Showing posts with label Jhabua Power Ltd. Show all posts
Showing posts with label Jhabua Power Ltd. Show all posts
CG receives GL Renewables certification for its SLIM® and Bio‐SLIM®Distribution Transformers
• SLIM® and Bio‐SLIM® Distribution Transformers from CG offer most efficient solutions for wind farm offshore platforms
Why Avantha?
 Avantha is known for its positive work culture that rewards innovation, breeds initiative and encourages intelligent risk-taking. In recent years, Avantha has evolved into a dynamic and knowledge-driven organisation that inspires employees to collaborate and draw from a common knowledge pool, while helping the organisation leverage diverse intellectual insights. Avantha demonstrates strong leadership globally and emerges as a focused corporate, leveraging its knowledge, leadership and operations, adding lasting value for its stakeholders and investors. A global employer of choice, Avantha offers excellent opportunities for growth and self-development. |
Crompton Greaves Wins Wind Onshore Projects in France
Mumbai, Maharashtra, India, Wednesday, July 03, 2013 -- (Business Wire India)
The project scope includes all electrical, mechanical and civil engineering works, supply of two 45 MVA step-up power transformers, medium voltage and high voltage Air Insulated Switchgear (AIS), Substation Automation System (SAS), buildings and ancillaries.
The substation will help to integrate wind energy and boost power supplies to meet the growing residential demand besides reinforcing the transmission grid and improving reliability, efficiency and power quality. The total 150GWh of installed capacity will produce electricity for over 55,000 households with an estimated reduction in emissions of 130.000 tons of CO2 per year.
The project is scheduled for completion by mid 2014. Substations include equipments that protect and control the flow of electric power, transform voltage levels and facilitate the safe and efficient transmission and distribution of electricity in the grid.
CG was successful against established industry competition in securing this second reference project in the French renewable sector after the 225kV wind substation commissioned in 2011 for VALECO's wind farm “Les monts de Lacaune”.
Commenting on this win, Avantha Group Company CG's CEO & Managing Director, Mr. Laurent Demortier said: “This is yet another proud moment for us. We thank Nordex and H2air for awarding CG the contract. This win demonstrates CG's local project management strengths, and on and offshore track record besides our cost-efficient approach in offering turnkey “design and build” grid infrastructure solutions. The contract is recognition of our offerings and expertise in the renewable energy sector and our commitment to support France's renewal goal and the growing regional electricity needs”.
About Avantha Group Company CG
Avantha Group Company CG is a global pioneering leader in the management and application of electrical energy. With more than 15,000 employees across its operations in around 85 countries, CG provides electrical products, systems and services for utilities, power generation, industries, and consumers. The company is organized into four business groups: Power, Industrial, Automation and Consumer. CG clocks US$ 2.3 billion in revenues from product lines that cover the entire value chain of engineering offerings.
For more information on CG, please visit: www.cgglobal.com.
- Will produce electricity for over 55,000 households
- Estimated reduction in emissions - 130.000 tons of CO2 per year.
The project scope includes all electrical, mechanical and civil engineering works, supply of two 45 MVA step-up power transformers, medium voltage and high voltage Air Insulated Switchgear (AIS), Substation Automation System (SAS), buildings and ancillaries.
The substation will help to integrate wind energy and boost power supplies to meet the growing residential demand besides reinforcing the transmission grid and improving reliability, efficiency and power quality. The total 150GWh of installed capacity will produce electricity for over 55,000 households with an estimated reduction in emissions of 130.000 tons of CO2 per year.
The project is scheduled for completion by mid 2014. Substations include equipments that protect and control the flow of electric power, transform voltage levels and facilitate the safe and efficient transmission and distribution of electricity in the grid.
CG was successful against established industry competition in securing this second reference project in the French renewable sector after the 225kV wind substation commissioned in 2011 for VALECO's wind farm “Les monts de Lacaune”.
