Saturday, September 01, 2012

Pawan Goenka, Ppresident, Automotive & Farm Equipment

Pawan Goenka, Ppresident, Automotive & Farm Equipment, M&M , Talks about the Group’s M&A Strategy, Future M&A plans and endeavours for a Global Presence, particularly in neighbouring China in this Exclusive interaction with B&E’s Pawan Chabra 

B&E: Can you elaborate on the growth plans that M&M has in mind to leverage from the position of being India’s largest producer of tractors. Are you planning to acquire more companies, especially in China?
PG: We are certainly looking at expanding our global presence in the tractors segment. The last acquisition we made in China was close to one and a half year ago, but we haven’t done any acquisition beyond that point in that region. Clearly, we are looking at markets like China and US as they are among the few important markets for the tractors segment. While we are currently the #5 player in the Chinese market so far, we would certainly aspire to become a player in the top three on a 5-6 year horizon. All I can say is that the strategy will evolve over time and I cannot say today what will happen at a given point of time. For now, I cannot comment on whether we will enter China with two-wheelers or SUVs.

B&E: The company has recently picked up a 20% stake in the Vayugrid’s India operations, What kind of money has been pumped in for same and can you explain the strategic advantage behind the deal?
PG: This was a very small deal which will require an equity infusion of close to `1 crore and close to `4 crore in convertible debentures. It was a start up company, which has a business model somewhat similar to what we want to do in our Farm Equipment division. It focuses on creating opportunities for farmers to be able to manage crops better and enhance their productivity. Moreover, it also offers an option for farmers to buy their crops and we are clearly supporting it by having a small equity stake in it. The deal is not at all focusing on the motive to sell more tractors. What we are looking at is to create a business model out of Vayugrid, which will support farmers to gain more productivity and has a guaranteed off-take in return.

B&E: Is Scooters India next on the list of the company as it will offer a large presence in the three-wheeler segment for your company?
PG: I had said a few days back that we haven’t had a word with the government so far regarding the same, but I recently had a word with Vilasrao Deshmukh, Union Minister for heavy Industries and Public Enterprises and asked whether the government is serious about selling a majority stake in Scooters India. As he said yes, we hope to discuss further.


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