Financial Daily from THE HINDU group of publications
Saturday, Nov 05, 2005
Financial Daily from THE HINDU group of publications Saturday, Nov 05, 2005 |
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Corporate
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Outlook Marketing - Strategy Chemfab Alkalies seeks foreign partners for health products unit M Ramesh
Chennai , Nov. 4 CHEMFAB Alkalies Ltd is seeking foreign partners for its `life-sciences' division, which produces a range of health products such as sodium-free salt, carbohydrate-free sugar, membrane-filtered refined edible oil, and fat-removing alkaline water. The Chairman and Managing Director, Dr C.H. Krishnamurthy Rao, told Business Line that the company was talking to "two large international retail companies" for a tie-up. He added that different modes of alliance were being explored. For instance, the foreign partner could open a chain of retail outlets in India from where it could sell Chemfab's health products. Or, if necessary, the life-sciences division itself could be spun off into a joint venture. In any case, Dr Rao expects investments of around Rs 100 crore to go into the marketing effort for selling the health products. This would help the business grow to a size of around Rs 500 crore in the next three-four years, from practically nothing today. Sales of life-sciences division products in the current year is expected to touch Rs 1 crore, but Dr Rao said that the company currently has only one sales point - a custom-built container stationed at Vandalur near Chennai at the premises of Chemfab's associate company, Team. With only one outlet and only word-of-mouth advertisement, the sales have picked up "more than expected," he said. The first step is to start eight retail outlets in the current year in Chennai, locations of which are being identified. Second, Chemfab wants to enlist "some 20-30 housewives" who would sell these products from their homes, just as they do the products of multi-level marketing companies such as Amway. Dr Rao said that the efficacy of the products would itself be a good selling point. These products are designed to be health giving, yet tasty. For example, the human body needs no more than a teaspoonful of salt but Indians devour the tastemaker, ingesting too much sodium. Chemfab offers two alternatives - one that is entirely sodium-free and the other that contains 40 per cent sodium. Another example: producers of refined edible oils heat the oils to clarify them, killing several nutrients in the process. Chemfab uses membrane technology, instead. Dr Rao holds patents for `ultra filtration hollow fibre' membrane. These membranes are manufactured by another associate company of Chemfab called Membrane Technologies Ltd and the products are marketed worldwide by DuPont. Similarly, `alkaline water' - produced by electrolytically breaking water into acidic and alkaline parts - neutralises paunch-causing acidic wastes in the body. These products have been duly certified by authorities in Singapore. (Dr Rao is a Singapore-based NRI and runs a research company called Dr Rao Holdings Pte Ltd there.) According to Dr Rao, international suitors are also keen on marketing these products abroad. Meanwhile, Chemfab Alkalies has repaid high-cost loans of Rs 12 crore to IDBI, borrowing the same amount from SBI. In the bargain, the company's bottomline will be enriched by at least Rs 1 crore.
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