Vedanta Resources Plc’s new CEO, Srinivasan Venkatakrishnan, has big plans to build the company into a giant producer of commodities, with main focus on Africa and India.
“If you look at diversified companies, they come with a bright and strong heritage,” he told PTI in an interview yesterday. “Exxon has roots as an American company, BP as a UK company. Likewise, Vedanta starting its roots in India, I believe, can actually grow broader than India without compromising the growth in India – looking elsewhere as well and becoming one of the largest resource companies.”
According to him, the mining mogul Anil Agarwal-led company has already demonstrated the potential in terms of its growth trajectory over the past few years. So Venkatakrishnan, or Venkat as he is known among peers, aims to invest heavily in more local production of all commodities. In fact, Vedanta will invest $8 billion in the next two-and-a-half years – a bigger kitty than miners such as Rio Tinto Group and Anglo have pledged to spend over a similar period.
Vedanta hopes to gain from Venkatakrishnan’s South African experience in leveraging the strength of its copper mines in the country. The company is due to start production at a big zinc mine in South Africa later this year. Moreover, there’s talk of a merger between Vedanta and Anglo American Plc’s South African business. Agarwal is already the largest shareholder of the international miner through his holding firm Volcan Investments.
According to Venkatakrishnan, Africa spells a huge opportunity, where Agarwal is the single biggest foreign investor. “Outlook is bright. I am very optimistic in terms of future,” he said. The new CEO will be spending the next 90 days understanding the company, where he wants to “spend time right up to retirement” and leave a strong legacy.
Venkatakrishnan spent the last 18 years of his life with AngloGold, one of the world’s biggest gold producers. He is known to have turned around the company’s fortunes during his stint as the CEO. When he took over the reins in 2013, commodity prices were collapsing and debt was threatening to bury the firm. He not only brought down the company’s total costs by 30% and nearly halved its debt, but also managed to improve the company’s productivity. AngloGold completed two new mining projects in his tenure.
“The [Vedanta] group already has good cost savings measures in place and ambitious cost targets. I believe I can, with the experience that I have, bring an additional catalyst to the party..not that the group cannot achieve it without me,” Venkatakrishnan told the daily.
However, Agarwal is seeking more than just tangible financial gains from his new CEO. “He [Venkatakrishnan] is a huge brand for safety all over the world and it will be one of his priorities to make sure that our consciousness for the environment shines through,” Agarwal told the daily. “People will think twice before they put a finger [on the company] on the issue of environment and safety.”
This comes against the backdrop of the increasing flak Vedanta has received from the government and local communities for flouting environmental norms in the past few years. Its anti-green image took a the latest hit in May after protests in Tuticorin – demanding closure of the 400,000-tonne copper smelting plant, on water pollution grounds – claimed 13 lives