The Profitability Of Wool-Gathering

58-year-old Sheel Chandra worked in a hotel and then a chemical company before finding his real métier wool brokering. Woolsheel India, set up 15 years ago , recently crossed a turnover of Rs 100 crore. But while cashmere may be Chandras cash cow, it is his carpets that he is known for.

We lived in Shimla, where my family had a thriving real estate business. But after the British left, Shimla lost its pre-eminence and prices crashed. We had to sell our property at a tenth of its original value. The shock killed my father and my twin Akhil and I moved to Delhi in 1962. We didnt have any qualifications and had to start from scratch.

 

Both Akhil and I got into hotel management he joined Ashok Hotel and I worked at Claridges. Akhil continued, but I left after two years and joined Hext Dyes & Chemicals. Then, in 1971, accidentally, I got into wool trading.

I happened to meet the cousin of a friend who was setting up a wool brokering firm. For some reason he liked me and made me a junior partner in his firm, India International Pvt Ltd. I only invested my brain in the venture.

Almost 80 per cent of the worlds wearable wool comes from Australia and even the biggest mills buy it through brokers. This is because wool is a commodity, and there are constant price fluctuations. Besides, it is a natural fibre and there is always an element of surprise. We have to ensure that our buyers get the right price and that the wool is delivered to them at the right time.

It is a very competitive business. And because the overheads are high, we have to ensure a minimum profit margin of 30 per cent. Our first client was Raymond. When I went to sell them our first container of wool, they made me wait all day. For lunch, I was sent to the workers canteen. Finally, they made me an offer much below the market price and asked me to confirm in 12 hours. I confirmed it right then. The crucial thing was getting our first client. I went on to build relations with Raymond it is one of our biggest buyers today. In the first two years, we got buyers such as Reliance, OCM and Indian Rayon. In the first year we broke even. In the second year, our turnover was A$50,000, or Rs 7.5 lakh, going by the exchange rate then.

A couple of years into the business, I pulled Akhil into it. Gradually the business evolved in such a way that we were able to buy it. The original promoter moved abroad and he generously sold India International to us for Rs 10 lakh. And in 1983, Woolsheel India Pvt Ltd was born. Today, we are among Indias biggest wool brokers. Our turnover touched Aus $50 million last year.

Recently, with the help of Raymond, we have developed shahmina, a shawl which has almost the same fineness and warmth of shahtoosh. It is the eco-friendly alternative to shahtoosh and is made of baby cashmere. We are supplying shahmina to leading Italian fashion houses such as Nina Cherotee and Zegna.

Wool has been my bread and butter and will always be. But recently, I started trading in carpets through Kismet Carpets Inc. Initially, we only exported, but now we sell carpets through Carpet Cellar, a store in the basement of our house in New Delhi. The expansion was inevitable. I have been collecting antique carpets for 30 years. I gave my family some very anxious moments I would spend all my money on carpets!

Owning carpets became an obsession; I knew that one day I would trade in them. I may have been building a wall of security around my family. After all, there is no such thing as a wool stock. We only buy and sell wool never own it. And the Indian middle-class mentality dictates that one must hoard for the rainy day. Only, while most people buy gold, I collect carpets and rugs!

With the break-up of three civilisations due to the Iran-Iraq war, the Afghan war and disintegration of the Soviet Union a lot of carpets became available at throwaway prices. Sometimes, sellers dont know the worth of their carpets. The cheapest rug at the Carpet Cellar is priced at Rs 5,000 and the price can go up to several lakhs.

I have a collection of over 3,000 carpets and rugs, Asias largest carpet collection. We also restore carpets on a non-profit basis. Recently, I signed a $40,000 contract with a German publisher to write a book on How to Buy a Carpet.

Right now, 95 per cent of our turnover comes from wool. But by 2000, it will come down to 75 per cent. We have expanded, but have not really strayed from familiar territory. We went from raw wool to carpets to pashmina to cashmere. Anyway, I am happy just being a carpet fiend.