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NIRMA
INTRODUCTION:
Nirma is a group of companies based in the city of Ahmedabad in western India that
manufactures products ranging from cosmetics, soaps, detergents, salt, soda ash, LAB and
Injectibles. Karsanbhai Patel, a well known entrepreneur and philanthropist of Gujarat, started
Nirma as a one-man operation. Today Nirma has over 15000 employees and a turnover of over
Rs. 3550 crores. In 2004, Nirma's detergent approached 800,000 tonnes one of the largest
volumes sold in the world under a single brand 'NIRMA'.
COMPANY PROFILE:

Type: Public
Industry: FMCG
Founded :1969
Headquarters: Ahmedabad, India
Key people: Karsanbhai Patel (CMD)
Products :Nirma detergent, Nima soaps
Revenue: Rs. 3504 crores (2011 standalone)
Rs. 5008 crores
US$ 1.12 Billion (2011 consolidated)
Employees: 14000
Website: www.nirma.co.in

COMPANY OVERVIEW:
Starting as a one-product, one-man outfit from a 100 sq ft (9.3 m
2
) room in 1969, Nirma became
a very successful company within three decades. The company had multi-locational
manufacturing facilities, and a broad product portfolio under an umbrella brand Nirma. The
company's mission to provide, "Better Products, Better Value, Better Living" contributed a great
deal to its success.
Nirma successfully countered competition from HLL and carved a niche for itself in the lower-
end of the detergents and toilet soap market. The brand name became almost synonymous with
low-priced detergents and toilet soaps. However, Nirma realized that it would have to launch
products for the upper end of the market to retain its middle class consumers who would
graduate to the upper end. The company launched toilet soaps for the premium segment.
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However, analysts felt that Nirma would not be able to repeat its success story in the premium
segment.
In 2000, Nirma had a 15% share in the toilet soap segment and more than 30% share in the
detergent market. Aided by growth in volumes and commissioning of backward integration
projects, Nirma's turnover for the year ended March 2000 increased by 17% over the previous
fiscal, to Rs. 12.17 bn. (source:- http://en.wikipedia.org/wiki/Nirma)
Company history
http://www.indiainfoline.com/Markets/Company/Background/Company-Profile/Nirma-Ltd/500308
http://www.nirma.co.in/genesis.htm
History
In 1969, dr. karsanbhai patel, a chemist at the Gujarat Government's Department of Mining and
Geology manufactured phosphate free Synthetic Detergent Powder, and started selling it locally.
The new yellow powder was priced at Rs. 3.50 per kg, at a time when HLL's Surf was priced at
Rs 15. Soon, there was a huge demand for Nirma in Ruppur (Gujarat), Patel's hometown. He
started packing the formulation in a 10x10ft room in his house. Patel named the powder as
Nirma, after his daughter Nirupama. Patel was able to sell about 15-20 packets a day on his way
to the office on bicycle, some 15 km away. By 1985, Nirma washing powder had become one of
the most popular, household detergents in many parts of the country.
By 1999, Nirma was a major consumer brand offering a range of detergents, soaps and
personal care products. In keeping with its philosophy of providing quality products at the best
possible prices, Nirma brought in the latest technology for its manufacturing facilities at six
locations in India. Nirma's success in the highly competitive soap and detergent market was
attributed to its brand promotion efforts, which was complemented by its distribution reach and
market penetration. Nirma's network consisted of about 400 distributors and over 2 million retail
outlets across the country. This huge network enabled Nirma to make its products available to
the smallest village.
In November, 2007, Nirma purchased the American raw materials company Searles Valley
Minerals Inc. - making it among Top-7 Soda Ash manufacturer in the world.
Company History - Nirma
1980
- The Company was incorporated on February 25, as Private Limited Company to carry on the
business of manufacturing and selling Synthetic Detergents, Soaps, Chemicals and Allied
Products. The Company is promoted by Shri Karsanbhai K. Patel.
1993
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- The Company became a deemed public limited Company under Section 43-A of the
Companies Act, 1956 and was then converted into a Public Limited

