DEMPO: The Road Ahead

Now that the dust has begun to settle on the Rs 1750 crore divestment of their mining assets in Goa, what lies on the road ahead for the Dempo Group and the suave young couple at its helm? Rajiv D’Silva tries to find out.

For a company that has been as synonymous with mining in Goa as Dempo, it must feel strange to be no longer in the business in their home state. Shrinivas Dempo, the current Chairman and the third generation of his family at the helm of the conglomerate, readily admits that although last month’s deal with London-based mining major Vedanta Resources made perfect business sense, it was a difficult decision to make from an emotional perspective. “The family legacy is extremely important to me,” he says, “and as the inheritor of that legacy I know it is incumbent upon me to continue the traditions of the family, not just in the business, but also our social & religious commitments. So it has been a very difficult decision emotionally to let go of assets that have been part of the group since its inception.” After all, the company legacy does go back a long way. The Dempo Group was founded by Vassantrao Dempo and his younger brother Vaikuntrao in 1941, but the family’s business acumen predates that. Shrinivas, not without some pride, says that his ancestors first ventured into the shipping business more than 500 years ago, when sailing boats would transport coconuts grown on family lands to countries as far off as on the African east coast. “But, having taken that decision,” he continues, “I have no regrets. I look forward to the exciting opportunities that are coming our way. I feel this is the right time to explore other ventures. Asset prices and input costs are much lower than they were, say, a year ago.''

Plans for the future
Shrinivas is expansive about his plans for the future. ''We have always been, and will remain, a Goan company, but we are going to expand our national and global presence,'' he says. Dempo's Goa Carbon is already a major player in the Petroleum Coke industry in India, and they now have a greenfield Petcoke venture in China firmly in their sights, with plans in an advanced stage at the time of filing this story. The group also plans to acquire new mining assets elsewhere in India and even abroad, to add to the one they already own in Sindhudurg. “I am very bullish about the mining sector,” he says. “Given the limited quantity of mine-able reserves here, it does seem mining in Goa cannot be looked upon as a sustainable business in the long term. But opportunities elsewhere do look very promising.”

Do these moves signal a gradual shift away from Goa being central to their plans? “On the contrary, we are very committed to Goa, both socially and business-wise. We will take up business opportunities wherever they arise, that will depend on pure economics. But we are confident that Goa affords enormous scope for us to expand our current businesses and get into entirely new ones.” He contends that part of the reason for divesting the mining business was so that the group could push more aggressively with their other operations. The group has already finalized plans to expand Aparant Iron and Steel’s pig iron plant in Costi, Sanguem, to produce the more lucrative ductile iron in partnership with an as-yet-unnamed global expert in the ductile iron business. And an added impetus to Devashri Real Estate Developers, the group’s real estate division, is on the cards, with the company looking to get into the affordable-housing market. And if there are opportunities to get into the infrastructure sector through the Public-Private Partnership (PPP) route, they see no reason why they wouldn’t want to get into that too.
The Dempos have also long run a successful media business. Their media division, Navhind Papers & Publications, publishes the English Navhind Times and the Marathi Navaprabha. The media and travel businesses of the group are headed by Pallavi, Shrinivas’ wife, who is quite forthcoming about the challenges before her flagship publication. The Navhind Times, for long Goa’s pre-eminent English daily, has seen that position under threat since the advent of the Times of India in Goa. Pallavi doesn’t entirely agree with that assessment, though. “I look at it as healthy competition. I believe there is space for both brands to grow,” she says. Maybe, but Navhind is certainly not taking things lying down. After investing in a new, state-of-the-art print facility at Verna and putting the paper through a substantial re-design, Pallavi wants to position the paper as “young and vibrant, but with its credibility and integrity intact.” She also plans to leverage the paper’s position in the market to gain footholds into other “related businesses” that she would rather not elaborate on at this point. All will be revealed in due course, one presumes.

