 "Sunil Mathur")
As a trainee auditor with A F Ferguson & Company in 1985, Sunil Mathur was tasked to check the accounts of Siemens India. Two years later, Siemens offered him a job and since then there has been no looking back. Mathur, who took charge as managing director and chief executive officer of Siemens India in January, is the first Indian to hold the post. He was also the first Indian to be the chief financial officer of Siemens in India - a post that he held from December 2008.
Siemens has been present in India since 1922, but its association with the country is even older. The company's founder, Werner von Siemens, personally supervised the laying of the first telegraph line between London and Calcutta (now Kolkata) in 1867. The company has a glorious past, but Siemens' current state, like many of its capital goods sector peers, has been impacted by the slowdown. Revenue and net profit fell, and orders grew a mere seven per cent in financial year 2013.
Globally, the German multinational company is in a churn. Siemens AG CEO, Joe Kaeser, announced an overhaul in strategy and administrative set-up last month. There are reports of the company laying off 12,000 employees globally. Mathur has his task cut out. He has to achieve growth and profit, and manage the transition in India.
But luck is on Mathur's side. Siemens Ltd's stock price has rallied nearly 60 per cent in the last two months, as markets have cheered Narendra Modi's appointment as prime minister. At least for Siemens shareholders "ache din aa gaye hain" (good days are here).
"It is Sensex sentiment," Mathur tells us, as we meet him at the Siemens head office in central Mumbai. Mathur declines a luncheon meeting at a restaurant since he is preoccupied with commitments.
"There is euphoria and a great expectation, and the new government has the opportunity to really turn things around. The first thing any government will look at is infrastructure and the Narendra Modi government is already talking about it. If you want the GDP to improve, you will improve infrastructure and that includes power, mobility, airports, healthcare, capacity expansion in factories. You put all that together and Siemens is present in all the sectors," he says.
But is it euphoria alone that is driving the company's stock, we ask him. "There is the initial euphoria. But I do believe we are on the right track. The prime minister has taken smart moves by combining the coal and power ministry. Significant steps are being taken. When will the moves translate into orders for Siemens? It may take a little bit longer. You can not unbundle years of inactivity overnight. But we have to be continuously upbeat," Mathur adds.
The food, which has come from Copper Chimney restaurant, is served. There is a spread of pulao, veg kadhai, paneer palak, mutton and butter chicken. We opt for the vegetarian fare. Mathur settles for butter chicken and two vegetables, but skips the pulao. "I am trying to avoid carbs," he says, as he bites into the chicken.
Over the past few years, orders have thinned and revenue has taken a hit. In the first six months of financial year 2014 (Siemens follows the October-September calendar), orders fell four per cent and sales were down seven per cent. Siemens blames this on "continued stagnancy" in the capital goods sector.
"I do not believe 2014 will be substantially better than 2013. The year (2014) ends for us in September and I do not believe anything significant can happen on ground in two to three months. Do I believe 2015 will be better than 2014?" Mathur asks and goes on to say: "Marginally. But I am certain about 2016. I believe 2016 has potential to be substantially better than 2014. A lot of it will depend on the pace at which reforms actually roll out. But we are optimistic."
At the global level, Siemens management is driving its Vision 2020 plan launched last month. Under the plan, the German company will focus on new growth areas - digitalisation, automation and electrification, cost controls, engaging more closely with customers and introducing new technology to meet customer requirements.
One of the changes that is underway is an administrative overhaul. Siemens management has removed one layer of administration and made members of its global management board in charge of all business units in various geographies. Until now, board members were only responsible for one of its four main business segments. This will help the Siemens management to get close to the customers and understand their issues, says Mathur.
Over lunch, he delves into his personal life. Mathur, who loves playing the piano and collecting coffee mugs as souvenirs, did his schooling in Panchgani, Maharashtra. He wanted to be an engineer (I had not heard of Siemens until then, he jokes), but could not get selected.
After completing his graduation in science from Chandigarh, Mathur completed his chartered accountancy. His association with Siemens began during his trainee days in A F Ferguson. He opted for a job in Siemens over an MBA course and was inducted in an internal audit role, and then various roles in India, Germany and England. His last assignment before moving to India as CFO in 2008, was head of finance of a global business unit in Germany.
Dessert is served - watermelon and gulab jamuns - but Mathur skips it. So what is his strategy for growth? Are there a lot of expectations from his Indian colleagues? Mathur says he is unaware of public expectations, but is clear about one thing - he has to deliver and not let down his bosses.
When business is slowing down and the downturn is prolonged, the company needs to focus on resources, training its staff and customer engagement, Mathur explains. "You have to take steps to optimise resources, that could be optimising products, that could even mean bringing new products. That is what we did by introducing 'smart' products (a range of low-cost efficient products). We are concentrating to maintain the bottom line despite a volatile environment. We are focusing on the training and development of our staff to improve their skill sets. This is also the time when we have to go and hold customers' hands because the downturn has been impacting them too. My aim has been to meet as many customers. In the last four months, I have met 60 to 70 customers," he says.
"Our strategy is clear. We have to go to the customers. But we are cautious and will take orders or businesses that are profitable and where customers are in a position to pay," he says. "I am upbeat about energy and mobility (metro), on transmission, smart grids and I believe that if the right environment is created to promote investment, private sector capital spend will increase and we will have a significant role in the process," Mathur adds.
"As a strategy, there is no downsizing in India. We look at our capacities and make adjustments. There may be certain business areas which are not doing well where we might have to ask some people to leave. That is part of optimisation. On the other hand, we might go and recruit people in other areas. We are not going about cutting staff strength across everywhere. That is not happening and that will not happen," Mathur assures.
