Business Orientation Report

On

Submitted by
SHRUTI MODI
(2022-24)

Under the guidance of

Dr Amit Shrivastava
(Professor Finance & Accounting)

JAIPURIA INSTITUTE OF MANAGEMENT

INDORE, MADHYA PRADESH

July 2022

Acknowledgement

I extend my deep sense of gratitude and sincere thanks to Prof. (Dr.) Anil Vashisht, Director,
Amity Business School for allowing me to take up this dissertation. I would also like to thank
Dr. Monica Chauhan Bhadoriya, Asstt. Professor - ABS for continuous support in my
dissertation. I also thank my parents for their continuous support, understanding and
patience without whose support and understanding this endeavour would never have been
fruitful. I also thank all my friends for helping me out in completing this dissertation and
helping me in solving various problems encountered during the progress of this dissertation.

SHRUTI MODI
Table of Content
Executive Summary
 Introduction
About the history of Balaji Wafers

Comprehensive study of the website of the chosen company

b. Founder/CEO and other key personnel of the company
BRIEF INTRODUCTION TO THE MANAGEMENT

This is a brief introduction of the managing persons of the Balaji

Wafers Pvt. Ltd. These are the person who gave their greatest contribution
towards company’s success.

1. Mr. Bhikhubhai Virani (Chairman)

2. Mr. Chandubhai Virani (Managing Director)
3. Mr. Kanubhai Virani (Technical Director)
4. Mr. Hiteshbhai Virani (General Manager)
5. Mr. Nayanbhai Tank (Marketing Manager)
6. Mr. Parmar bhai (Production Manager)
7. Mr. Ketanbhai Patel (Finance Manager)

The success story of Balaji Wafers Pvt. Ltd.

The company has been engaged in production of delicious and

nourishing food products. It produces Wafers and Namkeen having good
quality for each product.

Brief History of the Company

Most of the growing companies have a modest beginning. The infancy

of the company began 36 years ago in 1982 with the efforts of Mr. Popatbhai’
sons, Mr. Meghjibhai, Mr. Bhikhabhai, Mr. Chandubhai and Mr. Kanubhai the
members of their family.

The initial business was started in canteen of Astron talkies. Then it

acquired a small place with every limited investment wile indigenous frying
method. Thereafter, a semi-automatic plant was established with production
capacity of 200 kg per hour. Finally, a fully automatic plant, the first of its king
in Gujarat, was established to offer excellent food products to food lovers of
Gujarat.

Best Quality, Affordable Price

 It is the policy of the company to accept nothing less than a perfect.
Besides, the company is determined to offer its products in attractive and
weather resistant packing at affordable prices to all classes of people in
Gujarat.
It is an encouraging fact that the share of the company in the ‘Brand
Loyalty’ has remained around 70% to 80% in Gujarat. The stalwarts behind
the success story of the company are Mr. Bhikhubhai (Chairman), Mr.
Chandubhai Virani(Managing Director), and Mr. Kanubhai Virani (Technical
Director), who have also devised an ideal distribution channel to ensure the
supply of fresh products in any comer of Gujarat within 48 hours. Effective
distribution is an important as efficient production for the growth of the
company.

Scaling high with Customer Satisfaction

In the past two decades of life, the Virani Family has woven most of its
personal activities, aspirations and dreams with the fabric of the company.
These sacrifices have enabled the company to crave its name in the industrial
history of Gujarat as a unit with most sophisticated and latest plant.

Company’s Achievements

The company’s food products like potato wafers, banana wafers and
other salty products are prepared in its fully automatic plant with bacteria-free
and stringent hygienic standards. The use of computer system ensures
uniform quality and obviates the necessity for touch of human hands. The
production environments make it possible to make the products less oily and
more nutritive.

Vision

The Company’s Vision, shared by the brothers and the young is to grow into a
global giant using modern methods and techniques. The key drivers in this
journey of growth will continue to be the age-old traditions of Trust and
Quality, without any compromise.

Mission
The company aims to a ‘value for money product’, accessible to consumers
all across the country. To accomplish this, the company is seeking to
strategically develop a strong and credible distribution network, C&F agents,
dealers and retailers.

Technology

Balaji Wafers is constantly striving to upgrade its technological strengths with

latest machinery and processes. The aim is to manufacture the best possible
product, with an eye towards “green” practices and smoother work systems
for the staff.

The company was among the first to install a fully automated plant in Gujarat.

Quality

Balaji Wafers is committed to providing Quality products and takes extra care
to ensure that its high standards are met at every step of production. Only the
best and graded raw materials are used for making the products. Production
is continuous and automatic to ensure Zero human contact to preserve its
sterility. International parameters are strictly adhered to for nutritional and
hygienic values.

