Thursday, September 07, 2006

“I pay for all products I take home for personal use!”

Meet your buddy, Vol 5: BV Ramanan

For most alumni BV Ramanan needs no introduction. He has been the most visible face of RECAL over the years. While we all know BV Ramanan for all he has done for alumni network – literally enabling a ‘phoenix’ – and as an active member of NIT Trichy board of governors, not many people are aware that he is an equally successful entrepreneur too. His company Livia Polymer Bottles Pvt. Ltd garnered revenue of Rs.250 million in last financial year and is projected to grow to more than a billion rupees within next 4-5 years! He has also been contributing to development of industrial ecosystem of Trichy as Chairman, Confederation of Indian Industry, Trichy region.

Even though the passion with which he is involved with the alumni activity is difficult to ignore, in the following interview we focus more on the entrepreneur named BV Ramanan. Needless to say, he is exemplary even in that facet of his persona.

Ramanan’s father was one of the first set of Engineers who started BHEL Trichy. He had mentored a large number of BHEL’s ancillary companies, most of them in and around Thuvakudi Industrial Area. Ramanan had seen entrepreneurs lining up his home right from his childhood. It was in those days that he learnt his first few lessons in entrepreneurship. He graduated from REC Trichy in 1981 with major in Chemical Technology. Thereafter he went to get a postgraduate degree in Chemical Engineering from University of Calgary, Canada. On returning, he worked with Chemfab Group to set up a large caustic soda plant in Pondicherry, called Chemfab Alkalic.

Later, Ramanan was also involved with Indian space department’s cryogenic fuel project and it was here (DRL, Hyderabad) that he got a chance to interact with Dr. APJ Abdul Kalam, honorable president of India. Thereafter, he went ahead with the plan of setting up Livia Polymer.

Livia Polymer had its beginning and growth despite the clutches of license raj in India in 1989. Those days, the only semblance to a venture fund was Government of India’s IDBI – Seed Capital Assistance Scheme. A 15 member panel used to interview (grill!) each aspiring entrepreneur and one was expected to know each and everything about business from finance to engineering – financial projections, robustness of business plan etc – plain technical stuff was just not enough for them!

Today, Livia Polymer is South India’s largest manufacturer of ubiquitous PET bottles. Almost 75% of packaging of UB group in south India happens in ‘LivPET’. So, the next time you are ordering the “No.1”, you may actually be giving business to Livia Polymer!

Here is a glimpse of our interaction with him over breakfast table at The Richmond Hotel in Bangalore:

Mr. Ramanan, it all looks rosy when you see the present day success. Tell us something about grueling days of the entrepreneur.

Livia Polymer’s present day success is no joke. Firstly, we had to import technology from Japan which was a major problem in those days of license raj. Then, in the initial 3 years of operation it went almost broke as the market in India was nascent and there were hardly any products to be packaged in PET bottles. In 1991, Livia Polymer cracked big business deals with Hindustan Lever Ltd. for packing Flora refined oil and Pondicherry Mineral Waters. With 1996 came the path-breaking deal with the UB. After that there has been no looking back.

But basing an industry in Trichy might have its disadvantages…

No, in fact quite the contrary. Trichy is a centrally located place with respect to Bangalore, Chennai and Cochin. And these days, distance doesn’t matter in supply chain. Initially, Government of Tamil Nadu had given us some sops for locating the industry at its present location in Pudukkottai district. That allowed us to stay afloat even during bad times.

India has certainly proved its prowess in services. What is the future of manufacturing in India?

Indian industry’s strength has always been its scalable manufacturing operations. It will continue to thrive on manufacturing. As you can see, of late, the thrust has been put on manufacturing too. It was feared that liberalization will kill Indian Manufacturing companies. On the contrary, they have grown a lot.

What steps should one follow to set up a long-lasting business?

My experience as a first generation entrepreneur has been that one should not try to take money out of the system in the beginning. If you have a credible business plan, it makes sense to test it yourself for soundness of approach. These days it is not difficult to get money once you have a good idea. What is important is to maintain a ruthless approach towards finance. One should be extremely careful and critical of the money flow.

What is the message you would like to give to other budding entrepreneurs?

First and foremost, I would like to say that with great power comes greater responsibility. Entrepreneurship gives you a lot of freedom and it is very easy to get complacent and casual after you are through the initial round of struggle. This is the prime reason why most companies do not survive more than a decade. For example, most entrepreneurs make a mess of their company’s finance by drawing increasing amount of money out of it rather than putting it back into the system.

Livia Polymer has been exemplary in announcing its audited financial results every 1st April while most companies take a quarter or two more. With Livia Polymer, we are also able to rotate the same working capital 10 times over in a single financial year. This means that a working capital of Rs.2.5 crores is used to produce the same effect of Rs.25 crores!

Secondly, entrepreneurship offers an immense opportunity to learn. While it is imperative that we learn from our mistakes, we should not let us make them too. One should learn to persist even when everything seems to be going down the drain.

Once the company reaches a steady state, it should be left to run completely by professionals. I have managed to delegate almost everything and the only role I practically play at Livia Polymer is that of a ‘logistic manager’. This is opposite to the tendency among most entrepreneurs who tend to hold it closely. Doing this also allows you to the leisure time to ‘dream’ and spend time with family. All my Sundays are reserved for family.

