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Published on: Feb. 14, 2023, 10:33 a.m.
How Kent set a trend in the water purifier business
  • Gupta: a remarkable journey; Photos: Sajal Bose

By Sajal Bose. Executive Editor, Business India

Due to several factors, including a growing population, reduced rainfall and higher temperatures, there has been a persistent drop in freshwater resources, presenting a considerable hazard to drinking water supplies. Currently, 65-70 per cent of Indians have poor or limited access to safe drinking water. As a result, over the past three decades, the domestic water purification industry has grown. While water purifiers were not found in consumer durable stores until 1999, they are now sold through multiple channels and are no longer considered a luxury, but a necessity. However, there is still much progress to be made.

Meet Mahesh Gupta, a mechanical engineer who saw the future potential of the water purification industry, and with his sharp acumen, revolutionised the sector with the introduction of the first RO (Reverse Osmosis) water purification technology in the country under Kent RO Systems Limited in 1998. Today, Kent RO is the most popular technology in the water purification industry.

“We identified the constant worry of every Indian household and successfully offered the right solution,” explains Mahesh Gupta, founder and chairman. Kent has become the number one in the sector and Gupta claims to have a 40 per cent market share of the Rs4,000 crore RO purification sector, on par with Eureka Forbes. However, the overall water purification industry is worth Rs8,000 crore and is growing at 10 per cent, with Eureka Forbes in the lead. A senior marketing executive of an MNC present in the RO sector, speaking anonymously, said: “In RO, Kent is the consumer’s first choice. They are ahead of others in terms of quality.”

RO is the process by which water is forced through a semi-permeable membrane by pressure, creating a stream of treated water (permeate) and a stream of rejected water (concentrate or brine). These systems have the potential to remove water contaminants such as lead, volatile organic compounds (VOCs), PFAS, arsenic, bacteria and viruses. Currently, reverse osmosis (RO), ultraviolet (UV) technologies, or water purifiers with a combination of both, are in high demand. However, gravity water purifiers, which are more economical, continue to sell in high volumes in the mass market.

Due to Kent’s success and the benefits to consumers, major players in the water purification sector, such as Eureka Forbes, LG, HUL, Havells and Livpure, have been forced to enter the RO technology market. Eureka Forbes was the first company to become popular for its UV technology. After consolidating its position in the water purification market, Kent recently ventured into the ceiling fan sector, and is exploring entry into the kitchen chimney sector as part of kitchen appliances. “We only enter a business if we see value and can make an impact,” says Gupta.

Kent is a shining example of a bootstrapped start-up success story. Hailing from Uttar Pradesh, Gupta was raised in Delhi, where his father worked in the finance department of the government. After graduating from IIT Kanpur with a degree in mechanical engineering and studying at the Indian Institute of Petroleum in Dehradun, Gupta began his career in 1978 with Indian Oil in Mumbai. However, he always had a passion for entrepreneurship and left his comfortable job against his family’s wishes to start his own business, producing an oil flow meter called Kent.

  • Varun: streamlined customer service and turned it as a profit centre

With an initial investment of Rs20,000, the product quickly gained popularity among various industries that consumed oil. He used to market the product, along with a few employees. The company still exists and does Rs6 crore worth of business yearly. “When I left the job, my father was so upset that he did not speak to me for a month. But I proved him wrong,” recalls Gupta.

 Accidental entry

His entry into the water purification business was accidental, and a result of his children falling ill with cholera. He realised that this was due to the poor quality of drinking water. While planning the installation of a water filter in his home, he discovered that the only available option was a UV-based one, which only killed bacteria and germs but not soluble impurities in the water.

Being an engineer, he then decided to create his own RO water purifier by importing purifier components. After several trials and six months of hard work, he settled on reverse osmosis technology which promised the results he was looking for, and built an RO water purifier machine for safe drinking water.

This success resulted in the formation of a business, with Gupta launching a door-to-door campaign to raise awareness of his product. It was priced at Rs20,000, which was initially seen as high compared to the Eureka Forbes UV purifier, which was sold for only Rs3,000. However, as the market became more aware of the advantages of RO water purification over other methods, it began to accept and embrace the product.

“Gradually, the market realised that RO water is tasty, pure and retains minerals, and it started accepting our product,” remembers 69-year-old Gupta.

His son Varun – a computer engineer – joined him in 2005. Varun learned the nitty-gritty of the business after spending time in production, procurement, HR and customer services. He was instrumental in implementing ERP in the company. “It took me almost one year to stabilise ERP in our system,” says Varun, 39. He later went on to study for an MBA at Colombia University and played a crucial role in implementing an ERP system within the company.

As Kent’s popularity grew, Guptas realised the importance of branding and signed Bollywood star Hema Malini as an ambassador for the company in 2005. This proved to be a major coup for the company and the association with the actress continues to this day. The father-and-son team are now taking the company to new heights.

Encouraged by the success of its water purifiers, Gupta realised that in order to grow, he needed to add more kitchen-related products. Hence, in addition to a diverse range of water purifiers, Kent diversified its product portfolio over the years to include air purifiers, vegetable cleaners, water softeners, and the smart chef range of kitchen appliances. The brand is now known for its innovative use of next-generation technology in enhancing the quality of everyday living.

