Value creation is an unceasing journey which is at the core of every business. With astrong belief and raison d'tre around creating sustainable value for every stakeholderon an ongoing basis your Company over the past three and half decades has been constantlyinnovating optimising economising and realigning business strategies.
360o Transformation : Why?
Change is a way of life ...
But change which is only in a specific sphere tends to be less impactful.
As we introspect at a macro level on what is the scenario today it becomes evidentthat there are key elements that drive our industry our business environment andourselves:
- Enormous and varied choices available - be it chemicals fertilisers cars whitegoods electronic goods restaurants... you name it
- Very minuscule differentiation amongst the choices
- Cheapest discounts deals being the key purchase drivers In one word: We are in aworld of Commoditisation.
Thus began our journey along with McKinsey to re-question our need forexistence and to explore a path for the next decade which will lead us from:
1. General market to segmentation
2. Customer to consumer specific
3. Product to holistic solution
4. Price to value
The outcome of a company-wide six months introspection lead to the path for animpactful change: a 360o transformation covering all facets of our business: -be it size - be it backward integration - be it process enablers - be it product andservices offering - be it corporate entities - be it mindset changes
We have already embarked on this transformative journey in full earnest:
- Recently commissioned a Rs. 750 crore investment in the fertiliser sector tohelp triple our NPK capacities with technologies to allow unique productdifferentiation.
- A Rs. 550 crore investment underway to propel us to become Asia's largest Acidcomplex to serve the growing specialty chemicals sector.
- Another capacity hike under active consideration is to take our TechnicalAmmonium Nitrate capacities to be among the global top three thus making available thismuch-needed product for the growing coal infra and cement sectors.
Each of these moves is to ensure that we get our size right for an impactfulplay in the sectors of Crop Nutrition Business Chemicals and Mining.
In addition under active consideration is an alliance to securitise our most criticalraw material - ammonia with investment of around Rs. 2700 crore to bring themuch-required backward linkages to the existing downstreams with a capacity which willfind 100% captive and cost-effective consumption besides also drawing advantage of aglobally softening gas pricing scenario.
These investments are expected to unfold in the forthcoming 24 to 36 months which willprovide a sustained and comfortable leverage into sectors where we have astrong and deep grip over the last 35 years that covers manufacturing safetylogistics customer management and all facets of the business vertical.
Additionally in order to effectively and efficiently manage the growing business sizewe have taken up a strong initiative to bring the latest and the most powerful processimprovement drive to cover IT Sales & Operations Management Supply-Chain ManagementCustomer Acquisition optimisation as well as Human Resource Management systems.
Finally to sharpen our focus on each vertical as the size and scale demands we havealready begun a spin-off into sector-focussed corporate entities. Post NCLT approvalstransfer of Technical Grade Ammonium Nitrate and Crop Nutrition Business to separatesubsidiary is the first step in that direction.
Besides bringing sector-focussed management and consumer overview intensity it willalso open up a matching of investor profiles to specific sector interest includingthat of strategic global players.
While the above transformation journey will be evident in the coming six monthswhat will be more impactful is our 360o shift at the marketplace taking us fromcustomer/dealer/intermediary toward the final consumer with a value proposition thatcomprises not just of products but digitally outreached services andnetworked adjacencies to make an impactful change on the lives of our consumers.
This path-breaking challenging journey will be immensely meaningful as it willbring the required focus on value creation.
The next 36 months promise to be beyond change... they promise to bring a 360otransformation.
S. C. Mehta
Chairman & Managing Director