You are here: Rediff Home » India » Business » Special » Features
Search: The Web
  Discuss this Article   |      Email this Article   |      Print this Article

On a roll in Punjab
Sangeeta Singh
 · My Portfolio  · Live market report  · MF Selector  · Broker tips
Get Business updates:What's this?
August 13, 2005
Nothing demonstrates the entrepreneurial traits of the Punjabi better than 2029 up, the Shatabdi Express that connects New Delhi with Amristar.

On board, cellphones ring constantly as businessmen confirm consignments, make (or receive) export enquiries, issue instructions to office assistants - even as they juggle two mobiles, one probably a Delhi number, the other a Ludhiana or Jalandhar one.

The scene is not very different from that on board the Shatabdi that connects Mumbai Central with Ahmedabad, or on the Flying Ranee heading towards Surat from Mumbai - the only difference being that the Gujaratis are replaced by the Punjabis doing what they do best - eating, drinking and breathing business.

On board the Shatabdi, morning tea comes with a packet of Cremica biscuits, further confirming the business acumen of those who have made Ludhiana the new manufacturing hub of the north. With a factory in Phillaur, midway between Ludhiana and Jalandhar, Cremica promoter Rajni Bector was just a housewife before she started selling her kitchen-made ice-creams at Diwali melas in the late 1970s.

Fortis: Healthcare with a difference

Today, Cremica does sales of Rs 200 crore (Rs 2 billion) and is an important link in the supply chain to the fast food industry with an inventory of buns, breads, sauces, ketchups and ice-cream toppings to the likes of McDonald's, and syrups and mayonnaise to Barista.

Rajni Bector's is not a stray case, proving that Ludhiana is fertile with business opportunities. In a land celebrated as much for its ability to fashion lassi out of washing machines as its back-slapping flamboyance and opulence where kids turning 14 are given an S-class Mercedes to park in the porch, Ludhiana is part of India's billionaire's row where to have it is to flaunt it.

A tour of Ludhiana's Kitchlu Nagar takes you to the Rs 800 crore (Rs 8 billion) Abhishek Industries [Get Quote], which supplies terry towels to the world's leading retail chains like Walmart, Chris Madden and JC Penney.

Its CEO and managing director Rajinder Gupta, a school dropout, was forced to earn his livelihood at an early age. He set up shop with 17,000-odd spindles in 1993. In the dozen years since, he's got into yarn, paper and chemicals, besides terry towels, and manages the Rs 1,500 crore (Rs 15 billion) Trident Group with elan.

What used to be a bastion for bicycles, hosiery and wool industries, Ludhiana now has entrepreneurs in every field. Brij Mohan Lal Munjal of the Hero group, Sunil Bharti Mittal of Bharti, and S P Oswal of Vardhman are among some of its stalwarts.

In 2004, two prominent Ludhianites - Rajinder Gupta and Sunil Bharti Mittal, among 18 others - were shortlisted for the Ernst & Young Entrepreneur of the Year Awards, eventually bagged by Mittal.

"Entrepreneurship is in the air of Ludhiana," says S P Oswal, chairman, Vardhman group, once famous for its knitting wools. "And unlike other industrial clusters like Tirupur, it is not restricted to a couple of products. There are hundreds of medium enterprises here."

Rummy Chhabra, managing director, Metro Tyres, which began by making cycle tyres in Ludhiana and has since spread to Uttar Pradesh and Haryana, agrees. The group's basket today includes fans and motorcycle parts: "Even labourers coming from Bihar and UP show high productivity levels over here. In fact, they prefer to work for companies that offer overtime. You see, we Ludhianites are not just helping Punjab but also other states," says Chhabra.

A visit to Bharti Teletech's telephone manufacturing facility in Hambran, 17 km from Ludhiana, does prove that Punjabis can work hard - and make others work hard too! At least 14,500 PCB (printed circuit board) installations are done manually every day in the factory.

"This is one of the highest number of installations done the world over, and higher than some phone factories in China," confirms Rakesh Bharti Mittal, vice chairman and managing director, Bharti Teletech.

The company makes 2 million phones daily. More interestingly, over 70 per cent of the assembly work is undertaken by women from neighbouring villages.

Rajinder Gupta too claims high productivity levels in his factory. He uses locally available resources to raise productivity and lower costs.

"More than 80 per cent of the raw material for Trident's paper business is agro-based," says Gupta. Not just that; he also follows modern best practices.

