The demand for filters is on an upswing, projected to touch $860 million by 2011. Manufacturing and dealership opportunities beckon entrepreneurs in this segment
Between 2001 and 2006, filter demand in India rose by more than 12% per annum while industry production expanded by 7.9% per year from 2001 to 2006, says a recent report by The Freedonia Group, the US-based industrial market research firm.
The demand for filters globally is projected to jump by 5.6% annually through 2011 to $49 billion. Filters can broadly be divided into two types—air filters and liquid filters. While air filters find broad usage in automotive, chemicals and pharma industries, liquid filters are used in water purifiers and the oil industry.
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Opportunity areas
With vehicular pollution touching new levels, and India becoming a hub for automobile manufacturing, the demand for filters is set to rise. According to estimates, the automotive industry is worth around $34 billion a year and ropes in about 5% of India’s GDP. The industry produces about 1.5 million vehicles. Manufacturing and supplying filters to automakers could rake in good profits. The demand for internal combust engines and related filters stood at $180 million in 2006, and is projected to touch $290 million by 2011.
Buoyed by the growth prospects, when Mann & Hummel, the German automotive components giant, set up its subsidiary in Tumkur, Karnataka in 2006, it wanted to produce and sell its air filter systems to automotive companies and original equipment manufacturers in India. The parent company had indeed read into the finer lines of the booming automotive industry here. Also, the country’s prowess as a major contract manufacturing hub made India an attractive market.
Two years down the line, Mann & Huummel is reported to be contemplating expanding its production facility in Tumkur, having spent around Rs 45 crore on the facility. It is also mulling setting up another facility somewhere in north India. The motive is clear: to make the most of the rising demand for filters in one of the world’s fastest growing economies.
The other segment that holds promise is air purification. With more and more offices and business centers dotting our urban landscape, the demand for cooling and heating systems is on an upswing. Air filters are used in these systems to remove dust, pollen, mold and bacteria from air and improve indoor air quality. These filters are used in building ventilation systems. The demand for air purification filters touched $140 million in 2006, and is projected to reach $215 million by 2011.
Tajinder Pal Singh is a happy man. His company, Kanwal Enterprises, manufactures and exports filter-making machines, most of them used to manufacture air and automotive filters. He is quite upbeat about the demand side of his business. “The demand for filters will always be there because all filters used in machines have to be replaced after a certain period of time,” says Singh. In a highly unorganized filter market, dotted by several small players across the country, Singh represents the optimistic side of the filter manufacturing business.
| DARE/quick facts |
| World filter demand to jump by 5.6% annually through 2011 to $49 billion |
| China, India and Russia will post some of the strongest sales gains |
| Sales of filters in India totaled $550 million in 2006, making the country the fourth largest market in the Asia Pacific region |
| Filter production in India expanded by 7.9% per year from 2001 to 2006 |
| Between 2001 and 2006 in India, filter demand rose by more than 12% per annum |
| With shipments of $410 million in 2006, India is the fourth biggest producer of filtration products in Asia Pacific region |
While Singh manufactures machines used to make filters, Kolkata-based Amit Karmakar runs Clean Filter Industries, which manufactures and exports air filters used in air-conditioning and chemical plants. He too is quite upbeat about the growth of this industry. Karmakar cites the example of the use of filters in the chemicals industry. “Take the example of a nitric acid manufacturing plant. The air used cannot be ordinary air. It has to be filtered before entering the plant. This is where our ventilation filters are used,” he says. Demand is high from the medical industry too. “Operation theaters have to have clean air, and the filters have to be changed time and again,” he adds. Karmakar also provides filters to several leading air-conditioner manufacturers in the country.
Filters are being widely used in air-conditioning systems to maintain indoor air quality. For instance, Paharpur Business Centre in Delhi maintains indoor air quality with the help of its air purification plant comprising filters, air scrubbers and dehumidifiers.
| DARE/quick facts | |
| Globally* | |
| • Donaldson | USA |
| • MAHLE International | Germany |
| • Mann & Hummel | Germany |
| • DENSO | Japan |
| • Parker-Hannifin | US |
| • Wix Filtration Products | US |
| • CLARCOR | US |
| • Sogefi | Italy |
Filters are also used in maintaining air quality inside airplanes. Take the case of US-based Donalson, a leading manufacturer of filtration systems and parts. In December last year, top aircraft manufacturer Boeing chose Donaldson to supply high efficiency particulate air (HEPA) cabin recirculation filter and electronic equipment (E/E) cooling filters for the new Boeing 747-8 aircraft. According to Donaldson, HEPA filters meet or exceed 99.97% efficiency on 0.3µm, the highest rating available for aircraft cabin recirculation systems, trapping dust, lint, smoke, bacteria, viruses, spores and other contaminants.
Betting big on the growth of nuclear fuel technology, a US-based firm Nuclear Filter Technology provides ventilation for flammable gas mixtures in nuclear waste containers. The company is founded on a unique product that safely vents gases through a robust, chemically inert and radiation-resistant carbon composite filter.
With the demand for filters reaching new highs, it would not be wrong to call it a “green” opportunity.
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