Suravaram plays for profits on artificial grass
06 Jan, 2009 | The Mint
BY S ANAT V ALLIKAPPEN
Devashish Bagchi, director of physical education and sports at Smt Parvatibai Chowgule College of Arts and Science in Margao, Goa, says the turf the college laid out on its football field three years ago is serving it well.
"It cost us Rs3 crore, but after that it's maintenance-free for the next 20 years," says Bagchi. Twenty years? The Chowgule College football field has artificial grass with the look and feel of real grass.
Bagchi says he has had to "comb" (clean and straighten the fibres) just once since installation.
Welcome to the world of Suravaram Marketing Pvt. Ltd, a Hyderabad-based company that represents Montrealbased FieldTurf Tarkett in India and other South Asian nations as an exclusive licensee to import, market, sell and install artificial grass, which is manufactured in Dalton, Georgia in the US, and Auchel in France.
While 85% of Suravaram's revenues come from the 15 varieties of grass it markets and installs, laying of synthetic athletic tracks and indoor sports flooring make up the rest. Founded in 2004, Suravaram claims at least 1,000 installations in India, across sports arenas, rooftops and balconies, educational institutions, clubs, children's play areas and traffic islands, spanning an area of 580,000 sq. ft.
Owning a business was on Suravaram managing director Anil Kumar's mind even before his graduation in engineering from Osmania University, Hyderabad.
"With some work experience and a move back to India in 2004 (he was in the US for seven years prior to this, working with Wipro Ltd and Ramco Systems), it seemed like the ideal time to take the plunge," says Kumar. "Zeroing in on this opportunity took a lot of planning, analysis and footwork. I felt that with artificial grass, we were not only providing aesthetics, but also a product that had high utility value." A football moves on the surface at "natural speed", says Chowgule College's Bagchi.
"Besides, it is porous and semipermeable which means there is no waterlogging." But the challenge for Sura varam is that its product is 10-20 times more expensive than natural grass. "It's ideal for climates where you cannot grow high-quality grass, but the challenge is whether in India, where people typically think short term, it can replace the low cost of natural grass and the mali (gardener)," says Sandeep Aneja, chief operating officer and managing director of Milestone Capital Advisors Pvt. Ltd, a real estate fund with about $600 million (Rs2,910 crore) under management.
Kumar admits that natural grass is the biggest competitor.
"Initially, people were not willing to pay for this more expensive product which they were not familiar with. They also doubted its durability." He tackled this by focusing on convincing the architect community. "Once they got convinced, it led to a few installations, and from there, we built up momentum," he recalls.
Further, internationally, while FieldTurf (the artificial grass) is largely used in sports arenas, India's relatively low focus on sports infrastructure, may mean a market that's limited. "In India, given the relatively low focus and investment in sports infrastructure, we saw a far quicker and stronger acceptance in the landscaping market (homes, businesses, clubs, public parks)," says Kumar.
That said, while the number of sports arenas the company equips with FieldTurf may be low, the size of these projects means they derive maximum revenues out of these, as and when they happen. Suravaram had a turnover of Rs3.5 crore in the year ended March, and profits of Rs38 lakh, according to Kumar.
Almost 85% of this turnover was derived from landscaping projects, with the remaining coming from laying of synthetic athletic tracks and indoor sports flooring. "If we get something as big as a football field, the top line (revenue) tends to shoot up," said Kumar.
Prominent corporate clients include Infosys Technologies Ltd, Reliance Industries Ltd, Microsoft India Pvt. Ltd, and Coca-Cola India.
Suravaram Marketing Pvt. Ltd, Dharya Information Pvt.
Ltd and MedSphere Technologies Pvt. Ltd are among the nominated companies at the Tata NEN Hottest Startups competition, of which Mint is the official print media partner. Details of the competition can also be accessed at www.livemint.com/hottest startups
LIBRARYWALA.COM - Lending books makes good business sense
BY N AMITHA J AGADEESH
Eight years ago, four college students wanted to read Built to Last (by J.C. Collins and J.I. Porras), a book that analysed 18 successful ventures such as Wal-Mart Stores Inc.
and Hewlett-Packard Co. to find out what made them so.
It cost Rs300 and the local library only stocked thrillers, romances and children's comics.
So the four pooled in Rs75 each and bought a copy.
