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  • FMCG as Driver of MSME Growth

    Published on April 25, 2019

    Kolkata: Merchants’ Chamber of Commerce & Industry organized an Interactive Session on ‘FMCG as Driver of MSME Growth’ with Shri P. M. Chandraiah, MD and Director Finance, Bengal Chemicals & Pharmaceuticals Ltd. (BCPL) and Dr. G. P. Sarkar, Founder Chairman, Allen Group today at the Conference Hall of the Chamber.

    Shri P. M. Chandraiah, MD and Director Finance, Bengal Chemicals & Pharmaceuticals Ltd. (BCPL) said that the MSME sector in India contributes around 6% of manufacturing GDP, provides employment to 120 million persons, contributes around 45% of overall exports and it has consistently maintained a growth rate over 10%. The FMCG sector is the fourth largest sector of the economy worth USD 53 billion in 2017-18,  which is expected to become more than  USD 100 billion by 2020 growing at a CAGR of 28%.

    BCPL is a great turnaround story after incurring many decades of losses. It has enjoyed positive gross margins since 2015-16. The Company reported its first net profit in 2016-17. BCPL made a net profit of Rs 10 crores on total income of Rs. 95 crores in 2017-18.  In 2018-19, BCPL expects to report a net profit of Rs 26 crores on total income of Rs 121 crores. The company has a negative net worth of Rs. 66 crores at present. BCPL is repaying its loans to both Banks as well as Government.

    Challenges of running BCPL include its salary structure which is at levels prevalent in 1997. Despite such anomalies, workers are dedicated and hard working but morale could be better. It is difficult for management to attract talent at such poor pay scales.

    Some rules applied by management for the turnaround are as follows: (1) If employees feel that they are the real owners of the organisation where they are working, then no organisation will incur losses for a very long period; (2) There is no hierarchy at BCPL. Every employee has equal responsibility towards the growth & survival of BCPL & all work is every employee’s duty; (3) Discipline brings growth particularly value based inbuilt discipline; (4) Do the work, earn the profits and take the respectable salary instead of depending on Government for help; (5) The employer should treat all employees as his own children and treat retired employees as mentors / parents.

    It is expected that BCPL will become a positive net worth company by 2021 and a debt free company by 2022. It expects to receive Mini Ratna status by 2023.

    Dr. G. P. Sarkar, Founder Chairman, Allen Group said that he is marketing several health care and FMCG products from a few companies some of which are run by his close relatives. In his professional experience spanning 50 years, he has learnt that everyone can do better and success will come subject to honesty, hard work, dedication and devotion. The mind set is important for success. It is easier to operate micro, small and medium enterprises than large scale industries in West Bengal.

    When a businessman is marketing his product through advertisements, he should understand the competition. Innovation is important for both development of products and presentation of products. One should sell better products than their competitors.

    Dr. Sarkar is now the Chairman of Enterprise Development Institute (EDI), promoted by Bengal National Chamber of Commerce & Industry in association with Government of India and Government of West Bengal. Entrepreneurs are being trained at EDI. EDI will shortly offer an MBA in Entrepreneurship and any entrepreneur or businessman can contact EDI for training.

    Shri Rishabh Kothari, Chairman, Standing Committee on MSME, MCCI said that the MSME sector is a driver of growth and FMCG is a rapidly growing sector with excellent prospects as prosperity spreads in the country. MCCI’s SME series is meant for learning as well as inspiring others.