“I felt that Ananda was academically and professionally qualified to become an entrepreneur. He was always brimming with new ideas. I encouraged his ideas and was confident that he had sufficient expertise and experience to incubate and diversify. When we were discussing names for the new enterprise, I asked him to consider my father’s name, ‘Paramesu’. He has always been prudent in business and won my confidence. Today, I am very proud of our new baby, Paramesu Biotech, and the fact that it has posted more revenues compared to other poultry businesses. I am confident that he will take Paramesu Biotech to the next level,” says T Upendra Reddy, Chairman, Paramesu Biotech and the promoter of Anaparthy Poultries Pvt Ltd, Karnataka Poultry Farm, and Manikyam (incidentally his mother’s name) Poultry Farm.

Adavani adds: “I was hell-bent on maize-based speciality products as I had seen its vast potential. India has not even scratched the tip of the iceberg in the field of maize-based starch applications in day-to-day life right from toothpaste to food to cookies to instant coffee to tablets and even saline.”

He quit his job at Bharti AXA in 2010. Paramesu Biotech was incorporated in 2011, and the land for the factory was bought in 2012. Indian Bank’s former (retired) General Manager, Lakshmipathi Reddy, says: “I was zonal manager for five districts from East-West Godavari to Srikakulam and Reddy and Adavani approached me with a novel business idea. While we had a decades-old relationship with Reddy and his poultry farm business, I found Adavani to have good academic credentials and professionalism. His business plan was robust and addressed all the key aspects such as location and proximity to the maize belt. I asked him: ‘Why are you leaving your job to become an entrepreneur?’ and he spoke about his passion and vision. He said that maize-based speciality products had a lot of potential and a huge number of applications and variants relevant for many industries. Upendra’s poultry business was also closely associated with maize (bird feed). The factory was within a 30 km radius of the maize belt. Paramesu Biotech’s story has been an inspiration to several entrepreneurs in the East-West Godavari region. During my days there used to be 15-20 units but today Indian Bank is financing hundreds of units, all of which have grown manifold and are our valued customers now.”

Paramesu started commercial production in 2015 with 160 tonnes per day and is now at 800 tonnes per day crushing capacity. It soon added names like Andhra Paper, Emami, JK Paper, ITC, etc, to its customer base. Alpesh Bung, Managing Partner, Alpha Adhesives, one of the earliest customers of Paramesu Biotech, says: “Ananda and I met 2-3 years after I started my business. Unlike others who we meet in the market or in the field, Ananda met me at a Coffee Day outlet. Since Paramesu Biotech was new, we were initially sceptical about giving them orders, but Ananda instilled confidence. We started with small quantities but as things progressed, we saw their good work, customer service, and improvisations on quality aspects. I have been inspired by their growth and the way Ananda has functioned. He ensured we had quality products and was committed to our business arrangements despite business cycles and price fluctuations. Honouring previous commitments is the most important quality in this business. He also ensured timely delivery. Today, I look up to him as a mentor for his business savviness and acumen.”

Building blocks

Adavani soon realised that buying small volumes of maize from different locations is very different from buying bulk from one location. Adavani says: “Maize as an agricultural commodity is difficult to procure. We started building a network of suppliers including big traders. Soon, we started approaching farmers and small commission agents directly. Our visibility in the market increased. We started getting assurances of supply but we had to educate farmer suppliers on harvesting techniques and best-in-class practices.” Even today, the company harps on quality when it comes to farmers.

Slowly, Paramesu’s maize crushing capacity increased from 160 TPD to 180 TPD to 240 to 420 and 800 TPD today. They undertook several growth initiatives, added new machinery and changed pump capacity. They have a covered area of 44 acres in Devapalli in Andhra Pradesh and an open area of 16 acres. Today, the company has 360 employees and 250-300 contract labourers.

