Bond of Brothers
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CCI NG 3.7 Product: ETMumbaiBS PubDate: 12-06-2018 Zone: MumbaiCity Edition: 1 Page: ETMCPG11 User: sandesh.pingale Time: 06-11-2018 23:25 Color: CMYK WWW.ECONOMICTIMES.COM Family Business Deep Dive 11 BOND OF BROTHERS A strong code of behaviour has kept the Group Contours two promoter families of Emami together Listed entities/market cap over the years, even as the founders have Emami Ltd `25,718 crore Emami Paper `1,396 crore struggled with the succession question Emami Infrastructure `722 crore Other businesses include Suman Layak ity cosmetics,” as Agarwal describes edible oil, them, often sold for `3-4 for a dozen. cement, medicine retail, healthcare The business all but went bust in Edible oil is targeting a turnover of mami Group, owned and months, drowning the `20,000 capital `13,000 crore in 2018-19 managed by two Marwari provided by Goenka’s family. Internal assessment of the group’s families from Kolkata and Meanwhile, their professional ca- net worth `60,000 crore now pushing a valuation of reers blossomed. By the mid-70s, E`60,000 crore, has a couple of Agarwal had become a vice-president secrets behind its success. with the AV Birla Group and Goenka What Makes Emami While the first one provided an initial was heading income tax for the KK boost, the second has helped hold to- Birla Group. In 1974, the two friends Families Tick? gether the group that spans ayurvedic gave their business dreams another Clear leadership of Radhe Shyam cosmetics to cement to edible oil. go, with borrowed money, a new brand, Agarwal The early secret of success was a clas- premium packaging and pricing, large sical Indian fragrance called jannat- commissions for retailers and, of Entire business is held together by the ul-firdous or just firdous, meaning course, the magic fragrance, firdous. bond of family relations ‘garden,’ with a citrus and floral blend. No one is sure today, how the brand Family members’ pay allowances and In the seventies, the Emami founders name Emami was found. “In Italian, spending on luxuries such as cars is used firdous, traditionally used only amami, means ‘love me’,” says Goenka, regulated by the family elders for incense burning and agarbatti, hinting that the brand found its mojo for their vanishing creams and cold as an afterthought. All family members are present daily lunch together at the office creams. It helped distinguish Emami Over the years, Agarwal and Goenka for products and established the brand. have tried hard to keep the two fami- An annual mandatory holiday during Founder chairman of Emami Radhe lies together and bonding all the time. Photos: SUBHAJIT PAL Durga Puja sees 60 members from the Shyam Agarwal himself had a knack Goenka’s youngest brother Sushil is two families at a resort for a week with scents and perfumes, from spend- the designated managing director Corporate Clan A family council comprises everyone ing hours at the family shop selling toi- (though bulk of the executive powers in the family letries in a Kolkata bylane. are with RS Agarwal and RS Goenka) FOUNDERS Radhe Shyam Agarwal, The creams grabbed more than 5% for the flagship Emami Ltd. There is a chairman, and Radhe Shyam A business council, comprising family market share within two years. For clear division of responsibility among Goenka, co-chairman members who work in Emami Group the founders, this was a case of being key family members. OTHER FAMILY MEMBERS and professional CEOs, takes major second time lucky. For, the real secret For the second generation, initia- SUSHIL GOENKA business decisions sauce for the success was friendship. tion into business started early. Priti : RS Goenka’s Sureka, Goenka’s daughter and the youngest brother, is managing In 1974, Agarwal and eldest among the next generation who director at the same time, grew with the busi- Goenka gave business a chose to enter the business, recalls PRITI SUREKA: RS Goenka’s ness and contributed.” Aditya adds, how she would come to her father’s daughter, and eldest among the “We have never lived without each second shot on the back office for a few days every week even second generation, handles strategy, other; we do not know how that is.” of a loan, a new brand, when she was in school. “I would be research and brands like Boroplus Mohan does, however, indicate that diversification is seen as one way of given small tasks to perform.” MOHAN GOENKA: premium packaging and For the boys, the routine in the mid- Sales, distribution managing the future. The Emami pricing, big commissions nineties was to attend morning classes and some brands under Emami Ltd Group has clearly emerged as a diver- at St Xavier’s College