Cover Story

NEW GENERATION OF BUSINESS LEADERS TAKING COMMAND

TRADITIONAL business families have dominated the Indian trading and manufacturing sector for decades. Many of the business groups were comfortable with the fact that their operations were controlled, which prevented competitors from entering the markets.
However, economic reforms, liberalisation and the dramatic changes to laws have virtually impacted all businesses in India in recent years. Many of the staid old business groups, which refused to see the new changes – or accept them – have seen their operations getting hurt, even forcing them to shut down (or sell) their businesses.
But a new generation of business leaders is emerging at the top of some leading corporates in the country. They may be scions of industrial empires, likely to replace ageing parents. However, they have struggled hard by studying in American and European universities, where merit is the only thing that matters.
Our cover story this time features many of the emerging and young business leaders, who have obtained degrees – and even post-graduate qualifications in business management – from some of the most respected universities abroad. They worked for a while in top international companies, returned home, joining their family groups in relatively lower positions.
And now, after a few years’ experience, they are heading new groups within their family businesses, or taking command. Read their fascinating stories over the next few pages, where we feature interviews with these budding entrepreneurs and capture their views on a range of subjects.

By-TEAM URBAN VAASTU

Exciting future for the Indian ports sector

AN economics graduate from Purdue University, USA, Karan G. Adani began his career by learning the intricacies of port operations at Mundra in Gujarat. As the CEO of Adani Ports, he now looks after the strategic development of all Adani ports in India.

He aims to build the group’s identity around an integrated business model, backed by his sound understanding of new processes, systems and macro-economic issues, coupled with his growing experience. An exclusive interview with Karan Adani. Excerpts:

hem_1607

Founder: Mr Gautam Adani
Year Started: 1996
Area of Operation: 10 ports in Gujarat, Karnatka, Tamil nadu, Kerala, Odisha and AP. ICDs in Gujarat, Rajasthan, Haryana and Punjab
No. of Employees: Around 2500

adani-logo-master

Adani Ports has emerged as the largest private sector ports operator in India. Could you take us through this fascinating journey for the company and how it managed to do so?

Indeed, it has been a fascinating journey. We have grown from a single port infrastructure company to a muliple ports infrastructure company in the last five years; we have added SEZ to our portfolio and are into logistics business through our container train operations and ICDs.

We were incorporated as Gujarat Adani Port Ltd on May 26, 1998, and commenced phased operations at Mundra Port in October 1998 with commercial operations beginning in October 2001.
We were initially promoted by Adani Port Ltd and Gujarat Port Infrastructure Development Co Ltd, an undertaking of the Gujarat government.
We entered into a concession agreement with the Gujarat Maritime Board (GMB) and the state government in February 2001, pursuant to which we were granted the right to develop and operate Mundra Port located at the Navinal Island in the Kutch region for a period of 30 years.
We received approval as a developer of a multi-product SEZ at Mundra and the surrounding areas from the Indian government in April 2006.

In order to reflect the significance of the SEZ status and the changing nature of our business, we changed our name from Gujarat Adani Port Ltd to Mundra Port and Special Economic Zone Ltd in July 2006. The name of the company changed from ‘Mundra Port and Special Economic Zone Ltd to Adani Ports and Special Economic Zone Ltd (APSEZ) in 2012.
Post this Adani Ports has moved from strength to strength and today we are present on both the west and east coasts of India, thus strengthening our leadership position. We have emerged as a truly pan-India player.
We believe that the journey is only going to get more fascinating, with us getting into LNG and LPG terminals, focusing on transshipment of containers and coastal shipping.

What are the company’s expansion plans, both in India and elsewhere in the world?

Firstly we need to complete our existing projects. Our long-term goal is to make APSEZ a leading global port developer and operator, with an edge of being an integrated logistics service provider.
There are very few private global port developers in this region. Most of the companies in port business are terminal operators/developers.
We would like to cover India first and for this we will add a few more ports so that we are strategically present across the Indian coast

line, thus enhancing our facilities, level of services as well as flexibility to serve our clients varied needs.
Globally, we are exploring options for acquiring greenfield or brownfield port projects. We already have a port at Abbot Point in Australia and we continue to explore more from the perspective of gaining strategic presence.
We are expanding in Dhamra (the port in Odisha), doubling our capacity from 20 million tons per annum to 100 million tons per annum. In fact, we envisage Dhamra to be the Mundra of the east coast in the long run.
With the hinterland covering not just the eastern part of India but also central India and serving as a gateway for the south, through coastal shipping, our vision for Dhamra is ambitious.
At Hazira we have to get our railway line in so we are focusing on that as well. We are setting up our LNG and LPG terminals in Mundra and Dhamra.
So this year we will just focus on what we have in our hand, close that, finish our construction and get the business running.
Apart from developing Kattupalli and Ennore ports, as part of our strategic presence on the east coast, we are focusing on Vizhinjam port development and our commitment to develop it in the time period promised. Mundra, Dhamra and Vizhinjam ports are targeted to be the hub ports for containers.

mundra-port
hazira-port-dji_0009

Could you share your thoughts on the growth potential for the ports sector (especially for private players) in India over the next three to five years?

India’s port sector has a great deal of potential because the country is so poorly served in this respect. All the ports in India put together would equal one port in Shanghai.
The next 10 years are for India to grow from a deficit to surplus and this will help Indian ports business to grow.
Private ports are currently offering the much needed additional capacity with excellent and upgraded infrastructure that is working in their favour. With the right ecosystem in terms of connectivity, mix of cargo and anchor customers, private ports offer highly efficient cargo handling capabilities preferred by customers, which is resulting in the increase in their market share in the total pie of exim trade.
We can see that the central government as well as state governments are keen on the port sector. With their support on policies, connectivity and flexibility to develop large port clusters we are hopeful that ports would see a major upwards push in future.
Owing to world-class infrastructural facilities, superior operational efficiencies and focus on customer requirements, private players are well placed to contribute more on such opportunities.
The central government is also focusing on efficiency and capacity improvement at major ports, which is going to enhance competition in the sector.

