The vice-chairman & MD of India Cements shares with Sushila Ravindranath the highs and lows he faced in the cement industry
When you hear the name N Srinivasan, you think of cricket. As it happens, cricket is not his only passion. Cement is the other. He has lived and breathed cement his entire adult life. Last year marked his 50th year of association with the industry. To celebrate this landmark, the company has brought out a coffee table book on him. The usually low-profile Srinivasan is in a celebratory mood.
His journey in cement industry, as in cricket—while his son-in-law, Gurunath Meiyappan, was convicted in the IPL scam, Srinivasan was cleared by the Supreme Court, though the top court came down heavily on “conflict of interest” on Srinivasan’s part—has seen high and lows, and a lot of triumphs. India Cements Ltd (ICL) was founded in 1946 by SNN Sankaralinga Iyer and TS Narayanaswami (Srinivasan’s father), both from Tirunelveli district of Tamil Nadu. Srinivasan was made the joint MD of ICL in his 20s when his father passed away unexpectedly at age 59, in 1969. He had to cut short his MBA at the Illinois Institute of Technology where he had done his Masters in Engineering.
His career in ICL came to an abrupt end in 1979 because of a rift between him and the MD KS Narayanan, the other founder’s son. He then fought an epic battle to get back to the company. I want to ask him what makes him stick to cement industry when he could have started some other business when he was out of it.
When I suggest lunch, he says he prefers the Coffee Shop at the Leela Palace, which is next door to his sea-facing office in Chennai. He is a man of fairly fixed habits. He frequently has lunch there with his daughter Rupa Gurunath, the whole time director in the company. He tells me he always has pizza margherita with green chillies. I, too, decide to have a vegetable pizza with a few more veggies thrown in. As we are served green tea, he says he believes in sticking to what he knows.
“This is a great industry to be in. After decontrol, we are the second-largest cement manufacturer in the world, with 400 million tonne capacity. It is a cyclical industry with constant supply-demand mismatch. You need a 10-year vision to survive. You can’t judge it by quarter-to-quarter, like IT. The industry has been facing challenges. It will improve a great deal in five years and will be outstanding in 10.”
I ask him how he kept track of ICL when he was out in wilderness. “It wasn’t difficult. Till partial decontrol, cement was a sluggish industry.” Although he tells me this, Srinivasan kept himself hyperactive building contacts and a network of supporters ready to back him. He won friends in Delhi, which was difficult for a South Indian to do those days. “I had to weave through bullets. My single-minded objective was to get ICL back. I managed to stop the company being taken over by ITC in the nick of time. My father started the company and it was a business I knew.”
After many twists and turns, the two factions made up. Srinivasan came back to ICL in 1989 as its MD and Narayanan’s son N Sankar, chairman, Sanmar Group, was made non-executive chairman. ICL was then not a company anybody other than Srinivasan would want to touch. It was in bad shape, its balance sheet was in the red, input costs were spiralling, labour was restive, while cement prices were under pressure in a glut-market situation.
Srinivasan chose aggressively to bid for the million-tonne Chilamkur cement plant of Coromandel Fertilisers Ltd in Andhra Pradesh in 1990, a year after he took over the management of ICL. It created waves in the industry.
We are served our pizzas. “I came back at the time of decontrol. It opened up many possibilities. The bidding for Chilamkur plant was a calculated move, not a gamble. Our conclusions were backed by in-depth technical studies. Where I scored over others was in my grasp of the projected outlook for cement, which, thank God, proved accurate.”
With several takeovers, some aggressive, setting up greenfield plants and technology upgrade and expansion, ICL is now one of the top 10 manufacturers of cement in the country. “We are now going into MP and UP.”
A major issue he had to deal with was labour, which was on a boil in the early 1990s. “I am committed to labour welfare. There is trust on both sides.” He has been able to successfully achieve amicable wage settlement with cement industry workers throughout the country, with all trade unions coming together for 30 years. “I am now working on the 7th wage settlement.”
We are about to finish pizzas. The staff at the Coffee Shop knows he ends his meal with a butterscotch ice-cream. I ask for a coffee. Srinivasan tells me that being based in Tamil Nadu was a disadvantage and a challenge. “All the bankers were in Bombay and they used to break into Hindi during meetings. It was difficult for somebody who wasn’t fluent in the language to keep pace with them. We would have been much larger had we been in Bombay.”
ICL remains independent and will not consider selling out to MNCs as many of his erstwhile rivals have. Srinivasan has bought out his brother’s and Sankar’s shares. “I am at peace with myself and MNCs. I know I am better than MNCs. But they have the advantage of low interest rates. We have learnt to deal with that.”
As we leave, he answers my first question. Why has he not considered entering any other industry? “Cement is a difficult industry. It is even more difficult now. But it suits my temperament. I like challenges, tough situations. I don’t give up. When I am confronted with a problem, I don’t complain. My mind immediately moves to what’s next.”
What about cricket? “That’s another long story, another time,” he says.