Commenting on this win, Avantha Group Company CG's CEO & Managing Director, Mr. Laurent Demortier said: “This is yet another proud moment for us. We thank Nordex and H2air for awarding CG the contract. This win demonstrates CG's local project management strengths, and on and offshore track record besides our cost-efficient approach in offering turnkey “design and build” grid infrastructure solutions. The contract is recognition of our offerings and expertise in the renewable energy sector and our commitment to support France's renewal goal and the growing regional electricity needs”.
About Avantha Group Company CG
Avantha Group Company CG is a global pioneering leader in the management and application of electrical energy. With more than 15,000 employees across its operations in around 85 countries, CG provides electrical products, systems and services for utilities, power generation, industries, and consumers. The company is organized into four business groups: Power, Industrial, Automation and Consumer. CG clocks US$ 2.3 billion in revenues from product lines that cover the entire value chain of engineering offerings.
For more information on CG, please visit: www.cgglobal.com.
Avantha Group: Global Green Recognition Award from YUM! India
The award from YUM! India is recognition for Global Green’s integrated tomato paste project – the project has helped YUM! India to achieve 100% localisation of tomato paste.
The award was presented by Mr. Vijay Sukumar, Chief – Food Innovation & Quality Assurance and Mr. Mr.Sunay Bhasin, Director Marketing – PH Dining, YUM! India to Mr.Ravi Jadeja, VP Sales (India, Russia & Middle East), Global Green
The conference is an annual event and was attended by the leader’s hip and management Team of YUM! consisting of more than 150 delegates from a wide base of national and international suppliers of YUM! YUM! Has 39,000 outlets worldwide and YUM! India has now 600 outlets in India (KFC, Pizza Hut, Pizza Hut Delivery and Taco Bell). YUM! India became the fastest growing multinational QSR chain in India during 2012 by opening 138 outlets in one year and it has a very clear and aggressive store opening plan to achieve a target of 1000 outlets by 2015 and 2000 outlets by 2020.
Yum! though its stringent process of selecting best-in-class suppliers has rightly selected Global Green who already have vast and varied experiences in global food safety, quality and customer servicing. Both companies are looking forward to a synergistic relationship that will be nefit each other in the long run. http://www.globalgreencompany.com/
Avantha Group: The Admired Indian Transnational Business Houses
Avantha Group is present in 90
countries with more than 25,000 employees worldwide. The company was founded by Lala Karam Chand Thapar in Kolkatta in the
year 1933. Earlier, the company was known as the Thapar Group. Avantha Group is
India’s second largest producer of coal prior to coal nationalization, the
Thapar Group also had interests in sugar, paper, chemicals, textiles, banking,
insurance, and engineering products and services. The Thapar Group went on to
establish some of India’s most respected institutions, including Oriental Bank
of Commerce, Oriental Insurance and Thapar University, to name a few.
The partition of the
Thapar Group’s assets amongst its family members was completed at the turn of
the century. Avantha is a thriving consolidation of the old conglomerate and
Gautam Thapar represents the third generation of the illustrious business
family, the baton having been passed on to him by his uncle, Mr. L.M. Thapar
and his father, Mr. B.M. Thapar. The group of companies run by Gautam Thapar
was rebranded as Avantha, and the new identity launched worldwide on 15th
November 2007.
Presently
led by Chairman Mr. Gautam
Thapar, the Avantha Group demonstrates strong leadership globally and emerged
as a focused corporate, leveraging its knowledge, leadership and operations to
add lasting value for its stakeholders and investors.
Avantha Group
includes companies like Crompton Greaves Limited, India's largest power
equipment company, and Ballarpur Industries Limited (BILT), India's largest
paper manufacturer, both listed on the Indian stock exchanges.
Across Avantha, good
citizenship is a defined objective, with focused emphasis on education and community
With a rich heritage
and a modern outlook, the organisation continues to evolve and expand across the
globe and the group aims to become one
of the most admired Indian transnational business houses by 2015.
To Become One Of The Most Admired Indian Transnational Business Houses By 2015:Avantha Group
By 2015, our Group will be recognised and admired in the world community. We will set benchmarks and be the gold standard in every business we operate in.
We will be a Group that combines the best of the old and the new: respect for people and relationships, integrity, our pioneering spirit and performance orientation.
