Patanjali Ayurved
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In brief
The Times of India, March 16, 2016
Namrata Singh & Partha Sinha
At Patanjali Ayurved's manufacturing facility in Haridwar, there is brisk activity as cartons of freshly made products are being loaded onto trucks to be dispatched to stores across India. With the financial year nearing a close, an official pointed explained, all hands are on the deck to help the company achieve its targeted turnover of Rs 5,000 crore.
For a manufacturing company set up about 10 years ago, achieving a Rs 5,000-crore turnover is not easy . However, for Patanjali Ayurved, which is breaking conventional marketing norms, sales are inching up month on month. Sources in the know believe Patanjali could have clocked monthly sales of around Rs 600-700 crore in January and February , which means Baba Ramdev's baby could become a billiondollar entity, with its annualized turnover expected to cross the Rs 7,000-crore mark before the end of fiscal 2017.
Which means, Patanjali could become the fifth largest FMCG company in the country , after Hindustan Unilever, ITC, Nestle India and Britannia Industries.This would bring it well ahead of traditional FMCG players like Dabur, Godrej Consumer Products and Marico.
In an exclusive interview to TOI at the company's headquarters, Acharya Balkrishna, MD, Patanjali Ayurved, said in the current fiscal, as of early-March, the company's turnover has already crossed Rs 4,500-crore and is cruising at a monthly rate of about Rs 500-550 crore. “Our target is to go be yond Rs 500 crore a month.Because we are also making plans for future expansion, we are moving in line with the target,“ he said.
“We may even reach Rs 600 crore a month mark -that will give us an annual turnover of approximately Rs 7,000 crore,“ said Balkrishna.
Even at the current level of Rs 4,500-crore turnover, Patanjali has paced ahead of oral care leader Colgate-Palmolive (India), challenging it which its `Dant Kanti' toothpaste.
Given that Patanjali has been grabbing eyeballs through its advertising, industry experts believe the company could soon even reach Rs 10,000 crore turnover, which would make it as big as ITC's non-tobacco FMCG sales.But Balkrishna said that would take time. “We have to plan, right from procurement of raw materials to processing to manufacturing and marketing. We work on a single channel right from the farmer to the end consumer and that is the real reason why our quality and costs are under control. There are very few companies in the world which may be following such a system,“ he said.
Revenue collection: 2015-16
The Times of India, April 27, 2016
“Around 5 crore people are searching for Patanjali on the internet,“ said Ramdev.“We see huge potential in that. Apart from online push, we will also focus on traditional retail and open many Patanjali mega-stores across the country .“
In 2015-16, the Haridwarbased company raked in revenues of Rs 5,000 crore, up from around Rs 400 crore in 2011-12 and Rs 2,000 crore in 2014-15. Products such as ghee (Rs 700 crore) and toothpaste (Rs 300 crore) emerged as bestsellers in its FMCG portfolio which has around 300 products.
In contrast, HUL and Colgate had revenues of around Rs 30,170 crore and Rs 4,211 crore in 2014-15 respectively.
Acharya Balkrishna, MD of Patanjali Ayurved, said the company is exploring the possibility of exports of Patanjali products. It has created four verticals -homecare, natural cosmetics and healthcare, natural food and beverages and health drinks -to help expand its distribution network. “We are also digitizing around 1,200 Patanjali Chikitsalayas that will now be interconnected online,“ Balkrishna, who owns around 94% stake in the company , said. Ramdev claimed Patanjali Ayurved is the highest tax payer in Uttarakhand and pays around hundreds of crore of rupees in taxes.
“Many MNCs are trying to hurt Patanjali's prospects with several strategies such as encouraging fake product testing,“ Ramdev said. “But at the same time, top-level executives from companies such as Unilever and P&G, who have patriotic feelings are joining us. All our products are about patriotism and purity ."
