Nirma's Karsanbhai Patel is in the news once again after bagging cement assets of LafargeHolcim for Rs 9,300 crore, beating larger rivals like JSW Cement and the Ajay Primal Group
Nirma’s Karsanbhai Patel is in the news once again after bagging 11-million-tonne cement assets of LafargeHolcim for an enterprise value of $1.4 billion (Rs 9,300 crore), beating larger rivals like JSW Cement and the Ajay Primal Group for the plants located largely in eastern India.
Beating larger rivals has been something Patel could be credited to have specialised in, if his success story over the years is taken into consideration.
According to Forbes, Patel’s net worth is $1.84 billion. Credited as the “detergents king”, the low profile business man’s success story has been documented as a case study in management schools.
In 1969, Patel started Nirma, which set off a new segment in the India’s detergent market sector. In his profile, Forbes says, “Farmer’s son, Patel got start mixing soda ash in his backyard and selling door-to-door on his bicycle.”
Named after his deceased daughter Nirupama, the low-price Nirma brand put Patel in a sort of detergents war against giant rivals such as Unilever and Procter & Gamble.
The company not only countered the competition but also created a niche for itself in the low price detergent market.
According to a case study, it took 30 years for Nirma to become a Rs 1,700 crore company. Much of the success of the brand was possible because of Patel’s vision of offering “quality products at affordable rates.”
Nirma detergent powder was Patel’s own innovation. A chemist by training and an employee of Gujarat Government’s Department of Mining and Geology, Patel produced phosphate-free synthetic detergent powder and started selling it locally for Rs 3.00, when the cheapest detergent powder available was selling at Rs 13 a kg.
By the 1990s, Nirma detergent powder had become a household name as “sabki pasand Nirma” ads beamed through television sets in homes across the country.
A year before the start of the new century, Nirma had become one of the major consumer brands with items like detergents, soaps and personal care products.
Nirma has now a presence in products such as soaps, salt, soda ash, caustic soda, cement and packaging. With over 12 manufacturing facilities in India and the USA, Nirma sells its products across the globe and reported a sales figure of over $ 1.1 billion in 2015-16.
In 2012, Patel, handed over operations of the company to his sons.
With the entry of other low priced rivals, like Ghari, Nirma has been facing a tough competition recently. Though Nirma has spreads its reach in segments like pharma, chemicals, infrastructure and cement, with the Lafarge cement deal in place, Patel’s illustrious story may see some more successes.
(With agency inputs)