Germany’s Aluplast to invest €3-4 Mn in India

Germany’s Aluplast to invest
€3-4 Mn in India

Watch this exclusive interview from Zak Expo, Subhajit Roy engages in a discussion with Babak Golriz, Head of Expanding Markets – Africa, Middle East, Asia & Australasia, Aluplast and Ravi Balakrishnan, Managing Director of Aluplast India.

The focus of the conversation centers on Germany’s Aluplast and its strategic decision to invest €3-4 million in India. The interview delves into the intricacies of this significant move, shedding light on the motivations for Aluplast as it navigates the dynamic business landscapes of Africa, the Middle East, Asia, and Australasia.

Given your substantial investments, could you elaborate on the significance of the Indian market for the Aluplast group?
Babak Golriz: India is a significant market for us due to its strategic location as a gateway to Asia and Australasia. We have made substantial investments in India, including land, buildings, and machinery. We are currently in the process of expanding our investment with Phase II, which involves doubling our machinery capacity and increasing our footprint in Baroda. Although India currently constitutes a relatively small part of our group, valued at over €600 million, we anticipate a more substantial role for India in the future. Despite the challenges posed by the market’s emphasis on price, we are working to strike a balance between maintaining our quality-oriented approach and providing a compelling value proposition to ensure wider access to Aluplast Windows in India.

What is the allocated investment amount for Phase II of your investment plan?
Babak Golriz: We are currently considering an additional investment of €3 to €4 million, which is already in progress. We anticipate the completion of this phase within the next 18 months.

After 18 months of implementing Phase II of your growth plan in India, what will be the size of Aluplast and its contribution to the group’s turnover?
Babak Golriz: The investment will provide us with increased capacity and space. However, the challenge in India lies in ensuring that sales match the expanded capacity. While it’s challenging to pinpoint, our estimate suggests that India could eventually contribute around 10% to the group turnover. Achieving this will take several years. It’s crucial to note that India serves not just as a standalone market but also as a hub for the Asia Pacific and Australasia regions. Our Indian exports reach countries such as Singapore, Philippines, Australia, New Zealand, and occasionally back to the Middle East and Germany. India’s role as a strategic piece in our overall operations is significant.

As part of the Aluplast group, what commitments do you have to meet the high expectations from the Indian market?
Ravi Balakrishnan: Certainly, a family-owned German company has decided to make a substantial investment in our operations in India, demonstrating a serious commitment. On behalf of the Aluplast India team and myself, I want to emphasize our 100% commitment to delivering a high-quality product in the market and ensuring the continuous growth of the Aluplast brand. Our focus goes beyond market share; we aim to sell innovative products for the benefit of everyone. Our commitment involves maintaining quality, and we are not pursuing quick wins.

For the Aluplast group, Aluplast India serves as a gateway to Asian markets. Given the diverse economies in the Asian market, how do you plan to address both cost and class considerations?
Ravi Balakrishnan: In principle, we have decided not to compromise on certain aspects. For instance, we use a single high-quality blend for extruding profiles, consistent across all markets. While this may initially result in a premium for our product, it establishes our brand as a serious, high-quality choice in the market. Despite potential short-term challenges, this approach ensures we don’t take shortcuts for immediate gains. Over time, this strategy tends to succeed, as seen in various examples in the Indian industry. To illustrate, Apple’s success in the Indian mobile market is a notable case where a premium product, after some time, gained significant traction.

Regarding your customers, what preparations should Aluplast undertake as a brand?
Ravi Balakrishnan: We strongly believe in total quality. For the end user, a homeowner, this means receiving a functional window that provides peace—quietness, sunlight, and a disturbance-free environment for relaxation. Selling Aluplast is not just about designing and manufacturing correctly; it’s equally crucial to fabricate, deliver, and install it correctly to deliver value to the end user. We work with a limited number of well-trained partners who are consistently monitored by the Aluplast technical team. This ensures that not only is the product good, but the installation and other aspects are also well taken care of.

Watch the exclusive interview now!