Bulcke further says, "We have been growing double digit over the last year or so. You may have, to get a whiff of the environment in India, a slower growth for one-two years. I do believe that intrinsically India has all the characteristics of growth."
Bulcke says, "We really try to see the opportunities everywhere in the world and building the capabilities to go after these opportunities, the fact that we have been growing in Greece. So, our business is not directly related to GDPs. We are related to what consumers, the building up of middle classes are going for. That's the interesting dynamics that actually inspires my optimism."
Below is the edited transcript of his interview on CNBC-TV18.
Q: What is your view on emerging markets?
A: When these countries were growing above 10 percent, they say that the engine is overheated. It goes down a bit and then we all are a little bit nervous lately. So, tried to maintain perspective on these things and see over time. Over time, I see 80 percent of the world population going for and working for a better tomorrow. That's where we want to be part of. That's where I see potential for the future.
Q: You talked about nervousness. How nervous are you feeling about the emerging markets? I want to talk to you about specifically China and India because these were the markets that were giving everybody double digit growth. These were the economies that were expected to grow between 8-10 percent. China has come down to about 7 percent. India, at best, is probably going to do about 6-6.5 percent. What does that mean then for a company like yours?
A: I am not nervous. I am alert. That's somewhere strength of Nestle too. We are not only there. We are also in Africa. We are in Latin America. We are growing in Europe. We really try to see the opportunities everywhere in the world and building the capabilities to go after these opportunities.
Q: I want to talk to you specifically about the India growth story. I know you are in the closed period in India, but you are talking about 5-6 percent growth. You have seen in India in excess of 20 percent kind of growth numbers. What do you now expect, as far as Nestle is concerned? The analyst community is pegging CAGR between 18-20 percent, would that be a fair estimate?
A: We have been growing double digit over the last year or so. You may have, to get a whiff of the environment in India, a slower growth for one-two years. I do believe that intrinsically India has all the characteristics of growth.
Q: You talked about pricing. You talked about going after the Indian middle class and that opportunity. One of the things that people say about Nestle is that you have been one of the most aggressive players in India in terms of pricing, is it clear that Nestle is not going to sacrifice margins to go after market share and that is going to be the considered strategy going forward?
A: Pricing as a result of need for pricing. There is still a need to increase prices because that would eat up margin. We have to do that because our profit margin is actually our future. That's how where we finance our R&D, our innovation, we also contribute to people who have trust in our company by putting their capital in. So that's a normal dimension. We have to do it wisely. We don't have to do it straightaway.
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