Abhishek Agarwal
Joint MD, RMCL Retail

India thrives on small and medium sized businesses which are predominately entrepreneur driven. Packaging/ lubrication/ ancillaries/packaging machineries are the areas which are technology driven and the industry is adopting next-generation technology at a very fast pace. RMCL Retail today is the one-stop shop for most packaging materials, industrial tools and machines.

In any consumer driven industry, be it food, pharmaceuticals, healthcare or any FMCG industry, packaging cost is second after the raw material cost.
From years of in depth packaging process and products know how, Radha Madhav Corporation Ltd (RMCL) is able to garner crucial insights into specific packaging needs of clients operating in the pharmaceutical, food, healthcare, catering, industrial, metal, electronics, white goods, chemicals and other highly demanding industries.
Through research, RMCL learnt that customers were not fully informed about the latest products available in the market that best suited the packaging of their related end products.
They also did not have timely access to optimum packaging methodologies, packaging materials and overall packaging related solutions.
Research also indicated a strong demand for a one point source, where a customer could walk in with a product packaging need and walk out with a comprehensive and optimized packaging solution. RMCL also identified a demand supply gap, a niche that could be turned into a profitable venture for RMCL as well as the local channel partner.
With the concept of “everything in packaging” as a core idea RMCL has initiated a franchise model driven, nationwide chain of shops branded as RMCL Retail. This store is based on both the physical, as well as a robust online business model and is positioned to be a one stop shop for most packaging materials, industrial tools and machines.
RMCL Retail proposes to standardise the product specifications, the application methodology, material safety data and handling operations and unit packaging, in order to avoid confusion and malpractices. It proposes to create awareness in the market through dedicated advertisements and presentation of its products.
RMCL Retail is promoted by Radha Madhav Corporation Ltd, Radha Madhav Research & Trade PVT Limited and Radha Madhav Holdings Limited. The Group is promoted by Anil Agarwal and his Family and it is also patronized by SAR Group (Luminous). There are a host of suppliers who has been shortlisted to supply products to Franchisee through our distribution network.
Total manufacturing asset size of Radha Madhav Group exceeds Rs. 400 crore. SAR Group has various brands like Livepure, Lectra, Luminous, Fly mobile, Wynmobile etc. RMCL is a Public Ltd company listed on the NSE and BSE and has brands like Attrakt, Corobon, Ultimo, Fresh-IN, RM-Green etc. “RMCL Retail” is exclusive brand of Radha Madhav Corporation Limited.
RMCL Retail is designed to cater to small and medium enterprises for their Industrial needs like packaging, safety and cleaning products. All the products are self manufactured barring few which are sourced through dedicated warehouses in China and other global resources.

Brand’s Unique Selling Proposition:
n Existing base of 8000 + loyal and reputed customer s
n Visible Brands with excellent quality
n Marketing support and hand-holding
n Leasing of machines for local manufacturing
n Reward of packaging contracts in association with local franchise
n Moderate print, internet and TV advertisement in association with local franchise
n Order collection through portal www.rmclretail.com
It is seen that hi-technology products remain within the reach of only large MNC. Small and medium enterprises find it difficult to get new generation products.
Building brands hence becomes difficult for SMEs. In a situation when such products and technologies are made available to SMEs, professionals like carpenters, plumbers, contract packagers, amongst others the percentage of profit is phenomenal higher than supplying to corporates.

The offer:
RMCL will train the franchisee for all the products, services and handling of contracts. It will avail material to franchisee at very competitive prices and ensure that the franchisor makes desired profits. Training is extensive and is imparted as an ongoing process. First time training is included in the fees and subsequent trainings are provided free of cost by franchisor as a routine process.
We have direct shipments to franchisee. There is no intermediary. There are two large manufacturing locations. One is in Daman and another one is in Rudrapur. Franchisor is planning to open 20 Warehouses in next one year to ensure JIT service to franchisee.
To understand market dynamics, the company had started shops by the name “The Packaging Store” in four cities in 2008. These stores were to understand and improvise the standard operating practices and the policies for its much-awaited RMCL Retail. These stores, however, were withdrawn in 2010 to make way for RMCL Retail.
In the first phase, the company plans to open 100 stores by the end of 2013. Presently it has 30 stores opened within a span of 9 months. None of the store is company-owned.

The requirements:
Capital investment range from Rs. 20 lakh to Rs. 200 lakh (small/medium/large). There is also a possibility of contract manufacturing for which investment may vary from project to project
Area required is 200-350 sq. feet for small and 1,000 sq. feet for large format. The area does not need to be located in a prime location and industrial areas, remote areas are also accommodated to ensure minimum rental outflow. The franchisee can expect a return-on-investment (RoI) of about 35-60 percent per annum depending upon the product mix. The franchisee can expect a break even within the first month itself.
However, we suggest 3 months due to inexperience of franchise. For a product like ours, there are two types of buyers — reseller and end-user. For resellers, margins low at 4-7 percent but the working capital required is only for 10 days. The franchise can rotate money thrice in a month.
In case of end-users, margins are up to 15 percent, but the franchisee has to offer a credit of 30 days and working capital involvement is for 45 days.
In an ideal mix of 50:50 reseller and end-user, gross margins are around 10 percent per month. Net margins are generally 8 percent per month annualized around 90 percent per annum. We generally suggest 40-50 percent per annum looking at various uncertainties.

We are looking for franchisees with profiles mentioned below:
The franchisee should be financially sound and ready to learn the products and industry. The market size of packaging industry is Rs. 12,000 crore per annum for the dealt products. The total size is Rs. 27,000 crore and includes glass and metal which we do not deal.
We are looking forward to register a topline of Rs. 800 crore per annum with the existing infrastructure.
The number of stores operational (company-owned and franchised) are 30 and an expansion is targeted across India.

A brief of our Surat franchise – Shakti Packaging Solutions

Pawan Bagree is an enthusiastic entrepreneur hailing from Nagaon, Assam. He started the franchise shop for the company at Surat.

“I was looking to get associated with franchise model with some reputed company and found RMCL Retail as the most promising one. I did not want to get into food chain or fashion industry as there is immense risk and stagnancy. I wanted to increase my business by my hard-work and not sit idle at the cash-counter,” says Bagree, 26. According to Bagree, looking at the market scenario he wanted to get in some franchise as he did not want to start any business from scratch. Having looked at several options, RMCL Retail was his first choice.

“It is like family working with the management and I am enjoying my success. There is complete transparency and I am earning handsomely. I am looking at expanding the business by starting the second level franchise, getting more and more integrated with the company. I find industrial products to be much better than perishable and fashionable products being offered by other franchisors. Here the goods are intact and I have no fear of spillage, going out of fashion or theft,” he says. Bagree says the investment for the franchise has been low as he has spent only on some furniture. “I can increase the business to unlimited heights with the same fixed investment. The potential for business seems very high and now I am looking at growing my business at least 4 to 5 times than I had anticipated while beginning. This business is more secure and safe and I have no down-side risk,” says Bagree.