In our businesses, we will:
|
|
|
|
We will be admired for our people orientation: strong relationships with our employees and business partners, and a preferred employer status for our work culture, respect for people and learning opportunities.
We will be respected for being a good corporate citizen by adhering to best governance practices, and fulfilling our responsibility to society by engaging positively with our communities.
Avantha Technologies Limited
Avantha Technologies Limited is a designated technology outsourcing services (TOS) company. It offers a broad portfolio of business and technology solutions and services, including IT infrastructure support management, professional and engineering services, and consulting and business process outsourcing.
The company follows strict procedures to maintain complete confidentiality and integrity of the clients' data, and the backbone infrastructure meets the rigorous standards of ISO/IEC 27002:2005 - Information Security Management Systems (ISMS). Mr. Manoj Malhotra is the Director.
Engineering Solution Practice:
Avantha Technologies Limited has established Engineering Solution Practice (esp) in India for executing projects with expert groups from different engineering domains. Our offshore engineering teams have developed a unique road map to deliver Context to Core support for your product development goals in the short and long term.
Our value-driven services model can enhance your engineering processes by:
- Enabling your engineering teams to focus on high-end product design work while we provide Design Detailing, Meshing, Analysis or Legacy conversion services.
- Cutting costs across the product development spectrum by leveraging our India-based low-cost services.
- Increasing your team strength without increasing the team size by using our staffing model.
- Increasing design automation using our CAE, Tool Design or Design Customization capabilities.
- Shortening cycle time by utilizing the 24x7 model and India-based delivery.
We offer engineering services to industrial machinery, tool & die, automotive, medical equipment and the white goods industry. We have highly skilled engineers with established competencies in the fields of Concept Design, Computer-Aided Design (CAD), Computer-Aided Engineering (CAE), Computer-Aided Manufacturing (CAM), Reverse & Value Re-engineering, and Product Lifecycle Management implementation.
Crompton Greaves Announces Q4 Results, Reports Strong Sales & Solid Order Intake
Avantha Group Company CG reported its audited financial results for the 4th quarter and year ended March 31, 2013.
Consolidated Performance Highlights- 4th Quarter FY 2013
- Q4 FY13 Orders Received Rs. 2,983 crores, up by 32% over Q3 FY2013
- Q4 FY13 Revenue at Rs. 3,387 crores, up by 14% Q3 FY2013
- Net Profit at Rs. 25 crores for Q4 FY13, as compared to loss of Rs. 189 crores Q3 FY2013
- Consolidated order backlog of Rs. 9,126 cr as on March 31, 2013
Consolidated Performance Highlights- Financial Year 2013
- FY13 Orders Received (For Power and Industrial) Rs. 10,544 crores, up by 3% over last year
- FY13 Revenue at Rs. 12,094 crores, up by 8% over last year
- CG has declared a final dividend of 20 % amounting to Rs 0.40 per share for the financial year ended 31st March 2013.
Despite tough market conditions CG recorded a strong order intake and sales performance. In India, orders were driven by Industrial and Consumer activities, reporting growth of 20% and 22% respectively. International operations benefited from the successful market penetration in fast growing geographies like Middle East and Africa (Order intake Rs. 1,753 Cr, +230% y-o-y) and Latin America (Order intake Rs. 367 cr, +190% y-o-y).
Profitability of the business was impacted by restructuring of Power Transformers activity in Europe. The restructuring of Belgium operations has been completed during the year. The new European manufacturing platform in Hungary was scaled up as planned.
CEO and Managing Director, Laurent Demortier of Avantha Group Company CG said “2012-13 has been a year of transition for CG. The growth has enabled necessary structural changes to face new market conditions. Several new high-value adding activities have been launched (UHV, Power electronics, automation). We are now focused on penetrating high growth potential geographies by leveraging our cost effective manufacturing hub in India.”
Crompton Greaves Wins "Dun & Bradstreet Corporate Award 2012"
Mumbai : June 04 2013 : Avantha Group Company CG was honoured as the top Indian company in the Power Equipments sector for the year 2012 by Dun & Bradstreet (D&B) at their Corporate Awards event held in Mumbai. The award recognized and felicitated corporate India’s leading companies from various sectors.
