The framed company logo bearing employees’ signatures in his corner office says a lot about Girish Patel. “I am a team leader, who has built a team, and they have now rechristened the whole organisation,” says the 52-year-old promoter of Ahmedabad-based personal care and FMCG major Paras Pharmaceutical.
Patel’s next “project” — his biggest — will be mentoring son Arpit’s venture. “I will incubate something that interests my son,” he says. Patel junior, an MBA, was distanced from Paras’s affairs. Instead, Arpit has been training under his uncle at a paper packaging company that services ITC. Here, he has been dealing in almost every department from accounts to client servicing and has seasoned his business acumen.
So, how does Patel senior plan to mentor his son? “I will sit him down, discuss eight or ten opportunities and then take a call. I will make him understand the pros and cons. My belief is that a tree doesn’t grow beneath (another) tree. It is he that has to work; I can only mentor,” says Patel, who intends to invest his Rs 1,000-odd crore earnings and 35 years’ experience in the business.
Investing in the next generation appears to be a Patel family heirloom. In 1983, Patel’s father, Naranbhai, floated Paras Pharma and, within two years, Girish and brothers Darshan and Devendra joined the company. With Patel’s debut, the company stood true to its name (Paras means touchstone), clocking a turnover of Rs 40 lakh in 1985. The next decade saw the birth of brands like Moov, Krack and D’Cold — brands that helped Paras wrangle a buyout deal eight times its turnover in 2010.
“I built the company gradually until 2005, after which we slowly started transforming it into a professionally-run company,” says Patel. But, even while Paras was transforming, the definition of ‘family’ itself was changing for Paras, say sources. People who watched developments closely in the mid-2000s say differences between the brothers over how the company should be run led to Darshan and Devendra exiting Paras in a span of two years between 2006 and 2008, selling their stakes to private equity firm Actis.
This allowed Patel to bring about more professionalism at Paras with the help of Actis. Changes, or “consolidation” as Patel calls it, were visible in the sporadic churning of employees, addition of manpower to one-man departments, and new product initiatives. “We started studying gaps, because change alone doesn’t help. You need to identify the gaps. We identified the quality of manpower that we required,” Patel recalls.
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Apparently, around half the manpower addition took place in the first year of consolidation, with new recruits forming almost two-thirds of the workforce in the last three years. According to Patel, “Of the five zonal heads now, only one is from the old legacy. The rest four are new recruits. Only those who lived up to expectations remained.”
A top Paras official indicates that the company is not only lean in terms of manpower, but also has a team that can boast some of the best names in the industry. While the decision now lies with Reckitt, it is unlikely that a lot of retrenchment will take place. Patel claims he has literally hand-picked every employee that now works for the company.
Patel has worked hard towards his dream of making Paras a force to reckon with. “I believe in teamwork. One has one mind, two hands and two legs to work. But, if you have 15 minds, 30 hands and 30 legs to work, imagine how much more innovative you can be. Imagine how much out-of-the-box thinking can take place,” he explains. This is the thought that he intends to pass on to other family-run businesses to help them transform the way Paras did.
Patel will now turn his energy to building a new team that will help him scout small family-run businesses with potential to make it big over four to five years. “Family-run businesses are risk averse. So, many of them do not realise how they can grow from a Rs 100-crore company to a Rs 1,000-crore company within five years. I can act as a bridge between a PE firm and promoters of businesses,” he says, clarifying that he will not float a PE firm of his own. He would rather invest in his “individual capacity” and, if needed, as a co-investor with another PE player.
FMCG, however, now stands as a closed chapter for Patel. Paras may have been close to his heart, but Patel says he will never work in the sector again — he will neither build another FMCG brand nor mentor an upcoming FMCG company. Sources say he has a non-compete agreement with Reckitt.
Patel’s far-sightedness can also be seen in how he chose Reckitt over others. “In most cases, PE firms want to go for the absolute value and there were better bids. But, we wanted an organisation that would be able to take Paras brands global, so that my creation stays. People would remember me as the person who created these brands,” Patel says proudly.
Engineering and infrastructure are the sectors that now interest the erstwhile FMCG wizard. One of his close associates for years says: “It is actually very interesting to watch how entrepreneurs think. He built brands like Moov, Krack, Livon in FMCG, and then became associated with a hospital project and emerged successful, making Sterling one of the most sought after hospitals in the city. He can take up any sector, irrespective of whether he has prior experience in it.”