Chennai-based Take Solutions, a provider of supply chain management and life sciences products, has this year alone received several awards. It has bagged the Madras Management Association award 2010 for Managerial Excellence in the services category and has been given the 2010 ?Editor?s Pick? distinction by the Consumer Goods Technology magazine. It has also been recognised as one of the Top 100 Logistics IT Providers by Inbound Logistics magazine. Its vice-chairman and vision holder HR Srinivasan is the recipient of the CII Tamil Nadu Emerging
Entrepreneurs Award, given in association with The Hindu Business Line.
All these honours have been coming regularly to Take Solutions and its promoter Srinivasan for several years. The company was founded in 2001. Within 10 years of being founded, it has emerged as the leader in its chosen area. Its competitors are from South-East Asia, Europe and the US, not India. Considering that it works with the manufacturing sector and 65% of its business comes from the US, it rode out the downturn quite successfully making one understand why the company wins awards.
Take Solution?s Srinivasan claims he never meant to be an entrepreneur. His father was a government servant and following suit, Srinivasan joined the Indian Railway Service. He lasted seven years there. He then wanted to move to the private sector and took up a job in the Chennai-based Shriram Group. The group?s chairman, R Thyagarajan, became his mentor and encouraged him to do something on his own. Thyagarajan saw the spark in Srinivasan even before he himself did.
Srinivasan then moved to Sembpark Logistics in Singapore and on to Temasek Holdings, the company that owns and manages Singapore government?s direct investments, both locally and overseas. The Singaporean experience gave Srinivasan an insight into how technology can be used to improve the efficiencies of a company and also how it should be used from the domain side. By 2000, Srinivasan and 20 of his colleagues from Sembpark were ready to launch an enterprise to provide solutions in the logistics area. A colleague and him put in the initial capital from their savings, and mentor Thyagarajan stepped in with funds. The others received sweat equity. The Shriram Group still has a stake in the company. In 2001, Take Solutions was launched.
Although the US is the most lucrative market, Srinivasan decided that they should tap the Asia-Pacific market first. The first three years focused on this region. ?My strengths were in the Asia-Pacific region,?says Srinivasan. This strategy paid off. Take Solutions made profits in the shortest possible time and was ready to enter the US market. In 2004, the company started thinking seriously about how to crack the US market as none of the original team members had any experience working or doing business in that country. They could either build the business from ground level up or hire an expensive team in the US and manage them. Neither was a viable option. ?We were not good at remote management. What we had going for us was that we knew how to work with each other. We came with the domain knowledge of supply chain. So we decided to look at a similar team in the US.?
Srinivasan says that purely by chance they came across a team very much like theirs with a similar ethos. It was a much smaller company headed by an Indian-born American and was in the life sciences space. ?We moved in with a set of people with whom we could create value in a unified company. They also knew how to operate in that geography.? That is how Take Solutions got into the life sciences space. Take Solutions entered the US market in 2004 itself.
The American operations went smoothly, the company was getting known as one of the fastest-growing IT companies in India (it got one of the top rankings by a Deloitte study for several years running) and then the downturn happened. ?To be honest, none of us saw it coming,? says Srinivasan. Take Solutions does not export services but products. It provides software solution packages in logistics for the manufacturing industry. It was both manufacturing and production that crashed badly in the US. If you do not produce, you do not have to transport. So supply chain was the worst-hit and the customers were not buying. For the October-December period in 2008, the company?s revenue was at Rs 99 crore. It dropped to Rs 54 crore in the next quarter. However, the company did not make a loss.
How did they survive the downturn? ?As an institution we are a frugal company. We are frugal during good times and bad times.? The company never sacked anybody, either in India or the US. The top twenty took a 20% pay cut and there was a wage freeze for the others. The management decided to put the revenue on stream and then work on profits. It took them four quarters to do that. They changed the business model, put more focus on intellectual property (IP) and licence sales and re-engineered their products and processes. Srinivasan feels they are far more competitive today than they were in 2008.
The results showed. The consolidated revenue for the year ending March 2010 was Rs 366 crore, up by 8% compared to the previous year. The company?s net profit, which was Rs 32.4 crore, did decline (33%) due to the steps taken by the company to increase its market presence. But profits are back on stream. It has reported a net profit of Rs 12.2 crore for the quarter-ended March 2010, which is nearly three times higher than the corresponding quarter last year. Revenues increased by 87% to Rs 100 crore.
Buyer behaviour is improving in the US. Things are certainly looking up. The company has 18 products in the supply chain area and two in life sciences. It has two patents pending and plans to file more patents, and create serious IP. It has entered into a strategic alliance with Reliance Life Sciences. The original twenty who started Take Solutions still remain with the company. ?We still feel the same passion,? says Srinivasan.
sushila.ravidranath@expressindia.com