A ‘Natural’ Way to Business Success

Kochi: I meet Dr. A V Anoop, 55, Managing Director of AVA Group, at his Kochi office near Kacherippady on a Thursday afternoon as the monsoon is playing out in full fury outside. He is in Kerala very often though his business is headquartered in Chennai. The Dr prefix is because he has a PhD from Medicina Alternativa Institute, affiliated to The Open International University for Complimentary Medicines, Colombo, Sri Lanka.

Medimix, the world’s largest selling Ayurvedic soap, was launched in 1969 by his maternal uncle Dr. V P Sidhan of the famed Cholayil family of Thrissur which has been practising Ayurveda for five generations. The business was divided amicably in 2000 between his son V S Pradeep and Anoop. AVA Group was thus formed and given right to sell Medimix only in South India (Kerala, Karnataka, Tamil Nadu, Seemandhra and Telangana) while Pradeep retained all-India (except South India) and overseas rights. Anoop also received Sanjeevanam, the Ayurvedic Food, Therapy and Beauty Centers business which he had started. Dr. Sidhan passed away in 2011.

By joining his uncle Dr. V P Sidhan’s single-brand soap manufacturing enterprise in 1983, A V Anoop was, in fact taking a big risk. But the young man’s hard work and self confidence have paid off, handsomely well. Today, as he stands tall as the leader of one of the two ‘most trusted brands in India’ from Kerala according to the Brand Equity Survey published by The Economic Times, Anoop still finds time to indulge in his other passions, film and theatre, and even to make business sense out of it. Destination Kerala spoke to the man with the ‘midas touch’ who has transformed every opportunity into business success.

FORAY INTO ENTREPRENEURSHIP

I start by asking him how it was to work with Dr. Sidhan? “My uncle was a visionary and a staunch practitioner of authentic Ayurveda. His simplicity continues to guide us in our daily lives even today. For example, he never wanted the business to grow too big or go public. He wanted it to be of reasonable size and all of us to live in peace happily.”
Anoop was studying in MG College Thiruvananthapuram when his father A G Vasavan, Director of Fisheries, Government of Kerala, passed away in 1982. With no other means to earn a living and take care of the family, he decided to start in a small way a taxi business using his brother-in-law’s Matador van. “Luckily the business picked up and that is how I started considering entrepreneurship. What my dad was making in a month I started making in a day. My father had told me business was bad and not to talk to businessmen. Dad’s dream was to see me in government service. Since he died in service I had the eligibility for a government job once I completed my degree course and my papers were processed,’’ reminisces Anoop.

Cholayil was still a small single-brand company and in the worst of times Anoop joined Dr. Sidhan in 1983. Due to labour strife the factory was shut and the impasse was getting worse forcing Dr. Sidhan to move out of Chennai due to a threat to life. Luckily, since Dr. Sidhan was employed with the Indian Railways then, he could survive. “He temporarily moved to our house in Thiruvananthapuram. He saw what I was doing and got impressed. He went back once the situation had improved. One day I received a letter from him. It was an offer to join him in Chennai to reopen the factory and run the business. A government job has growth limitations and salary constraints but in business our hard work is the limit, he wrote to me.” It was an opportunity in front of Anoop but no one in his family thought it was a great idea. They wanted him to take up the government job.

“I decided to join Cholayil after college education. For the next 12 months during my final year in college I shuttled between Thiruvananthapuram and Chennai managing paper work. We found a house on the outskirts of Chennai, hired five workers and started making soap. The factory remained closed as the labour case was going on. The week I landed in Chennai the CBI raided us, saying a government employee was engaged in running a private enterprise. But the business was in Dr. Sidhan’s wife’s name so there was no case”. Dr. Sidhan retired from government service many years later.

The trio, Dr. Sidhan, V S Pradeep and Anoop, started small factories in many places and began delivering Medimix to the market. “We initially did not have even an office. Then we rented a small apartment. Then the adjacent one and the next one as business grew. We hired more and more people.” It was after private TV channels came that the brand started growing. Medimix was one of the earliest advertisers as well as biggest spenders on TV, be it Sun TV in Tamil Nadu or Asianet in Kerala.

