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This Kanpur-based doctor-entrepreneur’s bandage business is in the pink of health

October 12, 2018

A chance conversation with a fellow medical professional on the poor quality of adhesive plasters in India led Kanpur-based Dr Ajit Rai Sabharwal to try his hand at manufacturing a product that would please his professional colleagues and also prove effective to patients.

“This is where the idea struck me. I knew what goes into making a good bandage," says Dr Sabharwal.

With an idea that had potential and his desire to disrupt the market, the 80-year-old immersed himself into the business and roped in his lawyer son Manish to assist him negotiate potential roadblocks in the heavily regulated medical field.

“My son Manish was studying law. I wanted to set up a business for him, which could make use of both my medical expertise as well as his educational background,” adds Dr Sabharwal, further explaining the motive behind his decision.

With an investment of Rs 1.7 crore, Dr Sabharwal established Dr Sabharwal Manufacturing Labs in Kanpur in 1984, to manufacture plaster of paris bandages and adhesive tape. “We took a loan of Rs 1.5 crore from the Uttar Pradesh Financial Corporation and invested Rs 20 lakh from our own savings.”

The beginnings

For the initial four years, Manish handled the company’s operations single-handedly. However, as the business grew, so did the team.

“The medical field is constantly evolving. I realised I could not handle more than product development, marketing and compliance alone. I needed my father to manage the production and general administration if we were to grow and develop new products,” Manish says.

Dr Sabharwal stepped in after putting his medical practice on the back-burner in 1988. Since then, the company has grown substantially. In 34 years, Sabharwal Manufacturing Labs has gone from churning out two products at first to over 100 in 2018. It currently employs 400 people and has a turnover of Rs 25 crore.

Manish says one of their latest products is a pain relieving patch, which replaces the need of taking tablets and a P U bandage, which is used to treat fractured bones.

“The P U bandage is our patented product and is completely indigenous. Unlike other bandages, it does not need refrigeration for storage. It is in heavy demand in India and abroad,” he says.

The company heavily caters to the foreign market, with 66 percent of their total sales coming through exports, adds Dr Sabharwal.

“We export to the USA, UAE, Malaysia, Indonesia and many other countries.” Apart from exports, the company also participates in government tenders.

The challenges

Sabharwal says labour laws in India can be rigid and a major constraint for investment and business opportunities.

“Many times, labour strikes have brought our business to a halt. In fact, given their strong political backing, their demands sometimes have been unreasonable,” he says.

To minimise such issues, in 2005, Sabharwal established another factory in Baddi, Himachal Pradesh with an investment of Rs 10 crore. He says, “Himachal Pradesh is better than Uttar Pradesh. We are so disgruntled by the frequent labour strikes in UP that we are thinking of closing the factory there.”

Labour-related issues are not their only concern. The company is also facing tough competition from neighbouring China as their products are priced lower.

“China provides its industrialists with a number of incentives. They are provided with electricity, transportation and water at a single place and operational licenses are issued in a day.”

However, Sabharwal accepts that no road is easy for an entrepreneur. According to him, the first five to 10 years are the toughest for any manufacturing business and says an alternate source of income can be a boon.

He adds that maintaining cordial relations with customers is fundamental to the success of a business. “You have to cooperate with the clients. Quite often, we receive complaints about shortage of few pieces in the final order. We never ask counter questions and we just rectify the complaint.”

The company targets a 5-10 percent growth every year. To achieve this, the firm takes part in exhibitions abroad to learn about new products and practices in the industry and incorporate the same back home.

“It is important to understand the medical field is advancing daily and the products that are in demand now will become obsolete in five to 10 years,” says Sabharwal.

(This story is published in partnership with the MSME Ministry to showcase success stories of SMEs)

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