Chennai: Chennai-based Parryware Roca Private Limited has changed itself in to a multi cultural company in the last nine months.
With the Spanish company Roca buying 50 per cent in the Parryware Roca (formerly Parryware Glamourooms Private Limited), the company now has 13 expatriates working for it and the top management comrises Indian, Spanish and Brazilians. (See Roca buys into Parryware Glamourooms for €50 million).
While managing director, K E Ranganathan is an Indian, all his key deputies are expats; the deputy managing director and finance controller are Spaniards while its general manager, operations, is from Brazil.
"The company is now like a multi national company (MNC) headquartered in Chennai," remarks Ranganathan.
After Roca's entry, the Indian company has undergone various changes apart from the organisational structure. Today employees at different levels travel to Roca's 48 plants across the globe to learn the production process and shop floor practices.
Similarly the Indian company can now tap the research and development (R&D) wing of Roca. The company's new plant at Perundurai, Tamil Nadu was built with Roca's inputs.
Speaking about the joint venture genesis he says, "We saw the growth in the passenger car industry and expected the same to happen in the sanitaryware industry. That is, the entry of foreign brands first through imports and later production plants being set up in India.
Even though Parryware is a superbrand with a sizeable market share, competing with foreign brands is a different potty seat. One example is that the imported brands are now playing the pricing game. The Murugappa group company had two options in the wake of imports viz fight against the deep pocketed MNCs and get its bottomlines burnt or join hands with an MNC.
As the fight would be uneven, nine months ago the Murugappa group decided to opt for the second and sensible option of partnering with the $1.7-billion Roca.
With the company commanding 47-per cent share in the Rs400 crore organised sanitaryware market (total market is Rs850 crore), Ranganathan and his team decided to focus on (a) improving the manufacturing efficiency (b) increasing the retail presence across the country (c) production and marketing of Roca's premium range of products in India and (d) increasing the sales of taps and becoming the number one in 5 years time.
Improving the input-output ratio
Speaking about increasing the shop floor efficiency Ranganathan remarks, "The challenge for us is to get 9 pieces out of 10 that goes into the kiln. Currently it is 7/10 with three getting rejected because of various reasons. There are 128 reasons for a potty to be rejected at the shop floor."
According to him, making sanitaryware is an art and the yield is dependent on various factors like technology, labour, climate, raw materials, workmanship and others.
For Parryware Roca the two-year target is to get ninety per cent out of its kiln and 100 per cent yield in five years time. "In all our four plants- Ranipet, Perundurai (both in Tamil Nadu) Dewas, Madhya Pradesh and Alwar, Rajasthan- the productivity has gone up and the cost per kilo has come down."
The company is investing around Rs10 crore in the Dewas plant to improve capacity utilisation.
Meanwhile, at the market place, Parryware Roca is benefitting out of the construction boom. The company's topline is growing by 24 per cent and the turnover target for this fiscal is Rs300 crore.
For the company the dual brand strategy is working very well. While Parryware is positioned as a premium brand, Johnson Pedder is the brand for the middle market segment.
Speaking about the market he says, "The institutional segment – builders and others – is growing at 30 per cent rate. The retail segment comprising mainly the replacement market and new bungalows is logging 8 per cent growth.
However the Rs80 crore imported premium product segment is witnessing increased activity these days. The import of several brands from Thailand and Indonesia, are driving down the prices. Currently importing some products, Ranganathan says that the company would soon import and market Roca products. "In a year's time we will start manufacturing Roca range of sanitaryware here."
Parryware is everywhere
Selling five pieces every minute Parryware Roca is unperturbed by the increased competition. "We offer three benefits – products, experience and post sales service," says Ranganathan.
On the product front Parryware Roca offers innovations like perfumed or glow in the dark toilet seat covers, electronic flushing system and the water economising Niagara flushing system.
"The Niagara series was the outcome of joint work between IIT-Madras, the National Institute of Design and ourselves." The commode and the cistern had to be redesigned slightly so that the water drops at the required force to flush out.
A pioneer in exclusive showrooms for sanitaryware under the brand Parryware Glamourooms, the company is now in the process of expanding the same and also adding one more branded chain called Roca.
The Roca chain will have around 20 outlets and would sell only the Spanish company's products. The company plans to have two formats – the bigger showrooms measuring 4,000sq-ft and the boutique 1,500sq-ft -2,000sq-ft. "We are targetting 5 per cent share in the Rs100 crore market in two-three years," he adds.
This apart the company will be expanding its existing Parryware Glamourooms showroom network by adding 25 more.
In the taps, Parryware Roca has notched up impressive performance within a short time of getting into the segment logging 40 per cent growth. "We are number three in the branded category. We hope to become number two this year replacing Marc and the number one in five years time ahead of Jaguar brand." The company will be launching three more range of taps shortly .
also see : Roca buys into Parryware
Glamourooms for €50 million