Krishna Maruti's Ashok Kapur: His factory of 100 workers near Gurgaon rolls out a whooping 1,250 seat sets per shift

Half-past three on a January afternoon at Ashok Kapur's plant near Gurgaon, it's time for Business 101. Kapur, a short man with an indulgent belly and closely cropped salt-n-pepper hair, is leaning back in his chair and talking to his daughter at the other end of the mobile phone. "...Listen to me, beta. Every rupee matters. You have to be more persistent. Don't you ever say no to ads...." Kapur's 20-something daughter, Shruti, is on a deadline for the launch of her new magazine, Platform, and she has just turned down a couple of ads that her father has helped organise. And Kapur, a self-built entrepreneur who's helped his daughter get started, can't believe that she is actually turning away precious revenue. "Where do you think the money is going to come from? Besides, you never say no to your customer," admonishes the 58-year-old Kapur. "Remember, customer is not king, he's god."

Sitting in Kapur's spartan office, which still sports the same workstation and conference table it was set up with more than 10 years ago, it's hard to think that the man may be exaggerating. Back in 1993, when "a family arrangement" left the youngest of four brothers (one of whom is Surinder Kapur of Sona Koyo Steering Systems) with no manufacturing business, Kapur started from scratch by setting up Krishna Maruti, a joint venture (JV) to supply car seats to the auto giant. Since then, Kapur has not just become the biggest supplier of car-seating systems to Maruti with group revenues of more than Rs 400 crore, but also one of the few vendors to have struck a unique relationship with Suzuki Motor Corporation. He already has three Japanese collaborators thanks to the Suzuki connection, and could soon be striking another JV with Maruti in a company he's just acquired. Says Kapur: "There are two things everybody in my company knows about me. One, that I don't compromise on quality, and two, that I regard the customer as king."

In an industry cluttered with first-generation entrepreneurs who still run their businesses like mom-n-pop stores, Kapur's philosophy of putting the customer first has paid off handsomely. Until now, whenever Suzuki had a new component to indigenise or where it wanted a new vendor for a related component, it has first offered the opportunity to Kapur. That's how his company kept adding to the core business of seats by getting into mirrors, head rests, seat trims, door trims, roof liners, carpets, and now fuel tanks (with the new acquisition), where Maruti will be a partner. Says R.C. Bhargava, former Managing Director of Maruti Udyog and a mentor to Kapur: "He's totally committed to Maruti and Suzuki. That's why he's been able to earn Suzuki's trust."

It's a trust Kapur has earned the hard way. In October 1995, when a labour strike threatened to cripple production at his factory-itself built in a record 120 days-Kapur locked out all workers and asked the white-collar staff for a show of hands: How many were willing to cast their lot with Kapur and fight it out? As it turned out, all of them were willing. With about 42 white-collar employees and 58 contract labourers, Kapur stayed put in the factory for 18 days, working the foam rolling machine by day and sleeping on the conference table in his office by night. Not only did he and his team make all the deliveries to Maruti, but actually upped daily production by 10 per cent. (The lockout ended on the 19th day, and Kapur sacked 38 of the 100 workers before letting the others return to the factory.) On another occasion, Kapur ordered Rs 11 lakh worth of seats scrapped because they were marginally off the error tolerance range (by a few millimetres). Says A. K. Bedi, Chief Manufacturing Officer, Krishna Maruti: "His message to us is clear: quality must be embedded in our system."

KAPUR AND HIS COMMUNION

A man of faith: Kapur at Delhi's Chattarpur temple Ask Kapur what makes him tick and he'll simply say "god's blessings and hard work". Intensely religious, Kapur performs a havan every day at home and also visits Delhi's Chattarpur temple, where he's a trustee. His office at the factory near Gurgaon is full of statuettes and paintings of Krishna and Ganesha, and there's even a temple just outside the factory for employees to pray. In fact, Kapur even attributes his recent diversifications to providence. As a man who counts his blessings, Kapur believes in giving back too. He runs a trust called the Sat Krishna Charitable Trust, which has adopted a village across the road from his factory. Here, he's built a school, hospital, orphanage, technical institute and a temple complex. It's interesting how the whole thing came about. Four years ago, the head of the village came to ask Kapur for some minor help. Instead of doing just that, Kapur tossed back an idea to the man: why not allow Krishna Maruti to adopt the village and bring improvements on a larger scale? The villager thought Kapur was being sarcastic. Today, it's not just money that Kapur is spending on the village; he, his wife Arti (she heads the trust) and employees routinely volunteer at the village. The orphanage is currently home to 25 children, but by March 2007, it will accommodate 50. The technical institute has graduated 40 students, and in the next batch, the number will double. "I am merely fulfilling my mother's desire that I should do something long-term for the society," says Kapur.

