'The biggest concern for us is the Asian market'

R. Mukundan, 42, will be one of the youngest Managing Directors of Tata Chemicals when he takes charge of his new assignment from the current Managing Director, Homi Khusrokhan, who retires December-end. In a chat with BT, Mukundan shares the challenges for the company and how he plans to take them on, especially in the US, where the company has acquired a chemicals firm. Excerpts:

Q. What are the challenges for you in the new assignment?
A. The challenges are three-pronged—to maintain revenue growth at a time when customer-end (users of soda ash) industries are slowing down, to protect the profit margins and also keep the new initiatives like bio-fuel business going.

Q. How do you see the international business of Tata Chemicals performing in the wake of slowdown, especially in the US?
A. Luckily for us, our international assets have done well. Our biggest concern was the high freight rate, but this has fallen sharply in the last few months. In our business, freight cost is more than the energy cost, but the freight market has fallen sharply compared to the energy market. European markets are doing well for us.

Q. Will the US slowdown affect the business of General Chemical Industrial Products, the company acquired by Tata Chemicals?
A. There would be a slowdown and we expect the US slowdown to affect the demand in the local market by 10 per cent. But this will be compensated by the demand from Latin-American markets.

Q. So, where is Tata Chemicals affected then?
A. The biggest concern for us is the Asian market as the Chinese products’ prices are lower.

Q. How do you compare the current slowdown for Tata Chemicals vis-à-vis the previous one in the mid-1990s?
A. It is a challenging environment (at present), but we have competitive assets and this should help us.