-The Company proposes to set up a 1200 tpd (4,20,000 tpa) Soda Ash Project in technical
collaboration with AKZO NOBEL ENGINEERING BV (AKZO) of Netherlands based on the
Dry Lime Technology as a backward integration to the existing activities.
-The company proposes to set up a facilities to manufacture Toilet Soaps with an installed
capacity of 60,000 tpa and Synthetic Detergents with installed capacity of about 3,00,000 tpa.
The Company will be entering into a long term agreement with the Bhavnagar Municipal
Corporation for providing of requisite quantity of sewage water.
1994
- The Company came out with its maiden public issue of Equity Shares of Rs.10/- each for cash
at a premium of Rs.100/- per share aggregating for Rs.44.78 crores in February.
- The Company also ventured into manufacture of Fatty Acid, Glycerine, Toilet Soaps,
Sulphuric Acid and Alfa Olefin Sulphonate (AOS).
- Nirma Ltd. has become a multi product company representing a wide array of product lines
starting from Detergent Powders and personal care products like Toilet Soaps to chemicals like
Sulphuric Acid, Glycerin, Alfa Olefin Sulphonates, Fatty Acids, Oxygen etc.
- The Brand name NIRMA is owned by Nirma Chemical Works Pvt. Ltd. which has given a
non exclusive license to AME thereby allowing AME to use the Nirma brand trade marks.
- The Company has also installed 26 Wind Turbine Generators (WTG) With a capacity of 5.94
MW to generate power at Dhank Dist., Rajkot.
- Nilnita Chemicals Limited will be amalgamated with the Company With effect from 1st
April.
- The Company proposes to establish R&D Centre at site for better waste utilisation and
infrastructural betterment.
- The Company has entered into a Memorandum of Understanding with Indian Oil Corporation
Ltd., for release by I.O.C.L. of 80,000 MTPA net of LAB feed stock in case the Company
decides to establish a plant for the production of 80,000 MTPA of Linear Alkyl Benzene.

1995
- The Company is setting up salt works facility at Kalatalav on 25,000 acres of land adjacent to
its proposed Soda Ash plant for meeting its entire salt requirement.
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- The Company has entered into an Agreement with Humphrey & Glasgow Consultants Ltd.
for Detailed Engineering, construction supervision including Civil and Architectural Designs
and Procurement Services for the Soda Ash Plant.
- The Company would be entering into Equipment Supply Agreement(s) With the Critical
Plant & Equipment Suppliers which, inter-alia, should provide for performance guarantee of the
equipment, penal provisions for non-fulfilment of guaranteed norms, delay in delivery and
defects in workmanship/design etc.
1996
- During the year, Company has introduced Shampoo, which has been Seed marketed and has
been accepted well by the consumers.
- During the year, on account of modernisation, Company has successfully manufactured IP
Grade (Pharmaceutical Grade) Glycerin and the same has been well accepted and is in good
demand.
- The Company has technology tie up with UOP Inter Americana Inc. U.S.A. who will be
providing technical and basic engineering services. The Company has also tied up with Uhde
India Limited for providing detailed engineering services.
1997
- Nirma is one of the country's largest detergent producers selling over 4.5 lakh tonnes of
detergent and having the largest market share in the low value mass market brands. Nirma,
powder sells more than Hindustan Lever's Wheel, though Hindustan Lever is the largest
producer of detergent and toilet soaps put together.
- Nirma Ltd is launching a mega public offer totalling Rs. 350 crore. The offer will be
distributed through the 100 per cent book-building process, whereby the sale price of the share
and the total size of the offer will be driven by demand for the stock.
- Nirma is not only India's largest selling brand in detergent segment but is also the second
largest manufacturer of toilet soap in the country.
- Nirma Ltd has entered into a separate agreement with Nirma Chemical Works Ltd (NCWL),
the trademark owner of the Nirma brand, for exports.
1998
- ICRA has assigned an LAAA rating to the Rs.200 crore Non-convertible debentures
programme of Nirma Ltd (NL), indicating highest safety.
- The company Nirma has already announced successful completion of it's state-of-the-art
80,000 tpa Linear Alkyl Benzene plant.
- Nirma is one of the few Indian companies that have matched the MNCs in the retail sales
through innovative marketing strategies.
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- The firm has set up state-of-the-art packaging and printing units and will now directly produce
key raw materials to improve product quality.
1999
- The edible salt market is set to witness a keen battle with a new entrant, Nirma Salt, about to
hit the market.
- The company is putting up a three-stage vacuum salt plant with an installed capacity of
280,000 tonnes a year.
- The overall sales growth has been constrained due to a plant shutdown in the industrial product
segment to manufacture N-Paraffin.
2000
- Nirma has decided to acquire the business of Kisan Industries for a cash consideration of Rs
200 crore with effect from 1st April.
- Kisan Industries, having manufacturing facilities for detergents and fertilisers and for printing
and packaging at Moraiya village in Ahmedabad district, had the right to manufacture 20 per
cent of Nirma brand of detergents.
- Nirma has decided to issue redeemable NCDs with a face value of Rs 1,00,000 each at Rs
1,00,000 each, aggregating Rs 150 crores, in one or more tranches on private placement basis for
a tenor of 350 days, carrying an interest rate not exceeding 11.5 per cent per annum, payable
yearly.
- Credit rating agency ICRA has retained the highest safety rating of `LAAA' to the Rs 200
crore non-convertible debenture programme of soaps and detergents major Nirma
2002
-Garners Rs 75 crore by issuing one-year floating-rate debentures
-Undertakes manufacturing of toilet soap under the brand name 'Camay' for its subsidiary
Nirma Consumer Care Ltd which obtains license from Procter & Gamble Home Products Ltd.
Nirma Consumer Care Ltd launches the product on October 08, 2002 -Closes down Bangladesh
unit due to low sales volumes
2003
-Kicks off a fresh valuation of its two key brands namely, Nirma and Nima, together with the
trademarks
2004
Nirma Education and Research Foundation (NERF) has set up NirmaLabs, a not-to-profit
Section 25 company with a corpus of over five crore, to nurture talented individuals in their
pursuit of high-tech, knowledge-based wealth generation.
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- Karsanbhai Patel, promoter of the Ahmedabad-based detergents major Nirma Ltd, is becoming
a venture capitalist. A Patel entity, Nirma Education and Research Foundation, has set up a new
company, NirmaLabs, which will incubate talented individuals and projects.

