One 2 One With Mr. Raj Patel, Director, Royale Touche Group

person access_time   6 Min Read

Started in 1978 in Wadhwan city, Gujarat, Royale Touche is known in India for design innovation in laminates. They gave the laminate a complete makeover with finishes and colours like never before. Suddenly the laminate was no longer just an economical, hard-wearing countertop. The company created laminates that had texture, unparalleled designs and most importantly; character.

Today, Royale Touche group has over 175 marketing professionals across India. Mr. Raj Patel, who is at the helm of affairs spoke to The Ply Reporter giving insights about how Royale Touche is doing today, as well as current undertakings, plans and initiative.

Q. How is the market of decorative laminate for Royale Touche at present?

A. The market for decorative laminate has been good for Royale Touche. We have grown by around 18.0 % every year during last 3 years and we expect to grow further by 20.0% in this year. Our product innovations are performing well and being acknowledged for quality and finish. Despite of the competition in HPL trade, we have grown in sales and reach. Each of the brands under the Royale Touche umbrella is growing at a decent pace. We have witnessed around 30% growth in our premium and 1.0 mm product category.

Q. Since a year, the limit of ‘increased capacity with lowered price rate’ went beyond expectation. Did Royale Touche feel similar pressure?

 A. The market is, on the contrary, has improved for good products and brands. The unfair practices that had been prevailing in the market along with Tax evasion have reduced. Owing to that, the product price gap has decreased between our products and other substandard products. Because of this people are more susceptible to choose a high-quality product available at reasonable rates.

Q. Please reflect on the turnover and the expected growth ahead.

A. We have generated around Rs. 375 crore turnover revenue in our Laminate business. We have planned a further growth of 20 percent this year.

Please show me a company who is manufacturing 0.92mm Laminates and has a healthy balance sheet. The product has been introduced in the market to earn a slightly better margin but in reality, achieving that differential is not possible because the product has no differentiating factors. Also, the manufacturers don’t get the advantage.

Q. While the market is facing difficulties & pressure, Royale Touche is moving positively with around 20% plus growth, is quite interesting.

A. We have stuck to our policy and norms. If we are going to be consistent with our processes and product quality, which is the backbone for any successful brand, if we are going to be loyal to our channel partners, if we are committed to their growth, and most importantly if we respect fair trade practices then growth is inevitable.

  • We have grown by around 18.0 % every year during last 3 years and we expect to grow further by 20 % in this year.
  • We have witnessed around 30% growth in our premium and 1.0 mm product category.
  • Our Laminate business has generated around Rs. 375 crore turnovers.
  • Price is always secondary for the quality conscious.
  • The sale of 0.8 mm will be for certain clients based in rural areas and small towns but that is also because they have not been exposed to 1 mm and 1.25 mm products.
  • I do not see anyone having a 0.8 mm range, which is even remotely as good as any of the top players.
  • 0.92 has been introduced in the market to earn a slightly better margin but in reality achieving that differential is not possible.
  • When the concept of Non-Folder started, it was clear that it was not going to last because there was no basis to it, or a sustainability model behind it.

If we are going to be consistent with our processes and product quality, which is the backbone for any successful brand, if we are going to be loyal to our channel partners, if we are committed to their growth, and most importantly if we respect fair trade practices then growth is inevitable.

Q. While some manufacturers are struggling to stay afloat, some other budding ones are starting the same practice.

A. Yes, it is true. However, it is also true that when they face a lot of difficulties in the market with low demand and chaos, they gradually realise that it hurting their own growth, these practices will slow down gradually. And whenever there is pressure in terms of price, they adopt by creating low priced products, affecting the quality of product which in turn just hurts the market. A lot of processes are not diligently followed and a lot of corners cut while making of a low quality product. This hampers and hurts the consumer perspective of the laminate and an entire product category. Low quality products work towards shrinking the market share.

Q. Earlier, good designs were exclusive and were offered by few but now there are many. Do you agree?

A. No. It looks like people have caught up in terms of design and quality, but when one goes out in the market; the issues faced by such products are visible. The depth, clarity and getting the right combination of texture and paper is very difficult to achieve. Also, lower quality design papers lack the finesse and detailing is required to enhance the look of the product.