and then come MANISH GOENKA and ADITYA sified play, with group turnover likely for retailers and the in to work at the of fices. They g rew up AGARWAL: Classmates through touching `15,000 crore in 2017-18 and magic fragrance, firdous handling little details like despatch, school and college, they have moved Emami Ltd’s turnover at `2,530 crore. couriers and even post office work. out of Emami Ltd and together None of the businesses are subsidiar- Agarwal, 73, and cofounder and co- The tradition has continued till the handle edible oil, biodiesel, cement, ies of Emami Ltd, all being directly chairman Radhe Shyam Goenka, 72, third generation. As Sureka spoke healthcare and paper businesses owned by the promoters. have been life-long friends. In the six- to ET, Agarwal’s grandson (son of It may broadly be viewed as a succes- HARSH AGARWAL: ties, they felt the need for a venture, to Aditya) Vibash walked in wearing a M&A, HR, media sion plan – a business for every scion. be able to spend more time together. school uniform and touched Sureka’s and marketing, Emami Over the years, as the business grew feet before taking a seat. “It is a daily PRASHANT GOENKA: RS Goenka’s UNITY IN DIVERSITY in size, the duo built an almost ritual- routine (for) the youngsters whenever nephew deals with the international Emami had a lucky break with edible istic routine for the two families ensur- they come in meet all the elders,” says marketing division of Emami oil, which now has Amitabh Bachchan ing they bond like a clan. Today, with Mohan, eldest son of RS Goenka. (Top) Emami founders RS Agarwal as brand ambassador. The oil is being more than half a dozen members of the Today, there are more rituals – like and RS Goenka; (above L to R) Harsha marketed at less than `100 a litre, next generation in key positions, the the daily lunch that all working fam- Agarwal, Aditya Agarwal, Manish grabbing market share and aimed at succession questions looms large and ily members must have together at Goenka, Priti Sureka, Mohan Goenka a turnover of `13,000 crore for 2018-19. the basic tenets of the Emami Group’s the Emami headquarters in Kolkata. and Prashant Goenka The plant in Haldia was originally a operations will soon be tested. Often, an external expert or a business tGe biodiesel project; Emami promoters CEO from the group is invited to join. Infinite Datacenter 1 tive roles in the flagship company to did a smart pivot when biodiesel busi- BOND, EMAMI BOND There is also a formal business coun- handle the other businesses – namely ness did not take off. The raw material Goenka says, “All of us at Emami cil, where the group’s professional paper, cement and edible oil. Realty, — imported palm oil — was the same, have accepted RS Agarwal as our chief executives and family members ballpoint pen tips, healthcare, phar- the plant was located on the coast and leader.” The top management of the sit together for major decisions. There macy and retail are also in the mix. processing equipment was similar too. group today has nine members of the is also a family council, where all fam- Manish’s elder brother, Mohan, says The group is also investing heavily two families working together, and ily members — almost 60 — can meet. succession planning and how the fam- in cement across India, eyeing a capac- Goenka says Agarwal’s undisputed Every year, at Durga Puja, the two ily will manage the group in future is ity of 20 million tonnes per annum in position ensures disagreements can extended families take week-long va- an unresolved question. The second another three years, having already find quick solutions. cation together. Usually, a resort — or need generation tried to discuss it among hit a turnover of `2,000 crore. As his senior, Agarwal had taken part of it — is booked and the family themselves but results were unsatis- Emami Group is also the largest Goenka under his wings while the mostly stays indoors, enjoying compa- ollar factory. “It’s a sensitive issue,” he says. manufacturer of newsprint in India two were studying at Maheshwari niable meals and playing cards. One Harsh Agarwal, who works for and has had brief dalliances with steel Vidyalaya in Barabazaar. By the six- meal during the vacation is inevitably Emami along with Mohan, says he and mono-filament yarn too. ties, both became chartered account- cooked by the men of the family! prefers the seniors handle the issue. Even Emami is looking to move ants and had separate jobs, but their “We are not supposed to plan any- ructure “Each one of us have specific roles strongly towards FMCG, soaps and friendship had only become stronger. thing else during that week. We all assigned to us, which is substantial shampoos for expansion.