From low-tech traditions to high tech production

The Dhobi Ghat in Mumbai is the world’s biggest open-air laundry. Built by the British Raj in 1890, it now generates around US$1,232,700,000.00 a year. Over 7,000 Dhobis (washermen and women) toil for up to 20 hours a day, mostly without access to modern machinery, chemicals, processes or technology. It is so well established, it is difficult to forecast its fast demise, for many laundries and hotels in the city’s urban sprawl reportedly send washing to the Dhobi Ghat and simply sort, iron and fold.

But India’s middle classes and super-rich are mushrooming, along with demands for more sophisticated services. This year’s Wealth Report by Knight Frank pegs Mumbai as the world’s twelfth most wealthy city. Delhi alone is now home to 23,00 millionaires and 18 billionaires. Half of India’s 1.3 billion-strong population is under the age of 30. And so, the US$70bn laundry landscape, still dominated by “Mom & Pop” operators, is changing fast in this vast, second-most populous country in the world.

Railway traffic

Take the railways, which saw passenger traffic of a staggering 8.3 billion in the 2018 fiscal year. But Indian Railways is plagued by complaints about its dirty laundry. It needs around 400,000 bedrolls (comprising two sheets, a pillow, hand towel and blanket) daily for its first class passengers. In the past, it was happy to wash blankets every two months. Now Indian Railways has bowed to customer pressure, announcing blankets will be washed monthly, replaced them with wool and nylon versions and set up around 50 state-of-the-art mechanised laundries at railway stations to cope. Ten more are planned. The Minister of Railways, Commerce and Industry, Piyush Goyal, says in some of its laundries the equipment was supplied by the railways, in others only the land was supplied while machines and manpower were outsourced. A total 65% of its bedrolls are reportedly washed in railway premises, the remainder outsourced.

Girbau is heavily involved with Indian Railway installations and says it has “a notable” one in progress, boasting multiple high-spin washer extractors, eco-dryers and its PC-series flatwork ironers with folders.

Jensen has six tunnel washing systems in India and highlights a major installation at the Ahmedabad Railway laundry – a one tunnel washer plant with Jensen machines operating nearly 24/7. Jensen says its tunnel washers use less than 10% of the fresh water used by old conventional washer extractors. 

Another mechanised laundry, commissioned by the Southern Railway and operated by Orion Ventures, is at the Basin Bridge Junction yard in Chennai. The multi-million-dollar installation involves steam wash, automatic drying, pressing and folding processes. It has the capacity to handle 18 tonnes in three shifts, and it is presently catering for 42 trains on an average day. “The Electrolux equipment installed offers energy and water savings, besides high-quality wash results and the dryer gives us excellent drying results due to its shorter drying cycle and less creasing of linen,” says a spokesman.

Launderettes

Landerettes are increasingly popular. Arunabh Sinha, co-founder and CEO of launderette chain UClean, says 97% of India’s industry remains unorganised. But this has allowed his quick expansion, through franchising and rapid operational efficiency. “It’s a miniature version of an assembly line setup,” he says.  “Our typical laundry setup is 250-300 square feet.” People, he adds, will need high quality and doorstep convenience at the click of an app as their incomes soar and UClean offers home pickup and drop-off. It secured seed funding of $1m from Franchise India, an angel investor and Alliance Laundry Systems, reputedly a strong believer in the franchise model. UClean now has around 130 operational stores across 35 cities and over 50 franchises already signed up. In August it bought the infrastructure of White Tiger and its 20 laundry outlets in Delhi.

Washapp is another new-ish kid on the block. Now in its third year, it partnered with established laundries to build “an Uber laundry model”. COO Dheeraj Balusani says there is no pan-India player within the B2C segment. Most of the premium laundry facilities are heavily invested with systems majorly adopted from foreign countries, but how actual services are used is very different in India. Locals, he says, demand that most clothes are ironed – even tee-shirts – and folded. This, of course, is dependent on labour, increases costs and can lead to sorting issues. Washapp concentrated on building its own semi-automated laundry facilities and most importantly, its own sorting system. It now manages around 2,500 pieces a day. “We feel this is the right kind of model for scaling laundry across India,” Balusani says.