Looking back over the past seven years, since you got involved in the management of various ports of the group, what have been your key observations about the sector in India?

The phase which we witnessed and participated in the last 10-15 years was one of evolution of the port sector. Players like APSEZ were pioneers in shaping the dynamics and demonstrating that a long term vision of thinking big can make a huge difference, as demonstrated by our Mundra port.
We believe that the next phase, which has already begun, would see major expansion, with new capacities being added. This will not only provide capacity to the sector, but will enhance competition, and thus the service levels.
We believe we are well positioned for this phase with our expansion plans across the coast line, with our focus on efficiency enhancement and cost reduction, leveraged by technology, and with our experience in port development and operations in India.
The Indian port sector plays a crucial role in Indian economy as 90% of the country’s trade by volume is done via sea. We have already discussed about the role and future of the port sector in India, as we see it.
The shipping industry is a different story in India. It used to be a major global force in the world many decades ago.

While India might be well positioned in terms of merchant shipping fleet among the developing nations, we need to have a vision of being global players. The dynamics of the shipping industry in the world has evolved and there are now various aspects relating to policies, taxation and registration which govern the fleet dynamics.
We need to think about our positioning with respect to these dimensions and then move along that path.
The Indian shipping Industry supports transportation of national and international cargoes and also provides various other facilities such as ship building, repairing, lighthouse facilities, freight forwarding, etc.
However, it is struggling with various taxation and policy related aspects, which is affecting the capacity and creating challenges such as ageing of fleet. On top of that there is a debate on cabotage law, which on one side offers hopes for coastal shipping, if relaxed completely, and on the other side puts pressure on Indian shipping industry which is in a desperate situation of needing help from the government.
We also need to look at the global scenario of the shipping industry. The up-cycle has recently ended and we have entered the down-cycle, with shipping companies facing the heat of over-capacity.
Given that Indian dynamics remain somewhat different, the shipping industry can think of ways to benefit in this period. If Indian shipping industry can keep pace with development of the port sector in the country, it can definitely add tremendous value in future, especially for coastal shipping and inland waterways.

Do you see Indian ports emerge as major hubs over the coming years, finally attracting large vessels?

Yes, we are already seeing this happening. Recently Mundra Port handled its largest parcel size vessel. We are also designing our terminal, on all aspects including depths and cranes for the future.
We are not only planning for the biggest vessels that are plying, but have also kept in mind the vessels which are on the drawing boards. Vizhinjam and Mundra will be the ports in India which will be able to handle the largest vessels in the world.
For making our major ports as major hubs, depth and facilities are not the only parameters, as we need to market ourselves well in the region and also develop suitable logistics chains so that the hub ports can provide required services in a seamless manner.
We are working towards that and while Mundra is already on the path to become a major hub port, our other ports would also emerge as hub ports serving the largest vessels in the region.

Could you tell us about your foray into the trans-shipment segment (developing the Vizhinjam port in Kerala)? Do you plan to take up more such projects?

The idea to build transshipment ports in India is to cut dependence on facilities located in

Colombo and Singapore, which handle the majority of transshipment of Indian containers apart from Jebel Ali.
Vizhinjam port, which is located on the southernmost tip of the Indian peninsula, is very strategically located as it falls on the international trade route. We are looking to compete with Colombo purely on operational efficiency and on cost. Today in Vizhinjam we have the flexibility to charge rates that will be as competitive as Colombo port.
We are also keen to have transshipment terminals in Southeast Asia, especially in Myanmar and Bangladesh, and also in East Africa, so that these facilities can serve the upcoming Vizhinjam facility.
With such facilities in India, our trade can enjoy benefits of reduced costs and faster shipment.
Apart from Vizhinjam, we plan to develop Mundra as well as Dhamra as hub ports, serving different parts of the country and the region. Apart from the advantage of being strategically located and better facilities, we enjoy the confidence of shipping companies and EXIM players, having proved our ability to handle large vessels and service levels.

Adani Ports aims to nearly double its cargo handling capacity to 200 million tonnes by 2020. How is the plan progressing and could you talk about the figures for the next five years?

In fact, we have a target of exceeding 200 MMT of cargo handling by 2020 by a large margin and reaching up to 300 MMT. We plan to achieve this through a multi-pronged strategy.
First of all, we don’t intend to compromise with the profitability of the business. Secondly, with technology leveraged operational efficiency, we would be able to enhance our asset utilisation. Thirdly, addition of new capacity at existing ports, like Dhamra and Mundra, as well as new ports under development like Ennore, Kattupalli and Vizhinjam, would provide the additional capacity.
This includes addition of new capacities in the form of LNG and LPG terminals at Mundra and Dhamra. Fourthly, we would be adding value added integrated logistics services to our portfolio to attract more cargo at our ports. Fifth aspect is that we will also be focusing on coastal shipping of coal.

Overall, how do you view the prospects for the Indian ports sector over the next 10 to 15 years? Will Indian ports emerge as among the most efficient ones over the next decade, thanks to the presence of private sector players like Adani?

India will soon witness port hubs emerging within the country which will cater to the entire South Asian region, reclaiming its lost glory. Our country is investing a lot of capital and effort to modernise operations with an aim to make them more competitive and future ready.
We are motivated and excited with the thought of what will be the future of the port sector in India; our plans to cater to that future and play a major role in building that future only adds to the excitement.

