RNI No.35850/80; Reg. No. MCS-123/2015-17; Published on: Every alternate Monday; Posted at Patrika Channel Sorting office, Mumbai-400001 on every alternate Wednesday-Thursday `50

n ONE BELT ONE ROAD

n MODI’S THREE YEARS

n BANKING: PERFECT STORM

May 22-June 4, 2017 n AYURVEDA VERSION 2

Anil Agarwal Founder-Chairman Vedanta Plc

An Indian Giant Cairn’s merger into Vedanta creates India’s No 1 natural resources company Cover Feature Business India u the magazine of the corporate world The natural resources billionaire

here are stories told of the nation,” says Agarwal candidly. 65-year-old Anil Agarwal, “Don’t we have the right to use our group chairman, Vedanta Anil Agarwal puts own oil, gold, copper, fertilizer, etc?” Resources plc (listed in India on the global he asks. “We have to look at these in London) & chairman natural resources the swadeshi perspective. So, this is Temeritus of its Indian arm, Vedanta the genesis of my dream, to become Ltd. They say, in his early 20s, when map, with Vedanta a natural resource player. And, trust he first came to Mumbai from Patna, among the top 10 me, whatever I do, I do with a ‘pur- he barely understood English. The pose’. I tell all my executives: you only two words he knew were ‘yes’ producers must have a feeling about what and ‘no’. However, Agarwal relocated Vedanta is doing, it is for a specific abroad in 2003 and, as an n r i living purpose, it is for our society. If there in London (as he does these days), he not for satisfying personal needs,” is anything in what we are doing, has picked up a lot more of the lan- says Agarwal, who has a passion for you feel, will not be good for soci- guage, and can speak with passion mother earth. “If you look at how ety, please pause to rethink,” exhorts on the subjects closest to his heart – America was built, and I got this from Agarwal, while elaborating on the natural resources and the building of the Discovery channel, it doesn’t philosophy that has guided him. the nation, India. show any politicians, scientists or But, one word he hasn’t added to inventors, but they talk about the Dream into reality his vocabulary is ‘maybe’. This anec- industrialists, who have built Amer- Agarwal’s dream from the very begin- dote exemplifies his steely vision and ica – the likes of John D. Rockefeller, ning was to become a global natural determination. Nowhere has this J.P. Morgan, Henry Ford, Cornelius resource player. “You know we are been more in evidence than in his Vanderbilt and Andrew Carnegie. the only mining and natural resource takeover and turning around of a slew They speak about how their indus- company in India. Everybody feels of companies, including the latest, trial innovations and business proud to have a world-level natural Cairn India. A strong believer in the empires revolutionised modern soci- resource company originating from India growth story, Agarwal’s mantra ety. These are the people, Discovery his country. bh p Billiton says ‘I am is to use every opportunity that has channel says, who have built Amer- from Australia’, Axon says ‘I am from potential to create employment and ica, which was nothing. India has a America’, Vale says ‘I am from Bra- eradicate poverty. He envisions an huge culture and history of centu- zil’, Anglo American says, ‘I am from India self-reliant on its energy needs, ries. America had nothing and they South Africa’. Now, Indians can say, export-oriented, sustainable and a built the foundation on these five here is Vedanta, which is from India. socially responsible country. people. So, I findI ndia is probably in We want to have our d n a tested to And he has done it, leading from the very same situation – you need prove that we are an Indian com- the front, creating a R71,721 crore a political leader; you need a leader pany and are proud to be an Indian (post merger) conglomerate, which who can take the country’s trade, company,” he adds. Agarwal has now is one of the fastest-growing diversi- industry and infrastructure forward. completed the merger of Vedanta fied global metal and mining majors, Now is the time for India”. with Cairn, a company he bought in with interests in aluminium, zinc, “Earth is important; its contribu- 2012, which was a major step in the copper, lead, silver, iron ore, oil & tions are above the ground, as also direction of becoming a full fledged gas and energy. The group has opera- below the ground. Above the ground natural resource player. tions in India, Zambia, Ireland, Aus- is agriculture. I have undertaken this On 15 May 2017, the merged tralia, South Africa, Liberia, the UAE mission to explore natural resources, entity has come out with its cor- and Namibia. which are below the ground. They porate scorecard for the year ended “Vedanta, I believe from my heart, are also important and they help March 2017. While the revenues are is a company with a ‘purpose’; it’s to eradicate poverty and build the up from R63,920 crore to R71,721

