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INDIA NEWSLETTER PUBLISHED BY THE EMBASSY OF INDIA VIENNA YEAR 1 | ISSUE 5 | MAY 2011

SPECIAL REPORT

INDIA-AUSTRIA 2010 TRADE SNAPSHOT

2010 TRADE SNAPSHOT


News Economy & Business April 2011 Highlights ► ECONOMY Economic Growth. India's GDP is projected to grow at a brisk pace of 8.8 per cent in

additional Sistema share issue. Sistema

a joint venture company for setting up an

said SSTL increased its share capital by

integrated 250 Mw solar photovoltaic mod-

around US$ 647 million.

ules plant. They have also shortlisted two locations in Karnataka and one in Andhra

2011-12 (FY 12), a leading economic think-

Acquisition. India's third-largest technolo-

tank said.

gy services company Wipro Technologies

Exports. The Federation of Indian Export Organisations (FIEO) said the country's exports would cross $ 300-billion in 201112. "In FY 11, exports touched USD 246billion and we expect it to reach the USD 300-billion mark in FY 12. Asia, Latin America and Caribbean (LAC) region and

Pradesh for setting up the plant at an investment of $450 million.

announced the purchase of a portion of the American IT business of Science Applica-

Solar Energy III. Tata Power, subsidiary of

tions International Corporation (SAIC) for

the Indian Tata Group, announced a part-

$150 million. The purchase covers only the

nership with Sunengy, an Australian com-

IT business of the firm's oil and gas vertical

pany that specializes in Liquid Solar Array

which provides consulting, system integra-

(LSA) technology, to build a floating solar

tion and outsourcing services to oil majors.

array power plant in an as yet to be announced location in India.

Africa have been the main contributors to

Tourism. In addition to taking up the budg-

this growth," FIEO President, Ramu Deora,

etary ramifications, Subodh Kant Sahay,

Nuclear Power. PCI, part of the diversified

said.

Union Minister of Tourism has set up five

Prime Group, and French entity Onet Tech-

sub-groups of National Tourism Advisory

nologies announced the formation of a JV

Council (NTAC) to formulate action plans

to provide various services to the Indian nu-

on promotion and marketing heritage, rural

clear power industry, including engineering

and eco-tourism.

design expertise, service and maintenance

► INDUSTRY/BUSINESS Expansion.

German

car

maker

Volkswagen is planning to invest approximately $27 million in India for the establishment of a non-banking financial arm. The car maker‘s Volkswagen Finance Private Ltd has already received license from the Reserve Bank of India that allows it to commence operations of its Non-Banking Finance Company (NBFC). Expansion II. French technology, consultancy and engineering major Alten has drawn up big plans to beef up its presence in the Indian market following its acquisition of Calsoft Lab, a wholly-owned subsidiary of Chennai-based California Software (Calsoft). Alten is planning to use Calsoft as a spring board to realise its business aspi-

work, decommissioning and waste managePaper. US-based International Paper Comof 53.5% equity in Andhra Pradesh Paper

Automotive. Seeking German cooperation

Mills (APPM) from LN Bangur group last

for making available clean auto fuel in the

month, is planning to further invest about

country, Heavy Industries Minister Praful

$330 million in the expansion of the plant

Patel said, addressing a meeting of the In-

located near Rajahmundry.

do-German Working Group, India would follow the ―strictest‖ environment norms for

Renewable Energy. Matrix Partners, a private equity firm from the US, is in talks to buy a 20% stake in Soham Renewable En-

and the CIS, announced an increase in the

German investment in services, chemicals and automobile.

pany at $80 million. Soham Renewable En-

Healthcare. The board of Fortis Healthcare

ergy plans to produce power from hydro re-

took a decision to acquire 86% shares of

sources. This is the fourth PE funding that

diagnostic services chain Super Religare

Soham would receive in 3 years.

Laboratories (SRL) for an undisclosed sum.

Solar Energy. Indosolar and China‘s GCL fied public financial corporation in Russia

the transport sector. Mr. Patel also sought

ergy India for $15 million, valuing the com-

rations in India and Asia. Expansion III. Sistema, the largest diversi-

ment.

pany, which had announced the acquisition

Solar System will jointly facilitate development of solar farms in India.The total investment involved is close to $290 million.