Talent, not degree, counts, says Sanghi Cement scion

Alok Sanghi, whole time director of Sanghi Cement, is known for his flair evolving corporate and marketing strategies. Having launched many products in domestic and international markets, this young entrepreneur reveals to Urban Vaastu there is more to business than merely doing business. As far as innovative ideas are concerned it is not about young or old. Either you have it or you don’t, he says. Business is not his only forte as sports activities are not far from his mind.

2b2a1577

Hobby: Music, loves to read history
Favourite Sports: Formula 1 racing, TT, chess

What are your views on emergence of new crop of business leaders from established business families taking over their family businesses?

World has changed from my father’s generation or his father’s to the times we live. Those days business acumen counted more and today you have to prove yourself before being handed over responsibility. For third generation entrepreneur good education and experience makes difference to be in family business or going out alone. What we bring to the table aside from education is cultural diversity. If we consider previous generations their education was different without exposure like ours. They used to learn business on the go and mature. We are from a generation with vast exposure to digital medium making us communicate better. That is a big advantage.

How different is this trend in India, as compared to those in the US, Europe or Australia?

I don’t think there is lot of difference; I have worked in the US before coming here. Technology has played big role for younger generation and meritocracy hasn’t changed whether you are in Europe, Australia, US or India. Talent gets recognized not because you returned from the US and I don’t think this idea exists anymore even if you are from MIT or Stanford.

How was your journey from top American Universities; working in companies abroad; to Sanghi cement?

My working in the US was brief. Work ethics different there. India is casual but we do put our hours in work. Initially I wasn’t given key responsibilities until I became fully aware of the company. I was patient enough to understand how things work which led to my confidence growing.

Do the new generation business leaders in traditional empires dare to diversity into new products and services? Is Sanghi planning to diversify into other segments?

There was a trend initially to change business logic. So, a company producing cement would shift to steel, power and then to telecom like TATAs and Birlas did. Today focus is to specialise so as to have sustainable growth. Gone are the days leveraging political connections while trying to diversify. Today’s world looks out for specialised organisations.
No plans to diversify. Within cement manufacturing there are different products and services and we cater to customer’s requirement. No longer is the market about push sales, it’s about generating sales with commitment to quality. When I joined we manufactured only one product, selling just in one market. Now we have 6-7 products and 4 markets and no longer just in Gujarat. We brought change in manufacturing process, way marketing is done of products and services. We have 4-5 teams just looking at customer satisfaction for quality products. We brought more specialists into the space.

Your thoughts on Indian cement Industry now the world’s second-largest?

Earlier cement was sold as generic product. Now the world has greater needs for customisation and shifted from cement being a commodity to its greater application. There are enough variants of cement. We want to move from 4 products to 20 products range carving out a specialised niche.

As business leader of this generation do you see companies like yours expanding overseas, even acquiring other companies?

Newer technologies changing cement industry are the way we think of doing business. Now we have various types of cement — Nano, energy efficient, transparent and fibre based. In India we have to have economic viability. In other countries, demand size is small so they can produce variants. Here we simply can’t switch to variants when the demand is too large. Indian customers have larger demand and also want value or would cut right back. So, we l focus much on what we can specialise and right now we don’t want to expand.

We want to strengthen the core of 4-5 geographies we built painstakingly. Rather than a global player we want to be regionally dominant company.

Sanghi’s CSR activities?

My father’s core belief was “if you take from society, you give it back.” CSR can also mean generating enough employment and that is what runs an entire family. We have helped many areas in Kutch transform. Even before the new CSR law, our company was spending huge sums. We have taken up Kutch villages and provided electricity, water and created a few IT hubs to enhance job opportunities.

Your message to young leaders controlling traditional family business

Young or old your ideas have to be innovative. I would recommend first start business in India and learn thoroughly by seeing the market and studying the needs of the people.

Your hobbies

I love music. Read a lot about history being history buff. I like innovative ideas and read a lot about it. I love to watch Formula One racing. Play table tennis, cricket and chess.

2b2a1575

Tradition and Agility the key to success

Maulik D Mehta, 33, whole time director, is full of verve. Bachelors of Business Administration from University of Liverpool, UK and Masters in Industrial and Organizational Psychology from Columbia University, USA he is also the founder of a Web 4.0 product called Link wok 4.0. In a freewheeling interview to Urban Vaastu, he talks of how changing ethos of family businesses are making facets of business change when competitiveness is the prime factor. Excerpts

mauli

As a young executive, who belongs to a traditional business family, and has acquired degrees from international universities both in the UK and the US, what are your views on the evolution of family-controlled businesses in India?

Family managed businesses in India have to deal with the goodwill of family values and culture that has brought them to where they are and also have to deal with an evolving India which is concerned with how they are able to compete with the rest of the world.

I think the best new generation of family entrepreneurs are able to look at this very adroitly and are able to take their own competitive advantage and add the simplicity of the systems that have been so successful in the western organizations.

So, I think tomorrow, the companies that are successful will be the companies that remember their heritage and at the same time that are able to evolve not just digitally or systematically but are also able to attract right kind of talents that appreciates the family managerial orders and cultures.

Is the younger generation in many of the business groups, who are equipped with degrees from top international universities, initiating changes in the segment? current role?

I would like to downplay the value of an International education- by itself the degree is what it is and I feel like our top Indian Institutions will give you as much worth as any international institution.

The value comes from being able to interact with people from all around the world and being able to do that while realising that right now’s India is no longer the India we have witnessed in 1800’s and 1900’s, where we felt the need to be one step back.
Today Indians are proud to work in India, in an Indian style and to compete eye to eye with any organisation in the world. However, with that said, I give a lot of credit to my education which has given me lot of skills which I may otherwise have not received as easily.
Right now, my role is a lot about keeping chairman’s vision in mind and ensuring that the strategy and growth of the organisation should be in-line with that vision.

