Lifestyle diseases have boosted the Ayurvedic firm’s performance, but it needs more advertising.

India’s increasing affluence and accompanying ‘lifestyle’ diseases such as diabetes have boosted this Ayurvedic company’s performance, but it needs to do more on advertising and distribution.

Consider this: India has over 61 million diabetics according to the International Diabetes Foundation. By 2030, this figure is expected to cross 100 million. By that time, India will be second only to China in terms of the number of diabetics in the world. This is not all. Cancer is also catching up fast as a killer disease. According to the Indian health & family welfare ministry, some 5.35 lakh patients succumbed to cancer this year. Though marginally higher than the figure reported last year, the signs are clearly not good.

India is rapidly seeing the emergence and growth of lifestyle diseases. As affluence grows, bringing with it a change in dietary habits, ailments such as cancer, diabetes and heart problems are becoming the order of the day. Ironically it is throwing up a myriad of possibilities for the herbal healthcare company, Himalaya, which banks on the science of Ayurveda to develop products. The perception that Ayurveda is also safe in comparison to mainstream allopathy is what makes the prospects of firms such as Himalaya bright, say market experts.

The unlisted, Bangalore-based entity has a turnover of over Rs 1,000 crore. Key verticals — pharma and FMCG — which contribute 60 per cent and 40 per cent respectively to overall revenues are growing at a clip of about 25-32 per cent per annum, according to Ravi Prasad, executive chairman, Himalaya Drug Company, who has been with the firm for well over 20 years now. Under him, the largely pharma company, which was formed in 1930, stepped into the FMCG space in 1999. Considered a close confidant of the low-profile Manal family, who are founder-promoters of Himalaya, Prasad has driven Himalaya’s international expansion into markets such as Russia, Ukraine and Romania. Today, Himalaya products —both pharma and FMCG— are available in over 80 markets including the US, Europe, South East Asia and the Middle East.

Himalaya is also counting on its international markets to drive growth as it seeks to move to the next level in the coming years. The move to step into FMCG over a decade ago, say Prasad, was prompted by the firm’s need to grow. Driving growth in international markets is key now, he says.

Ironically, with the world increasingly moving from largely curative to preventive medication, Himalaya with its herbal heritage finds itself in a unique position: to address medical needs with patented products that are based on good, solid research. “Most Indian pharmaceuticals companies are in the generics space which is largely a volume-driven business. We do not operate in that segment,” says Prasad.

The pharmaceuticals market in India is roughly Rs 56,000 crore, growing at a clip of about 15 per cent per annum. Over 95-96 per cent of the market comprises generics players, who market off-patent allopathic products. Himalaya, in contrast, has opted to build a strong pipeline of herbal products. The journey typically from R&D to final product takes easily about eight to ten years, says Prasad.

Thanks to this, Himalaya has some notable products to its name including Cystone (for people suffering from kidney stones) and Liv.52 (for those suffering from kidney ailments). Liv.52, in fact, is ranked amongst the top ten pharma products in the country, according to market research agency ORG IMS (see chart).

Liv.52 also happens to be among Himalaya’s early success stories. Launched in 1955, the herbal product went on to become one of the most trusted names in liver care. Available in tablets as well as syrups, Liv.52 has a share of close to 46 per cent in its space, and consists of Ayurvedic herbs that helps restore the functional efficiency of the liver (check chart on Liv.52). The drug also acts as a daily health supplement that helps improve appetite and promotes weight gain.

Cystone, the other blockbuster drug in Himalaya’s arsenal, was launched in 1943. It has a share of 40 per cent, and is considered to be effective in tackling the problem of kidney stones in more than 70 per cent of patients (check chart on Cystone). Company executives say that what has worked for both Liv.52 and Cystone, and indeed, all pharmaceutical products under Himalaya, is their recommendation by not just Ayurvedic doctors, but also practitioners of allopathy.

Philip Haydon, chief executive officer, pharmaceutical division, Himalaya, says that it is this recommendation by doctors over the years that helped the company sustain double-digit growth.