Both Fortis and SRL are controlled by billionaire brothers Malvinder and Shivinder Mohan Singh. SRL is in the process of getting listed on stock exchanges, while Fortis is already a publicly listed company. The

share capital of its subsidiary in India, Sistema Shyam TeleServices Ltd (SSTL). The

Solar Energy II. The Bharat Heavy Electri-

acquisition will result in the entire promoter

Indian company provides telecommunica-

cals Ltd (BHEL), the state-owned power

stake in SRL getting transferred to Fortis.

tions services under the MTS brand. The

equipment major and Bharat Electronics

capital stake increase was by means of an

Limited (BEL), have firmed up plans to float

Logistics. Global private equity firm, War-

May 2011 - India-Austria Newsletter | 2


News April 2011 Highlights (cont'd ) burg Pincus, is to make an investment of

industrial users if they are able to reduce

$100 million in India‘s leading logistics com-

wastage of water. The incentives may fea-

pany, the NDR Group. The transaction

ture in the new National Water Policy,

amount will see Warburg Pincus acquire a

which is being prepared by the water re-

minority stake in NDR Group‘s flagship

sources ministry and the Planning Commis-

company, Continental Warehousing Corpo-

sion. The policy is likely to be introduced

ration (Nhava Seva) Limited (CWCNSL).

next year.

Kazakhstan. Embarking on an ambitious roadmap to consolidate their strategic partnership, India and Kazakhstan signed seven pacts, including a framework agreement in civil nuclear field and a stake-sharing accord in oil sector. Prime Minister Manmo-

Warburg Pincus will undertake the investment through its Indian affiliate.

May in New Delhi.

Clean Energy. The Indian union cabinet

han Singh said there was ―vast potential‖

cleared the creation of a national clean en-

for cooperation in all areas.

HR. Manpower Group, the world leader in

ergy fund that will finance green energy

innovative workforce solutions, has suc-

projects and research ventures aimed at

cessfully completed its acquisition of a 74

reducing India‘s carbon footprint.

Portugal. Portugal is looking to boost its trade relations with India and particularly keen to improve the trade ties with Goa, its

per cent stake in Kolkata-based Web DeEco-City. According to report submitted by

former colony. Ambassador of Portugal,

Toshiba, Manesar will soon be home to the

Jorge Roza de Oliveira , told that they are

country‘s first Eco-City, which is part of the

trying to work on the trade ties with India to

Delhi-Mumbai Industrial Corridor Initiative.

make up for the existing trade deficit.

sulting, development and application sup-

Green Building. India‘s green building

Turkey. India and Turkey have the poten-

port services to large clients across the

space has been growing exponentially

tial to expand trade and investment rela-

Asia Pacific region. ◄

since 2003 when it started with a registered

tions exponentially in the coming years. To-

green built-up area of 1,850 m2 to the cur-

wards this end, the Governments of the two

rent level of 60.2 million m2. The figures

countries are engaged in negotiating a free

Steel. Taking a cue from ultra mega power

suggest an average of 40-fold increase

trade agreement, said Mr Dilip Dandekar,

projects, the ministry of steel is planning to

each year over the last eight years.

President,

velopment Company Limited (WDC). WDC is a leading IT services and professional resourcing company. WDC operates from five delivery locations in India, offering con-

► INFRA-STRUCTURE

set up ultra mega steel plants on fast track basis in five mineral-rich states. This move is aimed at meeting demand-supply deficit in the steel sector. Coal. After the civil nuclear agreement, India and the US are pursuing an alliance in the coal sector. Both the countries are con-

Indian

Merchants'

Chamber

(IMC). Ports. The government is looking at an investment of over $ 22.5 billion in 13 majo

Russia. India and Russia are likely to sign

ports, majority of which will come from the

a giant energy deal towards the end of this

private sector, to expand their capacity by

year. The Indian side of the pipeline TAPI

767 million tonnes in the next 10 years.◄

(acronym for

Turkmenistan-Afghanistan-

Pakistan-India) gas pipeline will be con-

► INTERNATIONAL

structed by Russian giant Gazprom. The project, which will cost $7.5 billion, will span

sidering encouraging equity partnerships

EU. Union Commerce and Industry Minister

with offtake in expansion projects, long term

Anand Sharma said talks between India

offtake arrangement and equity in new pro-

and European Union had been intensified

jects. India‘s premier coal producer, Coal

in an attempt to stitch up a free trade

India (CIL), has identified 142 new projects,

agreement (FTA) within this year. This was

comprising 35 under ground (UG) and 107

deliberated upon during the bilateral meet-

opencast (OC) for ultimate capacity of

ing Mr. Sharma had with the visiting Ireland

Canada. Canadian Industry Minister Tony

380.22 million tonnes with an estimated

Minister for Enterprise, Jobs and Innova-

Clement has reiterated his country's com-

capex of $7.7 billion.

