At 50 million, India’s small and medium enterprises employ 40% of the country’s workforce and contribute 17% to GDP. That’s sizeable by any measure, except when you think of the potential this segment holds for the aspirant manufacturing destination that is India. China’s small and medium enterprises, in comparison, employ 80% of its workforce and contribute a way higher share to the national income at 60%.
What can unleash the potential in India’s SME segment? The recent economic survey highlights that Indian small enterprises have little incentive to invest in upgrading skills of largely temporary workers or in investing in capital equipment. That’s unfortunate, because if investment is key to growth, growth is the biggest incentive to invest. India needs to unshackle itself from this vicious cycle to a virtuous cycle of growth.
The good news is one can finally see a glimmer of hope thanks to a confluence of factors. To begin with, the government is making a concerted effort to spur manufacturing activity through its Make in India campaign and extending fiscal sops to spur innovation. Secondly, the advent of an online revolution is enabling a lot of peripheral suppliers and unorganised units to enjoy higher stakes by partaking in the growth of the new digital economy. And, more importantly, the evolving alternative lending platforms are ensuring that credit is becoming increasingly easier to avail of.
If India has to truly shine in a globally challenging economic environment, it can only happen if we have the right ecosystem. Outlook Business Smart Enterprise is a small cog in the wheel to create this ecosystem.
Small enterprises engaged in ancillary industries are a vital component of Make In India, and recognising their importance, Outlook Business has been dedicating an annual special edition to bring forth their problems, hopes and expectations through in-depth ground-reports over the past six years.
The culmination of our efforts will be showcased at a unique one-day event that will bring together all stakeholders on a single platform to deliberate over how India can harness the true potential of its SMEs. Enterprises from 15 industrial clusters will discuss the opportunities and challenges facing them, as Indian manufacturing renews itself with Prime Minister Modi’s Make In India push.
The Union Minister of Micro, Small and Medium Enterprises (MSMEs) is expanding the coverage of several schemes and strengthening their implementation to enhance the competitiveness and productivity of MSMEs in the country. The ministry claims that around 1.1 million jobs have been created over the past three years under the flagship scheme of the ministry the Prime Minister's Employment Generation Programme.
The Union Minister for Skill Development and Entrepreneurship's primary focus is to develop a robust policy framework and programme of action for scaling up skill development efforts in India, at speed and scale, while ensuring quality outcomes. Since the launch of the Skill India mission in July 2015, over 1.1 crore aspirants have been trained through various schemes.
NITI Aayog acts as a knowledge hub and a think-tank by facilitating better policy implementation. Under the leadership of Mr Kant, Niti Aayog is preparing a 15-year vision document keeping in view the social goals for a period of 15 years and a 7-year strategy document spanning FY18 to FY24 to convert the longer-term vision into implementable policy. A member of the IAS, Mr Kant was also the chairman of the Delhi Mumbai Industrial Corridor Development Corporation and the National Productivity Council.
Mr. V. Vaidyanathan founded Capital First Ltd by first acquiring an equity stake in an existing NBFC, changing the business model, and then executing a Management Buyout by securing an equity backing of Rs. 8.10 billion in 2012 from PE Warburg Pincus which included (a) buyout of majority and minority shareholders through Open Offer to public; (b) Fresh capital raise of Rs. 1.00 billion into the company; (c) Reconstitution of the Board of Directors (d) Change of business from wholesale to retail lending; (e) Creation of a new brand “Capital First”. Post the buyout he holds shares and options totalling 10.5% of the equity of the company on a fully diluted basis. He believes that financing India’s 50 million MSMEs and India’s emerging middle class, with a differentiated model based on new technology platforms, offers a unique opportunity in India. As part of this belief, on acquiring control of the management, he exited legacy businesses of Real estate financing, Foreign Exchange, Broking, Wealth management, Investment management and instead transformed the company into a large retail financing institution with operations in 222 locations across India. Between March 2010 to March 2017, he has grown the retail financing book from Rs. 0.94 billion ($14 Mn) to Rs. 183.53 billion ($2.82 Bn), has grown the Equity Capital from Rs. 6.90 billion ($106 Mn) to Rs. 33.99 billion ($523 Mn), reduced Gross NPA from 5.36% to 0.95%, got the long term credit rating upgraded 4 notches from A+ to AAA. The market cap of the company has increased from Rs. 7.90 billion ($122 Mn) to Rs. 76.00 billion ($1.17 