Not mere soap bubble

With a thrust on new launches, sales promotion and distribution efforts, Nirma Ltd have shown extreme consistency in maintaining its growth, which even by conservative estimates is quite impressive. Acknowledged as one of India’s best on cost management, Nirma has excellent operating margins. On the marketing front as well it has displayed tremendous grit, especially in the toilet soap market where HLL has established its stronghold. In fact, within five years of its launch, Nirma’s toilet soap tonnage equalled 15 per cent of the market, second only to HLL’s monopolistic 65 per cent. This is remarkable considering how most of the other brands have actually lost market share to HLL. The success of Nirma can, without any doubt be credited to the unpretentious Karsanbhai Patel. Armed with very little except for his exceptional business acumen this David dared to take on the multinational Goliath, HLL. And though it will be difficult for anyone to fit into his shoes, the new order, however, is gradually making an impact with its innovative ideas. The mantle at Nirma is likely to be passed on to Hiren Patel. Patel junior happens to be the current CMD of Nirma Consumer Care Ltd. But whoever may be at the helm at Nirma, Karsanbhai’s credo of selling high-value products at the lowest price is unlikely to be discontinued. Hiren Patel’s emphasis has also been on cost reduction while maintaining volumes. Exploring rural and other potential markets, he has helped push Nirma’s volumes. What’s more, BDR and BSF not withstanding the company has made an impressive inroad into Bangladeshi market. Nepal and parts of Africa have also been regularly buyers of Nirma products. In another cost reduction exercise Patel recently ventured into in-house printing and packaging, with the acquisition of Kisan Industries. The addition to profits due to this latest acquisition will apparently be around Rs 300 million. Meanwhile, the company has quietly entered a new area – that of food retailing. In fact, Patel has already launched a retail supermarket under the brand Radhe in Ahmedabad. The response that the mall receives will eventually decide whether the Patels will strengthen their hold in this segment or stick to detergents. But at the moment it seems like Patel’s plans are not merely about soap bubbles after all.

Soaring High

Yet to complete a decade of existence and Jet Airways, India’s fledgling private domestic airline has shown remarkable fortitude in the face of every possible obstacle. While counterparts like ModiLuft, Damania, East West and Archana Airlines are defunct and have become a part of Indian aviation history, Jet continues to add to its glossary of achievements at regular intervals. The latest being its much publicised attempt to buy Indian Airlines and the Air Transport World Award 2001 for Market Development. And the only man who seems to be enjoying his flight in the Indian skies is Naresh Goyal—the travel agent turned NRI entrepreneur. Now that there are not that many private airlines left to offer any sort of resistance Goyal has taken on Indian Airlines in its home turf. Jet operates 215 flights every day across 39 destinations within the country, flying a total of 5.9 million passengers, has total assets worth Rs 2,000 crore, the youngest fleet with 33 aircrafts, Rs 2,547 crore revenue and has a 42 per cent share of the market. While Indian Airlines focuses on reducing its losses Jet’s profits for the year ended March 31, 2001 stood at Rs 12.50 crore. Controversies not withstanding, Jet flies more than 17,000 passengers in a day. But Goyal, who time and again has had to prove that he is the majority stakeholder in Jet, has ambitious plans. If he had his way Goyal would like to pocket Indian Airlines too. He also plans to extend his reach to neighbouring countries but for that he will have to wait for the much-touted open sky policy. But things will not be easy. For one, Indian Airlines finally seems to be waking up to competition and is planning to unleash a slew of innovative schemes to lure air travellers. What remains to be seen is whether Goyal can continue to steer clear of bad weather.

(Dilip Cherian, runs a public affairs firm Perfect Relations. He is an economy watcher and tycoon tracker. None of the people he writes about are his clients. Your insider tales are welcome at dilipcheriannow-india.net.in)