Building A Global Company In India Dr Jairam Varadaraj Elgi Equipments

TITLE: Building a Global Company in India | Dr Jairam Varadaraj, MD, Elgi Equipments | Krish Kothari CHANNEL: Krish Kothari DATE: 2024-01-25 URL: https://youtu.be/mcfcjw3bRl8 ---TRANSCRIPT--- Elgi equipments is one of the largest air compressor manufacturers in the world formed in the 1960s the company has grown into an organization with global reach today the company generates revenues in excess of 3,000 crore and commands a market capitalization of close to 18,000 crore. Dr Jairam Varadaraj is the MD at Elgi equipments and has spearheaded the multi-decadal rise of the company into a world-class manufacturer that does business in over 120 countries. I sat down with Dr Varadaraj at Elgi’s Coimbatore headquarters to understand the business and industry and learn more about his own journey as an entrepreneur. Dr Varadaraj’s story is as fascinating as it is instructive. I enjoyed my time with him as well as the opportunity to tour the incredible state-of-the-art factory of the company. I trust you will enjoy our conversation as much as I did. I also recommend watching Elgi’s own YouTube channel for some interesting videos including a recent video documenting a unique example of indigenous technology developed to serve the country. As always nothing in this video or on or connected to this channel is investment advice nor a recommendation to or not to buy sell or hold any security.

Hi Dr Varadaraj thank you so much for coming on. Welcome to the show. Good to be with you Krish. Welcome to Coimbatore, thank you so much. It’s lovely. I toured the factory earlier today and absolutely fantastic and it’s incredible seeing such world-class facilities and we’re obviously going to talk about that a lot later on. I actually want to start with the most basic question I can think of which is what is an air compressor and why is it an important industrial component in so many industries.

Okay so an air compressor stating the obvious produces compressed air. Right now compressed air is the focus, it’s a utility just like electricity. So unlike electricity which is centrally generated in a power plant and can be very efficiently transmitted or transported through cables and wires, compressed air cannot be. So you can’t have a central generation plant which can be piped through, it’s very inefficient and that’s why you need a compressor. So the fundamental thing is the compressor is incidental, compressed air is the hero of the story. So it’s like electricity it’s a form of energy and it’s used in a lot of instances where electricity can’t do the job. We’ll give you a couple of instances. Say for instance in a textile mill when they’re spinning yarn the yarn breaks, the fibers come apart, they have to be re-entangled into the tube, it’s compressed air. So it’s a lot of esoteric applications which electricity cannot do. It cannot compete with electricity in terms of efficiency but electricity cannot compete with it for some of the functionalities that it can deliver.

So you’re the only man who can put the toothpaste into the tube. Yeah exactly.

Before we go more into the business and talk about everything that Elgi does I want to first start with your story. You went to the US, did your PhD there. Why did you make the decision to move back to India at a time when that wasn’t such an obvious move? In the ’70s ’80s and ’90s it was very counterintuitive to do that so what propelled you to take that decision?

So I wanted to be a teacher and that’s why I went and did my PhD at the University of Michigan. And I come from a business family so I had a basic understanding what business is all about but the kind of research that I was expected to do to become a tenured professor — because if you’re not tenured then it’s no fun being a teacher — there was a lot of quantitative statistical mathematical modeling that was expected, you had to publish, the publish or perish kind of thing, in order to get tenured. And while I didn’t have a problem doing that I couldn’t get myself doing it for the rest of my life because it was so devoid of reality. And my thesis coincidentally in 87 I finished was why aren’t Indian companies competitive worldwide. That was a time the Japanese were beginning to dominate all over the world from basically the same starting point 1944 right after the world war, the Koreans were making a lot of noise, Korean companies that was in 1950 the Korean War, 1947 Indian independence. So all three countries and companies from these countries pretty much started out at the same starting block. And companies from all these places went to the same companies in Europe and in America for license, whether it was GE or General Motors or Mercedes or whoever. But companies in those two countries took it to another level whereas the companies in India kind of remained within the context. So my question was why. So that was my thesis and I came to India and I interviewed about 23 CEOs of very large companies as part of my understanding and I had developed a point of view, I said yes we can do it. So after I finished my thesis and I didn’t want to continue on as a professor, either join a consulting company or join another company or come back home, put your money where your mouth is and try and build a global enterprise. So that’s been my journey so far and that’s what we’ve been doing.

