Ever since cousin Navroze Godrej, son of Chairman Jamshyd Godrej, relinquished his executive role at G&B in 2017, Nyrika Holkar, 38 has been in charge of the Rs 11,500 crore engineering giant. Nyrika's mother Smita Crishna is the sister of Jamshyd Godrej and owns a fifth of the Godrej empire. Nyrika herself is married to Yeshwant Rao Holkar, the scion of the erstwhile royal family of Indore. She talks to Nevin John about transforming the century-and-a-quarter old firm through customer centricity, digitisation and new technology:
In 2011, the Godrej Group announced an ambitious target of 10 times revenue growth in 10 years. Today it seems group companies are separately pursuing targets. What are your thoughts?
The 2011/12 exercise was a group-wide direction setting for businesses to determine the quantum of investments needed and have a strategic focus for the coming decade. It was a longer-term view rather than the conventional three-year strategic business planning model. In some businesses, we looked at strengthening our play in international markets, while in others, we thought about diversifying into adjacent businesses.
Since G&B is a diversified conglomerate, business realities and industry dynamics for each business segment are vastly different. Some are long cycle and dependent on government orders while others are short cycle businesses that work with private sector companies and can be more agile to scale. So, some businesses grew faster than others. The G&B Board felt that a one-size-fits-all approach could not work for such diverse businesses. It was important to have separate growth targets for each business to be in sync with market realities.
Godrej has transformed a lot in the last 10-15 years, ever since Adi Godrej's children Tanya, Nisaba and Pirojsha, started leading operational responsibilities. How is transformation and innovation guiding G&B?
Transformation has been a way of life at Godrej Group since 1897. Each generation contributed in different ways to continue the journey, which helped us bring the best of India to the world. In the 21st century, we have developed and built the world's tallest CCR Reactor for a nuclear power plant, helped ISRO launch hundreds of satellites using our launchers and thrusters as well as contributed significantly to India's landmark missions to the moon and Mars.
Whether it is indigenisation of components in the global supply chain for medical equipment, furniture and appliances, new opportunities in defence and aerospace engineering or a seamless omni-channel retail experience for our furniture and furnishing brands, we remain optimistic about the India growth story. Our businesses are focused on leveraging these opportunities.
G&Bs revenues are Rs 11,500 crore. By when will the company be able to reach Rs 25,000 crore size? How do you plan to improve margins?
We do not publish forward-looking revenue or growth estimates. However, pre-Covid, we were expecting double-digit Y-O-Y growth in top line and bottom line. While Covid impacted demand for some of our offerings, it also opened new opportunities with the government and desire among consumers for Indian goods and services.
G&B wants to tap growth opportunities in science, ecommerce, healthcare and technology... How will it turn the ideas/proposals into viable business opportunities?
There are opportunities in line with current trends that play to our strengths. One is Atma Nirbhar Bharat, which focuses on domestic manufacturing in key sectors. . The Godrej Tooling & Ordinance Factory in Chandrapur has collaborated to develop an indigenous automated assembly for Pinaka rockets. Our precision engineering business delivered key systems like the Fuelling Machine Bridge and Carriage for the Kakrapar Atomic Power Plant and the aerospace team made actuators in collaboration with ADA/DRDO for the LCA Tejas.
Responding to the pandemic, our aerospace business stepped up to the challenge of manufacturing 3,000 electro-magnetic valves with DRDO. It is a critical component of ventilators for which we were reliant on imports. This underscores our manufacturing expertise and capabilities. Our Interio business makes multi-use furniture (which can convert a living room into a bedroom or a dining room without compromising on anything) and this solution can be used to fit out home offices. Our appliance & security businesses have started making ultraviolet sterilisers for items like cash, keys, mobile phones.
How are you planning to transform the core business segments to increase customer reach? How is G&B changing products with new technology, competition and aspirations of consumers?
Appliances, Interio, locks and security are our consumer facing businesses that serve 100 million consumers. In these businesses, we are leveraging digital technologies to enhance reach through our own ecommerce as well aggregator sites. We have invested in enhancing collaborative digital platforms. We believe ecommerce will play an important part in our customer outreach.