The company is keen to replicate this success in other areas such as oncology (cancer-related medication), viral & tropical diseases, stem cell therapy and nutritional products. “These are some areas we are working on,” says Prasad. On the FMCG front, the company is looking to add advanced anti-ageing to its repertoire of products, which includes skincare (facewashes, creams, moisturisers), haircare (shampoos, conditioners, hair oils), footcare, oralcare (toothpastes) and lipcare respectively.

“There are some other vacant spots too in our FMCG portfolio such as hair colour, deodorants and men’s products. But we are not immediately rushing into these segments,” says Saket Gore, chief executive officer, consumer products division, Himalaya.

With a nation-wide presence with facewashes and lipcare, and a regional, mostly south-centric presence in other categories, Gore says that his hands are full at the moment. In face-washes, lipcare and shampoos, which are Himalaya’s most important categories, key rivals include Hindustan Unilever (HUL) and Lóreal respectively. In lip care, for instance, Himalaya is third after HUL and Lóreal, while in facewashes, it stands at number two after HUL, and marginally ahead of Lóreal.

For all this, analysts have an interesting take to offer about Himalaya’s FMCG play. Unlike pharma, which is the backbone of the 81-year-old-company, FMCG is a newer business, launched 12 years ago with Ayurvedic Concepts. The latter was subsumed into the larger Himalaya brand name owing to the heft it carried with consumers. From then to now, the business has grown in double-digits, but remains smaller than the mainstay pharma business. Pharma also lands up sucking bulk of the profits on account of its intensive focus on R&D.

According to Haydon, the pharma division has a three-to-five-year-pipeline of products ready. “Our basket is full,” he says. “There are no dearth of products.”

With a total reach of about 4 lakh doctors worldwide, Himalaya’s pharma business is largely push-driven (that is, driven by medical representatives who hard sell the product to doctors, who eventually recommend or prescribe it to their patients). The FMCG business, on the other hand, is pull-driven (that means it banks heavily on consumers being drawn to products based on aggressive advertising, marketing and distribution).

While Gore declines to give investment details, he does admit that the firm has some miles to go on both brand-building and distribution.

In the south, for instance, the channel of distribution for Himalaya in FMCG is modern-trade (that is, organised retail stores), not traditional trade (that is, neighbourhood or kirana stores). Kirana stores give over 90 per cent of sales to an FMCG company so Himalaya’s limitation to organised retail stores for categories such as shampoos is a clear disadvantage. Its national categories facewashes and lipcare, in contrast, are distributed via both traditional and modern trade. “But FMCG calls for a lot of investment,” admits Gore.

With peers in the space such as Dabur and Emami spending substantially more on both distribution and A&P (that is, advertising & promotion), the task is not easy, say analysts. Adspends as a pecentage of sales for most listed FMCG companies including Dabur and Emami is in the region of about 10-12 per cent. In the case of Himalaya, it is significantly lower, say market experts. Investment in distribution is also lower than peers, say experts. For listed FMCG companies, distribution expenditure as a percentage of sales is about 5-6 per cent of sales, they say.

Gore says that the firm is working on ramping up FMCG distribution largely through modern trade. It also has its own network of 129 retail stores, largely used as information centres than points of sales.” So far this year, we have added eight stores. And we propose to keep this momentum going,” he says.

But with competition only heating up in FMCG, thanks to the entry of new players as well as the actions of existing players, opting to play in a limited geography using limited tools of distribution may not be the best strategy, say analysts. Gore responds by saying that Himalaya’s products remain strong. “The focus for us is there,” he says.

source: http://www.business-standard.com / Home> Companies & Industry / by Vicent Susan Pinto / Mumbai, December 21st, 2011

Media Release

Mangalore, Nov 14:

A record qty of 1512 TEUs  handled at New Mangalore Port  in a single voyage in the container vessel- M.V. TAMPABAY  which called at the Port on 9-11-2011.  This is the highest number of containers ever handled at the port from a single voyage surpassing the  earlier record of 1436 TEUs handled on 3-7-2009 from the vessel M.V. ELBE TRADER.  Out of the total 1512 TEUs, 934 were imports and 578 exports.  Major items of import are raw cashew and export consists of coffee, cashew kernels, fish and fish products, candles, etc. M/s Atlantic Shipping are the Feeder Line Operators and M/s Delta Infralogistcs Pvt. Ltd.(HML) the agents of the vessel.

