Monday, August 1, 2011

[ZESTCaste] How dalit entrepreneur Kalpana Saroj revived Kamani Tubes Ltd

How dalit entrepreneur Kalpana Saroj revived Kamani Tubes Ltd
Naren Karunakaran, ET Bureau Jul 29, 2011, 03.34am IST

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.

How dalit entrepreneur Kalpana Saroj revived Kamani Tubes Ltd
Naren Karunakaran, ET Bureau Jul 29, 2011, 03.34am IST

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

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

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.

...And through it

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.
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"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.


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