Excerpts from the interview:
How does it feel to take on the giants, day in and day out, in the Indian market?
We had to struggle hard to reach whatever levels we are at today. We started the company from the scratch, without any previous business experience in India. But it is still going to take some time before we reach threshold levels in terms of turnover. Economies of scale happen only then.
What has been your major challenge?
We started the business operations in 1994. The biggest challenge has been activating the sales and distribution network, which is very vital in an FMCG business. The way out was to acquire a company which had such a network after we began operations in 1994. But we were thwarted by the market leader, who acquired the company which was up for sale, just to make sure we did not buy it.
What has been the turning point for your company?
The turning point came when we acquired the consumer product division of Shaw Wallace in 1999. This gave us access to brands like Margo, Neem toothpaste, along with their sales and distribution network. Their network was pretty strong in the East. With that acquisition, all of a sudden we grew from a Rs.60 crore company to a Rs.200 crore company. Today, we are a Rs.350 crore company. We have also strengthened our sales and distribution network. In terms of distribution, we are weak in the west and north but we are strong in south and east.
What is your vision for the company?
Our immediate vision is to grow into a Rs.500 crore company. Once you reach that level then the economies of scales would start working. We are nowhere near the giants in India. We fight them everyday in Europe and other markets. We know how to fight with them, but we are not looking at growing into a giant-sized company overnight. We want to grow at a steady pace and reach our objective. In the next couple of years we should reach Rs.500 crore turnover.
What’s going to be your game plan for growth?
One strategy is to strengthen our sales and distribution network. Secondly, we are strengthening brands, which are doing well, and increase our share in the market. As long as we grow faster than the market, we stand to gain. And this is what we are aiming at.Our flagship brands are Henko, Mr. White, Margo, Pril, Fa, where the strategy is to expand distribution and cover more areas across the different regions.We are also focusing on consolidating regional brands like the Neem toothpaste. It is strong in certain areas like West Bengal, Karnataka and Delhi. We don’t have a sales and distribution network like the leader in the market or the deep pockets for advertising. So we are focussing certain brands in certain regions.We are also working on a concept called ‘fast forward’ in sales distribution. It is a concept where the focus is in terms of giving a good service to the retail outlets. At the moment, we are doing it in 24 cities and we would soon extend it to 72 cities. This should also help us realise our objectives in terms of achieving Rs.500 target. We have plans to target categories, which have lower penetration - for example, shampoos or dish washing liquid. Detergent and soaps are at 90 percent penetration levels.We are also looking at possible acquisitions. If something good comes our way in the laundry care or toiletries or cosmetics, we would consider it. All these things should help us in increasing our turnover.
How much do you care for the environment?
We are very conscious about protecting the environment and ecology. In fact, with Henko, we are the only phosphate-free zeolate-based detergent makers in the country. I will tell you something more interesting. When we acquired the consumer product division of Shaw Wallace, we had a Phenyl-based cleaner that was doing well in the market. Just because Phenyl-based products are carcinogenic, we decided to stop selling it, and forego Rs.one crore profit from that brand.
P C Vinoj Kumar