Panchgani-based Mapro Foods is a small company, but dreams like a big one. It started as small-scale jam unit, after government officials who wanted to promote food processing industries in the region gave pharmacist and businessman Kishore Vora a fruit processing licence. Vora began by making 10 kg batches of strawberry and raspberry jam in a tiny room equipped with a kerosene stove and a pot.
Word-of-mouth popularity prompted him to move to a bigger production facility. He started experimenting to make other fruit-based products. The high fruit juice content of Mapro's crushes and squashes - 45 per cent, compared to 25 per cent for rivals Kissan and Mala's - made them instant hits. "We came up with fruit crushes because there was a demand for fruit-based milk additives. Since Panchgani accounts for over 70 per cent of the country's strawberry production, we were able to forge exclusive partnerships with farmers for sourcing," says Vora.
| THE LOW-DOWN|
- Mapro Foods was founded in 1959 by pharmacist Kishore Vora
- His nephew Mayur Vora runs the company, and Mayur's son Nikunj, 29, heads the chocolate division
- Key products are fruit chews, squashes, crushes and chocolate
- The recently launched Falero fruit chews and Mazaana chocolate are driving growth
- The company has a strong presence in Gujarat and Maharashtra, and plans to expand distribution beyond western India
In 1983, Kishore was joined by his nephew Mayur Vora, an IIM Bangalore alum who had two years' experience at Voltas. However, the company could not expand much beyond Maharashtra and Gujarat, and had to be content with modest growth for years.
The rise of modern retail gave Mapro a nationwide network and access to customers with deep pockets
. Also, the government replaced the 15 per cent sales tax rate with a flat four per cent VAT. Vora invested the extra money back into the business and set up three new units in Satara and Pune districts in Maharashtra and Pathankot in Punjab. Today, installed capacity is some 100 tonnes a day.
As growth in the jams and squashes business started slowing in 2005, Mapro entered the confectionery and chocolate business. According to Technopak Advisors, the squashes market, pegged at Rs 70 crore, is growing at 10 per cent.
By contrast, the Rs 5,000-crore chocolate market has been doubling every three years. In May 2008, Mayur Vora came up with pulpy fruit chews, branded Falero. Today they contribute almost 50 per cent of revenues. "Falero, priced at Rs 1, is an indigenously developed product," says Mayur.
"Nothing comparable exists. It's available in flavours such as unripe mango, Alfonso mango and strawberry, which appeal to the Indian palate." There are reports that even bigger rivals such as Parle and Perfetti are trying to develop something similar. "We have 400-odd distributors right now who are largely located in western India. We are exploring partnerships with distributors in other parts of the country and intend to soon expand the distribution network to 700."
Ashok Vithlani of Polad Trading has handled the distribution of Mapro products in Gujarat
for 15 years. He covers 25,000 retail shops in 110 towns. He says Mapro's product replacement guarantee operates till the last mile. "Unlike other FMCG companies, Mapro replaces the product immediately in case of breakage, even if it happens on the retailer's premises," he says. "They value business associates and support them through better margins and loans for expansion."
Mohit Bahl, Partner (Transaction Services), KPMG, says companies like Mapro need strategic investors to grow beyond their limited geographical reach. "Private equity companies that specialise in consumer business can help them build processes and a management team, and take their brands to a national level," he adds.
He cites the example of Paras Pharmaceuticals. In 2006, with a turnover of less than Rs 300 crore, Paras received a $42 million investment from PE firm Actis. In 2010, Paras was bought by Reckitt Benckiser India for Rs 3,260 crore - eight times its 2009/10 revenues. But the Voras see no great need for PE investment.
Mayur says he gets proposals from PE firms almost every month. "There's no big name left who has not approached us," he says. "I don't know what they can bring to the table except money. Sure, we need money to build a national presence, but that can come from bank borrowing and internal accruals."
Mapro revenues have risen from Rs 25 crore in 2006/07 to more than Rs 100 crore in 2010/11, a compounded annual growth rate of some 32 per cent. Success, as they say, is sweet.