Jan 1 2016 | Q&A

The manufacturing sector in India faces critical challenges in the areas of power

The manufacturing sector in India faces critical challenges in the areas of power, ports, railroads and roads, as well as the governance framework, which is intertwined between the Central and State structures. Additionally, manufacturing in India has long lagged behind targeted goals.

Pradhyumna Ingle Business Director, General Industry, Henkel Adhesives Technologies India Pvt Ltd shares his views with Sandeep Sharma about Henkel’s core competencies, manufacturing base, capacity, production process, products/solutions offered, application and usage of adhesives and sealants in India, energy efficiency measures and challenges before industries in India. Edited excerpts….

Could you tell us in brief about your company and core competencies?
Henkel operates across the world in three business areas: Laundry & Home Care, Beauty Care and Adhesive Technologies; however, in India, Henkel has two business verticals: Adhesive Technologies and Beauty Care.

The Adhesive Technologies business in India is the market leader in adhesives, sealants and surface treatments. It has a long tradition of a well balanced portfolio of international, regional and local brands. Solutions from Henkel can be found in many objects that are manufactured, which touch our lives every day: cars, books and magazines, computers, aircrafts, refrigerators, cell phones, furniture, textiles, packaging, and many more. These solutions include anaerobic adhesives, cyanoacrylate adhesives, silicone sealants, polymer composites, solvent based adhesives, solvent free adhesives, and cold seal laminating adhesives used in flexible packaging industry. These are used in diverse segments ranging from electronics, automotive, manufacturing aerospace to biomedical industries. Henkel India’s well-known brands include Loctite, Teroson, Bonderite and Aquence.

The Beauty Care business in India offers Schwarzkopf Professional range of products. Based on professional partnerships with hairdressers, its focus is to provide innovative concepts and services, which match the needs of international salon businesses. Schwarzkopf Professional is present in over 80 countries across the world. In India, Schwarzkopf Professional is a leading brand in professional hair care. The leading sub-brands of Schwarzkopf Professional include BC Bonacure, Igora and Osis+.

Could you share with us details about your manufacturing base, capacity and production process?
Manufacturing is absolutely core to the success of our business. With 9 manufacturing locations spread across the length and breadth of the country, today, Henkel is close to its customers. Our focus is on providing local solutions while leveraging globaltechnologies and expertise. India is one of the growth markets for adhesives, and we have invested in a Greenfield project at Kurkumbh, near Pune, where we will be setting up India’s largest multi-technology manufacturing plant for adhesives, sealants and surface treatments. This plant will help us capture the Indian market’s growth potential and meet all other objectives by virtue of its size, proximity to customers and best-in-class technology.

Through its experience and interdisciplinary approach, Henkel has developed a broad application expertise and understanding of customer requirements. Always aiming to anticipate market trends, Henkel experts develop adhesives specific to market and application needs. In line with its corporate strategy, Henkel focuses on enhancing safety and sustainability without compromising on performance. The ambition is to deliver even better and safer products and services with a smaller environmental footprint.

Henkel combines innovation with sustainability and cooperates with partners such as equipment providers or raw material suppliers to further improve processes, line speeds and efficiency of production processes.

Could you provide us insight about your products/solutions offered under the industrial and infrastructure segment? Henkel is a leading solution provider for adhesives, sealants and functional coatings worldwide. We offer a comprehensive portfolio of tailor-made solutions for our customers and of high-quality consumer products. Our global team of experts partners with customers to deliver best-in-class service. Our powerful innovations and leading technologies under top-brands such as Loctite create sustainable value for industrial customers. Our SBU-wise products/solutions offered by us is as follows:

Transport and Metal business

The Strategic Business Unit Transport and Metal (AT) serves customers in the automotive, metal and aerospace industries.

  • Automotive

As the global leader in adhesive, sealant and surface-treatment technologies for the automotive industry, we create competitive advantage for our customers along the entire value chain of car manufacturing. And we partner with our customers right from the start, so that we understand their needs and develop tailored solutions – for today and tomorrow.