Workwear is another flourishing sector. Micronclean, specialist supplier of workwear rental and laundered cleanroom garments, has a three-acre site just north east of Bangalore – an ever-expanding pharmaceutical hub along with Goa, Hyderabad, Pune and Vikshakkhapnum. In Bangalore, Micronclean has pledged the building of two cleanrooms with capacity for 80,000 garments a week, using in-house technology from the UK. It promises phase two will double its capacity.

Water

But is there enough water? “I think it’s the biggest challenge facing the industry, not only in India but globally. Water is the single biggest input for the laundry business,” says UClean’s Sinha. Hydrofinity (Xeros Technology Group) warns of a fast-worsening crisis amidst dire reports from the Composite Water Management Index (CWMI) which says 21 major Indian cities are racing to reach zero groundwater levels by 2020. By 2030, the country’s water demand is projected to be twice the available supply and with an eventual 6% loss to the country’s GDP. Leakages, antiquated pipes and pilfering is often to blame. Xeros Technology Group has developed, among other companies, water-saving technologies and recently signed an exclusive agreement to develop and license its domestic and commercial washing machine technologies to South Asia equipment supplier IFB Industries. Sales of the commercial washing machines incorporating Xeros’ innovations will begin over the next two years.

While major manufacturers such as Jensen and Girbau – to name just two – all see major opportunities in India, the government is focusing on its ‘Make in India’ campaign. Meanwhile laundry equipment is classified under GST as a luxury item and is subject to a 28% import tax, despite India pursuing ongoing economic reform and its goal of joining the Association of Southeast Asian Nation (ASEAN) 5% tariff rates. It is a complex system and lacks transparency The World Trade Organisation estimates India’s tariffs are the highest of any major economy. All this doesn’t make it easy for overseas manufacturers but they say they win on providing reliable, western world technology. They recently had welcome news: India has just incorporated 13 separate government agencies to simplify customs, meaning importers now only need three documents to cut down on customs processing time.

Meanwhile, educational institutions and healthcare remain “evergreen” areas, says Jensen’s Ravi Chandran, technical manager India. But, says Akash Dharamsey, director of ADD Laundry Concepts Private Limited – Girbau’s principal distributor in India – the most lucrative revenue sector is tourism and hospitality. Tourism’s direct contribution to GDP is expected to grow to US$106.9bn this year from $98bn in 2018. This means more hotels, more linen. New private laundries are emerging to cater for both middle class travellers and 3-4 star hotels, but the burgeoning five-star hotels most often go in-house. Hyatt Hotels plans a further 1,000 rooms. bringing the group’s key count to almost 8,000 in the coming 12 months. Four Seasons, Shimla Hilton…… every brand is upping its game.

Drycleaning

Meanwhile, drycleaning lags behind Europe. Solvents are widely used, along with PERC. New systems and technology also need skilled labour, and there are concerns that India hasn’t got enough of it in certain parts. In the south, such as Hyderabad and Vijayawada, skilled manpower can be garnered but, as Avinash Kashyap, proprietor of Super Dry Cleaners, told Clean India Journal: “You need to go and search for the from a different city, pay them good wages, and also provide them (with) accommodation.” Many others warn of high labour churn in the future and urge the formation of more educational institutions.  The Laundry and Dry-cleaning Association of India (LDAI) says it is making a conscious effort to channel different industry segments and needs under one umbrella and to focus to promoting education, best practice and employment generation in the future.

Other major challenges? Jensen’s Chandran sums them up: “Perceived high risk/reward ratio, lack of skilled labour, high management and logistics costs.  We do, however, all have a big obligation towards the environment and future generations.”

Economy Panel

Skittish global investors have flocked to the dollar while India’s rupee has plunged in value. Imports such as energy and factory equipment have soared and India is battling with the results of excessive lending over past years. The escalating global price of oil, for example, makes emerging countries like India vulnerable to external global events out of their control. It has been the world’s fastest growing large economy, often boasting 8% growth.

Now it is on target for more like 5%. Unemployment is 8.4% and growing (Centre for Monitoring Indian Economy). Prime Minister, Narendra Damodardas Modi, is under attack for ignoring early signs of a slowdown.

The textile industry employs 45 million people – the second largest employer after agriculture – and it is worried, reports India’s Economic Times. In two years since 2017, Moody’s has downgraded India’s growth rate three times from 7.5% to 6.2% for 2019. Meanwhile, Statista forecasts GDP at US$4,080.14bn or 7.33% in 2023.