After studying law I vectored towards journalism by accident and it's the only job I've done since. It's a job that has taken me on a private jet to Jaisalmer - where I wrote India's first feature on fractional ownership of business jets - to the badlands of west UP where India's sugar economy is inextricably now tied to politics. I'm a big fan of new business models and crafty entrepreneurs. Fortunately for me, there are plenty of those in Asia at the moment.
Chairman and MD, Pidilite
Rank in the Rich List: 34
Net Worth: $2.42 billion
The Big Challenge Faced in the Last Year: Keeping growth on track. A lot of categories that the company operates in are likely to mature
The Way Forward: Constantly looking out for new growth products. Pidilite has entered the construction chemicals sector, and its Dr Fixit brand is doing well
In 1954, when the late Balvant Parekh set up Pidilite, there was no easy way to sell synthetic glue; the industry used natural glues made of animal matter or starch. Synthetic adhesives were not widely known, and a few carpenters—the primary target group—had not even heard of the product. Madhukar Parekh, Balvant’s son and present chairman of Pidilite Industries, recalls that his father chose to enter the business because of the high entry barriers such as a manufacturing process that was difficult to replicate.
Over the next few decades, Balvant not only introduced a new product concept but also built a brand that became a successful industrial product and a household name across India. Pidilite Industries is currently valued at Rs 19,880 crore (as of September 16) and has 34 brands under its umbrella. In the past five years, the company has doubled its sales to Rs 3,878 crore with profits rising by 59 percent to Rs 468 crore. Fevicol alone brought in more than Rs 1,000 crore in sales last year.
In 2014, Pidilite has seen another round of aggressive price earnings expansion. Its market cap works out to an earnings multiple of 42—higher than that of FMCG leaders Hindustan Unilever and ITC. This is no mean achievement for a company that was worth Rs 60 crore when it listed in 1993.
But Balvant’s story does not start with Fevicol. He had been a trader in chemicals for several years with his business centered around Jacob Circle in South Mumbai. During the course of running this business, he met someone who had distribution rights for Hoechst, a German chemical giant, in India. A young and energetic Balvant was persuaded to join the distributorship while his uncle stayed back in the chemical trading business. He became the second-in-command in the distributorship and sold various products, gaining experience that was far more varied compared to his earlier business.
So, it was hardly a surprise that when Hoechst decided to set up its manufacturing facilities in India, thus ending the distributorship, Balvant set up his own enterprise in 1954, which evolved into modern-day Pidilite.
His first two products were synthetic glue and pigment emulsions that are used to dye textiles. “Those were boom years for textiles in India and getting into this sector seemed logical,” Madhukar explains. But the sector came with its challenges: Manufacturing pigment emulsions was difficult as the kneading process required a complex set of machines. So, Balvant innovated and made the kneaders himself. Selling synthetic glue—unknown among carpenters and wood-workers—proved to be a challenge too. And this required innovation of a different kind.
He sent his son Madhukar on a tour of the market and realised that carpenters worked hard at convincing customers about the designs they created. They carried catalogues with pictures of furniture they had designed when they visited customers. Realising that the carpenters could be wooed with something extra, Madhukar offered them Fevicol Design Ideas, a book with furniture designs. In 1971-72, he began to give it away for free and carpenters lapped it up in large numbers. Today, the book’s print run is in millions with even a digital version available. Around the same time, Fevicol sales crossed Rs 1 crore: A momentous occasion and a reflection of how far the business had come.
SELLING INNOVATION THROUGH SMART ADS