u 30 u may 22-june 4, 2017 Business India u the magazine of the corporate world Cover Feature sanjay bora sanjay d e

u 31 u may 22-june 4, 2017 Cover Feature Business India u the magazine of the corporate world crore, the profit after tax has soared b sanjay by three times to R10,022 crore, as

against the previous year’s R3,553 orade crore. The other key financials show progress too – e b i d ta (R21,437 crore), cash (R63,471 crore) and net debt (R8,099 crore). Today, with a market cap of R1,14.308 crore, it is the eighth largest private sector industrial unit in India (excluding banks and tech companies) and the first to publish a tax transparency report. “The merger with Cairn India transforms Vedanta Ltd into a diver- sified natural resources powerhouse, anchored in India. The combined entity truly reflects our strong, diver- sified, low-cost portfolio with indus- try-leading volume growth from our well-invested assets. We are looking forward to an exciting 2017-18 and future years, with all our businesses Navin: the operations man operating at full capacities and cost efficiencies,” explains Navin Agar- has supplemented revenue growth. returns for all our shareholders,” adds wal, chairman, Vedanta Limited, In particular, record production lev- Thomas Albanese, c e o, Vedanta Ltd. who is the younger brother of Anil. els at zinc and aluminium were well- Albanese hails from Rio Tinto, where “Our strategic focus, to ramp up timed in an environment of strong he was c e o from March 2007 to Jan- production across the portfolio in supply side pressures on both com- uary 2013. zinc, aluminium, power and iron modities. Our cost management ini- “In less than three decades, Agar- ore businesses throughout the year, tiatives have helped us deliver strong wal has managed to build a diversified Exploration hydrocarbon potential of the technologies in North Amer- Rajasthan block. For this, one ica. The management team n one of the biggest buy- world. The first polymer injec- of the key hurdles was the non- acted swiftly to initiate a two- Iouts for a domestic com- tion at the Mangala field was clarity on exploration, and rev- pronged strategy to develop pany, Vedanta acquired Cairn achieved ahead of schedule enue share, in a development the tight oil & gas formations. India in 2012. The UK Cairn Plc in October 2014. Today, over phase of the block. The gov- The Vedanta group initi- had a business model of dis- 400,000 barrels of polymerised ernment, in 2013, clarified ated an ambitious appraisal covering oil, putting the fields liquid are injected in the field the exploration policy, paving programme for the tight in production and then hav- and the Mangala eo r produces the way for Cairn’s expansion. oil discoveries focussing ing captured the growth, sell- about 56 kboepd (8 per cent of In order to establish the full on Barmer Hill. The group ing to focus on new areas for domestic production). Buoyed potential of the block, Vedanta invested more than $100 mil- exploration by the success of the Mangala invested a capex of over $600 lion in order to test new frack- At the time of the acquisi- eo r project, the management million for exploratory and ing technology and assess tion, Cairn was at a nascent team is pursuing polymer flood appraisal wells and seismic the hydrocarbon potential. At stage of growth. One of the execution in the Bhagyam and data acquisition. The success- Barmer Hill, eight horizontal key projects Vedanta initiated Aishwariya fields. ful exploration programme wells were drilled. Every well was the commencement of the Over the course of the added 1.7 billion barrels of had about 10 fracs and, on enhanced oil recovery (eo r) six years since acquisition, oil or oil equivalent of hydro- an average, 2,00,000 pounds project for the most prolific the gross production volume carbon potential with 13 new of proppants were infused for Mangala field. This project was from the Rajasthan field has discoveries. these fracs. The ‘limited entry planned ahead of schedule, increased from 100,000 bar- These new discoveries technique’ of fracturing using with the management team rels of oil or oil equivalent posed a fresh set of challenges multiple perforations in sin- identifying the potential for per day to 160,000 per day for the management team gle stage and precise reservoir chemical eo r at an early stage in 2016-17. to monetise. However, for targeting has increased res- of development. The Man- Focussing on rapid growth Vedanta, this only opened up ervoir coverage by almost 30 gala eo r project is the largest is in Vedanta’s d n a . The group a window of opportunity – to per cent. Vedanta pioneered polymer programme in the was keen to unlock the vast replicate the success of drilling in introducing such fracking

