Taking the road less travelled

If there?s one thing that strikes you immediately on meeting Sanjay Lalbhai is his ability to laugh at himself. The head of India?s largest denim and textiles major is, in fact, brutally honest. Prod him a little about the much-in-the-news Vedanta-Cairn acquisition story and pat comes the reply, ?India is a growing economy with a multitude of growing opportunities and there?s no reason why you can?t pull off such a deal, provided you have deep pockets and the entrepreneurial ability to take risks. In any case, Vedanta is not the first one doing this?look at the Tatas, Reliance, Essar and Adani?they are present in fields as diverse as telecom, refining and retail and are creating value in all segments where they are present.?

But it?s what he says after that which stuns you into silence, for the simple reason that it?s not often that you meet a successful industrialist who is not squeamish about admitting his own mistakes. ?Do you know that way back in the Nineties, when I was grappling with the issue of Arvind?s expansion, I was actually toying with the idea of entering the telecom and refining space? However, my financial consultants, McKinsey, discouraged me from straying away from my core competence in textiles and I decided to build the Santej facility and focus on creating textiles assets instead. I regret that decision even today; who knows where I could have been had I followed my instincts?? he ruminates.

In his own way, though not on such a staggeringly large scale as Vedanta, Sanjay Lalbhai has dabbled with unrelated business as well over the past three decades or so that he?s been in the business. ?I have a passion for doing new things and experimenting with new ideas. Sitting idle gets me restive,? he confesses. The penchant for taking roads less travelled, in fact, developed while growing up under the shadow of a Colossus-like grandfather, Kasturbhai Lalbhai, and a host of famous uncles and cousins. Reveals his wife of 31 years, Jayshree Lalbhai, ?The first three years of our marriage were very tough for Sanjay. Working for a family-run organisation never came easy to him as he was, and still is, fiercely individualistic. Convention and society don?t govern him. All I remember about the early days of our marriage is his obsession to prove himself.?

Recalls Sanjay Lalbhai, ?I joined Arvind Mills as a materials manager way back in 1979, after a brief stint with another sister company under the Arvind umbrella. That was shortly after completing my MBA from Jamnalal Bajaj Institute of Management. But, I was not happy with the functional job.? To stave off boredom, he sometimes borrowed money in his name and at other times, joined hands with some close friends to try his hand at creating new joint venture companies. In partnership with some friends, Sanjay Lalbhai started Anagram Finance, a finance and broking company; Ashima, a denim manufacturing unit; Amtrex, an air-conditioner manufacturing facility in a joint venture with Hitachi, and Trikaya, an advertising company. In addition, few may recall the once well-known colour TV brand of the late ?80s, Pyramid, too, was a brainchild of Sanjay Lalbhai, as was Perfect Placement, a placement agency.

Over the years, however, Sanjay Lalbhai has exited from all these ventures. Anagram Finance, for instance, had to be sold off as a distress sale to ICICI in the late ?90s, though Anagram Broking, the successful brokerage and wealth management arm of the same company, was recently acquired by Edelweiss for a modest Rs 164 crore. Similarly, Hitachi acquired the Lalbhai stake in the Amtrex-Hitachi JV almost a decade ago. Trikaya was sold off to advertising giant Grey Worldwide, while controlling stake in Ashima was acquired by Chintan Parikh.

The forays into such diverse ventures also clearly indicate a voracious appetite for risk and an uncanny ability to take, and stick by, tough decisions. Wife Jayshree reminisces how mother-in-law Pannaben Lalbhai was instrumental in honing these abilities in her son. ?My mother-in-law had complete faith in my husband?s decision-making abilities and his fierce streak of individualism. She actively fanned and nurtured these. When Sanjay wanted to return from an Ivy League US college barely three months after he?d gained admission, my father-in-law tried to persuade him to give it at least one year before taking such a drastic decision. But it was my mother-in-law who supported him completely and called him back.?

This ability to take decisions against the tide was, in fact, instrumental in Sanjay Lalbhai?s now legendary foray into denim, that too at a time when denim was a relatively unknown commodity in India. He candidly confesses, ?Almost all my friends and relatives tried to dissuade me from getting into denim, but I was convinced about the viability of the business. I just told all nay-sayers that I had a strategy and I?d see it through.?

He did just that even during the turbulent times during the late ?90s, when the industry all but wrote Arvind?s obituary. With a growth and expansion plan gone horribly wrong and over 125 lenders baying for their money, Sanjay Lalbhai showed remarkable staying power and resilience. ?Though Sanjay never brings work pressure home, that phase was extremely rough for him,? recalls Jayshree. ?He completely withdrew into himself and became very reticent. But he kept chipping away, drawing on his inner resources of strength and kept doing whatever had to be done.? What brought him out of the abyss, she says, was his tenacity and his ability to laboriously negotiate one step at a time. ?He didn?t, for instance, try to convince all 125 lenders at the same time, but dealt with them one at a time, convincing them not to give up on him and Arvind.?

Today, Sanjay Lalbhai is busy consolidating and expanding Arvind Group. Over the years, it has morphed into a major textile player, straddling not only denim, the mainstay of its business, but has emerged a big player in the woven, knitted and technical textiles space as well. Already an over Rs 3,460-crore group, Sanjay Lalbhai plans to steer it on a growth trajectory, which would take it to Rs 8,000 crore by 2014-15.

But somewhere along the line, business has lost its glamour for the denim czar, who can?t wait for his two sons to take over the reigns of his empire so that he can devote himself totally to corporate social responsibility projects and spirituality, which have become his latest obsessions. That?s not to say that creating new ventures doesn?t fire his innate passion for promoting new ideas. Only recently, Arvind has forayed into realty to optimally utilise the staggeringly large land bank that the company owns. In addition, Lalbhai has taken a first tentative step into organic cotton farming as one of his largest CSR initiatives so far. The company is actively working with poor farmers of the Vidharbha and Akola regions of Maharashtra to promote organic cotton farming. ?We have some 30 agronomists working with over 3,000 farmers of these regions, which account for the largest number of farmer suicides and provide them with technical assistance to grow organic cotton, which we then buy from them and supply to huge retail giants like Walmart and H&M for their organic clothing lines,? he enthuses. He is clearly upbeat about this project, which will touch and improve the lives of over 25,000 people in these impoverished regions. Plans are also afoot to grow other organic rotational crops on this land and package and supply it to retail chains like Reliance and Spencers under the brand name Pure Farms. Admits the proud father, ?This project is actually a brainchild of my older son, an environmentalist from Yale who, as a naturalist, has lent a completely new dimension to our business.?

Another lesser-known fact about the Arvind chairman is that he?s passionate about reforms in the education sector as well, or about ?giving shape to ideas and dreams of Gen Next?, as he succinctly puts it. With this in mind, he?s launched Knowledge Academy, an educational initiative which would provide certification and financial planning courses to make youngsters graduating with ?plain BA or B.Com degrees more employable?. For the man who?s credited with making denim a fashion statement in India and is now a major supplier of various types of denim to designers and brands the world over, India is on the roll. ?What the US once was, India is going to become,? he predicts with total conviction. And, when it does, he?s taking steps to ensure Arvind will be in the warp and weft of the country?s growth story.