Bn) in March 2017. He joined ICICI Limited in early 2000 when it was a Domestic Financial Institution (DFI) and the retail businesses he built helped the transition of ICICI from a DFI to a Universal Bank. He built the Retail Banking Business for ICICI Limited since its inception, and grew ICICI Bank to 1400 Bank branches in 800 cities, 25 million customers, a vast CASA and retail deposit base, branch, internet and digital banking, built a retail loan book of over Rs. 1.35 trillion ($20 Bn) in Mortgages, Auto loans, Commercial Vehicles, Credit Cards, Personal Loans. He also built the SME business and managed the Rural Banking Business. These businesses helped the conversion of the institution to a universal bank renowned for retail banking. He was earlier the MD and CEO of ICICI Prudential Life Insurance Co (2009) and an Executive Director on the Board of ICICI Bank (2006). He was also the Chairman of ICICI Home Finance Co. Ltd (2006), and served on the Board of CIBIL- India’s first Credit Bureau (2005), and SMERA- SIDBI’s Credit Rating Agency(2005). He started his career with Citibank India in 1990 and worked there till 2000 in consumer banking. During his career, he and his organization have received a large number of domestic and international awards including the prestigious CNBC Asia Innovative company of the year IBLA-2017, Economic Times Most Promising Business Leaders of Asia Asian Business Leaders Conclave 2016, Malaysia, ‘Outstanding Entrepreneur Award’ in Asia Pacific Entrepreneurship Awards 2016, Greatest Corporate Leaders of India- 2014,Business Today – India’s Most Valuable Companies 2016 & 2015, Economic Times 500 India’s Future Ready Companies 2016, Fortune India’s Next 500 Companies 2016, Dun & Bradstreet India’s Top 500 Companies & Corporates 2016 & 2015, “India’s most trusted financial brand – 2016” by WCRC Leaders Asia, “Best Retail bank in Asia 2001”, “Excellence in Retail Banking Award” 2002, “Best Retail Bank in India 2003, 2004, and 2005” from the Asian Banker, “Most Innovative Bank” 2007, “Leaders under 40” from Business Today in 2009, and was nominated “Retail Banker of the Year” by EFMA Europe for 2008. He is an alumnus of Birla Institute of Technology and Harvard Business School and is a regular contributor on Financial and Banking matters in India and international forums. He is a regular marathoner and has run 23 marathons and half marathons. He lives in Mumbai with his family of father, wife and three children.
Based in New Delhi, Mr Kumar is Boeing’s most senior in-country executive who integrates and advances Boeing’s activities in India across its three business units: Boeing Commercial Airplanes (BCA), Boeing Global Services (BGS), and Boeing Defense, Space & Security (BDS). Before joining Boeing in 2012, Kumar served in various leadership roles at General Electric (GE) for close to a decade in the US and in India. He started his career as a consultant with McKinsey & Company in the U.S. Mr Kumar earned a bachelor’s degree in mechanical engineering from the IIT Delhi and a doctorate in materials engineering from the Massachusetts Institute of Technology
Mr Sawhney is responsible for managing Renault Société Anonym's entire operations, including vehicle sales, servicing and marketing for the Indian sub-continent. Mr Sawhney has over 15 years of experience in the areas of sales, marketing and network development. An MBA from IMS Indore, he has worked with GM and Fiat in India prior to joining Renault. Under Mr Sawhney’s helm, Renault India has made its mark in the domestic market with the launch of “Made In India” Kwid, which today accounts for 80% of Renault's sales in the country.
UPL has been one of the fastest growing agri-input companies in the world with strong presence in the seeds, plant nutrition, crop protection and post harvest food preservation value chains. Mr Shroff has driven the transformation of UPL from a largely domestic player to a truly global Indian multinational organisation operating 28 manufacturing plants in India, Asia, Europe, Latin and North America and serving the global farming community
Mr Unnikrishnan began his career with Thermax after graduating from the VNIT, Nagpur in 1982. Joining Thermax as a graduate trainee, he went on to establish the marketing set up for the energy division of Thermax in the Western Region. After rejoining Thermax as general manager in 1997, he headed the waste management and absorption cooling divisions of the company, turning around both these businesses and making them profitable. Mr Unnikrishnan, who completed his Advanced Management Programme from the Harvard Business School, took over as the managing director in 2007.
Ravi Kant Jaipuria is the founder chairman of RJ Corporation, Varun Beverages and Devyani International. Varun Beverages, PepsiCo's second-biggest bottler, went public recently. Varun has bottling operations for PepsiCo in India, Nepal, Sri Lanka Morocco, Zambia and Mozambique, and is building #30 million new plant in Zimbabwe. Fast-food venture Devyani owns the franchisee for brands KFC, Pizza Hut, Costa Coffee and TWG Tea. The group besides expanding the bottling business is also looking to create a large dairy business.
