When most people engage with most each other the relationship in cases remainsfunctional. With respect to commercial transactions this is even more so; in most casesthe engagement is limited to the basic exchange of goods and services rendered.
At Dalmia Bharat we recognised the limitation of such an approach. We recognised thatunless we strengthened our business model to enhance the profitability or take-home valuefor our stakeholders we would be reduced to the generic or like any other principalcompany.
And that is the Dalmia Bharat value system that we strengthened: the confidence todemand value from stakeholders only after we have generated larger value for ourstakeholders in the first place. Take a small instance: we focused on servicing our tradepartners with quicker product replenishment; this made it possible for them to work with alower working capital outlay; in turn this made them achieve higher revenues with thesame quantum of financial resources strengthening profitability and helping unleash thetrade partner's larger potential.
Over the years what has made us different is that our executives who engage with ourtrade partners are encouraged to extend their relationship beyond business; they areencouraged to take an interest in the larger well-being of the trade partner's lifebusiness or family; they are encouraged to offer advice and support in areas that extendbeyond the transaction. In doing so we believe that a number of our sales anddistribution executives have long outlived the narrow description of their job profilesand functions; they have emerged as friends-philosophers-guides for the thousands of ourtrade partners. They are perceived as individuals who help unleash the potential of ourstakeholders.
Shareholder value driver
Besides the Company acquired shareholding of Kohlberg Kravis Roberts in Dalmia Cement(Bharat) Limited and brought KKR in as a shareholder in Dalmia Bharat (8.5%) making itthe largest foreign institutional investor. The divestment of KKR from the cementoperations and investment in the holding company reinforced a sense of trust andpartnership enhancing structural clarity. This enhanced public float in a listed companyattracting reputable institutional shareholders helping unleash the value of the equityof the Company. The restructuring of Dalmia Bharat Group expected to be completed by endof FY18 would not only strengthen and consolidate our position as one of the leadingcement players in India but also enhance the shareholders' value as the shareholders ofthe Company would receive two shares of the merged entity for every one share held.
Responsible nation builder
The Company strengthened its brand as a responsible nation builder manufacturingcement in line with the highest quality standards. Besides the Company introduced a widerbrands complement addressing the specific needs of customers making it possible tounleash the true potential of their structures.
As a potential-focused management we believe that it is imperative to grow people fromwithin; in turn our people collaborate and co-operate; our team-working within a locationand pan-organisation-working locations makes it possible to transform standalone learningsinto a transformer of best practices. This approach ensures that we enrich the potentialof our people which in turn extends outward to touch all our stakeholders.
At Dalmia Bharat this philosophy is validated most unambiguously in our ability toperform better than our retrospective performance average.
If over the last few years we have been able to acquire four companies and integratethem successfully each time with a shorter learning curve then this achievement has beenderived from our ability to empower trust educate and de-risk.
If over the last few years we have been able to report possibly the lowest carbonfootprint in the global cement industry then this benchmark performance has been achievedbecause we have outlined challenging targets and empowered our people to find the best wayto get us there.
If over the last few years we have performed better than our sectoral growth averageit is because we have continuously been driven by the belief that nothing is impossible.
This then is the deeper import of the message that we wish to convey: if we haveemerged as the fastest growing large cement company in India and one of the mostresponsible corporates then it is only because we placed our stakeholder first with theobjective to unleash his / her potential.
Optimistic of prospects
At Dalmia Bharat we are optimistic of our prospects. We believe that India is at thecusp of a significant transformation: we see the structural correction (throughdemonetisation and GST implementation) as a platform for robust and sustainable nationalgrowth. We also believe that private capital expenditure will gradually witness pick-up;sustained increase in personal incomes will continue to drive home-building and; we expectthe government to extend higher tax collections into stronger infrastructure spending. TheCompany is adequately invested for the moment is attractively placed to capture thedemanding upturn in the regions of its presence and will enhance its capacity utilisation(operating leverage) in line with growing demand which we believe will translate intosuperior value.
We must thank the stakeholders of the Company Government bankers equitypartners Board of Directors employees and community members for their guidancesupport and faith in our prospects. We are optimistic that we will be able to live up totheir trust and help each of our stakeholders unleash the true value of our relationshipwith them.
|Puneet Yadu Dalmia ||Gautam Dalmia |