Raju to focus

K. S Raju, the chairman of the colossal Nagarjuna group is witnessing a lot of activity in his stable. The flag bearer of the group, Nagarju...

K. S Raju, the chairman of the colossal Nagarjuna group is witnessing a lot of activity in his stable. The flag bearer of the group, Nagarjuna Fertilizers and Chemicals Ltd NFCL is undergoing a financial, organisational and business restructuring. NFCL has been passing through a rough patch owing to liquidity constraints. The ongoing petroleum refinery and power projects, which attracted their share of teething problems and have hurt bigger groups than this, led to NFCL8217;s plight. Moreover, these capital-intensive projects were unrelated areas as far as Nagarjuna8217;s original turf was concerned. Raju has negotiated a debt-restructuring plan that8217;s a little above one thousand crore, with the FIs. The package involves the rescheduling of long-term loans, conversion of short-term into medium term loans and reduction of interest rates to 12.5 per cent from the usual 15 per cent. Now Raju has to see if these initiatives would bring succour to the company. Realising his folly in taking up more than the core areas, Raju has decided that what his group now needs is single-minded focus. He has zeroed in on the agro-chemicals business to form the core of Nagarjuna Corporation. To take his object forward, he is gearing up to roll out a broadened product portfolio in this sector. In addition in a move that8217;s smart for this sector he resolves to brand his new products.

Which are value-added fertilizers designed to meet crop-specific macronutrient requirements. This new product is supposedly targeted at a so-far untapped market and Raju is betting on their tangible contribution to the revenue. He envisions his becoming a provider of complete solutions to the farming community. In the meantime, he plans to reverse-merge the fertiliser company into the Nagarjuna Corporation. This reverse-merger is in keeping with the core business concept. Looks as though Raju has finally identified his group8217;s blunt edges and has decided to sharpen them.

Prepare for the sting

Anand Mahindra is planning to increase Mahindra 038; Mahindra8217;s share in the pie of hardtop utility vehicle segment. His SUV project Scorpio is being introduced in 25 Indian cities. Scorpio has the credit of being India8217;s first sport utility vehicle. It has been designed and manufactured entirely by the company. Anand Mahindra can certainly flaunt these new feathers on his cap. At least for a while. The vehicle, which will be in the same class as international models like Pajero, Land Cruiser, etc will be much more affordable in terms of price, promises the young auto tycoon. Scorpio marks Mahindra 038; Mahindra8217;s second attempt to break into the urban market after the launch of Bolero two years ago. Anand Mahindra8217;s attempt to attract urban customers has so far not been a story to write home about. A key reason for this has been Mahindra8217;s image as a manufacturer of tough and rugged vehicles used by rural taxi operators and the police department. But things are going to be different, insists the tycoon. According to Anand Mahindra, what M 038; M needs is a change of image very different from its rugged feel. And that is what the Scorpio assures. Scorpio as the name suggests supposedly will give M 038; M the much-needed edge in the utility vehicles market. It is bound to appeal to the sports vehicle lovers due to its smoothness, driveability and undoubtedly sporty looks, insists Anand Mahindra. Now with this launch, he hopes M038;M8217;s product offerings will take a quantum leap. Certainly the job will not be easy especially when the utility vehicles market has been stagnating over the years. But it is surprising to note that in spite of investing around Rs 600 crore on the project, the tycoon is opting for relatively fewer dealers and suppliers. A marked change in strategy. Perhaps he expects the Scorpio to attract customers to itself. Meanwhile, it is just wait and watch for Anand Mahindra as to whether the huge vehicle will meet his long list of expectations. But the rest of the market is scurrying for alternates to escape the sting of the Scorpio.

Dilip Cherian, runs a public affairs firm Perfect Relations. He is an economy watcher and tycoon tracker . None of the people he writes about are his clients. Your insider tales are welcome at dilipcheriannow-india.net.in