Chairman Dr. P. Tamilvanan has stated that the port is witnessing steady growth in container traffic thanks to the pro-active marketing efforts made by the Port management coupled with the infrastructure addition created during the past few years like expansion of container yards, container handling equipments like reach stackers, increased number of reefer plug points, concretization of roads, simplified documentation system etc.  This has yielded positive results in fostering the container movement to the port from the hinterland which is evident from the fact that from 9646 TEUs handled in 2005-06, it has grown to 40,158 TEUs in 2010-11.  During the current year 2011-12(as on date) 30,454 TEUs handled as against 25,709 TEUs handled during the corresponding period of previous year.

Container traffic at NMPT got a shot in the arm when the first consignment of 40 feet container with Garments/Linen exported through New Mangalore Port on 7-3-2011 in the container vessel M.V. OEL TRUST.  The consignment of 4237 packets of cotton processed garments/linen produced at the Hassan SEZ by M/s Himatsingka Seida Ltd.  has been exported to USA.  This is for the first time garments are handled at the Port.  The Mainline operators are M/s CMA CGM and the handling agents M/s Cargolinks. The total transit time will be 28 days.

Shri P. Tamilvanan, Chairman has attributed the handling of this new cargo, hitherto moving through neighbouring ports, to the pro-active marketing efforts  made by the Port  at various locations of the hinterland during the last few years coupled with the Infrastructure additions made for the smooth handling of containers.  He has added that the above garment unit , which is a 100% export oriented one  is expected to move their entire consignment of export to the tune of 25 TEUs per month through New Mangalore Port.   The container traffic at the Port has crossed 36000 TEUs during the current year(as on date) with a growth rate of 27%.

source: http://www.daijiworld.com / Monday, November 14th, 2011

Caption:

1) Some of the honey, jams and sauces produced by Nectar Fresh. 2) Chayaa Nanjappa with business partner Rajappa at Ahaar expo in Chennai. 3) The entire processing unit consisting of a container to feed honey to the settling unit.

Mysore:

They say ‘fruit of hard work is sweet’ and in this case it is metaphorically and literally sweet. Shall we call this a success story of a lone lady who made it big in the small scale industries sector or the growth of a brand which has today become one of the leading names in the field of honey? It is difficult to describe one without the other as this is the story of a lady who started a honey brand from scratch which has grown to great heights over the years. In this Weekend Star Supplement, SOM introduces its readers to this lady who says ‘If I could make it, then any other lady can

’ A flavour for every season

History:

Nectar Fresh was launched by Chayaa Nanjappa in 2007 at Bangalore and was backed by Khadi and Village Industries Board. Born on June 20, 1971 at Kodagu, Chayaa says, “I had a gut feeling and wanted to do something connected with my hometown. That instant I knew I wanted to start honey manufacturing and wanted to name it as Nectar Fresh.”

“The plant was doing well in Bangalore but due to some circumstances we had to relocate to Mysore in 2010.

Initially people said that Mysore is a small town and is not feasible for such businesses. But for me Mysore has been a lucky mascot. Most of the major deals were struck after we shifted here,” she says.

The plant was relocated to Kadakola near Mandakalli Airport when Chayaa partnered with Rajappa of MyStore.

