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Interview with Vijay Mallya

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  • Kingfisher: "I saw color, I saw vibrancy ... I saw a bit of cheekiness"
  • "I'm absolutely certain that the Indian economy is on a roll"
  • "It's good to be able to invest in assets that you can enjoy"
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GOA, India (CNN) -- Anjali Rao: He's dubbed the "King of Good Times." The billionaire tycoon casts a long shadow in India with high-profile launches and lavish parties. Vijay Mallya inherited an empire of different businesses at the tender age of 27, streamlining the operation and founding the Kingfisher brand. Today, his holding company United Breweries is worth $5 billion.

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India's "King of Good Times" Vijay Mallya casts a long shadow with high-profile launches and lavish parties.

Internationally, he's best known for his beer and spirits companies, recently buying whiskey makers Whyte & Mackay, but is expanding his aviation business fast. He launched the airline in 2005 and is already looking to move into long-haul with an order of four A380 super jumbos. We meet soon after he acquired Air Deccan, India's first budget carrier. Our journey begins aboard his private jet as he shuffles between meetings.

Vijay Mallya: Welcome to my home. My apartment.

R: Home away from home... You launched Kingfisher Airlines in 2005, you had zero background in the aviation industry then. How were you able to pull off such a coup as to turn your airline into such a success?

M: When we launched Kingfisher, we had certain very clear-cut parameters, brand-new planes, commonality, fuel bases between fuel efficiency and controlled costs, and then of course we did a huge market research on the name, the brand, the consumer expectations...

R: But it's still not profiting right? Isn't that annoying when you've put so much into it?

M: No airline in India is profitable because you know, in any industry where the floodgates are suddenly open, a lot of players dive in, and there is a period where there's a bloodbath, but then consolidation inevitably takes place, good sense prevails, and then everybody becomes profitable. And in a country like India where aviation growth is almost 40% every year, I mean, it's probably one of the most attractive sectors.

R: And as far as expanding, you are, as I understand it, planning on taking Kingfisher to a more global level. What exactly are you intending?

M: We acquired Air Deccan, India's largest low-cost carrier, and with it we've became India's largest airline. So UB group has the proud pleasure of being India's largest airline, within just two years and two months of launch. Going overseas is natural, there's huge growth. And while everybody else wants to emulate the established carriers of Europe and the Far East and the Middle East, I decided that the future was in non-stop ultra-long-haul travel. We're going to fly from Bangalore to San Francisco non-stop, Bangalore to New York John F. Kennedy non-stop, and of course Bombay-London is a given.

R: You've also placed a new order for A380s. That model has had particular problems over the last year or so -- why you've got such faith in it?

M: I bought the A380 because I believe in the A380. I know they've had delivery problems, but that's not uncommon from, for any new aircraft that's so different and so revolutionary in terms of technology. So while there's a delay on one hand, I have to say the A380 to me still demands an extremely compelling, profitable proposition.

R: The next part of our journey takes us into the heart of Kingfisher territory, the coastal state of Goa at the height of monsoon season. Kingfisher says 90 percent of the beer sold here is theirs. And it's the location of Mallya's seaside retreat.

What you're known for, I suppose, internationally, is your beer business -- Kingfisher Beer to be exact. How did you turn that beverage industry into a multi-million, or billion-dollar even, business that it is today?

M: When I was straight out of high school, and I went to do my graduation, I was actually working as well. That's when, while going through the archives of United Breweries, which was a British company my father bought in 1947, I stumbled across this label of Kingfisher Beer that had been launched in the 1850s, but was no longer in production and sale. And something excited me about Kingfisher, you know, the bird. I saw color, I saw vibrancy, I saw movement, I saw a bit of cheekiness, you know, the kingfisher sort of fishing. And so I went to my father and asked him, I said, you know, I want to relaunch this brand and I want a million rupees for it. And a million rupees, I mean, he threw me out of the office. Finally, with a great deal of persuasion, I got a small budget.

So I went to various colleges and interviewed youngsters, 17, 18, 19 years old. Asked them if they drank beer, what kind of beer they drank. And I found out very quickly that the youngsters in India had a whole lot of aspiration. They wanted to live a more free, more western-oriented life. Because India, since independence has been a very controlled, sort of socialist economy. So I decided that Kingfisher would be a lifestyle brand, positioned on a lifestyle platform.

So we started sponsoring music events, we started sponsoring sporting events, we started putting Kingfisher into yachting, and fashion. So Kingfisher over the last 30 years has grown into a sort of generic name for lifestyle in India. I mean, if you talk to anyone on the street and ask them about Kingfisher, the first thing that will come to mind is the good life or the good times.

R: You also recently won your multi-million-dollar bid for Whyte & Mackay, scotch whiskey, which is traditionally a very Scottish brand. Why was that such a focus for you, as an Indian?

