I don’t need to be told that India is a great place to do business: Peter R Huntsman

By Sriram Ramakrishnan

MUMBAI: Mumbai’s notorious traffic is probably at its worst in the road that branches off from the Western Express highway and snakes down to the far end of Andheri East where gleaming high-rises sit cheek-byjowl with slums and industrial estates. One such high-rise is a spanking new building that will house Huntsman Corporation’s India headquarters.


Three out of the seven floors will comprise research facility, labs. In an area populated by corporate offices of large multinationals and domestic firms, Huntsman’s building does not particularly stand out though the kind of work that will happen inside will be hugely important as India makes every effort to attract global giants into building manufacturing facilities in the country.

In the next few weeks and months, as the last bit of carpentry and masonry gets completed, Huntsman's scientists and researchers will begin work on developing the latest dyes and chemicals for textiles, polyurethane foam to be used in construction, and advanced materials that conserve energy.

The cutting edge work that delivers innovative products to farmers in the field, textile works in their factories and construction workers on the building site will happen in these three floors. And the reason why this is important is that Huntsman’s model, which is essentially a strong stress on R&D, accompanied by manufacturing investments, is something that the Indian government would like every multinational to emulate.

The Make in India mantra is all about attracting manufacturing investments with a cutting-edge research.

“India is not a commodity market. It does not have cheap raw materials. I am not interested in a market where you are going to exploit cheap labour,” says Peter Huntsman, president and chief executive officer of Huntsman Corporation, downplaying what many would consider to be one of India’s biggest advantages.

“Our expertise is going to be moving further downstream, more products, more specialty, capitalising on human creativity.”

Now, a lot of companies in various sectors are probably doing what Huntsman is doing, but where the Texas-based chemical company owned by the billionaire Huntsman family stands out is its exclusive focus on R&D in specialty chemicals, agrochemicals and dyes. Among other things, Huntsman researchers are working on textile dyes that never fade, surfactants (used in detergents) that can be made from sugar or agri products instead of oil and special agrochemicals that will be unique to India.

“I would rather be selling a brand like our Araldite product or looking at energy conservation. It is going to save money to the consumers. It allows Huntsman to make money. We create value to the Indian economy. I would much rather focus on a downstream product like foam than a basic plastic toothbrush,” he added.

While manufacturing in India has its advantages, (Huntsman says he is clear that his firm’s interest is not due to cheap labour), the firm is among the many multinationals and domestic firms who have been at the receiving end of bureaucratic delays.

The firm shuttered a plant in Chennai after the local pollution control board delayed clearances. A second plant in Ankleshwar in Gujarat got its clearance only recently after a three-year delay. The Huntsman experience should ring a warning bell to bureaucrats and ministers in the establishment who are pushing Make in India aggressively.

The real problem with implementation and with attracting investment will come at the lower level, the state bureaucracy, which will have to hand out permits and clearances.

Huntsman is now importing the products that were being made by its Chennai plant, a fact that does not augur well for manufacturing investment in India.

“I do not need to be told that India is a great place to do business. I do not need to be sold on the idea. I am already here. I am already investing, but why am I waiting years to invest once I already get here. I do not have that problem in Europe or United States. So this in my opinion is the single biggest issue that faces economic growth in India,” he adds.