By Shafquat Ali & Jayashree Mendes
Ranganath NK, managing director, Grundfos Pumps India, has a mission: With every new generation pump introduced into the Indian market, the company must reduce the number of toxic chemicals year on year.
He is keen that these new-generation of pumps should be more efficient not only in terms of working but also in terms of the energy they produce. But that’s not all. Ranganath is also eager to see that the improvements make the pumps recyclable. While pumps are not the easiest of machines that come under green, Ranganath says the company could closely monitor the production process where emissions are at its highest. Denmark-based Grundfos has a global presence countries and the company tries hard to ensure that it sticks to its value systems and one of them is sustainability.
“We will look at these three things: Concern, Care and Create,” he says, “but sustainability is what we want to put first as one of our main values.”
The company has introduced several new technologies in the Indian market. But the European company has not bothered with downgrading the product. “Many years ago, a buyer walked into our office armed with a wad of notes. He wanted to buy one of our pumps. The front office declined to do so. We did not sell retail then. But the man had seen his neighbour use the pump and realised its efficiency,” says Ranganath. “This incident helped me realise how efficiency plays an important role in the Indian market.”
This realisation also gave Grundfos a strong reason to start catering to a bigger market than the one they were playing in. They were sure about two things: one that they would not compromise on the reliability factor that had come to mean so much to customers, and second was the efficiency. Citing the Nano example, he says that while the car is an engineering marvel, selling it that price is an even bigger marvel.
“When we introduced our products in India, the market was yet to see anything like them before. Even at that time, we were 300-500% more expensive than any other brands. We took a lot of time convincing people about the quality of our products,” recalls Ranganath.
Although the effort has paid off over the years, Ranganath still recalls some of the questions that were thrown at him by prospective customers when they launched the pumps in India. But his response to the quality of products always was that the pumps reduced power consumption phenomenally, and, in most cases, the payback was less than 16 months. Secondly, a strong reliability would mean a lack of need for repairs and thus overall savings. And lastly, the comfort factor of using something which is reliable.
Grundfos is sure that as a global and responsible company, its words must translate into actions. “We want to be open about what we’re doing. We think ahead and innovate locally and whenever possible. We feel that if we innovate for the emerging Indian market, the technology could be used in other parts of Asia and in Africa which will open up in the next decade or so,” says Ranganath.
According to various statistics, Asia and Africa figure in the top 20 growing countries for 2014. Both these countries show promise in terms of growth rate.
“Since 87% stakes of the company is held by a foundation, we are not under pressure from share market players to increase profits. As such, we invest 5% of our global turnover in R&D every year,” explains Carlo Prola, group senior VP, Grundfos Management. “About 50% of our growth comes from technology platforms that were not developed till 2007. At Grundfos, we invent solutions the world has never seen before and, over the years, we have expanded our business with the addition of new categories and areas by using our technologies in new and creative ways, based on the requirements of our customers.”
Recent visits both to the company’s premises in Chennai as well as Grundfos’ facilities in Bjerringbro, Denmark, revealed that the company’s employees – no matter where they are located – are committed to innovation.
However, the company has had to contend with copyright issues, too. “We are perhaps the most copied pump in the world. It’s sad in one way and it’s a useless pride. There are some 80 copies of our pumps circulating in China and almost 10 to 12 copies in India. One company went to the extent of saying that they had copied Grundfos, which is strange,” Ranganath says. Not only are products being duplicated, much to the company’s consternation, even the documentation is being duplicated with a mere change in the number. But that doesn’t stop Grundfos from pioneering technology.
Building new technology plays a critical part for the pumps manufacturer.
Asked about the thought process behind their technology, Ranganath sums it up by saying, “Care for people and the planet, this is the underlying premise for any new technology. A concern for our planet has continued to be our business driver. We were doing that in Europe; we started doing that in China four years ago. Now we want to start doing this in India. Our president had clearly stated that 50% of our growth will come from technology platforms that weren’t around in 2008. And we are looking at being greener.”
“Technology enhancements can come when a company considers foreign markets as its own. For us, India and China are akin to home markets,” adds Prola. Water pumps are mainly sold in areas that face little pressure.
Grundfos had to look keenly and realised that this is a common concern across India. However, their ability to produce home motors and assemble the electronics with controller pumps, not to mention writing their own programmes has stood the company in good stead.
Besides this, Grundfos also makes its own silicon chips and embeds it with the required intelligence.
Currently, Grundfos India has about 5-6% market share because it is still a relatively new entrant but it also has products that are yet to reach the masses.
However, the company knows only too well that India is more of a mass market and affordability is also a question.
The pumps manufacturer is keen that it builds milestones in India. It has worked hard at establishing operations and creating a sustainability factor. The office building at its Chennai office was the one of the first building in the country to bag a gold green building certification. Later on, it went on to meet further criteria that would bestow them with a platinum building certification. It also ensured that it followed all the parameters to acquire ISO 9000 and ISO 14000. Naturally, a host of awards followed.
“We want to be a company that practises what it preaches. Our employees must match our ethics. For instance, when we re-certified from gold to platinum, the norms were far tougher. We are perhaps the only company in India to have done that,” says Ranganath. While not resting on their laurels, Ranganath is careful not to boast about the jobs well done. “Our commercial success may not be up to our expectations. This is because we have not compromised on our ideals. There have been times when we have agreed to give government contracts a miss because we did not agree on certain terms,” he mulls.
But Ranganath is not deterred. “Though we might not have a large range of products, we have to contend with established companies like Kirloskar. But our solace is our success in solar services. We are also pleased that we have been specifically mentioned in government tenders.”
Grundfos has been in the solar pumps business for 20 years in India, and a total of 32 years globally. It began with deep well solar pumps and has now moved to surface pumps. It’s experimenting with these products in the irrigation of rice fields in Bangladesh and Thailand. A few months ago, the company announced that it had sold more than 8,800 solar pumps across the country. The pumps come with capacities of 20,000 to 70,000 litres. The company is also working with large companies active in CSR campaigns in an attempt to take drinking water to the general public. There’s a mindset among buyers that one can pay up to 5-6% more on a product that is sustainable. But with the ratings system, buyers now have a choice to purchase a product that has been given lesser stars instead of a five star rated product.
Commenting on this milestone, Ranganath said, “An off-grid, self-sustaining solar pumping solution is the quickest way to provide water to millions. As a company which is committed to a greener and cleaner planet, Grundfos India constantly focuses on offering energy efficient and sustainable pumping solution, of which solar water pumps is one among them.”
In order to compare quality of its products with those that were blatantly copied, the company ran lifecycle tests on the products. The inferior quality of the copied products soon showed itself when they began to crumble under performance tests.
It’s a matter of quiet pride for the company that it continues a successful run in the country while keeping an eye on staying green.