Adopt Higher Levels of Mechanization in Rubber Industry To Improve Quality And Reduce Cost - T.K.Mukherjee

Interview With

T.K.MukherjeeT.K.Mukherjee CEO Mentor & Strategist Past President AIRIA

©2015 - Published by Rubber Machinery World. http://rubbermachineryworld.com

©2015 - Published by Rubber Machinery World. http://rubbermachineryworld.com

Hello Mr. Mukherjee. First of all thank you for accepting an interview with Rubber Machinery World and sharing your thoughts. For over 4 years, that we have been interacting, I have seen you transitioning within different leadership and mentoring roles with inspiration and ease. I have been in awe of your energy level and dynamism. So let me start with a personal question - what drives you?

11

The various driving forces which act on me are generally situational. However, the biggest forces are:

• I still believe that my best is yet to come • I always feel that as an Indian why can’t we be the

best • There must be a continuous transaction with the

society under which I operate However, strong driving forces do not always bring success. I grew up predominantly during pre-91 era. We had limited resources and hence ability to take up challenges was less. With the opening up of the economy, various opportunities started knocking at our doors and thus we progressed faster. Failures still remained as a great teacher in my life. One point is very relevant - the definition of success changes from generation to generation. We must appreciate that.

“..the definition

of success

changes from

generation to

generation…”

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Tell me about a leadership position that you enjoyed the most? Why? 22

I had the good luck to work as a CEO/MD for over 18 long years. During this period the most enjoyable and rewarding experience was to transform a sick PSU to a vibrant and profitable MNC. This process provided me a great learning - how to change the mind-set of the people. One very challenging issue was to convince the leftist trade unionists about the fruits of privatisation! There were cultural issues, communication issues - all providing challenges.

“One very challenging

issue was to convince

the leftist trade

unionists about the

fruits of privatisation! ”

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I believe that Indian Rubber industry could grow @7% CAGR during the next 5 years, thereby USD 14 Bn may touch 19 Bn. Similarly as far as Indian exports of rubber products are concerned it may touch 4 Bn, thanks to some recent govt. initiatives. The demand growth could be maximum in automotive sector - tyre and non-tyre rubber products. However, due to shift of energy sources from conventional to non-conventional, the rubber products sector depending on usage of fossil fuel may not grow at the same rate.

“Indian Rubber industry could grow

@7% CAGR during the next 5 years”

Indian rubber industry has a turnover of around USD 14 Bn with exports touching USD 2.67 Bn. Where do you see this in next 5 years and which subsector will have the most significant growth?

33

©2015 - Published by Rubber Machinery World. http://rubbermachineryworld.com

Apart from serving the interests of Indian Rubber Industry, you have also been a successful business leader of a leading MNC business brand in conveyor belt industry. Since you started, what have been the major changes in your business ecosystem? And how have you repositioned yourself against the challenges to sustain your company’s leadership position in the conveyor belt industry?

44

My 18 years’ experience in conveyor belt industry (till Sept.’13) is a mixed one. The growth was achieved primarily in correctly understanding the intrinsic needs of the customers early. Once that was mapped, then we could mobilize all the available resources at a fast pace in meeting them. The manufacturing process was re-designed to make it customer centric. And finally improving the core competence of the team members through series of HR initiatives in order to continuously accept and win challenges. The company’s leadership position was achieved by networking with all the stakeholders as per the business need.

“The growth was achieved

primarily in correctly

understanding the intrinsic

needs of the customers

early”

©2015 - Published by Rubber Machinery World. http://rubbermachineryworld.com

What kind of technological improvisations had you bought in to your business? Was this sufficient?

55

By being part of a MNC, we always had the opportunity to obtain continuous exposure of a world-class technology, whereby the customers always found the winning products from the company. Be it application issues or environmental issues or capex issues - we could always provide a workable solution. We always believed that improvement was a continuous process; hence the question of ‘sufficiency’ did not arise.

“(Indian

entrepreneurs)

are not equally

informative of

what is possible

within the

country ”

66 I know you have travelled widely and visited many rubber goods manufacturing plants. What is the level of awareness about developments in Rubber Machinery and production technology today in India? Is it different globally?

