One More from Harish Kumar, the founder of Maharaja Appliances
New Delhi: Serial entrepreneur Harish Kumar, who sold one consumer appliances company he founded to AB Electrolux, another to Groupe SEB, took both buyers to court, and runs a third one, GEM Home Appliances, has now turned to packaged foods.
Kumar, 59, has founded One More Foods Pvt. Ltd, a maker of ready-to-eat Indian salted snacks such as alu bhujia, moong dal, navrattan mixture and salted peanuts.
Unlike 1976, when Kumar, then a student of medicine, saw an opportunity and launched kitchen appliances such as mixers and grinders, this time around, he is entering a crowded market dominated by home-grown companies such as Haldiram Foods International Pvt. Ltd, yoga guru Baba Ramdev’s Patanjali Ayurved Ltd, multinationals such as PepsiCo Inc. and a bunch of smaller regional players.
Kumar says he entered the business simply because “the opportunity is huge.”
“Packaged food is far easier to sell. During the past six months or so, we have established a good dealer and distributor network.”
Kumar has launched his snacks in Delhi and the northern parts of India. Before the festive season, One More will enter the eastern Indian markets and expand nationwide next year. His ambition is to make One More one of the top four brands in the segment by 2020.
“This business is all about distribution. And, he has a track record of setting up good distribution in the past. In the snacks segment, there’s demand, and the market has appetite for more brands,” said Rajat Wahi, partner and head (consumer markets) at consultancy KPMG in India.
“It is not tough to start and grow up to a certain level. But companies struggle to sustain and maintain growth after a level. Considering what he has done in his previous ventures, this time also he may get a foreign partner after a point to scale up,” he said.
Kumar currently sources his snacks from other manufacturers.
“We are in process of setting up a production unit spread over 1.5 lakh sq. ft in Gurgaon in 2017-18,” said Kumar.
The facility is to come up where Kumar used to run one of his appliance factories. Over the next one year, Kumar plans to spend around Rs.100 crore on the brand.
Over a period, the company plans to launch biscuits and wafers. “We’ll do everything that’s possible in the snack segment,” said Kumar, who hopes to cross Rs.100 crore revenue by March 2018.
In 1995, Kumar sold 51% stake in his first venture Maharaja International Ltd to Swedish consumer durables company AB Electrolux. In 2001, he got into a legal battle against Electrolux, under Section 392 of the Companies Act, over perceived erosion of shareholder value after the merger of Electrolux India, Electrolux Kelvinator and Intron Ltd in 2001. The company then was selling brands such as Allwyn, Kelvinator and Electrolux. In 2005, Electrolux was sold to Videocon Group.
The brand Maharaja, however, stayed with Kumar. In December 2011, France-based home appliances company Groupe SEB that sells premium brands like Moulinex, Tefal and Rowenta, bought a 55% stake in Maharaja Whiteline.
This alliance did not live long either. Kumar and Groupe SEB landed in court after the latter decided to remove him as executive chairman and managing director for allegedly failing to meet financial targets. Kumar declined to step down to take a non-executive role before the end of his two-year term scheduled in December 2013. Finally, Groupe SEB bought the remaining 45% stake in Maharaja Whiteline in May 2014.
Currently, Kumar also sells home appliances under the GEM brand, which was originally owned by Electrolux Kelvinator. Maharaja Whiteline bought the brand in 2006. According to Kumar, GEM Home Appliances had sales of Rs.200 crore in 2015-16.