Racold plans to double business in 3 years

Racold plans to double business in 3 years
Racold, the flagship brand of Italy-based Euro Ariston Thermo Group of Italy, has a 25 per cent share in the water heater market. Mathew Job, Managing Director, Racold Thermo, shares his perception on Indian market and highlights his strategies
Could you brief the status of water heating products market in India? What is the market size in terms of volume and in terms of value?Over 1.6 million units of electric water heaters are sold in India each year, with a market size of Rs. 600 crore. Electrical water heater market is currently growing at 10 per cent per annum. The market size for solar water heaters is approximately Rs. 500 crore and growing at 15 per cent per annum. The gas water heater market is around Rs. 100 crore.
What is your company’s market share?Racold has a share of approximately 25 per cent of the total water heater market.
Racold is a fully owned subsidiary of Italy-based Ariston Thermo Spa. What is your commitment to the Indian market?Racold is the flagship brand for India of the 1.3 billion Euro Ariston Thermo Group of Italy. India is one of the key focus countries for our parent company. India currently contributes around 4-5 per cent of the total global turnover and is expected to grow its contribution substantially in the next 2-3 years.
What are the major growth drivers for your business sector and how are you positioned to capture major market share?Racold believes in introducing innovative technologies and providing products that are ideally suited for Indian market and water conditions. We draw on our global technological and design expertise but adapt the same for Indian conditions and requirements. This approach has helped establish and strengthen our leadership position in the market.  Some of the technologies that we have introduced are SPHP, Titec, intelligent timer, and anti bacteria feature.
SPHP (Super Polymer High Performance) technology provides unmatched corrosion resistance to the inner tank and the ability to withstand high pressure.
Titec technology for heating elements with titanium enameling ensures better protection and longer life of heating elements as well as improved energy efficiency.
Intelligent timer in our DG range provides the flexibility to the users for pre-setting bathing requirements like time and temperature.
We are also one of the first brands in India to launch water heater with cordless remote.
Could you highlight the challenges the industry is facing today as far as your business is concerned?The market for water heaters is growing at a pace of 8 to 10 per cent per annum in the country. If we look at the penetration of the category, it is still low at around 10 per cent. This signifies that the potential for the category to grow is immense. With the disposable income in the Indian households going up, the penetration is definitely going to increase. As a brand we see a lot of opportunities and hence, we are planning to double our business in the next 2 to 3 years.
However, it’s important to note that electricity shortages and frequent outages are major constraints for higher penetration of electric water heaters, especially in Tier-2 and -3 towns. Government’s subsidies in solar are going to propel growth of the market. Also, better infrastructure and piped water facility in rural India would drive solar water heaters penetration.
As the multi-brand in retail is through, what sort of opportunities you are expecting?As of today, organised retail doesn’t contribute very significantly to the industry turnover. Still the traditional channels comprise more than 90 to 95 per cent of the volume. However, we acknowledge the importance of this growing channel and are modifying our strategy accordingly.
Are you planning to expand your capacity to meet projected market growth?Racold has so far made investments in excess of Rs. 100 crore in its manufacturing plant at Chakan near Pune. This is the largest integrated water heater plant in the country with the capacity of producing more than 5 lakh units of water heaters in a year. Our present capacity will suffice for the immediate future. Expansion of existing capacity will be considered at an appropriate time.

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