Cocoguru has now grown to a 25-member organization, with immediate plans to increase the size to 35. When operations started a year ago, it was about selecting whoever was willing to work with us without regard to their skills and attitude. We were lucky to get a few good people, and a few of them were groomed to be disciplined and develop a sense of ownership towards their roles. Now, with the base set, we will select more people selectively. In this post, I discuss my experiences/frustrations with those selections and expectations from candidates. It is a mighty challenge to get good people to work for a startup, especially in a rural area.

Preparation
In the job advertisements, we would mention the company name, address, working location, vacancy position, qualification, contact details, and a few times the salary range. Candidates will do well to observe the details carefully before applying. Rather, what we see is that they apply blindly and then back out during later stages of the selection process due to the very facts already disclosed to them. Good candidates visit the website, find out the company’s product offerings, perform background checks with references, sometimes with existing employees, and visualize themselves working here for a long time.

The classic opening question
The job market has tilted so decisively towards sellers, i.e. employees, that they start calling the shots. This is how a conversation begins.
Candidate – “Is this Cocoguru?” (Many times, they don’t even bother to pronounce the name)
Me – “Yes, Sir”
Candidate – “You have advertised for a vacancy, right?”
Me – “Yeah, Right”
Candidate – In either a disinterested tone or rude tone, he then asks, “What is the salary?”!!!
Me – Unhappy that the discussion is entirely off-direction, I ask, “How much do you expect?”
There goes the conversion meaninglessly, each one trying to defend his ego and finally ending the conversation in a bitter manner. The classic opening question leads to an immediate conclusion.

In my theory, money is not everything as it is made out to be. It is merely a currency of “value”. Businesses should make good profits to reflect the value they create for their customers. Employees should take home good salaries for doing valuable work for the company. The focus should be on creating value, and money will follow.

In the above example, we see how bad the conversation was. Instead, it could have been much more fruitful if it had gone in the following lines.
Candidate – “Hello, my name is Vaibhav. I saw your advertisement in today’s Suddi Bidugade, and I am interested in applying for the position of Sales Executive”.
Me – “Okay. Good. Tell us more about yourselves.”
Candidate – “I am from Sentyar, a B.Com graduate, having 6 years of experience in Line Sales, last 4 years with Dash Marketing Agency selling ITC cigarettes in and around Puttur, Sullia and Subramanya.”
Me – “Why do you want to leave your present job, when it is so easy to sell cigarretes where demand is more than supply that too for a brand like ITC?”
Candidate – “I like my job as it gives me opportunities to meet new people, and I have developed good relations with a few retailers. I am only looking for better prospects.”
It would be blunder to say something like “Cigerrate is injurious to health, but Coconut Oil is good for health.” Because we know, you are looking to change for your own benefit and not for our benefit or that of people’s health at large. It will only prove that you are lier.
Me – “How do you plan to increase our sales?”
Candidate – “Sir, what is your present distribution setup? What places do you cover?”
Here, the candidate has not only given a overview of himself, but also has shown keen interest to know more about the company and the job he is going to do.

Brain Drain
Dakshina Kannada is a district with many bright talents and great educational institutions. So many top ranks in SSLC, PUC, CET, etc, go to them. The result percentage is also highest perennially in Dakshina Kannada. But they migrate to cities like Bangalore, Mumbai, Pune, Gulf and America. Because of all their talent, they are happy to work for someone outside. They don’t take risks to build a dream company at home or work for someone who wants to build such a company here (read Cocoguru ). It is right if suitable opportunities are not available here, but squandering them when they are available is bad. Only salaries are compared between 2 opportunities in Bangalore and here. The luxury of being at home with family, less travel to the workplace, staying away from the hustle and bustle, busy city life and a much lower cost of living are not considered in the decision-making equation.

Influence
Influence from a well known person may help get a job in government sector, where performance and results don’t matter. Some candidates who are otherwise not worthy of the job, try to have influence in their selection. Will that influential person be responsible for what the candidate delivers in the job? No, rather he threatens us with negative consequences when he is not selected.

Fixed Salary, Routine Job
Since we have only seen the candidate once and at most had an interview. It will be difficult to determine his worth for the company. So, we place him on probation for a lesser salary, with the intention of increasing it to generous levels once he proves himself and it is made permanent. Even once he is permanent, there will be periodic Appraisals to review his performance, and salaries will be increased in line with his performance. Sadly, the candidates don’t think long term; they only compare the salary during probation and assume it to be his lifelong income. Similarly, he has fixed his skill set to what he has acquired till now, without any aim of acquiring new skills on the job. He comes to the office with the intention of performing routine jobs where Standard Operating Procedures (SOPs) are defined. Anything beyond the routine takes him completely off-guard.

Office Work vs Field Work
The number of enquiries for office work like accounting far exceeds that for field work like sales. Logically, hard work gets paid a lot more than easy work. A salesman, when he exceeds his targets, gets more money in the form of commission. An accountant can, at best, get his annual bonus on superior performance. When we opened our factory last year for operations, about 50 ladies from nearby areas walked in looking for easy packing kind of jobs under a factory roof. They were willing to work for as low as 80 Rupees per day. The same people are not willing to work in a nearby farm for 250 Rupees a day. It is not only about the nature of work, but it is also a question of their prestige. They perceive Factory jobs to be a lot more prestigious than agricultural or household work.

