The Growth of Balaji Wafers
- Accommodation & Food Services
Chandubhai Virani was born on January 31, 1957, in the 2000-person village of Dhun-Dhoraji in Jamnagar, Gujarat. Three brothers—Bhikhubhai, Kanubhai, and Meghjibhai—and two children make up his household.
Among the brothers, Chandubhai is regarded as being very down-to-earth and wants to maintain a low profile. The walls of his office are covered with pictures of his father, his teachers, Swami Vivekananda, and a statue of Lord Hanuman with a background showing the bridge that the vaanar Sena (army of monkeys) had built to transport Lord Shri Ram to Lanka. He frequently wears a straightforward white and green checked shirt to work.
His story began in 1972. Rain was in short supply, and farming was getting harder by the day. In response to the deteriorating situation, his father sold the boys' ancestral agricultural land and gave them INR 20,000 to use for business.
Since they came from an agricultural background and moved to Rajkot, they decided to start a business selling fertilizers and farm equipment. They, unfortunately, lost all of their money since someone gave them identical fertilizer due to ignorance and lack of experience.
At the age of just 17, Chandubhai and Bhikhubhai started selling refreshments in Rajkot's Astron Cinema with big ambitions but no other options available. From the ticket booth to the doorman, they managed every department religiously and worked tirelessly!
As a result of their admirable efforts, Govindbhai, the proprietor of the theatre, gave them the canteen temporarily in 1976
And from this point forward, their successful journey began!
One of the top producers and distributors of potato chips and other packaged grain-based snacks is the Balaji Group, based in Rajkot, Gujarat, India. Their products include Plain-Wafers, Kela-Mari-Wafers, Masala-Wafers, Simply-Salted-Wafers, Tomato-Wafers, Aloo-Sev, Chanal-Dal, Gathiya, Khatta-Mitha-Mix, Moong Originally a micro business, it has grown into a multimillion-dollar company that produces high-quality goods with an ethnic flavor.
Before starting Balaji Wafers, they ran the canteen for six years, or until 1982. At that point, they decided to make it their primary business and invested about INR 20,000 in it.
Along with toasted sandwiches produced at home by their wives, they began providing wafers from the one and the only provider in Rajkot. They discovered that Potato wafers made up a significant portion of the sales of the refreshments—80% to be exact—but sadly, the supplier couldn't keep up with the demand. As a result, they immediately started making wafers at home.
Wafers were produced at the Virani household and distributed around Rajkot up until 1989. However, in 1989, Balaji Wafers invested INR 5 lakhs and made their biggest jump by opening a plant in Aji, the "Gujarat Industrial Development Corporation's" (GIDC) industrial estate in Rajkot, as a result of the significant increase in demand.
After that, in 1995–1996 another plant was added! But this time, Chandubhai installed a more technologically sophisticated semi-automatic plant with a capacity of 250 kg of potato chips per hour, keeping the future in mind.
However, within a few years, even with the factory operating at full capacity, demand once more began to outpace supply. Thus, there was a great need for better technology, which led to the installation of Gujarat's first completely automated potato chips plant by Balaji Wafers in 1999.
Sales increased so swiftly that by 2006 Balaji had a 90% market share of Gujarat's potato chip business and a 70% market share of namkeen. In addition, the marketplaces in Rajasthan and Maharashtra kept expanding quickly!
Motivated by the rapid expansion, Chandubhai, or should we say the Balaji Group, established a new facility in Valsad in 2008 with an hourly processing capacity of 8,000 kg of potatoes and a production capacity of 2,000 kg of potato chips.
One of the largest potato chip production facilities in Asia is the Balaji Group's Valsad facility, and materials for the entire facility were imported from the United States, Australia, the Netherlands, Germany, Japan, and China.
After so many years, they now have production facilities in Rajkot and Valsad that can produce 3,400 kg of chips per hour when working together.
The Balaji Group as a whole process about 400,000 kg of namkeens daily and 450,000 kg of potatoes daily. They operate a network of 550 distributors, and 400,000 retail locations sell their products throughout India.
Additionally, they provide 250,000 people with direct and indirect jobs necessary to run the entire operation. And in an unusual circumstance, women make up 70% of Balaji's staff.
Each employee at Balaji Group is treated as a member of the family, and the company is renowned for supporting its workers during trying times.
Namkeens are sold at rates ranging from INR 05 to INR 30 under the company's motto, "Value for money," which ensures affordability for all of its customers.
Overall, Balaji dominates the market with a share of local potato and vegetable chips that has increased from 9.5% in 2008 to 13.7% in 2012, while PepsiCo's stake has significantly decreased from 69.7% to 56.8%.
Additionally, the business has a substantial monopoly in Gujarat and the western markets, with a stake of 70% and 90%, respectively. Additionally, not only are their products well-liked in Gujarat, but also Maharashtra, Rajasthan, Andhra Pradesh, and Goa!
In addition, the Balaji Group has been planning to generate money worth INR 200-400 crores by selling no more than 15-20% of the company's stock to fund future expansion, which may involve the construction of industrial facilities. The company plans to enter the northern and southern markets using the investment shortly, and to begin with, they will be looking at strategic alliances with the local companies.
Around 15-20 investors have also expressed interest, according to Ernst and Young, who were retained by the company to discover the most suitable investors.
Numerous negotiations took place with some of the largest organizations, including PepsiCo, Kellogg's, and Capital International Private Equity Funds (CIPEF), however, the deal fell through for a variety of reasons.
Due to these experiences, the company abandoned the concept of selling stakes in 2014 and started making preparations for an IPO, which may raise over $400 crores from the equity markets.
Obtaining the required cash should be a breeze for them given their present revenue of more than INR 1,200 crores, an anticipated increase of 25–30% in 2014–15, and a valuation of INR 4,000 crores.