Watertec plans big expansion in FY22

Watertec, a Coimbatore-based end-to-end plumbing & bathroom solutions provider, is planning to set up three new manufacturing units and 24 retail showrooms across the country in FY22 to aggressively focus on the mass housing segment in metro, Tier 1 and 2 cities.

“In FY22, we are planning to invest about ₹65 crore of capex to set up a new plant in Gujarat and Odisha. We have already spent ₹28 crore in FY21 to set up a new plant in Coimbatore,” Bantwal Ramesh Baliga, CEO, Watertec, told BusinessLine .

A market leader in the polymer-based bath fittings industry, Watertec already has three manufacturing units in Coimbatore with combined production capacity of 2.5 crore pieces of bath fittings and 1.8 crore pieces of pipes & fittings annually.

Post expansion, the company will have four plants in Coimbatore and one each in Gujarat and Odisha. It also has 36 branches, 36 warehouses and 19,000 dealers across the country.

“Our output will go up by 30-35 per cent with two more plant additions which will take care of growth plans for the next two years,” Baliga said, adding, “after the new plants, bathroom fittings output will increase to 25 lakh pieces a month (from 20 lakh currently) while pipes and fittings will go up to 20 lakh pieces per month (from 15 lakh pieces).”

Watertec has been a dominant player in the affordable housing segment in Tier 3 & 4 cities and rural areas in a budget range of up to ₹20 lakh. Through capacity expansions and diversification from polymer to chrome-plated range of bath fittings, the company plans to focus on mass to luxury segments in metro and Tier 1 & 2 markets.

“Going forward, my core focus is going to be on what we call ‘smart homes’ or ‘mass segment’ with properties in the range of ₹40-80 lakh. All the products that I am building are targeted at that segment,” Baliga said, adding, “In the last few months, we have taken very big orders from Mumbai, Bengaluru, and Delhi. So we are slowly getting into the metro market already.”

Baliga also added that while the entire bathroom fittings industry was affected by the Covid-19-led real estate sluggishness, Watertec was largely unaffected due to its strong presence in the replacement market, particularly in Tier 2 & 3 markets and beyond.

“I have 70-80 per share in the replacement market in Tier 2, 3 and rural markets. Hence, my revenue was not affected due to Covid-19,” Baliga said, adding, “Given the amount of liquidity in the market, it will take at least two to three years for new constructions to start up. Till then, the replacement market is going to hold the key and our core strength lies in that.”

On brand recall, he said, the company will increase its brand awareness campaigns in metro, Tier 1 & 2 cities and will open 24 retail showrooms across the country starting from Mumbai, Delhi, Chennai and Kolkata as part of its brand building efforts.

Currently, 70 per cent of Watertec’s business comes from bath fittings and accessories, while pipes and fittings segment accounts for 25 per cent. Sanitaryware, started a year-and-a-half ago, contributes 5 per cent to total business.

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