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‘R&D, international marketing, pollution control have been the thrust’

Formokem Industries, a dyestuffs manufacturing company in the SSI, has bagged five DMAI awards for development of indigenous technology and process for manufacturing dyestuffs, pigments, etc, for excellent performance in exports, for successful introduction of new products in the international market by a small scale unit, and for excellent performance in pollution control. For a small scale unit, these are important achievements, and a reflection of the strategies that the company is following. In an exclusive interview with Reena Mital, Mr Madhu Maheshwari, chairman, Formokem (I) Corporation, speaks at length about the strategic plans of the company, and the urgent need for the same.

You have won five DMAI awards for very important achievements. How did you manage this?

Over the last few years, we have made concerted efforts towards developing and introducing new products in the international market. We realised that continuing in the commodity products would not help us survive in the long run. Especially as China today is becoming a major player not just in disperse dyes, but is venturing quickly into the whole range of dyestuffs, and posing very stiff price competition to the Indian industry.

Our main thrust has been on research and development, international marketing and pollution control. We are an ISO certified company. For a small unit, our investment in R&D is fairly high, around half a percent of our turnover, which not many SSI units have. This has helped us in catering to the very specific requirements of our customers. In fact, our emphasis has been on manufacturing tailor-made products for our customers, and building long term relations with them. This means that we had to ensure the best quality, the best processes, the best business practices, transparency, and timely deliveries. And we have been able to cater to the requirements of our customers successfully.

What are the kind of processes and indigenous technology that you have developed?

The European manufacturers are today moving into fairly sophisticated products, but manufacturing costs in these countries are fairly high. Realising this, we decided to develop indigenous technology for a number of products successfully. This required a lot of R&D work for three years. Initially, we marketed the products in small quantities, response to which was excellent, and large orders have now started flowing in.

We are constantly studying the new products that the MNCs are delivering in the international market, and we strictly follow these developments.

What are the kind of marketing strategies that you have evolved?

Proving ourselves in the international market was not an easy task, but we have succeeded in this endeavour. For our tailor-made products, we deal directly with our customers, and do not involve merchant exporters at any stage. This has helped us understand their needs better, and also helps us serve them better. We have had long term relationships with our clients, which we have further built upon, and I can say, that to a fairly large extent, we get our orders for the whole year in advance. Besides, in case of tailor-made products, there is not as much pressure, and your relationship with your customers tends to be for longer durations. I meet all my customers once in 45-60 days, to understand their requirements.

Around 80 per cent of our products are for the leather industry, and 20 per cent for the textile industry. We very closely monitor sales of our products, and are in a position to rectify any drop in sales of leather dyes, by then pushing the sales of textile dyes. My motto is to have a growth valuewise each year. Besides, we have gone into new markets too.

What are the pollution control norms that you follow, and how important are these in the present scenario?

Pollution control has assumed immense significance today, and no industry or business can flout these norms. We realised this early in our operations, and felt it was imperative to fulfill this social responsibility. We have set up an ETP, and given it to an agency to operate, but we keep a very close vigil on its working. Very frequently, we draw random samples of the treated effluent, and send it to the Textiles Committee for testing. All parameters - BOD, COD levels, metal component, etc, are well within the MPCB norms. We bear a cost of around Rs 8-9 lakh per annum on the running of the ETP, but that is a necessity that cannot be done away with. We have primary, secondary and tertiary treatment at the ETP, and reuse the treated water to clean floors, etc. For solid waste treatment, we have a contract with Bayer, which has its own incinerator in the area.

It has been recommended time and again that the Indian dyestuffs manufacturers should become suppliers to the MNCs. Are you planning any such move?

We are already supplying to one MNC. As regards a tie-up, a lot of factors will have to be accounted for if we plan to have a tie up, the most important being servicing our already existing export markets. We are open to a tie-up, but need to address a number of issues.