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Last Updated : Aug 08, 2018 07:24 PM IST | Source: Moneycontrol.com

Podcast | The business of family: The Apeejay Surrendra group

Tune in to the rather interesting journey of the Apeejay Surrendra group, a sprawling conglomerate that employs over 43000 people in multiple operations in tea plantations and tea brands, fast-moving consumer goods, shipping, boutique hotels, real estate , bookstores and tea rooms, logistics and knowledge parks and much more

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A company older than the Indian republic is today one of the country's most resolutely successful business empires. We use the word, 'resolutely' because this company has faced and survived a crisis that few enterprises can recover from.

This is Rakesh and today on Digging Deeper into the Business of Family, our continuing series on family businesses in India, I will trace the rather interesting journey of the Apeejay Surrendra group, a  sprawling conglomerate that employs over 43,000 people in multiple operations in tea plantations and tea brands, fast-moving consumer goods, shipping, boutique hotels, real estate, bookstores and tea rooms, logistics and knowledge parks and much more.

The company evolved from the patriotic fervour around 1910 like many other Indian businesses of the time to assert the Indian identity during the British Raaj.

It all began with one Pyare Lal, who inspired by radical India of creating businesses to feed a sense of nationalism, set up a tiny firm by the name of Amin Chand Pyare Lal in Jalandhar to churn out steel goods for the agricultural sector.

By World War II, the company was thriving and big enough to engage 100 employees and became one of the first importers of steel into India.

Exponential growth

One year post independence, in 1948, the company stepped into shipping operations.

By 1951, even though the founder Pyare Lal had passed, his spirit continued to inspire the family and the vision of Jit Paul and brothers Stya Paul, Swraj Paul and Surrendra Paul went on to nurture the business. The Group’s headquarters were established in  Calcutta.

When there was a steep slump in the market, the company tapped countries like  Czechoslovakia, Hungary, Poland East Germany, China and the USSR, to import the alloy which was crucial to the expanding infrastructural needs of an aspirational country. The business grew even further when the company started trading in finished steel products, coal, and machinery and began importing rails from Eastern Europe.

A crowning achievement of the time was the establishment of the country's most advanced steel mill in Calcutta and the manufacturing of stainless steel in a domestic market which was then dominated by  Hindustan Steel Limited and Tisco.

 

The birth of APJ, the brand

When the company's shipping empire began to expand, it branded its bigger, better vessels with spanking  new, distinctive red and white initials - APJ and the ships proudly took the new branding to many parts of the world including North America, the Far East and Europe. Today the shipping wing specialises in dry bulk cargo, with its regularly upgraded fleet meeting the changing standards of evolving global trade.

The ambitious sixties

Post independence, as India consolidated its position as a rising entrepreneurial force, the galvanised brand now set its sights on unexplored territories like hospitality, real estate, construction and pharmaceuticals.

It was in a way a full circle moment when a Swadeshi company acquired a controlling interest in British companies such as Martin Harris &Walter Bushnell that manufactured antibiotics and other key drugs of the time to battle malaria and angina.

Another feather was added to the APJ hat when in 1967, it initiated what was going to be a seminal moment in its history , the first ever hotel at the bustling Park Street in Calcutta.

Success and heart break

Surrendra Paul became the Chairman of the Group in 1982 and the company was well on its way to acquire more dimensions. The company added  to its kitty, tea estates in the North East. In fact, says the company on its website,  and we quote "Within less than a decade, the tea enterprise had created new jobs, better pay and more facilities for its workers. The greater exports and higher tax revenues substantially contributed to the economy of the state of Assam." Unquote.

In 1988, Surrendra's daughter Priya Paul joined the company, a refreshing thing to see at a time when daughters of large business families rarely if ever stepped into boardrooms, leave alone handle business responsibilities.

On April 9, 1990 however, an unexpected tragedy struck the family. Surrendra Paul, who was then also the chairman of Assam Frontier Tea Ltd (later renamed Apeejay Tea Ltd), was travelling in a car along with his general manager Ashish Kumar Choudhary across Upper Assam’s Tinsukia district, about 500 km from Guwahati,  when unidentified gunmen fired at the vehicle and Surrendra Paul unfortunately succumbed to his injuries.

This was an unprecedented event in the Indian business circles and in politics and led to the dismissal of  the state government that was then led by chief minister Prafulla Kumar Mahanta. Dramatic measures were taken to ensure the safety of the remaining staff and top tea executives were airlifted from Upper Assam. The Apeejay brand subsequently added Surrendra's name to its brand identity to pay a lasting tribute to him.