u 32 u may 22-june 4, 2017 Business India u the magazine of the corporate world Cover Feature metal, mining, and oil & gas explo- b sanjay focus on a field (metals, for exam- ration group of global scale, com- ple) with crazy positivity, driving

peting with global mining giants. orade costs down in operations to achieve His success in the cyclicality-prone global scale. He values vantage view commodity business can be attrib- like few others. His coming to Mum- uted to his risk-taking abilities, quick bai or moving later to London indi- decision-making process, successful cates his keenness to open up greater acquisition strategies and the ability vistas and his readiness to suffer the to transform loss-making units into complexities of the process. Coming highly profitable ventures, through from Patna with only a school certif- enhancing scale by investing large icate, he has proven that lack of for- amount of capital into the businesses mal education does not stand in the he believes in,” explains Nimesh way of a man to build an empire,” Kampani, chairman, jm Financial says Vallabh Bhansali of Enam. group. He adds that the most signif- “Anil Agarwal is a turnaround icant point to be noted is that, over man. From mining to metals, from the years, Anil has worked towards crude to power, from fibre to network the simplification of his group’s cor- integration – he has always focussed porate structure and created a truly on expanding the size of businesses, diversified company, with a strong after acquiring them. As a result, balance sheet and cash-flow generat- h z l’s capacity has grown more than ing businesses. “The merger of Cairn Jain: the finance guy 20 times to 6.15 million tpa, Balco’s India and Vedanta Ltd is one of the 13 times to 1.32 million tpa and Sesa largest fusions involving Indian cor- inorganic routes,” adds Kampani. Goa’s 10 times to 2.30 million tpa. porate entities, which took almost 18 “Anil’s story is one of sheer pos- In fibre-optics and cables too, he has months to close. The merged entity itivity, focus, fearlessness, innova- scored, Sterlite being among the top has strong growth outlook, diver- tive business approach all adding 5-6 players of the world,” explains sified businesses and the necessary up to his reputed risk taking ability. Deven R. Choksey, m d, K.R. Choksey financial flexibility to pursue further He doesn’t always articulate his rare Investment Managers, who has been growth through both organic and gift of sighting opportunities and following Agarwal since his early days technology in India and this and a field development plan South Africa, where a seismic project, like the polymer proj- technology can open up dif- for Raageshwari Deep Gas was survey has been undertaken ect, is one of the largest of its ficult geologies and maximise approved with a capex invest- and prospects are being iden- kind in the world. India’s resource potential. ment of over $400 million and tified for drilling. In the Ravva Vedanta, over the course Over the course of the last few gas production of over 100 block, the group has invested of the last few years, has been years, when oil prices receded, mmscfd. The fracking tech- heavily in testing a high pres- transforming the oil & gas Vedanta’s oil & gas business nology was again replicated sure, high temperature explo- landscape of India. The pro- displayed the agility to focus in 15 gas wells with success. ration prospect based on 4D moter group’s risk appetite, on reducing development The expected ultimate recov- seismic technology. along with the execution skills costs in line with the reduction ery has increased by over 26 Planning ahead of time of the management, has pio- in prices. On the back of these per cent and the management and continuously identify- neered some world-scale proj- efforts, across various facets team is now focussing on ing opportunities for growth ects in India. These efforts by of drilling and surface facility increasing further production has been the key mantra of Vedanta are yielding high divi- costs, the Aishwariya Barmer volume and has tapped other success for the management dends to the Central as well as Hill Field development plan gas opportunities in the field. team with full support from state exchequer in the form of is viable at $40/bbl oil price, Vedanta has been quite the promoters to charter various levies with an annual with expected ultimate recov- aggressive in testing out new unconquered territories. After gross contribution in excess ery of 30 million barrels. exploration plays to derive the success of the eo r polymer of $1.7 billion, in addition to At the time of acquisition, large value. This led to the at Mangala, the management the reduction in imports. The Cairn India was primarily an oil foray in the Mannar Basin in team is now working on the zeal to adopt new technology company. However, Vedanta Sri Lanka, where the group has next level of higher crude oil and invest in India’s oil & gas looked at the opportunities for invested more than $250 mil- recovery through the imple- sector has triggered Vedan- developing the gas business. lion and has had two explora- mentation of an asp (alkanline ta’s ambition to contribute to Along with the management tion successes out of four wells. surfactant polymer) project. domestic production, to take team a focussed effort was The group also has a vast acre- The pilot has been successful its share from ~ 27 per cent put to monetise the tight gas age of more than 20,000 sq and the team is working on to more than 50 per in the fields. The efforts bore fruit km in the Orange Basin in its implementation. The asp near future. u

