From the Times of India profile of the company which recently raised capital from StanChart Private Equity:
Two years into the business and Privi had not yet created a sufficient client base, pushing it to the verge of shutting down. In 1994, its losses eroded its equity and the company's prime creditor, State Industrial & Investment Corporation Of Maharashtra (SICOM), served a notice to take over.Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of data and analysis on private equity, venture capital and M&A deals in India. View free samples of Venture Intelligence newsletters and reports. Email the author at email@example.com
"We briefly thought of quitting and trying something else," Rao says. "But then we decided to fight it out rather than accept failure." Those days, the big players in aroma chemicals were Bush Boake Allen, Reckitt & Colman of India, Hindustan Lever, Hindustan Polyamides and Fibres, and Tata Oil Mills Company (Tomco).
The partners did their best to turn around the business. They brought down operational costs, switched to synthetic raw materials and negotiated for cost-effective order sizes. The firm also changed its strategy. "Rather than just catering to the incense sticks market, we targeted attar, detergent and soap makers. We rolled out amberfleur (woody notes), sandalwood and dihydromyrcenol (citrus). And our efforts began to pay off," Rao says.
Today, exports contribute 70% to Privi's Rs 370-crore turnover and its clients include Procter & Gamble, Henkel and flavouring and fragrance manufacturers such as Givaudan, Symrise and Firmenich - all based in Europe.