Page 36 - Plastics News March 2019

FEATURES

Nilkamal: A firm mould

Samar Srivastava
The Parekhs of Nilkamal have, over nearly four decades, built abrand that's become synonymous with
plastics

few years after Nilkamal was set up in 1981, Sharad name recognizable and trustworthy. This is clear from its
A Parekh, then 37, found himself following a milk van enviable growth record from the time it listed in 1991.
all the way to the Worli Dairy in central Mumbai. Now 75, Revenues have since climbed from Rs 5.09 crore to ~2,160
and managing director ofNilkamal, he had been on the crore, a compounded growth of 25.1 percent over 27
lookout for new growth avenues. Operation Flood had years. Though the business is heavily dependent on raw
led to a mushrooming of dairies and he wanted to see if material prices, it has healthy operating metrics. At Rs 123
Nilkamal could enter the market for plastic milk crates, crore in profit in the year ended March 2018 and a market
cap of Rs 1,900 crore, the company generated return on
equity of 14.5 percent. This is commendable, given that
Nayan Parekh, President and Executive Director (material
handling), acknowledges, "There are zero barriers to entry.
It is a combination of many factors that results in a moat."
While in the 80’s Nilkamal started directly marketing to
B2B customers (such as the
order for milk crates) a large portion of its business came
from working as a contractor. Coming to the recent times,
the last five years have seen Nilkamal's bottom line expand
while the top line has been relatively flat. Fortunately the
company is in a segment that has a long growth runway
The company is candid enough to acknowledge that getting
top line growth is a challenge and that from Rs 2,000
which was a huge emerging opportunity. His persistence crore, growing even 10 percent will require the addition
paid off and, by 1983, Nilkamal got an order for plastic of Rs 250 crore to the top line every year. What Nilkamal
crates, opening up a new business line. The 1980s and is clear about is their expansion will be asset light. A key
the 1990s were when plastics began to be used in a whole ingredient of the company's success has been the trust
host of applications due to the availability of high density the family members share. As Nilkamal grows, it would
polyethylene in India. be fair to expect more from the Parekhs.
Plastic buckets replaced metal ones. Foldable metal ( courtesy: Forbes India)
chairs at wedding venues made way for lighter plastic
ones that were easier to transport. Office chairs and
suitcases have also gradually moved to plastic. A host of
unorganised players emerged but a few brands were built.
Since then Nilkamal, Supreme Industries, and Wimplast
(Cello) have emerged as trusted names. Be it plastic
chairs, tables, office furniture or industrial crates, the
Parekhs of Nilkamal have an almost four-decade history
of innovating and entering new lines of business with
unfailing regularity.
In a market in which brand loyalty and pricing power are
not necessarily strong, they have worked to make the

Plastics News March 2019 36