The current business environment is ever changing and so are the growth strategies. The emerging trends being observed are the increasing push towards innovation, diversification, and customer centricity to gain a competitive edge. Out of these strategies, diversification is of high significance. New markets or new products can be used to diversify risks and opportunities for businesses. This approach minimizes the risks of being dependent on one source of revenue, and the company can sustain operations during economic crises. Also, diversification may lead to synergies, increased market coverage, and long-term growth. It is, therefore, an impactful strategy for managing risks and guaranteeing continued success of the business in the face of uncertainties.
Illustrating the impact of diversification is Vishnu Kumar Agrawal, Executive Director, RMC Group. Launched in 1992 as Rajesh Metal Crafts, his company initially started its operations as a tin container manufacturing company and has over the years expanded its operations to cover a wide range of products from metals to cement. First, it started its business as a steel trader in the capital city of Nepal, Kathmandu and then shifted its business to a small town near the Indian border, Birgunj with a manufacturing unit. It established a small unit that was manufacturing tin containers for edible oil sector and steel drums for paints and varnishes. Later, the company grew its business by incorporating a small steel tube mill that produces mild steel tubes. This diversification assisted it in avoiding risks and seizing numerous business opportunities in the market.
“In 1996, Nepal-India trade relations were enhanced by the signing of a trade treaty that allowed exports to India. We seized this opportunity to export steel. At first the market was not completely receptive, but gradually customers acknowledged our quality. This decision helped us increase our company’s production capability and thus, the profitability. We introduced galvanized corrugated sheets in 2004 to our product portfolio even when business was affected by political instability in Nepal. We were able to transport the sheets to Assam, thus increasing the market scope,” says Vishnu Kumar Agrawal.
The company embarked on backward integration in cement manufacturing by establishing Palpa Cement Industries in 2020. This new venture included a 2000 TPD greenfield integrated cement manufacturing unit in Bhairahawa, capable of producing cement directly from limestone. Palpa Cement Industries began exporting cement to India under the brand name 'Tansen,' becoming the first company to do so. In the steel sector, Rajesh Metal also made a significant impact by being the first company to export steel to India. These achievements marked a transformative moment for the Nepalese steel and cement industries. Additionally, Rajesh Metal undertook both forward and backward integration strategies, incorporating a cold rolling mill for backward integration and a color coating line for forward integration.
His insight led the company to opt for backward integration at a time of global recession and establishing a cold rolling mill in 2012. This investment assisted the firm in cutting down its costs and attaining profits within two years. He ventured into cement manufacturing business in 2011 with RMC Cement. Afterward, RMC Foods was established in 2019 as he diversified into edible oil manufacturing with a bakery shortening unit to replace the imported ones. He transformed Rajesh Metal into a public limited company that is in the process of going for an IPO.
"All of this has been achieved through the joint effort, support, and guidance of my father, Shrawan Kumar Agrawal (a two-time member of Parliament), and my elder brother, Rajesh Kumar Agrawal (the current CNI President of Nepal). They have been supportive through all the ups and downs, helping our family reach our current level of success," shares Vishnu Kumar Agrawal.
Adaptability & Resilience
Vishnu Kumar Agrawal has been a flexible and tenacious employee in his professional career. His life is studded with major events including political turmoil, natural calamities, and economic downturns. He was able to overcome these challenges and continue to do business and even prosper through these challenges by changing his tactics. For example, in 2004 when Maoist disturbances were at their worst, he faced numerous problems in establishing and managing a large plant, such as transportation problems and labor problems.
However, he was able to set up the plant and export the product to India despite the mentioned barriers.
Moreover, he managed through economic down turns for instance the global steel recession in the year 2008 which was a source of big losses. He was able to get the backing of the Nepal Investment Bank in order to go for backward integration, which in the end proved to be the turning point for his company. Likewise, the earthquake that occurred in Nepal in 2015, which caused much destruction also, challenged his strength. At this time, his company was involved in the provision of roofing sheets to aid the homeless which shows that the company is versatile and socially conscious.