I have taken several responsibilities which highlight the change in evolution of the company like taking the right opportunity for mergers and acquisitions, making sure the plants we design are well setup with internet of things and systems and processes which will be able to take advantage of cheap labour available in India and also have efficiency and ability to scale.
But by itself value and innovation mean nothing I believe the focus should be on adoption, If adoption doesn’t occur you may have the best idea, you may have the best execution but if no one’s using it, it doesn’t matter.

Hobby: Reading and music
Holiday destination: Italy
Mentor: My professor named Malcolm Gladwell he is well known for writing books
Success mantra: If the plan doesn’t work, change the plan but never the goal

Do you see this new generation of business leaders taking over a substantial segment of the traditional business sector in India over the coming years? Including the present government policies like GST- Is this the good initiative or the laws that are being made. Are we heading towards positive era?

I think Indians are so used to thinking election to election that they don’t think about the norms. I think people of India should look past transient disruptions like demonetisation and GST, and think about how these things can pave the road for the future of the country. We have the advantage and disadvantage of being a democracy, because of this the government has to constantly think about populism and whether everyone will be happy. Keeping that in mind, these are the right steps to have been taken and I commend the government for doing something that is unpopular in short term but highly beneficial for success and profit in the long term. Initiatives like India Stack is another example of great work by the government in taking a step forward India with 1.2 Billion population, where majority is flirting along the poverty line moving towards cashless economy- this is unheard off. We need to approach challenges as Indians and not Chinese or Europeans.
GST- It may be inconvenient today but has anyone given a thought to whether the previous tax system was convenient? It wasn’t, it was just what was in place, GST is a lot easier for entrepreneurs to understand- it may seem like a hurdle now but we will overcome it. We are Indians, we are stoic and we know how to overcome challenges. Let us not kid ourselves thinking, that one year of slowing growth from GST and Demonetisation that it means the country is broken. It is not and let noone tell you otherwise

Could you tell us about your role as whole-time director at the $700 million Deepak Nitrite?

My role as a director is to make the strategy for the company. The people under me are focussed on identifying and executing improvement plans across the company that ensure that inefficiencies today, are resolved tomorrow. So essentially if I were to explain what my team does to others, I tell them to imagine a big wheel of Swiss cheese my team and I fill holes as soon as possible with appropriate solutions and immediate decisions. Until now, initially our aim was to grow at a breakneck speed that easily can bring holes because we end up depending more on people and less on processes.
My role also involves looking out for new opportunities for the company. I also need to ensure that I act as a correct kind of proxy for chairman and managing director both inside and outside of the organisation.

What about Linkwok, which you set up recently? How is the market responding to your idea management software and research process management software?

Honestly this is a mixed bag, the product has changed and team has evolved, which I believe is for better.
I tell you what the original concept was.
I had this concept when I was in grad school, when I had to do research, I realised this then and even now how difficult it is to access information on a topic which someone has probably already researched and to take advantage of their curated research.It went from there, to why not be a knowledge sharing portal and let’s allow people to collaborate across the world as a team. This is what it started out to be initially and the target audience here was B2C.

Our initial challenge we faced was that majority of our users demographics were in US and UK, but the talent in development was in India. That’s when we started to focus on B2B and start to focus on where I have an unfair advantage. My unfair advantage is manufacturing and there I have noticed severe level of inefficiencies that come about with many Indian companies when they grow so rapidly. We devised such a program that the management gets to see the problem on granular level and also not get overcrowded by it. Secondly, we realised that if you put inexpensive sensors and systems around plant management can generates huge amount of data, which can help in scaling up and identifying problems at a very initial stage. Today IOT, systems and management, data management- these have become catchwords but they have a lot of thought put into them. This company HQ is in Baroda and we have an office in Mumbai as well.

What, according to you, are the challenges confronting Indian businesses? And what are the opportunities that are available for growth in the country?

In manufacturing, the biggest challenges organizations face is not only the competition with not just China but also with Western countries. We need to understand this one thing that western countries can borrow money from banks at a much lower interest rate. Sometimes that erodes a bit of the edge that we Indians would get because of our naturally entrepreneurial natures. The other challenge that Indian entrepreneurs often face is the lack of infrastructure because of which we are forced to focus on certain hotspots.
The final obstacle is getting the right kind of visibility on an international stage. Indian companies for whatever reason are very reticent in ensuring a digital presence. In that respect, I think it is very easy with the right talent and type of involvement from senior management to create an outsize digital presence, one that allows international person to look at Indian company and international company at the same level, which is the way it should be. Which I hope is a challenge which many Indian companies would realise and overcome.

Do you see traditional Indian business groups gradually being taken over by a new generation of highly-qualified younger generation leaders from the promoter families?

Honestly there is a mix. A lot Indian families are going about it the western way, where newer generation wants less and less to do with the family setup and are content to let professional management takeover. On the other end, I have seen others working to ensure the company is run the way it has always been run. On the third hand, which is I believe will be the most successful are the ones that values the traditional nature of the business and are able to adapt to the newer changing methods. These organisation will never forget who they are and their promoters stay an integral part of the organisation.

How do you spend your off-work hours? What are your passions and hobbies?

I spend most of my free time with my daughter who is the apple of my eye. I also try to regularly go to the gym and maintain a healthy lifestyle and any remaining time is spent voraciously reading and sometimes writing.

