Current Volatility and Raw Material Cost: Present Challenges & Opportunities

Parag Chheda, JMD of Prince Pipes & Fittings Ltd was interviewed about the present challenges and opportunities in the sector with the current volatility going on and the raising price of raw material costs.

Question 1. Under your leadership, Prince Pipes group has grown in a big way and is currently operating from 5 plants. Please brief us about your expansion plans.

We added a unit in Jaipur which will get operational by Q1 FY 20 and adding one in Telangana post our IPO. These plants will strategically place us in the northern and southern markets, respectively. We plan to expand the presence of our Trubore brand, which currently has presence in South India. We plan to grow sales of our Trubore brand by increasing our geographic reach and product expansion and also expand presence across all southern states by increasing our dealer spread and gradually moving into the northern, western and eastern markets, respectively, thereby making our Trubore brand a pan-India brand in the next three to four years. Our Trubore range is largely catering to the underground water extraction segment. We have recently launched a complete product range for building industry products comprising of SWR for external drainage and CPVC for internal plumbing under the Trubore brand. In the fourth quarter of fiscal 2018, we expanded the reach of our products for application in underground drainage by entering the HDPE segment with double wall corrugated (DWC) pipes from our Haridwar plant. We have successfully installed DWC machines at our Chennai, Aurangabad and Dadra plant. Some of the key drivers of growth are the Government of India initiatives like Smart Cities, AMRUT Scheme and Clean Ganga Mission, to name a few.

Question 2. What is your vision for Prince Pipes and Fittings Ltd.; where do you want to see it in the coming years?

To be the acknowledged leader in the Indian plastics piping industry by exceeding customers’ expectations and maximising bottom-line for all our stakeholders. Further our endeavour is to become a debt-free organisation.

Question 3. What are the opportunities and challenges faced by Plastic Pipes and Fittings Ltd. in India?

One of the biggest challenges is the volatility in currency and raw material costs. However, at the same time, it throws up a good opportunity as we have a hedging policy in place. While intensity of competition has increased, so has the market opportunity in terms of newer markets and requirements for CPVC / PPR products in established markets

Question 4. Please share with us your stand as regards new innovations in PVC Pipes & Fittings Ltd. as a manufacturer in India?

Innovation is a continuous process within our company. We have recently received patents for our nahani trap and circlips finding application in borewell piping. We have applied for patent towards a design in our fitting segment and exploring a patent for an innovative jointing system.

"While intensity of competition has increased, so has the market opportunity in terms 
of newer markets and requirements for CPVC / PPR products in established markets,” enunciates Parag Chheda, in dialogue with POLYMERS Communiqué."

Question 5. You have bought a number of lines from Rollepaal in the recent past for your uPVC business. What has been your experience as regards the product performance?

As far as product performance is considered, we are pleased with the performance of Rollepaal and, therefore, have gone with multiple lines from them in the last few years. We observed that Rollepaal has been able to understand our requirements with regards to quality of products and throughput of the extruder. At many instances, Rollepaal has customised multiple lines based on our requirements, instead of providing us with a generic product solution.

Question 6. These days, capital equipment manufacturers in the industry continue to add vale to customers by enhancing the services offered. How do you rate Rollepaal here?

In our experience, Rollepaal has continuously been adding value to
their product offering from time to time. They have a very good process of identifyingand understanding thecustomers’ needs and expectations. Over the years, their product performance has been consistent with minimum downtime, strengthening our partnership with Rollepaal. Owing to the continuous advice on newer products and upcoming technologies for our adoption, they have become a natural partner of choice leading to a healthy and growing business relationship which we intend to take forward.
Recently, for example, they have launched Rollepaal foam core machines, high output PVC machines and auxiliary equipment’s like high line speed cutter based on our requirements

Question 7. Corporate Governance means a lot to you at Prince. How do you consider practices adopted by Rollepaal resonate with your thinking?

Being a branded manufacturer, Rollepaal has adopted all the best practices. From the receipt of the order to dispatch of machines, we 
are informed and updated on the progress on a continual basis, feedback 
on the product in terms of improvement is well captured, new products have been properly communicated to us and any improvement in the existing lines is also well communicated and training is promptly provided based on the feedback given.

Question 8. As a procurement strategy, you would create a list of preferred vendors. What are your key criteria? How does Rollepaal score here?

Our criteria towards a list of preferred vendors would essentially involve adherence to consistent quality, meeting our requirements in a timely manner, competitive pricing and, lastly, favourable credit terms. We have always given preference to product quality and delivery, as customer satisfaction is in our core values. Our vendors are rated based 
on this and we rate Rollepaal amongst our ‘A’ list vendors. 

Question 9. How do you see distribution as your strenght in business? Changing role of supply chain for business success...

We have a clear focus on the horizontal and vertical penetration through our well structured retail reach expansion programme (RREP). The company continuously evaluates and adds distributors in various regions to improve reach and for further penetration. Also, we look at continuously increasing our product range across categories. We will look at both, increasing distributors as well as increasing throughput  from existing distributors to enhance performance. Supply chain in the current market scenario is a very key element towards business success. Our 5 manufacturing facilities contribute towards prompt deliveries of products to our distributor network.

Question 10. What are key product differenciators in your business? What role can technology play here?

Key differentiators are around material composition and stringent adherence to BIS standards. We also undertake focussed plumber, borer, builder and architect meets translating to newer products as per their needs and expectations. Each polymer is positioned uniquely based on its application. For e.g., PVC polymers are positioned for normal application not involving pressure or temperature. CPVC is positioned as a plumbing solution which can withstand hot / cold and someamount of pressure. PPR, on the other hand, can handle extreme temperature and pressure with its superior anti-corrosive properties. HDPE is ideal for DWC given its smooth surfacing and anticorrosive properties.

Question 11. What has been your guiding principles in business?

Maintaining ethical business practices across the organisation, with our customers, vendors and bankers whilst delivering consistent quality products, adhering to all prescribed norms are our core values driving our business. Further, a profitable 
growth for the organisation to aid in future expansion, upgradation of technology and reduce debt, while ensuring healthy competition in the marketplace through focus on being near to the customer are some of our guiding principles.

Question 12. Finally, your suggestions on further improvements to sustain and survive in this competitive market.

Some of the initiatives that we 
follow include:
- Improving on customer experience through use of technology - IMON 
- Building brand loyalty with distributors, retailers and plumbers through an interactive approach - UDAAN 
- On Time In Full (OTIF) - Aim to dispatch material in complete within 72 hours on receipt of order.
- Manufacturer Of Excellence (MOE) - Award for excellence in manufacturing due to control in cost by improving manufacturing efficiencies.