BUILDING THE FOUNDATION FOR A STRONGER TOMORROW
“At a macro level, I see organisations shifting from being capitalists to custodians.”
Operative companies across AM International group have performed well in 2021, with some delivering historically best results. In a year-end interaction, Ashwin Muthiah, Founder & Chairman, dwelled on how the group companies have navigated the COVID-19 pandemic while riding the tailwinds to create a sustainable foundation for future growth.
Here are edited excerpts from the conversation:
1. What factors led to the exceptional performance of group companies at AM International during the past year?
AM: COVID-19 has been a lesson for every corporation in terms of preparedness, planning and sustainable business operations. We built our readiness on the three pillars of health & safety of our employees, operational continuity and cost optimisation. The tailwinds coming out of COVID-19 have been favourable. 2021 saw a pick-up in demand. I believe both internal and external factors have contributed to the tailwinds.
One crucial factor has been our ability to continue operations by activating a dependable local supply chain network. This proved immensely helpful when international logistics were facing disruption. Even as cross-border trade came to a halt due to the pandemic, we were able to meet domestic demand. Many players who were solely dependent on cheap imports from neighbouring countries faced supply roadblocks. This led to a surge in domestic demand and worked in the favour of local manufacturers.
Our group companies leveraged the opportunity to gain momentum. With a tech-forward approach, sweating our assets, keeping a prudent eye on finances and stringent governance, we were able to navigate the pandemic with agility.
2. What will be the impact of this phase on the organisation’s future?
AM: The impact of this phase has clearly been in the form of an acceleration effect. The pandemic accelerated our companies’ technological transformation efforts, which led to modernisation of our customer interfaces and digitalisation. Technology integration is a key growth strategy across the AM International group and our investments in green tech and clean energy will continue as a priority.
Moving ahead, we will continue with a focus on agility to not miss any opportunity to strengthen our financial resources. This is vital to ensure sustained margins and bring down costs to generate more advantages for the business. In terms of integration, our focus will be on opportunities that add value to our core businesses with no fresh diversification.
One crucial factor has been our ability to continue operations by activating a dependable local supply chain network. This proved immensely helpful when international logistics were facing disruption. Even as cross-border trade came to a halt due to the pandemic, we were able to meet domestic demand.
3. How will the AM International group businesses leverage the growth they witnessed in 2021 to optimize future performance?
AM: Having navigated this phase, our companies are well equipped to turn an unparalleled threat into an opportunity. Our leadership teams set an example from the top. They were able to put the crisis to work by accelerating strategy, scaling innovation and deepening customer engagement. This helped us generate the momentum required for companies to thrive, despite the hurdles presented by COVID-19. Alongside, we ensured strict adherence to the pandemic protocols for the safety and well-being of our employees and their families.
Looking ahead, I expect the world to normalize in the next 18-24 months. Once normalcy returns, most businesses will go back to sustainable ends. To make the most of the upturn in performance, we will leverage the surge to fortify trust among stakeholders.
For instance, we will invest in greener technologies and brownfield expansions. We will continue to be prudent in our financial
decisions. This is important to ensure that we sustain strong performance without getting carried away by the healthy profits of the past year. This approach will help our businesses remain sustainable and successful when things normalise.
4. In 2022, how do you see your way forward plans and various priorities?
AM: As a group, we will enter 2022 in a position of strength. We will use this to consolidate and solidify our market leadership with a focus on our core businesses of fertilizers and petrochemicals.
Second, we are committed to deploying resources for brownfield expansions and green technologies to enable more efficient raw material sourcing. For example, the switch over from naptha to natural gas at the SPIC plant replaces high-cost fuels with a more energy-efficient and cost-effective resource. The move will also enable us to contribute to a cleaner environment.
Third, we will look at meaningful merger and acquisition (M&A) opportunities – either within India or outside – that will help our companies to win market share or support our core businesses. As we advance, our investments will be in technology-oriented assets, which will help us either reduce raw material costs or upgrade the product efficacy for our core business. We’ll approach such collaborations with very balanced gearing. The idea is to ensure that the companies remain successful independently.
5. How do you see the post-COVID world panning out at a macro level?
AM: At a macro level, I see organisations shifting from being capitalists to custodians – showing more compassion and empathy, making decisions in accordance with values and trust and serving communities. This has underpinned the culture with which we built the AM International platform of companies.
Another aspect is the omnipresence of technology. COVID-19 has made us appreciate how we can use technology to survive. I don’t see a situation where technology becomes only a solution or fallback in the future. It will be ubiquitous.
Having said that, the human element cannot be forgotten. Physical interactions are vital to express emotions and feelings. So that cannot be overlooked. Therefore, the post-COVID world will be defined by compassion, communities and a combination of physical and digital worlds – a phygital one. Organisations of the future have to operate with both the head and the heart!