Videocon chairman Venugopal Dhoot combines aggression with positive attitude to drive his empire to a global scale.
In 1988, when Venugopal Nandlal Dhoot decided to launch Videocon’s washing machine, it was clear to him that the general consumer saw foreign brands superior to homegrown consumer products. He had learnt this from four years of selling televisions in India under the Videocon brand. The clever entrepreneur in Dhoot, then 35, wasted no time in forging a technology alliance with National Panasonic and created a 350-acre facility in Aurangabad producing washing machines for export to Japan.
The objective was to win the confidence of Indian consumers. A trip of 3,000 dealers to Aurangabad was all it took to drive home the message: Indian-made products are inferior to none. Dhoot’s ruse worked. Today, Videocon has a near-third share of the Indian consumer electronics market despite global brands pounding the Indian turf. Not only has Videocon been able to maintain market share, it has generated enough surpluses for the group to expand into areas like oil and fund its global expansions from Netherlands to Korea.
For the chairman of the $2-billion Videocon empire — with businesses ranging from consumer durables and electronics, oil and natural gas — his late father was his mentor, and Mohandas Karamchand Gandhi, his idol. Gulu Mirchandani, chairman, Mirc Electronics, maker of the Onida brand, praises Dhoot’s people skills, saying, “He is doing a good job by acquiring companies and knows how to network well.”
The 53-year-old Dhoot’s positive attitude and networking skills have served him well in his decades at the Videocon helm. The mid-1990s were perhaps the toughest year for the group. Videocon entered the oil and gas sector in 1994 when Dhoot won the rights to the Rava oil field, only to see crude prices falling below $10 a barrel later that year. Dhoot approached ICICI chairman and managing director KV Kamath to lend Rs 700 crore to Videocon that it needed to fund its oil business — a deal that helped Dhoot hang on and go on to reap the riches as crude soared.
Oil prices have looked up since and helped the group stabilise in its core consumers durables business. In fact, even though Dhoot denies it, industry insiders still believe Videocon is afloat only because of its profits from oil and gas. Dhoot says the oil surplus is driving the group’s expansion in the oil fields in Oman, Australia, Sudan, among others. A positive attitude came to Dhoot’s rescue in 1996 too, when he managed to keep his head above a recessionary trend in durables, and went on to make two major acquisitions: Thomsun and Electrolux, catapulting him on the world scene.
Videocon’s $711-million Daewoo Electronics, which closed earlier this week, will complement its Thomson buy and take the company up the value chain in the television business. “Our aim is to expand our portfolio to include plasma and LCD TVs and to sell in Europe and the US,” says Dhoot, who believes in sustaining his positive energy through his grounding in Hindu scriptures, guidance from his spiritual guru Sri Sri Ravi Shankar and his passion of flutes.
Where does Dhoot see Videocon going from here? Integrating the acquisitions into a cogent whole is uppermost on his mind. It’s still a long way to go before he is ready to take the back seat, he feels, and confidently says that he’ll be chairman and managing director of the company for at least another ten years from now. He also promises to keep family interference—his brother Pradeep Kumar Dhoot, son Anirudh Dhoot and nephew Saurabh Dhoot are active members of the group’s top management—minimal and allow professionals manage his company.
Dhoot’s immediate problem, say analysts, will be to break out of the mould of a low-end maker of consumer electronics. “Videocon lacks in credibility among consumers about the quality and the innovative capabilities. It concentrates more on volumes, be it in terms of number of products sold or the number of brands owned,” says Deepak Jassani, head of retail research, HDFC.
Industry insiders credit Dhoot as a branding ace, an astute businessman who comes up trumps working a maze of bureaucracy to his benefit, and a specialist who squeezes extra costs in the production chain through well-dovetailed manufacturing synergies and by exploiting tax loopholes. However, at this juncture, the biggest challenge for Dhoot would be to master new technologies to make Videocon’s products appeal to an audience aspiring for global quality while keeping to Indian prices. Will he be able to do so? Going by his track record, he has a good chance.
