Godrej & Boyce bets on indigenous manufacturing, aims at 20% revenue growth

In its 125-year journey, Godrej and Boyce, the first Indian company to make typewriters, refrigerators and ballot boxes for Independent India's maiden election, still considers indigenous manufacturing as one of its core areas to fuel growth, an official said.

Started with making of locks in 1897 and safes in 1902 by its founders Ardeshir and Pirojsha Godrej, the group's flagship company now has presence in construction, electrical and electronics, industrial engineering, appliances, furniture and aerospace, and aims at 15-20 per cent growth in revenue this year riding on its understanding on consumer insights and innovation, Sr VP and Head of Brand and Strategic Insights, Godrej & Boyce, Mehernosh Pithawala told PTI.

 

The Mumbai-headquartered company clocked a revenue of Rs 11,800 crore in the 2021-22 fiscal, he said.

The diversified conglomerate intends to strengthen its position as a global source of manufacturing with the world looking at a "China plus" policy and is planning to increase its exports by 30 per cent year-on-year for the next two years, he said.

Ardeshir spotted a business opportunity in making locks in 1897 as incidents of burglary were on the rise at that time and he started making safes five years later, said Pithawala.

"This is how the company started its journey. We have done a lot of things which are the first in the country, ranging from typewriters and refrigerators to the development and delivery of proportional solenoid valves for ventilators to DRDO to help combat Covid-19.

"The company believes in an Atmanirbhar Bharat and thus indigenous manufacturing remains core to us. We have plants for all products that we make from our 14 business verticals, " he told PTI.

Godrej and Boyce currently has 38 factories in 12 locations across the country.

Pithawala said the company has progressed with a focus on innovation, sustainability and durability among others and these pillars of success will remain intact as it, in recent times, introduced or innovated a slew of products such as medical refrigerators with a cooling technology that ensures temperature control with no risk of freezing vaccines, 3D concretes, recycled concrete blocks, installing of cameras on forklift and IoT-enabled items such as video door phones, biometric and digital locks.

"One of the strengths that Godrej has is the understanding of the need of Indian consumers. We do innovate around that and bring technology which is relevant to the country.

"For example, Godrej produced India's first indigenous typewriter in 1955. There were close to around 1,800 components and we indigenously manufactured all in the country," he said.

The company has close to 80 patents and filed around 273 applications, he said, adding that it has collaborated with 8-9 startups to drive innovation of products for semiconductors, cameras, 3D concrete and locking systems and zinc-manganese batteries etc.

Elaborating on the reputation of its products, he cited the 1944 explosion.

"The S.S. Fort Stikine, a 7,142-tonne cargo vessel, blew up in Victoria Dock No. 1 in Bombay. Hundreds were killed and the dock was badly damaged. Godrej safes, installed in the merchants' officers at the docks, stayed intact," Pithawala claimed.

As the conglomerate partnered with Amar Chitra Katha to lock its history in a book as part of the 125th year celebrations, it is also keen to make strides in the expansion of businesses to "double the revenue" in the next five years.

"We are looking to grow both B2B (Business to Business)and B2C (Business to Consumer) segments. The export is a focus area as we are looking at a 30 per cent growth year-on-year in our shipments in the next two years to increase its share from seven per cent of the total annual revenue to over 10 per cent," Pithawala told PTI.

He said the company is confident to achieve the exports objective as "right now, the world is looking at a China -plus policy and therefore, a lot of manufacturing opportunities or orders are coming to India".

Pithawala said there are scopes to grow in many categories where Godrej and Boyce has its presence.

"For instance, refrigerator segment has 28 per cent penetration in the Indian market, while the same for air conditioners is around five-odd per cent. We expect lots of growth and expansion of businesses in tier II and III cities," he said, adding that intralogistics is also an area of focus.

The conglomerate is looking at "adjacencies to its existing businesses as part of its expansion plan", the official said.

"We are expanding our portfolios in the categories where we have presence now and will continue to do that. For example, in locks, we will strengthen digital ones in this category, surveillance camera in the security business, appliances offerings will be broadened," he said.

Pithawala said the company is not looking at any acquisition at present as the scope for organic growth is "immense".

The company's B2C segment, which includes locks and security solutions, appliances and furniture, contributes 60 per cent of its revenue, while the B2B segment, comprising industrial engineering, process equipment, construction, storing solutions and others, accounts for 40 per cent.