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A man of
trial and error
Shashikant Agarwal has opened and closed many businesses and now he presides over a business conglomerate with Rs. 4,000 crores annual turnover as the Managing Director of Maliram Shiv Kumar Group. What are the lessons learnt from this trial and error style of doing business?
First, it is not possible to survive with only one or two businesses in Nepal as the market size is very small. “It is related with the age-old maxim that you should not keep all your eggs in the same basket,” he explains. Second, you have to start small and gradually grow. And the third, if you find that the environment has changed and there are other better options available, you have to change your business.
A chronological account of his journey in business will explain the ideas.
He started getting involved in business when he was about 16 years old as an assistant to his father who was selling textiles imported from India. When the government allowed imports from overseas, the firm started importing from overseas as well. The idea of concentrating on a single business, however, had to be abandoned when a ship carrying a big cargo for Nepali traders was seized by the Hong Kong authorities due to non-payment of dues by the ship owner. As a result there was no business for several months for the Nepali traders whose cargo was stuck. “Thus, I learned that it is better to diversify.”
So, he started a hosiery unit after some consultations and study about what business to enter into. It started small – as a cottage industry – to play safe. But within a couple of years, it became the largest hosiery unit of the country, he recalls. “And it gave us an experience about how to do an industrial unit.”
He then started a unit to produce polythene pipes as well. With the experience of about four years in running a manufacturing unit, he started a textile unit – Pashupati Textile, which he recalls as the largest textile unit in the Kathmandu valley, complete with all the necessary parts.
This experience was used to go even bigger in the field of textiles and he opened up Pashupati Spinning (again in Kathmandu valley) and the Reliance Spinning Mill near Biratnagar.
Now the hosiery unit as well as Pashupati Textile and Pashupati Spinning are closed. While the hosiery was closed to concentrate on other businesses, the first textile unit was closed after the cheap imports from China (he calls it smuggling) rendered the Nepali textile industry unviable. The spinning mill was closed after the Maoists bombed it a couple of years ago.
Though the Maoists bombed Reliance Spinning too, the factory is continuing operation.
Agarwal has also been operating a synthetic yarn unit – Dhanlaxmi Synthetics. “It is an effort in backward integration. Earlier, we were bringing synthetic yarn (POI) from India and making textiles out of it. With Dhanlaxmi, we make the yarn from polythene granules. But the problem is that while the finished product can be imported for no duty, the granules attract 10 percent duty,” he complains.
In between these developments, he also tried his hand at a carpet factory, a readymade garment factory and a cinema hall. But all three had to be closed down. Meanwhile, he has also expanded into construction material industry (CGI roofing sheets and iron rods), sugar mill, housing colonies and FMCG items such as the Lion brand of dry cell batteries, Dalima brand of washing soaps and confectionery.
Why such a trial and error style of business (opening and closing units so frequently)?
“One must change his business with a change in the environment. If any unit of mine is not doing well and there is an option where I can do better, it makes business sense to change track,” is his reply.
He says that some of the units were opened on his personal whim, for example, the Manakamana cinema hall.
However frequent the business change may be, Agrawal says that he has not suffered a loss in the process. “Though I may have lost some money in the process, I have gained valuable experience and nobody, neither the lenders nor the employees, have been harmed by such steps of mine,” he claims.
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