

(Apr-

Dec)

84642000 - Grinding /

Polishing machines for

working stone etc.

7.38 8.70 14.3 12.37 300 550 420 430

84798950 - Car 0.18 0.22 0.26 0.95 120 50 60 -



Value (US$ million) Quantity (Nos.) Custom code and

Description 2005

-06

2006

-07

2007-

08

2008-

09

(Apr-

Dec)

2005

-06

2006

-07

2007

-08

2008

-09

(Apr-

Dec)

Washing and related

appliances

84798991 - Industrial

Vacuum Cleaners

5.96 7.13 1.57 0 9,180 9,730 18,100 0

85081000 - Vacuum

Cleaners

2.34 3.14 6.90 0 157570 222200 287360 0

85092000 - Floor

polishers

22.07

11.78 0.07 0 1780

70 320 0

84798999 - Other s 307 410 559 424 70,000 106,000 127,000 90,000

Table 16.: Imports of Consumables

Value (US$ million) Quantity Custom code and

Description 2005

-06

2006

-07

2007-

08

2008-

09

(Apr-

Dec)

2005

-06

2006

-07

2007

-08

2008

-09

(Apr-

Dec)

48025450 - Tissue

Paper (Kg)

2.66 3.18 3.78 2.37 1266

1981 2217 1457

33074900 - Other

Odoriferous preparations

used for de-odorizing room

(excluding agarbatti) (Kgs)

0.76 0.91 1.19 1.02 286 230 243 220

34029011 - Washing and

cleaning preparations having

basis of soap other organic

surface active (synthetic

detergents) (Kg.)

3.22

3.73 3.63 3.74 1083

1104 953 1331

34029019 - Other (synthetic)

detergents (Kg)

4.91 5.49 6.26 4.05 1555

2578 2531 2021

38084000 - Disinfectants

(Kgs)

0.65 2.48 1.28 0 108 493 155 0

Table 17.: Imports of Tools and Accessories

Custom code and Value (US$ million) Quantity (Nos.)



2005

-06

2006

-07

2007

-08

2008

-09

(Apr-

Dec)

2005

-06

2006

-07

2007

-08

2008

-09

(Apr-

Dec)

96035000 - Other

Brushes constituting parts

of machines, vehicles etc.

2.25

2.37

2.99 2.81 282 505 549 699

6805 - All types of

Natural/artificial abrasive

powder etc. of textile

material or paper/ paper

board w/n cut to shape

11.61 15.94 19.6 16.85 1606260 18434

60

248063

0

252622

0

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)

84642000 - Grinding / Polishing machines

for working stone etc.

Italy 4.63; China 3.31 ; Germany

3.19

84798950 - Car Washing and related

appliances

USA 0.09 ; Korea 0.03; China 0.02;

Italy0.01

84798991 - Industrial Vacuum

Cleaners

Italy 0.39 ; China 0.18 ; Sweden

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

Equipment

84798999 - Others Germany 77.34 ; Italy 77.33 ;

Korea 65.79 ; China 65.59

Consumable

s

48025450 - Tissue Paper China 0.92 ; Germany 0.55 ; Japan

0.55 ; Italy 0.01



Custom code and Description Top exporting countries in

2007-08 (US$ million)

33074900 - Other Odoriferous

preparations used for de-odorizing

room (excluding agarbatti)

China0.44 ; Thailand 0.09 ;

Vietnam 0.09 ; Italy 0.02

34029011 - Washing and cleaning

preparations having basis of soap

other organic surface active (synthetic

detergents)

USA 0.51 ; Germany 0.96 ;

Singapore 0.70 ; Netherland 0.31 ;

Italy 0.17

34029019 - Other (synthetic)

detergents

Switzerland 1.40 ; Germany 0.62 ;

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 &

Accessories

96035000 - Other Brushes

constituting parts of machines,

vehicles etc.

Germany 0.89 ; Italy 0.46 ; Japan

0.12 ; China 0.11

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

imported

products in

total sales

Country

of origin

Name of

foreign

supplier

Remarks

Germany Hako Werke

GmbH

Manufacture in India under

license + marketing in India

and SAARC countries

Roots

Multiclean

40-45%

USA Minuteman

Power Bosch



Share of

imported

products in

total sales

Country

of origin

Name of

foreign

supplier

Remarks

Italy SOTECO Wet and dry vacuum

cleaners

Italy Interpump Pumps

Eureka

Forbes

100% Denmark Nilfisk

Advance

Johnson

Diversey

100% Switzerland,

Italy, USA

and China

Taski

Man

Machine

100% Germany Karcher

Western

Floors

100% Italy IP Cleaning

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 &

Boyce Mfg.

