Tourism and investment help to drive growth

India's economy continues to grow. The government's Central Statistics Office estimates that GDP for the second quarter of 2015-16 will rise 7.4%, compared to the same period in the previous year (Ministry of Statistics and Programme Implementation, 30 November 2015).

In May 2014, the BJP, led by Prime Minister Narendra Modi, came to power with the biggest majority in 30 years and in the following September, it launched the Make in India programme, a series of initiatives designed to encourage global and local business partnerships in manufacturing in India.
"The new government is seen as business-friendly with a positive intent to bring in reforms that will further support growth in GDP," says Anupam Chakrabarty, managing director of Lindström India. "However, it is still not able to push some key legislature such as GST (uniform goods and service tax) as it is still a minority in the Upper House in the Indian Parliament."
He adds that some sectors such as electronics, food and pharmaceuticals are doing well and have attracted many greenfield investments and also as mergers and acquisitions but other industries are still waiting for the new government to implement more steps that will boost the climate of investment and growth in the country.
Three factors impacting on the laundry and drycleaning industry in India are foreign investment, tourism and textile exports, says Animesh Sharma, Electrolux sales manager for laundry in India.
Foreign investment has started coming into India thanks to the government's easing of norms that will encourage this trend.
Tourism, on the other hand, is affected mainly by infrastructure availability (hotels, for example) and the need to ensure security for visitors but the sector is still doing well both in terms of tourists on vacation and those coming for business.
Textile exports are mainly dependent on the availability of raw materials in India.
"The laundry and drycleaning business has grown over the years due to more tourists coming in and the increasing requirements of hotel laundries," Sharma says.
"In addition, with the cost of labour becoming more expensive, people are getting more and more inclined to use laundromats rather than employing help in the house to wash their clothes.
As a consequence, the industry is starting to change. "The laundry industry is just beginning to organise itself from being a very fragmented one," says Karan Goyal, vice president of Supershine Laundry Systems, the distributor for Milnor machines in India. He explains that most laundries are small family-run businesses, although there are a couple of medium-sized groups. These laundries operate across several sectors including healthcare, industrial and coin-operated/full-service laundromats. Hotels and hospitals are becoming more open to outsourcing their laundry service requirements than having on-premise laundries.
Milnor recently sold its first tunnel washer in India which, according to Goyal, suggests that the laundry and drycleaning industry in India is evolving and graduating to the next level.
Imported equipment has traditionally been bought by five-star hotels, leading multi-speciality hospitals and large commercial laundries, while Indian equipment has been sold to smaller hotels, hospitals, commercial laundries, railways, garment exporters and defence establishments.
For light, domestic and small retail laundries the demands are for 5 - 25kg washer-extractors, drycleaning machines and finishing equipment, according to YS Wang, regional manager for Jensen Asia. "This segment is growing fast and is capturing a large market share across the country, so market penetration is easier," he says.
Medium and large scale businesses, such as commercial and in-house laundries require customisation and end-to-end solutions. It is a segment that is picking up in larger cities, while the heavy-duty laundry sector is still in an experimental phase.
But Wang expects that more heavy-duty laundries will be set up in the near future. While automation is still in its infancy and is likely to take some time to become widespread,"it is the future of laundries in India".
Jensen has set up a fully automated, state-of-the-art laundry plant at Western Railways in Ahmedabad, providing it with a complete solution that includes a P50-8 Universal continuous tunnel system and two sets of Jensen flatwork finishing equipment. The laundry was commissioned in 2012 and the capacity is currently operating at 16 tons a day,"
Anand Dubey, regional sales manager for Alliance Laundry Systems, says that he has seen the centralised laundry sector - laundries that provide services to small groups of the smaller three-star hotels - grow by 32% in the last 12 months, while the expansion of the middle class is driving the development of laundromats.
"Within our culture, washing, drying and ironing has been provided as a service, because labour was cheap. "The idea of "self-service" was not considered necessary," Dubey says. "But this is changing. The increasing globalisation and exposure of India's people to western cultures is helping the laundromat concept to be accepted and embraced. It will be a significant opportunity for the market, and Alliance specifically, in 2016 and beyond.
In addition, a drive to improve hygiene standards in the healthcare sector is opening up other opportunities for suppliers. "There are currently around 2,000 government hospitals that are being renovated, and this presents a significant opportunity for Alliance and our dedicated barrier washer range," Dubey explains.
"There is similarly an opportunity within the hundreds of new private hospitals that are being built, and that are managing their laundry in-house".
Residential laundry is also growing in areas such as Delhi, Mumbai and Bangalore, where a large amount of building work is taking place and the number of new apartments blocks is growing.
"In Gujarat and the Punjab, too, India's people are exposed to western life, and therefore see laundry as part of a daily routine. Targeting the country's major builders and developers will therefore be important in the future," Dubey says.
The main concerns for small to medium sized laundries are power and water. Both these resources are scarce in India and sell at a premium.
"This has brought an increased focus on alternative energy and the recycling of discharged effluent," says Eric Brouwers, executive manager of Christeyns, which is "bullish" about its growth plans in India. He says that there are several initiatives at
pan-industry levels by state and central governments to provide uninterrupted power supplies.
"Privatisation in this sector is expected to increase, which should resolve the power problem over a period of time," Brouwers suggests.
In October 2014 the Prime Minister launched an initiative called Swachh Bharat Abhiyan, the Clean India Mission, to celebrate the birth of Mahatama Ghandi.
Brouwers says the campaign has brought about a paradigm shift in attitudes towards environmental issues in India: " Both large laundry set-ups in hotels, hospitals and industrial laundries have been mandated to ensure they meet tolerance levels for effluent/water discharge. Most of these type of laundries are resorting to full water treatment to ensure 100% water reuse. This reduces their spend on water and also helps them be environmentally compliant."

