Saint-Gobain: strategy reorganization to boost sales

Saint-Gobain Glass (India) has started to reorganize its business strategies in response to the flat growth of its float glass business between January and October 2008. Aiming at increasing volumes a…

Saint-Gobain Glass (India) has started to reorganize its business strategies in response to the flat growth of its float glass business between January and October 2008. Aiming at increasing volumes and sales, the company has started to renegotiate its supply contracts. Saint-Gobain India managing director B. Santhanam said, We have gained market share. But we are walking like never before. As part of its cost cutting plans, the company is also concentrating on re-negotiating rates with its suppliers for the scheduled greenfield plant at Bhiwadi in Rajasthan, announced in June 2008, with an investment of Rs 10 billion. Stressing the need for more aggressive sales and marketing, Santhanam said by improving planning and by adjusting strategies, companies had the potential to reduce costs by 10%. He added Delay in the Nano (Tata“s small car) launch will affect us. Saint-Gobain is the only vendor for Nano“s auto glass sourcing. However, the company proposes to write off the loss in 2009. Santhanam said the embedded cost of raw materials and freight must be evaluated from a supplier perspective, taking into consideration which part of the vendor has been touched by the oil economy. While there is no uniform rule to cut costs, strategic cost parameters must be taken into consideration using intelligence and information. With regards to global meltdown impact, he said the company had upped its market share by 41%, especially thanks to the increasing popularity of green buildings, of which India had a potential of one billion sq.ft. another reason for this increase comes from the demand from solar energy. Sales saw an increase of 11% in the automotive sector, he said, adding that supplies to exports of Hyundai“s i10 had benefited the company. For Saint-Gobain, the automotive business has been good,” Santhanam said, adding that its value-added products are received well in the Middle East, where it saw considerable potential.