In 1981, Vamanrai Parekh and Sharad Parekh decided to exit the family business of button manufacturing and make plastic products, gaining prominence in the market.
The brothers started a small business of making plastic household items at rented premises in Powai, Mumbai, which included buckets, baskets, mugs etc., thus leading to Nilkamal Plastic, which later became Nilkamal Limited. Little did the brothers at that time know that their small business would grow at great profits and become a household name for everyday needs.
In the last four decades, Nilkamal has acquired a strong heritage and gained consumer confidence.
In a conversation with us, the third generation entrepreneur and current executive director of Nilkamal Limited, Mihir Parekh, spoke about the business journey, how the company continued to move with the changing times based on market trends.
B2C and B2B segments
While Vamanrai and Sharad were running plastic household goods, they did extensive research to expand the market. One day while passing through Worli Dairy, the two used wooden boxes to carry bottles of milk, although during this time the brothers realized that plastic boxes would be more durable and cheaper to handle.
“Around 1,000 crates were being used in a dairy and my grandfather and his brother saw a huge opportunity in the material handling segment. So in the mid-80s he started manufacturing crates by setting up another unit in Andheri, Mumbai and entered the B2B segment. “
In the late 80s, the brothers were attending an exhibition in Germany, where they saw long rows of plastic chairs. At that time Indians were using wooden or metal chairs and there was no demand for plastic furniture. But Vamanrai and Sharad placed an order for chair moulds in Germany and decided to make plastic chairs in India. This is how Nilkamal’s furniture manufacturing work started.
To expand the business and diversify into other verticals, says Mihir, requires large amounts of money. Being a bootstrap company she was bringing her profits back into the business, the brothers realized going public. However, the economic situation in the early 90s was not favourable.
“My grandfather thought that going public was the best way to increase business efficiency and gain consumer confidence. However, in 1991, when he planned to enlist, the Gulf War broke out. Oil prices were skyrocketing and India had a trade deficit. Nevertheless they went public and got tremendous response, then our shares were subscribed 6.5 times. ”
Since then, Nilkamal has not looked back. The company expanded its material handling business, which now includes plastic pallets, insulated iceboxes and fish tubs, waste management equipment and road safety products. Nilkamal also expanded his furniture portfolio in later years.
In the late 90s, second-generation entrepreneurs Hiten Parekh, Nayan Parekh and Manish Parekh carried forward the brand’s legacy, continuously expanding into furniture. Today it offers a range of bedroom furniture sets.
With over 2,000 distributors who supply Nilkamal products at 19,000 retail points and a sales team of over 400 who manage their B2B segment, the company is involved in a business of over Rs 2,200 crore.
Nilkamal has 11 manufacturing units, 10 of which are located across India and one in Sri Lanka. The company’s client list for the B2B segment includes PepsiCo India, Coca-Cola Company India, Maruti, and Volkswagen.
In 2005 the company also launched ‘@Home’, a furniture retail chain that now has around 45 stores. In 2012, the company came up with Nilkamal Matrez and in 2019 it launched a mattress brand – Doctor Dreams to cater to online customers.
Move towards the packaging industry
Mihir joined the family business in 2015 after working in the investment banking industry for two years. Growing up a family-run business in collaboration with first and second-generation entrepreneurs, Mihir says he wanted to innovate further.
Noticing a gap in the packaging industry, he came up with the idea of launching the Nilkamal Bubbleguard, a series of unique honeycomb-structured boards, to change the face of printing, packaging and security.
The brand offers packaging, printing and panelling that find use in industries such as construction, automotive, steelwork, furniture, F&B, advertising, decoration and logistics. Starting with 200 GSM (grams per square meter), Mihir increased the brand’s limit to 3,500 GSM to replace less efficient contemporary materials for printing, packaging, and security.
The epidemic has also troubled Nilkamal’s trade. Though Nilkamal’s content business has grown and other materials fall under the required categories, its other business verticals are currently on hold.
“At the beginning of the epidemic we realized that there would be a significant need for hospital beds and infrastructure in India. We decided to ramp up our production line and tailor the products according to the need. “
Soon, the company developed timely solutions, such as seven-position isolation beds, which help patients with difficulty breathing; Quarantine beds (steel beds for isolation areas); And Quick-COVID Bed (an innovative lightweight bed solution that can be built in just three minutes and delivered to make-shift hospitals across India).
The company was able to make a greater impact in collaborating with Reliance, which has been the oldest supplier of Nilkamal for polypropylene raw materials. Nilkamal, through the Reliance Foundation, donated 2,000 quick-COVID beds and 2,000 bedside cabinets at the Sardar Patel COVID Center in Delhi. The company has supplied 1,500 beds and cabinets to Navi Mumbai Hospital and 1,000 beds to BKC Hospital in Mumbai.
Nilkamal has also launched TravelGUARD between seats in public transport buses to prevent the spread of the virus.
Challenge and competition
Nilkamal stands in a large and diverse market including home furniture, office furniture and mattresses. The company’s differentiating factors include high quality, consumer-focused and innovative products and a strong channel partner.
As a company with a great presence in the offline sales medium, Covid-19 is a big challenge. Mihir says
“The current epidemic has forced us to rethink our business strategy. We are focused on digitalizing all aspects of the business. With the current and changing environment, we are increasing online sales, digital marketing and striving to improve our technology as physical retail is moving to online platforms. ”
Talking about future prospects, Mihir says that the company is optimistic and that the way the epidemic has changed it strategically requires a lot of changes. Digitalization has become the key to survival and thus Nilkamal is focusing on expanding digitally as well.
The company has a lot of products under development and will continue to launch later this year.