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'Indian Companies to Recognise the Changing Global Landscape'
Anurag Jain, President & CEO, Specialty Chemicals Business, SRF Ltd. Being an expert in Fluorination/Halogenation which is a major factor that provides the bedrock for the Specialty Chemicals Business, SRF Ltd has enhanced it further by expanding into other chemistries and developing expertise in them, says Anurag Jain, President & CEO, Specialty Chemicals Business, SRF Ltd. In a detailed discussion with Mittravinda Ranjan, he elucidates the company’s transformation from a commodity chemical manufacturer to become a globally recognised name in the Specialty Chemicals marketspace

What does it take for an Indian company to be successful in the global market?
For an Indian company to be successful vis-à-vis its global counterparts, a key differentiator lies in the management approach to R&D. Continuing and longterm investment in R&D becomes essential in the face of stiff a global competition and investor expectation to generate recurring and sustainable profitability from the core operations of a company.

One must also recognise that India is now very much a part of the global market. All major international entities are present in India today. Developing low-cost yet high-quality processes for generic drugs which Indian pharmaceutical manufacturers are known for, or becoming a force to be reckoned with in the two-wheeler space as Bajaj has done, are fundamentally built on a bedrock of know-how generated over years of sustained investment in innovation. The world today recognises that the ability to make something, per se, is not a differentiator; the rules of the game are being re-written.

The onus lies with the leadership of Indian companies to recognise the changing landscape. Being efficient and operationally excellent are mandatory; but competitive advantage requires the ability to innovate.

Though India has the best of the minds to carry out research work, on an average, industries only spend around 2 per cent of revenue in R&D. How important is it for Indian companies to change to survive in the long-term in the time of global competition?
India ranks 81 out of 141 countries on the Global Innovation Index 2015. Globally, Switzerland, the United Kingdom, Sweden, Netherlands and the United States are ranked as the most innovative countries in the world. It is, perhaps, no surprise that these countries are considered the most successful countries today.

This is not to say that India is not changing. It is closing the gap with the top innovators, and it is, today, considered an innovation outperformer within the category of developing countries. The 2 per cent metric is surely a strong pointer towards the under-investment in innovation, though it does not factor in the reality that India has some of the lowest-cost intellectual capital in the world. In order to succeed globally, companies need to increasingly depend upon innovation as a tool to drive their next wave of growth. Innovative companies are more likely to gain in the long-term than companies that invest merely in capacity expansion that permit them to make more of the same.

Driven by this view, SRF has invested and continues to invest in R&D and technology development. SRF's process research and development work is driven by two state-of-the-art R&D centres located at Bhiwadi and Chennai. Both the R&D centres focus on product and process development, developing futuristic new processes and chemistry platforms. The R&D team has developed processes and technologies for the production of a number of fine chemicals and intermediates in the field of Specialty Chemicals. Because of our approach to research, development and innovation, SRF is, today, a preferred partner to major pharmaceutical and agrochemical companies worldwide.

What steps has SRF taken to transform itself into a technology and innovation oriented company and maintaining the environment across all business segments? (Please talk about major challenges that organisation has to face from time to time and continuous effort & investment in people.)
SRF started life as a commodity chemical manufacturer. We purchased technology from global majors and operated in an environment where the license raj determined demand and supply. The first major challenge the company faced was liberalisation, the opening up of the economy in the 1990s. SRF seized upon that opportunity to diversify and grow. We recognised that the only way to survive was by gaining capability. This process required us to learn and internalise the technology we had purchased.

The next challenge we faced was phaseout of our products under the Montreal and Kyoto Protocols, and the reluctance of developed nations to sell us technology for newer generation products. Again, SRF reacted to this challenge by developing in-house technology. This was possibly one of the more difficult challenges the company faced – transitioning from a purchaser of technology to a developer of one – and it took us many years to scale this peak, completing by the early 2000s.

Emboldened by this experience and driven by SRF’s vision to become an innovation and technology powerhouse, SRF set up its own R&D centres to develop process technologies for Fluorine chemicals. This was possibly the hardest challenge the company took up – driven not by external pressures but by an internal drive to change and grow. It has taken us close to ten years to become a globally recognised name in the Specialty Chemicals marketspace; the blink of an eye in some ways, a long and arduous journey fraught with challenge and difficulty in others.

TQM is our quality philosophy of choice. Retention of our people and development of their capabilities is what will differentiate companies and countries in the days to come. We have been somewhat successful in this endeavour, and have four generations working together shoulder to shoulder. In the digital age, managing their likes and preferences is a key challenge we are working on.

What are your plans to expand speciality chemical business and which are the future businesses SRF will be looking at in the years to come to add to the portfolio and strategies for realising them?
With expertise of over 25 years, SRF has become an epitome of quality production. We are now the largest backwardintegrated specialty Fluorination player in India. The Specialty Chemicals business has also established itself as a credible, global player in the Specialty Chemicals business space.

The Business enjoys an enviable reputation for its capabilities to develop and manufacture advanced intermediates for agrochemical and pharmaceutical companies. While agrochemicals is a sizeable market, growth in pharmaceuticals segment is driven by a significant rise in demand for newer drugs that requires newer APIs.

At SRF, we believe sustainable technologies are the key to the future. We continue to invest in clean, lean and green technologies and believe this will enable us to continue our growth trajectory in the years to come.

What are the key success factors that define the success of the Specialty Chemicals Business at SRF?
Being an expert in Fluorination/ Halogenation is a major factor that provides the bedrock for the Specialty Chemicals Business. We have enhanced it further by expanding into other chemistries and developing expertise in them. Our expertise also arises from our ability to develop products at competitive cost structures, which can emanate from finding solutions through breakthrough technologies, doing backward integration in multiple key building blocks, and the like. We have continued to expand our multi-step synthesis capabilities and focus on backward integration as we continue to leverage our strong technical expertise. Apart from this, it is the strong project implementation and plant operational skills that transpire into better delivery at competitive prices for our customers.

How has the focus on technology and environment contributed in gaining customer trust for the Specialty Chemicals Business at SRF?
The Specialty Chemicals Business is today respected for the deep knowledge it has on certain types of platform chemistries, where some of our customers may even trust us to develop better processes than they can themselves. There can be no higher statement of trust than to be handed over a molecule, a timeline, and a statement of confidence; and this has only been possible as a result of sustained investment in technology and people, and our capability to execute our operations safely and reliably.

Merely development of technology is not enough. The world is increasingly alive to the fact that responsible handling of hazardous products is essential. A clean and green process is always preferred, and SRF’s focus on environment – born of our values as an organisation – has held us in good stead. Truly elegant solutions find that clean and green technologies are extremely lean as well, with cost-effectiveness emerging from the absence of effluents and waste. The ability to think in this way has transformed how global leaders in agrochemicals and pharmaceuticals perceive and relate with SRF.