Financial Daily from THE HINDU group of publications
Thursday, Mar 07, 2002
`Shaw Wallace can beat MNCs at their own game'
Mr M.R. Chhabria
MUMBAI, March 6
WITH all odds stacked against him, people wrote off Mr M.R. Chhabria as yet another entrepreneur who wanted to make it big, but could not. What they didn't anticipate was his comeback.
The Chairman of the Rs 3,000-crore Jumbo group of companies believes in one motto: A winner is not one who never fails, but one who never quits! And quit he didn't. And one of his group companies, Shaw Wallace, is all set to make a big splash once again in the alcohol and beverages industry in the country.
Business Line spoke to Mr Chhabria on the restructuring in Shaw Wallace, his plans for reviving Dunlop Tyres and the Herbertsons case.
What is the road-map for Shaw Wallace?
The road-map is to make it one of the largest alcohol and beverages companies in India, not only in terms of sales but profitability as well.
What are the initiatives taken in that direction?
In the liquor business, it all depends on volumes, capacities and brands- all matter. The first that we are focussing on is to build capacities. We are now concentrating on increasing the existing capacities as well as looking for new distilleries and breweries in various parts of the country. The second thrust area is sales.
We are not as fragmented as before and have made an organisational structure to support it. We now have Vice-Presidents for sales, marketing, and institutional sales, besides brand managers and product managers. This will now ensure a focussed approach to every part of the liquor business.
We have organised ourselves as a typical marketing and distribution company. Earlier, in a liquor company, there was no segregation of areas of work... it was all under one roof.
Any specific segment that you would be targeting?
We are actively looking at the institutional business. The business development section will be responsible for activities such as the institutional sales business in which we hardly had any presence. In the process, our competitors got an edge over us.
When we put these things in place, logically, we will be able to be the number one liquor and beverages company in India. Since we do not have to promote our brands, our focus will be on brand awareness.
We have a sizeable market share in most of our brands... we only need to bring about awareness about them.
What about quality?
Yes, to some extent, we also have to increase our quality. Quality of the products is a very important element in the spirits business, especially since multinationals are also trying to make a foray here.
Also, once we achieve the number one position, the onus will be on us to maintain that position. And one can do that only if the quality of the products is the best.
We are introducing eleven repackaged brands with a new image. We are also launching several new brands in certain other segments that we had no presence earlier. We are giving our existing customers new choices, and at the same time, creating new customers.
So this way, we would be prepared to take on the multinationals set to foray into the Indian market. We will be able to beat them at the very things that they are good at and will be way ahead in terms of market share.
What is the status on the other group company, Dunlop Tyres?
There are a few things that need to be done on the Dunlop front as well. It's a pity that despite all our sincere efforts, we are not arriving at a result. But I am confident that very soon we will be in a position to do something.
We have even proposed a new plan. Let's see if the workers want to consider it. I feel that the workers have been instigated against us. There are interested parties who want the company to remain closed.
It is ironical that with two major companies in the business shut, Modis and Dunlop, there should be no positive development in the industry. So I think there is something drastically wrong in the industry itself. Our efforts are to open the factory as soon as possible. We hope sense will prevail.
Any time frame for re-opening the company?
In two months, there will be positive development in this regard.
What about Falcon Tyres?
Falcon Tyres is doing quite well. Last year, it had a 40 per cent growth.
Any new markets identified for Falcon Tyres?
No. We are only concentrating on the domestic market. In fact, our total capacity is sold off. We have implemented the same strategy of low-cost production that we had for Dunlop and it has worked for Falcon.
Would you then implement the same strategy once Dunlop is reopened?
Yes, we don't need finance or investments, We can arrange them on our own. We need the Government's go- ahead; that's it. Even in our BIFR (Board for Industrial and Financial Reconstruction) application, we have not asked for any financial help.
The Budget had some incentives for the liquor industry. Any impact on your company?
It is good for the consumer. There are some sops for foreign liquor, but that is not very significant.
What do you have to say about the recent SEBI verdict on the Herbertsons case?
What can I say? This is between Mr Kishore Chhabria and Mr Vijay Mallya.
Would you buy stake in the company if they sell it?
If they sell... why not... but will they? I am monitoring the situation.
What is your current stake in Herbertsons?
We are small shareholders in the company.
Are you going to patch up with your brother, Mr Kishore Chhabria?
Our relations are ok. There is nothing wrong between the two of us. He has to give us Officer's Choice and BD. He never understood what we wanted... now we are gaining strength... probably he might recognise that.
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