Ramesh Tainwala's path to Samsonite International's CEO is rooted in both chance and choice. His ambitions, however, have their foundation in pure ability
Serendipity best describes the nearly two-decade-long journey Ramesh Dungarmal Tainwala, 55, has taken to become chief executive officer at Samsonite International, the world’s largest travel luggage maker.
Consider that in 1981, as a 22-year-old, Tainwala was rejected for a management trainee’s job with Indian luggage giant VIP Industries. Yet, a few years later, he became one of their long-time vendors, supplying the company with raw material and, later, plastic sheets.
Also consider that Tainwala might never have worked with Samsonite if not for a joint venture struck by chance. His elevation to the top post might not have happened either, given that Tainwala had resigned twice at Samsonite earlier.
Most of all, this: “[Prior to working with Samsonite] I had no clue how to make or sell luggage. The only luggage I used was what my wife got in her trousseau,” Tainwala, Samsonite’s CEO as of October 1, says in an interview with Forbes India. And now, Tainwala is shaping your luggage choices.
You have to call it serendipity.
In 1981, Tainwala, a postgraduate from the Birla Institute of Technology and Science (BITS), Pilani, who grew up in Ranchi, in the eastern state of Jharkhand, applied for a management job at companies such as VIP Industries, Asian Paints and Century Spinning, among others.
These were reputed organisations and, equally importantly, based in Mumbai, the land of Bollywood, which Tainwala was enamoured with.
It was not to be. Not then, anyway. Tainwala got rejected by VIP as well as the others. But he didn’t lose heart. In 1983, he moved to Mumbai and started working with his uncle’s friend, Kamal Kumar Agarwal, who ran a polymers business and was a vendor to VIP, selling them plastic raw material. “I was excited about Mumbai and its glamour,” recounts Tainwala. A year later, he started out on his own as a small commodity trader, through a firm Tainwala Trading & Investments.
Tainwala says he managed to “stand out” as a commodity trader as he was interacting with people who were “sophisticated”. This was a combination of both “luck” and his “outgoing nature”, he says. He had come to know stalwarts like Idea Cellular’s former managing director Sanjeev Aga, who at that time worked with Blow Plast (which later merged with VIP). Tainwala’s other clients included Asian Paints, Kelvinator, Godrej and luggage firms Safari and the now-defunct Gujarat BD Luggage; some of these companies later started to buy raw material in the form of polymers from Tainwala when he started to sell later in 1984.
In 1985, as a natural progression of selling polymers, Tainwala decided to set up another company, Tainwala Chemicals, to manufacture plastic sheets which are moulded into making suitcases. The opportunity, as he saw it, was that some of his clients, who tried making these sheets themselves, were able to use only 20 percent of the capacity produced, a sub-optimal level for them.
To set up the company, Tainwala borrowed funds from family and friends to raise Rs 20 lakh. He also met some brokers who helped him successfully raise around Rs 50 lakh from the capital market (through an IPO) and the balance from banks (after successfully convincing ICICI’s then chairman Narayanan Vaghul): This resulted in a cumulative capital of Rs 2 crore in the late 1980s.
While still working on his own in the late 1980s, his main lender, ICICI (now ICICI Bank), approached him after Gujarat BD Luggage blamed Tainwala Chemicals as one of the factors for its non-revival, at a hearing with a government agency, Tainwala says. ICICI had been appointed as the nodal agency to revive the firm.
The charge, he points out, was that Tainwala Chemicals had not supplied Gujarat BD Luggage plastic sheets as it had not been paid dues for two years. “After a year-long hearing, ICICI asked me to take over Gujarat BD Luggage, which had a JV with American Tourister,” Tainwala says. (The Gujarat BD Luggage revival issue remained unresolved for a long time.)
Tainwala was evaluating this purchase option when he learnt that Samsonite had bought American Tourister in 1993. This prompted ICICI to ask Tainwala to initiate discussions with Samsonite on a potential buy-out of Gujarat BD Luggage, which had outstanding loans of about Rs 3 crore. “I thought if Samsonite takes over Gujarat BD Luggage, I might be able to recover my unpaid dues [Rs 20-30 lakh] and also hoped that Samsonite could become an additional customer to Tainwala Chemicals,” Tainwala says.
But the deal was never finalised. Samsonite had other ideas after India had opened up its economy to overseas investment, post the 1991 economic liberalisation. Samsonite, an established brand in the West, was keen to build its presence in India but, as per local rules, it required a local partner who would need to hold a 40 percent stake.
In 1994-95, Tainwala met Samsonite’s then president and CEO Luc Van Nevel. “Samsonite has the money, I need somebody reliable I can work with, Luc told me,” recounts Tainwala about the meeting with the Samsonite boss at Hotel Leela in Mumbai. “I told him, if you want me to work, I will.”
(This story appears in the 31 October, 2014 issue of Forbes India. To visit our Archives, click here.)