It was an early December morning in 2013. Bharat Puri and his wife Alka, who were vacationing at Fort Lauderdale in Florida, were seated on a beach, discussing plans for the last ten years of his working life. He was also thinking of moving to India and there was an opportunity. Madhukar Parekh, chairman and managing director (MD) of Pidilite, the largest manufacturer of adhesives and industrial chemicals in India, had offered Puri the post of the first non-family head of the company. Parekh, son of the late founder Balvant Parekh, would take on the role of executive chairman.
The Parekhs wanted to take the company global and were scouting for professional talent. Enter Puri, who was president, global chocolate, gum and candy for Mondelēz International, based out of Zurich. (Earlier, as head of Cadbury India, which was later acquired by Kraft Foods in 2010 and split into two companies—Kraft and Mondelēz—he knew the local FMCG market and had successfully led the company through a crisis in 2003, when, in a few instances, worms were found in the milk bars.)
Not surprisingly, Puri, who had been an independent director on the board of Pidilite since 2008, took the call to join Pidilite. “I told myself: Here is an opportunity to take a good homegrown company to the next level. Can I make it a world class company where I can leave behind a legacy?” Puri, 55, tells Forbes India at his Andheri office on a rainy June day. And, in April 2015, he became the first professional managing director of the Mumbai-based Pidilite.
So far, the legacy seems to be shaping well. For the year ended March 31, 2016, the company recorded revenues of Rs 5,369.45 crore, a year-on-year increase of 11 percent; net profit went up by 47 percent to Rs 755 crore and operating margins stood at around 19 percent.
This growth, sustained at a CAGR of 16 percent over the last 5 years at Pidilite, is the result of a clear three-pronged focus—on brand-building, on the spirit of innovation and on maintaining strong relationships with customers. Simply put, Puri has inherited a strategy that works—one he has to continue to employ and build on.
How it works: The company identifies underserved markets and provides them with a brand; the first-mover approach typically results in them becoming a pioneer, and often leader, in most of the categories they operate in. Building the brand early is key because it helps their products define or become synonymous with their category. After all, adhesive does equal Fevicol in most Indian households. And it all comes down to their ads. “Look at their pride in their advertising that they even put it on the cover of their annual report once,” laughs Piyush Pandey, executive chairman and creative director, Ogilvy & Mather (India and South Asia), and a long-time associate of the Parekhs.
The veteran adman first worked with Pidilite in 1982, but the company’s association with the agency started in the early ’70s. Then, the focus was largely on trade advertising. At that time, the MD of Ogilvy & Mather was PN Sarma, who, along with Balvant Parekh, designed the elephant logo for Fevicol—it was for B2B purposes. It was only in the late ’80s that they decided to transform Pidilite into a consumer-facing brand (today, 85 percent of its revenues comes from the consumer business). The need was mass media advertising and that is when Pandey stepped in.
For the first commercial ad he created for Pidilite in the late ’80s, Pandey says the brief was to show a ‘strong bond’. He experimented with the concept, but was short of money, so he did the voiceover himself “and the chorus was given by Ila Arun’s theatre group, all for free,” he says. Once the ad spot was shot, he presented it to Balvant and Madhukar Parekh. They loved the film, but felt that it suits Fevicol better, and not Fevitite, for which it was originally shot. (Fevitite is a variant meant for commercial use.) Pandey was given the financial support needed to reshoot the advertisement. The rest, and ‘Dum laga ke haisha’, is now history.
Ultimately, it’s “peace of mind for consumers”, says Puri. “The consumer reassurance is seeing the Fevicol dabba (container). That’s the power of the brand.”
This belief also manifests in their decision to promote M-Seal, bought for Rs 10 crore from the Mahindras in 2000. Pidilite even allowed Pandey to create a 70-second advertisement for it. Reason: The management was convinced about the potential of the brand and has managed to grow it 15 times over its original value.
Puri’s experience with brands, then, will prove crucial. “Bharat [Puri] has a very good knowledge of brands, not just from the advertising perspective, but also from a trade, marketing, distribution and sales standpoint, and this is probably the reason he has been so successful with companies that value brands, be it Asian Paints, Cadbury or Pidilite,” says Vijay Bhat, who worked with Ogilvy & Mather for 21 years, and met Puri in 1993 when he was working for Asian Paints.
But it isn’t just about the advertising. The product is at the heart of it, constantly getting innovated in conversation with—who else—the consumer.
For instance, in 2010, Pidilite’s research and development team found a huge demand from the market for a glue which could stick metals and beads on to fabrics. To create the right product, Pidilite’s team worked with zardosi karigars in places like Surat, Delhi and Mumbai. Today, Fevicryl No Stitch Fabric Glue, is not just a fast-selling product in India, but is also exported globally. Puri says he hasn’t seen a competitor yet.