Targeting a turnover of Rs 1000 crore by FY2017, bothers Alok and Anuj are determined to take their father Jagdish Saxena’s vision to the next level. Will the infusion of bold and complementary new strategies from both sons be strong enough to weather the competitive times ahead? Or will sibling rivalry play the spoiler? By Usha Sharma
Opportunities don’t happen. You create them,” is a common motivational quote which possibly best defines the journey of Mumbai-based company Elder Pharma. It was founded by Jagdish Saxena in 1987 and after his demise in 2013, is currently being managed by his sons: the elder Alok Saxena and the younger Dr Anuj Saxena.
From the archives
Interestingly, company lore has it that the patriarch had no plans to set up his own pharma venture. He joined the Indian Air Force in 1960, and quit three years later to join Sarabhai Chemicals. Two years later, he joined Tata Fison Industries, where he put in a long stint, going from a liaison officer for their pharma products, agro chemicals and industrial chemicals division, to Sales Manager of their pharma division at Mumbai with added responsibility of Delhi.
In 1973, he joined Martin & Harris as Marketing Manager and was promoted as Director in 1975. In 1978, he joined Walter Bushnell, as Managing Director. In 1987, the company shocked employees when it announced that it was shutting down its pharma division. Concerned about the future of the 300-odd employees of his division, Saxena senior took the bold step of investing his personal funds to launch his own pharma company. Even though this was his first venture, all the 300 employees, including key personnel from the pharma marketing division, who were about to lose their jobs decided to join him. The company was up and running by 1987.
Story behind the name
While deliberating on many options, inspiration struck senior Saxena when he was on holiday in Australia and saw a trailer truck for the first time, which had the world ‘Elder’ written out along its side. Struck by the sight, he decided to name his company, Elder Pharma.
For the next two and a half decades, Elder Pharma came to be defined by his continuous efforts, be it making the company a successful brand or developing new products like Shelcal. After his demise on October 11, 2013, the responsibility passed smoothly onto the shoulders of his two sons, both of whom already had key responsibilities in the business.
Recalling the lessons learnt from his father on business and life, as he joined him after leaving law studies, at the age of 22 years, Alok Saxena, Managing Director and Chief Executive Officer avers, “This has been a great journey for me. We started with a small operation and have built great brands. I think this journey for me still has a long way to go.”
Till the demise of his father, younger son Dr Anuj Saxena’s involvement in the company’s activities was much lesser as he was pursuing a full time career in the TV and films industry. Today, he is working full time with Elder Pharma. Explaining the division of responsibilities, Alok says, “Anuj is the COO of the company and takes care of all domestic operations while I handle international business.”
Recalling his successful stint on the small screen, spanning TV and ad films, Anuj points out that he waspart of some of the most successful television shows like Kkusum (Sony), Kumkum (Star Plus) Saara Akaash (Star Plus), and Prratima (Sahara) to name a few. Another passion he indulged is was to run a restaurant in Mumbai.
Anuj managed to strike a balance between his responsibilities at Elder Pharma and his on-screen career. As he explains,“I was always a part of the Elder team, even while acting and would manage my time in such a way that I could devote six to eight hours to Elder, involving myself in operational and decision making roles.”
Difficult choices
After showing a steady growth graph for several years, the company started facing a financial crisis. Dealing with the issue called for some hard choices, selling off Shelcal and 29 other brands to Torrent Pharma, for Rs 2004 crores in 2014.
Explaining the hard choices before the company Anuj says, “Over the last seven to eight years, Elder grew and spread its wings and invested in various acquisitions in India and abroad, which is expected to generate major revenues and profits – but in the long term. These investments resulted in certain short term fund issues, forcing us to take a practical and business decision of selling off our brands to Torrent; keeping in mind the longevity and future of the group.”
When the announcement broke in the market, the obvious question was why does the company have to sell such an impressive and performing brand like Shelcal? Is it because the company is facing financial issues? Answering such hard hitting questions, Anuj says, “With competition increasing and market conditions getting tough, our company decided to take certain pragmatic decisions which involved selling-off of vour key brands.”
