Ajay Singhania (Epack Durable) on building a Rs 3500Cr empire from near bankruptcy
The journey of Ajay Singhania, MD and CEO of Epack Durable, is a masterclass in resilience, adaptability, and strategic growth. In a fascinating conversation, Ajay shares his incredible story, taking Epack Durable from a small family-backed venture to a publicly listed company with a market cap of approximately ₹3500 crore. This isn't just a story of success; it's a blueprint for navigating challenges, seizing opportunities, and building a lasting business in the competitive manufacturing world.
Check out the video of the conversation here or read on for insights.
👶 Early Life and Family Background
Ajay was born in 1975 into a lower-middle-class family in Assam, India. Before starting his entrepreneurial journey by opening a motor parts spare parts shop in Guwahati, his father worked as a salesperson in a relative's shop. This shift marked the beginning of a family business that would inspire Ajay and his siblings.
Growing up with three siblings, Ajay experienced a nurturing yet competitive family environment. Their parents instilled a strong work ethic, and the children were encouraged to excel academically.
“There was always some sort of competition between the siblings. The gap between me and my brother is just one year, and there was this informal competition to draw more attention from our parents.”
Despite their humble beginnings, Ajay and his siblings were bright students. This emphasis on education became a cornerstone of their upbringing, setting the stage for Ajay's future endeavors.
🎓 Education and Pursuing Engineering
After completing his schooling, Ajay followed a path that diverged from his brother's choice of commerce. He decided to pursue science, unaware of where it would lead him. This decision was driven partly by the desire to stand out in his family and to gain parental attention.
Ajay found himself in a premier high secondary school in Assam, surrounded by peers who were more academically accomplished. This environment opened his eyes to new possibilities. He began preparing for engineering entrance exams and successfully secured admission at the National Institute of Technology, Hamirpur, where he pursued electrical engineering.
“I learned a lot about what options exist when you think of choosing a career or a professional journey in life.”
🌍 The Decision to Pursue an MBA in the US
With a degree in engineering under his belt, Ajay began contemplating his next move. He aimed higher than merely working for someone else. Inspired by his brother, who was studying for an MBA in Australia, Ajay decided to explore the possibility of pursuing an MBA in the United States. This was a daunting proposition for someone who had never travelled abroad.
Ajay prepared diligently for the GMAT and TOEFL, and his hard work paid off when he received a full scholarship to the University of Scranton in Pennsylvania. He described this achievement as a dream come true.
“I had a dream, and I followed it, and I landed up in the US.”
While studying for his MBA, Ajay remained resolute in his intention to return to India after graduation, unlike many of his peers who aspired to settle down in the U.S. His focus was on making a mark back home and contributing to the family legacy.
🚀 Starting Epack Durable: The Initial Steps
Ajay returned to India after completing his MBA, where he and his brother sought to carve their own paths. They were determined not to simply join the family business but to create something bigger. Their entrepreneurial journey began when they partnered with the Bothra family, who had established themselves in the manufacturing sector in Delhi.
Ajay and his brother explored various opportunities before finding their niche in thermocol packaging for LG, a burgeoning company in India at the time. Ajay recalls the excitement of this new venture.
“It seemed like an opportunity. Let's do it together.”
With the construction of their new facility underway, Ajay joined the business in December 1999, just months before they officially launched operations in January 2000. They built their factory in Greater Noida, strategically located next to LG's manufacturing facility, which positioned them well in the supply chain.
🏭 Establishing Manufacturing Operations with LG
From the outset, Ajay and his brother were determined to set their enterprise apart. They opted to import cutting-edge machinery from Korea, a significant investment compared to local alternatives. Ajay took on multiple roles during the factory's initial setup, including training operators and translating manuals for Korean engineers.
As they began producing moulded thermocol packaging, LG quickly became their primary customer. Ajay's hands-on experience and commitment to quality were instrumental in establishing a solid foundation for Epack Durable.
“We wanted to put up an automatic imported plant from Korea, which was ten times the cost of what we could have bought from India.”
This decision proved to be a turning point, as it not only improved production efficiency but also positioned Epack Durable as a leader in the thermocol packaging industry.
⚖️ Challenges and Inflection Points
As Epack Durable grew, so did its challenges. The company faced significant hurdles when LG's management decided to consolidate manufacturing back to their own facilities.