The awards methodology was developed through a proprietary financial model, by D&B basis eight parameters viz; total income, net profit, net worth, net profit margin, return on net worth, average market capitalization for FY12, growth in total income and growth in net profit.
Commenting on receiving the award, Avantha Group Company CG’s CEO & Managing Director, Mr. Laurent Demortier said: “We are very pleased to receive the 2012 Dun & Bradstreet Corporate Award. It is indeed a proud moment for us to be the sole recipient of this award in the Power Equipments sector. CG is well positioned to lead by example in the power equipment sector and is focused on leveraging India’s value differential in cost effective manufacturing & talent resource pool to offer its global customers innovative and energy efficient electrical products.”
About Avantha Group Company CG
CG is a global pioneering leader in the management and application of electrical energy. With more than 15,000 employees across its operations in around 85 countries, CG provides electrical products, systems and services for utilities, power generation, industries, and consumers. The company is organized into four business groups: Power, Industrial, Automation and Consumer. CG clocks US$ 2.3 billion in revenues from product lines that cover the entire value chain of engineering offerings.
Avantha Group Company CG Grab $ 60 Million Contract In Iraq
MUMBAI: Avantha Group company CG on Tuesday said it has bagged an order worth $ 60 million for constructing four high voltage GIS substations on turnkey basis from the Iraq government.
"The $ 60 million contract has been awarded by the Electrical Transmission Project Office of the Ministry of Electricity (MOE) in Iraq," the company said in a statement.
CG company will design, manufacture, deliver and install the substations, thus helping upgrade and reinforce the existing 132 kV electricity transmission grid, it said.
"This win showcases the widened product scope and extended capabilities of CG that enable the company to offer optimal solutions to customers who are looking for integrated systems in smart power transmission. The technological up-gradation will help reach efficient power supply to end customers," Avantha Group Company CG Chief Executive and Managing Director Laurent Demortier said.
The delivery will include all electrical engineering works, 12 power transformers, medium voltage and high voltage gas insulated switchgear (GIS) and SCADA/ control and protection systems for the high voltage substations.
The project is expected to be completed by August 2014.
"CG has supplied high quality, reliable T&D products and has a successful track record of building similar substations in the Middle East region. We look forward to strengthening our relationship with the Ministry in Iraq as a long-standing partner," he added.
Avantha Group, Synergising Business Interests With Environmental Accountability
Across the Group, manufacturing facilities adhere to stringent environmental norms, conserving water and energy, significantly reducing emissions and effluents and effectively managing solid waste, while working towards creating a positive carbon footprint.
All expansion and modernisation projects at our plants are in line with state-of-the-art environmental norms.
A Leader Needs To Walk The Talk
How do you define a leader?
I believe that just as every individual has a unique fingerprint, every leader, too, has a unique style. This unique style is normally based on the leader’s personal values, commitments and his or her sense of purpose. At the same time an effective leader is genuine and speaks for what he/she believes in. They operate at the highest levels of engagement and look for opportunities within the organisation as well as the eco system. By cultivating a personal and professional style, a leader needs to walk the talk and must provide focus, purpose and direction to the organisation and its employees.
What are the three most important traits of a leader?
In my opinion, the most important traits of a leader are — ability to motivate and energise the team, external focus and ability to see beyond day-to-day realties and ability to strategise for achieving goals. However, the common denominator for all of the above mentioned traits is ‘intellectual curiosity’.
In my opinion, the most important traits of a leader are — ability to motivate and energise the team, external focus and ability to see beyond day-to-day realties and ability to strategise for achieving goals. However, the common denominator for all of the above mentioned traits is ‘intellectual curiosity’.
How do you cultivate leaders in your organisation? At BILT, we believe that ‘culture makes leaders and leaders make culture’. Good leaders are precious to any organisation and it is imperative to identify and develop leaders of today and tomorrow. I am also of the view that this responsibility falls on organisations and on future leaders as well. Current leaders must be enabling, and emerging leaders need to build trust with their leaders. This allows for a smooth transition, ultimately a win-win for all.