Lunch time for the Viranis, founders of the Rs 1,000-crore Balaji Wafers, is
sacrosanct. The three founders, Bhikhubhai, Chandubhai and Kanubha, along
with their sons Mihir, Pranay and Keyur, respectively, get together over home
cooked Gujarati meal every afternoon at their corporate office on the outskirts
of Rajkot. Often, the sons seek business advice from the elders. The goal of
the younger Viranis, says Keyur, is to make Balaji a national brand. "We are
net savvy and are more in touch with consumer preferences and production
best practices," he says. "Our Endeavour is to be as contemporary as
possible but not at the expense of diluting the brand value that our parents
have created."
The second generation of the Virani family is clearly beginning to take
centre stage. The foray into healthier snacks is the brainchild of the younger
Viranis. The company recently invested about Rs 250 crore in setting up new
machinery at its 85,000 sq. meter fully automated factory on the outskirts of
Rajkot, where it would make a range of baked, multigrain snacks that are
perceived to be healthier than traditional fried snacks. It has also acquired
land near Indore to set up its third factory, which would be operational in
2016. With this, the company would be spreading its wings to northern India,
from its traditional foothold of Gujarat and Maharashtra.
 The younger Viranis are aware a bet on healthier snacks by bigger
companies - PepsiCo's Aliva and Parle Product's Smart Chip, for instance -
failed to lure customers. Keyur, who looks after research and development,
says the R&D team is trying to come up with a product that is tasty as well as
healthy. Pranay, who takes care of business development, says Balaji is
reducing oil consumption even in its traditional offerings such as potato wafers
and namkeen. "But the value addition is only up to the level where the taste
doesn't get compromised," he says.

The second generation also feels the need to get some strategic
investment into the business in order to take it to the next level. The Rs 1,000-
crore company was in advanced talks with PepsiCo and Kellogg's last year,
but both deals fell through. "Our idea of strategic partnership was to get
access to global best practices... but all of them wanted a majority stake in the
business which we were not ready to part with," says Keyur. The company
has also been evaluating private equity deals. However, Managing Director
Chandubhai isn't keen on roping in strategic investors. He says strategic
partners would only want profits. "They will never grow the business with the
same passion as we have done," he says.The company has more than 70 per
cent market share in Gujarat and over 60 per cent in Maharashtra. Despite its
lofty ambitions, Balaji Wafers remains regional in its thinking. For instance, it
doesn't believe in spending much on marketing and advertising. While
PepsiCo spends seven to eight per cent of its snack revenue (around Rs
6,000 crore) on advertising and hires Bollywood superstars such as Ranbir
Kapoor to endorse its brands, Balaji's ad and marketing spends are negligible.

Chandubhai's mantra for growth is to pump in as much muscle into

distribution - the company has a network of 600 dealers in Gujarat and
Maharashtra. He feels that marketing is all about understanding consumer
needs and offering great products. This strategy has certainly worked. It not
only has more than 70 per cent market share in Gujarat, but has also
managed to displace PepsiCo's Lays in Maharashtra from leadership
position in the last five years since it has entered the market, according to
industry estimates. Balaji Wafers has over 60 per cent market share in
potato chips in the state.

The biggest positive rub-off of having a distribution-only model is the

company's ability to offer more at the same price. While an Rs 10 pack of
Lays or Bingo has around 13 grams of chips in it, an Rs 10 pack of Balaji
contains 20 grams chips. However, Keyur says they may be soon forced to
cut down on gram mage as potato prices rise.

The company is also increasing its dependence on snacks. The

contribution of wafers has come down from 70 per cent to 40 per cent.
"Snacks get us higher margins than wafers, so we are trying to balance our
portfolio," says Pranay. Increasing focus on snacks is, indeed, a logical step
forward, points out U. Krishna Rao, the head of the snacks business at Parle
Products. Rao says that in the Rs 9,000-crore snack business, the growth of
potato chips has decreased to single digits while the namkeen segment is
growing 20 per cent annually. "The erratic potato pricing as well as consumers
not wanting to consume too much potato wafers has affected sales," says
Rao.

The company is also not too open about hiring professionals. Apart
from the head of production, Nishikant Bapat (formerly with PepsiCo) and the
R&D head, all the other employees holding managerial roles have been
groomed by Chandubhai. "Professionals don't stick on for long, all the people
I have personally groomed are still there with me," he says.

The Virani family's traditional mindset has definitely worked so far. But
will this mindset work when the company is at the cusp of taking a leap to the
next phase of growth? Its biggest challenge would be attracting professionals
as grooming local talent in a new market would, indeed, be tough, says a
senior partner in a leading consulting company.

