Millennium Post

At last, a globalised India

At last, a globalised India
The Indian economy seems to have shaken off the grip of the global negative economic trend and looks to be set for a high rise, even as businesses continue to draw investment from foreign institutions alongside increasing their exports at a growing rate. Even as the Narendra Modi government is making efforts to live up to its promises, the industry is going about its business as usual in a calm and efficient manner that has begun attracting attention of countries and foreign multinational companies seeking bilateral trade or to put their money in ventures in the second largest populated country in the world. 

One of these countries is tiny island of Taiwan. Bilateral trade between India and Taiwan crossed $8 billion in 2011-2012 and is expected to increase significantly upon conclusion of an FTA (Free Trade Agreement) between the two countries, according to Emma Yang, Director, Taipei World Trade Centre Liaison Office.  Noting that the Taiwan-India relationship has witnessed significant progress since 2002 due to mutual continued broadening of scope of cooperation, she said the two countries have built up a strong relationship in areas like economic cooperation and cultural & educational exchange. 

Taiwanese investment in India is over $1.2 billion and, in a step forward in this regard, Taiwan has been engaging Indian consumers and business associates through its Taiwan Excellence campaign through the theme ‘Excellent Lifestyles in India’ through various promotional activities, she said adding that from 2010 to 2013, over 630,000 visitors experienced the Taiwan Excellence Experience Zones in major shopping malls.

She said this year 47 leading Taiwanese brands from the Information& Communication Technology (ICT), Home Appliances, Sports& Leisure and Healthcare industries have pledged partnership to the Taiwan Excellence 2014 campaign being held in Mumbai from July 11 to 13, which has been organized by the Bureau of Foreign Trade (BOFT), Ministry of Economic Affairs (MOEA) of Taiwan and implemented by the Taiwan External Trade Development Council (TAITRA).

Dr Guann-Jyh Lee, Executive Director of Economic Division, Taipei Economic and Cultural Center in India,  said India’s rapid economic growth has recently outpaced many other nations, demonstrating its strong potential for development . ‘India is the largest country in South Asia, which is also one of the five BRICS (Brazil, Russia, India, China and South Africa) countries and therefore Taiwan attaches great importance to its relations with an emerging power like India,’ he said. The 2014 Campaign was launched here by Bollywood actor Siddharth Malhotra as he lit a lamp, rode a Taiwan-made portable bicycle and posed with models highlighting Taiwanese lifestyle products in India.

The Tatas are making their presence felt in not only automobiles sector but now also in the aerospace market. Earlier this month, TAL Manufacturing Solutions Ltd. (TAL) — a Tata enterprise and a wholly-owned subsidiary of Tata Motors — announced the delivery of its first advanced composite floor beam (ACFB) for the Boeing 787-9 Dreamliner to Boeing. The ACFB was produced in collaboration with Boeing by TAL at its dedicated world-class facility in MIHAN SEZ in Nagpur.

 Senior TAL officials including the Chairman, R.S Thakur, John Byrne — Vice President, Aircraft Materials and Structures, Supplier Management, Boeing Commercial Airplanes (BCA), and Jay Campbell - Managing Director, International Business Development, BCA, were present to commemorate the occasion. Boeing India - President, Pratyush Kumar described it as a major milestone not just for Boeing and TAL but also for India. ‘This is not just any part,’ Kumar said, ‘It represents a highly advanced form of composite manufacturing that enhances India’s stature in the global supply chain network of Boeing. This is an excellent example of India bringing productivity and competitiveness to Boeing, and Boeing bringing cutting-edge technology to India – a truly win-win partnership.’

‘We are proud of achieving this milestone,’ said Rajesh Khatri, Executive Director & CEO, TAL. ‘This would not have been possible without the support of the Boeing Team. We will accelerate production to meet Boeing requirements and are committed to create a center of excellence for aerospace in India backed by world-class facilities, proficient people and global best practices.’ ‘Manufacturing composites for aerospace is a complex, demanding process,’ said Kent Fisher, Vice President and General Manager of BCA Supplier Management. ‘We are pleased with the progress TAL has made in such a short period of time’.

In less than five years, TAL has transformed a greenfield site at MIHAN, SEZ into an aerospace manufacturing facility, building sophisticated aero structures. It has also created employment opportunities for more than 200 persons – with a potential for many more. Now, TAL is positioned to methodically ramp up production for 787-9 floor beams that are shipped to Boeing partners in Italy, Japan and the United States.  With a state-of-the-art facility and capability of manufacturing precision, high quality and cost effective aerospace components, TAL is set to foray its presence in the global aerospace domain.

Mahindra & Mahindra too are not far behind. The Mahindra Group and CIE Automotive of Spain tied up last year to form Mahindra CIE Automotive, a global automotive component supply network with combined annual sales of approximately Rs 15,000 crores with operations in North and South America, Europe and Asia through listed businesses in Spain, Brazil and India.  Anand Mahindra, Chairman, Mahindra Group, said that CIE Automotive — through one of its subsidiaries — will acquire from Mahindra Group a stake in its listed and unlisted companies belonging to Systech Automotive Component business and CIE Automotive will contribute its forging business in Spain and Lithuania and together consolidate all companies under MFL, which will be rechristened Mahindra CIE. Mahindra CIE would continue to be listed on BSE and NSE. The share sale by Mahindra would trigger open-offer provisions under the Securities Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations 2011. 

