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The Economic Times

Date: 12/06/2018 Page No: 11 Location: Main Circulation: 153922

Edition: Mumbai

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 Suman Layak ity cosmetics," as Agarwal describes Other businesses include edible oil, them, often sold for 73-4 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 720,000 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 now pushing a valuation of reers blossomed. By the mid-70s, ?60,000 crore 760,000 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 EWhile 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 toedible oil. go, with borrowed money, a new brand, Agarwal The ea rly secret of success was a clas prem ium packagingand 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 creams. It helped distinguish Emami Over the years, Agarwal and Goenka for lunch together at the office 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 bondingall the time. 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 ing hours at the family shop seUing toi (though bulk of the executive powers Corporate Clan A family council comprises everyone letries in a-Kolkata bylane. are with RS Agarwal and RS Goenka) FOUNDERS Radhe Shyam Agarwal, in the family The creams grabbed more than 5% for theflagship 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 timelucky. For, the real secret For the second generation, initia business decisions sauce for the success was friendship. tion into business started early. Priti SUSHIL GOENKA: RS Goenka's Sureka, Goenka's daughter and the youngest brother, is managing In 1974, Agarwal and eldest amongthe 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 given small tasks to perform." diversification is seen as one way of MOHAN GOENKA: Sales, distribution premium packaging and For the boys, the routine in the mid- managing the future. The Emami pricing, big commissions nineties was to attend morningclasses 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 offices. They grew up AGARWAL: Classmates through touching 715,000 crore in 2017-18 and magic fragrance, firdous handling little details like despatch, school and college, they have moved Emami Ltd's turnover at 72,530 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 ties, they felt the need for a venture, to Aditya) Vibash walked in wearing a HARSH AGARWAL: 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 AmitabhBachchan 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 membersof the Today, there are more rituals - like and RSGoenka; (above L to R) Harsha marketed at less than 7100 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, MohanGoenka a turnoverof713,000 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 biodiesel project; Emami promoters CEO from the group is invited to join. tive roles in the flagship company to did a smart pivot when biodiesel busi BOND, EMAMI BOND There is also aformal business coun handle theother businesses-namely ness did not ta ke 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. processingequipment 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 pla nning 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 You don't need an unresolved question. The second another three years, having already find quick solutions. cation together. Usually, a resort—or generation tried to discuss it among hit a turnover of72,000 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- a million dollar 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 andhas had brief dalliances with steel Vidyalaya in Barabazaar. By the six mealduringthe 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! IT infras ructure 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 "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. ET met with the duo in Kolkata, at have to be present for this," says to have enough for us," he says. However, it has all not been smooth Agarwal's new house on Ballygunge Manish, younger son of RS Goenka. Mohan points out, "There is no clear sailing. In 2011, after a fire at AMRI, Circular Road, named Adwait (mean Many other things are forbidden - leader among us. We are all the same a hospital run by the Emami Group, ing, united), where Agarwal and like buying expensive cars or show techno^' age, wecame into the business almost both RS Agarwal and RS Goenka were Goenka displayed all signs of their ing off. In fact, cars are a llotted by the arrested, along with others from the decades-old camaraderie. families depending on need. Family Agarwal and Goenka second generation. The tragedy was In what looked like a practiced rou members are not allowed to make edge the largest hospital conflagration in tine, Agarwal said, with mischief in investments in businesses outside have tried hard to Innovate Fast and India, claiming the lives of 92 patients. his eyes, how he used to lead theschool Emami, or give unsecured loans. Today, Goenka says one has to experi Secure With keep the two families teams in almost all sports—football, ence jail to know what it can be like. NxtGen Cloud together and bonded. cricket and hockey — and Goenka BREAKING BUSINESS Nonetheless, despite challenges and added without batting an eyelid, "Oh, The second generation, Manish .Computing Solutions. There is a clear division the fact that Agarwal has not been keep that wasall his dadagiri. Do you think Goenka and Aditya Agarwal, can ing well, the founders seem serenely anyone can be the best in allsports? " give Emami watchers a sense of deja of responsibility among unhurried about settling succession. In 1968, the two started a cosmetics vu. The two were classmates and even ww/w.nxtgen.co key family members, Perhaps, they have a plan. Or perhaps business alongside their jobs. It wasn't benchmates at South Point school and they believe the bond of brotherhood called Emami then; the first brands then at St Xavier's College. Around a two councils and a they haveforged within the family will were Kanti and Bulbul. "Cheap qual- decade ago, theduo moved out of execu- healthy dollop of rituals seethe Emami Group through.

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