We provide undisputed, world-class excellence in our innovative solutions – based on the pillars sustainability, cost reduction, lightweighting, e-mobility and comfort and safety.

  • Metal

Henkel’s performance-driven solutions for the metal industry lead to improved production speed and efficiency, lower applied cost, and reduced downtime spoilage and waste.

The portfolio stretches from lubricants and products for cold forming to metal cleaners and conversion coatings. But all of these applications have one thing in common: perfectly balanced formulations to ensure the utmost in process reliability.

  • Aerospace

Henkel is the leader in structural adhesives and surface treatments for the aircraft OEM and MRO industries. Henkel invests heavily in R&D and product support and is a world market leader in this industry for over 40 years, being listed in over 5.000 aerospace specifications. Henkel’s innovative materials provide our customers with practical, economic and performance benefits.

Our structural assembly portfolio of products provides structural adhesives and resins for the fabrication of metal, composite and honeycomb structures. Our comprehensive portfolio of surface treatment products provides solutions for the cleaning and maintenance of all aircraft metals ranging from landing gear to jet engines. Our products and solutions are used on commercial aircraft, regional jets, business aircraft, jet engines and nacelles, space and defense, helicopter and airline refurbishment and overhaul operations.

  • Packaging and Consumer Goods Adhesives business

This business provides innovative adhesives solutions for a range of areas such as packaged food and beverages, diapers and hygiene products, shoes, furniture, and much more. The actual amount of adhesive in the products may be small, but determining factors are the specific properties of the adhesive and the techniques used to apply it. Henkel adhesive solutions ensure reliable bonding on all kinds of surfaces and for the entire spectrum of machines and applicators around the world.

Packaging plays an essential function for food and consumer goods companies. It not only provides the durability and strength required for protection and transport, but has become an integral part of on-shelf marketing. Henkel plays a key role on both fronts, from the adhesives used to produce the packaging to the coatings that make them stand out on a crowded store shelf. For the Disposable Hygiene and Nonwovens industry, our innovative products combine skin friendliness with high adhesion.

  • General Industry business

Henkel offers superior adhesives, encapsulation materials and conformal coatings to address a wide variety of applications in the energy and utilities industries. Henkel is a global leader and the preferred supplier to many of the largest manufacturers in the world. With expertise and products in both OEM design and facility maintenance, Henkel is able to offer a complete solution package.

Every industrial assembly application carries its own set of challenges. Factors such as adhesive raw materials selection, temperature resistance, viscosity and curing time must be reviewed. Henkel offers a wide range of assembly and protection materials for the industrial environment, including environmentally responsible materials.

This business also offers a product for every application in the sphere of maintenance, repair and overhaul. It has been a leading supplier of state-of-the-art industrial adhesives and sealants, metal pretreatment technologies, metalworking compounds and high performance coatings to a variety of industrial markets for assembly and maintenance and repair.

From metal stamping and bending lubricants in the HVAC industry, to the pre-treatment of tractor cabs in the agriculture and construction industries, to the bonding of top lids for washing machines in the appliance industry, Henkel delivers optimal performance while reducing manufacturing assembly costs. Backed by powerful brands such as Loctite®, Teroson® and Bonderite® - the business group partners with hundreds of markets segments, such as:

  • Appliances
  • Medical Devices
  • Maintenance and Repair
  • Automotive Aftermarket
  • HVAC and Filters
  • Wind and Solar
  • Agricultural and Construction Equipment
  • Recreational Vehicles

The manufacturing sector in India faces critical challenges in the areas of power, ports, railroads and roads, as well as the governance framework, which is intertwined between the Central and State structures. Additionally, manufacturing in India has long lagged behind targeted goals.

Manufacturers from around the globe rely on the General Industry group for the highest quality and reliable technologies and technical support in the industry. We are involved early in product development helping to reduce assembly costs, provide design and application assistance, increase process reliability, and improve productivity and profitability.

