With national and international hotel chains entering the Northeast, the hospitality industry in this region is on a path of growth

Hoihnu Hauzel 01 Mar 2016

'With national and international hotel chains entering the Northeast, the hospitality industry in this region is on a path of growth'

When Vivek Agarwal acquired The Belgachi Tea Estate in 2010, a 2,500 acre tea garden and tea factory in Siliguri, West Bengal, it had already been declared a sick unit. Today, six years later, the company manufactures 1.5 million kgs of tea every year and generates employment for more than 1500 people. But this achievement should hardly come as a surprise given this dynamic young entrepreneur's penchant for taking a company's fortune to new heights. Inspired by his father, who has been his mentor and guide, Agarwal believes in creating business opportunities rather than wait for one to come by. It is a philosophy he has lived by his entire life, from the time he was a shy, young boy, born and raised in Kishanganj, Bihar.After completing his 10th grade, he moved to Bangalore to pursue further education. At the age of 17, Vivek started earning his pocket money by selling books to college students for which he received a commission. When the need arose, he also gamely undertook a variety of odd jobs including selling packets of tea and coffee door to door. It is this grit and fortitude that have served him well and contributed to charting his rise from his humble beginnings to acquiring a business degree from theNottingham University business school (UK) and today heading the GPA group of companies. The group comprises of several companies of which he is the founder and managing director, including M Tech Informatics Pvt. Ltd (a sales and services company), e-shopping portal), GPA Exim (distributor of Lotte confectionery and beverages), Leverage Group (a real estate group in Nagpur), Belagachi Tea Estate, and Yet however far he may have come, Vivek has not overlooked the importance of giving back to society.He is one of the co-founders of SUIT (Societial Upliftment Initiative Trust) which works towards educating underprivileged children. SUIT is currently active across five states (10 districts) with the support of ten implementing partners. Through its educational efforts as well as other initiatives such as hygiene awareness campaigns SUIT has been also been actively participating in health education for disease prevention in more than 25 villages. SUIT’s efforts have been recognised by HPCL, Apar India, Various Local MLA’s and leaders and various media agencies.

At NE Travel and Life we particularly wanted to learn more about the trials and tribulations and ultimately the satisfaction of resurrecting a defunct tea estate as well as his deep connection with the Northeastern states. 

How did you turn around the Belgachi Tea Estate to make it a success wherein it manufactures 1.5 million kg of tea today?

From the outset we faced a host of problems. Namely,resource constraints, climate changes, competition of land and productivity, availability of labour resources and mechanisation, a market for produced tea, supply chain logistics, emergence of new business models, consumer attitude towards food behaviour and competition.But drawing on my experience in dealing with these problems in previous business capacities, I employed steps that have worked in the past to turn it into a successful venture. Some of these strategies were benefiting from government subsidies, employing best practices in mechanisation and supply chain logistics, introducing organic farming, climate study as well as softer issues such as creating a favourable environment for employees.

* What is drawing you to the Eastern part of the country? Do you think the region has potential and that it would pay if you invest today?

Northeastern India covers 7.9 per cent of the total geographical area of country, which is a total of 2.62 lakhs in square kilometers. The biodiversity it possesses is not only rare, but unique to each of the its eight neighbouring states. People often describe the eastern part of the country as a backwater, but we prefer to think of it as the gateway to a wild frontier. Only tenuously connected to the rest of India, Sikkim and the seven sisters - the states of Assam, Meghalaya, Tripura, Arunachal Pradesh, Nagaland, Manipur and Mizoram - is a world apart from the Indian plains. It is virgin land of green meadows, lush bamboo jungles, gushing waterfalls, hilly rivers, rare flora and fauna, vast tea gardens and the mysteries of the indigenous tribes. A trip here is etched in the memory forever. With this kind of beauty the tourism potential is huge. Besides, tourism provides huge opportunities for generating income and employment.

The Government of India also understands the lure of its Northeastern states and is sufficiently investing in the development of its tourism industry. This includes financial assistance for the development of tourist infrastructure, tourism related events in the region, information and technology related projects, market development assistance, and human resource development. It would certainly pay in the future if investment is made today.

* What is your reading of the hospitality scene in the Northeast? There are branded hotel chains that are setting foot in the region, would this bring about a change or a competition among stakeholders?

Hotels in the Northeast have registered year-on-year growth in occupancy figures due to the central government's efforts to boost tourism in the region as well as the interest shown by domestic travellers. With national and international hotel chains entering the Northeastern market and regional chains turning aggressive, the hospitality industry in this region is on a path of growth.

Being a repository of natural resources and home to a harmonious multicultural community incuding a number of indigenous tribes, the region's tremendous growth potential has caught the attention of many in the hospitality and tourism industry. Tapping a new and slowly growing region has been a challenge in terms of investment returns, but buoyed by the initiatives of the central government to promote the Northeast, the tourism and hospitality industry in the region has now started looking up. Induced by these efforts several private entrepreneurs who until now had ignored the region, are now looking at the region seriously and including it in their future scheme of things. Today several leading hospitality groups are either already setting up or in the process of setting up their properties in the region.

* You are also a venture capitalist in your own right having financed a couple of startups, how do you go about deciding what venture to promote?

Before investing in any venture, I consider the following facts amongst others- the target and size of the market,size of the market opportunity, competitors,returns on investment, uniqueness,credibility of team members, track record in building product traction, and managementrisks.

* Why do you think the region has not got its share of visitors despite the natural beauty? 

The major constraints are insufficient funds, lack of infrastructure, inadequate transport facilities, poor marketing, border security and insurgency and limited tourist permit periods.

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