LIXIL is targeting 15 lakh consumers by 2021; says it considers affordable housing a huge opportunity
Japanese multinational firm LIXIL expects India to be one of the top three global markets outside its home country Japan for its water technology business in the next seven-to-eight years. It expects its pre-fabricated bathrooms, which it puts together and delivers within 16 hours, to drive growth.
The company has invested Rs 400 crore on its Vijayawada factory, which has a capacity to produce 1.2 million pieces of ceramics. It has also set up a windows fabrication unit at Manesar at an investment of Rs 20 crore.
Bijoy Mohan, CEO, Asia Pacific at LIXIL, who heads its water and housing businesses in 23 markets across Asia Pacific, said the company may also invest another Rs 100 crore to double capacity of ceramics business in another three years in India.
A: Our biggest focus has been on providing access to sanitation. We want to make a difference to more than 2.5 billion people. Hence, India becomes a key focus area, given the problem of open defecation and the fact that Swachh Bharat Mission is in place.
Through our global initiative Sato toilets, we have tried to solve sanitation issues in Africa and Bangladesh. We wanted to use that platform for India too. Under the Swachh Bharat Mission there are some 47,000 toilets being built every day in India.
Our research suggest that almost half of those toilets fall into disuse after a few months. This is primarily due to functional issues such as the twin pits getting filled too fast or pits getting clogged. We decided to solve this issue through technology and developed a new system called the VTrap that helps slow down the rate of filling of the pit as it uses a lot less water and avoids clogging of junction boxes used in the twin pit system. Both help solve the problem of toilets falling into disuse.
We have already installed some 35,000 of these units across the country and are targeting 15 lakh consumers by 2021. We started with a few pilot villages in states such as Odisha, Madhya Pradesh, Jharkhand, Bihar, Rajasthan and Maharashtra.
Globally, we have constructed 2.5 million units, primarily in East Africa and Bangladesh. Our biggest penetration has been in Bangladesh where we have touched a million. The cost of these toilets is less than $10.Q: What are your investment plans for India?
A: We have two businesses in India – LIXIL Water Technologies and LIXIL Housing Technologies -- to solve day-to-day needs of the country. In the next three years, India would be among our top three markets. We have invested Rs 400 crore for a ceramics factory in Vijaywada, spread across 44 acres, which has a capacity to produce 1.2 million pieces of ceramics a year. We hope to double capacity going forward.
We have invested Rs 20 crore for setting up a windows fabrication unit in Manesar. We have also introduced pre-fabricated toilets to help builders save on time and labour costs. These units cost anywhere between Rs 1.1 lakh to Rs 1.4 lakh, which is close to what it costs them in case of traditional construction.Q: Any plans to associate with the Affordable Housing Mission?
A: We have a separate segment that addresses the government sector. Affordable housing is a huge opportunity for us. Here we are offering products that are low-cost versions of our existing products. We are undertaking a lot of research work in this area to arrive at a proposition that provides value at the right price point. This is a critical market for us from a global perspective.Q: The structure and defects liability clause under RERA 2016 mandates that a developer has to offer a five-year warranty for products installed from the time of possession. How are developers addressing this problem?A: We have a solution which we did not consider when we developed it. The biggest value add that our prefabricated platforms give is the waterproofing guarantee. Developers have found that the biggest concern in case of bathrooms under RERA is to provide a water proofing guarantee because today there is no single person who can be held accountable if the water proofing goes wrong.
Developers are approaching us for our pre-fab bathrooms on which there is a five-year guarantee. That practically covers everything relating to bathrooms. Similarly, for pre- engineered windows, developers get an assurance on water proofing. Fixtures are also covered under this five-year warranty, apart from physical installation.Vandana.email@example.comSubscribe to Moneycontrol Pro and gain access to curated markets data, trading recommendations, equity analysis, investment ideas, insights from market gurus and much more. Get Moneycontrol PRO for 1 year at price of 3 months at 289. Use code FREEDOM.