Generation Next At Dabur
Recently, management consultant M B Athreya was handed four resumes. These were not applications from job-hunters. The CVs belonged to four of the heirs to the Rs 722-crore Dabur empire. Athreyas brief: to find ways of fitting this fifth generation into a group that was working hard at metamorphosing from homegrown ayurvedic products maker to a professional consumer goods conglomerate.
The exercise was part of a build-up to a radical McKinsey-prescribed reformation that this conservative, 114-year-old family business plans to implement from April 1, 1998. For the first time, Dabur is inducting an outsider close to the top, reducing the number of Burmans on the board and setting up management committees for strategic inputs.
The question of finding roles for this current generation of Burmans is part of the groups attempts to professionalise in readiness for challenges from power-multinationals like Hindustan Lever and Colgate. At the end of the day we want to be an Indian multinational. The shareholders and FIIs are getting very picky. There is a very competitive market and you have to take hard-nosed decisions, says Dr Anand Burman who is stepping in as deputy managing director of Dabur India.
The contrast between the current inheritors and their forbears couldnt be more stark. Unlike their fathers and uncles, most of them have studied in the West, worked in foreign banks or FMCG companies. Today, they can no longer assume chief executiveship or board membership. But they seem comfortable with working their way up the corporate ladder.
Anand Burman, 45 Director
Hes the bridge with the fourth generation. Publicity wary, some say he is closer in temperament to his Calcutta-born uncles.
But his second cousins call him ultra-cool. This may have something to do with their older cousin being an over achiever. He is a founder member of the American Association of Pharmaceutical Scientists. And on the board of seven... maybe eight companies, says one. But dont go off thinking he is iron-grey. He is never boring. Or stuffy. Did you know he plays the sax? This cuts ice with 26-year-old Chetan Burman, a pianist from the Trinity College of Music, London.
Unlike his cousins, Anand Burman has worked in the company for 18 years. In 1980, armed with a doctorate in pharmaceutical chemistry from the University of Kansas, he joined as manager R&D. Nine years later, he set up Daburs pharmaceutical division and was instrumental in getting the company to diversify into bulk drugs, phytochemicals and phytopharmaceuticals. He also set up the Dabur Research Foundation (DRF) in Sahibabad with a team of over 100 scientists.
Dr Burman knows more about Daburs Rs 95 crore pharmaceutical division than anyone I know in the company. Razor sharp. Hes a man of few words. But he can tell you anything you want to know about Pacilitaxel or Docitaxel, says a scientist at the Foundation.
But from April 1, 1998, Dr Burman will have more to do with providing strategic guidance. He is already thinking on those lines: We are hiving off our branded pharmaceutical formulations. We decided to look for an alliance because we dont have anything to put on the table five years down the line in terms of new products. He adds, The oncological products will remain with Dabur.
Analysts tend to agree with his strategy. Daburs long-term plan to set aside its core competence in oncological products from its branded pharma products suggests that in the post-patent era, Dabur will survive the onslaught by global pharma giants and yet command a brand identity of its own, says Dr Vikram J S Chhatwal, health care strategist, Nandi Health Consortium.
A drug for treating breast and ovarian cancer, Pacilitaxel generated sales of Rs 3.8 crore within a year of its launch. Analysts say Dr Burman foresaw that Pacilitaxel would go off patent in 1997 and was quick to enter the US market. Domestic sales of Pacilitaxel are likely to be in the region of Rs 25-30 crore annually and would largely depend on Daburs production capacity, says Dr Chhatwal.
Mohit Burman, 29 Deputy general manager
Pegged as the financial whiz, Mohit Burman wields a two-edged sword. He could wreck Daburs bottomline or send the profit graphs soaring.
He thinks and talks so fast. I always feel breathless trying to keep up with him, admits a slightly intimidated colleague. Mohit Burman can speak without pausing in three languages English, French and Hindi. Unlike his uncles, he doesnt speak Bengali.
This is understandable. The Burmans made the shift to Delhi from Calcutta much before his time. In fact, Vivek Burman sent his eldest son, the teenage Mohit, to live with his maternal grandfather, London-based businessman H L Malhotra and attend Richmond College. A double major in marketing and management, Mohit worked for two years in London with Welbeck Property Partnership.
Then in 1992, he found you couldnt do without figures and enrolled in the Babson Graduate School of Business in the US. He returned with an MBA degree and a grounding in global capital markets, financial accounting and venture capital. I guess we were always pushed to pick up the right degrees and get that extra training, he says.
In 1994, he joined Dabur Finance, in which Dabur India Limited has a 76 per cent stake. The balance is held by the Burmans. Analysts tracking Dabur India have been sceptical about the diversification into finance. It will only put a strain on the companys resources, says Umesh Kansal, analyst, DSK Securities.
