Chairman Adi Godrej decodes the
Godrej Group’s success strategy and the roadmap in a free-wheeling interview
with
We have always tried to be contemporary. We have built a strong brand. Over 750 million Indians use our products everyday. We have tried to be No. 1 or 2 in the businesses we are in. We have a strong strategy positioning to keep an eye on what we should be and should not be doing. We make sure our business processes and systems are competitive.
How has doing business changed from pre-Independence days?
At the time of Independence, we were already 50 years old. There were restrictions during British rule: British companies were encouraged. After Independence, India went into a few decades of socialism. That kept growth low and restrained the private sector until the economy opened up. A large part of our growth came after 1991. If we liberalise further, the economy can grow at double digits.
What guides your overseas expansion?
Most of our overseas expansion has been in Godrej Consumer Products. We were growing quite well in India, but there is a limit to that growth. We needed to expand outside. Since that company generates a lot of cash and we don’t need much capital for our Indian operations, we decided to go for acquisitions abroad. We have been doing it for over 10 years and that has added to growth. Identifying new targets is a constant process.
What’s behind the diversification from locks to agri inputs to property?
Most of our diversification has been a logical sequence. From locks, the logical expansion was security equipment; since we were doing steel processing, we moved to steel furniture. We were also making soap. From there it was logical to go into detergents, and personal and household products. Since we were using vegetable oil to make soap, we started plants to extract this oil. The byproduct, oil cake, was exported; customers abroad used it for animal feed. So we started using it to make animal feed in India. From feed, we diversified to agri inputs. We had a large landholding in Vikhroli, so we started real estate development.
What are the biggest challenges you have faced?
One of the biggest challenges was the socialistic decade, which put restrictions on businesses and resulted in interference. Today, the challenges relate to economic policies. The ease of doing business is much better, but we need to improve further. We need reasonable rates of taxes. Following the best global practices will let us become a high-growth economy.
Where do you see the Godrej Group ten years from now?
We hope we will continue to grow. Our roadmap is constantly reviewed. We have a general growth target, which we call 10x10: to be 10 times as big in 10 years, a CAGR of 26 per cent, to be achieved organically and inorganically. At the same time, if we have to get out of some businesses, we should be doing it so that the net effect remains 10x10.