The influential businessman dhirubhai ambani


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The influential businessman dhirubhai ambani

  1. 1. BUILDING RELIANCE  Dhirubhai was born on December 28, 1932, to Hirachand Govardhandas       Ambani and Jamunaben Hirachand Ambani. He was the middle of five children, three boys and two girls. His father was a local school teacher in a village called Chorwad in the Junagadh district of Gujarat. After his matriculation in 1949, Dhirubhai left for Aden, (now in Yemen) at the young age of 17. His first job was to fill gas and collect money at a Shell petrol station, earning Rs 300 a month. Within a few years, he rose to the position of a sales manager in the same company. After working for eight years in Aden, Dhirubhai decided to come back to India and start something on his own.
  2. 2. BUILDING RELIANCE  On December 31, 1958, he came back to Mumbai and started the Reliance Commercial Corporation (RCC) with a borrowed capital of Rs.15,000. RCC was mainly involved in exporting commodities like ginger, cardamom, pepper, turmeric, and cashewnut. Using his connections in Aden, he exported a wide range of commodities to Aden. Aden, being a free port attracted lot of exports.  In the mid 1960s, the Government of India (GoI) introduced an export promotion scheme under which the earnings from the export of rayon fabrics could be used for the import of nylon fiber.  In the mid 1960s, the Government of India (GoI) introduced an export promotion scheme under which the earnings from the export of rayon fabrics could be used for the import of nylon fiber.  This attracted Dhirubhai's attention and he decided to switch from spices to textiles.
  3. 3. BUILDING RELIANCE  In 1966, he set up a spinning mill at Naroda 20 kms from Ahmedabad      with borrowed funds of Rs 2,80,000 and registered it (Reliance Textile Industries) as a powerloom unit with a paid up capital of Rs 150,000. Another program, the High Unit Value Scheme introduced by the GoI in 1971 gave tremendous boost to Reliance textiles. The scheme allowed the import of polyester filament yarn against the export of nylon fabrics. RCC was benefited the most from this scheme and its exports constituted more than 60% of exports under this scheme. There were rumors that the scheme was solely devised for Dhirubhai. Dhirubhai strongly denied the allegations saying that Reliance cannot be blamed for taking advantage of the scheme „when others kept their eyes shut.‟
  4. 4. BUILDING RELIANCE  He said “I do not consider myself cleverer than my colleagues in the industry. If       there was a very large margin of profit, why did they not take advantage of it?” When the High Unit Value scheme ended in 1978, Dhirubhai focused his attention on the domestic market. During this time, Reliance Textiles was not a very well known name in the domestic market. His first priority was to establish the Vimal brand, under which Reliance Textiles sold its fabrics in India. An advertising programme was launched to facilitate its entry into the domestic market. Dhirubhai knew that a strong brand image was crucial for winning the consumer's confidence. To achieve this objective, Reliance tried to emphasize the superior quality of its fabric in all its advertisements.
  5. 5. BUILDING RELIANCE  Besides this, Dhirubhai also took steps to develop an efficient distribution     system for Vimal as he found that the existing marketing channels were inadequate and inefficient. Dhirubhai adopted the concept of company stores from its main competitor, Bombay Dyeing and pursued it on a grand scale. Dhirubhai toured the entire country intensively, offering franchises to shareholders. Dhirubhai promised that Reliance would provide financial and advertising support. In his search for high volumes, Dhirubhai identified a new market - the nonmetro urban segment. By 1980, Reliance fabrics were available all over India through 20 company owned retail outlets, over 1000 franchised outlets, and over 20,000 retail stores.
  6. 6. EXHIBIT I RELIANCE GROUP OF COMPANIES RELIANCE •RIL was the world's second-largest producer of polyester INDUSTRIES staple fiber and polyester filament yarn, the third-largest LIMITED producer of paraxylene, the fourth-largest producer of purified terepthalic acid, and the sixthlargest polypropylene producer. It operates the world's largest grassroots multi-feed cracker at its Hazira petrochemicals complex. •RPL is India's largest private company in terms of sales, second only to RELIANCE PETROLEUM RIL in terms of profit, net worth and assets. The first refinery to be set LIMITED up by the private sector in India, RPL is the world's largest grassroots refinery, and the seventh-largest refinery in the world at any single site, having a capacity of 27 million tonnes per annum. The refinery has the technical capability to deliver products of international specifications (even beyond Euro II norms). It is the only refinery in India capable of producing gasoline with less than 1 percent benzene content, and diesel with less than 0.05 percent sulfur content.
