Q&A: Saroj Poddar, Chairman, Adventz Group

'Brands have a tremendous value for business growth'

Last month, chairman of Adventz Group Saroj Poddar unveiled a group brand identity for his companies that includes Zuari Industries, Texmaco Rail and Engineering. In an interview to Ranju Sarkar, he explains the objective and significance of the branding exercise as the group tries to accelerate growth. Edited excerpts:

The group unveiled a new corporate identity last month. What’s your objective?
All companies in my group had been working independently. I want them to work collectively, with a common logo, values and finance. We would like to see that all key resources are integrated; hence, we will have integrated management, financial services and human resources. This will certainly make these companies grow faster. The idea is to accelerate growth, which I am doing, and build on the foundation laid by K K Birla.

In fertilisers, a lot of our demand is met through import. There’s a huge capacity deficit. Our brands are very strong. That is why we have lined up $2-billion investments over the next five years. If you look at our engineering business in Texmaco, it is clear the Railways will have to play an even more important role than it has played till now if India has to grow at 8.5-9 per cent. They buy 18,000 wagons a year. With the dedicated freight corridor, this will grow. Plus, there’s demand for specialised wagons from the aluminium, steel and automobile industry.

The third area is lifestyle, which includes real estate, furniture and fittings. We have taken a huge project in Mysore. A big project is coming up in Delhi, and others in Kolkata and elsewhere. We have considerable line-up of real estate development. Once we do this, we plan to offer these as package units, including furniture. This would certainly lead to an increase in demand for furniture.

What’s the significance of the branding exercise for the group today?
By bringing the companies under a brand, we are not only creating a brand value, we are telling our associates and customers that we are here with certain commitment in terms of quality, business dealings, and ethics. We are going to produce products which meet certain quality parameters that the group is known for.

But you have disparate businesses in the group. How do you see them unifying under a common brand, and customers and stakeholders relating to the brand?
There are some integration benefits. The companies can work together for each other’s growth. If I put up a fertiliser plant, the engineering plant can be very handy. When I put up a real estate project, the engineering and the furniture companies can contribute. Similarly, human resources of one company can be moved to another. Till now, the individual companies did not get the benefits of the group.

Isn’t that an option available to you today, even without the unified brand?
Not really. Because these companies have always been run independently and there have never been an integration that you see in the Bajaj Group or Godrej.

Why was this change necessary? Is this a turning point in the history of the group?
Till recently, these were smaller companies. We are now pushing the button. Look at the investment of these companies in the last 20 years and the investment of these companies in the next five years. There’s a world of difference. We have not invested more than Rs 100- Rs 200 crore in the last few years. Today, we are talking of investing $2 billion. Dr Birla had left these companies in a good shape. I want to take advantage of this and build on the foundation he had laid.

You talked about the investment pattern. Was that a function of the sector you are in or a function of risk appetite? Why were the investments lacking earlier?
We are willing to take a bigger step forward and risk to accelerate growth. The balance sheets of these companies have substantially improved in the last three to four years. Today, we are ready. That day, I must confess, we were not ready in terms of removing debts, improving profitability and accelerating growth. There have been significant improvements.