Drycleaning sector
One sector of the industry that is emerging is that of drycleaning. Switzerland-based, global brand 5àsec was first approached to start its franchise concept in India in 2009 and so far has opened up 13 outlets in Mumbai and Bangalore - it has opened nine new shops in the last 18 months and is looking to open 10 - 15 shops a year over the next five years, with a target of having 100 shops in major centres around the country by 2018.
"When we started, there weren't any big players - most were mum and pop shops," says Gilbert Bieri, International Director for 5àsec. "Customers didn't know what we were doing, so we had to explain it to them. Our first shop was very important [in a high-end location in Juhu, Mumbai] - it set the level of service."
The 5àsec shops are targeted at the wealthier end of the market and prices are set accordingly. "These customers value service and are very demanding, more so than in Europe," Bieri explains.
Its master franchisee is Suresh Bhatia, managing director of SB Fabcare. "Before getting into this market we hardly had any drycleaning experience, but our study made us realise that almost 98% of the country's drycleaning industry was very unorganised and unprofessional," he says. "There were very few that had proper machines and a set-up to reckon with."
As in laundry, the main challenges for drycleaners are rising costs, for rent, wages, electricity and water. Another challenge is training staff to deliver the quality required and keeping them once they are trained - the attrition rate is high, Bhatia says. In addition, the technology in the drycleaning shop must be able to deal with the complexity of Indian textiles, such as those used for saris. 5àsec's Maxima technology, which uses the hydrocarbon solvent KWL, was developed specifically to deal with fragile and ornamented textiles, such as saris.
Since 5àsec first opened up shop, the market has started to evolve, with many other players venturing into the business. The model for new drycleaning and laundry businesses in India is Europe rather than North America, according to Marco Niccolini, Renzacci's general sales and marketing manager.
Local entrepreneurs are becoming involved and Renzacci has advised on the entry of the EuroClean franchise which has established a shop in Mumbai using Renzacci's Excellence machines and its Nebula system.
Two or three years ago, Niccolini says there was a clear division between drycleaning and laundry but since the end of 2014, the number of establishments that offer combined laundry and drycleaning services has grown, reflecting the focus on replicating European practices.
Renzacci has been in India since 1992, when there was no separate drycleaning sector in the country. Customers brought their garments to five-star hotels to be cleaned - and many still do this, Niccolini says.
The "unorganised" side of the laundry and drycleaning industry, the dhobis still operate across the country. "These service providers are deeply rooted in India. They work by the roadside to provide ironing services, and sometimes washing and sundrying to householders," explains Karan Goyal, who is also the agent for Pony in India.
"They constitute the huge unorganised sector of the Indian laundry and drycleaning industry and, to date, still have a role to play as their services are cheap."
He says the emergence of mid-sized drycleaning groups in the sector is driving professionalism in the market. "Drycleaning shops are used by all households but only a limited number of garments require drycleaning because of the short winter season in India," Goyal says. Pony provides a full line of pressing and finishing machines to the market, combining quality and competitive prices to become one of the most popular brands.
Macpi is also a well-known brand in India for ironing finishing technology. "We have an office in Bangalore and a team of technicians that are competent and qualified," says Enrico Cartabbia. "India has 1.3bn people so it offers many opportunities, both in the big cities with the most developed areas and in tourism."
Cartabbia says that while the country may not yet be ready for the fully automated systems that are popular in Europe and North America, it is a very good market for ironing tables and dummies. "Macpi exports a lot of these machines to India. The most popular is our Model 389 dummy for ironing shirts, which is recognised as functional, solid and productive."
Macpi is also looking at opportunities in the laundry sector, which Cartabbia says has become "very interesting in the last three or four years and this is the reason... we participated in Texcare Asia."
As in laundry, one of the main concerns for drycleaning operators is the absence of a formal platform that could bring them together to develop initiatives and quality standards. Niccolini says Renzacci is trying, through its sales network and Indian trade associations, to organise seminars and meetings that will encourage operators to promote their services more actively.
With regard to solvents, perc still dominates in the industry but alternative solvents, particularly hydrocarbons, are slowly gaining ground.
Suppliers of solvents other than hydrocarbon are looking to the future. GreenEarth initiated its GreenEarth Cleaning option in India three years ago, with Wotek Corporation as its master licensor. It now has one licensed GreenEarth machine in the country, at the Bureau Veritas Testing Agency outside of Delhi. "This machine was commissioned in the summer of 2015 for the testing of garments and fabrics by European garment manufacturers and European Fashion brands," explains Tim Maxwell, president of GreenEarth Cleaning. "Natural skins clean beautifully in GreenEarth and a number of very popular fashion brands have requested care instructions recommending the GreenEarth Cleaning System exclusively - thus the Bureau Veritas testing."
Xeros is also looking at opportunities in the market. "Now that we have an established foothold in the USA and Europe, we are evaluating several new markets for global expansion including India," says Scott Wicker, Xeros senior vice president, brand marketing.
It is certainly a market to keep an eye on.

COMPLETE SOLUTION: Jensen set up a fully automated laundry at Western Railways in Ahmedabad, providing it with a P50-8 Universal Continuous Tunnel system and flatwork finishing equipment