— Vijay Pandey, Vice President, Bosch Power Tools India Can you share your outlook on the Indian power tools sector?
The market size of the power tools industry in India is around Rs.1,000 crore wherein Bosch holds one-third of the market. The reason for this high market share is that we are present in India since 15 years. There is a plant in Bengaluru which roughly produces 35 per cent of our products; rest is imported from Germany, Malaysia, China, Switzerland and United States.In India, Bosch Power Tools has two other brands, Dremel and Skil.
What are the major growth drivers for the power tools sector?
Traditional artisans will sooner or later adopt the modern power tools. Second is infrastructure. We know that government has planned to spend $1 trillion in the 12th Five-Year Plan. I know things are not good right now but even if there is a small percentage of growth we must be happy and optimistic about it, because there is dire need of good infrastructure. The country needs good infrastructure.
What was your company’s growth like in the past two years?
Our growth was 25 per cent CAGR till 2011. We plunged down by approximately 9 per cent in 2012 due to slowdown but still had a double-digit growth. We look forward to touching a turnover of Rs.2,000 crore.
In the first quarter of 2013, the company has grown by 7 per cent and the Indian economy is approximately growing at the rate of 5 per cent. But India is an unpredictable market. It may go down and then again see a sudden stride.
Which sector adds more to Bosch Power Tools’ revenue mix?
Small medium enterprises are the ones which add to our revenue mix i.e. approximately 60 per cent. The big companies only contribute 20 to 30 per cent. For SME segment Bosch has started medium price point tools, namely Skil. It’s for those people who want good quality tools at medium prices and we have a great response from Tier 2 & 3 cities.
Government, education, defence and railways contribute around 7 to 10 per cent to our revenue mix and it is likely to grow and work as a growth driver.
How do you compare India vis-à-vis China?
Well, the revenue mix of China is higher because the market is three times bigger than India. There are few challenges which we need to overcome. First is that how we can incorporate these power tools in the unorganised sector completely, which will help increase productivity. Second challenge is to serve the semi-urban rural market because logistics is a hurdle. Third is shortage of skilled laborers and operators. We need more training institutes and there is a dire need and requirement of vocational courses to run the power tools. Unfortunately, even in the engineering institutes there is no training or exposure given to a student on power tools.
Is Bosch planning to open its own training institutes?
Instead, we are supporting a few institutes like NIT Surat. We, at Bosch, also tend to contribute to initiatives and schemes wherein the people are getting trained. We also look forward to opening our own institutes where modern methods will be used to run machines.
What is Bosch Power Tools India’s strategy for the future?
Our strategy remains to grow in all the three markets. One, the traditional trade (artisans and carpenters); two, industrial institutional, where the big infrastructure companies have a different approach and require technical assistance; and three, ‘Do It Yourself’ (DIY) which we started three years ago. In this segment a tool box is provided and these tools are easy to use and don’t require any training.
