From Rangwalas to Berger Paints
By
Sonu Bhasin
From Rangwalas to Berger Paints
From Rangwalas to Berger Paints
Realizing he couldn’t handle everything alone, Kuldip involved his wife, Meeta, and sister, Ashi, in the export business. As the list of export items continued to grow, his wife and sister began signing orders for the new items. In Russia, Kuldip became known as the person who could be trusted to procure any material from India. Besides chemicals, the procurement list now included garments, sewing machines, sewing machine motors, and other items unrelated to chemicals. UK Paints became an accredited company. “UK Paints was one of only two private Indian companies to receive accreditation from the Russians. Until then, accreditation was typically granted to Indian government companies like SBI, Air India, and MMTC,” Kuldip proudly states. Accreditation provided Kuldip with many privileges, almost equivalent to diplomatic status, including the offer of an office and residence in the diplomatic complex.
In Delhi, a growing crowd of suppliers seeking to export to the Soviet Union through UK Paints gathered outside Kuldip’s office. Those were the years when import licenses were issued only upon receipt of export receipts, and everyone was eager to secure export orders.
Kuldip received a call from Adi Godrej one day. Adi Godrej wanted to export detergents and other household chemicals to Russia and sought orders from Kuldip. Kuldip agreed to meet Adi Godrej the next day at the Godrej office in Asaf Ali Road. “I still remember what Godrej told me,” says Kuldip quietly. Adi Godrej stated that UK Paints was the client and Godrej was the supplier; therefore, following protocol, it was Godrej who would come to Kuldip’s office. “I thought to myself, ‘he is such a big man but has such good values,'” says Kuldip. However, Gurbachan remembers the same meeting differently. “Godrej wanted the order for detergents. We were already manufacturing them for export, so we knew the costs,” says Gurbachan with a delighted laugh. He meticulously broke down the costs presented by Godrej, ingredient by ingredient, and managed to get them to agree to a cost that was 30% lower than the initial offer. “We knew all the costs down to the last detail because both my brother and I had worked at the ground level,” says Gurbachan.
Purchasing Berger Paints from Vijay Mallya
Vijay Mallya owned a portion of the company, while the rest was held by an offshore company. Some funds were available in U.K. Paints Overseas, and the remaining balance was arranged with permission from the RBI. The Indian shares were bought using funds within India.
The acquisition of Berger Paints came at an opportune time for Kuldip. The export business was still thriving. “I was frequently signing orders. They wanted to deal exclusively with me, so there were days when I signed two orders in a day,” says Kuldip. Every order had to be signed accompanied by cocktails, lunches, and dinners. There were days when Kuldip would have an early dinner, sign a contract, and then attend another dinner later in the evening to sign another contract. Since he was dealing with the Russians, he had to keep up with their drinking habits. “I was leading such a hectic life—business meetings throughout the day, drinking with the Russians, then dinner, and drinking until late,” says Kuldip with a shudder. He was prone to headaches but couldn’t let his health hinder his business. He started taking even more painkillers. Since, in most cases, he had to host his business partners for cocktails and dinner, the painkillers were washed down with alcohol. “I was certain that I would die if I continued this lifestyle,” says Kuldip. “My body couldn’t handle it for much longer.”
Soviet Union Disintegrates
It does seem that fate or destiny has played an important part in the life of Kuldip Singh Dhingra. As luck would have it, just when Kuldip Singh’s mind and body had started protesting against the imposed lifestyle, the Soviet Union disintegrated, and the booming export business came to a screeching halt. “I went to Bangla Sahib and thanked Babaji the day the Soviet Union collapsed,” says Kuldip. “It saved my life,” he adds with absolute seriousness.
The Dhingra family once again became the Rangwala family. They focused on the paints business, and after the acquisition of Berger Paints, there was a lot of work that needed to be done.
In 1991, Berger Paints was India’s smallest paint company in the organized sector. It was in a precarious financial condition, with low employee morale and delayed salary payments. Moreover, the Dhingras were based in Delhi while the company headquarters were in Kolkata.
“So why did he buy Berger Paints?” I ask. Kuldip explains that he believed in the good brand name of Berger and the fact that it was being run by professionals. He had grown up following Kesar Singh’s business model, which involved having professionals to manage the businesses. It brought great comfort to know that Berger already had capable professionals handling the company’s day-to-day operations. Therefore, the geographical distance between the owners and managers did not matter much. The key was to provide funds for the business. Once again, it followed the family’s model, where the owners provided the capital while the professionals handled the operational aspects. Kuldip did provide the required capital in the early years after the acquisition. “At one point, the company asked us for a Rs. 10 crore loan. In those days, that was a significant amount of money. But we made it available on short notice. Additionally, we had to agree to a lower interest rate and a payment moratorium for five years,” recalls Kuldip. It was a challenging decision, but Kuldip believes that as owners, they must support the professionals to deliver results. “This degree of separation between ownership and management in Berger Paints is rare compared to other companies,” says Abhijit Roy, MD, and CEO of Berger Paints. Even the vendors and suppliers appreciate this separation. “I have only met Mr. K S Dhingra once when the foundation stone for the Puducherry factory was being laid,” says A Kumar, owner of Gemini Paints, a vendor with more than 30 years of association with Berger. All his dealings are with the management team, although he knows that Kuldip is fully informed. “But I have never seen him interfere in the process,” adds Kumar about Kuldip.
