We intend to invest around INR 40-50 crores every year in India: Pau Abello Pellicer

How has Roca evolved as a brand in India? What’s the Y-O-Y growth?

In 2006, Roca Group entered India through a JV with the Chennai-based Murugappa Group Parryware. Tracing our journey, until 2007, we had not launched Roca in India. However, being a diverse country with so many varied choices and income groups of people, it created an opportunity to serve each and every segment in a different way. Over the years, other Roca group brands, Laufen, Armani-Roca and Johnson Suisse, each catering to a different segment of customer were launched in India.

The expertise, quality, R&D, technology, portfolio as well as team of Roca coupled with the customers’ trust in Parryware have proved to be a potent force. We work closely with Roca Group headquarters in Spain to bring many best practices developed in the past 100 years of the Group’s journey to India. Roca being a premium and international brand enjoys a great market share today.

The CAGR for Roca brand  in past years have been around 25 per cent, but we can expect a revamp in real estate, resulting from lower mortgage interest rates, delivery of long-pending projects,  start of new projects, investments from international funds in real estate and in general, a better economic situation in the country. With more and more toilets being constructed and the perception of bathroom spaces gradually becoming more personalised, we expect our brands to gain from the opportunity and serve more and more customers.

Keeping in mind the growing customer preferences, what’s your Omni-channel strategy? Is booming e-commerce an opportunity? What’s your online pivot?

We have been working hard in terms of what can be done at retail points, so as to make our brand more visible. Depending on the nature of store and brand, there are different approaches to be followed. In India, Roca Group offers a vast collection of products under its 6 brands, each of them catering to different segments in the market. And, in every brand we offer full collection of bathroom products: vitrous china, faucets, bathtubs, accessories, furniture, mirrors, etc.

For each brand, the focus is different and hence the strategy in each one is different as well:

·        Armani-Roca: The products under the brand are exclusively available with selected distributors in India. The latest one being Evolve in Coimbatore.

·         Laufen: The brand is exclusively sold through FCML in India. In 2016, the point of sale has increased to 12.

·         Roca: We are widely increasing dealerships for Roca in India. The company has increased the number of dealers from 150 in 2015 to 225 in 2016 and plans to achieve 250 by 2017.

·         Johnson Suisse: In 2015, the brand was launched in India via FCML and has received exponential growth so far.

·         Parryware: The brand has a huge demand in the market and we constantly receive requests from potential partners. We are currently focusing in areas where our presence is not significant, especially in tier 2 and tier 3 cities. Right now, Parryware has around 1000 dealers in the country. For Parryware, we have a Design Studio in Gurgaon, where we are showcasing products exactly the way we want them to be seen, without any distractions.

·         Johnson Pedder: We are planning to increase the number of dealers in the market such as in areas of Arunachal Pradesh, Madhya Pradesh, Chhattisgarh, Telangana, Maharashtra etc.

In India, small-sized stores are more dominant and we give our dealers proper branding, consistent look and feel, and additional selling material. Talking about e-commerce, even for bathrooms products where touch and feel is a very important aspect; there has been a noticeable e-demand. In my opinion, we will certainly see an increase in the e-commerce sales of bathroom products, but having said that, the traditional channel will not be disturbed. We are now analysing and testing all the possibilities: from starting our own e-sales to selling some of our products on some portals by other vendors. As in our industry, after-sales support and guarantee is only given by the manufacturer; hence it should be us who should cater the e-demand directly. As of now, we are not in a hurry to enter in e-commerce for our industry. 

What all innovations have been introduced by the company this year in terms of design, customer loyalty, and technology, among others?

Bathrooms are now a space for rejuvenation and luxury. With Roca products, we understand the need for the customer’s personal space and design the bathroom products by integrating advanced technology with subtle aesthetics. We are known for our technological prowess – be it products or processes. To enjoy the luxurious ambience, our products such as - WCs and vanity basins, electronic faucets, bathtubs, shower solutions, smart toilets, furniture have set a benchmark in the industry with their innovative technology and appealing design. These are not only utility products, but also add value to the bathroom space with multiple innovations offering more value to the consumer such as single piece WCs, low water consumption urinals, water saving faucets, automatic seat controls, personalised water temperature control, etc.

