It’s one of those rare instances in life where a friendship between two persons has lasted close to four decades. Though business partners now, the friendship between Shiraz Naqvi and Dinesh Sharma has only strengthened over the years. Childhood friends, Naqvi and Sharma went to the same school (Salwan School, Delhi), graduated from the same Delhi-based college (ARSD College) and when it came to looking for a job landed their first one with Eureka Forbes. The friendship/partnership doesn’t end there. In 1988 they launched their company, Ultrapure Technology and Appliances India.
Ultrapure Technology manufactures and markets electrical chimneys under the brand name Ultrafresh. From 10 units a month in 1992, the company now sells close to 2,500 units. The clientele range from individuals to real estate developers, who fix these chimneys in new houses. In 2006-7, Ultrapure’s turnover was Rs 125 crore. With real estate business growing at roughly 10-15%, Naqvi and Sharma are confident of doing business worth Rs 500 crore by 2010-11.
But like most entrepreneurs, the friends-turned-business partners foray into business was nearly derailed because of teething problems. “The first couple of years were really difficult. Customers were difficult to come by, processes were not in place and there was also a capital crunch,” says Sharma.
The company was floated as a marketing agency. But the first product—water purifier— did not take off. In fact, the product “bounced” in the trial stages. On hindsight, Naqvi says it was ahead of its time and the pricing was faulty. The marketing of the second product nearly didn’t take off. A friend of theirs used to work in a supermarket in Lagos, Nigeria. According to him, electrical chimneys from Italy were very popular among Nigerians. He suggested to Naqvi and Sharma that they could export chimneys to Nigeria and grab a share of the market by pricing the appliance competitively.
The new entrepreneurs tracked a chimney-maker in Delhi. But to make this venture successful they had to be volume-driven. However, their manufacturer was unable to ramp up production. That left Naqvi and Sharma with a dozen or so chimneys and no market. “We then did what we knew we did best—selling the chimneys ourselves,” says Sharma. “Selling was always our USP. We were sales executives at Eureka Forbes. We knew how to work the markets,” adds Naqvi.
Leveraging their strength and experience, the duo went on a door-to-door selling expedition. According to Naqvi they visited Delhi’s tony neighbourhoods and looked for houses with a swing. It would be the owners of these houses who were most likely to buy a non-essential appliance such as an electric chimney. “Our gut feeling proved right. We managed to sell 10 units in the first month,” says Sharma.
It was a small beginning. But they had spotted an opportunity and grabbed it. Looking at India’s suburban sprawl they knew they had hit the right pitch. India’s newhome sector was burgeoning. It was these home owners, aspirational by nature, who were likely to be their customers.
However, the company’s lack of volumes was a stumbling block. Ultrapure Technology had to ramp up to keep its grip on a niche market. But the manufacturer was still unable to increase his production capacity.
In 1997, Naqvi and Sharma started their own manufacturing unit in Bhiwadi, Rajasthan. “We decided to sew up the back-end of our supply chain. We no longer had to depend on an outside manufacturer. We could increase our production and also take care of quality issues,” says Naqvi. In the last 10 years they have added three more factories (all in Nalagarh, Himachal Pradesh).
There was another opportunity within the electric chimney segment that Naqvi and Sharma discovered. A growing number of house owners wanted foreign brands that would distinguish them from their neighbours. And so was born the tie-up with the Rs 4,500-crore Spanish kitchen appliance manufacturer, Cata. Today, Ultrapure sells close to 3,000 units of Cata appliances a month.
It’s been close to 40 years that Naqvi and Sharma have been friends and business partners. And they have worked out a formula whereby their professional and personal domains are kept separate. “Our responsibilities are clearly demarcated. While Dinesh looks after production, my responsibility is marketing,” says Naqvi. Sharma adds that they leave their friendship at the door during board meetings. “We are professionals. We go into a meeting prepared to criticise and receive criticism. The same is true of all senior executives in the company.” Both believe in being transparent while doing business— transparent to colleagues, clients, and more importantly, to each other.
Keeping abreast with housing design trends, in 2005 Ultrapure moved into manufacturing and marketing modular kitchens. “Importing modular kitchens will not help. Our kitchen habits are different from those in the West. It makes sense to indigenise your product as well as cater to the growing demands of a modern consumer,” says Naqvi.
If they do have a mantra for success it’s sheer hard work—of hours spent on Delhi’s streets trying to find customers who would be willing to buy electric chimneys—and perseverance. Today they have achieved a modicum of success.
The next step is to grow their business by increasing production capacities and tapping the Tier II city markets. But for this they do not intend tapping outside capital. The profits are recycled into the business. Naqvi and Sharma are confident of changing the face of Indian kitchens. And they have taken the first small steps.