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The DB Corporation

Zid karo, duniya badlo
March 05, 2010 | By By Fayez Ali

Persistance has paid off for DB Corporation — it has altered the media landscape. The closing share price of DB Corp. on the NSE was Rs. 242.65 on 15 February 2010. After its long awaited IPO in December, and its listing on 6 January on both the BSE and the NSE, the DB Corp stock has seen fluctuated between a high of Rs. 274 and a low of Rs. 201, with an approximate market capitalisation of Rs. 4,400 crore or just under a billions US dollars.

Bhaskar Printing plant in Jaipur

The group’s earlier efforts at raising capital lead to Warburg Pincus Group’s investment company Cliffrose Investment investing Rs. 150 crore in Writers and Publishers Limited in 2005. According to Business Standard in October 2009, prior to the DB Corp IPO, Cliffrose had a 7.14 per cent stake in DB Corp. and 7.12 per cent in the Synergy Media Entertainment. According to media sources, in the December 2009 IPO, Cliffrose Investments divested a chunk of its share (possibly half) for Rs. 116 crore — as a part of the shares allotted to the public for Rs. 385.31 crore.

Growth chart
Dainik Bhaskar launched its first edition in Bhopal in 1958 -- and it took another 25 years before it launched its second edition in Indore. Then it was a mere 5 years for the launch of the Raipur edition. It took another five years for the launch of the Bilaspur edition in 1993. By this time Dainik Bhaskar had shifted into in a new trajectory of ambition and growth.

In 1996 Dainik Bhaskar stepped into the neigbouring Hindi belt state of Rajasthan with its Jaipur edition. Hereafter Dainik Bhaskar lined up frequent launches of new editions, entry into new states and shed its mantle as a Hindi only newspaper publisher with new business ventures, mergers and acquisitions and new plants in every year, except 2002.

Having started Divya Bhaskar in Gujarati in 2003, DB Corp. acquired Saurashtra Samachar in 2004 and became the biggest Gujarati daily newspaper group. 2004 also saw the daring commencement of a joint venture with the Zee Television group in Mumbai to launch the English Daily DNA — right in the bastion of Bennett Coleman’s Times of India. Aha Zindagi a national Hindi magazine was launched in 2004 as well, and in Gujarati in the following year.

2005 saw the inception of the group’s new identity as DB Corp. with two subsidiaries. The first being IMCL which maintains web portals for Dainik Bhaskar (Bhaskar.com), for Divya Bhaskar (divyabhaskar.co.in), Indiainfo.com, and for MYFM (Radio Channel)(myfmindia.com) and mobile services. The second subsidiary initiated in that years was SMEL (Synergy Media Entertainment Ltd) which currently operates 17 radio channels in 17 cities across 7 states. The group’s first radio channel became operational in 2006.

2006 also marked the northward expansion to Punjab with new editions of the Hindi daily. DNA the joint venture English daily based in Mumbai, was brought to Jaipur, Surat and Ahmedabad in franchise agreements by DB Corp. Two more magazines, Lakshya (Hindi) and Young Bhaskar (English) were launched in 2007 along with DB Gold a compact daily in Gujarati from Surat. The group’s golden anniversary year 2008, saw it sign on Indian cricket team captain MS Dhoni as its brand ambassador for the nation wide campaign of ‘Zidd Karo, Duniya Badlo.’ Business Bhaskar, the Hindi financial newspaper, was launched at seven locations with separate editions for each city in 2008. DB Star the group’s second compact daily was launched in Hindi in 2008. DB Corp. now finds itself in 11 states with 48 daily newspaper editions in three languages with a readership of approximately 15.5 million.

DB Corp. newsroom at Ahmedabad

Professionally structured management
Every state where DB Corp is active has a state head, who reports to the managing director. The state head is responsible for the complete performance of all the publications and projects in the respective state. Each state has an editorial in-charge for all editons known as the state editor.

The DB Corp. board has 10 directors, and the chairman of the board is a non-executive and non-independent director. The members of the board include the Agarwals from the promoter family who effectively manage the group on a day to day basis — with Ramesh Chandra Agarwal the chairman with Sudhir Agarwal as managing director and younger brothers Girish Agarwal and Pawan Agarwal as the two non executive directors.

The other directors include Niten Malhan a computer science graduate from IIT Delhi and an MBA from IIM Ahmedabad as non-executive Director appointed by Cliffrose. The non-executive independent directors include Ajay Piramal, Kailash Chandra Chowdhary, Piyush Pandey, Harish Bijoor and Ashwani Singhal.

DB Corp. believes in growing through the Tier II and III cities of India, although they are so far very much present in the major metros of Mumbai and Delhi NCR region. With their FM channels they are strongly in favour of Tier II cities and have no plans of entering already overcrowded airwaves of the major metros. Looking at their interactive, Internet and mobile services through IMCL – they are only missing a job website. While they are reluctant to share their plans for new states and languages, one might speculate that their next steps might include dailies in Marathi and Kannada since they are already present with large plants in both these regions. This would increase their challenge to the Bennett Coleman group which already publishes dailies in six languages.