But the company clearly believes in the Shelcal brand, and hence retains the international rights which will help the company in growing further. Expressing the possibilities of regaining momentum from Shelcal among the international markets, Anuj informs, “Elder sold only the rights for the brands in India and Nepal and we still have the international rights for the brands. Currently, brands like Shelcal and Chymoral are under registration in a lot of African and South Asian countries and we expect it to increase in the next two to three years. These brands will grow and will contribute to the business turnover. We will register these brands in more countries in times to come. Our initial response to Shelcal internationally has been extremely positive and encouraging.”
According to the company’s press release issued in this June, Elder Pharma has commenced exports of Shelcal to more than 25 countries, and targets to receive Rs 100 crores from global sales. For FY2015-16, the company is likely to notch up sales of over Rs 25 crores with demand coming from countries like Cambodia, Myanmar, Sri Lanka, Mauritius, Maldives, Zambia, Uganda, Yemen, Guyana, Burkinafaso, Cameroon, Congo, Ivory Coast, Gabon, Papua New Guinea, Mali, Mauritania, Niger, Senegal, Burundi, Rwanda etc. Shelcal is currently exported in the form of 250/500 mg tablets and syrup but new line extensions are also being planned which will include Shelcal CT (Calcitrol), Shelcal OS (alpha Calcitrol) and Shelcal HD (high dosage of Vitamin D3).
The company is also targeting the markets of Europe, CIS and LATAM. Shelcal’s European thrust will be spearheaded by Neutra Health, its wholly owned subsidiary in the UK which will market it across the EU. Sold through the ethical route, Shelcal has found support from health conscious persons as the source of calcium used in it is from ‘oyster shell’, which provides calcium in its purest form.
With international markets under his wing, Alok projects that with the overwhelming response and acceptance of its product in all these markets, the company is looking at a strong prescription base in over 70 countries by March 2017.
Building a new superbrand
A logical and major part of Elder Pharma’s future growth strategy is to develop other products as successful as Shelcal and expand the geographical reach of the company. Spelling out some of this blueprint, Anuj reveals, “Going forward, our mother brand is going to be Eldervit. Eldervit falls in the category of multivitamins and minerals and Eldervit Injection enjoys very strong brand equity in the Indian market. In terms of opportunity and market size, Eldervit has much bigger and better opportunity as it is mass market and the size of the market is much bigger when we compare with a calcium supplement, especially for osteoporosis and other such diseases. The idea is to obviously capture all other markets as well. Currently, Elder Pharma is predominantly present in class I and II towns in metro cities. With products like Eldervit, we would eventually spread our base to the interiors, wherein we would explore the mass population to get maximum returns.”
Building Eldervit into a super brand will obviously be no cakewalk, given the profusion of brands in the supplements category. Even more so when you consider the change in management. Perhaps unfairly, but Shelcal’s success is largely attributed to the late Saxena senior’s expertise with marketing and promotion strategies, even though both sons were very much part of the company.
But there are already signs that both sons have learnt their lessons well. Predicting the future of Eldervit and other promising brands, Dr Saxena says, “I personally feel the brands like Eldervit and some of the anti-infectives like Formic have the potential to be a bigger brand than Shelcal. We are also working on new molecules and brands in the years to come to increase our market presence, both in size and value. “
An example of this is Anuj’s role in helping the company diversify its business portfolio. According to him, “The Elder Health Care Division/Company took full form under my leadership after 2006, when our company foresaw the huge potential of the fast moving health goods (FMHG) sector. Before that, there were a few brands in Elder Health Care and its team. However, the team and the company came into force as an independent existence in 2006, when I took charge.”
Under his leadership, the company launched several products in FMHG segment like mouth wash AMPM, which the company has since re-launched with an addition of a range for smokers/tobacco users. It has also expanded its Solo range of OTC products with the launch of the Solo range of inhalers for nasal congestion.
