A.C. MUTHIAH (L) WITH ASHWIN MUTHIAH Ashwin will have to reduce SPIC's investment in associate companies. He will also have to restructure the company's crippling debt.

These days, N. Sankar has taken to lingering over the breakfast table. There is, after all, no need for the 56-year-old chairman of Chemplast Sanmar to rush off to work at 8.30 every am; his son Vijay Sankar is there to run the show.

Another chairman of a Chennai-based company, V.L. Dutt (the company is engineering major KCP) recently took off to Vietnam to visit a sugar factory managed by his company. In his absence, his wife Indira and daughter, Kavitha Chitturi, managed the company. Increasingly, says Dutt, he finds himself delegating more responsibility to his 30-year-old daughter. ''I am here purely in an advisory capacity and hope they don't throw me out.''

And yet another chairman of a Chennai company is preparing for retirement. K. Mahesh of Sundaram Brake Linings, the second Indian company to win the Deming award, would have done so earlier. Only, his son Krishna Mahesh insisting on working outside the 'family business' (with McKinsey and Toyota, for those obsessed with details) before coming back into the fold. Now that he has signalled his readiness to do so, Mahesh Sr. is hanging up his boots.

There are more instances of the kind (See Succession, Southern Style). All have happened in the past year; some are common knowledge; others aren't; and all successions have been remarkably quiet. Some companies may have held press conferences to announce the event. Others may have hired pr pros to net airtime on business channels or column CMS in the business press. But they do things differently down south.

It hasn't been a happy beginning for some of the young successors. A few have inherited once-thriving business empires that haven't really managed to use a decade of reforms to their advantage. Others have taken charge of companies that are caught in a limbo of sorts: they are big enough to attract attention of predators and competitors, yet small enough not to enjoy the benefits of scale. And still others are just victims of timing-the slowdown has taken its toll on their companies.

C. SATHYAN (L) WITH R.G. CHANDRAMOGAN Sathyan is exploring the posibility of making Hatsun a national player in the milk business and launching value-added offerings.

Making Sense Of It All

SPIC and Chemplast Sanmar are amongst those companies that got left behind in the decade of reforms. ''We are still a Rs 1,200-crore group, while we should be Rs 6,000 crore, but we did not possess the skills to deal with the environment,'' rues Sankar. But Vijay Sankar can't really think in terms of growth right away. With over 24 companies in the group's portfolio, his immediate concern is consolidation. The Sanmar group does have a corpus of professional managers running the show-Sankar counts this among his achievements-and Vijay's primary responsibility is to work with them and worry about the investments. ''I am happy being an investor and will focus on my investments paying back.''

Vijay Sankar can get along by playing investor; Ashwin Muthiah can't. The 36-year-old Vice Chairman and CEO of the conglomerate assumed that charge barely six months ago. SPIC started life as a profitable fertiliser company, but unrelated diversifications-most failed-have wreaked havoc on its financials. Expectedly, its own performance suffered. In 2001, SPIC boasted a turnover of over Rs 2,000 crore but profits of a mere Rs 15 crore. The other companies of the M.A. Chidambaram Group fared better: a turnover of Rs 1,475 crore and profits of Rs 172 crore.

And so Ashwin Muthiah has had to stop pursuing his interests in polo and golf, and devote attention to SPIC. First up, he plans to get rid of the company's unprofitable investments-some Rs 800-odd crore in associate companies. Then, he plans to restructure SPIC's debt (interest costs alone added up to Rs 210 crore in 2001): to do this Muthiah Jr. will have to resolve the fate of SPIC Petrochemicals a Rs 1,300-crore initiative to make PTA, PFY, and SPIC Fertilisers and Chemicals Fze, a fertiliser company located in Dubai's Jebel Ali Free Trade Zone, neither of which has taken off.

That's an impressive agenda. Can Ashwin Muthiah do it? He thinks he can, but says it will take at least three years.

N. VENKATRAMANI (L) WITH RAM Ram would like to see IP leverage its association with Federal Mogul to become a global player. To this end, he's extending the company's expertise to design and software.

Building On A Sound Base

The auto component makers who feature in this story-Sundaram Brake Linings, India Pistons, and Wheels India-are in better shape. India Pistons is lower than low profile: it is part of the closely-held Amalgamations Group and not many are aware that management guru C.K. Prahalad began his career in the company. India Pistons is managed by N. Venkatramani, widely recognised as the technical brain behind the group-he is married to Sita, the sister of Amalgamations Chairman A. Sivasailam-and a hands-on manager. It is also, increasingly, managed by his sons. The elder, Anantharamakrishnan (Ram for short and named after the group's founder) is 34, currently designated Executive Director and looks after operations and quality. The younger, Gautam is 27 and heads marketing.

