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Manufacturing

Published on: Oct. 17, 2024, 3:24 p.m.
Can Hafele’s plans empower India?
  • Schloeder: strong footprint

By Lancelot Joseph. Executive Editor, Business India

India stands at the threshold of a transformative growth story, driven by initiatives like ‘Make in India’ that aims to enhance domestic manufacturing capabilities. ‘Make in India’ transcends policy – it embodies a strategic imperative to enhance local production, generate employment, and catalyse technological advancement across sectors. “At Hafele India, we fully support this vision,” affirms Frank Schloeder, MD, Hafele South Asia. “It aligns perfectly with our values of promoting domestic manufacturing and underscores our dedication to contributing meaningfully to the Indian economy through job creation and skill development. We recognise that building a robust local supply chain necessitates time and strategic investments in technology, infrastructure and human resources”. 

In line with this vision, Hafele has been an integral part of India’s growth journey for the past 20 years. “We have established a strong footprint in the interior solutions industry, leveraging our core expertise in modular interior solutions and positioning ourselves as one of the key opinion leaders in the market,” adds Schloeder. “With an extensive network of 15,000 touchpoints, including franchisees and dealers, we have uplifted industry standards by providing products tailored to India’s specific requirements. Our dedication to quality has elevated and significantly influenced consumer preferences towards acceptance of superior solutions and set a benchmark for excellence across the sector”.

As a forerunner in adapting European standards to Indian ways of living, Hafele’s customer-centric approach includes innovations, such as filter-free hoods under the Teresa range and fully sealed hobs under the Altius range, customised to meet the unique needs of Indian cooking. This focus on customisation and quality has resonated well with consumers, who continue to look for better standards of solutions and services for their home environment.

Catering to the sensibilities and expectations of the evolved Indian customer, the government is increasingly emphasising customer-centric policies, such as the quality control orders (QCOs) introduced by the Bureau of Indian Standards (BIS). 

“While the government’s initiative is commendable and we completely support it, transitioning suddenly to local sourcing, for companies in our industry, presents significant challenges due to the established nature of our existing supply chain”, says Schloeder. Hafele India has long-standing partnerships with international suppliers, which have been crucial in providing high-quality products at competitive prices. 

Currently, hardware demand in India is met 90 per cent through imports and only 10 per cent through local sourcing. “We fully endorse the principle that ‘production follows market’,” stresses Schloeder. “And, therefore, we anticipate a significant increase in the share of locally sourced hardware in the coming years. This shift represents a structural change for the industry and requires a well-organised approach. We estimate that it will take a minimum of two years to achieve a notable increase in local sourcing and about five years to fully stabilise this transition”.

  • We recognise that building a robust local supply chain necessitates time and strategic investments in technology, infrastructure and human resources

A long way to go

While the industry-specific capabilities and supplier landscape have shown improvement over the years, India still has a long way to go. “We are committed to accelerating our efforts in this direction by partnering with the right local suppliers and supporting the development of their infrastructure, skills and technology,” informs Schloeder. “This approach will help bridge the gap, allowing us to build a strong sourcing base in India and support the growth of the domestic industry”.

But to do this, “We need the support of the government, so that we get the right amount of time to manage such a transition holistically,” Schloeder observes. “For example, companies should be granted a realistic transition period of six to 12 months to liquidate existing stock purchased before the implementation of new regulations.”

To support the government’s vision of a dynamic domestic furniture industry, Hafele has envisioned a three-pronged approach – one, strengthen local sourcing, where the company aims to increase its efforts and provide a platform to nurture local suppliers, enabling them to develop high-quality solutions. This includes collaborating on knowledge-sharing programmes and addressing gaps in technology and manufacturing expertise.

The management has also advocated for the government to initiate programmes to train local suppliers, provide necessary infrastructure and ensure that they are equipped to manufacture in accordance with international standards. Two, bring international expertise & manufacturing investments to India, where the company is in talks with its long-standing global partners to collaborate with it to create a production line in India to meet the growing demands of the region.

To support this, Hafele has appealed to the government to create an environment conducive to interaction, by opening doors to suppliers from different geographies, so that they can bring their technical expertise and investments to India and create manufacturing hubs here.

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