Home » , » Inspiring Story of Karuturi Global..

Inspiring Story of Karuturi Global..

He is the world's largest exporter of roses. His company has leased 3,000 sq km of land (that is five times bigger than Mumbai, which is 603.4 sq km in size!) in Ethiopia. Here is his amazing story..

With 15 per cent of the global market in his grasp, Karuturi, today, is the world's largest exporter of roses.
Three years ago, he added agriculture to his bandwagon. Today, his company Karuturi Global Ltd has 3,000 sq km of agricultural land in Ethiopia (that is 5 times the size of Mumbai!) and 239 hectares of land for rose cultivation.Here is his story of Sai Ramakrishna karuturi fro the man himself.. 

In 1994, I zeroed in on the flower business. I was immensely influenced by management guru Michael Porter's theory of 'Sustainable Competitive Advantage'. I was looking at any business that has sustainable competitive advantage from India into the global market.I never looked at a business that supplied into India or into a particular region. I wanted to start an enterprise that would sustain itself globally. I was looking at a variety of businesses and the flower business appealed to me the most.

When I visited Israel, I perceived the enormity of the flower businesses, and it left a mark on me. I fell in love with this business, and my passion for it has not dimmed in all these years.
I started with a shoe-string budget of Rs 133,000 which was what I had in my bank account then. Bank loans were easy to get for this sector and many others were also getting into the business with crores of rupees. Then, my father gave me a seed capital of Rs 50 lakh (Rs 5 million). I approached IDBI and they sanctioned Rs 5 crore (Rs 50 million).
The building block of our success started with frugality and the Indian way of stretching the rupee thin. Our capital and revenue costs were kept very low.I built this business on very strong foundations of keeping costs low and that has helped us reach where we are today!
Moving to Africa
We had about 10 hectares of farmland in India and we had reached about Rs 4-5 crore (Rs 40-50 million) of sales when I thought of expanding our horizon.I found that we were not competitive in Europe because they had an import duty on Indian products which our competitors from Africa didn't have to suffer from. So, they had a 9 per cent cost advantage.
Freight costs were also lower. They were paying 25 per cent to 30 per cent lower airfare than what we were paying to Europe. We just couldn't compete with Africa. We looked all over India but could not get contiguous land.
So, in 2000, I decided to move to Africa. The idea came to me when I bumped into a former manager of ours who had migrated to Africa. Till then, Africa was a faraway land where somebody was doing something.When I went to Africa, I was astounded by the scale, the profitability and the sustainability of the business. I realised we had a 40 per cent cost advantage there.

Units in Ethiopia and Kenya
I decided to set up a unit in Ethiopia in 2004. The Ethiopian ecosystem was quite welcoming. It was easier buying land there than in India. I started with Rs 18 lakh (Rs 1.8 million) and it was like testing the waters. By the end of the first year, we had invested Rs 7 crore (Rs 70 million). Over the years we went on investing in land and today, we have close to $170 million invested there.
We are now the world's largest rose company. We produce one-and-a-half million stems of roses every day in Ethiopia and Kenya together. We employ about 9,000 people there and 1,000 here in India.
In Africa, we run our own hospitals, schools and football clubs. We employ only the locals. We take good care of them and they take good care of our business.Today, we have a 9 per cent market share in Europe and we are heading for a 15 per cent market share as we are doing a lot of expansion.
Today, we produce 650 million roses a year, which is about 2 million roses a day. We are looking for a billion rose stem capacity! Every day, we send one charter flight from Africa to Europe.The Indian production goes mainly to the Indian market. We don't export from India any more. Today, 95 per cent of our production is in Africa. So, I spend 15 days a month in Africa.We harvest roses five times a day and process them the same day. They are despatched early next morning, and they reach the destination by the end of the day. They are sold on the third day.
Moving to agriculture
Three years ago in 2007, we decided to buy land in Ethiopia for agriculture. Today, we have 3,000 sq km of land which is 5 times the size of Mumbai, and it makes us one of the world's largest landlords! I never thought of becoming a landlord, much less one of the world's largest. That was not a goal at all.
We harvest rice, maize, vegetables, palm oil, and sugarcane. We produce about 5 million tonnes of rice which we export to many countries. That is about one per cent of the world's rice production and 20 per cent of the traded volume in the global market.
We have already been rated by UNCTAD (United Nations Conference on Trade and Development) as a member of the 25 largest transnational corporations in agriculture. I want to be ranked among the top 5 and make every Indian proud that one of their own has reached the heights, not in IT but in agriculture.
Future plans
Though horticulture is the main driver of our business, in the next 24 months, agriculture will be twice as big as horticulture.We expect incremental revenues from agriculture to go past $600-700 million and I don't see horticulture revenues going past $200 million (it is currently $150 million).

Disclaimer : This Story was published by www.rediff.com and all the above text is copied from the same.I found the story very inspiring and thus sharing on the blog.For the original story click on http://business.rediff.com/slide-show/2010/jul/22/slide-show-1-meet-the-worlds-largest-exporter-of-roses.htm#contentTop.


Copyright © 2011. Investlane.com : lets talk investments... . All Rights Reserved.