For his white-collar employees, he has hired HR consulting firm GrowTalent, which will help Abhishek Industries become a great place to work. "Ludhiana is a university of entrepreneurs," Gupta says triumphantly.

Neighbouring district Jalandhar isn't lagging too far behind. What marks it is the same drive and motivation; the only difference is that industries in Jalandhar tend to be smaller. This is also reflected in the household incomes of the two cities.

Acccording to a survey by the National Council for Applied Economic Research, while there were 267 households with an annual income above Rs 1 crore (Rs 10 million) in 2001-02 in Ludhiana, there were only 96 such families in Jalandhar.

In fact, Ludhiana is ahead of the state capital Chandigarh as well, which had 199 households with an annual income of Rs 1 crore and above. But looking at recent developments in both Jalandhar and Ludhiana, these numbers are bound to have risen.

According to street speak, there is a lot of foreign money coming into Jalandhar. But in spite of its dizzying ascent to prosperity, emigration too is growing vertically, and can be gauged by the number of IATA-approved travel agencies. "In 1992, Jalandhar city had three to four such agents; today there are 60," says R K Sharma, manager, InterGlobe Air Transport, Jalandhar.

Travel between Jalandhar and Chandigarh by road and you'll find footprints in even smaller towns like Ropar of at least a half dozen such agents. Sharma adds that 1,000 Punjabis travel (to visit relatives or emigrate) to Vancouver and Toronto, 3,500 to the Middle East, and another 1,000 to the US every month; newer destinations like Italy and Netherlands are also specking the horizon.

"Of the Rs 250 crore (Rs 2.5 billion) worth of revenue that the travel industry makes from outbound travel, Rs 150 crore (Rs 1.5 billion) comes from Punjab itself. These days, students are going in hordes to New Zealand and Australia," adds Sharma. If Jalandharites are to be believed, farmers from the Doab region are ready to pay anything between Rs 10-20 lakh (Rs 1-2 million) to travel illegally to foreign lands.

And those who are not headed Westward are sending their goods there. Jalandhar's industrial area, Focal Point, is a hub for machine tools, auto-parts, carpets, sports goods and the like. So while Rajan Mayor exports golf balls and footballs, Suk Dev Raj exports hand tools and Shital Vij exports carpets, blankets and rugs.

"There are at least 200 industrial units in Jalandhar, but they are labour intensive, smaller units with sales between Rs 25-30 crore (Rs 250-300 million)," says Sukh Dev Raj, managing director, Victor Tools, which supplies hand tools for home use to European countries.

Banks in both cities rank industrialists in Jalandhar and Ludhiana high. "In the year ending March 31, 2005, we extended term loans of Rs 2,000 crore (Rs 20 billion) to 45 units in Ludhiana -- and they have all complied," says a senior official in the State Bank of India [Get Quote], Ludhiana. "There is only one case of default, and that too is under debt restructuring - and the default amount is Rs 20 crore (Rs 200 million), which will not be difficult to get."

But where industry and finance may be looking ahead, the municipal bodies' apathy towards both cities is stark. The cities are dirty, the roads have potholes, and there are piles of garbage everywhere. "We have 8-10 hours of power cuts every day," complains Sukh Dev Raj of Jalandhar.

S P Oswal in Ludhiana has a similar complaint: "Power cuts are rampant and civic amenities far from what is expected of the government." But the principal secretary, industry and commerce, Punjab, S C Agrawal, has a different take: "The problem is part of the entire northern region," he says, "and will be sorted out in a couple of years. Meanwhile, industrialists can rely on their own power generation sources."

A multiplicity of responsibilities among various departments makes it easier for senior bureaucrats in Chandigarh to pass the buck. An official of the Punjab Urban Development Authority says its job is only to develop housing in Punjab, on which front it is doing fine in both Ludhiana and Jalandhar.

Does that suggest that citizens have to fend for themselves? "We Jalandharites try and do the maximum we can for fellow citizens," says Sheetal Vij, managing director, Shital Fibres, who is also president of a 150-bed charitable hospital that has several modern ventilators in its ICU, and where a CAT scan costs as little as Rs 1,400.

Most government hospitals in the region lack even basic facilities. To do their bit, the Mittals have started the Sat Paul Mittal School in Ludhiana in a tie-up with Delhi's Sri Ram School. The upmarket school has a student to teacher ratio of 25:1, and there is one computer for every child. S P Oswal has started a commerce college to offer management courses.

