On the growth trajectory

Published: Mar 31, 2022
Updated: Mar 31, 2022

Rahul Timbadia’s hard work, perseverance, vision and quick thinking has seen him transition from a successful stint as a steel maker to a realtor who today heads a Rs 900-crore organization which has interests in segments as diverse as metals, agriculture and hospitality.

Learning the ropes of the steel trade as a young man in a relative's firm, he made a lightning-quick decision to acquire a metal maker that was on the verge of closure, naming it La Tim in a nod to his family name.

Fortune favoured Mr Timbadia further when he forayed into making Colour-coated steel sheets - a segment which was not viable for big steel makers. His move to realty was marked by the purchase of around 200 acres in Panvel near Mumbai, following which he successfully branched out into hospitality too.

Wherethere's a will, there's a way. And that truism holds good even if one has to navigate the most extreme obstacles en route. Of course, one needs a good measure of courage, patience and perseverance to actually reach the intended destination. And Rahul Timbadia, Managing Director and supremo of the Rs 900- crore La Tim group, has these qualities in spades. He had to literally pass an 'agni pariksha' to realise his dreams - in his place, most others would have broken down and thrown in the towel. His sterling qualities of head and heart were backed by hard work, enviable stamina and tremendous faith and selfconfidence. And, of course, his unswerving faith in the Almighty to see him through.

Having navigated mind-boggling obstacles, Mr Timbadia, a far-sighted and dynamic first-generation entrepreneur, today has the satisfaction of overseeing his well-diversified businesses from his posh office located in a tower in the Vile Parle suburb of western Mumbai. He presides over a Rs 900- crore business empire encompassing verticals as different as metals, agriculture and hospitality. He has acquired a BSE-listed company, Drilco Metal Carbide, and rechristened it La Tim Metal Industries - after the first two letters in the name of his mother (LAbhu) and the next three words of the family surname (TIMbadia

'STEELY' START

To begin at the beginning, after graduating in science from Jaihind College, Mumbai, a young Rahul, hailing from a middle-class family, joined his uncle's firm which was engaged in the steel trade. Hard-working and always ready to learn new things, the young man endeavoured to master the nittygritty of the steel trade. This was in the early 1970s when the licence-quotapermit raj was the order of the day and made trading a complicated business. Having learnt the ropes of the steel trade in such trying times, Rahul started dreaming of doing something of his own and prepared a mental roadmap of the business he wanted to enter. Starting to do well in trading in steel, he ventured abroad to import steel from various countries. His overseas travels widened his mental horizons and expanded his business opportunities.

Having established himself as a trader in steel, he realised that prospects in the business were not encouraging as various government rules and regulations were major obstacles in achieving rapid growth. He thus decided to diversify into real estate.

REALTOR BY CHANCE!

Mr Timbadia's entry into the realty sector can be termed 'accidental'. While trading in steel, he become very active in the industry and on account of his leadership qualities was elected director of the Bombay Iron Merchants Association. In those days in the late 1980s, the steel market was being shifted from Mumbai (near the Masjid Bunder station) to Kalamboli in New Mumbai. CIDCO (City and Industrial Development Corporation) had allotted 600 bungalow plots in New Panvel and 2,000 warehousing plots in Kalamboli to iron and steel traders. But these traders were not willing to take up the offer as they did not want to shift from Mumbai city.

CELEBRITY CLIENTS

"I designed a farm house scheme and started marketing these farm houses under the brand name 'Vrindavan Society'. To my pleasant surprise, there was literally a deluge of responses. Do you know who were my customers? Wellknown cricketer Dilip Vengaskar, actor-comedian Paresh Rawal and cine writer Salim Khan were among the first members of the society. They were soon followed by leading actor Salman Khan. During the period from 1987 to 1997, there was a big boom in real estate. By the end of 1999, we had a land bank of around 2,000 acres. But again, as there were so many restrictions on land development, we decided to diversify our business activity.

"Realising that there are excellent growth prospects in the hospitality sector, we started with a 80-room hotel in Mahabaleshwar and styled it 'Sai Hotel'. This was followed up by another Sai Hotel in Malshej with 40 rooms. As there was good demand, we plan to add 20 rooms there. Our third hotel came up in Pench, 90 km from Nagpur. Initially the Pench hotel had 20 rooms, but seeing the excellent response have planned to add 35 rooms to make it a 55-room hotel. As these three hotels started doing well, we set up our fourth hotel in Goa with 27 rooms. But the Covid-19 pandemic poured cold water on our plans. Taking a practical step, we gave our Mahabaleshwar hotel to Club Mahindra on 9-year lease. All the other three hotels are doing very well and they are being looked after by my son Parth and my nephew Karna who have studied abroad and have a keen interest in the hospitality sector. We also have two modern restaurants. We feel there are very good growth prospects in the hospitality sector and hence we are devising big plans for expansion. Our hospitality business is being managed under one company, Sai Hotels Pvt Ltd."

For the group's land development activities (including farm houses) Mr Timbadia floated a company styled La Tim Lifestyles and Resorts. He sees future growth prospects not just in Mumbai or Panvel but beyond them. He points to the example of the US, "Where near each big city there are towns which are developed on the same lines as big cities with the same kind of architecture and an almost similar lifestyle. I think the time is not far away for India to follow this pattern."