u 33 u may 22-june 4, 2017 Cover Feature Business India u the magazine of the corporate world when he started his jelly-filled cable b sanjay opportunity to contribute to nation business from an imported second building. Our investors have been

hand plant in the late 1980s. orade well rewarded with a total return “Since then, he has developed a of about 200 per cent this year, tri- knack of picking up ailing businesses, pling market cap while, overall, roc e turning them around profitably, mak- has hit a run rate of over 20 per cent ing them global-sized entities. He con- in the quarter. The combined group tinues to run them with an expansive balance sheet, with strong diversi- mindset. In the last decade or so, he fied operations and solid liquidity, is has trained his focus on backward all set for the new phase of growth.” integrations, by acquiring mines in Jain took Vedanta into a primary list- Australia, Africa, Latin American etc, ing on the London Stock Exchange – and making the group an integrated the second largest listing on the lse player in the global commodity busi- – in 2003. “We have raised almost ness. Probably, they are among the fast- $33 billion in the last 12 years and est growing metal and mining majors invested 95 per cent of it in India”. in the world in the last decade, with “Vedanta has a best-in-class bal- their market capitalization having ance sheet, with nearly $7.5 billion grown at a c ag r of 16.6 per cent (from of liquidity, a net gearing of over R6,694 crore in 2006-07 to R26,652 12 per cent and a net debt to e b i d ta crore in 2015-16),” adds Choksey. “It ratio of 0.4 times, making it the best is interesting to observe that the mar- amongst Indian peers and compara- ket cap of Vedanta Ltd has increased Albanese: ramping up production ble to global peers. With the merger from R7,000 crore to R27,000 crore in in place, the combined entity (with the last 10 years, at 16 per cent c ag r , takes care of the over all finance. an earnings capacity of $1.1 billion whereas the cash flows from opera- Jain is also responsible for business plus e b i d ta in a quarter), is widely tions have grown at c ag r of 47 per development, as also the mergers held as a n if t y top 50 listing, and is cent, which is three times the market & acquisitions in the group. Cur- a fit investment case, given the back- cap growth. The ev too has grown at rently, as director and member of drop of a vibrant ‘make in India’ focus a c ag r of 35 per cent, which is more the group executive committee, for the country’s g d p growth,” adds than double the market cap. With the he says, “Vedanta has contributed Arun Kumar, group vfo, Vedanta. turnaround in the metals cycle in nearly R40,000 crore to the exche- the economy, Vedanta could produce quer in the form of taxes and divi- PSU divestment profits of R15,000-18,000 crore in the dends this year, making us the likely Agarwal has come a long way from his coming 4-6 quarters.” number one corporate group here. early days in Mumbai in the 1970s. Agarwal’s trusted vetern Tarun We feel humbled by this enhance- He started in Goria Toli in Patna, Jain, who joined the group in 1984, ment in status and look at it as an where his father Dwarka Prasad was