The Mittal-promoted Nehru Sangathan Kendra Trust offers scholarships especially for girls. The Vardhman group has a commerce college and a management institute for students who don't have formal degrees: "We should nurture local talent rather then get management graduates from Delhi or Mumbai," says Oswal.

If Jalandhar and Ludhiana reflect that there is very little the Punjab government has done for its cities, ironically the same is not true of its capital Chandigarh. Plush government buildings line the road, in perfect sync with private bungalows. PUDA's own office in Mohali opposite Fortis Hospital looks like an extension of the hospital, an architectural landmark in that area.

Punjab slipped from the top position in terms of per capita income some years ago, and presently occupies the fifth slot, behind Haryana and Maharashtra. Nevertheless, it is still considered one of the most developed states in the country. So, are its citizens with their considerable bonhomie leading the charts in prosperity? Or is it just the turbulence that rocked the state in 1980s that has made them stronger, more resilient?

Balle Balle: It's part time

The general belief that Punjabis work hard and party harder is best reflected in Ludhiana and Jalandhar. "We Punjabis can travel any distance to enjoy ourselves and have a good meal," says Geeta Bector, Rajni Bector's daughter-in-law.

Only, the definition of good food has changed from tandoori chicken to fast food. "We pay toll charges to go and eat at McDonald's, which is outside the city's municipal limits," she says.

The Bectors, Guptas and Oswals are all awash with luxury cars, and the S-class Mercedes is ubiquitous here. S P Oswal may suggest that, "For me, a car is a car and not a showpiece", but his daughter Suchita insisted on his S-class "because I travel a lot by road". Others believe that if you can afford a Mercedes, why not flaunt it?

According to a rough estimate, there are no less than 400 Mercs in the industrial belt, though Daimler Chrysler's figures suggest that no more 100 Mercedes cars ply in the whole of Jalandhar, Ludhiana and Chandigarh. Where are the other Mercs coming from? They're apparently brought from other regions - such as Delhi, and the number plates on the cars bear that out.

The mall culture is catching up fast too," says Parminder Chadha, a resident of Ludhiana. "We can't wait for Ansal Plaza to open. As of now, we go shopping in the malls in Delhi and Gurgaon."

"We saw the potential for malls in Jalandhar and Ludhiana as early as 2003 and started construction on our Ludhiana mall in February last year," says Pranav Ansal, chairman, Ansal Township & Projects Development. "We will open next month."

With 80 per cent of its space leased out, the mall will house Meena Bazaar, KFC, Pyramids and McDonald's. The one in Jalandhar will take a little longer before it becomes operational.

Old movie halls like Malhar are being razed to give way to multiplexes like Waves and PVR. "In six months time, the entire complexion of Ludhiana will change. Even today, it is very different from the time I was a schoolboy," says Adish Oswal, managing director, Amran Trading.

Oswal himself has got into the trendy business of high-end lingerie and sports and casual wear with stores in Ludhiana, apart from those in Delhi and Gurgaon. The MBD group (which owns the Radisson hotel in Noida) is planning mixed-use developments in Ludhiana and Jalandhar by 2007.

To join their friends in the bhangra, Ludhianites drive out of town to attend weddings in Harsheela and Kotari Resorts on Ferozepur Road. Their indulgence makes good business sense to those owning these farmhouses.

Spread over 5-7 acres, these "marriage palaces" attract rents ranging between Rs 75,000-100,000 with food catered for anything between Rs 250-700 per plate. Restaurants, highway hotels and waterparks have mushroomed.

The neo-rich have swimming pools, snooker tables and landscaped gardens in thier palatial homes. Sprawling gardens, the latest furniture ordered from luxury stores in Delhi and Mumbai, branded wear from international fashion labels - it's all on display in their homes and on their shoulders.

Little, however, has changed on the lifestyle front. Though Rajni Bector claims she was the one who introduced cold cuts and healthy salads in Ludhiana, they occupy buffet tables more for display than for consumption.

Harpal Singh, chairman, Fortis Heathcare, warns: "Their unchanging food habits may be harmful for the Punjabis in the long run." Obviously, with 100 cardiac surgeries and an equal number of angioplasties, and over 300 angiographies a month at Fortis' Mohali hospital, the sons of the soil need to watch out if they're not to fall prey to the ills of a life lived easy.

Powered by

More Specials
 Email this Article      Print this Article

© 2008 India Limited. All Rights Reserved. Disclaimer | Feedback