Mumbai: In 1994, when the steel-to-shipping Essar group launched its group brand “the plus sign” with a caption positive attitude, it was to show the group’s confidence to save the ship from sinking by the burden of loans availed to build steel plants, buy ships and oil rigs and construct power plants. The shareholders were concerned about their investments in the company. Lenders were forcing Essar group promoters Ruias to hawk some of the assets to repay them and even advised not to build their refinery at Jamnagar in Gujarat. Last week, after 14 years, Essar group re-branded its positive sign with a tinge of orange and maroon and with arrows pointing to the sky. The caption, now, is a bit longer with action and achievement with attitude intact. In 14 years, the group has more than trebled its steel capacity, bought steel plants abroad, it ships are fully booked, oil rigs pump out oil in overseas seas, refinery have started selling petrol and diesel. The group has diversified from a predominantly commodity player to consumer facing mobile phones retail and back end business process outsourcing. It became cash rich with revenues risen to $20b from $1 b in a decade from operations in 19 countries. The group had added 39,000 employees primarily in Aegis. But they also lost in the race to buy Esmark of the US, a steel company, as it lacked international image of a diversified group. Aparup Sengupta, managing director and chief executive of the group’s Aegis BPO Services Ltd., and Sandip Sen its global chief marketing officer who logged in 200 man-hours to unveil its new brand says the new brand reflects a new beginning for the group. At the top, the younger Ruias are in the drivers seat now.
Why has Essar undertaken a re-branding exercise?
Sengupta: It’s not just a difference in size. If you look at the nature of the business, we’ve moved beyond just core to new age businesses. Today we want to create an entire value chain from mines to metals, from rigs to retail. The point is that the group has grown very large and so, we want to consolidate as one group, one brand, single identity. We upgraded our brand to make it new, international and to reflect the new consumer facing business and to communicate that the group is getting younger. We also want the new identity to communicate our size, scale and reliability to the financial community and attract new talent.
Sen: Brand refresh or brand change is a necessity of time… if the company has changed, it is even more necessary. So purely from the marketing aspect I would always recommend a brand refresh at intervals. Particularly when the company has morphed into something else. In this case it has morphed in many things, not just in terms of size, but if you look at the nature of the business, from mobile stores, you’re selling steel through hypermarkets, and to BPOs. The whole group has morphed. It doesn’t have to be linked to something as drastic as the Great Depression. There is a genuine reason - it is about refreshing the brand in the mind of internal employees, customers and its stakeholders.
As Aegis, when I’m going to a Fortune 500 company for a $5 million contract, it is important for him to know we are a part of Essar, which is a good company with governance and financial soundness. That gives him the confidence to give us the business. A global brand helps when you go to new markets, new countries and new economies.
Did your survey with customers give you a feeling that your brand did not reflect the transformation to a diversified conglomerate with operations in 19 countries? Any such trigger that led to re-branding?
Sengupta: There was no one trigger or impetus or single event or data point that has led to this. We’ve gone ahead and done something interesting from the way we have structured the group. In the last two years everything has been consolidated under the umbrella group. When that exercise started, we decided that beyond the overall and financial structuring we would also look at all aspects, from the way the group operates to the way our brand is perceived by the customers, by the people, by the community. Re-structuring can be done quickly, but revamping a brand takes time because you really have to study the heritage, the key ingredients that brought it to this stature and how we want the group to be represented. There are very few companies in the world that have been able to grow 20 times in 11 years, without diluting equity.
Who helped you in this exercise and do you have a target audience?
We appointed Start Creative Ltd. a UK based firm to work on the identity of this group. We have not frozen any budget as yet and neither do we want to take that classical route. The philosophy has been to identify the target audience and based on that, arrive at the key message that has to be given at various points in time. The idea is to make the brand more relevant today and fulfill our vision. We have appointed Start to do the brand book and in India we are looking at Ogilvy & Mather to take this forward.
Like any company our target audience are our employees, customers, and shareholders. We are extending this group to include the communities that we touch directly or indirectly
In the past, you have been labeled as investor-unfriendly company. Will this new branding help overcome this impression?
Sengupta: I don’t know what it will do. It is all a matter of time. We have taken all the consumer data into consideration. Now the journey is on to communicate this to every target group.
Sen: A new brand identity reinforces all the positives to fulfill our vision of a global entrepreneur. So, while we are reinforcing the positives, we think we need to do better.
The Tata group charges a fee to license the brand to its group companies. Do you have any plans in future?
Sengupta: Honestly, we haven’t thought about this licensing and all yet. We have worked out the brand architecture and have brands and sub-brands and affiliate brands. We haven’t lent names. It’s important for us to reinforce and focus on this new beginning..