Nirma boss Karsanbhai Patel says the company's trumpcard is its low-cost prod -ucts which target a huge market—con -sumers who don't wear Levi's or Armani. But is hopeful that the Nirma price will cap -ture a chunk of the premium market as well. Exce
On Nirma being a personality-based company: Well, I am still involved with Nirma, but now I work only eight hours a day compared to those days when between 12 and 16 hours at work was a norm. Now Nirma is quite a team effort in all senses of the term. The next rung of management (Patel's sons and son-in-law) is even more aggressive than me. Their enthusiasm and plans about the company are as strong. It is their ambition that is driving the group today.
On expansion plans:I had backward integration in my mind from day one. To remain competitive with the highly resourceful transnationals in the country, we had to integrate our detergent operations.
On who takes the decisions: The next generation has been responsible for the financing patterns, timely execution of new projects, and high technology orientation of the plants. I initiated the plans, but they found the ways and means to go about executing them.
On family control: After the 1994 public issue, our stake fell to 74 per cent. The recent mergers with group companies have increased the family holdings to over 80 per cent. With the planned new equity funding, the promoters' stake will come down to almost 68 per cent. In future, we may offload some more stake, but we will never go below 51 per cent. I believe that unless you have a personal ownership stake in a company, your commitment won't be 100 per cent.
On clashes in the next generation:Not at all. In fact, at Nirma, I could have done with some more people at the top. Kalpesh, my son-in-law, is the executive director of Nirma, while Hiren and Rakesh are taking care of the entire marketing and production, including new projects. Besides, in this business, there will always be a need to grow through expansions and diversifications. If one business stagnates for a while, they have to put up new businesses and expand. Opportunities are endless and the sky is the limit for growth.
On diversification: Most chemicals we produce are for captive use. It's only the balance that will be sold to other companies. Some byproducts formed while manufacturing our captive raw material might be sold. For instance, the sul-phuric acid produced after sulphonation of non-edible oils is used to make single super phosphate fertilisers which is then sold as Nirma SSP fertiliser, and we have gained substantial volumes in Gujarat and Madhya Pradesh. Similarly at our soda ash plant, we are putting up a state-of-the-art vacuumisation plant that will produce Nirma salt. All our industrial products will be produced in our LAB and soda ash plants. The only commitment unrelated to any of our other businesses is education. The group has set up the Nirma Institute of Technology and the Nirma Institute of Management at a cost of over Rs 36 crore. This is something I believe in. This is my contribution to society.
On arch-rival Hindustan Lever:We are on a pretty strong wicket. In the detergent industry, not only are we leaders in the popular segment, our newly-launched Nirma Super blue powder is giving Surf a very tough time. In the personal soaps industry, Nirma Fresh Lime is selling as much as Liril. With time, our price will capture a substantial amount of this premium market as well. The Levers of this world will never be able to match our costs and that will continue to remain the secret of our success. Our low cost would give us an edge among consumers who don't wear Levi's and Armanis. By the turn of the century, we'll definitely more than double our turnover.