Brand-building is a must for this eco-friendly company if it is to take on the transnationals.

By Rakhi Mazumdar

Their's is a new paradigm in marketing disinfectants: take a deep swig of the product while cold-calling a potential consumer. And gently explain that Arpita Agro's neem-based Nimyle is bio-degradable, non-toxic--and a disinfectant surface-cleaner too. That's exactly the brief Joydeep Majumdar, his younger brother Sudeep, and Haimanti Dhir--who founded Arpita Agro--give their marketing team 5 years ago.

By piggybacking on the age-old properties of the neem tree to tap the growing market for environment-friendly household products, Arpita Agro's revenues touched Rs 2.50 crore last year, with net profits of Rs 22 lakh. In November, 1996, the company applied to the Patents Office, Mumbai, to register its two flagship brands, Nimyle (which is made out of aza, or azadirachtin, an active ingredient of the neem seed extract), and Nimit, a liquid mosquito and insect repellent spray (which is made from the active ingredient of the neem leaf extract, nimbin).

Next year, by when the patents are expected to be granted, Arpita Agro's second factory will have been commissioned at Thakurpukur, near Calcutta, at a cost of Rs 70 lakh, which will make a range of skin-care products for the export market too. Meanwhile, Arpita Agro will soon launch a neem-based bath soap, Nimbath, and a skin cream, Nimsafe, for which it has also applied for a patent.

Claims Joydeep Majumdar, 40, Managing Director, Arpita Agro: "We are on our way to becoming a full-fledged Fast Moving Consumer Goods (FMCG) company," adding: "I had always felt strongly about the tremendous harm being done to the environment because of the rampant use of chemicals, detergents, and disinfectants." Then a real-estate developer, he got a chance to do something about it in 1992, while talking to his childhood friend, Haimanti Dhir, who had a doctorate in botanical sciences from Calcutta University. That's when the duo decided to get into the business of eco-friendly products.

In 1993, Arpita Agro was set up by Majumdar--who roped in his younger brother, Sudeep--and Dhir. Says Dhir: "After trying our hand at natural vitamin-creation, we settled on neem, impressed by its vast array of natural properties." After two years of research, she developed Nimyle, which rhymes with phenyl, the most commonly-used household surface-cleaner in the country. While the market for phenyl is estimated at Rs 700 crore--largely dominated by the unorganised sector--this byproduct of benzene is carcinogenic. Says A. Sivakumaran, 30, Senior Product Manager, Henkel, whose Brisk brand of surface-cleaners is non-carcinogenic: "Henkel is not interested in phenyl products since they are not bio-degradable, and are carcinogenic in nature."

Arpita Agro's competition in the organised sector comes from the Rs 393-crore Reckitt & Colman India's (RCI) Lizol, which now faces stiff competition from the Rs 8,574.95-crore Hindustan Lever Ltd's (hll's) Domex. Says B.P. Shrikent, 52, General Manager (Corporate Affairs), rci: "Nimyle is a competitor and we cannot ignore it. Moreover, being a neem-based natural product, it should appeal to Indian consumers."

Then, Dhir explored neem's anti-feedant and repellent properties to launch Nimit. With environmental norms becoming more stringent, the Rs 20-crore repellents market is expected to grow five-fold by 2000. In 1994, with 2 products in hand, Arpita Agro set up a 12,000-square feet factory at Poilan, an industrial area about 20 km away from Calcutta, with a capacity to manufacture 2 lakh litres of Nimyle and 1 lakh litres of Nimit per month.

The cost of the plant, Rs 50 lakh, was taken out of Majumdar's savings from his 10 years in the real estate market. He complains: "The first question we were asked every time we approached the institutions for funds was: do you have a (time-) proven technology? And that, when there was hardly any financial support to prove ourselves and our product."

With inadequate funds, Arpita Agro had to go slow on expanding its market. It has, thus, not strayed far away from home. On the back of a 300-strong distribution network, Nimyle and Nimit--which accounted for 60 and 40 per cent, respectively, of Arpita Agro's Rs 2.50-crore turnover in 1997-98--are available in, apart from West Bengal, the adjoining states of Bihar and Orissa. Says Majumdar: "We are not in a position to stretch our supply-lines. Thus, we have had to keep our operations tight and move slowly, one state at a time." Arpita Agro only recently launched its products in Maharashtra (February, 1998) and Uttar Pradesh (May, 1998). And it was only this year that the company got a Rs 1-crore working capital and term-loan from the State Bank of India.

For all the constraints, Arpita Agro's products are doing well in East India, its core market. Says Mitali Sen, 52, a Calcutta-based housewife: "I have been using Nimyle and Nimit for almost a year now. It is very effective, and not poisonous. But it doesn't get much publicity on tv, which is a pity since it is better than any of the other synthetic mats or disinfectants." Another problem: Arpita Agro's distribution network is skewed towards kirana stores. Thus, its products are not available in most of the departmental stores, which attract the kind of audience it should ideally cater to: the young, educated, and environment-conscious. Agrees Majumdar: "We realise that our products have to be available on credit in the large stores. At present, we deal with distributors who rely less on credit."

The absence of retail reach is unfortunate as, in terms of pricing, Arpita Agro's products are no different from its transnational counterparts. For instance, a 250-ml bottle of Nimyle costs Rs 18; while hll's Domex is identically priced, RCI's Lizol retails for Rs 18 for a 200-ml bottle. And this lack of visibility is accentuated by small adspends: this year, Arpita Agro plans to spend a minuscule Rs 60 lakh on advertising and brand promotion. While the company is planning a Hindi campaign on tv to target Uttar Pradesh and Maharashtra, Arpita Agro is also taking Nimyle to hospitals and nursing-homes for large orders. Complains Majumdar: "If only we had had one-tenth the ad budget of hll's, Nimyl would have been a powerful brand today."

It isn't, and that's why Arpita Agro is turning to exports. The company is in the process of finalising an arrangement with a buyer in the US, Earthly Hygiene, which markets natural products. However, Arpita Agro, which will supply in bulk, will not be able to sell its products under its own brandname in the US. As chemicals are being phased out in the developed world, many countries are receptive to neem--the US, in particular, is the single-largest market for neem pesticides--but not having a big brand is hurting Arpita Agro. "Applying for a patent in the US is an expensive affair costing upto Rs 10 lakh per product," Majumdar shrugs.

Instead, Arpita Agro is planning to take the Nimyle and the Nimit brands national over the next two years. It also plans to launch an array of neem skin-care products, like soaps, skin cream, and, maybe, even a toothpaste. Adds Dhir: "We have also produced herbal alternatives to pain-relievers." But in its hurry to become an fmcg company, Arpita Agro must remember that, sooner rather than later, transnationals like hll and rci will patent their own neem-based products. Selling an idea that has reached its time, the neemies now face the daunting task of building a green brand.

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