Entrepreneurship Project

Made by – Mansi Dhamija

BBS – Vth SemesterRoll. No. - 1230

Acknowledgement

In the following project, my major effort has been to present the information about the Dabur India Ltd. and its success as an entrepreneurial venture.

I express my sincere thanks to my teacher Miss Astha Kanjlia and my friends for guiding and encouraging me by providing useful suggestions to prepare this project throughout every stage, since the assignment of topic till the completion.

Table of Contents

S. No. Topic

1 Introduction2 The Story3 Product Portfolio4 Strategic Intentions5 What sets Dabur apart

6 The Flip Side7 Ten Year Highlights8 Vision 2010

DABUR – Celebrating 125 years of health and well being

Introduction

Dabur India Ltd is one of India’s leading FMCG Companies with Revenues of about US$600 Million (over Rs 2834 Crore) & Market Capitalization of over US$2.2 Billion (close to Rs 10,000 Crore). Building on a legacy of quality and

experience for over 125 years, Dabur is today India’s most trusted name and the world’s largest Ayurvedic and Natural Health Care Company.

Dabur India is also a world leader in Ayurveda with a portfolio of over 250 Herbal/Ayurvedic products. Dabur's FMCG portfolio today includes five flagship brands with distinct brand identities -- Dabur as the master brand for natural healthcare products, Vatika for premium personal care, Hajmola for digestives, Réal for fruit juices and beverages and Fem for fairness bleaches and skin care products.

Dabur today operates in key consumer products categories like Hair Care, Oral Care, Health Care, Skin Care, Home Care and Foods. The company has a wide distribution network, covering over 2.8 million retail outlets with a high penetration in both urban and rural markets.

Dabur's products also have a huge presence in the overseas markets and are today available in over 60 countries across the globe. Its brands are highly popular in the Middle East, SAARC countries, Africa, US, Europe and Russia. Dabur's overseas revenues stands at over Rs 500 Crore in the 2008-09 fiscal, accounting for about 20% of the total turnover.

The 125-year-old company, promoted by the Burman family, had started operations in 1884 as an Ayurvedic medicines company. From its humble beginnings in the bylanes of Calcutta, Dabur India Ltd has come a long way today to become one of the biggest Indian-owned consumer goods companies with the largest herbal and natural product portfolio in the world. Overall, Dabur has successfully transformed itself from being a family-run business to become a professionally managed enterprise. What sets Dabur apart from the crowd is its ability to change ahead of others and to always set new standards in corporate governance & innovation.

The products of Dabur are marketed in more than 50 countries worldwide. The company has 2 major strategic business units (SBU) - Consumer Care Division (CCD) & Consumer Health Division (CHD), and 3 Subsidiary Group companies - Dabur Foods, Dabur Nepal and Dabur International. Dabur International has 3 step down subsidiaries - Asian Consumer Care in Bangladesh, African Consumer Care in Nigeria and Dabur Egypt.

The story behind one of the most successful entrepreneurial ventures of India

1884 – Birth of Dabur

Dabur was born in a small Calcutta Pharmacy in 1884. It was founded by Dr. S.K. Burman, who was trained as physician in Bengal . He was a visionary entrepreneur with a mission to provide effective and affordable cure for ordinary people in far-flung villages.Soon, he started preparing ayurvedic or natural remedies for diseases such as Cholera, Malaria and Plague. Due to his natural and cheap remedies, he became to be known as 'Daktar'. And that is how his venture Dabur got its name - Daktar Burman(Da-Bur).

1896 – Setting up a manufacturing unit

With the growing popularity of Dabur products Dr. Burman set up a manufacturing plant for mass production of formulations.

Early 1900s – Ayurvedic Medicines

In the early 1990s Dabur entered the specialized area of ayurvedic medicines, for which standardized drugs were not available in the market

1919 – Establishment of research laboratories

In 1919 research laboratories were set up to develop scientific checks and mass production of traditional Ayurvedic medicines

1920 – Expands Further

Dabur expanded further with new manufacturing units in Narendrapur and Daburgram. The distribution of Dabur products spread to Bihar and other North Eastern states.1936 – Dabur India Pvt Ltd.

