He was one of the driving forces behind the transformation of a small Kolkata-based business venture to an important global player in the fast-moving consumer oods (FMCG) space.
Radhe Shyam Agarwal, who founded Emami in 1974 along with Radhe Shyam Goenka, is planning to retire. In an interview with Shine Jacob, he shares his dreams and aspirations about the Kolkata-based company. Edited excerpts:
Succession is the talk of the town as far as Emami is considered. How have you charted the process?
The succession plan is being considered very carefully and analytically. We are taking assistance from experts. It is a family matter, so we can even do without succession now. But, we are doing it seeing the long-term future of our shareholders, employees, suppliers and everyone. It is a matter of not just some 20,000 people we are directly employing, but also of around 50,000 to 100,000 workers indirectly attached to the company.
As far as a change of guard is concerned, there is no understanding gap within the family. The succession process will be completed within a year.
If there is no understanding gap in the family, then why did you have to set up a panel to find a successor?
We are seeking their (experts’) views so that there won’t be a problem in the future. One thing is for sure: somebody from the family will take charge. In fact, succession is a continuous process; it is already happening — step by step.
The Emami board last October approved raising of Rs 5,000 crore via debt and equity for acquisitions, but since then, you are losing all the acquisition battles. Reason? Are you planning any major acquisition in the near future?
We are in talks with some national and regional brands now. But till now, the efforts were unsuccessful. Somehow, it is not happening...may happen in two months, may not also happen in even two years. Among the acquisition bids, I am still surprised on why Paras (Pharma) did not come to us. I am convinced that our offer of Rs 3,500 crore was the highest.
What is your strategy for the personal care business of Paras Healthcare?
We are in touch with (UK-based consumer goods company) Reckitt Benckiser for this. We are actively participating in the bid, too, but will not pay for it more than the valuation.
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The paper industry is undergoing major changes, with the recent acquisition of AP Paper Mills by the world’s largest paper company. What are your expansion plans?
We are going to set up a Rs 200-crore pulp plant and a coated paper plant in Balasore (Orissa). In newsprint, we are already number one in India. With new plans, we will increase the market share. In the space, we are trying to take over units abroad in some countries in Asia and the US. Emami Paper would be investing close to Rs 1,500 crore on writing paper capacity and another Rs 800 crore on the duplex board facility.
What are your restructuring plans for the real estate sector?
We have proposed to merge Emami Realty, Emami Home and Emami Estates into Zandu Realty to reduce operational problems.
AMRI also seems to be on an expansion mode. Do you have any specific plans?
Currently, AMRI is bidding for Sterling Hospital chains in Gujarat, as we are one of the groups they picked. Moreover, for organic and inorganic growth, the hospital chain is going to spend around Rs 1,000 crore within two years.
What are your other major expansion plans?
In the retail sector, we are expanding Starmark and Frank Ross. In terms of volumes, Frank Ross will almost double it in the coming year (from 70 outlets to 110). We may make homeopathic products, as we recently took over King & Co, which was one of the biggest homeopathic companies in Kolkata.
As a major industrial group based in West Bengal, what is your take on the ‘Paribartan’ (change) that has happened here?
Let us be in a wait-and-watch mode. Every movement has its pros and cons. But corruption is going to come down in the present Mamata Banerjee era.