Note: This piece was originally published on Sep 15, 2012
Below is an edited transcript of the interview on CNBC-TV18.
Q: Were you briefed about a plan to have younger executives lead companies across the group?
A: I think the group has gone through a lot of transformational changes and I could'nt tell if there was a grand design because I was part of the process. But now in hindsight, it looks like there was probably a grand plan.
Q: You took over a company in the middle of transforming from a largely commodity company to a consumer-oriented one. Is that that one of your ambitions for the company?
A: I think I would like to add a lot more consumer-oriented products to the table. We certainly believe that we will do well as a we have evolved a formula that works in the market place. So clearly, the transformation is part of an conscious initiative to highlight the company's presence in the public eye. A chemical company is an invisible entity, but we emerged to the fore thanks to a brand called Tata Salt which gave us tremendous consumer presence,
Q: So you realised that Tata Salt was an unique brand?
A: Yes, and we decided to build on that. And the journey has been exciting and the team has worked to get new products off the table. I think the team has learned and is still in a process of learning.
Q: I can understand the move into food which is a bigger market thanks to Tata Salt which is available at all grocery stores. So, your foray into pulses is a natural fit. But what were the synergies in your water purifier brand Swach?
A: It is mainly around technology. I think we found a technical, low cost solution that did not require electricity, water supply and yet purified water. Though the product was thought to be a fit for a consumer-durable company, there were no takers. So we had to take this to the market place ourselves.
Q: So you did actually look around for a consumer-durable company?
A: We debated a lot at that point of time and realised that at the end of the day that when we were selling the water purifier, that what we were actually selling was the replacement cartridge which, like any replacement cartridge, is a non-durable.
Q: How many have you sold?
A: We have sold over a million now in two years and I think we selling about half a million a year. So, we are selling half of our target of selling a million every year.
Q: And how big is the opportunity in the food sector? The packaged food segment has been touted as a big opportunity for a long time. Has the segment attained significant size?
A: We find the sector very interesting - from loose to packaged to processed. We have decided to start with packaging items that are today sold loose and give it an assurance of quality assurance and brand value. So after salt, we have entered the pulses category. It's the single-largest loose product being sold in retail stores today. So our effort is to sort, package it, brand and give it the quality assurance it needs.
Q: But is it getting the traction you estimated?
A: The foray is growing slowly because of the difficulty in establishing a price. Commodity food prices witness regular fluctuations and it is tough to keep changing the price of a packaged product with brand value. So, we want to solve this problem before we expand.
Q: Where do you see Tata Chemicals in 5-10 years? What will it be- a commodity or consumer retail or a technology company?
A: We have always articulated that we will always be a chemicals company. But the proportion of the non-commodity or specialty chemicals and branded products arm has grown over the last six-to-seven years. In 2004, they were about 11%. Seven years later the proportion is at about 22% and in another seven years it will probably double and become 40-50% of the company.
Q: Can you give us a break-up of the growth regarding growth abroad and in India? The company's earns a total revenue of about 40% from overseas. Are you seeing a larger growth of branded products in India or overseas?
A: We understand the Indian consumer so I think we want to focus on the consumer side of the business in India and adjacent markets. I think the Indian diaspora may extend the reach of some of our products into Africa.
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