Success comes from a recipe of innovation and perseverance.

By Larissa Fernand

They met exactly nine years ago, said cheese to each other--and have been milking profits steadily. Rajendra Ghogale, 37, and Mohan Mathunni, 49, were introduced to each other at Sugam Dairy--the research & development unit of the National Dairy Development Board (NDDB)--in Gujarat. Despite the 12-year difference in their ages they hit it off instantly.

The entrepreneurial streak in both these die-hard technologists was too strong to keep them tied down to Sugam Dairy. And despite being tucked away in a corner of corporate India, the duo decided to capitalise on their existing strength: the processing of cheese, specifically paneer. Says Rajendra: "The idea was to take a traditional home product and provide it a shelf life."

And that was the innovative entry strategy behind the selection of paneer as a branded product. Hardly had the idea fermented when Cheesemakers (India) was born in May, 1994, in Pune. And in time, too. For, the paneer market--which sees volumes of 180 tonnes a day in the country today--was just about ripening, and was dominated by the unorganised sector, with the only institutional producers being mafco, the Rs 252-crore Mahanand Dairy, and Parsi Dairy.

It is not that the organised sector is any different today. But the market--not to mention the opportunity--is exploding. According to R.S. Sodhi, 39, assistant general manager (marketing), Gujarat Co-operative Milk Marketing Federation, one of Cheesemakers' main rivals: "To peg the size of the paneer market at a few hundred crore is a gross underestimation."

So, when Rajendra's wife Surekha also showed her keenness on being a part of Cheesemakers, the team was complete. With Mohan looking after production, and Rajendra tying up the marketing end, Surekha would be functioning as the operations administrator. Rajendra, who had switched to marketing at the Rs 250.41-crore Garware Polyester in 1991, put in his papers at the company, and Mohan bid goodbye to his 20-year stint with NDDB.

To begin with, the trio approached banks and financial institutions in search of a Rs 1-crore loan. Needless to say, Cheesemakers didn't cut much cheese with bankers and financiers, some of whom only volunteered a bit of advice: opt for an exotic cheese or yoghurt. Reminisces Surekha: "Our worth as entrepreneurs with technical skills and ideas found no favour with the bankers."

Forced to start off without any financial assistance, Cheesemakers started producing paneer at Mohan's kitchen in May, 1994, with Rs 20,000 as capital. All they had were gas connections, a small packaging machine, wooden moulds, and the services of three women workers. Their daily output: two kg. But it went up to 10 kg within two weeks, and to 100 kg in another fortnight. Within a month, Cheesemakers moved out of Mohan's kitchen into a small plot of land in Pune, donated by Rajendra's father. While the Ghogales' garage served as Cheesemaker's office, the rest was turned into a pilot plant.

Although the trio had started out with the idea of targeting the middle and upper-middle class, the result of the study that they commissioned from the Food & Nutrition Department of the Mumbai-based sndt University when they had embarked on their cheese-making business changed their minds. With as much as 58 per cent of paneer buyers in Mumbai comprising five-star hotels and catering companies, the institutional sector was far too large to ignore.

This necessitated an increase in volumes, resulting in the need to invest in new moulds and heating vessels. Unlike cottage cheese, where bacteria works on the milk and processes it for a long time, the milk in the case of paneer is broken down with citric acid. But making the product with the help of muslin--as is usually the practice in Indian households--is too tedious, and there is always room for worry since it isn't hygienic.

Normally, when paneer is made in big quantities, a heavy object is placed on the sealed moulds, and the fat breaks down, releasing oxygen. At Cheesemakers, Mohan devised a method that didn't need a weight to be applied to the moulds. The resulting paneer didn't get oxidised. This not only made preservatives redundant, but also offered a shelf life of 45 days. Says Mohan: "We took six months to standardise the product."

During its hunt for finance, Cheesemakers had also approached the Small Industries Development Bank of India (SIDBI), where they were advised to obtain a patent for the product. The trio complied, getting the product patented at the Indian Patents Office in Mumbai. Four informal meetings and one presentation with the SIDBI later, they managed to obtain a loan--the amount, however, wasn't disclosed by Cheesemakers--in November, 1994. Says Rakesh Rewari, 45, general manager (venture capital), SIDBI: "It was their innovative technology and the desire to address a growing market which impressed us." Today, SIDBI owns 30 per cent of the shares in the company, with the rest being held by the promoters.

The loan from SIDBI enabled them to put up a plant, which went on stream on December 2, 1995. The plant, with an installed capacity of two tonnes a day, received immediate publicity. Within a fortnight, Cheesemakers bagged its first overseas order for 200 kg from Dubai, becoming the first Indian company to export paneer.

The cheese-makers haven't looked back since. Says Rajendra: "You have to move faster to consolidate your position in such a competitive world." This line of thinking pushed them into developing a new technology in August, 1997. "We got samples from the international market, bought a lot of reading material, and worked our way up," says Mohan. Then, in January, 1997, the company started exporting feta cheese to West Asia.

Despite the fact that it has never advertised its products, Cheesemakers has still managed to bag clients like the Rs 613-crore Indian Hotels and the Rs 440-crore East India Hotels' flight kitchen. Obviously, it has been the right mix of a high-grade idea and fresh thinking that has processed paneer into profits at Cheesemakers.