Mr Thuard is the CEO of Legrand Group India - a subsidiary of Euro 4.5 billion Legrand Group, the global specialist in electrical and digital building infrastructure. Spearheading the Legrand India division, Mr Thuard is responsible for leading the development of the brand in India, which includes the acquisition of the UPS business of Numeric Power Systems and the switchgear division of Indo Asian Fusegear. He drives the Indian subsidiaries’ actions within the overall vision of the Legrand Group. With a keen expertise in driving strategy oriented growth across different geographies, Mr Thuard brings on board a wide global cross-functional experience with a strong focus on making Legrand the industry leader in India.
Arvind Mediratta joined Metro Cash & Carry India as managing director & CEO in February 2016. Prior to joining METRO Cash & Carry India, Arvind held the position of corporate vice-president (Fresh Business), Walmart USA. Before that was Regional Vice-President (Texas Operations), at Walmart USA. He was instrumental in successfully setting up Walmart Cash & Carry business in India from the ground up under the banner of “Best Price”. Mr Mediratta has over 25 years of experience in general management, marketing and sales across industries such as retail, packaged goods, consumer durables and food service with top companies like Wal-Mart, Procter & Gamble (India & Asia Pacific), Whirlpool, Yum! Restaurants International and Marico India. He holds an MBA from the IIM, Kolkata and a is a chemical engineer from the IIT, New Delhi.
Mr Rajiv Chawla is chairman of the Integrated Association of Micro, Small and Medium Enterprises of India. It is an institution created and run by entrepreneurs to facilitate and promote the growth and development through collective solutions. Mr Chawla is also the founder and chairman of JaiRaj Group of Industries, which manufactures auto-components, electrical and white goods, moulds and moulded products. Mr Chawla is also an independent director on the board of the National Small Industries Corporation.
Rajeev is one of the founding partners with BMR, leading the indirect tax practice. He has over 30 years’ experience in tax matters and specializes in structuring transactions related to nationwide distribution for goods and services covering a range of indirect tax issues. He has worked closely with the central government and various state governments, leading multi-disciplinary teams to define and implement new legislation covering indirect taxes. He is a graduate in commerce from the University of Delhi and is a qualified CA.
A CA by profession and an alumni of the Indian Revenue Service, Ms Bela is currently leading the GST project for Shell India. She was country tax lead for India for the past eight years and was also a part of the global Shell transfer pricing team and led the global CbCR project. Her professional experience includes working with government as a tax officer, with KMPG as a tax consultant and then with industry as a business tax advisor.
Mr Ajay Sahai is the director general & CEO of the Federation of Indian Export Organisations (FIEO), jointly set up by the Ministry of Commerce, Government of India and private trade and industry in the year 1965, for promoting India’s exports. During Mr Sahai’s tenure, in last eight years, the membership of the organisation increased from 7,200 to over 22,000. Mr Sahai was earlier joint DGFT in the policy division of the Directorate General of Foreign Trade where he played a key role in the formulation of the Foreign Trade Policy from 1996 to 2003. He was member of the High level task force of Government of India on Exim Policy. Besides expertise in foreign trade policy matters, Mr Sahai brings to his position considerable experience in the area of customs and excise.
An electrical engineer who worked with Best & Crompton Engineering for 15 years, Mr Mohan started his own venture PowerAids in the year 1985 at Chennai. A specialist in aluminium welding technology, Power Aids has executed erection of high tension bus ducts at various power stations all over India and still continues to carry out the same. They are also in the erection of gas-insulated substation, which is a sunrise industry. Mr Mohan is actively involved in various activities along with various MSME Associations in Tamil Nadu for the promotion of micro and small scale industries. He served as the Tamil Nadu Small and Tiny Industries Association (TANSTIA) vice president – Chennai region for four years and general secretary for two years and as a vice president of TANSTIA for two years. Currently, he is serving as the general secretary of TANSTIA.
When basmati rice manufacturer, KRBL introduced ‘India Gate Classic’ in 2008, it was the beginning of a revolution. The top-notch quality and taste of the new Pusa 1121 variety took the market by storm making KRBL the largest branded basmati rice company in India. However, this was just one among the many memorable moments during KRBL’s 120-year long journey. The legacy of Khushi Ram & Behari Lal which started in 1889 in Pakistan has been carried forward by the three third-generation brothers, Anil Mittal, Arun Gupta and Anoop Gupta. Today, KRBL is the world’s largest rice miller and exporter. Its flagship brand ‘India Gate’ is the market leader in several of the 73 countries where it spreads the aroma of basmati rice. The company hopes to clock a revenue of nearly #6,000 crore over the next five years on stronger demand from international markets.
