THE UN­LISTED AU­TO­MO­TIVE GIANT

Steered by his vi­sion and a quest to make it big in life, Tarang Jain took a train out of the ‘City of Dreams’ to set up the Var­roc Group in Au­rangabad in 1990. In what started as an au­to­mo­tive parts sup­ply busi­ness, the Var­roc Group has since grown both

Marwar - - Contents - Text Joseph Rozario Pho­to­graphs Cour­tesy Var­roc Group

Steered by his vi­sion and a quest to make it big in life, Tarang Jain took a train out of the ‘City of Dreams’ to set up the Var­roc Group in Au­rangabad in 1990. In what started as an au­to­mo­tive parts sup­ply busi­ness, Var­roc Group has since grown both or­gan­i­cally and in­or­gan­i­cally to es­tab­lish it­self as a global au­to­mo­tive com­po­nent be­he­moth that has clocked sales of 10,300 crore in FY 16-17.

IN TERMS OF TURNOVER, THE VAR­ROC GROUP, THOUGH un­listed, pips most listed com­pa­nies on the na­tional bourses, in­clud­ing some of the big­gest cor­po­ra­tions. What’s more amaz­ing is that this in­cred­i­ble achieve­ment has come off the ef­forts of a first gen­er­a­tion en­tre­pre­neur, Tarang Jain.

Orig­i­nally from Delhi, Tarang Jain’s jour­ney to suc­cess be­gan in the early eight­ies in Mum­bai. Af­ter grad­u­at­ing from Sy­den­ham Col­lege of Com­merce and Eco­nom­ics, he ap­pren­ticed with a few lo­cal com­pa­nies and in­terned with his twin brother, Anu­rang, at Kaycee In­dus­tries Ltd (an elec­tric switch com­pany where their fa­ther, Naresh Chan­dra Jain, was the chair­man) and then at Ba­jaj Auto Ltd, which was headed by their ma­ter­nal uncle, in­dus­tri­al­ist Rahul Ba­jaj.

Set­ting up shop

Af­ter about a cou­ple of years at Ba­jaj Auto, the broth­ers, mo­ti­vated by their uncle’s suc­cess as an en­tre­pre­neur, felt in­spired to start their own busi­ness. Their pre­ferred line of busi­ness was un­der­stand­ably some­thing re­lated to automobiles. This had them look­ing to Pune, In­dia’s au­to­mo­tive cap­i­tal, to get things rolling, but fate took them to Au­rangabad in­stead,

an up­com­ing in­dus­trial town­ship in the in­te­rior of Ma­ha­rash­tra.

“It’s des­tiny which brought us here,” says Tarang Jain, sit­ting in his posh of­fice at the Var­roc head­quar­ters in Au­rangabad. “Though we wanted to start a fac­tory in Pune, we got a li­cence for Au­rangabad, it be­ing the days of the Li­cence Raj, when the cen­tral gov­ern­ment gave you a li­cence and few op­tions as to where you could put up a fac­tory.” This, how­ever, was a bless­ing in dis­guise for the broth­ers as Ba­jaj Auto was in the process of putting up a sec­ond plant in Au­rangabad at the time, thus cre­at­ing pos­si­bil­ity of their uncle’s sup­port, which was forth­com­ing. “We were for­tu­nate as my uncle gave us an op­por­tu­nity to be­come a sup­plier for Ba­jaj Auto, which we grabbed with both hands. He sug­gested an alu­minium die-cast­ing project for mak­ing en­gine cov­ers for Ba­jaj scoot­ers and a cou­ple of other al­lied prod­ucts,” says Tarang Jain. With that, in 1985, Anu­rang En­gi­neer­ing Co Pvt Ltd was born. “But he only pro­vided us with the op­por­tu­nity, which, of course, was some­thing very big and for which we will ever be grate­ful to him. Af­ter that, we broth­ers had to man­age and com­pete,” adds Jain.

Go­ing solo

A cou­ple of years later, in 1987, as their busi­ness grew, Tarang Jain felt he needed to en­hance his man­age­ment skills and pro­ceeded to the In­ter­na­tional In­sti­tute for Man­age­ment De­vel­op­ment (IMD), a busi­ness school in Lau­sanne, Switzer­land, for a year-long MBA course. Upon his re­turn, he joined the busi­ness again, but soon af­ter the broth­ers parted ways am­i­ca­bly with Tarang set­ting off to make his fu­ture in plas­tic/poly­mer moulded com­po­nents for two-wheelers—an emerg­ing ma­te­rial for light weight­ing in those days— while his brother Anu­rang con­tin­ued to man­age and ex­pand Anu­rang En­gi­neer­ing. Look­ing back at the in­cep­tive years of his now flour­ish­ing Var­roc Group, Tarang Jain says, “We gave Ba­jaj Auto the idea of con­vert­ing the alu­minium fan and steel fan cov­ers into plas­tic, which they ac­cepted. And with that, in 1990, I started sup­ply­ing plas­tic moulded com­po­nents to Ba­jaj Auto. Around that time, Video­con also hap­pened to come to Au­rangabad, and they too gave us some parts to make for their tele­vi­sions and wash­ing ma­chines.”