Source : Financial Express
In 1988, when Venugopal Nandlal Dhoot decided to launch Videocon’s washing machine, it was clear to him that the general consumer saw foreign brands superior to homegrown consumer products. He had learnt this from four years of selling televisions in India under the Videocon brand. The clever entrepreneur in Dhoot, then 35, wasted no time in forging a technology alliance with National Panasonic and created a 350-acre facility in Aurangabad producing washing machines for export to Japan.
The objective was to win the confidence of Indian consumers. A trip of 3,000 dealers to Aurangabad was all it took to drive home the message: Indian-made products are inferior to none. Dhoot’s ruse worked. Today, Videocon has a near-third share of the Indian consumer electronics market despite global brands pounding the Indian turf. Not only has Videocon been able to maintain market share, it has generated enough surpluses for the group to expand into areas like oil and fund its global expansions from Netherlands to Korea.
For the chairman of the $2-billion Videocon empire — with businesses ranging from consumer durables and electronics, oil and natural gas — his late father was his mentor, and Mohandas Karamchand Gandhi, his idol. Gulu Mirchandani, chairman, Mirc Electronics, maker of the Onida brand, praises Dhoot’s people skills, saying, “He is doing a good job by acquiring companies and knows how to network well.”
The 53-year-old Dhoot’s positive attitude and networking skills have served him well in his decades at the Videocon helm. The mid-1990s were perhaps the toughest year for the group. Videocon entered the oil and gas sector in 1994 when Dhoot won the rights to the Rava oil field, only to see crude prices falling below $10 a barrel later that year. Dhoot approached ICICI chairman and managing director KV Kamath to lend Rs 700 crore to Videocon that it needed to fund its oil business — a deal that helped Dhoot hang on and go on to reap the riches as crude soared.
Oil prices have looked up since and helped the group stabilise in its core consumers durables business. In fact, even though Dhoot denies it, industry insiders still believe Videocon is afloat only because of its profits from oil and gas. Dhoot says the oil surplus is driving the group’s expansion in the oil fields in Oman, Australia, Sudan, among others. A positive attitude came to Dhoot’s rescue in 1996 too, when he managed to keep his head above a recessionary trend in durables, and went on to make two major acquisitions: Thomsun and Electrolux, catapulting him on the world scene.
Videocon’s $711-million Daewoo Electronics, which closed earlier this week, will complement its Thomson buy and take the company up the value chain in the television business. “Our aim is to expand our portfolio to include plasma and LCD TVs and to sell in Europe and the US,” says Dhoot, who believes in sustaining his positive energy through his grounding in Hindu scriptures, guidance from his spiritual guru Sri Sri Ravi Shankar and his passion of flutes.
Where does Dhoot see Videocon going from here? Integrating the acquisitions into a cogent whole is uppermost on his mind. It’s still a long way to go before he is ready to take the back seat, he feels, and confidently says that he’ll be chairman and managing director of the company for at least another ten years from now. He also promises to keep family interference—his brother Pradeep Kumar Dhoot, son Anirudh Dhoot and nephew Saurabh Dhoot are active members of the group’s top management—minimal and allow professionals manage his company.
Dhoot’s immediate problem, say analysts, will be to break out of the mould of a low-end maker of consumer electronics. “Videocon lacks in credibility among consumers about the quality and the innovative capabilities. It concentrates more on volumes, be it in terms of number of products sold or the number of brands owned,” says Deepak Jassani, head of retail research, HDFC.
Industry insiders credit Dhoot as a branding ace, an astute businessman who comes up trumps working a maze of bureaucracy to his benefit, and a specialist who squeezes extra costs in the production chain through well-dovetailed manufacturing synergies and by exploiting tax loopholes. However, at this juncture, the biggest challenge for Dhoot would be to master new technologies to make Videocon’s products appeal to an audience aspiring for global quality while keeping to Indian prices. Will he be able to do so? Going by his track record, he has a good chance.
Source : Financial Express