India Pistons is among India's largest piston manufacturers, but it operates in an industry characterised by shrinking profit margins. Worse, the threat of competition from cheaper imports looms large. The company has global aspirations, and Ram would like to see them realised. The key to this could be its ability to leverage its association with Federal Mogul, a global auto component major and supply pistons to all of the latter's 50 plants in all parts of the world. To this end, says Ram, ''We are willing to take care of design and software development.''

India Pistons may have been a dasher in the 1970s-it was among the first companies to induct management trainees-but it is widely perceived as a non-aggressive marketer. ''I am changing that image,'' says Gautam. Still, the challenge lies as much within the company as it does without. ''They may have got a head start,'' says Venkatramani referring to his sons, ''but they still have to prove themselves.''

N. SANKAR (R) WITH VIJAY With over 24 companies in the group's portfolio, Vijay Sankar's immediate concern is consolidation. He is happy being an investor and wants to focus on his investment paying back.

That sentiment is echoed by SBL's K. Mahesh. ''My son will have to face my managers and establish himself''. That shouldn't bother Krishna Mahesh who has cut his teeth at McKinsey and Toyota. And fact is, he inherits a company on a high: SBL has just won the Deming award and it does have the operational bandwidth to cope with imports. Still, the younger Mahesh (for the benefit of those unfamiliar with South Indian names, his first name his Krishna, his father's, Mahesh) is aware that the company needs to address several concerns. He lays these out like a blue-blooded consultant: one, SBL needs to have a clear strategy that leverages its continually improving operational capability to compete with entrenched incumbents (much like Toyota did in a number of countries, he adds); two, it needs to have in place capabilities (people and R&D) to confront long-term challenges including product diversification; and three, as the global auto industry switches from mechanical systems to electronic systems, SBL needs to have products that serve as the analogue of the current brake lining.

Learning On The Job

If Krishna Mahesh spent time in other companies picking up relevant experience, C. Sathyan did so by beginning early. The 24-year-old has just been named Executive Director of Hatsun Agro Products, but he has been part of business decisions of the Rs 215 crore company founded by his father R.G. Chandramogan since he was 12. Hatsun, for the uninitiated, owns the Arun brand of ice creams that is the market leader in several parts of southern India, and is the largest dairy corporate (it processes 4.5 lakh tonnes of milk a day). Hatsun's rise has been nothing short of meteoric-its turnover was a mere Rs 35 crore in 1997-and that, paradoxical as it may sound, makes things difficult for Sathyan. ''We cannot afford to make mistakes,'' says Sathyan. ''There's too heavy a price to pay (if we do)''. Rs 200-odd crore is an awkward size and Sathyan and his father realise it. The former is studying the northern and western markets and plans to make Hatsun a national player in the milk business.

It'll be difficult, but at least he has to cope with a growing company, unlike KCP's Kavitha D. Chitturi who has to manage a company affected by the recession. The year 2000 may have been the only year KCP suffered losses, but like most other engineering companies, it too has borne the brunt of the recession. Worse, in 1996, the company divested its sugar business in favour of a member of the extended Dutt family, and this resulted in an erosion (by around 50 per cent) in its revenues. Today, KCP is an engineering conglomerate with interests in cement and software (ERP solutions for sugar, cement, and engineering industries). And Chitturi manages the company's human resources department and is looking for growth opportunities. ''We will stick to the existing businesses,'' she says, ''and the technology venture will just add value to that, but I would like to see us getting into biotech again (the company had a joint venture that failed to take off in the domain).''

The next generation may be different from the earlier one in many ways-Mahesh Jr is a vegetarian, and does not drink or smoke, unlike his father-but there's still a constancy surrounding most South Indian family-owned businesses. The family will continue to call the shots, either as managers or investors; and the emphasis will remain on gradual, but consistent growth. Don't expect quick makeovers, then. As Wheels India's Srivatsa Ram-he's Executive Director and looks after day to day operations; father S. Ram has shifted to a more strategic role-puts it when queried about what he plans to achieve, ''Ask me 10 years down the line.'' We're willing to wait.