New figure heads and expansion

After Surrendra Paul’s demise, his wife Shirin Paul became chairperson and his brother Jit Paul took over the day to day running of the empire. This was a trying time for the family and especially for young Karan Paul who learnt of his father's demise in the US where he was studying. The future would see the three siblings  Karan, Priya and Priti  handling retail, real estate and shipping but we are getting ahead of ourselves.

It was in 1990 and 1992 respectively that  Priti Paul and Karan Paul joined the business and the APJ baton was successfully passed on to the third generation.

In the nineties, the Apeejay Finance Group came into being along with Apeejay Securities Private Limited , a real estate division that introduced Business Centers and a triumphant resurgence of the The Park Hotels brand.

1999 was also a significant time because it was then that the iconic brand  now known as Oxford Bookstores  was introduced in a new avatar.

The next decade was marked with consolidation and says the company's website and we quote, "The Group embarked on consolidation of the Corporate Structure with objective of ensuring highest standards of corporate practice, corporate ethics and corporate governance. Corporate Strategy, Corporate Affairs, Treasury; Human Resource Development; Information Technology, Corporate Communications were centralized in Apeejay Surrendra Management Services Private Limited. Incorporated in 2000 this entity owns the Apeejay Surrendra brand licensed for use by Group companies." Unquote.

The next generation

The family business had been split amicably into three parts among the four brothers in 1989 with Caparo,  a British company involved mainly in the  design, manufacturing and marketing of steel and  engineering products, going to  Lord Swraj Paul, the Apeejay Education Society going to  Stya Paul, and the Apeejay Surrendra slice going to Surrendra Paul and Jit Paul.

Karan Paul joined the Group right after his graduation. He independently ran a finance company and a stock-broking company for about 10 years and then sold them in 2006-07. He became the Group Chairman of Apeejay Surrendra in 2004 and  set the goal for the future and we quote his vision for the company, " To be one of India’s largest and most profitable privately owned family business”. Unquote.

A step towards that goal was achieved, when in 2005 the company's Tea division  acquired Typhoo, a legendary 100 year-old English tea brand.  This was at that time,  India’s second largest global FMCG acquisition and the 7th biggest corporate takeover by an Indian company, says the company website. The tea division

Well-equipped Knowledge Parks were also established in  Eastern Indian states.

Major steps were taken to diversify into  Marine Cluster and Logistics Parks sectors  and the company's brand equity was further enhanced by multiple mergers, acquisitions, joint ventures etc that are too numerous to mention here.

Karan has brought with him a modern operational style and he takes a special interest in processes and policy matters.

In a 2017 article in www.entrepreneur.com, Karan was quoted thus, "Working hard, being humane, doing good business with integrity and fairness, ensuring a win-win partnership for everybody related to the enterprise — whether it is employees, suppliers, customers or bankers — constitute my family’s legacy and values I was born to.” Unquote. According to him in the same article, the Pauls have succeeded consistently because they have followed a forward, backward and vertical integration approach for diversification.

Centennial celebrations

In 2010, the company that  was birthed in the tumultuous pre -independence India, grew along with the Indian republic and rose above immense tragedy, celebrated 100 fruitful years.

To mark the milestone, 100 Community Initiatives were launched.

Community service initiatives

 The Apeejay group  believes in adhering to a Sustainability and Social Responsibility (SSR) framework and we quote the company motto, "The SSR  framework adopted by our CSR Committee outlines our target to protect, conserve and preserve ecosystems and all natural resources on our Estates." Unquote. This of course refers to the company's tea estates where it is easy to forget the human stories and the larger context of  biodiversity.

The company however in its own words, "remains committed and invested in finding solutions for reducing the impact of human elephant conflict in Assam." Unquote. This is a very important issue full of emotive subtext for not just eco warriors, local communities but also those who live and work on tea estates.

The company's CSR Policy addresses this issue thus and  we quote, "We will create and sustain cornerstones of our community's future through projects that halt biodiversity loss, protect, restore and promote sustainable use of terrestrial and aquatic ecosystems, preserve the tangible and intangible cultural heritage, keeping responsible business practices that demonstrate highest standards of corporate and environmental governance always front and forward in the execution of our business strategy." Unquote.

As a  tea producer, the company wants to align with UN Sustainable Development Goals and is committed to deliver the following targets - Life on Land, Climate Action, Gender Equality, Clean Water and Sanitation.