women in Ringus, Rajasthan, Aligning with the community offers graduate and pg courses Vedanta’s csr activities are centred on education, providing renewable energy, in arts, science and com- childcare, health and hygiene, women clean water, hygienic toilets merce. It has more than 2500 empowerment and skill development in an earthquake-resistant students. Across locations, pre-fab structure Vedanta has almost 3,216 l e-learning through self-help groups, which sup- In 2016-17: education, healthcare and television ports 38,765 women. Vedanta l Number of beneficiaries: empowering women with l Skill development and Gurukul Public School, at Rin- 2.18 million skill development. entrepreneurship of women gus, Rajasthan, undertakes to l Amount spent on csr: l National development through seed funding conducts classes up to XIIth R110.04 crore agenda of Start-up India, l Health – 1 mobile van per standard and has 1,600 stu- l The 2017-18 csr budget: Swachh Bharat, Beti Bachao cluster, 1 medical clinic per dents. Vedanta Charitable R300 crore – Beti Padhao; MoU with 25 clusters of Nand Ghar Hospital and Research Cen- Signature Project m c d ministry; construction l Nutrition – To provide pre- tre, in Ringus, Rajasthan, pro- Nand Ghar of 4,000 Nand Ghars in 11 packed ready-to-eat food, as vides free medical services to Mission: committed to the states in 36 months. per government guidelines. the under-privileged, treat- Prime Minister’s national l To reach out to 2.5 million Vedanta post-graduate ing almost 20,000 patients. vision of eradicating child community members girls’ college – established in Vedanta Hospital, Lanjigarh, malnutrition, providing l State-of-the-art facility, 1995 for the underprivileged Odisha has catered to over

u 34 u may 22-june 4, 2017 Business India u the magazine of the corporate world Cover Feature a dealer in aluminium conductors. b sanjay After studying at Miller High School

in Bihar, in his early 20s, he moved to orade Kalbadevi, Mumbai, close to the met- als market. There, he took the plunge into the scrap business, trading in alu- minium and other metal alloys. At the age of 27, he acquired Shamsher Sterling Corporation, a Ghatkopar (Mumbai)-based cable manufacturer, for R60 lakh in 1976, which he renamed Sterlite Indus- tries. This was a small company and owned the Sterlite brand. It was actu- ally taken over by Agarwal’s Calcutta- based Rainbow Investments, which was later renamed Sterlite Cables and finally Sterlite Industries, to reflect its changing business portfolio. In Ster- lite, he strengthened the making of jelly-filled cables, by buying a plant in Illinois and shipping it to India. The company went public in 1988, Mathur: disruptive returns to shareholders when his plant was set up at the low- est capital cost, as against the likes of work complementarily to each other. when the subsidy period expired, Birla Ericsson, Vindhya Telelinks and Navin is the ‘operations’ man, while Malco did not have to depend on a host of others, which had also made Anil is the ‘visionary’. And, Jain steps expensive and erratic power supplies. a beeline to the capital market, then. in with the financial discipline. This “Malco was reopened within seven The 1990s saw Agarwal emerge is how the trio has always worked on days of the takeover and had soon as a turnaround artiste. He acquired a ‘turnaround’. started making profits,” recalls Jain. Madras Aluminium Co (Malco), a bif r Sterlite managed to turn around. Then followed the big moves. case, in the mid-1990s. While every- Though the high cost of power was a The government was keen to priva- one had given Malco up as a lost case, major issue, a power subsidy for three tise psus. The big breakthrough came Agarwal and his team, backed by his years, which had come as part of when the government, as part of its brother Navin and his financial right the bif r package, helped. Also, a 75 liberalisation drive, put up 51 per hand man Jain, thought differently. m w power plant was imported from cent equity stake of Balco on block Agarwal brothers Anil and Navin China during that period. Thus, to the highest bidder. Agarwal’s