The company also has to deal with the challenge of coming up with
snacks tailor-made for local tastes. Ganthia, a snack which sells like hot
cakes in Gujarat, may not necessarily work in UP. The younger Viranis claim
that they are fully prepared for the challenge.

Despite being a competitor, Rao of Parle Products is confident that the

Viranis will be able to establish themselves in the new markets. "They
completely cornered the market leader in Maharashtra when they came in five
years ago and became a leader with huge shares. Balaji's entry into North is
surely an alarm bell for the larger snack companies."

A tough competitor for multinationals: Chandubhai Virani

What was founded with a capital RS. 20000 by two brothers who came
to Rajkot from a remote village in Jamnagar district has grown into an empire
with revenues of Rs 1,200 crore. Multinationals like Pepsico and Kellogg
India are reported to have shown interest in picking up a stake in the Rajkot-
based wafers and 'namkeen' (salted snacks) giant.

In 1974, three sons of a farmer in Dhundoraji migrated to the nearest urban

centre, Rajkot. Armed with no more than a primary education and Rs 20,000
as initial capital from their father, the Virani brothers - Bhikhubhai,
Chandubhai and Kanubhai - came to Rajkot in search of work. They had not
much money, no references, and no prior experience of working in
manufacturing industry.
 Bhikhubhai and Chandubhai began selling refreshments in Rajkot's
Astron Cinema, and in 1976, the cinema owner Govindbhai handed over the
canteen to them on a contract basis. Six years later, in 1982, the brothers
decided to turn this into their core business and invested around Rs 20,000 in
it.

They began sourcing wafers from the only supplier in Rajkot, and also
started selling toasted sandwiches made at home by their wives. Potato
wafers, they noticed, constituted around 80 per cent of the refreshment sales,
but the supplier was unable to meet the demand. This got them thinking of
ways to develop their business by inducting new technology.

In 1989 the company set up a plant in Aji, Gujarat Industrial

Development Corporation's industrial estate in Rajkot, investing Rs 5 lakh.
Since then the company has invested around Rs 500 crore in operations. The
first year's revenue was around Rs 2.4 lakh.

Chandubhai and his brothers were quick to realise the importance of

technology in scaling up. In 1995-96 the company installed its first semi-
automatic plant with a capacity of 250 kg of potato chips per hour. By 1998-99
it was working at almost full capacity.

Demand still exceeded what they could produce, and in 1999 Balaji
Wafers installed Gujarat's first fully automated potato chips plant, following it
up with another in 2003-04 in Vajdi district with a capacity of 1,200 kg per
hour. Sales continued to grow and, between 2000 and 2006, Balaji captured a
90 per cent share of the potato chips market in Gujarat, and a 70 per cent
share of the namkeen category. Besides, its markets in Maharashtra and
Rajasthan were also growing.

Thus encouraged, they set up yet another plant in Valsad in 2008 with
a processing capacity of 8,000 kg of potatoes per hour, producing 2,000 kg of
potato chips per hour. The company now has a capacity to process around
450,000 kg of potatoes per day and 400,000 kg of namkeen per day. It
generates direct and indirect employment for 250,000 people.
 Recently, there have been reports of Balaji Wafers' promoters looking
to dilute their stake, and multinationals like Pepsico and Kellogg have shown
interest. Pepsico is believed to have exited the race because Balaji was not
open to selling more than 15-20 per cent of its holding. However, Kellogg is
learnt to have started discussions with Balaji to pick up a 10-15 per cent
stake. Balaji is now considering entering the northern and southern Indian
markets, and plans to set up manufacturing plants over the next two to three
years with an investment of around Rs 200 crore. The stake sale is likely to
help fund the expansion plans.

Chandubhai declined to discuss the stake sale issue, saying, "All

decisions will be taken by the next generation. Whichever way they want to
run this company, I am with them."

Balaji Wafers to set up new production facility in Indore

Rajkot-based snacks maker Balaji Wafers Private Limited is setting up a new

production facility at Indore in Madhya Pradesh.

The company plans to invest about Rs 400 crore in a phased manner in the
next two or three years.

"As part of our expansion, we acquired land in Indore some months back.
Construction work is going on and it will be over within the next year and a
half," said Keyur Virani, director, Balaji Wafers Private Limited.

The initial production capacity of the new plant will be 1,500 kg per hour for
wafers and other snacks and gradually, output will be doubled based on the
requirement.

The setting up of a production unit in Madhya Pradesh is part of the

company's plan to tap markets in the North Indian market.

Virani said, "With this new plant, we will be able to cater to Madhya Pradesh,
Rajasthan, Delhi and surrounding areas. The new plant will manufacture all
the products of Balaji."