M: You know, United Spirits, with all its brands that I just mentioned, with a huge market share, was addressing the opportunities in India going forward. But uh, focusing on the Indian consumer and growing aspirations, it was extremely clear to me that one day the youngsters would start demanding scotch whiskey. And that was a huge gap in my portfolio, because being an Indian company, we could never produce scotch. So there was a compelling reason for me to actually make an acquisition of scotch whiskey assets and production capabilities. On the other side, we actually use scotch whiskey to blend our Indian whiskeys. And we were dependent on major scotch whiskey companies to source this raw material.

BLOCK B

R: So Vijay, apparently you once said that you wanted this house to make people go weak at the knees, tell us a bit about it. I'm definitely feeling a bit shaky, and it has nothing to do with these heels.

M: No, actually this house has a lot of history to it, a lot of sentiment. When my father passed away in 1983, my grandmother was very distraught. That was the first time that I was told that our family temple was actually here in Goa. It was about seven years ago that the chief priest of our temple here in Goa contacted me through my office and said that the deity that we worship as a family somehow wasn't pleased with me...

Difficult for Westerners to believe this, but and he came to Bangalore and said something very interesting. He said, you were supposed to build your family home in Goa, which you haven't done. Having a family home is very sacred, very sacrosanct in our culture. This is probably the only property here in Goa that stretches all the way from the main road all the way to the beach, and that explains why it's so long, it had to be oriented this way.

R: It is quite something. It's, you know, I've seen some opulence in my time doing this gig. How much of a hand did you have in designing this place?

M: No decorators at all, did it all myself.

R: You're kidding.

M: Absolutely. And talking about opulence, all these are absolutely priceless tanjo paintings, which are antiques, and that's actual gold leaf, hundreds of years old. Actually I bought these in South India and have been collecting these for many years, and so when I designed this big hall, the proportions were decided by the art.

R: Just around here, I noticed earlier that there's a picture of your father. How important are his teachings to you today?

M: I respect him for his shrewdness. I remember in 1977 when Morarji Desai was prime minister of India, he advocated prohibition for all of India, and obviously the values of all liquor companies and breweries collapsed. My father actually went out and acquired these companies at pretty cheap values, which propelled UB into being a significant player in the industry. So he bucked the trend and had the guts and the foresight to buck the trend. I remember having asked him why he was doing it, and he said government revenue depends too much upon this industry, particularly at the state level, and we are very large contributors. So prohibition has never succeeded anywhere in the world, not even in the United States. It's not going to succeed in India, and so I'm going to decide to grab the opportunity when I can. So I guess a bit of the sort of confidence that I have to take businesses stems from his example.

R: Over here we have what cannot be ignored, the drum kit. How often do you get a chance to practice and, you know, to really play with any of the huge array of toys that you have?

M: Whenever I'm here, I really sort of do what I want to do. And if I feel like playing the drums, I play the drums. If I want to play a bit of pool, I play pool. If I wanna swim I swim. You know, it's kinda totally chilled out. But I have my office there fully staffed, opposite the discotheque where smaller parties take place.

R: To all those watching this, this might look like a charmed existence that you've got. And you live in utter paradise. Is there anything about your life that you would change if you could?

M: I may have done a few things differently in my life, but otherwise I'm happy and content the way I am, actually.

R: It doesn't surprise me, I would be happy and content too... Going way back, apparently, you didn't want to go into business, you wanted to be a doctor and follow in your grandfather's footsteps. But your dad put his foot down and said no, this boy is going to be a businessman.

M: Just before my father died I had worked for three-and-a-half years in the United States. And I learned a lot during my experience there. So you know, I was termed a playboy, I was termed flamboyant, and yes, everybody thought that I'd fritter away what I had inherited. But I was determined to prove people wrong. You know, I also have some self-esteem. But more importantly, the biggest single moment of joy in my mind was when I bought the worldwide Berger Paints group in 1988, then I sold it in 1996 after successfully floating it on the London, Singapore stock markets. And when I sold it, I made, I think a profit of 66 million dollars. So I went to my mother and I said, I earned this money, I did not inherit it. Now if I buy a yacht, a plane or a car, nobody's gonna question me about it.

R: In the early years, there were these persistent rumors that you were funneling off the cream from the businesses and basically using it to line your personal bank account. How did you deal with people who thought that you weren't perhaps acting entirely above board?

M: Well, you know, this is a general perception that prevailed in respect of all businessmen in India. I was not the only one who was singled out. Perhaps the fact that I live my life in a more colorful way probably just reinforced that focus on such impressions. But if I was ciphering off funds from my companies, I wouldn't be able to create successful brands and successful companies and create the kind of shareholder value that I have created.

R: India, though, still struggles with grinding poverty as a country. How do you reconcile your vast wealth with that?