tion, Richard Bruton Ireland. India and the

mitment to signing a free trade agreement

European Union hope to sort out the re-

with India by 2013.◄

Water. In an effort to promote judicious use of water, the government is planning to offer incentives, such as tax breaks , to big

1,678 km and is expected to go on stream by 2015. It would supply at least 33 billion cubic metres of gas to India from the very first year, and the volume is expected to be increased dramatically year on year.

maining issues to a free trade agreement in their next round of meeting ofofficials in

May 2011 - India-Austria Newsletter | 3


News India-Austria Bilateral Trade Snapshot 2010 ports after having its import volume almost triplicated based on its 2006 mark. Iron & Steel, which represents a volume of about €82 million of imports, registered 64% increase. It has not yet recovered from its sharp drop by -52% in 2009, though. Nonmetallic minerals, on the other hand, managed recovery from the -33% drop and registered increase by 65% y-o-y, which represents an overall increase by 180% since 2006. Non-metallic minerals currently account for 5.5% of India‘s total imports from Austria with a volume of about €36 million.

After showing stable advance during the crisis year, India‘s exports to Austria remain on a constant growth track and registered an increase by approximately 10% y-o-y in 2010 with total export volume amounting €483.1 million. This marks an increase by 55% on 2006 Indian exports volume to Austria and an average exports growth by 12% y-o-y.

largest jump in comparison to 2008.

As far as India‘s imports from Austria are concerned, after registering a -8% decrease in 2009, trade has gone back on track and registered an upturn by 16.9%, which represent a 7.6% growth based on pre-crisis levels. 2010‘s imports from Austria amounted €654.9 million. After a great jump by 41.8% in 2007, trade results indicate an average growth on imports by 16.5%.

Also important to notice is Footwear, which account for approximately 8.6% of India‘s exports to Austria. After the drop in 2006, the group has experienced slow recovery in the 2007-2009 period. Only in 2010 year exports rose above its 2006 mark by 21.5% (approx. 26% y-o-y)

On the EXPORTS side, India‘s exports to Austria in 2010 are mainly characterized by Manufactured Goods, Machinery & Transport Equipment as well as Chemicals.Textiles & Yarns as well as apparels account for about 30% of India‘s total exports to Austria. While experiencing volatility, the volume of exports of Textiles & Yarns in 2010 is back to its 2006 mark. Apparel & Clothing Articles, on the other hand, have seen constant growth and marks a 20% rise based on its 2006 mark. Machinery & Transport Equipment represent 26.4% of India‘s total exports to Austria, where 10% refers to Road Vehicles and 8% refers to Electrical Machinery. This group deserves special attention, for exports of these items have increased by 230% in the past 5 years. The trade of these items have not been hit by the financial crisis. On the contrary, 2009 marked the

Chemicals represent 13.6% of India‘s exports to Austria, 7.6% of which consist of medicinal and pharmaceutical products. The other 4% consist of organic chemicals. The group has experienced constant growth levels and 2010‘s export volume is more than double of its mark in 2006.

While on the IMPORTS side, India‘s imports from Austria in 2010 are mainly characterized by different types of machinery, which altogether accounts for 50% of total imports. Iron & Steel represent 12.6% of imports and Chemicals account for 10.9%. After experiencing 46% growth in the 20062008 period, Machinery and Equipment saw a decline by 3% in 2009 followed by a recovery by 3% in 2010, bringing the balance back to its pre-crisis level. As it represents 50% of total imports from Austria with total imports volume amounting €327 million, this group is expected to return to its pre-crisis growth levels as exchange of infra-structure and technology increases between India and Austria. Within the Machinery Group, special attention shall be brought to Electrical Machinery, which represents about 9% of total imports and experienced growth by 80% in the last five years. Just as important to highlight is the performance of Metal Working Machinery, which currently represents 6.8% of total im-

