THE SPIRIT OF ENTERPRISE:DR. KARSANBHAI PATEL

Karsanbhai Patel – the man who shattered all the business theories, to rewrite new ones. He is the legendary behind the hugely successful brand, Nirma. He is the driving force behind a large number of companies and institutions in India under this banner.

BIRTH AND EARLY LIFE

Dr. Karsanbhai Khodidas Patel was born in 1945, into a farmer family from Ruppur, Mehsana, North Gujarat. At the age of 21, he completed his B.Sc in Chemistry. Karsanbhai started his career with the New Cotton Mills of the Lalbhai Group, in Ahmedabad, as a lab technician. He later joined the Geology and Mining Department of the State Government.

SABKI PASAND NIRMA

Karsanbhai started Nirma as an after-office business in the backyard of his house in 1969. The name came from his daughter Nirupama’s name. Nirma was a benchmark.

• The detergent was phosphate free.

• The packs were handmade.

• They were delivered at the doorstep by Karsanbhai, on his bicycle while going to his work place, which was 17 km from his home.

• They were sold for Rs. 3 per kg, which was one-third of the then least priced popular detergents.

• Even at this price, he managed to give a money back guarantee with every pack that was sold!

• The detergent was environment friendly too.

• The process of detergent production was labor intensive and this gave employment to a large number of people.

Also, the story of Nirma has become a classic marketing case study. Karsanbhai identified a massive market segment that was starving for a good-quality detergent at an affordable price. Nirma became a huge success. During that time, the domestic detergent market was limited only to the premium segment and there were very few companies, mainly the MNCs, which were into this business. And so, Karsanbhai could successfully target the lower and middle income groups.

THE JOURNEY CONTINUES

It was after three long years that Karsanbhai felt confident enough to quit his job for the further development of Nirma. He set up a shop at a small workshop in an Ahmedabad suburb. Later he said: “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.”
And within a decade, Nirma was the largest selling detergent in India. It gave the bigger established brands like Unilever and Procter & Gamble, a run for their money and soon occupied the top market share. In the 1980s, Nirma moved ahead of Surf, a detergent by HLL, a giant in the field.

After establishing its footprints in the economy-priced detergents, Nirma entered the premium segment, launching toilet soaps: Nirma bath & beauty soaps and a premium detergent, Super Nirma. The company also ventured into shampoo and toothpaste, but were not as successful. On the other hand, the edible salt Shudh is doing well.

Nirma beauty soap is one of the leading toilet soaps, behind Lifebuoy and Lux. Overall Nirma has a 20% market share in soap cakes and about 35% in detergents. The company got listed on the stock exchanges in the year 1994.

Today, Nirma has entered the neighboring countries’ markets as well. In the national market, Nirma’s soaps and detergents sell through two million retail outlets. In 2004, it expanded into pharma by acquiring an IV fluid factory in Ahmedabad. The company also acquired US based Searles Valley Minerals to become one of the top producers of soda ash in the world.
Karsanbhai’s two sons and his son-in-law are now at leading positions in the Nirma organization.

CORPORATE SOCIAL RESPONSIBILITY

Along with being a noted businessman, Karsanbhai is a philanthropist as well. He has established one of the premier institutions of higher learning in Gujarat, the Nirma University of Science & Technology in 2003. Apart from this, Nirma Education & Research Foundation (NERF) that came up in 1994, runs these various educational institutes. Nirma has also set up Nirma labs in 2004, which prepares aspiring entrepreneurs to face different business challenges effectively. Nirma also runs Nirma Memorial Trust, Nirma Foundation and Chanasma Ruppur Gram Vikas Trust as a part of their efforts of a socially responsible corporate citizen.

ACCOLADES

On this path to success, Karsanbhai has won himself many accolades, along with people’s acceptance and love.

• Padma Shri Award for the year 2010.
• In 2001, Karsanbhai was awarded an honorary doctorate by Florida Atlantic University.
• In 1990, the Federation of Association of Small Scale Industries of India (FASII), New Delhi, awarded him the ‘Udyog Ratna’.
• The Gujarat Chamber of Commerce has felicitated him as an ‘Outstanding Industrialist of the Eighties’.
• He has served twice as Chairman of the Development Council for Oils, Soaps and Detergents.

The company that started as a one-man-army, today employs more than 15000 people, has a turnover of more than $ 500 million, sales as high as 800000 tonnes and the man’s net worth as per Forbes in 2005 was $ 640 million.

Challenging established multinationals needs extreme courage and to win in the long run needs foresight and skills. Karsanbhai has fulfilled this challenge and he made the multinationals to follow Nirma and introduce substitutes such as Wheel. He is a man to be followed. He teaches us a lesson that entrepreneurs can build their empire on gut feeling too, rather than just following the classical patterns taught in business schools.

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