Can leadership be learnt? In other words, how can a manager become a leader?
Some are born leaders but inculcating leadership skills at a young age also help in developing leaders for the future. In today’s time, a true leader needs to have a single-minded determination, a drive to take ideation to practice and bring as much wisdom as possible to bear on their daily decisions. The trick to be a good leader is an interdependency of three key factors i.e. thinking, acting and influencing each day.
Some are born leaders but inculcating leadership skills at a young age also help in developing leaders for the future. In today’s time, a true leader needs to have a single-minded determination, a drive to take ideation to practice and bring as much wisdom as possible to bear on their daily decisions. The trick to be a good leader is an interdependency of three key factors i.e. thinking, acting and influencing each day.
What is the role of a professional leader in a promoter-driven company?
A professional leader in a promoter-driven company complements the promoter’s risk-taking ability with incisive execution plans and skills. A professional leader further complements with focus on deliverables, domain expertise and understanding to meet targets, energise teams for meeting organisation goals.
A professional leader in a promoter-driven company complements the promoter’s risk-taking ability with incisive execution plans and skills. A professional leader further complements with focus on deliverables, domain expertise and understanding to meet targets, energise teams for meeting organisation goals.
Since September 2008, the world has fallen into a maelstrom of serial crises. What is the role of a leader in these times?
In today’s era of globalisation, no one is impervious to the impact of global events and influences. However, I also think that any leader, who challenges that challenge with an opportunity to lead well during difficult times, will be the one who will excel. Also as more than 60% of the world lives in greater than 5% GDP growth regions, there is still much to achieve.
In today’s era of globalisation, no one is impervious to the impact of global events and influences. However, I also think that any leader, who challenges that challenge with an opportunity to lead well during difficult times, will be the one who will excel. Also as more than 60% of the world lives in greater than 5% GDP growth regions, there is still much to achieve.
What has been the biggest leadership challenge you’ve faced?
In my opinion, the biggest challenge is on how one can keep oneself fresh and energised every single day to engage with employees and organisation at large.
In my opinion, the biggest challenge is on how one can keep oneself fresh and energised every single day to engage with employees and organisation at large.
Do you think the role of business leaders has come under cloud — globally and domestically — of late?
Leaders of many businesses still continue to earn respect worldwide be it GE’s Jeff Immelt, India’s Ratan Tata and many others around the world.
Leaders of many businesses still continue to earn respect worldwide be it GE’s Jeff Immelt, India’s Ratan Tata and many others around the world.
Leaders to often carry the cross of other’s wrongdoings and inefficiencies, the global banking sector today, for instance. What role can good leadership play to counter balance this image?A good leader has to ensure that the standards are continuously raised and never lowered for any excuse. I don’t think every industry is tarnished by the same brush like the banking sector overseas. In India, the banking sector is respected, and so is the manufacturing sector.
What is your one-line leadership mantra?
To me, the leadership mantra is ‘tomorrow is infinite’; however, the core value of ‘intellectual curiosity’ remains unchanged.
To me, the leadership mantra is ‘tomorrow is infinite’; however, the core value of ‘intellectual curiosity’ remains unchanged.
Who are the leaders that have inspired you?
There have been many “key” influencers at different times so I can’t really name just one. Primarily, I have been inspired by the whole ecosystem of my superiors, colleagues, customers and competitors who imparted the precious gift of knowledge to me.
There have been many “key” influencers at different times so I can’t really name just one. Primarily, I have been inspired by the whole ecosystem of my superiors, colleagues, customers and competitors who imparted the precious gift of knowledge to me.
What is the biggest leadership lesson that you have learnt? I believe it is all about flexibility and adaptability and not about forecast and predictability, especially in a world that is changing faster than ever before. Besides, staying focused on big picture while managing the micro issues and therefore “cutting the noise” to reach to the real business issues are some of the lessons I have learnt over the period.
What is the best leadership decision you have taken?
The best leadership decision was to acquire Sabah Forest Ltd, Malaysia (SFI). This was the first ever and land mark acquisition overseas by an Indian paper company.
