《Henkel has ambitious plans for expanding its business in India: Jeremy Hunter》：
The market for adhesives, which find applications in almost every manufacturing sector, has been showing steady growth in India due to rise in industrial activities. Henkel, one of the leading global adhesive companies and which owns brands such as Loctite, Teroson, Bonderite, etc, is looking to expand its business in India, as the German company aims to generate half of its targeted sales of Euro 20 billion in 2016 from the emerging markets.
In line with this strategy, the company recently opened its research lab in Pune. In this interaction with Rakesh Rao,Jeremy Hunter, President, Henkel India, reflects upon growth prospects for its adhesives business in India and challenges facing the industry.
How has Henkel’s adhesives business in India evolved?
Adhesives are used in almost every manufacturing sector right from flexible packaging to textiles and have gained widespread popularity across sectors – renewable energy, auto, aviation, construction, FMCG, healthcare, etc among many others. The global trends of industrial adhesives point towards steady growth. However, growth in the emerging markets continues to build much faster than the developed economies due to rapid pace of industrialisation and rise in manufacturing/industrial output. It has been 25 years that Henkel has been present in India and has ambitious plans for expanding its business here.
ALSO READ: India remains a strategic country for DuPont: Dr Rajeev A Vaidya
Globally, the business split is 34% packaging, consumer goods & construction adhesives; 24% adhesives for consumers, craftmen & building; 20% transport & metal; 15% general industry and lastly 7% electronics.
Recently, Henkel inaugurated its research lab in Hinjewadi, Pune. What is the significance of this lab for Henkel?
Henkel aims to grow sales to Euro 20 billion by 2016, of which 10 billion Euros is expected from the emerging markets that contribute to 45% of the sales.
Setting up of the Henkel India Innovation centre is yet another step in strengthening our relationship with our customers in India by providing an integrated one-stop offering of adhesive technologies, testing facilities, dispensing systems and application training. As the centre is networked with Henkel’s advanced technical facilities globally, the customer’s will have an access to Henkel’s expertise and resources worldwide.
How has been the market for adhesives and sealants in India?
Adhesive industry, itself has witnessed high growth in the recent years and has formed a giant market globally and in India owing to widespread application of adhesives, in a broad range of industrial and commercial sectors.
Henkel’s first quarter figures FY2013 highlights the success of company’s investments in emerging markets particularly in India which has generated a strong momentum.
Henkel has ambitious plans for expanding their business in the country. The company has ten manufacturing plants currently and plans to expand its facilities in India. Henkel has also recently launched R&D centres in India to offer more and more innovative solutions.
What are the challenges before Henkel in India?
Despite the continued challenging market environment, Henkel delivered a strong third quarter. We significantly increased both sales and earnings with all our business sectors contributing, globally.
The adhesives industry is witnessing high growth on an account of growing demand in the Asia-Pacific region. China and India are the biggest consumers of adhesives & sealants due to rapid industrialisation and infrastructure growth.
ALSO READ: Henkel inaugurates innovation centre in Pune
However, procurement of important raw materials is a constant problem faced in India. Non-availability of feedstock is the key challenge which Henkel and the industry at large need to address. Further to this, there are no manufacturing facilities for certain chemicals like adipic acid and isophthalic acid which find widespread use in the industrial adhesives segment. Hence, Henkel is forced to bank upon importing the same in bulk amounts from countries like China, resulting in cost escalation.
Especially, the packaging, construction, and automotive industries are growing at a high rate in China and India driving the demand of adhesives and sealants.
How optimistic are you about auto sector, which has been a major end-user of your products?
Automotive industry at large has been affected by economic downturn globally so is ultimately adhesives used for the industry. Car sales had fallen in 2012-13 for the first time in a decade and the current momentum could mean a second year of decline. The gloom and doom story for the industry is quite in circulation and analysts do paint an unhappy picture.
The fact is that the automotive industry has historically seen many fluctuations. At Henkel, we are optimistic of the future and this is an ideal time to focus on engineering, bringing down costs with better technology and improving service levels.
Henkel this year has launched a new green water-based products which consumes 20% less with similar tested results which becomes a more efficient option for our customers at this point of time. Henkel works with all the major auto sector companies in India. Maruti, Mahindra and Tata to name a few. It is our constant endeavour to provide global expertise and bring some of the best practises to India.
Which end-user sectors are you bullish about?
India’s growing middle class, demand for convenience packaging, awareness on sustainability, concerns on environment and health safety will be the key future trends & drivers to take technological developments to next level.
ALSO READ: Manufacturing industries are looking for joining hands with gas manufacturers: Moloy Banerjee, Linde India
Industry alignment to these key drivers and its execution will help ascertain deliver higher value for our customers at a reduced footprint. And this would help our customers and consumers reduce their environmental footprint with these new age products and expertise.
What are your long-term growth plans for India?
India, over the past years, have emerged as a hot bed for all the industrial sectors which industrial adhesives cater to like automobiles, shoes, printing industry, diapers, undergarments, cigarette tipping, surgical equipment, construction, interiors and so on. Hence, it has great potential for Henkel Adhesives.
Henkel is open to invest in expansion of manufacturing capacities to cater to growing market needs. Henkel plans to invest more in India and consolidate its position as the largest industrial adhesive manufacturer and supplier in India. Henkel intends to achieve this with a healthy mix of both, inorganic and organic growth.
