CEAT eyes $2 billion revenue in near term: Anant Goenka

In an interview, Goenka, managing director and chief executive of the tyremaker for over a decade, traces his growth through the group, the prospects for the company and the group’s changing management style. Edited excerpts:

How has been your personal journey since joining the group?

I have been in the group for 20 years. For me, the first 10 years were skill-building, where I started at CEAT as a regional leader, sales, and progressed in various roles from leading a small SBU (strategic business unit) to leading the supply chain. Raised. KEC International. In each of these roles, I felt like I was thrown into the deep end of the ocean, where I had to quickly learn the soft aspects of leadership and people management, along with functional skills. I naturally had a fear of public speaking, which I had to overcome in my role as CEO of CEAT.

Managing various stakeholders like investors, board, media and clients has been another enriching experience. I’ve always had a personal affinity for CEAT because, from a young age, it was the easiest company to be in, being a product and marketing-oriented company.

EPC (Engineering-Procurement-Construction) and technology are not intuitive to understand, and so when someone asks, “What does your family do?”, “We are in the tire business”, would be my answer. The last 10 years at CEAT have again been significant as I understood the importance of purpose and values ​​in an organization. This belief system has come through in our Total Quality Management (TQM) journey, for which we were awarded the Deming Prize in 2017.

What is your vision for CEAT?

Overall, I am very optimistic about the sector, be it the tire industry or the auto sector. Be it inflationary pressures, changes in safety and loading norms, GST and demonetisation, various events have subdued the last four or five years from an auto demand perspective. Today, however, the sector is poised for further growth.

With respect to CEAT, we have a vision to cross $2 billion in revenue in the near term by focusing on the passenger and off-highway tire (OHT) segments. We already hold a leadership position in the two-wheeler segment and are now expanding our growth to the passenger car and SUV (Sport-Utility Vehicle) segments, where penetration is still low in India. Internationally, India is becoming the farm tire manufacturer to the world, and we have made strong gains in the EU and US markets over the past five years.

There’s a lot of innovation in the auto and tire sectors, driven by the push for EVs, sustainability and connected vehicles. We already dominate the two-wheeler EV segment and have introduced our exclusive low-noise, low rolling resistance and high-durability range of EV tyres, across all product segments.

Within the company, digitization is a high priority for improving customer experience and efficiency in factories. With climate change becoming a serious threat to our quality of life, we are focused not only on making our products eco-friendly but on the entire value chain from sourcing, manufacturing, transportation and till the end of life of the tyre. are concentrating. It is our responsibility to give back what we are taking from the earth.

Most importantly, we aim to ‘Make Mobility Safe and Smart’. We do this by continually understanding our customers’ needs, solving their problems, and inventing on their behalf.

Are you exploring inorganic opportunities that may present themselves at this time? Are you looking to partner with private equity investors like you’ve done in the past?

We are open to acquisitions; However, the tire industry is relatively small, and opportunities are scarce. However, if there are potential-based acquisitions, we will consider them.

How is the group developing new businesses? What is your capital allocation strategy?

We allocate approximately 70% of our capital to core, 20% to adjacent and approximately 10% to higher-risk, higher-return businesses. Each company in the group looks at mega-trends and its own endowment to decide which is the next area to invest in.

For example, at CEAT, we believe there are huge cost-saving opportunities in the truck fleet through driver training, fuel management and tire management.

We also have a large number of direct fleets that we have relationships with.

With the decreasing cost of sensors and connected vehicles, we can work with fleets to reduce their costs. Similarly, for RPG Life Sciences, as the world is reducing its exposure to China, the API space, or KEC, could be an opportunity to accelerate growth in green energy.

RPG Group is one of the oldest business groups in India. How has the management style of the group changed over the years?

The RPG group comprises businesses that are vastly different from each other – tech, pharma, tires and engineering-procurement-manufacturing.

We have a federated structure in which unlike many other companies, most of the companies carry a separate brand name. We give each company a great deal of independence and the group is extensively involved in senior management recruitment, people systems, M&A and high level strategy. One aspect that binds the group is our belief system of being focused on people – whether it’s investing in their development, giving them freedom or a greater purpose of making a difference in the world. We truly care about our people and their happiness.