100% USA Tennant

Continental

Hygiene

Concepts

75% Italy IPC Ready

System,

Floor

Dulevo India 100% Italy Dulevo s.p.a

Nilfisk-

Advance India

100% World wide Nilfisk

advance

RGS Vacuum

Systems

100% Italy RGS Impianti



Share of

imported

products in

total sales

Country

of origin

Name of

foreign

supplier

Remarks

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

imported

products

in total

sales

Country

of origin

Name of

foreign

supplier

Product range Remarks

Pudumjee

Hygiene

100% UK Waterbury’s

Vectair

Wash room

and odour

control

products

Using

dispensers

from Italy

Johnson

Diversey

10-15% Sweden SCA

Hygiene

Products

Tork brand of

tissues, hand

wash and room

fresheners

Distribution

in India, Sri

Lanka,

Maldives,

Bangladesh,

Nepal and

Bhutan

Schevaran

Laboratories

Neg. USA and UK Various Dosing Pumps

and Diluters

Eureka

Forbes

100% Germany Ecolab

Jade

International

100% USA, UK Technical

Concepts



Share of

imported

products

in total

sales

Country

of origin

Name of

foreign

supplier

Product range Remarks

Kimberly-

Clark

100% USA Kimberly-

Clark

Worldwide

Tissue jumbo

rolls

Conversion

into retail

packs done

in India

Charnock UK Bio-

Productions

Ltd. (part of

Stapro, UK)

cleaning

products and

formulations

c) Tools & Accessories

Share of

imported

products

in total

sales

Country

of origin

Name of

foreign

supplier

Product range

UK TC Continental

Hygiene

Concepts

75%

The

Netherlands

Bentfield

Roots

Multiclean

40-45% Italy TTS Compact Janitorial Trolleys

Italy Euro Mop Various tools & accessories Man

Machine

100%

China Trolleys, mops etc.

Unger India 100% USA,

Germany,

UK, France

UNGER

Global

Brushes, Mops/Wringers,

Trolleys & Carousels,

Washers & Squeegees,

Charnock 100% UK Numatic

International

Trolleys, mops/wringers,

carousals, glass cleaning

eqpt.

Western

Floor

100% Italy IP Cleaning Trolleys, mops/wringers,

glass cleaning eqpt.



Share of

imported

products

in total

sales

Country

of origin

Name of

foreign

supplier

Product range

USA Dupont Bristles

Germany Hahl Diamond Abrasive

filaments

Italy Hollow car washer fibre

Poona Brush 5%

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 &

Accessories

31.011% to

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

Mode of sales Company Name

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-

70%

30-50%

Soma Specialities 60% 40%

Innovative 100% -

R V Industries 100% -

Santoni 75% 25%



Mode of sales Company Name

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-

70%

30-40%

Kimberly Clark 20% 80%

Altret Performance

Chemicals

10-

15%

85-90%

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

Own

offices

Delhi

Coimbatore, Madurai,

Cochin, Chennai,

Mysore, Trivandrum,

Bangalore, Hosur,

Secunderabad

Mumbai, Goa, Vapi

Kolkata

Roots

Multiclean

Dealers Chandigarh, Jaipur,

Gorakhpur, Rishikesh,

Varanasi, Bhopal &

Satna

Bangalore, Tirupathi,

Vishakhapatnam

Vadodara,

Ahmedabad, Vapi,

Pune, Nagpur, Indore

Assam, Imphal,

Bhuvaneshwar, Ranchi,

Jamshedpur

Own offices Delhi, Jaipur

Bangalore (head

office), Chennai

Mumbai Kolkata

Delhi, Chandigarh,

Srinagar, Jaipur,

Lucknow

Bangalore, Chennai,

Hyderabad, Cochin,

Pondicherry

Mumbai, Indore,

Vadodara, Goa, Pune,

Aurangabad

Kolkata, Guwahati

Eureka

Forbes Ltd.