Soon af­ter, the com­pany pro­cured other com­po­nents busi­nesses from Ba­jaj such as painted parts, PU foam seats, air fil­ters and mir­rors. These, how­ever, were all built-toprint jobs, where Var­roc had lit­tle de­sign or tech­no­log­i­cal in­put. This roused Tarang Jain to think be­yond a mere build-to-print busi­ness and ex­tend his ex­per­tise to more stim­u­lat­ing and prof­itable ven­tures. “We de­cided that we didn’t want to do just built-to-print com­po­nents but

A cou­ple of years later, in 1987, as their busi­ness grew, Tarang Jain felt he needed to en­hance his man­age­ment

skills and pro­ceeded to the In­ter­na­tional In­sti­tute for Man­age­ment De­vel­op­ment ( IMD)

also be a pro­pri­etary part sup­plier,” he says. “There­fore, we got into man­u­fac­ture of elec­tri­cal and elec­tronic com­po­nents and as­sem­blies for automobiles. We also started a metal­lic divi­sion which made crit­i­cal parts like en­gine valves, and trans­mis­sion gears and shafts. In this way, we not only de-risked our busi­nesses but also made them more prof­itable.”

As a re­sult, in the early nineties, Var­roc took to man­u­fac­tur­ing prod­ucts like starter mo­tors, AC gen­er­a­tors, lamps and han­dle bar switches for two-, three­and four-wheelers and also got into man­u­fac­ture and sup­ply of ma­chined forg­ings and com­po­nents like en­gine valves and gears which com­prised the new metal­lic divi­sion.

To do all these, Var­roc ini­tially had to re­sort to tie-ups with Ja­panese and Ital­ian firms. One among them was Scarpa & Columbo of Italy, to­gether with which his com­pany Durovalves In­dia Pvt Ltd sup­plied en­gine valves to Ba­jaj. An­other was Del­phi Cor­po­ra­tion of the US, with which his com­pany, Var­roc Ex­haust Sys­tems, col­lab­o­rated for sup­ply of cat­alytic con­vert­ers. There were ad­di­tional tieups with Ja­panese com­po­nent sup­pli­ers like Mit­suba and Shin­den­gen for elec­tri­cal and elec­tronic com­po­nents.

Along the line, Var­roc grad­u­ally be­gan to set up its own en­gi­neer­ing cen­tres and to­day the group boasts 11 of them around the world with cut­ting-edge R&D, test­ing and val­i­da­tion labs. With these also came pro­fes­sion­al­ism which saw Var­roc put in place strong sys­tems, pro­cesses and poli­cies, in­clud­ing the ‘To­tal Pro­duc­tive Main­te­nance’ sys­tem, all of which helped drive qual­ity and ef­fi­ciency through­out the group. These ini­tia­tives were not only to help Var­roc stay ahead of com­pe­ti­tion but also es­tab­lish it­self as a world-class player with its own technology and range of world-class of­fer­ings.

Growing in­or­gan­i­cally

One of Tarang Jain’s strong­est qual­i­ties is the abil­ity to take cal­cu­lated risks which spurred him to ac­quire two Ital­ian com­pa­nies be­tween 2006 and 2011. The first was Mi­lan-based Imes SpA, which man­u­fac­tured large forg­ings for Cater­pil­lar ve­hi­cles and the off-road oil drilling in­dus­try. With man­u­fac­tur­ing units in Italy and Poland, Imes SpA strength­ened Var­roc’s forg­ing busi­ness in the Euro­pean mar­ket. The sec­ond was Tri. O.M. Spa, the largest sup­plier of two-wheeler lamps in Europe, in which Var­roc bought a con­trol­ling stake (80 per cent) in 2011. The com­pany had fac­to­ries in Ro­ma­nia, Italy and Viet­nam. In be­tween, he also set up a joint ven­ture with Plas­tic Om­nium, a global plas­tic ex­te­ri­ors com­pany for four-wheelers, in which his son, Ar­jun, later started his ca­reer, in Detroit, USA.

