The Covid19 pandemic has added many new dimensions to the way we carry on with our daily routines, and hygiene has, by far been, the one most talked about. The increased focus on cleanliness puts companies working in the ‘hygiene segment’ of the building materials market like Kohler in the spotlight. Buildingandinteriors.com in conversation with Mr.Salil Sadanandan, President South Asia and EMEA at Kohler.
B&I: From the vantage point you are at; how do you see your markets pan-out over the next 1-2 years?
SS: The markets are currently understandably slow and may remain like that for the coming 2 to 3 quarters, but I am extremely optimistic about the longer term given the supply gap in quality housing in urban india. The silver lining is the increased interest in homes over the last few months. Homes are the new sanctuary and consumers are willing to invest both time and money. We are already seeing faster than expected recovery in the high end business as the well to do rush to complete their houses before the festive season.
The residential project business will be slow in the near term but I am expecting it to rebound by the end of the year. The real challenge facing the building and construction industry is not a demand challenge (except in the short term) but the potential availability of work force – over 80% of the work force in this industry is casual labour and they have not been well treated or managed in this pandemic. A lot will depend on how the Government rehabilitates them.
B&I: You have a fairly large geography to manage. What are the common business challenges across these regions? In the pecking order, where does India feature in these regions?
SS: Every geography comes with its unique opportunities and challenges. The economic life cycle stages are different across my multiple regions as is the rate of development and infrastructure. In the current pandemic situation there has been an exodus of both skilled and semi skilled work force in most of my important markets – this will surely effect the rate of recovery. Alongside US and China, India continues to be one of our key strategic markets and a significant part of the business that I manage.
B&I: What are your plans on capitalising further on ‘Make In India’? What is the status on exports from Kohler’s India plants?
SS: We have been operating on the ‘Make in India’ initiative for several years now. Our products are Made in India, for India and the world at the two state of the art plants in our 230 acre facility in Gujarat. A significant proportion of our production is also exported to our markets in USA, Europe, Middle-East and Africa.
B&I: Post-Covid19 market is slated to see a multi-fold increase in contact-less/touch-less solutions. How is Kohler positioned to address this demand? What are your concerns with such solutions when it comes to the Projects business?
SS: The crisis has led us to the ‘new normal’ with increased focus on hygiene, wellness and technology. We have seen a 5X growth in demand for our touchless sensor faucets since March 2020. Kohler’s touchless faucets use sophisticated time of flight sensor (which are used in smart phones) instead of conventional Infrared sensors – helping us make the sensor invisible and achieve faster actuation (0.75 seconds).
Another category which has seen peaked demand is cleansing seats. The category has seen a steady growth over the past few years and we believe that this category will see a massive jump in the near future as hygiene conscious consumers will look to replace their normal toilet seat with a touchless one.
Smart as a concept had great traction in India even before this pandemic hit us. Discerning users have been using Kohler intelligent toilets as an ultimate in luxury- completing the entire cleansing process without lifting a seat or pressing the flush button after getting up. This luxury combined with heightened sense of hygiene and safety has opened new opportunities for us. We have been expanding our portfolio and will be adding 2 more intelligent toilets this year. We have started pitching Numi too which is Kohler’s most advanced toilet and has won the prestigious Consumer Electronic Show (CES®) 2020 Innovation Award Honorees in the smart home category.
B&I: Water quality in India varies hugely. Do you need to make changes in your manufacturing processes to address the challenges that the water quality in India poses?
SS: Water quality and availability is an escalating challenge in India . Over the years we have used our resources in the Indian Innovation Center in Gurgaon to develop technology and solutions to enable our products to perform optimally in deteriorating water conditions. Our plating processes are double the industry standards and our manufacturing labs do stringent tests to ensure the lifetime durability of our products.
B&I: How important is Project Business at Kohler? What is the typical profile of a project that you are mostly keen to pursue? In terms of the percentage share, what is the split between Project and Retail business?
SS: The project business is extremely important for us. Not only does it provide for a stream of revenue but is also a source of bathroom inspiration for our discerning consumers. With the increase focus on homes in the last few months, several consumers want to emulate a 5-star bathing experience at home.
Hence, we work with all the big players in the hospitality sector for their iconic projects. Projects get us significant business. We have heathy mix of upscale residential, commercial and hospitality projects.
B&I: How important are the Architects/Plumbing Consultants in your business strategy? What makes these specifiers work with Kohler?
SS: Architects and plumbing consultants are critical for our business and are a part of a larger customer ecosystem that we cater to on a regular basis. We continuously strive to be their preferred partner and their one stop solution for all bathroom related needs. Since 80-90% of our premium and luxury customers work with architects and plumbing consultants, they are also key influencers for us in the consumer buying cycle.
We are today the most preferred and recommended brand of leading specifiers including architects and plumbing consultants in the country. This is a testimony to our design, technology and quality leadership in the market.
B&I: As markets open, it is being widely believed that the premium-end of the market will take a hit. Your comments on that.
SS: I would politely like to disagree with the notion, as markets open, we are seeing a huge surge in demand for several of our categories. It’s a well known fact that the upper end of any market is less elastic to slow down and recessions; our healthy uptick in the high end independent homes over these past few weeks is a clear indication of it.
B&I: There are many suppliers in the market who are increasing their product categories to address the requirements of the ‘common customer’. What is your opinion on that?
SS: For us, no customer is common. All customers have varied tastes, preferences and requirements and we create products to satisfy all such needs. The concept of one size fits all doesn’t exist in today’s time.
We have products across all relevant premium price segments, which we meaningfully try to update without compromising on the quality and performance of our products.
B&I: Kohler operates in upper segment of the market. Do you have plans to introduce more competitive product lines/sub-brands to milk the mid-segment?
SS: At the moment we only intend to operate with Kohler brand. Though we have launched an even more upscale line matched brand Kallista from our global portfolio.