Dr. KarsanbhaiKhodidas Patel “Rags to Riches”
Early Life • Karsanbhai Khodidas Patel was born in 1944 in Northern Gujurat to a farmer family • He finished his B.Sc. in Chemistry at age 21 • Thereafter, he joined New Cotton Mills in Ahmedabad as a lab technician • He later joined the Geology and Mining Department of the State of Gujurat
Beginnings of Nirma • In 1969, while still employed, Karsanbhai started making handmade quality detergent in his home as a means to earn some side income • Naming it Nirma after his daughter, Nirupama, it was run as a one-man enterprise utilizing indigenous technology for product creation • He would bicycle through the local neighborhoods to sell the detergent on the way to work
Beginnings of Nirma • Most detergents at the time were priced at around Rs. 13/kg. Nirma was priced at Rs. 3/kg • Nirma was an instant success in the local neighborhoods and offered great value as a high quality product for a low price • After three years of reaping profits, Karsanbhai left his job and set up a small workshop in a suburb of Ahmedabad
Nirma Revolution • Nirma revolutionized the detergent market which had been dominated by big multi-national, billion dollar companies such as Hindustan Lever and Proctor & Gamble • Effectively targeted low-income families – a large class of society that had been ignored by established companies • Within a decade, Nirma became the largest selling detergent in India
Nirma Expansion • After establishing its leadership in economy-priced detergents, Nirma’s foray into the premium brand segment for soap and detergents was equally successful • Nirma’s annual sales touch 800,000 tones, making it one of the largest volume sales with a single brand name in the world
Nirma and Society • Nirma was made of an innovative formula which was phosphate-free and deemed environmentally friendly. • Since the process of manufacturing Nirma detergent was labour intensive, they became a leading employer in India. • Currently, Nirma employs over 14,000 individuals
Nirma Shudh Salt Nirma Beauty Soap Super Nirma Detergent Nima Sandal
Perfection of the 4 P’s Rs. 3/kg Competition at Rs. 13/kg Price Product Cornerstones of Marketing Promotion Same advertisement jingle for 30+ years Place Local villages
Nirma Market Share • Nirma is the largest detergent brand with a market share of 38% and the second largest toilet soap brand in India with a market share of 20% • Nirma’s annual turnover is Rs. 2500 crore
Dr. K.K. Patel in the Present • Currently, Dr. Karsanbhai Patel is worth over USD $640 million (Rs. 2880 crore) • Served as a Chairman for two terms to the Government of India’s Development Council for soaps and detergents and as President of Gujarat Detergent Manufacturers Association.
Dr. K.K. Patel in the Present • Dr. Karsanbhai Patel is a recipient of various awards and accolades, including: • Udyog Ratna by Federation of Association of Small-Scale Industries of Gujarat, New Delhi. • Outstanding Industrialist of Eighties by Gujarat Chamber of Commerce and Industry, Ahmedabad (in 1990). • Gujarat Businessman Award in 1998 by Gujarat Chamber of Commerce and Industry, Ahmedabad. • Excellence in Corporate Governance Award by Rotary International District 2000.
Philanthropic Efforts • Started the Nirma Education and Research Foundation to oversee an Institute of Technology (train leading engineers) and an Institute of Management (business). • NirmaLabs education project was aimed at training and incubating entrepreneurs.
Summary • K.K. Patel started making handmade detergent from his house • Sold about 15 – 20 packets at Rs. 3/kg (around Rs. 50/day) • Eventually, he left his job seeing an opportunity to make it a massive enterprise • Currently, the company is the leading seller of detergents in India and is trying to become an international player K.K. Patel came from nothing and made something of himself. Truly a “Rags to Riches” story.
“ It all started as a means to earn side income, and at that stage, I had never imagined this kind of success. ” Accidental Fortune
Starting a Business “ The lack of any such precedent in my family made the venture fraught with fear of failure. But farmers from North Gujarat are known for their spirit of enterprise. ”