Chairman-designate of the over Rs 14,700-crore Murugappa Group, A Vellayan, is hopeful of steering the group to a growth of more than three times that of the current GDP growth of India over the coming years, besides increasing the group’s market share across all segments. In an exclusive interview with R Ravichandran, Vellayan, who is set to take over reigns of the group in October-end, says its target is to double overall sales to Rs 34,300 crore by 2013-14 and explore new areas such as power, water, education and defence. Excerpts:

What would be your immediate priority and growth strategy?

We are actively involved in sectors that are more or less mirroring the Indian economy. Our objective is multiple growth from our existing business entities, as well as new areas. We want to make more effort and invest in our two new businesses, neutraceuticals and back office publishing, which hold immense potential and would also become major contributors to our overall business.

What would be your overall business target and what are the driving factors?

We have set an internal business target of Rs 34,300 crore by 2013-14. Existing businesses such as fertiliser and pesticide, sugar, engineering (auto components), abrasives, financial services and new businesses such as neutraceuticals and back office publishing are going to drive our future growth. We expect that by 2013-14, with the expansion of our fertiliser capacity from 2.7 million tonne to 4 million tonne, the revenue would grow more than 50%.

Similarly, we expect the revenue from pesticide business to double from Rs 300 crore. We are also looking at expanding overall sugar capacity (including that of the Kakinada refinery) from 1.1 million tonne to 2 million tonne and trebling our engineering business turnover to Rs 5,000 crore by 2013-14.

The abrasive business (including silicon carbide, refractories and overseas subsidiaries) is expected to grow four-fold to Rs 5,000 crore by 2013-14.

We are also looking at 20% growth in our financial services business, particularly in the general insurance business. The diversified business entity is also expected to contribute over Rs 500 crore to the overall business. We plan to achieve our desired results with a specific focus on each of our business through proper investments and synergies. The group would always look out for suitable acquisitions in each of these segments to grow faster.

What are opportunities and challenges you foresee?

We see opportunities in two ways. Firstly, to grow our new businesses with renewed vigour and sizeable investments, apart from growing existing business entities with a CAGR of 21% for the next five years through organic and inorganic ways.

Secondly, the group is looking at entering into core areas ? power, defence, water and education ? which hold immense potential and will bring in sustainable growth over the years. We have an internal strategy group which is studying the possibilities of entering into these core areas. The group would study and evaluate not only opportunities, but also how things can be synergised with the existing business entities to further supplement our growth.

Keeping in mind our growth strategy, we see a challenge in identifying, selecting, training and moulding suitable workforce to achieve the desired results.

On the export prospects…

We are looking at a 20% turnover from exports. The new businesses of neutraceuticals and back of publishing are going to make a difference for us in the years to come. Both these two areas are recession-proof and will help increase our export revenue substantially. In addition, our chain (bicycle) and pesticides business has huge export opportunities.

Can you elaborate on your overseas subsidiaries/operations?

We are looking at two types of opportunities ? one to set up pure marketing/sales offices across the globe for our agribusiness and other group activities and, secondly, to grow our existing owned and joint venture operations in countries South Africa and Russia for raw material purposes. We are also looking at Latin America and Europe to explore business opportunities.

Your views on the current economic scenario in India.

Despite a poor monsoon, India’s growth is likely to be over 6%. The government’s focus and initiatives in the infrastructure sector, as well as taxes, is a welcome move, but need to be addressed aggressively.

The government should spread the GST across the country simultaneously and protect the domestic industry from cheap imports from China. Every country is adopting a mechanism to protect their domestic industry due to the global meltdown and India should do the same.