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SPARK OF THE CORPORATE

The name 'Dr. K.K. Patel' may not instantly ring a bell for many of our generation. And, for obvious reasons: because it represents a person who has always relied on industry and simplicity. But, if one were to dig a little deep, one will be amazed, in fact almost intrigued, to know that it is none other than the man who has to his credit the remarkable achievement of single-handedly, literally, starting a venture, Nirma, which went on to become a house-hold name for a quality yet affordable detergent throughout the country in very little time since its inception. Dr. Patel is an example, in flesh and blood, of what one can do with a little window of opportunity if one puts together one's vision, education, hard work, determination, and of course -being at the right place, at the right time, and doing the right thing.

Birth of the Spark

It is, may be, the power of humble beginnings that quite often spurs people on to greater things, who without much care or concern for the outcome, just go about their chosen path and create their own space and shape their destiny. Dr. Karsanbhai Khodidas Patel's saga -it is no less than one- is one of the most cited examples of the spirit of enterprise which brought him unprecedented success, and which has since become a part of entrepreneurial folklore.

Dr. Patel was born into a farmer family from north Gujarat in 1945, and by the time he was 21 years of age he had already taken up employment, after having finished his B.Sc. in Chemistry. His first stint was to work as a lab technician in the New Cotton Mills, Ahmedabad, of the Lalbhai group, and then at the Geology and Mining Department of the state Government.

Perhaps it was scripted that the son of a farmer, instead of treading along in the family occupation, saw beyond the limitations of a middle-class life and the vagaries therein, and willed to make it big -not just for himself but for hundreds and thousands of others- in a field that was under the monopoly of giant multinational companies. The thought of quitting a government job which was to secure livelihood for himself and his family for something which had the makings of a very costly adventure if things didn't turn out as planned, especially for a man whose family had never been into anything like that, was fraught with fear of failure. But once he was sure of what he wanted to make of himself, and was clear of his vision, he never so much as even wince after that. He had a keen eye, and was quick enough to analyze the scenario and gauge the potential of the field. But, however courageous one may be, one still requires exercising prudence. That is exactly what Dr. Patel did. He continued with his job, and proceeded with his entrepreneurial instincts only as an after-job activity.

He started it off with selling about 15 -20 packets of handmade yellow detergent, door-to-door on a cycle in the neighborhoods (Kishanpur) and, eventually, in the bustling lanes and by-lanes of Ahmedabad. He was testing the waters and was only hoping that he sold some of his produce. But he was secretly confident of the success of the detergent powder, with quality at a low price as its USP, and its indigenous formula which was phosphate-free, thus making it environment-friendly too. It has to be said that though knew that this was what distinguished his product from others, he could not have imagined that his product was soon going to revolutionize the detergent industry and even fire the imagination of the multinationals. At Rs. 3 per kg, it was priced at only a fraction of the popular brands of detergents that were available in the market back then. It was an instant success. Consumers welcomed with open arms a product that offered the quality of the other brands yet was considerably cheaper.

And it went on like that for quite some time, and in 1980, when he was reasonably confident, Dr. Patel started a small workshop in a suburb of Ahmedabad, naming it after his daughter Nirupama, as 'Nirma.'

Nirma soon established itself as a brand to reckon with in Gujarat, and started spreading its wings into the neighboring state of Maharashtra.

The journey

It would be very easy to jump the gun and say that with a top quality product at the lowest possible price, it would have been a cake-walk for Dr. Patel and his team to penetrate the market countrywide. But then, in the midst of such competition as was prevalent, it required some thinking and smart moves. Dr. Patel quickly seized this fact, and soon came up with a marketing strategy to connect with the psyche of the Indian middle-class housewives. The adverts with catchy and striking jingles also helped Nirma make its way into the hearts of the millions of women who comprised this very important target segment and, within a decade, became the largest selling detergent in India. It was able to create a new market segment in the economy for detergents. The success and popularity of Nirma, and indeed its market penetration, had caught many MNCs unawares. So much so, that they found it difficult to contend with so much competition coming from such an unexpected and, unknown entity. They had to buck this trend. So what they did - come up with so-called economic brands of their own, seemingly to wrest back the market hold. But such endeavors did not succeed greatly, as Nirma had deeply and firmly embedded itself in the minds of Indian women as the best 'Indian brand.'

It would have been naïve to think that this position of strength in the market will hold good forever. A lot of effort had to put in to sustain its growth and success. Dr. Patel was conscious of this fact and so he led the company onto a path of consolidation. This was to come from newer and target-specific line of products in the premier segment, which were -admittedly- not intended to eat into the market share of the competing brands, but rather to stay true with the traditions of the Nirma group - that of top quality at the most affordable prices. So, came about Super Nirma detergent, Nirma bath and beauty soaps, which have been able to, slowly but surely, make their presence felt in the super-competitive beauty soaps segment. It must be recorded here for posterity that, although the Nirma-effect seems to be waning in the 21st century, the flutter and the accompanying euphoria it created while the Nirma-revolution was in full-swing across the country, was unprecedented, and hasn't been matched by any other brand or product even, since.

