Unnao Tanneries Limited: Post COVID Business Strategy

ABSTRACT

Unnao Tanneries Limited (UTL), formerly known as Monir Leather Works, was set up in the 1980s and has been a family-owned business for over four decades. The primary activity of UTL in the initial years was leather jackets and purses. It sold its products under the brand name Brown Cliff. It shifted its manufacturing units from Kanpur to the nearby town of Unnao to cut costs and increase capacity in 1990. It later expanded its product range to primarily include leather footwear, targeting the menswear market. It became one of the top players in the northern part of the country with a proper business strategy. The footwear segment was growing rapidly and profitably for UTL. The business was smooth for almost four decades with minor hiccups until the government imposed a ban on its functioning due to a sparse wastewater disposal system in May 2019. The initial ban was prolonged further due to the COVID- I 9 pandemic in the country in March 2020. As a result., UTL suffered a significant loss in sales and clients. Reviving demand for the products after the easing of partial lockdown in the country was a daunting task. UTL became a contractual manufacturer for CONTE to utilize its idle resources and reduce its financial burden. Later, UTL got an offer from Batla Leather Products Limited (BLPL) to become its contract manufacturer. BLPL was one of the top players in the national and international market and it was looked for facilities to quickly scale up its operations. This case allows the readers to put themselves in Mr Sadiq Monir's shoes and analyse an unforeseen business situation. The choice between short-term profits and sustainability versus long-term growth of the family brand Brown Cliff had to be made. The case gives several macro and micro factors supporting the choices and the decision to be made. The decision dilemma has two facets-to gain expertise in improving operations and to have a steady flow of income for the next 2-3 years versus risking the loss of independence and dilution of the family brand Brown Cliff.