'Almost
30% of our export turnover is contributed by
businesses that
are on long-term contracts'
Interview
More and
more progressive Indian chemical companies have
begun to chart success stories in the international
market. Recently, Deepak Nitrite Ltd. (DNL) crossed
the Rs. 100-crore turn over mark from its international
business for
the financial year 2003-04.
It has been a remarkable
transformation for DNL in the past few years -
from a commodity oriented bulk volume product company
focussed on the domestic market, to a speciality & fine
chemicals company catering to leading multinationals
worldwide.
Recently, Chemical Weekly got an
opportunity to interact with two leading architects
of this transformation, Mr. Deepak
Mehta, Managing
Director, and Dr. Suresh Gore. President. During
this free-wheeling discussion, they dwelt
at length on their successful export strategies
acquisition activities and future plans.
Excerpts from the discussion:
Deepak Nitrite's emphasis on fine chemicals seems
to be paying off and exports now account for a significant
portion of sales.
What were the factors that propelled the strong emphasis
on fine chemicals and exports?
Deepak Mehta (DM): Before import duties
started to come down in India, our company like most
other domestic manufacturers, focused on developing
import-substitute products, with less emphasis on
cost. But with lowering
of trade barriers and increase in competition from
international manufacturers, we decided that the
best way to counter this competition
was to get active in the global market, by making
niche market products.
We examined every product that we were manufacturing
to see if we could convert it into niche products.
For example, we were making intermediates for some
basic dyes used for making colours for Holi or for
colouring turbans
in North India. We started converting these intermediates
into products that were much sought after for very
high-end speciality purposes, like speciality colours
for colour faxes,etc. We worked on developing abilities
to make these kinds of fine chemicals, using our
present intermediates as base.
Whichever fine chemicals we chose, we first chose
our competitor. We ensured that we are pioneers and
did not have any existing competitor in China or
India. We didn't mind having competitors from developed
nations, like Japan or Germany. We chose those niche
products, which would give us long-term continuity
of business opportunity. So that's how our foray
into fine chemicals took place.
Dr. Suresh Gore (SG): Deepak Nitrite has long been
known for its quality culture- we were among the
first in India to get ISO certification. We also
had strong in-house technical talent. When duties
began to fall and competition in the market became
more intense, we thought of looking at this as an
opportunity for entering newer markets, rather than
fighting competition on domestic grounds. Entering
the international market was the natural choice for
a company like ours. having the right business practices,
talent and quality culture. It was not as if we were
ignoring the Indian market, it was just to get more
value for our efforts.
For example, we were making intermediates for some
basic dyes used for making colours for Holi or for
colouring turbans
in North India. We started converting these intermediates
into products that were much sought after for very
high-end speciality purposes, like speciality colours
for colour faxes,etc. We worked on developing abilities
to make these kinds of fine chemicals, using our
present intermediates as base.