Mr Pronab Basak has been promoted as Director and Chief Operating Officer in AICA Laminates India Pvt Ltd in just 5 years, as he joined Regional Manager, East in 2017. With his hard work and dedication, company is expected to achieve a milestone of entering Rs 200 crore club in terms of turnover to be more precise the current fiscal year. The turnover may cross minimum Rs.225 crore, which was about approx. Rs 150 crore before Covid. With new products and capacity addition in Laminate, he aims to achieve Rs 500 crore annual turnover in next 3 years. Talking to Ply Reporter, he has shared his future plans of the company.
Q. How has been the journey with AICA Laminates?
When I joined AICA, I was looking after the Eastern region, and there was stiff competition among the players. If we talk about awareness level, AICA is being observed as a project company, not a retail company. We were getting majorly bank requirements, our folders and marketing tools were focused on the project marketing only rather than taking up the retail segment. So, for me, it was a big challenge right from the beginning when I joined AICA. Besides, our total capacity utilisation of the plant was lower due to lower sales volumes. We have done a fantastic job in terms of productivity improvement. Our volumes in the current year have shown growth of 15% over last year. Production is increased by utilising Japanese technology, lot of investments and more focus on labour force. The capacity utilisation also improved majorly as a result of sales volume growth, as our marketing team has increased sale volume by 25% to 30% from the preCOVID period to the present.
So, when I was in Kolkata, our priority was to shift the image of the brand from the project segment to the premium and retail segments. In a year, I came to Delhi and started looking after the entire India operation. As we all know, in laminates, availability is the first criteria to improve sales, irrespective of price. And the service would be there only if you had access to the materials. And for that, in four years, we have revamped /changed our warehouses, sales offices, and infrastructure in Ahmedabad, Delhi, Lucknow, Chennai, Hyderabad and Mumbai. Recently we opened up 4 stock points at our own Distributors/consignment agent’s place. As a result, availability has gone up, for example, in Bihar, there are 39 districts. Previously, the material had to travel to Patna from our Kolkata warehouse, but now we can send it directly to different districts after stock point in Patna. Similarly, we are having stock points in Rajasthan at Jaipur, in Taminadu at Coimbatore and in Orrisa at Bhubaneswar and are feeding the untapped areas from there as it saves time and results in faster deliveries.
Q. How many stock points are owned by the compan in the country?
In all the major cities like Ahmedabad, Bangalore, Kolkata, Delhi, Lucknow, Hyderabad, Indore, Pune, Mumbaiand Chennai, we have company’s own stock points. Besides, we are feeding in Punjab associating with distributors, and in other places like Jaipur, Bhubaneswar, Patna and Coimbatore etc., we are operating with Addl stock points at Distributors locations, which are similar to distributor points but the stock is given by the company, which was not in practice before. The company stated it would invest in stock through the distributor with proper security to ensure our stocks. Above all stock points are rented areas used for the stocking.
Q. Is there some area in India where AICA has not reached even now?
There are numerous places. We have reached all the major cities, but in the last six months, our reach has expanded to tier two and three cities as well. We have appointed 150 dealers and distributors in those areas. Our sales improvement is only due to this expansion. Our target is to make it to 1,000 new customers in a year and fulfil our dream of reaching a turnover of Rs 225 crore plus in this FY. Our goal is to reach a turnover of Rs 500 crore with addition of new products such as Edge band Tape, Adhesive, Pre-lam Boards within the next three years. We have several products from Japan that are doing well, like the Solid Surface etc.
Q. Are you going to produce all these offerings here in India that you just mentioned?
AICA is recognised as a Japanese company, and "made in Japan" means quality. Despite the fact that it is manufactured in India, the technology used is entirely Japanese. People who are monitoring it and helping us run the plant are also from Japan. Our MD and Quality Control Head both are Japanese and from time to time many people come to visit us from Japan. So, everywhere it is known that we are Japanese companies, that legacy does not allow for third-party sourcing. The adhesive, we are getting from other group companies, we will bring here later. We will be manufacturing edge bands and Prelam Boards at Rudrapur. We will install a short cycle press for valueadd purposes in MDF and Particle board by pre-lamination.
