In this exclusive interaction with BuildingandInteriors at Interzum 2025, Gregor Riekena, CEO, Hafele Group and Frank Schloeder, Managing Director, Hafele South Asia, make some interesting announcements and analysis on the road ahead for the brand, including a big announcement to set up a manufacturing hub in India. Read on to know more.
B&I: Interzum 2023 was the time when Hafele celebrated its 100 years in business. How has the journey been over the last 2 years leading up to this edition of Interzum?
Gregor Riekena
The last 2 years have been very intense for us at Hafele. We have been through a strategy process encompassing cyber security, supply-chain diversification and sustainability. I am pleased to say that we have made major progress on all three fronts. The strategy implementation has started to show tangible results. We have co-created ecosystems with our partners across the world. So, I would say that the last 2 years, in spite of being intense, have given us a great momentum to move ever more strongly into the future.
Frank Schloeder
As Gregor said, Hafele has been through an intensive 2-year period since we last met at Interzum 2023. The cyber-attack (which was a challenge at the global level) also affected our Indian operations. Then, in India, we had the BIS certification challenges. To our advantage, we had been working strategically on moving our supply chains to India for well over 6 months prior to the BIS mandate kicking in. We are now in stable waters again because we have reinvented our business model for the next decade. This has laid a strong foundation for our next round of growth. We have been able to get better control over our supply chains. Today, for the Hafele Group, India is amongst the top 3 markets in the world. All this activity, comprising both internal and external factors, makes us more optimistic and determined to move into the future.
B&I: With the global supply-chain realignments, does Hafele have any plans to set up a manufacturing facility in India?
Gregor Riekena
I think we can make a bold statement here. Both Frank and I have been working very closely on the global strategy from an Indian perspective. The last few months have been very busy in this regard. We are happy to share that we have just given the green light to the Hafele manufacturing hub in India. We will shortly buy a big land area to manufacture in India, both for India and for the world. This will be for our own captive consumption. Also, we are going a step forward in this process. We are inviting partners both from within India and abroad to co-create with Hafele. We plan to create a global supply chain from India.
Frank Schloeder
For the first time, we are expanding at this scale outside Europe. We want to increase our global footprint from India. As Gregor said, we are going to manufacture in India, both for India and the world. That’s a big change from the past, where we used to locally source less than 10% of what we sold in India. When I took over the Hafele India operations, we had a 2030 target of 1/3 India, 1/3 Europe and 1/3 the rest of the world. I’m happy to share that we are on track to achieve the India sourcing target by the end of 2025, five years ahead of schedule. This is an intermediate goal; our mid-term ambition is to cross 50% India sourcing.
We have more than 25 new suppliers from India that we are onboarding and activating. We have to spend a lot of time and effort to bring the suppliers to maturity, to meet Hafele’s global quality standards. All this has been achieved through an accelerated supply chain programme over the last 18 months.
Besides manufacturing, we are also investing in innovative start-up communities in India. 10 days ago, I was in New Delhi at the Ministry of Commerce. We signed a memorandum of understanding with DPIIT and the MSME Department to support the Indian start-up ecosystem. As proof of our commitment to establishing and furthering the Indian supply-chain ecosystem, we have invested in a start-up which will manufacture built-in appliances for us. Through this initiative, we are getting into the manufacturing of built-in appliances in India. The facility was ready in 3 months. As a first step, this is an assembly facility. Gradually, this facility will be scaled up to manufacture built-in appliances. This, for example, will be a big milestone towards securing the supply chain in this category.
Speaking of the manufacturing range, we will first start with the products we are already known for. We will also leverage our production strength with existing suppliers on the manufacturing side while working with our partner network on the market front. The problem with the European suppliers has been that they provide a 5-star product at a 7-star price. India wants a 5-star product at a 3-star price. That’s where Hafele has cracked the India success story. We have the right product at the right price. We are now working very hard to replicate this strategy for our upcoming manufacturing facility in India.
B&I: Would manufacturing in India also bring Hafele the cost advantages?
Frank Schloeder
The manufacturing that we will do in India will basically help us in securing our supply chains, both for India and for Hafele worldwide. Having said that, where there are cost advantages based on the products in focus, we will pass them on to the customer. Developing the supply chain is a challenging part, especially since China has the time-drawn advantage. What China did 20 years ago, we started doing in India 5 years ago. What is very encouraging for us in India is that we are on a strong path to have an equally strong ecosystem for effective supply chain creation and management.
B&I: Do you see a shift in demand for the premium solutions in the home-improvement segment, especially since the pent-up post-pandemic demand was fuelling this market?
Frank Schloeder
If we see the players in the construction space, across categories, it’s the same story. It’s a low to moderate one-digit growth (if there’s growth at all!). I don’t think that this is a structural problem that we have in India. I think the growth story in India is very much alive and kicking. In fact, it’s stronger than ever before. Interestingly, it’s also typical in emerging markets to witness a demand curve with a lot of volatility, and you have to be prepared for this volatility. But today, I feel that we are in a market which is consolidating. Things will get stronger from here. I foresee growth gathering momentum beginning from the second half of this year.
Gregor Riekena
Talking of the global perspective, the way people live and work has changed fundamentally across the world over the past 5 years. The pent-up demand (over 2021-22) was fuelled by people not being able to travel. So, they spent on solutions in the home improvement area. Over the next three years (2023 onwards), we are seeing that this pent-up demand has bottomed out and the ‘real-time’ demand is getting back on track with an expected rising curve. As the global population increases, so does the demand for living and working spaces. This, in effect, will continue to propel us into a stronger future.
B&I: What kind of technology play do you see over the next two to three years when it comes to the solutions from the Hafele portfolio?
Gregor Riekena
In our design strategy, we are working very aggressively in building an ecosystem around our portfolio of solutions. As an example, we started with our own competence in LED lighting. Taking it forward, we acquired a company that is a pioneer in LED lighting – Nimbus. Then we acquired a young software start-up at Stuttgart University – ThingOS. Last year, we merged them into one technology unit called Hafele Technology Solutions.
These steps open up new possibilities that no one else has on offer. For example, in a luxury retail environment, you can connect access control to lighting, and this is a very smart value-add for the customers that are operating in these kinds of environments, say the high-value showrooms like luxury product showrooms and jewellery stores. So this is absolutely our strong focus, for Hafele in India and worldwide, and we have dedicated 1/3 of our booth at Interzum 2025 exactly to this ecosystem.
B&I: What is Hafele’s message from Interzum 2025 to your markets worldwide?
Gregor Riekena
A very clear message in our tagline – Maximising the value of space. Together with Hafele, I invite customers and partners at interzum to bind forces to co-create, co-engineer, and I feel this is the right way forward.
Frank Schloeder
To elaborate on Gregor’s reply, we are looking at strong partnerships. There are many solutions on display at this Interzum which are very useful for the Indian market. For example, we have the micro-living solutions, which are very relevant for cities like Mumbai. Then there’s a big progress on lighting solutions. We are the only company providing both furniture lighting and room lighting solutions under one roof. So, whether it’s the kitchen area or the living room spaces, you can design your furniture and room with LED lighting from Hafele. Our solutions range makes it even more exciting for our customers and partners to join forces with us.
Hafele has built a comprehensive suite of home improvement solutions for the Indian market: Frank Schloeder
Home-improvement major Hafele India has made strong headway in the evolving new global business environment. The company is w
