Post-COVID effect on building hardware industry in India

July 2, 2020 Market Scan2

Consort Hardware MD Harish Sokhi Shares His Insights with Glass Bulletin

Construction industry is one of the worst-affected in India by the coronavirus-triggered lockdown, but with right policies and a positive approach, it can revive very fast.

Before COVID-19, India was a showcase as one of the most emerging economies in the world. But the pandemic spared no one. But the lockdowns lifting and the businesses resuming operations, India needs to adopt a manufacturingfriendly approach. Many companies are now looking to diversify their supply chains post- COVID-19, especially American companies. And this really is “a good opportunity for India” as countries are looking to de-risk from China. Countries like Indonesia and Vietnam are already ahead in the race. And India can seize this opportunity if it brings the right policies and takes steps to support its industries, especially the building materials industry. There are issues like lack of proper infrastructure and skilled labour. This has been magnified by the ongoing migrant labour crisis. But if these can be rectified, the country stands to win big. We have to learn to live with coronavirus and hope that a vaccine will be developed soon. There is no vaccine against dengue even after so many years. But COVID-19 is far deadlier and spreads very fast, so we have to change our hygiene habits and take precautions when meeting people and travelling. But it is time to open up the economy step by step, with restrictions in place. The way we introduced the lockdown step by step, the same should be followed while lifting it. Opening up the national highways is a good option because it effects all businesses. As hardware professionals, we can take this industry to the world. We think a few points are to be addressed to help the industry recover the business losses. Building material industry is the second-biggest employment generating sector in India. Hardware plays an important role in securing buildings. Given the right push, it can bounce back in very short time. Trade and OEM will start immediately because all underconstruction projects must be completed in time, although the government has extended the time limits for builders to complete those. One can stay without luxury items, but no building can be completed without doors and windows. Opportunities will arise for ironmongery companies as immediate demands have to be met. Considering the limited stock available in the country and that it will take time to import from China, the hardware industry will have to look to manufacture in India. Scope of the luxury industry seems to be bleak currently and the automobile industry, which the largest employer in the country, is also facing a tough time. The building industry, however, has some hope. In hardware, the number of products is huge and many ancillary industries like plating, casting etc. are dependent on it. Most of this business goes to unorganised sectors or we tend to import some cheap hardware from China. Indian manufacturers have fallen short in producing world-class standards or match the EN or ANSImarked products. For all mechanical, electric or electromechanical products, we are totally dependent on foreign suppliers. Unfortunately, we have very limited BIS STANDARDS available for Indian products. And therefore, by default, Chinese companies have flooded their products in the Indian market. When we talk about developing India as a manufacturing hub, we must consider a few things. We have a shortage of skilled labour not only in manufacturing sector but also in sales. This problem needs to be addressed. After COVID-19, we have to unlearn, relearn and regularly develop the new skills. Considering the market size of approximately USD 5-6 billion, which includes builders, hospitality, infrastructure, healthcare, smart cities etc. In the last 20 years, all companies put together have no yet achieved USD one billon in organised sector. All the multinational and Indian brands educated the market and the consumer with their capacity and knowledge, but size is so big that all these companies could not fully cover it geographically. We have a maximum of six-seven hardware companies that cover the entire country. In comparison, building material industries like tiles, bathroom accessories, electric suppliers, paints etc. see more than 25 active brands in each segment. Therefore, in hardware, either we need more players or require more and more efficiency to cover the maximum market. We have to keep in mind that design must be human or people centric. Focus needs to be put on the use of technology to complete projects in stipulated time. To reduce costs, apartments need to be compressed without reducing the size of the rooms. Architecture and engineering students should be trained to deal with challenges like pandemics, natural calamities and economic crises, besides focusing on designs. Labourers are hired through contractors to avoid overheads and other liabilities and hence, we do not keep any data of these labourers and technicians. Our biggest lesson is to take care of labourers employed at project sites in times of emergency because labour migration is best avoided. It is a big opportunity for Indian manufacturers to come out with products of international standards. In the automobile industry, we have experienced the failure of to sell the world’s cheapest car. It is important to understand and identify the right customer and trained people who can provide hardware solution to the trade and end-user. Many treat trade and retail in India as a price sensitive market, this has changed perception now. Consumer understands quality, otherwise all multinationals would not have worked successfully in India for over two decades. We must convince the user and specify that hardware is the only movable part in the furniture, and it helps to improve the performance and durability of the product, besides other benefits like safety, security, energy saving, fire rating etc. No furniture and doors achieve or pass any standard unless proper use of fittings. Good quality hardware of cabinets, wardrobe and doors can not only enhance the life of the finish product but provide aesthetics as well. Retail, trade and OEM’s is still dominant in the market, however project business on airports, IT, healthcare is still in demand. Upgrading of Indian standards is an urgent requirement if we want to enhance our manufacturing to world class levels. There is also a lack of information like standards, fire rating, safety, durability etc. There has been a very limited approach by manufacturers and suppliers to educate and guide the customers to use certified products If manufacturing facilities are developed in India, it will reduce costs drastically and control the lead time as well. Local supplies also help to maintain inventory and saves the cost on big warehouse. Presently big investment is being spent on warehousing, excise, customs. Import duties had been increased before locking down and USD is also at an all-time high against INR. Therefore, it is best to start looking for opportunities locally. I feel it is a very difficult task but not impossible. At least, we can shift the entire non mechanical products and specially furniture fittings where we do not have any standard to follow. We have the machinery and engineers who can produce products of global standards. They just need the right push and initiative. New projects are ready to kick start, six new airports are ready to be auctioned. Many airport projects are in the pipeline and work on 20 smart cities already in progress. Our domestic market is much bigger than many international markets and it is not immediately possible to shift the entire manufacturing but we should maintain a balance between import and export. Many experts believe door handle is first point of contact while using doors and so it can spread the virus very quickly. Many hardware products have flooded the market but require professional advice. Some might harm the user and others might not serve the purpose. A qualified ironmonger plays a crucial role in support of all government agencies, architects, contractors and multinational corporations, who demand the sophistication of quality product in every corner of the globe. We speak for the industry in India and abroad on committees concerned with building regulations, European and ANSI Standards and legislations like that. We have the expertise to provide the right solution for the hardware industry and always propose hardware considering the projects such as products suitable for hospitals, laboratories and embassies, antiligature hardware for old age homes, asylums and prisons, and special hardware for special needs. Many customers are still not aware of advantages of using good quality hardware and importance of security and safety. We should involve everyone in the selling process and make them accountable, especially in the government sector. While new NBC codes and the fire department has made it mandatory, a lot still needs to be done to reach out to more and more consumers. Scope for new products like finger trap for junior school is very evident at the present time. We should all speak for quality products and explore new avenues for the industry. In the new era starting after the COVID-19 outbreak, we should work very safe. E-catalog, video conferencing and working from home has become the reality. Hardware is the most important component of the entire building material product category and together we can make a very big difference.

About the writer Harish Sokhi is one of India’s first architectural hardware specialists from GAI – Guild of Architectural Ironmongery UK.

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Mobile: +91 9811619636

2 thoughts on “Post-COVID effect on building hardware industry in India

  1. patio glass

    August 23, 2020

    Hey! This post couldn’t be written any better!
    Reading through this post reminds me of my old room mate!
    He always kept chatting about this. I will forward this article to him.
    Pretty sure he will have a good read. Many thanks for sharing!

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