EYE ON FARMING!

Little wonder then that Mr Timbadia has started purchasing land in far-flung areas like Uran, Dapoli, Sindhudurg and Ratnagiri - areas which are being developed by the government. He says, "For example, ambitious plans have been made for Sindhudurg where even an airport has been made operational, beaches are being beautified and roads are being built. Seeing this, we have bought 25 acres in Sindhudurg. Let me reveal that farming is on my radar for the future as I see tremendous scope there also."

Meanwhile, Mr Timbadia came across an offer to take over a metal company, Drilco Metal Carbide, which was on the verge of closing down as the owner was acutely short of finances. Rahul didn't think twice before acquiring the BSE-listed company. With this acquisition, he not only fulfilled his dream of becoming an industrialist but was also a first-gen one as there was no industrialist in his family. Thanks to his sharp business acumen, far-sightedness and deep understanding of the metal trade, Rahul succeeded in staging a remarkable turnaround of the company and expanded his business operations.

During one of his visits to China, he saw colour-coated steel sheets. His fertile mind realised that there was very good scope for such sheets in India. He started importing these sheets from China and Japan, and subsequently took up their manufacture at his own factory which was shifted from Ahmednagar in Maharashtra to Umargaon in Gujarat. Such sheets come last in the steel 'heirarchy' - which goes from iron ore to long and flat products, cold rolled, galvanised and then PPGI - pre-painted galvanised steel. Though big companies also manufacture colour-coated sheets, their focus is on other items that give volume. Thus their production of coloured coated strips is rather small. Again, large companies are not interested in producing and marketing small quantities of designer products, which can be easily March 31, 2022 Corporate India 29 taken up by relatively small and medium-sized companies. The biggest advantage for companies like La Tim is that they can easily cater to a particular segment in a more efficient and cost-effective manner

DUTY BONANZA

Thanks to the imposition of anti-dumping duty on imported sheets, small and medium Indian companies have started experiencing a boom, which Mr Timbadia describes as a 'golden era' for the steel industry in India. He maintains, "La Tim is a great beneficiary of such a situation. We are engaged in the manufacture of flat products and are used in furniture, roofing for machinery and other capital goods, unlike long products which are used in the construction sector. Among flat products, the last category is colour-coated sheets. Future prospects for this segment are bright. Today, throughout the world, the use of colour-coated sheets is on the increase and in India too they are gradually replacing galvanised sheets."

According to Mr. Timbadia, today one can get many shades of colour and different designs, which increase the aesthetic value of the place where these sheets are used. Besides, they have a longer life span. As colour- coated sheets are made after galvanised sheets which follow coldrolled sheets, these processes make the colour-coated sheets weather-proof. In fact, any adverse atmospheric effect is reduced to a minimum.

Reveals Mr. Timbadia, "In view of the rising popularity of these sheets, we will have a plant dedicated to such production and will use cold-rolled sheets as raw material."

Experts believe that even if the crisis ends, the market situation will remain buoyant for quite some time.

TURNOVER ZOOMS

Mr Timbadia's sharp business acumen, his deep understanding of the steel industry and his aggressive marketing policies have changed the fortunes of the company which was on the verge of closure when he acquired it over 10 years ago. During the last four years, the company's turnover has expanded by twenty times - from Rs 2.21 crore in fiscal 2018 to Rs 45.05 crore in fiscal 2021 and profit of Rs 596 Lacs in fiscal year 2021, in striking contrast to a loss of Rs 76 lakh in fiscal 2018.

BRIGHT FUTURE

Mr. Timbadia maintains that he is satisfied with his progress so far and hopeful about future prospects. "I feel the difficult period characterised by the license, permit, quota raj, the teething troubles for our business and pandemic era are over. With liberalisation and globalisation as well as progressive and pragmatic nation-building policies like Atmanirbhar Bharat and Make in India, and the thrust on infrastructure development, we are excited about our business prospects going ahead. At La Tim Metal, we are planning backward integration. For land development, we see a bright future ahead. We are devising ambitious expansion plans for our hospitality division. I expect our group turnover, which is around Rs 600 crore at present, will cross the Rs 1,000-crore mark within the next five years," says a confident Mr. Timbadia, with a glint in his eyes.

If the 2020 performance is any indication, Russia was the second largest producer of crude oil and the fourth largest producer of steel, closely behind Japan and India ahead of it. It accounts for 10 per cent of global aluminium exports, around 12 per cent of nickel, 20 per cent of thermal coal exports and 12 per cent of the global steel trade. The sanctions on Russia have started pushing up prices of aluminim, steel, nickel and thermal coal. As India is also an exporter of aluminium, demand for Indian aluminium has started shooting up, pushing up the prices of metal companies like Hindalco, National Aluminium and Vedanta. These companies have started ruling the roost as their exports are on the rise along with the spurt in prices.