partnership with Skill Council hospital & research centre, a of Mining Sector (s c m s) and 170-bed tertiary care oncol- Indian Institute of Skill Devel- ogy facility, being developed opment (iisd). It is currently in Naya Raipur, Chhatisgarh, conducting intense residen- in ppp with the government tial training programmes for of Chhatisgarh. about 160 rural youth. Vedanta has partnered Vedanta’s Cairn oil & gas with the state government of business established an ro Odisha, to set up a govern- plant in Barmer, Rajasthan, ment medical college at Bha- which is one of the largest vanipatna, Kalahandi district, community drinking water Odisha, with an estimated plants in India, running on investment of R100 crore. It solar power. Vedanta Hin- is expected to be completed dustan Zinc Heart Hospital, by 2018. A state-of-the-art 250,000 patients since 2010. specialises in testing sickle cell upgraded in 2012, is a 150- hospital is also being built as In 2016-17, the total foot- anaemia. Yuvantaran (Min- bed hospital, with about part of the college to provide fall of the hospital was about ing Academy of hzl) provides 3,000 patients treated every easy access of medical serv- 60,000 patients. The hospi- training for underground month. It cost about R20 ices to the communities in the tal has a laboratory, which mining and is implemented in crore. There is also a cancer surrounding areas. u

u 35 u may 22-june 4, 2017 Cover Feature Business India u the magazine of the corporate world

the nation,” says Samir Cairae, c e o, diversified metals (India), Vedanta Ltd, since January 2016. He provides operational and strategic leadership for Vedanta Ltd’s aluminium, copper India, power and iron ore divisions. Prior to joining Vedanta, Cairae held various senior leadership positions in global operations at Lafarge and Schlumberger. In his last role, he was heading the global industrial func- tion for Lafarge’s 150 cement oper- ations in over 45 countries and was based in Paris.

The zing thing Agarwal and his team then made a pitch for the government-owned Hin- dustan Zinc Ltd (h z l) and also picked up a 51 per cent stake in the Zam- bia Konkola Copper Mines. h z l was Naidoo: diversity transformation acquired in 2002, which enabled him Duggal: focus on training to enter the zinc-lead business. Hindu- aggressive bidding at R500 crore was stan Zinc, the world’s largest integrated undeveloped zinc projects globally. nearly twice the next highest bid. zinc producer today, is also Vedanta’s It will produce 250 mt annually The bid evoked protests from politi- cash cow. Agarwal was always looking from 2018. cians and trade unions, who accused out to further enhance the zinc busi- “We have made huge strides in the government of selling off the ness. The opportunity came in 2010, diversity transformation over the past assets too cheaply. The Balco labour when he acquired the zinc assets of two years. The commitment from union complained it had not been Anglo Zinc in Namibia, Ireland and the top is clear and well communi- consulted. A strike, lasting 67 days, South Africa. cated. It is now one of the top prior- caused molten aluminium to cool “h z l fully aligns with Prime ities of everyone else too to enable and harden in the pots — a night- Minister Modi’s vision of develop- 20 per cent diversity across the busi- mare in the metals business. It took ing natural resources to strengthen nesses and ensure women are better several months to get the operation infrastructure and create millions of supported to take on larger roles and going again. employment opportunities in India. be further developed,” says Deshnee In late 2001, the Supreme Court On the same lines, we have also set Naidoo, c e o, Zinc International, mov- ratified the sale. And, after years of up Hindustan Zinc Mining Academy ing on with a dream to become one of complacency in the company, Agar- that will provide trained jumbo drill the largest, socially responsible inte- wal eliminated bottlenecks and inef- operators and winding engine opera- grated zinc producers in the first cost ficiencies, hiking production by tors to the mining industry in India,” quartile and merge the South African a third to shed off the flab. “In his observes Sunil Duggal, c e o, h z l , who and Namibian operations, currently drive to lower production costs, Anil joined the company in August 2010 420 km away into the Southern Afri- has always looked at backward inte- and has been driving h z l’s growth can Zinc Cluster. “The cluster has the gration as a key driver. Also timely over the years. potential to unleash further down- completion of greenfield and brown- In 2011, Agarwal bought assets stream beneficiation opportunities. field projects has been his forte,” from Anglo American’s zinc opera- Our zinc business in Africa is well observes Jain. tion for $1.3 billion, which gave him set for growth. Our project pipeline “Vedanta aluminium and power a head-start in operations in zinc in development will also lead to exten- businesses play a critical part in the international scene. Since then, sive socio-economic growth in the India’s growth story. We are currently Vedanta Aluminium has increased geographies we operate, which is what in an exciting phase. We are ramp- drilling across the portfolio, closed really drives us.” ing up production, reducing costs, Lisheen in December 2015 (three In his quest for backward inte- doing more value-added sales and years after Anglo envisaged the clo- gration, non-ferrous metals became accelerating focus on safety and sus- sure) and started the Gamsberg Agarwal’s passion. Sterlite itself set tainability. We still see imports con- greenfield project (40-plus year proj- up in-house facilities to make contin- stitute about 50 per cent of Indian ect) in July 2015, having promised uous-cast copper rods from scrap in aluminium consumption, while to do so within five years of acquisi- Lonavla, near Mumbai, and alumin- we have adequate capacity to serve tion. Gamsberg is one of the largest ium sheets and foils at Sanaswadi in