  7. 7. EXHIBIT I RELIANCE GROUP OF COMPANIES RELIANCE CAPITAL LIMITED The company focuses on infrastructural investments and insurance. The company also seeks attractive opportunities in the financial services sector. The company is also into leasing. RCL has invested in areas like power, telecommunications, ports etc. In 2002, RCL also entered the life insurance and general insurance business. RELIANCE INDUSTRIAL INFRASTRUCTURE LIMITED RIIL is engaged in the business of infrastructure and leasing activities. The company has operations in Surat, the Mumbai-Pune belt and in Jamnagar. The company has so far transported over 16 million metric tons of petroleum products through product pipelines. No failure or leakage has been reported during its 10 years of operations. RELIANCE POWER Reliance pursues its interests in the power sector through BSES (Bombay Suburban Electricity Supply). BSES and its subsidiaries provide electricity services to more than 5 million consumers, covering an estimated population of 45 million. As on March 31, 2002, Reliance was the single largest shareholder in BSES, with an equity stake of nearly 38%, and 2 nominees on the board of directors of the company, out of a total of 9.
  8. 8. EXHIBIT I RELIANCE GROUP OF COMPANIES contd... RELIANCE RIL holds a 26 % equity stake in Reliance Telecom Limited (RTL). Incorporated in TELECOM 1998, RTL provides cellular telephony services in 15 states, 118 cities and towns in India. The company holds a license for providing basic telecom services in the state LIMITED of Gujarat and the union territories of Daman, Diu, Dadra and Nagar Haveli. The company has initiated both infrastructure build-up and marketing activities so as to launch commercial services in rural, semi-rural and urban short distance charging areas (SDCAs). RELIANCE GENERAL INSURANCE COMPANY LTD. RGICL is one of the first non-life insurance companies to get license from IRDA. It is one of the few companies in the private sector, which provides complete insurance solution. The company has a state-of-the-art technology which enables it to fulfill the needs of its insurance customers. RELIANCE LIFE SCIENCES PRIVATE LIMITED. Reliance Life Sciences Limited was incorporated in January 2001. The company taps business opportunities in the fields of medical biotechnology, plant biotechnology, industrial biotechnology, contract research and clinical trials.
  9. 9. EXHIBIT I RELIANCE GROUP OF COMPANIES contd... RELIANCE Reliance Infocomm provides a host of communication services: from INFOCOMM. restrictive wireline connectivity to the all pervasive wireless technology; from public service telephone network to broadband; from analogue to digital transmissions; and from plain voice telephony to virtual networks. The company aims to set up a nationwide, worldclass broadband communication infrastructure comparable with the best in the world. Reliance Infocomm plans to start its services in three well defined phases: The first phase begins in 2003 and aims at providing the Reliance India Mobile service through a nationwide wireless network reaching out to nearly 90% of India's population. The second phase beginning in mid 2003, aims at bringing about enterprise netway revolution, by providing 100 mbps Ethernet links. The final phase begins in end 2003, with the objective of bringing about a consumer convergence revolution, by providing high speed Ethernet links to enlighten every home with an entire range of television channels, highspeed telephony, audio conferencing, videoconferencing and video on demand.
  11. 11. CHRONOLOGY OF EVENTS YEAR EVENTS 1932 Dhirubhai Ambani was born. 1949 At the age of 17, he went to Aden, and worked for A. Besse & Co., the sole selling distributor of Shell products. 1958 Dhirubhai Ambani returned to India. 1958 Started his first company in Mumbai, Reliance Commercial Corporation, a commodity trading and export house. 1966 Set up a textile mill in Naroda, Ahmedabad - the first step in Reliance's road to success. 1977 Reliance goes public and heralds the equity cult in India. 1980 Announces Rs 1 billion Patalganga project to integrate into fibres. 1986 Dhirubhai suffers stroke. Anil and Mukesh catapulted to the hot seat. 1988 Fibre intermediates and chemical production starts. 1989 Floods ravage Patalganga complex. 1991 First plant of the Rs 90 billion Hazira project commissioned. 1992 First ever GDR by an Indian company. 1993 Expansion into plastics and PVC. 1994 Major expansion planned to triple Hazira petrochemical‟s capacity to 6 mtpa.
  12. 12. CHRONOLOGY OF EVENTS Jan, 1994 Chosen 'Businessman of the Year 1993' by Business India. 1994 Awarded the Companion Membership of the Textile Institute, UK, anaward which is limited to 50 living members who have "substantially advanced the general interests of the industries based on fibres. 1995 Becomes the first Indian company to report a net profit of Rs 10 billion. 1996 Becomes the first Indian company to be rated by S&P and Moody's. 1997 World's largest multi-feed cracker commissioned in Hazira, first Asian company to raise 100-year debt. 1997 Commences cellular services. 1999 World's largest grassroot refinery commissioned at Jamnagar. 2001 Reliance life sciences incorporated. 2002 RPL merged with RIL. 2002 Wins IPCL through competitive bidding. 6-Jul2002 Dhirubhai Ambani passes away.
