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BW Businessworld

The Cuppa That Cheers

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Kolkata-based Dhunseri Petrochem and Tea has seen its net sales grow from Rs 1,217 crore in 2008-09 to Rs 1,984 crore in 2011-12. Its chairman Chandra Kumar Dhanuka attributes the firm’s success to a few decisions that paid rich dividends. The most significant being the company’s foray into petrochemicals. “There was little growth in the tea business as there is no land available for estate expansion in Assam,” explains Dhanuka. Today, petrochemicals constitutes about 90 per cent of its topline.

Dhunseri runs a 300,000 mtpa polyethylene terephthalate (PET) resin plant in Haldia. A second facility at Haldia has also gone onstream. A Crisil report says Dhunseri’s success can be explained by its focus on the local market where margins are higher, coupled with the strong demand for PET. “A strong growth in end-user industries and a preference for PET as packaging material has boosted demand; in the domestic market, it clocked an impressive 35 per cent CAGR during FY06-11,” says the report, putting Dhunseri's growth in perspective.

Dhanuka also made effective use of the inorganic route to growth in the tea business.

— Swati Garg




Putting Up A Good Show
In the year 2000, Anil Jindal entered the entertainment space by setting up SRS Ltd (Sab Raho Sath) under the banner of SRS Group. In a little over a decade, the group has grown to over Rs 2,000 crore in net sales and now operates cinemas, food courts, retail outlets and jewellery showrooms.

What worked for Jindal was the decision to focus on tier-2 and tier-3 towns. “Here, consumers have the spending power, but they lack options,” says Jindal. Besides, the 2008 move to enter the jewellery business saw SRS’s revenues trebling the very next year, and its profits going up five-fold. “The jewellery business was a game changer,” says Jindal.

SRS believes it has the “perfect self-balancing business model”. “From April to August, our cinema and food court segments do well. From August to September, our retail stores, sweet shops and restaurant business pick up... Then, towards the end of the year, starts the wedding season when our jewellery sales go up,” Jindal explains.

Today, 80 per cent of its sales comes from jewellery. Retail contributes 17 per cent, cinema 2 per cent and hospitality 1 per cent.

— Shrutika Verma




Good Buys Pay Off
In 2007, even as the Indian auto industry was undergoing a transformation of sorts, Ashok Minda, chairman, Minda Corporation, took a decision that surprised many. He bought KTSN, a German auto parts maker, in an estimated Rs 265-crore deal. Minda’s turnover then was barely Rs 200 crore. The next year, German car major Volkswagen announced its entry to India, proving Ashok Minda prophetic. In 2010, Minda bought Aksys Koengen, which had a turnover of Rs 240 crore and had patents for technologies for composites such as sheet mould compounding and glass long fibre. The technologies, absent in the Indian market then, helped the company reduce costs and in the creation of customisation techniques. The buys worked; in 2011-12, Minda’s net sales stood at Rs 1,385 crore. “The acquisitions helped us gain an expanded presence in Europe,” says the chairman. Now, 40 per cent of the firm’s revenues come from its international business. “We also set up an auto component unit in Uzbekistan,” he adds. Today, Minda with 25 plants globally, is in the driver’s seat.

—Swati Garg

(This story was published in BW | Businessworld Issue Dated 20-05-2013)