Let a million roses bloom is the credo of Sai Ramakrishna Karuturi, who became the worlds largest producer of roses last year. His has been a meteoric rise through smart acquisitions and timely forays. The journey has been rosy for the most part, and has come despite stiff competition from established players worldwide.
Karuturi, a mechanical engineer with MBA from the US, founded the company in 1995 as a 100% export-oriented unit in Bangalore. â€œThere was more value in this business than the cable business I started off with, he says. In 1999, he set up an internet auction portal by the name Rose Bazaar.com to derive benefits of weeding out intermediaries through the use of the Internet. The same year, he set up a second production facility for roses near Bangalore taking the total size of his rose farms to 10 hectares.
Roses for Valentines Day in 1998 earned him his first million. There was an order to supply 22 tons of roses to Europe, and the Air France flight that was to ship it, got cancelled. There was no flight to the destination after that. The buyers were not ready to wait, they would have switched to another supplier.
I was the president of the flower association and bought up the entire stock that was lying there on the tarmac at a a throwaway price as the sellers were desperate to get rid of it. I drove a truck all the way to Chennai, and finally after some haggling, got all the stuff in a Lufthansa flight. That consignment alone netted me my first million, says Karuturi reminiscing in his Embassy Centre office in Bangalore. By 2003, the company was the countrys biggest producer of roses through efficient farming techniques. Producing in India was getting costlier and the customs regulations did not make matters any easier.
So in 2003, he took a call. To be, or not to be in India, as he puts it. Finally, he decided to kickstart the next acres of farms in Ethiopia, a country which has been wooing investors and giving out lands at much cheaper rates. The wholly-owned subsidiary, Ethiopian Meadows Plc is now the epicentre of the groups activities. In 2006, he got his largest order from Tesco and that has been a terrific partnership. All the partnerships that we have had with the retail chains have endured, says Karuturi.
He made the leap from just another producer to the worlds largest producer of roses last year when he acquired Dutch firm Sher Agencies for $69 million. That acquisition boosted the revenue of Karuturi, which is also into food processing and software services, to Rs 4 billion from a billion rupees. The capacity now grew to 650 million rose stems from 150 million with this single deal. That changed everything, says Karuturi.
Growing at over 30% annually, the company acquired one lakh acres of land in May this year, and will soon add 6.5 lakh acres on long lease in Ethiopia for which he has garnered $250 million through debt and equity. This addition will put Karuturi on the fast track as a horticulture major. Here he plans to grow paddy, palm and sugarcane for both sugar and ethanol, while other crops such as sorghum and vegetables would be rotated to take advantage of the growing global demand for these commodities.
We are going to process crude palm oil for trading in ethanol. With the global energy crisis getting serious, there are plans for tapping the big oil companies selling ethanol for blending with petrol, he says. When he is not dabbling in shipping roses to almost all of the worlds big chains, horticulture and his Bangalore-based internet connectivity business, he likes to go on long drives with his family.
Through his business he has come across some interesting clients like a UK customer who wanted a heart-shaped bouquet made with 2,000 roses. Now that must have blown away his fianc says Karuturi with a guffaw. Much in the same way as he has ridden over competition from around the world and come up trumps.
I got my largest order in 2006 from Tesco. Since then, all the partnerships with the retail chains have endured.