May 2011 - India-Austria Newsletter | 4


India-Austria Bilateral Trade Detailed View India‘s Exports to Austria 2010 - Figures (in EUR) SITC 0 1 2 3 4 5 51 54 6 65 66 67 7 71 72 73 74 77 78 8 84 85 87 9 TOTAL

ITEM FOOD AND LIVE ANIMALS BEVERAGES AND TOBACCO CRUDE MATERIALS, INEDIBLE, EXCEPT FUELS MINERAL FUELS, LUBRICANTS AND REL. MATERIALS ANIMAL AND VEGETABLE OILS, FATS AND WAXES CHEMICALS AND RELATED PRODUCTS, N.E.S. ORGANIC CHEMICALS MEDICINAL AND PHARMACEUTICAL PRODUCTS MANUFACTURED GOODS CLASSIFIED BY MATERIAL TEXTILE YARN, FABRICS AND MADE-UP ARTICLES, NONMETALLIC MINERAL MANUFACTURES, N.E.S. IRON AND STEEL MACHINERY AND TRANSPORT EQUIPMENT POWER GENERATING MACHINERY AND EQUIPMENT MACHINERY SPECIALIZED FOR PARTICULAR INDUSTRIES METALWORKING MACHINERY GENERAL INDUSTRIAL MACHINERY AND EQUIPMENT ELECTRICAL MACHINERY, APPARATUS AND APPLIANCES, ROAD VEHICLES (INCLUDING AIR-CUSHION VEHICLES) MISCELLANEOUS MANUFACTURED ARTICLES ARTICLES OF APPAREL AND CLOTHING ACCESSORIES FOOTWEAR PROFESSIONAL, SCIENTIFIC AND CONTROLLING INSTRUMENTS COMMODITIES NOT CLASSIFIED ELSEWHERE

2006 15,863,486 2,441,916 5,153,804 1,706 118,083 28,908,950 7,246,182 14,393,782 72,288,089 39,238,325 10,946,436 8,118,663 38,526,470 1,675,310 490,865 351,447 10,163,218 11,259,281 12,584,614 147,163,759 89,611,895 34,107,809 1,098,543 9,343 310,475,606

2007 20,975,987 1,993,181 6,156,394 4,244 112,951 35,385,950 14,211,778 14,687,836 76,560,888 31,180,605 16,643,368 9,509,673 49,830,520 2,086,670 936,463 449,443 13,411,333 10,247,184 21,464,660 146,956,047 91,114,635 31,738,794 1,354,474 6,813 337,982,975

2008 22,258,906 1,759,375 6,462,128 10,221 157,610 49,934,933 14,383,785 24,555,655 103,938,441 47,318,882 17,801,756 17,807,370 71,917,028 4,060,287 1,302,949 711,236 17,136,873 11,815,494 34,311,488 158,643,974 98,140,085 31,841,289 1,030,541 2,486 415,085,102

2009 23,134,792 2,489,592 5,465,628 2 81,282 58,228,176 18,175,543 32,353,250 74,654,289 37,942,468 14,166,024 3,544,784 113,559,266 11,821,361 3,307,757 921,121 20,155,281 21,862,859 51,745,140 161,816,102 103,402,147 32,833,993 1,435,461 439,429,129

2010 19,135,604 999,753 7,913,591 1,026 40,714 65,491,155 19,535,053 36,755,060 82,248,908 39,146,087 16,364,571 4,899,645 127,377,762 9,041,267 5,814,459 429,510 19,006,259 39,325,511 48,205,098 179,935,005 107,372,902 41,447,466 2,158,943 1,973 483,145,491

2008 364,022 2,916,538 6,307,040 44,948 49,068,500 24,021,216 8,772,710 180,618,507 3,192,739 32,833,921 103,951,103 326,881,561 68,884,550 61,540,462 30,973,657 58,539,435 49,931,755 19,330,270 42,700,474 336,417 49,505 24,281,568 608,901,590

2009 5,867,892 3,086,882 14,419,080 36,595 249 57,917,962 30,659,631 7,692,599 118,499,184 4,113,994 21,799,868 50,061,938 316,568,038 42,010,362 73,953,794 28,483,513 82,535,831 38,716,131 15,879,018 44,022,202 76,595 15,643 32,432,547 560,418,084

