P S Jayaraman, P N Kapadia, Vijay Sankar, V Narayanan, N Sankar, N Kumar, Preety Kumar and M N Radhakrishnan: The Sanmar Group Board members at the dais.
Group Annual Day 2005 was marked by the participation of three Group Corporate Board members, V Narayanan, P N Kapadia and Preety Kumar. It got off to a rousing start with a powerful presentation by V Narayanan in his usual no-holds barred style punctuated by humour and anecdotes.
His presentation entitled ‘Dynamics of Business Leadership’ described the essential qualities of a good leader and dispelled some myths concerning leadership.
Narayanan stressed the strong customer orientation of successful organisations, their focus on people, results and productivity. He advocated the wise use of power to create a vision made up of shared values, the corporate mission, organisational goals and strategy.
Narayanan also spoke of the components of knowledge, the key areas of knowledge management, and offered insights into the building of a learning organisation. He differentiated between the different styles of leadership, between control and empowerment, and concern for people versus concern for performance. He saw profound differences between management and leadership. The workplace should be a fun place to work, fostering an open and participative culture, focused, flexible and friendly.
In her presentation, Sarada Jagan listed the HR challenges of today, with particular reference to Sanmar. Her journey down memory lane traced the evolution of the Sanmar people philosophy and HR policies over a decade and a half. She took the audience through Sanmar’s compensation philosophy and structuring, the cadres, appraisals, promotion policies, talent identification and development, manpower planning and budgeting, and how technology has powered HR in Sanmar. She spoke with pride of the ethics and values, learning potential, business freedom, excellent remuneration and the leading edge HR practices of the group. The common HR practices across the group could pose problems sometimes because of the iversified nature of the businesses, with industry practices differing across them. Another remarkable feature of Sanmar’s HR practices has been that they have been ahead of the market; an example is the concept of cash-based compensation pioneered by the group.
In his presentation, ‘Chemplast – The Road Ahead’, P S Jayaraman gave a quick overview of the present state of Chemplast and Cabot and then proceeded to outline the plans for the business for the next three years, both as a high quality manufacturing company and as a responsible corporate citizen.
Chemplast plans to become a low cost producer of ethylene dichloride (EDC), the feedstock for PVC manufacture, enhance PVC
capacity and explore opportunities in ethylene-based products are being achieved through the caustic soda plant at Karaikal, expansion of caustic soda capacity there, and the proposed manufacture of EDC at Karaikal at a cost of Rs. 127 crore. He gave details of the progress in the construction of the Marine Terminal Facility (MTF) and ethylene storage tank.
Jayaraman also elaborated on the Rs. 350 crore greenfield PVC project on the anvil, which would result in an annual capacity of 180000 tons. The MTF would facilitate import of VCM. It would be a zero discharge venture and the entire water requirement would be met through seawater desalination. TNPCB and the Tamil Nadu government have approved the project, which awaits MOEF clearance and is expected to be commissioned by December 2007. Jayaraman also spoke of the ethylene based projects under evaluation as a result of the facilities being created at Karaikal.
P Natarajan’s presentation was on the plans and challenges ahead of Sanmar Engineering Corporation. His status report reflected confidence in SEC’s business model, its successful strategy, great joint ventures with world leaders, and good track record with both customers and partners. He spoke of strong growth prospects based on the increasing capex investments in India in power, oil and gas and worldwide trends.
He listed as domestic market imperatives a stronger customer focus, the need to leverage on the combined SEC strength, strong focus on new products and applications, addition of more related products and the need to strengthen the SEC brand by exploring the potential of the Internet and adding a new dimension to technical service.
On the growth outlook for intercompany sales, he stressed the record growth rates being projected by our JVs, the big investments in oil and gas and petrochemical plants in the Middle East auguring well for the market potential there.
Natarajan stated Sanmar Foundries’ mission to develop into a leading worldwide supply chain partner to the valve industry for the full range of its casting requirements, both raw and machined. The machine shop would add value to both the sand and investment foundries, with a focus on high end machining and achieving SHE management practices needed for ISO 14000 and OSHAS 18000 certification.
In his presentation of the five businesses of Sanmar Speciality Chemicals (SSCL), Vijay Sankar outlined the backdrop to the businesses, plans, challenges and initiatives on the path to achieving SSCL’s goals. The key happenings of the year were the acquisition of INTEC Polymers at Dadra, Gujarat and SAP implementation there the commercialization of API-TMBT and the R&D thrust set in motion, the stabilization and growth of ProCitius Research and the integration of Bangalore Genei.
The Performance Chemicals division at Berigai, the oldest business of SSCL, makes advanced organic intermediates, chemicals for flavours and fragrances and chemicals for polymers. It also manufactures phytochemicals, specialised products based on Indian biomass as therapeutic ingredients.
The API division at Alathur is a USFDA approved, reliable source of API for pharma majors. The division recently opened a world-class kilo lab. Bangalore Genei is a strong presence in biotechnology reagents, making reagents and techware for genetic engineering and teaching kits, besides offering research services. ProCitius Research offers contract research and custom synthesis and process research including scale-up of established processes, alternative synthetic methods and building block synthesis. Intec Polymers manufactures wire enamels, varnishes and related chemicals like polyvinyl formal, polyisocyanates and organic titanates.
SSCL’s strategy would ride on its longterm competitive advantages, with a large pool of scientists, raw material and low cost capital equipment available in India as well as the reputation of the Sanmar group, with its financial strength, reputation for IP protection and policy of not competing with customers.
Vijay also described the SHE initiatives of SSCL, the ISO certifications obtained and the substantial reuse of water in all the plants. He spoke of the HR initiatives both in terms of hiring MScs and PhDs and the structure and compensation changes undertaken. He also mentioned the attempts to strengthen the company’s international presence
In his presentation on Sanmar Shipping, P Viswanathan described as healthy the performance in the first quarter of the year. Freight earnings of our MR tankers continue to be high, the drydocking of Sanmar Serenade meant 28 days off, and Shipping made an entry into the chemical tankers segment with the acquisition of Sanmar Majesty. He also spoke of the other events of the year, good and bad.
For the year 2005-06, Viswanathan projected higher than budgeted earnings from MR tankers, forecast the sale of Sanmar Symphony in the October- December 2005 quarter, and expected the year’s results to be better than projections made. He then gave an account of the fleet profile of the group.
Viswanathan spoke of plans to achieve a critical mass of ships by 2007-08, acquire ships that meet the ‘return’ criterion, have a presence in at least two segments and be active in sale and purchase to ensure the youth of the fleet. He stressed how a robust sale and purchase model had converted failure into opportunities, and the strength derived from crossfunctional teams in achieving goals.