Starch maker stiffens its position

The company that commenced production at Viramgam in Gujarat, western India, in 1994 with a corn-crushing capacity of 75 tonnes, is in an extensive expansion mode, with its Gokak unit being the single largest corn wet milling plant in India with a 750 tonne capacity.

It’s been a challenging journey for the Rs 2.5 billion (USD 56 million) company started by Chowdhary who, in 1990 convinced his family, till then trading in starch, to enter manufacturing. RSGB began with a single product but today transforms corn into starch and a wide range of products including nine grades of starch of the food, pharmaceutical, paper, textile, adhesive and explosives variety. Its product range comprises liquid glucose, dextrose monohydrate, malto dextrine, high maltose corn syrup, dextrose syrup, etc.

"We were trading in starch and financing the corn milling industry and had 30 years experience in corn procurement," he says, adding, "the first three years were frightening!" But 11 years into commercial manufacture, the business growth was from a trading turnover of Rs 90 million (USD 2 million) to Rs 2.5 billion in 2005–06 ( USD 56 million).

"We’re confident of growing at 20–25 per cent, and plan to cross the Rs 5 billion mark by 2009; every three years we want to double our turnover," says Chowdhary.

Expanded capacity and product range

Two big events in the journey were the acquisition of two plants from multinationals. In 1996 the company acquired K.G.Gluco Biols from Glaxo at Gokak, in northern Karnataka. In a major expansion in 2000, its crushing capacity was increased from 150 to 400 tonnes a day, and the product range expanded too. In 2005 came the acquisition of the biopoly-mer division in Pondicherry from Hindustan Lever, a joint venture of Unilever.

Gokak’s location is strategic being in the midst of India’s largest and lush-green corn producing region and Riddhi Siddhi (named after his two daughters) consumes a quarter of north Karnataka’s agricultural produce. "We help 150,000 Indian farmers by procuring corn directly from them, eliminating middlemen," he says.

RSGB’s product applications are mainly in the food, pharmaceutical, textiles and paper industries and its client list includes food and pharma majors such as Cadbury’s, Parle and Nestlé, Glaxo and Wockhardt. "While 60 per cent of our products go to food and pharma, 10 per cent serves the paper industry," he says. In food, RSGB’s products are used as thickening agents in sauces, gravies, puddings and pies, and for making baking powder and salad dressings. Its paper application is for strengthening and stiffening paper; in textiles its products strengthen the wrap yarn; in pharma they are used as compressing agents in tablet manufacture.

Quality machinery for quality products

When RSGB was looking for its first 12 starch washing systems, it wanted the best in the market and zeroed in on Alfa Laval. Chowdhary says: "Though cheaper alternatives were available in the Indian market, we went for the best established worldwide experience and exposure and support us with relevant data and technology.” "In the initial couple of years, one sixth of our total project cost of Rs 60 million (USD 1.33 million) went into Alfa Laval equipment."

Repeat orders followed in quick succession. In 1996, "Alfa Laval played a very big role in setting up the Gokak plant, supplying the spray drier, all the evaporators, and other equipment. We had confidence in a company already closely associated with the starch industry." He acknowledges that Alfa Laval gives "valued service; they have worldwide experience and exposure and support us with relevant data and technology."

Madhvesh Kallapur, Branch Manager, Alfa Laval India, adds that the co-operation between the supplier and customer is such that "they treat us more like partners than a vendor and are very open, telling us both our plus and minus points." But, adds Chowdhary, it would help immensely if Alfa Laval kept spares in India.

In 2004 RSGB began exporting to West and South East Asia. Exports doubled to Rs 150 million (USD 3.3 million) in 2005, and is slated to touch Rs 600 million (USD 13.3 million) by 2007. "The sky is the limit for Indian starch companies with quality products," says the upbeat Chowdhary.

Initiatives and visions

Recently the French starch major Roquette Frères bought a 14.95 per cent stake in RSGB; the money will be utilised for partly funding the company’s ambitious Capital Expenditure Plans of over Rs.1200 million in 2007 – investment in a new plant in Uttaranchal in north India and upgrading its existing plants. This partnership, says Chowdhary, is crucial to meet future challenges of new product technology, process know-how and R&D.

"We have to overcome our limitation as a small company and grow fast in a rapidly changing environment. Roquette, with its basket of 600 high value added products and with sophisticated R&D set up, will be an invaluable partner in our pursuit for excellence and product development."

Developing a sugar-free product for India’s diabetic population, the highest in the world, is on his radar. "Worldwide you get sugar-free sweeteners, cakes, puddings and other confectionery in supermarkets. Today young Indians are becoming very health conscious and sugar-free products have a bright future. Roquette will provide us with technical assistance to upgrade our product portfolio to international benchmarks of quality, efficiency, yield and manufacturing process." The management’s concern for health is evident in the "No smoking" and "No tobacco chewing" signs at the Gokak factory.

Mukesh Chowdhary, Executive Director, and Ganpatraj’s nephew, says the challenge is to "become a company of global standards. In our goal to benchmark ourselves with the best in the world, and we are now going in for ISO 22 000, the best in food standards."

His uncle is optimistic about the prospects of the industry in India, but says India will have to step up its corn production. Of the 600 million tonnes of corn produced in the world, India’s share is only 15 million tonnes, against 300 million tonnes of the US and 140 million tonnes of China. "Maize is a wonderful product – I call it the golden grain – from which 3000 products are made worldwide," he says, adding that production of ethanol and providing corn sweeteners to the cola majors will be areas of opportunity for RSGB in the future. "Also, the Indian starch industry knows only 15 to 20 products. If somebody can produce 1000 products from starch, why not we," he muses.

With a business philosophy which focuses on building and growing a young team, providing the right leadership and running plants "to full capacity for 365 days a year", his future goal of achieving a one million tonne annual crushing capacity seems attainable.

Alfa Laval’s brand ambassador in India

When Riddhi Siddhi Gluco Biols (RSGB) was expanding capacity at its Gokak plant in 2000, “we had no doubts about buying our new spray drier, evaporators, flash driers and decanters from Alfa Laval.

They not only supply quality equipment but also help with engineering expertise in our plant,” says Ganpatraj Chowdhary, Managing Director.

Madhvesh Kallapur, Branch Manager, Alfa Laval India, says RSGB was the first in India to buy its separators. "It was a STQX 520 machine used for the first time in the world for this particular starch application. RSGB has installed three more such separators."

The Alfa Laval equipment plays a crucial role in RSGB’s production and provides technical solutions to improve product quality and enhance plant efficiency and performance. "Our evaporators help increase the concentration of their products; first liquid glucose water is removed, then the concentrate is dried to get the final product. Our solution ensures a final product without a burnt smell that would harm its quality," says Kallapur.

Alfa Laval has also supplied decanters for thickening and starch washing systems. In the cost-sensitive Indian market, RSGB has proved to other starch players that such equipment enhances efficiency and ultimately proves cost-effective. So happy is Chowdhary with the Swedish major that he has become its brand ambassador in India. "I tell people they should buy Alfa Laval equipment; it might involve a higher initial cost, but you’ll save in the longer run."

When asked in a lighter vein if he gets a commission for his endorsement, Chowdhary smiles. "No, but more than commission I value the relationship and goodwill that we have."