Em­bold­ened by these suc­cess­ful ac­qui­si­tions, Tarang Jain turned in 2012 to his most am­bi­tious busi­ness move yet: the takeover of Amer­i­can auto com­po­nent giant Vis­teon’s ex­te­rior light­ing busi­ness. The ac­qui­si­tion im­me­di­ately dou­bled Var­roc’s turnover to over a bil­lion dol­lars. Once owned by Ford Mo­tor Com­pany, the rechris­tened Var­roc Light­ing Sys­tems had an es­tab­lished clien­tele, world-class technology and a global man­u­fac­tur­ing and de­sign foot­print.

The next gen steps in

A year later, in 2013, Tarang Jain’s el­der son, Ar­jun, joined the fam­ily busi­ness. He had stud­ied in the US, dou­ble ma­jor­ing in Eco­nom­ics and Po­lit­i­cal Sci­ence at Vas­sar, a lib­eral arts col­lege in up­state New York. He be­gan his ca­reer in Detroit with a six-month stint at French MNC Plas­tic Om­nium. He then re­turned to In­dia, to work at one of the ‘Big 3’ man­age­ment con­sult­ing firms, Bain & Co, in their Mum­bai of­fice. He spent two years there work­ing across a range of in­dus­tries and com­pe­ten­cies be­fore fi­nally join­ing ranks with his fa­ther at Var­roc in 2013.

“I started at Var­roc in 2013, in the strat­egy func­tion,” says Ar­jun. “Around that time, I re­mem­ber we’d de­cided that our vi­sion was to be a ` 20,000 crore com­pany by 2020 and were in the process of defin­ing, as my dad puts it, both ‘where to play and how to win’.” Then, he spent a year lead­ing the re­struc­tur­ing of the com­pany’s sup­ply chain func­tion, as well as par­tic­i­pat­ing in other key strate­gic ini­tia­tives in the ar­eas of man­u­fac­tur­ing technology and ma­te­rial cost re­duc­tion. As a re­sult of this, he was pro­moted to ‘Busi­ness Head’ of Var­roc’s ‘Elec­tri­cal/Elec­tron­ics Busi­ness Unit’, which man­u­fac­tures a host of Var­roc’s pro­pri­etary and high growth prod­ucts such as starter mo­tors, mag­ne­tos, light­ing units, han­dle bar as­sem­blies, dig­i­tal in­stru­ment clus­ters, ig­ni­tion con­trollers and volt­age reg­u­la­tors. As the head of the divi­sion, he says his prime ac­count­abil­ity is achiev­ing the growth ex­pected from the busi­ness unit, while, of course, en­sur­ing con­sis­tent prof­itabil­ity and sus­tain­abil­ity.

And what has he learnt from his fa­ther? “To have the mo­ral gump­tion to know that if you are on the right track, the right re­sults will even­tu­ally hap­pen. I don’t think I would have had the courage to start a busi­ness from scratch like he has,” replies Ar­jun. And how does the fa­ther feel about his son? “I would say that he has def­i­nitely done a lot of pos­i­tive things for the busi­ness, one of which is build­ing a strong team. Peo­ple fol­low him be­cause he sup­ports them, and in the right man­ner. I would also say he has courage, be­cause I re­mem­ber, he once stood up for a new plant head whom a cer­tain dis­sat­is­fied cus­tomer had wanted sacked. Ul­ti­mately, the plant head turned out to be a high per­former, some­thing which the dis­sat­is­fied cus­tomer too now hap­pily ac­knowl­edges.”

Suc­cess mantras

Com­ing back to Tarang Jain, asked about his phe­nom­e­nal suc­cess, he out­lines key fac­tors that in­clude per­sonal traits such as hu­mil­ity, re­spect and dili­gence, the abil­ity to take cal­cu­lated risks, hav­ing the courage to take strong de­ci­sions, ad­her­ence to com­pany guide­lines and, of course, en­sur­ing or­gan­i­sa­tional dis­ci­pline (es­pe­cially

He [ Ar­jun Jain] spent two years there work­ing across a range of in­dus­tries and com­pe­ten­cies be­fore fi­nally join­ing ranks with his fa­ther at Var­roc in 2013

fi­nan­cial dis­ci­pline). In the ini­tial years of Var­roc’s his­tory, the com­pany’s QCD guide­line (Qual­ity, Cost and De­liv­ery) for ex­am­ple had helped it grow by en­sur­ing the right qual­ity of prod­ucts, mak­ing timely de­liv­er­ies, and, most im­por­tantly, ob­serv­ing fi­nan­cial dis­ci­pline. Elab­o­rat­ing on fi­nan­cial dis­ci­pline, Tarang Jain says, “We were a `2,500 crore com­pany when we bought Vis­teon’s lamps divi­sion, a `3,500 crore en­tity. We could ac­quire the much big­ger busi­ness be­cause we were al­ways par­tic­u­lar about our fi­nan­cial dis­ci­pline—we planned well, we took cal­cu­lated risks, we didn’t over­trade and we didn’t pay too much.”

