M S Zahed: The PSU in changing times

Abstract

Globalisation and liberalisation have brought immense challenges and opportunities to Indian industry, more so to the public sector. Originally set up to be a vehicle of social change as well as a business enterprise, the public sector undertaking today finds itself marginalised. Unlike many floundering PSUs, however, HMT Limited, a $250 million company with a $300 million turnover, established in 1953 in technical collaboration with Oerlikon of Switzerland, is thriving on the challenge. HMT's diversified product range includes machine tools, watches, tractors, printing machines, presses, die casting and plastic injection moulding machines, food processing machinery and CNC systems. It has had technical collaborations with over 30 leading international engineering companies for the manufacture of various products.

M S Zahed, Chairman and Managing Director, HMT, spoke to N B Kanagal and G Shainesh about where HMT stands in the perspective of Indian business, and about its value proposition as a group. Dwelling in detail on the challenges of liberalisation and HMT's successful implementation of its turnaround plan, which envisaged comprehensive financial restructuring, closure of unviable units and downsizing, he stressed the role the government needs to play in leveraging the strategic capabilities acquired at so much cost, time, planning and effort. There are not more than 15-20 countries in the world with the capability in machine tools and watches that we have. With manufacturing as a percentage of the country's GDP coming down drastically, we have to look for markets outside the country. This is a difficult process, complicated by the fact that we as a country have not focussed on technology in the last 10-15 years. Zahed also spoke at length about the marketing challenges in an environment that has traditionally focussed on distribution, on the challenges of evolving and implementing a successful marketing strategy in order to capture a share of the world market, and on the imperatives of building a brand. Zahed also touched on the special challenges of managing a PSU with a diverse product portfolio and on the rich learning opportunities it provides for young managers.