Description
This is a documentation is about company analysis of Nirma.
COMPANY ANALYSIS- NIRMA
Nirma is a group of companies based in the city of ahmdabad in western India that manufactures products ranging from cosmetics, soaps, detergents, salt, soda ash, LAB and Injectables. Karsanbhai patel, a well known entrepreneur and philanthropist of gujrat, started Nirma as a one-man operation. Today Nirma has over 15000 employees and a turnover of over Rs. 3550 crores. In 2004, Nirma's detergent approached 800,000 tonnes – one of the largest volumes sold in the world – under a single brand 'NIRMA'.
INDUSTRY ANALYSISIndustry trends
Nirma Limited has diversified portfolio of soaps and surfactants, healthcare and processed minerals. It operates in four segments: soaps and surfactants, pharma business, processed minerals and other businesses. The soaps and surfactants include detergents, toilet soap and its ingredients. Its principal products include synthetic detergents, soda ash and toilet soaps. The processed minerals include the Company's operations in the United States. The other businesses include single super phosphate, vaccum salt, iodised salt, tooth paste, cement, wind farm and oil. Its subsidiaries include Karnavati Holdings Inc., Searles Valley Minerals Operations Inc., Searles Valley Minerals Inc., Searles Valley Residences LLC, Searles Domestic Water Company LLC and Trona Railway Company LLC. On April 1, 2011, it incorporated a subsidiary in Mexico under the name NIRLIFE MEXICO SA de CV. On March 30, 2011, Nirma Consumer Care Limited, a wholly owned subsidiary has been amalgamated with the Company.
PEST analysis Political
political factors do affect company, it has affected nirma too. political factors include areas such as tax policy, labour law, environmental law, trade restrictions, tariffs, and political stability. Political factors may also include goods and services which the government wants to provide or be provided and those that the government does not want to be provided. Furthermore, governments have great influence on the health of employees and infrastructure of a company Economical Nirma companies economic factors include economic growth, interest rates, exchange rates and the inflation rate. These factors have major impacts on how businesses operate and make decisions. For example, interest rates affect a firm's cost capital and therefore to what extent a business grows and expands. Exchange rates affect the costs of exporting goods and the supply and price of imported goods in an economy Social
Nirma co.Social factors include the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. Trends in social factors affect the demand for a company's products and how that company operates. For example, an aging population may imply a smaller and less-willing workforce (thus increasing the cost of labor). Furthermore, companies may change various management strategies to adapt to these social trends. Technological Nirma co. Technological factors include technological aspects such as R&D activity, automation, technology incentives and the rate of technological . They can determine barriers to entry, minimum efficient production level and influence outsoursing decisions. Furthermore, technological shifts can affect costs, quality, and lead to innovation COMPETITORS What Nirma did to HLL, it has had to face from other entrepreneurs. The two of the biggest competitors to have emerged are Kanpur Trading Corporation and Dandi Namak. Kanpur Trading Corporation are the makers of Ghari detergent. It is headed by a 56 year old Murli Dhar, who himself is an ardent admirer of Karsanbhai Patel. He is following the footsteps of his idolboth in sharing a humble beginning marked up by tin shed operations and bicycle marketing, through fiercely extending flagship detergent brand Ghari to kirana store shelves in UP and adjoining markets. Ghari has crossed the Rs.550 cr33 sales mark in 2002 and is the largest single brand in UP and adjoining markets. To give a sense of sizes Ghari is almost as big as Surf, Cadbury and Fanta, twice the size of Dettol and three times that of Ariel by sales34. Ghari is the fastest growing brand in the detergent sector at around 40 and 10% volume share on an all India basis. Suresh Agarwal makes the Kunwar Ajay brand of sarees. The trouble was people bought sarees twice a year. There were other irritants like retailers returning stocks unsold. To chivy up the demand he spent Rs.25 cr on a nationwide ad campaign. But sales of the Kunwar Ajay sarees did not perk up. Then he thought of getting into FMCGs. The two reasons of getting into the FMCG sector were that buying is much more frequent and goods once sold to the traders aren't taken back. So he decided to enter something as plebian as salt. Since its launch in October 2001, it shipped 60,000 tonnes to the trade. Agarwal also launched Friendly wash, a detergent in April 2002, in a bid to take on Nirma.
They face following competitors. Advanced petrochemical ltd. Arsi cosmetics & chemicals ltd.
