Anil Agarwal, founder and executive chairman, Vedanta Resources Limited, apart from being a multi-faceted industry leader, is a nationalist. In an exclusive interview with BW Businessworld’s Suman K Jha, held recently, Agarwal outlines his vision for the company, and also India.
When do you plan to open the Tuticorin plant after the go-ahead by the Supreme Court and the National Green Tribunal?
Nothing can happen without copper. Copper has to be processed. In the world, about 16 (companies) make copper. We believe the way we make copper is one of the best technologies. After we set up the plant, we are catering to 50 to 60 per cent of the demand in the country. About 200 industries are dependent on us. Hundreds of thousands’ livelihoods are dependent on this. Also, the fertilizer companies are dependent on us.
We have no idea how this situation happened. The plant was shut down. We have always said we are ready for any kind of inspection. The Supreme Court has directed the NGT to get into details and give them a report. NGT has come out with a report and said that the plant is to be reopened. They have made a suggestion for a further investment which was not necessary, but we have said that whatever suggestion they have made we will complete in due course. Meanwhile the court has said the plant is to be reopened.
I fully believe in the Supreme Court. I believe in the system of India. The government is losing revenue to the tune of thousands of crores. Thousands have lost jobs. It’s in the interest of everyone that we reopen the plant as quickly as possible. At the same time we have to see that the people don’t take undue advantage of the democracy that India is.
What about the mining issue in Goa?
Between Goa mines and Tuticorin, we have got, maybe, 5 per cent of our total business. It’s a livelihood issue for Goa. For the last 70 years, the economy of the state was dependent on this. There were no environmental issues.
We are working with the people and the court. Very soon some resolution will be there.
You have got strong views on mining. You think if one has to susbsidise agriculture, one should exploit minining to the fullest. Pl tell us more.
‘Explore’ is a better word. I have always believed India is not a country; it’s a continent. Even Nepal is 37 million people. You have 25 per cent of the population of the world. Agriculture is our mainstay, and we have to give subsidy to agriculture -- it’s required at least for another ten years.
To subsidise this, there is mother earth – below and above. Below, you have gold, copper, oil, zinc. Geologically, India is a very rich country.
I have always believed that the natural resources will eradicate the poverty of the country. The government is listening. We are the only natural resource company in the country. I think it’s a question of time. For a more sustainable life, we have to explore the wealth that we have.
Now you have shown interest in steel with Electrosteel. You hope to create another Bokaro. Tell us about this project and the targets.
It’s actually Jharkhand Chief Minister Raghubar Das – the chief minister feels that he should create another Bokaro in his lifetime. I met him for half an hour (recently). If one Bokaro comes, 23-30 lakh people will get livelihood. We are not creating just a Bokaro – we are creating the whole ecosystem.
At the moment, we are going to 1.4 million ton to 2.4 million ton (capacity). We will spend about $ 300 million.
The vision is that we should create a 4-5 million ton plant. In all it can be a 7-8 million ton plant. We have enough land. We are doing the study.
Moving to other issues, when and how do you plan to bring Anglo to India?
Technologically, Anglo is one of the best companies in the world in mining and resources. They have got a huge market. They sell in India. My coming in has given them a lot of comfort. Everybody is looking at India. We are talking to them. Our being the largest shareholder will give them comfort to come to India.
You think that we should be able to produce 50 per cent of our oil requirements. What is the latest on this front, and by when shall we closer to the landmark?
Any large country should be able to produce 50 per cent of their hydrocarbon / oil requirement if they wish to eradicate poverty. This is a thumb rule. India produces only 15 per cent. India has one of the best resources of hyrdrocarbons and we have acquired Cairn and we are the only oil and gas producer in the private sector. We are currently producing around 250 thousand barrels. We are looking to expand to 450-500 thousand barrels, and for that we already have a plan and an investment is on of $ 3.2 billion.
We got 41 very promising blocks Assam, Gujarat, Rajasthan, and Tamil Nadu, and offshore.
If we produce another 500 thousand barrels, we will be closer to the target.
Please tell us more about your LED and LCD business. The Nagpur facility was to become operational – What is the latest on that front?
I am a nationalist. I always look at where are the gaps – the gaps are natural resources and electronics. If we don’t start producing electronics, we will start importing electronics worth $ 200 billion.
In electronics we have decided to manufacture glass for TV, cellphone and computers. We have three plants – the R& D plant is in Japan and in the Korea facility some 600 people work. And then another in Taiwan.
In Maharashtra, we have met Chief Minister Devendra Fadnavis. Nitin Gadkari is very keen. Within one year, the feasibility report would be ready.
To start production here, it will take another three years from now.
Please tell us about the ambitious optical fibre-laying project of yours and where do we stand now?
Sterlite Technologies is one of the finest technology companies in the country. There are four optical fibre producers in the world, and we are one of them. We will be making some 50 million km fibre.
Our government wanted to connect the panchayats. We have taken that responsibility. We have connected about 100 thousand panchayats through the fibre so that they can connect to the mainstream.