If matters had got worse due to labour strike, why would his company still insist on hand-made soaps that required a large labour force? AVA Cholayil Healthcare, the flagship, is India’s largest and in all likelihood, the world’s largest manufacturer of hand-made soap. The 300 employees, spread across factories in Chennai, Pondicherry and Bengaluru, make 15 crore bars of bathing soap every year by hand, without the help of machines and without using a single unit of electricity. “Dr. Sidhan kept the process handmade when he started as he had very little money to invest in machinery. When we started growing, the fact that handmade soaps had zero excise duty compared to 12.36 per cent for soaps manufactured using mechanized process was a motivation too (this benefit, however, was removed in 2005). But the biggest reason has been this: Going mechanized would have meant letting go of the bulk of the 300-odd employees we had. It was against our conscience,” explains Anoop.

Handmade soaps are superior to machine-made soaps as they are skin-friendly. The manual process enables use of a higher proportion of coconut oil (which is good for the skin), more additives, especially ayurvedic herbs, and retention of natural glycerin, which leaves the skin soft. Also, the manufacturing process is environment-friendly as it does not use electricity at all.

Today, AVA Group is into soaps, cosmetics, food products, pharmaceuticals, Ayurvedic healthcare, organic farms and entertainment. What is the rationale behind diversifications? “Let us remove AVA Productions from the portfolio as that is a personal passion,” says Anoop with a chuckle. “AVA Group’s view is that each business is a separate entity with a different vision and goals. So we are into natural products and personal products. I do not do anything else. All diversifications are within this realm.”

BUSINESS INNOVATION

Sanjeevanam was started as a ‘no masala, no sugar’ concept. The Sanjeevanam restaurant in Chennai was an experiment. “I am not interested in the F&B business,’’ dismisses Anoop. Sanjeevanam is a healthy way of living and has Ayurveda, naturopathy, yoga, natural products, Ayurveda therapy, beauty care and a vegetarian restaurant rolled into it. It is not to promote vegetarianism but healthy eating habits. We have dieticians and doctors. It was my idea.”
Many years before Sanjeevanam was launched, Anoop had acquired a restaurant in Thiruvananthapuram called Kadalivanam. It did well initially but because the ‘healthy’ concept was rigid with no refrigerator and 100 per cent fresh ingredients, the pricing was comparatively high. Kaladivanam was too ahead of its time in Kerala. Anoop thought of trying the ‘healthy’ concept in a more progressive Chennai with Sanjeevanam many years later.

Sanjeevanam is a holistic health centre where you will find a confluence of natural solutions for all health issues. A complete health package of treatment, beauty, diet and food has been specially formulated in the four divisions: Ayurvedic Therapy Centre, Natural Beauty Centre, Vegetarian Restaurant and Nature Store. Sanjeevanam has three therapy centres, two beauty centres and one restaurant, all in Chennai.

Later this year, Anoop will open the Sanjeevanam Ayurveda Hospital, near Wonderla in Kochi. Interior work is ongoing at the 80-bed hospital. The project costing ~Rs. 30 crore will offer direct employment to at least 200 people. “All leading Ayurveda physicians will practice at the hospital,’’ informs Anoop. “It will be a full-fledged Ayurveda hospital with most modern facilities. Comforts, cleanliness, hygiene and attitude of staff will match that of any most modern allopathic hospital. This will be the first-of-its-kind in Kerala.’’

Anoop has a 10-acre land parcel at Manjaly, about 20-minute drive from Kochi International Airport. He is planning an Ayurveda resort there under the Sanjeevanam brand, early next year. Apart from Medimix, Anoop owns Divine, a natural skin care brand he bought and plans to scale up to national and international level. Divine range currently includes clear glycerin and turmeric & sandal soaps but the aim is to build a full portfolio of beauty care products under the brand.

NEW OPPORTUNITIES

Be it picking up Melam or tying up with Ambika Pillai, Anoop has exhibited a rare degree of focus and agility to spot opportunities and leverage them.

“I am open to harnessing opportunities as and when they present themselves. Melam was an opportunity. It was the number one brand in masalas, spices, breakfast items, sweets and pickles. When I was acquiring it, Melam was not even in the top five reckoning. I looked at Medimix and we were a top-ranked ‘most trusted brand’ at the Brand Equity Survey published by The Economic Times. Only two brands from Kerala were highly ranked in this survey – Medimix and Ujala. Melam had that ‘trust’ in the food business but Kurian’s (Kurian John Melamparambil, the founder of Melam) business interest had waned as he had become too involved in philanthropy. I bought it in July 2015 for a song in my view.”