In 1936 Dabur became a full fledged company

1972 – Shift to Delhi

In 1972 Dabur Pvt Ltd shifted its operations to Delhi and set up a new manufacturing plant in Faridabad

1979 – Sahibabad factory/ Dabur Research Foundation

Commercial production started in the Sahibabad Factory which is one of the largest and best equipped facilities for Ayurvedic medicines

Dabur research foundation was also set up to research in the area of healthcare.

1986 – Public Limited Company

Dabur became a Public Ltd. Company in 1986 after a reverse merger with Vidgum Ltd.

1992 – Joint Venture with Agrolimen of Spain

Dabur entered into a Joint Venture with Agrolimen of Spain to manufacture and market confectionary items in India and thus began a new chapter of strategic partnerships

1993 – Cancer Treatment

The company developed Dab 10, an intermediate for anti-cancer drug namely Taxol.The Company undertook to implement a phytopharma project at Ghaziabad, U.P. This unit would manufacture a specialised anti cancer drug Taxot apart from cancer drug andTerfenadine, a non sedative anti allergic drug.

1994 – Public Issue

In 1994 Dabur raised its first public issue. Shares were issued at high premium due to public confidence in the company and the issue was oversubscribed upto 21 times.

1995 – Joint Ventures

Dabur entered into joint ventures with OSEM of Israel for food and Bongrain of France for Cheese and other dairy products

1996 – 3 separate divisions

For better management three separate divisions were created on the basis of their product mix – Health Care Products division, Family Products division and Dabur Ayurvedic Specialties limited

1997 – Food Division/ Project STARS

Dabur entered full scale in the nascent product food market with the creation of Foods Division project – STARS – Strive To Acheve Record Successes.

1998 – Professionals to manage the company

For the first time professionals were inducted to manage the company

2000 – Turnover of Rs. 1000 crore

Dabur established its market leadership status with a turnover of Rs. 1000 crore. With Dabur now in the league of big corporate businesses the small entrepreneurial venture of Dr. S.K. Burman had sure enough made its mark.

2003 – Dabur demerges Pharma Business

Dabur India approved the demerger of the pharmaceutical business from the FMCG business into a separate company to provide greater focus to both the businesses. The fourth Largest FMCG, Dabur India Ltd tied with Free Markets Inc. for using leading edge technologies to execute online markets for its procurement needs.

2004 Dabur set to acquire Egyptian hair oil brand Touch Dabur India gets Tetra Pak award Dabur India inks pact with Accenture for outsourcing

2005 – Dabur acquires Balsara

Completed the acquisition process of Balsara Hygiene Products Ltd &Besta Cosmetics Ltd on April 16, 2005.

2006 – Dabur India crossed $ 2 Billion in market capitalization

2007 – Dabur Foods merged with Dabur India

2008 – Dabur acquired Fem Care Pharma

2009 Dabur Red Toothpaste joins ‘Billion Rupee Brand’ ClubDabur Red Toothpaste became Dabur’s 9th Billion Rupee Brand. It crossed the billion rupee turnover within five years of its launch.

Product Portfolio of Dabur

Mr. Sunil Duggal took over as the Chief Executive Officer of Dabur India Limited in June 2002, holding reins of the organization he joined in 1995.

Given below is the Product Portfolio of Dabur (Consumer Care Division 2006):

CHD (Consumer Health Division), dealing with classical Ayurvedic medicines Has more than 250 products sold through prescriptions as well as over the counter major categories in traditional formulations include: - Asav Arishtas - Ras Rasayanas - Churnas - Medicated Oils Proprietary Ayurvedic medicines developed by Dabur include: - Nature Care Isabgol - Madhuvaani - Trifgol

Dabur is also the owner of IPL Team Kings XI Punjab

Recently, Dabur has launched its New u stores. The mission is to offer the Indian customer the most comprehensive range of global beauty, health and wellness brands and products, combined with an unparallel product expertise, advice and customer care.

Sundesh - Sundesh is a non – profit organization engaged in carrying out welfare activities with the aim of improving the quality of life of the people in rural areas. Mr. Pradeep Burman is the founder chairman. Sundesh is majorly involved in Health Care, Education and other socio-economic activities.

