HEADLINES:
July 22 2019
Want to create long-living institutions: Ramco’s Raja
25 February 2019

We have to steadily keep on improving value so that our companies can sustain for long, says the group’s chairman

It’s not a sprint. It’s a marathon. Ask the czar of the low-profile Ramco Group. He will vouch for it. “There is no point in just being proud of your institution. How can you be a long-living institution? That’s our vision,” said P.R. Venketrama Raja, chairman of Ramco Group.

In a free-wheeling interview, the soft-spoken Mr. Raja indicated that the group had a blinkered horse-like focus on creating “long-living institutions” on the lines of those existing in Japan and Sweden.

“When companies are dying after 60-70 years, how can you be like Japanese and Swedish firms that have survived for long? What is it that helps us to go on and give value to society and stakeholders? What is it that we can build and that can also give us deep satisfaction? These were always high on the agenda of the group’s thought leadership,” he added.

“My wish is to steadily keep on improving value so that our companies could sustain for a long time,” he added. “That’s the approach we have taken. The world is rapidly changing. Hopefully, we will stay relevant as there are demand for our products. We are dealing in commodities (cement, textiles, infrastructure, software products and logistics) and not in fashionable products. And, the margins are thin in commodities,” he pointed out. “We want the Ramco Group to be remembered for its values.”

Ramco Systems, the IT product company of the group, had invested heavily in modern technology in the area of ERP. The firm’s products, he said, were much sought after worldwide.

“There is lot of interest for our products across the world. Again, there is solidity. It requires a lot of value, R&D and depth to give such products,” he said.

“We have created assets and excellent products in different sectors. Assets like these cannot be built again without wealth. It is important that we make it, give it, grow it and reach full value,” he added. Is Ramco Systems under-marketed? Not exactly, he said. “We had our own limitations. We focused on a few things ... though we could have done many things ... till we reach a particular stage. It is time now to scale up our products and workforce,” he added.

Are finances and workforce a constraint for scale-up? “It is not a problem. Things grow faster than expected. We have to solve it,” he said.

On the rat race among the new age companies, he said: “Rat race is there. Ultimately, if you have a fundamental purpose and something of meaning, some of them will sustain and others will go. Our approach has been to steadily improve value, sustainable in the long run as a company and institution. Hopefully, it will work, and we will continue to stay relevant. With deep R&D, efficient product and quality, we can be better than the competition.”

Bankruptcy law

To a question, Mr. Raja said that the bankruptcy law was the need of the hour. It was important for the economy as it facilitated the sunset of an asset, he added. “With its implementation, inefficient assets have been taken out of the market.”

To a question on the much talked about one-day default prescription for initiating insolvency proceedings under the IBC, he felt that it was a bit harsh.

In this context, he said India could also have a Chapter 11-like law as in the U.S. bankruptcy code.

 

 

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