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"mr.r.always a Step Ahead" – an Entrepreneural Case Story

Mrs.Thamaraiselvi asked:

MR.R…….. Always a step ahead!

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Ms.R.Thamaraiselvi

MR.R…….. Always a step ahead!

Case Summary

Coimbatore, the entrepreneurial belt in South India has breaded numerous entrepreneurs during the decades. One such individual was identified to develop into a case. “Mr.R……Always a step ahead!” brings out the real life experience, efforts and outcome of a young technical entrepreneur located at Coimbatore. It narrates his humble beginning with a focus into various factors that influenced him to venture into business. Three different units were established by him during a short span of fifteen years. Autocoats was established in 1989 as a service provider to the painting requirements of pump, automobile and textile industries. Associated Autotex Ancillaries (P) Ltd established in the year 1992 manufacturing bobbin holders and other related textile machinery accessories. 2001 Good luck Syndicate was setup to produce FMCG product, namely mosquito coils and liquid. All the endeavors turned to be a success story. The main aim of this case-let is to highlight and inspire young management students to transform into entrepreneurs by taking the leads found through Mr.R’s experiences. Mr.R could be a role model for budding entrepreneurs who may gain insights into starting a business and strategies to manage with competitive advantages.

Introduction:

Coimbatore -a city in the southern region of Tamilnadu has transformed itself into one of the ten highly industrialized cities in the country and now ranks fourth in terms of the potential for growth. The most striking feature of Coimbatore has been its diversity, enterprise and resilience. In its rise from strength to strength it converted to advantage even its disadvantages. Coimbatore district has achieved sustainable growth by a variety of industries ranging from the traditional cotton textiles industries and foundries to the manufacture of electric motors, pumps, automotive parts and accessories, consumer goods and computer peripherals. It offers unlimited opportunities to the entrepreneurs with diversified industrial activity and an innovative entrepreneurial spirit. There are, of course, countless success stories For instance, Mr.Ramanujam, Managing Director of Associated Autotex Ancillaries (P) Ltd. was chosen and considered in this case description. His initiative, growth and achievements during the last two decades are narrated in detail below.

Mr. Ramanujam is a Coimbatore bred technical graduate. In his newly built administrative office, sitting in his executive chair, he looks with satisfaction and pride at the upcoming three storeys building, which is fully modernized for his business operations. He subsequently thought, about his career and its development during the last two decades. Munching those thoughts was like recharging his potentials for further endeavor.

His thoughts went rolling to 1985. He was then a young, energetic technocrat working as an assembly manager in a Textile machinery manufacturing unit at Ganapathy, Coimbatore. In those days, his urge to start his own enterprise, something new and which was not available in Coimbatore, propelled him to look for opportunities. Incidentally, he identified a great opportunity in a news paper article about powder coated painting process.

He recalled his memories about those days, wherein motor and pump industries in Coimbatore were highly dependent on small and medium engineering (SME’s) units only. They did not own their own paint shop and thereby owners sought the help of part time painters for this purpose. Painting was more of conventional method and more dependency on painters was felt difficult during heavy demand periods. His entrepreneurial character sparkled in him to start a powder coating unit “Autocoats” – a commercial painting unit based on job orders. This was the first of its kind in Coimbatore!

Mr. R recollected as to how well, he had grabbed this opportunity to set up a powder coating unit with an electro static process in 1989 at Peelamedu with an initial Capital of Rs.5 lakhs. His investment included Rs.2 lakhs of his own and Rs.3 lakhs mobilized from bank. The company started to function with the objective of:

– Adaptation of the product and tailoring of coating in accordance with customer needs.

– Taking care of pollution worries.

Initially, marketing was conducted on door to door basis and gradually captured a place in the market. The company had a take off with the motto

“Try our coatings – Try is ensuring

See the difference – Seeing is believing”

It was a great start for him with lot of job orders flowing on his way. He managed to achieve tremendous success with just 10 employees. It was right solution for people who could not afford to have their own paint shop. Thereby motor and pump manufacturers brought their output for painting work creating enormous demand. He justified his success through proper marketing and appropriate quality combined with timely delivery.