Q. Can you please illustrate with an example?

A. Most of the other products are facing troubles in quality. If you meet any dealer randomly even if they are not selling our product, they will surely talk high of our quality. Price is always secondary for the quality conscious. We’ve not heard any complaints about our products while other products always face such problems frequently. It is extremely rare for our product to face issues which sometimes happens due to wrong fabrication. We work diligently to provide a better product and also promote awareness for the same.

Q. What is the primary differentiator between Royale Touche and other top organised brands?

A. If we talk about top brands, the focus has always been driven towards influencers and large scale projects in the market. However, we mainly focus on reaching up to the consumer. Our products are designed towards appealing to the emotional decision of the home owner when he is selecting the products for his house.

If we are going to be consistent with our processes and product quality, which is the backbone for any successful brand, if we are going to be loyal to our channel partners, if we are committed to their growth, and most importantly if we respect fair trade practices then growth is inevitable.

Q. While some manufacturers are struggling to stay afloat, some other budding ones are starting the same practice.

A. Yes, it is true. However, it is also true that when they face a lot of difficulties in the market with low demand and chaos, they gradually realise that it hurting their own growth, these practices will slow down gradually. And whenever there is pressure in terms of price, they adopt by creating low priced products, affecting the quality of product which in turn just hurts the market. A lot of processes are not diligently followed and a lot of corners cut while making of a low quality product. This hampers and hurts the consumer perspective of the laminate and an entire product category. Low-quality products work towards shrinking the market share.

Q. Tell us a bit about your new Sample Folder.

A. This time, we are launching a Matt Black folder otherwise folders were usually glossy. Around 15-20 days before, it weighed around 13 Kg. It has over 600 products. This time we have small size chips in the folder whereas market has all big chip sizes. We pioneered the introduction of large size chips in the market but now the SKUs have become too many and therefore there is need for a convenient and easy sample folder which can be used by everyone.

Q. Don’t you feel small sizes are not purchaser friendly?

A. There is not much difference in purchase behavior. Many people might have a problem with smaller sizes. But we are able to switch over to this because now we are reaching to influencers and our showrooms are helping in a big way. People can come to the showroom and see the product. Showrooms are available now in all cities. So, there is no need to keep these big size folders. In fact, we are moving towards standardization. We will finish the folder in 2-3 chips sizes. We are even planning to make the pieces even smaller. For instance, the new folder for architects is of only 1 size, there is no second size. They are extremely well exposed to designs and can easily comprehend the complete design from a small piece. What is your view about Anti-scratch laminates as it has been growing steadily in high Gloss category in 1.0 mm? The Anti-scratch segment is a premium segment where only few players have the right product. Along with that one need to have adequate infrastructure and Post-forming laminates. Because if someone asks for a particular colour, producing post-forming may require extra time and process time also becomes longer, which is a difficulty for most companies. We have the anti-scratch range, but we have focused on all products
evenly. We also realised that many of our consumers use anti-scratch, high gloss products for their kitchens, so are launching a set of really exclusive solid colours never before seen in this category in India.

Q. What is your view about Anti-scratch laminates as it has been growing steadily in high Gloss category in 1.0 mm?

A. The Anti-scratch segment is a premium segment where only few players have the right product. Along with that one need to have adequate infrastructure and Post-forming laminates. Because if someone asks for a particular colour, producing post-forming may require extra time and process time also becomes longer, which is a difficulty for most companies. We have the anti-scratch range, but we have focused on all products evenly. We also realised that many of our consumers use anti-scratch, high gloss products for their kitchens, so are launching a set of really exclusive solid colours never before seen in this category in India.

Q. What is your opinion about 0.8 mm? How do you expect it to perform?

A. The focus of Royale Touche is always towards giving the best in the market. So, we intend to continue our focus there. The sale of 0.8 mm will be for certain clients based in rural areas and small towns but that is also because they have not been exposed to 1mm and 1.25mm products. In the long run 1mm products would continue to grow and find more acceptances. The perception of market towards 0.8 mm is high.

