How this Amritsar-based businessman tapped into scarcity of a chemical supply to set up Rs 100 Cr manufacturing business
Since zinc sulphate, which is used extensively as a fertiliser in cultivation, was scarce at Amritsar, Anil and his brothers were able to fill the gap with BB Chemical.
Amritsar-based Anil Singhal (64) traces his desire for venturing into the manufacturing sector back to his college days in the early 70s. He says, “My father had a cloth trading business. But I never intended to join it. Since my college days, I wanted to make a career in manufacturing, but like many college students, I just had a dream and wasn’t clear on what to start with,” he says.
Anil recalls coming across some conversations his father repeatedly had in those times with other businessmen of the state who traded in zinc sulphate -- a fertiliser heavily used in paddy crops’ cultivation. He says, “From their conversations, it was evident that there was a glaring demand-supply gap of the chemical. The delay in general used to be quite prolonged, spanning at least three-four months.”
On hearing that many businessmen in his city suffered from a shortage of the chemical, Anil discussed with his two brothers the idea of setting up a plant to manufacture the chemical in Amritsar. The trio, with the support of their father, established BB Chemical Industries in 1973 in Amritsar to make zinc sulphate.
Over the years, Anil says that the company went on to become a pioneer of zinc sulphate manufacturing in Amritsar, and, thus, could establish another unit in Silvassa to supply the fertiliser to other parts of the country.
In 2001, the Singhal brothers took note of policy development at a SAARC summit, which enabled businesses to enjoy an import duty advantage for importing from associate SAARC nations.
The trio found the development to be apt for spreading the company’s wings further. Anil says, they realised India had a huge demand of brass and copper alloys in the tyre industry while the neighbouring country Sri Lanka had the abundance of such raw materials.
BB Chemical, therefore, acted on its expansion plan and established a new manufacturing unit in Colombo, Sri Lanka, to cater to a huge demand of brass and copper alloys back home. Anil says,
“Over other suppliers in the country, our costs stood 25-30 percent low on an average in the market in the initial years.” Now, such imports have become 100 percent dutyfree and, therefore, BB Chemical continues to enjoy a significant edge in the market, he adds.
Today, with its three manufacturing units, BB Chemical is seeing a turnover of Rs 100 crore and employs 300 people.
Tackling illicit supplies
Anil, however, feels that the advantages that the company enjoyed for long are getting diluted to some extent in recent times. He says,
“Nowadays, due to an increasing number of fraudsters who avail import duty advantages by manipulating data on record, illicit supplies in the market have increased and therefore, our profits have reduced.”
Location wise, Anil says, the company has an additional disadvantage of being located in landlocked Amritsar. “We are required to pay both inward freight charges for importing raw materials, as well as outward freight charges for supplying our products across India.”
However, according to Anil, the company has been able to reduce the impact from such limitations from its plant in Silvassa, which enjoys good transport connectivity, and proximity to South India, to which BB Chemical supplies majorly.
After dedicating four-and-a-half decades of his life to BB Chemical, Anil feels content with what he has achieved so far and intends to give back to the society now. Currently, he serves on board of the Bhavan’s SL Public School in Amritsar and does not draw any salary for it. He is also a staunch supporter of free speech, and at present is serving as the Managing Editor for Dainik Bhaskar, Amritsar.