The Hindu Business Line : `Developing human resources is our priority'

IT is now three months since Mr Karan Paul, the 35-year old son of the late Surrendra Paul, took over as Chairman of the Rs 500-crore plus Apeejay Surrendra Group having diverse business interests. In an interview given to Business Line, Mr Paul discusses various issues facing the Group. Excerpts:

You took over as the Chairman in ... .

Yes, I succeeded my mother, Shireen, as Chairman of Apeejay Surrendra Group and took over on July 14. Prior to that my designation was Director, although for the past two years I've been doing all the jobs I'm doing now.

Which means there has not been much of a change. Isn't it?

Not exactly. The change in designation means a lot, both internally and externally. Within the organisation, the employees come to know who is the present head of the organisation and thus everything else falls in place. To the world outside, the line of succession is clearly established. On the whole a visible structure is created.

What about other members of the family?

My mother is now Emeritus Chairperson and my uncle, Jit, Advisor to the Group while my sisters, Priya is looking after Park Hotels and Preeti, heading the real estates and retail businesses.

How big is your Group?

In 2004-05, we expect a healthy 15 per cent growth and the total turnover is estimated to cross the Rs 500-crore mark. The assets will be worth about Rs 2,250 crore or so.

What is your main business?

There is no one single main business. We've five principal businesses, namely, shipping, tea, hotels, real estates and financial services. Of these, shipping, tea and hotels are three major divisions, each having more or less equal contributions to the Group's turnover. Frankly, I feel that more than the turnover, it is the assets and the profitability which are important. This year the profits of the shipping division will perhaps be the largest.

As Chairman have you set priorities right for the Group?

Yes. I've identified three thrust areas, namely, developing human resources, developing strong identity for the Group and creating new assets through business development. First, I would like to have within our Group high quality people and we are therefore now focusing on HR initiatives and strategies. We've already appointed new CEOs for our shipping and tea businesses. We're recruiting people who have displayed capability in their respective fields.

Developing strong identity for each business group as also establishing the mother brand, Apeejay Surrendra, as a well-known and well-respected brand all over the country is part of the new strategy we would like to pursue vigorously.

Finally, business growth. My target is to create an additional Rs 1,000 crore of assets within a year from now. We propose to invest about $100 million in shipping to acquire additional tonnage, Rs 250 crore in hotels and another Rs 250 crore in real estates, retail business and financial services.

Could you please specify your proposed acquisition plans in shipping?

We're looking at bulk carriers, though not immediately. Let the market cool off a little. Right now it is virtually on fire and therefore not the right time for acquisition.

No plans to acquire a tanker?

Yes. We're also looking at the tanker market. We've an open mind in matter of acquisitions.

And in hotels?

We've plans to acquire assets in Mumbai as also in the South, most probably in Hyderabad and Bangalore.

Will you build new hotels yourselves? Or go for the acquisition route?

We're examining all the options.

What about funding?

Partly internal generation and partly debts.

Yours is privately-held Group. Isn't it?

Yes.

No plans for going to the public?

No. So far no such plans at all.

Each family-owned business in our country has its own culture, which does not necessarily reflect professionalism. What about your Group? Do you believe according full freedom to top class professionals you propose recruit in your Group?

I do not think giving unfettered freedom is necessarily the right thing to do. The owners must have strong supervision and engagement in their businesses even as they delegate sufficient authority to their senior executives. Ideally, it should be a mix of both. But the problem is where will you draw the line. It is tricky job which has to be handled with prudence. Traditionally, my Group has been doing mostly micro-management. In past few years, I was busy putting proper systems and processes in place and the job is largely over. I've many more things to do.

What is your biggest headache?

In any business there will always be headaches and headaches; only their nature keeps changing from time to time. The biggest challenge before me right now is how to change the organisational culture. It is not an easy job but I'm confident of achieving what I intend to achieve.

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