《Henkel has ambitious plans for expanding its business in India: Jeremy Hunter》：
The market for adhesives, which find applications in almost every manufacturing sector, has been showing steady growth in India due to rise in industrial activities. Henkel, one of the leading global adhesive companies and which owns brands such as Loctite, Teroson, Bonderite, etc, is looking to expand its business in India, as the German company aims to generate half of its targeted sales of Euro 20 billion in 2016 from the emerging markets.
In line with this strategy, the company recently opened its research lab in Pune. In this interaction with Rakesh Rao,Jeremy Hunter, President, Henkel India, reflects upon growth prospects for its adhesives business in India and challenges facing the industry.
How has Henkel’s adhesives business in India evolved?
Adhesives are used in almost every manufacturing sector right from flexible packaging to textiles and have gained widespread popularity across sectors – renewable energy, auto, aviation, construction, FMCG, healthcare, etc among many others. The global trends of industrial adhesives point towards steady growth. However, growth in the emerging markets continues to build much faster than the developed economies due to rapid pace of industrialisation and rise in manufacturing/industrial output. It has been 25 years that Henkel has been present in India and has ambitious plans for expanding its business here.
ALSO READ: India remains a strategic country for DuPont: Dr Rajeev A Vaidya
Globally, the business split is 34% packaging, consumer goods & construction adhesives; 24% adhesives for consumers, craftmen & building; 20% transport & metal; 15% general industry and lastly 7% electronics.
Recently, Henkel inaugurated its research lab in Hinjewadi, Pune. What is the significance of this lab for Henkel?
Henkel aims to grow sales to Euro 20 billion by 2016, of which 10 billion Euros is expected from the emerging markets that contribute to 45% of the sales.
Setting up of the Henkel India Innovation centre is yet another step in strengthening our relationship with our customers in India by providing an integrated one-stop offering of adhesive technologies, testing facilities, dispensing systems and application training. As the centre is networked with Henkel’s advanced technical facilities globally, the customer’s will have an access to Henkel’s expertise and resources worldwide.
How has been the market for adhesives and sealants in India?
Adhesive industry, itself has witnessed high growth in the recent years and has formed a giant market globally and in India owing to widespread application of adhesives, in a broad range of industrial and commercial sectors.
Henkel’s first quarter figures FY2013 highlights the success of company’s investments in emerging markets particularly in India which has generated a strong momentum.
Henkel has ambitious plans for expanding their business in the country. The company has ten manufacturing plants currently and plans to expand its facilities in India. Henkel has also recently launched R&D centres in India to offer more and more innovative solutions.
What are the challenges before Henkel in India?
Despite the continued challenging market environment, Henkel delivered a strong third quarter. We significantly increased both sales and earnings with all our business sectors contributing, globally.
The adhesives industry is witnessing high growth on an account of growing demand in the Asia-Pacific region. China and India are the biggest consumers of adhesives & sealants due to rapid industrialisation and infrastructure growth.
ALSO READ: Henkel inaugurates innovation centre in Pune
However, procurement of important raw materials is a constant problem faced in India. Non-availability of feedstock is the key challenge which Henkel and the industry at large need to address. Further to this, there are no manufacturing facilities for certain chemicals like adipic acid and isophthalic acid which find widespread use in the industrial adhesives segment. Hence, Henkel is forced to bank upon importing the same in bulk amounts from countries like China, resulting in cost escalation.
Especially, the packaging, construction, and automotive industries are growing at a high rate in China and India driving the demand of adhesives and sealants.
How optimistic are you about auto sector, which has been a major end-user of your products?
Automotive industry at large has been affected by economic downturn globally so is ultimately adhesives used for the industry. Car sales had fallen in 2012-13 for the first time in a decade and the current momentum could mean a second year of decline. The gloom and doom story for the industry is quite in circulation and analysts do paint an unhappy picture.
The fact is that the automotive industry has historically seen many fluctuations. At Henkel, we are optimistic of the future and this is an ideal time to focus on engineering, bringing down costs with better technology and improving service levels.
Henkel this year has launched a new green water-based products which consumes 20% less with similar tested results which becomes a more efficient option for our customers at this point of time. Henkel works with all the major auto sector companies in India. Maruti, Mahindra and Tata to name a few. It is our constant endeavour to provide global expertise and bring some of the best practises to India.
Which end-user sectors are you bullish about?
India’s growing middle class, demand for convenience packaging, awareness on sustainability, concerns on environment and health safety will be the key future trends & drivers to take technological developments to next level.
ALSO READ: Manufacturing industries are looking for joining hands with gas manufacturers: Moloy Banerjee, Linde India
Industry alignment to these key drivers and its execution will help ascertain deliver higher value for our customers at a reduced footprint. And this would help our customers and consumers reduce their environmental footprint with these new age products and expertise.
What are your long-term growth plans for India?
India, over the past years, have emerged as a hot bed for all the industrial sectors which industrial adhesives cater to like automobiles, shoes, printing industry, diapers, undergarments, cigarette tipping, surgical equipment, construction, interiors and so on. Hence, it has great potential for Henkel Adhesives.
Henkel is open to invest in expansion of manufacturing capacities to cater to growing market needs. Henkel plans to invest more in India and consolidate its position as the largest industrial adhesive manufacturer and supplier in India. Henkel intends to achieve this with a healthy mix of both, inorganic and organic growth.