The company's shipping wing also wants to improve its practices and we quote its mission statement, " We want to continuously improve our existing systems and processes to minimize pollution or contamination of all natural resources including marine resources.We have zero tolerance towards illegal wild life trade and are a signatory to the Buckingham Palace Declaration led by HRH the Duke of Cambridge." Unquote.

The company's  Ethics Policy outlines business conduct guidelines and  a statement of intent which according to the internal and external stakeholders guides proper business conduct.

That the values of the founders have had a trickle down effect is evident from  Karan Paul's message to the employees as their Chairman in 2004 and we quote from the company site, "We must always do good business and the right thing, drawing from our tradition of trust, reliability and fairness. These values are very dear to us and must not be compromised with."  Unquote.

The ideals of accountability and social inclusion have been part of the company's credo much before the CSR terminology was created and this was the case also with many companies that were founded before independence. The group remains committed to causes like education, job creation, gender equality at work place, the increasingly elusive ideas of peace and justice in corporate dealings, and the creation of sustainable cities and communities, and sensitivity to climate related issues.

The brand legends continue to unfold..

 A brand that is over a hundred years old has many important anecdotes and legends and one such story was born in  1967, when The Park was offered to Calcutta as the country's  first luxury Boutique hotel. The hotel is now a familiar presence all over India and is known for its unusual decor punch lines, art and sculpture collections, path breaking restaurants, spa services, edgy architecture and modern vibrance.

The  Oxford Bookstore was created and we quote from the company site, "as the best equipped 'base-camp' for journeys of the mind offering its customers the widest range of outstanding titles and consistently courteous and informed service." Unquote.

Interestingly,  the iconic book store's story began nearly a 100 years ago in Kolkata’s Park Street when people frequented a modest and unassuming books  and stationery store. Over time, the store has grown to over 30 locations and apart from offering books across  genres, the store hosts literary events and also visual and performing arts experiences.

Even before Amazon took over the pockets of the reading public in India, www.oxfordbookstore.com was the first online interface of its kind, and offered over 6 million titles worldwide.

What distinguishes an Oxford store from any other is its  fine-tuned ambience, and its diverse, hand-picked merchandise that includes selection of specially curated stationery, music, software, and of course a mix of classic and contemporary book titles. Not to forget, proceeds from every book  support  the ‘Give Back to Nature ‘ programme of WWF-India.

Influential players

 

 The late Jit Paul is credited with  not just creating the distinct Park street culture with the hotel he opened here but with with stamping the hospitality sector in India with his vision and also supporting the family after Surrendra's death.

One of his most favourite business acquisitions was Flurys, Calcutta’s historic tea room that he took over in 1965 after owner Joseph Flury agreed to sell it.

Born in 1923 on April 1, in Jallandar, into a modest business family,  Jit Paul joined his father in 1928 , in the steel business and there was no looking back from then on.

Another remarkable name in the family's crowded list of achievers is that of Priya Paul who has helmed the Apeejay Surrendra Park Hotels with great grace, vision and unrelenting hard work.

She joined the Park Hotel, Delhi, after graduating in Economics from the Wellesley College, in 1988. The times that followed were hugely challenging personally and professionally because of her  father Surrendra's unfortunate death.  She had to hit the ground running and to manage three Park Hotels and the experience also prepared her to envision the future growth of the brand. What Priya did with great success was to shake the idea of a hotel out of its traditional predictability and give it a modern, refreshed modern vibe architecturally and with inputs of designers like Michel Aram and artists like Hemi Bawa. She once even brought down legendary Italian chef Antonio Carluccio to train chefs in the Park restaurants. Her interest in art also extends to her role as a trustee of the India Foundation of the Arts.

She chose unusual locations close to financial nerve centres to open new  properties. Each hotel went on to acquire a welcoming design idiom that encouraged synergy and communication. Under her leadership, the brand was able to carve a niche for itself among industry giants with its ever evolving, young energy, trend setting ideas and competitive rates for business travellers.

In keeping with the company's CSR policies, the group under her leadership also took the responsibility for the  preservation and maintenance of Jantar Mantar in Delhi.

Her approach to business can be summed up in a statement she made during a 2003 interview in Hindu Business Line, "The challenge is to constantly innovate. No day goes by when you don't learn something new."  Unquote.

As Jit Paul once said memorably and we quote, "Performance builds image, not the other way around … Reliability of performance is the most secure capital." Unquote.  This is one capital that the Apeejay Surrendra group has consistently invested in and the goodwill has brought them exemplary success that many new businesses could learn from.

 
First Published on Aug 8, 2018 07:24 pm
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