Business Excellence At Emami

Overview

The Emami Group revenues, from a humble beginning, have grown manifolds to touch USD 1.48 billion today.

The secret of this aggressive growth: out-operating competitors.

This outperformance has been the result of a number of attributes.
Products customised around market needs.
Superior price-value proposition.
Prudent product positioning.
Distinctive recall.
Superior operating mechanics (supply chain and distribution).

The result is that Emami products and services enhance customer value.

At the heart of this ability to deliver superior customer value in a consistent way has been the Group’s focus on operational innovation. Reflected in new ways of doing the same things, and doing new things.

Importantly, business excellence is different from operational improvement, which usually refers to achieving high performance via existing modes of operation: ensuring that work is done as it ought to be to reduce errors, costs and delays but without fundamentally changing how that work gets accomplished.

At the Emami Group, operational innovation translates into new ways of filling orders, developing products, providing customer service and virtually every single enterprise activity. This consistent seeking of new ways of doing routine things has over the years helped Emami to transform the Group’s culture, strategy and human resource.

Result: sustained outperformance.

Initiatives

At the Emami Group, our obsession with excellence and the road less travelled has rippled across our enterprise.

Diversification:

The Emami Group, established in the 70s, has diversified its presence across varied sectors like FMCG, newsprint and packaging boards manufacturing, edible oil and biodiesel, real estate, hospitals, ballpoint tip manufacturing, retail, pharmacy chain, cement, solar power and contemporary art. This extensive presence has helped the Group address some core economic sectors, leverage established market insights, de-risk from an excessive dependence on select sectors and generate multiple revenue engines.

Serving national priorities:

The Emami Group is not just a product play; it enjoys multi-decade experience in some of the most dynamic business spaces that makes it a vibrant national play – what is good for India is good for Emami Group. The result is that Emami Group does not just participate in national progress; it also contributes to it. While the group’s FMCG business addresses the daily personal and hygiene needs of people, its healthcare services business serves public wellbeing; its cement business catalyzes national infrastructure development; its newsprint manufacture reinforces the information needs of the world’s largest democracy.

Leadership:

The Emami Group does not play for size; it focuses on leadership. The Group enjoys a leadership position across several product categories and niches. Three Emami Limited brands possess unassailable market leadership - Navratna Oil (61 percent-plus in the cool oil category), BoroPlus (77 percent of all antiseptic creams sold in India) and Mentho Plus Balm, and Zandu Balm in the pain relief category (55 percent-plus market share).

Acquisition-led growth:

It would have been easy for an enterprising Emami Group to remain content with its stellar achievements. However, it pushed the frontiers to identify suitable acquisition opportunities, stitch the best-fit deals and integrate the target into its core business and focus on its growth. This route has enabled the Group to shrink an essential resource – time – in its bid to capitalise on acquisition-led growth. Following the historic takeover of Zandu Pharmaceuticals in 2008, over the past five years, the Emami Group has made as many as 3 acquisitions that include the buyout of the 50 year old legendary Rasoi brand of edible oils, the purchase of Kesh King in the Ayurvedic hair care category and the buyout of Australia based Company Fravin in the natural and organic personal care product category.


Innovation:

While a large number of companies engage launching me-too products, the Emami Group focuses on creating an unmistakable . differentiator, whether in the form of product attributes or service delivery.

For instance, in 2005, Emami Limited created history by launching Fair and Handsome, India’s first fairness cream for men. This fairness cream for men represented unexplored opportunity in a tropical country. In doing so, Emami created a new market segment following the understanding that 30% of fairness cream users were men. Based on this reality, Fair and Handsome revenues touched around Rs 40 crore in the first year and continued to lead the category with the lion’s share of the market till today.

In yet another case, Emami Group’s CRI, a specialized company that creates and designs pen tips for some of the leading writing instrument brands of the world, is the first and only pen tip manufacturing company in India to be awarded the highly-recognized ISO 9001-2000 certification. It holds the 3rd position in its category on a global scale. Equipped with Swiss-engineered rotary transfer machines, the production facilities create a symphony between cutting-edge technology and craftsmanship.

