Locks-to-soaps conglomerate Godrej Group has now set sights on defence business as it sees opening of the sector presenting huge opportunity to private players.
Locks-to-soaps conglomerate Godrej Group has now set sights on defence business as it sees opening of the sector presenting huge opportunity to private players.
Adi Godrej, chairman, Godrej Group, said, "The private sector has been allowed into defence sector just recently. Our objective will be to supply to international companies that wish to come here. If necessary we will partner with them."
He said it was still early to share concrete details in terms of what shape it (defence business) will take going forward.
According to Godrej, the group is already supplying some parts to Rolls-Royce for their production. "The great thing about defence production in India is that most companies will not only be able to supply to India's needs but also international needs of the companies they may partner with," said Godrej.
While business-to-consumer (b2c) entities, primarily fast moving consumer goods (FMCG), consumer durables and real estate have been prime revenue drivers, the group is laying more emphasis on growing the business-to-business (b2b) entities and defence under Godrej & Boyce.
He said Godrej & Boyce has been supplying to Indian nuclear and space programmes since 1985 and it was in 1996 that the first order for cryogenic engine for satellite launch vehicles was concluded.
"Even the recent launch to the planet Mars was powered by one of our cryogenic engines," Godrej said.
On the company's fast moving consumer goods and consumer durables businesses, Godrej said that approximately 600 million Indians are currently using Godrej products while the number is over a few 100 million in international markets. "Our consumer base outside India is among the largest by groups headquartered in developing world. Among other companies with more consumers probably is China Mobile," said Godrej.
Having set itself a target to grow '10 times in 10 years' three years ago, Godrej said it will be achieved by clocking in a compounded annual growth rate of 26% annually. "We have largely met the annual growth targets despite slowdown in the Indian economy in the last couple of years," said Godrej, adding that 15-20% of the growth will be met through organic initiatives while the balance will be inorganic activities, mainly in the FMCG space.
While Godrej was optimistic about government implementing a unified Goods and Services Tax (GST) by April 2016 and its impact on enhancing the Indian gross domestic product (GDP) by 2%, he refrained from commenting on recent discussions about how GST in the present format will not lead to economic revival. "Implementation of GST will increase the GDP of the country to double digit figures, and will boost manufacturing tremendously," he said.
On the emergence of e-commerce and the group's plans to make it big in the digital space, Godrej said online will only be used for marketing and selling products and will not be pursued as a business activity. "The e-retailing firm we acquired has been merged with our gourmet foods business, Nature's Basket. However, we are not considering getting into the e-commerce business directly," he said.
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