Flyovers to flicks: Jog chooses to leap
By Usha Somayaji | 02 Aug 2001
Better know for its involvement in infrastructure projects under flagship company, Jog Engineering, the Pune-based Jog group is all set to make a name for itself in the "soft" areas of television programmes, educational software, horticulture and television channel business.
The group had already made a small beginning earlier with two subsidiaries. Jog Agrofarms, which would be entering the horticulture business and for which it has earmarked nearly 400 acres of land near Pandharpur (in the state of Maharashtra).
Jog Software, formed a year ago, is into creating educational software and expects to hit the market this month with 12 products aimed at students from the pre-school to graduation levels.
But, arguably, the most significant step taken by the group is in Jog Multimedia, which is into the television software business. The company already has a prestigious production - Chattrapati Shivrai (based on the life and time of the legendary Maratha leader, Shivaji) - being aired on the state-owned television channel, Doordarshan, within six months of inception of the company. The 104-episode serial is a joint venture with well-known Marathi stage actor and director, Vinay Apte.
The company also has some other productions on the floor for channels like ETV Marathi, DD satellite, Alpha Marathi and an undisclosed channel. While the company has a number of projects in the regional language of Marathi, it is understood that in the days to come Hindi productions would overtake the Marathi ones, with an expected 70:30 ratio for Hindi and Marathi productions.
The company is also planning a foray into television programming for the educational sector with a science education programme to be telecast six days a week, focusing on class ten students. This programme is slated to cover the areas in Physics, Chemistry, Mathematics and Biology, including a phone-in episode once a week.
Jog Multimedia has about 2,100 episodes on the shooting floor, making for 1000 hours of entertainment and education software for television.
Jog Multimedia also has plans to be present in the hardware of television production too, in creating production house infrastructure. On the anvil are two television studios, one each at Mumbai and Pune, expected to come up within the year. "These studios will have the latest in technology and equipment, ensuring higher productivity in TV production," says Madhav Jog, managing director. "Here, our experience in creating infrastructure, our engineering and systems applications expertise will come in handy," he says.
The company expects to put in Rs 5 crore each in each of the studios, and to put up the studios within six months of firming up the plans.
The third plan is even more ambitious, where it expects to start a TV channel, likely to go under the name, Jog Channel, featuring programmes on agriculture and education. "The programmes on agriculture will primarily have information oriented content, while the educational programmes will be geared towards science learning," says Mr. Jog. A third segment, that of entertainment will be later added, which would be in Hindi.
Thus, according to Mr. Jog, the channel per se will be multilingual, with agriculture related programmes in Marathi, education-oriented programmes in English, and entertainment in Hindi.
In all, Jog estimates the investment outlay to be in the region of Rs 50 crore, which would be met through equity from the promoters, and debt from institutions. Jog ruled out the issuing of any IPO for the purpose, at least in the near future.
All this raises one question. Why has the Jog group, which has been in the infrastructure and construction business for the past 49 years, got into a rash of new areas far removed from its original line of business?
"Over the past few years, we have been looking at our business in totality, and came to the realisation that all these years we have been catering to one single client -- the government. Be it at the centre, the state, or a government undertaking, it has always been the government," says Mr. Jog. " Is it wise to have a single client for your entire life? " he asks, rhetorically.
Left unsaid, but implied, is the constraint to growth under such constricting conditions. Flagship Jog Engineering has seen its turnover and profit margin being squeezed. For the year 1999-2000 had slid down to Rs 101.97 crore from the previous year''s Rs 113.22 crore, and profit after tax from Rs 5.75 crore from Rs 12.73 crore. That year was particularly bad due to public interest litigation (PIL) holding up one of its major projects (a flyover in suburban Mumbai), which made a gaping hole in its income and took up its cost of finance.
Hence the search for new opportunities. Opportunities of a different kind that would help flatten out the cyclical ups and downs of the business, and free it from dependence on a single client. "We looked at various areas where we could land safely, and identified these three areas outside of Jog Engineering," says Mr. Jog.
Jog Engineering, he assures, will continue its business. A new business, that of real estate, will be added to its portfolio. "It will be in addition to, and not in substitution of , the infrastructure business," he says. But, not being directly related with the government, it will help shield the company somewhat from the vagaries of a single-client operation..
