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BRFCS News Editorial

After a number of years of speculation and countless rumours, the hunt to find a new owner of Blackburn Rovers Football Club is nearly over, with Indian poultry giants Venky's of the VH Group thought to be close to buying the club in a deal worth a reported £46 million.

Over the next week or so BRFCS will be publishing a series of editorials that look at various aspects of the projected takeover. The first of these takes a look at the VH Group and who Venky's are.

The business was initially set up as Venkateshwara Hatcheries P. Ltd. in 1971 by Dr B V Rao, who previously had been working on a project to set up a poultry farm at Osmania University in Hyderabad. Despite making a success of this project, Dr Rao was shocked to be released. After a period of uncertainty, however, Dr Rao and his wife Uttaradevi set up a 7-acre farm on the outskirts of Hyderabad. The new venture took off straightaway and managed to get a 70% market share within one year. Nearly four decades on, Venky's is now the largest poultry group in Southeast Asia.

Venky's portfolio today includes animal health products, pellet feeds, processed chicken products, solvent oil extraction and specific pathogen free (SPF) eggs. It now also manufactures nutritional health products for humans and is the preferred supplier to McDonald's, KFC, Pizza Hut and Domino's Pizza in India.

In 1996 Dr Rao passed away, but his philosophy still dominates every aspect of Venky's business. This is largely due to his daughter, Anuradha Desai, who assumed her father's mantle in 1998. According to finance and stock advisor Vikram Kapoor, who works out of Mumbai and Delhi, "Anuradha Desai is Venky's." Moreover, Mr Kapoor claims, "Without her leadership the company would have split apart due to infighting. Initially it was thought that she was not strong enough to manage such a company, but she proved them all wrong. Not only has she successfully managed the business, she has managed to diversify its activities."

And, Mr Kapoor adds, "Mrs Desai is obsessed with maintaining her father's business ideologies. This has meant that the business is still very much a family affair, although the impression is that her brothers are not the driving force and that it is their sister who should be credited for the huge developments that the business has made over the last 12 years."

Mr Kapoor also provided BRFCS with an insight into Venky's reputation: "Venky's are a hugely respected business in India. It is well run and profitable. They have many different sub-divisions and each and every one without exception is profitable. Over recent years they have started to branch out into other parts of Southeast Asia."

Mr Kapoor believes that their reasons for buying the Rovers would be to increase brand recognition on a global basis: "I can see why they have bought a football club. It will be to increase brand recognition on the global markets. They also will want to penetrate the lucrative pharmaceutical industry in the UK. In terms of finance, this kind of deal will not present any problems for them. People also need to realise that many of the profitable sub-divisions are not listed companies and therefore their earnings are not publicly listed."

On the subject of the running of the club by our prospective new owners, Mr Kapoor offered the following insight: "I don't think this purchase will be funded by the Venky's Group. I would say that the purchase is being funded by the family itself, from its own finances. It is most likely that Balaji Rao is the one who is driving this — it is the kind of venture that he has been pushing for over a number of years. The worry for Blackburn fans should be: how much of a role is Anuradha Desai going to take? If she is hands-on, then you will see your club grow and progress as she has the business acumen to take this type of project forward positively. The uncertainty will come if she decides not to be hands-on with this venture and leaves her brothers to run this — the jury is very much out on their ability to drive forward a business. It is a little unfair, because they have always taken a backseat in the past, but the concern would be: are they able to cope with making decisions in a pressurised environment, particularly in an environment (the Premier League) which is alien to them."

In forthcoming editorials we will look at what the deal means for Rovers (pros and cons) and the stories behing the other, rival bidders and we will also take a look back at the legacy of Rovers' number one fan Jack Walker as arguably the most successful period in the history of Blackburn Rovers comes to a close. Discuss

* BRFCS would like to extend a special thanks to Vikram Kapoor for his time and invaluable input.

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