Vijay Mallya

Vijay Mallya (born December 18, 1955) is an Indian businessman and Rajya Sabha MP. The son of industrialist Vittal Mallya, he is the chairman of the United Breweries Group and Kingfisher Airlines, which draws its name from United Breweries Group’s flagship beer brand, Kingfisher.
Mallya receives substantial press coverage that focuses on his lavish parties and his yacht, the Indian Empress.
Business
He took over as Chairman of the United Breweries Group in 1983. Since then, the group has grown into a multi-national conglomerate of over sixty companies with an annual turnover which has increased by 439% to US$1.2 billion in 1998-1999 . The focal business areas of the group encompass alcoholic beverages, life sciences, engineering, agriculture, chemicals, information technology, Aviation and leisure.
In May 2007, United Breweries Group announced the all-cash acquisition of scotch whisky maker Whyte & Mackay for 595 million pounds (approximately Rs 4,819 crore).
Political career
He entered politics in 2000 and superseded Subramaniam Swamy as the president of Janata Party, a breakaway faction of the original Janata Dal party. His party contested almost all of the 224 seats during the Karnataka State legislative election. He campaigned vigorously through the media, but his party failed to make any impact and did not win a single seat. Following the party’s failure in the elections, it has been largely ignored by the media.



Kingfisher Airlines
In 2005, Vijay Mallya established Kingfisher Airlines. In a short span of time, Kingfisher Airlines carved a niche for itself. It was the first airline in India to operate with brand new aircraft. It is the first Indian airline to place orders for the Airbus A-380. At present, the airline connects 29 cities.
Mallya also owns the East Bengal Football Club, in Kolkata.
Brilliant orator and sportsman, VIJAY MALLYA has won trophies on the professional car racing circuits and is a keen Yachtsman and aviator. He is involved in a variety of sport by way of personal participation as well as promotion of sport and cultural activities by steering various sponsorships. Amongst his museum collection of historic rare automobiles are Jaguars, Ferraris, Alfa Romeos and Mercedes Benz.



THE HOUSE OF MALLYA THE HOUSE OF MALLYA GROUP FOUNDER: VITTAL MALLYA (1924-1983).YEAR OF FOUNDING: 1948.CHAIRMAN: VIJAY MALLYA, 41 (SON)FLAGSHIP: MCDOWELL & CO.MAIN BUSINESSES: LIQUOR, ENGINEERINGM, CHEMICALS, FERTILISER.


Luxury On Wheels

Indian tycoon sure knows how to throw a party. A week after bagging Scotch whisky maker Whyte & Mackay Ltd. for $1.2 billion on May 16, the 51-year-old chairman of India’s UB Group Ltd. staged one of his epic bashes aboard his 311-foot yacht, the Indian Empress, anchored off the French Riviera.
Among the 300-odd guests were steel baron Lakshmi Mittal and other Indian industrialists, European aristocrats, and celebrities such as American hip-hop artist Jay-Z. A DJ flown in from Mumbai spun Bollywood tracks. And while Indian dishes were served, the wine that flowed all night came from the Loire cellars Mallya acquired last year.
Mallya, you might say, is Indias Sir Richard Branson. Like the British entrepreneur, he has a larger-than-life personality and owns a slew of businesses, from breweries (his Kingfisher beer is a staple of Indian restaurants from Kolkata to Cleveland) to Kingfisher Airlines, a leading Indian carrier. UB Group is the worlds No. 3 spirits conglomerate, after Diageo PLC and Pernod Ricard. Mallyas empire also spans engineering, fertilizers, and petrochemicals. Among his personal investments are thoroughbred horses, a game lodge in South Africa, and small newspapers in the San Francisco Bay Area. “I’m not making money on [the papers], but it’s a fun business to be in,” he says. Mallya’s latest move: a May 31 takeover bid for Indian low-cost carrier Air Deccan.
Even in a country thats minting millionaires by the hundreds, the silver-maned liquor baron is in a class by himself. His net worth is estimated at $1.5 billion-a figure he doesn’t quibble with. And hes not shy about flaunting his wealth, with a collection of 42 homes scattered across the world, 250 vintage cars, a customized Boeing 727 and two other corporate jets, and three yachts-including the Kalizma, a 165-footer once owned by actor Richard Burton. “Everybody calls me flamboyant, as though it’s my middle name, but I’ve always been the way I am,” he says during an interview at his sprawling, 10-bedroom Mumbai home overlooking the Arabian Sea. Mallya is dressed down, in jeans and a bright red T-shirt emblazoned with the Kingfisher insignia.


