Mr. Merchant, Head of Exports Business of Permali Wallace, "Mega Composites
Players Should Get Level Playing Field Vis-a-Vis Small Players"
The interview is a component of research report entitled "US and European Based
companies in the Indian Composites Market: Lessons Learned." This report is
based on series of interviews with multi-nationals, who are exploring growth opportunities
in the Indian composite market. This 29-page report is FREE; to receive complete
report, please write to helpdesk@lucintel.com.
Following is an excerpt from interview with Mr. Mihir Merchant, Head of Export Business,
Permali Wallace
Permali Wallace, a leading manufacturer and exporter of a wide range of Insulation
Material and Composite Parts has set new benchmarks in the industry with its quality
products. Permali started as manufacturers of wood based densifed impregnated laminates
for Industrial and Engineering applications and diversified into wood veneer based
components, glass reinforced composites, SMC & DMC moulded components,
epoxy resin castings, cotton fabric composites etc.
In an exclusive interview with Editor, Lucintel, Venkat Rao; Head of Export
Business of Permali Wallace, Mihir Merchant shares his companies experience
in India
Q: When did you start a facility in India?
Merchant: Permali Wallace Private limited was established in 1961
in Technical and financial collaboration with Permali Limited, Gloucester, U.K.
and Chase Lowe & Co., Manchester, U.K and production started in 1962. We bought
back entire shares 5 years back. As per the purchase agreement we are still using
the same brand name
Q: What do U.S. and European companies need to know as they prepare to do business
in India?
Merchant: 1. The Foreign companies need to understand the Government
of India (for foreign investments and statutory compliances) rules and regulations
to start up the business in India. 2. Good idea of presence of unorganized sector
and small scale composite manufacturers. 3. It is also important to understand the
local culture in which the business is done.
Q: How significant is the Indian market to your business today and in the future?
Merchant: Indian market is significant for us. 80 pc of our business
is in India. Even in the long run Indian market would be crucial for us though our
Indian business might come down to 70 pc after a span of three years.
Q: What are some of the key challenges faced by your company in Indian market?
Merchant: Acceptance of composites in new applications and mega
organizations like railways and others are major challenge. Pricing factor is another
major concern. Whereas we look at long term benefit customers look for cheap product.
Buyers in Indian composites market tend to be more price sensitive than quality.
The concept of composite materials and its life-cycle cost advantage is lacking
among Indian buyers. Another major challenge is "Low Cost Competition”. Mega
organizations have to follow government rules and regulations in tenders due to
which their Quote rates go up whereas small scale manufactures can quote low because
of their being out of the purview of government taxes.
Q: What key lessons can you share from your company’s experience in India?
Merchant: Indian market lacks maturity. There is lack of awareness
and lack of quality judgment.
Q: How is doing business in India different from doing business in Europe or US.
Merchant: Both are almost same whereas composites awareness in
US-Europe is good but actualization of business is slow. Though it greatly varies
from organization to organization but as per our experience that there too one has
to cross many stumbling blocks.
Q: How much growth have you seen in last 2-3 years from your Indian business?
Merchant: We have been witnessing average growth of 20 pc per year
for the last five years. Last year our growth rate was around 25 pc. This financial
year we are expecting growth of 35 pc.
Q: How much growth do you expect in next 2 years?
Merchant: We are expecting slight slowdown due to recessionary
trends in the global economy but our growth rate would be 30 pc.