What challenges are India’s fan manufacturers facing in the current situation?
While the fans market has seen pent-up demand in late May and early June as unlock 1.0 unfolded, there is uncertainty about what the future holds. Because of business degrowth and job losses, consumer spending of late has been minimal. Additionally, rising costs of production and logistical challenges is adversely impacting the industry.
Besides, we are not being able to provide service, as consumers are rightfully still wary of allowing visitors including technicians and delivery guys inside their premises.
Having said that, we see opportunity for the industry in the current scenario and in the post-Covid era. With Indian Society of Heating, Refrigerating and Air Conditioning Engineers (ISHRAE) issuing safety guidelines to prevent transmission of novel coronavirus following concerns that heating, ventilation and air-conditioning (HVAC) systems could be adding to the spread of Covid-19 pandemic, industry players feel fans should be used to increase air movement and exhaust fans, in kitchens and toilets.
Health experts too are recommending consumers to stay in well ventilated areas where there is regular flow of air.
Use of fan increases air circulation in indoor areas lowering the risk of air contamination. As workplaces resume operations under strict hygiene regime, we are likely to see increasing installation of fans to enhance air circulation. I feel that fans are taking on an important role to beat Covid-19 and the heat too.
What is the market size and growth rate of India’s fan industry?
The size of the organised fans market in India is pegged at Rs 7,500 crore. As per third party research by Market Pulse, fans industry grew 9.5% by value and 6.7% by volume in FY’19-20. Because of Covid-19, growth in March to May 2020 period may not correspond to the previous growth rate.
Orient Electric controls 20 % of the organised fans market and manufactures 10 million units per annum at its Faridabad and Kolkata plants.
Does the company have enough inventory to cater to the consumer demand? If the lockdown again comes into picture, do you still have inventory to cater to the consumer demand?
The initial period of stockouts at retail points was not because of inventory deficit but largely due to supply chain bottlenecks. Currently, there is ample availability of inventory and we have also started production in our plants at Faridabad and Kolkata. In case government announces complete lockdown again, the existing inventory will help us cater to consumer demand for the next one-to-two months.
Are you planning to increase your product basket?
Product development is a continuous process and we at Orient Electric have been consistently focusing on developing products which are innovative and disruptive. We have recently introduced i-series range of fans powered by ECM technology that provides 50% savings on energy and electricity cost.
We are prepared to migrate to BEE’s star energy rating norms as and when it kicks-in.