How casual talk with Bidco’s Vimal led to hiring of new CEO

Thiagarajan Ramamurthy. file photo | nmg 

By JAMES KARIUKI

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Summary

• Incidentally he is reading American business consultant and author Jim Collin’s Good to Great, Built to Last and How the Mighty Fall.
• He steered Nakumatt Holdings as its Operations director in 2003 helping it grow from its initial 11 branches built in 11 years to 23 branches during his six-year stint.
• However, his tenure at Nakumatt was not as smooth sailing as he would have wished especially in the recent years.

Newly appointed Bidco Group CEO Thiagarajan Ramamurthy fell in love with Kenya immediately he arrived from India to head a rubber factory in 1990.

The 68-year-old workaholic revamped the factory’s management and ended its perennial rubber imports in favour of locally-processed products which generated more jobs as well as helped increase their earnings.

“I needed a change after working in India for 18 years and Kenya gave me the satisfaction of a life well lived; making people’s lives better by expanding job opportunities,” he said before adding that he quit after six years to take up a more challenging task at Nakumatt Holdings.

TRM, as Thiagarajan is fondly referred to by his peers, quickly realised the need to improve company-farmer relations helping them get a dedicated supplier group for all items.

“Kenya is an agro-based country and any venture to add value to any farm produce would touch more people than an investment in a project that relies on foreign raw materials. We want to grow the local economy while creating a fertile ground to attract foreign investment,” he asserts.

Mr Thiagarajan is passionate about institutionalising company leadership that he unconsciously delves deep into the family-led businesses’ curse that blocks their successful transition from one generation to the next.

Incidentally he is reading American business consultant and author Jim Collin’s Good to Great, Built to Last and How the Mighty Fall.

“Families that have invested millions of shillings into a successful business can only grow their brand by allowing professionals to inject fresh ideas and direction. This grows the brand while giving it higher value when an equity partner knocks,” he says.

Where family members must be involved in running a business, they must invest in educating their children to prepare for transition and succession that will last over 100 years, he says.

Mr Thiagarajan spent his first 14 years of working life at a family-owned rubber factory in Chennai, India starting off as a trainee and rose to become the company’s general manager.

“Kenya must talk to its young people who hop from one job to another. Get mentors and seek promotions within. Job-hoping wastes precious time that one trades with in exchange for skills but most youths have a problem with an appetite for higher pay,” he says.

The Group CEO said internal capacity developed helps a company to grow adding that business patriarchs and matriarchs must allow their children to take over early but retain responsibility.

“I am a Kenyan business leader who believes in disruption and differentiation. I am passionate about growth and a person who believes that actions speak louder than words,” he says on his style of leadership.

Akin to allowing a child to swim while watching from a distance, Mr Thiagarajan believes founders of a company should only intervene when things go wrong but their sole task should be to manage the risks.

He steered Nakumatt Holdings as its Operations director in 2003 helping it grow from its initial 11 branches built in 11 years to 23 branches during his six-year stint with subsidiaries in Uganda and Rwanda.

He returned to the motor industry at Simba Colt Motors but later went back to Nakumatt to take up an expanded portfolio as the regional director in charge of operations and strategy for the next nine years growing it to 64 branches in Tanzania, Uganda, Rwanda and Kenya with close to 5,000 workers.

However, his tenure at Nakumatt was not as smooth sailing as he would have wished especially in the recent years as stiff competition, a terrorist bombing at its Westgate branch in Nairobi and financing challenges hit the company.

The retailer recently closed its Ronald Ngala Street branch in Nairobi, citing years of low sales. One of its nine branches in Uganda was also recently closed following rent arrears running into millions of shillings, which highlighted the depth of the retailer’s financial woes. A company official said the rent had accrued due to a depressed trading environment and poor sales at the specific branch, consequently constraining its cash flows.

Nakumatt’s gross debt more than tripled to Sh15 billion in February 2015 from Sh4.2 billion in 2011, piling pressure on operations and resulting in long payment delays to suppliers.

This in turn led to stock-outs at many of its outlets. The company is currently working on a $75 million (Sh7.5 billion) deal to sell a 25 per cent stake to a strategic investor to retire its heavy debt burden in a transaction that values the business at about Sh30 billion.

The father of one daughter, now married and living in the US, adds that his choice of moving to Bidco Africa started during a conversation with its then Group Chief Executive Vimal Shah over a need to create value for local farm produce via world-class processed products.