Monday, February 11, 2013

‘‘Japanese domestic market has reached to near saturation”

Satobumi Taguchi, Deputy General Manager (Paper Trade Dept.), Overseas Division, Nippon Paper Group, Japan, talks to B&E’s Gyanendra Kumar Kashyap & Ashutosh Harbola about Nippon’s vision 2015 and its overseas expansion.

B&E: What prompted Nippon to integrate four mills in the Hokkaido region? Is it about improving the cooperative structure or just a strategic move?
(ST): Well at present, there are four plants, and Nippon Paper Industries decided to integrate three mills, namely Asahikawa Mill, Yufutsu Mill and Shiraoi Mill operated by the company in the Hokkaido area.There was only one manager who was managing the whole facility at the respective plants. Subsequently, it became a problem as we had to focus on different plants, too. And through this integration move, the managers now can share information between each other. In addition, it’s becoming profitable for us and we are certainly leveraging from it.

B&E : In 2008-2009, there was a drop in demand of paper coupled by digital documentation. How will the paper industry cope it?
(ST): The market is shifting from the holistic music players to scratch iPod or iPad. However, the best part for Japan is that the economical condition is slightly better than the general ones. The import paper also comes to Japan. That’s why Microelectronics Technology Inc. (MTI) has a holding and this trend can’t stop. Our goal is to move beyond domestic market by 2015. Despite having a big market outside, the domestic demand was not there earlier. We want to expand our overseas plans, and India is certainly the high growth potential market. Unfortunately, there are not many manufacturers of paper from small to medium market.

B&E: What is your 2015 vision and what figures are you looking to boost your business?
(ST): The Japanese domestic market is near stauration. Our main focus will be to become one of the top five players in the global pulp and paper industry by accelerating our overseas business development to achieve growth. Also, we would aim at 30% of our revenues coming from the overseas market compared to the present 10% level.

B&E: What kind of investments are you looking outside Japan?
(ST): We have already spread our wings in Australia, China and Taiwan. As far as India is concerned, we do not have any expansion plans right now, but within a year or two we look forward to expand our business. India is an important market for us, it is a high potential growth market. In addition, it is one of the fastest growing market and has a lot of potential and the paper domain is very strong here. There are not many producers, but the demand is comparatively high.

B&E: Do you have any plans to tie up with the local players like the Savant group to enter in the Indian market?
(ST): Looking at the current industry dynamics in India, tieups would certainly make a lot of sense. And lots of debates are going on the issue. But to cater to the needs of Indian market and to be counted amongst the formiddable players in the growing Indian market, we will have to think of partnering with local players sooner or later.

B&E: Digital process outsourcing are digital in nature. Don’t you feel such processes are a threat to the paper and pulp industry?
(ST): The use of such process is increasing among the business fraternity. But you need a leaf of paper as a proof of any document and that’s where you take a print for the same. Globally, numbers show a rise in the consumption of paper, even when there are CD-ROM and hard disc. So, I won’t consider it as a possible threat.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

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Thursday, February 7, 2013

J. Patrick Doyle, Global President & CEO, Domino’s Pizza

Global President and CEO, Domino’s Pizza,8 talks to b&e’s angshuman paul about the various peculiarities that personify the company’s India operations

B&E: Domino’s Pizza has been into this country for more than a decade. The initial years were slow growth years. Has there been any change in the growth momentum after that?
Doyle: Of course during the initial years, like any other MNC, we too had teething problems and it took us time to understand the Indian market. But that kind of a situation lasted just for two years after we entered India in 1997. Since the early 2000s, we have grown at a very fast rate.

B&E: So what potential do you see in the Indian market? Especially in terms of contribution to the global turnover of the company, where do you want to take the Indian venture?
Doyle: During the last two to three years, India has actually become the fastest growing market for us. India is the most important Asian market for us and Domino’s sees a huge opportunity in India for pizza and pasta. And in terms of contribution to the global turnover of the company, India is amongst the top 10 earners for Domino’s. Currently, India contributes to around 1.5-2% of Domino’s annual global sales – we expect to take it further to a double digit figure. By 2014, we expect India to be among the top five earners – and our concrete plans to achieve this goal are in action.

B&E: The quick service restaurant (QSR) market in India is growing at 25% by CII estimates, and categorically in pizzas, apparently 25,000 pizzas are sold per day in the various corners of the country. Where does Domino’s stand in this? And what strategy are you implementing to cash in on this fiercely growing market?
Doyle: We currently enjoy the leadership position in India in the home delivery segment and we’ve always believed in enhancing this too. This [home delivery] is the USP of our brand and we will retain this further. But yes, as I mentioned, in Indian market, there are lots of new opportunities to explore. For example in the tier II cities there are new markets and not many players are present there. Now, about 20-25% of the revenues for our company comes from tier II and III cities. In the future, therefore, we would be expanding more into such markets.