State-of-the-art innovation centre:

Most FMCG companies engage in negligible research. Emami Group invested in a state-of-the-art multi-storied research centre (30,000 sq. ft) in Kolkata for its FMCG business. This robust infrastructure focuses on product development, product processing science, competitive intelligence cell, analytical development, perfumery science, quality assurance and packaging and development. More importantly, it reconciles generations of hands-on domain knowledge and cutting-edge practices.

Process and raw material resource engineering:

Take a well-established category like talc. While several companies operating in this space exploited well-worn formulae, Emami transformed the game by introducing cool talc (Navratna Cool Talc brand). The company extended its product by launching Navratna Cool Talc Active Deo pan-India, ideal for the summer, through aggressive placements across more than 80,000 outlets in all major Indian towns. Even as entrenched players did not alter their established formulae, Emami dared to introduce mint and camphor into its product resulting in a cooling effect and sensorial rejuvenation.

Packaging innovation:

Even as consumers preferred Emami products, the Group graduated its conventional packaging with the objective to enhance packaging attractiveness and shelf offtake. Besides, Emami transformed the use of conventional packaging resources in an unconventional way, resulting in cost-effectiveness without compromising product attributes. For instance, the introduction of the innovative sachet packaging in oil category for Navratna revolutionized the market dynamics; Mentho Plus Balm and Zandu Balm graduated to small packs through the adoption of modern molding technologies; the 3D design pack of Navratna Cool Talc made it possible for consumers to examine the product in a convenient way; the Vasocare petroleum jelly pack with an in-built flip top cap represented packaging innovation. This focus on packaging innovation optimized the use of raw material and environment concerns.

Celebrity endorsements and in-film placements:

The Emami Group innovated the enlistment of celebrities for product endorsements. This helped Emami’s appeal extend from urban appeal to rural acceptance. Emami’s brands continue to be endorsed by prominent national celebrities like Amitabh Bachchan, Shah Rukh Khan, Kareena Kapoor, Chiranjeevi, Mahesh Babu, Suriya, Bipasha Basu, Malaika Arora Khan, Govinda, Sourav Ganguly, Sania Mirza, Sunny Deol, Madhuri Dixit, Virendra Sehwag, Sachin Tendulkar, Saina Nehwal, Milkha Singh, Hrithik Roshan, Sonakshi Sinha, Shruti Haasan and Yami Gautam, among others.

Pursuing ‘smart’ growth

The Emami Group has always been at the forefront of pursuing strategic acquisition-driven growth. Three instances elaborate this point.

The Group (through Emami Agrotech) acquired ‘Rasoi’, a trusted heritage Vanaspati brand with a rich legacy of more than 50 years. The acquisition was an attractive addition to the Company’s existing portfolio of edible oil brands like ‘Emami Healthy & Tasty’ and ‘Himani Best Choice’. This acquisition was in line with the Group’s vision to emerge among the three leading edible oil brands in India.

Emami Group acquired Zandu for reasons for strategic compatibility. “Bada bottle Zandu dena,” is a common consumer request for India’s best loved pain reliever. This Zandu brand enjoys a century’s presence and is respected for headache, body ache and cold remedies. As one of the biggest pain management brands, the product enjoys coverage across more than 16 lakh retail outlets across India, which is still growing.

Emami Limited also acquired the business of Kesh King and forayed into the world of Ayurvedic hair and scalp care. It represented one of the largest deals in the segment in recent times. Marking a foray into the fast-growing ayurvedic hair care segment for the first time, the acquisition paves the way for the company to enter products like shampoos, conditioners and capsules under the Kesh King brand. Kesh King is ranked among the top ayurvedic hair oils in India with an estimated market share of 35%.

Unconventional thinking. Unprecedented results.