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Updated: August 20, 2009 01:53 IST

Murugappa raises its sight, eyes power, water sectors

K. T. Jagannathan
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A. Vellayan Photo (file) : Bijoy Ghosh
Bijoy Ghosh A. Vellayan Photo (file) : Bijoy Ghosh

The $3-billion turnover Murugappa Group has kick-started an internal debate to explore the possibility of entering in a big way power and water sectors, which are expected to face supply constraints.

Indicating this in an interaction with The Hindu here on Wednesday, A. Vellayan, who is set to become the Executive Chairman of Murugappa Corporate Board (MCB) once the 65-year-old M. A. Alagappan relinquishes his office by the end of October, said, “we have decided to explore a bit more in-depth these two areas”.

A couple of outfits in the Group — EID Parry and CUMI — have already been generating power captively. Also, the group has been into desalination of water at Ennore and Vizag in a minor way. “Based on these minor experiences, we want to explore if we can enter these two areas in a big way,” Mr. Vellayan said. Moreover, the group has port-based operations at Ennore, Vizag, Kakinada and Kochi. The group was looking at these two areas so that it could leverage the opportunities presented by these port-based operations, he said. Mr. Vellayan, however, hastened to add that things were at a very nascent stage.

Mr. Vellayan said he would be taking over the mantle at a time when India “is in an era of growth”. Amidst depression in the wake of global financial meltdown, India and China were expected to grow at 6-7 per cent over the next few years. “This is a good positive for me,” he said.

The group was a leader regionally and number two nationally in major sectors where it had presence such as fertilizer, sugar, abrasives, steel tubes, engineering, cycles, auto components and financial services, he said. “It is important to maintain this,” he said.

He said the group was able to attract and retain talent. In this context, he said the group currently had seven CEOs (chief executive officers) who had grown from the ranks.

Asserting that the emphasis was on “building a learning organisation,” the Chairman-designate pointed to the robust appraisal system within and the role played by the Management Development Centre (MDC) in training and developing managerial skills.

Mr. Vellayan was concerned that the group was not present in many sunrise sectors. It is present only in nutraceuticals and back-office publication. He was also concerned that the governance code was applied in isolation only to the corporate sector and not expanded to cover political and judicial fields. The governance code must apply to these fields also if one were to escape avoidable situations, he said. Mr. Vellayan said a single holding company for the group was an ideal structure. “The current structure is more spread out, however. We have sort of consolidated sector-wise investments. We will make them more efficient and meaningful as we go along,” he said.

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