The transaction included one factory of Melam in Kochi and AVA Group retained 90 per cent of Melam’s staffing as part of the deal. Last year, in spite of being priced above competition, the Melam business turned positive with sales of Rs. 30 crore, which was double of what it did the previous year before the acquisition. Under the new ownership, Melam stopped undertaking job works for other brands and also the practice of selling products manufactured by third parties under its iconic brand name. The R&D team of Melam is now busy working on new products to expand the portfolio.

Renowned hair stylist and make-up artist Ambika Pillai had numerous offers, including from MNCs, to acquire her brand. But she decided to partner with Anoop’s AVA Group. “She checked the market for a suitable partner and we were referred by someone as very dependable. I did not know her personally. She called me and we discussed. She told me she did not want to sell out and was looking for a partner. I went back and evaluated the opportunity with my team.”

AVA Group’s research in the last 10 years was invested in developing premium personal products which actually aligned with Ambika Pillai’s market. Anoop was getting ready to launch and now had the opportunity to incorporate Ambika Pillai’s insights and brand name to it. He lapped up the offer resulting in a 50:50 joint venture, AVA and AP Naturals Pvt. Ltd.

The Kaytra range of shampoo, hair oil, hair pack and revitalizing hair cream for men was launched in Kerala in January 2017 and today sells across 500-plus stores. “When an opportunity presents itself, I pass it on to the team. They assess the opportunity and make a recommendation which I may accept or decline. Negotiations I may do myself considering who is across the table,” says Anoop.

Kaytra competes with the likes of Shahnaz Husain. In the next three years AVA Group is aiming to touch Rs. 100 crore with Kaytra alone. To take Melam, Divine and Kaytra across India and global especially the GCC market, Anoop has recently incorporated AVA Gulf Trading FZCO, Dubai and on boarded a new team of professionals.

The latest diversification of the group is AVA Farm. At the family-owned 120-acre farm at Vengal, Tiruvellore district in Tamil Nadu, which both Pradeep and Anoop have access to, the latter has earmarked 25 acres for experimenting with organic farming. “Organic farming requires extreme care and so it is tough. I am making baby steps.” Securing GLOBAL G.A.P. certification, which is internationally recognised for farm standards dedicated to Good Agricultural Practices (GAP), is in the process. “I want to follow GAP and produce safe food,” says Anoop with conviction. The farm also has Polyhouse and Greenhouse cultivation apart from traditional open farming for various fruits and vegetables using fertilizers which are environment-friendly, prevent soil erosion and improve soil fertility. Adequate steps have also been initiated for harvesting rainwater to the extent of 2.50 crore litres in two huge ponds. The farm has plans to establish a solar plant and generate power for all its agricultural operations.

MANAGEMENT MANTRA

“I delegate everything except my own performance. As we speak, GST is being rolled out but I am not stuck in the office. In our trade everyone is arguing that it is 12 per cent as we are into Ayurveda. I am billing at 18 per cent because I believe we are in the soap segment. I do not want to get into problems with the government later and lose precious time and peace of mind. This decision is mine even if it means taking a hit on the margin. The rest of it my team can manage.”

It was Anoop’s decision to ensure that no trader, wholesaler or distributor of Medimix suffered any margin loss due to GST. So his team worked backwards from the MRP ensuring sale margin of no stakeholder changed post GST implementation.

“We have professionals in all departments. The President of the company is the first employee, K H S Manian, who has been with us for more than 40 years now. Mostly people have grown within the system and we do not have family members in the business. I do not sign any cheques. Thanks to a smart phone, I can track my business which runs on ERP, on the move.”

Anoop is certain that AVA Group can be run by a qualified professional after his time. He is clear that it is not necessary that a family member lead it. Elder son-in-law Vivek Venugopal, an ISB grad, is involved in the new business ventures of the Group. Anoop’s two daughters, though qualified, are busy raising kids and may take up corporate responsibilities later.