Given Below is a Segment Wise Competitor list:

Category Dabur’s Share

Main Competitors

Product Category

Products

Hair oil Vatika, Amla, Sarso(Anmol coconut)

Shampoo Vatika heena conditioning, root-strengtheningAnmol-natural shine, silky

Baby & Skin Care

Vatika fairness, Gulabari, Vatika fairness face packJanmaghutti, Olive oil, Gripewater, Dabur lal tel

Digestive Hajmola range, Hingoli, Pudin hara

Health Supplements

Chyawanprash, chyawanshakti, Dabur Honey, Glucose

Oral Care Babool (rural market), Meswak (unani method), promise, Lal paste, Binaca, Promise

Home Care Odomos, Odonil, Odopic, Sanifresh

Fruit Juice 58% Real and Active

Tropicanna

Fruit Drinks (coolers)

1% Coolers Frooti And Maaza

Hair oil Coconut base

6.4% Vatika HLL

Shampoo Vatika 7.1%HLL and P&G

Hair care (overall)

27% HLL, P&G and Himalaya

Chyawanprash 64% Himani, Zhandu and Himalaya

Honey 40% Himani, Hamdard and local Players

Digestives 37% Paras and local players

Strategic intentions of Dabur Focus on growing our core brands across categories, reaching out to new

geographies, within and outside India, and improve operational efficiencies by leveraging technology

Be the preferred company to meet the health and personal grooming needs of our target consumers with safe, efficacious, natural solutions by synthesizing our deep knowledge of ayurveda and herbs with modern science

Provide our consumers with innovative products within easy reach

Build a platform to enable Dabur to become a global ayurvedic leader

Be a professionally managed employer of choice, attracting, developing and retaining quality personnel

Be responsible citizens with a commitment to environmental protection

Provide superior returns, relative to our peer group, to our shareholders

What sets Dabur apart?

Dabur has come a long way and is now ranked 25th in the list of India’s 100 most valuable brands.

Some of its other achievements are:

9 Billion-Rupee brands: Dabur Amla, Dabur Chyawanprash, Vatika, Réal, Dabur Red Toothpaste, Dabur Lal Dant Manjan, Babool, Hajmola and Dabur Honey

Strategic positioning of Honey as food product, leading to market leadership (over 75%) in branded honey market 

Chyawanprash - the largest selling Ayurvedic medicine with over 65% market share.

Vatika Shampoo has been the fastest selling shampoo brand in India for three years in a row

Hajmola tablets in command with 60% market share of digestive tablets category. About 2.5 crore Hajmola tablets are consumed in India every day

Leader in herbal digestives with 90% market share

The vision statement of Dabur reads as ―dedicated to the health and well being of every household‖. The organization which is celebrating its 125th anniversary currently religiously followed this philosophy since inception. This dedication can be attributed to the culture and values that were institutionalized by its visionary leader; Dr. S.K.Burman.He started the enterprise with a mission to provide effective and affordable cure to ordinary people in far-flung villages and this drive, fervor, zeal was inherited by his followers. His commitment and ceaseless efforts resulted in the company growing from a fledgling medicine manufacturer in a small Calcutta house, to a household name that at once evokes trust and reliability.

Every business starts as an entrepreneurial venture and continues to remain so if it constantly strives to innovate itself.

Dabur is a classic example of one such organization which has continuously forayed upwards on the path of development. An inspiring success story like that of Daburs, requires more than just a vision. It requires the entrepreneur to have the ability to inculcate his vision in all his employees and others working with him.

It requires the entrepreneur to be able to instill his strong sense of values which drive his mission, among his fellow workers.

Dabur is one of the prime examples of an organization driven by a strong set of values

Vision

"Dedicated to the health and well being of every household"

Principles

OWNERSHIP

“This is our company. We accept personal responsibility, and accountability to meet business needs.”

PASSION FOR WINNING

“We all are leaders in our area of responsibility, with a deep commitment to deliver results. We are determined to be the best at doing what matters most.”

PEOPLE DEVELOPMENT

“People are our most important asset. We add value through result driven training, and we encourage & reward excellence.”

CONSUMER FOCUS

“We have superior understanding of consumer needs and develop products to fulfill them better.”

