Manas Polymers’ MD, Vineet Bhadauria, outlines the company’s journey from solar power to polymers, its growth strategy, and expansion plans supported by IPO proceeds. He discusses upcoming capacity additions in packaging and solar, along with long-term ambitions for a 100 MW solar portfolio by 2030.
Mubina Kapasi: Hello everyone and welcome to Small Cap Spotlight. I’m Mubina Kapasi and today we’ll be talking to a company that essentially manufactures packaging materials for most of the FMCG products that you and I consume. The company is Manas Polymers and Energy and I have with me the Managing Director, Mr. Vineet Bhadauria, who will be joining us to take us through the company, his own career journey and what his vision is for Manas Polymers and Energy.
Mr. Bhadauria, thank you so much for joining us today. To begin with, let’s kickstart how the last decade or sorts has been for the company, when you established it, what was the vision, what were the key milestones, if you could sum up the last 10 years for the company.
Vineet Bhadauria: Yes, surely, thank you Mubina and just to introduce to you a long list of friends, thank you.
I started my career in 1994 with BK Bella Group of Companies and after 19 years, I just came back to my hometown, Valley, with the concept of bringing business for the next generation, so that the benefit of my work for the next generation is carried over. So, I started this business journey with a solar plant at Ujjain. Ujjain being the line of Mediterranean is the best place for the solar productions.
So, one megawatt plant was taken up there, was established in 2014 there. After that, I started my polymer division in 2015 with a buyback agreement with a future brand, with a new brand development and the process of development but unfortunately, that doesn’t work. So, normally people ask what are the challenges I face in my life.
One of the biggest challenge which is normally a part of SME business also, everybody has to face all these type of challenges. But just in the next month, when we started the polymer division, we tested the failure in a very big way because that company didn’t turn up to buy products which they promised. Then we start the cruise journey started from that point because the concept of having a buyback agreement and then establishing a market for yourself is a totally two different concepts.
But with the help of my wife and I being a good team, she was looking after the production and accounting and I after the marketing which was my core part of life. Then we started from the two injection machine, we grow to the five injection machine, 12 line machine, three HDD machine. This is our journey of 10 decades.
Now, we have sales partner everywhere, right from Jammu to the Bangalore and all over in MP, UP and Bihar. We follow a concept of exclusive sales partner so that they don’t face competition with among themselves. So this is my strategy of marketing right now.
And we have doubled more than double, triple the sale in the last 10 years basically. So interesting to hear about your journey, Mr. Guduria. What’s more interesting is that you didn’t always start off with polymers, you mentioned that actually your first step was solar power.
Mubina Kapasi: So could you tell us with that how that entire transition happened from solar power to polymers? I mean, is there some sort of synergy or something that exists between these two verticals?
Vineet Bhadauria: No, no such synergy worked out at that time. But now, when I feel when it was started, it was a basic investment type of idea to invest in the renewable energy that was a growing concept at that time. And the polymer division that I have just told you came up through the franchisee model to me.
But unfortunately, in MP, though, both the things cannot be coordinated, like I cannot use my own energy produced. So I’m just selling the solar power to others. But that 10 years gave me sufficient experience of bringing another solar plant what we are targeting right now is 15 megawatt solar plant and doubling our production capacity in polymer division also.
Mubina Kapasi: Yeah, I was just going to come to that because now with your IPO proceeds, you are looking at expansion. So could you tell us a bit about that? How is it going to expand your pet manufacturing and your solar power?
Vineet Bhadauria: Yeah, my major portion will be solar plant. Like we are just in the process of bringing a 15 megawatt solar plant again nearby Ujjain.
It would be the first phase, but what we’ll be targeting through this IPO, certainly 15 percent of the total fund value will be diverted to the polymer division. We have already taken up a land at nearby location, land more than double of it. So we’ll be putting two new machines and targeting few new modes, which are the demand of the current scenario.
Mubina Kapasi: Okay, understood. You know, you mentioned that you have these exclusive sales relationships with your individual partners. I wanted to understand, I know you mentioned so that there’s no competition, but if you could just elaborate a bit more on that, because I imagine if it’s exclusive, then maybe, I mean, our partners also then a bit hesitant because then they cannot procure from other pet manufacturers.
Could you explain a bit more on how this model would work?
