‘We are looking at a sevenfold jump in turnover over the next five years’
KOLKATA: The RP-Sanjiv Goenka Group is going through a restructuring that will result in its flagship CESC Ltd being carved up into four firms with separate managements. The aim is to have the businesses—power generation, power distribution, retail and business process outsourcing—apprised independently in the market, group chairman Sanjiv Goenka said in an interview. Edited excerpts: Is the timing of any relevance? We will be creating a pureplay distribution company, and it is going to be the first such in India. We are confident of creating our own benchmarks on the strength of scale and efficiency. Why are you averse to expanding generation capacity? I had decided years ago that we will not expand generation capacity. Generation is not remunerative because it does not readily give you access to coal or long-term power purchase agreements. Does that mean you wouldn’t consider acquiring distressed power plants even if offered at attractive prices? First, you have to make a distinction between potentially viable and unviable plants. A lot of these plants are ill-conceived. So, even if you get them at prices way below their book value, you may not be able to run them profitably for a variety of reasons such as fuel supply, evacuation and a market to sell power. How are you going to strengthen distribution? There are some basic parametres to measure efficiency such as zero outage, voltage stability and time taken to install a new connection. On these, we are very efficient in Kolkata and Greater Noida. But the three towns in Rajasthan, where we have started to distribute power, have a long way to go. Because we are already efficient in Kolkata and Greater Noida, the challenge is to do incremental things for our consumers— how can we improve consumer experience? What more can we offer so that, eventually, when we are faced with competition, our consumers remain loyal to us. Better network utilisation, or use of the same network to offer other services, could be one area of improvement, and we have got a study done by the Boston Consulting Group on this.
What led you to buy into a snacking company?
We sensed that there’s a lot we can do with foods—there are so many things that can do so well if marketed in the right manner. We bought Apricot Foods because we got it at an attractive price. We have lined up the launch of 40 variants of snacks—all at ₹5 each. We are internally aiming for a sevenfold jump in turnover in five years. There’s been a lot of speculation about your interest in media. Where is the group headed? We are keen to expand in media, but I will not comment on speculations. We are back in film production: 14 films are under production, each with a budget of less than ₹5 crore. These are being produced for digital release through channels like Netflix, and on these channels, you need only 200,000 views to recover money. Saregama has launched its portable music player, and it is one of the fastest selling products online. We are selling our recordings. We have found a way to sell the software, and it’s doing so well that we are not getting enough players to sell through Spencer’s stores.