‘Kottakkal’ aims for expansion in North India

As part of its organic growth strategy, the 112-year-old Kottakkal Arya Vaidya Sala, one of the most trusted healthcare brands in the country, is planning to spread out to North India.

The AVS, which specialises in classical ayurveda treatment of Kerala lineage, has a network of 2,000 exclusive dealers and 27 branch clinics, mainly in South India. In the next three years, it will be making its presence felt in northern States by opening more dealerships and branches. Already, it has a hospital in Delhi; and, a branch was opened in Indore recently.

An iconic institution in Kerala – known for its ‘traditional’ values, ‘classical’ treatment methods and ‘conservative’ management style – the AVS is also opening up to new market realities and the need for modernisation and innovation. The company, with a ₹300-crore annual turnover and 2,200 staff, currently gets 70 per cent of its revenue from medicine sales, and has been happy with sub-10 per cent annual growth in revenues.

“We don’t go in for rapid growth and quantum jump in sales turnover,” says P Madhavankutty Varier, chief superintendent and additional chief physician, who is also a trustee of the AVS. “We believe in a slow-but-steady expansion” he told Business Line . “Ours is organic growth, and we are content with it.”

The firm, most of whose facilities and assets remain at Kottakkal where Vaidyaratnam PS Varier founded a small ayurvedic clinic and pharmacy in 1902, has a unique management model mandated by the founder. It is run by a trust comprising seven members – five come from two families associated with the founder and two from among the staff.

The managing trustee is the CEO. The current managing trustee, who is also the chief physician of the AVS, is the 93-year-old PK Warrier. Remarkably healthy and agile for his age, PK Warrier has been at the helm for 60 years – probably the longest-serving CEO of a business enterprise in the country.

“We are not driven by the profit motive,” said Madhavankutty Varier. “We are into providing effective ayurvedic treatment and making genuine medicines in accordance with the prescriptions of classical texts.”

Propagating, strengthening, experimenting with and revalidating the Kerala lineage of ayurveda had always been the priority. The 350-bed hospital at Kottakkal has patients from several countries. The AVS produces 530 types of medicines at its three factories. A large chunk of herbs required comes from its own medicinal plantations.

KS Money, general manager, points out that charity is a major aspect of the AVS. For instance, 45 per cent of the profit goes to the 165-bed charitable hospital it runs and 10 per cent to an ayurveda college it founded. The rest of the profit is ploughed back into the AVS for development activities. The AVS also maintains the AVS Natyasangahm, a Kathakali dance troupe.

‘Who after PK Warrier?’ has been a question haunting the ayurveda community as well as the AVS staff for decades. The nonagenarian has been credited with building an all-India reputation for the institution.

“We have a succession plan in place but it will be revealed at the appropriate time,” Madhavankutty Varier, 65, who has also been a trustee for seven years, said. He also pointed out that technological upgradation of manufacturing processes was under way to meet increasing demand for medicines.

Money said administration and marketing was being modernised and professionals were being inducted.

But, observers point out that the AVS, with all its public goodwill and reputation, is shackled to its traditions and its past. Its leaders are aged, employees are drawn mainly from a particular socio-cultural-religious background, and its outlook is conservative. These are said to have held it back from its tremendous growth potential. The expansion and modernisation plan may partially offset shortcomings.