Hindware targets 10% of water heater market

Homegrown sanitaryware major HSIL has envisaged a foray into the water heater business, with plans to expand and grow its consumer products category.

The company, known for popular sanitary fittings brand ‘Hindware’, has strategically signed a long-term sourcing agreement with French thermal comfort solutions major Groupe Atlantic to sell water heaters and geysers under the co-branded identity — hindware-atlantic.

Under the agreement, the company will sell water heaters in the Indian market this month, beginning with 10–25-litre capacity models which occupy over 75 per cent of the market, priced between Rs 9,990 and Rs 11,490.     

“We are venturing into the water heater/geyser business for the first time, with the former pegged at Rs 1,500 crore, and growing at a CAGR of 15-30 per cent. Over the next three years, however, the same market in India is poised to hit the Rs 2,000-crore mark,” HSIL President and Chief (Consumer Business) Rakesh Kaul told Deccan Herald.

HSIL’s consumer products arm is currently involved in the production and sale of kitchen appliances and extractor fans. With the launch of hindware-atlantic, the company is aiming at a 10 per cent water heater market share in three years, garnering a business of Rs 250 crore.
“Over 40 per cent of the water heater market comprise of the unbranded segment, with few very large players. With our new co-branded range, we are offering a set of tech smart water heaters, which are also energy efficient,” Kaul said.

The SKUs for water heaters from hindware-atlantic will be sourced from Groupe Atlantic’s plants in Thailand and Egypt, and over the next 24 months will be sold across India through online platforms, and electrical, electronic, and sanitary outlets (around 2,500 retail outlets).

Groupe Atlantic’s push

The initiative will allow the €1.3-billion Groupe Atlantic to enter the Indian market. The company is a reputed name in Europe for its sustainable water heating solutions, which are likely to come to India in the near future.

“Solar energy is one of the areas that may be explored. But there is a large price difference between solar and electric energy for heating purposes. In many markets, there are subsidies for the former. Hence, we need to study the Indian market thoroughly, but are confident that it is a promising one,” Atlantic International Sales Manager (Middle East and French Overseas) Serge Raveyre said.

HSIL will launch its 1–6-litre heater line, and will also get into the larger capacity 50–100-litre water heaters. “HSIL’s total turnover as of March 2015 was Rs 1,965 crore. In the next three years, we believe consumer products will take up 15 per cent of the overall business,” Kaul added.