Sleep is going to be the next big business, vouches K. Madhavan, Managing Director, Peps Industries.

He can hardly go wrong, as he himself has spent many sleepless nights driving his spring-mattress venture from a turnover of Rs 4 crore to over Rs 100 crore in the past six years.

“I’m so bullish on sleep business not just because we are into it. Given the stress we all are in life, I believe not many will get to sleep for the prescribed eight hours a day,” he says. The conviction that people must enjoy a good sleep has helped Peps scale new heights.

Having worked as a professional for 30 years, it was not an easy decision for Madhavan to begin a business on his own. He started his career in 1976 as a production superintendent and rose to the ranks of general manager in Kurlon.

The urge to do something different in the sleep business inspired Madhavan to join hands with two of his friends — G. Shankar Ram and P. Manjunath — to embark on his entrepreneurial venture in 2006.

The search for a manufacturing unit led them to a sick unit in Coimbatore. The unit was owned jointly by an Indian and a Dubai-based businessman.

TURNAROUND

Recalling that first meeting in Bangalore, Shankar Ram, Joint Managing Director of Peps, says the sellers were ready to dispose of the asset, as they were piling on debt every day.

Hard bargaining bought down the price from Rs 4.5 crore for the unit to Rs 3.22 crore. After sealing the deal, a study was done to understand what went wrong with the unit despite having tied up with well-known mattress company Restonic Matress Corporation of New York.

Spring mattress was then a new concept. It was also concluded that the spring mattress, which was successful in developed countries, could not be sold in India without modification, says Madhavan.

Providing an analogy, he said, “Look at the success of pizza, a foreign food, in India. It has been modified to suit Indian taste. We now have masala and chilli pizzas.”

Greater emphasis was given to rework the product, price and positioning to bring Restonic quality to Indian market.

The company now has offerings from Rs 10,000 going up to a few lakhs. Apart from Coimbatore, it has units in Pune and Delhi to tap the northern and western markets. Peps produces 10,000 spring mattresses a month — its nearest rival churns out 3,500 pieces monthly.

The branded-mattress market in India is valued at Rs 2,000 crore. With growing affluence, it has the potential to touch Rs 10,000 crore in three to five years. The spring-mattress segment, which is growing at 35-40 per cent a year, is valued at Rs 200 crore, Madhavan said.

Shankar Ram said: “One of the major reasons for the success of Peps is the quality of people we have. We employ about 250 people who have been with us for a long time now.”

Lack of a standard bed size and transport have been the key challenges for the branded-mattress industry, which has been growing at 35-40 per cent a year. Peps plans to save the soaring transport cost by setting up units at many locations. Having covered the north, south and west regions, it is now exploring the option of putting up a manufacturing unit in the east. With the size of bedrooms shrinking, the cots are made in odd sizes and to make a mattress to suit to these demands is going to be a big challenge, Shankar Ram says.

PEPPY NAME

Does a sleep business need such a peppy name? When the company was bought over there were suggestions to change the name, but it was turned down, says Madhavan.

“We told our brand advisors to give a suitable word for the acronym and they gave us ‘perfect explanation to peaceful sleep,’” he said. Not many would have dreamt that one can make money by making others sleep well.

>suresh.iyengar@thehindu.co.in

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