In an interview with Indian Infrastructure Parag Chheda, Executive Director, Prince Pipes and Fittings Limited talks about the company’s product portfolio, new products and offerings, impact of Covid-19 on business operations, and strategies to deal with the challenges.
What is the current product portfolio of the company?
As one of India’s first movers in integrated piping solutions and multi-polymer manufacturing, Prince Pipes and Fittings Limited brings over four decades of experience in manufacturing multi-polymer piping systems with UPVC, CPVC, PPR and HDPE polymers being processed across six strategically located manufacturing facilities. Our product portfolio is retailed under two brands – Prince and Trubore – and comprises products catering to three main segments of plumbing, irrigation and sewage and underground drainage. I am also very pleased to share that in June 2020 we expanded our product portfolio and entered the vertical of storage tanks through the launch of Storefit Water Tanks in Gujarat as a pilot launch. This portfolio extension is very well aligned to our core strength in the PVC piping domain and enables us to leverage our strong distribution network.
What are the new products and offerings for the agriculture sector and what is your outlook for this category of products?
In our overall mix, agriculture is about 30 per cent and the rest is building materials. In May-June we saw healthy demand recovery in the agriculture sector and, going forward, with the government’s strong focus on the sector, our exposure to the agriculture sector as well as building material segment will mitigate business risk in these uncertain times.
Our products for irrigation include AQUAFIT (agri pipes, fittings, solvents and ball-valves range) for pressure applications and SAFEFIT (borewell piping systems). Even during the lockdown period, we continued to expand our already comprehensive product range by launching a crucial portfolio of high-sized agricultural fittings. Although the agriculture sector has strong competition, being the first mover and pioneer in this segment, there is significant potential for Prince Pipes to capitalise on its competitive strengths. We have been active during these challenging times especially with regard to our irrigation products and have reached out to multiple societies to support farming communities.
During the lockdown, to cater to agricultural markets in Tamil Nadu, Andhra Pradesh and Karnataka, we sourced products from our Dadra plant, while in a regular scenario these markets are serviced by our Chennai and Kolhapur plants. We leveraged our Haridwar facility to reach out to farmers in Haryana and Punjab to supply our agricultural pipes and fittings. Our strategy of “winning in many Indias” continues to be effective. Our distribution network spread across urban, Tier 2,and Tier 3 cities, as well as rural India has been a major reason for success even during COVID times. Along with this robust distribution network, our strong brand power and first mover advantage in the agriculture sector will be key growth drivers for our progress.
We believe that Prince Pipes is very uniquely positioned with a strong network across agriculture, plumbing, drainage and borewell categories, creating a multi-segment exposure that has served us well.
What strategies do you have in place to improve operations in the current context?
As evident, the impact of the COVID-19 virus has been severe not only in India but has also impacted global economy. We have always believed in nurturing long-term relationships with all our major stakeholders – employees, plumbers, farmers, channel partners, vendors and shareholders. Our honest approach with absolute transparency continues to be our guiding philosophy.
The COVID-led lockdown has had a major impact on the economy at large and our company also felt the impact on sales for the month of March 2020, which is the peak month for dispatches. Prince Pipes was one of the first few companies to restart dispatches from its facilities post partial lifting of the lockdown. This not only helped us liquidate inventory at plants, but also helped us penetrate markets effectively as we were one of the first movers in opening up the value chain. I would like to highlight that we have had manufacturing excellence and safety functions at each of our plants for more than six years now, and this helped us hit the ground running when we had to undertake COVID-related measures at our plants. We continue to be extremely cautious and have taken several precautionary measures in plant sanitisation and worker safety. We have been continuously engaged in discussions with our dealer network across the country to understand their challenges and concerns as well.
Moving ahead in our war against COVID, SANIFIT was launched as a contactless sanitiser made by Prince Pipes and Fittings. The response has been very encouraging, and we have already catered to the defence establishment and shipped the first batch to their southern facility. As a part of our CSR initiatives, SANIFIT has been distributed to various government departments and hospitals across the country. These initiatives have helped us improve and expand our operations during these challenging times.
What has been the impact of Covid-19 on the company’s business at different manufacturing sites? How are activities picking up pace in the current phase of unlocking?
With the gradual unlocking of the economy, we too started operations in our plants with several precautions and with limited manpower. The pandemic has led us to think and act differently and yet continue our business in the most efficient manner. We implemented a work-from-home policy at our head office in Mumbai and at offices across the country. Plants and offices are sanitised on a regular basis. We have started a bus facility for our staff’s ease and safety in commuting through an initiative #WeAreInItTogether.
With an improvement in the supply chain, we have been receiving scheduled deliveries of all contracted raw material from our suppliers. Our value-added products/plumbing business delivered healthy growth and has increased contribution to overall sales. This quarter, amidst challenges, we chose progress and launched the STOREFIT water tanks segment as part of a pilot launch in Gujarat and we will gradually expand retail in other regions as well.
As mentioned earlier, we catered to the farmers and their market demands in Tamil Nadu, Andhra Pradesh and Karnataka through our plants. We leveraged our Haridwar facility to reach out to farmers in Haryana and Punjab to supply our agricultural pipes and fittings. We are keeping our ears close to the ground to understand and evaluate the current situation and will continue to take judicious steps as we move forward.
What are the potential areas of growth in the industry going forward? What is the overall business outlook?
The piping industry has been the most optimistic one in building materials segment. We have been able to grow at a healthy pace over the past two-three years despite the real estate sector being the way it has been. We have seen strong market consolidation taking place where the big are getting bigger. This has not only helped us improve our market share but has also given us a pricing leverage resulting in margin expansions.
Our next frontiers of growth as far as geography is concerned is eastern India, where the urbanisation cycle has been relatively late. We are driving the adoption of plastic piping in this region as a result of our local manufacturing which helps us have lean cost structures and leverage the resultant market penetration capabilities.
Our next frontiers of growth as far as application is concerned is underground drainage. Around two years ago, we launched a segment of double wall corrugated (DWC) pipes which will replace RCC cement pipes that are used for underground drainage. Our DWC pipes have superior load bearing capacities and at the same time are more economical over the life cycle. The underground drainage sector has great opportunity in the medium to long term to be a growth driver for Prince Pipes.
Plumbing and SWR can help sustain margins and they will continue to be the main areas of focus for us. This sustenance will also come from reducing our receivables and being more pragmatic in the market place. We have been able to demonstrate this over the past three fiscals which has made us more efficient with working capital management. In the end, quality of the balance sheet is of prime importance.
Our strategy of focusing on delivering a premium product combined with a fierce distribution network has made us a force to reckon with in the piping segment and we will stay true to this approach in tanks as well. It is our strong belief that this is a more sustainable approach towards long-term value creation. Instead of pressuring immediate volume growth we will focus on providing a premium product and use quality and brand power to establish our place as a market leader in the long term.
We are cognizant of the current situation and will continue to be agile, adapting and working to ensure sustainable growth for all our stakeholders.