The Nirma Story

THE ROAD TO SUCCESS Contd...

FIGURE II
MARKET SHARES (DETERGENTS): 1999-2000

Source: ISTMA

The two new plants were completed ahead of schedule and at a much lower cost than estimated. The second phase of the Baroda plant was completed six months ahead of schedule and at a cost of Rs.2.5 bn as against the original estimated cost of Rs. 2.8 bn. The Bhavnagar plant was completed in a record time of two years at a cost of Rs.9.85 bn as against the original estimated cost of Rs. 10.36 bn. The staff strength at this plant was a low 500. In contrast, Tata's Chemical's plant, which was about twice the capacity, employed 10 times the number of people.

The Baroda plant produced 65000 tpa of N-Paraffin for Linear Alkyl Benzene (LAB) and Synthetic detergents.

The technology for this plant was sourced from UOP Inter Amercana, USA. The Bhavnagar plant could produce 4,20,000 tpa of soda ash.

The Akzo Dry Lime technology used in this plant was sourced from Akzo Nobel Engineering, Holland. The plant had 108 km of salt bunds, which would help it to produce vacuum iodised salt in the future. Said Patel, �We have a capacity of producing three lakh tonnes of pure salt. No one, except Tata Salt, has a similar plant in the country.�
Nirma also curtailed its costs of distribution by eliminating intermediaries. The product went directly from the factory to the distributor. Hiren K Patel (Hiren), CMD, Nirma Consumer Care Ltd. explained, �An order is placed and the truck leaves straightaway. It is like a current account. We send the stock, they send the money.� The company maintained depots in states like Andhra Pradesh, Tamil Nadu and southern Karnataka, as getting stocks to these areas was sometimes difficult. In states like Uttar Pradesh and Madhya Pradesh, stocks were delivered directly from the plants.

In March 2000, in a further cost reduction exercise, Nirma opted for in-house printing and packaging by acquiring Kisan Industries at Moriya, near Ahmedabad. Nirma hoped this would improve the quality of its packaging.

� Brand Wars - YES

Nirma also had innovative marketing strategies. In the mid-nineties, Nirma successfully extended its brand to other product categories like premium detergents (Nirma Super Washing Powder and Detergent Cake), premium toilet soaps (Nirma Premium, Nima Sandal, Nirma Lime Fresh). It followed its original marketing and pricing strategies in the economy segment as well as in the premium segment. In 2000, the company entered the hair care market with Nirma Shikakai, Nirma Beauty Shampoo, and Nirma Toothpaste.