TEAM WORK

“We work together on the principle of mutual trust & transparency in a boundary-less organization. We are intellectually honest in advocating proposals, including recognizing risks.”

INNOVATION

Continuous innovation in products & processes is the basis of our success.

INTEGRITY

“We are committed to the achievement of business success with integrity. We are honest with consumers, with business partners and with each other.”

Another quality of a successful entrepreneur is his ability to innovate. What sets Dabur apart from any other organization is its constant effort to innovate. Since, the very beginning, Dabur has been a very creative organization. What started as a small pharmacy in Calcutta is now the fourth largest FMCG in India. Right from its birth in 1884, Dabur has entered into numerous fields from healthcare products to juices and snacks to insurance. Its recent takeover of Fem which is a successful women’s skincare brand is another example of its ongoing innovation. It has also recently launched a new range of skincare products for women - Uveda

Dabur has always adapted itself to the changes taking place in the environment. Dr. S.K. Burman opened up manufacturing plants and forayed into other states when he realized that the demand for his medicines was increasing. It is thus, the ability of an entrepreneur to see change and adapt to it that sets him apart from others. Quoting a more recent example, Dabur decided to revamp its brand

image. Dabur associated itself with Amitabh Bachchan, Vivek Oberoi, Rani Mukherjee and Virender Sehwag for endorsements. New packaging and advertising campaign saw the sales of Chyawanprash grow by 8.5 per cent in 2003-04.

The year 2004-05 saw a whole new brand identity of Dabur. The old Banyan tree was replaced with a new, fresh Banyan tree.

The logo was changed to a tree with a younger look. The leaves suggesting growth, energy and rejuvenation, twin colors reflecting perfect combination of stability and freshness, the trunk represented three people raising their hands in joy, the broad trunk symbolized stability, multiple branches were chosen to convey growth, and warmth and energy were displayed through the soft orange

color. ‘Celebrating Life’ was chosen as a new tag that completely summarized the whole essence.

The culture at Dabur gives full autonomy to its employees. Various training and development programs like Young Manager Development Program, Prayas, Leading and Facilitating Performance, Campus to Corpora and a Balanced scorecard approach to performance evaluation, helps employees realize their potential.

Recently, Dabur has adopted an innovative HR program of offering ESOPs to new engineering and management trainees at the time of joining. Also in 2005, Dabur gave Bonus to its employees after 12 years. This boosted the employee morale further.

Dabur was listed as a “Great Place to Work”, in a survey conducted by Grow Talent & Company and Great Place to Work Institute, USA. Dabur was listed as the 10th “Great Place to Work”. The results were published in Business World dated February 2006.

Successful entrepreneurs thrive on competition. With increasing competition from companies like HUL, P&G, ITC, Himalaya, etc., Dabur realized the need to revamp its strategies. Following its plans, Dabur made significant changes in the time period 2002-2007 like brand rejuvenation, IT, HR and supply chain initiatives etc.

Dabur has also been undertaking a host of energy conservation measures. Successful implementation of various energy conservation projects have resulted in a 13.8% reduction in the Company’s energy bill in the 2008-09 fiscal alone. What was noteworthy was the fact that this reduction has come despite an 8-9% volume increase in manufacturing, and an average 11.7% increase in cost of key input fuels.

The Company is also continuously monitoring its waste in adherence with the pollution control norms. In pursuance of its commitment towards the society, efforts have also been initiated to conserve and maintain the ground water level. The efforts include implementation of rainwater harvesting, which has delivered encouraging results and has put the company on the path to becoming a Water-Positive Corporation.

Dabur also initiated a Carbon Foot Print Study at the unit level with an aim to become a carbon positive Company in years to come.

The host of measures – key among them being use of bio-fuels in boilers, generation of biogas and installation of energy efficient equipment – helped lower the cost of production, besides reduce effluent and improve hygiene conditions & productivity.

Another interesting fact about Dabur was that till 1998 the management of the company was in the hands of the Burman family. The ability to delegate is also one of the important qualities of an entrepreneur. However, what is more important is deciding the time till which the entrepreneurial venture needs to nurtured with hands of its founder before it can be opened up to outside professional help.

