Chennai
This will bring to close the two-decade long chapter for the India head, who has steered the subsidiary of the Danish pump major, foraying into Gujarat in 2017 to tap the west market. It has not only stabilised its operations in Gujarat, but also clocked a turnover of Rs 230 crore last year, that, in his words, is already half of the revenues registered by the Chennai facility. In an interview with DTNext, Ranganath shares the milestones hit by the pump manufacturer this year.
“There is more activity going on in Gujarat and the plant has done fairly well. We have capacity and we are running 1.5 shifts, now. While south continues to be the biggest market for us, local presence in the west and customers having the option of seeing the unit have helped. We do more localisation of stainless steel components in Gujarat, where they are manufactured. One shift is done for most of the assembling, and the balance for testing. So, when it comes to capacity on a single shift basis, we are running full,” says Ranganath, clarifying the factory had exceeded expectations, but not when it came to sales.
According to him, the south, comprising the five states were powerhouses compared to rest of India, but Gujarat and Maharashtra were larger markets which could not be ignored. “Sourcing talent, unlike in Chennai, is an issue. People in the western region are more inclined towards entrepreneurship. Overall attrition is less than 10 per cent,” Ranganath seeks to point out, as he throws light on the year-on-year growth of Grundfos India, that is a 400-member strong entity.
“We have seen slow growth over the last few years. But we are not complaining, given the overall economic scenario. YoY growth at the rate of 8-10 per cent is not too bad especially when 8-9 per cent growth over last year, is what we budgeted. There is no dearth of orders and cash flow situation will determine if orders will go through or spill over to the next fiscal,” he adds.
The emphasis on ‘smart’ pumps has worked as adoption of such products has risen considerably. “Our target is to have a 25 per cent smart portfolio, especially in the west. South has always been good, given the growth base. Companies are looking at input cost reduction. With a pay-back period over 12 to 18 months, it makes commercial sense. Cash rich customers pay immediately while those seeing value are borrowing be it in the form of loans for capital goods or even availing working capital,” Ranganath says, admitting the commercial building segment of their business has shown zero growth.
“Considering an 8 per cent growth in an industry, which has not been doing well, domestic business (individual homes for pump installations) of 16 to 17 per cent has been good,” he adds.
Incidentally, the service app developed by the Chennai team registered 35,000 complaints, and has been launched in Malaysia and other regions. “The app is helping to reduce the distance between the end-user and us. Internally, we are also improving the knowledge of our sales and other teams, so that they can look at value addition instead of merely selling a product.”
On capex, he says the annual investment (including Rs 36 cr in Gujarat so far) has predominantly gone towards replacing the assets. “We want to keep the age of the assets as low as possible and instead direct funds towards developmental areas. We are mostly investing in the Chennai plant, in the form of balancing machines or using a coir pith and gel for less-water absorption in the lawns, where we are located,” Ranganath says.
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