Tuesday, July 08, 2008

Coming of (ramp)age!

When IIPM comes to education, never compromise

With its ‘Indianness’ philosophy, the Bhilwara Group has woven a most admirable web

As you step inside the Corporate Office of the Rs.28.58 billion Bhilwara Group in Noida (also called Bhilwara Towers), the first thing you notice is the grandiose crescent shaped logo which says, ‘Proud to be Indian, Privileged to be Global’. You ponder over the words as you walk across the lobby to meet the man at the helm of this textile, graphite, steel and power behemoth. His vast cabin reeks of patriotic jingoism, manifest in the portraits and photos of freedom fighters adorning the walls. In the next few minutes you come to learn from the man himself – Riju Jhunjhunwala, Joint Managing Director, Rajasthan Spinning and Weaving Mills Limited (RSWM), Bhilwara Group – that you are in a temple where everyone worships everything Indian. More importantly, everyone bears an indomitable passion of bulldozing India on to the forefront of the global textile map.

Incidentally, the textile business of the LNJ Bhilwara Group comprises six companies that contribute the maximum to the top line of the entire group. Of these, the listed flagship textile arm of the Bhilwara Group – RSWM (annual revenues worth Rs.10.75 billion) - has the Mayur brand in its portfolio (with over 7% market share in the suitings segment), which has done extremely well in the value-for-money segment over the last one year. From roping in Bollywood biggie Salman Khan as its brand ambassador on Valentine’s Day earlier this year to launching its ready-to-wear collection, Mayur has certainly been creating waves. Says Jhunjhunwala, “We’ve revamped our brand positioning to become a leader in the ready-to-wear formal dressing. In the front-end, we have roped in Salman and in the back-end, we’ve re-structured our management.”

While RSWM is flying high on the Mayur brand, the other textile arms of the Bhilwara group cannot be ignored either, primarily Maral Overseas Ltd., a major producer and exporter of Polyester/ Viscose Blended yarn in India; BSL Suitings, which peddles premium worsted tags; and BMD Ltd., an automotive furnishing unit that boasts clients like Honda, Maruti, GM, Ford, et al, in its kitty.

However, it’s RSWM that has clearly taken a lead for the LNJ Bhilwara Group, with a renewed and enhanced focus on the bottom of the pyramid segment over the last year. RSWM is betting high on the ready-to-stitch segment, which they forayed into in February this year. The bid is to tap the high-potential consumer base in semi-urban and rural India (largely cornered by the unorganised players). In April, the company set up a low cost denim manufacturing unit in Rajasthan to cater to the price-conscious consumer segment. Following suit, Reliance Mart, Mukesh Ambani’s hyper retail format also announced a similar venture in October. But, while Reliance has the winning proposition of having its own retail outlets to market these wares, Mayur, for now, has no such pan-Indian retail presence.

On the other hand, the presence of the brand in the global market has given it a shot in the arm in recent times. As much as 50% equity purchase in the Spanish company SISA S.A. will not only allow RSWM to leverage SISA’s brand image in the global higher value-added yarn market, but will also help it leverage the expertise of SISA in fashion trends and dyeing. “SISA brings with it a speciality and value-added yarn business in global market... It adds an established and well reputed marketing network to our operations, which’ll enable us to obtain better realisations for our high-end yarns,” says Jhunjhunwala.

With RSWM leading the way, Bhilwara’s textile business may not be setting the ramps at the Meccas of fashion on fire; but the group’s careful strategy of reaching out to the price-conscious Indian masses is likely to pay off sooner than later. Especially with the rising disposable incomes in tier II and tier III cities and towns, Jhunjhunwala may do well to actually start planning for those exclusive brand outlets now, a la Reliance Mart!

Edit bureau: Bikram K Jena, with inputs from Angshuman Paul

Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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