Organisational structure:-
Source:- http://www.indiainfoline.com/Markets/Company/Background/Board-of-Directors/Nirma-
Ltd/500308
Chairman K K Patel
Vice Chairman Rakesh K Patel
Director
Shrenikbhai K Lalbhai
Pankaj R Patel
Rajendra D Shah
Chinubhai R Shah
Kaushikbhai N Patel
Executive Director Kalpesh A Patel
Managing Director Hiren K Patel
Company Secretary Paresh Sheth
Addi.Direct. & Whole Time Dire Shilesh V Sonara

Achievement:
7
th
largest consumer brand by ACNielsen 03

First brand to recognize and harness the power of the Indian rural market.

First Indian brands to merit a Harvard business review case study.
Products:
Consumer products:
1) Soaps:-
Nirma Bath Soap, Nirma Lime Fresh Soap, Nirma Beauty Soap, Nima Rose, Nima
Sandal
2) Detergents:- Nirma Washing Powder, Nirma Detergent Cake, Super Nirma Washing
Powder, Super Nirma Detergent Cake, Nirma Popular Detergent Powder, Nirma Popular
Detergent Cake
3) Salt:- Nirma Shudh Iodized Salt
4) Sourcing Products

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Industrial Products:
LAB ( Linear Alkyl Benzene )
AOS ( Alfa Olefin Sulfonate )
Sulfuric Acid
Glycerin
Soda Ash
Pure salt
Vacuum Evaporated Iodized Salt
SSP ( Single Super Phosphate )
Sodium Silicate
Top competitors of the company:
1. Hindustan Unilever
2. Godrej Consumer Prod
3. Dabur India
4. Colgate Palmol. (I)
5. Gillette India
6. marico
7. Godrej Industries
8. P&G Hygiene
9. Emami
10. Jyothy Laboratorie

Market Share:-


The detergent market can be classified into premium(Surf, Ariel), mid-price (Rin, Henko, Tide)
and popular segments (Nirma, Wheel, Mr. White)a)
They account for 15%, 40% and 45% of the marketrespectively, which is only 60 per cent of the
totalmarket.
b)Regional and small unorganized players still accountfor a significant 40% of the total
detergent market.
c) Per capita consumption of detergent in India (2.7 kg)is lower than any other country
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Source: - http://www.icmrindia.org/free%20resources/casestudies/The%20Nirma%20Story3.htm

Profit & loss account (source:- http://www.moneycontrol.com/financials/nirma/profit-loss/N#N)
Profit & Loss account of Nirma
------------------- in Rs. Cr. -------------------

Mar '13 Sep '12 Mar '11 Mar '10 Mar '09

6 mths 18 mths 12 mths 12 mths 12 mths

Income


Sales Turnover 2,223.43 6,827.69 3,504.66 3,329.18 3,354.15

Excise Duty 0.00 596.11 263.23 213.31 322.33

Net Sales 2,223.43 6,231.58 3,241.43 3,115.87 3,031.82

Other Income 70.86 60.52 46.61 29.98 -74.03

Stock Adjustments 38.68 88.32 33.28 6.80 31.08

Total Income 2,332.97 6,380.42 3,321.32 3,152.65 2,988.87

Expenditure


Raw Materials 968.52 2,992.54 1,541.27 1,369.83 1,483.04

Power & Fuel Cost 379.97 1,071.21 506.53 394.83 401.06

Employee Cost 120.89 321.51 133.14 113.45 99.00

Other Manufacturing Expenses 0.00 104.05 40.41 35.47 33.44

Selling and Admin Expenses 0.00 0.00 553.49 551.20 423.43

Miscellaneous Expenses 403.96 924.55 74.79 64.26 48.06

Preoperative Exp Capitalised 0.00 0.00 0.00 0.00 0.00

Total Expenses 1,873.34 5,413.86 2,849.63 2,529.04 2,488.03


Mar '13 Sep '12 Mar '11 Mar '10 Mar '09



6 mths 18 mths 12 mths 12 mths 12 mths

Operating Profit 388.77 906.04 425.08 593.63 574.87

PBDIT 459.63 966.56 471.69 623.61 500.84

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Interest 73.71 190.24 51.93 55.44 71.59

