Infusing Aroma

“Our greatest strength is our product quality and innovation. We believe in offering the best to our customers and in the finest quality possible, which gives us an upper edge against our competitors. While providing the best quality products in the market, we have been able to keep the price at a standard market rate and we have been part of India’s prayers for seven decades now,” shares Arjun Ranga, Managing Director, Cycle Pure Agarbathies, during an interaction…

How is the FMCG industry performing over the years?

The FMCG industry is huge and is very dynamic. If we take the example of the agarbatti industry in particular, it has been growing many folds since the past few years and it has touched a revenue of `965 crore in FY18. States like Tamil Nadu, Karnataka, Uttar Pradesh, and Maharashtra are showing excellent consumption patterns. Although the industry is largely unorganized, it is flourishing at rapid speed with lot of emerging opportunities. Many new regional players have entered in this space in last couple of years. It is one of the most vibrant cottage industries and we have the scope of providing major employment opportunities especially in the rural part of India.

What are your strategies to create a prominent brand position?

Our greatest strength is our product quality and innovation. We believe in offering the best to our customers and in the finest quality possible, which gives us an upper edge against our competitors. While providing the best quality products in the market, we have been able to keep the price at a standard market rate and we have been part of India’s prayers for seven decades now. We also boast a very strong distribution network, which helps us in servicing our customers better. The challenge for any FMCG company is to make their product available to its consumer. With our strong distribution network, we have been able to achieve that goal substantially. As a company, we are very conscious towards the environment, we are the only Carbon Neutral certified agarbatti manufacturers in India. With that, we have been able to neutralize our carbon footprint from production to store.

What are the complexities involved in your line of business?

Being the leader in the segment, we face the challenge from smaller players who are duplicating the products in various regions. Of course, these duplicated products lack quality. So our challenge is to make our product available and eliminate the need for duplication altogether. At a larger scale, the challenge is to ensure product quality over decades. But we look at it as an opportunity to innovate and stand out from the crowd. At an industry level, it is a very unorganized market, and the challenge is always to bring everyone under regulations and ensure safety & quality norms. The industry itself works with a lot of rural population and ensuring that the raw material reaches them and the process is smooth thereafter is challenging. All India Agarbatti Manufacturing Associations (AIAMA) is working with a lot of small and large players to set industry standards.

This is a family business. How difficult has it been for you to carry on the legacy and still bring in your own individual contribution towards growth?

It was an extremely seamless transition, and right from my childhood, I've observed my family in this industry. The learning of the industry and learning to understand people came naturally to all of us. However, we had to be qualified for the job and learn the tactical parts of it. I had gone abroad for my higher studies and gained a few years of work experience over there. When I returned to the family business, I took my time understanding a smaller part of the business and then went into managing the organization. There have been no great challenges, but cultural change, understanding our organizational behavior are some of the things we faced and worked on consistently to be where we are today. However, the ethos remains the same from great grandfather to this generation. That made it really easy for all of us to understand the decisions and the functioning of this organization.

Kindly enlighten us on the entire value chain that goes into making these products.

We have adopted a very robust mechanism in our production process. We have a cottage industry model which includes clusters where women from rural areas are engaged in rolling, manufacturing and packaging the products. After the preliminary production, we get the agarbatties back in our factories in respective regions where we add fragrance and do an intense quality check followed by packaging. We also ensure that the raw material we source are FSC certified. With GST in place, we have also strengthened our supply chain and upgraded few of our warehousing units to manufacturing units. Our warehouse and distribution arrangements ensure delivery in every nook & corner of the country in the best condition.

You have been diversifying your product portfolio off late. How are your various SKUs performing?

Very early, our organization realized the need for diversification. An organization can only thrive on innovation and diversification. The idea of a great lifestyle or culture is constantly changing and so has to our products. We have diversified our puja line extensively. Recently we have introduced three new products – Om Shanti Chandan Tika, Om Shanti Pure Puja Oil and Om Shanti Pure Cow Ghee Diya. These products are the result of innovation and responding to changing needs of our consumers. These products are convenient and highly userfriendly, which make them perfect for everyone to use. While demand of agarbatti and home worship products is constantly increasing in Maharashtra, UP, West Bengal and Gujrat, the quality product consumption is strong in Tamil Nadu, Karnataka and Kerala region. Keeping in mind the consumption pattern, we have also innovated region-specific products for some parts of the country, which are doing exceedingly well.

How crucial is the supply chain for your business and how do you manage that?

We function in an FMCG industry. Hence, supply chain is crucial for our distribution network. The organization has worked hard to create this network of distributors. The way forward from here had to be to make our distribution network extremely smooth. Technology has allowed us to create a customized network with each of our distributors. Cycle Pure has recently integrated an IOT based Sales Force Analytics Platform, which allows its employees to monitor processes on their handheld Devices. This App has facilitated Cycle Pure in meeting their delivery targets exponentially. We will continue to upgrade and ensure that our supply chain management is extremely smooth.

How is the e-commerce channel working for your line of business? How are you planning to take the omni-channel route?

Integration of online and offline is the future. As mentioned earlier, we would want to be available in any platform that you look out for. Our website has products ranging from Agarbatties, to Puja Packs, carefully designed for all occasions. It is a one-stop solution for all products under which we are already available in all formats of retail and have created a strong presence in e-commerce platforms as well. We have our website and a mobile-based application Pure Puja app, which provides instant solution to all the puja needs. We will continue to innovate and be available anywhere our consumers are looking for our products.

What goes into packaging design?

During our initial days, my grandfather was the pioneer in bringing innovation in packaging.
While all the companies used tin box for packaging, my grandfather introduced cardboard packaging. His aim was to provide our customers with value for money. He focused on enhancing the quality of the products. At present, the packaging material we use are all Forest Stewardship Council (FSC) board certified. The raw materials are strictly sourced from a regrown forest and not from a virgin forest as we are very conscious as an organization. Our product packaging is aligned with our brand ethos. With our packaging, we ensure that the quality of the product is intact. Both the internal and external wrapping is done with great care and due diligence. Our packaging process is mostly labor intensive, over the years with trial & error method, we have realized that manual packaging is much more efficient than machine packaging.

How do you drive the spirits of employees to achieve the desired results?

We have a lot of activities internally for our employees. We have our internal communication team Sampark ensuring that our employees are energized and motivated. We have activities like Ranga Samskuthika Milana (RSM 2018), Stepathlon, NR Antakshari, we also have gala celebrations for Ganesh puja, Independence Day, Republic Day, etc. We also have annual NRPL – Sports event (Cricket Tournament). So all together, we celebrate every important day together. We are a 70-year old organisation and we have many employees who are working with us for decades. We take pride in the fact that we understand people and understand their strengths. Employees are given freedom in taking decisions. We are confident this helps boost their confidence, skill and encourages them to do better.

What are your growth strategies ahead?

We are amplifying our existing strong distribution network in the country. After GST, we have been able to convert numerous stocking locations into manufacturing units. In the pilot plan, we are converting these units in 6 places. We have started two new plants – Koval Patti and Gingi in Tamil Nadu. We have also recently installed a new manufacturing plant in Ambala, Punjab, which should be up and running soon. In 1948, my grandfather, N Ranga Rao, started the company and within a year, he researched and realised that to be successful in this business, you need three key things: A differentiated product, a brand, and access to the market. Keeping up with the same philosophy and continuing the legacy, our goal is to ensure that when each and every person in the country thinks about prayer and spirituality, they think of Cycle Pure Agarbathies.