The year of scaling up for Proklean Tech

The bearded 64-year-old Sivaram Pillai talks in measured tones. His answers are clear and crisp, even when he talks about his venture Proklean Technologies Pvt Ltd missing its revenue target for three years back.

“We didn’t hit those numbers,” he says, but is confident that this year will be one of scaling up for Chennai-based Proklean, which makes probiotic products to replace chemical products in a variety of industries, including leather and textile processing.

Sivaram says “the actions we have taken in the last 3-4 months, we believe the current year will be a quantum jump in the numbers.” Proklean has hired a senior professional with years of experience in the chemical industry to head its Sales efforts. It has strengthened its Sales and Marketing teams. It has added more products to its range for the textile processing industry and plans to add a few more, besides entering one more industry segment this year.

Now, says Sivaram, Proklean has more products for its customers and will also address industrial sectors, which gives it the confidence that this year will see its performance showing a marked improvement. Proklean has an exclusive licence from SCD Probiotics, USA, for using its certified mother culture to manufacture and market the probiotic products. All the products are natural, non-toxic and fully bio-degradable that replace certain chemicals being used in industrial processes, according to Sivaram.

The company was founded in 2009 by Sivaram, a Ph.D in biochemistry, B Chandrasekhar, 55, and Vishwadeep Kuila, 51, both engineers and MBAs from IIM-Ahmedabad

The agreement with SCD Probiotics was that Proklean would make the products here and the US company would sell those for the leather industry globally, while Proklean would sell it in the Indian market. For the textiles processing industry, Proklean would sell the products in India and globally too. “We are selling in Bangladesh, the Philippines, Sri Lanka and we are starting Indonesia,” says Vishwadeep, Director, Proklean.

Proklean has raised ₹6 crore in two rounds of funding, from the Chennai Angels, a network of angel investors, and Infuse Ventures, an early-stage venture capital fund set up by the Centre for Innovation Incubation and Entrepreneurship at the IIM-Ahmedabad, which invests in sustainability and clean energy sectors.

According to Sivaram, Proklean is looking to raise ₹10 crore in a fresh round of funding, in which the existing investors and shareholders have agreed to put in money. The money will be used for research and development and product development; sales and marketing; and, to improve the production facility. It will set up a separate R&D facility; right now it has a small laboratory in its factory for research activity.

Proklean’s production facility in a Chennai suburb has 120 tonnes capacity a month, of which only 60 per cent is being used. With new products being launched, the company expects the capacity to be fully used by the middle of this year and it will need to increase capacity in the second half of the year to meet the demand, according to Sivaram. It had hoped to hit ₹10 crore in revenue at least three years back, but fell short of that number. It didn’t scale up the way it had planned to and the sales cycle took much longer than anticipated. The last two years, it ended up with nearly ₹6 crore in income, but is targeting ₹14 crore in sales for 2017-18. The company was affected by the floods in December 2015 due to which production was hit for 45 days and it took more than six months to recover fully. That hit the company’s performance in the last two years.

According to Sivaram, Proklean now has four products for the textiles industry from only one earlier and is in the process of adding two more products for this sector. The company is increasing its presence in overseas markets. This year, it plans to sell in Africa, West Asia, Malaysia and Vietnam, for the textiles processing sector. Proklean will launch products for the paper and pulp industry this year.

“We have filed for patents. We have also done a few mill trials. We are ready with the first product for the paper industry, which will help reduce the usage of chemicals or with the same chemical consumption, increase the brightness of paper,” says Sivaram. The offering for the paper industry is: increase the brightness, reduce pollution levels. This product too will be exported directly by Proklean and through SCD for the Americas.

Sivaram says Proklean’s products can be used in a variety of industries. “If you see the range of products we are making, we are replacing chemical surfactants with non-toxic, bio-degradable surfactant-like formulations. So, wherever chemical surfactants are used, we have an opportunity to develop a replacement,” he adds.

With the expansion and new products, Sivaram expects the company to break even this year. He also feels the fresh round of funding will see the company through for another 18-24 months, by which time its turnover would have significantly increased. It would also have more products in the market. It will then be time for the company to take a look at its business plan, maybe go in for a significantly larger fund raise or opt for a strategic relationship.

Vishwadeep says Proklean has got over the stage where it had to educate customers on using probiotics and it is now getting calls from various textiles hubs.

What are the challenges as they push for a faster growth? Three years ago it was one of credibility and establishing the product. “Today, it is only a question of how well we are able to scale up our sales and marketing effort, how do we reach new geographies,” says Sivaram.

On the cost savings for customers, Sivaram says Proklean’s products, apart from being competitively priced, help bring down water consumption by 20 per cent, reduce pollution by 30 per cent and compress process time by 10 per cent. The saving for the customer also comes from the better quality of their produce.

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