The Hindu Business Line : `Shredders market in India still at nascent stage'

WHEN Lt Col Oliver North shredded sensitive documents that were required in the Iran-Contra deal, a scandal erupted that just stopped short of reaching Watergate-esque proportions. He was subsequently tried and convicted in May 1989 on charges of obstructing Congress and unlawfully destroying government documents, but the fact is, $35 million (the cost of the investigation) went down the drain because of one shredder.

Moving from the 1980s to 2005, and from politics to business, like all other things, shredders have improved with technology, and can get rid of sensitive documents, cheques, credit cards and even CDs in a blink of an eye.

The market is still at a nascent stage in India. Mr S. Annamalai, Manager, Business Development, FAL Industries, says that there is no organised study being done, but according to information from the market, between 25,000 and 30,000 machines were sold last year.

According to him, FAL Industries is looking to sell 5,000 machines in the next financial year. The machines are priced between Rs 2,000, for a personal shredder, and Rs 12,000 for the heavy-duty one. He says: "But the market is still very new and right now, we are explaining to each of our potential customers why people need a shredder."

And why are they necessary? Mr Vipin Sachdev, Chief Executive Officer, Sunshine Foods, which owns the Subway chain of restaurants in Chennai, says that he has purchased shredders to get rid of documents that contain valuable information such as food costs, labour costs and other financial details. He says that after each meeting of the Subway restaurant managers, all the papers that the managers brought with them are shredded. Nothing is given back. "In fact, I bought one of the machines that shreds both vertically and horizontally, so that all that is left are 5 sq mm bits of paper," he says. "We have bought shredders for every top-level manager in the company."

Says Mr Micky Watwani, Partner, Vijay Enterprises, garment exporters use it more as an efficient waste management tool. "I use the machine to destroy all my invoices and important documents," he says. "It is just better to shred them than tear them. It is more convenient," he adds.

Mr Nandakumar Dhruvan, Managing Partner, A Pluz International, distributors for FAL Industries' shredders in Tamil Nadu, says: "Banks, medical, hospitality, manufacturing and, of course, the IT industry are the areas we are looking at," he says.

Banks are constantly dealing with sensitive documents, such as cheques, and documents requesting a change in account number. "With that information, you can make online transactions or even use the ATM yourself — the four digit password can be hacked," says Mr Dhruvan. Similarly, insurance forms and medical bills contain a wealth of information about the patient — the PAN number, the bank account number, and the signature of the patient.

The need for a shredder sometimes goes beyond the expected. Jewellers need it because they need to get rid of their estimate bills, simply because they may quote different prices to different customers! Similarly, pawnbrokers prepare chits with the given rate for gold, and the bills apparently differ from customer to customer.

On the other hand, in an area where you would think a shredder would be an absolute necessity, it may not be used so widely.

Mr S. Haresh, chartered accountant, says that though they deal with confidential information, they are required by law to keep all the documents for audits.

"In India, 90 per cent of the chartered accountants don't use shredders," he says.

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