u 36 u may 22-june 4, 2017 Business India u the magazine of the corporate world Cover Feature

Kishore: employment creation Kumar: ‘Make in India’ focus Cairae: growth story

Maharashtra. Once he started making the mining industry. Thrust must a time took the Cairn senior lead- copper in Tamil Nadu, he acquired be given to the iron ore sector to ership by surprise. Cairn manage- an Australian copper mine in 2000. meet the steel vision of India to pro- ment responded by re-engineering In 2004, he consolidated the copper duce 300 million tonnes of steel that the five projects that collectively cre- business by acquiring Konkola Cop- will generate more revenue and cre- ated reserves of about 100 million per Mine (kc m ) in Zambia. ate more employment,” says Kishore barrels and production of 80,000- Meanwhile, to get more focussed Kumar, c e o, Vedanta, iron ore busi- 100,000 barrels. I believe the insatia- and unlock value, the group decided ness. Kumar joined the group in April ble growth appetite of Vedanta and to separate its metals and telecom- 2003 and has held various executive the relentless pursuit of technologi- munications businesses in July 2000. roles in Sterlite Copper, kc m , etc, cal excellence of the oil & gas team The telecom business was demerged including international operations will provide disruptive returns to into a new company called Sterlite in zinc. He was appointed c e o of the shareholders in the near future,” says Optical Technologies, now run by group’s iron ore businesses in Febru- Sudhir Mathur, c e o, Cairn Oil & Gas, his youngest brother. ary 2015 and is leading the revival of who has been with Vedanta Limited profitable, low-cost iron ore mining since June 2016. Earlier, Mathur had Move to diversify operations in Goa and Karnataka, been c fo, Cairn India, since Septem- In 2007, in a move to diversify from as well as developing the Liberian ber 2012. He began his career with non-ferrous metals Vedanta entered project. Prior to joining the group, PricewaterhouseCoopers in 1986. into the iron ore business with the Kumar had worked for Hindustan Since then, there has been no look- acquisition of Sesa Goa. It is the larg- Lever for 12 years. ing back. Agarwal is a deal maker – est producer and exporter of iron ore In 2011, in one of the biggest buy- always with an ace up his sleeve. This in India. Then again, looking for con- outs of a domestic company, Vedanta has come in handy as he has adopted solidation of the iron ore business, in acquired Cairn India. This acquisi- both the organic and inorganic routes 2009, he acquired Dempo, a leading tion has proved to be a game changer to the top and has been consolidating iron ore company in Goa. In 2011, for Vedanta. At the core of Agarw- his metals and mining business. Sesa acquired a controlling stake in al’s strategy was the plan to deliver Western Cluster, another iron ore growth and long-term value, while Scanning for ‘targets’ company in Liberia. With reserves and upholding sustainable development But Agarwal has not been sitting resources of over 1 billion tonnes and through a diversified portfolio of quiet. He has an eye on the govern- an expected saleable product of about large, long-life and low-cost assets. ment of India’s divestment plans and 330 million tonnes, Western Cluster’s “While Vedanta and Cairn had is busy scanning the government’s acquisition has given a strong boost to been working towards creating a list of disinvestments. “Anything can the group’s iron ore business. shared future, the rude shock of the come up anytime,” reasons Agarwal, “The government has come up oil price crash accelerated the pro- looking forward to maximum action with transparent policies and using cess. The encouragement provided in the auction of bauxite mines and the best technology to keep track of by Vedanta to pursue growth at such not ruling out entry into the steel and

