Friday, July 22, 2011

The rise of Dalit enterprise: Entrepreneur Sushil Patil

When you stay in a 200 sq ft shanty and fail at 20 businesses, there is only one way you can go: up. The transformation for Sushil Patil , 37, has been dramatic. He now lives in a glass-fronted, threestoried, 3,000 sq ft house in the tony Nagpur locality of Manish Nagar; and he owns and runs a Rs 280 crore company that does engineering consultancy and project work.

Till 2003, Patil knew only losses. From poultry to software, broking to services, the civil engineer from Nagpur University dabbled in every conceivable business. And as Reliance chairman Mukesh Ambani says, learnt 20 ways of avoiding mistakes. Setbacks were nothing new for Patil. From an early age, he was witness to financial strain and caste prejudice. Like the day his father had to request the engineering college to waive Patil's finalyear fees. "I can never forget my father bowing before the dean. That hit me hard," says Patil. He also recalls the discrimination his father, Ramrao Patil, faced.

Senior Patil was as a labourer in an ordnance factory; and, after office hours, he sold snacks in the office to feed his family of four. Still, he once went 15 years without apromotion. "His colleagues, who were from upper castes, received regular pay hikes and other benefits," he says. This humiliation made Patil resolve to have his own venture. After completing his civil engineering in 1995, Patil worked for several construction firms. "I never wanted to work under anyone, and soon quit," he says. In 1996, Patil borrowed Rs 1 lakh from a friend and started a stock-broking firm.

But the venture failed because he knew little about the business. In 1999, Patil started cleaning overhead tanks. That too went bust -- he lost Rs 1 lakh and was saddled with a Rs 7 lakh liability. In 2000, he sunk Rs 1 lakh in the poultry business. His experience with running a software-development firm was similar. "I had no money, but I somehow survived," he says. Patil returned to his calling: engineering. This time, though, he played safe. He worked for a small firm for six months and learned project-implementation strategies.

In 2003, using the last Rs 5,000 of his savings, he started IEPC, an engineering services firm. Today, that company provides engineering, procurement and construction (EPC) services to power companies --basically, assembling a power plant --and handles projects worth Rs 2,000 crore. Its beginnings were small. In its first year, IEPC bagged an engineering and designing feasibility project for a 8 MW plant in Rayapati, Chhattisgarh, through a friend's reference. The one thing Patil did from the outset was to structure the terms of a project such that it offered him an advance to take care of his initial costs related to designing engineering layouts and modules.

His big break came in 2008, when he was asked to do a techno-feasibility project for a 108 MW, gas-based power plant of NDPL, jointly commissioned by the Tata Group and Delhi government. "I put my best engineers on the job and submitted the report in 45 days," he says. "That helped us secure bigger projects."

For all these projects, he always negotiated an advance; subsequently, he started asking clients to pay him in phases. Initially, getting work from big power companies was a big ask and Patil spent hours outside their offices.

"I mostly failed, but I never quit," he says, adding that many people did not take him seriously because he was a Dalit entrepreneur. "They thought this was not my cup of tea and that I would shut my business after some time." At times, he adds, companies denied him projects because of his caste; in 2003, people from upper castes were reluctant to work with him. In order to break into this system, he started offering clients concessions. "I would charge only for the original project and would offer to do additional projects for free," says Patil. Small projects, of 1-10 MW, came his way. Gradually, he learned to handle 100 MW projects. IEPC has since designed a 108 MW power plant for Pashupati Power in Kashipur, Uttaranchal, and two 4x660 MW coal-based plants for Shanghai Electrical in Jharsuguda, Orissa, and Jhajhar, Haryana.

Patil's clients like his commitment and professionalism. "Last year, we awarded IEPC an operations and maintenance contract for our 8 MW power plant in Raipur," says B Vishwakarma, senior general manager of Jindal Electricity Generation, a Sajjan Jindal group company. "His team surprised us by completing it 14 days before the due date." "He wants to grow fast and is passionate about his work. He has the vision to execute projects in a short time," says Shamshil Kawade, vicepresident of Sepco, a Chinese EPC firm. IEPC has assembled a boiler turbines unit as a sub-contract project for Sepco, which has 20 EPC projects from the Vedanta group. In order to maintain quality parameters, Patil hires experienced engineers who have retired from stateowned or private companies, drawing them with a 50% mark up in salary over the market and other incentives.

IEPC takes on projects only from clients who have the ability to pay on time and not scrimp on consultancy fees. The aim, he says, is to provide clients the best services in the shortest time. All this has given Patil the confidence to think bigger. He is projecting revenues of Rs 350 crore this year for IEPC -- a 20% growth. IEPC is planning to bid for two 660 MW supercritical power plants to be built by the Adani Group.

It is also designing India's first 50 MW solar-thermal power plant for Godavari Projects. But the biggest plan of them all is to run power plants. IEPC wants to set up 5,000 MW of capacity across coal, solar, hydro and thermal. "We are talking to the Spanish and German firms we collaborate with," says Patil, while refusing to name them. Patil displayed a keen business acumen early in life. "I used to showcase my projector in class 8, and earn 50 paise per student," he says. Much has changed since. His old friends, who still live in the slum in Indora, on the outskirts of Nagpur, idolise him. "BR Ambedkar is my God," he says, pointing to a picture of the Dalit messiah in his office.

Patil makes it a point to give back to the community: about 150 of the 480 workers in IEPC are dalits, who were also trained here. "In the next five years, my staff strength will be 1,000 and we will try to get many needy people on board, irrespective of caste," he says. Patil has another dream to fulfil. He wants to construct a hospital in his hometown of Nagpur where the poor and needy will be treated for free. The project, he believes, will be a true testimony of his success.

Source: Economic Times

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