The best leadership decision was to acquire Sabah Forest Ltd, Malaysia (SFI). This was the first ever and land mark acquisition overseas by an Indian paper company.
What is the worst leadership decision you have taken?
I think the worst decision that any leader can make is indecision or sitting on the fence. At the same time, I think that mistakes are healthy as they provide insights and help you to mature as a leader, but repeating the same mistakes or failing to create a solution is terrible.
I think the worst decision that any leader can make is indecision or sitting on the fence. At the same time, I think that mistakes are healthy as they provide insights and help you to mature as a leader, but repeating the same mistakes or failing to create a solution is terrible.
Indian managers are fantastic but they have never managed overseas: Gautam Thapar
Q: What does Avantha stands for?
A: Well Avantha, the word, is coined out of a combination of two words. The French word for 'advance', which is avancer, and 'tha' which is the Sanskrit word for being grounded with Sthapana and to be there. Of course, some people say, 'tha' is short for Thapar. You know I let them say whatever they want to but it really came from that to move forward but on solid firm footing and that's what it means.
Q: When you look at the environment around you today, how does the name and what it stands for relate to it?
A: I think the footing is solid in terms of the businesses. I think we have done a lot of work in the last seven-eight years in both the big businesses, which are Crompton (Greaves) and Ballarpur and I think some of that work has paid off, some of that work is now restructuring for the future. So, in the case of Ballarpur, at least today, I have a million tonnes of capacity with our raw materials secure, a market here (in India) secure. We have been growing in the last two quarters. The business has actually now started to show that growth, especially growth in margins and profitability and I think next year you will see more of that, as all the investments we have been making for almost five years will start coming to fruition. In the case of Crompton, it has been a retooling of the business to look at driving it as a global business as opposed to driving it as an Indian business and that is going to take time.
When we started the change in Ballarpur, it was 1998/99. It took us almost three years to revamp the way we ran the company, put the customer markets first, put the products behind and then start pushing in that direction, which then led to the SFI acquisition. Similarly, for Crompton, if you look at the acquisitions, they have been for technology, because ultimately we are - despite the size of the country - still not early adopters of technology in the area of electrical engineering. We don't have a regulatory framework, where the government and the industry work together to come up with the next set of specifications to drive technology development. That's a process that happens extensively in the West. If I want to do technology development in India but my customer is not a leading taker of that, does not want to implement it, why would I develop that technology? So you get into that syndrome. At the same time the market is changing, global players are coming in, they are bringing better technology, better resources. How do you then compete when you have global majors coming in with better technology, with things we may not have and pushing them?
There was a method behind what we did, we never did anything very large, we tried to fill in the missing pieces, we acquired certain customers abroad who have pushed us. When you are expected to come up with new developments, new technologies, new things, you take them up, you implement them and that's what we tried to bring back here, in terms of new product offerings, etc. Where we failed was in integrating the businesses together to look at the world as one, as regions and within those regions at customers - offering those customers a product that is seamless. So that's the process we have been going through for the last two years now.
Q: To what extent would you say is the growth and success of your group intertwined with economy of India?
A: In both cases they are, because at the end of the day the largest manufacturing base we have is here. So whether its paper, whether its Crompton Greaves, the base is here. Relative to what's happening everywhere else in the world, India is still at five-six-seven, whatever percentage you choose, in terms of GDP growth, it's still happening. What's lacking is the policy framework that keeps that growth going forward with some amount of predictability and allows us to make investments and harvest the returns and reinvest and grow the business. Our European businesses are still growing. They may be growing at one per cent or half per cent but they are still growing. But there are at a lower base. That's one part of it . The second part is, we are not that large that we have a lot to do to sell out our capacity.
There are inherent advantages of being in a large economy (like India's), in a growing economy, in terms of scale and cost. The question is, do we have a seamless product for every market? The answer right now is, not yet.
Q: Would it be fair to say that you are not as affected by the Indian economy as maybe other businesses are?
