2. VISION AND MISSION STATEMENT
•Vision - Evolution is constant
•Mission - Tobe a part of consumer’s daily life by
giving them best value for money through well
researched and ever evolving excellent products
3. ABOUT RSPL
RSPL Limited (RSPL) is the flagship of the RSPL Group and is one
of the leading manufacturers and marketer of detergents in India in
the popular brand within the laundry care segment with its brand
“Ghadi”. RSPL was incorporated on June 22, 1988 as Shri
Mahadeo Soap Industries Private Limited.
On June 17, 2005, the company's name was changed to Rohit
Surfactants Private Limited following the merger of four group
companies, also engaged in the manufacture of detergent cake
and powder, with RSPL.
In 2008, the group underwent a restructuring, which resulted in the
detergent and leather business being consolidated in Rohit
Surfactants, while the real estate business of the group was
separated.
In 2011, the leather business of the company was also hived off
into a separate entity and the company was converted into a public
limited company from August 29, 2011 and was renamed as RSPL
Limited.
4. ABOUT RSPL……CONT…
The company is a closely held company held by the Gyanchandani
family of Kanpur.
The company has steadily expanded its operations over the years
and currently has 25 manufacturing units spread across India.
Besides, the company also has its own packaging units at Greater
Noida and Kanpur.
The company sells detergents in the economy segment under the
“Ghadi” brand, toilet soaps under the “Venus” brand and dish-wash
bars under the “Xpert” brand. RSPL has a large marketing set up
with over 3,300 exclusive distributors.
The company also has wind energy units in five states with a total
generation capacity of 50.1 MW.
5. HISTORY
In 1987, a year before Wheel was launched by HUL, without much attention
of media or public, Muralidhar and Bimal Kumar Gyanchandani launched
Ghari detergent in Kanpur, Uttar Pradesh. In 1988, Muralidhar and Bimal
Kumar incorporated Shri Mahadeo Soap Industries Pvt. Ltd. under which
they started manufacturing Ghari detergent. Eventually, Shri Mahadeo Soap
Industries Pvt. changed its name to Rohit Surfactants Private Limited
(RSPL) in June 2005.
It is said that Ghari was inspired by Nirma, which was launched in 1969 and
evicted HUL's Surf within four years of its launch to become the market
leader in 1987 having a market share of around 30%. Nirma was at its peak
when Ghari was launched in 1987. In 1988, HUL launched Wheel to take on
Nirma which snatched top spot from Nirma in 2000. Ghari had to compete
against two big players Wheel and Nirma since its launch. After 25 years of
its inception, it took the top spot in the detergent market in 2012.
7. EVOLUTION OF DETERGENT INDUSTRY IN INDIA
Detergent industry had its beginning in 1957. Swastik Oil Mills in Wadala, Mumbai,
was the first Indian factory to manufacture synthetic detergents. The evolution of
detergent powder industry is summarised in the table below keeping focus on Indian
subcontinent.
Year What happened
1930
German scientists develop synthetic detergents to overcome post-World War-I shortages in
key ingredients then used for soap, animal fat and vegetable oils. The other big advantage of
synthetic detergents was that they were better at washing clothes in 'hard' water. They were
also far better suited than soap for use by the textile industry.
1945-47 Detergents, specifically the brand Persil, enter post-War German morbid humour. Persilscheins was
the jokey shorthand for the de-Nazification certificates issued by Allied Powers to Germans.
1950s
Huge post-war expansion of the synthetic detergent industry in its key market, the US, and
the associated environmental problems. Sulphonates used in detergent to get the dirt of
clothes, were not biodegradable. Their release into water bodies lead to huge amounts of
foam being formed in lakes and rivers. Under public pressure, manufacturers switched to
biodegradable substances.
1957
The first Indian factory to manufacture synthetic detergents set up by Swastik Oil Mills
in Wadala, Mumbai. Even though key ingredients are imported, they still cost far less than
importing finished detergents.
1960s
HUL (then HLL) enters India accelerating the shift to detergents is persisting shortages of
vegetable oils, a key ingredient in soap. By the mid-60s large corporates like Tata Oil Mills
and Hindustan Lever establish themselves in the business. The latter even begins exporting
to Russia.
8. 1965-70
Since 1950, another key ingredient in detergents was phosphate chemicals, which is effective in washing clothes in
'hard' water. But they also caused 'eutrophication', a dramatic and excessive growth of plants in lakes and other water
bodies that uses up most of the oxygen, leading to the death of marine life like fish. Detergent makers in the US
started using non-phosphate chemicals in response to the criticism, though they fight against an outright ban.