Social commitment
Pallavi echoes her husband’s views on their philanthropic plans. “Social causes are something we are both passionate about and very committed to,” she avers. Refreshingly, they then put their money where their mouth is. The corpus of the Dempo Charities Trust that funds their philanthropic activities and backs causes deemed as worth funding is set to receive a boost, and although both Shrinivas & Pallavi would rather not have us reveal the figure by which the corpus will be swelled, we can vouch that it is quite sizeable. Already, the Trust sponsors three of Goa’s brightest sporting prospects as Dempo Goodwill Brand Ambassadors. The promising swimmer Talasha Prabhu, the chess wunderkind Ivana Furtado and the great tennis hope Natasha Palha have all received funding to the tune of Rs 50 lakh, a substantial sum by any yardstick. “We will adopt more such young and talented individuals that show a potential to make it big on the national and world stage,” Shrinivas says. Also on the anvil are plans for a substantial ramping-up of the activities currently being carried out under the aegis of their Dempo Research Fellow programme that funds research into aspects of Goan culture & society. “The aim is to widen and deepen Dempo’s Corporate Social Responsibility and philanthropic initiatives, so that we can sustain this wonderful relationship between Dempo & Goa,” emphasizes Shrinivas, and he certainly believes that is one of the important goals for the company going forward. “We would like to think that we are not just another company, and we are aware of the responsibility that comes with being a Dempo. This is why, although many of my peers questioned me as to why I did it, I went on state television and explained my rationale for the decision to divest the mining business in Goa. I felt that so many people look up to us, that it was necessary for me to let them know what our thinking behind this was.”

Corporate structure
Shrinivas, mindful of the challenges before a family-run business, states that he has recently embarked upon a plan to put in place a structure at the Dempo Group that will take advantage both of the family’s long history of innovation and that of the expertise of professional managers. “I am very clear in my mind as to the role of the family & the professionals in the company. The family will set the vision for where they want the company to be by, say, 2050. The role of the professionals is then to translate that vision into reality,” he articulates. To this end he has recently appointed, for the first time in the group’s history, a Chief Operating Officer, who is expected to take his position shortly. The group also wants to develop strong middle-level managerial leadership across the board. He acknowledges that this is a challenging task, but having started out, is determined to see it through to its logical conclusion. The Group is also in the process of ushering in a corporate structure into one of their most well-known brands – Dempo Sports Club. The football club has achieved major successes at the national and Asian level, but resting on its laurels is the last thing on his mind. “Sports can no longer be treated as a philanthropic activity,” says Shrinivas, “and it is to this end that we have recently corporatized the football club. We are looking to appoint a new Chief Executive Officer soon.”

What makes them tick
Pallavi & Shrinivas make an interesting study as a business couple. They have been sometimes described as the ‘First Couple’ of Goan business, a tag that rests easily on their young shoulders. At first glance they are as different from each other as any couple – Shrinivas is expressive and articulate, and when he is passionate about what he’s talking about, it shows clearly. He doesn’t quite thump the table to punctuate his speech, but he’s nearly there. Pallavi, on the other hand, is less emphatic, if resolute in a quietly confident sort of way. But what they have in common is their shared interests and passions–and similar backgrounds. Both come from families steeped in a tradition of business. Pallavi’s grandfather Pandurang ‘Chalebab’ Timblo, was a mining magnate in his time. Both credit their families for inculcating in them the values that make them so alive to their social commitments. “We have both been raised with similar values & ethics, and that is one of the things that is driving us towards expanding the scope of our philanthropic activities today,” says Pallavi. Both are also deeply religious and spiritual, again something that, if you are a Dempo or a Timblo, comes with the territory.

Ask them what they do to relax, and their answers are the same again. Both love spending time with their two children, taking them on long drives or going on a holiday to some off-beat destination. And both are foodies – they will eat anything just to experience it and love all kinds of cuisine. “One thing I never do when I travel abroad is go to an Indian restaurant. I’m game to try out all kinds of food, and luckily I have as yet never had occasion to regret that attitude,” says Shrinivas, and adds that one of the happy effects of his divesting the mining operations in Goa has been that he is now able to spend more time with his family doing the things that they like doing together, something that he was unable to do earlier, with mining in Goa being “a 24/7 business”. Do they talk shop even at home? “Most of the time,” Pallavi laughs, “we use each other as sounding boards for all sorts of ideas and plans – there is nothing we don’t talk about.” Another trait that the two share is a mutual love for fitness and working out. “I work out to keep both my mind and body fit; it is something that I am paranoid about. Even when I’m travelling, I see to it that I find the time for exercise,” says Shrinivas. “I find that spending some time in the gym every day is a wonderful way to de-stress and refresh one’s mind at the end of a long day at work.” Well, with the Dempo Group poised for some interesting times ahead, he’s going to need all the presence of mind he can muster. Will the Chairman’s vision for his company see fruition in the near future, and how successful will he be in his undertaking? We’ll let time be the judge of that.