Not-so-easy Indian market poses challenges for Grundfos Pumps

Considering India and China as their second home, Grundfos pumps are on the look-out to expand their reach in the energy efficient pump manufacturing sector.

 Claiming to not compromise on their quality and efficiency, Grundfos pumps is now on the prowl to make more ‘affordable’ products either under their own brand name or under their sister concern from Italy, DAB pumps.

Specialising in pumpsets meant for both commercial and domestic purpose, Grundfos has complete monopoly in their home nation of Denmark. In India, since 1992, Grundfos pumps has been seeing a steady market share of close to five to six per cent.

However, with a limited growth primarily due to their expensive pumpsets and staying away from the lucrative State government tenders, the company has been unable to make serious in-roads into the emerging market of the country.

“What we are looking at now, is to bring out a product which is efficient but compromised on its aesthetics. We are looking at local Research and Development (R&D) for making India products for India,” said N K Ranganath, Managing Director for Grundfos India.

The company is already pumping-in revenue earned from their India market for their R&D and has setup a software division in the country with close to 300 employees. 

With a manufacturing unit in Chennai, Grundfos is now expected to launch its new product of solar pumps at an affordable price in the next few months. The company is also trying to push for its product range which converts grey water/waste water into useable water.  
At the other end, the company has admitted that India is a ‘not so easy’ market with several complicated layers of business dealings. This includes the controversial aspect of ‘kickbacks’ expected by certain government officials in the country, resulting in the company has been staving away from major government contracts across the nation.

“We are not into business dealings which involve kickbacks. We admit that some opportunities might be lost and understand that India is not an easy market. But its ok.

We are not like other companies which is answerable to its shareholders and have to achieve targets of profits on ever dollar,” justified Group Senior V-P, Grundfos Pumps, Carlo Prola. A fallout of this, the company has compromised on its growth rate in the country and has decided to stick to only the private sector.
 
Nonetheless, not ready to pass up on the opportunity of a lucrative public sector market in India, Grundfos has said that it was ‘indirectly’ participating in tenders by collaborating /partnering with key contractors, OEM’s and Business Associates.

Their ‘indirect’ participation has kept the company active in the States of Bihar, Rajasthan, Maharashtra, Delhi, Orissa, Chhattisgarh, Bihar, Punjab, Karnataka, Tamil Nadu, UP, MP ,Gujarat etc, said Grundfos India, director for service & training, Rangarajan Ramaswamy.  
On the possibilities of setting up plants outside its present base in Chennai, Grundfos MD Rangnath said: “At this point of time there is no plan to invest in another factory in Karnataka. The facilities in TN are sufficient to cater to the market. The investment in Karnataka or other states will only be market related, more to encourage use of energy efficient pumps and pumping systems.”

(The correspondent was in Denmark at the invitation of Grundfos)