Wednesday, June 02, 2010

Enlightening interview of Kapil Gulati

The conventional wisdom is that Brazil, Mexico or Argentina are the platforms to launch pan-latin american business. Kapil Gulati loves defying conventions. He is the new breed of Indian executives with a new mindset. He operates from the small country of Costa Rica and manages a business of 160 million dollars in 13 Latin American countries as well as in USA. And he wants to expand the business with new acquisitions.

During our lunch in Buenos Aires last month, I found him sharing my optimism and confidence about the prospects of Latin America for Indian business. He has adapted well to the Costa Rican ¨Pura Vida ¨.

Here is Gulati´s enlightening ( ... his company Havells is in the lighting business..) interview in Financial Express of today.

We are scouting for acquisitions & tie-ups in Latin America.

Costa Rica is the America headquarters of Indian company, Havells Sylvania. Kapil Gulati, the company’s director of America, manages the $160-million operations in the region, including the US. Havells had bought the lighting and fixtures business of American firm Sylvania worldwide and Gulati is in the process of consolidating and streamlining the business. He discusses the company’s inorganic growth strategy for the region with FE’s Huma Siddiqui. Excerpts:
How do you plan to expand in the region?
Havells Sylvania is among the top-four lighting companies in the world owned by Havells India since 2007. In Latin America, we now have two manufacturing plants, in Colombia and in Costa Rica. We have local operations in 13 Latin American countries, from Mexico to Chile. We employ more than 750 locals and generate about $200mn revenue, 16% of the business of Havells India.
After India, Latin America has highest growth for the corporation. Chile is a developed and stable country with highest per capita GDP ($15,000). Peru is among the highest growth rate countries of the region. The countries touched 9.8% real GDP growth in 2008. These were a perfect fit in our phase-1 regional geographical expansion. In phase-II, besides improving our reach within the existing countries, we are improving our export business in Uruguay, Paraguay, The Caribbean & other Central American countries (Nicaragua & Honduras).
Last year, we formed local companies in Chile & Peru, but due to the global economic situation decided to put the process on slow track. This year in Q1, we started team building activity and local product validation process. In May, our local business in Chile was started.We are scouting for strategic tie ups, joint ventures and acquisitions to strengthen our position, especially in the biggest Latin American economies — Brazil, Mexico and Argentina.
What are the opportunities available to Indian companies in the region?
Over the last seven-10 years, the Indian business community has increased its participation in Latin America. The region has stabilised economically. With success stories like Havells, other Indian business houses can keep Latin America on their high-priority expansion list.
What is your company’s participation in energysaving programmes?
Some of the Latin American countries (Ecuador, Colombia, Argentina, Brazil) have announced banning and phase-out schedule for high-energy consumption products like incandescent lamps. Most Latin American countries are now giving subsidy or even distributing free compact fluorescent lamps.
Have you identified partners for joint ventures in the region?
We are looking at local companies, with the objective of expanding our manufacturing base for energy-efficient products. Since we are a public-listed company, we have to follow certain guidelines, therefore cannot give more details.

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