IIPM : EXECUTIVE EDUCATION Nirma’s Hiren Patel has the same instincts as his father, says SAVREEN GADHOKE
Google ‘Hiren Patel’ and you are unlikely to find more than a few links. Search using more key words and there are only a handful of articles that have his reference. That’s the low profile that Hiren maintains, despite being in charge of the Rs.25 billion consumer-care giant, Nirma, along with his brother, Rakesh. Agrees Dipankar Roy, Regional Director, FICCI (Ahmedabad), “He is not very flamboyant and is totally entrenched in his culture. He believes in doing more and talking less. Hiren is a soft-spoken, young, dynamic leader who believes in action.”
For those who know him, he’s in the mould of his father. In his younger days; Karsanbhai started as a small-time chemist at Gujarat’s Department of Mining & Geology, prepared washing powder in his backyard, and started selling 20 packets a day on a bicycle while returning from office. Hiren may emulate his father more over time. When he was older; Karsanbhai took on the might of Unilever when he launched Nirma, which originated from his daughter name, Nirupama. Reminisces Harish Bijoor, CEO, Harish Bijoor Consults, “Nirma was established as a home-grown business with a unique consumer proposition.”
But it was under Hiren’s leadership that the brand reached a new level. From being touted as a value-for-money detergent manufacturer, Nirma made the transition to a premium products maker. For example, Hiren played a key-role in acquiring the India manufacturing, marketing & distribution rights of global beauty care soap, Camay, in 2002. Globally, Camay is owned by P&G Home Products. Call it far-sightedness or sheer instincts, this move increased revenue channels as competition in the soap & detergent market became cut-throat.
While launching two premium variants of Camay, Milk Cream and Saffron, in 2002, Hiren disclosed that he would position the brands in the skin care segment to give them a broader perspective, & price them lower than competitors. He hoped Camay would be able to do well this time, referring to the fact that P&G had earlier failed to reposition the brand in the premium segment.
Even as Nirma has gone forward to acquire a premium image, it has strived to strengthen its backward integration initiatives. On November 27, 2007, it acquired the US-based natural soda ash manufacturer, Searles Valley Minerals. for over $200 million. An official statement said: “The acquisition would enable the company to raise soda ash capacity to more than 2 million tonnes a year, placing it among the world’s top seven producers.” Nirma’s scrip price spiraled, closing at Rs.220.05 on the day, an impressive 7% higher than the previous day’s close. According to news reports, the move gives Nirma an access to low-cost raw material, apart from an entry into newer markets.
Like his father, who created a new market for detergents, Hiren has tried to do the same. When he re-launched Nirma Shudh salt in 2002, he said that the “salt will be a distinct business. We aim to be a major foods player within the next two years. Be it a product or segment, Nirma believes in creating markets.” However, many analysts believe that diversification is not Hiren’s, or Nirma’s, cup of tea. They maintain that each time the group entered new categories, it was unable to make an impact.
For instance, Camay has a miniscule share in the marketplace. The salt business is still quite small as a proportion of the group’s overall turnover. It’s only in the bread-n-butter business of soaps and detergents that the group is doing well. According to the latest report by Centre for Monitoring Indian Economy, Nirma commands a 20% market share in the detergent powder segment. The company recorded consolidated net profits of Rs.1.15 billion and net sales of Rs.22.9 billion in 2006-07.
In addition, there’s a question mark on the management capabilities of the Patel brothers, Hiren and Rakesh. Critics claim that they have been unable to make the shift from being a family-managed firm to professionally-run. An analyst at FICCI, who started his career at Nirma, says, “I felt that they lacked professionalism and were conservative. But, of course, they are hard working. And whatever may be their successes and failures, they take it on their own shoulders.”
Also, Hirenbhai, as he is fondly called within the organisation, has managed to strike an emotive chord with his employees. “Once an employee committed a grave mistake because of which the company incurred losses. Hirenbhai took control of the situation, and made sure the matter was not leaked publicly. And, in a calm manner, he explained the repercussions of such mistakes to the employee. The idea was that the individual realises his folly and does not repeat it again,” recalls a current employee.
Adds the same employee, “Hirenbhai knows how to take care of people. It is his care and the individual importance he bestows on employees that has enabled him to motivate them. No wonder, in Nirma, all employees share a long-term relationship with the organization.” And Roy of FICCI adds, “Hiren is a soft-spoken, young, and dynamic leader who believes in action.” Maybe, these are the qualities that have worked in his favour. Whether Hiren emulates the successes of his father or not, the fact remains that the MD of Nirma Consumer Care lives in a world that’s defined by one mantra – take Nirma to newer heights.
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