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AVA Group to set up new unit for Melam in Chennai, will tap immunity market soon

AVA Group, makers of the popular handmade soap Medimix, is taking a conservative approach to its business expansion this year.

AVA Group to set up new unit for Melam in Chennai, will tap immunity market soon
AV Anoop


Having been impacted by the pandemic significantly, the group remains optimistic about the future. For the first time, it is seeking to move its ‘Melam’ brand of masalas beyond Kerala and setting up a factory in Chennai on 1.6 acres. 

Outlining his plans, AV Anoop, MD of the Group, tells DTNext that this decision is to position Melam in Tamil Nadu, as the scope for the brand is tremendous in the state. “We have an array of 60 products, from spices, masalas, breakfast items to pickles under Melam. Though it is only five years since we acquired the brand, we see immense potential for its growth,” he says, adding that the ‘puttu podi’ in particular, has seen good traction. 

Melam’s export growth was 26.5 per cent, while domestic growth was 11 per cent. The Rs 340 crore AVA Group owns three other brands – Sanjeevanam, Kaytra and Divine, to cater to diverse markets such as herbal products and healthcare. 

Last February, Medimix completed half-a-century. The Ayurvedic brand was founded by the late VP Sidhan, under the Cholayil umbrella. The flagship brand was divided between Sidhan’s son Pradeep and son-in-law Anoop in 2007. Since then, the south market under AVA, has been growing at a steady pace but COVID-19 played spoilsport. 

“We had been seeing 30 to 40 per cent growth year on year for Melam, but last year was extremely tough with survival being the main focus. We have lost employees and our returns were in the negative in March. The lockdown has been hard on us,” he laments. 

The doubling of raw material costs has added to the woes of the soap maker. “We witnessed shortage of materials, high costs of inputs, spikes in the supply chain, and increase in the cost of packing materials too. Therefore, major investments were not possible. We did launch a sanitiser but the offtake has been difficult, considering the paucity of materials,” he seeks to point out. 

Anoop is quick to add that the business despite seeing a negative growth in March 2020, was able recoup in April and May, recording 20 per cent growth in March 2021, compared to the previous year. The demand for hand wash and sanitisers has gone up substantially but he is keen to pursue long-term sustainable businesses. 

The group is gearing up to launch post-COVID care products such as chyawanprash and herbal tea. “With the AYUSH ministry’s positive signals, we are working on immunity building products, which are in the pipeline,” he says. 

Frugal measures such as completely slashing the advertising spend (typically 8 to 10 per cent of its turnover) had to be taken to manage the disruptive period. “We took a call to stop our brand building budget. We may even look at partly mechanising (power instead of manual labour) some of our functions like unloading oil, pumping oil and packaging,” he signs off.

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