Jul 2, 2008

Kerala Ayurveda companies join hands to battle retail giants

Kochi: Kerala’s Rs600 crore organized Ayurveda industry is embarking on an expansion and quality improvement drive as it braces to compete with retail giants moving into its turf.
After a joint venture with state agencies to ensure uniform testing and manufacturing facilities, the industry wants to set up an Ayurveda export promotion council to boost exports.
The impetus for the drive comes from the entry of firms such as Reliance Retail, through its Reliance Wellness unit, Hindustan Unilever Ltd’s (HUL’s) Ayush and Pantaloon Retail (India) Ltd’s Tulsi brand of Ayurveda drugs and health centres.  
Their entry into the ancient Indian system of health care is a sign of “the appeal Ayurveda holds for consumers”, says P.R. Krishnakumar, head of the the Confederation for Ayurvedic Renaissance Keralam Pvt. Ltd (CARe-Keralam), a group of 15 Ayurveda firms that are trying to reinforce the strength of their traditional knowledge of the “science of life” with marketing muscle.
Vaidyaratnam Oushadasala, which makes and markets Ayurvedic drugs and runs a nursing home, plans to set up 500 retail outlets across the country in two years, taking the total to 1,500, said managing partner E.T. Neelakandhan Mooss. The outlets will have a qualified Ayurveda doctor to attract patients.
The firm has two manufacturing units, and will set up a third at Pollachi in Tamil Nadu to take advantage of the availability of herbs and cheap labour there. Vaidyaratnam also proposes to double the bed capacity of its nursing home at Thrissur in Kerala to 200.
All the investments will add up to a modest Rs8 crore. The company, which has set up an advanced testing facility to ensure quality control, hopes to log an annual turnover of Rs50 crore in the next two years, from Rs35 crore now.
Mooss says his plans reflect the coming expansion of Kerala’s Ayurveda industry andits increasing emphasis on quality.
The 15 Ayurveda companies that have grouped under the CARe-Keralam banner have formed a joint venture with Kerala Industrial Infrastructure Development Corp. and Kerala State Industrial Development Corp. to set up a Rs30 crore project that will help promote uniform production and quality standards.
The project, to come up on a 10-acre plot at Koratty in Thrissur district, will include modern research, production, testing and certification facilities, a herbarium, museum, information centre and reference library.
Companies that use the production facilities would also be able to ensure common quality standards.
CARe-Keralam plans to document Ayurveda products—mandatory for marketing them abroad—besides branding some of them. The Union government has promised a subsidy of Rs9 crore in the initial stage for the grouping. Ayurveda drugs worth Rs10 crore are exported annually from Kerala, where the industry is seeking the formation of a council to promote overseas shipments.
The expansion of major retailers into Ayurveda products could pose other challenges, such as takeovers or mergers of smaller firms, said D. Ramanathan, managing director of Sitaram Ayurveda Pharmacy Ltd.
“Quality will be the prime concern, and only the best in the industry will survive,” added Ramanathan, who is also general secretary of the Ayurvedic Medicine Manufacturers Organization of India.

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