MSMEs dilemma of balancing growth & sustainabbility cii surat 23 feb17 v2

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Perspective on MSMEs Dilemma

Balancing Growth & Sustainability MANISH KOTHARI, MANAGING DIRECTOR

RHINO MACHINES PVT LTD DATE : 23 RD FEB 2017 @ CII SOUTHERN GUJARAT ANNUAL DAY 2017

The MSME Manufacturing Sector The MSME Contribution • More than 6000 products traditional to hi-tech • 38% Contribution to the GDP in manufacturing • 40 to 45% Contribution to the GDP in Exports • Sustained Annual Growth Rate – 10 % 2

Yet we are in a Dilemma?

Unlimited Opportunities – Limited Resources Unlimited Opportunities • Made in India & Make in India push • Automobile Hub – pushing metal industry, electronics • Increasing Domestic Demand from Defence, Rail, Road, Infrastructure

Limited Resources • • • •

Trained Workforce Affordable Technology Finance accessibility Handling complex documentation 3

Typical Growth – MSME Mfg Sector Establishment Period (5 to 7 years) • • • •

Establish Product/Process Create Customer Base Generate financial stability Put together at Team

Growth & Stabilisation (Year 7 to Year 15) • Finding the Right Market • Building Assets – Man, Machine & Finance (we feel all is set)

What Next???? – the Dilemma starts • Vertical or Horizontal Growth?

• Retention of Team?

• Tackling New Entrants & Competition?

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Sustained Growth – somethings we did Invest in Development & Innovation • Earmark %age of profit towards continuous development or upgradation or innovation in product & process

Leverage the strengths • Identify adjacent or similar markets to leverage the manufacturing & management capabilities

Partnerships • Network, identify and partner with other MSME’s

Learn, Learn & Learn • Continuous exposure to seminars, workshops, exhibitions – open your vision • Engage team in the learning habit

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Leveraging your Strengths Sharing increases your Strength • Your income with your employees, workers & partners • Your knowledge with your customer and supplier • Your resources & network with your stake holders

Join & Complement Businesses • The faster way to grow is to align with an existing business and leverage your strength • Create a market as 1 + 1 = 11 • Like minded MSME’s of dis-similar businesses are stronger than dissimilar thinking and similar business partnerships 6

Concluding Note from 25 years @ Rhino Machines Finding the right partner • Experimented with Hired CEO, Courtship Partner before realising the right partners were those within the organisation

Creating Wealth • Work on Financial Stability – Building Assets & Becoming Debt Free • Work on Investing in People – the most important resource commonly missed, the pillars of strength

Finding White Spaces • Create time to look for white spaces • The biggest strength of an entrepreneur is to find the white spaces in the market – business owner should make himself free to look for them

Recognise Opportunities & Challenges • Be Alert, Be Available – you never know when a challenge or opportunity is knocking on your door

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Summary of the partnerships Fondarc – foundation for Rhino’s growth

MSME Branding Govt Policies Social Need

Fata – added product range, access to corporates

Thank

ACEF Sustenance Quality Improvement Sustainability Joy of Giving

Ecolibrium Recurring Income Larger Network Value addition

Leverage Soft Skills & Training

Spread Risk Leverage Finance & Management Resources

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Summary of the partnerships

Thank

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