With the death of Ashwin Dani at the age of 79, a critical bridge between the past and present of Asian Paints, one of India’s most successful companies, has been lost. Dani took charge of the company as its vice chairman and managing director at a time of great stress in December 1998 and steered it successfully for the next 10 years till March 2009 when he stepped away from his executive roles.
A bachelor’s degree from Mumbai University’s famed Department of Chemical Engineering and a master’s degree from the University of Akron, had already provided him with the educational background to pursue his passion for his business of paints. In addition, by the time he took charge of Asian Paints, which was set up in 1942 by his father and three other partners, he had already spent 30 years working through its ranks.
A Difficult Start
On taking charge, Dani’s immediate challenge was to ward off a complex hostile takeover attempt by ICI Ltd. The giant British paints and chemicals group wanted to improve on its lowly fourth place in India’s fast-growing paints market and was looking to increase its share by acquiring the 9.1 percent stake of Atul Choksey, son of one of the company’s promoters.
Dani, who was still recovering from a bypass surgery that he underwent in 1995, along with another major shareholder, Ashwin Choksi, rallied the Indian company’s defences. They invoked a clause in the Foreign Investment Promotion Board (FIPB) guidelines whereby a company’s board had to clear any foreign investment before it went for government approval.
Thus thwarted, ICI retreated and in an ironic turn of fortunes, in 2003, Asian Paints bought the government’s 9 percent stake in ICI as part of its disinvestment process.
Dani’s Global Ambitions
But Dani wasn’t just a crisis leader. He set the company firmly on the path to globalisation, marked by his 2002 purchase of Singapore-based Berger International. The acquisition gave Asian Paints access to 11 markets including those of China and Malaysia and served as the launchpad for its global ambitions.
That year, its international sales jumped to Rs 500 crore, nearly a third of its domestic sales of Rs 1,600 crore. He also led a 50:50 joint venture with US-based PPG Industries, the world’s biggest automotive coatings manufacturer. Today, Asian Paints is the third largest paints company in Asia and among the top 10 in the world.
Under him, Asian Paints pioneered computerised colour matching as well as plastic packaging for paints and also launched Apcolite, a transparent coating for wood, an idea which came to him when a friend complained that his glass of whiskey tended to spoil his wooden table.
The focus on technology was of course part of Dani’s legacy. The company had always been ahead of the curve on harnessing the latest technologies to build operational efficiencies in distribution, sourcing, marketing and manufacturing. In the 1970s, its founder Champaklal Choksey spent a minor fortune to buy a supercomputer for the company. This was used to process the masses of data that it collected from each neighbourhood that it operated in. This allowed the company to make precise demand forecasts for its products and manage its inventory much more efficiently than its competitors.
A Company Shepherded Well
Today, this authentic Indian garage startup whose original name, The Asian Oil and Paints Co, was chosen at random out of a phonebook, dominates the Indian paints market with sales that dwarf those of its next three rivals, Berger Paints, Kansai Nerolac Paints and Akzo Nobel India.
Its double-digit compound annual growth rate (CAGR) for nearly 60 years is the stuff of legend as is its balance sheet management. Despite disputes within the promoters which led to the influential Choksey faction breaking away within a year of Dani’s taking over as MD, as well as later issues with regulators, the company has held fast to its market leadership for the past 50 years.
For that the company has a lot to thank Ashwin Dani, the keen yoga practitioner who stepped into the breach when it looked like a fine Indian company was in danger of imploding from within. He went on to lay the foundations of a powerful Indian market leader that was also globally competitive, a rare and precious achievement.
It is instructive to compare the fortunes of Asian Paints with that of Ranbaxy, another company that, at the turn of the millennium, was bidding to become an Indian MNC. Today, the company and its legacy lies in tatters whereas Asian Paints has overcome several speed bumps to stay on top.
Sundeep Khanna is a senior journalist and the author of the recently released book 'Cryptostorm: How India became ground zero of a financial revolution'. Views are personal, and do not represent the stand of this publication.
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