I think it was maybe 93 94 when you really sort of embarked on that journey of making Elgi a much more global enterprise versus what it was. Sure I think the process started earlier but 91-92 was an inflection, was a wakeup call because that’s when India had to dismantle all the protection and integrate with the rest of the world. I still remember when I joined the business the import duty on a compressor was 60%. And there were restrictions on what you can import, you had to get a license. So we were well protected. Now all that was going to go away and our technology, most products in India at that time were pretty archaic, many generations older. All that is going to come back and haunt us so we had to really transform. And we were horizontally diversified just like most Indian companies because that was a licensing system’s consequence. So we had to either sell off or shut down a lot of businesses, clean up the portfolio and start focusing. That happened 91 as a consequence of the shift in the economic policies.

And so just coming back to your thesis what was your conclusion, what does make a company globally competitive? The real reason why we didn’t globalize, build global companies, is it’s too easy to make money in India. You could navigate the license, you navigate the corridors of power, you get your license, it was easier to build a business, it was easier to make money because supply and demand was moderated for you. So I think that was the real reason. It was not government restricting you or preventing you, there’s a lot of theories around it but none of them made any sense.

So we had inadvertently created an oligarchy of some sort. Absolutely. And extreme mediocrity because you could get away with just about anything. I still remember cars had a waiting list of 5 years, two wheelers had a waiting list of 13 years, telephones took 6 7 years, life was like that so it was okay.

So things have obviously changed in many ways since then and now we have Atmanirbhar and there’s a lot of focus on Made in India. How do you think the world’s perception of India as a manufacturing center has evolved say over the last 20 years or so, is today Made in India an asset for any company? I don’t think so, not yet. India as a manufacturing label is not as strongly perceived as China as a manufacturing label. We haven’t built scale, we haven’t invested in technology, our capital has been frugal. I mean we are more a services country, we are known for our services not in manufacturing.

So Dr Varadaraj I want to now come specific to Elgi. There’s an apocryphal story of Henry Ford and the story goes that one day someone asked him why did you make a car, what did you hear from people that made you make a car, do you listen to your customers, and his response was if I listen to my customers I would have built a faster horse. So what I want to understand from you is in an industry like this how do you preempt the needs of your customers, because if you wait for the guy to tell you okay this is what I need and it takes you maybe a year or two to develop it you’re probably too late.

So I think Henry Ford is right. You go to a customer and you ask them what they want they will be quite biased by the functionality of the existing product and they’re going to talk about something faster cheaper easier to use than what they have. The classic example was Blackberry, Research In Motion is a company that made blackberries. It was a flat phone with a screen and buttons. So you go to a Blackberry user at that time if you ask the question what would you like, 9 out of 10 would have said bigger buttons because the buttons were so small you ended up pressing the wrong one. But nobody would have said I want a touch screen because it’s outside the realm of the customer’s perception of what the product can be. So imagining the next is not through the mind of the customer, it’s through innovation. So that’s a parallel track. But the state of the current art you can be the best, you can’t abandon that and then imagine the next. So these are two parallel tracks that you pursue. How can you be the best in the state of the current art even while you build the state of the next art or the future art.