  • Maintenance repair and overhaul (MRO)

Backed by the powerful Loctite® brand, the AG business provides products and training solutions to maintenance engineers across all industries. With a full range of maintenance adhesives, repair epoxies, lubricants, coating and sealants, we can repair and improve the reliability of most any piece of equipment. Anywhere there is equipment and physical plant components to be maintained or technicians to be trained (Manufacturing plants, Processing plants, Public utilities, Government operations, etc.), there is a Henkel solution.

The business also offers maintenance workshops that teach maintenance technicians how to solve the most common maintenance problems and prevent future breakdowns.

  • Vehicle Maintenance and Repair (VRM)

Similarly in the vehicle maintenance market, our products have been reliably solving automotive maintenance and repair needs for over 50 years. OEM specifications of Loctite® and Teroson® brand products give automotive mechanics the quality and confidence to get the repair done right. The Vehicle Repair and Maintenance market encompasses service and repair products for:

  • Automotive repair
  • Heavy-duty truck maintenance
  • Fleet maintenance
  • Service parts business of major equipment manufacturers in agriculture, construction, small engine and automotive

Could you throw some light on the application and usage of adhesives and sealants in India?
The global adhesives & sealants market, along with its applications, has witnessed a high growth for the past few years and this growth is estimated to increase in the coming years. Asia Pacific is the largest consumer for adhesives and sealants in the global market. The growth of adhesives in this region is primarily driven by rapid industrialization, strong GDP growth, and rise in manufacturing and industrial output. Adhesives and sealants are vital products in many key industries. Key application areas of adhesives include furniture, footwear, construction, automotive, packaging and pressure sensitive applications, while those of sealants are automotive, construction, assembly, packaging, pressure sensitive tapes, etc. Medical adhesives and sealants are rapidly finding practical usage in newer application areas such as dental and surgical procedures, thus driving growth in the overall market both in terms of volume and value sales. Specialty adhesives and sealants designed for specific consumer needs in niche markets are also gaining wide traction.

On the energy efficiency front, what kind of initiatives are taken at Henkel?
At Henkel, the aim of our Sustainability Strategy 2030 is to triple our efficiency by either delivering three times more value with the same environmental footprint or reducing the footprint by one third while delivering the same value, in other words, achieving more with less. Energy and climate is one of our six focal areas. We explore all options for reducing energy use and the related carbon emissions, in order to avoid generating climate-damaging gases in the first place. Besides optimising our own production processes, we also focus on developing products and technologies, which help save energy while they are being used.

A case in point of Henkel’s commitment to a sustainable future is evident from its range of Loctite products which we continue to develop to deliver sustainable solutions for industry such as greater energy efficiencies, improved machine reliability, decreased necessity to replace parts, reduced downtime and maintenance, and a lower ecological footprint.

Government of India plans to set up number of manufacturing hubs across India. What are the challenges and opportunities before industries in India?
According to World Bank report, India ranks 142 out of 189 countries in ease of doing business based on surveys conducted in the two major cities of India, Mumbai and Delhi. Despite the fact that manufacturing in India has remained healthy due to strong domestic demand, its contribution to GDP is only 16 per cent, as compared other countries, and is largely oriented to the domestic market. The manufacturing sector in India faces critical challenges in the areas of power, ports, railroads and roads, as well as the governance framework, which is intertwined between the Central and State structures. Additionally, manufacturing in India has long lagged behind targeted goals.

The Indian government has now committed to raise its investment in infrastructure from 7 per cent to 9 percent, representing a US$ 500 billion opportunity for growth within India's manufacturing sector. Moreover, state governments have been proactive in making manufacturing zones attractive for manufacturers. Lastly, it is important to note that Innovation in manufacturing is crucial; India’s competitive edge is not only in labour arbitrage but in technologically intensive manufacturing.

You are one of the lead players in the Adhesives and Sealants space. What's the market size and your share in this segment?
India is a very important market for Henkel globally. Henkel is the biggest player in various business-to-business adhesive and sealant segments. We serve three different markets in India.

Transport and Metal business, which provides the automotive, aircraft and metal processing industries with superior system solutions and specialized technical services.

