5 questions for… B Santhanam

05/18/2020

B Santhanam is CEO of the Saint-Gobain Group in India. He tells us about the consequences of the Covid-19 pandemic in this vast country, which is very gradually emerging from lockdown, along with new consumer expectations and changes to working life.

How is business for the Group in India?

After a great start to 2020, in March, our sales reached just 55% of the pre-Covid level. In April, the entire nation was under a lockdown and our sales were mainly from exports. In May the market is slowly reviving even as the construction sector is expected to see a fall of 20% to 30% in 2020. It is vitally important for us to gain a higher proportion of consumer spending and we are exceptionally well positioned in all our businesses to do just that

At this exceptional time, the Group’s companies are focusing on their customers’ needs – taking into account each one's specific characteristics, constraints and needs in order to develop bespoke solutions. Despite lockdown, thousands of projects are still being monitored, so that as soon as one is able to restart we will be ready to supply it.

As lockdown is lifted and business resumes, what are your priorities?

I have three: a cautious and safe return in terms of health, improving the cash position and rapidly identifying and converting every business opportunity.

In terms of health, we are committed to providing our employees with optimum conditions, aligned with government requirements to enable them to return to work safely.

From a business perspective, our plants, including those producing glass, plasterboard, abrasives for the national market are now operating on demand, since our priority is cash and therefore inventory reduction. We are however accelerating the restart of all lines that are export oriented. Many of our production lines have adapted to provide an agile response to market movements, such as lower volumes, very fast production times, etc. We have used this period to reimagine our Fixed and Variable cost structure and have unleashed an ambitious program of Total Cost reduction across both regional and global businesses.

Finally, remote working and the need to rethink the layout of large numbers of offices represent interesting sales opportunities for us. Our leadership in digital technology also allows us to finely target our customers’ needs. These conditions represent a real opportunity for our activities, which are very well established locally.

Do you think that the Covid-19 crisis will change the Indian market… and its consumers?

A radical change in consumption habits is perceptible – a paradigm shift that we will need to study very closely. Our sales, marketing and innovation teams are collaborating on this project.

What we are already seeing is that the post-Covid world will be more local, less globalised. It will inevitably be marked by uncertainty, by an explosion in remote working and the flourishing of e-commerce.

Consumers are now looking for value and a reinvented production model – although their aspirations to own a home or a car, and an optimal standard of living generally, will continue to drive our economy... But these important purchases will no doubt be deferred at first in favour of basic necessities, savings followed by investment in home renovation to facilitate working from home.

How should the Group respond to this reinvention of the market?

We need to focus on the opportunities offered by the market changes that I mentioned earlier. This involves a detailed understanding of customers’ new needs, in collaboration with business lines and our partners, to develop solutions matching their expectations. Expectations in terms of hygiene, privacy, acoustics, versatility and modularity will drive future design of homes, working spaces and interiors.

A team combining business and R&D is therefore working on the launch of new solutions and new products.

Now is a good time to rapidly roll out digital tools in abrasives to improve productivity of our customers. In the construction sectors, in addition to cross-functional solutions, the emphasis must be placed on simplicity, ease of application and digital tools which help to reduce friction and potential difficulties installing or using our products. This is also the reason we plan to reinforce our capacities in Augmented Reality and Virtual Reality. Our Data and Analytics academy will help us locate potential customers even as they look for authentic expertise

Will this crisis affect the way we work?

Yes, of course. The explosion in working from home, reduction in travel in favour of virtual meetings, reduction in the surface area of office space required... And above all, Covid-19 has forced us all to increase our digital skills.

I am convinced that all these changes will occur without loss of productivity and will even allow increased collaboration between functions and business lines. I am also pleasantly surprised by the agility shown by our teams in adopting these digital tools. While we continue to remain trusted experts in our fields, we are all learning to learn continuously and reshaping the world sustainably.