The two-day golden jubilee convention of the Madras Management Association (MMA) began with the inaugural session on 3 February 2006, followed by three sessions by several distinguished speakers and continued the next day with another three sessions before it ended with the valedictory session on 4 February 2006 at Le Meridien, Chennai. The Union Minister of Communications and Information Technology Dayanidhi Maran and the Tamil Nadu Governor Surjit Singh Barnala addressed the convention at the inaugural session on 3 February.
Addressing the convention, the Union Minister said that the growth in manufacturing sector was the key to generating employment. In his address, the Tamil Nadu Governor said that greater growth was needed in food production and manufacturing industry to meet the needs of the growing population. D P Padmanabhan, President, MMA, in his welcome address detailed the growth of the association from the days when management education was nascent to the present lives in which entrepreneurs from India were not restricting their operations within the country, but looking for growth opportunities worldwide.
N Sankar, Chairman, The Sanmar Group, receiving a memento from M S Kumar, Past President, MMA & CEO, Precimax Tech.
“India without boundaries”
We reproduce below the text of Sanmar
Chairman N Sankar’s speech at the
convention.
The theme of this convention is ‘An India
that knows no boundaries’, and this is
nowhere true as much as with regard to
the Manufacturing and Engineering
Industry, which we will focus on in this
session. The opportunities for this sector
in India currently are enormous - perhaps
unparalleled anywhere else in the world.
I am sure we are all aware of the reasons
for this, but permit me to encapsulate
them.
First, unparalleled market opportunity.
India offers a practically unlimited market
for almost any product over the medium
and long term. Indian per capita
consumptions of most products are a 4th
or a 5th of that of even countries like
Thailand and Malaysia, let alone the
western world, which are much, much
higher. Thus even if we catch up with
the consumption levels of our closer
neighbours, the multiplier effect of India’s
one billion plus population will ensure
continued double digit growth in
demand for most products and services
for several years to come.
Next is the global migration of industrial capacity away from the Developed Nations. The moving out of manufacturing capacity, particularly the heavier industries, from the developed world, is a phenomenon India has begun to capitalize on. India offers an excellent manufacturing destination, particularly for the engineering industry. With a well executed strategy, India has an excellent chance of emerging as one of the manufacturing powerhouses of the world. Lowest costs in the world India offers the opportunity to set up manufacturing units at perhaps the lowest conversion cost on a global basis.
The capital costs of greenfield projects are much lower here, as are the costs of conversion once the units get underway. These advantages arise primarily from the significantly lower cost of our excellent Indian manpower – the engineers, the technologists, lawyers, accountants, software specialists and so on. The rest of the world has woken up to this fact, and the results are seen in the large number of multinationals setting up Greenfield manufacturing sites here both for the local market and to feed into their global supply chains, as well as research and design and development centres. These are in my opinion the most important positive factors in favour of the engineering and manufacturing sector.
There are many more and I am sure we will hear about them later. But, now let us move on to the flip side, the impediments. All is not hunky dory in India. In spite of several rounds of economic reforms, some basic problems continue to stymie our economic progress.
These essentially concern our Infrastructure, Labour legislation, Education and dichotomies between central and local Government legislation and fiscal policy, driven by bad politics, not good economics. Poor Infrastructure is possibly the number one retarder of economic development. Whilst we can be rightfully proud of our Telecom infrastructure specially over the last few years, the story is very different when it comes to Roads, Airports and Sea Ports.
The Golden Quadrilateral is only now being slowly completed caught as it was in a change of Government at the centre. But we possibly need a score of golden quadrilaterals, not just one. And airports continue to be bogged down in political controversy, even as we show the fastest growth rates amongst airlines of the world.
And turnaround times in major ports continue to be measured in days when the rest of the world has moved to hours. A visit to China will demonstrate how much we are behind the world in this key area of infrastructure, progress in which could propel India to the number one position in the world. On the labour front, with technology and product obsolescence becoming the order of the day, businessmen need the freedom to tailor employment to business requirements. And the Bonus legislation needs to recognize that Bonus can arise only when there is Profit.
List of session chair persons/ speakers at the convention:
N Lakshminarayanan, President & CEO, Cognizant Technology Solutions.
K Raghavendra Rao, Managing Director, Orchid Chemicals & Pharmaceuticals.
P K Mohapatra, President & CEO, Technology Business Sector, RPG Enterprises.
Srinivasan K Swamy, Managing Director & CEO, R K Swamy BBDO.
N Sankar, Chairman, The Sanmar Group. Ajai Chowdhry, Chairman & CEO, HCL Infosystems Ltd.
Shanker Annaswamy, Managing Director, IBM Global Services India Pvt. Ltd.
G V Prasad, Executive Vice Chairman & CEO, Dr Reddy’s Laboratories Ltd.
R D Thulasiraj, Executive Director, LAICO Aravind Eye Care System.
Raghu Pillai, Managing Director & CEO, Home Solutions (Retail) India Ltd.
Arvind Singhal, Managing Director, KSA Technopak India Pvt. Ltd.
Puneet Johar, Star India. Bhaskar Das, Executive President, Times of India, Bennett Coleman & Co. Ltd.
Subir Raha, Chairman & Managing Director, Oil & Natural Gas Corporation Ltd.
B V R Subbu, President, Hyundai Motor India Ltd.
