Using local raw material and focusing on a global niche helped Rajiv Suri strike gold in leather.

By Ranju Sarkar

He's the urbane cowboy. Who's riding high on his natural instinct for business, perseverance--and an uncanny ability to switch products like horses. A turnover of Rs 8.22 crore in 1996-97 provides no clue to the profile of the rider: the 42-year-old Rajiv Suri, who has become a thoroughbred manufacturer of equestrian products such as saddles, harnesses, and bridlewear.

That has made Suri's Kanpur-based start-up, Lex International, the country's second-largest exporter of saddlery and harnessing equipment. The most notable notches on his saddle: global customers like the US-based Miller's Harness Co., the Netherlands-based Nedernium, the Belgium-based Weco Ageco, and the Australia-based Zilco International.

As for the saddler, he has learnt his lessons lassoing customers. The way Suri grabbed Miller's--the largest distributor of equestrian products in the US, and now his most prestigious customer--is a clear indication of the entrepreneur's tenacity. In 1982, when the exporter made his first attempt to rope in Miller's, it was just not interested in doing business with an Indian supplier.

A year later, Suri invited Miller's purchase manager, Robert Meagan, to visit Lex's works in Kanpur. Meagan came, but Miller's was unconvinced. Suri, however, was determined. In 1984, Suri went and met Joe Millers, a senior technical manager at Miller's, in the US, and flooded him with product samples. Impressed by his zeal, the manager gave Suri some tips on how to improve product quality by making minor changes.

Finally, three years later, came the big break: a Miller's order for 1,000 bridles, valued at $13,000 (Rs 3.90 lakh) in 1987. But Suri's biggest moment came in 1994, when Miller's--which then had three ranges of saddles, Crosby (the UK), Collegiet (Argentina), and Maycraft (India and Pakistan)--decided to develop an exclusive range, Lancer's, with Lex.

What keeps Suri firmly in the saddle? His ability to scan the horizon. Things were not gung-ho when Suri was cutting his teeth on leather. In 1977, when Suri joined his family business, Suri & Sons--which used to make flat (leather) belts for power drives--he just wasn't convinced about its future. He decided to venture into leather utility bags on his own, and, in 12 months, managed to bag an order for the supply of 15,000 binoculars bags, valued at Rs 1.25 lakh, from the State Trading Corporation.

The T-point came in 1979, when he visited the Spoga--the annual saddlery fair--in Cologne despite the stiff opposition of his parents, who refused to fund the trip. Undeterred, Suri managed to get the local export council to sponsor him. Recollects Suri: "It was one event which changed my outlook towards business." The overwhelming response to Indian products there made Suri switch from bags to saddles. Which now account for 90 per cent of his business.

Being based in Kanpur, Suri realised that he had the twin advantages of skill and raw materials. Besides a large pool of traditionally-skilled craftsmen, Kanpur is the only place in the country where harness-leather--required for making saddlery products, and derived by impregnating tanned leather with vegetable fats and oils--is available. Luckily, at that time, European buyers, turned off by the high prices there, were looking at India as a source of leather products.

But that turned out to be a hot chase. Although Indian saddlery was in demand, it was targeted at the lower end of the market, and bought and sold at auctions. So, in 1980, when Suri tried to get in touch with Weco Ageco--Belgium's largest wholesaler of sports goods--from Dusseldorf (Germany), he was refused an audience. But Suri persisted: "I have spent so much time and money to come here. Can't you see me for 15 minutes?" The Belgian agreed, and impressed by the quality of Lex's products, gave him a Rs 1.50-lakh order. Including the other deals he signed during the trip, Suri returned home with an order book of Rs 8 lakh. An exporter was born.

Like the hides Suri uses, business is tough. Sophisticated customers demand superior product-making skills which Kanpur sorely lacks. No one can hire people offhand, and ask them to make a saddle of a particular quality. Besides, ensuring the quality of harness-leather--which constitutes 70 per cent of the costs--is crucial. Explains Suri: "If you select the right quality of leather, half your job is done." In the absence of ox-leather--which is thicker and has smoother grains--Indian exporters are forced to use the thinner buffalo leather, with coarse grains.

That's not all. Indian leather emits a peculiar smell, which is disliked by foreign customers. Lex overcame these problems by working closely with some tanneries. For instance, the Rs 10-crore Pioneer Tanneries has developed odourless leather, which is used by Lex. It has also tied up with a British tannery, Sedgwicks, which meets 50 per cent of Lex's harness-leather requirements. While this has helped, the quality of saddle-trees--the base of the saddle, which is either made of wood or fibre--remains a problem. Says Paul Foquet, 55, CEO, Weco Ageco, which buys bridlewear from Lex: "Indian saddles are too heavy. They don't have the right quality of wood for the saddle-tree." Suri has overcome this problem by switching to fibre, and by personally monitoring production.

Sophisticated customers also demand timely delivery. Complains Paul Val Lochem, 52, ceo, Nedernium: "Although it is the best quality bridlewear you can get from India, Lex's delivery is not always on time." Alleges Shakil Ahmad, 45, the CEO of the Rs 4.11-crore Leather Sellers, Lex's main competitor: "If you cater to too many buyers, especially retailers, to make more profits, you have to keep some people waiting." Counters Suri: "There used to be delays earlier. But after my new unit was set up last year, there have been no delays, and we have been delivering on time."

Despite the fact that Lex's net margins, at 40.63 per cent, are high, it needs to bridge the price differential between Made-in-India and products from England and Argentina. For instance, Miller's (Made-in-UK) Crosby range commands a price of nearly $1,300 (Rs 52,000) for a saddle while Lancer's (Lex) fetches just $299 (Rs 11,960). A better price realisation is possible only by consistently improving quality, investing in brands, and switching to imported leather which, if tanned locally, can help manufacturers save costs--and increase value. Says Weco Ageco's Foquet: "They (the Indian companies) have the potential to emerge as world leaders."

Lex definitely has. While its consistent-quality-at-affordable price strategy has paid dividends so far, its recent diversification into riding boots and goodyear-welted shoes reveals the other side of its founder: ambition. Clearly, Suri wants to be a complete player in equestrian products. To win the West, however, all he needs to do is to retain his focus. And learn to ride it out.

Issue Contents  Write to us  Subscriptions