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M P Ramachandran
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Following above you will read today success story of Mr. M P Ramachandran :
Moothedath Panjan Ramachandran also known as MP Ramachandran is the promoter chairman and managing director of Jyothy laboratories, India’s fifth largest FMCG (fast moving consumer goods) business.
A post graduate in financial management from the University of Mumbai, Ramachandran in 1983 started Jyothy laboratories, also his daughter’s name with Rs 40,000. The company which witnessed huge investments from foreign investors like Baring and Actis has a market capitalization in excess of USD 350 million today.
Prior to setting up Jyothy Laboratories, Ramachandaran who worked as an accountant has always been known for his famous monotonous dressing style- a white shirt and white trousers which he never tires from wearing.
And it is his fascination for white that ‘Ujala’ came into being. Since he washed his own clothes he knew exactly what the consumer would want from a fabric whitener. He strived hard to get a better shade of white until he got the perfect dazzle.
The brand offer of ‘chaar boondo waala’ communicated its key promise of ease of use in a simple telegraphic manner. The brand leveraged the four drops story across all media though television remained the bedrock of the marketing efforts.Today Ujala commands a 72% share of the fabric whitener market. The brand has annual turnover of about Rs.300 crores.
In the last few years Jyothi has tried diversifying into detergents, Ujala washing powder, Ujala stiff and shine and Ujala technobright, dishwash Exo and mosquito repellents Maxo but competition in these categories has made the going tough. The company’s ‘Exo’ brand of dishwash though has managed to overtake ‘Vim’ in Kerala.
Jyothy’s reach in rural India is tremendous and about 70 percent of its sales come from rural India. For Henkel its reverse as 70 percent of its sales is from urban India. Jyothy hopes to capitalize on this and cross pollinate across networks to have a larger footprint.
Many observers warned that Ramachandran’s emotional streak could later become his weakness. Recently Jyothy acquired 50.9 percent in the beleaguered Henkel India for Rs.118 crore in a deal that attracted criticism but the latter was convinced that it was right move for a nearly there decade old company.
By acquiring Henkel India, Jyothy which has been so far a debt free company has taken Rs 400 crore as debt on his books. Though the FMCG Company has always followed a conservative outlook , acquiring Henkel was not an impulse decision. Though Henkel is a loss making company but the brands are very strong as per audit. Ramachandran believes it was interplay of national sentiment and emotion of brotherhood that helped Jyothy clinched the recent acquisition of Henkel India.
Jyothy has a good portfolio fit with Henkel which has brands like Pril, Margo, Henko and Fa. Ramachandran’s next move is to start manufacturing Henkel’s brands in Jyothy’s 28 manufacturing facilities which are spread across India. But it has a tough competitor to guard -Hindustan Unilever which would watch it’s every move.
The company is already orchestrating a new branding strategy. Their priority will be Henko champion and Mr White which are the largest contributors to Henkel’s business. The company is looking to do away with what it calls frivolous administrative costs.
The acquisition of Henkel India can provide new opportunities for Jyothy laboratories to flourish. The challenge for Jyothy is to display the same intensity of effort behind the Henkel brands. In many ways it’s a bold acquisition which takes the company out of its comfort zone.
The good news is that if the Henkel brands have any chance of succeeding they will need the kind of energy and focus that Jyothy has brought to its brands. Plan and products it has but time will tell how far it will take the brands.
With acquisitions and mergers being a part of business foreplay one thing is clear that the 65-year-old Ramachandaran would never sell any of his brands to which he is emotionally attached and the company which he built from scratch. He says, “So far we have not sold any of our brands. It is to do with emotions. Ujala and some of our home grown entrepreneurs can possibly teach multi nationals a few lessons on how to view advertising as an investment not an expense.”
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