Rice to the occasion

Starting from a sleepy hamlet in Punjab to creating one of the biggest packaged rice companies in India, VK Arora, chairman of LT Overseas, is the perfect example of perseverance blended with vision. He���s the man who introduced basmati rice to global palates. A commerce graduate from DAV college in Amritsar, Arora trained under his father for six years to hone his business skills. ���I learnt the nitty-gritty of running the family business and in 1984 he gave me independent charge to run the business that used to be called Lalchand Tirathram Rice Mills,��� he says.

After his father was killed in a terrorist attack in Punjab in 1985, Arora came up stronger, earning his first million rupees in 1986. ���After my father���s death there was a psychological setback but we earned Rs 15 lakh from the business by launching the Daawat brand of packaged basmati rice,��� says Arora. Sensing opportunity in the government���s decision in 1980 to allow exports for selected premium rice, Arora started his first basmati rice-processing unit in Sonepat in 1984 and two years later Daawat was born. ���There were many challenges in the domestic market such as inconsistent quality products sold by unorganised players. We had to establish the brand as one that promised consistent quality,��� says Arora. In 1990 the company���s name was changed to LT Overseas. ���We changed the name because it was difficult to pronounce in the overseas market,��� he says.

Arora recounts the first major export consignment of 20 tonnes to Dubai under the new brand. ���I lost $20,000 as I fell into bad traps of the game. But it was a learning experience that helped us to identify the right distributor and the right market before sending any consignment,��� says Arora. Soon he had mastered the game and began making inroads into countries such as the USA, Canada, the UK and some in the EU.

At a time when rice was being treated as a commodity, Arora drew up a plan for launching branded and packaged food products. This innovative step resulted in a strong vertical ascent in the growth of the company. ���We started the business of milling, processing and marketing branded basmati rice and manufacturing of rice food products for domestic and overseas markets,��� says Arora.

Between 1993 and 1997 the company���s revenue grew 100-fold to Rs 300 crore. ���I made my first million dollars during this period. However, this time I was focusing mainly on building the brand both domestically and internationally,��� he says. Business has grown to Rs 700 crore now and Arora projects Rs 1500 crore by 2010. The company���s product portfolio includes brown rice, white rice, steamed rice, parboiled rice and organic rice. The business has a 50:50 domestic and exports ratio. ���By this year end a new vertical in the business will be started under the name The Rice Food Co, and we���re planning to put up a factory in Madhya Pradesh for the same where we will produce nutrional rice, convenient easy to cook rice, healthy rice, and puffed rice,��� says Arora.

He adds that the company is the first in its industry to install metallic silos, a storage system that helps increase rice and paddy storing capacity, which is very essential in rice aging.

In 2007, LT Overseas acquired US-based company Kusha Inc for Rs 200 crore. Kusha had a share of 42% in the US rice market. "This acquisition has increased our business to 52% in the US,��� says Arora. The company has hired R&D professionals from North America to help develop better technology to produce various varieties of rice. The company is developing ready-to-cook and ready-to-eat rice in various flavours as part of its expansion plans, and also developing value-added products for institutional buyers, who account for more than half the revenues in the rice business.

Arora has come a long way from driving a broken Fiat to owning a fleet of cars - BMW, Mercedes and Land Rover - and now he wants his family-run business to grow into a large corporate enterprise. ���We have hired Accenture and Ernst & Young to help improve our supply chain and distribution in the global markets,��� says Arora.