Interio B2C, Script, India Circus and Appliances ecommerce platforms are operational and we believe they will contribute significantly to the bottom line. We are trying to create more channels of engagement with consumers and our online customers through webinars; our furniture design and ergonomic experts have been helping customers adjust to WFH with their current furniture for example.
On the B2B front, our warehousing, office products, appliances, industrial products and project businesses help us indirectly reach 500 million Indians. The appliance business is trying to help its dealer ecosystem digitise 25,000 offline retailers to have Facebook/Google Business Pages which will allow them to contact consumers through Whatsapp to discuss, negotiate and conclude the sale. This will enable consumers to access product information and allow them to transact with their local retailers digitally. We have introduced a video-assisted live demonstration from the brand's store-based advisors, supplemented with a payment gateway, to facilitate remote selling. For service, we have adopted mobile apps to enable field engineers and consumers to access client needs, maintenance history, schedule customer visits, and so forth.
Our businesses have put additional effort to extend the B2B product portfolio from hospital furniture to appliances on the government's GEM portal to make it easier for government and PSU customers to understand the products we offer.
We have re-oriented our digital footprint by launching a revamped godrej.com with better content and curation so that customers can understand our B2B and B2C businesses better and engage with us easily. The B2C businesses are building a portfolio of smart products to address changing preferences for digital and smart locks, smart mattresses, multi-purpose furniture and real-time home security systems which consumers can monitor remotely.
What are your global expansion plans?
We have been expanding our global footprint in various businesses. The process equipment division manufactures the entire range of custom-built critical process equipment for global end-users in oil & gas, refineries, petrochemicals, chemicals, fertilizers, power and water across the world. We acquired Yuba and Ecolaire brands in 2018 for feed water heaters and surface condensers which enabled us to license technology for global operations.
We have small manufacturing facilities in Oman and Vietnam. We export office furniture to ASEAN countries and Australia and are now expanding to the United States too. Our security solutions business focuses on West Africa. The warehousing business has been globally competitive over the past six decades.
Defence and aerospace is fast emerging as a major vertical. Will Indias import reduction help the industry? What are major steps in aerospace engineering?
We have been investing in defence and aerospace over the past two decades. We have manufactured engines for space vehicles, missiles and missile launchers, apart from equipment for ground forces. Today we supply civil aviation components to global aviation giants such as Boeing, GE, Honeywell and Rolls Royce.
Import reduction will enable Indian manufacturing to leverage licensing for global operations and open up opportunities to build capability. We are gearing up to pursue these. We have long standing partnerships with DRDO, ISRO and many others and they have always recognised our contribution.
How does Godrej Infotech contribute in tech transformation?
Godrej Infotech has partnered with G&B businesses to provide for their IT requirements, including back-office systems for customer interactions. From supporting the lifecycle of customer engagements to creating effective supply chains and optimal processes, they have the experience to drive seamless connectivity from the shop floor to the board room. They are helping drive digital transformation across businesses at G&B.
Their solutions cover all consumer retail sectors like fashion, supermarkets and multi-brand outlets, providing tech-driven solutions across supply chains. They are building integrated IT infrastructure solutions in the cloud with Database, Applications, Mobility, Analytics, and CRM using our expertise in IoT, machine learning and data science. We believe businesses will increasingly leverage digital to enhance their systems, processes and customer experience proposition.
What are the major learnings from G&B? How were the last five years in business?
It's been a steep learning curve. Understanding and appreciating G&B's diverse businesses and complex interlinkages was challenging. I tried to learn the contours of each business, our sustainable manufacturing processes, the 600 million consumers that businesses serve, and the competitive landscape.
One learning has been on how to understand customer preferences, pain points and refine insights to meet expectations. We realised customers were aware of the perils of e-waste and wanted to dispose of used appliances and electronics responsibly. Our e-waste collection scheme resonated with customers and we collected over 15 metrics tonnes of waste and target to increase this substantially over the coming months. Since customers need a convenient and accessible retail experience, we complemented our physical retail presence for furniture and furnishings with an extensive online presence across our e-commerce platforms and aggregator sites.
Over the last three years, we have put a real-time risk management system in place, so our business leaders have a clear understanding of liability at any given point in time, using live dashboards.
The uncertainty bred by the pandemic has helped me understand and appreciate the core engineering strengths of G&B and look at emerging opportunities we can leverage over the short and medium term.