Tuesday, February 27, 2024
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Hettich is Building a Global Manufacturing Hub in India

Furniture fittings leader Hettich India has recently inaugurated its third plant at Vadodara. Simultaneously the company conducted the groundbreaking ceremony for its second plant at Indore, which is expected to be operational by 2025. In this 35-minute conversation, managing director Andre Eckholt tells me that Hettich is building a global manufacturing hub for feeding its markets in India as well as other countries.

“With this inauguration, we now have three at Vadodara and one in Indore. To date, we have invested over Rs 1,000 crore in building this state-of-the-art manufacturing complex. At Vadodara, we have doubled our telescopic slide capacity to two million sets per month. And we will be investing another Rs 700 crore for building more capacities, including our fifth plant that’s coming up at Indore.”

Eckholt says that India remains an import-dependent market as far as furniture fittings are concerned, with at least 70 per cent of the demand being catered by supplies from China. “Even though several Indian manufacturers have built up sizeable capacities, there is significant headroom for more investments.”

However, Hettich seems to be looking at a much larger picture, of making in India and supplying to the world. Already it is shipping slides and hinges from India to China, the Middle East and Europe, Eckholt confirms. “The Indian operations will play a significant role in Hettich’s global business within five years, as India will be the next largest manufacturing base after Germany.”

Hettich is also intent on positioning itself as a lifestyle brand, with innovative solutions that allow furniture users to save space, make their lives efficient, and enable high degrees of personalisation. In his keynote at the India Kitchen Congress in April 2023, Eckholt had indeed stated that urbanisation and individualisation were the key megatrends that would significantly impact the home improvement industry and that Hettich’s strategies were aligned with these trends.

“Individualisation is happening now, it is not a trend of the future. People are seeking an aspirational lifestyle, even where there is a space deficit. Hettich is helping them to achieve their aspirations with innovative solutions.”

Several of the company’s marketing initiatives, which involve close engagement with design professionals, consumers and builders, are aimed at gaining a deep understanding of the way consumers live and how furniture and interiors can be designed to improve their lives.

Eckholt also talked to me about some of the marketing initiatives that Hettich was currently undertaking and the kind of impact they were having on the brand’s positioning.

An interesting development that Eckholt spoke about was the recent acquisition of the Italian furniture fittings brand Formenti & Giovenzana (FGV) by Hettich. “While we are awaiting the approval of the regulatory authorities, all I can say is that both organisations have decided to come together as a single entity. Both are family-run businesses and share common values and believe that this coming together would be in the interest of the shareholders and customers. However, both companies will continue to operate in their respective markets as independent entities.”

FGV was founded in 1947 and has operations in Europe, Brazil, North America and Asia. With its five plants and over 900 employees, it offers a range of furniture solutions including hinges, drawers, alternative openings, sliding systems, guides, etc. In 2022 the company generated revenues of €250 million, with 80 per cent coming from markets outside Italy.

Hettich was founded in 1888 in Germany and is currently run by the family’s fourth generation, led by Dr Andreas Hettich. It clocked revenues of €1.50 billion in 2022, with 74 per cent being generated from outside Germany.

In this conversation, we also spoke at length about the significance of the recently issued Quality Control Orders by DPIIT, mandating compulsory BIS certification for resin-treated compressed wood laminates, wood-based boards, and plywood and wooden flush door shutters. Eckholt mentioned that other similar proposals were pending including one for telescopic slides, hinting that the furniture industry is going to be challenged in the short term, “but in the mid and long term I believe it would be good for the furniture as well as fittings and materials industry, as such regulations would help the industries to get organised and standardised.”

ALSO READ: VitrA’s in for the Long Haul in India

In sum this was a conversation that revealed the thought process at Hettich and how the company is aiming to build a massive base in India, which would not only enable it to drive the domestic market but also respond to global challenges and opportunities in the long term.

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