Packaging and Consumer Goods Adhesives business, which works with major international customers to develop innovative solutions for the production of grocery packaging and consumer goods from sneakers to baby diapers to the food packaging and pretty much everything that you would buy in a retail store that needs gluing.

General Industry business, which offers a comprehensive portfolio of products for the manufacturing and maintenance of durable goods. This business caters to the needs of a wide range of industries from power stations to wind turbines to washing machine makers and railway carriages and so on.

Are you planning any capacity expansion or a Greenfield unit in India apart from your Kurkumbh plant?
Our Kurkumbh plant will be India’s largest adhesive plant and is a very important milestone of Henkel’s journey in India. The plant will be scalable; that is, it will be built in a phased manner. The site plan has an area earmarked for future expansion, which will enable us to integrate new technological developments in the future. We intend to create the footprint for the next 10 to 15 years through this plant.

Who are your major clientele and which are the prestigious projects you have been associated with?
Adhesives, sealants and functional coatings from Henkel Adhesive Technologies are everywhere – at home, at school, in the office, on the building site and in the factory. They can be found in many objects that are manufactured, which touch our lives every day: cars, books and magazines, computers, aircraft, refrigerators, cell phones, furniture, shoes, textiles, packaging, and many more. Without our products and technologies such items would look different, not last as long, cost more to produce or simply be manufactured using traditional methods.

Going forward, what are your immediate and long term plans for expansion in India and abroad?
The factors that will boost growth of adhesives and sealants market are technological advancement, globalization, and the increased usage of adhesives and sealants to seal and protect materials in an environmentally friendly manner. Technology innovation to find newer, better and faster products that will dramatically influence the cost effectiveness of the customers’ operations would be the other industry drivers.

One of the goals of Henkel in India is to create new markets by educating the stakeholders and expand existing markets by finding new applications for adhesives. We continuously explore areas where we can replace metal fasteners or traditional methods of riveting or bolting with adhesives be it in automotive or any other sector we play in. An interesting example of this is the auto business where earlier cars were bolted together or riveted, and now, to a large extent they are glued. The benefits of this are that the cars are lighter and quieter and more comfortable to drive. They use less fuel too. Henkel is making a significant contribution to the light weighting movement, which is going to keep us in the forefront of developments. At Henkel, we drive powerful innovations and develop leading technologies that create more value for our customers by keeping our customers at the centre of what we do and working closely with them to develop solutions to challenges faced by them.

How is the FY2015-16 so far in terms of products launched, business generated, and growth achieved in both domestic and international markets?
In the first nine months of 2015, Henkel’s sales increased significantly by 1,413 million euros to 13,715 million euros, reaching a new high for Henkel. This was an increase of 11.5 percent compared to the first nine months of 2014. Adjusted for foreign exchange, sales grew by 6.4 percent. Organically—i.e., adjusted for foreign exchange and acquisitions/divestments—sales increased by 3.1 percent, with all Henkel’s business units contributing. We significantly increased both sales and earnings across all business units. Organic sales in emerging markets were strong, once again making an above average contribution to growth. Henkel launched many new products and solutions during the year. Some examples:

  • Loctite PC 7000 High Temperature Abrasion Resistant Coating, a unique three-component rapid setting silica-based composite coating system, designed to protect industrial processing equipment such as coal tip burners in boilers and furnaces against harsh temperature and abrasion environment. This product is an environmentally friendly water based system containing resins and abrasion resistant filler mixture.

  • Loctite EA E-30HV, a High Performance Epoxy Compound for applications of Potting and Bonding, which is developed for the Manufacturing sector’s need for insulation and thermal resistance potting and bonding.

  • TEROSON® products for the automotive aftermarket, namely TEROSON® WX 157 (Heavy Cut HP), TEROSON® WX 150 (Fast Cut), TEROSON® WX 175 Glaze HP and TEROSON® WX 180 Polish Wax. These are rubbing and polishing compounds that help remove scratches and sanding marks, give excellent gloss final finish and give protection to painted surface with an easy application process.

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