I’m happy when team is happy

Sandeep Mundra, 46, CEO of IndiaNIC, means business and is not alone. He looks at his company as “our company.” A man of vision and innovative ideas he can build solutions for wide range of users and industries. Talking to Urban Vaastu he speaks about his plans. And for aspiring entrepreneurs who have stars in their eyes his advice? Education!

skm
optimized-maxw950-indianic-logo-original

Founder: Sandeep Mundra
Year Started: 1997
Area of Operation: Operation, Sales & Marketing
Hobby: Reading and Sports
Fav. Holiday Destination: Las Vegas
Role Model: Elon Musk , Steve Jobs
Source of Inspiration: Seeing my team happy

Could you run us with company’s history when it began about 20 years ago, when IT sector was different and about your family, schooling, and higher studies?

I am a science graduate, I did my graduation from Rajasthan and then charted accountancy from Mumbai. After that I moved to Ahmedabad. I like this city and a few of my friends at that time were doing engineering and suggested that it is now all about internet. I didn’t want a job and accountancy was not very inspiring. Those days internet just launched in India. I then began providing hosting and domain registration and then moved to development area. We started to get clients from US and that’s how it all began.
As for my family, my parents motivated me. I didn’t have money and they lent me $1500 to start my business. Despite my academic credentials they did not compel me to do a job. Instead I was encouraged to do something different. My younger brother who is in computer field helped me get into IT business and he was the one who assembled my first computer for my company. Because of him I got at tracted to IT business.

So, how did your company evolve? Was it difficult to get suitable partners?

Initially we started working in domestic channel of hosting. I kept abreast of technology and goings on in the market — about domain hosting and registration, especially when it was decentralised. That’s when I started to provide domain registration at reasonable price which made me a top domain registrar in Gujarat. The biggest challenge was to get new partners, to synchronize with them and working with different clients. That is how you eventually learn about their taste.

You knew Bangalore, Gurgaon were IT hubs and Ahmedabad not really a place where IT was blooming. What gave you the idea to start up in Ahmedabad?

Gujarat is land of entrepreneurs Ahmedabad being no exception. Here, we don’t recruit employees but entrepreneurs. Gujarat has best infrastructure and people are friendly. That’s why I selected Ahmedabad as business is in their blood plus government support is excellent and accommodating. People want to work with you without reservations. That’s why my office came up here.

You have prestigious clients who are leaders in their own field. Your experience working with their executives?

Our clients are NDTV, Nirma, Vodafone, Cartoon Network, and TATA.
The process to take these clients on board is very complex and you must make sure you are delivering extraordinary results because these people are pioneers in their business and their companies are in Fortune 500.

One single error on our part might affect business. We take care of little things and I feel honoured to work for them. We have also created 700 portals for fire stations and 900 police stations in United States. That makes me and my team proud.

What are your expansion plans in India and abroad?

Our Ahmedabad office comprises 50,000 sq. ft. which is enough to accommodate 1000 odd people. Right now, we have office in Silicon Valley (the US), in Dubai, Spain, and Australia. Planning to open in East coast like New Jersey and enabling tie-ups in Australia. Expansion plans are there in the next couple of years. In the Scandinavian region the countries like Norway, Finland, and Denmark have good amount of business and they want to work with us and provide end-to-end solution. They are willing to pay well but want excellent services. We need to have local representatives. Our plan is to collaborate with them in a year or so.

How many employees do you have in Ahmedabad?

Right now, we have 400 plus. In India, we have just one office. Once we had an office in Hyderabad but merged it with Ahmedabad. Right now, no plan of expansion. People from all over India are willing to come here and work with us. Once talent was scarce. Not anymore. Our team is international as people have come from Romania, Morocco, Italy, and other places.

I wanted to create an environment where people are happy around me and wanted to provide them with innovative and inspiring ideas. This company’s biggest strength are its people. My aim is to keep people happy around me, and that’s how my company has evolved.

What kind of bond you share with employees?

I never use the term “employees.” I call them “my friends” or “team members” and for me friendship is more important than acting as a boss. Be it team members or clients, business is just a by-product of that relationship.

What are your views on demonetisation and Vibrant Gujarat event?

Demonetisation is the best that happened in last 16 years and for time being, people might think that it is giving trouble. Its benefits accrue in long term. Plastic money is the future. It’s a good way to bring transparency in the system and initially I used to spend cash everywhere but nowadays it’s all about plastic money as I use the card everywhere.

You have a very interesting logo?

Did you notice the word “I” in “IndiaNic” designed in the shape of people? Our Company is all about people. We always wanted to promote the idea that it is not just “my company” but “our company”.

Your advice to young entrepreneurs

Education is a must. Keep abreast with knowledge and development in technology.

I have no ‘employees’ as they are friends & team members

How do you see prospects for IT and high-tech sectors in India?

IndiaNic is focussed on developing mobile applications specifically the IOS and Android. We used to be pioneers in open source technology having launched it in Gujarat when nobody did at that time or knew about it. Now 70 to 80% our strength is on mobile application development. In the first few years of mobile application development it was just kind of ideas or being a start-up venture. Now enterprises have entered the market. The future is good for growth of enterprises mobile applications where the enterprises would be looking to integrate their package and customers to the mobile and everything is going to be with the mobile.

Your website has a very interesting video on the term “IDEA” as “everything begins with IDEA”. What gave the idea for IndiaNic?

As you know initially we started with domain registration and the term “IndiaNic” stands for “India network information centre.”

You can get information using internet. I rank education on top of all other requirements. Knowledge is power and that is what turns one into a good entrepreneur.

After demonetisation, digital payment mode came into vogue. Even in West it is 100% cashless. India after 5 years in terms of digitalised economy?

