I want to leave behind a landmark which my country will remember me by.

"

- Cherukuri Ramoji Rao, Chairman, Ramoji Group.

Introduction
In April 2001, Ramoji Group's Film City, hosted its first English production, 'Quicksand',
produced by Ramoji Rao1 and directed by Sam Firstenberg2. Thus, Ramoji Film City brought
international (Hollywood) attention to Hyderabad. Ramoji Rao incorporated the Ramoji
Group in 1962, with Margadarsi Chit Fund Ltd. By 2001, the Rs. 15 billion Ramoji Group
became one of the biggest business houses in India.

The group had interests in newspapers and magazines, hotels, films and television,
investment companies, condiments and confectioneries, a 1000-acre film city, apparels and
handicrafts. (Refer Exhibit I) Over the years, the Ramoji Group under the entrepreneurship of
Ramoji Rao, seemed to have set standards in the print, television and the film industry.
Analysts felt that Ramoji Rao's excellent business acumen, sharp insight and an eye for
spotting out opportunities, made him a successful entrepreneur.

Background Note
Ramoji Rao, started his career in the early 1960s in Delhi with an
advertisement agency – Ad Crafts. In 1962, he opened the first
branch of Margadarsi – a chit fund company in Hyderabad.
Realizing the advertising needs of Margadarsi, Ramoji Rao
established an ad agency – Kiron Ads – named after his eldest
son.

Kiron Ads was the first accredited ad agency in Hyderabad. After

a few years, the second branch of Margadarsi was opened in
Visakhapatnam (Andhra Pradesh). This was followed by the
setting up of Dolphin Hotel in Visakhapatnam. In the late 1960s,
Ramoji Rao also started a magazine for the farmers called
'Annadata' in Telugu3.

Background Note Contd...

Commented Ramoji Rao, "My heritage lies in the soil and my forefathers were all farmers.
But I sold off all my property and to atone for this and to do something special for the farmer
community I started a magazine in their language" In 1974, Ramoji Rao entered the print
media by launching Eenadu, a Telugu newspaper in Visakhapatnam. Ramoji Rao explained,
"I focussed on the region which I thought was most relevant to the people." The Hyderabad
edition was launched in 1975, followed by the Vijayawada (Andhra Pradesh) edition in 1976.
In the early 1980s, Ramoji Group entered the foods business with Priya Pickles. The Priya
brand was later extended to culinary pastes and powders. The Group then made a foray into
films with Ushakiron Movies.
 The Group established Mayuri Film Distributors to distribute its
films and Mayuri Audio to market the audio cassettes of the
films. In the early 1990s, Ushakiron Movies diversified into
satellite television with ETV – the Telugu channel. In 1992, the
Ramoji Group started a handicrafts division under the name
'Kalanjali'. The division was set up with a view to promote the
sale and export of handicrafts, cottons and textiles of Indian
craftsmen.

The Group set up a showroom in Hyderabad. From April 1993,

the division started exports of various goods under the trademark
of 'Kalanjali'. On September 9, 1997, The Ramoji Group
inaugurated its most innovative creation – The Ramoji Film City
based on the maxion – "Walk in with your script and walk out
with your print".

Spread over 1000 acres, the Film City had gardens, temples, a sprawling countryside, a fort,
hotels, city streets, railway stations, a palace, an airport, a mobile kitchen etc. It had all the
technical support to make a film – 40 studio floors, a fully-equipped prop shop, a set design
and construction division, state-of-the-art equipment, experienced production staff, and hi-
tech digital editing, dubbing and sound-recording facility.

Said Ramoji Rao, "The idea is to save time, energy and resources and focus on creative
excellence, executional quality, economical schedules and meticulous planning." The USP of
the Film City was claimed to be its ability to rebuild any place for a shoot. Producers had
choice of flexible locations. For instance, a song could be choreographed in any or all of the
locations.

Background Note Contd...

Later changes could be made to the fountain's appearance, the layout of the street or the
facades of the buildings in the streets or the shape of the multi-dimensional pond, to create a
totally different locale. In the late 1990s, the Group started an Internet edition of its
newspaper – Eenadu. The Internet version was designed to give the same look as the original
newspaper. Content was designed to provide local news about Andhra Pradesh. The group
claimed that the website received a phenomenal response from the Telugu populace abroad.
Within three months of its launch, the site achieved the landmark figure of a million hits a
day.

In April 2000, ETV launched ETV Bangla4. The channel telecast a combination of
entertainment and news programs in Bengali. In July 2000, ETV Marathi5 was started
followed by ETV Kannada6 in December 2000. In mid-2001, the Group entered the world of
fashion with Margadarsi Apparels. The company planned to introduce garments for both men
and women. The garments were segmented as formal wear, work wear, and casual wear for
all the age groups. The company expected to manufacture 30,000 garments per day.
 Ramoji Rao – Spotting New
Opportunities
Ramoji Rao's vision was to achieve excellence in his every
venture he undertook. His biggest coup in the print industry was
the introduction of a color, tabloid sized 'mini-edition' of Eenadu
for each of the districts in Andhra Pradesh and the mini-detailed
paper for Hyderabad. In 1998, he bagged the B D Goenka
Award, a prestigious award for excellence in journalism. Some
analysts however felt that Ramoji Rao followed 'campaign
journalism.'

