Ruia nephews sprout wings under avuncular gaze

MUMBAI: Anirudh Bhuwalka is in his early thirties and on a mission. A third generation entrepreneur who hails from a family with antecedents in tea, finance and real estate, he is entering a segment that has the likes of Volvo, Man AG, Tata Motors and Ashok Leyland as current or future competitors.

But Bhuwalka, who last week announced the launch of Asia MotorWorks’ (AMW’s) monster trucks in the 25-49 tonne range on Indian roads, is unfazed by the presence of 800-pound gorillas in his path. One reason is the huge excise and sales tax concessions he has been able to wangle from the Gujarat government for locating his plant in Bhuj. He has already put 900 assembled trucks on the road and hopes to sell 5,000 heavy commercial vehicles by 2008. He is hoping for a 90% market share in the 49-tonne range.

But another reason for Bhuwalka’s confidence could be his family linkage. A nephew of Shashi Ruia’s wife, Anirudh guardedly admits that the senior Ruia “is a mentor and a guide.” He is more willing to hold forth on Renault-Nissan CEO Carlos Ghosn’s positive remarks on India’s skills in “frugal engineering.” AMW’s own frugal engineering skills have enabled it to source all critical components for its trucks from other agencies - the engine from Cummins, the gears from ZF and the clutches from Valeo - enabling it to price its vehicles much cheaper than Volvo and Man.

Bhuwalka is not the only Ruia nephew to get some ‘mentoring’ and handholding. The senior Ruia brothers, Shashi and Ravi, who recently confirmed their multi-billionaire status when their 33% holding in Hutchison Essar was valued at over $6 billion after Vodafone bought the company, have played benevolent uncles to other nephews as well.

Among them are ABG Shipyard’s Rishi Agarwal, and Shammi Apparao, who owns a fleet of boats. Both are sons of the Ruia 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.

Both sides - uncle and nephews - are guarded and prefer not to talk about their association. 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.

After several orders in the past for tugs and barges, ABG Shipyard recently secured a major order for the construction of four, 54,000 dwt Supramax bulk carriers at a price of Rs 618 crore from Cyprus-based Essar Shipping & Logistics Ltd. As for Anirudh Bhuwalka, sources in the know reveal that Shashi Ruia has been mentoring the young scion since the time he used to operate from Essar House, the glass-walled skyscraper which overlooks the Mahalaxmi race course in Mumbai.

Anirudh shifted base after setting up his 600-acre HCV facility in Bhuj and has now moved base to his own headquarters in the Bandra-Kurla Complex of midtown Mumbai.

But Shashi Ruia’s help was obviously not restricted to the soft aspects. AMW was offered the use of Essar’s Hazira steel plant to test its new trucks. Essar Logistics has also placed an order for 20 AMW trucks and could be ordering more in the future as the company expands its fleet of trucks to ferry oil from the Gujarat refinery to retail points and coal from pitheads and ports to its various factories.

Anirudh also appears to have learnt some neat tricks from his uncle. Just as his uncle shipped a used plant from Europe to start his 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 says. 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 Essars, 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 time 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, and most are being delisted.

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

The group 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.