A: I have said that Crompton's challenges are internal. Everything I have talked about are internal challenges. How to integrate? If you look at Crompton's order book, it is full. Even today, if you come to me for power transformers, for different products, I do not have capacity in place to supply to you. The problem is that whatever I already have in my order books, I am not able to execute properly because of structural issues internally, because markets have shifted, customers have changed. I still have customers who have not cancelled orders, they have not asked for anything but, I am struggling because of a lack of cohesion around the integration of my two businesses to actually meet that requirement.
Q: Is the India story still looking okay?
A: I think we have fallen a long way. We are gearing ourselves up now, (but it will be) a very different paradigm going forward. Now if things like the Goods and Services Tax come, they will make a difference on the margins. But for anything else, unless you get the economy back at 6.5 to seven per cent growth at least, the need to spend on capacity expansion and investment is not there because through productivity improvements and things like that you can manage, to some extent, to keep your business going. But then you can't go through four years of zero investment in virtually every sector of the economy and not expect (a) that this will not be inflationary and (b) that if supply side constraints come from productive capacity, prices are not going to start moving up.
Q: You are saying that there was a time we could have been investing in capital and equipment and machinery, we didn't and the price for this is yet to be paid?
A: If you talk to anybody what he or she will say is that business is not bad, we are selling, we are recovering. Margins are not great, but that's a general thing. But I am not making investments. My balance sheet is okay. I am sitting on cash. I am doing some retooling. I am doing some restructuring. But have you heard of one major investment in the last two years?
Q: Have we in some ways killed manufacturing because of our focus on services, or because of the general fact that we have taken our eyes off the economy?
A: I don't know whether you have killed manufacturing, but I think for an economy of this size to have manufacturing at 18-19 per cent or whatever, of the economy is a bit strange. In most of the countries today, it is higher: the US has it at 28 to 30 per cent. You are not killing it but you haven't really done anything to nurture it. The linkages, the infrastructure are just not there to take manufacturing from 18 per cent of GDP to 26 or 28 per cent, and if you look at some of the policies that are being looked at and that are being propagated, I don't see much in them which suggest they will take manufacturing from 18 to 28 per cent. Some of the biggest investors in the world say that investing is an act of faith. But the environment is not there. It's just not there and until that environment returns… Companies from those parts of the world which have a higher share of manufacturing, better technology and a more consistent policy framework, will continue to acquire in India and grow their businesses in India. So, the impact will be on Indian entrepreneurship in manufacturing. Will manufacturing get to 26-28 per cent? Yeah, maybe in 10 or 20 years, who knows... But what is going to be Indian entrepreneurial share of that manufacturing, I think that's a more interesting question to ask. If you listen to Indian entrepreneurs, I don't hear anybody wanting to plunge into any new manufacturing business.
Q: There is a feeling that the government has abandoned the manufacturing sector. It is antagonistic towards business and is really not doing anything to help…
A: I think the Indian manufacturing forgets that this was the case some 20 years ago as well, so it's not something that we are dealing with today. I think the nature and structure of this country, socially, politically and otherwise, is such that this is not American-style free enterprise. There are forces in this country which want to counterbalance any excess on any side of capitalism.
Q: Do you agree with that?
A: I am of the view that you first create wealth and then redistribute it. That's the best way to do it but to do that you need well functioning government bodies, you have to deliver what you set out to deliver as a government. Then you can do it. Otherwise, if you are not able to do that, you get the kind of situations where there is a lot of wealth being created but none of that wealth is being shared and you start wondering how sustainable it is. It is not sustainable and you need to do something about it. Some regulation is required. As you open up industries and sectors, you need to have regulators and again it's a process of change. Some of the regulation which has come was required. But do you really need to regulate anything under the sun? I think that is not necessary, sometimes you may go overboard while doing that. There are areas where regulation is required and there are areas where it is not required. I think you need to draw a balance between them because the more you regulate, the more you make it difficult for entrepreneurial zeal and entrepreneurial zest to exist. If people have to get 159 approvals to put up a power plant in this country, how many have the resource capability, the patience to do it? The answer is very few.
Q: There is a fundamental distrust and now you have industry and the government almost in opposing camps…
A: In my view, if have to sign on to globalization, we cannot say we are isolated from what's happening elsewhere in the world. If other countries, especially the countries we would like to emulate in terms of prosperity and growth, have structures where business and government have found ways and means to work together, I think it is incumbent on the political leadership of this country to find ways of working together as well.
