Benu Gopal Bangur
Chairman, Shree Cements
Age: 82
Rank in the Rich List: 35
Net Worth: $1.66 billion
The Big Challenge Faced in the Last Year: Slowing growth has put profitability under pressure; company has seen margins dip
The Way Forward: The Bangurs are going ahead with an ambitious plan to double cement capacity. So far the company has been restricted to North India but it is now looking to set up two units in Chhattisgarh
Nearly 10 years ago, the Bangurs were having a tough time running a two-mill cement plant in Rajasthan’s Beawar district. This was in 2002, after the market had gone through a four-year slump. Saddled with excess capacity, Shree Cement, their company, was hardly making any money. To compound its problems, it had borrowed money at 19 percent to fund expansion.
Managing director Hari Mohan Bangur got nervous and decided to look for a prospective buyer. They zeroed in on French cement major Vicat, which was looking for a presence in India and had valued the business at Rs 800 crore. Moreover, it was willing to do a 50-50 deal. Vicat needed a toe-hold in India while the Bangurs needed funds to repay the banks. The price seemed right and two sets of lawyers had vetted the agreements. “Spirits were high that night,” says Bangur. The papers were to be signed at 9 am the next day.
But the 61-year-old is a born fighter who still plays volleyball every day during Kolkata’s winters. “I knew there is nothing 50-50 in business. If I like the colour red and they like yellow, whose word prevails?” he says. “Plus, in time, my stake would get diluted and I would be left with nothing.”
So Bangur went to his father Benu Gopal (BG), now 82 and chairman, and asked for one more chance to turn things around. The way he looked at it was that there were takers for the company. Even if he couldn’t turn things around, they could always find a buyer a couple of years down the line. Vicat even raised the price, but his mind was made up. “My life is over, it is for you to take this decision,” Bangur recalls his father telling him. BG Bangur seems to have done well by trusting his son.
A decade later, Shree Cement remains firmly in his hands with a 10-fold capacity increase. Vicat, meanwhile, has had to partner with Andhra Pradesh-based Sagar Cements that barely manages to churn out 2.35 million tonnes annually compared to Shree’s 13.5 million tonnes.
Shree Cement has seen its stock jump from Rs 45 ten years ago to Rs 4,500 today. Simply put: A rupee invested in Shree Cements in 1985 would have appreciated at a rate of 28.5 percent a year. This has propelled BG Bangur to 35th on the Forbes India Rich List with a net worth of $1.66 billion (he was 34th with $1.7 billion last year).
What is it that makes Shree Cement a consistent performer? For starters, the market turned around sharply after 2003-04. More importantly, Bangur, who studied chemical engineering at IIT-Bombay, was able to make use of a pioneering technology in India. Add to that the complete operational freedom to his executives—he rarely travels to his plants—and you begin to understand why Bangur has succeeded where others faltered.
The Roots
The Bangurs belong to an illustrious Marwari business family from Didwana in Rajasthan. In the 1950s and 1960s, they were among the top 10 business houses in India, with interests spanning jute mills, tea gardens, textiles and shipping.
Cement was not part of the core family business. In 1915, Bangur’s grandfather went to Jamnagar where the maharaja offered him land and other sops to set up a cement plant. Digvijay Cements was born. (It has been sold several times since and continues to do business till today.)
During this period, the Bangurs operated as a joint family. In the 1970s, during the licence raj, some executives from Digvijay Cements suo moto went and applied for a licence to start a cement plant in Rajasthan. The owners continued to be unaware even as the executives received the licence. When they were finally informed, the promoters upbraided the employees saying the company was barely making any money, and they did not want to set up another cement plant. Defeated, the executives said they would get the permit cancelled, at which point they were given another tongue-lashing: “Humaara naam kharab karoge kya? (You want to ruin our reputation?).”
Construction began in the late 1970s. Prashant Bangur, Hari Mohan’s 33-year-old son and executive director, says delays were inevitable in those days. It took till 1985 to complete the plant and the company shipped out its first bag of cement in 1986.
Bangur came up with a three-brand strategy: Shree Ultra, Bangur and Rockstrong. While Shree Ultra and Bangur are in category B, Rockstrong is in category C. All three cater to Delhi, Haryana, Rajasthan and western Uttar Pradesh. In order to make the distinction clear, the company keeps the marketing and advertising functions separate; offices of the different brands are in different parts of Delhi; they use different advertising agencies as well. Depots, too, are kept separate.
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(This story appears in the 28 November, 2013 issue of Forbes India. To visit our Archives, click here.)
Your outstanding and commendable performance with innovative vision had made your company's growth a great success story in international scenario to achieve 24 Million ton/annum capacity, I must congratulate you both for the great success. Kindly recollect our meeting at your Calcatta office in 2009 regarding innovative energy saving technologies in cement industry in raw meal silo area. Over the time, I have retired but as you know, an engineering mind keeps on working on innovations. My background just to remind you is, I am Chemical Engineer from IIT Delhi and had been a Scientist at NCB and retired in 2012, now running 64 years. Was incharge of Forum on Science and Technology and coordinator of paper evaluation of NCB's Three International Seminars, besides many diverse job functions in early career at NCB. Prior to this, conceptualised and contributed in setting up world's first cement plant based on Calcium Hydroxide Sludge, a bye product from carbide plant at Kota for Shriram Cement. Travelled to more than 20 countries . I have been working on ventless cooler technology after retirement and I have come up with a technology for saving upto 100 Kcal/ kg clinker in clinker cooler by way of changing the aerodynamics to atomise and increase the heat transfer area of clinker multifold, thereby increasing heat transfer rate resulting almost 50% reduction of cooling air intake in clinker cooler, eventually to achieve a ventless cooler. Besides this, a great benefit Carbon Trading and pollution control followes. This level of energy saving in financial terms is about Rs. 10 Crores per year for one million/ year capacity cement plant, amounting a saving of Rs. 240 Crores /year for your 24 Million per annum capacity. The modification can be implemented in planned shut down of any of the plants without wasting operational time . I am looking forward for implementing the technology in any of the coolers available during shut down and willing to have personal discussion on the subject beforehand either at Calcatta or at your Cement plant. The technology must be kept confidential and would only be discussed at your highest level, Therefore instead of email communications, we should communicate on phones to determine the further roadmap. Kindly let us make this technology a success story.
on Mar 6, 2016Great to know so much in depth, wish Shree, will continue to climb success ladder, and shall break all the old records. Best wishes.
on Jun 19, 2015Its great to inspire and deal courageously
on Jun 18, 2015We are proud of you Congratulations. .... Jai Balaji....
on Jun 17, 2015Real attitude of a real mar wadi. inspirational. proud to be part of it.
on Nov 15, 2014Proud of u , glory of my village SCL
on Feb 22, 2014we are proud of you
on Jan 27, 2014there is one more man behind the success of the company which is shri mk singhi
on Nov 26, 2013As per i know the executive director of the conpany is shri mk singhi
on Nov 24, 2013Extraordinary Achievement...Congrats..
on Nov 22, 2013Extraordinary achievement...Congrats...
on Nov 22, 2013We are proud of u.
on Nov 20, 2013It is extraordinary that Mr Bangur takes the CAT exam every year just as a mental virility check! Wish there were more leaders like him, specially in Indian politics!!
on Nov 18, 2013