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By Our Special Correspondent
CHENNAI, JUNE 21. SSI has embarked on a quiet exercise to review its education and training business in the light of the emerging environment. According to Kalpathi S. Suresh, Chairman and CEO, SSI will have to call off this business sooner or later since the availability of skilled manpower has become a non-issue in the present context. SSI forayed into the education and training area more as a backward integration to help its software development and consulting division (SSI Technologies) get adequately trained manpower regularly. The re-focus, according to Mr. Suresh, had been necessitated by the slump in retail segment of the training business due to an assortment of factors. The tie-ups with Institute of Chartered Accountants of India, Department of Social Welfare in Karnataka, Andhra Pradesh State Road Transport Corporation, Scheduled Caste Financial Corporation and the like were all aimed at consolidating its position in the institutional space of the training market. The objective was to ensure an unhindered revenue flow for the company in the wake of a crumbling retail market. The education and training division had contributed about 56 per cent of the total revenue of Rs. 447 crores during the year ended June 2001. This was 66 per cent in the preceding year (Rs. 212 crores). In fact, SSI had said last year itself that all company-owned centres and ESPs (education service providers) would be converted into franchisees over a period. The situation has turned for the worse since then. It is against these backgrounds that SSI has begun a review of its training and education business. It is yet unclear as to what look SSI will sport post-review. Mr. Suresh said he and his two brothers were making investment in Velvette shares in their individual capacities and that SSI had nothing to do with it. The brothers will together pick up 24.34 per cent stake in the company. They will each be allotted four lakh shares of Rs.10 each. He said their investment decision was consequent to the assurance given by the existing management, led by C. K. Rajkumar, to professionalise the team and bring in lot of new products. Post-preferential allotment, Mr. Rajkumar and his ilk would have a stake of 32.19 per cent in the enhanced equity base of Rs. 4.19 crores. Velvette, it may be recalled, pioneered the selling of shampoos in sachets. It had a marketing arrangement with Godrej initially. Subsequently, it had chosen to court the NEPC group. After a while, it had opted to go with Amrutanjan. The failed tie-ups, the rise of CavinKare, a company promoted by his brother, and the aggression of MNCs like Hindustan Lever have all seen Mr. Rajkumar's company pushed hard in the marketplace.
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