Mr. M.C.Anand Kumar, Senior VP, Cholayil Pvt Ltd.
The company sees Medimix making its foray into variants in soaps and a set of related brand extensions.
Cholayil came into existence over three decades ago with a global vision rooted in Indian value. Cholayil has business interests in Toiletries, Personal Care and Health Care. Started with a meager capital, Cholayil has registered an impressive growth of over twenty times its turnover from what it was ten years ago, to become a player to reckon with in the Indian FMCG industry. Dorcas Market Makers Ltd is the marketing arm of Cholayil with a full-fledged team to market all Cholayil brands all over the world. DMML has exclusive divisions to cater to the diverse needs of international and institutional and institutional needs. Cholayil has manufacturing facilities at Madhavaram, Thirumazhisai, Thada, Pondicherry, Bangalore Villupuram and Thandalachery (Water Plant). Under the Personal care segment, Medimix Ayurvedic Bath Soap was launched in the year 1969 with eighteen powerful Ayurvedic herbal ingredients. Medimix, ayurvedic soap is a Rs120mn worth business and its share in south Indian market is 7%.
M.C.Anand Kumar joined Dorcas Market Makers Ltd, marketing division of Cholayil Pvt Ltd in Oct 2004, as Senior Vice President . Prior to joining Dorcas Market Makers Ltd, Anand served as General Manager for S&M, Raymond Apparel Ltd where he worked with brands like Parx, Park Avenue and Manzoni, before taking up the post of Head of Retail division of Raymond. An alumnus of IIM-Ahmedabad, Anand also holds a Master?s degree in Economics & Bachelor?s degree in Mathematics from the University of Kerala.
Anil Mascarenhas of India Infoline posed a few questions to Anand Kumar, who says," The company sees Medimix making its foray into variants in soaps and a set of related brand extensions."
What is your take on the economy going forward? Are you betting on a rural growth story for your sales?
Enough is being written on the Indian Economy?s robust growths across sectors and the positive outlook for future. We are quite sure that the growth trends are riding on strong fundamentals and hence are optimistic about the future. Medimix soaps has a very strong presence in rural and we are keen on doing even better in this area.
You have with interests in Toiletries, Personal and Health Care. What is the revenue break-up between them? Going ahead which segment is going to ad to your bottomline and topline?
Cholayil came into existence over three decades ago with a global vision rooted in Indian values, using indigenously developed processes, engineering designs, tools and machinery. Cholayil has business interests in Toiletries, Personal Care and Health Care. The company makes Soaps, Talcum Powder and Pharmaceutical Products with successful brands like Medimix and Cuticura.
Sanjeevanam- the first-of-its-kind holistic wellness centre, is a five-fold, integrated, unique endeavor from Cholayil to help you lead the perfect, healthy life- the natural way. Sanjeevanam is doing well and we are sure it will add to our overall growths.
With the relaunch of Medimix, the company sees this as the beginning of the path to a big and bold future for the brand. We believe the brand has immense potential and see Medimix making its foray into variants in soaps and a set of related brand extensions as we go along. We have recently launched a new Glycerin variant in the northern and eastern parts of the country.
We are also working on Cuticura and possible other new brands to help fuel our growth. We have invested in significantly strengthening our R&D centre in terms of infrastructure and hiring experienced personnel at senior levels.
What would the urban-rural mix be for your soaps?
Approx 31% of our volume comes from rural
What kind of revenues do you expect after the relaunch?
Medimix is looking to achieve a turnover of Rs230bn in the next two years
What kind of distribution set up do you plan to add on?
About a year and a half ago we set up our own sales force across India. Earlier, we had third party distribution arrangements everywhere except South and Maharashtra
We have also invested in a separate team for Modern trade and Institutional sales
Do you see the gap between the organized and unorganized shrinking? Which market are you targeting?
The soap market has been seeing a lot of changes with a host of launches and tweeking, and while there was no pressure on the company, the relaunch was done with an eye on the future. Medimix has 3.2% of the Rs49bn market (4.5 lakh tonne soap market)
The market is extremely fragmented with many national and regional players. The unorganized sector is also fairly active
We are targeting users across India now (earlier, the focus was largely South and Maharashtra). We also want to get the younger consumers in to the brands? fold across SECs
Would you be outsourcing any manufacturing?
We have a mix of own manufacturing and outsourcing for our brands, though for Medimix it?s largely our own.
What kind of excise and tax benefits would you get?
Medimix is a handmade soap, which enjoyed excise free benefits till this financial budget imposed the same.
What kind of marketing initiatives are you planning? What is the budget for the same?
For Medimix, we would be looking at getting a larger Pan Indian consumer cutting across age groups and SECs through a set of variants in soaps and perhaps in other categories as well at a later date. Our communication and below the line activities are all designed to meet this objective
We have an A to S ratio of around 18%.
The retail chains which are cropping up across the country, do you think your products would make it there?
Certainly, we will make it there. In fact, we think our offerings will do well there as they have strong benefits for the consumer.
Comment on your exports? Which are the countries you plan to tap in the near future?
The products which are currently exported include Medimix Ayurvedic Toilet Soap, Tejaswini Skincare Capsules And Medimix Ayurvedic Cough Syrup
Our products are reaching customers across the world , in various countries namely: United Arab Emirates, Saudi Arabia, Oman, Bahrain, Kuwait, Qatar, Brunei, Israel, Taiwan, Malaysia, Singapore, Japan, Sri Lanka, Bhutan, Nepal, Mauritius, Maldives, Kenya, Sudan, South Africa, Seychelles, United Kingdom, Italy, France, Portugal, Sweden, Lithuania, Latvia, Estonia, United States of America, Canada, Haiti and New Zealand.
Tell us more about the re-launch of Medimix. What was the amount set aside for the same?
The change is major as it comes after 36 years. One critical thing to remember is that we are re-launching when the brand is doing well. Also, we are proactively seeking to avoid getting into the trap of an aging consumer base.
Based on consumer feedback we felt it was time for the brand to go in for a more contemporary look.
We are also giving room for the brand to maneuver into variants and extensions. The earlier pack design had severe restrictions on that count.
Is there any change in the fragrance and ingredients or is it just a packaging change? Is it still a handmade soap?
The change is only in the shape and packaging while the ingredients remain the same. It is still a handmade soap.
Who is your target profile?
While the consumer profile for Medimix has traditionally been the middle class and twenty plus age groups, with the re-launch we would also be targeting the younger age groups.
Any change in the prices?
Not when we relaunched. The various price points were Rs. 17 for 125 gms, Rs. 12 for 75 gms, Rs. 5 for 45 gms, and Rs 2.50 for 18 gms. Post the excise duty imposition in this budget; we increased 125 gms to Rs. 18 and 75 gms to Rs.13.
What is your break-up between institutional and retail? Who are your institutional clients?
Institutional business contributes to about 4% of our business. However, it is important to remember that we sell an 18gm sku of Medimix largely in this business, so in terms of number of soaps, it?s a big number. We sell to several Institutions including hotels, CSD, various industries etc.
India Infoline Research Team / 08:44, Jun 26, 2015
IIFL is hosting 10 companies at a Management Roadshow in Mumbai today. The opening is a subdued start. US market saw minor losses with Dow, S&P 500 and Nasdaq closing marginally lower.