It wasn't as if Dr. Patel met with success all the time. When the group was into expansion mode, it also ventured into the shampoo and toothpaste segment along with the salt segment. But, the market, in connivance with time, so-to-say, has its own way of keeping its equilibrium. So, while Shudh, the Nirma brand of salt, has been able to stay afloat reasonably well, the presence of Nirma in the other two segments is nothing much to write home about. Despite such minor failures, nevertheless, Nirma is now one of India's leading consumer products and chemical companies; the company which has 6 manufacturing units sells its soaps and detergents through a network of 400 distributors and about two million retail outlets across the country. In 2004, showing a keen sense of strategic thinking, the company under Dr. Patel's astute leadership, diversified its operation into other segments like linear alkyl benzene, soda ash, and pharmaceuticals. Its foray into pharmaceuticals kicked-off with the acquisition of an IV fluid factory in Ahmedabad. It also went on to acquire the U.S.-based Searle Valley Minerals, thus becoming one of the top producers of soda ash in the world. The company that started-off, in 1969, as a one-man operation, today has 14000 employees and a turnover of Rs. 2500 crores. It is no wonder then that, despite the ever-increasing competition in an evolving market-economy, Nirma, which listed on the Indian Stock Exchanges in 1994, has a 20% share in soap cakes and about 35% in detergents markets, besides running successful operations in neighboring countries (Joint Venture with Commerce Overseas Ltd., of Bangladesh being just one example).

Strategic Thinking

One of the major decisions of the Nirma Group under Dr. Patel's leadership was the backward integration approach to be adopted by it. So, the group set-up two raw materials manufacturing companies, one in Baroda, and another in Bhavnagar, whose institution was completed in record-time and well within the estimated budgets. In addition, the company also embarked upon applying latest technology for its manufacturing plants with technology sourced from the USA (IOP Inter Americana for paraffin) and Holland (Akzo Nobel Engineering for soda ash) respectively. It also went in for in-house printing and packaging as opposed to outsourcing the processes. This, coupled with the acquisition of Kisan Industries at Moriya, Ahmedabad, definitely gave a fillip, at the time, to the growing revenues of the company. This phase also saw the company relying heavily on an effective and wide distribution network and eliminating some intermediaries who were believed to be surplus in the scheme of things.

Other ventures

Dr. Patel had, very early into his entrepreneurial activity, recognized the significance of having on board top talent in order to continually keep up the company objectives. Therefore, to withstand global competition as also to meet the need for quality professionals, he founded the Nirma Institute of Technology (Ahmedabad) in 1995, which grew into a leading engineering college of Gujarat. Soon an Institute of Management followed, with the entire structure being consolidated under the Nirma University of Science and Technology in 2003. The Nirma Education and Research Foundation (NERF) was constituted in 1994 to oversee the smooth functioning of these institutes as well to ensure conformity to the long-standing ideals of the group. Thereafter, in 2004, the group came out with an education project, Nirmalabs, that was aimed at training and incubating entrepreneurs.

These initiatives are nothing but an extension of the self of Dr. K.K. Patel, who has imbued his values into everything that the group undertakes: the unflinching resolve, determination, self-reliance, diligence, business acumen, being sensitive to the market-dynamics, and innovation. The group business is always driven by one fundamental principle - 'value-for-money.' These institutes of higher learning have furthered the cause of education in Gujarat, and have been churning out top professionals not only for Gujarat but the Indian industry as a whole.

In recognition of his ability, acumen, and wisdom he was entrusted to lead many an organisation of national importance. And he hasn't disappointed in that sphere as well, and has rendered services in various capacities to the best of his ability, and invariably, to the satisfaction of one and all. Some of the roles he has assumed in addition to being the inspirational leader of the Nirma group were that of being the Chairman for two terms to the Government of India's Development Council for soaps and detergents, as a Member of Bureau of Indian Standards Committee for Soaps and Detergent Industries, and the President of Gujarat Detergent Manufacturers Association.

Family incumbents

Dr. Patel has two sons, Rakesh K Patel & Hiren K Patel, and a son-in-law, Kalpesh Patel, to carry forward his legacy. Mr. Rakesh is an MBA and looks after procurement and logistics, while Mr. Hiren Patel has a chemical engineering as well as an MBA, and heads the marketing and finance departments. Mr. Kalpesh looks after the human resources as indeed the healthcare segment (Nirlife) of the group.

Philanthropy

Besides the several educational institutes and research labs which are run under the umbrella of the NERF, the Nirma Group also runs the Nirma Memorial Trust, the Nirma Foundation, and the Chanasma Ruppur Gram Vikas Trust as a part of their efforts as a socially responsible corporate entity.

Awards

Dr. Karsanbhai Patel is a recipient of various awards and accolades. He has been bestowed with

*'Udyog Ratna' by Federation of Association of Small-Scale Industries of Gujarat (FASII), New Delhi.
*'Outstanding Industrialist of the Eighties' by the Gujarat Chamber of Commerce and Industry, Ahmedabad' (in 1990).
*'Gujarat Businessman Award' in 1998 by Gujarat Chamber of Commerce and Industry, Ahmedabad.
*'Excellence in Corporate Governance' Award by the Rotary International District in 2000.
*Inducted into the A&M Hall of Fame, 2000.
*Awarded an Honorary Doctorate by Florida Atlantic University, Florida, USA in the year 2001, in recognition of his exceptional accomplishments as a philanthropist and businessman.
*Was conferred with PadmaShri Award for the year 2010.
*Honorary Doctorate by Devi Ahalya University, Indore.

Quotes

"The lack of any such precedent in my family made the venture fraught with fear of failure. But farmers from North Gujarat are known for their spirit of enterprise."

"Dar ke age Jeet Hai (Beyond the fear lies the victory)."

"We have talent, money power, and yet we suffer because we are not united."

"If Sardar Patel was alive today, he would have felt sorry to see such a weak society. There is no need for anyone to be afraid of anybody."

Hope viewers caught up the spark...

 

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