1969 Nirma, HUL's future nemesis, is born.
1970s
Shortages in vegetable oils accelerate and so does the use of synthetic detergents. To promote their use among wary
soap-using consumers in rural India, companies like HUL perform plays and puppet shows at mandis. HUL also
introduces Rin Bar at about this time. Mindful of the need to conserve the use of vegetable oil, government classifies
synthetic detergents as a 'core' industry.
1974
Despite the expansion in synthetic detergents, the capacity of the Indian industry is still only 84,000 tonnes, far less
than the government-sanctioned capacity of 3.5 lakh tonnes. Queering the pitch, the government begins pondering
the liberalisation of licences, but only to the small-scale sector.
1975
Due to the West Asia oil crisis, prices of key petrochemicals skyrocket, by as much as 100%, forcing manufacturers
to raise prices of detergents. The price of Surf doubles in one year, causing outrage in Parliament against companies
like HUL. Such high raw material prices will persist through the 70s.
1975
Point, a detergent brand, achieves history by being the first product in this category launched by a sarkari factory, the
public-sector Government Soap Factory of Bangalore (which also makes Mysore Sandal soap). Soap Opera,
Mid- to Late-70s High detergent prices make soap manufacturers competitive, causing consumers to switch.
1983
25 years after the first domestic factory was established, synthetic detergents only manage a 25% market share of the
total fabric washing market. By comparison, the market shares in Thailand that time is 99% and in Kenya, 60%.
1985 Saea ade as lower-priced Nirma evicts HUL's Surf from the pole position in the detergents market.
1987
Unnoticed by the biggies, brothers Muralidhar and Bimal Kumar Gyanchandani launch Ghari, which will eventually
come to rival the two giants in market share.
1988
HUL introduces Wheel to take on Nirma. In its battle with Nirma, HUL will bring its massive marketing and
distribution muscle to bear.
2000s HUL wins the battle. Nirma falls to second place.
Early 2012 Ghari overtakes HUL.
Evolution of detergent industry in India
9. THE DESIGN SOLUTION
First and foremost the Brand Logo was tweaked. A bevel effect was rendered to it
along with a modern look. The Font and Colours were retained. However the black
colour was eliminated to simplify the logo. The fact that Ghari is a detergent brand was
reinforced by bringing the words ‘Deteregent Powder’ close to the logo and giving it the
logo colours thus forming a tight lockup.
10. WOW! DESIGN
A dipstick research conducted with the existing Ghari pack, showed that the
consumer did recognize the blue wave on the pack however they were not
happy with the rendition of the same. The Wave was given a more life-like
rendition, without those sharp edges in the existing pack. The same was
created by interspersing bands of different shades. The existing pack has the
wave running horizontally. The same was given a little tilt adding more action to
the pack; afterall a wave is supposed to be more dynamic and full of energy.
11. THE RESULT
The outcome was a new refreshed look for the
Brand, yet not losing out on the familiarity in the
minds of the consumer. A perfect example of where
‘Less is More’.
12. PRODUCT MANUFACTURED BY RSPL
Household Products
Ghadi Detergent Cake, Ghadi Detergent Powder,
Xpert Dish wash Bar, Xpert Ultra Gel (Liquid),
Uniwash Detergent Powder
Personal Care Products
Venus Toilet Soap
Hygiene Care Products
Pro-ease Sanitary Pads
Dairy Products
Namaste India
13. BRAND ANALYSIS AND STP
Ghari Detergent Brand Analysis
Parent Company
Rohit Surfuctants Private
Limited
Category Soap & Detergents
Sector FMCG
Tagline/ Slogan
Pehle istemaal kare, fir
vishwaas kare
USP
A low-priced detergent
which provides cleansing
within the budget of a lower-
middle class family
Ghari Detergent STP
Segment Detergents for
households
Target
Group Lower-middle class family
(Tier-4 & Tier-3 families)
Positioning
A detergent which
provides cleansing at
competitive prices
14. Strengths
1. Market leader in the tier-3 & tier-4
segment of detergent market in India
2. Strong reach to the rural consumer
3. The tagline ‘Pehle istemaal kare fir
wishwaas kare’ has struck a chord
amongst the price-sensitive mass
market
4. High push by retailers and high word-
of-mouth amongst consumers
5. Good branding through TVCs and
print ads
Weaknesses
1. Limited export market as compared to
international brands
2. Unable to completely penetrate in
premium segment because of image
Opportunities
1. Entered western &
southern India recently
where lies a huge market
opportunity
2. Further penetrate the rural
market by collaborating with
various NGOs
Threats
1. Low profit margins in
detergent sector
2.Threat from existing and
new players in the market
Ghari Detergent SWOT Analysis
15. GHARI DETERGENT
• The detergent brand was founded by
Muralidhar and Bimal Kumar Gyanchandani
in 1987.