EMPIRE AT 27

Despite Mallya’s obvious success, his freewheeling lifestyle long cost him the respect of India’s straitlaced business community. Mallya was only in his 20s when his father died in 1983, leaving him in control of an empire with annual revenues of $100 million. He spent the next two decades winnowing the 22 businesses he inherited-ranging from a brewery to a drugmaker to a battery manufacturer-to just a half-dozen. Those he kept, though, have flourished. Today, revenues for the UB Group run to $1.2 billion. Yet for years, Mallya was dogged by allegations that he dipped into his companies’ coffers to fund his lavish lifestyle, something he vehemently denies. “I was born with a silver spoon, so why should I spend the company’s money?” he says.
It wasn’t until Mallya launched Kingfisher Airlines in 2005 that he earned the corporate acceptance he craved. With its seatback video screens, smartly dressed flight crew, and attentive service, Kingfisher raised the bar for domestic Indian carriers. The five Airbus A380 superjumbo jets Mallya has on order will surely generate additional buzz. After the Deccan acquisition, Kingfisher will be in a strong position to take advantage of an expected doubling in India’s air passenger traffic, to 60 million, by 2010. “Mallya has become an important part of Corporate India,” says Vijay Chugh, an analyst at JPMorgan Chase & Co. in Mumbai. “The airline business has changed his profile completely.”
Now, he’s aiming to go global. Mallya hopes to begin Kingfisher flights to the U.S. and Britain by the end of the year. He’s also stocking up his liquor cabinet. The Whyte & Mackay acquisition gives him an international brand in spirits to add to the French wineries he bought last year from Champagne Taittinger. (He wanted the bubbly, too, but was rebuffed.) The spate of dealmaking has powered a 150% increase in the market capitalization of his eight listed companies over the past year, to $3.5 billion.
Still, Mallya remains quintessentially Indian. He refrains from negotiating during Rahukalam, the hours during the day that some Hindu faithful believe are unlucky. And he has his planes blessed at Tirupati, a Hindu temple in southern India, before putting them into service. That’s not to say, though, that he thinks his current streak is just a run of good luck. “I had to show the world that I was quite capable of standing on my own feet, making money and shareholder wealth,” says Mallya. “And doing,” he adds with a smile, “what the hell I wanted to do.”
Dr Vijay Mallya, India’s most charismatic billionaire hailed the King of Good Times, celebrated the success of his £595m bid for Whyte & Mackay Scotch whisky group in uncharacteristically low-key fashion: a review of the company’s branding, followed by a head-to-head with the Scotch Whisky Association.
“I would have celebrated with a grand party,” said Mallya, as he headed back to India, “but I am on my annual fast, so am 'on the wagon’. I’ve not touched alcohol for six weeks.”

