Nilon's pickles: Taste the success formula
May 08 2012, 18:27 | By CNBC-TV18
Nilon Pickles is a popular SME brand.
Image: SME Mentor
Nilon's today is the largest producer of pickles in India. 32-years old Dipak Sanghavi joined Nilon's in 2001 and since then he is professionalised the business and also made it the largest manufacturer of roasted vermicelli and tutti-frutti.
With its factory in Jalgoan in Maharashtra, Nilon's has an annual production of 30000 metric tons of pickle. With a compound annual growth rate (CAGR) of 59% over the last nine years, Dipak claims that growing nine times that of the category. Having already grossed revenues of Rs 240 crore, Dipak now wants to touch the Rs 1000 crore mark in the next five years.
CNBC-TV18's special show Young Turks talks to Sanghavi about the hardwork and the road ahead.
Sanghavi took over the family pickle business after the untimely demise of his father, when he was just 24 and since then has corporately churned a new growth story for his five decade old business. Nilon's spiced up its product portfolio in 2004 to include instant mixes, ginger garlic paste and spices. Today pickles contribute only 45% as compared to 90% earlier. With a strong distributed network across India, Sanghavi's focus has been at aligning a strong backend with the frontend.
Having invested Rs 100 crore in the last 18 months Dipak is now hoping to build Nilon as a one point shop for wholesalers.
With a compounded annual growth rate of 59% Nilon's has been growing at nine times the sectors average over the last nine years. Nilon's has four factories in Jalgoan near Pune and two in Assam with an annual production of 30000 metric tons of pickle.
Retailing across half a million outlets in India this market leader has already grossed revenues of Rs 240 crore and technology has played a large part in growing the business.
The company deals in two markets, Indian and overseas. Indian market is the 120 crore population who lives, loves and likes the Indian ethnic food product. We are there to service and cater them through modern trade, mom and pop stores, institution and multiple channel of distribution.
The second market is the international market where serve on two platforms. One is on the institution where we supply B to B, product like candied fruits and second to the people who like Indian ethnic food product.
We are using multiple technologies for different food products, so we have say Italian plant for our candied fruit products or Italian plant for our pasta but we have some American machines and some Belgium machines for our pickles.
We use multiple machines or multiple technologies because we process in multiple verticals. The concept is as much automation we can do in the production we try and do because automation brings uniformity in the product. More the human intervention the quality will suffer, more mechanisation will give that same consistent quality which our consumer desires for.
In terms of volume, because of the multiple vertical, we are handling we are processing more than 1 lakh tons of various fruits and vegetables, pulses and grains. Pickle, being the largest, where we are doing more than 25000 tons of pickle per annum while candied fruits is around 10000 tons per annum.
Similarly in other lines whatever product we are in we believe that we need to reach a particular volume or we need to be in the top three players in that particular category in the country.
Challenges: The biggest challenge is again isgetting very good high class manpower at the senior management level who have a very impeccable record of execution, planning and thinking.
The other challenge would be, with this multiple product range that we have and so unique and so tasty that once a consumer buys he falls in love with the product, how do we take the entire product range as many numbers of outlets across the country? If we are covering around half a million outlet, how do we take it to two million outlets?
The third challenge would be on the procurement side because food is so unique in taste. Every mango that you get from every different plant has a unique taste and our consumer wants the same taste of the end product, so how do you manage getting the same recipes year-after-year, bottle-after-bottle giving the consumer the same product, the same consistency?
Plans: The dream that we have in Nilon's is we want to build a food conglomerate by creating factories in the 200 acres of land that we have in Uttran where we want to build factories of multiple Indian ethnic food product because we deal only in vegetarian products. So that it is a one point shop for the consumer, for our buyers where we see the trade changing in India from a mom and pop slowly to the modern trade, where we can ship directly a truck from the factory to the store, where we have so much range in the factory available that we do not have to have the intermediaries through whom we have to transfer. T
his will enable us to transfer the product directly from the factory to the modern store which brings the efficiency and consumers the freshest product because it reaches quickly to them. We are touching turnover of roughly Rs 240 crores In next three years we would be targeting Rs 500 crore and in next six year we will be targeting Rs 1000 crore.
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