NSE2ZOOM: How dalit entrepreneur Kalpana Saroj revived Kamani Tubes Ltd

Sunday, August 16, 2015

How dalit entrepreneur Kalpana Saroj revived Kamani Tubes Ltd

Navinbhai Kamani doesn't betray any emotion over the fate that has befallen him and his industrial empire. Now, in his eighties, he has "detached" himself from the past; the glorious years when Ramjibhai Kamani, his father, rubbed shoulders with Gandhiji and later Pandit Nehru, paving the road for an industrial India, along with the Tatas, Birlas, and the Bajajs. "Father even stepped out of business for a while, taking to spinning khadi in rural Gujarat," he recalls.

Navin bhai now leads a spartan life in a rented house in Mumbai's Worli amid constant threats of eviction. The fact that, in June 2011, the Board for Industrial and Financial Reconstruction (BIFR) released Kamani Tubes Ltd (KTL), a group company comatose for decades, to chart an independent course doesn't stir him at all. As chairman of KTL, he had handed over his embattled company to workers in 1988, after a prolonged spell of labour trouble.

A Supreme Court-directed move, it was then hailed as a bold experiment in worker ownership and management. Unfortunately, KTL, which made non-ferrous metal tubes and pipes, hit the rocks within a decade, with the company retiring sick in 1995. Yet, when the stoic Navinbhai learns that the current KTL chair, Kalpana Saroj, who bought the company and nursed it back to health in a daring revival scheme, starting 2006, is a dalit, he perks up and his brows rise.

"She is a dalit?" he whispers incredulously, and recounts how Saroj visited him some time ago to write out a cheque for Rs 51 lakh — his dues, including provident fund, as part of the KTL restructuring exercise. "Navinbhai's financial condition was precarious; and I presume the money did him some good," says Saroj, sitting in her well-appointed office, once the boardroom of the Kamani group, at Kamani Chambers, in Mumbai's Ballard Estate.

She, still immersed in the minutiae of blowing life into the company, however, fails to comprehend the significance of the situation; a dalit, once a denizen of the city's slums, bailing out the scion of a once mighty industrial empire, and the recipient expressing silent gratitude! Kalpana Saroj of Kalpana Saroj & Associates (KSA) has indeed traversed quite a distance from Murtizapura, a hamlet in the interiors of Maharashtra.

Today, she presides over varied businesses. The single factory Sai Krupa Sakhar Karkhana in Ahmednagar, in which she holds a substantial stake, is graduating to an integrated sugar complex.

Capacity has been enhanced to 7,500 TCD (tonnes of sugarcane crushed per day), and a 60 KLD (kilo litres per day) distillery is coming up. "We are also building a 35 MW co-generation power plant," she says.

A diversification into steel manufacturing and mining has come about recently. Initial investments of Rs 10 crore for a 100 tonnes per day steel plant has been made at Wada, on the outskirts of Mumbai. A bauxite mining initiative across 1,230 acres in Udgir, along the Maharashtra-Karnataka border, is being drawn out.

Meanwhile, she has also resurrected the Kamani brand in the Gulf through Al Kamani in Kuwait and Kalpana Saroj LLC in Dubai to cater to the huge demand for copper tubes, especially from the water and sanitation sector. "The Arabs are familiar with the brand," recalls Navinbhai. "They would, in my time, often pay a premium for our products."

Daughter of a police constable, Saroj has had a troubled past. She was married off at 12, and migrated to Mumbai's slums. A broken marriage forced her to return to her village. She couldn't fit in, and therefore, attempted suicide, and survived.

Determined to chart her own destiny, she returned to Mumbai and laboured for Rs 2 a day at a hosiery unit, married again, took over a steel almirah fabrication business on her husband's death, and stumbled into the construction business. From then on, she rode the realty wave.

Alongside, Saroj dabbled in social work, which brought her into close proximity with politicians of all hues. It enabled her to climb the social ladder quickly. Her critics view this as an opportunistic trait, but it's also true that business easily cultivates friends and patrons in high places.

"My capital has always been people," explains Saroj. Her tryst with KTL was also thrown up by the ecosystem she was in. The company was weighed down by a debt of Rs 116 crore, salary and provident fund dues of over 500 workers, and over 170 court cases. "Takeover suitors would appear, conduct a due diligence and flee for dear life," recalls Ramesh Bondkar, general secretary of Kamani Kamgar Ekta, KTL's workers union.

However, Saroj bid for the company when it was put up for sale by IDBI, the operating agency of the BIFR. In March 2006, her scheme for revival was accepted. She settled all claims by lenders. Workers dues of over Rs 8.5 crore were cleared. "I paid Rs 90 lakh more than what was due to workers as a gesture of goodwill," explains Saroj.

The revival, though, wasn't easy. She has had to confront the old Kamani Employees Union (KEU), which accuses Saroj of coming in merely to strip KTL. D Thankappan, now with Delhi's New Trade Union Initiative (NTUI), who earlier piloted the experiment in workers management, has always maintained that Saroj is an interloper, with political contacts; and that, as a builder, she is eying the company's assets. Her counter: except for a 3.75 acre piece of land in Bangalore, the company has no property whatsoever. Even the land on which Kamani Chambers stands is on leasehold land of the Port Trust.

"KEU wants liquidation of the company, and not revival of the company and restoration of workers livelihoods," laments MK Gore, MD, KTL. "It's inexplicable." Even the Bombay High Court, in an order of October 2009, frowned upon the predatory petition-filing antics of the KEU and opined: "...the whole purpose of filing the petition appears to be to create hindrance in the implementation of the scheme..."

Govind Kharatmol and Ramchandra Kadam, workers who survived by driving rickshaws all these years, accuse a ruling KEU clique for ending a wonderful workers initiative by systematically siphoning out money. "They tasted blood then, and now, they want more," says Kharatmol. Saroj maintains this too shall pass. Only two of the KEU affiliated workers now remain on her rolls, and they retire by the year-end. KTL started commercial production in December 2010.

Sales are inching up; it stands at about Rs 1 crore or so. Three new gas furnaces have been installed at KTL's new plant in Mumbai. The company is quickly moving into newer areas of demand. "We are developing cupro-nickel alloy tubes, required in large quantities by power plants," reveals Ashish Deshpande, CEO, KTL. Also on the drawing board are SBP brass wires for ball pen tips. It's powering along, slowly. Few companies in India has had such a chequered history, and fewer still have such a chairperson: a gutsy, at times reckless, dalit; a school drop-out; child-bride; slum dweller; suicide survivor.