Now a days the Indian entrepreneurs are travelling outside India quite a bit. They have a fair amount of knowledge of what is globally available. But they are not equally informative of what is possible within the country. It could be a good idea that Indian Rubber machine companies may jointly undertake to showcase to Indian entrepreneurs their capabilities by organizing pan India road shows. This would also help them to understand their customers need.

©2015 - Published by Rubber Machinery World. http://rubbermachineryworld.com

77 Today you also consult clients in rubber industry. Is the machinery industry in India currently meeting your client’s technology requirement? Do they import machinery? If yes, how do you feel this gap in technology be bridged over next 5 years?

The Indian Rubber Machinery manufacturing industry need to grow in terms of scale, cost competitiveness and quality. Chinese machines with comparable quality are still cheaper. The ultimate customers have more reliance on American/European/Japanese machines, equipment and process, though these are expensive. We definitely need to bridge this gap. Perhaps many companies are trying to manufacture all the major machines as a package deal. Instead of that, we need to focus on mixing, calendaring/extruding, curing press etc. Technology tie-up/equity partnership with American/Japanese companies may help Indian companies to achieve world class standard during the next 5 years’ time. In this direction the ‘Make in India’ initiative, Mumbai-Delhi Economic corridor could provide an excellent opportunity.

“The Indian Rubber

Machinery

manufacturing

industry need to grow

in terms of scale, cost

competitiveness and

quality”

©2015 - Published by Rubber Machinery World. http://rubbermachineryworld.com

88

“National Policy on

Rubber (NPoR) is an

excellent initiative in

addressing various

issues of the

stakeholders -

though sometimes

these are

diametrically

opposite.”

Rubber sector in India has grown to over 6000 units and is today a highly labour and energy intensive sector. Employing over half a million skilled manpower and many unskilled, what difference do you see the National Rubber Policy making to the stakeholders including the rubber machinery sector?

National Policy on Rubber (NPoR) is an excellent initiative in addressing various issues of the stakeholders - though sometimes these are diametrically opposite. Definitely issues related to Rubber Machine industry must also be highlighted as they are also a stakeholder. Handling skill level of a labour intensive industry like Rubber is a challenge. However, under the NSDC umbrella we are quite active in sectoral skill development initiatives under RSDC. This would help sustaining the growth momentum as mentioned earlier.

©2015 - Published by Rubber Machinery World. http://rubbermachineryworld.com

99 Currently, you play a very key role as a strategic mentor to CEO’s and also involved in financial sector. SME’s today starve due to lack of “timely” funds and this has been the case in the past too. No change. Is this situation improving? Is there something that SME entrepreneurs can proactively work on to attract funding?

I agree that finding fund for growth of SME sector continues to be a problem. Banks have their issues like - mounting NPAs, high cost of operation etc. Similarly SME sector has their own problem of organizing collaterals and proportionate equity contribution. Various schemes of govt. are also not known sufficiently to the entrepreneurs. In this regard Industry associations may take a leading role in facilitating the process. The financial conditions of many state governments are weak and uncertain- as a result they are able to meet their own commitments. Actually a sustained work is necessary during the next 5 years in order to improve the lot. The Indian rubber industry is dominated by SME sector, hence such improvements can only ensure growth of this sector.

“a sustained work is

necessary during the

next 5 years in order to

improve the lot.”

©2015 - Published by Rubber Machinery World. http://rubbermachineryworld.com

1010 Great! And one last question, what would be your advice on machinery to your clients and entrepreneurial business leaders in rubber industry?

The Indian entrepreneurs must accept that only by adopting a higher degree of mechanization they would be able to improve the quality and reduce cost. However, they are somewhat uncertain about the skill level of their own people- Blue and white collar. There has to be an engagement program involving all the work force. There has to be a low cost mechanization program. If one looks at some of the successful SME rubber companies, this point would be well established

“Only by adopting

a higher degree of

mechanization

they would be able

to improve the

quality and reduce

cost.”

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©2015 – Interview Published by Rubber Machinery World in July 2015.