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Executive Interviews: Interview with Anand Sundaresan on Managing Troubled Times
March 2009
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By Dr. Nagendra V Chowdary
As the MD of a global company
having its operations across various
countries, what comes to your mind
as an answer to the present economic
scenario?
It is true that the globalmeltdown has
had a serious impact on the Indian
manufacturing sector. The
management and CEOs of the various
companies in the sector have limited
control over the overall scenario.
However, I believe that these times of
crisis can be used well to the
advantage of the companies, as this
gives us an opportunity to scale up
efficiency levels, reduce wastage and
eliminate certain wasteful practices.
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This also gives the companies, the
opportunity to streamline production
activities and ensure financial
discipline. Instead of worrying about
the challenge that the meltdown
presents, it is imperative that we look
at the prospect of benefit that exists in
this situation. Corporates need to
plan their activities a lot more
strategically and adopt a more
proactive and reactive approach.
Indeed, this is a good time for many
corporates to get their backlog orders
cleared and update their order books
accordingly. -
Incorporated in June 1998,
Schwing Stetter commenced its India
manufacturing operations in 1999
and as of today it is an ¤850 mn
concrete machinery manufacturer.
Your company’s manufacturing units
exist in 12 countries and the one in
India takes care of the demand of the
Asian market. As Head of India
operations how far themanufacturing
sector in general and construction
industry in particular has been
impacted because of the economic
downturn?
The global recession has definitely
adversely affected all industries and
the construction industry is no
exception to this. Broadly speaking,
the construction industry can be
classified as project construction
sector, realty sector and ready-mix
sector. The meltdown has severely
affected the realty sector, which in
turn, has badly affected the ready-mix
sector. Recent statistics show a radical
decrease in the number of housing
registrations made on a daily or
monthly basis. Similarly, the
substantial increase in interest rates
has led to a drop in the number of
housing loans that are being
processed by banks. The IT and BPO
sectors have also been severely
affected by the meltdown, which has
led to a decrease in the construction
of IT parks and software buildings.
Construction of shopping malls has
also come down drastically and many
construction projects are being
delayed, deferred or even cancelled in
the face of the current cash crunch.
All these factors, cumulatively, have
impacted the construction equipment
manufacturing industries. The
revenues of some of the equipment
companies, in fact, have dropped 30-
35% below the revenues that they
made last year. The project construction sector, per
se, has not been affected badly yet, as
the ongoing projects have not been
halted, fortunately . However, if
newer projects and contracts are not
announced, this sector is also likely
to be affected. Also, financial closure
has not taken place in many of the
projects as the bankers have become a
lot more cautious and the projects are
being scrutinized more diligently.
Construction equipment is
predominantly funded by banks and
NBFCs and these institutions are
choosing their clientele a lot more
carefully. -
How long do you feel it will take
for the industry to recover?
This is a very difficult question to
answer. However, my personal
opinion is that India will recover
faster than other economies in the
world. As a guestimate, I would say
that this situation could continue at
least for a year, before the recovery
process slowly starts. It is something
like a world war, where, everything is
destroyed and the entire nation has to
be rebuilt brick by brick. It also largely
depends on the government in
implementing new projects and
awarding new contracts.
1.
Troubled Times Case Study
2. ICMR
Case Collection
3.
Case Study Volumes
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