This evening in southern India, however, the wagon will screech to a halt. Mallya – who finds solace in the teachings of Sri Ravi Shankar – will be in Sabarimala in Kerala, where he will join thousands of pilgrims to walk barefoot six miles and climb 18 golden steps to pray to the deity. Then the partying will begin. “I am carrying sufficient stocks of Dalmore single malt and Jura single malt to celebrate adequately tonight,” says Mallya. “Jura was my father’s favorite whisky.” In Mumbai, the stock market couldn’t wait. This week, shares in Mallya’s United Spirits group jumped 33pc.
Hailed the Branson of Bangalore for his high-profile, impressive sweep of interests and soar away Kingfisher Airlines, the world’s fastest growing carrier, Mallya comes on as a warm, friendly, entertaining soul with a brilliant memory. He always cuts a dash: his broad-shouldered frame is topped with grizzled leonine hair, while he is perennially blinged up with gold and diamonds, like a maharaja caricature. Mallya made his first unsolicited offer for Whyte & Mackay last May. Why did the haggling take so long? “They [previous owners Vivian Imerman and Robert Tchenguiz] needed to make up their minds whether to sell,” says Mallya. “That took a few months. Then the price of whisky went up. Given Whyte & Mackay’s huge stocks [independently valued at £350m-£400m], it was like trying to hit a moving target. We had to figure out when to freeze the price. That took another few months. We then did due diligence. And then the whisky price rose. Again.” An informal accord was reached whereby Imerman and Tchenguiz would not conduct an auction for Whyte & Mackay unless Mallya’s bid lapsed. “Ravi Nedungadi, my CFO, and I conducted the price negotiations ourselves.”
Whyte & Mackay, the fourth largest producer of premium Scotch, is “the last whisky company big enough to be worth bothering to acquire”, and accounts for 9pc of the market. Pre-Whyte & Mackay, Mallya’s Bangalore-based United Spirits arm was the world’s third-biggest spirits company on the strength of distribution in India and the Middle East. Post-Whyte & Mackay, his aggregated spirits portfolios vie with Pernod-Ricard for the No 2 spot behind Diageo. Mallya reckons he’ll overtake Pernod-Ricard “in a few months”. “Our premium whisky portfolio is growing in excess of 20pc a year.”
Until now, almost all of Mallya’s whiskies have been molasses-based spirits distilled in India. Whyte & Mackay, however, is the real thing. “Scotch is Scotch,” beams Mallya. “For whisky drinkers, it is the ultimate. Within Whyte & Mackay, we have several brands at different price points. I was amazed to see them. They were in India 20 years ago. I am very excited about relaunching them. Whyte & Mackay is running well, and with our vast distribution in India, we can accelerate that momentum. I’ve spent today redesigning the brands for immediate export.”
The Whyte & Mackay deal puts Mallya in an interesting position. Scotch is “liquid gold” in India, but heftily tariffed. To protect his Indian whisky portfolio, Mallya has staunchly opposed efforts by the Scotch Whisky Association to abolish the tariffs. Now, he finds himself in both camps.
There have been other tiffs with the SWA, chiefly relating to Mallya’s Scottish imagery on his Indian brands, and even his use of “whisky” for molasses-based spirits. (“They cannot have proprietorial rights over whisky,” he has fulminated. “If the end product tastes like whisky, you cannot challenge that it is not whisky.”)
But now is not the time for reviving old spats. Relations with the SWA are as smooth as Dalmore 40-years-old. “Gavin Hewitt, chief executive of the SWA, called on me today,” says Mallya. “He said he would be delighted to invite me as a member. I agreed and said, 'let’s bury our previous differences.’ ”
Mallya plans to spend one week a month in Scotland, staying at his Keillour Castle in Perthshire, while overseeing the transitional phase of Whyte & Mackay. Meanwhile he has other business to attend to. Mallya’s empire runs from property via pharmaceuticals, fertilizers, South Africa game lodges and tropical islands to racehorses, politics (he is a member of Parliament in India’s Upper House), motor sport, super yachts, private jets and a classic car collection.
His greatest business passion, however, is Kingfisher Airlines, the all-frills carrier he founded in 2005 based on his Kingfisher beer brand. Kingfisher’s 30-strong fleet operates 168 daily flights. The “guest experience” includes valet service at check-in, live in-flight satellite television, goody bags and “the prettiest air hostesses in the sky”. Mallya can hardly wait to take Kingfisher global. The inaugural flight to London is pencilled in for next January.




