SGS is one of the world’s leading inspection, verification, testing and certification companies. Established in 1878, it has transformed itself from a grain inspection house to a multinational conglomerate comprising 10 business verticals. In a tête-à-tête with The Dollar Business, Cresenciano G. Maramot, Managing Director, SGS India and Sri Lanka, reveals how the company has sustained growth for more than a century and discusses factors that have helped it stay ahead of the competition across global markets.

Aamir H. Kaki | August 2016 Issue | The Dollar Business

TDB: Established in 1878, SGS has a long history of sustainable growth. How would you describe its journey so far and how has been your experience?

Cresenciano G. Maramot (CGM): In 1878, when we started in Europe, we did not have the nine business verticals that we have today. We started with the traditional business of providing agricultural inspection services. Thereafter, we started offering services to other industries like mineral, oil & gas and consumer products. Eventually, we moved to Switzerland and got listed in 1981. In early 2000s, we organised this steadily expanding business into 10 business lines. It was only last year, we have regrouped some of our businesses in order to offer more focused and competency-driven services to customers. Currently, we are running our businesses across nine verticals.
In India, we have been operating for more than 60 years and are running 10 business lines. Transportation is one key vertical. We command operations in more than 35 locations across India and employ almost 3,500 people. As a group, we operate in more than 140 countries and have 1,000 offices and labs across the world. Globally, we have 85,000 employees in our network.

TDB: In the last century, the global economy has seen several ups and downs. What are the factors that have helped you overcome uncertainties?
CGM: Our customer-focused services have translated into competitive advantage. That is the main reason why we qualify as one of the world’s leading testing, inspection and certification companies. The knowledge of our vast network of people helps us in addressing the local as well as global needs of customers. This, coupled with our strong focus on trust and integrity, has helped us tide the uncertainties.
I believe that we shall be able to sustain continuous growth and a leadership position in coming years because we offer a wide and diversified portfolio of services. In such a scenario, we are not dependent on one industry segment for profitability. Similarly, if there are challenges in a country, we are able to balance it with the operations in other countries.

TDB: You are based in Europe. So, do you see any direct impact of ‘Brexit’?
CGM: I would say probably not. We are headquartered in Geneva, Switzerland. Actually, as far as the impact of Brexit is concerned, it is very premature to
predict anything or comment.

TDB: SGS has operations in almost all countries. How is Indian market different from other markets?
CGM: The Indian market is very complex. It provides a lot of opportunities in terms of quality and regulations. SGS, as a testing, inspection and certification company, is working collectively and collaboratively with all stakeholders to address the market demands most effectively. For example, while working in partnership with automotive industry, we assist the industry in improving the quality of products. At the same time, we help them in terms of complying with various regulations and adherence to government policies.

TDB: Is there any difference in standards followed in India and western countries? If yes, how does SGS manage the different requirements of the countries in which it operates?
CGM: This largely depends on the marketplace in which our specific customers are providing their products and services. For instance, there is a lot of exports happening from India. If we take Indian automotive industry, it is already exporting a lot of products or automobile parts. In order to export effectively, the industry has to meet international regulations. We work with automobile manufacturers and OEMs (original equipment manufacturers) to guide and assist them in meeting these requirements. When we speak about the domestic market, wherein governing policies and regulations are according to the domestic standards, we provide a separate suite of testing and inspection services as per our customers’ requirements. Due to our local as well as international knowledge, we are able to balance our services accordingly as per different standards and regulations
followed in different countries.

TDB: SGS is also into logistics services. How does it ensure quality service and strong customer satisfaction?
CGM: Most of the services we provide in the logistics industry are related to security aspects and quality of goods being moved. We have a portion of services that cover the logistics industry as far as the actual logistics movement is concerned, but as a testing, inspection and certification company, this essentially boils down to the quality of products being moved. We provide a comprehensive suite of logistics services to our customers and ensure quality of these services, from the time of manufacture to the time of moving the goods from one place to another, and from the time of getting it at the port to shipping it to the destination.

TDB: The logistics industry in India is relatively nascent compared to developed countries. How are you aiding the industry apart from bringing in technology and innovative solutions?

CGM: Professional training is one of the many services that we provide through our CBE (certification and business enhancement) business. Our training and development solutions are designed to help organisations and individuals improve personal competence and skills – core enablers of sustainable business development and competitive advantage.
As a global leader in professional training, we bring in the required expertise and support. However, for Indian logistics industry to thrive, and to advance to the next level, there should be a collaboration amongst all stakeholders in the industry to adequately train the human resources across various functions, levels and roles.

TDB: SGS has been in India for 60 years now. How has business climate changed over years, in terms of ease of doing business, tax regulations, etc.?
CGM: We operate across different business verticals in India. Therefore, to an extent, the change in regulations does not affect us much. Moreover, we are a B2B company, which means our clients are businesses and trading companies. So, if a policy is beneficial to our client, it directly or indirectly boosts our business too. We have lot of hopes on GST, like any other industry. Once it's implemented, it will definitely help the industry.

TDB: How do you view 'Make in India'?
CGM: ‘Make in India’ is targeted on increasing the size of manufacturing industry in India. It will definitely boost manufacturing and support the sustainable growth of the country. If manufacturing increases, our role in validating the quality of products and processes for exports and domestic consumption will also increase. This, in turn, will
generate more work for us.

TDB: What about your investments in India? Where do stand as of now?
CGM: With respect to our transportation business in India, we have invested in 2-3 standalone state-of-the-art facilities in the last three years. One facility means creation of hundreds of new jobs, procurement of advanced machines and introduction of at least two to three new technologies. We also have several
upcoming projects.

TDB: Do you import machinery and technology from abroad for setting up facilities in India?
CGM: It depends on what machines we are procuring. Having said that, in the field of analysis, India still lacks the precision and accuracy levels that European, American and Japanese companies command. We have the mandate of balancing national and international regulations. Therefore, while at times we opt for domestically manufactured machines, we do import machines as and when required. When we have an established industry or technology in place in India, we go for Indian machines. Otherwise, we import them from overseas markets. Hence, there is no set rule for procuring machines.

TDB: What is your current market share in India?
CGM: India plays a significant role in our scheme of things and contributes a significant value to the group. As a group, we are number one in the industry.