Although it seems to be a script of Bollywood
movie, but this is the real life story of Mr.Radhe Shyam Agarwal. He is a
Chartered Accountant, Company Secretary, LLB and a Master Degree holder in
Commerce. From a very humble beginning and with very limited resources, Agarwal
has driven the Emami with exceptional and extra ordinary skills to make the
company reach its present stage. Considered as a present day Management Guru
who is innovative, an administrator par excellence and possessor of great
consumer insight and far sight.
In 1970, he joined the renowned Aditya Birla
Group as Vice President being a Chartered Accountant. But within four years, he
left his cushy job and decided to follow the torturous trail of
entrepreneurship. The inception of Emami Group took place in West Bengal, when
two childhood friends, Mr. R.S. Agarwal and Mr. R.S. Goenka left their high
profile jobs to set up Kemco Chemicals, an Ayurvedic medicine and cosmetic
manufacturing unit in Kolkata, in 1974.
It was an extremely bold step in the early
seventies when the Indian FMCG market was still dominated by multinationals.
Several such companies headquartered in Kolkata were considering shifting out
of West Bengal due to labor unrest and political problems. But against all odds with a vision of combining
the age old wisdom of Ayurveda with modern manufacturing techniques for
creating winning brands the company started with a merger amount of Rs. 20,000.
A dream of reaching out to the Indian middle class; a target audience whom they
thought will have increasing potential for consumption, the company started
manufacturing cosmetic products as well as Ayurvedic medicines under the brand
name of Emami from a small office (still retained) in Kolkata’s business
district of Bada Bazar. Their consumer insight is reflected today in the
mission statement of Emami Limited: "Making people healthy and
beautiful naturally".
This is what set the ball rolling when the
partners launched Emami Talcum, Emami Vanishing Cream and Emami Cold Cream and
glycerine soap, which were great favourite brands with the quality conscious
consumers in the mid-seventies. The company soon became adept in selling
beautiful dreams to Indian women interested in finding their own identity. The
signature tune of Emami played over radio and TV became a household favourite.
In the early days the two friends used to go
around places and sell their cosmetics from shop to shop. They piled their
goods on hand pulled rickshaws and went on distribution drives making their
brand extremely popular, available and acceptable among consumers.
The first-rate quality of the products soon
created a consumer pull and gradually some people were hired to work for them.
A chain of distributors was established and the sale of Emami products spread
from West Bengal to rest of Eastern India and gradually to other states.
The intial days were tougher then they appeared.
The capital base of Emami was small, angle investing was a non existing concept,
and the entire cosmetic market was dominated by multinationals.The financial astuteness came handy in 1978,
Himani Ltd (incorporated as a Private Limited Company in 1949) had become sick
unit and was up for sale. Himani, almost a 100 year old company with good brand
equity in Eastern India and a well laid out factory in Kolkata, was producing a
number of cosmetics. Mr. Agarwal and Mr Goenka realized the opportunity and
acquired Himani though for their young organization it was a tough task to
mobilize resources for buying a sick unit and even tougher to turn it around to
a profitable venture. The degree of financial risk involved was enormous
considering the small capital base of the company in those days. However they
decided to go ahead with the deal which later on proved to be the turning point
for the organization.
Himani was restored to profit and the debt taken
for the deal was paid off within two years. Production of various health care
items and toiletries based on Ayurvedic preparation had begun in the Himani
factory. Ten years after commencement of the company, it launched their first
flagship brand Boroplus Antiseptic Cream under the Himani umbrella in 1984.
Many additional brands followed Boroplus including Boroplus Prickly Heat Powder
which came as a brand extension of the mother brand. Emami brands started
selling in all states of North, East and West India. Today Boroplus is not only
the largest selling Antiseptic Cream in India but also in Russia, Ukraine, and
Nepal.
Nineties was very eventful for Emami. The next
flagship brand of the company Navratna Cool Oil came in the nineties under the
Himani Umbrella and the second factory was opened at Pondicherry to expand
production. Navratna over the years has become market leader in the cool oil
category.
The introduction of new brands continued and the
distribution network of the company was extended to South India with Navratna
spear heading the process.
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Early day picture of Mr R S Agarwal and Mr R S Goenka in office |
In 1995, Kemco Chemicals, the partnership firm
was converted into a Public Limited Company under the name and style of Emami
Ltd. In 1998, Emami Ltd was merged with Himani Ltd and its name was changed to
Emami Ltd as per fresh certificate of incorporation dated September1, 1998.
In 2000, with a view to concentrate on its core
FMCG business, Emami's investment undertaking was demerged and Pan Emami Cosme
Ltd. issued its fully paid up shares to shareholders of Emami in the ratio of
1:1. In 2003 a new factory unit was set up at Amingaon, Guwahati.
