Whatever happened to the granite, aquaculture and floriculture booms of the early 1990s? Dodging creditors, foreign competition and babudom, the victors provide lessons in surviving the decade after.

By E Kumar Sharma & Nitya Varadarajan

Sir is not in the office. I don't know where he is. I will pass the message when he calls.'' It's the same response every day. After tiring of this telephonic pursuit, it's best that you visit the mysterious ''Sir'', whose calling is to mine, cut and polish great big slabs of granite, the stone that winds up on your kitchen counter, or your floor. But repeated visits to his office in Somajiguda, Hyderabad, draw a blank.

Then one day, ''Sir'' comes to you. A 40-something, portly man clad in white cotton shirt and black slacks, he's verified your credentials and now begs you not to identify him. He apologises for the stonewalling, the subterfuge. ''I am sorry my people did not give you my coordinates,'' he says sheepishly. ''You see we have many creditors and they adopt various ways of getting to us.'' He's now selling his palatial house-yes, it has lots of granite-in tony Jubilee Hills, lest his creditors think he still has money. Home is now a modest apartment in heaving Somajiguda. With a sigh, he confesses: ''At this moment, I have 40 NBWs (non-bailable warrants for bounced cheques) against me, so I lead a very uncertain life.''

The uncertainty is a way of life in the new millennium for stragglers from three boom industries of the early 1990s. It was a time when India's economy was opening up to the world, when bulls ran the stockmarkets, when money was easy, and breathless entrepreneurs and established companies rushed into new fields of dreams. The global marketplace lay before the Indian entrepreneur and not surprisingly, hundreds of granite, aquaculture, and floriculture industries targeting mainly exports set up shop.

Some of India's best companies joined the rush-the Tatas, the Essars, the JKs, the L&Ts-but the surviving companies are almost all in the hands of hardscrabble entrepreneurs, who learned that above all, these industries needed sweat, toil, and tears.

Today the dotcom boom is done, the it boom stutters along, and the biotech boom is at hand. But they are only in their todays or their day afters. The stone, prawn, and flower stories are windows to silent entrepreneurial panoramas. They show us the perils of over-playing a boom. They show us how little the government's suffocating role has changed in the every day life of the entrepreneur, half a generation after liberalisation. They show us what boom industries could look like the decade after-and the lessons we can learn from the survivors.

GRANITE
The End Of The Quarries

Gautam Chand Jain, 46, was a wholesale cloth merchant when the granite boom hit the headlines. His canny Marwari mind saw the opportunity, but it also urged caution. Many companies rushed to excavate mines and buy expensive equipment to cut and polish the stone. But Jain, watched and learned. Today, he is one of the handful of companies that made it through the boom-and the bust.

Companies with backers like Voltas, L&T, and other smaller companies, couldn't cope with a tangle of financial, technical, and official intricacies that the granite business threw up. China and a host of other countries have overtaken India-never mind that we hold 25 per cent of the world's granite reserves-and it's only the rich variety of colours available in India that sustains local units. Of the 900 odd registered exporters that existed in the days of the granite rush, about 160 remain. No more than 60 are profitable.

The immediate problem is the unrelenting focus on the American market, where the business runs on credit but without letters of credit. The result: most survivors reel under big defaults, mainly from NRIs. E. Utham Kumar, Managing Director of Deccan Granites, Hyderabad, runs his unit at just 30 per cent capacity and is busy negotiating compromise settlements with his debtors. It's a far cry from 1995-96, his first year, when he notched up a Rs 28 crore turnover. Weary, Kumar just wants a decent valuation before either auctioning the business or putting it up for direct sale. ''Either way,'' he says, ''it's a more certain future than today.''

Many companies simply set up factories without ensuring a supply of granite. ''Some people didn't do their homework,'' says Vinay Kumar Poddar, 62, President, All India Granites and Stones Association. ''Without having their own quarries, they have suffered.''

Mining granite is, well, a minefield. K. Badrinarayan, 59, owner of Enterprising Enterprises, Chennai, says it requires a will that a professionally run company simply can't muster. ''At the village level, the local goonda will insist on talking to the MD and forcing (the acceptance of) demands,'' exclaims Badrinaryan. ''I can protect mines from hooliganism because it is my money, but will a professionally employed chairman with a limited stake in a listed company bother?''

The short answer: no. The biggest problem is getting to the granite. Today most entrepreneurs are embroiled in court cases over bad leases. Mines ravaged the land and antagonised locals. So governments took every opportunity to suspend leases. That's why many corporates closed down their mines over the last five years. L&T quit one venture because it couldn't find a quarry. Voltas incurred multi-crore losses which the Tata group had to make good. ''It requires great personal grit to stay in this business,'' says Badrinarayan. Globally, granite companies are family held, including the world's largest company in Japan.

Babudom finally lowered the boom. R. Veeramani, 59, Chairman of the Gem group of companies in Chennai, has three companies in three southern states. One is a proprietary firm, another a partnership, and the third a public limited company. Inter-state check posts still do not recognise valid permits from other states. Trucks are held up for days while the ships they are headed for literally sail away. ''There is no chance for growth as a single entity as each state wants its cut... follows its own norms,'' complains Veeramani. That means replicating infrastructure and manpower. The frustration shows. ''If I had known the situation would be so bad,'' sighs Veeramani, ''I would have settled abroad.''

At the end of the day, granite isn't gold, or oil. It never saw much growth because markets are limited. There is only so much granite that you can sell for use in monuments, buildings, kitchen, and bathroom counters. Of course, Indian love granite but the domestic market's promise is tempered by black-market payments-and defaults on payments.

Survivor Jain of Pokarna Granites lived through granite's boom, the bad days and learned. ''We have grown by first learning about the quarry business, selling rough blocks and then acquiring sick, good quality units, which were available at a reasonable price.'' In other words, he didn't try to do everything at one go-or by himself.

Pokarna also sells to the tricky American market, but only after studying prospective buyers. With 7 per cent of turnover spent on marketing, he says the key is to establish a relationship with customers, either through buyers guides or local contacts. For the quarter ended July 31, 2001, Pokarna had profits of Rs 2 crore. Sales: Rs 15.2 crore. Jain is today busy implementing a Rs 10 crore expansion plan.

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