From launching its oil brand to manufacturing the Leher range for PepsiCo, and now venturing into packaged drinking water and namkeen, the Sanjay Godhawat Group is set to position itself strongly in the Indian market. Shrenik Godhawat, Director, shares their business plans
What are the Group’s current activities?
Sanjay Ghodawat Group is headquartered in Kolhapur (Maharashtra). It entered the FMCG sector in 2000 with the launch of its Star brand of refined edible oil. Our 25,000 sqft manufacturing unit is based in Chipri, Kolhapur District. The oil is available at organised retail outlets like Biz Bazaar, D Mart, and Star Bazaar in Kolhapur, Pune, and Ratnagiri. By September-end we will be launching Star555 gold packaged drinking water, which will have gold nano particles in it.
Please elaborate on the concept behind Star 555 Gold packaged drinking water.
We have been developing the technology for the past four years through consultants and our own R&D, and have now patented it. It will be a new concept in the Indian market. Gold is considered good for controlling blood pressure, reducing stress, and providing energy. On an average, one litre of water will have 0.001 gms of gold. The packaged water will be available in 1 litre, 250 ml, 500 ml and 20 litre jars at affordable price points for instance, the one litre bottle will cost only Rs 20.
The labelling on the packaged water will mention that the product has 99 percent pure gold and contains less than 0.01 mg/ litre. But we cannot claim health benefits of gold since the quantity is not substantial. Rather, gold will an added mineral in the water and does not form a major proportion, so the label will just highlight the purity and quantity.
So far, the company has invested Rs 10 crore in the machinery and the plant. An additional Rs 1 to 2 crore will be required as working capital. Production will start once we get the BIS certification. Our plant has the capacity to produce 120 bottles per minute.
The bottled water industry is currently estimated to be Rs 20,000 to Rs 25,000 crore and expected to grow at 15 to 20 percent every year. There are several new entrants in this space but we are confident that our differentiated product will give us an edge in the market.
You also plan to launch new variants for your namkeen brand Star555?
Yes, we plan to launch five namkeen variants this September, namely, Matar Masti, Singh Bhujia, Aloo Bhujia, Spicy Mix, and Moong Daal along with potato chips in three variants – Masala, Premium, and Tomato. Star Fataake, a corn snack will be another product to be launched.
No doubt the snacks market is saturated in India, but we have an advantage because unlike many brands we have our own manufacturing units through which we can monitor quality of our products. We also foresee that in the next 3 to 4 years, most of the namkeen brands will become regionalized as tastes and preferences vary from region to region. So, namkeen consumption will become more region specific. Our regional presence will benefit us greatly.
We were already manufacturing snacks for different MNCs under private labels. For instance, the entire range of Leher namkeens offered by PepsiCo was manufactured by us through a separate entity called Excelus Star – a JV with Mumbai-based company Excelus.
Having expanded our distribution, we decided to launch our own namkeen brand, and set up a namkeen manufacturing plant in 2010-11 at Chipri, Kolhapur, with a capacity to produce around 600 tons per month and it covers an area of 40,000 sq.ft. With our namkeens we are targeting the mass segment with a five rupee pack of 15 to 25 grams. However, in the next three months, we plan to launch half and one kg packs for Rs 10, and Rs 20, respectively.
In which markets will the products be launched?
We will have a network of 180 to 200 distributors for our water and namkeens in Maharashtra, Karnataka, and Goa initially, barring Mumbai and Bangalore for now. In fact, we plan to set up new plants in Mumbai and Bangalore in the third quarter of 2015, which will further expand our reach to urban markets. Currently, the Group is more active in the semi-urban and rural markets.
What is your targeted revenue this fiscal?
We aim to be among the top three players in the namkeens and water space in the next three to five years. For the current fiscal, we are targeting a turnover of Rs 40 to Rs 50 crore from both the product categories, and next year, we will target Rs 150 to Rs 200 crore.
