Exploring uncharted waters
up at a cost of Rs 2
05 August 2003
"Everything was new to us at every stage and there were no precedents to take inspiration from, no one to seek advice from and no competitor to learn from. That is why it took us a fairly long time to get going," says Harivallabhdas.
The product line he had chosen did not make the task any easier. "But these are very versatile products," he says animatedly. Giving details, he says dimer fatty acids find application in epoxy resins, surface coatings, industrial lubricants, greases and corrosion inhibitors.
Linoleic acid is used in resins (paints), polyamides, surface coatings, inks, flexible packaging. Tocopherol is used for extraction of natural source vitamin E, which finds use in various fields like pharmaceuticals, cosmetics and food products.
Initially, HK had to struggle hard to find buyers. "Globally, there are three main producers who dominate the field of vitamin E — US-based ADM, Cognis Corporation (a Henkell spin-off), and Cargill.
"When HK approached Cognis, the latter was reluctant to start with a new supplier. But we succeeded in convincing them about our quality and after seeing things first-hand they had no doubts at all. Eventually, Cognis turned out to be a good business partner for us. They even helped us to fine-tune our operations," says Harivallabhdas.
Expectedly, in the first year of operations, HK suffered losses. "Our response was to infuse more funds into our business," says Nahoosh Jariwala, executive director of the company. "In the meantime, we entered into a pact with Cognis and became their dedicated suppliers. For three years, we did good business and then the dream-run ended with Cognis expanding its business and, in the process, cancelling our contract."