Later on, they started serving OEM, industrial and commercial customers with Hi-tech coating solutions. It was a successful endeavor with an ability to secure regular job orders from several OEM giants like Lakshmi Machine Works (LMW), Jeetstex engineering and Sharp group of companies. Also multinational corporations like Bonfiglicli Transmissions Pvt Ltd, Reiter-LMW Ltd.

From the humble beginning as pioneers in this field, Autocoats has developed into one of the leading powder coater with widest range of industrial and comprehensive coating system. After achieving the break even point in five years, the company has grown with 50 employees and turnover of Rs.1 crore in the year 2004. The Fig 2 brings out the sales turnover of Autocoats between years 2000-2004

Mr. R enjoyed the state of monopoly for two years after which few others slowly ventured into the trade. Now, Autocoats has developed into one of the leading powder coater with a widest range of industrial castings and comprehensive coating system starting from Zinc chromate / oxide, Stoving enamel, Polyurethane and Electrostatic power coating.

Fig 2: Sales turnover of Autocoats

In this context, Mr.R is confident of attaining a turnover of three to five times of the current potential with the expansion of Autocoats, using conveyor belt in the forthcoming production process. Also they have an immediate plan to give a face lift to Autocoats by shifting its operation to a new building

Then his thoughts slowly shifted to dwell in depth, the reasons for diversifying his business and how he emerged into a new sector relating to Textile industry. In the art of industrial coatings, there was heavy demand for job orders, but however there was also an inbuilt uncertainty with erratic schedules. At times, they had to wait for orders and other times they were unable to manage the flow of work orders. And so it was more dependent on customers and this made him to think that he cannot continue in the same manner for a longer perspective.

Mr.R thought about how he ventured into a new business owing to these reasons and what factors made him to choose the kind of business. The ideas that were lingering in his mind included-

• It should be their own product

• A light engineering product

• Less dependent on labor and more on systems.

Then he landed up with Autotex.

Coimbatore, the textile hub of South India encouraged him to initiate and produce textiles related product. Guided by the thought that bobbin holders were procured by his previous employers from a manufacture in Ahemadabad from Gujarat, persuaded him to try out manufacture of bobbin holders. Mr.R was reminded of those days when, with an init
ial investment of just Rs.5000/-, how the product was designed and tested for its acceptability in the market for about one year. He was also r
eminded of how he had toiled 12 to 15 hours of initial working with commitment, which has resulted in his present achievement.

Based on the results, Autotex Ancillaries private limited was promoted in the year 1992 with an initial investment of Rs.25 lakhs and with 25 employees. The objective of the unit was to manufacture sophisticated plastic components to serve the textile and engineering industry. The resultant outcome was bobbin holders, fluff protectors and plastic automobile components.

Mr.R took over as the first managing Director of the concern. He takes care of CAD, new projects, personnel, and marketing activities of the organization. Mr.R Director of the company was involved in the administration and Finance function of the group. The General Manager who reports to the Managing director takes care of purchase, stores, and assembly and moulding activities of the concern. (Fig 2) Mr.R takes the pride about his company that has grown to be one of the leading suppliers to OEM of Textile machinery manufacturers the world over within a period of ten years.

Fig 2: organization chart of Associated Autotex Ancillaries (p) Ltd.

His major achievement was the development of designed patented Bobbin holders indigenously and further, successfully captured 90 percent of the global requirement. The bobbin Holder with multi break system was the first of its kind was also patented by the organization. They were also the first to secure ISO-9001 certification in this manufacturing segment.

Since inception, Autotex stands always a step ahead in understanding and fulfilling the customers over increasing demands by providing products with outstanding performance and new innovations in bobbin holders. Presently, there is about 124 employee strength and the company had achieved steady growth right from its inception from 396 lakhs to 750 lakhs in 2004-05.

Transformation and acceptability for auto bobbins came to Autotex, when their product was accepted by Reiter the textile machinery manufacturers of Switzerland. In 1994, though only 5000 units were exported to them it was a great breakthrough for Autotex. The other OEMs of textile machinery in India also accepted Autotex for bobbin holder supply. From then on, it was a success story for the organization. It has reached a production of 12000 units / day in 2004 from the start of 50 units / day.