SOCIAL ACTIVITIES

Anoop has been very active in the Malayali social scene ever since his migration to Chennai in 1983. He is the global president of the World Malayalee Council (WMC). He has also been involved with Confederation of Malayalee Associations and All India Malayalee Association. Under Anoop’s leadership, WMC has been doing yeomen services for the poor and needy. Through eye donation camps organised by WMC over 200 people have received sight. Flood relief efforts during the recent Chennai floods under the aegis of WMC saw 110 homes being built for the poor.

“I have never worked with Lions or Rotary. I was the secretary of the Chennai Malayalee Club when we celebrated 100 years of its formation in 1996-97,” says a proud Anoop. “We are now doing a unique WMC project with Dronacharya award winner Thomas Master at his Sports Academy in Thodupuzha. Twenty-two kids have been selected through camps across Kerala and he is now training them in athletics for an Olympic medal quest. It is a 10-year-long project and we are investing crores of rupees into this to meet all the expenses of the kids.

That apart, through AVA Charitable Trust, education and healthcare initiatives are being spearheaded by Anoop. This is not mere cheque book charity and he is supporting hundreds of kids. It is a full lifecycle commitment towards smart underprivileged children till they secure meaningful employment. “I tell my team at the factories that I do not want to see their children coming back into the manufacturing line. They should come into higher functions like HR, marketing, finance, quality, R&D or IT.”

THE ARTIST

Since his days in college, Anoop has been involved in drama both as an actor as well as in other aspects of its production. This year he has already performed in four. He is the chairman of a drama troupe, Team Arts Chennai, which stages Malayalam drama. He also participates in drama programmes of Malayalee Samajam, Asan Memorial Association and Malayalee Club.

It is this involvement in arts that led him to cinema. AVA Productions was established in 2007 and has released 16 films to date, 13 in Malayalam. Anoop received the Rajat Kamal at 56th National Film Awards 2008 from Pratibha Patil, the then President, for Best Film on Family Values – Appuvin Nayagan – Spotty (My Hero). “I have encountered losses only in cinema,” says Anoop nonchalantly. “Initially, I used to put money at the story stage but later the film would evolve differently! Now I invest only after a project has been mounted fully.”

Anoop produced many films, when the real estate boom was in full swing. He channelled those super natural profits to finance his passion. “Earlier, films were funded by real estate margins and satellite fee,” says Anoop. “Today, both satellite and real estate have gone down so the business model has to rely only on theatre collections, which means a film has to have a good story. The recent success of Malayalam films is because of this reality as makers are focusing on customers and hence, good stories.”

A DAY IN MY LIFE

“I wake up at 6 am and go to the gym for an hour. I do not anymore play badminton due to back pain. I still play the flute which is a personal passion. I have been training in it for so many years now. During summer, I take a dip at the home pool every day. After that I read the newspapers. I go to the office only if I have any official appointments.” Anoop spends a lot of time at home with his grandchildren. In the evening, he may go out for social commitments. This is followed by drama rehearsals late into the night.

SMALL IS GREAT

It was rumoured that FMCG behemoth HUL was after Anoop in the mid-1990s to buy AVA Cholayil for any price. I ask him about it and he shoots back: “I thought what would I do after that? I am doing this to engage myself productively and not just for the money. That was my view then and even now it remains the same. With an outright sale to an MNC or a stake sale to a PE I may double or treble turnover and grow rapidly but I do not think I will be happy.”

AVA Group did a turnover of ~Rs. 260 crore last FY. The reluctance to accept growth capital has indeed slowed down growth. But Anoop values the financial freedom he has. As a business, AVA Group does not offer credit so there is no money lying in the market. And since business has done well over the years, there is enough internal accruals to fund any new venture. Anoop is doing business his way – success without stress.

AVA GROUP OF COMPANIES

  • AVA Cholayil Healthcare Private Limited, Chennai
  • AVA Products and Services, Chennai
  • AVA Condiments LLP, Ernakulam
  • AVA Gulf Trading FZCO, Dubai
  • AVA & AP Naturals Private Limited, Ernakulam
  • AVA Productions, Chennai
  • AVA Farm, Chennai
  • MAAC Power, Abu Dhabi, UAE & Saudi Arabia