Editorial

Collaborative Working is the buzzword floating around these days, propelled by management wizards to push a slew of new products and services. The idea of collaborative working comes across beautifully in this modern remix of an old parable.

The hare and tortoise happened to meet again. The hare smarting from the defeat of its ancestor challenged the tortoise to a new race. Fresh with ideas from management schools, the hare ran the race at a consistent pace without any let-off and easily defeated the tortoise. Moral: Act swiftly, consistently and relentlessly. The wily tortoise knew that the ground rules do not favour its style and asked for a new race on a new route. The brash and overconfident hare immediately accepted only to find that the finishing post has now been set across the bank of a wide river. The tortoise ambled and swam across to victory leaving the hare gaping. Moral: Set your own ground rules. These two lessons suited well under yesterday’s licence and permit regime, but not today’s laissez faire environment of global competitiveness.

Fortunately, both our hare and tortoise were visionaries and they decided to challenge the hare-tortoise pair from the neighbouring pasture. They knew each other’s strengths well now and had the perfect game plan. The hare ran the first leg carrying the tortoise on its back till they came to the river. Now it was the turn of the tortoise to carry the hare on its back across the river. Through their collaborative effort they won the race hands-down.

The Chemical Industry offers a wide canvas and several opportunities for such collaborative endeavours. It is for all of us to discover them and act upon them.

Last month was a month of seminars for the Chemical and Pharmaceutical industry. Such seminars provide good platforms for the industry spokesmen to voice their expectations and concerns.

In an interesting review of the Chemical Industry, KPMG has indicated that it is a significant component of the Indian economy with revenues of approximately 28 billion US Dollars. The Chemical Industry contributes 6.7 % to India’s GDP and makes up 10 % of our total exports. Their analysis indicates that our present consumption of polymers is quite low - 1.8 Kg per capita as compared to the world average of 17 Kg per capita. KPMG expects the consumption to rise with economic development and improvement in lifestyle. The above 28 billion US Dollars has 18 % contribution from Pharmaceuticals, Biotech, Agrochemicals etc which KPMG term as ‘Knowledge Chemicals’.

The growth expectations obtained during the course of KPMG survey will see the industry to rise to around 60 billion US Dollars in the year 2010. At that level, the contribution of Chemical Industry to the country’s GDP will increase from the present 6.7 % to 7.1 %, while its share of the global industry will increase from 1.9 % to 2.3 %. Further KPMG draws up an aspiration scenario for the year 2010, in which they expect Indian Chemical Industry to grow to 100 billion US Dollars. This scenario envisages an average growth rate of 15.5 %, with basic chemicals growing at 7.7 %, speciality chemicals at 16.4 % and knowledge chemicals at 2.7 %.

I wish that this prediction of KPMG becomes a reality, so that the industry that has been languishing for long sees a brighter future in the days to come

.D.P.Misra

The Newsletter of December 2002 carried the news that MRC has been adjudged the Best Regional Centre at the CHEMCON 2002 in Hyderabad. This has brought back my past memories of Bombay Regional Centre started during 1959. I was then elected as Honorary Secretary with Prof.N.R.Kamath as the Honorary Chairman. The members were less than 100 and funds were meagre. The lecture meetings were announced through printed post cards with hand written addresses. Funds were collected by holding a series of lectures by Prof. Kamath on Drug Intermediates as requested by a group of chemists from the Pharma companies. In order to have a good attendance at the AGM, the first contributory dinner (free for spouses) was held at the Radio Club, through our member S.M.Mistry of Ahura Chemicals. Prof .Kamath continued as chairman for the next year. Subsequently Dr.K.G.Kudva, Dr.H.K..Joshi, H.N.Bannerjee served as Chairmen for a decade or so. In order to keep the records J,S,Shah donated steel cupboard and later a cash box.

I also recollect the first Annual Seminar held on a grand scale at the Taj Hotel, on the topic of Pesticides, which was well attended under the chairmanship of Dr.H.K.Joshi. Dr.C.B.Khanpara was the Convener and Dr.D.V.Tamhane,, Dr.S.G.Bhat and K.B.Kukarni were members of the Steering Committee. The Chief Guest was N.V.Khote, Managing Director of Rallis India Ltd. The activities of BRC included regular monthly lectures, annual seminars, visit to factories. At one stage, the then Chairman, Dr.S.S.Kalbagh and his committee decided to give more importance to the technical topics, instead of venues like 5-star hotels and held the Annual Seminar at TIFR Auditorium at Colaba and the expenses were reasonable. It will be of interest to note that two annual sessions were held under the auspices of Bombay University and IIT Bombay.

The members who were intimately associated with Bombay Regional Centre in the early days were Dr.R.B. Roy Choudhary, Y.H.Gharpure, Dr.M.R.Chivate, K.P.Mohandas Rao, A.N.Basu, Dr.S.B.Pandya, U.B.Rao, V.H.Pandya, Dr.P.K.Sharma, Dr.M.K.Bhattacharjee, G.K.Joshi, K.Venkatraman, Dr. G S R Narasimhamurthy, Dr.D.V.Khakkar. There are several others who were closely associated in the committee, but whose names I do not recollect now. Bulletins were taken out at regular intervals, but there was a lull in between. Depending upon the Chairman, the activities were many sometimes, fewer at other times. There were student activities too. Inter-collegiate debates were held for some years. On the whole, BRC’s calendar was full of activities. The membership decreased when other regional centres in Pune, Ankleshwar came up. It is a credit to BRC that several of our members became Presidents at National Level – some of the names are Dr.G.S.Kasbekar, K.P.Mohandas Rao, Dr.K.K.Tiwari, Prof.N.R.Kamath, Dr.A.N.Dravid, Prof G.D.Yadav.

