April 2015 | Gayatri Kamath

'Fiscal 2016 is going to be a year of consolidation for us'

Leap 2020, Tata Chemicals' five-year growth plan, aims to triple the company's market capitalisation and expand its three business pillars. Excerpts from an interview with managing director R Mukundan.

After a growth phase, Tata Chemicals seems to have taken its foot off the pedal with its acquisitions. Does this mean organic growth is the preferred way forward?
As of now, we are focusing on growing organically. We do have investments in mind, and as and when opportunities arise we will make such investments. Our major investments are going to be in the consumer and farm businesses, but none of them is going to be big-sized. In the future the bulk of our business is going to be less capital-intensive than it has been in the past. We do believe that will expand our operations in the United States and Kenya. But barring these two, our India business will grow in an asset-light manner, and mainly in the technology, market or brand spaces.

What does the financial year 2015-16 hold in store for Tata Chemicals?
Fiscal 2016 is going to be a year of consolidation for us. We will ensure that our operations in the United Kingdom and Kenya are nursed back to proper health and that our operations in the United States and India continue on a healthy keel.

We intend to make greater investments in the consumer space. We have just launched Tata I-Shakti spices in Punjab. We intend to roll these out elsewhere in North India and maybe one more region during the year, with a national rollout next year. And there are other new food and nutrition products in the pipeline.

We are increasing the reach of I-Shakti Dals (the pulses brand) to about 100,000 stores; by next year, the brand should be available in about 150,000 stores. We believe that the major investments that we have made in this brand will start paying off in the next fiscal, and the business will start turning profitable.

The company has drawn up an ambitious vision called 'Leap 2020'. What is it about?
Leap 2020 denotes where we want to be five years from now. We want to triple our market capitalisation and we want to grow our three business pillars. The target for our consumer products business is to grow from Rs12 billion to Rs50 billion. The exciting task ahead of us is that we want to touch 1 billion people with our food and nutrition products. Tata Salt already goes to 100 million households, which translates into about 500 million customers.

Tata Chemicals celebrated its 75th anniversary in 2014, and continues to serve society through science. Watch the video
We want to enhance our farm business — at least the non-subsidised, deregulated part of it — from Rs25 billion to Rs80 billion. For our chemicals business, our approach is to remain viable, profitable and vibrant, and the turnover will go to approximately Rs120 billion.

All three businesses will grow but the major share of profits, which currently flows from the chemical business, will shift to the consumer and farm businesses. Going forward, we see the branded businesses of Tata Chemicals comprising 50 percent of our profits. Increasingly, the shape of the organisation will be that of a branded food and farm company. The industrial chemicals business will continue to give the company the cash flow it needs to build the branded businesses.

Our growth will be driven by the values of the company — safety, passion, integrity, care and excellence, what we call 'spice', which is the underlying foundation of our organisation.

This is an excerpt of the interview from the April 2015 issue of Tata Review in which chief executives of 14 Tata companies speak about the performance of their companies in the year gone by and their plans for the future:
Tata Consultancy Services: 'At TCS, it's always about the team'
Read the complete interviews and more in Tata Review
Jaguar Land Rover: 'Will deliver 12 significant product actions in next 12 months'
Tata International: 'Scale is necessary for a trading company'
Tata Steel: Driven by innovation
Tata Steel Europe: 'European countries remain the key to our success'
Tata Motors (commercial vehicles): 'We will deliver tangible value to our customers'
Tata Motors (passenger cars): 'We plan to introduce two new vehicles every year'
Tata Global Beverages: 'The global market is vital to our health'
Titan Company: 'Will continue to explore opportunities in lifestyle space'
Tata Communications: 'Mindset is the key'
Rallis India: 'Want to be among the most valuable companies in our domain'
Tata Technologies: 'We see opportunities in aerospace and defence'
Voltas: 'We look forward to deploying our strengths...'
Tata Projects: New areas of business, new opportunities