He has placed one of the largest ever orders of Airbus aircraft: 50 so far. A source close to this deal says Mallya has uniquely ordered A320, A330, A350 and A380 aircraft: “No other customer has ever done that. Most buyers are more cautious than Mallya. The airline industry is booming in India but it is badly served in capacity and customer service. Mallya recognizes that this is a great opportunity for someone prepared to make a long-term commitment.”
Staying calm in the face of a physical, mental or financial challenge is a Mallya trait. His friend SD Lalla describes his as having “nerves of steel, a heart of gold, the shrewdness of 10 marwaris [Indian business leaders] put together and naïve as a kid when he wants to be.”
There are two distinct themes to Mallya’s rise.
One is a flare for audacious and very precise deal making. His late father Vittal Mallya, son of an Indian army doctor, bought shares in United Breweries when prohibition was mooted. Believing prohibition to be unworkable, he snapped up rival breweries at depressed prices. He was proved right. Plans for prohibition were dropped five years later, and Mallya’s brewing empire took off.
Upon Vittal Mallya’s untimely death by heart attack in 1983, Junior took charge aged 27. Bedeviled by a “playboy” tag and subject to a “humiliating” tax investigation in 1985 (charges were never pressed; he was exonerated), Mallya exiled himself to London. In 1988, he persuaded HSBC to fund a 100pc leveraged bid for Berger paints. He sold Berger in 1996 at a $66m profit. “I went to my mother and said, 'now, if I buy a plane or yacht or fast car, no one can ever complain.’ I felt a huge sense of accomplishment. The Indian media stopped all this playboy nonsense.”
In 2005, Mallya showed a more relentlessly calculating side. In 1985, Shaw Wallace, India’s second biggest spirits company and a boxwallah hangover from the British Raj, was bought by Manu Chhabria , a pugnacious self-made tycoon based in Dubai.

“We became bitter rivals,” said Mallya. “Ever since then, I wanted to buy Shaw Wallace.” Upon Chhabria’s death in 2002, his family specifically excluded UB from buying the company. “I went hostile,” says Mallya.
“It was a high-risk strategy. I had waited 20 years. Shaw Wallace transformed my drinks business. It gave us 60pc market share in India and improved profitability because both companies had been spending crazy sums competing.” The other theme behind Mallya’s success is his grasp of the transformation in lifestyles in India today. Flicking through an archive at United Breweries in the 1970s, Mallya chanced upon the Kingfisher beer label. “I read up the history of Kingfisher,” he says. “It was launched in 1865 and transported in hogsheads. I found something exciting about its vibrancy and cheekiness. I asked my father for 1m rupees (£12,000) to relaunch the brand and was shown the door. I was later given enough cash to launch it in Bangalore.”
While conducting market research by canvassing people outside cinemas, Mallya stumbled on an important point. “India is the youngest nation in the world. We have 500m people under 25, and 400m under 20. India has 1m university graduates each year. Today, these people are getting jobs in industries that didn’t exist in my time, in software and biotech. They want to live like kids in Europe with satellite TV, cars, bars and restaurants.” This intelligence has served Mallya well.
Next weekend, having propitiated the deity and recovered from his party, Mallya will watch the Monaco Grand Prix from his 95m yacht Indian Empress. Kingfisher Airlines sponsor the Toyota team. His mind, however, may be on his struggle to unite the two rival Indian national motor sports factions both of which he chairs, before hosting India’s first F1 grand prix in 2009 or perhaps looking up at the skies.
As Mallya says, he wants for nothing “but my ultimate objective is to pilot a Kingfisher Airlines A380 super jumbo”.

Formula 1 in New Delhi

Mallya now wants to bring a Formula 1 race to India as the Indian Grand Prix. New Delhi is the target, with a street-race being the favorite of Mallya, track designer Hermann Tilke[2] F1 boss Bernie Ecclestone[3] and Delhi CM Sheila Dixit. F1 track designer Hermann Tilke has designed a layout for a street-race like Monaco in New Delhi. [5] The plan is to have the first Indian F1 race in 2009. Tilke has previously designed F1 tracks in Turkey, Shanghai, Bahrain and Malaysia. [4]
Track design
The setup cost of the race would be at least U$100 million. [5] This is considerably less compared to building a brand new track specifically for car racing. Tilke wants the cars to go around India Gate and down Rajendra Prasad Rd. [6]
Achievements
Contributions to: The Victoria and Albert Museum, London; Prince's Youth trust; and the Duke of Endinburgh Awards Scheme.Establishment of Mallya Hospital in Bangalore.Helped to fund the Mallya Aditi International School, a prestigious private school in Bangalore.Successfully bid for a sword of Tipu Sultan of Mysore, and brought it back to India.[6




