Rs 15,000 to a Rs 1,100 crore empire: How CavinKare's CK Ranganathan took on MNCs

Discussion in 'Jokes' started by g3sudha, Jan 26, 2012.

  1. g3sudha

    g3sudha IL Hall of Fame

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    CK Ranganathan's story is the stuff dreams are made of. With Rs 15,000 in seed money in Tamil Nadu's Cuddalore town, the CMD of CavinKare took on multinationals and eventually came to run an Rs 1,100 crore empire. Known as the 'father of sachets' in the Indian FMCG domain, Ranganathan or CKR, as he's fondly called, realised how value-conscious Indian consumers were much before the competition. From salt to shampoos, selling sachets brought him success. In a tete-a-tete with CD, CKR talks about dilemmas, downturns, demergers and dashboards. Excerpts:

    What's the biggest challenge you've ever faced?

    In 1993, we were a small company and Manmohan Singh was the finance minister . He withdrew concessions on excise duties for small companies. That brought us into direct competition with MNCs. The dilemma before me was if I should sell off the company or turn the company professional. I decided to do the latter by hiring top talent from the IIMs. It paid off and from that year, we grew exponentially.

    What do people want?

    It has to be a good environment to work with. They want the company to do well and offer them good career growth.

    One defining bet you made that paid off for you...

    Investing in R&D beyond our capability in 1997. We ran our operations out of a small rented place and invested Rs 4 crore in R&D , twice as much as our Rs 2 crore profit then. That stood me in good stead as I was able to produce good quality products down the line.

    And one bet that didn't pay off...

    In 2008, we acquired a beverage company in Tamil Nadu for Rs 30 crore. It was a small company that made the 'Maa ' brand of fruit drinks. It was doing very well and we were able to expand it to Rs 85 crore. So we thought of merging the brand with our own distribution network . That was a big mistake. We found that as a stand-alone brand, relationships with key outlets of the brand were much higher than when it was being sold with our other products. So the brand lost market share and sales. So we demerged it last year, and again the cycle has turned.

    Did the slowdown change your thinking?

    Not at all. Whenever there's a downturn, I go on introspection mode. What can we do better and how can we do it? In a slowdown , first you have to create opportunities and then seize it.

    How has your role changed over the years?

    It has become complex. The role changes each year. I personally sat on the machines packing sachets, went to the market to buy material, went from village to village on bicycle as a salesman . That was a very good foundation and gave me connectivity with the grassroots. Today, I'm sitting in a posh office with division heads, empowering them and making them passionate about what they do.

    Which established notions of management do you challenge?

    The one that says you need deep pockets to compete with MNCs. All you require are big ideas and execution talent.

    Which other Indian leader whom you've personally met do you admire and why?

    It's NR Narayana Murty. I like his simplicity and the values he has been able to instill in Infosys. He certainly comes across as an ethical leader.

    How will the challenges be different in the next decade for your company?

    The challenges will be far more global. There will be more multinational companies and ideas will come to India at a much faster rate. So the cycle will get reduced.

    How can we manage the India versus Bharat growth parity?

    The average per capita has gone up in both places. While India is making room for modern retail, there is pressure on foods in Bharat. Here, the government should do well by investing in infrastructure and modernising agriculture.

  2. lavii

    lavii Gold IL'ite

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    wow..thanks for the share..motivating
    1 person likes this.

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