A 1970-model blue Vespa kept in a glass enclosure greets me as I set foot in the corporate office of Muthu Group in Egmore.
On the wall, right above the classic scooter, there is a note.
“We don’t sell banned drugs here,” it says.
The scooter and the note serve two different purposes.
“While the former reminds me of my beginnings, the latter apprises visitors of the value on which the company is built,” explains E. Gnanam.
He set up his first pharmacy 45 years ago in a 300 sq.ft. space in Perambur.
“This is the first vehicle I bought from my earnings; it costed me Rs. 3,000 then,” says Gnanam.
It was with this vehicle that he would go on his business rounds.
From that humble beginning, his enterprise Muthu Group has grown into a Rs. 300 crore business, consisting of five companies — Muthu Pharmacy Pvt. Ltd., Muthu Pharma Pvt. Ltd., Pearl Medicals, Shell Pharmaceutics Pvt. Ltd. and Rao and Co. Pharma Pvt. Ltd.
Gnanam, who is Chairman of Muthu Group, says he has built the brand over the years based on ethics, trust and hard work.
“We stick to the brand prescribed by the doctor, and don’t suggest any other. We don’t sell expired goods,” says 65-year-old Gnanam.
Starting from scratch
So, how did his journey begin?
When he was 16, Gnanam left his village in Tanjore and came to Madras, where he worked at his uncle’s pharmacy shop.
“My work involved sweeping the shop and cleaning the shelves where medicines were kept. My first salary was Rs. 60, a major portion of which would go towards buying food,” says Gnanam who simultaneously did a diploma in pharmacy at the Kilpauk Medical College.
No, this is not what you are thinking: there is no rags-to-riches story here.
Gnanam did not have to put himself through such deprivations, but chose to. His family has always been financially sound and he subjected himself to menial work at a pharmacy because he wanted to learn the ropes of the profession.
By 1970, Gnanam knew what is took to run a pharmacy and set up his own enterprise. His first shop was called Sangam Pharmacy, which he opened borrowing Rs. 60,000 from his mother. It was located near Lourdes Mada Church in Perambur.
For the next two-and-a-half years, Gnanam would be the only employee at the shop.
“I was making sales worth Rs. 250 per day. When it reached Rs. 700 a day I hired an assistant,” he says.
Since then, the business has been steadily growing.
From 1974, Gnanam opened one outlet every two years, giving a fancy name to each of them.
“In 1978, I decided to stick to one name and re-branded all the outlets as Muthu Pharmacy,” he says.
In 1982, he forayed into the wholesale pharmacy business.
“It took me 14 years to find my feet in the business,” he says.
As the brand started expanding, Gnanam was faced with other challenges. Not knowing English was a stumbling block for Gnanam who would later go on to become the general secretary of Tamil Nadu Chemists and Druggists Association and joint secretary of All India Chemists and Druggists Association.
“I picked the nuances of English at work, especially from many of my Anglo Indian customers. It did not matter that my grammar was wrong,” says Gnanam, who spoke to me in halting English.
On the subject of competition, Gnanam says it has not affected the brand in any way. “We never give any discounts, which are a lie,” he says. “Also, name the medicine, and we’ll have it.” From 1990, Muthu Pharmacy started looking beyond expansion, and began to offer value-added services. It introduced door-to-door delivery of medicines.
It added a doctor’s chamber to its pharmacy. Currently, 10 shops in the city have a room where customers get to consult a doctor and get the medicine from the same roof.
Muthu Group now has over 500 employees. While his daughter takes care of the HR and finance aspects of the business, his cousin takes care of the retail units.
It currently has 51 pharmacy stores and 19 wholesale outlets. They deliver to 3,500 chemists in and around the city in a day. The company plans to stop expanding its stores when it reaches 100 outlets.
“We have around 46,000 formulations in our retail outlets,” says S. Srinivasan, managing director and relative of Gnanam, who has been helping him run the business since 1981.
Reaching out
In the initial years, the pharmacy built its brand conducting blood donations camps.
“Our campaigns were a huge hit. The blood we collected from donors was given only to government hospitals,” says Gnanam.
Through Muthu Pharmacy Charitable Trust, the company has been funding the education of underprivileged children. It has also instituted an achievers award. The Muthu Hospital at Pulianthope is also reaching out to many people.
(A column about entities that started in a small way in a neighbourhood and grew bigger)