“We were given a grace period that within five months, this entire business is going to move out.”
During this tumultuous time, Ajay and his team rallied together. They recognized the need to pivot their business model and explore new opportunities. This crisis led them to forge new partnerships, including one with Voltas, which opened doors to new revenue streams and allowed them to shift from being an OEM to an ODM.
Through determination and innovative thinking, Ajay and his team turned a potentially disastrous situation into a springboard for growth. By the end of 2013, they had not only recovered their previous revenue levels but had also established themselves as a competitive player in the Indian manufacturing landscape.
🔄 Transitioning to ODM and Expanding Product Lines
As Epack Durable transitioned from Original Equipment Manufacturer (OEM) to Original Design Manufacturer (ODM), the company embraced a broader scope of manufacturing capabilities. This shift marked a significant turning point in Ajay’s vision for Epack.
“We started making our own heat exchangers, our own plastic parts, our own steel parts. This was a huge leap for us.”
By 2013, the company had fully integrated these capabilities, allowing them to produce components that were previously imported. Ajay's commitment to quality and innovation drove them to develop essential parts in-house, significantly reducing dependency on external suppliers.
The decision to manufacture critical components, such as heat exchangers and controllers, not only enhanced their production efficiency but also positioned Epack Durable as a leader in the industry. This transition was not merely about expanding their product lines; it was about redefining their identity in the manufacturing landscape.
📈 Growth and Recent Developments
The growth trajectory of Epack Durable has been nothing short of remarkable. From a revenue of ₹550 crores in 2020, the company has showcased a staggering growth rate of nearly 50% year-on-year.
Ajay attributes this growth to strategic decisions made during challenging times, particularly during the pandemic.
“The pandemic period was a golden period for us when we realized our potential. We did our first round of private equity raise in September 2021, raising $20 million.”
This influx of capital allowed Epack Durable to expand its manufacturing footprint, establishing new facilities in Rajasthan and Andhra Pradesh. The company’s CAGR of almost 45% from 2021 to 2024 reflects their robust expansion strategy and commitment to innovation.
Moreover, Ajay's focus on diversifying product offerings has been pivotal. The company is not just growing; it is evolving into a comprehensive ODM provider for various sectors.
🏛️ The Role of Government Initiatives in Manufacturing
Ajay emphasizes the significant role government initiatives, such as the Atmanirbhar Bharat campaign, have played in fostering a conducive environment for manufacturing in India.
“The government approached us, asking why certain products were being imported and how we could manufacture them locally. This dialogue was crucial.”
The government’s commitment to reducing import dependency has led to substantial policy changes, including the Production Linked Incentive (PLI) scheme. This initiative incentivizes manufacturers to produce locally, thus enhancing the competitiveness of Indian products on a global scale.
As a result, the domestic manufacturing landscape has transformed dramatically. Ajay highlights that the import of complete air conditioning units has decreased significantly, with local manufacturing of components rising from 25% to over 65% in recent years. This shift not only strengthens the economy but also empowers local industries to thrive.
🌟 Future Aspirations and Strategic Directions
Looking ahead, Ajay envisions a future where Epack Durable continues to redefine its market position. His ambition is clear: to triple the company's revenue and become India's leading ODM for appliances.
“We want to diversify into other appliances and aspire to be India’s number one appliances ODM company.”
The company is already making strides in this direction by expanding its product portfolio to include kitchen appliances such as mixer grinders and air fryers. Ajay’s passion for product development is evident, as he dedicates time to designing innovative products that resonate with consumer needs.
Additionally, Epack Durable aims to enhance its relationships with existing customers by cross-selling a variety of products. This strategy not only increases customer loyalty but also maximizes revenue potential across their product lines.
💡 Advice for Aspiring Entrepreneurs
Ajay offers invaluable advice for aspiring entrepreneurs.
“Follow your instinct and don’t try to copy anybody. Whatever is your dream, vision, or passion, you’ll always find a way.”
He encourages young founders to remain steadfast in their vision while being adaptable to change.
In a rapidly evolving market, staying true to one’s instincts can be the key differentiator. Ajay’s story serves as a beacon of inspiration, illustrating that with determination and the right mindset, success is within reach for those willing to embrace the challenges of entrepreneurship.
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