CHHEDA INDUSTRIES

The next time you see a stainless steel chafing dish, think of Chheda Industries.  Nestled in the busy residential locality of Purasawakkam, this enterprise churns out world-class equipment from kitchen equipment to table service.  We basically service the hospitality industry says Deepak Chhedda, CEO of Chheda Industries while speaking amidst a cacophony of noises. The result of a small army of industrious men, who are going about their tasks efficiently, producing equipment to be exported to the American market.  "It was only very recently, hardly a decade back that we started targeting the international hospitality industry and the export market in an ambitious way", says Chhedda.

Chheda Industries was started in 1967; they initially catered only to the domestic market, specifically the South Indian market and then slowly started supplying on a national level.  In the early 90's, seeing that it did not make any business sense to concentrate on the domestic market alone, taking into consideration the heavy regional competition, they diversified into other markets.

"The difference between the Indian and International market is that the buyer abroad expects new designs every six months.  The buyer in the American and European market demands something different for every order.  If they want an item according to the style and configuration that they require, they send us samples based on which we give them what they require.  The main factor that drives the buyer to us is the price factor, as the local manufacturer abroad is very expensive.  The plain chafing dish that we offer starting from $30 would be around $90, if bought from the local manufacturer abroad", says Chhedda. 

The main product is the chafing dish, which is mostly used for buffet.There seem to be two kinds of buyers basically - the wholesale buyer who buys in bulk and distributes and the institutional buyer who buys directly from manufacturers, who is also the end user. One of the drawback of this industry is that the material required to make these products to measure up to international standards is most of the time not available in the local market.  Another inhibiting factor is the huge investment to be made in Research and Development (R&D) to continually fine tune the process of production and keep making new designs.  Though it may be seen as a liability in the beginning and inhibit new players, it benefits the manufacturer who has invested in R&D, since the buyer is assured of good quality and is sure to return.

Price is still the key purchase decision, quality is only secondary.  In India, a variety of raw materials are available. Starting from 18 / 0 stainless steel to 18 / 10.  This denotes the amount of nickel present in stainless.  However only one variety of stainless steel can be used, which is 18 / 8, the accepted international food grade for stainless steel.  "We use only that because, anything below that is sub standard stainless steel which can rust or crack and even be poisonous", says Chhedda.

"Most often the buyers come down, visit our units, study the technical aspects and only then do they place orders.  What they look for is Price, Quality, Service and Timely delivery.  Timely delivery is important from the manufacturer's part is also important because the payment being through a Letter of Credit, the delivery needs to comply much before the precise time of delivery as a delay in living up to the promise would mean that the manufacturer would have to forego his money as the Letter of Credit is bound by a time frame.  Power cuts or strikes that may cause delay at any port, postal delays etc are certain risk factors that are out of the manufacturer's hands", says Chhedda.

Chedda exports around, fifteen containers every year. These containers are sent almost every other month, with around 1200 chafing dishes. The prices of these chafing dishes varies between $30 to $250.

Generally hotels and restaurants are the biggest consumers of these products.  If you take any of these products, they are used in the beginning at the best restaurant, then after a year at the second best restaurant before it finally comes to the buffet section, after which it is rejected.  At the most it takes four to five years for an order to be renewed. The Chennai market is looking brighter, as new projects are throwing up a lot of opportunities.  Availability of excellent skilled labour is another thing that Chennai can boast of.

It is a labour intensive industry; it requires a lot of production follow ups to live up to promised delivery schedules. Designing of products and designing of the tooling itself offers a lot of opportunities, for both skilled and unskilled labour. Depending on the buyer's requirements, sheet cutting, deep drawing, blending, polishing, crafting, finishing are the various processes the raw material goes through to come out as a finished product.  The amount of time taken to finish an order would depend on the complexity of design and the required finish.

"One of the important things that I would want the buyer to understand from the manufacturer's perspective is the difference in the quality of raw material used and therefore the difference in prices.  Both sub-standard stainless steel as well as high grade stainless steel look the same after finish. It is only after they are used, does the difference become obvious; The sub-standard stainless steel rusts and breaks. Usually the raw materials used are Aluminium, Brass, Copper and Stainless Steel," says Chedda.

According to Chedda, they have to be very careful while procuring the raw material.The surface is most important, as a dent or a scratch could prove expensive at a later stage.  Another aspect in this business is safety of workers, since they are handling material, which can be dangerous with its sharp edges and may cause grievous injuries if not handled properly.

"China and Taiwan are our competitors.  The buyers who come to us are the ones who have already placed orders from the Taiwanese and Chinese markets.  They choose us because even though the Chinese and Taiwanese may offer cheaper goods, they compromise on quality", says Chhedda. Also as the Chinese market is saturated with orders, the customer is not assured of timely delivery.  So the difference in quality and timely delivery are the two factors that bring buyers to the Indian market. 

The future is bright for this industry as the scope for growth is buoyed by the fact that the Asian and African markets can supply material at a cheaper price, as labour costs are cheaper.  This forces European buyers to buy from these markets, in order to be cost effective.

Address: Chheda Industries, 42 / 25, Vallam Bangaru Street, Vepery,
Chennai 600 007.
Phone: 642 2959
Tele-Fax: 532 1819
Cell: 98410 31083
E-mail: chheda3@vsnl.com
Website: www.chhedaind.com

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