Indian firms abroad
Under the radar
Godrej, an Indian conglomerate, goes global its own way
THE world is used to big Indian firms planting flags in foreign fields.
Now the subcontinent's medium-sized firms are venturing abroad, too, and often proving quicker and nimbler than their peers in other emerging economies.
Take the Godrej Group, a family-controlled conglomerate based in Mumbai.
The firm began as a lockmaker in 1897.
While the Indian economy was closed it could not expand abroad much, so it diversified wildly: into soap, typewriters, forklift trucks, animal feed and talcum powder.
When India opened up in the 1990s, it had to become less jumbled and to shape up, says Adi Godrej, the chairman.
We put our thinking caps on.
After a false start experimenting with joint ventures with foreign firms, the group has settled on having clearly defined divisions,typically fully controlled.
Together they have sales of $3.3 billion, with the largest being Godrej Consumer Products, a sort of mini-Unilever that cranks out soap, detergent, hair products and weapons for waging war on creepy-crawlies.
This unit has led the foray overseas, with deals in Nigeria, Indonesia, Argentina, Britain and South Africa since late 2005.
It has spent about $1 billion, says Mr Godrej, and now makes about a third of its sales outside India.
In June it announced the acquisition of Darling Group, which sells hair extensions in 14 countries in Africa.
If a Western firm did this, it might be clobbered by fund managers for being too thinly spread.
Indian investors have been more open-minded: Godrej Consumer's shares have more than tripled since the end of 2007, valuing the firm at $3.2 billion.
Mr Godrej says the key is to pick niche products with sizeable local market shares which pass under the radar of big global rivals.
Aware of its limited pool of managers and knowledge of new countries, Godrej grants the acquired firms autonomy.
Its financial disclosure is surprisingly poor, but the deals have all boosted earnings, it says, and more are likely.
Godrej will eventually face a universal problem: how to marry ambition with family control.
Two big holding companies sit above Godrej Consumer.
Such fiddly holding chains can cause problems if the family is unwilling or unable to fund new investments or accept the alternative of losing control.
Godrej may be different, though.
The holding companies are not mere shells, but maintain profitable operations in their own right, have manageable debt and are sitting on a vast plot of land in Mumbai that could eventually be worth billions of dollars.
So the family probably has the resources to fund expansion without resorting to financial engineering.
All that's left is for them to agree with one another.
Today Mr Godrej supervises the firm peacefully along with his brother and cousin, while employing a cadre of professional managers.
The next generation is making its way up the ladder.
By tradition all family members on the payroll are expected to meet for lunch on Thursdays.
It's likely they will be more jet-lagged and stressed than in the past, but with luck there won't be any food fights for a while.
An American conglomerate holds a major share in the company.
All our hopes rested upon this venture.
He is a nimble climber.
I'm gonna need a forklift cause all the baggage weighs a ton.
The divisions between the various classes of society are not so sharply marked as they used to be.