The newly re-launched AMPM has the key ingredient ‘triclosan’, an antibacterial and antifungal agent. The new version of the product is available in three variants: AMPM PLUS, AMPM SPECIAL and the newly launched AMPM NICOFRESH which is specially formulated for smokers/ tobacco users. In addition to triclosan, AMPM NICOFRESH contains sodium perborate which helps remove smoke and tobacco tar. The oxygenating effect of NICOFRESH hits one of the most stubborn sources of sulphur-producing bacteria and stops it at its source.
While justifying the re-launch of the AMPM product and the company’s focus to strengthen its presence in FMHG, Anuj says, “The FMCG brands like AMPM and Solo have just been reintroduced in the market. It is too early to comment, but I am hopeful that in times to come we can see the success of the same. In the next one to two years, we will focus on our existing brands port folio, but at the same time we will be doing the homework to keep new products ready and at an appropriate time we will launch them, as and when needed.”
While sharing the company’s business strategies to revamp its presence in both the markets, he mentions, “As we restructure, going forwards, we will obviously concentrate on the prescription market because that has been our strength. However, we will also slowly increase our FMCG/ OTC brands exposure. Till now Elder Health Care was responsible for the sale and marketing of the FMCG/ OTCS brands. Going forward, the brands will now be marketed and distributed through the Elder Pharma distribution chain. The advantage that we have within the group is that a lot of our FMCG/ OTC brands require chemists for placement of the products and this is where we have an edge over a lot of other companies. We will exploit our inherent strength in the years to come.”
Challenges galore
The company has received a considerable amount from Torrent but has it been enough to put an end to the question mark on its financial viability? Going by market buzz, the business environment of the company has not changed much and it is still in the process of settling its debts. Fending off these queries head on, Anuj informs, “The challenges the group faces today are the liabilities that still need to be cleared off, but which are more than sufficiently covered by our assets and brands. The support of employees at all levels has also been a major factor in turning around the cash flow situation of the company. The current products of the company are in great demand and are enabling the company to generate good cash flows. We expect a complete turnaround in our financial position by FY 2015-2016. Every organisation, big or small, goes through such challenges and we are no exception, but it has been a huge learning which we hope will stand by us in the long run. By FY 2017 Elder Group (domestic and international) is expecting a turnover of Rs 1000 crores.”
Bumpy road ahead?
Unfortunately, business is not the only arena where the family is finding it difficult to sustain its identity. There seemed to be some turbulence on the personal front as well. A year after the death of Saxena senior, a legal case was filed for division of his assets. The legal battle pitted Anuj against the rest of the family members ie; Alok, mother Sneh and sister Shalini. Giving an update on the developments of the legal dispute, Anuj says, “Keeping the best interests of the business, employees and the shareholders, the family is working out a solution to settle the matter. Hopefully it will happen soon.”
Nurturing their father’s vision
Saxena senior has played a mentor’s role in his children’s life. Now it’s time for his children to nurture the father’s vision for Elder Pharma to its fruition. Both Alok and Anuj have geared themselves up to take up their father’s responsibilities and are trying their best to improve the company’s present performance.
Reminiscing about his father and his advice, Anuj says, “His guidance was crucial to us but we are working along the lines he used to take decisions. In the past two years, I have involved myself in – and successfully restructured – every aspect of the group, from finance, accounts, sales, marketing, HR, administration etc. I think that this is the right way to make the company grow because it was important for me to understand the real situation of the company before I embark on rebuilding the group.”
Though the company is a family-run business entity, the promoters value professionals as well. As Anuj mentions, “We have a very professional team led by my brother Alok and by my late father and founder Jagdish Saxena. There is a substantial delegation of authority in our organisational set-up.”
While mentioning his father’s dream which he had set long before starting his final journey, Alok unveils the ultimate goal of the founding family saying, “We are looking at making Elder Pharma one of the top companies in the healthcare arena.”
Many companies start out as a dream, but it takes executors to weather the challenges and translate a dream into reality.
Elder Pharma is facing several challenges but the founding family has already shown the courage and pragmatism to take difficult decisions as well.
Navigating the road ahead will need creativity and courage but above all, a speedy resolution of all tangles on the personal front.
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