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CS Rajiv Bajaj
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1Bajaj
http://www.csrajivbajaj.com
Date: 9thJune, 2015
2. www.csrajivbajaj.com
M P Ramachandran,
Promoter Chairman And Managing Director, Jyothy
Laboratories
Henkel was all set to leave the country and go back. We told them our
country has a good civilization. That’s why we gave them the option of
picking up 26% in Jyothy after five years. So don’t talk business only in
terms of money. There is something which works with emotions as well.
EARLY LIFE:
Moothedath Panjan Ramachandran also known as MP Ramachandran is the promoter chairman and managing
director of Jyothy laboratories, India’s fifth largest FMCG (fast moving consumer goods) business.A post
graduate in financial management from the University of Mumbai, Ramachandran in 1983 started Jyothy
laboratories, also his daughter’s name with Rs 40,000. The company which witnessed huge investments from
foreign investors like Baring and Actis has a market capitalization in excess of USD 350 million today.
CAREER PROFILE:
Prior to setting up Jyothy Laboratories, Ramachandaran who worked as an accountant has always been known
for his famous monotonous dressing style- a white shirt and white trousers which he never tires from wearing.
And it is his fascination for white that ‘Ujala’ came into being. Since he washed his own clothes he knew exactly
what the consumer would want from a fabric whitener. He strived hard to get a better shade of white until he got
the perfect dazzle.
The brand offer of ‘chaar boondo waala’ communicated its key promise of ease of use in a simple telegraphic
manner. The brand leveraged the four drops story across all media though television remained the bedrock of
the marketing efforts.Today Ujala commands a 72% share of the fabric whitener market. The brand has annual
turnover of about Rs.300 crores.
In the last few years Jyothi has tried diversifying into detergents, Ujala washing powder, Ujala stiff and shine
and Ujala technobright, dishwash Exo and mosquito repellents Maxo but competition in these categories has
made the going tough. The company’s ‘Exo’ brand of dishwash though has managed to overtake ‘Vim’ in Kerala.
Jyothy’s reach in rural India is tremendous and about 70 percent of its sales come from rural India. For Henkel
its reverse as 70 percent of its sales is from urban India. Jyothy hopes to capitalize on this and cross pollinate
across networks to have a larger footprint.
Many observers warned that Ramachandran’s emotional streak could later become his weakness. Recently
Jyothy acquired 50.9 percent in the beleaguered Henkel India for Rs.118 crore in a deal that attracted criticism
but the latter was convinced that it was right move for a nearly there decade old company.
By acquiring Henkel India, Jyothy which has been so far a debt free company has taken Rs 400 crore as debt on
his books. Though the FMCG Company has always followed a conservative outlook , acquiring Henkel was not
an impulse decision. Though Henkel is a loss making company but the brands are very strong as per audit.
Ramachandran believes it was interplay of national sentiment and emotion of brotherhood that helped Jyothy
clinched the recent acquisition of Henkel India.
Jyothy has a good portfolio fit with Henkel which has brands like Pril, Margo, Henko and Fa. Ramachandran’s
next move is to start manufacturing Henkel’s brands in Jyothy’s 28 manufacturing facilities which are spread
across India. But it has a tough competitor to guard -Hindustan Unilever which would watch it’s every move.
The company is already orchestrating a new branding strategy. Their priority will be Henko champion and Mr
White which are the largest contributors to Henkel’s business. The company is looking to do away with what it
calls frivolous administrative costs.
With acquisitions and mergers being a part of business foreplay one thing is clear that the 65-year-old
Ramachandaran would never sell any of his brands to which he is emotionally attached and the company which
he built from scratch. He says, “So far we have not sold any of our brands. It is to do with emotions. Ujala and
some of our home grown entrepreneurs can possibly teach multi nationals a few lessons on how to view
advertising as an investment not an expense.”
More than 5,000 people work at Jyothy, including his daughter, for whom the company is named. She has also
joined the board of the company and looks after the company's sales, marketing and branding activities.Jyothy
Labs has generated employment mainly in rural India of which 60 per cent are women. From a proprietary
concern making a single brand, Jyothy has become a multibrand company manufacturing and marketing fabric
whiteners, mosquito coils, soaps, detergents and incense sticks.