From being a die casting manufacturer and having Bajaj Auto as its sole client to being recognised on the global stage — Endurance Technologies has come a long way. The early years though were not easy. As it was dependent on just one product segment, it expanded its presence into two- and three-wheeler suspension, braking and transmission. Backed by strong R&D, the company led by Anurang Jain succeeded in diversifying its business as well as customer base. Between 1995 and 2006, the company grew by a staggering number — almost 50x. By then, the company had also started thinking about acquiring European companies to expand its presence. Despite the 2008 global financial meltdown that followed its acquisitions, the company has ploughed on, implementing the lessons it painfully learnt.
After coming into being in 1985, Intas Pharma had a slow start for about a decade. Its strategy was always to gain a foothold in the chronic therapeutic business, which included neurology and psychiatry. The big break came with the foray into oncology, which has given the company a serious foothold in the international markets. Intas’ strength lies in its ability to identify segments before competition. It managed to do so in oncology and later on with infertility. Now, with the acquisition of Actavis’ assets in the UK and Ireland, its position in the European market will only get stronger. It is hoping to replicate the success story with its entry into biosimilars after having been the first company to launch its offerings in the EU. Even in the domestic market, Intas is among the top ten. Its sustained growth story has helped it in attracting private equity funding and making it the most valuable unlisted Indian pharma company.
Vini Cosmetics has been well and truly a disruptor in the Indian deodorant industry. By tapping into the existing gap in the market, its founder Darshan Patel decided to introduce a deodorant with a non-aerosol pump that didn’t require any gas. This resulted in the emergence of Fogg, a deodorant without gas – a first of its kind in India. Although a late entrant, it has successfully managed to reposition the way men’s deodorants have been viewed by the Indian consumer. Consumer research was the key to finding a unique positioning for Fogg – Vini’s leading brand. Fogg managed to dethrone Unilever’s Axe which was the market leader then within two years of its launch. With a 20% market share, Fogg now rules the roost in the Indian deodorant market. Fogg has moved into women’s deodorants as well and is now also eyeing the growing Indian skincare market.
It’s something Unilever was salivating over for a long time but hasn’t managed to get a bite of even now. 44-year-old P C Musthafa, however, grabbed the biggest white space in the foods industry with his centre of plate offerings like chapati, parota and batter for idli and dosa. Through his company iD Fresh Food, he has managed to build a solid food brand in categories with greatest potential to convert from unorganised to organised packaged foods – something every food company is today envious of. It is a result of not just smelling the “food” at the right time, but having the creativity to market it the right way and even more, embracing technology to scale the operation efficiently.
How often do you find septuagenarians founding companies that end up winning contracts to build satellites for Indian Space Research Organisation (Isro). In December 2016, a consortium of players led by Bengaluru-based Alpha Design Technologies managed just that. Established by ex-army man Colonel HS Shankar, it not only manufactures defence electronic equipment for India’s armed forces and agencies, but also has customers in developed markets like France, Germany and Israel. About two-third of Alpha’s revenue is derived from shipping their products to these countries. Alpha allocates about 40% of its expenditure for R&D to keep pace with fast changing technology. This has helped them develop state-of-the-art defence and avionics products, ahead of global competition.
When his cousin advised him to explore the spice oils (oleoresin) export trade in 1972, little did CV Jacob know that his venture would become a formidable flavours and fragrances manufacturer. Synthite Industries that began with producing pepper oleoresin, has transformed into a nearly #1,800-crore powerhouse today. In a country that accounts for 70% of the global spice oleoresin market, Synthite ranks at the top of the current pecking order. Innovation and technological advancement guaranteeing impeccable product quality is its prime focus. Be it the introduction of oleoresin blends, or marigold extraction with varied applications, or setting up the first C02 extraction plant for food products in India, or adoption of nanotechnology, Synthite has several pioneering efforts to its credit. All this with the vision of reaching #3,000 crore by FY20 and clinching the title of the undisputed value-added spice king.
An Rs 800 crore success story woven out of a small town like Raichur – this was the vision of a first generation entrepreneur, Vishnukant Bhutada, managing director of drug manufacturer Shilpa Medicare. 30 years of being in business, Shilpa is among the leading suppliers of oncology APIs in the world with eight manufacturing plants and three R&D centres. When most pharma companies rushed to the US, the biggest pharma market, Bhutada took a different route choosing the rest of the world to establish its global footprint. After firmly establishing itself in Europe, Japan and other markets, the company made its foray into the US last year. While Europe forms the largest chunk of Shilpa Medicare’s revenues, its recent entry into the US markets is all set to push the company into a higher growth trajectory.
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