Rahul Jain, the President and CFO at SRF limited spoke to BW CFO World’s Janani Janarthanan on how the company has found new ground during the pandemic and where the renewed product innovation is headed.
Following localised lockdowns and a year of supply volatility, how was the technical textiles business affected and how is it faring now?
The Technical Textiles Business was the most impacted at the beginning of the lockdown as majority of our plants were shut. With improving market dynamics that are mainly due to faster-than-expected recovery in the tyre industry and SRF’s continued focus on initiatives to enhance operational performance, the performance of the technical textiles business has been strong.
With a pickup in the economy, replacement demand has also been healthy. In addition, due to the uncertainties in supplies, customers have tended to prefer domestic supplies, which augurs well for us.
The Belting Fabrics segment, which is an important segment within our Technical Textiles Business portfolio has contributed significantly to the overall performance of the Technical Textiles Business. With the opening of the mining sector, the Belting Fabrics segment is expected to gain further momentum.
As a specialty chemical company, where is your best bet in terms of future investments?
SRF is at the cusp of scaling new, greater heights in the Specialty Chemicals Business. And we have started looking beyond Fluorination into other complex Chemistries, which will broaden our market space significantly. Business growth is also linked to investments that are currently being implemented and those that will be planned in future. The Chemicals Business is currently implementing capital expenditures of more than Rs. 2,000 crores, which will be completed over the next 2 – 3 years. These should take care of our next growth phase and we will look to continue the deployment of our free cash flow back into our businesses.
The packaging films business has grown considerably in the year gone by, with a foray into Europe and Thailand for manufacturing, what’s next and how is the global consumer consciousness around sustainable packing having an impact?
The COVID-19 pandemic brought the whole world to a standstill. It affected production, disrupted supply chains and markets, resulting in financial losses. Since the Packaging Films Business (PFB) is a part of the essential goods value-chain, SRF continued to operate its factories in a scaled-down manner during the national lockdown. During this time, we took pro-active steps to protect our teams that included additional hygiene, social distancing (including in canteens) and limiting access of employees on a need to basis throughout our manufacturing sites.
The pandemic has further established the need for hygienic packaging of essential commodities in the food and non-food categories. Looking ahead, civil work for SRF’s new BOPP Line & Metallizer at Indore is progressing as per schedule.
ESG metrics have become an important topic of investor discussion, talking of responsible manufacturing and sustainability reporting, how is SRF staying ahead?
The pandemic has further heightened awareness of how vulnerable our society is to changes in our environment, pushing sustainability to the top of our agenda. We are committed to ensuring our business practices are sustainable in every possible way, be it in the adoption of new technologies that enable a better, cleaner future or in the way we manage finite resources efficiently and care for our customers, employees, communities, and the planet.
Furthermore, we are looking to improve our ESG reporting standards and in this endeavour, we have included a detailed ESG section in our FY 21 annual report. We are working with specialists to setup a roadmap for our ESG reporting and KPI setting.
Learning from the pandemic, what are the new list of skills for the ideal CFO according to you?
As modern-day business paradigms change swiftly, so does the role of a CFO, from being function-oriented to strategy-oriented today. The DNA of the CFO now embodies the thorough understanding of the business, the strategies as also its competencies and capabilities. Being adaptable to respond to a situation, be it from a Work-from-Home perspective or responding to broken supply chains to support customers and vendors has fundamentally altered the conduct of business. Using data and analytics in managing complexity, anticipating potential disruption, and quickly developing a response is something that the pandemic has taught us.
It is also very important for the new-age CFO to be empathetic. In my role, I focus on “people” issues over-and-above the traditional financial governance responsibilities and use interpersonal relationships to help people make better decisions and get ahead. To be successful as a CFO, one must be highly interactive, social and a consensus-oriented leader.
As chemicals conglomerate, your top 3 predictions for the future as we recover?
Firstly, I believe that using Technology and Innovation to generate growth will see a huge momentum in the future. Across all SRF’s business segments, we see this as an opportunity – whether it be a technical innovation or an innovation of a business model or product.
In addition, ESG has emerged as one of the most important factors in today’s business environment. At SRF, we ensure that our manufacturing operations have low impact on the environment through sustainable practices focused on creating value.
We will continue to remain focused on our Research & Development and sustainability efforts in the future too.