Vineet Bhadauria: Yeah, like the sales partner, what we are having in the different cities, we are selling them to exclude, we are not bringing another competition to them so that they are loyal to me in a longer way because in 10 years, so many companies are coming in this pet also have a good competition right now within a city also there are few players and outside also. But the business, good business relation depends on the mutual understanding and faith. So right from that day to till date, we haven’t bought any other competitor in the same city for them to compete within themselves, particularly for our products.
Even we have developed many other products, we could have got a new set of channel for that even we are going in the try segment, but we follow the same system, same segment of channel partners are still selling the our Manas products at that particular place. So like if I have a channel partner and Jammu and sending the middle from there to there is a far means freight component is too high, but still we are able to sell because they don’t have a competition with the Manus products there and we never felt the competition is a competition. Right now all the players in MP are known to me and we have good relations, but because I’ve believed in bringing new setup of marketing, developing our own ways not to compete with the existing by challenging rates or by putting unfair methods, I never worked on those things.
Mubina Kapasi: Understood. So basically within one region or within one city, you just have one sales partner and then you do not hire too many. That’s it.
Could you tell us a bit about who your customers are? Which FMCG segments do you basically cater to and your products cater to?
Vineet Bhadauria: Yeah, basically beverages industry is a main customer because it also includes the oil segments. We do produce oil bottles, oil jars and cans and some medicine companies also like pharma company, Ayurvedic pharma companies also use the pet bottles and jars. So basically these industries in packaging and then we have right now just a few months back started thin wall containers also, which is a growing demand in the restaurant segment and everything is coming in a thin wall containers.
Like you must be ordering on day-to-day basis, food coming from the restaurant comes in a thin wall container. We have just started two months back that segment also.
Mubina Kapasi: All right.
Okay. Actually, you answered my next question as well, but nevertheless, I’m still going to ask it. Are there any plans to perhaps move up the entire value chain in the FMB packaging industry, any new product categories, perhaps also you already mentioned thin wall.
So anything else that’s perhaps on the radar, maybe something that’s more margin accretive as well?
Vineet Bhadauria: Plastic polymer industry is like the demand is changing on day-to-day basis because everybody like water industry particularly, the cost of material is only plastic. Other than plastic, water is free basically for them. So there’s a lot of pressure on the plastic industry to reduce the cost because they have no other way to reduce the cost.
So grammages are changing. They are bringing the new concepts are coming where in the lower plastic is required to take the water. So next we are taking up that project also by reducing the bottleneck, the plastic will offer almost 5 to 10% plastic will be saved.
So in a beverage industry, that is upcoming concept. Thin wall, thin mouth was like 26 mm in a state of 28 mm. So grammages will be like 4 to 5 gram in a 1 litre bottle will be saved.
So that is underway, the moulds are underway. Moulds is the biggest cost in plastic polymer industry.
Mubina Kapasi: I would like to hear a little bit more about the cost but before that just a little more on the top line front.
In a way, y’all could be called as a direct proxy to FMCG demand because if consumption sentiment in the country is low, then it kind of affects y’all as well. So tell us, have you seen that perhaps especially during periods like COVID? How closely associated are you with the whole consumption cycle in the country?
Vineet Bhadauria: Even in the COVID plastic industry, polymer industry particularly never faced any big challenge. The demand was a bit slow but still that was demanded because oil segment, particularly in the lower segment of the society, they cannot buy big quantities.
So they always buy small quantities of half litre and smaller quantities on a routine way. So that was the demand was always there. But right now, after the new government concept of make in India and made in India, that demand of developing new upcoming businesses, small businesses always coming up.
So I foresee like people who are not earlier using the package water as a drinking solution in travelling and all in the part of life is going in India. So there will be a more demand coming up because people depends on the food processed and packaged food. The trend is definitely very clear.
Mubina Kapasi: Now I want to understand a little bit about your own course. It’s polymer, it’s affected to, it’s directly correlated with crude in a way because you’re using derivatives of crude. Could you tell us a bit about what your costs are like? What kind of vagaries do you see in your costs?
Vineet Bhadauria: Our cost is directly associated with the normative would be purchased from the India’s biggest producers like Reliance and Chiripal Films and IVL also.
But the cost doesn’t hits us because that is like the petrol. Whatever prices comes up or down that goes to the customer. Same way in the polymer industries, cost of product never affects too much to us.
The main test is to reduce the working cost and over the period of 10 years we have done the part well. So margins we have but now it is currently I hope the best in the industry possible.
Mubina Kapasi: All right, super.
Right now, of course, you’re primarily an FMCG. I understand, you know, we inserted news reports that you’re interested in looking to expand into agriculture, automotive. Is there any plans over there? I mean, you can clarify.
