Chaudhary Caterers – A Promising Success Story

This is a story of consistent hard work and perseverance. Chaudhary Caterers was founded by Rajinder Singh more than 20-years ago as a proprietorship firm. Chaudhary Caterer is a mess contractor and undertakes contracts for catering and support manpower. In 2002, the firm got its first contract with Kansai Nerolac Paints to run its employee mess. In 2004, it got its second contract with Hindustan Unilever. Both remain its clients till date.

Challenges

Due to lack of funds, Singh could not complete the last semester of Hotel Management and had to take up the job of an Assistant Manager at Hotel Aryavrat, Kanpur. He was paid a salary of Rs 4,000 per month. This was often broken up into four weekly installments. There were occasions when the ‘weekly’ salary was paid on a fortnightly basis. This inspired Singh to start his own enterprise. His first break was Nerolac, which contracted him for one year. Impressed with his quality and service, his contract was renewed for another year and then year after year. Chaudhary Caterers’ first year turnover was Rs 4 lakh, which grew to Rs 1.10 crore last fiscal.

Singh’s challenges were many, prominent being availability of working capital. Further, his business was 100 km away from his residence, which he would commute on a daily basis. He initially invested money from his pocket and borrowed from friends. He paid back all his loans within the first year itself.

Solution

Singh applied for a loan of Rs 1 lakh under Pradhan Mantri Rozgar Yojana (PMRY) in 2002. It took over six months for approval and no one could believe that a person who was earning few thousand rupees would be setting up a business and requires Rs 1 lakh! Bank Manager suspected him and made him run from pillar to post in order to gauge his sincerity. Finally, loan was disbursed after three months with which Singh could operate his contract with Uniliver.

Chaudhary Caterer employs 46 people who have been with the firm for past 15-years or so. The firm is proud to be compliant and has all requisite registrations—Sales Tax, Service Tax, ESI, Provident Fund and Food Safety License.

A firm, the size of Chaudhary Caterer, also believes in CSR. It pays an average salary of Rs 7,500 to each employee that is just sufficient to feed his or her family. In case of any illness, they are not in a position to take the extra burden. The firm takes care of all medical expenses. It treats its employees as an asset as they have invested a large part of their lives with the firm. Additionally, it pays Rs 2,000 for all the delivery cases.

The firm has a good loan repayment history. The initial loan of Rs 1 lakh from United Bank of India (UBI) was paid back within a year. A year later, it took a fresh loan of Rs 2 lakh. Given Singh’s credit record, the bank did not ask for any collateral. This invited the attention of auditors at HQ, Kolkata who visited Singh’s factory in Manesar, Haryana. Pursuant to the visit, the limit was enhanced to Rs 10 lakh. In 2014, based on the MSIC Onekra SSI Rating (Grade SE3B), the UBI fixed Chaudhary Caterer’s limit at Rs 16 lakh.

Technology is not a barrier for Chaudhary Caterer. Despite its size, it is using ICT to pay its taxes and receiving all remittances online. It is endeavouring to pay all its vendors online, wherever possible. It is hoping to leverage Internet for digital marketing and growing its business further.

The firm is now targeting a turnover of Rs 1.5 crore this year and looking at expanding its business by adding new clients. Its clients include, Laxmi Cotton Mills, Rahman Exports and Military Engineering Services (MES). Singh’s dream is to contract with Indian Railways, airports, hospitality industry and build a five-star hotel.