The major scouring for their product was through exhibitions and direct marketing. They channelized their domestic sales and distribution through agents who are already dealing in textile accessories. The expertise, skilled and efficient manpower with added features of quality, service and continuous development programs have contributed significantly to the position of eminence and the trust of client’s world wide

Today the reputation of the company rest on their quality products, customer service and response levels world over. Their global network includes European, Asian, South American and South African countries. Owing to the meticulous effort of Mr.R in procuring export orders, the company has been accredited with EEPC (Engineering Export Promotion Council) regional award for export excellence for the consecutive two financial years.( 2002-04)

. Fig: Indicating Mr.Ramanujam with his working team

Table-1: Showing the sales turnover

Financial Year Sales value

(in Lakhs)

2000-01 396

2001-02 403

2002-03 555

2003-04 628

2004-05 750

The organization also expanded its service to manufacture Ring frame Tubes, Dye Cones, and Cheeses to cater to the Textile Industry. Now Mr.R, the Managing Director of the group is currently planning to move to large scale manufacturing of ring tubes, Simplex bobbins, separator card case production and other accessories.

MR.R thoughts were now on how he established the third unit. In 2001 after confident that stabilization in both the ventures were achieved efforts were made for diversifying. Guiding factors here included: to go for a product which is really consumable and it should come under the FMCG category.

He thought about how much time he has spent initially to study rigorously the details for the new venture. Yes! it took nearly a year to study about mosquito coil manufacturers, their problems, their sustainability, production technology from the machine manufacturers in Malaysia. So the venture took its shape in 2002 for the manufacture of mosquito coils and liquid vaporizer.

GOODLUCK SYNDICATE was established during the year 2002. This was started with an initial capital of RS.50 Lakhs. They were launched in the brand name of GOODLUCK and MAJOR. During the maiden year of operation the organization was able to achieve a turnover of 250 lakhs by which it was able to secure Third place in the state of Tamilnadu. Second year the unit was able to double its turnover in spite of stiff competition from multinational brands available in the market.

The Reasons for success of this venture flashed one after the other in his mind: efficient technical persons with sound knowledge in manufacturing quality coils suitable for remote pockets of the state and 40 experienced sales personnel who were able to penetrate the market were all responsible for the success of the unit. The unit made inroads market into the neighboring states of Tamilnadu, namely Kerala and Andrapradesh. It is also planning to enter the international market in the recent years. A great pride and satisfaction engulfed him at the recollection of his memories. Then he further thought, there are still miles and miles to go ahead with lot of avenues wide open in front of him.

Conclusion:

Mr.R, a Coimbatore bred entrepreneur has thus shown a remarkable ability to survive crises by adapting and innovating. The result is a big entrepreneurial success at the international level. This is widely held to be the main reason for the entrepreneurs of Coimbatore going global ahead of the country.

Questions for discussions:

1. Identify the entrepreneurial traits of Mr.R ?

2. What are the insights one gains through Mr.R’s experience?

3. Is the growth and success of Mr.R during this time period, compatible with Indian industry standards?

4. Comment on his marketing strategies.

5. If you were in Mr.R’s position, what may be the new paradigms for the competitive business world in 2025?

References:

1. Krishna Kumar Asha, 2002, Enterprise and resilience, Frontline, Vol 19, issue 20, oct12-25.

2. Krishna Kumar Asha, 2004, Enterprise and resilience, Frontline, Vol 21, issue 02, Jan 17-30.

3. Krishna Kumar Asha, 2005, Enterprise and resilience, Frontline, Vol 22, issue 03, Jan 29-Feb 11.

4. www.coimbatorecity.com

5. www.autotex.net

6. www.lakshmimach.com

Annexure

Sl.No Name of the Company Details

1. Lakshmi Machine Works LMW is the leader in the manufacture of textile machinery, CNC machine tools and metallurgy products with numerous high profile diversified activities with 60 % of market share in the domestic textile machinery industry. LMW also has global presence over the past seven years.

2. Sharp Group of companies Sharp are the leaders in the domestic water pumps and agricultural water pumps. With its brand well known among the households for Monoblock water pumps in India, has flourished successfully in the pump industry.

3. Jeetstex engineering limited Jeetstex Engineering Ltd started in 1978 is a Manufacturer & Exporter of Textile Machines and Importer of Textile Machinery Components. After a long stint, its turnover is turned to be several crores now.

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