MARKET ANALYSIS

Kingfisher : The King Of Good Times

Kingfisher is a classic case of branding success. This brand can even be termed as an iconic brand. A brand that had extended itself from beer to airlines can be equated to the Virgin brand. The brand is synonym with Beer in India. Now ask a young man from India what a Kingfisher is ? The most likely answer will be either Beer or Airline. The power of the brand has virtually made the bird a brand extension.Kingfisher is a brand from the UB group stable.It is the largest selling beer brand in India commanding a market share of over 28% in the Rs 5000 crore Indian Beer market.The brand epitomises energy, youthfulness ,enthusiasm ,freedom but with a touch of professionalism.
United Breweries (the original name of the group) have a history dating back to 1857. The company came into existence as UB in 1915 with the merger of five small breweries . The Kingfisher brand was launched in the year 1980 ( the exact year of the birth of Kingfisher is not known,80's marked the real life of this brand).


The brand was the brain child of the current Chairman of UB group Mr Vijay Mallya. Reports says that Mr Mallya went to work in Calcutta as a part of mentoring program under Mr HP Bhagat. At that time the brands that were popular from UB stable was Kalyani Black label, Doctor's Brandy etc. Mr Mallya wanted to create an exciting brand and none of the existing brands did not impress him. He went back to Bangalore,searched archives and stumbled upon an old label with a Kingfisher in it. That marked the birth of the Iconic Kingfisher brand.
The major factor behind the success of Kingfisher brand is the Passion that Mallya have on the brand. When marketing theorists says that Marketing is a serious business, Mallya will tell you that Marketing is CEO's business. When the CEO takes interest in the brand and virtually promotes the brand in every occasion, there is so much equity generated on the brand. Like Virgin's legendary Richard Branson , Mallya also showed that the primary task for any CEO is to be passionate about the brand. While in most cases CEO comes into picture to deliver the annual shareholder's meet, Mr Mallya takes the brand with him everywhere.
Kingfisher brand is a unique marketing success story because it thrived in an environment where liquor/ beer advertising was banned in India. The owners have built the brand circumventing the ban on promotion. During 1997 , the brand roped in Ajay Jadeja and Sourav to feature in the campaigns. In 1996 the brand become the worldwide sponsors of the West Indies cricket team. But the brand was conscious to keep Kingfisher the star . The West Indies team personified the brand values of fun loving but successful team. The famous jingle " Oola la le lo" and the fun filled TVC rightly placed the brand as a fun loving one. Unlike brands like Pepsi which is focused on cricket, Kingfisher promotes all sports and the brand sponsors football stars and even Formula 1.
The brand directly talks to people who are Easy going, chilled out person who's always willing to take a break and party with the friends. But they are very professional and successful .Most of the business reports try to relate the persona of Mr Mallya and the brand which I feel is unjustified. The brand Kingfisher does not derive any thing from the personality of Mr Mallya. The brand has its life of its own. Since the chairman is passionate about the brand, he takes personal interest in the brand . Other than that relating the person and the brand and trying to say that Mr Mallya is more flamboyant than the brand is doing unjust to the brand.
The brand also have a 360 degree approach to promotions tapping all possible ways to communicate with its target audience. The brand sponsors lifestyle events and the Kingfisher Calender has attained a cult status with in 4 years of launch. During 2003-04 the brand logo got a make over and the Kingfisher started flying rather than sitting. The new logo signals the brand's vision to get to new heights. The new logo designed by Claessens was backed with lot of noise in the media.
To circumvent the regulatory ban on surrogate advertising, the brand has launched into different categories like Mineral water and even into readymades taking a lesson from Wills.
2005 saw the UB group getting into the Airline business with its Kingfisher Airlines.The airlines became a brand to reckon with with in a year because the brand lived to its expectation and promise. Positioned as a funliner, the brand equity of the mother brand has been enhanced by this Extension ( can i call it an extension?).
Behind the glamour of swimsuits and parties , one should not forget the strategies that made the brand a super brand. The distribution and the point of promotion strategies of KF is excellent. The brand has maintained international quality but made sure that it is with in the reach of the Indian consumer.
Lot of entrepreneurs are jumping in. But how many will survive? Starting a low-cost airline is not the most difficult part, say analysts. For example, to start a low-cost service with nationwide operations, the cost will typically be between $20 million and around $40 million, depending on the scale of operations (a full-scale carrier will need investment of around $70-80 million), assuming that the airplanes are leased. A regional service can be started at a much lower cost - say around $10-15 million. CAPA's Kaul says, normally, low-cost carriers can break even in year two or, at most three. Depending on the model followed, the ability to keep costs low and the offer of an on-time service at an affordable price, despite the infrastructure constraints, will be the critical factor in deciding whether a new player survives or not. And this is particularly difficult in India, as many players are beginning to realize.

