Sacheerome, a third-gen fragrance and flavour house led by perfumer-entrepreneur Manoj Arora, has recently launched its IPO. From powering India’s FMCG scents to expanding globally, tune in to this conversation to know more about the company’s journey.
Mubina Kapasi: Hi everyone and welcome to SmallCap Spotlight. I’m Mubina Kapasi. Today’s guest is someone who’s a supplier to all the products that we use on a day-to-day basis, right from shampoos and soaps to even perfumes.
The company is Sacheerom Limited. It’s on the anvil of an IPO and today we have with us Mr. Manoj Arora, who is not only the Managing Director but also the Chief Perfumer. Mr. Arora, thank you so much for joining us.
To begin with, introduce your company to all of our viewers. Like I mentioned, it’s something that we use on a day-to-day basis. Could you tell us a bit about the products you manufacture and sell?
Manoj Arora: Thank you very much Mubeena for having me and giving us the opportunity to introduce Sachirom, which is known as Sacrom also in Europe.
So, we are in the business of fragrances and flavors and we cater to food and non-food grade FMCG products all over India to the key accounts and we have the good presence in the global market also. Mr. Arora, we would love to hear a bit more about you. It’s mentioned that you’re a third generation entrepreneur.
You started the business, I think, somewhere in the 90s. How did it all begin for you and what drove you to this industry? It’s a very unique industry, one with not a lot of players. Could you tell us a bit more about that? You know, as I belong to the third generation, I had to enter the business, my family business.
That was the obvious choice and with the time, you learn the things and ultimately, perfumery was my mission and my only motto and being the senior most in the company. So, in that capacity, I’m the chief perfumer of the company but we have a huge talent bank of perfumers in our company and they are the world class. They are the global level perfumers and flavorists.
Okay, let’s understand a bit more about this industry, especially in India. To what extent is the perfumery industry, the fragrance and flavors industry organized? To what extent is it unorganized and who would you say are your key competitors? You know, as I mentioned, you know, fragrance and flavor, they play a very important pivotal role in the success or failure of any FMCG product. You use one soap, you dislike the other.
You use one toothpaste, you do not use the other one. Maybe the agarbatti or the personal care products, home care products, your juices, your beverages, your chips or anything, you know, the fragrance and flavor makes it a favored product. There are global companies, we are also a mid-sized global company.
So, there are many global as well as Indian companies who are in this industry but you ask about how many people are in the organized, you know, there are very few companies which are in the organized sector in this. Let’s talk a bit about your customers. How do you maintain customer relationships and also what is your customer acquisition strategy? You know, we are dealing with the food and non-food grade FMCG products and anybody who makes these products, they are our customers.
Okay, I’d like to know a bit more about your product portfolio and product profile. I understand you’ve introduced products like such Natura and such Veda which basically blend your modern technology with basic principles of Ayurveda. So, tell us a bit about how you invest in these kind of product innovations in R&D and what’s your strategy over there? These are the segments of the perfumery.
Sec Natura, Sec Veda, Sec Mexicab, you know, these are the technologies. With the change of the consumer preference, there are many companies which want a natural product that we provide them from our Sec Natura. Ayurveda is gaining huge popularity after yoga and meditation, okay? So, this is another one because the ingredients of Ayurveda and ingredients of fragrances, there are quite a lot which are, there are many ingredients which are common, okay? So, you take the example of neem or sandal, there are many.
So, we have the Sec Veda range of products. Sec Mexicab is to prolong the, you know, the longevity of the product, of the performance. So, these are the very high technology products which we provide to our customers all over the world.
So, tell us a bit about your product strategy. How much do you invest in R&D innovation of products? You know, necessity is the mother of invention and in fragrance also, the R&D is the backbone, okay? Constant innovation, constant R&D is the backbone of our industry and it is the necessity to provide to our customers new products and innovate new fragrances and the technologies. Could you tell us how much of your sales is from domestic and how much comes from exports? India is a very big market and not only for Indians but for the global world depends upon Indian market and we are, we are fully focused on Indian at the same time we are promoting our products, products in the other parts of the world also but India is a very, very big market.
And, you know, look at the scale up in the FMCG industry, the buying power of the people. So, this all creates a huge domestic market for us and we being an Indian company has the advantage of the price, of the logistics. So, European companies, they have to come, they have to, you know, bring their materials, we get the advantage of that.
Okay, we understand that you’re entering the Middle Eastern markets in a big way, you know, since we are speaking about domestic and export sales but interestingly this Middle Eastern market, especially for perfumery, is already a bit crowded. I understand your logic, of course, behind entering that market but what’s going to be your strategy and, you know, you’re investing a lot in it. So, any projected ROI that you’d like to share with us? You have to stand tall, you know, in the crowded market.
You should be different and we are, we have proved ourselves and if the market is crowded it means there is a potential in the market and we see it as a very positive sign for the industry and we are not new in the Middle East. We have the key accounts of Middle East, you know, and for a long time we deal with them. So, this is not a new market for us.
Yeah, we are growing in that market much rapidly. All right. Tell us a bit about the raw materials that go into your manufacturing process, where you source them from and also are these subject to a lot of volatility like is the case with a lot of commodities? You know, we have the robotic production already which was started in 2015.
