Since 2014 as the MD of Sandvik India, Parag Satpute has been mapping the growth strategy for the company in India. MBA holder from UK-based Warwick Business School, Satpute has been with the company for over 15 years and have held several leadership positions in India and Europe. In his previous assignments, he has led large cross-cultural and cross-functional global teams driving collaboration and synergies that facilitate deliverying on business, employees and customers’ priorities. In his last assignment, based out of Stockholm, he was responsible for leading a project defining the long term global strategy for the Sandvik Group. Satpute in a conversation with FPJ’s Rahul Nayar talks about the company’s plan in India.
Where does the global company, Sandvik, stand in India in terms of turnover?
Sandvik has a long and illustrious heritage of over 150 years. It was founded in a small town in Sweden called Sandviken, from which it derives its name, as one of the first companies in the world to manufacture steel in a commercial scale. Right from the outset, the founders believed in innovation, high quality and working closely with customers, which are even today at the core of all our businesses. With these principles, the company has expanded and taken world leading positions in several high technology products such as tools and tooling systems for industrial metal cutting, mining and construction equipment and solutions as well as advanced stainless steels and special technology for industrial heating.
Sandvik is today present across 150 countries. The company came into India in 1960, becoming one of the first Swedish companies to establish a subsidiary with a manufacturing unit in the country. Today, Sandvik has a pan-India footprint with five manufacturing units and a strong network of sales and service personnel. The turnover of Sandvik group in 2016 was 81.5 billion SEK (Swedish Kronas) while that of India was 2.6 billion SEK.
What are the products manufactured by Sandvik India?
Sandvik Asia Private Limited is an important export hub for Sandvik globally. We manufacture products for both domestic as well as global markets. In India, we have five manufacturing units. The Pune unit is for cemented carbide and HSS tools, rock tools, solid carbide tools, mining and construction equipment assembly; Mehsana is for stainless steel extruded tubes; Hosur is for wire and heating technology products; Hyderabad is for rock tools and a Carbide Recycling Centre is at Chiplun. We are also an important export base for Sandvik globally catering to countries all over the world.
What is the market share of Sandvik’s products in India?
We invest to become leaders and our aim is to be number one or number two in the markets where we operate. This has led to assume leading positions in metal mining, infrastructure, oil and gas applications and automotive solutions.
Are there many competitors in this field?
We operate in varied segment and product types right from machining solutions to specialised materials technology and mining and infrastructure equipment solution. Sandvik is an amalgamation of over 25 product areas and in each of these, we have different competitors, most of them being renowned global players like Sandvik.
What was/is the impact of the two key policy events on Sandvik India, namely demonetisation and GST implementation?
Our early assessment on GST is that there is going to be a cash flow impact, because many of the equipment is put under the highest slab of 28 per cent. However, I do not expect any bottom line impact. For a company like Sandvik, we are geared up for this transition. We have been proactively engaging in industry forums and having dialogue with the concerned authorities and the government where they are open to the suggestions. Reflecting on our global experience in other parts of the world, there has been an inflationary trend initially that has tapered down in the subsequent years. We have done our impact analysis for over a year and we are well prepared for the transition. In fact, we are happy that finally it is happening and are confident to see a positive impact in the long-term.
When it comes to demonetisation, it did see a disruption in the lives of each one of us. However, its business impact has been negligible as most of our customers are from the organised sector.
Seeing the pace of reforms in India, where does Sandvik India see itself in coming three to five years?
A Sandvik should either be world leading, or have the opportunity to become world leading, in the areas and niches in which the Group operates. Today, we hold strong global positions in many segments. To maintain and strengthen these leading positions and boost our growth and returns, we aim to become even more customer-oriented, agile and global. Sandvik’s focus is on long-term value creation for all our customers, shareholders and employees. We need to continue to play a significant role in global industrial developments. India features as an important market in the sphere of things and has a strategic importance in the overall growth of Sandvik. In this journey, safety and productivity shall continue to remain the priorities for Sandvik.
Sandvik is known as a company committed towards gender equality. Can you please elaborate on Sandvik India’s initiatives in this regard?
We have a strong focus on gender diversity. We are sponsoring girls to pursue higher education. For example, one of our flagship projects is ‘Giving Wings to Dreams’ where we sponsor deserving girl students in pursuing engineering degrees. We instituted the ‘Sandvik India Diversity Awards’ last year and the first awards were given this year. Here we recognise people, organisations and companies, who are doing good work in gender diversity. This time we received 170 applications of which eight projects were awarded and the plan is now to work in supporting them.