The proposed business transaction would be carried out in a series of steps over the next year with M&M taking a stake of 13.5 per cent in CIE Automotive (making it the second largest shareholder in CIE), and CIE Automotive taking a majority stake in a single listed entity in India which would continue to operate the current Systech Automotive Component businesses globally and include CIE’s European forgings operations. 

Describing the tie-up as a complex deal in terms of structure and sequence, the Mahindra chairman said this however was necessary as the Indian automotive component segment was far too fragmented to compete globally. ‘Eight years ago, Mahindra set out to build an Indian automotive supplier with a global footprint and this drove a series of acquisitions in India and Europe for us, while we listened to customers urging to step up our globalization efforts,’ he said, adding that the alliance with CIE would extend Mahindra’s reach into new geographies – especially in all key and emerging markets -- and expand the collective product and technology portfolio in the coming years.

Noting that this alliance holds enormous value creation potential for Mahindra, the Chairman said a cash flow of 100 million Euros is coming in from CIE into buying the shares besides Mahindra also putting an equal amount into the alliance. Ironically, the Mahindra Group has spent 10 per cent more in this alliance due to the rupee being devalued, he said. ‘We are going to use India as the gateway into the Asian market as we believe this – and the next decade – will be the Indian decade with this country’s future being something unbelievable,’ Anton Pradera, Chairman, CIE Automotive, said, adding that CIE is a $600 million company and the Mahindra-CIE alliance will focus on the product market of Brazil, Mexico, Russia, China, European Union, NAFTA and India. China is a $50 million operation that produces niche products for CIE, he said.

‘CIE Automotive is one of the main suppliers of components and sub-components for the automobile sector in Europe, Brazil, NAFTA and China with sales of $2.2 billion. It is a diversified company with half in Europe and the other half in the USA, Brazil and Mexico,’ Ignacio Artacoz, CFO, CIE Automotive, SA, said adding that this diversification had ensured that the company is not suffering in volumes globally despite being affected with lower volumes – but still maintaining good margins – in Europe.

In a first-of-its-kind technological tie-up/acquisition that is expected to boost the India’s Military, BSF, Police and Homeland Security, Mumbai-based Mechvac Group has concluded a ‘Letter of Intent’ with Israel’s Star Defense Systems (SDS) for a tie-up/acquisition of Prismatec (New Noga Light) company (Israel) for transfer of technology in ‘Night Vision Devices’ that meets the ‘BUY INDIAN’ terminology.
Stating that this deal will help fast track growth and cater to the growing equipment needs of weapon sights for the Indian Army, Raj Chodankar, Managing Director of Mechvac Fabricators(I) Pvt. Ltd., said the deal would commence with technology transfer and offering products in Indian rupees under the BUY INDIAN guidelines, followed by acquisition.

Describing India as the ‘biggest’ market for night vision systems, he said ‘The company’s products are consumed by the Indian Army (through Ministry of Defence), Ministry of Home Affairs,  and till date, over 10,000 weapon sights – valued at $100 million -- have been supplied to these entities.’ This tie-up with Israel assumes significance in the fact that the needs and demands for the Indian Army and MHA comes to a huge 1.50 lakhs ‘weapon sights’ worth Rs 3,800 crores over the next few years, he said.

‘NNL has unique features in its night vision sights that combine +light sensor+ and +motion sensor+. All the components integrated in manufacture of night vision equipment will be produced in-house in our Navi Mumbai plant,’ Chodankar said. The eventual merger of Prismatec with MFIPL would ensure better exploitation of available opportunities in India and abroad for these products, Moti Solomon, Prismatec, said while highlighting the long collaboration and association with Mechvac in manufacture of several equipment in the past. 

‘India should become a sourcing hub for plastic items, besides focus on crossing the $15-billion export mark. While China is a major competitor with high volumes of production and competitive prices, a distinct change has been observed with overseas buyers seeking other sources of supply due to factors like rising costs in China and inconsistency in quality levels of Chinese supplies,’ Rajeev Chitalia, Chairman of the Plastics Export Promotion Council, while noting that India is emerging as the alternative source and this is the time to encash in this changed scenario. 

The Indian plastics industry has achieved $7.2 billion exports during 2012-13 with plastics raw materials accounting for 38 per centand the largest trading partners being the EU and USA. However, India’s share was barely a per cent of the world potential of over $450 billion and highlighted the need for targeting a bigger share of this market, specially in East Europe (Warsaw in Poland, and Prague in Czech republic) and Australia (Sydney and Melbourne)markets which have a huge 
potential of about $25 billion and $7 billion respectively, said Chitalia.
MPost

MPost

Our contributor helps bringing the latest updates to you


Share it
Top