Shriram Dandekar, 50, was instrumental in stitching the Rs 367-crore majority stake sale agreement to Japanese stationery major Kokuyo earlier this month. The executive director of Camlin Ltd tells Sanjay Jog and Viveat Susan Pinto about the deal and the joint venture's plans. Edited excerpts:
How easy was it to structure a deal like this?
Any deal structuring is always difficult till concluded successfully. Known challenges and unknown obstacles come along. The former are many, such as those concerning valuation, management structuring, ownership and regulatory and legal issues. Unknown obstacles could be the change of minds of negotiating partners, unknown/new regulatory issues and opposition from new quarters. We had our set of challenges.
Did you have support of the entire family?
Yes. I was fortunate to get the complete mandate from the Dandekar family. They also supported me with required guidance from time to time, as well as showing complete trust in my abilities to negotiate and conclude the transaction. I also made sure that all family members were informed at every stage of the deal.
You were talking to a number of players, including Zebra. What swung the vote in favour of Kokuyo?
As far as Zebra (of Japan) is concerned, we already have an exclusive distributor agreement with them for the Indian market. We never discussed any possibility of a joint venture (JV) equity partnership with them. We have also had a business relationship with Kokuyo for the past year and a half. I was conversant with the product line, manufacturing capabilities, management style and financial strength of Kokuyo. It is extremely important for two JV partners to understand each other well before they decide on a partnership. This is what helped us cement the venture with Kokuyo.
With Kokuyo now taking majority control and four board positions, will you be in a position to influence key decisions in any way?
There are two sets of decisions taken and implemented in any company with good corporate governance. One set are in respect of day to day management and conduct of business, taken and implemented by the executive directors (EDs). The second set, which come under the purview of the board of directors, are taken by the latter and implemented by the management. In this case, Kokuyo will have the right to appoint four directors and the promoter family, two. Day to day decisions in respect of the business will be taken and implemented by the EDs and the others by the board of directors. Key decisions will be taken in a consultative manner.
How fast will Kokuyo products be introduced in India?
Some, like Campus notebooks, are already distributed by Camlin in India. The joint venture will give us an opportunity to study various possibilities of introducing new products from the Kokuyo stable. This process will obviously take its own time.
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Which markets are you targeting for exports?
Kokuyo has a distribution network established in China, as well as in Vietnam. In the immediate future, some of the products manufactured by the JV company will have access to these markets.
What are your plans on the manufacturing front?
Kokuyo has experience of creating world class manufacturing facilities. The JV company will look at upgrading the manufacturing facilities in India to global quality standards and to set up new ones.
How soon do you expect to reach the Rs 1,000-crore mark in terms of turnover?
It is premature to comment on this. A detailed business plan & right execution process will ensure sustained growth of turnover, as well as respectable profitability.
Will you look at acquisitions to increase turnover?
We have not thought of acquisitions at the moment.