The Indian story is shampoo in a sachet, it was innovated for the first time by a company called Velvette that’s based in Chennai. Till that time it was all the Unilevers and the P&Gs were making shampoo in a bottle, maybe cost 150 bucks, it came to a certain segment at the top, it was not affordable to the people at the bottom but the aspiration for the people was there that I want to also use shampoo but it’s out of my reach. Now what did Velvette do, it made it one rupee. Now actually it is a much more expensive shampoo but it was cash flow that constrained the customer at the bottom. So that state of the next art, you can’t go to a shampoo user and say what do you want, people used to using shampoo in a bottle, they’re not going to say I want it in a sachet. So that reimagination of the future comes from inside. So for us it’s about doing both of these things, we call it stated needs and the unstated wants of the customer, we pursue them parallel. And what we call is the fate, customer says it’s my fate, and in that fate is the opportunity. So when the customer says it’s my fate, I use so much energy in the compressor, I use oil in the compressor, I pay so much for the compressor whether you buy it from Elgi or Elgi’s competitors it’s the same, that’s the fate. Now in that fate is the opportunity to build the state of the next art and which is what we’ve been doing and we continue to do and we’re looking to introduce some extremely exciting stuff in the near future.

So Dr Varadaraj I’m going to ask you to show off a bit right now. Can you explain why you think Elgi’s products are as good if not better than anything else on the market? Well what does a customer buy based on, based on energy efficiency, that’s the number one cost, life cycle cost. In most of the models in the world we are number one. Now this didn’t come by accident, this is something that we did, this is pursuing the customer stated need. That gives us the right to say that we should be the preferred choice. We are an unknown brand with a Made in India label. Now you go to Europe or you go to America, a well-known European multinational or an American multinational, they buy the brand and brand fails they’ll be forgiven, but an Indian brand unknown they buy and if it fails they’re not forgiven. So for us quality has been far far higher than profit and therefore we build machines that have some of the lowest defect rates in the market.

So that’s another reason why customers should buy. Now I can boast, nobody’s going to say I make terrible products. Now what’s the validation, what’s the money we’re putting on the table. We have the longest warranty in the market in the world. In America it’s lifetime warranty, in Europe it’s 10 years, in India it’s 6 years, all the others give one year. Now that means if we are stupid to do that our warranty cost will be very high. We have one of the lowest warranty costs in the industry. So long warranty periods combined with the lowest warranty cost means we are producing great quality.

I want to actually just dig a little deep on this looking at it from the customer standpoint. My understanding is that when you go to a potential customer the person within that organization who’s actually taking the decision to buy or not buy is someone who may be in that position for maybe a year 2 years 3 years and then move on. So all he really cares about maybe at a subconscious level is for those three years nothing should go wrong, after that it’s someone else’s problem. So do you think in an odd way having said that for 15 years you’re not going to have any problem is not as much of an advantage as it should be?

The person may leave after 3 years but he goes and joins another company in another job and he needs to put his reputation on the table. So if we are able to give him a reliable brand that he can carry through from whichever job that he’s switching to that’s great value for him. So it’s not that if I were working in a company and I’m using Brand X of a laptop, now I go to company Y I will say please Brand X because that’s reliable it served me well. So it’s not about looking at a person’s tenure in one company but looking at a person’s profession, you’re serving that whole profession.

So Dr Varadaraj I have a question on dealing with people. Let me ask you in a slightly dramatic manner, do you suffer fools, do you have any tolerance for nonsense especially internally? I’ll give you an example, imagine you’re in a meeting and there’s a team presenting something to you and you ask a question and you say what’s 1 plus one and he says it could be two sometimes could be three, you can fairly quickly tell this guy doesn’t really know but feels the obligation to give you an answer. How are you in those situations, are you a tough boss, are you forgiving?

If a person can give me an answer and justify why that answer even if it’s a little different and the person is able to give me a logic for it I’m very curious to know. But if it is just a shotgun kind of an answer, you know cowboy answer just to give an answer, then I don’t suffer that very well, so I am very dismissive of it.

Are you a tough boss? I ask tough questions, my job is to ask questions, and also to prod people and help them find answers. It’s not about just asking the questions and then okay so now jump into the lake figure it out find a way to swim, no, ask the questions, keep asking questions to the point where we collectively find an answer.

