EXECUTIVE INTERVIEW

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Voltas Limited has strengthened its brand equity from being seen as just a projects specialist to an end-to-end cooling and engineering solutions provider. Under Sanjay Johri’s guidance, the company is thriving on both fronts.

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hen Sanjay Johri joined Voltas Limited as Head of Strategy in 2004, the room air conditioning part of the business was struggling, having made a loss twelve years running. His solution was one that not only solved a business problem, but also positioned the company as a thought leader and changedW the whole perception of it in its Indian homeland. As Sanjay says, understanding the customers was the key, and when he started with the company he sought to find out: why consumers weren’t buying air-conditioning, why the industry was in the doldrums, why Voltas was number six in terms of market share, and why the company was losing money.

“We found that there are two reasons why people don’t choose air conditioning: affordability of the air conditioner itself; and also the running cost, or the cost of electricity,” he explains. “That’s why there is such low penetration of air conditioning in . Compared to a country like China — which sells thirty- five million air conditioners to homes every year — India only sells four million. As living standards and affordability go up, this will increase significantly.”

With a better understanding of its consumers, Voltas’ turnaround came through product differentiation, namely the introduction of energy-efficient Name Sanjay Johri Company Voltas Limited air conditioners, even before the government had introduced energy efficiency (Part of the ) norms. “The entire industry was in some degree of difficulty because the market Position Managing Director HQ , India was small and there were several companies competing with each other,” he Employees 5000+ says. “Margins were low. Nevertheless we took this as an opportunity; we

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developed new energy efficient air “I think it’s also socially a success that Sanjay points out is based Airports, the Delhi and Chennai metro conditioners and priced them a little responsible that we are on integrity. “We don’t cut corners, and stations, rural electrification in Madhya higher than the normal air conditioners. promoting energy conservation we give back to the community. These Pradesh, and the Plant at This actually became our USP, and in are the intrinsic qualities of our Kalinganagar. These projects link air 2007 — the first year of introduction in India.” - Sanjay Johri company. We act in a straightforward conditioning, water treatment, — sales went up by almost 40 per cent.” manner, treat our employees decently, plumbing, electrical work, irrigation and and we do the right thing with the landscaping — a one-stop-shop of That was the turning point for Voltas, ahead of all the multinationals from communities surrounding us.” engineering services and solutions. “We said to the consumers that you save Korea, Japan, China and the West, with money and the nation saves power; that a market share in excess of 20 per cent. This integrity stretches beyond Both globally and in India, Sanjay sees was our advertising slogan. I think it’s employees and consumers to partners massive opportunities ahead for all also socially responsible that we are Further innovative thinking in the as well. Despite becoming more global of the business’s interests. “There is promoting energy conservation in unitary cooling products business has with its supply chain, there are some opportunity ahead, and challenges, India,” explains Sanjay. “The solution led to Voltas expanding its air partners that have been with Voltas for and the fittest will survive,” he states. — being the pioneers in energy conditioning portfolio to selling air over fifty years, such as the textile And with Voltas’ strong history of efficiency — actually gave us the coolers in 2016. “Air coolers are to air machinery business, Lakshmi Machine innovation and integrity, it is certainly required fillip.” conditioners what two-wheeled vehicles Works. In Sanjay’s words, “They trust us looking like the company will be up are to four-wheelers,” explains Sanjay. with their entire sales and service, there as one of the fittest. Thereafter, from time to time, Voltas has “Air conditioners are more expensive which is a business of 2,000-odd crores

taken the lead in launching innovative because they are more comfortable. Air worth of machinery being supplied “Our long-standing partnership with Voltas has products and solutions. In 2010, it coolers by contrast only cool the air by through us.” successfully evolved into a collaborative supply chain approach for forecasting, planning, execution launched its ‘Sensible Cooling’ program, five or six degrees, but they are more and continuous improvement, leading to higher affordable. People migrate from having For Voltas, along with its core business throughput year-on-year, while maintaining which provided general guidance to cost efficiencies” - Vikram Manuskhani, Head consumers about energy conservation. fans — ceiling fans or pedestal fans in of air conditioning, the other big area 3PL, DIESL In 2012, came the ‘All Weather ACs’: their home — to having air coolers; showing promise is water. “With the machines that cool in summer, de- because air coolers cost about 6,000 droughts and shortages of water in humidify in the wet monsoon season, rupees whereas air conditioners are India, the water treatment business is and provide heating in winter; and in more than 20,000 rupees.” going to become very big in the future,” 2016 it introduced its ‘All Star’ inverter says Sanjay. Voltas is already investing in air conditioner range. If these solutions have been innovative, new water treatment technology and then the measures of success are largely project management solutions; however, “In the minds of the customers, we are traditional, but with a greater focus on with legislation on water tariffs and an Indian company that understands air customer satisfaction. “As in every other pollution in its infancy, and broader conditioning and therefore brings company the ultimate measures are political challenges to overcome, this is innovative solutions suited to their sales growth, market share, revenue a business that will come to fruition in requirements; including saving money growth, profitability and management of the long term. and cooling efficiently,” says Sanjay. working capital. These are the universal measures which we apply across all The ‘complete solution’ engineering part Today the Voltas brand is available industries and all businesses. But there of its business also continues to thrive. across many cities and in various retail are many intermediate measures also, Voltas’ projects division has worked on stores; from multi-product, multi-brand like brand recall, brand equity and completing MEP (Mechanical Electrical outlets to small single product air customer satisfaction.” and Plumbing) jobs on prestigious conditioning outlets. The product range projects including the Burj Khalifa is very wide, including products with Mainly due to its customer-centric Tower in Dubai — which, at 800 metres different colours, shapes and energy approaches, the company grew its high, is the world’s tallest building — efficiency levels, and the company is revenue by 13 per cent in the April to which took five years to build; hotels in backed by a decent customer service June 2016 quarter, which was high in a Oman; and malls, hospitals and chain of franchises that span across the tough economic climate; and its profits stadiums in Qatar ahead of the 2022 country to take care of customer have grown much faster. Quite rightly, World Cup. Back home in India, Voltas requirements. As Sanjay says, this is the employees of Voltas are proud of the has worked on several prestigious what makes Voltas the market leader, company’s success in their own country, projects like the Kolkata and Chennai

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