DESI FMCG PATANJALI EYEING GLOBAL MARKET
Haridwar based Patanjali Ayurved is a leading FMCG company now. Co-founder and CEO Acharya Balkrishna, with 96 percent stake, is driving the growth of the company. In a candid interview with BK Jha, the CEO tells about the growth story
First of all, the market buzz is- Patanjali forays into global market. Is this correct?
Yes, Patanjali’s plans of going global in the near future. Though our focus and priority is to provide top quality affordable products to domestic consumers, the company plans to go global and a unit in Nepal is just a beginning of that. After Nepal, China could possibly be among the other destinations as Patanjali’s products are very popular there, though sent through ‘ different’ channels and not exported by us.
Industry Chamber FICCI organised this 'Made in India – Food Buyer Seller Meet' . How do such event help the food sector players
The initiative taken by FICCI is an example of industry players taking a step towards making Indian food industry an international brand accepted by all. Patanjali Ayurveda Ltd. is committed to go global and fight adulteration in Food industry. We want healthy India. Hence at each such conference I urge the food sector players to come together and fight against adulteration.
What is your view on ‘ Make in India’ ?
Patanjali already has its presence in many countries thereby giving a push to Prime Minister Narendra Modi's drive of Make in India. The company is making its all India presence by opening processing units for several different products in the country. Recently, we have set up a processing plant in Tezpur, other units are coming up at NOIDA, Nagpur, Indore, Hyderabad. At Nagpur, we are setting up orange processing unit. Hopefully, production from these units would start in the current fiscal year.
Would you elaborate about investments being made for setting up such units ?
Gaining a larger market share in
the highly-competitive domestic FMCG space is a challenging task and needs huge investment. The company will invest around a total of Rs 1,300 crore to set up a facility at Tezpur in Assam, which would manufacture a wide range of consumer products such as cosmetics, nutritional foods and kitchen essentials among others. Recently, the Uttar Pradesh government also approved Patanjali Ayurved's Rs 2,000 crore investment in the state, which includes a 450-acre food park on the Yamuna Expressway. The Tezpur facility in Assam will provide employment to around 5,000 people,while the plant in UP will produce goods worth Rs 25,000 crore annually. It is expected to generate around 10,000 direct jobs that can benefit nearly 50,000 families.
Patanjali focuses on herbals. What are plans for this segment?
The company has ambitious plans to launch herbal medicines and products soon and extensive research has been carried out for that. The raw material is a very critical components for production and to meet the growing demand of Patanjali’s extensive range of products. Therefor, to address this challenge for herbal products, the company would undertake adequate herbal cultivation as well and a plan for that is ready.
Farmers have been exploited by the corporates and at local markets ( Mandees). Do farmers get adequate price for their produce from Patanjali?
Along with the consumers of the country, the company is fully responsible towards farmers from whom it sources raw material. We assure them a minimum support price which is normally higher than the existing market price. We ensure remunerative price for their produce. We make it very clear to farmers that if they produce a particular agro products which we require, they will get a minimum price which would be remunerative.
Market sources says you are one of richest CEO with with an estimated wealth of Rs. 25,000 crore. For good corporate governance, would Patanjali come up with an IPO?
We are enjoying the way we are going forward. This is an unlisted company and if it has been placed in world's richest company, then it is a big thing. This has been possible because of the immense love and support that we received from the people of the country. Very soon Patanjali will be at the number 1 position. We are achieving two-three times more than the set targets for a year.
On IPO, I would say there no immediate plan for this. We are not into profiteering. Once listed your focus would be on making profits for shareholders.
Right now we are enjoying doing beneficial things for the nation, for the farmers and our consumers.
We will continue to do that. A large chunk of income goes to charity. We feel that Patanajali is accountable to the Nation and its people.
Tezpur facility in Assam will provide employment to around 5,000 people,while the plant in UP will produce goods worth Rs 25,000 crore annually. It is expected to generate around 10,000 jobs
You emphasise on Economy of Scale to cope up with rapidly growing demand and lowering the production cost. How would you achieve this?
We always set ambitious targets and achieve more than that. You would see our results for Financial year 2016-17. But people do not realise, time, energy and money involved in the backend production processes. To make quality products and make available them at affordable price is a challenge and we are doing that perfectly. With growing demand, we would focus on economy of scale and that will give us lead in the market in terms of quality and affordability.
Focus of Patanjali is on Swadeshi, how is it aligned with foraying into global market?
When we open a plant, say in Nepal, the neighbouring country’s swadeshi spirit is not compromised. There are plenty of herbs and other raw materials, but processing units are lacking. By setting the plant there, the company will provide fair price to the farmers and create huge job opportunities for the local people. As I emphasise on charity, a portion of income from this plant would also go for promotion of Yoga, Ayurved and education in Nepal.
What are new areas and products, the company plans to enter in?
Selection of new products depends upon demand. Huge demand for our existing products is a driving force for us and encourages us to foray into new categories. Apart from herbal medicine and cultivation, we plan to enter into edible oil in a bigger way. We have mustard oil and going forward we will be adding other products like rice bran. One thing I would like to make it clear that here we would not go for chemical process. Our products will be made through non-chemical processes. That would be a major difference. Quality and affordable price remain our mission for each category of products.
To make quality products and make available them at affordable price is a challenge and Patanjali is doing that perfectly. With growing demand, we would focus on economy of scale
Acharya Balkrishna, CEO, Patanjali Ayurved