The slowdown has not been a deterrent for stationery products manufacturer Camlin. It has targetted 25 per cent growth a year for the next two years, even as it aims to become a Rs 500 crore company. Dilip Dandekar, the company’s chairman and managing director, tells Sapna Agarwal how he plans to go about this task. Excerpts:
What’s your roadmap for the current financial year?
Last financial year was a good year, as we posted a net profit growth of 59 per cent and sales growth of 32 per cent despite tough market conditions. This financial year, we are targeting a sales growth of 20-25 per cent growth for the next two years to become a Rs 500 crore company.
Towards this end, we have increased our capacities by 50 per cent and our manpower by 40 per cent. We now have 800 distributors and 250 field representatives. In terms of area coverage, we are now focussing on Tier II and Tier III towns. Every year, we will reach out to at least 100 new towns and build our distribution network accordingly.
Today the urban-rural break-up is 60:40. Sixty per cent of our revenues come from the urban markets versus 40 per cent from rural areas. However, the rural market growth at 40 per cent per year is outpacing urban market growth at 20 per cent. The reason for the higher growth from rural towns is the growing investments in schools and townships that is taking place there, whereas the metros are already saturated.
But, analysts say you have been losing out on brand equity over the last 3-4 years?
We have tremendous brand equity, but we did not have the technology and right products. Now as we invest in technology, infrastructure and distribution network, we are seeing the results. In the last one year we have invested Rs 28 crore in our Jammu plant. We now have a 50 per cent increase in capacity. We did Rs 10 crore production from this plant this financial year and are targetting Rs 50 crore from sales from it in 2009-10, equal to 15 per cent of our overall sales.
There is talk about you planning to diversify your operations...
We are moving into the pre-school education arena. Our first pre-school will begin in July in Andheri with 100 students. This is a pilot project and if we succeed we will roll it out nationally in the next one to two years.
Would the Camel re-invent itself to appeal to children who want to have fun?
The product range that we sell has a serious appeal. This is our brand equity and children value that. We don’t see any advantage in having the fun appeal, as our products are focussed on education.