2010 2,001,118 3,748,938 18,293,488 27,573 26 71,141,005 35,355,511 12,931,672 170,722,268 3,960,150 36,091,301 82,249,667 327,496,996 42,866,480 60,096,473 44,363,498 66,126,350 59,277,978 11,500,091 61,435,549 185,817 41,560 31,530,469 8,781 654,875,742

India‘s Imports from Austria 2010 - Figures (in EUR) SITC 0 1 2 3 4 5 51 54 6 65 66 67 7 71 72 73 74 77 78 8 84 85 87 9 TOTAL

FOOD AND LIVE ANIMALS BEVERAGES AND TOBACCO CRUDE MATERIALS, INEDIBLE, EXCEPT FUELS MINERAL FUELS, LUBRICANTS AND REL. MATERIALS ANIMAL AND VEGETABLE OILS, FATS AND WAXES CHEMICALS AND RELATED PRODUCTS, N.E.S. ORGANIC CHEMICALS MEDICINAL AND PHARMACEUTICAL PRODUCTS MANUFACTURED GOODS CLASSIFIED BY MATERIAL TEXTILE YARN, FABRICS AND MADE-UP ARTICLES, NONMETALLIC MINERAL MANUFACTURES, N.E.S. IRON AND STEEL MACHINERY AND TRANSPORT EQUIPMENT POWER GENERATING MACHINERY AND EQUIPMENT MACHINERY SPECIALIZED FOR PARTICULAR INDUSTRIES METALWORKING MACHINERY GENERAL INDUSTRIAL MACHINERY AND EQUIPMENT ELECTRICAL MACHINERY, APPARATUS AND APPLIANCES, ROAD VEHICLES (INCLUDING AIR-CUSHION VEHICLES) MISCELLANEOUS MANUFACTURED ARTICLES ARTICLES OF APPAREL AND CLOTHING ACCESSORIES FOOTWEAR PROFESSIONAL, SCIENTIFIC AND CONTROLLING INSTRUMENTS COMMODITIES NOT CLASSIFIED ELSEWHERE

2006 224,426 2,456,319 2,627,611 16,028 28,867,145 15,995,241 2,844,209 84,426,977 3,047,579 12,912,090 41,462,237 224,356,451 27,522,363 56,582,581 11,979,470 62,223,269 32,609,245 3,465,339 29,390,167 175,329 48,960 18,846,754 14,100 372,379,224

2007 355,710 2,741,494 5,250,019 41,961 14 34,944,517 17,226,227 3,696,524 170,096,099 2,765,215 30,762,350 99,929,317 275,938,016 27,477,127 50,862,638 47,094,736 67,212,296 42,591,348 16,681,756 38,483,904 620,404 128,467 25,872,028 10,560 527,862,294

May 2011 - India-Austria Newsletter | 5


Business Article Ruia injects lease of life into three German firms buy allowed the Ruia group to get into the fastener segment. Acument was billed as one of the two leading automotive fastener-makers in Germany whose core competencies were making special screws, ball-studs, assembly-parts and connecting rod bolts for the auto industry. It too charted a similar course during the 2008 crisis, culminating in insolvency in 2009. It is now trying to win back orders it lost with auto-majors like Mann and Daimler and is hoping to claw back to its position of eminence. Following restructuring by the administrator, it has started rehiring and investing in latest cost-efficient machinery.

G

ermans are known for their hospitality. And their welcome gets warmer when the guests are from a country that has pulled back a few companies from insolvency.

vency, as pacts with labour unions kept wages pegged at high rates (at times Rs.1,260 per hour) while competition from within Germany and the low-cost economies, eroded margins.

This was apparent during a recent visit to three closely-held German companies which fell into bad days after the 2008 recession which cut through many sectors, among them the automobile and auto component sector in the West. These three auto-component companies, some nearly 150 years old, were facing insolvency when they were acquired by the Kolkata-based Pawan Ruia group engaged in the tyre and the engineering segment.

In 2009, it came into the Ruia-fold with 59.9 per cent of the equity. Of the rest, 15 per cent remained with Jurgen Hien, now Joint Managing Director and the rest with the administrator.