One issue that the new entrants have to tackle is that of confused identity. Many are not following the cost discipline that low-cost carriers worldwide follow. These include weighty entrants like Kingfisher who are calling themselves "value carriers" - and offering frills like free food and entertainment despite low fares. Others like Indus Air and East West told BW that they would not be like Deccan - though they were not sure how exactly they were going to be different. Says Kingfisher's CEO Alex Wilcox: "Low cost in India now implies you've hit the bottom of the barrel. Shoddy service, selling even drinking water on board, and always late. But we are offering you the most spacious seats and entertainment."




Aviation industry experts are skeptical of whether these "halfway houses" can work at all. Very few passengers in India, they say, will pay more to be entertained or watch TV on an hour-and-a-half flight. Jet Blue in the US succeeded with this model but their audience is far more mature. The travel distances too are much longer. In fact, Kingfisher had to cut prices soon after its launch to come close to the price levels offered by Spice Jet. Company sources admit that sales in the first week before the price cut were quite lackluster.

Others point out that it is hard to see how Kingfisher's model will be low-cost when they are paying close to Rs 100 crore to the Indian Airlines to do their ground handling, have spent extra on fitting every seat with a screen, and serve free hot meals. This is rumored to be one of the reasons behind the differences between Wilcox and his colleague.

"Value carrier" is how Vijay Mallya defines Kingfisher Airlines

Wadia, for one, is convinced that the only model that can work in India is the one that offers the cheapest possible prices. "Price is the critical deciding factor. I want to follow the Ryan Air model and offer the cheapest fare. I know Kingfisher is offering a Kingfisher class. Good luck to them," he says.

One of the reasons Kingfisher is distancing itself from the term 'low-cost' is because it feels that Air Deccan's service in the last two years has given 'low cost' a bad name - flights are often late and cancelled and service is poor. There have been instances of irate passengers holding Air Deccan officials by the collar, swearing never to fly the airline again.

This may be partly the fault of the carrier - it has spread itself thin with minimal staff to keep costs low - but a large part of the blame also lies in poor airport infrastructure, even in the metros. There are too few landing slots and the race to grab them has only just begun.

Air Traffic Controllers (ATCs) in India have been used to handling only a limited number of flights all these years. Many systems are still not automated and the scope for human delays and errors are larger now with too many flights taking off and landing.

The problem of poor infrastructure is supplemented by the shortage of skilled personnel. As of today, 8 or 10 aircraft belonging to the public and the private carriers in India are grounded due to shortage of pilots. Projections by CAPA for India indicate a requirement for some 3,000-4,000 additional pilots, and over 5,000 maintenance workers in the next 5-7 years. Says Kaul: "The shortage of skilled manpower will have serious repercussions on the growth of India's airline industry."