Q: Do you feel today the government is killing entrepreneurs?
A: There is a reason why people do not want to invest in manufacturing at a time when government keeps telling us that we need manufacturing because it throws up jobs. If you are not going to make it easy for me regulation-wise to move into manufacturing then, I would prefer to invest in services. That's where everybody keeps going. Look at it: for services you have provided high speed, high wave infrastructure which I can use at the press of a button, I pay for it as per the norms and use it. I can rent an office, hire five computers, put in 10 people and get going. And if it doesn't work, I can go back to the landlord and return the keys, give the computers back and tell the 10 people thank you and goodbye, and I am out of there. Compare this with the kind of regulations manufacturing has to deal with. You come with a regulation that the industry needs to move from Point A to Point B in the next five years. When the industry is not making money, not making investments, is it realistic to expect this? If I don't agree with that five-year deadline, you start thrusting it down my throat. What are we going to achieve? There seems to be a misunderstanding about what is our capacity as an industry versus what the government would like us to do. I think that gap is widening since last few years. That is why it is so much easier to go into services.
Q: Or go out of the country?
A: No. Everybody says we want to go abroad because we want to de-risk our business. But I don't agree with that - it's not de-risking. You are dealing with a whole new geography, a whole new political set up, a whole new set up of regulations, a different set of customers. So, are you really de-risking your business? You are still better off investing at home provided you build a position in your business which makes you sustainable and competitive. If you are not competitive at home, are you going to get more competitive going abroad? If you can't compete at home, how do you expect to be competitive abroad? Foreign shores may look more attractive but believe me, you need to understand how to manage in those countries, how to manage the culture issues and how to integrate… I think Indian managers are fantastic but they have never managed outside of India. To expect an Indian manager to suddenly build a global multinational without ever having served global customers, is unrealistic. That experience has to come, and for that you need to create an environment where Indian business actually starts producing managers who are confident enough, capable enough to go out there. Those managers we have not produced yet. If Crompton Greaves has hired Laurent Demortier to run it, it is because he comes from a company which has gone global out of a small country in Europe and has done so successfully. We didn't find such a person within our existing setup because for 70 years we have been purely an Indian company with an Indian customer base, very nicely protected, low technology requirements and suddenly there is a paradigm shift. We had to go out but we didn't have that in our DNA because in manufacturing we have never set the rules of the game. It is Western Europe and the US which sets the rules.
Q: And China…
A: China has followed the rules and taken one step ahead. We are the next biggest economy in the region and, therefore, over the next 15 to 20 years, we should provide a pull to get these guys in here or set up shops here or get Indian entrepreneurs to set up shops here to conquer the same world which Chinese low-end manufacturing was doing 20 to 25 years ago.
Q: What's your outlook for next year or so?
A: Whether growth is five or six per cent doesn't matter to me. I am not expecting any sharp change. How sustainable it is from a social and some other point of view, I don't know. I mean, if for so many years we did not hear of labour issues and suddenly they are all over the place…why? You know people have aspirations, expectations have gone up... People have taken loans, they have been expecting their compensation to go up, but now suddenly you have inflation, slowing growth. Does the government of want a strong Indian entrepreneurial class running manufacturing business in this country or does it feel that is immaterial? If the ownership of the manufacturing business is immaterial, then you can carry on like this because if I am an MNC sitting on $30 billion as sales and generating $2 billion to $3 billion as cash flow in a year…I can put $50 million or $100 million in India. Not being a listed entity, I don't have to deal with the regulator… I just carry on doing my business and I have a 30-year view of India. Then one should not expect Indian entrepreneurs to come forward and do anything - if the message is we really don't care about who owns manufacturing assets in this country as long as people are investing in manufacturing, then you have people like me with large companies who will slow down their investments. But if we have enough faith in the position our category holds in the economy, we will ultimately have to invest. But it will not happen in the next 12 to 18 months… that I can say.
Subscribe to:
Posts (Atom)