Continental chemicals ltd. Hipolin ltd. Pee cee cosma sope ltd SWOT ANALYSIS Strengths: S t r o n g b r a n d e q u i t y . N i r m a i s a R s . 1 7 b i l l i o n u m b r e l l a b r a n d offering consumers a broad portfolio of products at multiple price points in the Detergents, soaps and personal care market. Produce a range of industrial chemical products which primarily serve as raw material or intermediates for soaps and detergent business. Market leadership in detergent market and fabric wash industry player in toilet soap industry. Wide distribution network. Weaknesses: High interest burden Less presence in premium segment. Lack global tie ups and thus lacking in export market. Opportunities: Exports Acquisition for strengthening its distribution tie ups. E n t r y i n t o o t h e r c a t e g o r i e s l i k e s h a m p o o s , t o o t h p a s t e s a n d f a b r i c whiteners. Threats: MNCs coming to India particularly in Toilet and Soap industry COMPANY DISCRIPTION Nirma is one of the few names-which is instantly recognized as a true Indian company which took on mighty multinationals and rewrote the marketing rules to win the heart of princess, i.e. the consumers. Nirma, the proverbial “Rags to Riches” saga of Dr.Karsanbhai patel,is a classic example of success of Indian companies in the face of stiff compitition.startinas a one man operation in 1969,today,it has about 14,000 employee base turnover is above 25,00 corers. India is one of the largest consumer economy, with burgeoning middle class in such a case Nirma aptly concentrated all its effective tools towards creating and building a strong preference towards its „value money „product. HERITAGE In scorching heat of 1969 a son of small-time farmer was trying to mix soda with few other intermediaries, to make a detergent produce. He was a qualified graduate and was working as a
junior chemist in government laboratory. As a moon lighting activity he was making detergent in 100 sq.ft back yard home, using bare hands and bucket. Once the mixture is ready. He used to put it in polythene bag and was selling door to door. Gradually, the product became accepted in consumer community, and the rest is known to one and all. In short span, he captured the domestic market, with a quality product. He crafted low-to-medium consumer pockets-a whole new consumer segment detergent. GENERAL INFORMATION-
Head officeNirma House Ashram Road Ahmedabad – 380 009 Gujarat – India.
Soda ash plant details Investment of Rs.1,140 corers. C P CT : AA IY 650,000 TPA. 770 m3/hr capacity sea water plant 40 MSW captive co-generation. 10000 MT solid handling. Energy efficient technology from Netherlands
Soaps plant details Investment of Rs.200 corers. 30,00,000 soap pieces sold per day. Annual sales of Rs.500 corers. 20% market share. Second largest soap manufacturer. Four lines of 500 soaps per minute
Edible salt plant details
Asia’s largest salt works. Spread over 30,000 acres. Edible salt capacity of 288,000 TPA
Detergants 50,00,000 pieces sold per day. 38% market share. Largest detergent manufacturer
Financial performance Equity share capital 79.57 crores(mar 2011) Net profit 177.95 crores(mar 2011) VARIOUS STRATEGIES In 1969, dr. karsanbhai patel, a chemist at the Gujarat Government's Department of Mining and Geology manufactured phosphate free Synthetic Detergent Powder, and started selling it locally. The new yellow powder was priced at Rs. 3.50 per kg, at a time when HLL's Surf was priced at Rs 15. Soon, there was a huge demand for Nirma in Ruppur (Gujarat), Patel's hometown. He started packing the formulation in a 10x10ft room in his house. Patel named the powder as Nirma, after his daughter Nirupama. Patel was able to sell about 15-20 packets a day on his way to the office on bicycle, some 15 km away. By 1985, Nirma washing powder had become one of the most popular, household detergents in many parts of the country. By 1999, Nirma was a major consumer brand – offering a range of detergents, soaps and personal care products. In keeping with its philosophy of providing quality products at the best possible prices, Nirma brought in the latest technology for its manufacturing facilities at six locations in India. Nirma's success in the highly competitive soap and detergent market was attributed to its brand promotion efforts, which was complemented by its distribution reach and market penetration. Nirma's network consisted of about 400 distributors and over 2 million retail outlets across the country. This huge network enabled Nirma to make its products available to the smallest village.
Starting as a one-product, one-man outfit from a 100 sq ft (9.3 m2) room in 1969, Nirma became a very successful company within three decades. The company had multi-locational manufacturing facilities, and a broad product portfolio under an umbrella brand – Nirma. The company's mission to provide, "Better Products, Better Value, Better Living" contributed a great deal to its success. Nirma successfully countered competition from HLL and carved a niche for itself in the lowerend of the detergents and toilet soap market. The brand name became almost synonymous with low-priced detergents and toilet soaps. However, Nirma realized that it would have to launch products for the upper end of the market to retain its middle class consumers who would graduate to the upper end. The company launched toilet soaps for the premium segment. However, analysts felt that Nirma would not be able to repeat its success story in the premium segment. In 2000, Nirma had a 15% share in the toilet soap segment and more than 30% share in the detergent market. Aided by growth in volumes and commissioning of backward integration projects, Nirma's turnover for the year ended March 2000 increased by 17% over the previous fiscal, to Rs. 12.17 bn.
doc_716489604.docx
This is a documentation is about company analysis of Nirma.