In early 2007, that love of reading led to their own venture: With its website Librarywala.com, Mumbai-based Dharya Information Pvt. Ltd took the local lending library model online and combined it with free home delivery and pick-up of books within 24 hours of request.
The firm, whose business model is inspired by US-based online DVD rental firm Netflix Inc., today has 5,000 registered users in Mumbai, Bangalore and Pune. It earns revenues through monthly subscriptions. "A lot of people suffer from the no-book syndrome, because local libraries have limited choice and buying books is expensive. We want to give users easy and affordable access to good books," says Hiten Turakhia, managing director, Librarywala.com and the only co-founder working full-time at the company. The others hold day jobs.
The firm stocks books on history, travel, health care, spirituality, children and adult fiction. It often sources books directly from large distributors and publishers, which ensures better discounts and lowers cost of inventory. On average, it buys books worth Rs80,000 every month.
Librarywala.com competes with local libraries, large retail bookstores such as Crossword and Landmark, and other online libraries such as Friendsofbooks.com and Bookmeabook.com.
Librarywala differentiates itself with a number of services such as one where users can keep books for as long as they like with no late fee. The site has multiple payment options both online, through credit and debit accounts, and offline cash or cheque payments that a representative will collect on your doorstep.
A unique feature is its request-a-book service, which allows users to ask for a book not in its inventory. The firm ensures it obtains a copy within seven weeks. It recently bought a hardbacked omnibus of Dilbert comics that cost a few thousand rupees on a customer request.
As with many consumer Internet businesses in India, the company will have to tackle issues of scalability and cost of customer acquisition, say venture capitalists. In addition, it may face challenges more common to retail chains, given its business model.
Currently, most of its operations, such as home delivery and stocking the inventory on the right shelf, are easily managed manually. With scale, "back-end inventory management and logistics are going to be big issues", says a Bangalore-based venture capitalist requesting anonymity.
In the last 16 months since it launched the site, the company has recovered investments made in office space, hiring and logistics. "Breaking even on the cost of books we've stocked will take longer," says Turakhia.
TELERADIOLOGY - Online medical consultancy gives MedSphere the market edge
BY S EEMA S INGH
Imagine this: An accident victim is rushed to hospital in the middle of night. There's no radiologist on duty and a diagnosis is delayed, increasing chances of a fatality.
Now imagine this: A radiologist, alerted on the phone, log ins to the Internet from wherever she is and provides a diagnosis in minutes.
That is what MedSphere Technologies Pvt. Ltd, a 20-month-old start-up, is trying to do through its suite of teleradiology products, which allow electronic transmission of patient images of X-rays, CT scans or MRIs.
The key differentiator, says radiologist Jagadish Prasad, is the streaming technology that allows an expert to view the images without downloading them completely. The data is viewed in real time, says Prasad, who's been an early user of MedSphere products after the company set up teleradiology infrastructure at Narayana Hrudayalaya hospital in Bangalore.
The firm was started by a group of six whose experiences range from those at medical equipment firms such as General Electric Co., Siemens AG or Philips Electronics NV, tech pioneers such as Yahoo Inc. and Motorola Inc. to international consultants such as Arthur Andersen Llp. The mixed bag of expertise has ensured that the first product was approved by US food and drug administration, "though we haven't sold our product in that market yet," says Sanjeev S., co-founder and CEO of MedSphere.
That's primarily because the founders believe India is a tough market and if they succeed here, cracking other markets won't be difficult. The company has 154 installations in the country and the products cost between Rs1 lakh and Rs80 lakh. "We saw the demand-supply gap and decided to fill it as some of the players had ridiculous solutions with mind-boggling prices," he says.
"Those who build Rolls-Royce don't want to build (the) Nano." Globally, the US, Europe and Japan constitute 88% of the market share, according to research and consulting firm Frost and Sullivan, but the Asia-Pacific region now offers growth opportunities.
According to Abhishek Dutta, research analyst, technical insights and health care practice at Frost and Sullivan, the competitive landscape is tough but still has moderately low number of firms, Hence, firms such as MedSphere will have a high bargaining power, he said. "There are no substitutes for teleradiology and the only alternative is the general imaging techniques with no telemedical provision." He warns that the firms will have to deal with the high costs of equipment, which could end up swaying end-users to stick to conventional methods.
Not quite impacted by the slowdown, which the founders say has actually lowered the threat of attrition, MedSphere does consider entry into the US market as one of its biggest challenges.
