Pages

Saturday, January 17, 2009

Moser Baer

While coming back from Dalhousie last year, thanks to a cancelled flight, Deepak Puri, the chairman of Moser Baer, was forced to take a train. At Pathankot, two push carts were selling his CDs. Business was brisk, and they managed to sell quite a few. A few months later, at an upmarket store in Delhi’s Khan Market, Puri discovered that the shopkeeper stacked only two of his titles. The reason: he would make a fatter margin—Rs 150 on a Rs 300 CD compared to Rs 8 on Moser Baer’s Rs 28 CD.“To make the same margin, I’d have to sell 18 of these CDs”, he told Puri.

Back in office, Puri immediately called his marketing executives and decided to restrategise. This involved selling his CDs in push carts in high-cost low-space areas, a model that has become a success. This ability to adapt and innovate in real time makes Moser Baer agile.

After proving its success in the optical storage business ($500 million), the company is now aiming for the sun—it anticipates its three-year-old solar photovoltaic cells business to be as big, by year-end. It has revolutionised the entertainment space through its low-cost CD and DVD-based movies, priced between Rs 28 and Rs 35, while also foraying into IT peripherals and film production.

Deepak Puri, 66 and Ratul, 37 Puri are optical storage manufacturers with a current turnover of Rs 495 crore
Deepak Puri, 66 and Ratul, 37 Puri are optical storage manufacturers with a current turnover of Rs 495 crore
Puri has come a long way. A mechanical engineer from Imperial College, London, he started with a time recorder unit, moved to manufacturing floppy disks and is now the world’s second largest optical storage media manufacturer. His initial investment—a loan of Rs 50,000 was taken on a collateral which was nothing more than “the shirt on my back and a passion to do business”. The journey has not been without its challenges.

Whether it was fighting anti-dumping cases imposed by the European Commission in 2003 or dealing with plummeting prices and market capitalisation, thanks to a global glut of DVDs in 2004, Moser Baer has managed to emerge victorious. Even now, the company has reported a net loss of Rs 104 crore in the first quarter of 2008-09, thanks to the adverse movement of foreign exchange.

Success mantra: Never think small. The effort or the pain is the same, whatever the scale of business.

Biggest victory: Contributed to the decline of piracy because of its low-priced movie CDs and DVDs

Personal take: The company’s logo was modified and its addresses always add up to 6 or 9,due to Vaastu reasons

But Puri believes for every problem that seems insurmountable, there is an alternative course of action. The company is betting on Blu-ray, which is emerging as a dominant optical format, as well as the photovoltaic and entertainment businesses which are expected to deliver significant growth.

“I have never dreamt small,” he says. “The effort that goes in is the same, whatever the capacity.” His son Ratul Puri, an executive director, and a computer engineer from the Carnegie Mellon University in the US, echoes his words: “Scale excites me. I don’t believe in niches.” But where the duo is similar, they are also distinctly different. If the senior Puri follows instinct, the junior Puri is more analytical. Yet they complement each other. “Like kathak dancers,” says Deepak, “we can anticipate each other’s moves.” The Puris believe in Vaastu. Not only was the company’s logo modified—the ‘o’ in Moser became red as did the Baer—but also the company’s addresses have always added up to 6 or 9. Even the address of their upcoming thin film PV plant in Chennai, was changed for Vaastu reasons.

Going forward, Ratul too wants to assume an overarching role in the business. Each of the company’s verticals is run by a CEO, who reports to him. “Every time you double your turnover, how you manage your business changes,” he says. “Initially you’re an entrepreneur, then systems and processes take over and finally you create entrepreneurs within an organisation,” says Ratul. Wise words from a quick learner

0 comments:

Post a Comment