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Shaju John

Mr B. Santhanam, Managing Director, Saint-Gobain Glass India Ltd (file photo). —

N. Ramakrishnan

Chennai, Oct. 6 The corner room is cool, as its occupant. Letting in adequate light, the high-performance, solar-controlled glass neutralise much of the heat from the blazing sun, and the roar of the vehicles speeding down the national highway.

“It is like being in detox,” jokes Mr B. Santhanam, Managing Director, Saint-Gobain Glass India, as he talks about the impact of the slowdown and how the company is using the time to improve efficiencies. He is not unduly worried about the slowdown in the real-estate sector, which accounts for a bulk of his sales.

For Saint-Gobain Glass India, the slowdown has provided a breather to improve and innovate a whole lot of processes and practices, which it would have found difficult to do if the market were going ahead full steam, he says.

There is no major revival in sight yet in the real-estate sector that accounts for the bulk of Saint-Gobain’s sales. There is some activity in the residential segment, but nothing major in the commercial sector — for offices and malls — that consume a lot of glass. However, the Commonwealth Games in Delhi next year will provide a major boost to the glass industry, as all the structures are supposed to be Green buildings.

From the middle of 2008, when the slowdown hit the real-estate sector, Saint-Gobain Glass India, a subsidiary of the French multinational Saint-Gobain, has used the time to focus on re-inventing itself, says Mr Santhanam.

Saint-Gobain Glass India has its float glass plant at Sriperumbudur, about 50 km west of Chennai on the national highway to Bangalore. The two float lines have a combined capacity of 1,500 tonnes a day.

The commodity end of the business — clear glass — will account for less than 40 per cent of Saint-Gobain’s business. In the value-added segment, where the company has a much wider range of high-performance glass compared with the competition, it is better placed than other players. The company has used this advantage in this slowdown to deepen its market presence.

Despite the slowdown, Mr Santhanam says the company has grown in 2009. Its exports are also profitable, he says, without going into specifics.

Saint-Gobain Glass India has focussed on the customer this year, he says. “Our service levels have improved.” In the commodity end, the retailers want a range of products in one shipment. For instance, they ask for as many as 18 different products in one truck.

In the high value-added segment — high-performance reflective glasses — customers are now asking for price-performance solutions. No longer are they merely negotiating on price but want the company to offer products that provide superior performance and help in saving costs.

The company, according to Mr Santhanam, embarked on a major cost-reduction programme, not just in terms of inputs. Using the lean Six Sigma methodology, this programme covered energy consumption, yield improvement, wastage, packing and transportation. This helped the company save as much as Rs 30 crore. There are nearly 110 cost- reduction projects, all of them tracked on IT systems. Saint-Gobain Glass India, like its parent, concentrated on free cash flow (profit before depreciation and tax, change in working capital minus capex), which has also helped it stay in shape during a difficult period.

The company invested in generating 1.2 MW from waste heat. It has applied for benefits under the Clean Development Mechanism, for which it has obtained host country approval.

Saint-Gobain has been working with glass processors that are its direct customers, to help them improve their efficiencies and processes. It has introduced over 10 new products in the solar control space, each better than the other in terms of energy efficiency at different price points.

Along with the company-specific initiatives, Saint- Gobain has been working on industry-wide initiatives, including on green buildings, energy code for buildings, improving energy efficiency in buildings and building materials.

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