SHE'S THE IMAGE OF THE doting daadima, snug in her shawl on a beige sofa, chatting with her granddaughter Avantika, who’s here on holiday from the U.S., son Vivek, and daughter-in-law Sumedha. It’s a cold January evening—10oC is chilly by Kolkata standards—but Meenakshi Saraogi’s living room is warm.
This is no typical Indian household, though. It’s the Saraogis, one of Kolkata’s most influential families, and owners of the
Rs 1,475 crore Balrampur Chini Mills, the country’s second largest sugar manufacturer. This is the first time that Meenakshi Saraogi has agreed to an interview and photo shoot. Missing from the idyllic scene in the old family home in the city’s posh Lower Rawdon Street are Saraogi’s husband Kamal Nayan, and their daughter, Stuti Dhanuka, an entrepreneur in her own right.
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 Uttar Pradesh’s 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 her mills scattered across eastern and central U.P. It’s no empty boast: Over 28 years, she transformed Balrampur Chini from a single factory that could crush 1,600 tonnes of sugarcane a day, into a 10-mill empire with a total capacity of 73,500 tonnes today.
As operational head, Saraogi was responsible for not only the company’s expansion but also its conversion rate (the percentage of cane that is turned into sugar) which, at 10% to 11%, is higher than the national average of 9.5%. Balrampur Chini is one of India’s most efficient sugar producers with an attractive 14% net profit margins. Apart from its efficient mills, Balrampur Chini’s balance sheet is the least leveraged of the top sugar manufacturers.
That may explain why the market is abuzz with rumours that rivals such as Bajaj Hindusthan and Shree Renuka Sugars are keen on getting a piece of the company, should the Saraogis be willing to sell their 37% share. This could not be independently confirmed. Vivek Saraogi, Balrampur Chini’s managing director, who has advised his mother on strategy and public relations since he joined the corporate office in Kolkata in 1985, rubbishes the rumours.
BALRAMPUR CHINI'S STORY IS also the tale of Saraogi’s metamorphosis from homemaker to sugar baroness. 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 (then Calcutta) at age 20 when she married businessman Kamal Nayan Saraogi, whose diverse interests included sugar. “I was happy to be a housewife and look after my family, but fate willed otherwise,’’ she says. In 1978, when Kamal Nayan’s uncles, Panna Lal and Govind Lal, wanted to sell their share in the family’s sugar business, he bought them out.
In her 13 years of marriage up to 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’d 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 business,” she recalls.
But Saraogi’s inner entrepreneur rose and shone when her husband decided he couldn’t stomach life in U.P., and moved 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. “He’s a macroeconomics guy. He understands the sugar business, but has little interest in managing day-to-day affairs,” she says. She is now joint managing director of Balrampur Chini. Her husband has been chairman emeritus since 2007.
SARAOGI'S SUCCESS STEMS FOR 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.
In the harsh environs of eastern U.P., and the rough and tumble of the sugar business, Saraogi’s path to becoming an efficient, no-nonsense manager was steep. 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.
Saraogi’s other big constraint 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 a price it fixes annually. Climatic vagaries add to the complications.
Saraogi’s first year at the helm was patently inauspicious. 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. (The company still stands by that promise: It buys all the cane produced in a 15 km radius of each of its mills.)
As if all that wasn’t challenge enough, being a novice and a woman meant Saraogi had to sometimes take drastic measures to prove she was the boss. In the early 1980s, when unit head Chedilal Saraogi, in charge of day-to-day business at Balrampur Chini, organised a strike, she sacked him. This, despite knowing he’d been with the company for years, that he was a family friend, that his father was munim (treasurer) to several family businesses, and that her decision would be opposed by family members. “There was no compromise where business was concerned,” she says. Within days, the strike was over.
TO RAISE EFFICIENCY, SARAOGI DECIDED that old hands with obsolete ideas had to go. Over three years in the early 1980s, she dismissed three business heads—production, engineering, and cane—even though it meant doing without a general manager for a year. “Sacking them at once would have been disastrous, so I did it in a calibrated fashion,” she says. Besides getting rid of those she considered dinosaurs, she promoted efficient employees. “I also brought in an outsider to head production, but it didn’t work out,” she adds. Within six months, she asked him to leave.
Of her 600-strong workforce, she says: “They were a hardworking lot. From the beginning, I decided I’d give them a 20% bonus instead of the mandatory 8.33 %.” To differentiate herself from 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 seasons. She’d discuss seed quality with farmers, study the growing and harvesting of cane, and learn how to improve yields through soil and water management. “I met experts such as sugar industry consultant I.D. Mittal and Kishan Singh, former professor of agriculture at the University of Lucknow,” she adds.
Saraogi 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 a.m. Her day would end close to midnight. She took no breaks. “There were no holidays, not even on Sunday,” she says. 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. Neotia says she even set up a monitoring device in the house to keep track of processes in the factory. “If machines broke down, all unit heads had to assemble within 10 minutes.”
There was no room for slackers. Saraogi made at least four rounds of the Balrampur factory, the last at 10 p.m. 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’s 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 of 11,000 tonnes per day. New projects at Akbarpur, Mankapur, Kumbhi, and Guleria—all in eastern U.P.—contributed another 31,000 tonnes by 2009.
Saraogi had to win the confidence of not just workers but also bankers. In 1998, when she wanted to buy the Tulsipur plant, she recalls, IDBI lent her money on condition that she ran it for at least six months. “Only when I agreed to their demands was the loan cleared,” she adds.
ONE OF BLARAMPUR CHINI'S GREATEST strengths, says Saraogi’s son Vivek, 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 alcohol derivatives and power. “We’ve commissioned three distilleries, seven bagasse-based power plants, and integrated sugar complexes.” Integrated mills—at Haidergarh, Mankapur, 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 Kalu Bankat in Balrampur district, she sued Bajaj Hindusthan, 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 Hindusthan’s factory still stands.
If there’s one regret, it’s that expansion is no more an option, given the excess capacity. “Once we were kings there. It’s no longer true,” says Saraogi. She may be referring to the four Bajaj Hindusthan mills in eastern U.P.
“Meenakshi 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’s biggest sugar producer. “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.