As the executive director of the Rs 39.31-crore Dabur Finance, Mohit Burman has learnt to deal deftly with standard arguments. What I have in place is a profit-making company with a clean balance sheet. This cant about unrelated diversifications is a little extreme. Financial services will grow in the next 10-12 years. But there will be a shakeout Dabur is conservative. We are already looking for an alliance that will keep us in the reckoning.
This number-cruncher is also tipped to play a significant role in the groups foray into the insurance sector. We know the Indian market, we can leverage the expertise of our partner, the Liberty Mutual Group and we will have the early entrant advantage.
Amit Burman, 28 Deputy general manager
An operations man by training with a Masters degree from Columbia University in industrial engineering and an MBA from Cambridge, his current portfolio is considered a logical fit
Like his cousin Mohit, Amit didnt rush home to join the family business. Instead, he worked for two years in New York in Colgates manufacturing strategy department. He did a sound study for the location of Colgates factories and warehouses in the US. And worked in the Kansas plant which manufactures soaps and detergents, says Vanhek.
In 1992, I joined the candy department in Dabur, recalls Amit. By investing in better machinery, he cut the 10 per cent wastage in laminates (used in pouches) to four per cent. That meant an annual saving of Rs 25 lakh.
In Dabur, though, Amits focus has changed from operations to marketing. With boss Kartik Raina, Amit is directing the groups foray into the Rs 3,000-crore convenience foods. Capsico which was languishing, has been given a new lease of life. Barely a year ago, the duo put out four sub-brands and with the marketing push, sales improved from Rs 50 lakh to Rs one crore. Capsico is now poised to become a Rs 10-crore brand in our portfolio, says Amit.
It isnt always smooth sailing. Daburs Real fruit juice launched with an investment of Rs 4 crore is trying to stave off bruising competition from Onjus, which is priced much lower. Burman answers his critics, We are coming out with a 200 ml single consumption pack. We realise that we have to plug all the gaps. He will also have to put more infrastructure in place to take on the likes of Nestle and HLL.
Aside from playing golf on Saturday afternoons, he has a private pilots licence to fly single-engine planes and a diploma in bartending. He can fix you 15 cocktails in under two minutes, says a cousin. That could presage stirring times for Dabur.
Chetan Burman, 26 Senior manager
The dark horse in the Burman stable, he is known to be more hands on and less degree-driven than his older cousins.
He started off by being upfront with Athreya. We had counselling sessions where I asked for a focused role, says this finance graduate from Richmond College, London.
For Chetan Burman this has meant working in Daburs Honey Bee project with UK-based consultant Robert Koleninski on purchases. Honey is likely to make a significant contribution to Daburs turnover. Branded honey constitutes 40 per cent of the total market and Dabur already has 65 per cent share of the branded market.
This project has meant taking on the honey mafia in Himachal, UP, West Bengal and Punjab. Prices fluctuate between Rs 10 to Rs 40 per kg because profit-seekers create a glut. We have tried to smash this by offering beekeepers a constant support price, says Chetan, who is rarely found behind a desk.
He loves being on the job: tracking beekepers on the road from Nepal to Patna. Even in summer he prefers the legwork to the paperwork, says a colleague. That extends to his interests off the job both Chetan and Mohit are trained scuba divers. Their favourite reefs: the Bahamas, Andaman & Nicobar Islands and the Greek Archipelago.
Gaurav Burman, 25 Senior manager
This is the hedonist of the family. The gregarious Gaurav loves to travel and has an eye for photography. If you want to know more about Gaurav read Society, whispered an employee. A TV journalist says, The boys a natural in front of the camera. Anchor material.
Gaurav went to school in England, and graduated with a double major in Economics and History from Tufts University. He worked in the forex derivatives division of Amex Bank, running a $50 million proprietary trading book.
Athreya says Gaurav was suited for sales and marketing. He joined the health care products division, and later the board of Dabon International, a joint venture with the $2 billion Bongrain of France to make speciality cheese. The 7,500 tonne a year cheese market has established players like Amul and Vijaya. Dabur will have a tough fight, predicts an executive in Nanz which is also entering the segment with fancy blue cheese.
The big question is whether this generation will be able to meet the demands of the McKinsey prescription. Dabur isnt big enough to accommodate six of them (counting Saket who is still in school). Ultimately, the joint ventures will be palmed off to each of the boys. That way they dont step on each others toes and get a piece of the cake, says a former employee.
But analysts do give credit to the Burmans. Says Shunu Sen, promoter of marketing consultancy Quadra Advisory and former director, Hindustan Lever , I dont think the Dabur we see today sets store by dynastic management and bloodlines. It is a sound marketing company, with well differentiated products, positioned well. The management and strategic restructuring has brought more focus.