Q & A

Competitiveness Has To Be Inbuilt In The Organization

Posted on 08 February, 2010 | Tags:

How resilient was Tata Chemicals to the global meltdown?
We continuously monitor the business environment and were expecting the business slowdown in our industry post Olympics in China. We had started preparing the team for the same in anticipation. While the downturn occurred due to financial meltdown in global economy, we had foreseen the problem coming and had taken appropriate steps to counter it. We were adequately prepared for the downturn and were expecting it to be a long lasting one. While Indian economy is somewhat insulated from the downturn, globally the effect of downturn is highly visible.

What strategies did Tata Chemicals adopt to combat the recession?
The team has gone through the downturn cycle before also and is very well equipped to handle such scenarios.It is very important to be Competitive. Competitiveness has to be inbuilt in the organization values and system. Being Competitive is the ability to structure and restructure the business, costs and volumes swiftly without hurting the margins and quality. In a downturn if you are slow in adapting to the changing scenarios swiftly, you will be out of the race. To face the current challenge, we have initiated a structured programme - ADAPT. This program focuses on 5Cs - Customers Focus, Cash Conservation, Capital Expenditure - Rationalization, Cost Optimization, and Communication with all the stakeholders. This programme is helping us sustain, in these times more effectively. Apart from being competitive, I would like to stress on three points, which are vital for any organization to sustain and grow in any condition and which we at TCL are doing very well.
Be close to the Customers - Keep customers well informed, be transparent and honest about the operating conditions. Develop long-term partnership and ensure delivery of promises. Customer-centricity is a core value to build a strong organization.
Treat Employees Fairly - This is the time to keep the employees engaged in the system as well as respond positively to any critical situation. A motivated and engaged employee will be able to deliver to the demands of the customer and organization. Have a constant flow of two-way communication with the employees; solicit their help in improving and innovating for better-cost management and deliveries, inculcate good leadership and entrepreneurship qualities in the employees.
Engage with Investors and other stakeholders with transparency - Keep investors and stakeholders apprised of the scenario and situation. Share with them the organizational challenges and the response plan, which has been deployed to overcome the challenges. Keep them informed through various communication channels. This will help keep their faith in the system intact and most significant of all - build trust with key constituents of any business.

What are your expectations from current year and how does the company plan to move ahead?
We expect current year to be challenging. Our employees and partners have responded to the challenge well and we hope that the same spirit will continue and help us emerge stronger from this slowdown.

What measures should Indian Government take to handle the competition faced by Indian chemical manufacturers because of imports?
With excess capacity in all commodities due to sudden demand collapse, domestic industry needs to be protected from undue competition from overseas players who may be looking forward to liquidate their inventories / stabilizing their industry at our cost. Government should immediately look at providing temporary protection against such issues.

May we have your comment on initiatives taken by Indian Government in Budget 2009 for the Chemical Industry?
The nutrition based pricing policy for fertilizers is a welcome move, however there have been no major initiatives for chemical industry in this budget.

Ramakrishna Mukundan, Managing Director, TCL