We have launched inspira range with a new material - fine ceramic for very slim basins in three shapes (round, square and soft available) as well as water closets. Talking about faucets, the faucets range is much more dynamic - the trend is towards different PVD finishes and electronic faucets.

The state-of-the-art features and designs have set a new trend in WCs, thus contemporising each bit of the bathrooms. Hygiene and innovation being the foremost concern for   making of smart toilets, with features for cleaning, drying, seat control and comfort along with silent mode and power saving technology are provided across ranges.  In terms of innovation, there is In-Tank Meridian, which has just one piece, both the toilet and the cistern (you do not need any concealed cistern to operate it) and the second is W+W, a sustainable proposal that reuses water from wash basin to fill the toilet’s cistern.

In bathtubs and furniture, the trends have more to do with different colours, materials (waterproof, moisture resistant etc). Over the years, Roca has collaborated with many designers, and constantly given the consumers novel bathroom space solutions. Roca has come up with designs that not only cater to the present needs, but also the future demands. Innovation rules our industry and there is no alternate route to that. We also have the roll-out of all these new trends and features to Parryware brand, and additionally, we have launched a lot of trendy and new colours in our ceramic ranges.

What all opportunities do you see going ahead?

The sanitary ware market in India has grown rapidly during the last few years and the opportunities in this market are immense. Factors such as increasing disposable incomes, higher standards of living, increasing presence of international brands and high expenditure on beautifying homes using premium products provide a further impetus to the growth of this segment. As a consequence, almost all international brands will come here; however, the good thing is that the market is so large that a portion is available for all.

The initiatives taken by the central government speak volumes about the confidence of end-users and international investors. Though, these initiatives are difficult to put into practice, in reality, they are indeed changing the perception of the country internationally. And clearly, there are opportunities for the bathroom products sector. Smart City is in early stages and we will see how it evolves. In Swachh Bharat, there has been real movement as concrete requirements are being worked out. In RERA and REIT, progress has been made for the benefit of the end-consumer; it is surely a confidence-boosting measure for all the stakeholders.

Additionally, GST is a much awaited and a positive move by the government. It is a must for a country like India. With GST in place now, we are expecting a higher growth rate and a complete change in the supply chain of our raw materials, components and finish goods. Clearly, we will see a boom in the organised players’ sale in the following quarters.

What’s going to be your future growth strategy?

India is eventually emerging as a huge market for real estate business and the driving winds are favorable for sanitaryware brands offering innovative products and designs in the market. Though the overall economy was facing a slowdown till last year, leading to slacking off in the sanitaryware industry as well as real estate sector, the current year has witnessed significant improvement. With GST in place, we, finally, will buy, move and store the products based on market logics and note just based on tax issues. Additionally, the conjunction of GST implementation and this demonetisation will force a lot of companies to stop selling in cash and be transferred to organised market or will disappear. We are hoping a huge positive impact from this move to our Company.

We have made a lot of efforts in last three years to increase the production capacity of vitreous china products, faucets and plastic cisterns/seat and covers. At the moment or in 2017, we do not have plans to increase capacity, as we already have 6.0 million pieces installed in vitreous china, 3.8 million in faucets and more than 3 million in plastic products. If in future the market revamps strongly and demands more, we will have the resources (land and finance power) to be able to ramp up the capacity very fast. 

As part of future plans, the company intends to continue investing around INR 40-50 crores every year in India to enhance the quality processes, our QA laboratories, provide with more technologically advanced machinery in all our seven factories and develop and launch many new products with an aim to increase the sales by 15 per cent annually. At the same time, we are evaluating the possibility to construct some more factories in our premises to start the production of other bathroom products.