Camlin Gets Ready For Global Competition

The story of how a mid-size, Indian company is reacting to multinationals, joint ventures and liberalisation

In July 1948, the government announced an Open General Licence Policy. Very soon the market was flooded by foreign brands. Attractive packaging, good quality, and cheaper! Who would now buy our items? ... In end-1949 I was able to convince the government of the havoc being caused by OGL.

D P Dandekar, founder of Camlin Ltd, 1949

After 50 years of highly protected economy, we are suddenly facing open competition from abroad. Nobody wants to stop foreign companies from coming in it is simply that it could have been done in a phased manner.

Dilip Dandekar, managing director, Camlin Ltd, 1997

A landmark? The voice at the other end is clearly flummoxed that anyone would need anything more than the postal address. A long pause. Finally: Camlin House is well known in Marol Bazar.

Once there, you find the adjoining building is a monstrosity that can be seen a mile away. But it probably never occurred to any Camlin employee to use that as a mark after all, no one uses a five-year-old building as a pointer for one several decades old.

Camlin House is a neat, grey complex, tucked away in a Mumbai suburb. And the organisation is a bundle of contradictions. It was started in 1931 by a young entrepreneur, D P Dandekar, whose imagination was fired by Swadeshi but who didnt think twice about borrowing the name of a well-known American brand.

Or take the second generation now being run by chairman Subhash Dandekar and brother, managing director, Dilip. Their challenge is to make sure that their carefully nurtured market is not washed away by MNCs. But for all of last month Subhash Dandekar has been abroad, looking for a distributor to sell Camlin art products and colours in the US. (He has held talks with one of the major US retail chains, whose name he refuses to divulge. He also claims he has solicited business for his pharmaceutical division from a couple of big multinationals.)

Liberalisation is posing a challenge for the Brothers Dandekar. On the one hand, they have to face stiff competition from new rivals in a range of market segments and niches from writing instruments to glue sticks which Camlin traditionally owned. At another end, their policy of growing slowly and steadily in pharmaceuticals a Rs 10 crore business after a decade of existence has meant that they are still fringe players in that fast growing market. Finally, Camlin is still a small corporation despite its hoary age it had a turnover of Rs 105.16 crore and net profits of Rs 9.99 crore in the last fiscal and cannot take on new rivals on its own.

Dilip Dandekar is clear that Camlin will have to ally with a big MNC to survive. But he is also sure that the alliance will not come at the cost of independence or management control: he has just broken off a proposed joint venture with Faber Castell because he thought the terms were unequal. As Dilip Dandekar explains: We still have a marketing joint venture for their products but we canceled the manufacturing joint venture last month because the investments required would have meant a minority stake for Camlin. (The total outlay for manufacturing Faber Castell writing instruments was Rs 16 crore, a little too high for Camlin to take an equal stake in.)

Camlin has a logic of its own, which might not always make sense to outsiders, but ensures its survival. And that approach tinges their entire operating strategy. Thus, the company has one of the best known Indian brandnames but is miserly when it comes to advertising budgets. And while it considers its strong brandname a reason to get into new businesses, it chose a business which does not use that brandname pharmaceuticals!

It all began one day in 1931, when founder D P Dandekar was sitting in one of Mumbais ubiquitous Irani cafes mulling over a name for his business. None of those he came up with Horse, DPD (for D P Dandekar) pleased him. Then he saw an advertisement for the American cigarette the Camel with its slogan, I can travel a mile for a Camel, and made up his mind.

As his son, Dilip, explains, the qualities of the camel were also peculiarly apt for the products ink tablets and powder his father was peddling. A camel can go a 100 miles without stopping for refuelling and the fountain pens equipped with the Camlin brand of ink could cover a similar amount of paper before drying up!

Anyway, Camlin Ltd prospered and consolidated its grip. Over the years, it expanded to encompass the entire stationery materials range for households. It also moved into art materials..

After a brief flirtation with the idea of diversification in the mid-eighties, Camlins focus has shifted back to art materials and stationery. In fact, the company has averaged a 15 per cent per annum sales growth largely because of this division. Also, the Dandekars have found one more business where their original strengths can be leveraged business stationery and supplies. With its brandname, 350 distributors and 30,000 retail outlets, Camlin can certainly make an impact in this largely unorganised business.

Though they dont have any organised competition in their mainline businesses, the Dandekars are conscious of the need to beef up certain areas to keep their near-monopoly. That is why they have had no qualms about taking distributorship for Winston Newton art materials and the Caisson range of poster colours in India.

And so the Dandekars carry on. Fiercely independent, choosing slower growth to loss of control, low profile but with one of the best known brands, and a mix of modernity and tradition.In fact, just another family-owned Indian business thriving in the new liberalised era.