Hafele hopes to increase the proportion of Indian procurement to 50% in the medium term and establish a supplier park

New Delhi, Dec 22 (PTI) German interior solutions provider Hafele hopes to increase its Indian sourcing ratio to 50 per cent in the medium term by gradually developing its supplier base, said Frank Schloeder, managing director, South Asia, at Hafele.

The company also plans to invest “billions of rupees” to set up a manufacturing unit to produce some of its products in-house in Europe, while also developing a supplier park with an eye on exporting from India to Europe. future.

Hafele India has a turnover of $The Rs 1,200-crore company expects its business to triple in the next six to seven years, but faces challenges due to lack of a proper policy framework for the furniture industry and measures such as the hinge quality control order scheduled to be introduced on January 1, 2025. Lord told PTI in an interview.

“So far, the proportion of sourcing from India is less than 10 per cent… Starting from 10 per cent in December, next year our internal target is for ‘Make in India’ to be close to 30 per cent,” he said.

Schroeder further said, “Then the medium-term goal is to cross from 30% to 50%, and then we will see how things develop.”

He was responding to a query about how Häfele is looking to increase local sourcing.

So far, 90% is imported from different regions, with China being the largest market but not the only market, he said, adding, “I think our exposure to China is probably less than other companies”.

Explaining why the company sources most of its components, he said: “Häfele is not a typical manufacturing company. Globally, we produce less than 10% of the products we consume ourselves.”

The company’s product portfolio is diverse, ranging from appliances to partitions to furniture, accessories and faucets, he said, adding, “We are like a platform in a way, we work with suppliers. So we have a huge ‘s supplier base” across the world and in all regions. ”

When asked if the company plans to set up its own manufacturing facility in India, Schroeder said: “As we do, around 10% of our production globally is done by ourselves, we It will also now set up its own factory in India and manufacture some of the products we produce in Europe and India. ”

He said the route would be “India for India” first, but with a “India for the world second step” mentality from day one.

“So we will establish a sourcing base in India, first to serve India, but secondly to Häfele’s global ambitions,” he added.

Schroeder noted that the company will also “create a facility like a supplier park where we will provide space for international suppliers from Europe and we will attract them to our facilities to work with Häfele in India.” “Made with happiness”.

“The second step is that we can take advantage of the cost-effectiveness of localized manufacturing to bring these products to other parts of the (world).”

When asked about the investment, he said: “I don’t want to give a specific figure, but it will be in the hundreds of billions of rupees and it can even reach four digits if the investments from vendors add up over five to six years.”

Commenting on the company’s growth in India, he said: “This is a $We have a Rs 1,200-crore business here and there is huge potential for growth… We are growing exponentially. It took about 10 years for the business to really grow exponentially. ”

“We are very optimistic about the development of India,” he added, adding that India is Häfele’s third-largest market in the world, after its home country Germany and the United States.

He added that the United States is currently 60-70% larger than India and Germany, and about twice the size of India.

Talking about the company’s future business in India, Schroeder said, “It’s hard to predict because India is also a very volatile market, and while I think the trend is upward, the volatility is like a stock curve. You have Given the volatility, we think it could triple, maybe even quadruple, maybe more, maybe less, over the next six or seven years.”

However, he said the Indian market faces challenges due to policy issues related to the furniture industry.

“We are now severely affected by Cabinet’s Hinge Policy Control Order… which they only gave six months to comply with,” Schröder said.

He stressed that while the company fully supports the idea of ​​quality control orders as it encourages the production of quality products in India that can compete anywhere in the world, the use of quality control to stop imports from certain areas is creating a lot of serious problems. , especially for those areas that do not have a sound manufacturing base. ”