Saint-Gobain's India march

The 350-year-old French glassmaker is stepping into the Tier-III and -IV cities

When Saint-Gobain entered the market two decades ago it knew that it had a tough trek ahead. India was never going to be an easy market to break into. But, nothing had prepared the French glassmaker for this: Being mistaken for an education conglomerate! Everywhere it went, Saint was shortened to St and people, more familiar with missionary-run educational institutions, assumed that it was another school in the making. It took years for the company to reclaim its identity and establish its base in the glass business. No surprise then that it considers the instant recall that the name now has, to be a greater achievement than the Rs 5,000-crore business that it has built in India.

It wasn't an easy journey, recalls B Santhanam, president, (flat glass) South Asia, Malaysia and Egypt. "It was a very big challenge to create a brand in India." Especially since the company has existed for nearly three centuries and in many parts of the world is a household name, he said. Not only was it struggling with an identity crisis, the company was also trapped in a market dominated by unorganised players.

GLASS WALK
Saint-Gobain is in 64 countries, turnover in 2014 was $41 billions. It has 1,90,000 employees .

IN INDIA:

• Turnover in 2014: Rs 5,000 crore
• Nearly 4-5 per cent of the revenue is invested in developing and creating innovative materials
• Tied up with IIT- Hyderabad on cool roofing and day lighting solutions; with IIT-Madras for affordable housing solutions, with IIT-Delhi for energy efficient materials
• 4,000 patents in the last 10 years and one in four products sold today has been developed in the last five years

Source: Company reports

It came to India in 1996, by acquiring a majority stake in Grindwell Norton. Despite the initial difficulties, the company persisted, and in 2000, it started its own glass manufacturing unit at Sriperumbudur, near Chennai. In June 2011, it acquired the Gujarat-based Sezal Glass Floatline and last year it inaugurated a Rs 1,000 crore plant at Rajasthan. The company expects to increase its total turnover by Rs 1,000-crore this year.

The industry is expected to touch Rs 340 billion(Rs 34,000 crore) in 2015-16, up from Rs 225 billion(Rs 22,500 crore) in the current year, according to an Assocham study but even today, over 70 per cent is in the unorganised sector. The use of glass is rising and slowly large glassmakers such as Saint-Gobain, ASAHI Glass India, Hindustan National Glass & Industries, Piramal Glass, Owen Corning, Triveni Glass and others are gaining prominence. The industry is expected to grow at compound annual growth rate (CAGR) of 15 per cent over the next three years.

Saint-Gobain believes that the work that it has put in, in building its brand, will help make the most of emerging opportunities. Continuous innovation and product development activities have helped incorporate some of the latest techniques and designs in its glass says the company. It has spent extensively on marketing and communication initiatives too. Its brand line says 'The future of Glass, since 1665' to convey the message that the company brings in reliability and heritage, along with quality and innovation says Santhanam.

It is also focusing on developing the most modern product. Market research shows that the world over, the quality of glass is measured by its transparency. Glass is good if it is invisible. The company incorporated this into their product development process and also effectively communicated this to its buyers. "We brought the promise of clarity through very high technological process. We took a simple idea which the consumer had and owned it," said Santhanam.

The company believes that it was able to build a connection with the buyers for two reasons: One, is of course, the product was being tailored to meet the need of the times and delivering on the promise of quality. But an equally important part was played by the humour-laced brand campaign that it launched. Sophistication, humour and simplicity - "that is really what brand building is about," said Santhanam.

How does the company know its brand building efforts are paying off? Well they conducted a survey and "50 per cent of them spontaneously said Saint Gobain is what they thought of when they saw glass," said Santhanam, adding that all of them know the company as a building material company, not just a glass company. Globally, flat glass brings in 22 per cent of the total revenue, 26 per cent is from construction products, 46 per cent from building materials and six per cent from packaging. In India, 70 per cent of the revenue comes from architects for construction and building purposes. And so, he says, "To accomplish this in a country like India in 15 years was a tremendous effort," said Santhanam.

The company is now moving into tier-III and -IV cities. "We actually stopped working hard on the metros, because in the metros we have a strong position and also in tier-II cities," said Santhanam. For that the company is going back to the drawing board - to make their glass not only the best in technology and most relevant to modern day building needs but also to make it affordable. Now, that is a tough combination to crack.