• When Ghari was launched, market was
already dominated by big brands like Surf
and Nirma.
• Over the years since the launch of Ghari
detergent powder, till date there have
been introduction of plethora of brands
from biggies like HUL and P&G and many
local players.
• It came to limelight in late 2012 when it
surpassed HUL's wheel detergent and
grabbed top spot in terms of market
share.
• It took almost 25 years for Ghari to be
the market leader in detergent market.
16. XPERT DISH WASH BAR
• In the Rs 600cr. Dish wash market,Xpert
dish wash bar is a fast growing brand in
the North Indian market
• As against the conventional lime
variants it was launched in orange
variant
• The company wants to increase the
market share of the brand and become
the category leader
17. NAMASTE INDIA
• Namaste India Foods Pvt. Ltd. is an
Indian Dairy Company, the sister
concern of 3500 Cr.RSPL Ltd., is
committed to supply
pure milk and fresh milk products.
• Its a fully automated unit, at par with
international standards, is planning to
collect, process and pasteurize 4
lakh liters of milk per day.
• We have Collection Centers in one
thousand villages and will be extending
to 2000 villages in the upcoming two
years. In this way, we are planning to
supply pure and fresh milk to every
house, in every village and very soon,
in every city.
18. VENUS SOAP
• Venus soap is the another major
product launched by rspl
company
• It is the creamy bathing soap
with many fragrances like rose,
lemon etc.
19. PRO-EASE
Our aim is to help women break deep-
rooted gender and cultural barriers and
live a happier, healthier life.
Through thoughtfully designed sanitary
products, we intend to help women
embrace womanhood with a smile.
Our objective is to help them step out
into the world with confidence and
ensure that nothing stands in the way of
their success. Not even their Period!
20. KAPILA PASHU AHAAR
• Established in 1992, Kamdhenu Cattle
Feed Pvt. Ltd. has become a known
Manufacturer and Supplier of a high
quality range of Cattle Feed under the
brand name of KAPILA CATTLE FEED.
• have been processing unmatched quality
products processed from high grade
ingredients sourced from the trusted
vendors of the market.
• We maintain high level of hygiene
and cleanliness to ensure safe
consumption, purity as well as high
nutritional value of the offered
products.
21. MARKET SHARE
Ghadi : Market Share
Today, Ghari is the market leader
in the detergent industry, with a
market share of 17.3% and Wheel
is tagging behind closely at 16.9%.
Within the economy segment,
both Ghari and Wheel are priced
similar.
Tide is at present at the third
position with a market share of
13.5% and Nirma has less than 6%
market share.
Source: nextbigbrand.in
Segment
The detergent market in India is divided into
three segments
Premium, mid-range, and popular.
The premium segment comprises Ariel
and Surf;
The mid-range segment comprises Tide,
and Rin; and
The popular segment comprises Wheel,
Nirma and Ghari.
The market share of the detergents in the
premium segment is 15%, and that of the
mid-range and popular are 40% and 45%
respectively.
22. POSITIONING
Ghari targets housewives in small town and villages, who are extremely
value conscious buyers and willing to switch brands. The only USP is the
Value for Money proposition. Hence the brand must remain
approachable for the consumers.
For a brand which operates in the economy zone and yet clocks sales of
over Rs.2,000Cr. its very much a volume game and hence any drastic
change in the brand can be fatal. More so because it’s a brands for the
lower SECs, who might not welcome their brand going for a complete
relook, overnight. Also in the market in which it operates there is also
the risk of the new brand look being thought as counterfeit.
Hence WOW! Design strongly proposed a very subtle change in the
Brand Design which just crosses the threshold of consumer’s ability to
spot a change in the Brand.
23. BRANDING AND PROMOTION
Advertising and Promotion
RSPL spends 2% of sales for marketing and promotional activities. All advertisements are centred
on the tagline ‘Pahle istemal karein fir vishwaas karein’ (Use it and then believe it) which
encourages trial and prompts repeat purchase.
Ghari is for common man and usually it targets household wives. To live in that spirit Ghari brand
has avoided using any celebrity to endorse it unlike wheel (endorsed by Salman Khan), Rin
(Kajol), and Ariel oxybin (Kiran Bedi).
Ghari detergent has gone to advertise in train too. The first train campaign was launched in 2008
and was called the ‘Ghari Detergent Express’. That train campaign ran between Lucknow and
Guwahati for two months. Then it advertised in Pushpak Express and Swarna Jayanti Express.
Apart from advertisements in train, RSPL promotes Ghari through roadside shows, magic shows
and exhibitions in smaller towns and cities. The magic shows have been highly successful in
giving the brand a good visibility in cities like Jaipur, Indore, Kota, Alwar and Kanpur.
