Once news filtered in that three companies, Mahindra & Mahindra, Kolkata-based Rs 3,000-crore-plus Ruia Group and a Korean company had submitted bids for troubled South Korean car Ssangyong Motors, Pawan Kumar Ruia, chairman, Ruia Group, said: ?It looks like the company is coming to India.? Ruia, of course, admitted that there are challenges, not least the language barrier, but after having seen their facilities and manufacturing capabilities, he said: ?This could be a good turnaround story.? He didn?t want to comment on the deal size nor from where funds could come in case the group won the bid. Ruia said ?some groups? had shown interest in providing financial assistance. On the day bids for Ssangyong were submitted, Ruia took some time off to talk to FE?s Sudipta Datta on takeovers, the opportunities globally for Indian companies and why Ssangyong is a good fit for India. Excerpts:
Are you happy with what you saw at Ssangyong Motors?
This could be a good turnaround story. The only question is whether we will be able to pierce through the middle management. I still feel this is a good story. Though it only has 2% marketshare, I feel it has a future. Though I will admit that there are challenges. Acquiring a company is a long process, it takes at least five-six months to consolidate and so forth. One has to understand the psyche, it?s not an easy process. Before we acquired the German company Henniges (now called Draftex), we had to abort two other deals despite spending huge amounts of money.
What is your synergy with Ssangyong?
We are in the auto ancillary space, we are into tyres. We always had the dream to acquire a auto manufacturing company. Ssangyong may be a luxury SUV maker, but it has the technology to make the car, which is required for India.
They have never tapped the Indian market, which is a vast growing market. If anyone understands the psyche of the Indian consumer, it will click in India. The numbers are here. The Indian market is very competitive now with every auto maker wanting to be here.
You have expertise in labour management, having taken over Jessop and Dunlop?
We have the expertise but here language is a barrier. It is a challenge and we will have to rediscover ourselves.
Should Indian companies aggressively look for opportunities elsewhere in a meltdown situation?
Absolutely. The West is seeing declining demand, we are seeing rising demand. They want to sell, we want to buy. Companies are coming in such beautiful numbers, today the Indian entrepreneur should go out and grab every opportunity.
Are you looking at more acquisitions?
Of course, we are looking for more buys in the automotive space, engineering infrastructure space, tyres.
What about your Indian companies, how are they doing?
Dunlop and Falcon are doing well, but I always feel we could have done much better. The Indian operations are doing fine but they require some time from me which I cannot give right now, that?s why we are putting in a lot of professionals in place over the last 9-12 months. In fact, some of them are already running independently.
What is the investment climate in India?
There is going to be an explosion in the Indian market. People are trying to gear up to meet that demand but I still feel there is going to be a supply-demand mismatch.