Once upon a time, it was an iconic name in the Chennai business world. However, a slide started for the well-diversified Kothari Industrial Corporation Ltd (KICL) after the demise of its promoter D.C. Kothari. Though his son Pradip Kothari was helming the affairs at KICL, things didn’t go smooth and a combination of factors soon pushed KICL almost into oblivion. Then, all of a sudden, a knight in shining armour emerged on the scene, thanks to whom, KICL is on a revival path today.
Meet J. Rafiq Ahmed, the new captain at KICL, who is on a blinkered horse-like mission mode to bring yester-year glory back to KICL. Ever since it came under a new management a few years ago, KICL has been through a major overhaul in management, human resources and business focus. According to Ahmed, the new management is determined to reinvent and invigorate the brand Kothari, which has a long and illustrious legacy.
Ahmed had a long association with the steel industry and was a significant importer of steel scrap many years ago. If grapevine had to go by, he slipped into KICL by chance. And once into KICL, he appears to have gone on a mission mode. Conversations with him reveal a sense of sincerity and unalloyed passion to bring the past glory back to KICL. What stands out is his commitment to the job on hand and the clarity in his thought-process. In his quest to reinvent KICL, he is focussed on amplifying job opportunity for women, especially in backward areas.
Under his leadership, KICL has emerged out of debt and made forays into areas such as drones and footwear. Also, it has got rid of its superphosphate plant at Ennore in Chennai by selling it to the Murugappa group.
Ahmed has also quietly gone on an initiative to beef up the financial viability of KICL as an organisation that has a long history spanning over several decades. He has inked a pact with a Doha-based organisation for an investment commitment of $125 million. Since he is still in the process of relisting KICL, the overseas investment could be brought only through some sort of a holding company. The fund infusion by the Qatar group is viewed as a vote of trust for Ahmed, in particular, and Tamil Nadu, in general.
The funds will be infused in a phased manner and primarily into project-related initiatives proposed by Ahmed. The overseas fund commitment will provide a lot of elbow-room for Ahmed to pursue project options, especially through KICL. The overseas investment from Qatar must be read in the context of the efforts made by him to revive KICL, even as it awaits relisting on the stock exchange.
Stepping into footwear business
The new management has already cleaned up the accounts of KICL through debt funding from his family enterprise. Under his leadership, KICL has formed an alliance with Evervan group of Taiwan to float a joint venture, Phoenix Kothari Footwear. The joint venture is setting up a footwear park in Perambalur in Tamil Nadu, which is expected to open up huge job opportunities – especially to women folk – there.
The first factory at the park, set up by JR One Footwear, a joint venture between Phoenix Kothari Footwear and Shoetown, to make Crocs brand of footwear, has gone on stream within the committed one-year deadline. The foundation stone for the factory was laid on 28 November 2022, by M.K. Stalin, Chief Minister, Tamil Nadu. Besides JR One Footwear, the park developed by Phoenix Kothari has attracted a lot of interest among investors from across the globe. Already, several MoUs with well-known global players in the footwear field have been initiated to establish factories in and around Eraiyur in the backward Perambalur district in Tamil Nadu.
This integrated cluster approach is a visionary step. It is expected to promote self-sufficiency and position Perambalur as a global footwear manufacturing hub. The cluster approach in setting up the footwear park signifies a shift towards reducing imports and fostering indigenous footwear production.
Phoenix Kothari has, in fact, tied up with internationally renowned brands such as Nike, Adidas, Skechers, Puma and the like, for establishing production facilities in the footwear park. KICL under Ahmed has also made a quiet foray into the drone field. He has predicted that Tamil Nadu would emerge as a global hub for non-leather footwear products.
The funding from a Royals-blessed Qatar enterprise is expected to trigger a positive fall-out on his initiatives to bring past glory to brand Kothari, one of the oldest and highly respected brands. The footwear foray could yet prove a game-changer for the management.
Footwear park
Zhong Bu Development Singapore is the first to set up an adhesive factory at the country’s first non-leather footwear component cluster coming up at Perambalur. The Singapore company has already floated an Indian subsidiary to implement the project. The plant is expected to involve an investment outlay of R70 crore and is projected
to provide jobs to over 200 people in
the region.
Zhong Bu is into the production and sale of high-quality adhesives and related products for the footwear industry. It has production plants in China, Vietnam and Indonesia with research and development (R&D) facilities and technical service capabilities. It has patented technology and technical cooperation with multinational manufacturers in the industry.
The foundation stone for the factory was laid during the Tamil Nadu Global Investors’ Meet (TNGIM) held in Chennai early last month. “Our aim is to get the factory on stream within six months from the date on which the foundation is laid”, says Ahmed, who is also chairman, Phoenix Kothari Footwear. According to him, the footwear park being developed by the joint venture company, Phoenix Kothari Footwear, will be a game-changer not only in terms of business opportunity but also from the point of view of providing jobs, especially to women.
This is, perhaps, the first time that a non-leather component cluster is taking concrete shape in the country. Only China has a non-leather component cluster in the world. Brazil did make an attempt in this direction, which, however, did not fructify. “The Perambalur component cluster will fit into the Make-in India pitch of the government of India. Tamil Nadu could well turn out to be the next Vietnam,” says Ahmed.
The non-leather component cluster would conform to environmental, social and corporate governance (ESG) goals with a focus on creating jobs, especially for women. Ahmed expects the Perambalur non-footwear component cluster to house 30 factories. “We are getting a number of overseas players into the component cluster,” he says. Phoenix Kothari Footwear has already tied up with 21 companies to set up facilities in the component cluster.
Ahmed is intent on playing the change-agent and keen to usher in a reinvented and rejuvenated KICL. Will KICL regain the pride of place in the business world of Chennai? Ahmed has no doubt that it will.
The new focus
The Kothari Building at the Nungambakkam High Road in the heart of the city of Chennai has been the home for business activities of the late D.C. Kothari and his brother the late H.C. Kothari. KICL (once the flagship company of the D.C. Kothari group) was run by D.C. Kothari. His son Pradip Kothari, who took over the affairs of KICL after the demise of D.C. Kothari, is still chairman, KICL.
But Rafiq Ahmed runs the show now. And, he has provided debt funds to rescue KICL. He is now striving hard to nurse KICL back to strength with a new focus.
A well-diversified company once upon a time, with interests in fertilisers, plantation, finance, liquor and the like, KICL under Pradip Kothari encountered several hurdles before Ahmed entered the scene to reinvent KICL.
The H.C. Kothari Group also operates from the Kothari Building. After the demise of H.C. Kothari, his son late B.H. Kothari, son-in-law of Dhirubhai Ambani, was running the affairs of the H.C. Kothari group. Kothari Sugars & Chemicals is the flagship company of the H.C. Kothari group, which is now run by the son of the late B.H. Kothar
K .T. JAGANNATHAN
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