Editorial systems and software
In our regular coverage of editorial systems we mostly come across international vendors with their very expensive systems and near exclusive English software support. Nevertheless CCI recently showcased its Hindi and Bengali capabilities at IFRA Chennai, no doubt with customers for those languages in mind. Indian editorial system vendors who have generally been more active on the Indian script front are migrating from their proprietary fonts to Unicode for Indian language script fonts. Some dailies such as Dainik Jagran opt for in-house development.

At DB Corp. the very first editorial system was an IEMS (Integrated Editorial Management System) introduced in 1999. This software was also integrated with the advertising booking system and both systems were developed by 4C Plus, based in the Delhi NCR. More recently, DB Corp. is migrating to Open Source software as a company policy, and to this end DB Corp. has developed a comprehensive content management system called Matrix. Both the text editing and the database management solutions are open source, and have been integrated with Matrix which has been developed by DB Corp.

The same build of Matrix is used across the entire 42 print locations in 3 languages. English for DNA, Hindi for Dainik Bhaskar and Gujarati for Divya Bhaskar. The content flows to the web sites from Matrix, but there are different CMSs for the various web sites. ePapers are however generated from Matrix and uploaded to the respective urls. There are ePapers for both the flagship dailies Dainik Bhaskar and Divya Bhaskar. Images are corrected in Photoshop, while pages are made in Quark.

DB Corp. uses SAP IS Media for advertisement booking for all publications. SAP was commissioned eight years ago and the latest version ECC6 is in current use. Virtualization is used at server level, while compression techniques have facilitated band-width conservation. Matrix is browser based and all print and publishing centres are connected via MPLS VPN. (Multiprotocol Label Switching — MPLS — to create Virtual Private Networks —VPNs.)

Asked about the response to these publishing software developments on the publishing of the dailies and maintaining and updating the web sites, Girish Agarwal says, “The response has been fantastic. Now there is seamless collaboration within the editorials across the group. Information transaction is instant. We have been able to cut down our cycle time between an event happening to reporting to 3 minutes and from page release to print start to 9 minutes.”

The Prisma fleet
In December 2007, Diligent Media Corporation and DB Corporation, signed contracts with KBA for seven Prisma newspaper presses with a total of 25 printing towers and seven folders for multiple locations. The first Prisma, a 4-tower configuration, went live in December 2008 at the group’s Bengaluru operation, and was followed in July 2009 by an 8-tower configuration in Jaipur. On 14 November 2009, the biggest installation, comprising three sections and nine towers, was officially inaugurated at the group’s new production plant in Ahmedabad, in Gujarat. The new press line, which has nine reelstands, one double folder, one single folder and four control consoles, was set in motion by Narendra Modi, Chief Minister of Gujarat. The double-width, single-circumference KBA newspaper presses in Bangalore, Jaipur and Ahmedabad are amongst the most technologically advanced of their kind in the country and very much a part of the move by Indian dialies to 4 x1 presses.

Indian dailies have now bought 4 x 1 press lines from Goss, KBA, manroland, Manugraph, Mitsubishi, Seikan and Wifag. The Seikan lines at Daily Thanthi and the Manugraph presses at Malayala Manorama are still awaiting installation while the Wifag at ABP is under final commissioning and trials.

In the words of Girish Agarwaal, DB Group director, the entire KBA Prisma project has been an unmitigated success: “We are all delighted at being able to complete such a major investment bang on time despite a challenging economic environment. Our award-winning marketing strategies have been highly effective, and in tandem with our high-powered KBA press technology give us grounds for boundless optimism.”

Technology price performance ratio
Although the DB Group originally focussed on production plants in Mumbai, Ahmedabad and Jaipur, after conducting a painstaking market survey the final choice was changed to Ahmedabad, Jaipur and Bangalore. Of the seven Prisma press lines ordered, six were brought on stream within the space of one year. Although location for the seventh press has not yet been confirmed, construction of a new plant in Navi Mumbai has begun.

R D Bhatnagar, DB Group CTO, is certain that, of the possible options offered by German and Japanese press manufacturers, the KBA Prisma was by the far the best choice: “The production figures prove that we made the right decision. Our expectations have not just been fulfilled, they have often been surpassed. Technology, price/performance ratio and delivery deadlines were most closely aligned with our specifications.” Dinesh Sharma, DB Group head of production, emphasises the trouble-free collaboration with KBA: “The timing, installation quality, commissioning and training were excellent at every facility. The project culminated in the start-up of the nine-tower Prisma installation in Ahmedabad, and technical acceptance took place twelve months to the day after the start-up of the first press in Bangalore. For our company this represented the harmonious completion of a circle.”

