Thirty years after it was founded, Welspun Group, the $3-billion textile-to-steel pipes conglomerate, is hiving off its yarn-spinning business, Welspun Syntex, which will be managed by co-founder Rajesh Mandawewala's elder son Abhishek, The Economic Times has reported.
Mandawewala, the Group's Managing Director, is in the process of purchasing partner and Chairman BK Goenka's stake in Welspun Syntex as part of efforts to ensure separation of ownership and management, while simultaneously planning a smooth succession of the business to the next generation, a Welspun spokesperson told ET.Thirty years after it was founded, Welspun Group, the $3-billion textile-to-steel pipes conglomerate, is hiving off its yarn-spinning business, #
Earlier this year, the Welspun Group hired consultant McKinsey to craft Vision 2020, a roadmap aimed at building a new organisational DNA according to which promoters will step away from operational responsibilities to take up a more strategic and nurturing role. In line with that decision, the promoters do not want Abhishek Mandawewala to take up senior managerial role within the group.
The conglomerate gets most of its revenues from selling pipes to global oil companies, and towels and bed sheets in both local and overseas markets. Welspun Syntex posted Rs 835 crore of revenue last fiscal year. Goenka has already stepped down from Syntex's board and Abhishek Mandawewala took over as a whole time director in August.
In his new role, 28-year-old Abhishek will be driving strategic initiatives and automation in various processes, and financial tie ups for the company, according to a filing with the Ministry of Corporate Affairs.
According to ET, Welspun Syntex has also started the process of changing its name to AYM Syntex. Incidentally, the first business the promoters set up in 1985 was Syntex. The arrangement leads to no change in the current promoter shareholding pattern of the group.
Apart from Abhishek, Mandawewala has a younger son, Yash, who is a management trainee at the group. Goenka has two daughters in their twenties. Succession plan for them is still unknown.
Last year, a Welspun Group company, Welspun India Limited (WIL) unveiled its new spinning facility at Anjar in Gujarat, which is India's largest spinning facility under one roof. The new facility will be instrumental in doubling WIL's spinning capacity to over three lakh spindles, thereby fulfilling nearly 70 per cent of the company's internal yarn requirements. It will also reduce WIL's dependency on external sourcing.
Welspun Group has ambitious plans to plans to raise its revenue to $5 billion by 2020 from the current figure of $3 billion. (SH)
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