Making of a first-gen entrepreneur - Rahul Timbadia

The Russian invasion of Ukraine has given a big boost to the Indian metal industry and Indian metal companies, particularly Hindalco, Nalco and Vedanta (aluminium), Tata Steel, SAIL, Jindal Steel & Power, JSW (Steel) and Coal India (coal).

“Our La Tim business group, started from scratch and passing through various headwinds, is now doing quite well and we are seeing exciting prospects for all our businesses. For La Tim Metal and Industries, we are thinking of backward integration. For land development, we see excellent growth prospects ahead, and for our hospitality vertical, we are planning an ambitious expansion. Our group turnover which is around Rs 600 crore at present is most likely to cross the Rs 1,000-crore mark within the next five years," maintains a jubilant Rahul Timbadia, firstgeneration entrepreneur and architect of the La Tim business group, in an interview to Corporate India.

Extracts from the interview:

• Corporate India: There is no industry background in your family. You are a first-generation entrepreneur who has created the La Tim business empire. What are the three basic policies or strategies which have guided your business development?
• Rahul Timbadia: Really a good question. My answer will benefit many budding entrepreneurs. The first thing I have learnt from my experience is that one should not place all his eggs in one basket. So that if one of your businesses is not doing well and the other is doing well, you will not get depressed and throw in the towel. If one business faces headwinds but the other is doing well, you will have the courage to go on. When my steel business was down, real estate was doing quite well, and when both steel and real estate were in difficulties, hospitality gave me the support and courage to go on. With the passage of time, the steel business improved and even real estate started doing well, but hospitality was in trouble due to the pandemic. Today, all my three verticals are doing very well.
• CI: And what is the second lesson you have learnt and adapted in your business strategy to emerge as a successful entrepreneur?
• RT: In order to emerge successful, one has to be innovative. I have travelled to several countries, and have kept my eyes and ears open to new things. As a trader in steel, I knew that all the leading steel manufacturers produce hot rolled and cold rolled products. Having realised that ours is a small unit, I decided to go for an innovative product like Colour-coated strips. I had seen these in China and the product fascinated me. Colour-coated strips have many advantages. They are light-weight, high on strength, have a variety of colours, are corrosion-resistant and have good processing flexibility. These characteristics make these strips extremely durable and make for less construction time, easy handling and installation. Many architects and designers prefer such strips as they offer a wide choice of colours and can be easily modelled into unique shapes. But as they are sold in small quantities, large steel mills don't focus on them. Hence, I decided to take up the manufacture of these colour-coated strips. Though they are bought in small quantities, there is very good demand for them and the growth potential is tremendous. I went for these strips and after my experience so far, I realised that I have taken the right decision. Now I have to devise imaginative and effective marketing plans to capture the widening markets for them.
• CI: And what is the third ingredient in your success therapy?
• RT: I have realised that in order to be a successful entrepreneur, one has to strive to excel in four things: (i) Time management: Time is a precious commodity and we have to ensure that there is no waste. (ii) Man management: Human beings are the best creation of the Almighty, but they are of varied nature and have to be managed with a lot of understanding, compassion and intelligence. (iii) Money management: Money is a scarce commodity and it should be managed intelligently. (iv) Idea management: One has to develop the thinking habit and learn to handle ideas beneficially. To manage these four things is a continuing process and I always endeavor to excel in this exercise.
• CI: Starting from scratch, you have achieved remarkable success. Is this the time to hang up your boots?
• RT: No, no. What I have achieved so far is just the beginning. We have to achieve a lot more. I have plans for the growth of all my business segments. For the steel vertical, we are aiming at backward integration. As far as land development is concerned, we would like to go for aggressive marketing of farm houses. Again, I am very fond of farming, which also has tremendous growth potential. You should not be surprised if after a few years, I go for farming with the use of modern technology. Tourism too has immense growth prospects. And we are planning ambitious expansion programmes for the hospitality sector.

La Tim Metal & Industries, a leading manufacturing of colour-coated steel strips, has after initial teething troubles entered the growth trajectory. Originally it was Drillco Metals Carbide Ltd promoted by entrepreneur Ramesh Khanna to manufacture carbide tips and it was listed on the BSE. However, it started facing trouble as China started dumping its products in the market and Drillco was plunged into severe financial trouble. Heavy and unbearable debt made Mr Khanna's life difficult and he had no option but to sell off his company. "He approached me and after visiting the factory at Ahmednagar in Maharashtra, I agreed to take it over. I changed the name of the company to La Tim Metal and Industries and took up the manufacture of colour-coated steel strips," reveals Rahul Timbadia, Managing Director.

Mr Timbadia acquired the company in 2010, paid off its creditors, and shifted the factory to Umergaon, Gujarat where he has several facilities. He surveyed the market, and being a practical man he decided to import colour-coated steel strips instead of setting up a manufacturing plant through backward integration and spending Rs 50 crore. Gradually, the market picked up and the company entered the growth trajectory. During the last four years, the company has expanded its standalone sales turnover from Rs 2.21 crore in fiscal 2018 to Rs 45 crore in fiscal 2021 and consolidated turnover from Rs 120 crores in fiscal year 2018 to Rs 396 crores in fiscal year 2021 . The company has started paying dividends for the last two years.

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