Arihant Industrial Corporation (Arihant) started off as an acrylic furniture manufacturing company, but today it is a company that exports water park slides to over 50 countries. Pankaj Joshi gains first-hand knowledge about Arihant from its chief Rajen Shah.
The journey of Arihant Industrial Corporation began in the year 1978 as a partnership firm, making acrylic furniture. It went on to diversify its business in 1984 and entered into outdoor playground equipment segment. The next diversification came in 1991, when the company started to manufacture water park slides. In 1996, the company created its own water park in the Mumbai Metropolitan Region (MMR) at Vasai, called the Great Escape.
This water park under Arihant brand, came into Indian market, at the time Walt Disney’s vision of amusement and theme parks was gaining global acceptance. While the company diversified, the company took a call to discontinue its furniture activity. However, the manufacturing division of the company amalgamates the skill sets of its traditional activity (acrylic furniture).
Sitting in Andheri office, Rajen Shah, managing director of the company, says, Arihant, had two partners, now the company has three promoter families. Talking further about the structure, Shah adds, “The original partnership agreement was well-drafted and that helped avoid disputes.
At one point, from the original two partner families, there were four families which then came down to three. Through all this, there were no recriminations and legal disputes of the kind which could hamper company growth.” He stresses the company managed to avoid the pitfalls that plague most businesses which evolve from partnerships to organisations.
When a company grows, it is natural for more members of the promoter families to get involved in the business. Shah explains, “At that point of time, it was very essential to create structures which would not make others uncomfortable and start talks of nepotism.” Going down to as basic as allowances, Shah states, the company policy on vehicles or mobiles was quantified in value for each level of seniority and there were no subjective allowances.
He believes such an approach helps dilute the potential of disputes or attrition. Such structures will not allow any incoming talent to take anything for granted. “Also, all family members were made to understand that professional talent was being constantly recruited from outside as part of the succession plan, and their own performances would be benchmarked,” he adds.
Such an approach has definitely helped the evolution of a corporate mindset at Arihant, which is a massive mental block for the SME segment. The fact that Arihant has overcome this block is evident by the fact that it exports to 57 nations. Shah is extremely proud that an Indian company could achieve such a feat. He informs, out of Arihant’s 450 plus projects, more than 100 projects are across Europe and USA.
“This demand validates the position that the company is now attaining due to its acceptably high standards in operations.” Shah expresses these multiple projects would be impossible if the company had not consistently adhered to the environment, health and safety standards which in those countries are not only high but also non-negotiable.
This demand from overseas market not only helps scale up businesses but also brings on board the currency advantage. The company’s mastery can be seen in its numbers too. Today, the organisation stands at approximately Rs 100 crore in topline terms.
The management is confident that the company would double in size over the next three years, which indicates a healthy 25 per cent CAGR. All the three verticals — playground equipment, water park slides and the park — would grow in tandem, as per the company. When asked about the building blocks for this growth, Shah stated that capex would be need based and it is estimated at around Rs 30 crore.
With respect to their capital needs, private equity or a public issue are options, but only in the long term. While the 2-acres-based Vasai manufacturing facility is now cramped, the other facility at Manor (around 100 km further north and spread over seven acres) has capacity to support the extra level of activity. Another option to move further northwards into Gujarat, is also available.
The company has around 300 people on its payroll. In terms of functions, around 100 are production workers and the rest come in administrative category. In terms of different businesses, the manufacturing activity accounts for 250 people and the park has 50 employees, with rest of the manpower under contracts.
Shah’s influence is not limited to his company alone but also extends to the industry where he has an extensive and long-standing involvement. From heading the industry association to participation across multiple committees, he has been extremely active.
It was due to the criticism voiced by him, about the average quality of equipment in parks, led to businesses adopting to high-standard equipment that is seen today. Shah is proud that the industry has been able to implement and maintain good practices, along with the industry evolution and geographic growth.
Today, India has around 250 amusement parks, and these have moved beyond metros and big cities to large towns and are now making a footprint into smaller towns too. Today, the Indian association is regarded as the second best worldwide — be it in standards, trade shows or training programmes.
Rajen Shah, other than having been active in the International Association of Amusement Parks and Attractions (IAAPA), is one of the founder members and has served the Indian Association of Amusement Parks & Industries (IAAPI) for over 15 years.
Responsibilities handled at IAAPI:
- Founder Member – Since Inception(1999)
- In Core Committee – 2 years
- Secretary General – 4 years
- Vice President – 2 years
- President – 2 years
- Chairman of Training Committee – 3 years
- Chairman of Finance Committee – 5 years
- Manufacturer and Export Promotion Committee – 2 years
- Training committee/Nomination committee – Present
Achievements to its credit:
- It is the first player in playground equipment to do the activity in a dedicated and organised structure of operations.
- It brought in technical competency.
- It was the first to bring in water slides in the domestic market as a product offering.
- The water park started by Arihant (The Great Escape) was only the second in the country.
- Water parks specifically, a segment within the amusement parks industry, were slow to gain popularity. The current popularity enjoyed by the sector can be traced back to the safety and innovation emphasis placed by the early players like Arihant.
- A very popular item in the water park is the Funnel. In the past five years, a new innovation in the park has been introduced, called the Water Play Structure.