COMPANY ANALYSIS- NIRMA
Nirma is a group of companies based in the city of ahmdabad in western India that manufactures products ranging from cosmetics, soaps, detergents, salt, soda ash, LAB and Injectables. Karsanbhai patel, a well known entrepreneur and philanthropist of gujrat, started Nirma as a one-man operation. Today Nirma has over 15000 employees and a turnover of over Rs. 3550 crores. In 2004, Nirma's detergent approached 800,000 tonnes – one of the largest volumes sold in the world – under a single brand 'NIRMA'.
INDUSTRY ANALYSISIndustry trends
Nirma Limited has diversified portfolio of soaps and surfactants, healthcare and processed minerals. It operates in four segments: soaps and surfactants, pharma business, processed minerals and other businesses. The soaps and surfactants include detergents, toilet soap and its ingredients. Its principal products include synthetic detergents, soda ash and toilet soaps. The processed minerals include the Company's operations in the United States. The other businesses include single super phosphate, vaccum salt, iodised salt, tooth paste, cement, wind farm and oil. Its subsidiaries include Karnavati Holdings Inc., Searles Valley Minerals Operations Inc., Searles Valley Minerals Inc., Searles Valley Residences LLC, Searles Domestic Water Company LLC and Trona Railway Company LLC. On April 1, 2011, it incorporated a subsidiary in Mexico under the name NIRLIFE MEXICO SA de CV. On March 30, 2011, Nirma Consumer Care Limited, a wholly owned subsidiary has been amalgamated with the Company.
PEST analysis Political
political factors do affect company, it has affected nirma too. political factors include areas such as tax policy, labour law, environmental law, trade restrictions, tariffs, and political stability. Political factors may also include goods and services which the government wants to provide or be provided and those that the government does not want to be provided. Furthermore, governments have great influence on the health of employees and infrastructure of a company Economical Nirma companies economic factors include economic growth, interest rates, exchange rates and the inflation rate. These factors have major impacts on how businesses operate and make decisions. For example, interest rates affect a firm's cost capital and therefore to what extent a business grows and expands. Exchange rates affect the costs of exporting goods and the supply and price of imported goods in an economy Social
Nirma co.Social factors include the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. Trends in social factors affect the demand for a company's products and how that company operates. For example, an aging population may imply a smaller and less-willing workforce (thus increasing the cost of labor). Furthermore, companies may change various management strategies to adapt to these social trends. Technological Nirma co. Technological factors include technological aspects such as R&D activity, automation, technology incentives and the rate of technological . They can determine barriers to entry, minimum efficient production level and influence outsoursing decisions. Furthermore, technological shifts can affect costs, quality, and lead to innovation COMPETITORS What Nirma did to HLL, it has had to face from other entrepreneurs. The two of the biggest competitors to have emerged are Kanpur Trading Corporation and Dandi Namak. Kanpur Trading Corporation are the makers of Ghari detergent. It is headed by a 56 year old Murli Dhar, who himself is an ardent admirer of Karsanbhai Patel. He is following the footsteps of his idolboth in sharing a humble beginning marked up by tin shed operations and bicycle marketing, through fiercely extending flagship detergent brand Ghari to kirana store shelves in UP and adjoining markets. Ghari has crossed the Rs.550 cr33 sales mark in 2002 and is the largest single brand in UP and adjoining markets. To give a sense of sizes Ghari is almost as big as Surf, Cadbury and Fanta, twice the size of Dettol and three times that of Ariel by sales34. Ghari is the fastest growing brand in the detergent sector at around 40 and 10% volume share on an all India basis. Suresh Agarwal makes the Kunwar Ajay brand of sarees. The trouble was people bought sarees twice a year. There were other irritants like retailers returning stocks unsold. To chivy up the demand he spent Rs.25 cr on a nationwide ad campaign. But sales of the Kunwar Ajay sarees did not perk up. Then he thought of getting into FMCGs. The two reasons of getting into the FMCG sector were that buying is much more frequent and goods once sold to the traders aren't taken back. So he decided to enter something as plebian as salt. Since its launch in October 2001, it shipped 60,000 tonnes to the trade. Agarwal also launched Friendly wash, a detergent in April 2002, in a bid to take on Nirma.
They face following competitors. Advanced petrochemical ltd. Arsi cosmetics & chemicals ltd.