Speaking about Nectar Fresh, Chayaa says, “We are one among the top 5 honey manufactures in India and are the only ones who are manufacturing different varieties of honey. Usually the Khadi and Village Board products are not considered as product for the high end markets. But today we have replaced international brands in hospitality sector under the Board. We have used their logo in our brand because it is the Board which has supported us. Also, there is a notion that business is only for the elite class who come from the same background or have the educational qualification for it. But we have proved this wrong. Anyone can do it if they have the survival instinct. Today we employ around 50 persons all over the country and around 20 in our Mysore plant.”

Chayaa, a PG Diploma holder in Mass Communication, underwent specialised training at Central Bee Research and Training Institute, Pune. She is also a member of the National Bee Board and is the first lady to have a honey processing plant in the country.

Process

The company has its mobile vans placed near the fields across India. Hence they are the only producers of a variety of honey in the country. They are also the first brand to launch honey blisters.

“Every month we have different varieties of honey according to the flowering season. This month it is acacia, clover and Himalayan honey,” says Chayaa, adding that lychee honey has the greatest demand.

Although Nectar Fresh has a wide network, it’s manufacturing unit is only at Mysore. The unit produces around 1,000 tonnes a day and is planning to increase it to 4,000 tonnes by procuring more equipment.

Processing plant: First, the honey is loaded into the container. This honey undergoes around 30 microns of filtration. It later undergoes moisture reduction and then again 2 microns of filtration. It is then cooled and sent to settling tanks. This will later be filled in containers and packed.

The brand has also started dealing with jams and sauces to help sick women groups. It aims to provide them with the technical knowhow and quality assurance and in turn market their produce thereby giving them a channel to avoid middlemen.

The processed honey is tested for quality at Pristine Laboratories, Bangalore and also at the units’s in-house laboratory.

Varieties

Nectar Fresh is known for its varieties in honey which include Coorg honey, rapeseed/mustard, eucalyptus, lychee, sunflower, Himalayan, acacia, clover, south Indian etc.

Market and export

Nectar Fresh today exports its produce to the Middle East, Malaysia and Australia. They will be looking forward to capture the US and European markets very soon.

The brand has replaced top international brands in India and today has a monopoly with the five star hotels.

“Previously we were not keen on our own private labeling and would supply in bulk and to the hospitality sector. But now we are entering the retail market also. We are the major suppliers to the Honey Society and are vendors for DFRL in city. Apart from this, ITC, Kerala Ayurveda, Taj group of hotels, Apollo etc., bottle their products here,” says Chayaa.

Mission beyond market

With an aim to be a leader in their business in India, Nectar Fresh is also seeing to offer its service beyond market. Apart from helping women with jams and sauces, they have empowered the locals around Kadakola region by providing them training and employment. They are also backing tribals by sourcing honey from the Sirsi belt.

The company is also associated with various charitable organisations helping girl child and Chayaa herself is a member of many women organisations in the country.

Competition

When asked about their major competitors in the market, Chayaa said “We have replaced many international brands including Australia’s Beerenberg Farm. In India, our major competitors are Kashmir Apiaries and Kejriwal Enterprises.”

Future

The company will soon be launching honey pouches with an aim to make honey available to even the lowest section of the society. The pouches are being prepared with the help of CFTRI. They will also be launching premixes of coffee and tea. The mix, which comes with milk, sugar and coffee/tea powder, can be prepared by just adding to a cup of water. With this the company plans to rule the Indian market and introduce Mysore and Kodagu to international customers.

Work hard and believe in yourself

I am not a feminist. But I support those women who work hard to stand on their feet. Most of the time, laws favouring women are abused and the most genuine cases do not have the privilege to use it. Hence, through our brand we intend to empower such women.

“Believe in yourself and have that never-let-go attitude. The success you achieve through this will give you a lot of self-respect rather than finding easy ways of making money.

“I have faced many hardships while coming this far. As a single woman, it was initially difficult for me to survive in this field. But that did not discourage me. With help from Corporation Bank, the government and of course from my business partner, now sky is the limit for Nectar Fresh. If I was able to achieve so much, then any woman can.”

source: http://www.starofmysore.com / Feature Articles / October 29th, 2011