And how do you think your competition perceives you? I don’t mean you personally I mean Elgi as a company and as a competitor. They say that the best way to know who’s the best company in an industry is go to the competitors and say if you had one bullet who would you take out, do you think you’re the one they take out? I really don’t know. I would like to think that our company’s in the radar of our competitors, they come and visit us, the fact that they come visit us means that they want to know. But would they come and visit you, what’s the reason? Just to build a, say hello build a relationship. But is it all nice and friendly? Oh absolutely, because the relationship is being played out at 30,000 ft and so it’s nothing intimate, so they’re all good people. So the fact that they come and meet us means that we’re doing something right.

And so there’s two very large global companies in the space other than Elgi, one is Swedish and the other one is American which was formed through a merger. So I want to talk about competing globally and this connects to some of the things you were saying earlier. What has been your experience competing not only globally but competing with companies that are materially larger than you, what is it being like being in some sense the David to their Goliath?

First of all it’s your definition of what a global enterprise. We want to be a global enterprise, now how do you define it, what is the meaning of a global enterprise. Now you can define a global enterprise by presence in so many countries or the revenue outside the country, for us those are not meaningful definitions. For us a global enterprise is one that is country agnostic, it can operate anywhere in the world and still be competitive. So if I put that lens on India and say which are the companies that are global I would say none, because all of us are dependent on cheap Indians, we’re not country agnostic, we can’t transport our company set it up in America or Europe on any of these high cost countries and still be competitive. You look at a truly multinational, you look at a Microsoft, can operate anywhere, it doesn’t have to have low-cost resources, you look at a Toyota, that for me is the definition of a true global enterprise.

Now how do you architect that solution. One is to build your business in Europe, build your business in America, revenues keep increasing, your share of revenue from outside India is growing, that doesn’t give me the satisfaction that we are building a global enterprise. There are some parallel metrics. So for instance one of the metrics that we have is we should be able to pay our shop floor employees what we pay our shop floor employees in our factory in Italy. Now the factory in Italy some of the key technologies for that factory go from here, they pay 30 lakhs a year which is a compensation, they’re not going to come to work, they’re profitable. We pay 10 lakhs which is also pretty good salary in the Indian context but it’s not 30. Our goal is to make it 30. It’s actually quite counterintuitive because most companies in India chasing low cost locations, we are actually going for a high cost location. Now the minute you’re able to pay 30 lakhs and so on up, then you’re country agnostic, you can set up your business anywhere in the world, not that we want to, but that’s a definition of a multinational that you’re not dependent.

So to do that, paying the salary is the easiest part, but how do you build technology, how do you build a brand, how do you build products that will afford this aspiration, it’s not that easy. That for me is part of our strategy. It’s not about saying through global sourcing we take out 5% cost, through rationalization we’ll do this, through technology we will automate these processes, those are for me table stakes, you have to do it as part of your efficiency improvement. The larger thing is to say how do I re-architect my business so that I’m able to afford this and make Elgi country agnostic.

The second part of a global company is a sense of equity. You can’t build a company which is sustainable which is inequitable. What we mean by that is the gap between the lowest paid and the highest paid. Now it’s obscene in the US and in India unfortunately and it’s not good for the company, it’s not good for our society, it’s not good for the country and it’s really not good to be a global enterprise of that nature. So if you look at us it’s about 360, India is about 350, Japan is at around 90, I think some of the Scandinavian countries are some of the lowest. We have set a target of 32. Why such a specific number. So 32 is for our company of our size on our business you need six levels, okay, so at every level we double our salary, and that’s a multiple of 32. We are at 32 and people come and ask me and saying oh you have equity in the company so you have the freedom and you’re getting dividend so you have the freedom to say I’ll keep my salary low, that’s not true. So even if there is a professional CEO who has higher aspirations I’m certainly willing to respond to that but raise the bottom. You raise the bottom, you get a multiple of 32, there’s nothing wrong with that, everyone wins. So for us the definition of building a global enterprise is not just numbers and markets, yes those are metrics that you look at but there are larger metrics.