(Corporate

Care Division)

Dealers

Sales and Service network in 100 cities in all regions, through distributors/dealers

Johnson

Diversey

Own offices Gurgaon Bangalore, Chennai &

Hyderabad

Mumbai (Head Office) Kolkata



Regional presence


Dealers 60 dealers all over India

Own offices Noida (head office),

Punjab

Bangalore, Chennai Mumbai, Vadodara Kolkata Man Machine

Karcher

Dealers 5 resident representatives and 18 dealerships all over India

Own offices Delhi (head office) IPC Western

Floor Dealers/Outlets Delhi, Ludhiana,

Kanpur, Chandigarh

Hyderabad, Chennai,

Bangalore, Cochin,

Indore, Mumbai, Pune,

Nagpur, Durg

Kolkata, Bhubaneshwar


Delhi

Inventa

Cleantec

Dealers 20 dealers

Own offices

Mumbai (head office) Soma

Specialities

Dealers > 20 dealers

Own offices Bangalore & Chennai Mumbai (head office),

Pune

Innovative

Dealers Nil

Own offices Delhi (head office),

Faridabad

Santoni

Dealers Chandigarh, Aligarh Hyderabad, Bangalore,

Chennai



Regional presence


Own offices Delhi Bangalore (head office) Mumbai Charnock Auto

Products Dealers Delhi, Noida,

Ludhiana, Kanpur

Bangalore, Hyderabad,

Chennai, Cochin

Mumbai, Pune, Nasik Kolkata

Own offices Pune, Mumbai Hafi Elektra

Dealers Delhi

Own offices Nil Bangalore, Kottayam Goa (head office),

Pune, Mumbai,

Ahmedabad,

Bilaspur Rodak Swiss

Trademark

Dealers Nil

Own offices Noida (head office)

Technoclean

Equipments

Dealers 2 dealers

Own offices - Hyderabad

Mumbai (head office),

Surat

Magna

Cleaning

Dealers Kochi Baroda & Sholapur

Own offices Delhi, Lucknow,

Chandigarh

Bangalore. Kochi,

Hyderabad, Chennai.

Vishakhapatnam

Mumbai (head office),

Pune, Ahmedabad,

Indore

Kolkata, Bhubaneshwar Godrej &

Boyce Mfg.

Dealers All India distribution network



Regional presence


Own offices Delhi Chennai Mumbai Kolkata,

Bhubaneshwar.

Jamshedpur

TPS

Infrastructure.

Dealers 12 in smaller cities All India

B) Consumables

Regional presence


Own

offices

Delhi Bangalore, Chennai Pune (head office),

Mumbai

Pudumjee

Dealers 32 dealers

Own

offices

Gurgaon Bangalore, Chennai &

Hyderabad

Mumbai (Head Office) Kolkata Johnson

Diversey

Dealers 60 dealers /distributors all over India

Own

offices

Mysore (head office) Schevaran

Laboratories

Dealers 22 dealers

Eureka

Forbes Ltd.

Own

offices

Delhi, Jaipur

Bangalore (head office),

Chennai

Mumbai Kolkata



Regional presence


Delhi, Chandigarh,

Srinagar, Jaipur, Lucknow

Bangalore, Chennai,

Hyderabad, Cochin,

Pondicherry

Mumbai, Indore,

Vadodara, Goa, Pune,

Aurangabad

Kolkata, Guwahati Dealers

Sales and Service network in 100 cities in all regions, through distributors/dealers

Own

offices

Delhi Mumbai (head office) Jade

International

Dealers 40 dealers

Own

offices

Pune (head office) Kimberly

Clark

Dealers 32 dealers

Own

offices

Bangalore (head office),

Hyderabad, Coimbatore

Kolkata Origami

Dealers Not available

Own

offices

- - Jabalpur - Haylide

Chemicals

Dealers 16 dealers

Naveen

Polycon

6-7 distributors

C) Tools & Accessories



Regional presence


Own offices Delhi (head office) Bangalore, Chennai Mumbai Continental

Hygiene Dealers > 25 dealers

Own

Offices

Delhi

Coimbatore, Madurai,

Cochin, Chennai,

Mysore, Trivandrum,

Bangalore, Hosur,

Secunderabad

Mumbai, Goa, Vapi

Kolkata

Roots

Multiclean

Dealers Chandigarh, Jaipur,

Gorakhpur, Rishikesh,

Varanasi, Bhopal &

Satna

Bangalore, Tirupathi,

Vishakhapatnam

Vadodara,

Ahmedabad, Vapi,

Pune, Nagpur, Indore

Assam, Imphal,

Bhuvaneshwar, Ranchi,

Jamshedpur

Own offices Gurgaon (head office) Bangalore, Chennai Mumbai, Vadodra Kolkata Unger

