Gautam Singhania bullish on Indian economy, says some exciting times lie ahead

作者:Editha    發表日期:2019-08-15 11:27:34

In a free-wheeling interview with Moneycontrol, Gautam Singhania, CMD of Raymond, talks about why he is bullish on India, and how he is separating ownership and management at the company. Excerpts:

Q. Is the supply chain now back to what it was in the pre-GST scenario?

A. I think everything is back to normal. It was only two, three months of disruption. It is a mind-set issue, a lot of people said, how do I get around GST, and then when they realised that GST is here to stay, they adapted to it. It is the new reality.

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I think we as a company were probably one of the quickest to adapt to GST. We were GST compliant very quickly.

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Q. Do you think after demonetisation, economy has recovered from these two big major events?

A: Tell me, how many economies in the world are doing as well as India is? Why do you always look at the negative, look at the positives.

Would you rather be sitting in the UK economy just now? I certainly wouldn't. Would I rather be sitting in the Middle East just now? I certainly wouldn't.

We are in a trajectory which is up, we are in the right direction.

Q. What is your view on the Indian economy?

A. I am bullish, I am invested here, I continue to invest here. I have invested in manufacturing here with the Make in India with a large plant in Amravati. So, I am bullish on India. I have the choice to live anywhere in the world. There is no law that says I have to live in India. However, I am here because I want to be here.

Q. Could you tell us more about the Amravati plant and the housing project?

A. We are setting up a linen manufacturing plant in Amravati. We as a company sell significant amount of linen and this is backward integration. We started with phase one, which is 4 million metres of linen production.

I believe the people that work for Raymond, should have a good quality of life and so we are also doing a housing project. However, Raymond is not doing the housing project. I am personally doing the housing project in Amravati. We are also setting up a school there.

The reason we are setting up a housing is that, I believe if you want to attract good quality talent in backward areas like this, you must give them a good quality of life.

So, we are building 200 homes in the first phase. Plus we are doing some retail and people want supermarket, they want some commercial activity.

Q. Is this facility at Amravati now fully operational?

A. Yes. It was commissioned in December. It takes a little time for it to its peak efficiency but it is fully operational.

Q. What is the scenario in terms of festive season sales so far in the second half of the fiscal?

A. It has been okay. It is as per our expectations.

Q. What is your plan for the Ethiopia plant?

A. We set up the facility in Ethiopia to make suits and jackets because they have duty free access to EU and America. It is a forward integration for us. So, whilst people think that we have gone and invested in Ethiopia per se; but fabrics are going from India, so it is a forward integration. It makes us more competitive in the global market. The garmenting was working better in Ethiopia but we actually look at it as integrated, that India's exports go up because of that complementary facility.

Q. What is your plan for the FMCG sector?

A. FMCG has been one of our smaller businesses. Philosophically what we are doing is, we are professionalising the group and I think FMCG has a great headroom to grow.

So, having put the building blocks in the main businesses together, I did a bit of focus on the FMCG where Park Avenue brand has got a lot of headroom, Raymond has headroom in terms of new product lines and new brands.

I wanted to professionalise that company, so I stepped off as chairman and appointed Rajeev Bakshi, with over 30 years of FMCG experience as the chairman of that company. So, there is a CEO, there is a chairman, we have appointed a full professional board and now I am just a director on that company.

You have to disconnect between ownership and management at some level and I am in that position where I can do it today.

I want all my companies to be run professionally, I am on the shareholders side, I have always said this in all my investor conferences that I am on the shareholders side.

Q. By when do you plan to monetise the Thane land?

A. I will do everything that will enhance shareholder value. So if we can monetise land, will it increase shareholder value? Yes, so we will do whatever it takes. I am not ready to tell you what we are going to do, but please understand, I am a shareholder of the company. What we are doing, I am not at liberty to discuss.

Q. Any other non-core projects that you are planning to monetise?

A. Everything we are doing here is to enhance shareholder value. So tomorrow if there is a business, at 'x' value might not be worth selling, but at 'y' value we might sell, because it will enhance shareholder value, we are open to it. Now I cannot tell you what we are doing. But, let me tell you this, some very exciting times ahead.

Now we have seen that competitive intensity in the garmenting space, in textiles in general is pretty high. So what is Raymond going to do differently going forward?

I cannot tell you my strategy. Just broadly. At the core of this company is product. That is where I spend a lot of my time and energy. You must have seen the trade show. This is probably the best trade show you will see in the country and we have a challenge every six months, how do we take the game up. I have seen this evolve over the last 2-3 years. How do we keep evolving ourselves? The only thing constant in life is change.