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TMCNet:  Chennai Silks wants to expand beyond textile kingdom [India Business] [Times of India]

[December 25, 2013]

Chennai Silks wants to expand beyond textile kingdom [India Business] [Times of India]

(Times of India Via Acquire Media NewsEdge) CHENNAI: For a business family that runs over a dozen companies, including one for inhouse IT needs, generates Rs 2,000 crore in revenues, and has nearly 40,000 employees on its rolls, the Chennai Silks group has for long been identified as a Tamil Nadu-centric saree retailer, battling it out against the likes of Nalli locally. It wants to change that now.

The nearly five-decade old family business, managed jointly by eight brothers, now wants to expand beyond home, to southern states initially. Not just that. It wants to expand beyond just garment retailing and even more specifically beyond retailing itself. Its new bets are on real estate, where it has tied up with Tatas for a project, and renewable energy.

It will all start with Chennai Silks, the retailer, after expanding fully in Tamil Nadu, going full steam in Kerala, says Ravindhiran PA, general manager and spokesperson for the group. Karnataka and Andhra Pradesh could follow.

The real estate foray is a 2,500-home project that uses the pre-cast concrete technology. The Chennai Silks group will do the structural designing, pre-cast modelling and execution, while Tatas will design the project. "The tie-up with Tatas is going to be big," says Ravindhiran. He says they are in talks with Siemens for a similar project.

And then, there's renewable energy. The group already has over 40 windmills through a company called SCM Energy. They together produce nearly 9 lakh units a month, about half of which is for captive use. It is now building a 2 megawatt solar plant through Tata Solar. More could follow, according to the group.

The intent to expand more aggressively and outside of just textiles has come at a time of a major rejig in the family business. Earlier, the eight brothers, representing the second generation of the family business, used to work in an unstructured way, getting exposed to all the group businesses on a day-to-day basis. Now that has been corrected, indicated Ravindhiran. The administration duties have now been split between the brothers so their roles are clearer. The brothers weren't available for comments.

The business founded by A Kulandaivel Mudaliar in 1962 is today an integrated textiles company. On the front-end, it has 13 stores, each of which, he said, witnesses footfalls of 25,000 a day.

On weekends, this number increases to 40,000 and during festival season swells to about a lakh. Already, it has a footprint in Tamil Nadu cities such as Chennai, Coimbatore, Tirupur, Erode, Tiruchi, Karur, and Tirunelveli. Ravindhiran says the group also exports to leading brands such as JC Penney, Walmart and Carrefour.

Most of its businesses have been built around its core textile business. One of its related extensions has been in IT. It has an in-house software to handle supply chain management, billing and sourcing.

Its vendors also use it. Ravindhiran says a major IT company wanted to buy this software but Chennai Silks didn't want to part with it.

The other related extension has been in building an e-commerce portal for online buyers. The business done online is currently equal to what they sell in a single brick-and-mortar store.

They aren't done with just expanding into realty and renewable energy, though. The group is mulling starting a B-school. Last year, it started a CBSE school in Avinashi, Coimbatore.

"We also want to take schools to other districts in Tamil Nadu," says he. "The group is planning big in the education space." (c) 2013 Bennett, Coleman & Company Limited

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