These companies — Draftex (formerly Henniges Grefrath), Gumasol and Ruia Global Fasteners (formerly Acument) — are on a recovery path, and some have begun rehiring old employees. There is now an air of cautious optimism. Take the case of Draftex. Based near Dusseldorf in Germany, this company makes sealants for the automobile-makers with auto majors Audi, Diamler, BMW and Volkswagen among its clients. Orders started drying up during the recession and totally disappeared in some cases. Employing 1,039, Draftex, found itself staring at insol-

Things have started to look up now said Mr. Hein, as he took visiting journalists through a tour of the plant which now works in three shifts and has begun rehiring (from 401 at insolvency, employment now stands at 539). In its first full-year of operation (ending December 31, 2010) Draftex exceeded its sales target (now at 48.1 million euro). Although this is lower than before, Mr. Hein is upbeat on being identified as a strategic supplier for Diamler and Volkswagen. ―This gives us an opportunity to do joint productdevelopment.‖ Such initiatives take time to translate into orders but no one is complaining. Another company Acument, (now renamed Ruia Global Fasteners), based in Neuss, has four plants and a logistic centre. This

The scene is similar at other RGF units — the Beckingen and the Neuwied plants. The Beckingen plant founded in 1872, specialises in making long-shafted parts and was owned by a private equity firm till 2006. Eventually, it went to an administrator and came to the Ruia-fold this year. Gumasol, another German company, is now with the Ruia group following a 2010 acquisition. It makes solid tyres and rubber compounds. It had outsourced nearly 38 per cent of its production to beat cost-blues but is still facing pressures on its margins and may have to increase outsourcing to 50 per cent for tyres and some more recasting is imminent. These companies, along with the U.K.based Shlegel Automotive, have given Pawan Ruia a foothold in Europe's automotive sector and he is thirsting for more. More buys in Germany and elsewhere are being eyed by the man who burst in to Kolkata's corporate scene with his acquisition of the ailing public-sector Jessop and then the closed Dunlop India and Falcon Tyres. He followed his purchase of the heritage companies with the acquisition of Montona Tyres and then a company in Malaysia before embarking on his European hunt. While most of these companies are on track, the performance of some like Dunlop remains a challenge, as it is taken as a litmus-test of his skills as a turnaroundmaster on his home ground. (as published by The Hindu Business on April 17, 2011)

May 2011 - India-Austria Newsletter | 6


Business Interview Dr Andreas Schaaf, India President, BMW

'We are relatively small in the country today, but the future belongs to India' Within two years of entering the Indian passenger car market in 2007, BMW toppled rival Mercedes-Benz to become the numero uno luxury car maker of the country. In 2010, the company recorded a 73 per cent growth in sales volume, maintaining its leadership position in the category. In conversation with Preeti Khicha, BMW India President, Dr Andreas Schaaf, outlines the company’s India strategy and the reasons for its phenomenal success. “My goal is to establish the foundation for the future organisation,” he says.

Q: Where does India fit in BMW’s global plans? Which are the top five markets for BMW?

Q: What factors would you attribute your success in India to?

Q: What is your current production capacity? How much have you invested in your production?

A: The fact that BMW is aimed at a target group that drives the future of the country has definitely helped us. There are a few things that have helped us be different — the product, marketing, dealership network as well as the spirit of the people (employees). Also, the BMW brand is highly attractive for people who have a modern view of things. We are perceived as a dynamic, sporty, innovative and aesthetic brand, and hence we‘ve have done well with a younger target group. The average age of the BMW buyer in India is 40 years. Instead of having a huge advertising spend, it makes more sense to us to develop more touch points where people can have a personal connect with the brand. For example, if you walk into a BMW dealership today, you will see that the place is sophisticated and you will be treated in a certain way. We conduct innovative marketing activities — professional golf tournaments, wine tasting sessions, events with designers — that have helped us get close to the customer. We have also spent a lot of time creating a unique spirit within the company. To give you an example, we became number one in 2009, but the next 10 months we were trailing our biggest competitor. Instead of losing faith, the group came together — not only at the corporate level but also at the plant, financial services arm and at the dealer network level. The fact that people are emotionally connected within the organisation has helped a lot to our success.

A: BMW has a special focus on BRIC countries, of which India is a part. Also, macroeconomic factors indicate that India will emerge the strongest among the BRIC countries. We are relatively small in India today, but the future belongs to India, and the whole company shares this vision. My goal is to establish the foundation for the future organisation.

