Shreevar Kheruka’s glass tales
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The summer of 2003 that Shreevar Kheruka spent as a foreign exchange trader at Goldman Sachs in New York taught him many things. Among these was an unusual adage he still remembers. “Shreevar, if you are really lucky in your life, in the first five years of your joining work, you will have a market crisis,” his boss told him.
Three years later, when his family business suffered a crisis, Kheruka discovered the truth of that pronouncement. By then, he had completed a dual degree at Wharton, University of Pennsylvania (2004), and had worked at Monitor Consultants (now Monitor Deloitte) in Boston for over a year before returning to Mumbai to manage the family-owned Borosil Glass Works Ltd.
He had bidden farewell to the jet-set life of a management consultant and to his sailing trips on the Charles river in Boston, married his high-school sweetheart Priyanka and moved back into the family house at Worli in Mumbai.
“It was hard at first; at work people see you as the boss’ son—they don’t want to listen to a kid who has just come out of college,” says Kheruka, now 35. Never mind his college credentials, or his work experience at the legendary Michael Porter’s Monitor Consultants.
“But then I got lucky. We had a crisis,” he says. Almost overnight, the Maharashtra State Electricity Board doubled the price of electricity. “Suddenly, we went from being profitable to making losses. Add to this labour problems and a drastic decline in production. At such times, people follow whoever gives them solutions.”
We are meeting for a buffet lunch at the Trident in Mumbai’s Bandra-Kurla Complex, next to Borosil’s corporate office. Kheruka is a vegetarian and the buffet is a quick lunch solution, for he has a flight later that day to Jaipur. Jaipur is one of four locations where Borosil has manufacturing facilities (the other three being Bharuch in Gujarat, and Tarapur and Nashik in Maharashtra).
As we settle down with our plates of food, we return to the 2006-07 crisis at Borosil. “All this happened in a short span of time. People were caught unawares. I looked at product costing and figured what would have to be the cost of the product to make it work,” recalls Kheruka, who had spent four years at Wharton working on complex financial models, costing and other finance courses. Armed with these numbers, he got on a plane and started visiting glass factories in Europe, the US, South-East Asia and China. It was a crash course in product standards for the hundreds of products that Borosil Glass manufactured. By the end of 2009, he had visited more than 100 factories and identified suppliers from all over the world for products previously made at the Borosil factory.
“The crisis really was a blessing. It gave us a new business model which didn’t exist before, with sourcing and low-cost manufacturing. Visiting all those factories gave me a good idea of their best practices, many of which I later implemented in our plants,” says Kheruka. Today Borosil Glass Works has put those days firmly behind it.
Turnover for the group companies Borosil Glass Works, Gujarat Borosil, Hopewell Ceramics and Klasspack, for the year ended March, was Rs557 crore. The company expects it to rise to Rs650 crore in the current fiscal.
Nashik-based Klasspack makes laboratory glass and Jaipur-based Hopewell Ceramics, opal tableware under the Larah brand. Kheruka, who has been scouting for companies to acquire for the last few years, came very close to buying a glassware company in France, but decided against it, choosing instead to finalize these two acquisitions last year.
Kheruka says he is open to more acquisitions. “We have a strong brand which we would like to build upon, and we have strong distribution, so it’s a good time for us to increase our product base, get new product portfolios and get economies of scale,” he explains. His team of advisers includes companies such as Avendus Capital Pvt. Ltd, Ambit Capital Pvt. Ltd, and Khaitan & Co.
Borosil’s consumer division has been growing 25% every year. “Our retailers tell us that consumers are actively asking for alternatives to plastic,” and with consumers upgrading lifestyles, there is also a greater emphasis on design and aesthetics. All this augurs well for a brand like Borosil Glass, which has been expanding its portfolio, concentrating on storage products—and has introduced a stainless-steel vacuum flask named Hydra.
Kheruka was six years old when his grandfather B.L. Kheruka , who had a glass manufacturing business in Kolkata, decided to diversify, buying a majority stake in Borosil Glass from Corning Glass Works (now Corning Incorporated). With that he also decided to move base to Mumbai. So, in 1988, the Kheruka clan moved—grandparents, parents, three elder sisters and young Shreevar, who joined Campion School and then The Cathedral and John Connon High School. Even in those days, Shreevar would accompany his father and grandfather on factory visits. “At home you would hear them (my dad and granddad) talk about sales, production or labour problems.... And I was always there.”
He was steeped in the family business, but this didn’t stop him from plunging headlong into life at Wharton, where he joined the Phi Sigma Kappa fraternity, took on a double major (business and international relations) and competed fiercely in the internship and placement processes. Forbes columnist Nicole Ridgway tells this part of his story, along with that of five other Wharton students from the class of 2004, in her book The Running Of The Bulls: Inside The Cutthroat Race From Wharton To Wall Street. “He (Kheruka) now had two offers in hand that he was seriously considering. There was the offer from Monitor, where he felt so comfortable, and there was also the offer from JP Morgan Asset Management for a position that the firm had said they had never before invited a person his age to take.... In ten days, Shreevar was going home to Bombay for winter break, and he wanted to be certain of his decision before he’d have to break the news to his grandfather and father. He was nervous that they would try to talk him out of it, and he wanted to have the proper mindset to convince them.”
Lunch is over, and Kheruka refuses dessert; he says he is too fond of sweets, and that he has put on weight. We order a cappuccino each instead and carry on the conversation on mindsets. It’s something that’s important to Kheruka: He thinks a great deal, listens to people like Isha Foundation founder Sadhguru Jaggi Vasudev, and even takes notes. “My family have been supporters of the Chinmaya Mission and we have grown up discussing philosophy,” he says.
Family dinners are an 8pm ritual with his grandparents, parents, wife and two daughters (two-year-old Krishnav, the youngest, is too young to participate). “No cross conversations are allowed at the table, no talk of work is allowed,” he says. Such traditions go towards building culture, says Kheruka.
Kheruka says he spends an increasing proportion of his time trying to build good organizational culture. This means empowering people, having clearly defined goals, celebrating success and, of course, pulling up people when required—even if it happens to be him. “The moment I accept an area where I have s***** up, it becomes easier for everyone else in the company to own up and take responsibility for where they have s***** up,” he says. At a recent annual review of the company, Kheruka stood up and confessed he was at fault for a delayed appraisal process. Next year, he would surely do better.
It’s 3pm. We’ve been talking for 2 hours. Kheruka has a hectic schedule—over the coming week, he will travel to Jaipur, attend an annual general meeting in Mumbai and then go to Vijayanagar. So we wrap up speedily, and I make a mental note to trade my Tupperware for glass.