There is an element of fragrance in almost every product we use in our daily lives. They act as key components to enhance sensory appeal, mask undesirable odours or create a pleasant experience. Whether it is cosmetics, personal care, home care, air care, food & beverages or pharmaceuticals, the flavours and fragrance producers are the backbone of the several industries that define a product’s success.
CKC Fragrances Private Limited is one of the oldest players in the sensory market of smell, offering a large catalogue of fragrances. The closely held company has been always in the forefront to bring innovative products and competitive pricing. CKC specialises in crafting concentrated non-alcoholic perfumery compounds and synthetic essential oils to meet a wide spectrum of applications and preferences. “Our USP is to offer consistent quality and be able to create customised products as per the customer’s specific needs,” says Rishabh C. Kothari, CEO, CKC FPL. After consolidating its position in the fragrance business, it is now foraying into the flavour business as part of its growth strategy.
Chandrakant Kothari, like any other Gujarati, had the zeal to set up his own business. While exploring opportunities, he got hooked on the industrial fragrance market, which is a low-competition and reasonably good margin business. Influenced by his elder brother, he founded Swastik Industries as a trading company for supplying aroma chemicals and natural essential oils. Later, in 1980, the name was changed to CKC Fragrances. “I used to supply mainly to the incense stick manufacturers in Bengal,” recalls 77-year-old Kothari, now chairman, CKC FPL. “I was also a preferred supplier to the iconic hair oil brand Jabakusum.”
Learning the ropes
Fascinated by the aroma, his school-going son Rishabh frequently visited his father’s office. Gradually, the passion turned into a business goal. After finishing his graduation, Rishabh went to Germany to work under a master perfumer to learn the nitty-gritties of creating fragrances. This learning experience in Germany gave him confidence that added value in the family business. Rishabh finally joined his father in 1998. “Soon after joining, I realised that nothing big can happen if the company remain solely in trading. Hence, we entered fragrance manufacturing and, then on, business commenced to expand.” He remembers sitting at his corner office on the Bombay Road in Howrah. Now 50, Rishabh is mentoring his son Ranjan, 20, who has just joined the business. Now, three generations are knitting the business up for a bright future.
Fragrance ’n’ flavour is a niche industry, but it is also a critical one and needs a minuscule amount of fragrance to give value to a product – and that itself is a game changer. The fragrance and flavour market in India is estimated to be close to Rs25,000 crore and growing at about 12 per cent.
Today, CKC FPL is designed to meet a wide spectrum of applications and preferences. Its diverse range of fragrances includes air care, home care, personal care, fabric care, candles, air freshener, mouth fresheners and tobacco products. Oriental and Arabic fragrances, among others, are produced in its modern manufacturing facility in Howrah, backed by the full-fledged research & development (R&D) unit managed by qualified chemists. The company has the capacity to produce 3,000 tonnes per annum of perfumes and offers 2,000 types of fragrances.
The raw material, aroma chemicals and natural essential oils for the formulations are sourced through domestic sources and imports. Prateek Bihani, sales director, CKC FPL, claims that the company’s marketing philosophy is ingrained in identity. “No two of our fragrances are ever the same; we craft bespoke solutions, thoughtfully and meticulously designed to capture the distinct vision, ambitions and needs of every partner we serve,” he adds.
“We put a lot of emphasis on quality control,” informs Kothari. “Every product formulation we create goes through a stringent quality check before it rolls out of the plant.” The company is also planning to double the export number from 10 per cent at present to 20 per cent of the total revenue. It is looking at emerging markets like Africa and South Asia, too.
Creating values
CKC FPL has been recording an 18 per cent CAGR for the last three years and has a current revenue of Rs55 crore. Incense sticks in FMCG constitute almost 25 per cent of its revenue. “Our quest of creating values through constant innovations has led us to seek creative and technological leadership to produce an ever-expanding repertoire of fragrances,” says Rishabh, who has been president, Fragrance and Flavour Association of India (FAFAI) earlier. “We spend 10 per cent of our revenue in R&D.” He is also a meditation trainer and proponent involved with the Heartfulness Institute.
“CKC Fragrances’ attention to quality, reliability and thoughtful services is remarkable,” says Pooja Nagdev, CEO, Haridarshan Sevashram Pvt Ltd, one of the largest incense sticks manufacturers, based in Delhi. “Its fragrances reflect care and refinement, and working with the CKC team has been a positive experience”.
Looking at the market trend and the growth potential, CKC FPL is now entering into flavour manufacturing for the food & beverages business too. The company is setting up a new facility adjacent to its old unit. The 30,000 sq ft state-of-the-art facility is coming up at an investment of Rs15 crore and is likely to be commissioned in the next nine months. “As consumption habits of the people are evolving in the F&B sector, the flavour market is also expanding significantly. It is a bigger market than fragrances,” Rishabh points out. While the company is yet to obtain food certification like FSSAI, it is actively examining the option of a JV with international companies. The management refuses to divulge further details on it.
The company will introduce a consumer pack through a brand called Soil & Us as a wellness product. The first round of test marketing for the product has been well-received.
The product will bring a new dimension to CKC Fragrances’ legacy. This range represents a strategic forward integration for the company – a move beyond traditional fragrance compounds into a curated portfolio of skincare and body care. “Our marketing strategy is built around storytelling that connects authenticity with aspiration,” exudes Swati Bihani, marketing director, CKC FPL, quite enthusiastic about the brand. “We aim to engage consumers with transparent ingredient narratives, lifestyle-oriented campaigns that position Soil and Us as a conscious and curated choice.” The partnership with retailers and digital platforms is expected to extend the reach.
“I know Rishabh well,” says Kedar Vaze, group CEO & whole-time director, S.H. Kelkar & Co, a Mumbai-based competitor. “He has led CKC Fragrances admirably through a focused approach to creativity and original fragrance creation, with a strong commitment to quality and service. This augurs well for the industry.”
The biggest challenge the fragrance and flavours industry faces is the inverted duty structure, where a large chunk of ingredients, natural essential oils, are subject to higher import duty, compared to the end product – the fragrances. So, cheaper imports are flooding the Indian market to the detriment of the industry, stunting its growth and also working against the principle of ‘Make in India’. The associations have sent several representations to the government to correct this anomaly, but to no avail yet.
There is a rising preference for natural ingredients over the chemical-based flavouring agents, because of health reasons. It is an advantage for India. As the country enjoys considerable biodiversity, the varying climates and soil conditions give India large quantities of natural aroma ingredients, including natural essential oils, spice oils, mint oils, etc. But, as an industry expert says, while India has done well in the lower-end of the spectrum, when it comes to cutting-edge research on natural oils, premium oil, etc, India has not been able to make much headway.
The Kotharis aim to grow the business steadily at 30 per cent y-o-y for the next five years. CKC FPL is built on hard work, innovation and a diverse product portfolio. All these efforts will make the company a significant player in the segment.