The recent activities of MRC are commendable as also the regular publication of the Newsletter, under the guidance of the committee headed by chairman D.P.Misra. It is no wonder that CHEMCON 2002 declared MRC as the Best Regional Centre for the second time running. I am confident that this team will steer the forthcoming CHEMCON 2004 in a magnificent manner

Dr.S.G.Bhat

Former Hon.Secretary, Bombay Regional Centre.

Shaping a World-Class Indian Multinational in E&C

With the emerging focus on value creation and increased thrust on competitiveness, E&C companies need to make radical changes and breakthrough thinking in their processes through dynamic leadership, in order to meet the demands of competition, volatility and fluctuations in the business trends. The changing business scenario and the building up of international competition in E&C sector are the main drivers for companies to expand their boundaries and go beyond the frontiers of limited local operations, to wider regional and global business. E&C business has unique features centering on single point responsibility which include competent management of complex and large projects, meeting tight committed schedules within fixed costs, addressing complex contracting terms, efficient working capital management, understanding the technical complexity and management of a wide range of risk elements.

While the main thrust is on constantly enhancing the value and customer satisfaction these companies must also look for global benchmarks to move from being India-centric to becoming a regional/global player.

The drive for looking beyond frontiers comes from the limited and matured domestic market and the growing international competition being faced in the domestic markets. The perceived advantages of Indian brand with low cost having large resource of skilled manpower should be effectively leveraged in the geographical expansion of business and focus on widening the reach and entering into new markets with the ultimate objective of getting an acceptance of Indian brand through offering products and services matching true global quality and safety standards.

The Lumpsum turnkey mode of contracting has been gaining momentum in India where many organisations are increasingly adopting to execute projects on a fast track basis. While many global leaders in E&C business have entered Indian markets to bid for many of these projects, this has opened up opportunities for Indian contractors to reciprocate by going global for a fair share of business in growing international markets.

Globalisation process involves consciously changing the dynamics of organisation through well structured transformation phases, from being an export organisation to an international organisation and further to transnational and ultimately to being a global contractor with a well defined global strategy of developing core business in select markets and integrating and leveraging internal capabilities for worldwide business.

The E&C companies must also be well aware of the basis of differentiation in the levels of functional segments that these companies could cover effectively within their strategic framework.

The E&C companies must evolve their own global business models with a focus on core products and niche markets, leveraging track record of similar performance and core competencies, nurturing strategic relationship and building competencies in risk management, international safety & quality bench marking and complex contractual & legal issues and innovative financial management.

For E&C companies looking for global business, advanced engineering analysis, global sourcing standards, constructability analysis and high calibre project management, act as levers for successful implementation of global projects.

Some of the high performance engineering systems include 3-D CAD modeling, front end engineering capabilities including steady state and dynamic simulation, finite element stress analysis, flexibility analysis of piping systems and so on. Some of the E&C companies are also focussing on modular fabrication as an opportunity to add value through global products and systems.

The efficient management of the multiple variables of E&C business needs an intelligent usage of Information Technology.

The thousands of items to be procured and delivered to the Project sites from multitude suppliers must be tracked accurately both for Cost and timely delivery. eProcurement & Enterprise Resource Planning software connect to the Bills of Material to be procured in the Plant Design & Engineering Information Systems. Not only do they enable quick & accurate transactions but they also give all Project team members an online status of the smallest activity in a Project right from the bidding phase to the Commissioning.

Doing a job better & better every time is the job of the Online Knowledge Management System. Experiences and Learnings on Projects are recorded in the KM systems and are a valuable resource for successive Project teams to tap the critical information.

The skilful integration of E&C business processes with the appropriate IT Systems is key to the success of an E&C organisation aiming to be a world class global player.

Indian companies aspiring to become multinational must develop a pool of competent people in the organisation to meet the variety of challenges.

The critical factor of the globalisation process is in building world class management cadre to be in a position to address the complexities involved in global business and to meet challenges faced in the international markets. New set of capabilities have to be built in international managers in terms of understanding international market, business development skills, relationship management, international negotiating skills, ability to work in transnational cross cultural teams, adaptability to new situations, sensitivity to different cultures, honing language skills and strategic awareness of global view without compromising on the values of the organisation but effectively leveraging core processes and core competencies of the organisation.

This would require well-structured training programs for capability and leadership development at various operational, tactical and strategic leadership levels. For shaping a world class Indian multinational in E&C business, the leadership of the organisation should institutionalise a well articulated vision, a set of uncompromising values, high quality systems and core organisational processes and a clear cut global strategy with well trained and committed people who are flexible and responsive to emerging challenges with ultimate objective of attaining sustainable growth of business in international markets.

Environmental Information Centre (www.cleantechindia.com) is a joint initiative by FICCI, ICICI Bank and USAID. This India based resource site has a global database of more than 8000 environmental technology consultants, equipment and service providers. In what is perhaps its most outstanding feature, the site has up to date news and information on the country’s regulatory matters and compliance issues including the latest amendments and gazette notifications. Case Studies and Best Practices from various industries are the icings on this truly wonderful site.

Send your feedback on this and the Newsletter in general to secretary@iichemrc.org. Of course do keep visiting www.iichemrc.org for the MRC news and www.iiche.org.in for the news from the IIChE Headquarters.

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