I will explain you with an example. In any chemical reaction, you need a catalyst for a chemical reaction. Demonetisation is that catalyst for digital money and this will boost our economy in next 5-10 years. It might be difficult in a country like India where 80% transactions are in still happening in cash and suddenly overnight cashless scenario is a bit difficult to imagine or adjust. Digital economy gives opportunities for many things to happen in future.

And lastly, what is your success mantra?

My success mantra is to work as a team. It is to keep people around me happy because if they are happy I too am happy.

Claris clarion call – hard work

Arjun Handa, Vice Chairman & MD of Claris Lifesciences, has many feathers in his cap.
A keen footballer and a great achiever, his vision of looking at things differently took Claris to a fast- paced growth. Never to allow grass grow under his feet, he has been formulating corporate strategy and experimenting with new initiatives. A graduate from Gujarat University and an MBA from Boston, USA, there is more to come from him. When Urban Vaastu met him, the commitment was visible to drive Claris forward fast. Being the inspiring force behind Claris, he explains how he realised his vision. Excerpts

b82a0543

Fav place: Africa (wildlife buff)
Fav sports: Soccer
Fav hobby: Reading & music
(Book: Creative destruction by Richard N foster and Sarah Kaplan and Built to last by James. C. Collins and Jerry. I. Porras)

How do you view the emergence of younger generation as highly qualified entrepreneurs in large and mid size companies of India?

Significant amount of youngsters are controlling many companies today. They can be seen in start-ups and large companies. One aspect of their success could be their early exposure to US work culture, and having acquired MBA from abroad. I think earlier generation has made it easy for this generation to be so savvy. Earlier it was about protecting one’s business turf. Now it’s all about growth. Good to see this across India, even in government functioning, where a lot of youngsters are seen. It all has to do with qualification, exposure and experience. New thought process is driving the country.

Do you see this trend continuing over the years?

Yes. I see this trend getting popular. Youngsters have ambition, capability and exposure for taking control. As long as they are able to deliver, the trend will intensify. Of course, maturity is the key. Maturity comes from experience, and elders are there to guide – as the baton is being passed on to those taking over. Education and degrees help, but good guidance coming from experience is vital. Sometimes one learns from failures. It is all about learning.

Can you take us down to your entrepreneurial journey from your graduation in Gujarat University to MBA from Boston?

I did my B.com from HL in Gujarat University, and then I worked for three years. I set up my own IT company and it ran for 3 years, before I went on to do my MBA in Boston. My company used to do work for Claris, and that point of time it was a small company. We also did a lot of IT work for other companies. From a 3-member company we went up to 100. And when “dotcom bubble” burst, the IT company was downsized into simply an IT department for Claris. It started working in ERP segment. Corporate India was growing during that time, and ERP was much needed. Then I went to the US, stayed there for 2 years doing my MBA. I gave my last paper, and I returned the very next day. Claris was growing and my dad was working.

I felt any additional entrepreneurial effort in Claris would pay off more than staying in the US. I asked him, “should I get more experience and come back later or I should come back as soon as possible and try to pitch in?” I joined Claris as soon as I was back. I had management training for good one and a half year. Then I started taking control slowly of one by one the technical functions of the company, and three years later became the Chief Operating Officer.

What is your message for young business leaders of group companies?

One mantra is to prove one’s own self. I have seen people struggling to take control from earlier generation. I have also seen people taking over a company without requisite experience or knowledge and then failing. Hard work makes life easy and it gives success. Failure is a learning curve. Knowledge coupled with hard work assures success early in life.

What contributed to Claris success?

Our business model was different. It had no precedent in India and we had nothing to go by. Only option was hard work, and to gain experience. We focused more on the US than India. US creates more value, but it is riskier; and the challenge was operational. Anyway, it helped our business grow faster. Claris is one of the few Indian companies that manufacture and sell sterile injectable products in the US on own name.

What led to sale of Claris injectables to Baxter in July? Will the Claris group be interested in injectables in future?

To scale an injectables company from india to US is very difficult, you need a larger umbrella: large management, large investment resources and larger bandwidth. A bigger company is more suited to take this platform forward. In the last 5 decades all the smaller injectable companies had to become part of a larger group within pharma for this very reason. We will be interested in the higher end of the technology within injectables like hormones, steroids etc.

You sold off Claris Lifesciences stake in Otsuka Pharmaceuticals India to the Japanese principal. Any plans for future buy-outs or sale of units to international players?

We are still exploring but I would say that now my focus will be in some FMCG product range.

You led Claris to many awards. Secret behind your success?

Ambition and motivation are the key. My parents taught me to be the best and this led to my success. After that, football bought a big change in my life. I learnt teamwork, strategy, how to cope with losses. When working, I am never distracted. And in a crisis, I go all out and resolve the problem.

How do you spend your non-working hours?

I like to focus on health and family first. I would prefer to go to the gym for an hour every day at least or play a sport. And at night would like to spend time with family. I have couple of hobbies like music, technology, and reading about new ideas & innovative thoughts. I like reading books. I would take at random 7 books and go on a trip for 4 days, maybe read 5 of them and come back.

Your CSR activities?

I picked up football as a CSR, taking young budding players of Gujarat. I sponsor them, encourage them and make them play in tournaments. My wife has recently taken up CSR activities in waste management, trying to inject new ideas to improve health and hygiene within the city and state. She tied up with Gujarat University for a start-up convention to help new entrepreneurs.

With GST where do you see Indian businesses heading?

I support all three initiatives taken by our Prime Minister Narendra Modi: demonetisation, GST and curbing black money growth. These are good for economy, and can attract a lot of MNC businesses and investment in India. For smaller businesses, GST might take away margins. On short-term, a little difficult but eventually small & big business are going to benefit.

