The Sugar Queen – Balrampur Chini;

Meenakshi Saraogi the homemaker-turned- Businesswoman transform a single factory into a coveted Sugar Empire?

Born in 1944 into a traditional Marwari family in Allahabad, she went to school in Nainital and studied political science in college in Kanpur, she moved to Kolkata at age 20, when she married businessman Kamal Naya Saraogi, whose diverse interests included sugar. After the split with his uncle’s Panna Lal and Govind Lal, they bought the share in the family’s sugar business.

In her 13 years of marriage till that point, Saraogi’s experience in the industry had consisted of travelling to Balrampur, some 160 km northeast of Lucknow, with her husband and kids during crushing season (November to March) there, she did play her usual roles of wife, mom and lady of the house, and help with the business in a desultory way. “I was clueless about the business” she says.

Her inner entrepreneur rose and shone when her husband decided he couldn’t stomach life in U.P. and move to Kolkata in 1982. She decided to run the company herself “it was like plunging into the deep end of the pool without knowing how to swim” she says. The two kids were packed off to their grandmother’s back in Lower Rawdon Street. Saraogi stayed on in Balrampur, managing the company’s operations, while her husband in Kolkata handled its finances as Chairman.

Saraogi’s success stems from her determination to defy those who wouldn’t take her seriously, says Suresh Neotia, who worked for 35 years with Balrampur Chini, first as a director and then as chairman. He recalls that he handed her the reins after persuading her husband to return to Kolkata. “She wanted to prove that she was better than any man in the business” he says.

Balrampur was one of the most backward parts of the state, with virtually no industries, a low per capita income, and poor infrastructure. Even now, raising productivity entails bone-rattling journeys on potholed roads to educate illiterate farmers about fertilisers. Thirty years ago, things could only have been worse. “I had to become part of the people to understand their needs and aspirations” she says.  The other big constrain was that the industry is fettered: State governments set the price at which manufacturers buy cane from growers, and there are limits on how much sugar can be sold on the market. The rest must be sold to the government at price it fixes annually. Climatic vagaries add to the complications.

The first year was really bad, the farmers were boycotting cane, because they felt they hadn’t got their due the previous year, and much of their stock had remained unsold. Saraogi literally went door to door to convince them to grow sugarcane. “As the proprietor of Balrampur Chini, I guaranteed we’d buy every stalk of cane they grew” she says. It worked and the company still stands by that promise; it buys all the cane produced in a 15 km radius of each of its mill. Even certain decisions would be opposed by her family members “There was no compromise where business was concerned” she says.

To raise the efficiency, Saraogi decided that old hands with obsolete ideas had to go. Over 3 years in the early 1980s, she dismissed three business heads – production, engineering and cane, “sacking them at once would have been disastrous, so I did it in a calibrated fashion” so before getting rid of those she considered dinosaurs she promoted efficient employees, within six months she asked them to leave.

Of her 600 strong workforces, she says “They were a hardworking lot. From the beginning, I decided to give them 20% bonus instead of the mandatory 8.33%” to differentiate herself from the other mill owners, she paid workers in the first week of each month, rather than waiting until the second week as allowed by government guidelines. Saraogi would visit the fields during the sowing and harvest season, she discuss seed quality with farmers, study the growing and harvesting of cane, and learn how to improve yields through soil and water management, she also had to learn how to buy cane from farmers, requirements had to be indicated three days in advance, after which a bumpy 70 km ride would bring her to a purchasing centre. “I’d visit many of the 50 odd centres in eastern U.P. and pick the best of the crop. The farmers would bring the rest of our requirement to the factory by bullock cart or truck” she says.

Her daily routine was punishing: She’d rise at the crack of dawn, and be in her office by 8 am her day would end close to midnight. She took no breaks “there were no holidays, not even on Sunday” she say. Work kept her from thinking about her family. “Out of sight out of mind” was my credo – otherwise I couldn’t have survived. To ensure that work continued around the clock during crushing season, Saraogi would sleep in a room where she could hear the machines and trucks. If it got quiet, she’d be out in  a flash to see why the work had stopped, she even set up a monitoring device in the house to keep track of processes in the factory “If machine broke down, all unit heads had to assemble within 10 minutes” There are no room for slackers. Saraogi made at least four round of the Balrampur factory, the last at 10 pm when the third shift began, and even called at midnight to ensure everyone was on their toes. “All I wanted was perfection and efficiency” she says “I was willing to go to any extent to achieve it. I spent a lot on new technology”

Greater efficiency was one part of Saraogi plan. The other was to build scale through buyouts, new projects, and capacity expansion. Her purchase of Babhnan Sugar (1990) Tulsipur Sugar (1998) and the Rauzagaon unit of Dhampur Sugar Mills (2005) added crushing capacity to 11,000 tonnes per day. New projects at Akbarpur, Mankapur, Kumbhi and Guleria all in the eastern U.P. contributed another 31000 tonnes by 2009.

His son Vivek was the greatest strengths, has been its ability to buy and turn around inefficient mills. “After acquiring a plant the company invests heavily in automation” he says “The Company has also diversified into an alcohol derivatives and power. “We have commissioned three distilleries, seven bagasse-based power plants and integrated sugar complexes” Integrated mills at Haidergarh, Mankkapur, Akbarpur, Kumbhi and Guleria produce sugar, alcohol and power.

But it takes more than a business plan to win this game. It takes fighting spirit and Saraogi has plenty. When Bajaj Hindusthan decided to set up its Itai Maida factory close to her proposed mill at Kau Bankat in Barampur district, she sued Bajaj saying it violated a ban on setting up a sugar mill within 15 km of another. The case was settled out of court and Bajaj factory still stands.

“Meenakshi Saraogi is a legend in the global sugar industry and an inspiration for the business community” says Kushagra Nayan Bajaj, Vice Chairman of Bajaj Corporation and Joint Managing Director of Bajaj Hindusthan, the country biggest producers. “She single-handedly built Balrampur Chini into a great organisation, despite the industry being political and volatile, she deserves a  BHARAT RATNA” success is sweet. But praise from one’s biggest rival? That’s the sugar on top.

Kolkata’s most influential families and owners of the Rs 1,475 crore Balrampur Chini Mills, the country’s second largest sugar manufacturer. Despite Saraogi’s advancing years and frail health – the 66 year old matriarch needs assistance to get up and walk – she still spends seven months of the year in U.P sugar belt. The feistiness that made her a formidable force in the industry is in ample evidence. “Nobody can beat me at understanding the cane industry” she says, as she reviews the day’s reports of cane procured and crushed by mills scattered across eastern and central U.P. it’s no empty boast: Over 28 years, she transformed Balrampur Chini from single factory that crushed 1,600 tonnes of sugarcane a day, into a 10-mill empire with a total capacity of 73,500 tonnes today. It is one of the most efficient sugar producers with an attractive 14% net profit margins, the balance sheet is the least leveraged of the top sugar manufacturers.

Meenakshi Saraogi doting daadima, snug in her shawl; its cold January evening – 10 degree is chilly by Kolkata standards but Meenakshi Saraogi’s living room is warm, chatting with her granddaughter and with other family members – Balrampur Chini is a tale of Saraogi’s metamorphosis from homemaker to sugar Baroness!!!

(Excerpt from the Interview in Fortune India)

4 responses to “The Sugar Queen – Balrampur Chini;

  1. Im very happy after reading story of your success mam ! Im also visit in your dairy farm of kumbhi suggermils a unit of BCM.

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