Vineet Bhadauria: Basically, they are totally a different industry. So right now we have sufficient scope in doing this business in the same division of FMCG and current segment of packaging for beverages.
Mubina Kapasi: Okay, understood. All right. Now, the fact that you are a food grade, you know, pet producer, does that also give you an edge versus other regular commodity players in a way? Because I imagine there are certain regulations and compliances that you have to take to be able to say that, okay, you can store food and edible items in my packaging. So does that give you an edges?
Vineet Bhadauria: Yeah, as a practice, we only use the food grade budget material for our industry.
But with the upcoming development in the industry, government has allowed some reprocessed material to be mixed, which is still on the upcoming stage, because of this higher cost. So that is not suitable right now. But big brands are asking for that also.
Certain percentage of reprocessed material. We are prepared for that also. We are doing it for some big names for it.
Mubina Kapasi: I imagine that would be a bit more cost saving as well for you and the brand.
Vineet Bhadauria: No, that’s not cost saving. That’s cost increasing part because 20% cost is higher, higher cost of raw material is coming in reprocessed material.
Mubina Kapasi: Okay, understood. Virgin is cheaper. I mean, Virgin is cheaper than the reprocessed material.
So that’s not the cost saving at all. That’s the compliance part basically. Got it.
Got it. Okay. All right.
Well, let’s just talk about, I want to understand if there is fear of import substitution in the interpet products industry. You know, you always have competition from countries like China. Do you see that?
Vineet Bhadauria: No, particularly what we make, there is no such competition of coming metal from that point.
But in our raw metal, there is a scope to buy the raw metal from imported sources. Earlier we used to, but after this current concept of Modiji, we buy Indian, I have stopped that practice also. Now I am buying only from India, my raw metals and preforms still are not coming to India, but we are planning to export it to smaller countries.
By the end of next year, I think we will be able to do that.
Mubina Kapasi: All right, super. Let’s just talk a little bit about numbers. You mentioned how in the last couple of years, you’ve managed to really grow your revenue. Do you think you could share with us what your trailing 12 months revenue was? And also maybe a vision that you have for Manas over the next couple of years, either in terms of products that you’re offering or revenue, there’s some ambition that you may have Manas should reach if you could share that with us long-term.
Vineet Bhadauria: The better will be to divide in two parts.
First will be the financial part. We completed, finished last 25 with 32 as a revenue and 4.5 at the top line. What I foresee is by the next month, September, next month, September of the 26th, we’ll be able to double both the figures because our production capacity will be doubled in polymer and 15 megawatts solar will be working by that time.
So figures will be doubled, I think, but that is a futuristic concept. So I should avoid saying that much of things, but still I’m confident I’ll be able to do it. The next portion of your question was, I’m missing the next part.
The products, product line. What I foresee in the next 12 months, I’ll be having 15 megawatt solar plant commission and the production capacity of the polymer will be doubled by that time. Okay.
And you’re already working to… Future plan for Manas, I just came back to that. You talked about the future plan of Manas and what I foresee Manas to be there. Manas as a concept, I wish I’ll be making 100 megawatt solar as my support to the society as well as to the investors.
100 megawatt of solar power is still by renewable energy is a good target. So for I foresee for by 2030 and by that time I see, we’ll be a member at Tennessee Main Board. That is my future plan.
Mubina Kapasi: Super, super. All right. Finally, just give us a bit of a flavor of your team, you know, what’s your employee strength like, and also who is there in your leadership team who’s, you know, helping you achieve all of the goals, plans and the vision that you have for Manas.
Vineet Bhadauria: The journey started was with my wife, who was also an MBA with me, classmate of mine. Now I have as a family members, I have two or three family members who are working with me in a contact basis. Like, my son is there, my daughter-in-law, my daughter-in-law, these are family members of the next generation.
And for the, so for the team is concerned, we have, we are equipped with the professionals like CA and CS full-time and team of 30 person looking after my polymer division. They all are experienced. They all are having older experience also and working with us for last 10 years.
We, I have never faced such a manpower challenge because people who are, whoever started with me, they are still with me, except two cases. So we are working as a team, we are working as a family and I look forward to be associated with the investors also in the same way.
Mubina Kapasi: All right, Mr. Bhadauria, this was a great conversation.
Thank you so much for joining us on SmallCap Spotlight. Well, there you go. That was Manas Polymers and Engineers.
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