  14. 14. EXHIBIT V MANAGEMENT MANTRAS OF DHIRUBHAI AMBANI Growth has no limit - keep revising your vision If you make one grand plan and stick to it without updating it with new inputs, adapting to new forces and adopting new practices, then it is a recipe for disaster. Remember, a goal is worth it only if you get there. And growth is life. Leap, look, leap There is a saying that there are only three kinds of people. Those who make things happen. Those who watch things happen and those who say what happened. Those that belong to the first category think big, project it with clear vision and then move with great speed to achieve their goal. Nurture and motivate the youth The youth are energetic and brimming with new ideas, and have talent and a desire to excel. Extend them the support they need, nurture them. Each one of them has an infinite source of energy. Create the right environment and they will deliver with glorious returns on investments. Build competencies Holding people hostage to core competencies restricts them. It is more productive to create competencies around people and processes to create value. This promotes flexibility, encourages growth and the value add-on will far exceed anything a conventional approach can bring.
  15. 15. EXHIBIT V MANAGEMENT MANTRAS OF DHIRUBHAI AMBANI Break out of your orbit The world is a series of hierarchically stacked orbits. To be successful, you have to break out of your orbit and enter the one above. After a spin in that orbit, you must break into the next one and so on till you reach the top. Bet on people 'trust' is a five letter word for success Trust is the most valuable thing and it is also the most valuable thing that you can give. There is nothing like partial trust - you either trust completely or not at all. Trust is the foundation of growth. Reject incremental thinking Piecemeal, blinkered and incremental thinking guarantees slow and stunted growth. True growth can come only with lateral thinking with multiple options and paths to attain a goal. Always encourage people to think out - of - the - box. Ideas are no ones monopoly. Be humble Humility in success is the greatest virtue. Realize that success is a matter of hard work and teamwork – of employees, shareholders and well-wishers. Never let them down and always let them feel they are a part of the family. In turn, they will never let you down.
  16. 16. EXHIBIT V MANAGEMENT MANTRAS OF DHIRUBHAI AMBANI Shun pretence A leader is not afraid to say he or she does not know. There is no equitable distribution of knowledge expertise and energy. Do what you can do to acquire knowledge and apply it. Delegate the rest to the best. Detail. Detail. Detail God is in the detail. Worship it. There isn‟t a single successful individual enterprise or nation that has succeeded without paying attention to detail. Some will argue and say 'simplify'. I say simplify the process but never forsake detail. Work with determination and perfection and success will follow. Achievement is history. Look ahead. This is often the most difficult to achieve but the most crucial for continued success. Any achievement is instant history; it becomes the past as soon as it is achieved. How you build on that achievement decides how far you go.
  17. 17. EXHIBIT VI ACHIEVEMENTS OF DHIRUBHAI AMBANI YEAR ACHIEVEMENT June, 1998 Leading business magazine, Business Barons placed Dhirubhai Ambani in its list of 'India's 25 Most Influential Business and Financial Leaders'. June,1998 Chosen as „Star of Asia‟ by Business Week, USA. June,1998 Awarded the Dean's Medal by the Wharton School, University of Pennsylvania for setting an outstanding example of leadership. October, 1998 Dhirubhai Ambani is the only Indian industrialist to feature in the 'Business Hall of Fame' in Asiaweek. July, 1999 Declared as the 'Most Admired Indian Business Leader' by The Times of India August, 1999 Placed amongst 'The Power 50 - India's 50 most powerful decision-makers in Politics, Business & Finance', Business Barons. Decembe Voted as 'Indian Businessman of the Century' in Business r,1999 Barons Global Multimedia Poll.
  18. 18. EXHIBIT VI ACHIEVEMENTS OF DHIRUBHAI AMBANI December, Chosen by the Indian Merchants Chamber as 'An Outstanding Visionary of the 1999 20th Century' in recognition of his unique achievements and contribution in the development of industry and capital markets in India. January, 2000 Voted as 'Creator of Wealth of the Century‟ in The Times of India poll. January, 2000 Voted the most admired Indian of the millennium in the field of Business & Economics in 'Legends - A Celebration of Excellence‘ poll audited by Ernest & Young for Zee Network. January, 2000 Chosen as one of the three 'makers of equity' by India Today in its special millennium issue '100 People Who Shaped India in the 20th Century'. March, 2000 Indian Entrepreneur of the 20th Century' award by FICCI, for his meticulous scripting of one of the most remarkable stories of business endeavor of the 20th Century. November, 2000 'Man of the Century' award by Chemtech Foundation and Chemical Engineering World for his contribution to the growth and development of the Indian chemical industry. August, 2001 The Economic Times Award for Corporate Excellence and Lifetime Achievement. February, 2002 Conferred the Lifetime Achievement Award by India HRD Congress.