Pat Schottler shares his overall experience at the Clean India Show expo

Thank you. Thank you for having me.

This is my second visit to India, but my first visit in the last 15 years. Five years since I've been here.

Thank you. It's great to be here.

Sure. Well, part of my job as a leader of a specific business unit is to decide which countries we should focus our resources on and invest in, because there are so many countries in Asia Pacific and it's such a compelling market. So when I evaluate geographies, we think about: is this a country that we can win in? And is this a market that we need to win in? So when I think about the Indian market, I think through those two lenses. Is it a market where the cleaning industry is compelling? It's either large or growing rapidly, or ultimately will be a large market. And is there a market where we can actually go there, be successful and win? If it isn't compelling or if we don't think we can win, we're not likely to invest our resources there. So when I think about the Indian market, for us it is both of those things. So it is a market where we feel like we need to win. It's not the largest market in the world today, but at 1.4 billion people, we believe over time the Indian market will grow into one of the largest markets in the world. So our perspective is we want to be a leader here as the market grows, so as it gets to be one of the largest markets in the world, we're out in front. So we feel like it's a market where we need to win. The second question is harder: can we win? And from our perspective, through the acquisition of IPC, it gave us the right to win in India because of the business that IPC has built here over the last 15, 25 years. We've built up a large sales organization, a large service organization. We've got relationships with the largest BSCs in the market. We've got a strong brand. And because of the business that's been built here, we now believe we're in a position to win here. So that's how I look at the Indian market. I think it's a market where Tennant Company can win, and I think it's a market where Tennant Company needs to win.

Absolutely. It is a challenging part.

For a lot of different reasons. I think one of the biggest challenges with the Indian market is it's a very price sensitive market. The reality is mechanized cleaning typically is a function of labor costs, and labor costs are low in India relative to more mature markets. So that puts pressure on price points. In some cases, it might still make more sense to have someone clean with a broom or with a mop and bucket than a mechanized piece of equipment. And with Tennant Company and the Tennant brand specifically, we're a premium brand and we believe in the value proposition. So one of the challenges in the Indian market is to be able to demonstrate our value to those that are using the cleaning equipment to justify that investment, recognizing the price sensitivity of the Indian market. That's one of the biggest challenges we've got.

I'm really excited about how different it's going to be for us now. Now with the combination of the legacy IPC business and the IPC portfolio of products combined with the Tennant portfolio of products, it positions us uniquely in the market. Let me explain why. Historically, IPC has a wonderful line of products and built a wonderful business here in India, very much focused on building service contractors, facilities management companies, cleaning mostly commercial spaces. Tennant's history and Tennant's legacy from a product perspective is very industrial. So if you think about cement plants, steel mills, anything where it's really heavy manufacturing, that's where Tennant's products have done the best globally for a very long time. So now with the strength that the IPC company has built here with a large sales organization, large service organization, good relationships, but a largely commercial product portfolio, now we can come to India with the Tennant product portfolio, leverage the business that's been built here to go into some new markets like the industrial markets. I think because of that combination, we look at India entirely differently than we would have three, four years ago.

That's right. Yeah. For Tennant, it's all about trying to communicate the value of what the equipment brings. So we will not bring Tennant equipment into environments where high performance, high durability, high quality are not needed. We will take the Tennant equipment into the most demanding environments where you can show the customer the value they're going to get in terms of the quality of the clean and the value they're going to get in terms of the life and reliability of the equipment. Take, for instance, a steel mill application or a cement plant application. If you were to put into that application a lower value product, it may last one, two, maybe three years if you're lucky. Over that three year time period, you're going to be investing significantly in service visits and replacement parts and consumables. So if you look at the total cost of ownership of a lower piece of equipment, it's actually higher. So if you come in with a Tennant piece of equipment, you can show them that over the life cycle of the equipment, you're actually going to spend less because you're buying fewer parts, you're having fewer service visits. The Tennant equipment is specifically built for those applications. So it's on us to go to the right customers that require that level of quality and durability, show that to them, and then have them build trust over time. It won't happen overnight. There are a select number of customers and we're going to focus on them first and continue to build the knowledge and the brand in the market and then grow from there.

We do.

Our approach at Tennant Company is we acknowledge that every market is different. No two markets are exactly the same from a go-to-market perspective or a product perspective. I believe it needs to be tailored for each individual market. The benefit of Tennant Company as a whole now is that between our legacy Tennant business, our IPC business, and even businesses we've acquired in China like Gaomei, across all of those manufacturing plants and all those product portfolios, we believe we have all the pieces necessary to be competitive in any market, especially from a floor care perspective. So we are more likely to pick and choose from our portfolio of products to apply the best possible portfolio for the Indian market. That portfolio is likely going to be different than what we would do in Japan, Korea, North America, or Europe. We are more likely to pick from our large portfolio of products and tailor it specifically to what the Indian market needs. Now, there are some cases where we will partner with local manufacturers where there is a very unique need in the market, but largely speaking, we think we have the portfolio products we need somewhere inside Tennant Company.

We don't currently have plans to manufacture in India, but we're always evaluating potentials and possibilities. So we'll continue to grow in the Indian market and we're going to continue to evaluate our growth strategy. At some point, it may make sense for us to research and explore whether manufacturing here gives us the ability to better meet customer needs. That will be our trigger point. As long as we can effectively meet customer needs, we likely won't. But as soon as we think that it's going to be necessary to better meet the needs of the Indian customers, then we'll do whatever it takes to ensure we deliver on it.

Nice to meet you as well. Thank you.