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Published on: Jan. 25, 2021, 12:07 a.m.
Cello marches ahead
  • Cello’s ability to innovate and launch new superior products has given it a unique edge in the market

By Arbind Gupta. Assistant Editor, Business India

From a humble beginning with a tiny factory for making plastic PVC footwear and bangles in Mumbai way back in 1967, the Cello group has come a long way, emerging as one of the most diversified houseware company/brands in the country. With over 5,000 SKUs in its fold, the Mumbai-based company has a presence across multiple segments ranging from plastic & steel ware, Opalware & glassware, melamine ware to moulded furniture, home appliances, air-coolers, writing instruments, paper & stationary products and cleaning products. The Cello brand is today one of the most recognised brands in the country and probably every household has at least one Cello product.

In 1982, the Cello group’s actual journey started when it first launched plastic houseware products and subsequently set up a state-of-the art factory for thermo-ware products in 1986. Today, Cello is one of the largest selling houseware brands in the country, with the widest range of products, which include water bottles, tiffin boxes, lunch carriers, insulated water jugs, flasks, hot pots; PET, PP, PC bottles, flasks, storage containers, bathroom sets, laundry baskets, dustbins, and many more. It has over 1,700 unique houseware products.

It was in the mid-1990s that the group diversified into the plastic-moulded furniture business (which is also the only listed entity within the group) and writing instruments. It has never looked back since and has kept on adding one business after another to its portfolio – the latest being Opalware in 2017. The same year, it also ventured into the cleaning category, launching a range of cleaning products called ‘Kleeno’; which includes floor, sink and ceiling brushes, kitchen wipers, mop buckets, brooms, dust pans and scrubs. These cleaning products, as also some of the vacuum-insulated thermoware products, have witnessed a significant surge in demand recently, even as the pandemic-afflicted market struggles to keep itself afloat.

Best products, best price points 

Importantly, most of these businesses have been backed by world-class technologies and processes, with a plan to offer customers the best products at the right price points. For its latest diversification into Opalware, the company set up the largest manufacturing plant in the country, deploying German technology as per European quality standards. Similarly, in the beginning, when it got into moulded furniture, the company decided to make elegant, versatile and durable plastic moulded furniture, made from special grade plastic and state-of-the-art moulds from Italy. Currently, for moulded furniture, it has got over 35 modern injection/extrusion machines across four facilities (spread over four regions) with a total capacity of 250-2,800 tonnes.

When, in 1995, the Cello group started the writing division, from the first batch of pens, it offered consumers the latest technology like Swiss tips and German ink in its clear pens. It developed LPHV (Low Pressure High Volume) technology in-house for superior writing. It had the largest range of high-performance ink and gel ballpoint pens in India and manufactured over five million pens every day to become India’s largest manufacturer of fine quality pens with 37 per cent market share.

Despite being highly diversified, the Rs1,500-crore Rathod family-promoted group has continued to focus on manufacturing, where it makes almost 75 per cent of its portfolio on its own, in order to maintain quality and consistency. The group, backed by over 4,000 workers, is one of the largest processors of plastics/polymers (about 50,000 tonnes per annum), with 18 factories across multiple locations (a total of 2.6 million sq ft of manufacturing area). With more than 550 sophisticated moulding machines under its manufacturing shop floor, it is amongst the top few players in the business today. Cello’s manufacturing facilities are located in Daman, Baddi, Pardi, Haridwar, Kolkata and Chennai.

As a progressive player, the company has been at the forefront, introducing state-of-the-art, world class manufacturing technologies. Cello’s ability to constantly innovate and launch new superior products has given it a unique edge in the market. It has proactively invested in the latest technology available worldwide. The group was the first to bring out a pen with a rubber grip, the first to introduce LPHV technology, as also offer bubble guard extrusion sheet boards to Asia.

It was Cello’s ability to constantly innovate and launch new and superior products that attracted the attention of French stationary major BIC group to its Cello Pens brand and its manufacturing facilities in India. In 2009, the French group acquired a 40 per cent equity stake in the writing instruments business of the Cello group for Rs790 crore or an overall valuation of Rs1,975 crore ($402.5 million). In 2015, the €2.5 billion French major, one of the top three players in the world stationery business, bought over the entire stake in the group’s writing pen division, which was then renamed BIC Cello (India).

After selling off its stationery business to France’s BIC five years ago, the Cello group is now re-entering the writing instrument category and is all set to launch products under a new brand, ‘Unomax’ in February-March this year in the domestic market, having already started exporting in small volumes to overseas markets. The company has a different strategy for its new stationery business to differentiate it from Cello Pens.

