Interview with Mr Giridhar Myneni

From a humble beginning in the seed business in year 1973, we have come a long way to become an INR 3000 Crore conglomerate. The Seed company was started by Mr M Venkatramaiah , the Founder Chairman of the company with a vision to provide every Indian farmer with good quality seeds at reasonable prices. Our current Chairman Mr. M. Prabhakar Rao took charge of the company the year 1982 and has since led the group with his sharp business acumen and the vision of transforming people lives.

Since inception, the Group has grown manifold in terms of size, business portfolio, revenue and profits. In year 2001, power business was added to the Group business portfolio. Subsequently, the Group expanded into Textiles (2002), Sugar (2003) and Infra (2008) businesses. Each of the businesses has grown significantly over the past years building on the Group’s strengths and the synergies that exist between different Group Companies.

Today, the combined revenue of the group stands at INR 1500 Crore set to grow to over INR 8000 Crore by FY 2014-15. The Group’s flagship company Nuzeevidu Seeds (P) Limited produces 45% of the top quality seeds in India and is reaching more than 10 mn farmers through its products. Company’s “Subeej” brand is a household name in rural India. The Group’s Sugar business is already among the top five Indian players in the industry. We have made investments to the tune of INR 1000 Crore in power business and INR 520 Crore in Infra business so far and set to emerge as major players in these businesses also.

Textile business is going to play a major role in realizing out goal for the Group. With our strength of “Cotton to Clothing”, we will offer customers the unique value proposition of full process control in the value chain. Keeping this in mind, we have made significant investments (to the tune of INR 1100 Crore) at every stage - ginning, spinning, weaving, processing and garmenting. With our Group’s traditional strength in Cotton seeds, cotton cultivation and cotton selection and the seasoned team, our textile business is poised to become a major Asian player in the industry.

With the flood scenario in Pakistan and China, the focus of the industry is mainly on cotton and cotton yarn. With 30% of the cotton fields destroyed in Pakistan and 7% of the cotton fields destroyed in China, the global cotton availability is reduced drastically. China already had less acreage under the cotton cultivation. On the other hand, rising consumption in China is expected to drive its import demand further. World demand is expected to grow while the yield has been stagnant. As a result of these factors, yarn prices, which were moderating a bit during July - August, are soaring again. Same is the condition of cotton market. We expect that the condition is going to remain the same in the near future.

Good market for yarn has prompted all the domestic spinners to run their plants at more than the normal utilization levels thereby increasing the workers’ demand. The effect is continuously increasing wages, which may affect the whole textile business chain in the long run.

Organized Mills in India continue to face problems of high costs due to higher wages and their presence in the urban areas. Going forward, the key to success in the fabric business will be the scale of operation and integration which will effectively reduce the overheads and the transfer related costs.

After the major demand slump experienced in 2008-09, garment industry has been picking up at a good pace. The imports from US and UK, the major importers of garments, have shown secular growth, which we expect to continue in the future. China, Bangladesh and Srilanka will continue the dominating exporters of garments.