The Hare, The Tortoise And A 1400-Crore Empire

Onkar Kanwars two sons are making their mark on the Apollo Group

Whats a fashion photographer doing at the Apollo group? He is trying to make the group sell leatherwear to the Arabs, aphrodisiacs to the Russians and rice to the east Asians. In its spare time, he would also like the Rs 1,427-crore group to get into real estate, information technology services and telecommunications. Dont tell me that just because I was born into this family, I have to make tyres, says Raaja Kanwar, the 28-year-old elder son of Onkar Kanwar, managing director of Apollo Tyres Ltd (ATL). Raaja is joint president of Apollo International Ltd (AIL), the Rs 170-crore trading subsidiary of India's largest tyre company.

 

Before you start wondering whether you should start selling Apollo shares, also listen to Neeraj Kanwar, the 26-year-old younger son, who heads strategic planning and coordination at ATL: I see tyres as Apollos core business and I want to make it more powerful.

When the 53-year-old Onkar Kanwar decides to call it a day, these are the hands that his empire will fall into. And the difference between the two cant be starker. Raaja is dynamic. He wants to build his own empire. Neeraj, on the other hand, has a lacklustre track record as an entrepreneur. But his strength lies in detailing, systems, procedures running a holding operation, says an old-timer at ATL.

Less than three years into their respective jobs, the Kanwar brothers are still learning the ropes. And Onkar Kanwar, who is currently recovering from his second bypass surgery, would probably be hoping that the risk-taker who wants to charge ahead and the conservative who prefers to hold back will be the perfect foil to each other.

Consider their backgrounds. While Raaja was away clicking pictures of Versace, Calvin Klein, Kate Moss and Cindy Crawford as a photographer for Vogue, Neeraj, an industrial engineer by training, was tinkering with machines at ATLs Cochin plant and dealing with customers at the district office at Piragarhi in Delhi. By the time Raaja came back to India and set up AIL, Neeraj had already given up on his entrepreneurial venture and was happily assisting dad in the family business. My job is to look at the future growth of the company in line with marketing and manufacturing, he says.

The Global Finance Company, a closely-held, family-run company set up by Neeraj in 1994, dabbled in the secondary market, leasing, hire purchase and consultancy before finally merging into Apollo Finance, a subsidiary of ATL last year. Plans for Apollo Finance are yet to firm up. We want to integrate it with our customers and dealers to provide them support in terms of leasing and bill discounting, says Neeraj. This thread of caution runs through all his projects. He wants to strengthen ATLs marketing network in the south, increase product lines, augment plant capacities, reach out for the original equipment market and make Apollo a global leader. He sums up his plan of action: The strategies are currently on the drawing board. We are going ahead in small and careful steps.

Raaja, on the other hand, set up AIL at a paid up capital of Rs 5 crore in January 1995 and by the year 2000 sees the company as Indias number one exporter of womens leatherwear and accessories. Then youll start saying that Apollos core competence is in leather, he grins. Its easy to understand why Raajas ready wit and unreserved manner make him hugely popular among the glitterati he socialises with leading fashion designers, patronises the Taj Palace hotels discotheque My Kind of Place, and is engaged to model and singer Kamayani Singh. I want to bring out a coffee table book but I am still looking for a topic. I like shock value, he says. Those character traits have also won him friends in the company and a few detractors. His impatience with plodders and habit of generously rewarding the bright people is a source of discomfiture to some, warns an Apollo insider.

AIL has established Raajas credentials as an astute, if somewhat flamboyant, businessman. Last year, the companys leather division did a business of Rs 5.5 crore while pharmaceuticals added Rs 10 crore to the total turnover. But AILs strength lies in its exports of tyres, tubes and flaps, which added up to Rs 150 crore. Ceat, its closest competitor, was way behind at Rs 119 crore, while JK Tyres exported Rs 117 crore worth of tyres. This year, AIL expects to increase its tyre exports to Rs 165 crore. It sources tyres from ATL and adds Rs 10 crore to the companys bottomline every year. There may be no need to scurry to your broker, after all.

AIL is the vehicle of diversification for the Apollo group, says its president Sunil Tandon. In the first year of operations, Raaja had taken to diversification with a vengeance, adding rice, tea, soaps, alcohol and pharmaceuticals to the companys product portfolio. I even considered exporting aphrodisiacs to Russia and got in touch with the guy who makes 30-plus. But he had orders for the next three years, he chuckles.

After a rather humbling experience in commodities 8,000 tonnes of rice had to be sold in the domestic market due to unforeseen bottlenecks at the ports, the plan to export tea never went beyond an in-house paper exercise the company wisely decided to focus on tyres, pharmaceuticals and leather. Manufacturers cannot be commodity people. My father cannot stomach the thought of Rs 10 crore worth of rice lying in the godowns, says Raaja. It is generally believed that Neeraj, a member of ATLs chief executive committee, is closer to Onkar. He is privy to more information on Apollo Tyres. says a company source. But then, that could simply be because the younger son, who is married to former Miss India runner up Simran, likes to be back home at 6 pm to spend time with the family.

Neeraj wants to build on the niche created by his father in truck tyres and has visions of taking Apollo to the number one position in the global buyers truck market. He is asking intelligent questions, says a former Apollo employee. Sources say that while Onkar is pushing a joint venture with the German major Continental, Neeraj is talking to smaller speciality tyre manufacturers such as the US-based Coopers.

Raaja, meanwhile, is toying with the idea of third country trading. He wants to leverage Apollos brand equity and move a lot of goods around the world. He is already buying jeeps in Malaysia and selling them in Argentina, says an AIL executive. Raaja also wants to get into real estate and marketing value-added services in information technology and telecommunications. Will the board of the Apollo group be agreeable to his ambitious plans? I havent told them yet. But I will fight for it, if I have to, he declares with characteristic spirit. To father Onkar, those words should sound rather familiar.