P.J. Kunjachan, a model entrepreneur with a modest beginning
A case study on Entrepreneur Development and Small Business Enterprises for an MBA course offered by Indira Gandhi National Open University lists three names as examples. The first two are anybody’s guess: Dhirubhai Ambani and Karsanbhai Patel.
The third person is from Kerala, a place not exactly known for entrepreneurship. In fact, P.J. Kunjachan, the Managing Director of Arjuna Natural Extracts Limited (ANEL), who was cited as a model entrepreneur, was surprised at the inclusion of his name.
“I came to know about it only when somebody showed it to me. They had not even contacted me,” Kunjachan said. He may not be known so well outside the world of spice extracts. The study describes him as a successful model entrepreneur, who started his career as a proofreader with a local vernacular daily and as a newspaper vendor, and rose to head a company targeting a turnover of Rs 100 crore this year. ANEL is the largest manufacturer of Omega-3 fatty acids from fish oil in Asia and is now the producer of the world’s largest selling bio-available turmeric extract BCM-95™.
BCM-95™, developed by ANEL scientists, is sold as an antioxidant and has obtained six patents from the US and one from Japan; the European patent is pending. ANEL has bagged 11 international patents in all. Perhaps what sets Kunjachan apart from other entrepreneurs from Kerala, is his willingness to do something different for which he is prepared to spend time, money and effort. The discovery of Omega-3 fatty acids 10 years ago was the first milestone that gave the company a name.
The man who earned his spurs as a fragrant spice extractor began ironically with a nasty smelling substance. He set up a unit for producing bone meal from crushed bones to be used as organic manure. A thriving bone meal business led to a turning point. With the inspiration of his brother-in-law biochemist Dr. Benny Antony and brother Paul, he set up ANEL 20 years ago to export spice extracts. He then faced a series of challenges — first of which was the mopping up of resources because no bank was willing to fund the project. They pooled in Rs 3 lakh to begin operations.
They developed essential oil from mustard, an innovative product at that time. Though it was tough to export it to the US because it had been classified as hazardous, it was a runaway success. The first year saw them making a turnover of Rs 70 lakh with a profit of Rs 45 lakh. He enjoyed a stroke of luck in the form of rupee devaluation and the export income began to pour in.
Banks started chasing him after this success. The state tax department slapped a penalty for nonpayment of tax. But Kunjachan won an appeal against it because export turnover was not taxable then. The company hit the jackpot when it identified and separated Omega-3 fatty acids, a good source of antioxidants, from sardine oil. It is sold to big pharmaceutical companies who made products based on them.
ANEL later shifted its focus to research when it found that competition was tough in spice extract exports. While many companies spend 3-5 percent of their income on research, ANEL devotes 12 percent of its proceeds on development.
Kunjachan admits it was a challenge to identify the molecule that enhances bio-availability of curcumin in the body. BCM-95™ is seven times more bio-available than any other curcumin extract. It is unique because the extract is a reconstituted one, meaning it does not use foreign molecules.
Today, the company employs 300 people. It has a production unit in Kerala and two in Tamil Nadu and it plans to convert a closed factory in Kerala into an R&D lab. Its two subsidiaries, Livlong Nutraceuticals and Herbal Supplements, cater to foreign markets.
Kunjachan says the real architect of the company’s success story is his brother-in-law Dr. Benny Antony, who has inspired the staff to develop new products. “As an entrepreneur, one should always dream of success. Yes, problems will be there but every problem has a solution,” and that Kunjachan says, is his success mantra.
This article first appeared in The Economic Times.