Silence the noise, says ftcash founder

Deepak Kothari had given his car for routine servicing and had to personally visit the garage to make the payment. No wonder he zeroed on a mobile payment start-up ftcash which later turned out to be a blessing for millions of small businesses.

As co-founder of ftcash, Kothari is a happy man. Now micro-merchants can come on the platform at zero cost paying a small transaction fee each time they receive payments. With payments seamless and digitalised there is scope to develop new systems, he feels. Speaking to Urban Vaastu he reveals his success mantra: “Don’t let the noise bog you down. Rise above it and enjoy music.” Well isn’t that music to micro-merchants’ ears? Excerpts

fai_1431_1

Hobby: Reading, Movies and Music
Role Model: Narayan Murthy
Favourite holiday destination: New York
Source of inspiration: Maternal Grandfather (Nana)
Founded: 2015
Founders: Deepak Kothari, Sanjeev Chandak & Vaibhav Lodha
What it does: Facilitates digital payments and loans to small businesses.
No of Employees: 50+

Could you tell us about the evolution of ftcash since the launch in 2015? Are you satisfied with the numbers – of merchants and consumers – who have been roped in over the past two years?

ftcash aims to empower the underserved micro merchants with the power of mobile payments and loans. Built on a digital platform it allows merchants to go live in less than five minutes and accept digital payments. With help of transaction history data created, merchants access institutional finance through innovative lending products in a seamless manner. Our merchant numbers have grown considerably since 2015 and post demonetisation and GST there is a surge of interest in this combo product from merchant community.

Any figures of consumers who now buy products and opt for ftcash payments and of the total number of merchants?

We’re focused on merchant services and currently working with 25,000+ merchants across India. Our merchant focused products allow us to engage with merchants to cater to their needs. The lending product allows the Indian merchant/proprietor to avail institutional finance and manage EMIs.

Are merchants and consumers happy with this hassle-free payment method? Is it only in cities like Mumbai, or are consumers and shop-keepers and even hawkers embracing this simple new technology in smaller cities and towns?

Lots of people have evinced interest from Tier II and Tier III cities. I belong to Varanasi and in my discussions and travel back home, the people are excited to be part of Digital India initiative aimed towards reducing dependence on cash. The new age of young consumers will adopt digital payments as their preferred choice given its convenience.

Will online payments exceed cash payments in India by 2023 as you predicted?

India is poised to move from a cash dependent economy to the back of digital payment led growth.

fai_1427

With increased smartphone penetration, bank account adoption, growth in alternative payment methods (Adhaar Enabled Payment System, Mobile Wallets etc) it is possible that digital payments might exceed cash payments in India before 2023.

You are hiring 500 additional personnel including engineers to meet the growing demand for your services. What is your goal for 2020 and beyond in terms of turnover and market size in India?

From a start-up perspective, we set goals given the fluidity of the markets. We aim to empower or service one million merchants over the next four years. Our goal is to provide financial services to merchants at the bottom of the pyramid in a cost-effective manner.

After raising IvyCap Ventures and 500 start-ups, are you hoping to reach out to other Silicon Valley and American financiers over the coming months?

We have received inbound interest from domestic and Silicon Valley investors. The talks are on and it’s premature to make comments.

Are auto service companies, including the larger ones, accepting the mPoS services being offered by you? How many companies are accepting ftcash payments?

We have extremely good market share in the auto service companies segment with over 1000+ car garages using our digital POS for accepting payments. Our coverage in the auto service companies range from the large to mid segment and smaller standalone players as well. We work with luxury carmakers like BMW, Mercedes to premium and mid segment carmakers like Volkswagen and Maruti.

Any other expansion plans? acquisitions, mergers?

Presently we are focused on building our base in the Indian market. We have identified a few sectors in addition to the car segment wherein we will be focusing over the next 6-12 months. We are working closely with our banking and corporate partners to identify further opportunities for digitizing the value chain.

What we are doing is position ourselves globally

2b2a1356

Hobby: Reading and travelling
Holiday destination: Duskin (I love culture and food of Italy)

For Kulin, a fourth-generation Lalbhai family member, and who has lived in places like San Francisco, Paris or Boston – which are some of the best cities in the world – Ahmedabad continues to be home and the closest to his heart. He, however, admits getting a sense of refreshment from globally energetic cities that he visits to get recharged and inspired. The Lalbhai scion discusses his life, his business ideas and his plans for the group in a fascinating interview with Urban Vaastu.

Could you tell us about Arvind group’s foray into e-commerce?

We’re not looking at it as just e-commerce. Digital technologies change the way brands are built and products are sold. Arvind took an ambitious step to build a digital toolkit and in a sense we are building a different business because digital business is not normally built in managerial sense. People involved are different and we built a start-up called Arvind Internet.

How does this change the retail experience?

Arvind invested incubating the idea which can be called Omni-Channel commerce which is bringing online and offline together. So, it is not pure online commerce. It is a case of connecting online and offline for a different experience. Future brands will be built online for total engagement with customers. Digitalised approach is a powerful medium because unlike the store business here you know everything about the person and this personalised service creates loyalty to brands.

How then do you define success and see five years hence?

Well, Arvind can bring its capabilities to global level. Five years hence I see 25% of our sales going digital. And more than the sales one must understand how much digital means to purchases. So, we could be where the US is today with 60-70% of the purchase decisions made digitally even if the customers don’t buy in the store and see its ambience. But we have to build capacities so that brands built digitally go global. We need skillsets to increase overall business. If that happens that is what I would call success.

What inspired you for this Omni-channel. Was it existing concept?

