Camlin prepares to induct next generation4 min read . Updated: 29 Dec 2010, 11:45 PM IST
Camlin prepares to induct next generation
Camlin prepares to induct next generation
Mumbai: The Dandekar family, promoters of school and office stationery maker Camlin Ltd, is preparing a road map to induct its next generation into the business it started 79 years ago with ink powders.
Camlin now sells 2,000 products, from pencils and paint brushes to pastels, pens and permanent markers.
Rahul Dandekar, the 27-year-old son of chairman and managing director Dilip Dandekar, who belongs to the second generation of the Camlin family, recently joined the company. Third-generation Dandekar brothers, too, are planning to launch their children in the family business.
Camlin (initially known as Dandekar and Co.) was set up by two brothers—G.P. Dandekar and D.P. Dandekar—in 1931. The company started with Horse brand ink powders and Camel ink, and later diversified into manufacturing office and school stationery. Camlin stands for a combination of camel and ink, according to the company’s website.
The second generation of Dandekars—Madhav and Sharad Dandekar (sons of G.P. Dandekar), and Subhash and Dilip Dandekar (sons of D.P. Dandekar)—took over the reins in the 1980s.
Shriram (son of Sharad), Rajeev and Deepak (sons of Madhav), and Ashish (son of Subhash) already look after parts of the Camlin business.
“My son Rahul has joined the business as a management trainee in the sales and production department two months ago after he completed his studies abroad," Dilip Dandekar, 59, said. “It is time the fourth generation also gets involved in the business and slowly they will be inducted in the business too."
Dilip Dandekar’s daughter Aditi will be looking after the pre-school and day-care centre business, Alphakids, that Camlin is setting up.
Executive director Shriram Dandekar, whose 23-year-old son Nikhil is pursuing higher studies in pharmaceutical engineering, said he wants his son to gain some hands-on experience and only then look at joining the family business.
“I would want my son and daughter to pursue whatever they want and the doors of (the) family business are always open to them. But I would definitely want them to get some hands-on experience before getting into the business," Shriram Dandekar said.
He said Deepak Dandekar’s son Siddharth (27), who has completed his education in production engineering, will join the main business.
The Dandekar family, unlike other business families, has ensured that only one of the four representatives of the second generation will be at the helm at any given point of time.
“We have made this as a rule to ensure there is discipline and order in the management of the business," Dilip Dandekar said. “It is my turn to lead the business now and someone else will take the baton after me."
Dilip Dandekar has ensured that his three children—Aditi, Ketki and Rahul—have an equal stake of 1.89% in the company through a transfer of shares. “This is an internal matter and has nothing to do with the company," he said.
Subsequent to this share transfer last week, Dilip Dandekar’s holding in the company stands at 4.33%. The promoter family owns 38.44% of the company, which had a revenue of Rs330.69 crore in the 2009-10 fiscal.
In the first half of this fiscal, Camlin posted a net profit of Rs10.42 crore on a turnover of Rs199.12 crore. In the corresponding six months of fiscal 2010, it had a net profit Rs9.04 crore on a turnover of Rs176.59 crore.
Anil Singhvi of Anagha Advisors Llp holds a 10% stake.
According to Sankaran Manikutty, professor of business policy and strategy at the Indian Institute of Management, Ahmedabad, there are three ways in which a family can ensure a business is passed on to the next generation. First, by being aware of what to do with each of their children, by knowing their core competencies. Second, by dividing the family business and there is nothing wrong in doing that. Finally, through diversification, where every member is made in-charge of a division.
According to an Aditya Birla Money report on Camlin, the school and office stationery market is unorganized, with many regional players competing for a share of it. Camlin’s real competition comes from school and art stationery manufacturer Faber Castell (India) Ltd, and adhesive and hobby art stationery maker Pidilite Industries Ltd.
“The market is growing at around 25% annually and we expect these companies to cannibalize more of the unorganised market. Camlin, with its reach and distribution, is definitely going to have the winning edge over its competitors," the report said.
Camlin, whose products are sold by a nationwide network of 50,000 retailers as per its website, listed on the Bombay Stock Exchange (BSE) in 1987. In 2006, it spun off its chemicals business into a separate company—Camlin Fine Chemicals Ltd, which is managed by Ashish Dandekar and is also listed on the BSE.
Camlin stock rose 0.22% to close at 45.95 on Wednesday on the BSE. Since April, the stock has risen 82.34% against the 15.57% rise of the Sensex.