Nobel Hygiene, which pioneered adult diapers market in the country two decades ago under the brand name of ''Friends'', is investing Rs 110 crore in a new plant at Halol in Gujarat, a top company official has said.
The Nashik-based firm closed last year with a revenue of Rs 600 crore on which it earned 13-14 per cent in profit margin, said its founder and Managing Director Kamal Kumar Johari.
He attributed the over 30 per cent growth last year to the COVID-19-proof nature of his business -- diapers for adults and kids, and sanitary napkins and medical hygiene products for women.
Johari has set a target of Rs 800 crore topline (revenue) for 2021-22 and Rs 1,000 crore for FY23 as the company is on an expansion mode.
Currently, its Nashik plant produces over one billion pieces of diapers and sanitary pads annually.
The new plant at Halol is coming up with an investment of Rs 110 crore on a 13-acre plot and will have three machines in the first phase, producing baby napkins and baby underpants from October-November this year, he added.
Johari expects the Halol plant to generate Rs 450 crore in annual incremental revenue on completion of the second phase, when he expects the annual capacity to almost double by adding 12 more machines.
It entered the Rs 3,000-crore sanitary napkins market last year with its brand Rio, which is also the pioneer of heavy flow pads for maternity purposes and for women with heavy menstrual flow under the label of Rio Overnight. It sells the adult diapers under the label of Friends and baby diapers under the labels of Teddyy and Snuggy, said Johari, who was optimistic about the overall business.
The over Rs 6,000-crore baby diapers market is clipping at 15 per cent a year and he expects to grow at much faster pace going forward. The Teddyy brand itself is fetching him almost half his revenue of around Rs 300 crore annually.
He said that while Friends is the largest adult diaper brand with over 50 per cent market share, his baby diapers -- Teddy and Snuggy -- are the largest local brands.
Snuggy was in fact originated in Kerala in the mid-1980s, by R Rajan of the famous mosquito repellent brand Goodknight, who sold it to the Godrej group 2005 but could not drive it as planned so sold it in 2018 to Nobel Hygiene. Snuggy now grosses over Rs 70 crore now and is on course to cross Rs 100 crore.
Johari owns a little over 50 per cent in the company, while the rest of the equity is with the leading healthcare-focused private equity firm Quadria Capital which entered in June, and Sixth Sense, which is the first domestic consumer-centric venture fund and owns 9 per cent.
Quadria has committed an investment of Rs 400-500 crore over the long run. A total of Rs 50 crore has already flown in and the company will use the money mainly for brand building and drive growth.
Quadria bought out existing investors Access Fund that had invested $11.5 million in the company earlier, and CLSA Capital Partners, which had invested $10 million way back in February 2015.
(To receive our E-paper on whatsapp daily, please click here. We permit sharing of the paper's PDF on WhatsApp and other social media platforms.)