“These ‘Unomax’ pens and stationery products have been positioned at price points slightly higher than where they were under our earlier Cello brand,” says Gaurav Rathod, 32, director, Cello group. “We have been waiting as it was necessary under the non-compete agreement and now we are all ready to get into this business in a big way. We will also have metal pens this time round.”

Outstanding performance

While Cello is known for its technologies, innovations and processes, it has put in place a strong distribution network in the rapidly-growing Indian market. Cello has one of the largest distribution networks with over 700 distributors and over 50,000 dealers and retail counters across the country. In fact, Cello, with its pan-India presence, is today one of India’s largest selling houseware brands. Besides, it has a well-established overseas network in over 65 countries and has been awarded the Plexconcil Award for outstanding performance 15 years in a row for product quality service, manufacturing practices, environmental safety, export performance, and excellence in marketing. The group exports over Rs300 crore worth products to overseas market. Cello is one of the leading exporters of household products, and supplies to the biggest retail stores globally.

“Cello is an old brand in the mine of houseware brands,” says Harish Bijoor, brand-strategy expert & founder, Harish Bijoor Consults Inc. “Early efforts in the space have stood it in good stead. The brand speaks the language of ‘sturdy first and cosmetic later’. This has held it in good stead in the Indian market.”

“Cello is a legacy brand with several decades of experience in the houseware industry,” says N Chandramouli, CEO, TRA Research. “It has evolved from a plastics kitchenware company to a holistic houseware brand, with extensions into a wide variety of dinnerware, clean ware, hydration and kitchenware. The trust that Cello evokes comes from decades of consistent brand focus, and also taking on Big B as its ambassador.” TRA Research, a Mumbai-based consumer-analytics and brand insights company, also publishes TRA’s Brand Trust Report.

“Over the years, we have grown from strength to strength, and are well-poised, in terms of strong brand, good network, well-diversified product portfolio, solid manufacturing capability and a good team,” says Pradeep Rathod, 55, chairman, Cello group. “We plan to continue this journey and consolidate our leadership position across all our key growing categories and explore categories which have volume and value growth potential in sync with our brand.”

“The last decade or so have been quite eventful for us, as we have managed to put up the most diversified portfolio in the houseware market,” comments Pankaj Rathod, 53, managing director, Cello group. “And, today, we have emerged as one of the leading house-ware brands in the country, with a growing overseas presence. We have consistently tried to provide households with world class products through our strong R&D and manufacturing efforts and, going forward, we will continue to consolidate our leadership position across all our product categories.”

Superior products

The zero-debt group is now looking to take its turnover to around Rs2,200 crore in the next two to three years to pursue its vision of being ‘India's most preferred household brand with innovative and aesthetically superior products at affordable prices’. Responding to changing trends in the market, the company, which has grown at a CAGR of about 20 per cent in the last five to six years, is increasing its presence in steel and glass houseware, as consumers are looking for alternatives to plastics.

“Our strategy of diversification, where synergy is the primary plan, has paid dividends for us,” affirms Gaurav, son of Pradeep Rathod. “And we will continue to provide our consumers with the best and contemporary products in the houseware and home segment. While doing so, we will also add newer products and actively try to consolidate the overall portfolio, by phasing out products that have outlived their use and need to be substituted by superior products. We want to be a complete solution provider for households.” Pradeep Rathod took over the chairmanship of the group recently, when his father and founder Ghisulal Rathod passed away.

Ghisulal had founded the business by initially setting up a small unit in Mumbai to make plastic PVC footwear and bangles. In 1982, he launched plastic houseware products, followed by the setting up of a modern factory for thermoware products in 1986. Not only has the company not looked back since, but it has also grown in stature. And, under Ghisulal’s stewardship, his sons Pradeep and Pankaj made Cello a household name in the houseware category. Now the group has been joined by the third generation, Gaurav, who has been taking an interest in the business from the early age of 18 years, when he did his internship under his visionary grandfather.

After garnering a bachelor’s degree in finance/economics from Bentley University, Massachusetts, USA, followed by a master’s in Business Management in Business Strategy from the University of Strathclyde, Scotland, Gaurav returned to India to strengthen his family business and worked for verticals like thermoware, writing instruments, housewares, appliances, glassware and moulded furniture.

In 2017, Gaurav was given the task of setting up the Opalware division from scratch – one of the most challenging projects in the history of Cello. He spearheaded and commissioned India’s largest and most advanced plant; launched and led the sales & marketing team and made Cello a leading player in the Opalware segment in a short span of three years – that too, against well-established brands in the category.