PBDT 385.92 776.32 419.76 568.17 429.25

Depreciation 139.63 425.86 314.33 287.56 244.38

Other Written Off 0.00 0.00 0.00 0.00 0.00

Profit Before Tax 246.29 350.46 105.43 280.61 184.87

Extra-ordinary items 0.00 -356.06 -28.36 8.49 -0.15

PBT (Post Extra-ord Items) 246.29 -5.60 77.07 289.10 184.72

Tax 72.42 55.52 3.03 47.22 31.29

Reported Net Profit 173.87 -61.12 74.04 237.94 93.43

Total Value Addition 904.82 2,421.32 1,308.36 1,159.21 1,004.99

Preference Dividend 0.00 0.00 0.00 0.00 0.10

Equity Dividend 0.00 0.00 0.00 71.61 63.66

Corporate Dividend Tax 0.00 0.00 0.00 11.91 10.82

Per share data (annualised)


Shares in issue (lakhs) 1,591.42 1,591.42 1,591.42 1,591.42 1,591.42

Earning Per Share (Rs) 10.93 -3.84 4.65 14.95 5.86

Equity Dividend (%) 0.00 0.00 0.00 90.00 80.00

Book Value (Rs) 184.01 174.11 177.95 173.86 163.44


Balance sheet (source:- http://www.moneycontrol.com/financials/nirma/balance-sheet/N#N)

Balance Sheet of Nirma
------------------- in Rs. Cr. -------------------

Mar '13 Sep '12 Mar '11 Mar '10 Mar '09


6 mths 18 mths 12 mths 12 mths 12 mths


Sources Of Funds


Total Share Capital 104.28 104.28 79.57 79.57 79.57

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Equity Share Capital 79.57 79.57 79.57 79.57 79.57

Share Application Money 0.00 0.00 0.00 0.00 0.00

Preference Share Capital 24.71 24.71 0.00 0.00 0.00

Reserves 2,848.81 2,691.28 2,752.40 2,687.32 2,521.47

Revaluation Reserves 0.00 0.00 0.00 0.00 0.00

Networth 2,953.09 2,795.56 2,831.97 2,766.89 2,601.04

Secured Loans 691.51 567.81 875.03 751.97 1,048.12

Unsecured Loans 847.32 769.14 86.43 209.47 66.84

Total Debt 1,538.83 1,336.95 961.46 961.44 1,114.96

Total Liabilities 4,491.92 4,132.51 3,793.43 3,728.33 3,716.00


Mar '13 Sep '12 Mar '11 Mar '10 Mar '09



6 mths 18 mths 12 mths 12 mths 12 mths


Application Of Funds


Gross Block 5,030.02 5,012.07 4,537.65 4,298.43 4,048.53

Less: Accum. Depreciation 2,966.88 2,848.28 2,723.74 2,382.32 2,129.59

Net Block 2,063.14 2,163.79 1,813.91 1,916.11 1,918.94

Capital Work in Progress 272.36 210.69 179.78 279.24 243.08

Investments 953.73 975.73 541.52 535.73 539.77

Inventories 1,045.23 1,019.11 734.81 592.15 600.27

Sundry Debtors 565.52 488.11 316.24 269.28 250.49

Cash and Bank Balance 21.95 32.78 62.60 11.01 13.09

Total Current Assets 1,632.70 1,540.00 1,113.65 872.44 863.85

Loans and Advances 811.35 506.63 867.08 830.85 725.12

Fixed Deposits 0.00 0.00 1.33 81.28 200.50

Total CA, Loans & Advances 2,444.05 2,046.63 1,982.06 1,784.57 1,789.47

Deffered Credit 0.00 0.00 0.00 0.00 0.00

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Current Liabilities 1,205.15 1,229.18 647.93 637.85 639.98

Provisions 36.21 35.15 75.91 149.47 135.28

Total CL & Provisions 1,241.36 1,264.33 723.84 787.32 775.26

Net Current Assets 1,202.69 782.30 1,258.22 997.25 1,014.21

Miscellaneous Expenses 0.00 0.00 0.00 0.00 0.00

Total Assets 4,491.92 4,132.51 3,793.43 3,728.33 3,716.00