Employees are also a very important aspect of a successful entrepreneurship. Renewing the commitment to Health Safety and Environment, Dabur has formulated a policy focusing on People, Technology and Facilities. A dedicated “Safety Management Team” has also been put in place to work towards the prevention of untoward incidents at the corporate and unit level, besides educate & motivate employees on various aspects of Health, Safety and Environment.

The Flip side

Over the last few years Dabur has been following the policy of increasing the number of brands under it. Although, Dabur has been growing at the rate of 17%, there is a school of thought that believes Dabur's choice may not be the best way of ensuring future growth: too many segments will constrain it from scaling up significantly to match increasing competition and that will bring down overall pace of growth.This is also evident from the fact that Dabur is not the category leader in any of the consumer product categories where it has a presence: it is No. 4 in shampoos, No. 3 in toothpastes and nowhere in the reckoning in toilet soaps. In addition, indiscriminate use of the brand across price points may dilute the brand equity

Ten Year Highlights

RS Crores

  FY00 FY01* FY02** FY03 FY04*** FY05 FY06# FY07^ FY08 FY09

Operating Results:

Sales 982 1100 1200 1285 1236 1417 1757 2080 2396 2834

Other Income 34 19 12 7 9 9 13 26 34 47

EBITDA 128 137 144 162 164 217 300 376 443 517.3

EBITDA Margins (%) 13.0 12.5 12.0 12.6 13.3 15.3 17.1 18.1 18.5 18.3

Profit Before Tax (PBT) 81 85 82 106 124 176 257 319 384 445

Taxes 4 7 14 14 15 19 30 39 52 54

Tax Rate (%) 4.5 8.5 16.6 13.3 12.0 10.8 11.7 12.1 13.4 12.1

Profit After Tax (PAT) 77 78 64 85 107 156 214 282 333 391

PAT Margins (%) 7.9 7.1 5.4 6.6 8.6 11.0 12.2 13.5 13.9 13.8

Financial Position:

Fixed Assets (Net) 251 243 371 257 250 295 512 379 465 559

Current Assets, Loans & Advances

412 393 504 522 340 408 471 640 774 951

Current Liabilities & Provisions 108 158 183 241 294 400 436 452 732 808

Net Working Capital 304 235 322 281 46 8 35 189 42 143

Days of Sales 113 78 98 80 14 2 7 33 6 18

Total Assets 609 558 705 640 433 543 624 670 749 1081

Share Capital 29 29 29 29 29 29 57 86 86 86.5

Reserves & Surplus 292 334 365 388 257 335 440 393 531 731

Shareholders Funds 320 362 393 417 286 364 497 480 618 818

Loan Funds 289 196 304 964 132 164 121 160 99 228

Total Capital Employed 609 558 705 640 433 543 624 670 749 1081

Return Ratios:

ROCE (%) 17.0 19.5 12.6 16.1 28.6 31.3 39.0 45.7 47.6 38.8

RONW (%) 24.7 22.0 16.6 20.6 38.1 43.5 46.1 61.3 55.3 48.4

Equity Share Data:

Earnings Per Share (Rs) 27.1 2.7 2.3 3.0 3.7 5.4 3.7 3.3 3.9 4.5

Dividend Per Share (Rs) 10.0 1.0 0.5 1.4 2.0 2.5 1.8 1.42 1.5 1.75

No of  Shares (In Crs) 2.9 2.9 28.6 28.6 28.6 28.6 57.3 86.3 86.4 86.5

The report highlights the tremendous success of Dabur over the past ten years. Future Initiatives (VISION 2010)

After the successful implementation of the 4-year business plan from 2002 to 2006, Dabur has launched another plan for 2010. The main objectives are:

Doubling of the sales figure from 2006

The new plan will focus on expansion, acquisition and innovation. Although Dabur‘s international business has done well — growing by almost 29 per cent to Rs.292 crore in 2006-07, plans are to increase it by leaps and bounds.

Growth will be achieved through international business, homecare, healthcare and foods. Southern markets will remain as a focus area to increase its revenue share to 15 per cent.

Taking their retail (H&B stores) to the next level.

With smoothly sailing through its previous plans, this vision seems possible. Time and again, Dabur has made decisions that have led to its present position. However, if Dabur could be more aggressive in its approach, it can rise to unprecedented levels.