As the Indian kitchen moves from the back of the house to its centre, TTK Prestige?s executive chairman tells Sushila Ravindranath about all that he is cooking up to meet new tastes and desires
TT Jagannathan, executive chairman of TTK Prestige Limited, has many reasons to feel happy. This kitchen appliance manufacturer?s turnover is R1,122 crore for the year 2011-12. It was hovering around R100 crore eight years ago. Its domestic sales registered a growth of 45.3% while exports grew at 30.2%. It saw an all-time high absolute value growth of around R347 crore. Profit after tax increased by 35.35%. The company has also been continuously receiving several honours from various agencies. Prestige today is a super brand in the kitchen segment. The company made it to Forbes Asia?s ?Best Under A Billion? list this year.
The TTK group was founded by a young and enterprising TT Krishnamachari (finance minister in India?s early Cabinets) in 1928. He took over an indenting agency in Madras that was marketing the products of Lever Brothers in South India. Then he moved on to the marketing and distribution of products that exist till today such as Cadbury chocolates, Woodward?s gripe water, Kiwi shoe polish and Brylcreem. TTK, as he was known, threw himself into the freedom movement in the 1930s and left the business to his young sons. It was an uphill struggle for them during the war years.
Jagannathan, an engineer from IIT, with a master?s in operations research from Cornell University, a job offer at the famous Rand Corppration think tank, came back to India in 1972 when he got an urgent call from his parents asking him to help run the family business, which was reeling under debt. He is a grandson of TTK, son of TTK?s eldest son TT Narasimhan. The TTK group was then unwieldy with 29 product lines, ranging across condoms, maps, atlases and fountain pens. There was an urgent need for shutting the loss-makers down and consolidating the rest. The flagship was always TTK Prestige. It initially had a technical tie-up with Prestige of the UK. For many decades, it focused on a single product, the pressure cooker. The Prestige cooker was the market leader in south India. The company coasted along till the 1990s when it started getting a beating from regional brands and products from the unorganised sector, which enjoyed an excise advantage. In 2003, the company made a loss of R13 crore. ?That is when I decided to take over product development. The new product development started with the pressure cookers by changing their look and making them colourful,? Jagannathan tells me when I drop in to see him at his corporate office in Bangalore. He has invited me to have lunch with him in his compact executive dining room.
Here, a standard, healthy, south Indian vegetarian lunch is served. The vegetables have been cut, chopped and sliced with various Prestige appliances. We are served hot rice and sambar with vegetables and salad. Rotis are optional. ?Our turnaround plans fortunately coincided with the time when the kitchen moved from the back of the house to the centre of the house. The traditional cooks are disappearing. So people want modern kitchens, modern gadgets. Last year, we introduced a mixie grider combined with an atta maker. It just flew off the shelf. People also want colour in the kitchen. We were ready for all the changes. There is a tide in the affairs of men and we took it. Now people want to invest in the company. I am meeting fund managers all the time. Last year, I met and had teleconferences with 181 fund managers and 141 were from outside the country.? TTK Prestige is closely held by the family.
When the economy was growing at 8%, the kitchen appliances segment grew at 25%. ?Our CAGR now is 35% and we have to maintain this,? says Jagannathan as piping hot cups of rasam arrive. The growth has been driven predominantly by volume expansion and introduction of new models and products. In a year, there are hundreds of products being conceptualised. There are prototypes in every senior executive?s kitchen. Jagannathan, a self-confessed foodie, says that unless you are passionate about food, you cannot do well in this business. He started cooking when he was just eight. He still cooks at home. ?Last year, we introduced 60 new products to the market. We launch them keeping in mind Indian tastes and needs.?
Who is working on the new designs, I ask him. ?I certainly don?t depend on engineers. You ask them to design a horse and they will produce something that looks like a camel. We hired a lot of young designers, all under age 35. We have 40 designers working for us depending on the product. We outsource designing to them. We have developed a rice cooker with four pots in which you can cook an entire meal. The current rage is induction cooktops, which we import from China. We have dedicated vendors in China. But we have ourselves developed tops with which you can make perfect dosas and rotis. We find products all over the world. We acquire the rights and adapt them to our conditions.?
We are now ending the meal in the traditional south Indian style with rice and yoghurt. Jagannathan tells me that the imported products the company has been selling contributed to 38% of the turnover last year as against 30% the previous year. Prestige has tied up with Meyer International of China, which is a large cookware manufacturer. ?They make something like 200,000 pans and 75 million pots a year. We make 6 million.? Outside India, Meyer distributes Prestige brands. ?So far they have not been in India. Now they are approaching us.?
The company has recently concluded agreements with World Kitchen of the US, which will give it a basket of high-end brands such as Corelle, CorningWare, Pyrex, Visions and Snapware. Manufacturing joint ventures are on the cards. There is an agreement with a Swiss company for the water-filter segment. ?I meet at least one MNC a week. They are all making a beeline for India. Why get married to any of them when we can have several mistresses??
TTK now has eight manufacturing plants across India, 1,500 employees and a R350-crore expansion plan in Gujarat. The company has ventured into retailing space through Prestige Smart Stores. At present, there are 356 stores, which will be increased to 480 by 2012-13. As we sip hot coffee, Jagannathan says the competition is increasing. MNCs are entering the business, regional and unbranded players chip away market share with their nonviable pricing. ?We will continue to provide quality consumer products at affordable prices. We are moving on to offering total kitchen solutions. I want to see a Prestige in every kitchen.?