August 2011 | Sangeeta Menon
Building on the positives
Engineering solutions giant Voltas has entered the new financial year with a renewed focus on green practices and building internal efficiencies. Sanjay Johri, the company’s managing director, talks about the year that has gone by and the way forward
Last year, our consolidated turnover went up by around 9 per cent, from Rs47.8 billion in the previous fiscal to Rs52.1 billion, but our net profit declined by 6 per cent to Rs3.57 billion. Of our several different business clusters, some performed better than the others. The turnover of our unitary products business group — the room air conditioner and commercial refrigeration business — grew by 37 per cent, driven by the strong rebound in consumer sentiment. It’s a highly competitive segment, with big multinationals for competition, but we continue to retain the second position in the market.
Yes, on the plus side we did have many important achievements. Our water management business witnessed a significant increase in new order bookings. There was a healthy 40 per cent growth in new order booking in domestic projects, both air conditioning and electrical. We completed several iconic projects, such as the F1 race track and Ferrari World in Abu Dhabi, and nine of the 15 major stadiums for the Commonwealth Games in Delhi.
Dubai was badly affected by the global meltdown. In addition to a dip in new business from the market, some ongoing projects failed to come to a satisfactory resolution. Fortunately, we were aware of the impending slowdown and had consciously started diversifying into markets such as Abu Dhabi, Qatar and Bahrain, which offered several opportunities.
The room air conditioning market has grown at over 25 per cent per annum in recent years and will continue to do so. We plan to feed the growing Indian appetite for consumer durables by widening our portfolio of products.
The challenge we are facing is that a lot of engineers are wooed away by the information technology sector. The other challenge is that a large number of fresh engineers from various technical institutions need to be put through extensive training when they join us. The third challenge is the high attrition rate we have to cope with, and this is as high as 19 per cent in our industry.
We would not like to put this into a mathematical grid, because there are many businesses that we are involved in and many different trajectories. We have internal targets and are working towards achieving those.
This interview is a part of the cover story of the August 2011 issue of Tata Review in which ten Tata CEOs talk about the past, present and prospects of the companies they head: