AICA laminates is currently going through profound changes and coming up with new range of products like, Anti-bacterial and Anti-virus laminates, pre-laminated substrate solutions and thicker laminates catering to the specialised segments of the market. The Ply Reporter interacted with Mr J L Ahuja, COO & Director, AICA Laminates India Pvt Ltd, during which he spoke about the company’s next move after COVID-19 pandemic easing up and on the current situation of the Indian market which is witnessing lot of change. Here is a brief from the conversation.
AICA being an international brand in laminate industry has seen numerous ups and downs during lockdown period. How much has it affected your business?
In India, we are part of the Indian economy. Primarily, our major share remains in the Indian market and we are into the upper (or premium) segment of the market especially for 1mm. And even for the small amount of 0.8mm which is being made, that is also catering the upper level of the market needs. As far as AICA India is concerned, we are still not a very major player in this segment. We merely have three presses and the capacity is small. In this, we are doing a lot of business with industrial laminates which can be called the self-reliant segment of the market, for which we provide high electrical insulating material for high tension electrical applications to the customers like L&T, Siemens, Crompton, and various such companies, etc.
In addition to this, we are also exporting nearly 20% of our material. There hasn’t been much impact as far as our business is concerned in these two segments of the markets. Between the two, about 20% of the total business has always been variant. Out of the balance 80%, we have recovered nearly 50% with a total of about 60% business at this point of time compared to last year’s business for the corresponding period. We are expecting to move ahead and gain another 10% or so during the coming quarter.
So, in the 1st quarter apart from the Industrial laminate sector, where did you not see any impact? How much has the 1 mm market seen impact?
The 1st quarter April-May was under lockdown but in the second quarter, we re-gained and there is no loss. In fact we even improved a little. In exports also, we re-gained at 70-80%. In 1mm laminate we re-gained 40-50%.
There are a number of anti-viral, anti-bacterial products coming into the market considering the current situation of covid. In this segment many organised players are also there with such products to get the advantage. What is your opinion on this?
We already have anti fungal, anti-bacterial material in our range, and we have been selling these in the international market. The upper segment of the market knows that we have laminates that are antibacterial and anti-fungal and they have been using for the projects. But, people are not willing to give any special premium for this. The idea was how to distinguish it from the rest. We have now found some solutions and we will launch it in a big way through the architects from October 2020 onwards.
We are now trying also to get into OEM and Modular sector. For these sectors, prelamination is required and for that we are going for contract manufacturing. Currently, we are in talks with two-three manufacturers with plans for long term arrangements with them
Which kinds of product would this be, anti-bacterial or something new altogether?
It will be Anti-bacterial and Anti-viral as well. In fact, we also have the anti-viral technology which is under testing by third party at present so that the credence is given to the architects. We wanted to give something new to the market. We have Japanese technology for anti-virus properties which is already being marketed in Japan, and we will bring that into India. But before that, we will get us have a third party accreditation so that it catches the right segments attention with the proper back up of Japanese famous theory. Many companies in India are talking about anti-viral, antibacteria etc but we don’t know to what extent the testing back up is there. As a company, unless we do not have proper back up of third party certification or accreditation, we will not like to introduce such a product/technology to the market.
AICA mainly caters to the project driven market, but the projects are badly affected due to covid scenario, what is your next move?
We are now trying also to get into OEM and Modular sector. For these sectors, pre-lamination is required and for that we are going for contract manufacturing. Currently, we are in talks with two-three manufacturers with plans for long term arrangements with them. So, we will be able to give pre-laminated solutions whether it’s particle board or MDF to back up these things. Now, we are planning to get into the OEM segment in a big way. We will be offering premium products to them.
So, how do you balance the laminate sale in projects at this time when sales have been going down since April onwards with no clear signs of complete recovery?
When we say project, India is a very huge market, and we are into that segment, which was not much affected. We are not pitching to very large projects, where there are many issues. We are in sectors such as financial sectors which have not gone down too much. We are also into segments like Transport, Navy, and especially projects which are Govt backed and are not much affected.
Now we are also getting into the project segment in small towns. Earlier our focus was big cites but now we are expanding the same phenomenon into smaller towns. We are trying to cover specifiers of projects of smaller dimensions and there are several of them in new towns.
When do you foresee improvement in 1mm laminate in India?
I think 1 mm market is not going to play a long term role, ultimately the manufacturers are likely to concentrate on lower thicknesses. I don’t foresee this happening in the next 5 years or so, because the awareness about the automation in this sector is still far away. The factory made furniture and DIY (Do It Yourself) thing has not gained that much acceptance yet.
We still need a lot of customised furniture. The standardisation in terms of apartments, showrooms, Bank ATMs hasn’t been much. So, customisation will have to be done. The skilled carpenters are still very much valued and fortunately India has the capability in this segment.
We have Japanese technology for antivirus properties which is already being marketed in Japan, and we will bring that into India. But before that, we will get us have a third party accreditation so that it catches the right segments attention with the proper back up of Japanese famous theory.
The skill development programme of the Govt. is giving thrust to this particular manual labour segment. We should not forget that the contractor and the labour also have got upgraded with time and changing market dynamics. The speed of operation even amongst the carpenters has got up-graded in terms of accuracy. Modular furniture still remains suitable for a mass scale but cannot provide a personalised look required by the customers.
Do you see any increase in application of higher thickness laminates in kitchen cabinets in India like other countries?
Higher thickness market is really good in the Middle East, Europe etc. It’s coming up in India as well, the thicker laminates is the new segment in which, in fact we have also got into which is protecting us from the vigour of this COVID. We are operating in it with 2.5mm, 2mm, 3mm, etc.