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Wooing Wal-Mart
COMMENTS PRINT
They have built industrial empires in an unlikely place: small-town India.The stories of these self-made entrepreneurs are unique. So are the challenges they face.
TV Mahalingam, Sriram Srinivasan, Ajita Shashidhar, Sudipto Dey
TV Mahalingam
Sriram Srinivasan
Ajita Shashidhar
Sudipto Dey

Karur

  • S Susindran, Chief Executive Officer, Sabare International
  • Area of operation:Textiles
  • Group Revenues: Rs 250 crore

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Karur, Tamil Nadu’s textile hub, exports roughly a billion dollars worth of home textiles—and it is easy to go unnoticed in the crowd. Still, S Susindran’s Sabare International, with just Rs 250 crore in revenues, has been able to stand out. It has grabbed the attention of the people who matter. Wal-Mart, JC Penney and Target are its clients. Kotak Private Equity owns a third of Sabare.

Sabare isn’t just another vendor to the retail biggies. After convincing Wal-Mart to give him a small order, the 43-year-old chartered accountant-turned entrepreneur spent two years virtually “on the retail floors of America.” And he came back with a unique business model. The usual practice would be for a retailer to make the order and get the shipment. The supplier would just move on to the next order. Sabare would help the retailer make the decision, manufacture what was needed, and dispatch it to individual outlets along with advising retailers on inventory management.

 
 
Sabare International, a textile exporter, is driven by Susindran’s unique business model—helping clients from start to finish.
 
 

In 2000, Susindran successfully showed how Wal-Mart could make higher margins under this system through a test programme of 15,000 textile units. Sabare bagged more contracts and now has operations in Panipat (Haryana), Atlanta (Georgia) and in China.

Before the recession hit, Susindran had even set a 2015 target for $1 billion in revenues. At its peak in March 2007, revenues were Rs 378 crore. Already, that’s down to Rs 250 crore now. This year is likely to see the same numbers. What Susindran is happy about now is that the clients are there and so are the investors. The big targets have been deferred slightly, he says.

Susindran is no stranger to crisis. Into the second year of his business, Sabare had just dispatched a big order worth Rs 80 lakh to a US client. Sabare was making only Rs 20 lakh in revenues then. Shipment over, Susindran heard the news that the client went bankrupt. The goods were also not coming back, as the customs authorities there had auctioned it off. “Only my will saved me. Or else, I would have been finished,” he says. To tide over, he borrowed Rs 10 lakh more (he already had liabilities of Rs 65 lakh). He focussed on his client in Australia, who was increasing his business with Sabare. The debts were paid off in four years, in 1998. It was then that Wal-Mart happened. “This small town company went into a different orbit,” says Susindran, a Dhirubhai Ambani fan.

His father, an ex-judge who didn’t want to see him in business, is happy now, says Susindran. “But still, the older generation sometimes feels business is a risk. Even if it becomes $1 billion big.”

COMMENTS PRINT
They have built industrial empires in an unlikely place: small-town India.The stories of these self-made entrepreneurs are unique. So are the challenges they face.
TV Mahalingam, Sriram Srinivasan, Ajita Shashidhar, Sudipto Dey
TV Mahalingam
Sriram Srinivasan
Ajita Shashidhar
Sudipto Dey
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