The Group Annual Day, held on December 23 and 24, 2002, spilling over to a second day to accommodate the varied agenda addressing vital issues, was one of the most rewarding and meaningful such occasions in the group in a long time. Much thought and planning went into the event, and the high quality of the presentations more than justified all the extensive preparation that preceded it.
N Sankar
L to R: P S Jayaraman, M S Sekhar, M N Radhakrishnan, N Sankar, B Natraj, Vijay Sankar and B Chakrapani.
The introductory and concluding remarks by N Sankar which flanked the presentations by the Managing Directors, set the tone for the rest of the programme, giving a crisp outline of the vision and philosophy driving the Sanmar group. These were followed by a three-fold presentation by B Natraj and his team, unveiling in all their details the hitherto unstated or partially stated policies of the group in terms of the way it deals with its people, its management philosophy and its ethical foundation, for the first time addressing the ethical dilemmas employees could be facing from time to time.
The second day’s programme featured a presentation by a team led by V Ramesh on the performance culture that is pervading the group and another, on the implementation of ERP in the group by M N Radhakrishnan.
The recognition and honouring of exceptional performers crowned the two-day long celebration of the group annual day.
In his address, N Sankar spoke at length on the strengths and weaknesses of the group, the opportunities and threats in its path, the “Imperatives of the Day,” the urgency of the need for a performance culture, and stressed the need for execution to be the main preoccupation of everyone, including the senior management.
“Corporate strategy, people strategies, the latest equipment and techniques, hardware, software, top quality managers—all these are available, and anybody who is interested can get them. What will differentiate the winners is how you utilize them and how well you execute your business plans and your people processes.”
According to Sankar,
“Get your hands dirty,” was in a nutshell the message sent out loud and clear to everyone at Sanmar. He closed his address by saying the two critical issues for Sanmar today are:
In his presentation, Managing Director P S Jayaraman (PSJ) gave an overview of the
chemicals business of the group.
Some highlights of the Chemplast performance in 2001-2002 were full capacity utilisation of all products, high realisations, reasonable fuel prices, and initiatives like strategic sourcing of imported EDC, keeping capital expenditure under check, maximisation of free cash flow, and replacement of high cost debt with low cost debt. He related with pride Chemplast’s exceptional track record of 25 successive years of profitability and dividend payment.
PSJ gave an account of the activities of Cabot Sanmar, including the expansion in capacity and commencement of a project to manufacture treated grade fumed silica. The initiatives to widen the application base for fumed silica, and cutting down dependence on imports were covered.
In his presentation, the SEC Managing Director, M N Radhakrishnan, spoke of the impact of two major restructuring exercises involving SEC—leading to the merger of FMC Sanmar with Sanmar Alloy Castings and the closing down of Sanmar PTI Filters. Ownership changes took place at two other JVs, with Sensortronics bought over by the Vishay group of companies and Xomox being sold to Crane Co. Another strategic merger was initiated in the case of Sanmar Engineering Services, which absorbed Sanmar Industrial Services.
M N Radhakrishna
To remain globally competitive, SEC went in for a voluntary retirement scheme and outsourcing was introduced at many of its units. Major capital infusions were made into some of the companies. Some milestones achieved included the completion of business process reengineering, and of ERP implementation in two companies, besides achieving rollout in four others.
In its pursuit of Best Global Cost and Quality Management, manufacturing facilities were upgraded and cell manufacturing was introduced. New incentive measures were introduced focusing on better responsiveness, cycle time reduction and throughput increases. In service and engineering, the concepts of onsite service for the Indian market and engineering services for JV partners were initiated. Clear business goals in terms of sales, PBT, exports and sizes of constituents were introduced.
SSCL Managing Director M S Sekhar traced the growth and development of the company from 1987, when the group made the decision to go in for the manufacture of speciality and fine chemicals to date. He touched on the various milestones, taking the audience through the commissioning of the aroma chemicals plant at Berigai in 1991, and concluding with the events that have followed the acquisition of the Alathur facility in 1999 and the commissioning of the Sanmar Speciality Chemicals Research Centre, to do research as a business activity.
Today, the business segments of SSCL are:
Segment | Products |
Pharma chemicals | APIs, intermediates |
Phytochemicals | Intermediates |
Performance chemicals | Wide range of products |
Research | Contract research Custom synthesis New chemical entities |
Outlining SSCL’s future scenario, Sekhar stressed global positioning as the company’s imperative. He announced that there were ten new projects under active consideration or evaluation.
Capt N J Nair
The Sanmar Shipping presentation was made by Managing Director B Chakrapani. He described shipping as a special business, truly international, and freight-rate driven, subject to high levels of standardisation and a plethora of inspections. “The company cannot entirely regulate the field staff who enjoy independent rights conferred by the Merchant Shipping Act.” He spoke of the linkages of the freight rates with several economies and products. Characteristically, the demand-supply elasticity is difficult to predict, and a company’s assets represent a significant component of its business.
B Natraj’s team then made an illuminating presentation on the Sanmar management philosophy, which they defined as a core set of values driving “all our actions and policies.” These policies are followed by everyone at Sanmar without exception and they go to make the Sanmar culture.
The essence of the Sanmar management philosophy according to the presenters was that our policies should be simple and easy to comprehend and implement. They should be logical, and the logic stated clearly, open and accessible to all employees, and flexible, with provision for the policy to be changed with changing circumstances. The Sanmar management philosophy, they told the audience, drives the management process every step of the way. Examples are the way we treat people, make decisions, supervise and execute management decisions, review performance, reward people and deal with the external environment. All the various aspects were dealt with in detail, with specific examples.
In the session on Sanmar’s people philosophy, the presenters, unveiled the first compendium of the personnel practices developed and improved over the years by the group, in its pursuit of excellence. In the words of N Sankar, the policy is a distillation of the “fair, transparent and objective management of all employees, superscribed with the practical realities of people management in a typically Indian cultural background.” The formalised Sanmar policies required paradigm shifts on fundamental principles such as an all-cash remuneration package, an incentive system that tackles the problems of a diverse group with different market challenges and closed shareholdings, the need to retain talent in the face of competition, the need to balance uniformity and fairness among managers in different industry groups, and identifying the value of employees and developing them to reach their potential. The idea is for Sanmar to have cutting edge HR practices in line with global standards.
The presentation showed how the personnel policies of the group cover integrity and transparency, career development, the performance culture, the group’s compensation philosophy.