Chinks in the armour
Misleading advertisements, 2016
May 27, 2016
Patanjali faces flak from ASCI for misleading ads
Baba Ramdev's Patanjali Ayurved has come under the scanner of Indian advertising watchdog Advertising Standard Council of India (ASCI) for several misleading ads. ASCI ruled that ads by the Haridwar-based FMCG company "unfairly denigrates" other products in the market. Patanjali took flak for ads of hair oil, mustard oil and washing powders.
Patanjali Kesh Kanti Natural Hair Cleanser & Oil's advertisement's claim, "mineral oil is carcinogenic in nature and may cause cancer" was false and misleading by ambiguity and by gross exaggeration," said ASCI. The company's Kachi Ghani Mustard Oil advertisement's claim that most of the other edible refined oils and mustard oils are made using neurotoxin Hexagon solvent extraction process, as many companies mix cheap palm oil in mustard oil, to make profits at the cost of consumers' health, was also not substantiated and was misleading, ASCI added. Similarly, for its Herbal Washing Powder, Cake and Dishwash Bar, the claim of "herbal washing powder, cake and dishwash bar" was not substantiated with data regarding which herbal ingredients in the product provide the cleaning benefit and was deemed misleading by ASCI.
Apart from Patanjali, ASCI upheld complaints against companies such as, ITC, Kalyan Jewellers, Johnson & Johnson and HUL, among others. Johnson & Johnson's advertising of Benadryl DR was pulled up. The advertisement's claim, "sookhi khansi ko dobara aane se roke" (stops dry cough from reoccurring) is an absolute claim and was not substantiated. Also, the claim does not convey a "suppressive" action and is misleading by exaggeration, said ASCI.
FMCG major ITC's advertising claim for Aashirvaad Multigrain Atta that said, "India's No. 1 Atta", is misleading by ambiguity as the claim was for the mother brand Aashirvaad whereas the advertised product was only one variant — Aashirvaad Atta with multigrains. Also, the disclaimer was not as per Nielsen criteria, the watchdog said.
For Kalyan Jewellers, the advertisement claim, "Kalyan Jewellers is the biggest jewellery showroom in the world", was not substantiated with comparative data of other similar showrooms and was misleading by exaggeration, said ASCI.
In March, ASCI's Consumer Complaints Council (CCC) upheld complaints against 90 out of 156 advertisements. Out of 90 advertisements against which complaints were upheld, 32 belonged to the education category, 30 in the healthcare & personal care category, followed by 10 in the food & beverages category and 18 advertisements from other categories.
Food park in Nagpur
Officer opposing concessional land transferred
In 2017, the Maharashtra government made a decision to give a 75% discount on land for a food park in Nagpur, which eventually was awarded to Baba Ramdev's Patanjali Ayurveda Ltd. But documents accessed through RTI show that the decision was not uncontested. A senior bureaucrat, then principal secretary of financial reforms, Bijay Kumar, had raised concerns in writing about the basis of the price waiver.
Three weeks after Kumar questioned the financial cal culations behind the price reduction, he was transferred on April 29„ 2016. The transfer came less than a year-and-ahalf into his posting while the usual tenure is at least three years. Kumar, who is currently principal secretary (agriculture) was unavailable for comment.
Chief minister Devendra Fadnavis who heads the Maharashtra Airport Development Corporation (MADC) board which cleared the allotment, told TOI that the entire process was transparent and the allotment followed open bids. He also said Kumar's transfer was routine and he had been given a posting of his choice.
The board relied on a sub committee, headed by urban development secretary Nitin Kareer, to suggest the land price for a park in the Mihan (Multi-Modal International Hub Airport) area in Nagpur.Kumar was a member of this sub-committee, which also included then MIDC CEO Bhushan Gagrani and then VC and MD of MADC Vishwas Patil.
Although MADC's rate in the area was Rs 1 crore per acre (4,046 sqm), the committee recommended a base price of Rs 25 lakh per acre for a food park. In August 2016, sole bidder Patanjali Ayurveda Ltd was awarded 230 acres of the land, paying Rs 58.63 crore for a 66-year lease.
