Brothers in arms, spawning an army of entrepreneurs

If a business historian were to write a book on the Ruia brothers, he or she would most likely dwell on their travails pre and post the Vodafone deal.

But, there’s more to the brothers than the latest deal. How group chairman Shashi Ruia (who has read right-wing philosopher Ayn Rand’s Atlas Shrugged at least a dozen times) together with younger brother Ravi Ruia, carved together an empire not only for his immediate family but also for his kith and kin, for example, would make for an engrossing read.

Take the case Anirudh Bhuwalka, a third-generation entrepreneur from a family with antecedents in tea, finance and real estate, who had dived into a segment that has heavyweights such as Volvo, Man AG, Tata Motors and Ashok Leyland. Bhuwalka, who in 2007 launched Asia MotorWorks’ (AMW) monster trucks in the 25-49 tonne range, now has several of the trucks fighting for space on Indian roads with vehicles made by his more illustrious peers.
In an interview during the 2007 launch, Bhuwalka, a nephew of Shashi Ruia’s wife, described the senior Ruia as a “mentor and guide.”

Not only was AMW was offered the use of Essar’s Hazira steel plant to test its new trucks, but also Essar Logistics had placed an order for AMW trucks, giving a leg-up to the young Bhuwalka scion as the Essar group company expanded its fleet of trucks to ferry oil from the Gujarat refinery to retail points and coal from pitheads and ports to its various factories.

Then there are Rishi Agarwal of ABG Shipyard and Shammi Apparao, who owns a fleet of boats. They are sons of the Ruias’ sisters. While ABG operates from a shipyard very close to Essar’s Hazira plant in Gujarat, Apparao operates a fleet of tugs and barges near the Gujarat coastline, close to the Essar plants, DNA Money had reported in 2007.

Both sides —- the uncle and nephews —- are guarded and prefer not to talk about their association. The Ruia clan prefers a low profile, though the brothers are linguists who can speak in several Indian languages including Tamil, as they started out in Tamil Nadu.

But it is clear that the Ruia brothers are keen to promote their nephews and handhold them through their initial years in the rough and tumble of Indian business.

Bhuwalka appears to have learnt the ropes well. Just as his uncles shipped a used plant from Europe to start their hot rolled coil project in Hazira, Bhuwalka hit a goldmine when he acquired a five-million capacity wheel rim plant from Europe for a throwaway price. “We bought the wheel rim plant with its existing customer base intact,” he told DNA Money then. The wheel rims will cater to car, tractor and truck manufacturers.

Interestingly, most of the outfits owned by the Ruia nephews are based in Gujarat, where the Ruias have their refinery, power and steel plants. This reinforces the geographical shift that has been steadily taking place for the Ruias, who started their shipping and construction businesses out of Tamil Nadu.

Shashi and Ravi Ruia, after decades of dogged struggle with audacious projects, have already entered the big league in India Inc, rubbing shoulders with the Tatas, Birlas, Ambanis and Mittals. While the Hutch caper —- where the Ruias were paid nearly half-a-billion dollars to avoid queering the pitch for Hong Kong billionaire Li Ka Shing’s sale of the company to Vodafone —- confirmed their high net worth, all their businesses have now turned around.

“Shashi saab is a wealth creator,” an Essar group source had said then. He has an eye for young emerging talent in his family and helps them nurture it.

The newest venture that Essar trackers believe has the Ruias lending a helping hand is the Matix group, promoted by the Kanodia family, related through a marriage (Ravi Ruia’s daughter is married to the Kanodia scion). The Matix group is building a greenfield fertiliser complex with a capacity of 3 mtpa in Panagarh, West Bengal. According to the Matix website, in Phase 1, the group will invest Rs 5,000 crore to set up a 1.3 mtpa single stream 2,200 metric tonnes per day (mtpd) ammonia plant and a 3,850 mtpd urea plant along with associated offsite and utilities.
So much so, Aparup Sengupta, managing director and global CEO of Aegis Ltd, in a conversation earlier spoke how the Ruia clan gave him a free hand to make the over 18 acquisitions, it made in recent times .

The Essar group has another trait that distinguishes them from the rest. It has remained united so far because Shashi and Ravi operate as one — both sitting in the same room. Shashi’s sons Prashant and Anshuman follow the same sharing routine.
The extended Ruia group, with nephews primed for success in their own right, will make them an even bigger powerhouse over the next decade.