Revival of Kothari Industrial Corpn hinges on projects worth Rs 16K crore
Projects in the pipeline include a Rs 7,000 cr NPK fertilizer plant in Qatar, two leather factories in TN and a skilling school for drone operations in Madurai.
CHENNAI: The Chennai-based Kothari Industrial Corporation Ltd (KICL) has got a fresh lease of life as the relisted entity’s VC-MD J Rafiq Ahmed is busy lining up marquee investors such as a Qatar ruling family member and signing up big-ticket projects that will entail an investment of Rs 16,000 crore.
Projects in the pipeline include a Rs 7,000 cr NPK fertilizer plant in Qatar, two leather factories in TN and a skilling school for drone operations in Madurai.
KICL got relisted after a 24-year hiatus, with Ahmed, going all out to revive the entity. “All efforts are being made to restore brand Kothari’s glory,” the ‘non-promoter’ said, as he gave an overview of KICL’s ‘aggressive’ business plans, to the media here, on Monday.
An open offer of 1,10,45,811 shares will classify him as a promoter. Post-completion, his stake will go up from 47.08 per cent now to 73.07 per cent.
A preferential share allotment prior to the re-listing exercise elevated Ahmed, having earned the confidence of institutional investors such as the GIC and LIC. “The resolution at the extra-ordinary meeting held in August was passed with 100 per cent voting.” In fact, in a meet, which saw 3,000 plus farmer-dealers’ participation, it was clear the Kothari’s ‘Horse’ brand pull remains intact. “Now, our aim is to drive the Horse brand fast,” he said.
For the uninitiated, Chandula Mothilal Kothari established KICL as the flagship company of the Kothari group in 1917, which later got split between the Kothari brothers – DC Kothari and HC Kothari.
Ahmed, who joined KICL as director in 2017, took charge a year later. Since then, his task has been to resolve the over-two-decade long compliance issues faced by the DC Kothari flagship for him to redraw its strategic business blueprint. Banking on his connections and leveraging the experience gathered by driving his logistics venture Parveen Roadways, he decided to identify key businesses that would signal KICL’s revival.
Essentially, fertilizers, footwear, food, drone technology and solar are being seen as the focus areas, with Ahmed exuding optimsm about roping in Qatar ruling family member Sheikh Falah Bin Jassim Bin Jabor Al Thani as an investor. “We see an aggressive growth path ahead and the Qatar ruler family member joining the Board soon as well as coming in as an investor augurs well for us,” he said. It is the availability of surplus ammonia in Qatar that has given its core fertilizer business a shot in the arm as negotiations are underway for KICL to run the operations of the 1.2 million tonne NPK factory in Qatar.
“We have signed the non-disclosure agreements with public sector undertakings to meet their fertilizer requirement, but the Qatar deal has been impacted due to geo-political circumstances,” he pointed out. However, backed by a Thyssenkrup report that makes the fertilizer project a viable one, he said, within two years, this would be sustainable. Pricewaterhousecoopers has been engaged to structure the deal. Ahmed also said its non-leather footwear products are available on the Amazon platform, with Dubai debut on the anvil. “We offer 8 brands, which are 100 per cent owned by Kothari,” he said, adding the company has been approached by Clarks too, which ended its two-year joint venture with Reliance Retail recently.
KICL is keen on the B2C model, as estimates show each person possessing 3.5 pairs footwear, that would translate to over 5 billion pairs for sale in India. “We are setting up two shoe factories within a year and by then the Perambalur component cluster will be completed,” he said, adding “In two years, we will serve one million people in the footwear business”.
In the food segment, following the recent launch of its ‘Una Villa’ restaurant in the city, plans are afoot to open similar outlets once in three months.