Satish Kumar Agarwal, Chairman & Managing Director, Kamdhenu Limited,
Gold Medalist in B.E. (Mech.) from Banaras Hindu University is the founder of Kamdhenu Limited. Mr. Agarwal has extensive industrial experience of 45 years and has played pivotal role in the success of the Kamdhenu Group. In the year 1994, he founded the Kamdhenu Limited with a single unit for manufacturing of HSD Bars at Bhiwadi (Rajasthan). Under his guidance and leadership, the company has introduced the franchisee business model, which proved to be a resounding success. Kamdhenu Group takes pride in its nationwide presence through franchisee units and is gaining a well-deserved place among the largest manufacturers of International quality steel bars in India. He has closely witnessed the phenomenal growth of the Kamdhenu Group which is result of his tremendous entrepreneurial and leadership skills. He has been the driving force behind the growth and expansion of the Kamdhenu Group. His understanding and sharp business acumen has been instrumental in evolving growth strategies and thereby significantly contributing to the implementation of expansion & diversification plans in different business verticals. Mr. Agarwal has received several accolades in recognition of his leadership skills and rapid business growth from various organizations.
In an interaction with Shweta Papriwal, Editor, IIFL, Satish Kumar Agarwal, Chairman & Managing Director, Kamdhenu Limited, said,
“Our focus on delivering quality product has positioned Kamdhenu as a TMT expert and we are the price setter in the steel TMT bar segment in India.”
Brief us about your product offerings.
Kamdhenu Limited is engaged in manufacturing, marketing, branding and distribution of a vast range of quality building materials including steel TMT bars, structural steel, colour coated metal sheets, decorative paints and allies products.
Two of our unique TMT products are KAMDHENU NXT & KAMDHENU SS 10000. These products are the outcome of research and innovation to fulfill the evolving needs of our customers. These are manufactured with cutting edge technology that is at par with international quality standards and bear double rib pattern which makes them earthquake resistant and provide safety. Kamdhenu SS10000 is a celebrated product among the premium users of double rib TMT bars while Kamdhenu Nxt, the next generation interlock steel promises to deliver the best value for money to our value conscious and price sensitive customers.
The brand image of Kamdhenu helped us immensely to step into huge market of decorative paints. Through our offerings, we cater to consumers looking for premium, medium and economy range of paint products. The products under the umbrella of KAMDHENU PAINT-COLOUR DREAMZ include Exterior Emulsions, Interior Emulsions, Acrylic Distempers, Enamel Paints, Cement Paints, Wall Primers & Putty, and Texture & Designer Finishes, Stainers, P.U. Wood Finishes and Metallic Finishes etc.
How does the franchisee model work for you?
In order to bring more transparency and dynamism to the operations of the company, we introduced unique franchise business model in 2004. This model helped in creating Kamdhenu's brand leadership in steel retail segment.
Under this model, we provide technology support, ensure quality steadiness besides providing excusive retail marketing network of 6500 dealers & distributors and branding support to our franchise associates. We also undertake research to introduce new products based on customer requirement in the market.
This asset light model is a win-win for us as well as our franchise partners. It enables franchise manufacturers to earn premium on their products and benefit from strong distribution network of Kamdhenu Limited leading to higher capacity utilization. Kamdhenu Limited benefits from this model by earning royalty from the sale of the products and ability to rapidly expand capacity without making huge capital expenditure.
We have more than 75 franchise units scattered across the country offering the finest class products at most cost effective prices.
What is your strategy for creating brand awareness? What is the percentage of ad-spends to revenues?
We are creating brand awareness through high decibel ad campaigns, which is featured & has participation of famous Bollywood celebrities. In July 2018, we launched a new series of Dual Paint ‘KAMODUAL LUXURY EMULSION’ under Kamdhenu Paints at the 6th edition of our Mega Event ‘Target Ka Badshah’ held at Bintan (Indonesia) and Singapore to celebrate and reward achievements of our high-performing dealers from all over the country. ‘Kamodual Luxury Emulsion’ can be applied on both exterior and interior surfaces which ultimately reduces the inventory cost of dealers and the final cost of the end user.
We are also capitalizing on the emerging digital and social media to increase brand awareness. Kamdhenu has taken lead in creating basic awareness related to Kamdhenu Steel and Paints through digital / social media platforms like Facebook, Twitter, YouTube to inform the people about the things to keep in mind, while purchasing building material products.
We spent around Rs. 70 crore in FY18 towards marketing and branding of Kamdhenu. This is around 6 % of our annual revenue.
How many manufacturing units does the company have as of now in India as well as abroad?
At Kamdhenu, our production capacity stands at 2.5 million ton (MT) per annum across the country through our 75 franchise associates. To cater to the growing demand for TMT bars with rapid infrastructure and real estate development in the country, we plan to double our brand production capacity to 5MT per annum in next five years through the investment of around Rs800 crore by our franchisee units.
Our own TMT plant is at Bhiwadi in Rajasthan with 72,000 metric ton annum production capacity of CTD/TMT Bars. Our state-of-the art paint production unit with 46,000 metric ton capacity is located at Chopanki, Rajasthan.
You have registered robust FY18 performance, do you expect the same to continue in FY19 too?
Rapid infrastructure and real estate development in India has opened opportunities for everyone related to the sector, be it raw material supplier or buyer of finished products. Government schemes like Housing for All by 2022, Pradhan Mantri Awas Yojana, among others are expected to create an additional demand of 100-150 MT TMT bar. Kamdhenu Limited is well placed to grab this opportunity and this will help us to achieve higher growth in FY19.
This year our royalty income increased by 50% to 61 crore. We expect our royalty income to rise further in FY19 on the back of increased demand for TMT bars.
Brief us about your Partner Programme.
We partner with independent producers through efficacious Franchisee Business Association Model to streamline the steel sector into an organized sector. Our business model ensures high benefit to all our partner producers as they are provided with advanced technology and procedures to upgrade their output as per the International Standards. Distributor facilitates Kamdhenu brand products manufactured by franchisee to the Dealer. Being a partner of Kamdhenu, a distributor always works in close co- ordination with the company by having direct communication.
Dealer for a particular area to sell Kamdhenu brand products are appointed only upon recommendation of Distributor of a particular region. A dealer primarily is involved in selling Kamdhenu brand products to the ultimate consumer. Since a dealer is always an authorized person by the company to sell Kamdhenu brand products, he always enjoys / benefits from the brand image of the company by receiving advertising support as well as incentive schemes. Products of the company are delivered to dealer through the distributor from franchisee units.
How are you placed vis-a-vis peers? Do you face competition in your business segments?
Kamdhenu Limited commands top-of-mind recall among retail customers. This contributes to new and repeat business for the company and further strengthens its leadership position. Our focus on delivering quality product has positioned Kamdhenu as a TMT expert and we are the price setter in the steel TMT bar segment in India.
How is the Paints segment performing vs. established players like Asian Paints, Kansai, etc.?
We are witnessing enthusiastic response for our paint products across India. This has encouraged us to expand our paint product portfolio. Our total revenue from the paint business stood at Rs.201 crore in FY18 up from 167 crore in FY 17. Kamdhenu Paints is now amongst the top paint brands in India. We expect momentum in paint business to continue going forward.