The Rajiv Group’s turnover in FY 2010-11 was Rs. 5.5bn. The flagship company, Rajiv Petrochemicals Pvt. Ltd., reported revenues of Rs. 3.8bn. The group is a leading player in the petrochemicals, polymers, woven sack bags & fabrics, electrical cables & switchgears, light fittings and panel boards. It has an extensive global network with exports to over 10 countries. Rajiv group is one of the largest agency houses in Gujarat for polymers and electrical switchgear. It is also one of the major producers of woven sack bags in the country. The Rajiv group has set a conservative target of crossing the Rs. 7bn sales mark over the next two years. The main growth drivers will be the flagship company, Rajiv Petrochemicals Pvt. Ltd. and the two major manufacturing outfits, Atlantis and Optiflex.
 
Tell us about the Rajiv Group briefly. Its inception; when and how it came into being? Who promoted the group? Who are the leading shareholders? 

Mr. Rajiv Vastupal promoted Team Rajiv (Rajiv Group), with a small amount of capital in 1980. Mr. Vastupal and his family are the 100% shareholders of the Rajiv Group. After failing in two manufacturing ventures initially, the young entrepreneur met with success in his third venture which was trading in chemicals. Thereafter, he ventured into other trading businesses and later moved into manufacturing too. 

So, after trading in chemicals, petrochemicals, electrical equipment, switchgear and cables, Mr. Vastupal moved into manufacturing of woven sack bags, panel boards, wires & cables and light fittings. So, from nothing, Mr. Vastupal has created Team Rajiv with a group turnover of Rs. 5.5bn as of March 31, 2011 over the last three decades.
 
Tell us about the initial struggle that you encountered in your first two business ventures? 

In 1980, Mr. Rajiv Vastupal created a joint venture company, located at Silvassa, which was into manufacturing of narrow fabric from Swiss machines. In spite of great efforts, the venture failed due to high debt, excess capacities, plant overrun and also because the end product seemed to have been ahead of its time. 
 
The second business venture undertaken by him was the manufacture of hardware rivets using German machinery. But, this venture too did not pan out and was another manufacturing failure. 
 
Rajiv Group has pretty diverse set of businesses. Could you tell us about each of them briefly and what is the driving force behind each one of them? 

Rajiv Petrochemicals Pvt. Ltd., the Group’s flagship company, is a leader in the trading of petrochemicals and polymers. It is one of the largest distributors of polypropylene and polyethylene from Haldia Petrochemicals, PVC resin and EDC from Finolex, polysterine from LG, polyester film from Jindal and many other products. The company posted revenues of Rs. 3.8bn in FY 2010-11.
 
Atlantis Products Pvt. Ltd. is the largest manufacturing arm of the Group and is a unique example of professional management. Even though it is fully-owned by Mr. Vastupal, he is not on the Board of the company and allows the professional management to run it. This company is one of the leading manufacturer and exporter of raffia woven sacks with a modern state-of-the-art production facility at Dholka, Ahmedabad district. 
 
The other major companies include, an ISO 9001:2008 certified, Optiflex Industries which manufactures winding wires as well as flat and flexible cables. Optic Liting Pvt. Ltd. manufactures lighting products such as architectural fine lights, CFL down lighter, LED spot lights, street lights, outdoor lights and office lighting products.
 
Riddhi Enterprise makes various kinds of panels required by end customers. These are tailor made and individual to customers’ desires.
 
Rajiv Enterprise deals in the trading of electrical switchgear & cables of leading companies like Finolex Cables, GE Power Controls, Legrand India, BCH Electric, HPL India and KEW.
 
The driving force of diversification and success was learning from earlier failures and the wish to become a leading player in whichever trading or manufacturing business the Group entered into. 
 
Could you give us a break-up of your annual group turnover in terms of various segments? Where do you see this business mix over the next few years? 

Team Rajiv total group turnover as on March 31, 2011 was Rs. 5.5bn. The flagship company, Rajiv Petrochemicals Pvt. Ltd. accounted for Rs. 3.8bn and Atlantis Products Pvt. Ltd. had revenues of Rs. 550mn. The remaining Rs. 1.15bn came from the other group companies, with trading businesses accounting for nearly 80% of these sales.
 
Rajiv group is planning to cross the Rs. 7bn in annual revenues over the next two years.
 
Petrochemicals has a disproportionately higher share in your turnover? Any plans to de-risk your business strategy to reduce dependence on this segment? 

Yes, petrochemicals and polymers have a very high share in the group’s turnover. But, as the Indian economy is on a strong long term growth trajectory, we will continue to focus on this segment. Our group has developed a strong expertise in this sector and we will derive maximum advantage out of it. 
 
Internally, the process of de-risking is continual. Business activities are carried out only with stable corporate customers in India. The business of manufacturing petrochemicals has been converted from within India to export activities with advance payment terms. The Petrochemical Group ensures risk factors are reduced while doing business by hedging the forex exposures, reselling, as well as carrying out import and export activities at a fixed price. 
 
How big is the export market for raffia woven sacks? Which are the current markets you are exporting these sacks to? 

Atlantis Products Pvt. Ltd. is our flagship manufacturing company for woven sack bags. The company is run by young professionals under the guidance of Mr. Rajiv Vastupal who does not have any formal position in the company. 
 
About 50-55% of woven sack bags are exported to countries in Latin America, Canada, Belgium, Switzerland, as well as a few African and Middle Eastern countries. 

This year, our company is in the process of developing a new product which will be suitable for the US and UK markets for increased value added export. At the same time we would like to keep 50% of our share for the Indian market as this is where we earn good brand equity. 
 
The export market for woven sack bags is quite large, but last few years’ exact statistics are yet to be released. 
 
What is the capacity for woven sacks? What are the expansion plans? 

At the moment, Atlantis Products Pvt. Ltd. has a manufacturing capacity of 650 MT for woven sack bags and 60 MT for laminates. An additional capacity of 300 MT is being installed and shall be operational in the month of August 2011. 
 
The machinery has been ordered and the building is ready but the execution of the addition 300MT capacity is still in the pipeline as we have too many orders on hand from our valued customers. The difficult part is that the plant would need to be shut down for at least a week in order to expand its capacity.