A Public Issue of 50 lacs Equity Shares of Rs2/-
each at a price of Rs. 70 followed in 2005. The issue was oversubscribed within
few seconds of its opening with an overall over subscription of 36 times of the
issue size. The share price sold at Rs. 70 today is quoted in the stock market
as over Rs.1250.considering all the aspects.
Global footprint
Taking one step at a time Emami went overseas and
international business contributes around 12% of the total revenue, growing at
a CAGR of 19% over last five years.
Emami has five international subsidiaries and its
global reach extends to more than 63 countries including India, SAARC,GCC, UK,
Sri Lanka, Bangladesh, Nepal, African and the CIS countries.
Beauty secrets and amazing array of ambassadors
In 2002 Emami roped in film actor Madhuri Dixit
as brand endorser of a full range of its cosmetics including hair oil,
sunscreen lotion, shampoo, fairness cream and talcum powder. The products were
formulated after intensive research and inputs from both Madhuri Dixit. The
actor had been collecting beauty secrets from across the globe, and the company
decided to brand the cosmetics the ‘Beauty secrets by Madhuri’ range. While it
is yet another first in Emami’s ‘first’ list it is also the first time in brand
history that an endorser co-owns a brand.
Emami has successfully established its brands
through strong celebrity endorsements. In a market where competition is
intensifying, product lifecycle is shrinking and strategic management of a
company is gaining pivotal position Emami’s inclusion of celebrities as brand
ambassadors established that it strictly relies on its own unique method of retailing.
Mr R S Agarwal is also known as marketing grow. It is the only brand in the country to have both
Amitabh Bachchan and Shah Rukh Khan as endorsers for the same brand, Navratna.
The concept of brand endorsement by celebrities was successfully experimented
in case of most of the brand launches. To name a few celebrated and acclaimed
entertainment and sports personalities who have endorsed Emami products over
the years-
Entertainment industry - Amitabh Bacchan,
Rakhi Juhi Chawla, Dharmendra, Divya Bharati, Kareena Kapoor, Shah Rukh Khan,
Preity Zinta, Malaika Arora Khan, Madhuri Dixit, Bipasha Basu, Suriya, Mahesh
Babu, Govinda, Chiranjeevi, Surya and Upendra among others.
Sports fraternity - Sourav Ganguly, MS
Dhoni, Dinesh Karthik, Amit Mishra, Virender Sehwag, Sachin Tendulkar, Gautam
Gambhir, Milkha Singh, Vijendra Singh, Harbhajan Singh, Zaheer Khan among
others.
In 2005 Emami created a marketing history in
India by launching Fair and Handsome, the first fairness cream for men. In a
tropically harsh country like India, a fairness cream for men represented an
unexplored opportunity. Emami created a completely new market segment by
introducing India’s first fairness cream customised for men.
Traveling the region and by interacting with a
host of retailers and intermediaries Emami discovered that 30 to 35 per cent of
users of fairness creams are men, with a growing interest in personal grooming.
The sales of Fair and Handsome in its first year had touched around Rs 50
crore. Another feather on the cap was when Emami roped in Bollywood superstar
Shah Rukh Khan to endorse the brand, targeting the male fairness cream market
in India which immediately made the brand even more popular and trusted by the
consumers.
In 2006 the company decided to introduce a Health
Care Division and a number of new brands of Ayurvedic OTC medicines. The
company has taken up the challenge of growing this new division with a
dedicated and enthusiastic team working on this project.
Emami Limited with an investment of Rs 730 crore
acquired Zandu Pharmaceuticals Works Ltd on the basis of huge business synergy
between Zandu and Emami. Post the acquisition of Zandu Pharmaceuticals, a
century old household name in India, some of its prominent brands like Zandu
Balm, Zandu Chyawanprash, Zandu Kesri Jeevan, Zandu Pancharishta, Sudarshan and
Nityam Churna came under Emami’s basket of brands.
In 2006, J B Marketing & Finance Ltd., the
erstwhile marketing company of the Emami Group merged with Emami Ltd. and the
total turnover of Emami including sales in domestic and export market stood at
Rs 518 crores at the end of the fiscal year 2006-07.
Within four decades, the company Emami Ltd has a
turnover of Rs. 1821, the flagship company of the Rs.8000 crore Emami Group.
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R S Agarwal and R S Goenka |
Recently Emami has moved to next level with the acquisition of She Comfort, Rasoi (Vanaspati Brand) and the latest Kesh King at a whooping 1650 cr (as per media reports) but as R S Agarwal decision was challenged while they acquired Zandu and he proved his critics wrong, these acquisition in last two years would also write new history in itself.
In 2015, the net worth of Mr. Agarwal was
assessed as $1.43 billion and ranked in top 100 along with R S Goenka who has
equal contribution in building Emami.
R S Agarwal is an author to several books, a prolific speaker and has received several awards for his contribution to CA fraternity, truly a man of substance.
A true leader
A true leader