B&E: Are you referring to your retail presence in these cities? What are your actual retail penetration plans?
Doyle: We have 300 stores in India and in total 9000 stores across the world. In another three years, our target is to have 500 stores in India, apart from the aim of entering newer cities and markets. There is still a huge untapped market in the country to be exploited.

Read more......

Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.



 
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EXCLUSIVE : WAR ON TALIBAN

Shahbaz Bhatti, Minister for Minorities, Pakistan

On being minority in Pakistan
The government believes in social justice, equality and humanity. It wants to offer democratic choice to all. We did not have a democratic regime for many years and therefore we had problems. The present government believes in the concept of Islam that guarantees the rights of the minorities. The present government has taken steps that is not only historic but ensures protection of minorities. For the first time, this ministry has been created separate from the ministry of religious affairs. For the first time, two members of the Hindu community in the National Assembly have won on the general seats.

On blasphemy law and legislations
We are changing laws to ensure proper registration of marriages for Hindus and Christians. The blasphemy law is being reviewed. The changes will ensure it is not be misused to harass minorities. We are also bringing in a minority protection bill. We are consulting political parties and community leaders for inputs. In the blasphemy law, we have decided that before the registration of FIR, there will be a thorough inquiry. Also, if somebody levels a false accusation, the complainant will be charged with perjury.

On minorities being targeted by Taliban
The atrocities on minority communities should not be taken in isolation. This is a mindset we are fighting against. This mindset has killed more fellow Muslims than minorities. Government has taken action against such people. We are sorry one of our Sikh brothers got killed, but we managed to free several of them.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.


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Tuesday, February 5, 2013

When the ‘ketal’ goes boiling...

An unknown Indian firm Dorf Ketal buys up the global catalyst business of DuPont Chemicals! Why isn’t everybody this side of the Atlantic celebrating, asks B&E ‘s Angshuman Paul

Seriously, how many of you had ever heard about Dorf Ketal? Considering that it is an Indian specialty chemicals company worth $220 million (revenues for year ending March 2009; targeting $300 million by 2010-11), you would understandably be quite reluctant to reply in the negative.

However, it isn’t entirely surprising that the company operates in relative obscurity. Besides the fact that it is a B2B player, the company has followed a very conservative model for growth and diversification. Consider this – after eight years of their corporate journey, the company decided to diversify (in 2000). And then, unlike other companies, Dorf Ketal hasn’t believed much in the concept of branding as a B2B company; even as world famous B2B companies are beginning to realise its criticality. And they intend to keep things that way. “Since we are in the B2B arena, mass consumers are not expected to know about us, but our target audiences like Reliance, IOC et al, know about us” argues a senior official from Dorf Ketal.

Nevertheless, things seem to be changing during the last decade for the company. They have grown by more than 30% during this period by cashing in on acquisitions. A bird’s eye view at the activity of the company during the past decade tells us that in a time span of eight years, the company has made at least five acquisitions to leverage potential synergies. For instance, when it acquired Sanmarg Specialty Chemicals-owned Intec, it helped Dorf Ketal to diversify into organic products like titanates and zirconates that have a strong demand in industries like oil & gas, paints & coatings, printing inks, industrial sealants, corrosion protection & emission reduction.

And now the name of Dorf Ketal has suddenly gatecrashed into notice with the acquisition of the global catalyst business of DuPont Chemicals and Fluro Products for around $40 million. The deal has been funded through debt and equity funds injected by the promoters. This particular venture of DuPont minted revenue of $50 million during 2008.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
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Sunday, February 3, 2013

Losing the thunder

Chauhan sold off Thums Up rather desperately

In the 1970s, the Coca Cola Company decided to abandon operations in India. To capitalise on the growing market, the then Parle brothers, Ramesh Chauhan and Prakash Chauhan, rolled out Thums Up, Limca and Gold Spot. Thums Up enjoyed a monopoly, overshadowing other players. Pepsi and Coke reentered in the 1990s but found it tough to compete with Thums Up (40% market share). Both offered to take over Thums Up. Fund constraint was a major hindrance for the Chauhans and then there was the challenge of creating a wide network to compete with the MNCs. Affirms Ramesh Chauhan to B&E, “It was difficult to create the franchise model required in the carbonated drinks business. And I had no other option.” Finally in 1993, Thums Up was sold to Coke for a mere $60 million. Coca Cola later acquired Limca too, and used these brands quite effectively to corner Pepsi.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
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