Indian rope trick

Like all Grand Slams, the French Open too wasn't just about players showcasing their talents. Away from the red clay, Roland Garros is an op...

Like all Grand Slams, the French Open too wasn8217;t just about players showcasing their talents. Away from the red clay, Roland Garros is an open-air boardroom and the hectic off-court business conducted there is almost parallel to Rafael Nadal8217;s frantic hustle and bustle on court. He, for a change, is prepared to play second fiddle in this partnership 8212; the Jhawars are holding only 40 per cent stake in the new joint venture, the rest going to the overseas partner. This is a change of corporate strategy that8217;s being closely watched by others.

Planned to start with a capacity of 3,000 tonnes per annum, the new venture8217;s capacity is likely to be scaled up to 10,000 tonnes in the coming years. As the new venture is expected to serve both domestic and the global market, capacity expansion may come sooner than expected.

Earlier in December 2004, Jhawar had already enhanced his capacity substantially with the takeover of JCT8217;s Steel Division in Punjab. This JV with the Austrians gives a fresh impetus to his global dreams. With manufacturing facilities in the UK, Thailand and UAE, besides his Indian plants, and a service and marketing network spanning the US, UK, Europe, Australia, Africa, Singapore, and the Middle and Far East, Jhawar8217;s No.1 dream may not take long to shape up. Clearly this is the new Indian rope trick to watch.

Southern invader

Mallika Srinivasan has long left her father8217;s shadow and groomed herself into a tactical businesswoman. Her Chennai-based tractor giant Tractors and Farm Equipments TAFE is now set to buy and integrate but not amalgamate three of Eicher8217;s plants 8212; the tractor unit in Bhopal, the engine unit at Alwar and gears unit in Parwanoo 8212; all bought for a consideration of Rs 310 crore. The transaction, to be carried out through a Special Purpose Vehicle, is to be financed by a combination of internal accruals and debt. The deal would scale up TAFE8217;s market share to 22 per cent in the Indian tractor market, taking it to the No. 2 position with a combined annual sales volume of 53,000 tractors, claims Wharton-educated Srinivasan.

Eicher8217;s decision to sell its tractors division and focus on its commercial vehicles business as its primary growth driver could not have come at a better time for South-based Srinivasan, who now will have greater access to the markets of Uttar Pradesh, Punjab, and Haryana. In fact, TAFE will become the No. 1 tractor player in these markets after the acquisition. The company will also have a better presence in the lower horsepower tractor segment with a wider product portfolio in which Eicher had a significant market share.

However, the tractor magnate would keep the newly acquired businesses as a separate entity, with an independent sales team for the Eicher brand. Seems like a well-crafted strategic decision.

Careful parting

Discordant family ties in several Indian corporate families are increasingly coming into the open. The latest to become public is the Piramal family feud. This time however, the story is less about division of family fortunes and more about 8216;realignment of relationships8217;. Dilip Piramal and his wife Gita, the acclaimed author, have decided to demerge.

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Knowing the underlying complexities of all family and business realignments that follow this move, Gita has gracefully stepped down from the board of directors of Blow Plast Ltd and VIP Industries. She has instead joined the board of another group company BP Ergo that manufactures state-of-art systems furniture for offices. That company already has the couple8217;s daughter Aparna as executive director.

Only time and the markets will tell what kind of an impact the exit of an image manager at the top level like Gita has on the perception of these Piramal companies.

The grapevine also has it that a second matrimonial event is planned days after daughter Aparna8217;s wedding. Piramal pyrotechnics is clearly not over.

dilipcherianhotmail.com