Sunday, June 19, 2011

Karsanbhai Patel - An Indian Entrepreneur who rewrote the rules of Business

Hey everybody!! It was a pretty long time i have posted on my blog. So i have decided to post at least a post on every Sunday. So from now i am hereby to say that i will post a knowledgeable post every week. As always this time i am back with an inspirational life of a successful entrepreneur.

 "Everybody says that my son/daughter is working in this company, in that company. But i usually get a doubt that why isn't he/she is not an owner of a company." Why we Indians will never think to start a company or to become CEO to a company? We always try to work under somebody but we never try to be that somebody.

Facts about Indians says that 36% of scientists in NASA are Indians, 34% of employees in Microsoft are Indians. But why there is no Indian company in that list?
 
This is our time to prove that even we are capable to produce great companies from India. 
This is our time to prove that history is meant only to books but not reality.

This is what i wanna say from many days but the sad part is that no one interested in these topics but they are interested in some gossips. :(
Now, i want to link above lines with the new post.


As i said already that this post is about a great person, he is the person who worked as a LAB ASSISTANT and now owning NIRMA. He is none another than once a poor person and now a great person Padmashri.KARSANBHAI PATEL. He is the one who rewrote the history of Indian entrepreneurship.

Karsanbhai Khodidas Patel (K.K.Patel) is a befitting example of a self-made man. Coming from a humble farmer family he understood the need of the masses to serve a segment that was neglected but at the same time highly profitable. He established a position for his firm in the lower income segment of the detergent market, overtaking many heavy weights and multinationals, to emerge as a winner.Literally, he made money by washing others’ dirty linens. He is the founder of thepowerful brand ‘Nirma’ which he aptly positioned using all the 4 P’s of marketing (viz. product, price, place and promotion) to his advantage.

Life:

Born into a farmer family from north Gujarat, Karsanbhai finished his B.Sc. in Chemistry at age 21 and worked as a lab technician, first in the New Cotton Mills, Ahmedabad, of the Lalbhai group and then at the Geology and Mining Department of the state Government. It was in 1969 that Dr. Karsanbhai Patel started Nirma and went on to create a whole new segment in the Indian domestic detergent market.During that time the domestic detergent market only had the premium segment and there were very few companies , mainly the MNCs , which were into this business.

 


Karsanbhai Patel used to make detergent powder in the backyard of his house in Ahmedabad and then carry out door to door selling of his hand made product.He gave a money back guarantee with every pack that was sold.Karsanbhai Patel managed to offer his detergent powder for Rs. 3 per kg when the cheapest detergent at that time was Rs.13 per kg and so he was able to successfully target the middle and lower middle income segment.

After three years, Karsanbhai felt confident enough to quit his job. Later he said:
"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 ."
Strategies used to beat MNC's:

Nirma became a huge success and all this was a result of Karsanbhai Patel’s entrepreneurial skills.
Karsanbhai Patel had good knowledge of chemicals and he came up with Nirma detergent which was a result of innovative combination of the important ingredients.Indigenous method was used ,and also the detergent was more environment friendly.

Consumers now had a quality detergent powder , having an affordable price tag.
The process of detergent production was labour intensive and this gave employment to a large number of people.Nirma focused on cost reduction strategies to make a place for itself in the market.Nirma has always been known for offering quality products at afforbable prices and thus creating good value for the consumer’s money.

In the 1980s nirma moved ahead of Surf , a detergent by HLL , to caputre a large market share.Later, Nirma successfully entered in the premium segment of soaps and detergents.Nirma went on to become the largest detergent and the second largest soap company in India.Nirma had more than 35% market share in the detergent segment and around 20 % market share in the toilet soap segment.The company got listed on the stock exchanges in the year 1994.

Nirma adopted backward integration strategy for the regular supply of raw materials,90 % of which they manufacture themselves.Nirma also gave due importance to modernization ,expansion and upgradation of the production facilities.The company also made sure that it uses the latest technology and infrastructure.

In 1995, Karsanbhai started the Nirma Institute of Technology in Ahmedabad, which grew into a leading engineering college in Gujarat. An Institute of Management followed, with the entire structure being consolidated under the Nirma University of Science and Technology in 2003, overseen by the Nirma Education and Research Foundation. The Nirmalabs education project, aimed at training and incubating entrepreneurs, was launched in 2004.

Karsanbhai's two sons and son-in-law are now at leading positions in the Nirma organization: Rakesh K Patel (MBA) looks after procurement and logistics, Hiren K Patel, chemical engineer and MBA, heads marketing and finance, while Kalpesh Patel is in human resources and Healthcare Industry (Nirlife healthcare).

Awards and Accolades:

 In 2001, Karsanbhai was awarded an honorary doctorate by Florida Atlantic University, recognizing his exceptional entrepreneurial and philanthropic accomplishments.
 In 1990, the Federation of Association of Small Scale Industries of India (FASII), New Delhi, awarded him the 'Udyog Ratna' award.
Honorary Doctorate by Devi Ahlya University, Indore
The Gujarat Chamber of Commerce felicitated him as an 'Outstanding Industrialist of the Eighties'.
 He has served twice as Chairman of the Development Council for Oils, Soaps and Detergents.
  Dr. Karsanbhai Khodidas Patel has been conferred with Padma Shri Award for the year 2010. The award will be formally conferred by the President of India Mrs Pratibha Patil

 The company that was started in 1969 with just one man who used to deliver his product from one house to the other,today employs around 14 thousand people and has a turnover of more than 3350 crores. In 2004 Nirma’s annual sales were as high as 800000 tonnes.According to Forbes in 2010 Karsanbhai Patel’s net worth was $ 575 million.