According to MRFR analysis, the Rice Milling industry in India is expected to achieve a CAGR of 3.51 percent from 2022 to 2030 and hold a value of over $392.6 million by 2030. With the increasing production and consumption of rice in India, the demand for high-quality rice is growing. That’s where Mohanlal Shankarlal Agro Foods comes into the picture. As a unit of ‘Chakradhar Group’ Incorporated in 2014, the company is at the forefront of providing the best quality rice brand. The company is involved in the cultivation, growth, harvesting, and processing of best quality rice to ensure that the benefit of this wonderful food reaches every household in India and the world.
Sumeet Agrawal, a renowned director has been leading Mohanlal Shankarlal Agro Foods, for 18 years playing a crucial role in the company's remarkable achievements and continuous growth. Through his commitment to innovation, he has diversified the business into sectors introduced new products, and cemented the company's position as a significant player, in the Indian business arena. In this interview with Industry Outlook Leaders, Sumeet Agrawal sheds light on the Mohanlal Shankarlal Agro Foods and its offerings.
Can you please provide an overview of your experience in the rice milling industry as a business leader & highlight the most significant milestones in your journey?
Our journey in the rice milling sector began in the year 1993 when my father and grandfather laid the foundation. I officially stepped into the business in 2001, initially working on a warehousing project. With great dedication, we successfully built a 20,000-square-foot warehouse in the year 2002, in one of India's significant agricultural produce centres. After a few years, I shifted to the rice milling industry. I got the opportunity to improve the production capacity of the mill which was approximately two metric tons per hour. After meticulous planning and effort, we set up a new factory that boosted our processing capacity to an impressive six to eight tons per hour.
One of the most significant milestones in our rice milling journey has been our commitment to constant improvement and product diversification. Initially, we focused on raw rice production, but in 2006, we ventured into processing steam rice, which has since become one of our flagship products under our brand name.
Another pivotal moment was in 2017 when we began our third factory and transitioned from a primarily domestic market focus to becoming a major exporter in Central India by 2021. We started from a local market, expanded to the national market, and eventually ventured into the international market.
What are the most significant business challenges you currently face, & how do you address them?
One of the primary challenges currently facing our industry is the significant rise in raw material costs, which have nearly doubled over the past decade. Unfortunately, while these costs have escalated, profit margins on sales have largely remained stagnant. Another critical business challenge we are grappling with is the substantial increase in working capital investment. In the past, purchasing crops operated on a credit-based system.
However, there has been a shift towards cash transactions throughout the entire supply chain. This shift has created a significant financial challenge for us and many others in the industry. Farmers, who often live hand to mouth, now require upfront payments. To adapt to this new reality, we have implemented contract farming, providing funds to farmers before they sow their crops, ensuring a consistent supply.
Consequently, the financial dynamics have undergone a significant change, with investments increasing by approximately 70-75 percent in just the last five years. To mitigate these challenges, we've harnessed cost-effective strategies for our exports. Leveraging government policies and benefits designed for exporters, such as Exporter's Packer Credit, has proven invaluable. This facility offers a remarkably low annual interest rate of approximately 5 percent, providing us with a robust financial tool to meet our export-related financial requirements. It has been an instrumental and extensively utilized resource for overcoming these financial challenges in our industry.
Try till you succeed & if you don’t, you will earn the experience. Experience is the most valuable thing
What's your leadership philosophy?
Being a business leader can be quite challenging as it requires a lot of time and effort. We operate in industries so there's always a lot going on. To motivate my team, I make sure to recognize and appreciate their work whenever they achieve milestones or perform exceptionally well. We also provide incentives to keep them motivated and encourage them to surpass their achievements. As a leader, I strongly believe in the importance of listening to everyone regardless of their position, in the organization. Whether it's an employee or a senior executive their opinions matter. Many issues can be resolved at levels without involving ups or external experts. Listening is always beneficial. My approach is to consider everyone's perspective and then make decisions based on the input received.
What advice would you provide to young entrepreneurs who aspire to become successful business leaders?
If you are already in business, my suggestion is to begin by focusing on improving the quality of your product or service to exceed industry standards. Strive to increase its value so that you can gain the most from what you offer. Additionally, consider exploring forward and backward integration. This approach can not only save you money but also create new business opportunities within your company, enhance the value of your product, and simplify your business operations. If you are a new entrepreneur entering the business world, try till you succeed, & if you don’t, you will earn the experience. Experience is the most valuable thing.
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