u 37 u may 22-june 4, 2017 Cover Feature Business India u the magazine of the corporate world

our decisions come from the bottom Hindustan Zinc’s Rampura Agucha Mine and the biggest thing is that we are up on transparency and governance too,” says Agarwal. He is looking to invest a further $8-10 billion in three years, mostly in India and also in Africa. “Such an action will increase our capacity by 75 per cent,” he says, studying the new Indian bankruptcy laws that open up an avenue for peo- ple like him to step in and takeover assets in a transparent manner. Agarwal says he has taken up a non-executive role and, unlike most patriarchs of business families, his vision was to build the institution and “I am in the process of building the institution, if my children are competent they can come and join. But that’s not the point, Vedanta is infrastructure sectors. “The govern- to sell the residual stakes in Balco the Indian institution and I am an ment may disinvest Hindustan Cop- and h z l , either to the public or to absolute trustee looking to develop per, or it may bring in a partner for Vedanta and move on. it. I am in my 60s and driving the o n g c , whenever things are not work- Currently sitting in London, he company and can still drive for some ing. At least, a 51 per cent partner has a core executive committee style time to come but, going forward, would increase the production of oil management team in place on the this can be run by a c e o. We can and it would be a good move – one, ground at each of the business ver- just be shareholders. Axon is run like which people will appreciate. o n g c ticals, which consists of a blend of that. Nobody can give up my name fields, which are not working, should because this is going to be here for- be either sold or put under partner- ‘Vedanta’s performance in ever,” he sums up. ship. Ditto for Coal India too, which the critical aspects of health, Agarwal, a hardcore Indian, has tremendous assets. And, if they safety, environment loves to listen to Indian are planning to invite partners, they and engagement songs and watch Bolly- should look at a big one. You have to with communities wood movies. “I am still give the partner power and a product and stakeholders is of a Bihari bhai, who has paramount importance that can change the whole scenario, spent 20 years of my life in to Vedanta and to our when the production is doubled. We short- and long-term Bihar. For me, habits don’t have given R55,000 crore royalty, growth. Our sustainable change. I am a foodie; so, which was not budgeted by the gov- development practices I eat all the time and I ernment, it has come without a bud- go beyond the regulatory explore as much as possi- get. So, you can imagine the power of requirements’ ble to find different kinds the natural resources. I agree, tech- - Phillip Turner of food. I do a bit of a cycling too nology is important, but the kind head – health, safety & environment when in Rajasthan”. of revenue you will get through the Some call him the ‘metal king’ resources, which you can use for the and others refer to him as a ‘billion- country’s infrastructure, is huge”. talent drawn from international aire philanthropist’, but those who and m n c companies, benchmarking know him well call him the man Government action with international peers. This exec- with a ‘golden heart’ – a person deter- “India has the best bauxite in the utive team of top 50 leaders comes mined to strike a balance between world. The government should put with vast experience from m n c s. business and service to the commu- bauxite mines for auction. I also The group has the empowered cor- nity. “Whatever you have earned, a urge the government to take a deci- porate executive committee, which portion of it should go back to soci- sion on 20-28 per cent residual hold- include the group c e o, business c e o s ety,” he says. On a personal level, he ing it has in h z l . It should sell the and heads of enabling businesses, has taken a pledge to donate 75 per balance either to the public or to a such as h r, legal, finance and com- cent of his wealth to philanthropy – private investor. This will be benefi- pliance. Business c e o s have their a decision inspired by Bill Gates and cial for the government, which has independent empowered executive the Dalai Lama. to be business friendly to progress,” committees that drive their opera- u LANCELOT JOSEPH says Agarwal, urging the government tions under empowered c e o s. “So, [email protected]

u 38 u may 22-june 4, 2017