M: You know, there is a divide between the haves and the have-nots, and as a member of parliament I'm acutely aware of the need to bridge this gap going forward. India is not a poor country, contrary to popular belief. India is a very wealthy country, and I'm proud to be Indian. But as late prime minister Rajiv Gandhi said, only maybe 18 or 20 percent of what's actually allocated reaches the poor people because of lack of accountability and corruption along the way.

R: Let me ask you your take on India's newfound economic push and whether you think it can be sustained.

M: Well, there's no question about that. The world needs us, and most of all, we have this huge domestic economy and domestic demand that is fueling consumption, and this is only going. People are earning more, per capita income is going up, the propensity to spend is increasing, and more importantly, people are saving a bit less and spending more on the specialty items, and all of this sort of helps funnel the economy and create this dynamic environment. So irrespect to what happens in Delhi and which government is in power, I'm absolutely certain that the Indian economy is on a roll and will continue to be on a roll.

BLOCK C

R: Where are we off to?

M: Back of our limousine.

R: Ah, delightful. How much work does it take to maintain all of this?

M: It takes a fair amount of work, considering the lawns are so extensive. But fortunately a lot of people in India need jobs, and so I look at it as a good opportunity to provide employment.

R: It's so peaceful and so tranquil. This must be a real sanctuary for you to come to.

M: Yeah, it's nice. It's peaceful, it's quiet, and Goa is beautiful. But what's nice is inside the property, of course, you have this tranquility and relaxation, and you get out of the gate, and that's when all the Goan actions take place. And Goa is a fun place, the Goans are fun people.

R: Do you ever bother going to discotheques and bars here, because you've got all that back at the pad?

M: Yes, I do, but it's nice to get out sometimes. The only trouble I have getting out and going out is the security, so, you know, I have armed police and stuff like that.

R: Would you look at that. It's another pool. How many pools do you have in this place?

M: This is the pool where we play some water basketball and have some fun, and it's all part of the Goan experience.

R: Wow, look at this! This is stunning. You could just have a party out here right?

M: I do.

R: And nobody would have to go traipse into the house.

M: No, the New Year's party particularly sort of has different groups, and this is a very popular place. So there's one group that sort of hangs out here. There's one bar there, another bar there, another bar down there, and yet another there. So you have these groups form, and of course there's the big dance floor in the middle, which also serves as a helipad.

R: Of course. I was going to ask where your helipad was. So let me think, you've got 250 vintage cars, God knows how many properties, a stud farm with more than 200 horses, loads and loads and loads of art, etcetera etcetera -- Is there anything that would constitute too much, as far as you're concerned?

M: All that you talked about are investments that I make, and these are sound investments. I bought some of the world's finest vintage cars, which keep going up in value every year. I buy art, which keeps going up in value too. I buy property that keeps going up in value too. So rather than have money in a bank and on a few percentage points of interest, it's good to be able to invest in assets that you can enjoy and which also appreciate and are pretty liquid.

R: Give us an idea of what your workday entails.

M: I go with the flow, really. I love what I do. To me, work is not stress. I don't say, Thank God it's Friday and I'm looking forward to the weekend or I'm looking forward to a vacation. I come back from Europe at two o'clock in the morning and I'm looking around for my secretary at the airport to show me my mail and to tell me what's going on. Because I find what I do very exciting, so it's no stress at all. It's just non-stop excitement. Sure, you have a few problems and challenges along the way, but I have never found those to be sort of a dampener.

Fortunately, being the boss, I can chose to take time off when I want, but I just enjoy what I do so much. My body tells me when to slow down. Trust me, I'm built like a tank. I've got a lot of energy, I can go many late nights in a row. But you know, when I feel that I need to get a good night's sleep or maybe just chill for a day or two I just do it, and everybody around me who works with me appreciates and realizes that.

R: You've been doing what you do for many years now. How has your approach to business changed, do you think, over time?

M: You know, when I first started out, obviously, I was a bit overwhelmed with the fact that the buck stopped with me, and then I didn't have a dad to run to and find out, you know, if I was in trouble or I was undecided. And once I got over that, I realized that you need to go forward against all odds. You need to be gutsy, you need to have fire in your belly, and there's no point in being scared of the system or of people who are against you, there are plenty of them. They still exist, particularly in a country like India, where there's a lot of jealousy. And you know, you sort of march on undeterred. And so it toughened me up quite a lot, actually.

R: Vijay, I wish you every success. Many thanks indeed for sparing the time for us today.

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M: Pleasure.

R: My guest today has been the billionaire tycoon Vijay Mallya, I'm Anjali Rao. Thanks for being with us on this edition of Talk Asia, I'll see you again soon. Bye bye. E-mail to a friend E-mail to a friend

All About Vijay MallyaGoaUnited Breweries Ltd.Whyte & Mackay Ltd.Kingfisher Airlines Ltd.

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