Brand recall
By name Ghari detergent, people immediately connect with the tagline ‘Pahle istemal karein fir
vishwaas karein’ which means, ‘Use it and then believe it’. Those who use Ghadi and come to
know about the credibility of the message it communicates through various advertisements,
would prefer to go for Ghari again.
24. DISTRIBUTED MARKETING BASE WITH STRONG DISTRIBUTION AND
MARKETING NETWORK AND LOW ADVERTISING & PROMOTION
(A&P) EXPENSE
RSPL has nearly 25 small manufacturing units& 6 wind power generation plants
spread across the country which enables it to undertake production near the
consumption centres and lower its cost of freight backed by a strong distribution
network.
RSPL has kept its advertising and promotion expenses (6%-7% of operating
income) lower than its peers (12-14%) as it relied more on print media to reach
out to its target customer base.
However, with increasing penetration of televisions, advertising spends on
television networks have been increasing for RSPL along with an overall
increase in advertising spending.
Nevertheless, the overall A&P spending remains significantly lower than its
peers.
25. Strategies of Ghari
Ghari followed Nirma’s path of aggressive pricing
The growth of Nirma in the seventies was not from market share gains within detergent powders; however,
it was from market expansion. The low price of Nirma brought an evolution among laundry soap users who
gradually switched from soap to detergent powder. Slowly detergent powders substituted laundry soaps
within overall fabric wash category. Ghari followed Nirma’s strategy of keeping low price and targeting
customers at the bottom of the market.
Regional Focus
Ghari did not have the financial power to beat giants like HUL and P&G. Focusing on Uttar Pradesh, its home
state, was a big advantage for Ghadi. The reason is attributed to the fact that Uttar Pradesh has a population
of 167 million, the highest among Indian states. It accounts for over 12% of the country’s FMCG sales.
In addition, the adjoining markets of Bihar, Madhya Pradesh and Punjab along with UP account for one third
of the total consumer products market. The strategic focus for Ghari was to capture adjoining markets after
capturing the massive market in Uttar Pradesh. Ghari was successful in capturing the adjoining markets over
a period of time.
Incentives to the Dealers
Compared to competitors who provided 5% profit margin, Ghari detergent provided a profit margin of 6-7%
to its dealers. This enabled Ghari to have a stronger dealer base to push sales while keeping its prices low.
Mobile application to track sales
Around April 2011 onwards, RSPL started using mobile phones to book sales and track distributor's positions
and sales for which it adopted a mobile application, ‘msales’. Msales helped RSPL’s sales force to take care of
the sales activity on the go and the data captured is pushed to its enterprise resource planning (ERP) system.
Msales is GPS enabled. So, it is possible to track the sales since the application is GPS-enabled. Earlier, it was
not possible to track sales on the go.
26. CHALLENGES
The dependence of the company on a single brand, Ghadi, for nearly 90%- 95% of its
revenue, competition from the organised and unorganised players and vulnerability to
volatility in the prices of the commodities like soda ash and LAB.
However, RSPL’s profitability is expected to moderate further in FY2019 primarily due
to the significant increase in the interest costs during the year owing to the continued
higher working capital borrowings and other term loans availed other than the loans
availed for the soda ash project.
RSPL has been able to undertake price increases at different intervals during the year
to partially offset the impact of the increase in the price of raw materials mainly Linear
Alkyl Benzene (LAB) during the year
High competition from organised and unorganised players in the economy segment:
o RSPL faces significant competition from unorganised players in the detergent market.
According to certain estimates, there are nearly 500 unorganised players in the
detergent market which results in significant competition in terms of the price points
in the highly price sensitive economy segment.
o Additionally, the organised players have also been aggressive in launching and
promoting the Rs. 10 Stock Keeping Units (SKUs) for detergent powders and detergent
bars. As a result, RSPL has been facing competition in the Rs.10 SKUs segment leading
to volume de-growth, though the 1kg packs have shown healthy growth.
27. FUTURE OUTLOOK
RSPL has plans to raise ~Rs. 1500 crore through an IPO by dilution of 10%
equity by the end of CY2019 to retire most of the project debt which would
lead to the improvement in the credit metrics of the company. The quantum
and timeliness of equity infusion will remain a key monitorable going
forward.
The benefit of backward integration from the soda ash project will start
accruing to the operating profits, though at net level the increased interest
costs will keep the cash accruals stable
The Outlook may be revised to Positive once the company is able to raise
funds through dilution of equity and/or material improvement in the cash
generation leading to improvement in the credit metrics of the company.
The outlook maybe revised to Negative if there is significant volume de-
growth or delay in ramping up of the capacity utilization of the soda ash
project leading to adverse impact on the cash flows and thus credit metrics
of the company.
Source: ICRA