How­ever, there has been the oc­ca­sional chal­lenge too such the re­ces­sion of 2008, when sales went down. Also, get­ting tieups with over­seas com­pa­nies in the growth stages of the com­pany was not easy. And buy­ing, man­ag­ing and run­ning over­seas com­pa­nies prof­itably did give anx­ious mo­ments, con­sid­er­ing the fact that he had no prior ex­pe­ri­ence in the field. But thanks to the values of Sin­cer­ity, Hu­mil­ity, In­tegrity, Pas­sion and Self­dis­ci­pline, or SHIPS as he calls them, that he has in­cul­cated and also im­pressed upon his or­gan­i­sa­tion, these chal­lenges were over­come with rel­a­tive ease.

Tarang Jain’s busi­ness spans across the globe to­day. About 70 per cent of it is abroad and the rest in In­dia. His clients in­clude Ba­jaj Auto, Hero, Honda, Ford, the Volk­swa­gen Group, Tesla, Jaguar Land Rover, Fiat-Chrysler and Daim­ler, to men­tion a few. The com­pany posted a turnover of `8,600 crore in FY15-16 and then achieved dou­ble-digit growth in FY 16-17 to touch `10,300 crore in sales.

Given Tarang Jain’s many achieve­ments, the awards and ac­co­lades heaped upon him are also many. The most pres­ti­gious of these are be­ing hon­oured with the ‘Au­to­car Pro­fes­sional Man of the Year 2011’ ti­tle (by Au­to­car Pro­fes­sional mag­a­zine) and be­ing named ‘Nex­tgen En­tre­pre­neur of the Year 2013’ at a cer­e­mony hosted by Forbes In­dia mag­a­zine.

Be­yond busi­ness

In the process of growing from strength to strength, the Var­roc Group, how­ever, has not re­mained caught in just rak­ing in the moolah but also has dili­gently en­sured health, hy­giene and mo­ti­va­tion for its staff, not to for­get liv­ing up to its en­vi­ron­men­tal and so­cial re­spon­si­bil­i­ties. One among these is the Kham River project in Au­rangabad, where a vi­tal stretch of the once choked and pu­trid river was cleaned up and sev­eral “green bridges” con­structed along its course to pre­vent the river from get­ting clogged again. A fur­ther stretch of the river is sched­uled for clean-up in the next phase of the project.

That apart, Var­roc also sup­ports an academy for cricket in Pune, to­gether with star crick­eter, Dilip Vengsarkar. Called the Var­roc Vengsarkar Academy, it boasts ex­cel­lent fa­cil­i­ties and pro­fes­sional coaches, where young, promis­ing crick­eters un­dergo train­ing. In ad­di­tion, young Au­rangabad-based sports­men from other fields such as ri­fle shoot­ing, body­build­ing, chess, etc, are also spon­sored and sup­ported. Tarang Jain’s leisurely ac­tiv­i­ties in­clude sports and vis­it­ing his­toric places. He also is an avid col­lec­tor of lith­o­graphs of rare 19th cen­tury In­dian paint­ings, some of which adorn Var­roc’s of­fice in Au­rangabad. He is mar­ried to Rochana, an in­te­rior de­signer, who is cred­ited with de­sign­ing the cor­po­rate of­fice and some of Var­roc’s fac­to­ries as well. The cou­ple lives in Pune with their two sons, 27-year-old Ar­jun and 21-year-old Dhruv, who is cur­rently study­ing eco­nom­ics at the Univer­sity of Chicago.

Tarang Jain to­day counts among the top play­ers in his cho­sen fields and is still growing. The global au­to­mo­tive com­po­nents mar­ket seems to be growing too, fu­elling op­ti­mism for both fa­ther and son. Fur­ther, with plans of go­ing pub­lic next year and the next gen­er­a­tion be­gin­ning to re­in­force the group with fresh per­spec­tive and ef­fort, his am­bi­tious tar­get of touch­ing the ` 20,000 crore turnover mark by 2020 starts to look quite re­al­is­tic

From top: The Var­roc head­quar­ters in Au­rangabad; Var­roc’s PU foam assem­bly line for seat­ing

From top: Ma­ha­rash­tra CM Deven­dra Fad­navis pre­sent­ing the ‘Emerg­ing Man­u­fac­tur­ing Giant’ ci­ta­tion to Tarang Jain; Tarang Jain re­ceiv­ing the Forbes Next Gen­er­a­tion En­tre­pre­neur award in Mum­bai

Left: Tarang Jain with his wife Rochana Above: Tarang Jain with his sons Ar­jun and Dhruv at the foot­ball World Cup in Brazil

Right: Var­roc Light­ing Sys­tems Mon­terry Plant in Mex­ico

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