You spoke about building a brand. What comes to people’s minds when they hear Elgi? I don’t know but I would like to say what I would like them to think. First one is a trustworthy company, you can trust them, you can rely on them, bank on them, you buy their product they’ll give you a great one and they will service the hell out of it if something goes wrong. So if somebody were to ask me what’s the automotive equivalent that I would like to be I’ll say it’s a Toyota, always starts, it just goes, never lets you down. So how do you build that. So that’s really what as a brand from a customer point of view, but a brand is not just customer, brand for us it’s the experience of every touch point of every stakeholder. So it’s customer, it’s the employee, it’s the distributor, suppliers, investors, society, these are our six stakeholders. Are we actively managing the experience. You came in today, we’re very concerned about your experience when you walk in, if that’s not good that’s the brand, that’s your experience. So it’s about getting into that visceral detail of every experience and if you view it through that it’s a very long journey of building brands. Advertising is a shortcut, that’s just messaging but it’s not an experience. Experience makes the brand powerful either way good or bad. Communication just makes the brand aware, not the experience.

And a lot of this of course is what companies now think of as culture, creating the right culture. I want to share this story because I was at the factory earlier and one thing that struck me — it’s a very large campus and there’s long walkways to get from point A to point B and there’s a lot of movement of trucks and vehicles so there have to be dedicated crossings, a zebra crossing. And I must have seen dozens if not more people crossing the road over the time I was there, I did not see one person jaywalk outside the zebra crossing. And remember this is not an actual road, it’s not like there’s literally cars always going where for your own safety, you could easily crawl across if you wanted to. And it’s remarkable especially when you consider this is not Switzerland where people are sticklers for rules. So the larger point I’m making is that it’s clearly a company where directly and indirectly people are told that look this is a culture and you have to be willing to accept this culture. Even things like saying that your salary you’re not going to make 500 times of the guy below you, this just not going to happen doesn’t matter how good you are. So how have you gone about building that culture, has it been a lot of leading by example and how much of it is sort of imposing your will, not in a bad sense but explaining that this is how things need to be done?

I think culture is like a brand, it’s experience, you can’t build culture with wallpaper and posters, there has to be a certain genuineness to it. So if you look at what you saw in terms of discipline, it’s not an imposed thing, we never stood there with sticks. But it’s over a period of time you build that thing of saying we’ve got to be precise. And during the early days I used to give this metaphor that when you go outside the factory you’re supposed to stay on the left on the road but people go on the right go on the left go on the center, life goes on, you go home electricity doesn’t work, life goes on, the sewage doesn’t work, life goes on, water doesn’t come, life goes on. Then you walk into the factory and then you say micron levels of precision. There’s a fundamental disconnect because the whole of society works on very broad tolerance and the factory works on very tight tolerance. So the thing that you need to say is this tight tolerance is going to somebody who’s put their hard-earned money on the table for us, that’s not the case in society. So we have a bigger responsibility here. Yes it is an anomaly but this is where we need to bring in our discipline and say leave that behind.

And you need to live it. For instance there were times when we said this is defective, we’ll take it back, and we bring those stories to everyone in the company and saying we produced a bad product and this was the consequence, and people understand what the consequences are. We need to become perfect, we need to have that sense of saying this is the boundary and we stick to those boundaries and not just once but repeatedly and that’s where you produce quality. So it’s about actually living it, then the culture changes. I don’t think you would have seen too many posters of what we do, you have seen safety posters, that’s about it.

