Thriving on Difficulties

Chief Executive Officer & Executive Director, Hero Future Energies

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Sunil Jain, chief executive officer and executive director of Hero Future Energies, says the company is on a roll given the growing acceptance of green energy…

One of the most challenging tasks for a corporate leader is to expand into new markets. Expanding into a continent that is very far away, largely unexplored by Indian companies, with a language barrier and with no previous association whatsoever, is even harder. And that is what Sunil Jain remembers as one of his finest achievements because he developed no less than 13 new export markets for Escorts’ auto parts when he was working with the company.

The continent was Latin America. It alighted on his consciousness when he realised that quite a few motorbikes were making their way from India to South America and the competition from the Chinese was intense. “But I knew we had a quality product, our auto parts were excellent. So I launched into this challenge with a vengeance,” he says.

During this phase, he was travelling 18-20 hours, sometimes catching not two, but four flights a day. New Delhi to Venezuela alone was 24 hours. Nor was he travelling only to South America. “I remember one day I had a breakfast meeting in Paris, caught a flight to Spain, worked there till about 4 p.m., then flew to Germany and in the evening, flew to Italy for some work. I did this kind of insane travelling for about 10 years,” he says.

Jain is a strict vegetarian and in those days, South America had no idea what to do with a vegetarian. In one restaurant, the frustrated chef, on being told of this vegetarian customer, came to his table and threw some grilled fish on it, saying petulantly, “that’s the best vegetarian dish I can do”, and walking away. Jain settled for a pizza instead.

Escorts was delighted at these new export markets – Chile, Brazil, Argentina, Uruguay, Columbia, Panama – particularly as hardly any Indian companies, barring Bajaj Auto, had ventured there. It was virgin territory. Finding the right staff was difficult, the currency fluctuation risk was high, South America suffered from political instability, no one spoke English – yet Jain thrived on these difficulties. But perhaps his ultimate achievement was to succeed in the auto equivalent of selling coal to Newcastle, a feat he achieved when Escorts became the biggest supplier of shock absorbers to an Italian company, and no less an Italian company than the scooter giant Piaggo, which itself was a brand icon. He remembers that with particular pride.

Eventually, though, the travelling became too much. That was one reason for leaving Escorts eight years ago. Another was boredom with the auto sector. And a third was the dismay at how the auto industry was unconcerned about damage to the environment. “I felt the auto sector was not contributing enough to cleaning the environment. My specialisation was creating new businesses and taking them to a logical conclusion. So when I was approached by IDFC, which had floated Green Infra and wanted someone with fresh thinking to head it, I was delighted at the opportunity. Green Infra became a good company and we did a lot of things differently,” he says.

In 2008, solar was non-existent. There was wind, but wind was more a tax-driven industry. “Green Infra was the first to come in with new power sales structures and to work on profitability rather than tax. We brought in fresh ideas and worked closely with the government in 2010 on its solar mission to ensure that it was fair and transparent,” he recalls.

As chief executive officer (CEO) and executive director (ED) of Hero Future Energies, what he finds most thrilling about the sector now is the sheer level of acceptance of green energy, both in India and globally. For Jain, what is an important and major development is not the lower tariffs for solar or the new developments in solar storage, or the latest technology developments, it is the “sheer acceptability across the spectrum of renewable energy”. “There is, therefore, the opportunity to grow, which was lacking earlier. And this is across the board, across the world,” he says.

Of course, that’s not to say that other developments are not important, such as the dramatic fall in solar prices, the fact that more utilities are now prepared to take up solar, and the fact that the Narendra Modi government is energetically promoting solar power. “We were all cynical when we first heard about the solar targets. But now I can see the government is serious and I am more optimistic that 100 GW of solar can be achieved. The only rider is that you can achieve the grid-related solar target, but achieving the rooftop target of 40 GW out of this 100 GW may be harder. Rooftop remains a challenge. The government has done a lot to push it, but it has yet to start being driven by consumers and the states,” he says.

The reason why the middle class isn’t taking up solar, Jain explains, is that power for this class is still subsidised and if the cost of grid power is lower than that of rooftop solar installation, they have no incentive.

Another reason for rooftop not picking up, he says, is that while many states have announced a net metering policy, it is not working as it should. In theory, the difference between what consumers consume by way of solar and what they sell to the grid should be subtracted from their bill. But instead, the states fix a tariff for the power going into the grid and so it is not net metering in the real sense of the word.

The good news is that demand for rooftop solar in the industrial, commercial and government segments is growing. Hero Future Energies is doing very well in this segment, even though it is less than three years old. “It is good that the government is ambitious about rooftop. It is coming out with a big rooftop tender soon and the cabinet has approved a subsidy for rooftop too,” he says.

A mechanical engineering graduate from the Birla Institute of Technology, Ranchi, Jain is happy with his bold decision to join the renewable energy sector without having any industry knowledge or background. It was a steep learning curve in the initial period, but he didn’t take long to understand the nuances of the business. When Hero Future Energies approached him in 2012, it was one of the few, perhaps the only, corporate house (barring Tata) to back a renewable power IPP. It was, he says, probably the only renewable energy IPP that built an entire platform with only family capital and no private equity.

He decided to join the company because it was simply a fabulous opportunity and he thought he could build a solid platform. Moreover, he sensed that not just Hero Future Energies but all companies of the Hero Group were committed to renewable energy and showed it by using solar in their buildings and plants in varying degrees.

In building up the business, the single most frustrating element of his job has been dealing with the fact that almost every state has its own policy, own tariff, own regulation. This policy framework lasts for around two years, so by the time a company has started investing in a project, the policy has changed, nullifying two years’ work and making planning difficult. “The only solution is that the central government comes out with a renewable energy act and its key guidelines are followed by all the states. Without this, we will continue our roller coaster ride,” he says.

These days he is busy working to push the company to make a quantum leap to become a 1 GW company by March 2017. Currently, it has a total installed capacity of around 400 MW. One of his top priorities is to ensure that the company is paid for the energy it supplies. “The financial state of the utilities is terrible. But mercifully, the UDAY scheme should change all that, and it’s for things like these that I give credit to the Modi government. Things are moving. However, the taste of the pudding is in the eating, so we need to see how things work out,” he says.

Jain is also working on building up the Hero Future Energies organisation. There are currently 101 employees. By December, he predicts this figure will rise to 175. Finding skilled personnel is a concern because renewable is still a new and growing sector. “The good thing is that we can find people in the conventional energy sector and train them to work in renewables. The other major concern remains policy, which is still a fluid area. Look at Rajasthan, it still does not have a solar policy as such. Most of the solar power installed in Rajasthan is the result of central policies,” he says.

To relax, Jain likes to read, particularly books on the environment. He is an active member of the local Rotary Club where all kinds of welfare programmes such as polio camps and the distribution of artificial limbs are organised. His wife, Poonam, is also very involved, teaching a class of over 40 underprivileged children regularly. The couple and their two grown-up sons live in Green Park, in New Delhi, a neighbourhood that Jain grew up in. “My grandfather came to live in Green Park in the 1920s and became famous for building the first Jain temple here. A Jain community arose around us and lots of people came to know us, so it is a comfort zone,” he says. Having travelled extensively for his career hasn’t put him off travelling for leisure. His wife and he are visiting China soon to explore villages in remote areas where the old lifestyle and architecture can still be found.

Jain is president of the Wind Independent Power Producers Association, representing the leading IPPs in the country. He is also a member of the CII Renewable Energy Committee. In 2012, he was awarded an excellence award for his contribution to renewable energy and sustainability by the Energy and Environment Foundation.

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