Kent RO Systems, based in Noida, is the leading water purifier brand in the country with an annual turnover of Rs1,110 crore. It is a closely held, debt-free company. It had a compounded annual growth rate of 7-8 per cent over the past 5 years and employs 3,500 people. Water purifiers contribute to almost 80 per cent of its revenue. “Our unique selling point is innovation, fail-safe quality, and uninterrupted customer service,” says Gupta. “We are the only company that offers 4 years of free service, which demonstrates the quality of our products.”

  • Upbeat about the growth of energy-saving fan

The company has a remarkable ability to stay evergreen, and recently entered the energy-saving fan market by launching BLDC ceiling fans under the brand name Kuhl. BLDC is an energy-efficient technology that uses a frictionless, software-controlled motor. These fans are Wi-Fi and IoT-enabled and can be controlled through a smartphone, Alexa, or voice commands.

"Currently fans are mostly based on obsolete induction technology in our country. BLDC technology will save 65 per cent of energy. We have been exploring this market for the last two years, and plunged into the segment,” says Gupta. The company has invested Rs140 crore to create a top end fan manufacturing line at NOIDA that can produce 5 lakh BLDC fans per annum. Elegantly and aesthetically crafted Kuhl range starts from Rs3.500 and goes up to Rs16,000.

"The total ceiling fan market is Rs10,000 crore. Crompton, Havells and Usha control more than 70 per cent of the  market. All the major players started manufacturing BLDC because the government has made it mandatory to have star ratings in fans like they put it in other appliances. Hence to be on the top rating energy efficient technology is must. We have a dedicated team to market fans,” says Varun.

In water purification, Kent has three integrated state-of-the-art manufacturing facilities: two in Uttarakhand at Roorkee and one in NOIDA, with a total capacity to produce one million water purifiers per year. Kent primarily produces RO water purifiers for the premium segment (70 per cent), but it also manufactures non-RO purifiers for all other categories, including the mass market. The Kent brand has a price range of between Rs3,500 to Rs20,000.

Most critical components, such as filters, membranes and pumps, are manufactured in-house as part of backward integration, which allows the company to monitor quality and achieve cost savings. This is supported by highly sophisticated quality checking and testing facilities. “Each machine undergoes an RO test for over 45 minutes at the testing plant before it is packed,” says Akashdeep Gupta, Associate Vice President, Supply Chain. The processes are highly standardised and benchmarked to the best in the world. Stringent quality assurance measures are adopted, and effective cost management systems have been put in place.

Kent boasts a robust team of 15 R&D members. They consistently develop innovative products and designs to stay current. “We spend an average of 2 per cent of our revenue on R&D,” says Gupta. Some of the unique products include multiple purification RO+UV+UF+TDS processes, zero water wastage, retention of minerals, UV light in the water tank to maintain purity, and a digital display of purity levels, among others.

 “Despite the many benefits of RO, only 4-5 per cent of people use it. The industry should raise more awareness to further develop the market,” says Gupta. Out of the total water consumption in a household, only 2 per cent is used for drinking water. “In the RO category, we make 50 SKUs,” says Akashdeep Gupta. Grand Plus is Kent’s best-selling product.

Kent sells its products through various distribution channels – retail chains, modern trade outlets, CSD and police canteens, door-to-door marketing and e-commerce. Kent is present in over 15,000 stores pan India. 35 per cent of the company’s sales come from the northern market followed by east, south and west. The company exports 5 per cent of its products to the Middle East and South East Asia. 

  • RO assembly line

Prior to 2011, service for the water purifiers used to be provided by its sales partners. The company had no control over this and the spare parts revenue was insignificant. “We changed the old system and introduced centralised services and created franchise providers across India. By doing this we made customer service a profit centre rather than a cost centre,” explains Varun.

Today, its centralised call centre and service centres serve 19,000 pin codes across the country. Laboratories of international repute, like NSF, WQA and more recently ISI, have certified Kent’s products for its quality and efficacy. 

Amour India is a dealer in Howrah for Kent, having been associated with the company since 2007. Says Bankim Bose (Business Development at Amour): “Kent is an innovation-driven company. Its RO is the best in the industry and it is the most sought-after brand in the segment among consumers.” But he opines that the company is losing in motivating distribution partners to increase their sales goals, unlike its peers. It is important to hold dealers’ meets and activities often, says Bose.

Last month Kent signed an MoU with the UP government to set up a new fan manufacturing facility in the next 3 years with an investment of Rs500 crore. The company has acquired a plot of 25 acres near the Yamuna Expressway. Gupta says: “If we have to compete with the big players in the segment, we need to ramp up capacity from the present 5 lakh fans to 50 lakh fans in the next 3 years.”

Built on a solid foundation, Kent has been growing significantly. The company has no plans to go public soon. It needs more enterprise to adopt the aggressive sophistication of the new markets. Gupta humbly says: “The best is yet to come.”

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