He was actively involved in promoting the Telugu Desam Party7

(TDP) founded and headed by N.T. Rama Rao8, in Andhra
Pradesh through his Eenadu. However Ramoji Rao defended
saying, "The role of the press is not purposeless. If I believe that
it is good for the people, I will do it."

Ramoji Rao – Spotting New Opportunities Contd...

He further said, "The media has to perform without vested interests, I have never sought any
favor from the government ever." One of the main reasons for Ramoji Rao's success was the
synergy between his different ventures. The Film City had become an asset for the TV
channels. With Film City's state-of-the-art technical and non-technical support, the group
could make programs for the TV and films at a very low cost. Commented Ramoji Rao, "If
we cannot afford the cost in Film City, we cannot afford it anywhere else."

Ramoji Rao had an eye for spotting opportunities. When he was

in Visakhapatnam for opening a new branch of Margadarsi, he
could not find a good hotel to stay. Within a few months, the
Group started the Dolphin Chain of Hotels, with a 3-star hotel in
Visakhapatnam, catering to the diverse needs of businessmen and
tourists. In 1997, when the Film City was established, the chain
expanded its hotels to cater to different segments— 'Sitara' – the
luxury hotel with restaurants, pool, gym and business centre was
started to cater to film stars, producers and directors. Tara was a
3-star economy hotel, and a budget accommodation for the rest
of the crew was available at Sahara. During his stay in
Visakhapatnam, Ramoji Rao, a newspaper addict, could not get
the daily newspapers as they reached a day later through post.

He discussed this problem with late A.J. Prasad, editor of Andhra Prabha9. Ramoji Rao
suggested that A. J. Prasad should start a Visakhapatnam edition. When Ramoji Rao failed to
convince A. J. Prasad, he started 'Eenadu' in Visakhapatnam. When Ramoji Rao saw the
tremendous success of Hindi movies, with heavy investments, he planned to enter the film
industry, but with creative and thought-provoking low-budget movies. Ramoji Rao explained,
"Convictions make you do things.

Ramoji Rao – Spotting New Opportunities Contd...

With mega-budgets and big names, Mumbai could work magic. But I thought, with some
creative effort, low-budget films could be made." The movies from Ushokiron Movies
seemed successful, appealing to all age groups. There were family dramas, comedies, love
stories and social movies to appeal to all kinds of movie-goers. Analysts felt that Ramoji Rao
was a good strategist. The 'mini-editions' concept of Eenadu was a great success. Eenadu was
also one of the first publications to be printed in color. Ramoji Rao also introduced different
supplements like 'Vasundhara' for women and 'Eenadu Cinema' with film gossips for
youngsters. Over the years, Eenadu became the numero uno newspaper in Andhra Pradesh
until The Times of India10 launched its Hyderabad edition in 2001. The Times of India
followed an aggressive price cut policy.

In June 2001, Eenadu formed an alliance with The Hindu11 to sell

advertising space in each other's publication, to counter
competition from The Times of India. In October 1998, Ramoji
Rao launched an aggressive global marketing campaign for his
Film City. This followed the completion of the latest technology
color laboratory, which was certified by Kodak as one among the
10 top processing facilities in the world, and dubbing and set-
construction facilities (Refer Exhibit II). He visited Los Angeles
and held meetings with owners of major studios and independent
companies. To penetrate further into the satellite television
market, Ramoji Rao planned to extend ETV to other languages.
In March 2000, ETV launched India's first private earth station,
to help expand the satellite TV market.

Ramoji Rao – Spotting New Opportunities Contd...

Apart from ETV-Bangla, ETV-Marathi, and ETV-Kannada, ETV launched the first Urdu
channel in India, ETV-Urdu in June 2001. By the end of 2001, Eenadu was planning to
launch channels in two other niche markets – Gujarati12 and Oriya13. Said an Eenadu official,
"The aim of the network is to build a brand and cater to niche audiences in all major regional
languages." Analysts felt that an important characteristic of the Ramoji Group was that it had
always been a family-run organization. The flagship company of the group, Margadarsi Chit
Funds, was managed by one of Ramoji Rao's daughters-in-law. Another daughter-in-law
looked after the hotels run by the Dolphin Hotels chain in the Film City.

The Road Ahead

From one company in 1962, the Ramoji Group became a Rs 15
billion business empire with presence in many industries by
2001. For future growth, Ramoji Rao planned to concentrate on
the group's core businesses like the print media, satellite
television and films. As part of the future plan, Ramoji Rao
 announced investments in film industry. In 2001, Eenadu TV
planned a Rs.600 million upgradation of its earth station. The
project included a Rs.180 million project to automate its
newsroom. The group also planned to launch newspapers in
other south Indian languages. As a first step, Ramoji Rao
planned a Kannada daily for Karnataka to be launched by 2002.
His plans included making his Film City the best not only in
India but also in the world.

He described the City as "The Last Milestone." He said, "Our immediate concern is to make
it the best… It is an open ended project where facilities will continually be upgraded." The
group was also focussing on its new venture – Margadarsi Apparels – to make it the best in
the textile retailing industry.