Even when I, along with my family, am the 100% shareholder of Livia Polymer, I always present all my bills of my outstation trips the very next day of my arrival at Trichy. And so do all my managers. I even pay for all products I take home for personal use! This kind of prudence has helped us tide through the bad days with relative ease.

Another important area in which one can make a difference is employee care. The school fees of children of all 170 employees are paid by me. The net result is that I have an enviable attrition rate of nearly zero. I believe that the role of MD/CEO is just like another employee in office. As a policy, we shun the practice of giving bribes. I am proud to say that all this has been done without giving a single rupee of bribe! Such integrity, commitment and consistency will take an entrepreneur a long way.

I have come to believe that the value system in a company should be established right from the day one. This thing is difficult to keep but each one of us is proud of being squeaky clean in our operations. Even the tax office certifies us!

What is up next for Livia Polymer?

As the technology and market changes, newer products and requirements come up. But the basics remain the same – any new technology should cut costs. Recently, we signed a deal with Perfetti – the makers of ‘Mentos’. Earlier these products were solely packaged in sachets/glass. Then, there are smaller, lighter packaging for cosmetics like Parachute hair oil which we will increasingly target.

In other industries, I was considering setting up a remote disaster management service company for IT companies in Chennai, Bangalore and Pune to secure their data at Trichy. However I am aware that while the safety net is slightly better in manufacturing – allowing you to stay afloat for a few more days – services business is a different ball game altogether and is fiercely competitive.

When you are talking to BV Ramanan, it is difficult not to ask him about his vision for NIT Trichy. Could you please elaborate on what changes are coming up in the campus?

Recently, the board of governors of NIT approved a three point plan for NIT Trichy:

1. Infrastructure: We intend to add close to 2000 rooms in the campus in next three years. We are committed to providing better quality food to the students and pilot project in this direction had been launched already. NIT Trichy is going to be the first smart campus in the country. A preliminary proposal in this regard has been in principle cleared by the Ministry of Communication and NIC will be the coordinator.

2. Virtual Education: NIT Trichy can be one of the leading institutes in providing content to the EduSat program. Earth link and necessary infrastructure is already available in Octagon.

3. Quality of education: We have committed ourselves to the goal of securing at least one IP of our own before 2010. All the departments have been asked to benchmark themselves against the best department in the world, do a gap-analysis, and present a plan for bridging this gap substantially in next 5 years.

What do you think should be done to increase alumni’s interaction with the campus?

I believe that institute has to play the central important role in making this happen – that is where our heart is. Alumni should be invited to participate in all important events of the institute. A specific role for alumni needs to be defined in the curriculum setting. Most people remain unaware of what is happening inside the campus. A periodic communication should also flow from institute to the alumni.

What are the steps being taken to bring more industries at Trichy?

Tamilnadu government is working on an ambitious airport expansion project for Trichy. An investment of Rs.75 crores has been made for new Terminal to handle 150 passengers at peak hours. This work has already been started and slated to be completed by the end of the year 2007. We at CII-Trichy, were able to bring focus to the need for a much larger airport, keeping in mind the future requirement of Trichy. The Louis Berger Group from the US (the consultants for Airport Authority of India) have already been brought to Trichy and the proposal for about Rs.550 crores will be presented to the Minister of Civil Aviation for the next phase of expansion which needs to be completed by the year 2010.

Currently Trichy airport receives about 30 aircrafts a week, which will go up to about 69 aircrafts a week by the end of the year. Trichy airport, by the year 2008, must handle atleast 150 aircrafts a week, both national and international.

We are also promoting Trichy as an alternative industry destination. An IT Park is to be located on a 50 acre campus with the Tamil Nadu Government chipping in with a Tidel Park (similar to Chennai). Many software giants like CTS, Wipro, and Infosys are increasingly showing interest in Trichy.

The energy equipment manufacturing sector in Trichy is doing extremely well, what with BHEL and its ancillary units. In fact, many ancillary units have graduated to become large scale units with turnover poised to reach Rs.200 crores each. The energy equipment manufacturing sector will deliver Rs.7000 crores worth equipments this year and is poised to touch Rs.15000 crores by the year 2010.

I am sure that in future, Trichy will be able to regain its past glory as the industry town of Tamilnadu.

[BV Ramanan lives in the outskirts of Trichy and would love to get in touch with you. He can be contacted at ]

[We are thankful to all your suggestions. Please keep your enthusiastic support flowing in. If you know a luminary alumnus whose achievements deserve publicity, do let us know.]

Anurag Saxena (Meta 2005)
IBM India Pvt Ltd.

Arpit Agarwal (ECE 2005)
Ittiam Systems Pvt Ltd.

6 Comments:

Anonymous Anonymous said...

It is always good to go through the success stories of NITT alumni. A commendable effort from arpit and anurag. Keep up the good work.

1:31 AM  
Blogger sandy said...

great stuff! it was both enlightening and encouraging...keep up the gud work.

3:43 AM  
Anonymous Anonymous said...

This comment has been removed by a blog administrator.

10:14 AM  
Anonymous Anonymous said...

It's fantastic to hear on your comments on Trichy and it's great potentials, with which, wish to look forward in seeing Trichy, next to Chennai, Delhi or Mumbai, in the World map.CHEERS&GOOD LUCK.

Thanks & Regards,
A.Maran

5:24 AM  
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