Ahmedabad based Symphony Ltd was able to reach the pinnacle of success within a very short span, and also neared bankruptcy in equally great speed. The Managing Director Achal Bakeri learnt from the mistakes and pulled the company up from the shackles of failure. At present Symphony is the largest manufacturer of air coolers in India, with a market capitalization of Rs 6,300 crores. In 1988, Bakeri commenced his journey with air coolers, and not joining the family business of the real estate. The industry of air coolers was small and unstructured, the products then look clumsy and odd; in this scenario, Bakeri came up with air coolers that looked like AC, and priced at Rs 4,300.
Within a span of three to four years, Symphony could give tough competition to Crompton Greaves, Usha, Polar and other multiple product giants of the market. In 1994, the company decided to build its own factory and started manufacturing other products besides sir coolers, like room heaters, air purifiers, washing machines AC, water heater etc. But it failed miserably in attracting the vast user base. By 2001, the situation became critical, the company lost investors and was under a debt of Rs 50 crores, and it was then referred to the Board for Industrial and Financial Reconstruction (BIFR).
Just like Siddhartha Lal of Royal Enfield, Bakeri did not get bogged down by the failure of Symphony Ltd. He learned from his mistakes and started working to revive his brand. As per his interview with Business Today, “We continued to believe that one of the first things people aspired to own was a residential cooling product”. He focused strictly on his core product that is the air coolers and modified the company’s business models. The company stopped launching the other products and started introducing new product variants, updated models of air coolers having different price brackets.
Bakeri planned to outsource the manufacturing, thus increase the margins and decrease the price of the product. In 2009, Symphony Ltd acquired Mexican bankrupt company International Metal Products Co (IMPCO), gained access in the US market and started launching products for the foreign market. Thus, Bakeri chalked out a successful business plan for retrieving the past glory. The annual turnover of Symphony in 2010-11 was Rs 238 crores, and it increased to Rs 466.39 crores by 2014. As of 2015, Symphony is enjoying a 40% market share followed by brands like Kenstar, Usha and Bajaj Electronics. Since then, there is no looking back.
As per the Executive Director of Symphony, Mr Nrupesh Shah, “The size of the air-cooler market is estimated to be seven million units worth Rs 3,000 crores. It is expected to grow to 10 million units by 2020. The global market (except China) is estimated to be another Rs 4,000 crores. However, only 20 per cent volumes come from the organized sector,” Symphony Ltd is exporting products in more than 60 nations, and draws 15% of the total revenue. The company has produced air coolers resembling AC for retail segments. But it has shifted towards central air cooling only after achieving the inorganic growth after the acquisition with IMPCO.
In 2015, the company bought Munters Keruilai Air Treatment Equipment (Guangdong) who has top-notch research facilities and manufacturing units in Asia. The company increased the profit margin by giving lucrative discounts in the offseason and also penetrating the market of the neighbouring country Sri Lanka. As per Motilal Oswal’s report, “While 54 per cent out of 143 million households live in hot and dry climatic conditions and 4 per cent live in moderate climatic conditions, only about 8 per cent own air-coolers, providing a huge opportunity for growth.”
Bakeri has not only targeted the homes and industries, but it has also kept the temples, marriage halls, cattle shades, and poultry firms in mind. Symphony Ltd has bagged two premium projects and executed them successfully, the first one being eco-friendly cooling in Baba Ramdev’s Yog Bhavan in Haridwar and secondly Mecca Complex in Saudi Arabia. At present, Symphony has become synonymous with air coolers, not just in India but across the globe. From the epic journey of this homegrown brand, we can learn some valuable lessons.
- Set your priorities: The core product of Symphony Ltd was air coolers. So, Bakeri abandoned the other products like washing machines and air conditioners and concentrated on one product. He perfected the product and gained market share, both domestic and global. He has set his priorities and worked for it.
- The visual appeal matters: The air coolers and AC perform similar functions, but the air coolers are cheaper. Moreover, the designs of the Symphony were unique, beautiful and modern. Keeping the air coolers can add to the aesthetics of the space, and Bakeri was well aware of it.
- Inorganic growth is good for business: A business can expand by virtue of inorganic growth that is by mergers and acquisitions. Symphony acquired a Mexican bankrupt company and this was a daring task to do. By doing so, the company gained insight and access to the foreign market, which proved to be fruitful in the long run.
Not everyone can turn around, brands like Kodak, Nokia failed miserably. But no one starts a business to fail, right? I am sure you would like to avoid such mistakes in your business growth. You may have several doubts and queries in your mind which Google cannot solve with hundreds of pages of answers. Then who can, you might think!
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