Manufacturing Today, August 12, 2022
Consumer Durables manufacturing is expected to fuel India’s USD 5 trillion economic growth. With a vision to build the country into a global sourcing hub, Aequs is developing world-class Consumer Durables manufacturing capabilities apart from building an ecosystem for the sector at Hubbali in Karnataka, India. Manufacturing Today caught up with Rohit Hegde, President, Consumer Durable Goods segment, to understand more about the industry and what Aequs is doing in the sector.
The pandemic has drastically altered consumer habits. How do you see the prospects for the consumer durable goods sector?
The Consumer Durable Goods industry proves an interesting study in the context of the pandemic. While in the first wave, demand had contracted considerably, in the second wave, it was a different story. Demand for consumer durable goods went up. One explanation is that lockdowns and social distancing shifted consumer demand away from services toward durable goods, particularly among the urban upper middle class in India. Consumers have also moved from price consciousness to quality and safety as a value proposition, particularly for home automation products. So much so, the `75,000 crore appliances and consumer electronics industry are expected to double-digit growth in 2022. According to a report by India Brand Equity Foundation, the Indian consumer durable goods industry was valued at USD 10.93 billion in 2019 and is poised to reach USD 21.18 billion by 2025. Metros such as Mumbai and Delhi are emerging as consumption hubs of consumer durables products. As the nation marches towards becoming a USD 5 trillion economy by 2025, this sector will play a significant role in achieving the target.
India’s liberal and investor-friendly Foreign Direct Investment (FDI) policy is a significant driver of the growth of the consumer durable goods market. In today’s new normal age, this industry is expected to grow due to increased digital influence, leading to improved product awareness and a rise in demand from the tier-II and tier-III cities.
How is government policy tuned to cater to this growth? What more support is needed to ensure growth?
The consumer durables industry is going through an exciting time. As leisure travel restrictions remain and the work from home continues for several industries, consumers are focusing on making their homes more utilitarian. This is giving momentum to the demand for durable goods.
The government’s 100% FDI Policy for consumer electronics hardware manufacturing has helped the manufacturing industry to amplify its production to support a significant boost. The recently announced Production Lined Incentive (PLI) scheme for white goods, with an assured investment of Rs 4,614 crore, is an excellent opportunity for manufacturers to ramp up their production, reduce import dependency and make products more affordable.
With increased consumer awareness about technological advancements and their applications across sectors, artificial intelligence and automation in production will be vital upcoming trends. Industry 4.0 will also drive investments in R&D, technological infrastructure, and processes to improve production efficiencies.
Aequs aims to create a one-stop, manufacturing platform to cater to consumer goods manufacturers.
What are the plans and how do you see demand panning out?
As India develops into a global manufacturing hub, Aequs’ clusterbased approach is a leap for Indian manufacturing. Its clusters are equipped with modern, global scale ecosystems that straddle the entire manufacturing value chain replete with all the capabilities needed to cater to global OEMs and markets across aerospace, toys, and consumer durable goods industries. The cluster-based ecosystems not only enhance local sourcing but also propel the socio-economic development of Tier-II and Tier III cities of North Karnataka.
Aequs ’model leverages its integrated design-to-product realization capabilities to make cookware and home appliances. Apart from offering integrated capabilities that address the entire manufacturing value chain most cost-effectively and efficiently. Aequs also provides warehousing and logistics services for domestic and global manufacturers. Presently Aequs manufactures non-stick pans and rice cookers. It will further augment its manufacturing capacity and capabilities for a more comprehensive array of innovation-driven products across categories to meet an ever-growing demand for durable goods.
Spread over 400 acres, the Hubballi Consumer Durable Goods Cluster (HDC), will redefine consumer durable goods manufacturing. The fully integrated industrial park will provide seamless capabilities and unmatched ease of doing business for manufacturers with all solutions under one roof.
How would you summarise Aequs’ priorities for the future?
With the consumer durables sector primed for exponential growth, Aequs’ contract manufacturing capabilities will help meet the ever-growing demand for durable goods. Having established its leading presence in aerospace manufacturing, Aequs is taking strides in durable goods manufacturing to help realise a better future for India. Aequs will focus on innovation-driven solutions for its customers, leveraging its tried and proven manufacturing platform. It is a scalable, flexible, and optimal solution that the manufacturing industry has been looking for a long time.
This article first appeared in Manufacturing Today