'I burnt the midnight oil to prove feasibility of my idea'
Founder of Bangalore-based Natural Capsules, Sunil Mundra says the secret of success is being patient while navigating the rough times keeping your eye firmly on the future
August 13, 2013 / 16:36 IST
Gargi Banerjee
A go-getter attitude and an irresistible urge to step out of his comfort zone is what propelled Sunil Mundra to cut his own path in the world of business. The young entrepreneur-in-the-making also knew when to buck the trend and when to go with the flow, qualities that make for a successful businessman.At the age of just 47, Mundra is founder and managing director of Bangalore-based Natural Capsules, which manufactures hard gelatin capsule shells, a product used across the pharmaceutical and nutrition industries.Nearly two decades after establishing his presence as an exporter to 23 countries across South East Asia, Africa, Latin America and the Middle East, and building up to an annual turnover of Rs 60 crore, Mundra is not resting on his laurels. Natural Capsules has two manufacturing facilities, in Bangalore and Pondichery, which have the capacity to produce 18 million capsules a day.Bitten By The Entrepreneurial BugGrowing up in Sojat in Rajasthan, Mundra always had a head for numbers. Hailing from a family of agricultural traders, he had figured out supply chain management pretty early. While it was assumed that Mundra would join the family business after graduation, the lad grew up with other ideas. He was smitten badly by the entrepreneurial bug and he closely followed how Aditya Vikram Birla virtually changed the face of business in India.By the time he completed his graduation with distinction, Mundra was certain he was not cut out for agricultural trading. So he secured a degree in chartered accountancy and was introduced to bulk drug trading by relatives who were in the business. The field of pharmaceuticals and its complexities fascinated Mundra and he made up his mind.Bridging The GapBetween 1987 and 1992, Mundra learnt all he could about sourcing bulk drugs for the biggest names in the industry. He also realised there was a severe shortage of gelatin capsule shells in the pharmaceutical industry, a gap he set out to fill. Even though the production of gelatin capsule had been included in the negative list by licensing authorities, the go-getter in him was not discouraged. During the late '70s and early '80s, many companies ended up as sick industrial units and financial institutions were not keen on lending to a new enterprise. Again, Mundra was not deterred. "The winds of change were sweeping the pharma world. Closely following industry trends worldwide, I fathomed that I could no longer go with the then prevalent practice of installing semi-automatic machinery in my production units. We had to begin with automatic machinery from day one, and I needed a bank loan for that," reveals Mundra.This was perhaps the most trying period of his life and it would have been so easy to just give it all up. And even though financial institutions were not prepared to entertain him, Mundra persisted. Finally, the Industrial Development Bank of India (IDBI) conceded to at least listen to his business idea and Mundra left no stone unturned to prove his point. "I burnt the midnight oil to collect market data to prove the feasibility of my enterprise," he says. He also collaborated with manufacturers of automatic machinery, and simultaneously put in place public relations activities to increase awareness about his project to those who mattered.Turning PointAfter six long months of scrutiny, IDBI decided that Natural Capsules was indeed a trustworthy project and it lent Mundra's company Rs 1.65 crore with a debt-to-equity ratio of 1:1. Mundra also added Rs 1.60 crore as seed capital that he sourced from his family.Amid hardships that included political and economic unrest in the first five years of its existence, Mundra's Natural Capsules also began to carve a niche for itself. "The bigger players would not trust us yet as they preferred to rely on their existing suppliers for gelatin shells. So we began targeting smaller players and travelled into the hinterland to seek out trading companies who needed our products," explains Mundra. This strategy worked, for here was a smaller supplier in a relatively starved market who was able to custom-make hard shells of varying shapes, sizes and consistency. Tiding over the initial hiccups, Mundra began to explore opportunities for growth and pre-empting the need for vegetable-based capsule shells as opposed to gelatin (made of animal sources) capsules. Natural Capsules was the first in the country to produce hard shells that used HPMC (a cellulose-based compound) in the year 2000.However, the new product was ahead of its time and the company did not find too many takers for a product that was five times costlier than gelatin-based capsule shells. Mundra believes he could have improved this new product with better research and created a market for it. Alas, a couple of years later, a larger rival company started manufacturing the same product. "But these mistakes are part and parcel of business and I have since concentrated on growing my enterprise inorganically by acquiring sick industrial units rather than going in for greenfield projects."Targeting The FutureToday, Mundra's clientele includes some big names in the pharma industry such as Smithkline Beecham, Aurobindo Pharma, Dabur, Kopran, USV, Himalaya, Micro, Strides and Flamingo. He has also focused on enhancing his in-house research and is working on re-launching vegetable-based capsule shells.Mundra has a word of advice for young entrepreneurs: "Regardless of the hardships that come your way, do not give up if you truly believe in your vision."You can send your feedback on smementor@moneycontrol.com or simply post comments below Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
