‘It’ll be a tragedy if the foods supply chain breaks down’

Global Indian manufacturing is the flavour of the moment. India companies that have gone global are mainly in the IT space. In manufacturing, what intellectual property do you have?

When you look at our companies, you may be No. 1 in India, but how long are you going to compete when you have no IP? Things are going to get tougher.

Take a look at our group companies: All of them are getting good multiples and have strong operating performance. I don’t have bureaucracy to deal with. Sure, there has been a significant improvement in processes. But, I’m not sure about products. The knowledge gap needs to be bridged. That’s where the owner, entrepreneur comes in. A contrarian person like me will always ask: why can’t we do it globally? Increasingly, manufacturing will shift to India, China.

Biggest inhibitions come from management. There’s insecurity. If you want to go global, there has to be a mindset change at the psychological level. There was reluctance, but then I’m equally thick-headed.

How did you deal with the resistance when Crompton Greaves acquired Pauwel’s transformer business a couple of years ago?

Pauwels is a family business. Crompton is a professional company. There are sensitivites, but we had a full understanding. I retained the CEO, as the relationship brings value. I saw a professional, with the requisite softer skills. The challenge lay in bringing a professional culture into Pauwel. We found very poor management systems, but the technology was very good. There’s lots of work to do in power systems/transmission before we can think global.

There’s a lot of buzz around the retail and foods space. How does your foods company Global Green fit in?

Foods is a big focus area. Global Green is the only company in the country that will soon acquire a global supply chain. I don’t believe there are enough food brands to fill those shelves. We supply private labels. And I don’t believe Corporates are good farmers. It’ll be a tragedy if the supply chain breaks down. So there’s no choice: The Indian market still can’t give you the opportunity to scale up. You need 30-40 customers to scale up globally.

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