From selling gas stoves to manufacturing them, Haryana-based Eehan is seeing success

After completing his MBA, 31-year-old Prince Arora from Kurukshetra, Haryana was left with two options - he had to either start his own business or pursue a job to help an existing business grow and develop.

Arora says he chose to start his own business. “An MBA makes you astute. You become more observant,” he says.

“I realised selling LPG stoves could be started with a low investment and chose to go ahead.”

Arora started selling gas stoves in 2012 and continued the business for four years. “By 2016, my trading business had a turnover of Rs 4 crore. I felt that with the accumulated wealth and knowledge, the time was right to move towards manufacturing stoves and scale my business,” he says. 

With an investment of Rs one crore, Arora started manufacturing gas stoves on a small scale and established a workshop called Eehan Industries in Kurukshetra, Haryana in 2016.

Within two years, the workshop has scaled to a full-fledged factory, with a production capacity of 500 stoves a day. The company currently has a turnover of Rs 5 crore and employs 15 people.

According to Arora, his gas stoves are sold more through government-owned channels than in the open market. “We sell through gas companies like Indane, HP and Bharat Gas. These companies, under the government’s Ujjwala scheme, find areas and BPL households where people still have not adopted to LPG,” says Arora.

He says, in just two years, Eehan Industries has supplied around 50,000 gas stoves to the state government and has also been supplying to Assam, Bihar, Odisha and Jharkhand. “To use the already setup channels of the gas companies, we pay a fee of around 10 percent on each gas stove sold,” adds Arora.

Apart from collaborating with the government, while selling in the open market, Arora says the company defies wholesalers network completely. “We deal directly with the retailers. We don’t want our product costs to get inflated with the wholesaler’s margin. This way, our stoves hit the market at a lower rate than our competitors.”

About 70 percent of sales happen via government channels and the rest through open market. While having established marketing channels does put sales process at a pedestal, Arora says, “Over reliance on the government can cost us heavy. We see a lot of fluctuation in demand. Quite often, many sanctioned projects get aborted due to one reason or the other”.

His biggest learning has been the acceptance of the fact that markets are uncertain, he says. “In my first year of business, the returns exceeded my expectations. As a result, I expected a much higher return in the second year. But, I faced a loss. I did not know that markets could be uncertain. I learnt businesses are all about crests and troughs.”

Arora also believes that a prior trading experience in a particular segment can be of great value when one plans to advance towards manufacturing in the similar domain. He says, “You may have investment, but you would lack knowledge about some of the things fundamental to the market, especially pertaining to your domain.” He adds, “Trading experience in a similar domain does help.”

Like many medium and small businesses, which took a hit post demonetisation and GST, Eehan Industries was no exception. Arora says, “There is liquidity crunch in the market now. Though GST has been beneficial as excise duty has been done away with, there is still cash crunch in the market."

On further elaborating his challenges, Arora says, “In this sector, one needs a Bureau of Indian Standards (BIS) and Indian Standard Institute (ISI) licence renewal every year. But, when an application goes for renewal, officials cite shortage of staff and delay. While there is a demand our gas stoves outside, I cannot produce more units until the licenses are renewed.” He says, licence renewal takes around two months. The delay could be fabricated to enable corruption. “I want this to be resolved and the processes should speed up,” he says.

(This story is published in partnership with the MSME Ministry to showcase success stories of SMEs)