Q. As a director, what are your FIVE priorities for the company to achieve your target?
The first priority is to CREATE A BRAND. Like other brands, SUNMICA is popular as a product, not a brand. The biggest challenge we face is creating awareness as a brand in household operations so that anyone saying "SUNMICA" means "AICA-SUNMICA." So, once that comes into play, we will be able to do well in retail. So, in retail, we have to work a lot using tools to create awareness. Among them is the first tool, a folder. This is the first time our folder is being designed in Japan. It will have a distinct feel that will draw people in.
It's fascinating that the Japanese are also working hard to get good business from India. They started to realise that India is a very potential market. Fortunately for us, AICA India, as well as our subsidiaries in Vietnam, Indonesia, and Thailand, have been performing admirably over the last couple of years.
Secondly, AVAILABILITY, for which we have to create more stock points and with that the market will automatically expand. And it will be possible only when we appoint more and more new distributors and dealers. This is a chain; with availability, the dealers and distributors will create awareness, and with that, a new demand will be created. And to sustain this chain, we have to give service.
The third priority will be QUALITY, and we must maintain our quality offering. Only growth and expansion will not work for so long. There are a lot of inquiries for 0.92 mm with a slight change in thickness and paper quality? A lot of people do that in the market to get the projects. If you really see it as per the IS standard, a 10% variation plus or minus is acceptable in 1 mm. And, while offering 0.92 mm instead of 1 mm is valid, but by doing this the emphasis on quality is lost. So, we offer 1 mm that is complete 1 mm, and we also offer 0.8 mm that is also complete 0.8 mm in thickness.
Fourth, of course, FOCUS ON PREMIUM PRODUCTS by opting for display centresto grab the attention of premium customers. Many players are doing that by having displays in showrooms. AICA hardly has any display centres except one or two in the country. My strategy is to have an AICA display gallery in the majority of markets. And from that, we are definitely going to get good sales in the premium segment, as there is no issue of price; if anyone likes it, they will get it irrespective of the price.
And the fifth, this is related to the internals, our EMPLOYEES—they are the most important asset of any organization. With their satisfaction, the organisation will also be progressive. There is also a sales training
I believe the laminate business in India is going to have continuous growth. If I'm not mistaken, the industry has grown at an annual rate of 8–10% over the last five years. I believe it will continue to grow at this rate.
programme for the interaction with sales people, etc., and knowing their vision and inputs. If we don’t put sense of responsibility to them, our target of reaching a level of Rs 500 crore in turnover is never going to happen. So, I strongly believe that everybody has to work as a team and the focus should be the same, then, only the company can grow fast.
Q. When will you be in a position to fully utilise the additional capacity?
Our target is to fully utilise the exiting capacity by March this year, because for every company, the fourth quarter is the best. The biggest advantage with us is that we will get the additional capacity from January onwards; that may be 100% utilised or less, but this quarter will be like a semi-final for us. Our budgeting activity will start soon, and the next year's activities will be decided on the basis of the performance of the last quarter of this FY. After that, our path will be smoother. Our target is to have 100% utilisation of our additional capacity by the financial year 2023–24.
Q. How do you see India's laminate business in the next five years?
I believe the laminate business in India is going to have continuous growth. If I'm not mistaken, the industry has grown at an annual rate of 8–10% over the last five years. I believe it will continue to grow at this rate. Because the people's spending power is greater now, they will almost certainly opt for more interior designing, there is going to be good demand from Housing sector and public sector banks and also from furniture manufacturers. So, the demand is definitely not going to come down, and 8–10% growth is definitely going to be there in the laminate industry
Q. What is your suggestion to change the bad practices related to dealers, manufacturers, product offerings, etc. that are not good for this industry's growth?
Unfortunately, in the laminate sector, very few are working in an organised way, whether in manufacturing, production, selling, marketing, etc. I would say 70% of the market is dominated by the unorganised sector, where the price, quality, and sales practices are not ethical. There should be a certain price for a certain quality. If your quality is good, you cannot go down in terms of price. We charge Rs 1100 per sheet, but it is also available in the market in the range between Rs 600 – Rs 700. So, how can we control that? As a result, achieving ideal sales will be difficult until the unorganised players sustain in the market.