Balaji Wafers enjoys around 65 percent market share in western Indian

snacks market and is present in Gujarat, Maharashtra, Goa, Rajasthan and
some parts of Madhya Pradesh.

Its turnover exceeds Rs 1,200 crore in 2013-14 and the company expects Rs
1,600 crore turnovers by the end of current financial year.

Talking about the investment for the project, Virani said, "It is an Rs 400 crore
project and we will manage fund through our internal sources and from banks.
Investment will be done in a phased manner. First, we will invest about Rs
200 crore to set up the plant and its machinery and in the second phase,
another Rs 200 crore will be spent for various other requirements."

The company had invested about Rs 100 crore and installed two production
lines at its plant in Rajkot in 2014. It also doubled its production capacity at
Valsad.
c. Products that the company offers along with the price of the product
I. WAFERS
1. Stack up - Sizzling chilli & Salted. (Prices-
2. Potato Wafers – Simply salted, Masala Masti, Tomato Twist, Chaat
Chaska, Cream & Onion, Peri Peri, Pizzy Masala. ( Prices- 5,10,30)
3. Crunchex - Simply Salted, Chilli Tadka. (Price- 10)
4. Rumbles- Pudina Twist. (Price- 10)
5. Banana Wafers- Masala, Mari. (Price- 10)

II. WESTERN SNACKS

1. Gippi Masala Noodles (Price- 10,45)
2. Moon Crunches Masala (Price- 5)
3. Nachos- Flamin’ Hot, Tomato Salsa, Cheese Chilli (Price-5,10)
4. Funne Spicy Punch (Price- 5)
5. Scoopitos Masala (Price- 5)
6. Poprings – Masala, Yummy Cheese (Price- 5,10)
7. Wheelos- Masala Wheels (Price- 5,10)
8. Chataka Pataka- Flamin’ Hot, Chinese chatka, Tangy Tomato, Masala
Masti (Price- 5,10)

III. NAMKEEN
1. Yumstix (Price- 5,10)
2. Punjabi Tadka (Price- 10)
3. Sago Balls (Price- 5)
4. Khatta Mitha Mix (Price-5, 10,)
5. Tikha Mitha Mix
6. Meetha Farali Chiwda
7. Farali Chevdo
8. Chana Jor Garam
9. Bhel Mix
10. Mung Dal
11. Chana Dal
 12. Masala Peas
13. Shing Bhujia- Garam Masala, Nimbu Chatka.
14. Aloo Sev
15. Classic Sev
16. Bhujia Sev
17. Ratlami Sev
18. Gathiya
19. Sev Murmura
20. Masala Sev Murmura

d. Major competitors and competitor details

CASE related to the company
e. Market share of the company and major competitors
f. Customer segment of the company
g. Distribution strategy of the company
h. Advertisements of the company (brand ambassadors / celebrities
etc.)
i. Sales promotion activities that the company does
j. Any Corporate Social Responsibility activities undertaken by the
company
k. News or video clippings about the company

https://www.thehindubusinessline.com/specials/corporate-file/the-
growing-appetite-of-balaji-wafers/article34066638.ece
Conclusion (1 – 2 pages)
Conclusions:  • Based on the findings of this study, we conclude that Balaji wafers have a
sizable market in India. The majority of people prefer Balaji wafers because of their quality,
quantity, and taste.  Balaji wafers are mostly consumed by students and people between the
ages of 21 and 30. However, some people remain loyal to Balaji products and prefer them over
other brands.  Approximately 53 respondents gave a 5 rating, 30 gave a 4 rating, 14 gave a 3
rating, and 3 gave a 2 rating.  The majority of respondents chose the Rs 10 packet. Around 70
people chose a 10 rupee packet, 16 chose a 5 rupee packet, and 14 chose a 30 rupee packet. 
Approximately 64 people responded, 'Whenever they need or want'. Around 19 respondents use
the product on a weekly basis, 14 on a monthly basis, and 3 on a daily basis.  The most popular
brand was Balaji, with 74 respondents, followed by Bingo with 13 respondents, Haldiram's chips
with 8 respondents, Uncle Chips with 3 respondents, and Parle's wafers with 2 respondents
Learnings and recommendation for the project.
Suggestions:  Based on our market research, we discovered that people are willing to try more
flavours of wafers from Balaji, so they should introduce more flavours of wafers.  • Some
people prefer healthy snacks such as baked wafers or wafers with less trans fat or oil, so they
should think about healthy wafers.  • Balaji should improve its taste and quality because it
competes with Balaji, which dominates in those areas.  More promotion in rural areas is
required.