So for instance we don’t have a wage agreement, we don’t have a union, we have a settlement where we say that the shop floor employees’ standard of living is protected by the company and the standard of living is defined in elements of consumption. So we have 367 elements of consumption that are co-created by the company, the employees and their families in terms of consumption. It has 10 kilos of tomatoes or a vacation, school uniform, laptop, cell phone, Wi-Fi charges, durables, semi-durables, so everything including contribution to spirituality, everything is there. And employees in the month of March go to actual shops and schools and wherever else to get the actual prices and that becomes the new salary. It’s very transparent, it takes us all of 15 minutes in a year to say this is the new salary. Every 5 years we sit and say okay now what’s the new aspiration in life, what’s the affordability of the company, how can we both meet, and then we co-create another set of baskets, expand that basket. Now there are times when the business goes down, challenges come, economic challenges or whatever, but we’ve never violated this covenant. Because at the individual level you can’t go and say oh I’m sorry the German economy is gone bad or the American economy, I can’t do the salary, I mean the impact at that level is far higher, you got to take a longer term view and say no we will do this and we have done this. And we have stayed true to this from 1996, ups and downs. So you live it, then over a period trust is built, credibility is built, and everybody knows that this is how it happens and there’s no difference. If anybody can blow the whistle, we have a simple app, they don’t even have to reveal their name, they don’t even have to download the app, it’s just a scan, and people at levels of vice president have been let go because of so there is everything is open. So then you build a culture of saying integrity is important, trust is important, credibility is important, sensitivity, there’s no us and them kind of a thing. So takes time, we still have a long way to go, it’s a never-ending process, there’s just always room for improvement.

Dr Varadaraj I want to just come back a little more to the business side of things. One of the interesting things about your industry is if you take the three major players, even though it’s an industry that’s been around for so long, as far as I know there aren’t major global scale large scale Chinese companies that seem to have dominated the market or attempted to dominate the way they have in most other industries, especially these sort of heavy industry B2B type of businesses. So I want to understand, if you’ve ever thought about why that is, is it a technology barrier or is it something else that the incumbent players have done so well that customers have simply not bothered saying okay is there a guy in China who can do it for less?

No it’s a very interesting question and it is something that we have reflected quite deeply on because we were in China for almost 10 12 years and we pulled out. The Chinese companies that have been very successful have commoditized products and they make them very cheap which is their strength, which is how they’ve gained that credibility as a global sourcing platform. Now if you look at the compressor business like I told you it’s a form of energy, it’s a utility, in the utility efficiency is very important. 80% of customers buy on the basis of value, 20% will buy on price, that 20% you go and give it to them for free they’ll ask for a discount. So that’s the kind. Now the Chinese companies traditionally in all segments have played to this 20%. Now that 20% is not big in the global compressor business. So you, I think there are probably 100 150 Chinese companies making compressors but they’re all playing in that 20, and globally very few have come out, but not to the scale because they have to get into that 80%. When you get into that 80% efficiency starts, you need to have quality, you need to have the brand, you need to have aftermarket, because you look at a compressor it’s anywhere between 10 to 15 years life cycle, so you need to be around, you need to convey that confidence to the customer that I’m going to be around, I’m going to supply parts to you and service the machine. That’s not the same as making a cheap product. You take a cell phone, a life cycle of a cell phone these days, my cell phone life cycle is 5 years, now it’s probably a year year and a half, they don’t care, you can make something cheap extremely fancy features, year year and a half people are changing, there’s not much of a service there.

Did any of the Chinese players or anyone else even internationally attempt to reimagine the model? So the model as it stands today is someone buys an air compressor uses it for 10 15 20 years but there’s constant renewal of parts. There are a couple of companies that are attempting to do this, we’ll have to see how successful they are. The game is available for everyone to play. You look at Haier in the appliance business, a Chinese company but the look and feel of Haier is not like a Chinese company, it’s more like in the same league as an LG or a Whirlpool or a Samsung. So they can build if they want to but it’s a long game it’s not a short game.

You spoke about the customer needing to have confidence in the supplier that this guy’s going to be around for the next 15 years to service my compressor. So Elgi it’s been around for 63 4 years or something like that and over such a long period there are obviously going to be ups and downs no matter how well you do yourself, there’s things that are beyond your control. So what have you learned over the years about both emotionally and technically in terms of running the business, learning to swim both with the tide and against it?

