{"id":43464,"date":"2023-10-12T07:39:04","date_gmt":"2023-10-12T07:39:04","guid":{"rendered":"https:\/\/cabanesetcompagnie.com\/?p=43464"},"modified":"2023-10-12T07:39:04","modified_gmt":"2023-10-12T07:39:04","slug":"nirmas-new-clothes-the-journey-of-detergent-brand-towards-healthcare","status":"publish","type":"post","link":"https:\/\/cabanesetcompagnie.com\/business\/nirmas-new-clothes-the-journey-of-detergent-brand-towards-healthcare\/","title":{"rendered":"Nirma’s new clothes: The journey of detergent brand towards healthcare"},"content":{"rendered":"

How Hiren Patel, founder Karsanbhai’s son, is reinvigorating Nirma by administering a shot of pharma.<\/strong><\/p>\n

<\/p>\n

Nirma’s tryst with the pharmaceutical space started in 2006 when it acquired the ailing Core Healthcare in a deal reported to be worth Rs 300 crore.<\/p>\n

The Ahmedabad-based manufacturer of intravenous fluids was subsequently renamed Nirlife.<\/p>\n

Pharma industry insiders say Nirma, which broke open the detergent market in the 1990s with low prices and massive advertising, tried an encore of the low-price strategy in pharma, but with mixed results.<\/p>\n

“The price disruptor strategy that worked wonders in the detergent space, when Nirma took on the likes of Hindustan Unilever, did not work as expected in pharmaceuticals,” says a senior executive of an Ahmedabad-based firm.<\/p>\n

The highly fragmented nature of the pharma business in India, filled with thousands of small and medium players, worked against Nirma.<\/p>\n

Whereas the detergent market was dominated by multinational giants who were vulnerable to a guerrilla attack, the small pharma players were equipped to fight a price battle with Nirma.<\/p>\n

Undaunted, Nirma has mounted a sustained onslaught on the pharmaceuticals market.<\/p>\n

On September 21, Mumbai-based Glenmark Pharmaceuticals said its board had approved divestment of 75 per cent equity in its subsidiary, Glenmark Life Sciences (GLS), to Nirma for an estimated Rs 5,651 crore.<\/p>\n

Hiren Patel, Nirma’s managing director, said in a statement: “Nirma has been actively involved in the pharmaceutical sector since 2006.<\/p>\n

“We are excited about this transaction and firmly believe that it presents an ideal platform to propel our pharmaceutical business into its next phase of growth.”<\/p>\n

An email to Nirma for further details has yet to get a response.<\/p>\n

Nevertheless, Business Standard<\/em> tried to piece together its story in pharma and its likely game plan.<\/p>\n

Nirma’s game plan<\/strong><\/p>\n

In the 1970s, Karsanbhai Khodidas Patel, a Gujarati farmer’s son and a lab technician with a government department, tried his hand at making a basic detergent.<\/p>\n

He took on the might of Hindustan Unilever (then Hindustan Lever) with his inexpensive brand, Nirma, named after his daughter Nirupama, who had died in an accident.<\/p>\n

At that time, most households were using laundry soap.<\/p>\n

Detergent powder was considered a premium product.<\/p>\n

As vegetable oil prices soared, the detergent market moved to synthetic, and the segment was popularised by HUL’s roadshows in villages.<\/p>\n

However, in the 1970s, high petrochemicals prices led to an increase in detergent prices.<\/p>\n

The time was ripe for a low-cost, no-frills alternative to HUL’s Surf.<\/p>\n

When Nirma Chemical Works started in Ahmedabad in 1969, it was literally a cottage industry.<\/p>\n

The cottage that housed it did not have an electricity connection.<\/p>\n

Patel, 25 years old, packed the hand-made powder in polythene bags, stapled them by hand, and went around selling them door to door on his bicycle every Sunday — his day off from work.<\/p>\n

He managed to keep the costs low by paring production, marketing and distribution costs.<\/p>\n

He had a single line of distributors who directly supplied the retailers.<\/p>\n

He was able to price Nirma at Rs 3 per kg at a time when Surf charged Rs 14 a kg.<\/p>\n

By 1985, Nirma had twirled its way to the top of the detergent chart, toppling Surf.<\/p>\n

Nirma forced HUL to go back to the drawing board and bunk the long-held belief that MNCs should not sell low-end products for fear of eroding its brand.<\/p>\n

HUL’s Operation STING, short for Strategy to Inhibit Nirma’s Growth, resulted in the launch of Wheel in 1988.<\/p>\n