Vishnu Kumar Agrawal has been, & continues to be, a man driven by commitment to quality & standards
Practical Hands-On Leadership
Being an operative manager, he commences by familiarising himself with each aspect of a new plant, including the machinery and production processes and the layout of the plant. Thus, he ignores the convention and, instead of engaging consultants, he develops layouts for the plants on his own. This way, he is directly involved in the business management and fully aware of its operations.
He employs competent managers to run the plant, but he does not delegate work immediately. However, he cooperates with them and studies the layout and the
machinery of the plant, the production systems, and the overall financial situation. This enables him to have a clear insight into the various aspects that are involved in the management of the team. He stresses on the need to work hard and sets the pace for the rest of the team.
In his opinion, people are the most important element in the organization. This is because he knows that nothing is as critical as how they are treated since it plays a big part in the overall achievement. He is quite frugal with expenditures and cost of productions, and keeps a mental account of the company’s balance sheet, and prefers oral briefing instead of written reports. This is seen in crisis management where he comes in when there is a crisis but otherwise gives his team freedom to work.
Commitment to Quality & Standards
Vishnu Kumar Agrawal has been, and continues to be, a man driven by commitment to quality and standards. Gradually growing from minor supply problems, he established credibility among Indian traders for steel quality within a year. This proactive effort ensured that the company got the Bureau of Indian Standards (BIS) certification thus been in a position to supply the Government projects including roof sheets during power blackouts. Such regular plant upgrades and regular interaction with the suppliers of the machinery show his commitment to technology and the best practices in the plant’s operations. Thus, he not only gained the reputation of a reliable person but also contributed to the recognition of Nepal’s industry and its development.
Innovative Problem-Solving
He demonstrates creative thinking in the management of the cement industry as depicted by his visionary leadership. Not confining Nepal’s export potential to steel products, he initiated Palpa Cement with the vision of exporting cement to India, a vision that faced barriers at the beginning. Thus, using his knowledge and working hard through difficulties he has created a platform for Nepali products in the international market. His leadership skills are also seen as strong because he has managed to deal with the challenges that come with rules and presentation of goods in the economy. Besides, his strategic vision has not only improved the industrial status of Nepal but also has set the country on the global map.
Team Empowerment & Trust
Team motivation and trust are the significant factors that are evident in Vishnu Kumar Agrawal’s leadership style. He also stresses that, leading by example is crucial. He holds that passion and commitment towards work make the team work harder and deliver their best. Knowing that trust is the cornerstone, he considers his subordinates as important resources in attaining the team’s goal. He does not only lead but also makes sure that his team is able to stand on their own and be accountable.
His measures, for instance, the plan for conversion of Rajesh Metal into a public limited company, shows his strategic thinking and confidence in his people. His strategy in business expansion, for example, exporting cement to India, is a perfect combination of vision and realism. He also solves the problem of lack of technical skills and inadequate infrastructure through the provision of modern facilities and a conducive working environment for his employees.
Community & Social Responsibility
In difficult moments, Vishnu Kumar Agrawal has helped the homeless with roofing sheets to be able to have a shelter. Together with the government, he has eliminated the problems of energy constraints and ensured the availability of power supply for production. This initiative reflects his concern towards the well-being of the society. His CSR efforts are diverse: he provided education to the people of neighbouring villages and constructed schools, provided scholarships and installed water recycling plants even before it was made compulsory. In addition, his company ensures that there are roads and water tanks for dust suppression, encourages education to avoid social vices and has helped in supporting health facilities such as the one in Kathmandu. In this way, it aims at mitigating the effects of industrial activities while at the same time promoting tree planting.
Mentorship & Succession Planning
Stressing the need to adapt industrial strategies to the specific local environment, Vishnu Kumar Agrawal knows that one size does not fit all. He supports the flexible strategies like using automation where there is availability of cheap labor like in India. His father’s mentorship was to learn and be responsible, which is associated with capability and authority. His travels around the world have expanded his vision, influencing his management style and the strategies for business and succession, which focus on the ability to anticipate change and adapt to it in the global environment.
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