B&E: But India contributes only 3.5% to Imerys’ global turnover. How are you planning to increase this share over the next few years?
UCD: That is the whole point. Since the contribution is less, the possibilities of growth are phenomenal. Growth can be achieved both organically, as well as inorganically. In other words, through internal means and external ways. And we have been considering both the routes for a faster growth. Talking about our target, we want to double our contribution in the company’s global revenue in the next two to three years.
B&E: But historically, Imerys has been dependent on external means (mergers and acquisitions) to grow...
UCD: You cannot achieve 100% growth organically even after putting in a lot of effort. However, you can achieve a lot more through external means in a rather short span of time. Keeping in mind our need to grow at a faster rate, M&As are actually a more suitable strategy at this point of time. For example, earlier this year, Imerys acquired Rio Tinto’s talc business in Australia for $340 million. What this acquisition accomplished was not just adding talc to our minerals portfolio, but also getting us access to many markets where this particular business had a presence. Therefore, we look forward to both organic and inorganic growth. We believe that an attempt to grow organically alone would put a lot of pressure on our existing businesses.
B&E: Talking about operations, globally you are working on a margin of 12.5%. But looking at the rising input cost and increasing competition in this domain, do you think such margin can be maintained in the Indian operations as well?
UCD: It can actually be done. One who has adequate technical expertise, delivers quality products that stack up to the requirements of consumers and is competent enough will definitely control market dynamics. As far as competition is concerned, I would say, if input cost goes up for us, it goes up for our competitors as well.
B&E: 45% of your turnover comes from consumer business and the rest from industrial. Do you have any plans to restructure this setup?
UCD: I don’t think there is going to be any sort of change in this setup because this is what we have been following globally. In fact, this is how we have built our expertise. So, unless and until there is a huge opportunity – for example, a need for more talent that in the consumer business or some serious upsurge in demand – we will continue with our present business structure.
B&E: At present you are into four different businesses in India. Moving ahead, how would you like to prioritise them?
UCD: Going by revenues, mining continues to be our key business at present as it gives us close to Rs.5 billion ever year, whereas the rest generate just over Rs.2.20 billion. But we would certainly like all our businesses to grow and will focus equally on all of them. Having said that, we must also agree to the fact that it is the market dynamics and requirements of each business that would impact and decide our future strategic moves with respect to different businesses.
UCD: That is the whole point. Since the contribution is less, the possibilities of growth are phenomenal. Growth can be achieved both organically, as well as inorganically. In other words, through internal means and external ways. And we have been considering both the routes for a faster growth. Talking about our target, we want to double our contribution in the company’s global revenue in the next two to three years.
B&E: But historically, Imerys has been dependent on external means (mergers and acquisitions) to grow...
UCD: You cannot achieve 100% growth organically even after putting in a lot of effort. However, you can achieve a lot more through external means in a rather short span of time. Keeping in mind our need to grow at a faster rate, M&As are actually a more suitable strategy at this point of time. For example, earlier this year, Imerys acquired Rio Tinto’s talc business in Australia for $340 million. What this acquisition accomplished was not just adding talc to our minerals portfolio, but also getting us access to many markets where this particular business had a presence. Therefore, we look forward to both organic and inorganic growth. We believe that an attempt to grow organically alone would put a lot of pressure on our existing businesses.
B&E: Talking about operations, globally you are working on a margin of 12.5%. But looking at the rising input cost and increasing competition in this domain, do you think such margin can be maintained in the Indian operations as well?
UCD: It can actually be done. One who has adequate technical expertise, delivers quality products that stack up to the requirements of consumers and is competent enough will definitely control market dynamics. As far as competition is concerned, I would say, if input cost goes up for us, it goes up for our competitors as well.
B&E: 45% of your turnover comes from consumer business and the rest from industrial. Do you have any plans to restructure this setup?
UCD: I don’t think there is going to be any sort of change in this setup because this is what we have been following globally. In fact, this is how we have built our expertise. So, unless and until there is a huge opportunity – for example, a need for more talent that in the consumer business or some serious upsurge in demand – we will continue with our present business structure.
B&E: At present you are into four different businesses in India. Moving ahead, how would you like to prioritise them?
UCD: Going by revenues, mining continues to be our key business at present as it gives us close to Rs.5 billion ever year, whereas the rest generate just over Rs.2.20 billion. But we would certainly like all our businesses to grow and will focus equally on all of them. Having said that, we must also agree to the fact that it is the market dynamics and requirements of each business that would impact and decide our future strategic moves with respect to different businesses.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
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IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
IIPM B-School Detail
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
Prof. Rajita Chaudhuri's Website
domain-b.com : IIPM ranked ahead of IIMs
Arindam Chaudhuri's Portfolio - he is at his candid best by Society Magazine
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
IIPM B-School Detail