Q. Majority of dealers demand for it too. What is your take on this?

A. In 0.8 mm, I do not think people are doing well. And if anyone says that they are doing very good in point 0.8 mm, I do not see anyone having a 0.8 mm range, which is even remotely as good as any of the top players. It is always a second-grade product that they have. It is not a mass product but quite generic, price-conscious product that is selling in the market, definitely, not as brand.

When the concept of Non- Folder started, it was clear that it was not going to last because there was no basis to it or a sustainability model behind it. There was no commitment by the supplier regarding its quality. It might be giving some extraordinary margin to dealers who might be able to benefit from that particular activity but there is no long-term sustenance.

Q. The perception of market towards 0.8 mm is high. Majority of dealers demand for it too. What is your take on this?

A. In 0.8 mm, I do not think people are doing well. And if anyone says that they are doing very good in point 0.8 mm, I do not see anyone having a 0.8 mm range, which is even remotely as good as any of the top players. It is always a second-grade product that they have. It is not a mass product but quite generic, price-conscious product that is selling in the market, definitely, not as brand.

Q. What is your comment on 0.92 mm prospering?

A. Well, my question is, please show me a company who is manufacturing 0.92mm Laminates and has a healthy balance sheet. The product has been introduced in the market to earn a slightly better margin but in reality achieving that differential is not possible because the product has no differentiating factors. Also, the manufacturers don’t get the advantage. Whatever, little price advantage that is achieved is only limited to the channel partners. People who are doing this sooner or later will realize it.

Q. Any guess about how long this saga might continue till the market understands.

A. We have been in Aluminium extrusion industry for 7 years. In terms of volume and reach, we were amongst the top players in the country for that product, but we saw that the people functioning in the industry are selling products on ‘Kilogram basis’ as a commodity. So where is the scope for branding or R&D? Whatever the condition, they are always fighting for that one paisa or two paisa. The day we realized it was not worth our efforts, we made an exit. There were 5 other major players who exited the industry because it was just a waste of time and effort. After that the prices have doubled. The market will change after some drastic steps are taken.

The laminate industry will mature and consolidation will happen eventually. If a company is not organised and process driven and does not have commitment for quality, it will have to exit one day.

Q. Also share your perspective about the market of Non-folder.

A. When the concept of Non-Folder started, it was clear that it was not going to last because there was no basis to it, or a sustainability model behind it. There was no commitment by the supplier regarding its quality. It might be giving some extraordinary margin to dealers who might be able to benefit from that particular activity but there is no long-term sustenance. Without a proper supply channel and dependable source of product, nobody can serve a demanding market.

Q. Where is the Laminate industry heading to? Do you see more addition of companies or exits?

A. There are rumours about at least 15-20 players who want to sell their units. Some of these players have been in the industry since 15-20 years. People enter into the industry but are not able to establish themselves in the market. The laminate industry will mature and consolidation will happen eventually. If a company is not organised and process driven and does not have commitment for quality, it will have to exit one day.

Q. How do you see the impact of IKEA on Plywood?

A. I do not see major changes happening. Even with IKEA’s aggressive expansion plans, in the next 10 years, it will extend its operations to 8 metros. Even if sale is happening in Hyderabad, I don’t see a person in Vijayawada buying from IKEA so the operations would be localised. In India, there are 800 plus class 1 towns, so IKEA would take a substantial time to cover that ground. I don’t see there will be any major impact, not even in Delhi.

Q. What is your total capacity at present?

A. We are having a capacity of 8 lacs sheet every month. We expect to expand further in coming time as demands are steadily growing for our product. Export market is also growing that may help us to expand.

Q. Any plan for diversification?

A. Yes, we are adding Laminate Flooring. It is going to have the same commitment to quality and innovation as Royale Touche, in three categories of 12, 10 and 8mm in terms of thickness. Towards the end of the year, we are targeting monthly sale of 2-3 lakh sqft, mainly through our channel partners. Currently, we are starting with laminate flooring and later engineered wood and solid wood products will be added.

As a complete tie-up, we are sourcing the product from a 45-year-old German company, with one of the largest manufacturing facilities in the world located in Germany, a pioneer in developing innovations. We have no AC3 products. All are AC4 and AC5 rating.
 

shareShare article

Post Your Comment