By then Nirma reportedly had 60 per cent of the market.<\/p>\n

In the mid to late 2000s, both Nirma as well as Wheel (the latter was sidelined by HUL’s “power brands” strategy) faced a tough fight by another indigenous brand, Ghadi, from Kanpur-based Rohit Surfactants.<\/p>\n

Ghadi followed Nirma’s footsteps and beat it at its own game, in the process pushing Nirma’s market share down to 10-12 per cent by 2015.<\/p>\n

Nirma’s new colours<\/strong><\/p>\n

In 2016, Karsanbhai’s son, Hiren Patel, then 43, sealed a deal to acquire Lafarge India’s 11-million-tonne cement business for $1.4 billion (about Rs 9,478 crore), including debt, beating formidable names such as Ajay Piramal and Sajjan Jindal to the post.<\/p>\n

He came on board the family business in 1998 as a director and took over in 2006 as the managing director.<\/p>\n

Hiren is the one in charge of rebuilding the $2.5 billion Nirma empire.<\/p>\n

People who know him say he has inherited his father’s spunk.<\/p>\n

Cement is now a Rs 10,586 crore business (2022-23) for Nirma. And now comes the renewed focus on pharma.<\/p>\n

Aculife, incorporated in 2014 by demerging Nirlife, offers more than 600 products in multiple markets and therapeutic areas, including anaesthesia, critical care, anti-infectives, renal care, infusion therapy, and parenteral nutrition.<\/p>\n

Parenteral is what is administered into the body in ways other than the digestive tract, such as through subcutaneous or intravenous methods.<\/p>\n

Aculife offers injectables in forms such as glass and plastic bottles, vials, ampoules and pre-filled syringes.<\/p>\n

Its products are marketed under Flexivent and One Use brands.<\/p>\n

The customer base is primarily nursing homes, private and corporate hospitals, and government institutions, spread over not only India but also many other countries.<\/p>\n

As the fast-moving consumer goods (FMCG) space was getting competitive, the Patels realized early on that their low-cost strategy and advertising blitzkrieg in one television channel won’t work for long.<\/p>\n

In the 1990s they had set up plants to manufacture soda ash and linear alkyl benzene, the key ingredients in soaps, and started to behave like a commodity producer rather than an FMCG company.<\/p>\n

In 2007 it acquired United States-based Searle Valley Minerals, becoming one of the largest soda ash producers in the world.<\/p>\n

Perhaps a similar strategy is at work in pharma.<\/p>\n

Pharma fare<\/strong><\/p>\n

In a rating rationale of Aculife in September 2022, Crisil said delays in completing capex and new product registrations and launches had delayed the launch of its high-margin products to 2023-24.<\/p>\n

Earlier this year Nirma acquired 100 per cent stake in Stericon Pharma, a Bangalore-based contract manufacturer that makes sterile contact lens cleaning solutions and eye drops.<\/p>\n

Both will benefit from the synergies with GLS, with which Hiren is trying to plug the gaps, say industry experts.<\/p>\n

With the GLS deal, Nirma gets access to active pharmaceutical ingredients (API), or bulk drugs, which are used to make formulations.<\/p>\n

It also gets four manufacturing facilities, three research and development facilities, and an API manufacturing facility that is in the process of being set up.<\/p>\n

Hiren said after the GLS announcement that it would place Nirma among the top five independent API companies in India and enable it to leverage indigenous R&D.<\/p>\n

Says a pharma industry veteran: “The world is moving towards contract development and manufacturing, and development of specialised high-end APIs.”<\/p>\n

The Nirma girl, which was the centrepiece of the company’s advertising-led success in the 1990s, can be seen gyrating down that path, twirling her lab coat.<\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

How Hiren Patel, founder Karsanbhai’s son, is reinvigorating Nirma by administering a shot of pharma. Nirma’s tryst with the pharmaceutical space started in 2006 when it acquired the ailing Core Healthcare in a deal reported to be worth Rs 300 crore. The Ahmedabad-based manufacturer of intravenous fluids was subsequently renamed Nirlife. Pharma industry insiders say Nirma, which broke open the […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"yoast_head":"\nNirma's new clothes: The journey of detergent brand towards healthcare - cabanesetcompagnie<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cabanesetcompagnie.com\/business\/nirmas-new-clothes-the-journey-of-detergent-brand-towards-healthcare\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Nirma's new clothes: The journey of detergent brand towards healthcare - cabanesetcompagnie\" \/>\n<meta property=\"og:description\" content=\"How Hiren Patel, founder Karsanbhai’s son, is reinvigorating Nirma by administering a shot of pharma. 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