Prof Marti G Subrahmanyam, Charles E Merill Professor of Finance and Economics, Stern School of Business, New York University.
Adil S Zainulbhai, Managing Director, McKinsey & Co.
Gurcharan Das, Former CEO, Procter & Gamble India Ltd.
Dr Prakash G Apte, Director, IIM - Bangalore.
And the well intentioned and illstructured reservation policies followed by the centre and numerous state governments, now threaten to engulf the private sector too. Threatening to cripple meritocracy in the face of political opportunism. Yes, we need to take several firm steps if we are to wake up ‘where the world is not broken up into fragments by narrow domestic walls’.
Education concerns Education, which I had earlier cited as a major advantage, could soon reverse its character if we are not careful. One just has to look around Chennai to see the results of the freeing up of Private Sector in education over the last few years. A large number of technical institutions – close to 250 if you take the whole of Tamil Nadu – many of them new, are churning out 50,000 graduates a year covering the whole spectrum of engineering and technology. Granted not all of them are employable on an international basis, but the opportunity that such an availability of technical manpower throws up is mind boggling. A few bad examples among the private educational institutions should not lead to a wholesale reversal of policy.
The explosion in demand by the software / BPO sector has sucked up so many people, that the manufacturing industry is already complaining of the lack of availability of technical manpower. Role of government And finally the role of the state and other local governments. They need to push for and support central labour legislation on bonus and redundancies. They need to accept the spirit of VAT and not circumvent its purpose by introducing non VAT able items such as Entry taxes, Octroi, etc. Against this background, we have some amazing examples of success in the manufacturing industry spearheaded by Indians, and not just in India. Many of them have translated their successes here to expansions abroad – names such as Bharat Forge, Sundaram Fasteners, the Tatas are all well known to us. All of them have built internationally on hard won success in India and such success is definitely to be admired and emulated, given the background that I referred to earlier.
We have today with us an individual who is extremely well qualified to analyse the reasons for such success. Mr B V R Subbu, the President of Hyundai Motors has undisputed credentials in this regard. He has almost thirty years of experience in the automobile industry in India – first with the Tatas and then with Hyundai, whom he joined as
Director, Marketing and is now the President. Chennai is perhaps unique in the world that in the last decade two complete grassroots automobile plants have come up, apart from a few other assembly plants, and of course the consolidation of the auto component industry here. Hyundai has been remarkably successful in India and has made inroads in product areas where there were already entrenched heavy weights, like the compact car market.
B V R Subbu, President, Hyundai Motors.
The Madras Management Association (MMA) organises an annual event for young managers, open to participation from Corporate teams. This year was a special year for the organisers – the Golden Jubilee year of MMA. The theme had to be special as well – and that it was, being reflective of the buoyancy in the Indian economy, the surge in the growth rate in the Indian economy, the (almost) limitless potential - ‘This India knows no boundaries’ was the canvas. This year’s competition saw close to 30 registrations. The format for the competition, as always, was a written submission of 5000 words, followed by an oral presentation to a panel of judges on 6 January 2006. Teams from AllSec Technologies, NEG Micon, Polaris, Wipro, TCS, Covansys, IOCL were in the fray.
Sanmar had 2 teams taking part – one team represented by Anupama Rao, Aarathi Chellammal and Deepak Anand (Sanmar Team 1) and another represented by Ram Prasadh, Karthik and John Jacob (Sanmar Team 2), mentored by Arjun Ananth and Ramkumar Shankar. Sanmar Team 1’s presentation centered around the traditional industries. While Indian companies today are in a better position to take their operations overseas, building brands overseas continues to be a major challenge. Creative industries present a great opportunity for Indian entrepreneurs to build niche global brands – Tanishq, Hidesign and Ritu Beri were the examples that were show-cased. Sanmar Team 2, in their presentation, covered the manufacturing industry (Bharat Forge), the pharmaceutical industry (Ranbaxy) and the retail industry (Moserbaer).
The teams were ranked on both the written presentation (originality, accuracy, extent of research) as well as the oral presentation (communication & presentation, team work, interaction with the judges). A team from TCS, Trivandrum was ranked the best. Sanmar Team 1 was ranked second. The awards were given away at the MMA Golden Jubilee Annual Convention held on 3 and 4 February 2006. “Personally, I must say the entire experience was pretty interesting – the research that we did, the discussions that we had before we zeroed in on the traditional industries as our ‘focus area’, the race to get our written submission in on time(!!) – was absorbing. I thoroughly enjoyed being part of the team”, says Anupama Rao, who was part of the team that won the second position at the 10th MMA competition for tomorrow’s managers.
At the competition conducted by MMA for women managers, to identify the “Outstanding Woman Manager” for the year, Lavanya Venkatesh, Assistant Manager-HR, Chemplast Sanmar, was placed second. Of the 24 candidates who had participated in the competition, four were chosen. The candidates were required to make a paper presentation on the topic, “Women in India: 2020. There is no stopping us”, followed by an oral presentation before a panel of judges. Bhooma V G, Deputy Chief Personnel Officer, Indian Railways, Integral Coach Factory, was adjudged the outstanding woman manager of the year.
Members of Sanmar Team 1 at the awards function.
(L to r): Aarathi Chellammal, D P Padmanabhan
(President, MMA), Deepak Anand, Gurcharan Das
(Former CEO,Procter & Gamble India), Subir Raha
(Chairman & MD, ONGC) and Anupama Rao.