We have our own software.
This plant is in Pune. And then in Aurangabad. It’s headed by MD CEO Anand Agarwal.
You plan to invest $ 8 billion in the country in the next three years. What are the details?
A sum of $ 3.2 billion will be invested in oil & gas. We are looking to invest $ 1 billion in aluminium to make the capacity from 2 million to 3 million ton. We are looking to invest altogether in steel, iron & ore about $ 1 billion to have 50 million ton in iron ore and to have 3.5 million tonnes in steel. In zinc, I think, it will cost another $ 1 billion to take the capacity to about 2 million ton. In copper, we are expanding from 400,000 tonnes to 800,000 thousand tons. So in all, it will be around $ 8 billion worth of investment which will make our turnover top line to US $ 26 billion.
You are keen to take the remaining govt stake in Hindustan Zinc and BALCO. What are your thoughts and what do you expect from the governments?
This is the story which everyone should know. A government investment worth Rs 500 crores today is yielding almost Rs. 40000 crores. They are very friendly and they are very positive to disinvest the stake. They are working on it. They have not come out very clearly how to come out for the disinvestment. I believe they are very serious and this should happen this year.
You have very strong views on the autonomy of PSUs, and on empowering Collectors so that India can really become top 50 countries in terms of ease of doing business. Tell us more.
There are 5 things which come to my mind.
Number one is simplifying natural resources. We should explore as much as possible. It will create lots of jobs.
Then on PSUs. This is the third or fourth government which has maintained that a government has no business to be in business. Then, somehow, it does not happen. They are still in business. And the backbone is the public sector.
If they free them and bring autonomy as I have seen in the Hindustan Zinc, Balco, they have increased production up to 5, 6, 7 fold. So you can imagine steel being produced, copper being produced, oil being produced, coal being produced!
Indian manager and Indian minds are some of the best managers. If you see them in the IT companies, they have a huge reputation. If they are given autonomy and a very strong independent Board, then 50 percent of the bureaucrats will be free. And so this company can have three times of production and tremendous valuation. The whole economy will change. We can have three time production in coal, oil and gold.
Third, we have around 650 districts. Districts collectors are very well trained and they are young and powerful as well. They can be the business development managers. Like in China. So whether in sports, tourism and industries, mining anything, the buck should stop with them. This was suggestion, and I think, everybody liked it.
For tourism, I said that kind of monuments, museums and beaches what we have, we should make them independent. Don’t keep them in the control of the government. If you do that, tourism will grow 100 times.
Finally, I feel our youth should seriously look at liberal arts. Our children, if they want to play the flute, any kind of music, or they want to get into arts, or painting, or sports, they should be encouraged.
You also think microfinance can be a vehicle of change...
I think anyone with Aadhar should have the right to borrow Rs. 2 lakh. So once you give them, somebody will buy an auto, some will set up a tea stall, and so on. I am asking my CEOs to incorporate this in CSR. I get representations from NBFCs and they want to spread this micro-financing. If this is institutionalised, the pressure on us to create jobs will ease and people will be self-employed.
What is your ambition in life for yourself and your company?
When I see Exxon, GE in the US and BHP in Australia, I get ideas. If I can be a catalyst to create something like this, it will be good. Professionals should run the company and make this company which can run for hundreds of years, create livelihoods and support the country. This is my ambition for the company is concerned and it will happen. We have two companies -- Vedanta and Sterlite Technologies. And, both will flourish.
I am ensuring most of the wealth we generate goes back to society. We are looking at how we can help through this Nand ghar initiative. India has 130,000 Nand ghars. And we have about 8 crore children and about 5 crore women. In my lifetime, I want to ensure that no child is deprived of food or education and healthcare. When they grow up, they should remember they are products of Nand ghars.
This is not difficult to achieve. I am a man of design. This requires a replicable model.
You have a foundation of giving back to society and your two children are in some way or the other involved with the company also. So how does the succession plan work?
The children can be directors in the company but they have to prove their mettle. On succession planning, I am very clear. Only capable people, top professionals who can drive the company should run the company because they have a long route and goal. At some point of time, they (if the children) prove to be capable, and can do something, then why not?
How do you view the upcoming elections 2019?
No matter which government comes to power, India is not going to stop. Nobody can stop India’s growth. I have experienced this first-hand. I have worked with the Narasimha Rao government, Atal Bihari Vajpayee government, Rajiv Gandhi government, Narendra Modi government, and I didn’t find anybody who is less progressive.
How does the Modi report card read like?
I think he has done two or three things which are phenomenal. What he has done in the Bankruptcy Code is phenomenal. My heart used to break down when people use to take the money from the bank – the heard-earned money of the public -- and splurge it on their houses and personal functions. After the new law, people will think 10 times.
GST is a landmark move, though it requires some adjustments.
Thirdly, I find states are being empowered. Oil and gas have reformed.
Yes, the Modi government could have done definitely much more. They had the opportunity to open up businesses more, for instance. I am sure in the coming days they want to do it.