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| Lunch with BS: Sanjiv Goenka | | Retail Power |
| Devjyot Ghoshal & Ishita Ayan Dutt / Kolkata Jul 13, 2010, 00:22 IST |
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RPG Enterprises’ vice-chairman is upbeat about retail firm Spencer’s and talks of a pan-India growth plan for power company CESC.
 Sanjiv Goenka, the vice-chairman of RPG Enterprises, is almost the stereotype Indian industrialist. This dapper man, who’s fond of fashion, had everything that an illustrious industrialist’s son could possibly get — a good education and perfect grooming. But that’s just one side of the story. At 28, he was the architect of the CESC acquisition, the fulcrum of the Rs 16,000-crore RPG group. And he was one of the youngest national president of the Confederation of Indian Industries (CII). During the two-hour lunch, he answers a whole lot of questions for Devjyot Ghoshal and Ishita Ayan Dutt. For this foodie and infrequent cook, the conversation begins and ends with food. That’s the way it is at home as well, he says.
The Maidan, an ephemeral patch of green amid endless sequences of human constructs, perfectly frames the peculiar view from the plush leather couches at The Chambers, on the top floor of Kolkata’s Taj Bengal. From here, the deficit of rain-laden dark clouds, which usually gather around this time of the year, is glaring.
Goenka arrives presently, and promptly proposes a move to the dining room down the corridor. The sight of the city is hardly any different here, as one settles into heavy wooden chairs. Just that Goenka and the iconic New Hooghly bridge seem juxtaposed, appropriate for this second-generation industrialist who is trying to straddle changes in more ways than one.
The conversation has hardly begun and the rather large menu cards arrive. Goenka doesn’t seem to need them and recommends a couple of dishes offhand. But, when told that we have considered going vegetarian for this particular meal, he protests, “My wife and I are the only ones who order vegetarian food.” We do away with meat for the appetisers. Goenka settles for some steamed white and green asparagus with mirin, panko-crumbed vegetables and miso vinaigrette. We order some asparagus and pine nut soup, asparagus with hollandaise, crumb-fried Brie and warm red cabbage sauerkraut.
Though we are done ordering, there is more discussion on food. It’s been a difficult few years for Spencer’s Retail, the retail venture of the RPG Group that Goenka handles, but things are now changing for better. “Like you take credit for good decisions, you have to take responsibility for the bad ones. I’m not saying getting into retail was a bad decision. It was probably a decision that was ahead of its times, indeed. Spencer’s started operations in the 90s from southern India, but couldn’t really gain the first-mover advantage.
“But I’m still passionate about it and I’m still going to go on with it,” reassures Goenka.
The numbers are improving, he explains, as small-format stores are discontinued and the focus on localisation deepens. From April to June, Spencer’s Retail turned in sales of about Rs 900 per sq ft, against Rs 620 per sq ft a couple of years ago. “Towards the end of this fiscal, we will reach break-even,” Goenka promises.
So, is the RPG portfolio up for review, we can’t resist asking? He doesn’t really sidestep, but smiles and says, “ At the end of the day, a portfolio is meant to be reviewed.” Before we can delve deeper into his statement, he waters it down by adding, “Power and carbon black will be strong growth areas for us. Music will continue to be a passion; retail will be an area of growth. I do not see us exiting any of these sectors.” These businesses are nurtured by him.
Just as the conversation begins to metamorphose into a question-answer session, the appetisers arrive. There is a clear partiality for asparagus on this table, which no one seems to mind.
By now, our respective asparagus affairs are complete. The table is cleared. We await the next round that is to comprise simple spaghetti with a spot of olive oil, roasted garlic, ginger and green chilli for Goenka; and a more elaborate combination of grilled chicken breast with fettuccine, pesto and sun-dried tomato and spaghetti with crisp cherry pink bacon, sweet paprika and mascarpone for us.
The discussion steers towards CESC, which is ready to take the next leap, as it moves beyond Bengal. “My emotions are in Bengal for sure, but emotion cannot be an overriding factor for business. We will go to whichever state gives us a good opportunity,” he says.
A pan-India growth plan is in the works spanning the eastern states of Orissa, Jharkhand as well as Maharashtra with the acquisition of Dhariwal Infrastructure Private Ltd (DIPL).
Historically, acquisitions have been the group’s forte. Goenka’s father Rama Prasad Goenka was the takeover artiste of the 1980s. But, has his sons lived up to his reputation?
“In the 80s, ‘growth’ and ‘big’ were bad words. You had a cap of Rs 30 crore on the gross assets of a company. So, every legislation was anti-growth. Today, every legislation is pro-growth,” says Goenka. Of course, there are not many CESCs to be acquired.
Waiting for, and dealing with, change is something that he does well, confesses Goenka. That he must, if the imminent political change in West Bengal does happen when the state goes to the hustings next year.
“Change is a way of life. It is not for us to say who should be in power. As stakeholders in the development of the state, we should work with the chair or the administration. We would like to work closely with whichever party is in power. We are not in politics,” he says.
But Goenka is in a curious position. His proximity to the incumbent, Buddhadeb Bhattacharjee, is well known. But, that has not restrained him from praising the chief minister-in-waiting, Mamata Banerjee.
“Just because you are close to somebody does not mean you can’t respect someone else. At the end of the day, my future lies largely in the state of West Bengal. I have a lot of investments in the state, and will invest even more. For us, we have to work with whoever is in the administration,” he puts it succinctly.
The main course is finally done with after some tough negotiation with the cutlery. There is space for a little more, and so we order Ben & Jerry’s chocolate mud pie. Goenka wants his strawberry flavour, but settles for strawberry cheesecake, rather reluctantly.
Time’s running out, but we haven’t yet asked him a favourite question of business journalists: Succession. We put it in context. A year ago, elder brother Harsh Goenka said in an interview that he was open to an outsider succeeding him. Is it the same with Goenka? A short answer: “No.” “My son will succeed me. I have no illusions about that, neither does he,” Goenka asserts.
It’s well past two hours. “It’s the most sinful lunch I’ve had in a long time. I’m sleepy,” says Goenka. We pretend we can’t afford such luxury.
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