National Detergent Company plans to broad base its portfolio by focusing on sectors ranging from industrial specialty chemicals to oil and gas to construction. The company will shift the existing powder manufacturing facility to Sohar Industrial Estate in the first quarter of 2016, says its Director and CEO V Sundaresan in an interview with Oommen John P
Can you share with us how National Detergent Company’s product range has evolved over the years?
NDC was one of the first few manufacturing units to come up in Oman. We were among the first few companies to put up a detergent plant. The initial years were tough as we had to make a name for ourselves in the face of intense competition from MNCs. However, the company promoters were keen on giving quality products comparable to the best. Another thing that they did right from the beginning was to reach out to people in terms of distribution. As a local company, we set up our own distribution network and reached the smallest towns in Oman. That gave us the opportunity to make our products available in various locations. Our reach was very good. Omanis by and large were very proud to use locally produced products. And that is something that helped the company. Their innate desire to patronise local products helped us in the initial years. And once they tried and found that quality was equally good, it certainly helped us to grow. Within a matter of three to four years, we started selling good volumes and Bahar became the leading brand. In fact, Oman is one of the few countries in which a locally manufactured brand is selling the maximum in terms of volume. To become the Number 1 brand was a creditable achievement.
How has the NDC product portfolio fared in the Oman market?
NDC started in 1983 and manufacturing commenced in 1984. In 1988, the company expanded its range to dish washing liquids. In 1990, we moved in to manufacturing toilet soaps, while in 1993, the company forayed into institutional cleaners and personal care products in 1990 and 1991. In 2013, we started putting up a new liquid plant in Sohar and that came on stream from June 2014. Thereafter, we started expanding the range of liquid products with the launch of floor cleaners – Bahar Clean and also fabric softeners. Many of these brands have started doing very well, not only in Oman but also across in GCC, which is very heartening.
The USP of the brand is that the products are of international quality and prices are competitive. Consistency and reliability of the brands and consumer orientation are the reasons why consumers continue to be loyal. The company’s strength is its workforce of around 430 people. There are many Omanis who are working with us for more than 15 to 20 years. They always look back with a lot of pride and satisfaction in working for a successful local company.
Over the years, NDC has been receiving numerous awards and recognition including the HM’s Best Factory award for four times. Bahar has been voted as “best brand” in Oman in 2011across all the product categories in a survey conducted by Oman Observer. Today, we have a range of products and good brand equity not only in Oman, but also in the UAE, Saudi Arabia, Bahrain and Qatar. We are strong in the GCC and the company exports to over 50 countries. Exports account for more than 55 per cent of our value and volume sales. However, in the last few years, some export markets have become tough to sustain due to dollar appreciation and other facts.
In Oman, we are doing well. In detergent powders category, we have leadership position in spite of the onslaught of MNCs. We hold more than 40 per cent market share in powders and dishwashing liquid categories. Bahar alone accounts for a sizable share in the powder segment. Bahar Clean is yet another important brand name in floor cleaners. NDC’s flagship brand Bahar and all other major products have performed well in local and other export markets.
What are the new initiatives in place at NDC?
NDC is always keen on expanding its range of products. Another initiative which we believe has potential is catering to institutional and industrial customers. With FMCG being a competitive industry, where margins are always under pressure, we drew up a strategy to broad base our product portfolio. We have been looking for opportunities during the past three to four years. NDC is looking at some specialty chemicals and construction chemicals that can be manufactured and supplied to some industries, which are locally very relevant such as oil and gas industry and construction chemicals.
We have also recently signed up with an India-based technology supplier for oil and gas specialty chemicals. We have planned to set up a manufacturing plant in Rusayl to manufacture specialty chemicals catering to the needs of oil and gas sector in Oman. Hopefully, this plant will be on stream by March 2016. We just don’t want to be a chemical supplier, but also want to be the “solutions provider” to the customers’ problems in many areas.
Our vision for the next five years is that industrial and institutional chemicals business for NDC becomes as big as our current FMCG business. And profitability wise, it will certainly be better than our FMCG business.
How was the financial performance of NDC in 2014? What are the growth prospects for 2015 and beyond?
The year 2014 was a good year. We were able to grow both in volumes and value. Profitability was slightly lower compared to previous year due to various reasons such as material and operational costs. However, 2015 has not been the same. Volumes and value have been affected up to June 2015. One of the main reasons is that there is a marginal decline in revenue as the non-GCC market has almost dried up. Further, the intense competition and dollar strengthening has made our products uncompetitive in many of the markets.
What are the new investments proposed in the next couple of years? Is NDC planning a foray into new segments?
We believe that 2016 will be a better year than 2015. We have initiated a lot of steps. Additionally, raw material prices have started softening. Further, we will be shifting the existing powder manufacturing facility to Sohar Industrial Estate in the first quarter of 2016 that will not only improve productivity but will give us cost advantage as well. Construction chemicals industry is yet another segment that we are looking to get into at the right time with the right technology partner.