Rapid transition to new technology
Sharad Patel, who is responsible for engineering at the Ahmedabad plant, says: “Thanks to the outstanding training provided by KBA instructors, our press operators mastered the transition without a hitch. Alongside their much bigger colour capabilities the Prisma presses offer us unprecedented format flexibility and output levels. Our production line in Ahmedabad can print as many as 85,000 copies per hour, each with up to 72 full-colour pages in three sections. The pre-folding facilities in the KF 5 folders allow us to print quadruple spread ads or posters, which gives us additional layout options.”

Leadership
The phenomenal growth of the DB group has not gone unnoticed by either the newspaper industry (especially its competitors in three languages) or management experts. The launch of the Ahmedabad edition of Divya Bhaskar in 2003 and the Jaipur edition of Dainik Bhaskar in 1996, merited case studies by the Mudra Institute of Communications in Ahmedabad (MICA) and the Indian Institute of Management, Ahmedabad (IIMA).

IPP too has followed this growth story for many years — Girish Agarwal made a presentation at the IPP 7 Conference in New Delhi in 1998. Last year we went to Bengaluru to see the first of the four KBA Prisma 4 X 1 press installations. Last month we visited the other two KBA Prisma installations — the biggest print plant of DB Corp. in Ahmedabad now called Print Planet where the largest of the Prisma installations is in place with 9 towers; and the third KBA Prisma installation in the new eight storey tall structure in Jaipur. The fourth installation is still to take place in Mumbai where new premises are being built.

In parallel, in November 2009 MP Printers which belongs to the parent Dainik Bhaskar Group installed a new Komori System 35S heat-set web offset press at the commercial printing plant in Noida’s Phase II. The newly built commercial printing plant is used for the full colour supplements and magazines of Dainik Bhakar as well as for magazines and colour supplements for other publishers. On the new Komori System 35S heat-set the main work consists of sixty magazine titles including Outlook in Hindi, The Week, Business World, and 4Ps. The Noida Phase II facility already had several heat-set machines and has become a complete commercial printing facility with the addition of two new multi-colour Komori sheet-feds including a perfector.

DB Corp. is one of the two major groups who are expanding as commercial printers — the other being HT Media with their Sector 62 plant adding a manroland sheetfed in addition to their gravure printing joint venture HT Burda Media in Greater Noida. At the same time many other newspapers are getting out of heatset printing and are increasingly outsourcing their colour supplements and their magazine production.

In years to come DB Corp will inspire more case studies perhaps of the transition of a single city Hindi daily in the heartland, to a national publisher in several languages and states (and North America) that has dared to challenge the mighty Bennett Coleman in its home base with a start-up daily. From a family owned business to a public company with the highest market capitalisation of any media company on the stock exchange. And from a company that used to move one old press line to a new location, to one that builds huge new plants housing the latest technology.

Speaking of the future, Girish Agarwal says, “Over the next few years we are confident of maintaining or even enhancing the growth trajectories we have achieved in the print sector in previous years. For us, the printed word is still the most authentic way of disseminating information.”

Divya Bhaskar, Ahmedabad
When we visited the new Divya Bhaskar plant in Ahmedabad, Rakesh Singh head of production in Gujarat, told us that the new 4 x1 KBA Prismas are installed in Bengaluru, Ahmedabad and Jaipur. Indore, Raipur, Mumbai and Pune have Manugraph presses and the rest are TPH lines. While a new plant is being built in Navi Mumbai for the remaining 4 Prisma towers and two folders the configuration for the installation there will become clearer in March 2010.

Divya Bhaskar, DB Corp’s Gujarati broadsheet daily has seven editions with five supplements in a week. In addition to the Ahmedabad edition, the supplements for all the other locations are printed in Ahmedabad. Divya Bhaskar was launched with 10 colour pages out of 20, which grew to 12 and then to 16 colour pages in a 24 page edition.

Space and technology both have improved with the new printing plant built to house the KBA Prismas, Krause CtPs, Wamac mailroom systems and storage areas. The old press building now houses all the editorial and marketing staff. Aggressive growth including the 9 Prisma towers at Ahmedabad have given Divya Bhaskar a competitive edge for the next 5-10 years. “All 72 pages can be printed in full colour, there is space for one more tower and then we will be in a position to do 80 broadsheet pages all colour. No one else has CtPs in the regional language market in Ahmedabad so Bhaskar is much ahead of the game.” says Rakesh Singh.

“The feedback from readers, advertisers and other newspaper publishers following the production start of the first Prisma presses has been overwhelmingly positive — they have all shown tremendous interest. Since the new press line came on stream at our plant in Ahmedabad more than 5,000 visitors have come to see the Prismas in action. We have become a showcase for cutting-edge KBA newspaper press technology in India and are helping to open the door for KBA to a market with enormous growth potential. This is typical of the DB Group mentality: we are a leader, not a follower,” added Rakesh Singh.