We had the opportunity to bring Mr. Manas Datta as a guest on our podcast – Cashflo Unscripted.
Mr. Manas Datta, is Group CFO of Wockhardt Ltd – one of India’s truly global pharmaceutical companies with operations across the globe. Mr. Datta has 30+ years experience as a finance leader in corporate finance, treasury, M&A, and taxation in diversified businesses – pharma, chemicals, fertilizers, power, and hospitality. He is a cost accountant by qualification and an alumnus of IIM Ahmedabad. He has been featured in Forbes, in the September 2019 issue and is also the recipient of many awards and accolades, including CFO 100 for three years in a row. He is named among the most influential CFOs by the Chartered Institute of Management Accountants.
It was truly an honor to have such an influential and experienced CFO at CashFlo Unscripted and share his perspective on the different aspects of working at a billion-dollar company.
Manas faced numerous challenges in his journey to bring Wockhardt back to strong financial health. Before Manas joined in 2014, Wockhardt was under the scrutiny by USFDA for maintaining unsanitary working conditions, has posted negative net profits since 2016 and flat revenue over the same time period. When Manas joined the company, he came up with three different buckets of strategies to tackle the problem.
The problem of US safety was affecting three of Wockhardt’s plants and the molecules it was selling, across the globe. This led to a decline in the business with the US, from $500 million to $125 million and it was only because Wockhardt couldn’t enforce quality management in India.
The three buckets of strategies that he talked about included research-driven programs, de-growing the generic branded business in India and using the money for R&D, and entering into business in many different geographies across the world. This helped Wockhardt to improve its standing in the market and cover the decline caused during 2014. Later on,it went on to add six new molecules and now runs one of the largest end-to-end antibiotic research programs in the world.
As the CFO of a multinational company, one of the biggest challenges that Manas faced was spending 14% of the top line on R&D without any financial support from banks. Therefore, the challenge was to make sure that the company was liquid enough to spend more than $300 million in R&D. The other challenges that he faced were making sure that the organization structure was flexible enough to adjust globally in an evolving scenario and also ensuring that the management gets the right information and not the bulk of information.
“To me there are no challenges rather a provocation that everything is an opportunity.”
When asked about the challenges faced in raising funds for R&D, Manas said that research and development in pharma rarely have any organized financial norms and the internationally orientated debt funds are likewise not accessible. Consequently, the solitary source left for financing is venture capitalist or private equity players yet they are exceptionally costly. So Wockhardt takes funding from various Indian and global lenders for its R&D projects.
To tackle the problem of agility and getting the right information at the right time, Manas implemented a day-2 reporting system, which means that by end of the month without changing anything that normally an accountant would do to manage its reporting structure, they go live with financial reports. Wockhardt captures everything on the last day of the month, and with time differences some places have it on day +1 and for some it’s day +2, and immediately present the reports to management. In the last five years, moving from a data-based ERP to rapid digital reporting has benefitted from the 2-day reporting system.
“Digitalization is a complete organizational transformation and not just digitization”
From funding we moved onto a more theoretical note, talking about the difference between entrepreneur and professional. Manas believes that an entrepreneur would be infinitely optimistic whereas professionals are trained to be pessimistic. As a professional, they are trained to follow a set of norms but as an entrepreneur, there are no limits or bounds.
We moved on to talking about the effect of the pandemic on Wockhardt, Manas said that being an essential commodity supplier they had the luck of opening up after one month of the lockdown. For the initial one month, there was trouble due to the restricted supplies from China. These challenges pushed the organization to search for unconventional ways of doing work, in terms of getting alternate resources and sources of material. Financing wasn’t a challenge during this time for the company and there was global support as well.
By the end of the discussion we were interested to know Mr. Manas’s view on the changes in the supply chain due the government’s “Atma Nirbhar” policy. Manas has the view that having such a strategy will not be extremely practical on the grounds that it moves against existing supply chain infrastructure. He doesn’t accept that everything should necessarily be done by India, and we could develop by focusing on value-additions, and especially for pharma the attention ought to be on value-added products instead of pure manufacturing (API).
It’s a testament to the challenges a CFO, at a billion-dollar company faces and the way he tackles each situation with a plethora of strategies that further help in development of the organization.