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Our new factory at Kallarpe (Aryapu Village, Puttur) manufactures Roasted Coconut Oil. Our new customers have instantly liked it because of its enhanced aroma and taste. But our old customers who have used cold-pressed coconut oil manufactured at our old factory in Parladka (Puttur) have various doubts about it. I seek to clear those doubts here.

Cold Press Coconut Oil
Virgin Coconut Oil is many times referred to as Cold Press Coconut Oil. Virgin Coconut Oil is extracted from fresh Coconut. But, here we refer to oil extracted from Copra (dried Coconut).

Copra with about 8% moisture is crushed as it is on a Rotary Machine (Chuck/Ghana). Oil is filtered through sedimentation of solid particles for 7 days in settling tanks. The process is extremely simple and requires minimum capital investment.

The resulting oil has a crystal clear transparent colour and smells and tastes like Copra as it is. Many people like this as it is considered to be natural and local made product.

Roasted Coconut Oil
Copra is cut into small pieces and dried using hot air to about 5% moisture level. This Copra is heated for about one hour on a multi-stage steam-jacketed vessel for roasting. A bit of steam is also added to Copra for cooking. This opens up the fat cells and helps in easy oil extraction. Oil is then filtered using a Pressure Leaf Filter and Filter Press to remove sediments when oil is extracted. This process requires more capital investment for a Steam Boiler, Pipeline, and Cooker with an Agitator and Motor. It also has higher running costs in fuel for steam generation and power.

The resulting oil has a golden yellow color. It has a stronger smell and taste. It has just the same effect as what roasted Ground Nuts give.

During processing, the temperature of oil and oil cake rise up to 100 degrees, while in cold pressed it is only about 60 degrees. In the process the oil loses moisture and reduces the risk of going rancid. Copra gets sterilized as the bacteria and fungus die, which again prolongs shelf life.

At higher temperatures, triglycerides in other oils start breaking into free fatty acids causing rancidity. But Coconut Oil being mostly Saturated Fat and is quite stable. So, roasting does not deteriorate the quality of oil.

Hair Oil manufacturers prefer Roasted Oil for its stronger smell and longer shelf life. It has a 5% premium in the bulk oil market over Cold Pressed variety. But we are selling at the same price to consumers now. It is something new to them here in Dakshina Kannada market and not yet fully accepted. We have been working hard in educating them about this new variety.

Despite so much of difference they are still the same i.e. Coconut Oil. Both of them are made from the same quality of Copra; they have the same chemical composition, and both have the same miraculous health benefits as coconut oil.

Download Write up of Roasted Coconut Oil FAQ

This is the letter that we submitted to the Industry Chamber and hence to the Government of Karnataka to clear many of the anomalies in Value Added Tax for Coconut Oil in Karnataka. Majority of these issues are brought out in an earlier post.

To,

The President
Puttur Chamber of Commerce and Industry

Subject:- Revision of Value Added Tax rates for Coconut Oil as Edible Oil

Respected Sir,

The Union budget and the State budget are coming up shortly. As part of the Coconut Oil Industry, we request the Government to

Reduce the Value Added Tax rates for Coconut Oil from present levels (5%)
Consider coconut oil sold in all quantities (above/below 200 gms) for edible purposes and apply the same rate (instead of 5% and 13.5%)

The following are the points considered to arrive at the above conclusion

• Coconut Oil is a prime cooking oil not only in Kerala but also in coastal Karnataka.
• Neighbouring states of Kerala and Tamil Nadu don’t have any taxes for Coconut Oil. Meanwhile, in Karnataka, VAT is 5% for quantities above 200 grams and 13.5% for quantities equal to and below 200 grams.
• Under such high tax regime, business that pay taxes can’t compete with businesses that don’t pay taxes. So the market is flooded with adulterated and lower quality products.
• Various research has shown that Coconut Oil is good for the heart and health, so it should be promoted for use in cooking.
• Since the price of coconut oil is higher, other edible oils such as palm oil, sunflower oil and soybean oil are being imported without any customs duty and is becoming a threat to indigenous coconut industries and farmers.
• While other edible oils are trading with lesser taxes, coconut oil with higher taxes is not having a level playing field.
• Weaker sections of the society who earn daily wages and have to spend for their daily food prefer to buy their cooking oil in smaller quantities like 50 ml, 100 ml and 200 ml. These are now taxed at a whopping 13.5%!
• Prices of the essential commodities like coconut oil and coconuts have doubled over last one year and is becoming less affordable to majority i.e. middle and lower class consumers.
• We manufacture coconut oil for edible purpose, we follow the Prevention of Food Adulteration guidelines and have obtained Edible Oil Packing license for the same. But the products we sell attract taxes that are meant for cosmetic items and not edible items.
• Being an essential commodity, the market is extremely price sensitive and any reduction in taxes will benefit the farmers and lower class consumers tremendously.

Request you to kindly communicate the matter to the respective government departments for taking necessary steps and actions.

Thanking You,

Yours faithfully,

For Cocoguru Coconut Industries Pvt. Ltd.

B. Keshava Ram

Managing Director

Update on 25th February 2011 – Karnataka Government hikes tax rates for goods presently taxed at 13.5% to 14%

Update on 1st August 2012 – Rate is again hiked from 14% to 14.5% with effect from August 1st 2012 to July 31st 2013