A Tight Ship

Despite the size of his closely-held group, Kapur's workforce is remarkably small. The flagship Krishna Maruti (Kapur's mother was named Krishna) employs just about a hundred workers, making its wage cost (less than 2 per cent as a percentage of revenues) possibly the lowest in the business. Production in the last five years has risen from 550 seat sets (the front two and the single rear one) in two shifts to a stunning 1,250 seat sets per shift now. There has been no increase in headcount and no capacity expansion, except for a polyurethane plant, says Kapur. What did the trick? In 1995, the company signed up to be part of a total quality management (TQM) cluster initiated by Maruti, with a Japanese quality expert, Yoshikasu Tsuda, guiding the group. There was so much inefficiency and wastage that mere elimination of those, plus more disciplined manufacturing, increased capacity. Says Jagdish Khattar, Managing Director of Maruti Udyog: "They come across as one big team that's working in sync."

A large part of the credit for that goes to Kapur. He's positioned himself as a father figure to his workers, and manages them in a style that's not very conventional. For example, although his company is running for the prestigious Deming Prize this year, Kapur doesn't believe in certifications or awards. He would rather the shop floor spoke for itself. Says Shinichi Takeuchi, Joint Managing Director, Maruti Udyog: "The top management policy is well spread and understood down the line."

Anybody coming in late to work even by a minute loses half-a-day's wage, but Kapur will roll up his sleeves and join them in cleaning the factory and machines once every Saturday. All the workers are cross-trained and as much as a fifth of their salaries is linked to productivity, allowing the company to make do with just one shift. Executives must arrive to meetings on time or else just stay out. Says Kapur: "People may think I am crazy, but that's how I am."

Over the last three to four years though, Kapur has been moving away from day-to-day operations to more strategic issues. He's been busy striking new JVs and diversifying. In 2002, he teamed up with the Batras to buy, and then sell to Sahara, Mumbai's Centaur hotel. The following year he bought and sold a mid-sized power company (he wouldn't reveal the name), and last year he diversified into real estate by partnering with an associate to set up a 500,000-sq. ft. mall in west Delhi. The Paradise Mall will open late next year with early tenants like Piramals' Pyramid Megastore and Ajay Bijli's PVF. And this year, Kapur finalised the acquisition of a large auto components manufacturer, with annual revenues of about Rs 185 crore. Says Kapur: "Would you believe it? I didn't plan for a single one of them. All of them just fell into my lap." (See Kapur And His Communion.)

Heir apparent: Kapur's son Sunandan heads almost all the new initiatives at the group

By early 2009, Kapur plans to hang up his boots, but not before he's handed over his 30-year-old son a group that's at least Rs 1,000-crore big. At present, Sunandan looks after door trims, (automotive) carpets, roof liners and mirrors. In addition to that he is a JV partner in Krishna Quinette Seats (Quinette Gallay of France is an equal partner), which makes auditorium seats. The JV already does Rs 18 crore worth of annual business, but Kapur is planning two more JVs in the seats business: one for aircraft seats and the other for bus and train seats. To start with, Kapur will oversee the aircraft seats project, and his son, the other one. Says Sunandan, who worked abroad before deciding to join his father's business in 1999: "Having made a headway with theatre seats, I feel we are now ready to take on bigger projects."

Once the joint ventures fall into place, Kapur plans to consolidate. For starters, he's putting in place a corporate structure to simplify group ownership and ensure a smooth handover to his son. Says Kapur: "Ten years ago when I started Krishna Maruti, I never thought it would become this big. It's God's blessings. Now, I have plans of giving back to the society."

Kapur's ancillary empire may still not be as big or global as those of TVs or Bharat Forge. But, obviously, he's laid a path to it.