Continental chemicals ltd. Hipolin ltd. Pee cee cosma sope ltd SWOT ANALYSIS Strengths: S t r o n g b r a n d e q u i t y . N i r m a i s a R s . 1 7 b i l l i o n u m b r e l l a b r a n d offering consumers a broad portfolio of products at multiple price points in the Detergents, soaps and personal care market. Produce a range of industrial chemical products which primarily serve as raw material or intermediates for soaps and detergent business. Market leadership in detergent market and fabric wash industry player in toilet soap industry. Wide distribution network. Weaknesses: High interest burden Less presence in premium segment. Lack global tie ups and thus lacking in export market. Opportunities: Exports Acquisition for strengthening its distribution tie ups. E n t r y i n t o o t h e r c a t e g o r i e s l i k e s h a m p o o s , t o o t h p a s t e s a n d f a b r i c whiteners. Threats: MNCs coming to India particularly in Toilet and Soap industry COMPANY DISCRIPTION Nirma is one of the few names-which is instantly recognized as a true Indian company which took on mighty multinationals and rewrote the marketing rules to win the heart of princess, i.e. the consumers. Nirma, the proverbial “Rags to Riches” saga of Dr.Karsanbhai patel,is a classic example of success of Indian companies in the face of stiff compitition.startinas a one man operation in 1969,today,it has about 14,000 employee base turnover is above 25,00 corers. India is one of the largest consumer economy, with burgeoning middle class in such a case Nirma aptly concentrated all its effective tools towards creating and building a strong preference towards its „value money „product. HERITAGE In scorching heat of 1969 a son of small-time farmer was trying to mix soda with few other intermediaries, to make a detergent produce. He was a qualified graduate and was working as a
junior chemist in government laboratory. As a moon lighting activity he was making detergent in 100 sq.ft back yard home, using bare hands and bucket. Once the mixture is ready. He used to put it in polythene bag and was selling door to door. Gradually, the product became accepted in consumer community, and the rest is known to one and all. In short span, he captured the domestic market, with a quality product. He crafted low-to-medium consumer pockets-a whole new consumer segment detergent. GENERAL INFORMATION-
Head officeNirma House Ashram Road Ahmedabad – 380 009 Gujarat – India.
Soda ash plant details Investment of Rs.1,140 corers. C P CT : AA IY 650,000 TPA. 770 m3/hr capacity sea water plant 40 MSW captive co-generation. 10000 MT solid handling. Energy efficient technology from Netherlands
Soaps plant details Investment of Rs.200 corers. 30,00,000 soap pieces sold per day. Annual sales of Rs.500 corers. 20% market share. Second largest soap manufacturer. Four lines of 500 soaps per minute
Edible salt plant details
Asia’s largest salt works. Spread over 30,000 acres. Edible salt capacity of 288,000 TPA
Detergants 50,00,000 pieces sold per day. 38% market share. Largest detergent manufacturer
Financial performance Equity share capital 79.57 crores(mar 2011) Net profit 177.95 crores(mar 2011) VARIOUS STRATEGIES In 1969, dr. karsanbhai patel, a chemist at the Gujarat Government's Department of Mining and Geology manufactured phosphate free Synthetic Detergent Powder, and started selling it locally. The new yellow powder was priced at Rs. 3.50 per kg, at a time when HLL's Surf was priced at Rs 15. Soon, there was a huge demand for Nirma in Ruppur (Gujarat), Patel's hometown. He started packing the formulation in a 10x10ft room in his house. Patel named the powder as Nirma, after his daughter Nirupama. Patel was able to sell about 15-20 packets a day on his way to the office on bicycle, some 15 km away. By 1985, Nirma washing powder had become one of the most popular, household detergents in many parts of the country. By 1999, Nirma was a major consumer brand – offering a range of detergents, soaps and personal care products. In keeping with its philosophy of providing quality products at the best possible prices, Nirma brought in the latest technology for its manufacturing facilities at six locations in India. Nirma's success in the highly competitive soap and detergent market was attributed to its brand promotion efforts, which was complemented by its distribution reach and market penetration. Nirma's network consisted of about 400 distributors and over 2 million retail outlets across the country. This huge network enabled Nirma to make its products available to the smallest village.
Starting as a one-product, one-man outfit from a 100 sq ft (9.3 m2) room in 1969, Nirma became a very successful company within three decades. The company had multi-locational manufacturing facilities, and a broad product portfolio under an umbrella brand – Nirma. The company's mission to provide, "Better Products, Better Value, Better Living" contributed a great deal to its success. Nirma successfully countered competition from HLL and carved a niche for itself in the lowerend of the detergents and toilet soap market. The brand name became almost synonymous with low-priced detergents and toilet soaps. However, Nirma realized that it would have to launch products for the upper end of the market to retain its middle class consumers who would graduate to the upper end. The company launched toilet soaps for the premium segment. However, analysts felt that Nirma would not be able to repeat its success story in the premium segment. In 2000, Nirma had a 15% share in the toilet soap segment and more than 30% share in the detergent market. Aided by growth in volumes and commissioning of backward integration projects, Nirma's turnover for the year ended March 2000 increased by 17% over the previous fiscal, to Rs. 12.17 bn.
doc_716489604.docx