India Dealers 35 dealers all over India

Own offices Gurgaon Bangalore, Chennai &

Hyderabad

Mumbai (Head Office) Kolkata Johnson

Diversey

Dealers 60 dealers /distributors all over India


Punjab

Bangalore, Chennai Mumbai, Vadodara Kolkata Man

Machine

India Dealers 5 resident representatives and 18 dealerships all over India

Own offices Delhi (head office)



Regional presence


IPC

Western

Floor

Own offices Delhi (head office)

IPC

Western

Floor

Dealers/Outlets Delhi, Ludhiana,

Kanpur, Chandigarh

Hyderabad, Chennai,

Bangalore, Cochin,

Indore, Mumbai, Pune,

Nagpur, Durg

Kolkata, Bhubaneshwar Own offices Pune (head office)

Dealers Nil

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

End Users Company Service

Provider

s

HORECA Health

&

Hygiene

Industr

y

Comml. Govt. Others

Equipment



Provider

s

HORECA Health

&

Hygiene

Industr

y

Comml. Govt. Others

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

Floor

45% 10% 20% 10% 15%

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

Equipments

5-8% Nil 25-30% 50-60%

Hafi Elektra 10% 80-90%

TPS

Infrastructure

5% Nil Nil Nil Nil 95%

Consumables

Pudumjee 20% 30% 50%


Schevaran

Laboratories

40% 10% 40% 10%

Eureka Forbes 10% 20-25% 5% 20-25% 40%

Kimberly Clark 20-30% 10-15% 10-15% 30-40% 15-20%

Haylide

Chemicals

40-50% 20% 5% 20% 40-

50%

20%

Naveen Polycon 10% 50% 20% 10%

Tools &

Accessories


Poona Brush 90% 10%



Provider

s

HORECA Health

&

Hygiene

Industr

y

Comml. Govt. Others

Unger India 40 5-6 15-20 2

Bangalore

Brushware

50% 10% 30% 5% 5%

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

employees

Machinery

manufacturers/Importers

Consumables

Manufacturers

/Importers

Tools & Accessories

Manufacturers

/Importers

Up to 10 Nil Naveen Polycon Nil

10-100 Eureka Forbes (90), Man

Machine Karcher, IPC

Western Floor, Inventa

Cleantec (70-75), Soma

Specialities (25), Aman

Cleaning (25), Santoni,

Charnock (35), R V

Industries (16), Magna

Cleaning, Rodak Swiss

Trademark, Innovative

(60), Technoclean

Equipments, Guru Nanak

Engineering Works (15)

Schevaran

Laboratories (75)

Jade International

Kimberly Clark (250)

Haylide Chemicals (90

)

Origami (25-30)

Continental Hygiene

(55)

Poona Brush (20)

Unger India (35)

J&B Industries (30-

40 in Delhi, 20-25 in

new facility in UP

with more

automation)

100-500 Roots Multiclean (300),

Johnson Diversey (150),

Godrej (120), TPS

Infrastructure (40

Graduate engineers, 45-

50 diploma holders, 100

workers, 80 indirect)

Pudumjee Hygiene

(130) + contract labour

Nil

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,

NOIDA, Faridabad etc.)

10500 60003

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

per month

6 months advance (Interest free

deposit)

3 year lease

Interiors 250 – 300 per sq m

Work spaces 300 - 400 per seat

Residential Apartment

rentals

50 per sq m per

month unfurnished,

bare walls

6 months advance (Interest free

deposit)

3 year lease

Industrial land 30 - 60 per sq m Buy / 33 yr lease


Euros Basis

Staff, junior management

salary

150 - 500 per month add 25% benefits

Middle management 1000 – 2500 per

month

Performance based

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.

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