In a short span of time, Opalware has grown to a Rs200 crore-plus business and is looking to leave its mark in the market, where players like La Opala, Borocil, Solitaire and Luminarc are the established ones. In 2013, Cello launched its kitchen appliances and glassware range. In kitchen appliances, the company’s range include over 80 premium products like mixer grinders, hand blenders, sandwich makers, juicers, induction cookers and tea makers.

In glassware, the company has already emerged as having one of the widest ranges of products, from tumblers, bottles, jugs to storage containers, mixing bowls, bake-ware and ceramic casseroles. In the houseware segment (plastic and steel), the company is today one of the largest selling brands in India, with a wide range of products. While plastics continue to dominate its offerings, the company is gradually increasing its presence in the steel and glass segment to suit changing customer preferences.

“As a company, we have been proactive in adapting ourselves as per market needs and have tried to provide our consumers the best products,” says Gaurav. “Consumers trust our approach and, as a brand, we have always tried to live up to their expectations. We are also looking to increase our presence in the rural market. Our online presence has gone up to about 15 per cent from, say, five per cent.”

While some of the products saw dip in demand during the ongoing Covid-19, this was more than compensated for by the exceptional surge in demand for other products, where consumers took to using vacuum ware for hygiene and safety. Experts believe that the well-diversified portfolio has helped Cello in a big way during this difficult time. And the company is now diversifying into the rural market in a big way. Since the retail market was adversely impacted recently, the company has significantly increased its presence in the online/e-commerce segment. It has already recovered more than 80 per cent of its pre-Covid sales.

In October 2020, even as the market was yet to recover, the Cello group went ahead to strengthen its sales and marketing efforts, roping in Bollywood superstar Amitabh Bachchan as its brand ambassador. The actor endorses Cello’s range of products across social media platforms to enhance and build the consumer connect across different markets, and to grow its market presence.

“Cello is a value-for-money brand, and we want to showcase our diverse range of products across demographics,” says Gaurav. “No other brand ambassador has such an appeal across different age groups as Amitabh Bachchan, with everybody able to relate to his persona. Having one of the best actors in the industry as the brand face, associating with some of the best household products in its segment, we believe, is a winning move. We cut across different markets in India and, hence, Amitabh Bachchan will be able to help us connect better. The central idea is to highlight the importance of using credible, reliable, and durable products.”

The go-to-brand

Cello has always been an excellent combination of innovation, quality, and classical designs. An environmentally-conscious vegan brand, it emphasises the importance of using eco-friendly materials as well. With an unbeatable mixture of style, durability, design, and strength, the company has endeared itself to its customers and has become the go-to brand for everyone.

The overall houseware market has been growing impressively. Aspirational demand across segments is expected to continue to drive consumption and consumer spending. Increasingly, the keenness of nuclear families to invest in their own homes is leading to consistent growth in the housing sector, which is bound to push demand for home products. Experts are of the view that, though competition is growing, the pie is big enough.

Moreover, a reputed brand like Cello will always be the preferred choice in the market, where it is competing well with its competitors across various categories. Its rivals include Milton, Tupperware, Borosil, Lock & Lock, Eagle, Blueplast, Treo, Steelo, Princeware, Hamilton, Signoraware, Nilkamal, Supreme, Avro and many others. Though Cello is diversified across multiple categories, insulated & non-insulated plasticware, vacuum-insulated steel ware, moulded furniture and glassware are the top four categories for the company, contributing over 60 per cent to its topline.

With all these developments in place, Cello as a brand, has definitely left a mark for itself in the houseware market, which has been growing quite impressively and is expected to continue its march. Over the last decade or so, the company has been aggressive in adding more categories and products to its overall offering and has thus emerged as being one of the most diversified houseware brands in the market. It is this strategy that has helped it in not only growing its topline but also providing a much-needed hedging mechanism aganst market vagaries.

During this pandemic, when some of its categories were hit quite badly, some of the other ones fared well and this helped it tide over the challenging market scenario. Its zero-debt, cash-rich status has also been a big boon, since despite the recent slowdown in the market, as a company it has moved on quite well.

What differentiates Cello in the market is the fact that, while pursuing its diversified offering, the company has never compromised on quality and always tried to come up with the best products, and that has gone down quite well in the market. 

In order to control and maintain quality, Cello makes most of its products on its own and, while doing so, it deploys world-class technologies and processes. Recently, when many of its competitors struggled to maintain their supply chain due to hurdles faced in outsourcing, Cello remained unaffected to a large extent. Its ability to be quickly respond to market changes and serve customers with the best products at affordable prices has provided it an edge in the market, and customers have continued to repose their trust in the brand. So far, the company’s diversification strategy has paid rich dividends, but going forward, it remains to be seen how it manages this large and diversified portfolio.

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