tata consumer: New CEO Sunil D’Souza aims to make Tata Consumer simple & nimble

MUMBAI: Tata Sons, the holding company of the salt-to-software conglomerate, has mandated Sunil D’Souza, the new chief of its consumer products arm, to make the company nimble and chase sales growth that eluded the company in the past.

D’souza, who took charge as CEO of Tata Consumer Products early this month due to the ongoing Covid 19-led lockdown, has to build a scalable FMCG business both through acquisitions and organic growth to create shareholder value. The company’s former head Ajoy Misra, who retired in March, will be an advisor for a short period of time, officials said.

Speaking exclusively to ET, D’souza said he is reviewing the business structure to break hierarchy, focus on action bias and ensure faster decision making to create a future ready organisation.

“Simplification is a “mantra” that we are planning to drive across the organisation” he said.

Tata Chemicals de-merged its consumer product business into Tata Global Beverages to create a combined entity – Tata Consumer Products – with revenues of ?9,099 crore and EBITDA of over ?1,150 crore. India remains its largest business, accounting for 61% of the overall sales followed by the US and UK at 18% and 12% each.

D’souza is currently integrating the businesses to unlock synergies and create a common execution platform in terms of organisation structure, go-to-market and supply chain.

“There are significant opportunities for the company to move up the value chain into more value added and premium products in the food and beverage space. This is part of the growth strategy work stream that we are working on currently,” said D’souza, who worked previously with Whirlpool and is known to be a hands on executive, decisive with the ability to take people along and build strong teams.

To begin with, the new management team will initially tweak the business strategy by region and also create profitable distributors of scale to expand active reach in market. “While we have brought two businesses together, the key is to now take an outside-in view, a clean sheet start and build a business for the future, almost like building a start up,” said D’souza.

Tata Consumer Products will also focus on multiplying distribution, focused and faster innovation and stronger cash flows to invest in growth.

Tea is its largest segment for the company and accounts for 57% of its overall business. In India, where tea is consumed in nearly 94% of all households, Tata is the second largest player by value and the market leader in volume terms. However, regional companies control more than half the segment, an opportunity it can cash in The company’s sales and profit growth have largely remained flat in recent years and its business is more prone to global commodity price volatility. Also, the coffee business in the US is sluggish and the black tea market in the UK has been declining. The company has been exiting non-performing international operations in Russia, Sri Lanka and China.

IIFL, in a recent investor note, said exposure to a largely-staple category and consumer up-stocking in international geographies makes Tata Consumer one of the best performers within FMCG universe during Jan-March quarter.

Source Article

Lois C. Ferrara

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