Chemical transformation
February 2011 | Gayatri Kamath

Tata Chemicals is reinventing itself. About seven years ago, the company had embarked on a global asset-buying spree that culminated in the home-grown chemical company becoming the world's second largest soda ash manufacturer with plants and facilities in the UK, the US, Africa and Europe. The Tata Chemicals of today is poised to grow along entirely new directions, most of which are completely organic in nature. In an interview with Gayatri Kamath, R Mukundan, who took over as managing director just two years ago, describes the company's new vision and his views on the role of a corporate leader.

What led to the company entering so many new fields?
At every stage the company has redefined the boundaries in which it operates. About two years ago, we recrafted our vision to be serving society through science. Though we started our life as a chemical company, there is a lot of intersection with other sciences. We were also looking at new avenues for growth.

We believed that chemistry would make a big impact at the intersection of chemistry and physics (nanotechnology) and at the intersection of chemistry and biology (biotechnology). Our Innovation Centre in Pune is focused on these areas and one well-known outcome of the research being done there is the Tata Swach water purifier. In addition, we have an agritechnology centre in Aligarh from where we derived a new line of business called customised fertilisers that are designed for a specific soil and crop.

A couple of years ago, we identified what we call the FEW areas of focus — Food and fuel, Energy and environment, and Water and wellness. We were already engaged in food through Khet-Se, Grow More Pulses, Rallis and our fertiliser division.

In the area of energy and environment, we created a completely new business line by focusing on flue gas treatment. Today we have a thriving business in Europe around Briskarb and the same business model is being used in the US. We also decided to engage with the biofuels space and invested in Jatropha and bioethanol.

In the area of water and wellness, the water purifier was one of the key products. We are also looking at nutraceuticals, as part of our wellness initiative.

We are building these businesses for the future. Five years from now, we may still not see the impact, but 10-15 years from now, some of these spaces will be quite big.

What are the critical challenges that TCL has faced?
The entire programme of climate change under Dr JJ Irani's leadership has brought sustainability to the centre of the table (sustainability being defined as concern for the environment and safety, health and care for the community and other stakeholders, while remaining focused on delivering value to shareholders). This is a very critical challenge but we decided that we would take a few knocks financially in the short term but in the long term we would concentrate on building a sustainable organisation.

The second challenge was the credit crisis two years ago. The time when I took charge was the month of 26/11; that was the worst quarter ever and we actually showed a loss.

In 2009 at a public meeting, one of the youngsters stood up and asked, "Will I have my job tomorrow?" And I replied, "Of course everyone will have a job." What we decided is that we will all take cuts voluntarily so that all of us can get through the crisis. We didn’t cut back on training, or expenditure on community or new programmes on sustainability. We put together a programme which focused on cash and profits. We took some hard decisions under this; for example, we shut down the Netherlands plant.

At the same time we continued to engage with customers exactly the same way as before. That worked very well and customers like Proctor & Gamble and Unilever came back to us. We have got awards as one of the best suppliers and our customer satisfaction scores in most markets have gone up.

In the end, the company managed to recover very quickly. We had to work at the grassroots to keep the morale of the team up. We faced the crisis and came out of it unscathed because our people were motivated to deliver.

The big challenge of the future is to keep the company relevant. As the world keeps changing, we need to remain a sustainable and innovative company, so that we can attract the best talent.

How has the responsibility of being CEO changed you as a person?
What one doesn’t realise until one takes this position is that you have the last word. That's a very big responsibility and it comes up suddenly. You realise only after a couple of decisions that they can't be reversed; there is no one to reverse them!

That responsibility almost forces you to begin to listen to signals even more closely than before. You need to learn to pick up weak signals early on. Even a small signal or issue could be a kernel of a big issue that can emerge later to impact the company. For example there were plenty of signals about the credit crisis which we didn’t pick up early on. One needs to be watchful.

There were times when I felt that we were not moving fast enough. But I now feel that one needs to be a bit more patient than one is, that being impatient can actually backfire. Having a good team around you always protects you from hasty decisions.

How has the leadership equation in corporate India changed?
When I joined this group, leadership was viewed as a position of power. But the view now is that leadership is about enabling people, and building an environment where you can unleash people's capabilities and deliver to the market. It’s about using authority to create an enabling environment. There is not one leader anymore, there is an entire leadership team that works.

How do you handle job pressures?
Just smile! You need to look at things that you can change, and those that you cannot change in the short term, and put them into two separate buckets. A lot of issues will take time to unfold. As long as you are in the right place and on the right path, they will unfold the way you want, but it’s going to take time. That realisation takes an immense amount of pressure off.

Also, the ability to switch off and self-energise is very critical, and one needs to take time off to build oneself back in order to be able to focus again on work. Being at the highest level of energy when at work is very critical.

Each person has a different way of doing this. I feel one needs to rest and be physically active as it keeps the mind and body in good shape. You need to have varied interests and your knowledge should be more than just work based. This enriches the mind and opens it to different possibilities.

Who are your most admired leaders?
Our group chairman Mr Tata is a living legend for all of us. It’s been a great learning to be able to observe how he manages people and issues. For me, one very inspirational figure is the father of our nation, Mahatma Gandhi, and along with him Nelson Mandela.

Chemical explosion

Tata Chemicals	Five years ago	2010
Turnover	Rs3,998 crore (2005-06)	>Rs10,000 crore (2010-11 yet to be declared)
Sphere of operations	India	India, UK, USA, Kenya
Core areas of business	Soda ash, soda bicarbonate; fertilisers; table salt	Soda ash, soda bicarbonate; fertilisers, specialty nutrients, crop protection, seeds; table salts, pulses, fresh produce; water purification; biofuels; environmental chemicals
No of people	3,306	4,656
The vision	Going global Investments in chemical companies: Brunner Mond (UK) Magadi Soda (Kenya) GCIP (USA)	Growing sustainable Investments in: Foods (I-Shakti pulses, Khet-Se fresh produce) Biofuels (JOil, Singapore) Water purification (Tata Swach purifier) Agri-inputs (Rallis India)