Godrej Group: Inspiring Better Living
3/21/2013 9:00 PM Thursday
The Godrej Group has historically been a touchstone for quality and consumer focus in the Indian markets, and has enjoyed a strong market reach. Adi Godrej, Chairman, Godrej Group in a conversation with Prasanna Bidkar, tells us more about what makes the group stand head and shoulders above its peers and about its plans ahead.
- The Godrej Group has about 500 million consumers in India who use one or the other of our products everyday. Whether they are using a Godrej soap or opening a Godrej refrigerator door, we have more consumers than any other Indian group. There are larger Indian groups, but they mainly have a B2B presence and so, they don’t have as many as consumers using their products as ours. That shows very strong brand strength for us, and we want to develop that.
- We have a 3x3 strategy and are very clear on this. Three products groups where we very strong in India and where we have very good technology are household products, hair products and personal wash. We wish to grow in these three categories in the three continents in the developing world, i.e. Asia, Africa and South America.
While there are so many companies operating in similar businesses, a similar economy and similar platform, not all have created value for the shareholders...
In fact, I would say that quite a few companies have created value in India. But this is always going to be there – not every company will be successful and not every company will create value. That happens all over the world. In some companies, value creation becomes negative.
Your company has been in the industry for such a long time. How do you think the company and the overall economy have created value post and pre-liberalisation?
Pre-liberalisation, the Indian economy was in a very poor condition. The growth rates were very low, and polices were negative. Most of the big value added or value creation in corporate India has been post liberalisation, or I would say post 1991. Post 1991, things have improved considerably, and this has helped the company.
How much do you think the reforms process has panned out in the last five years?
I think we had some good polices in 2009-10 and 2010-2011. We had fiscal and monetary stimulus, the economy also did quite well, and there was 8.4 per cent GDP growth in both these years. But in approximately a year’s time before Chidambaram came in as FM, there was a very little reform and very few good policy announcements.
But in the last six months, since Chidambaram has taken over the Finance portfolio, there has been good movement on the reforms front and on policy formation. I thought the pronouncements in this budget were quite good and the emphasis has been to try and get the Good and Services Tax (GST) legislation in place. That one legislation will add two percentage points to our GDP growth. So, I expect that there will be momentum from now onwards.
How far have these policy reforms in terms of rural upliftment helped GCPL on a micro basis?
Rural expenditure and the fact that rural incomes have increased has helped GCPL, and our sales growth in rural India has been good. Even in this financial year, we expect about 30 per cent plus growth in our rural business. So, clearly the improvement in the rural economy has helped us.
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