A conversation with Chief Operating Officer of Cleantech Pvt. Ltd. on the janitorial and housekeeping Business
The need for janitorial and housekeeping services grows with the expansion of businesses and societies. When a business sells a product or service directly or indirectly to consumers, their working environment should be clean to portray an impressive image of the company and to provide a clean environment to both the employees and customers. There are some businesses in which janitorial services are essential including hospitals, clinics, restaurants and hotels.
There are few companies which are providing quality janitorial products in Pakistan. Different areas of a particular locality have varied cleaning requirements and therefore different machines are available to fulfill these requirements.
Cleantech Pvt. Ltd. is the only company in Pakistan which is offering all kinds of cleaning equipment. Almost every janitorial and cleaning company is using the equipment of Cleantech which is the sole distributing agent of Numatic, a leading international brand manufacturing reliable cleaning products. IBEX team speaks with Mr. Pirzada, the Chief Operating Officer of Cleantech Pvt. Ltd. about the operations of their company and the increasing demand of this business in the market.
Cleantech
Cleantech is the equipment provider for cleaning and janitorial services. It is not only the market leader in the business of janitorial equipment in Pakistan but also has an experienced team who understand the market and guides the customers according to their requirements.
Initially, the company was named as Dar International which started operations in 1987. At that time it was the only importer of mobile phones in Pakistan. In 1998, a new company by the name of Cleantech was established.
Clients
The main clients of Cleantech include the hotel industry, hospitals, government organizations, multinational companies, foreign missions (embassies) and cleaning companies. Almost all cleaning companies offering services to different offices and residential areas use equipment provided by Cleantech. One of the top clients of Cleantech includes Serena hotels.
Competitors
There are few competitors of Cleantech. They however, lack complete solutions or range of products. One company can provide equipment for window cleaning and another will only have the equipment for floor cleaning. Cleantech is the only company in Pakistan which is offering a complete range of cleaning equipment for every industry and has the biggest market share.
Types of Clients
Repute
All 5 star hotels must maintain the quality of service for their guests. Maintaining the cleanliness of the hotel is also a vital responsibility. The hotels have to sustain their own repute and providing a clean environment is a prerequisite.
Obligatory
Pharmaceutical companies also have the compulsion of maintaining cleanliness. Even hospitals and clinics cannot survive without the required janitorial products and services. Providing post operative care of the patient involving janitorial services is relatively difficulty since patients who are being operated have zero resistance power and are easy carriers of germs and viruses. Operation theaters and Intensive Care Units have to be thoroughly cleaned.
Prestige
Foreign missions and embassies also want their offices to be cleaned on regular basis due to the prestige factor. Diplomats are trained in this regard and already have a developed concept of cleanliness in their minds.
Awareness of Local Market
There is only 10% – 20% awareness in the local market about the importance of janitorial services and its impact on their business and clientele. Big cities have more awareness as compared to small towns and cities. Comparing Islamabad and Karachi, the city of Islamabad is more conscious in terms of cleanliness as Karachi is vast in terms of area and population making it difficult to maintain cleanliness.
Region Wise Potential
A few years back, 50% of business was from Karachi, 30% from Lahore and 20% from Islamabad. Due to the political and economical crises in Karachi, the business slowed down but now it is on the rise again. The major difference between south (Karachi) and north (Islamabad) is that Karachi comprises 80% of private sector and only 20% of the government sector. On the other hand, in Islamabad 80% business is from the government and 20% is from the private sector whereas Lahore comprises 60% of private business and 40% of the government. The major focus of this business is the private sector as the government has less development funds. These days, private hotels and hospitals have huge potential for this business.
Major Issues of this Business
These days freelancers pose a threat in this business. If we quote Rs. 100 for particular equipment, another person will quote Rs. 80 for the same product. He quotes a low price as he has no proper setup, no back up services and has adopted illegal ways of importing the equipment by under invoicing in duties. All these factors automatically reduce the cost. Government organizations are price conscious and usually hire these freelancers.
We also go in litigation in such situations as we are the sole distributors of a product and have created its repute and demand in the market. The freelancers buy those products directly from other countries and sell in the local market through under invoicing of taxes. They do not offer proper training and backup services. We also take these freelancers to court as at the end of the day they are using our product giving it a bad image in the market.
Numatic
Numatic is the pioneer of vacuum cleaners. The research and development department of this company is one of the best in the industry. They are using their own materials for the manufacturing of vacuum cleaners. Numatic manufactures a complete range of products which are used in all areas of a building (office, hotel, hospital etc). Their products have quality, reliability and durability. Cleantech has been in collaboration with Numatic for a long time. About 90% – 95% of the cleaning equipment in Pakistan is by Numatic.
Local Manufactured Equipment
Sajani is a local company which is manufacturing cleaning equipment in Karachi by importing motors from other countries. The quality and prices of these products is no match with international products due to the less volumes or the small size of the local market.
Government Policies and Issues
State Bank has imposed a restriction on the local banks stating that no importer can make a payment in advance of not more than 20% while importing any product. On the other side, suppliers in other countries do not trust the local businesses which make them disagree to this percentage of advance payment. This creates an issue for local companies who are importing legally.
Investment Opportunity
Currently, there is only 10% – 20% awareness in the market for these products and services. There is still a huge potential to create awareness and generate more business opportunities as the other 80% market is yet to be captured. This business is all about reputation. New entrants must maintain their repute in the market to make long term clientele. After sale and backup services are also essential components in the business. Manufacturers of cleaning equipment are increasing in Europe and China and some manufacturers are even manufacturing products for more than one brand. The concept of cleaning in third world countries is being promoted to improve the hygienic conditions. Clearly, this business has opportunity and is extremely profitable in Pakistan.
