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Source: www.forbesindia.com
*What do they do when kids lose their father at an early age?
*What does one do when a flourishing business comes to a grinding halt and the family legacy is at risk?
*What does one do when one is asked to leave everything in the middle, forgo all dreams and come back home at once to pick up the pieces?
*What does one do when after the father’s untimely demise, the elder brother (a father figure) suffers a stroke and is unable to guide the family anymore?
*In essence, What does one do when life ends the way you know it and everything around you is falling apart?
Most people would succumb to the circumstances, others might head out on their own and leave the rest of the family to fend for themselves but a handful great men dig deeper, muster strength from the family values and the sacred bonds of brotherhood to rebuild much more than what had been lost.
Amongst those handful, is the Dhingra family. Rising up to the challenge and showcasing the grit that became a precursor to their astronomical success, fame, legacy and wealth over the years that followed. Especially the incredible duo of Kuldip Singh Dhingra and Gurbachan Singh Dhingra, brothers and owners of Berger Paints.
It all started in 1898 when Kuldip and Gurbachan’s great-grandfather and grandfather set up a paint shop in Amritsar, Punjab. It was their foresight that since all the paint in India was being imported in the late 1800s, trading in paints made for a good business opportunity. As the business took off, their family came to be known as the ‘Rangwala family’ in Amritsar synonymous with their business of colourful paints.
Kesar Singh, The duo’s grandfather was a visionary man. He had five sons whom he had sent to all different parts of the country to set up the family business of distribution and sale of paints with expansion plans in mind. Back in those days, he understood the importance of professionals running the business and had always employed them in the family business. The professionals were called ‘working partners’ as they were given a share in the profits. This was a revolutionary idea for those times which has become the norm of the corporate world today.
Niranjan Singh, the duo’s father was an ambitious young man. He scaled up the family business from trading to manufacturing by setting up a paint factory in Delhi and named the company Dhingra Paints and Colour Varnish Private Limited. Niranjan was a firm believer that import/export is where the future lies, he travelled across the globe in order to boost exports. He was expanding the business at a neck break speed when tragedy struck. At the age of 37, he died while undergoing an appendix surgery. This untimely demise of their father had left the ten-year-old Kuldip and his younger brother Gurbachan shattered. Kuldip was called back home from Ajmer where he was studying and Sohan Singh the eldest of the brothers was called back from IIT Kharagpur while in the first year of college.
It also brought the family's booming business to a grinding halt. The factory was sold off, the import/export business was discontinued and the Delhi shop was shut down. The kids and their mother rented out the first floor of their mansion in Delhi to the Romanian embassy in order to make some money and the Amritsar shop was entrusted to managers who were already running it for some time now.
Their elder brother Sohan Singh, completed his studies and had numerous job offers lined up for him but he decided to head back to Delhi for the sake of his family. Even though Sohan started working for his uncles in Delhi, he always wanted to carve out his own path and restart the business that was his father's dream project. After acquiring another shop from their uncles in Amritsar, the family moved to Amritsar to start afresh led by their mother and elder brother Sohan Singh. To resurrect his father’s dream, Sohan set up a tiny paint factory at the outskirts of Amritsar. Hence, Rajdoot Paints was born.
Keeping his family’s interest ahead of his dreams of settling abroad, Kuldip joined the sales side of the business at Amritsar and started excelling at it as he was always a people person. Gurbachan was learning the art of manufacturing from his elder brother Sohan and the trio got the ball rolling again. Once Kuldip had mastered the craft of salesmanship, he was sent to Delhi in order to expand their paint business. He started operating from the garage of their Delhi home as they couldn’t afford to rent a shop. Even though they didn’t have the money, they possessed the grit and resourcefulness of an entrepreneur which was priceless.
On the back of Kuldip’s superior salesmanship, the factory was finding it difficult to produce enough paint in order to keep up with the demand. As the business was evolving at lightning speed, lack of working capital started becoming an issue. Rather than accepting the constrained financial condition, Kuldip came up with an ingenious solution. He launched a deposit scheme for his dealers. Dealers could give money to the company as deposits and earn an interest that was two percentage points higher than what was being offered by Bank fixed deposits. The scheme was a big hit as the same deposit was also deemed as security and an equivalent amount of credit was extended to the dealers. This timely inflow of money enabled them to invest more in the plant, machinery and raw materials. Hence, ramping up the production.
Still, the Amritsar factory was unable to handle the ever-increasing demand. So the brothers decided to mortgage the Delhi mansion to set up a new factory in Delhi which was much bigger than the one at Amritsar. The family moved back into their Delhi mansion which they once had to rent out due to their dismal financial condition. In a way, life had come a full circle for the ‘Rangwala family’.
Building a spotless reputation in the industry had always been a top priority for the brothers. Rewarding their honesty & integrity, lady luck shined on them as they got an export order to supply white enamel paint to Russia for the Moscow Olympics in 1980. This opened the floodgates for their business as the Russian demand was insatiable in those days. Kuldip’s resourcefulness and reputation among the Russians had become so impregnable that ultimately they made Kuldip their single point of contact for doing business in India. Even if they needed something unrelated to paints from India, Kuldip became their go-to man.
The symphony of the brothers was their secret sauce, with Sohan Singh heading production and overseeing the whole business, Kuldip handling the Sales and Marketing and the youngest Gurbachan looking after the production and formulation part. As a result, they became the sole paint suppliers to Russia with orders that had started with 50 tonnes in 1978 and had grown to more than 20,000 tonnes within a year.
As fate would have it, tragedy struck the family once more with Sohan Singh suffering a stroke in 1982 which meant he could never go back to business again. This made the duo of Kuldip and Gurbachan having to shoulder the burden of taking the company forward. As the business was booming and the orders were flowing in every day, the brothers set their eyes on Berger Paints company which had been put up for sale by the then owner of the company, Vijay Mallya.
As the duo acquired Berger Paints, Soviet Union disintegrated and so did their export business to the Russians. But now they were faced with an even bigger beast. In 1991, Berger paints was the smallest company in the organised paint sector and the brothers knew that they would have to put in a lot of work to grab market share from the industry leaders.
Berger was a business which was already being run by good professionals and the brothers had learnt the importance of that from their forefathers. The Dhingras understood early that the bottleneck for the company was the lack of capital needed for expansion. So unlike the previous promoters, the brothers kept pumping in money to make the company a pan India player which now operates ten factories across India. The laser-like focus of the promoters on exclusively doing the paint business has been another key to their success as they have stayed away from mindless ‘diworsification’. With the introduction of revolutionary ideas such as ESOPs, tinting machines and many more in the early days of the company, the Dhingra brothers had started making their mark on the Indian paint industry.
They have been able to create the second largest paint company in India after starting their manufacturing operations from a 15ft by 30ft shed at the periphery of Amritsar in 1962. With the current market cap of 30830 crores, an investment in Berger Paints in 1991, has given a phenomenal compounded annual return of 28%.
The journey of the Dhingra family personifies the quote that,
Life’s high peaks aren’t necessarily conquered by the naturally nimble but, rather by those willing to endure, wait out the storm, and try again.
References:
- The Inheritors
- The Unusual Billionaires
- http://www.forbesindia.com/article/anniversary-special/behind-bergers-rise-as-indias-second-largest-paints-company/43301/1
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