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BW Businessworld

Adapt To Grow

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One would imagine that when a company sells its core business its growth rate slows down. Not so in the case of Metroglobal, an Ahmedabad-based company.

Metroglobal, which was mainly in the business of manufacturing textile intermediates till 2009, sold its Vadodara-based factory to Swiss company, Huntsman Textile Effects, for an undisclosed amount. The deal had a five -year non-compete clause. “After the deal, we could not manufacture intermediates so we decide to diversify,” says Gautam Jain, chairman, Metroglobal.

The company diversified into three main businesses — real estate, paper and paper products and trading dyes and intermediaries. The new businesses brought growth for the company in the past three years.

Asked how Metroglobal managed to grow at a healthy rate at a time when the Indian economy had slowed, Jain says, “I have seen worse days and many growth cycles as I have been in this business for the past 30 years. Over the years we have learned to read early indications of a slowing economy and we adjust our strategies accordingly.”

In 2011, the company swiftly shifted focus to the domestic market for its dyes and intermediaries. “There was potential for growth in India if you could offer a quality product at a good price. The same went for our real estate business, and we saw our sales and profitability improve over the past three years,” says Jain.“Profitability also increased as we started trading in chrome ore; it has better margins,” adds Jain. The company has also invested heavily on its marketing team in the past two years that is now showing results.

In real estate, the company is currently developing eight properties in and around Ahmedabad. While the focus is on the residential segment, Metroglobal is also witnessing growth from the retail segment. “Real estate in Ahmedabad, especially in the peripheries of the city, has seen stable growth in the past few years as compared to other Indian cities,” says Jain.

Not one to rest on its laurels, the company has charted a growth strategy for the next five years. With the agreement with Huntsman coming to an end by year-end, Metroglobal plans to re-enter the field. “We will invest Rs 100 crore initially and set up a factory for manufacturing textile dyes and intermediaries,” says Jain.

(This story was published in BW | Businessworld Issue Dated 11-08-2014)