Coming of (ramp)age!

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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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Paving way for a ‘pure’ future

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The company has come a long way, achieving turnover of Rs.30 crore in the first three months of this fiscal year. Kent RO expects to touch the Rs.100 crore mark by the year end & Rs.200 crore by the next year. However, Kent RO still faces tough competition in the market, as its RO technologies expensive compared to the Ultra Violet technology that Aquaguard and other water purifiers use. Adds Gupta, “On one side we have competition from a generic name – Aquaguard, while on the other side we have packaged mineral water.” So what entices a customer to go and buy a more expensive product that is even a late entrant in the market? The answer is simple, Kent-RO provides two advantages – firstly, a better quality product that can purify even dissolved impurities in water that no other purifier can and secondly the consumer gets the convenience of on the spot availability. Explains Gupta, “The reason why people prefer this is that the packaged water will still have chances of contamination during the process of transportation or pilferage as you call it. On the other hand, you can be sure of the quality that is made with your water at your home.”


Feeling the threat of its superior technology also convinced Aquaguard to come out with a water purifier with RO technology. But clearly in this segment Kent RO has leap-frogged ahead of competition. Leaving no stone unturned, the company has been marketing the brand and technology in a big way. Roping in the three Deol girls gave the brand instant eyeballs. Asserts Gupta, “I had to do two things; one to educate my customer and other to build trust. Now our brand is associated and known through Hema Malini.” Besides direct marketing channels & dealers’ network, Kent- RO products are also visible in branded retail stores such as Big Bazaar, Reliance et al. Moreover, it has tied-up with Indian Oil for better visibility. And with people getting educated and wanting the ‘BEST’, Kent RO will soon reap the rewards of its investments.

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Source : IIPM Editorial, 2008

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

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And the chase goes on...

When IIPM comes to education, never compromise

ABN Amro shareholders must decide now

The road to the ABN Amro acquisition has been quite a peculiar one for Barclays. After initial speed bumps, the company would have expected a smooth ride, but till date, it’s hardly paydirt time! Blame the Royal Bank of Scotland (RBS) team, including Spain’s Santander & Belgian-Dutch Group Fortis, which gave an irresistible counter offer of $97.8 billion for the Dutch bank, and which led Barclays to increase their bid to $93.1 billion and include 37% cash in the earlier all-stock deal with help from China Development Bank & Singapore state investor Temasek Holdings. However, the amount still falls short of the RBS offer, which is over 90% cash. To top it all, the ABN Amro board, which earlier recommended the Barclays deal, has decided to take a neutral stance now.

The logic for a merger – no matter who gets the bounty – is pretty clear. A Barclay-ABN Amro combine will create Europe’s second largest bank after HSBC, with synergies in retail banking, securities & asset management operations. Moreover, they will be able to tap opportunities in the growing markets like Netherlands, Asia & Latin America. John Hitchins, UK Banking Leader, PricewaterhouseCoopers, explains, “A matured domestic market is one of the factors leading banks in Europe to merge, in order to get entry into new markets.” As far as the RBS consortium is concerned, they are looking to split the assets amongst themselves, which the ABN Amro board finds risky.

With the board now in a muddle, the ball is in shareholders’ court. If cash is what they want, RBS is the obvious choice. But would they be able to fathom seeing their beloved bank being broken up? Well, maybe they would too!

Edit bureau: Aditi Soni

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Source : IIPM Editorial, 2008

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

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HCL

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While other IT majors have begun to impress with flamboyant statements, HCL is stuck with a fuddy duddy image

This company virtually gave birth to the Indian computer industry, three loooong decades back. Cut to the present, HCL is still very much a proud Indian. Talk about low-end computers or high-end business solutions, the company practically has it all. The brand spans the entire infotech and digital spectrum today. Talking on the brand virtues, an HCL spokesperson told 4Ps B&M, “The single most important factor that has contributed to the success of the brand is differentiation.” Shiv Nadar, Founder, HCL, further adds, “What we have built across technologies, is the legitimacy and ability to be there.” Creativity, which too is an important facet of brand’s personality, reflects in its penetration across verticals such as aerospace and life sciences. HCL, as a brand, endeavours hard to not tread the beaten path, but do things differently. Now, it is focussing on a ‘Blue Ocean Strategy’ of creating uncontested market spaces in unexplored territories, expecting 50% of its future business to come from technology areas that it has not entered yet. Though galloping ahead with its ‘FEARless’ campaign the brand needs to get rid of its fuddy duddy image. Brand HCL has gained enough stature to take on the world, this will help it to do the same, in style!

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Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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