We are one of very few companies world over who have the robotic production and our new plant will be also robotic but with the much better production capacity and, you know, there’s a huge difference in the technology in 10 years time has taken place. You know, every industry has the phase, the, you know, change in the price or increase. So, this is a quite a stable industry in comparison to other industries.
Yes, you know, due to these climatic conditions sometimes because there are lots of natural products which are used in fragrances and flavors. So, yeah, it happens but you have to plan the things if you know the industry, you know that what is the climatic condition, what are the global conditions and that’s what we are perfectly fine with the changing scenarios in the industry. Perfumery is a business, you have to procure the ingredients from all over the world like, you know, lemongrass, citronella, these are the Indian products, sandalwood is the Indian product but better quality of lavender comes from France but at the same time, Kashmir, there’s a purple revolution taking place in Kashmir.
Maybe India will be the biggest producer of lavender and due to the climatic conditions and soil and various factors, you know, like saffron cannot grow everywhere in the world. It grows either in Kashmir or the Iran or there are some other Spain. So, every company in the world has to procure the raw materials from different parts of the world.
We are not the exception. And Mr. Arora, you also have an IPO. So, let’s talk about that.
I understand that a big chunk of the proceeds are going to go towards a new manufacturing plant. So, what’s the expected date by which this plant will be commissioned that you have, you know, do you have a target date in mind? And again, what’s the ROI like for that? You know, our production capacity will be multiplied by four times, four to five times. To be precise, from 760,000 kg to 27 lakh plus kgs.
Okay. So, you know, this is the, we are coming up, we are at, we are putting up the new plant at YEDA, Y-E-D-A, Yamuna Express Industrial Development Area, which is the most sought after area. This is next to the, you know, the Noida International Airport is in that area only.
And ours is next to that. So, this is like, to part finance the production facility, we are coming out with this IPO. The idea is to corporatize the things.
We should not remain like a family company. It should be governed by the corporate culture. That’s the idea of coming in the IPO.
You know, you supply to a whole host of FMCG companies, and that’s a sector that’s certainly very interesting and lucrative in India. Could you tell us a bit about what you expect will be growth drivers for you? You know, there are many factors. In India, the food processing and personal care industry is growing very fast.
Okay. Then, rising demand for packaged ready-to-eat food and beverages is also, you know, happening very fast. Growth of quick service restaurants, increasing urbanization and western food influence, as well as shift towards natural and organic flavors.
This is for the flavor part. But look at the usage of the personal care products, hygiene products, everything. You look at the buying capacity of Indians.
And so, these are the factors which is giving India a huge push in the manufacturing. You know, the personal care industry, which is expanding very fast, as I mentioned. Okay.
Personal grooming and awareness about hygiene. Innovation in food, I just talked about with you. Sustainability and natural ingredients, which are in demand.
So, these are the driving factors which will push the growth. You know, your current clientele is obviously primarily companies. Just curious, would you consider entering B2C and catering directly to retail clients through online or perhaps brick and mortar stores? No, we are in the B2B and no one will ever, not at least us, will ever come in competition with our customers.
That’s a totally business, different business, different ballgame, different mindset. We will remain a B2B company, creative house. And there’s a huge scope of growth in this industry.
We were looking at your numbers for the last few financial years, and the growth has been stellar. Could you tell us what aided that? Not only last few years, but since the inception, we have been continuously growing. And the quality, the innovation, the new technologies.
And India is growing. You must understand, India is growing fast. So, we are the part of the Indian growth story.
What’s interesting is that along with the increase in the top line has also come the doubling almost of your profit after tax. What has aided that? The demand is growing. We have a fantastic team of professionals who are with Sacrum for 20-30 years or more.
And providing the customers the innovative products which have the technical edge. So, that’s the Sacrum’s USP. And Mr. Arora, you have a very clear stated goal for 2030.
Could you share with our viewers what that goal is? And how do you see Sacrum transform as a company by then? The world is changing, and the world expects the best from India. If you will not give the best, then you will perish. So, our focus shall remain on the smart green factory, which has many other factors.
If you want, we can discuss in detail. Apart from that, you know, global expansion and innovation is the key of the success of any company. You cannot remain confined to a small segment.
And innovation shall remain the key of the success of fragrance and flavour industry, and which is very rapidly changing. Focus on sustainability. So, these are the factors which are very important and very close to the heart of Sacrum.
And we will expand keeping in mind the global preferences, global trends in the industry to take it forward to the next level. And finally, who is in your team who is helping you achieve that stated goal? Could you share with us a bit about who forms a part of your core team? You know, team is not, it is not one segment. I’ll tell you, in the fragrance and flavour industry, there are perfumers, before that there are salespeople, those who take the brief, before that there are marketing people who, you know, share the trends, discuss with the customers.
After perfumers, then there is application, then there is evaluation. You know, there’s a large process which is involved. It’s not that mixing two products becomes a fragrance.
There’s a large team of people, experts in all the departments, they make it a successful company. Thank you, Mr. Varora, for joining us. All the very best for your IPO.
And thank you very much, viewers, for tuning in as well. If you found this video interesting, don’t forget to hit the like button and subscribe to SmallCap Spotlight for more such interesting insights.