KK Modi group plans Rs 4,000-cr business rejig in four years

Modi expects the group's revenue to grow more than 20% a year in the near future

Industrialist Krishan Kumar Modi-led Modi Enterprises will invest Rs 1,000 crore each over the next four years to revamp its various businesses. The group, with interests in cigarettes, retail, personal care, education and agri-chemicals, is working on a project to integrate all its ventures for better leveraging and optimising resources. 

Most of the investments would be made keeping this in mind, apart from brand building, Modi told Business Standard.

“Our new focus area is digitising our internal databases, which will let us interconnect all our businesses. We have a presence in every mandi (wholesale market) in the country. We have a million consultants under the Modicare business. But currently we are unable to interconnect. The project on digitising all our internal operations is underway, which should start delivering the change from next year onwards,” he said. 

Apart from sharing and better management of consumer insights and helping it in cross-selling, the new system, once in place, will impart better efficiency and deliver higher sales. 

The project is expected to be completed in two to three years. Modi expects the group’s revenue to grow more than 20 per cent a year in the near future. 

The Rs 8,000-crore Modi group gets Rs 1,200 crore (or 15 per cent of the total) revenue from exports to about 80 countries. 

Growing the share of revenue from overseas markets to 50 per cent is another target Modi has set. 

The company is setting up subsidiaries in various countries. It has set up two subsidiaries in the US and the UAE and a branch office in Singapore recently through its group company Godfrey Phillips India (GPI). 

The Modi group, various trusts and its promoters, including K K Modi, Charu Modi and Sameer Modi, among others, hold 72.06 per cent in GPI, makers of the Marlboro brand of cigarettes in India. 

While, of late, the profit margins are under pressure and industry sales are on the decline, Modi’s focus in the business is also changing. The firm has recently launched a range of electronic cigarettes. According to Modi, the new category is for the future as smoking in India is a costly habit.

“In the cigarettes business the focus will be on new-generation products like vaping or e-cigarettes. This is a new area and comes with less concern for health-related issues. A majority of tobacco users in India consume (the stuff) in chewable form. These kinds of products have the potential to attract such tobacco users as well,” he said. The group plans to set up a plant to manufacture e-cigarettes as sales grow. Currently, GPI is importing e-cigarettes from China.

According to Modi, exports of cigarettes too remain a green shoot for the group. 

In the current year, GPI’s exports crossed Rs 600 crore and it has added countries such as Australia, New Zealand and the UK to its list of destinations. 

Its flagship brand for exports market is Jaisalmer, owned by the Modi group, unlike other brands such as Marlboro, which is a Phillip Morris brand.

“Our Modicare business has grown by 50 per cent this year. The revamping of our retail business, which is placed under Twenty four seven, will help increase revenue by 50 per cent – from Rs 8 crore per store per year to Rs 12 crore per store per year,” he said.