So I think there are certain foundational things that you cannot violate. Things like customer support, things like employee engagement, your connect with the employee, your commitment and your contract that you have with them, these are all long-term, it’s almost like your purpose. Those when you have something come against you, those are the touchstones that you need to touch and remind yourself that that’s the guiding thing. So for instance when Covid hit, I still remember end of 2020 March and the country was shutting down for a week then 2 weeks then 3 weeks and then the whole world shut down and we were sitting at home, factory was shut and we said what are we going to do. Nobody knew how long it’s going to last and how deep the impact would be so we did a lot of research, fortunately internet was still on, we looked at the Spanish flu and what happened during the Spanish flu and said can we learn from it. So we said there is a possibility that it could be a U recovery with 3 years or a V recovery of one year. So we said either way it’s bad for our employees. So we said this is the time that you put your profit aside, look at yourself as an organization of people. So we said nobody’s going to lose their job and nobody’s going to cut, we’re not going to cut anyone’s salary. So we made that decision and we said oops now how do we fund it. So we went back and as a family we said we will dilute our equity, raise capital from private equity if necessary, that much money that is required to sustain at least for a year, and we started the process, started the conversation with private equity. Fortunately in 3 months time we started seeing a recovery and fortunately private equity was a little inertial so they didn’t take a decision so we didn’t, but we were ready. Now that for me is some of the foundational stuff that when you’re swimming against the tide you don’t forget. Now you can turn around and say can you metricize what has been the benefit of that, don’t know, but that’s culture, some bricks have been added to the building, you don’t know where but you know it has been.

So Dr Varadaraj I just have one last question, this is a little more personal rather than specific to the business. How would you, what do you think are your defining characteristics as a person and as a business leader, or let me ask it in a different way, if I went to your kids and said describe your dad in one sentence what do you think they’d say? It’s very intense, that’s what they’ll say. Are you always intense? I tend to become, I’m trying to be less intense. Intense when I need to go into the minutest detail and I think that comes from the desire to say we just should not fail as an Indian company, we cannot, we should not give anybody the opportunity to criticize an Indian company which means you cannot fail. So you get into my detail. The other thing is I question everything, is there a better way to do it, is there a better way to make a product. So if you walk into our factory, things like we build the mother machines, now that doesn’t flow naturally, you question it and say why am I paying 15 crores for this machine. And I tend to have this habit of taking everything and saying what is it price per kilo, and when I do a price per kilo of that machine it’s like gosh it’s so high, the price per kilo of my compressor is so low, I said why are we doing that, how can you use this machine to produce this, this price per kilo has to be lower. So you tend to then say can we challenge this and we do something a little differently. So the intensity and that wanting to innovate, those I think will probably be a defining thing for me.

It’s interesting that listening to your answer it’s almost as if the reason you want to succeed it’s not about letting yourself down, it’s not about spoiling the Varadaraj name, it’s that you don’t want India to look bad. It’s actually the mindset that a lot of the Japanese companies had coming out of the world war two and the point was we should make, the founders of Sony and Toshiba and all these iconic companies, their mindset was Japan should be the cornerstone of international manufacturing. I’ve had some personal experiences during the days of my college and university, like go into a room and a European or an American walks in and there’s a lot of respect, an Indian walks in okay, I said I don’t like that, how can I change that. You can change it by beating your chest and seeking attention or you change it by saying we are the best and we are respected for that. I think that’s the journey of this company as well.

And the important thing is it’s in some ways a journey without a destination, it’s a never-ending process. Yeah. Well Dr Varadaraj thank you so much for taking the time, it was really wonderful listening to all the stories, I appreciate your effort. All the way from Bombay. No not at all, it’s my pleasure, thank you so much, I hope you enjoyed it. Absolutely, thank you.