“In the maize-based speciality products business, we need to be close to the raw material,” says Adavani. He adds that contract farming in maize will not work as the producer has multiple alternate buyers. “This is an easy crop and enough acreage is available. Farmers can get money in 100 to 120 days and earn enough in two seasons every year,” he says.

From 2016, they started exporting and today they export regularly to Indonesia, Malaysia, South Korea, Thailand, Vietnam, Bangladesh, UAE, Sri Lanka, and Africa. Ananda’s wife, Maniswetha, Co-Founder & Director, Paramesu Biotech, avers: “During our MBA days, Ananda and I discussed new business and entrepreneurship ideas. Since then, I always knew he would get into business and the only question was when. Our core business took off and we have crossed several significant milestones in the last few years. I still feel that we have a long way to go as we see new challenges every day. It is very inspiring when we see the facility today — for example, when you go to the parking lot, we see around 300 vehicles every day as compared to only the family cars parked there when we started the factory. Ananda is very hard working and is willing to go the extra mile every time, everywhere. He has a people-centric management style and is a good judge of people. He is a tough taskmaster but empathetic towards our staff and workers. That’s why many of our team members are loyal and have stuck with us.”

Addressable market

The Indian native maize starch industry is expected to be valued at $1,897 million in 2023 with a volume of 4.87 million tonnes. The market has grown at a CAGR of 3.27 per cent since 2019 and is further expected to grow at a CAGR of 4.56 per cent until the forecasted period. The growing applications of native maize starch in the pharmaceutical, textile, adhesives, paper, and cosmetic industries are propelling the growth of native maize starch in India. Native starch is incorporated into a wide variety of consumable products, such as bakery mixes, frozen cakes, sheeted snacks, batter mixes, brewing adjuncts, dry mix soups and sauces, processed meat, pudding powders, cold process salad dressings, dips, and fruit preparations.

It is also added to pet food products as native starch is an effective source of energy for dogs and cats and enhances the density and texture of the product. It is used as a stabilising, thickening, gelling, and moisture-retaining agent. It is also employed to stiffen textiles for improving the appearance of fabrics by imparting a glossy texture. It is widely used as a flocculant, binder, and bonding agent in the paper industry.

“This industry has been viewed as a commodity business, but this is not true. There is value addition as per customer requirements. We, at Paramesu, make many starch products like oxidised starch, thin-boiled starch, cationic starch, etc, which are generally produced by chemical, physical, and enzymatic modifications based on customer-centric applications. You need to understand the chemistry of starch,” says Adavani.

With a global share of approximately 14.3 per cent in 2022, India stands as the world’s top exporter of maize starch. A relatively small amount of maize starch is imported. The Indian native maize starch market is highly competitive, with several key players dominating the industry. Some of the other major players in the market include Roquette Riddhi Siddhi Private Limited, Gujarat Ambuja Exports Limited, Sanstar Biochem, Sukhjit Starch & Chemicals Ltd, Sayaji Industries Limited, Universal Starch Chem Allied Ltd, etc. Key end users in the domestic market for native starch are Mondelez, Parle Products, Nestlé, Britannia Industries Limited, Priya Gold, ITC, Dabur, JK Paper Limited, Weikfield Foods, Arvind Ltd, JCT Ltd, Century Pulp & Paper, to name a few.

Adavani’s passion for growth and expansion is still intact. Even today, the management team sits on the shop floor and does not have a corporate office. Over the last few years, Paramesu has supplied to over 1,500 customers, and at any given point of time, they have 300 customers in hand. Yet, they have been able to get only around 20 per cent of their customers’ share of wallet or budget.

“In advanced countries, starch has multifold applications, but India witnesses very few applications. There is huge potential in precision fermentation as vegan culture and the demand for nutraceuticals grow. To grow the culture, uniform stable nutrients are required and the only alternative is starch derivatives. There is a need for high-end protein production as the increase in per capita income leads to an increase in per capita protein consumption. Significant investment is needed in plant-based fermentation,” sums up Adavani.