Honestly, what we are doing is to position ourselves globally. Retailers have realised it what we call Omni-channel for all to survive. Nothing unusual for online and offline concepts being brought together. We had seen the change coming and are willing to embrace it. I wouldn’t call it single sourced inspiration. In today’s world where disruptions and innovations change businesses quickly you have to be ahead in the curve by creating value. This I got to know from my days at Harvard. There are certain approaches about creating innovations in a large setup. If you want to build something great there should be a team that is better than you. Our effort in this arduous journey is to bring right people into the team.

What are its key features and you planning major expansion ?

We are excited because there is a decade long bull-run in consumption. When a company crosses $2000 per capita GDP mark disposable incomes substantially rise. Demand for branded apparel jumps and we are already seeing that phase now. It is an inflection point since we are at $1600-$1800 per capita GDP bracket. In certain parts of the country we are at $4000 range as in Delhi. I think our move towards an organised branded company had begun. We have brands that straddles different segments and all are future ready. So the segments that will help us grow are the casuals and beauty range of youth segment. These are the areas with fantastic opportunities to showcase the brand platforms. Our vision is take us from Rs3500 crores to Rs9000 crores in five years, a 25% growth per year which is bold target. The macros are there in India to support this kind growth. With a strong portfolio of brands the challenge is to execute the vision. We are ready.

You have niche brands. Are there brands for different segments of society?

Each brand has to a role to play and there cannot be one super brand trying to do two different things.Brand has to stand for something and with a democratic portfolio we have straddled the price points for various segments in the market. Calvin Klein is niche and for certain set of people. We have a large format called Unlimited which is a family store where average price is Rs.500. It is a thousand crore retail concept and might turn into 5000 crore. For value, fashion has got a huge space and Unlimited as a concept has value. Mass premium brands like Arrow, US Polo, Flying Machine are accessible and these are 500 crore plus brands today. The middle class is the core consuming class for these brands and this is the largest market. Then we have premium class brands like Tommy Hilfiger, GANT, Calvin Klein and it will become larger in the future once India becomes more affluent. Indeed, we have a very balanced portfolio in terms of brands and value.

You have stayed in several cities like Boston, Mumbai, Ahmedabad and Bangalore. Which city you love most and advantages (or disadvantages) living there?

Wherever I lived be it San Francisco, Paris or Boston they are some of the best cities. But for me Ahmedabad is my home and closest to my heart.

It is the only place I can be truly happy. That being said you always get a sense of refreshment from globally energetic cities. I visit these cities often to get recharged and inspired every now and then.

Will share of textiles sector come down in overall turnover of the group in near future?

Maybe in short-term. The speed of brands is growing up in the group. We believe future of textile is exciting so much so that the percentage growth of our business will increase over the next 3-4 years. We are going to invest a lot to aggressively grow in textile business. Brands growth is faster than textile and brand share too grows faster.

How do you view the prospects for the textile sector in India, especially with imports from China, Bangladesh, Thailand and other markets?

Big opportunity in global textile is that China will start exiting from many parts of this segment due to affordability factor. Now if you look at global trade, 35% is of China. The next largest is India with 3.5% share and 1/10th in comparison. For this amount of market share someone has to absorb it and there are a few places in the world that has the labour potential to this type of quantum manufacturing. India needs to double up its share in the global textile trade given the big opportunity. Two big worries in global textile are: global trade isn’t free like it used to be before given the import barriers;

and secondly differential treaties limit market access all over the world. We have seen it once in China. Over the next 30-40 years, we might see it happening in India. But for that to happen you need a strong governance and a better policy framework. Secondly, India is blessed with youth many of whom are technologically oriented, English speaking and democratically inclined. And I would like to see a 10% GDP growth for next 30 years. Only worry is how to ensure we take everyone along. Global capitalism is creating massive inequality and you cannot have that in a country like India. It is the moral duty of this generation to eradicate poverty and if we fail no overall GDP growth howsoever much it is flaunted can make any sense.

Your message to young entrepreneurs who want to make a difference in society

I think we need to figure out the right models that work for our economy, for our culture, for our people so that we create sustainable models. And whatever we do despite the wealth creation, the ultimately it is the society that is meant to be prosperous. It can be a different matrix in jobs creation but there has to be a valuable change in people’s lives.
The beauty of entrepreneurship is that if you harvest it in the right way, it will be the most positive influence in the country. It is everyone’s duty to create value for stakeholders but to create this value there has to be a theme.
The way we see it is not in terms of just e-commerce. Digital technologies are changing the way brands are being built and products sold. So, our vision of Arvind is to hold India’s largest portfolio of lifestyle brands and through building capacities. So, we took an ambitious and bold step for a digital toolkit. For a company like Arvind approaching digital business cannot be done in managerial sense.

vis_6433

We cannot feel shut out though we need lots of preferential access to large consumption market like Europe and USA. So we need to be mindful while signing a trade agreement which has to serve our purpose. Our policy should complement Make in India movement. I think the government is looking at our sector as priority sector. It is up to us how we really use the opportunity. India needs more blue-chip professional companies in the textile space.

Where do you see India in next 15 to 20 years? Will it emerge as a powerful economy and see poverty levels coming down?

I am an optimist and there are a few times in human history when such a large shift happens with people moving from a poverty situation to the middle class level.

There has to be lot of energy and entrepreneurship. The kind of people we need have to be different and so we built a start-up Arvind Internet where youngsters are of average age of 25. These people are from biggest global tech companies with entrepreneurial drive. Arvind has invested much in incubating this idea to incorporate later into the core of brand business. We are building technology that will transform retail experience in store technology for online selling. It is not just online commerce, it is Omni-Channel commerce. So entire engagement with customers is digital where you come to know of the person unlike the store experience. With personalised service and personalised recommendation brand loyalty gets established.. In a way that is how we define success in a nutshell.

Get in Touch

Your email address will not be published. Required fields are marked *

*

*

*