'Cut strategic costs, not tactical costs'

Chennai, Nov 14: B Santhanam, Managing Director, Saint Gobain, has called upon Indian companies to cut the flab to survive the global meltdown that might hang around in India till March 2010. Addressing 'Insight' 08' seminar on 'Management in challenging times,' organised by the Loyola Institute of Business Administration, he said the Indian companies were yet to understand the risk they were facing. They could survive 2008-2009, while 2009-2010 would be a bit tough. So, they had to cut strategic cost, and not tactical cost. "Every contract can be renegotiated. Saint Gobain will talk to suppliers who have been benefited from the recent fall in the oil and commodity prices. We will ask them to pass on the benefits to us. We will make more sales and marketing calls and spend more time on receivables," he said, when asked about his company's plans.

Santhanam said that though the company gained some market share in the first 10 months of 2008, the growth in the float glass segment remained constant. To keep itself afloat, the company would penetrate into those markets that had not been affected by the crisis. "To survive any crisis, we have to think, plan and carry out strategic cutting. There are lots of opportunities to cut the flab. Over the past five years, we have built a lot of fat, and we can consider cutting up to 10 per cent," he said.

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