A: We have just increased our capacity in the Chennai plant from 5,400 to 8,000 units. If needed, we will look at a second shift, and also expand the capacity of the plant. We have 8,000 units for CKDs (completely knocked down unit) and CBUs (completely build unit) which should be sufficient, but if the market develops much faster or continues to develop by 60-70 per cent, then we will expand. In total, we have invested Rs 1.8 billion (Rs 180 crore) in the Chennai plant. We have adopted a strategy where we invest in bringing a greater degree of flexibility in the production processes — flexibility in terms of how you can change between the different model lines that you produce. Q: Last year, BMW launched its financing arm in India to service the credit needs of retail customers, fleet owners and dealers. What is the potential of this business? A: India is a strong financing market and 80 per cent of the cars that we sell are financed. The financing option plays a very crucial part in the buying process, and that is the reason we set up the BMW Finance service. Going ahead, I think this will help us create finance products that are made to measure. Also, it is all about speed — today if we want to create a finance product, we can do it very quickly since it is within the company and you can immediately receive feedback for it.

Q: Do you source components from Indian suppliers for your global network? A: Let us look at the big picture. India will become one of the biggest automotive markets and as a consequence there will be a reasonable skill level. You have to consider Indian suppliers to supply to your network. I will not look into Indian suppliers to service the demand for India alone as these are relatively small numbers and thus will not make sense. The idea is to identity Indian suppliers who are qualified to deliver their parts to the global network. Currently, we have two-three Indian suppliers for our global network but this is still at a relatively early stage as we started only a year ago. Rico Auto and Sundaram Clayton are two suppliers who deliver castings like oil pan, differential case and brackets. We have set up international purchasing offices in a couple of emerging markets in the East, as the East is the engine of future growth and hence you have to look at the supply structure in this region. We are increasingly sourcing components from Korea, China, Japan and India. India is still small but going forward we will identify more suppliers. The Indian car components market has a very different characteristic — it is geared more towards the economy car, rather than to a premium luxury product. You need to have different skills to deliver as a supplier for a premium car maker as compared to a mass manufacturer. (extracted from an Interview published by Business Standard on January 17, 2011)

QUOTE OF THE MONTH "India is our most dynamic market anywhere in the world" John S Hamilton President and CEO Electro-Motive Diesel Inc

May 2011 - India-Austria Newsletter | 7


Industry Sector Close-up Auto Components The Indian auto component industry is expected to grow by over

and braking parts, transmission and steering parts, electronics a d

four-fold to US$ 113 billion by 2020, according to Automotive

electrical and interiors. By 2015, body and structural will account

Component Manufacturers' Association (ACMA).

for 35 per cent of the auto component industry, engines and

The total passenger car production in the country will jump four

exhaust 20 per cent, suspension and braking parts, transmission

times to reach 9 million cars by 2020, the industry body said in its

and steering parts and electronics and electrical will account for 13

forecast report. Although a major chunk of this will come from the

per cent each and interiors 9 per cent.

fast growing domestic market, exports are likely to form around 35

The potential compounded annual growth rate (CAGR) of the auto

per cent of the total market by 2020.

component industry is likely to be around 18 per cent in the years

"India would be among the top-five vehicle producing countries in

2010-11. Exports from the auto component industry are estimated

the world by 2020," said Vinnie Mehta, Executive Director, ACMA.

to be worth US$ 5 billion in 2010-11.

As per a report by ACMA, the turnover of the auto component

Europe is likely to account for 36.9 per cent of India's auto

industry is being estimated at around US$ 26 billion in 2010-11, up

components exports in the years 2010-11, followed by Asia with

18 per cent from US$ 22 billion in 2009-10.

28.1 per cent and North America with 24 per cent. The industry

The report states that 40 per cent of the auto component industry

has witnessed a shift in the composition of exports over the years.

was dominated by body and structural products in 2009, 20 per

Investments in the auto component industry are estimated at US$

cent by engines and exhaust, and 10 per cent each by suspension

12 billion in 2010-11, according to ACMA.

Destination India

Policy Initiatives

India is turning out to be an attractive

contribute around 43 per cent of the total

The Government has taken many initiatives

destination as a global outsourcing hub and

production, while foreign companies such

to promote foreign direct investment (FDI)

manufacturing base for original equipment

as Magna, Visteon, Valeo, Bosch, Federal-

in the industry:

manufacturers (OEMs), especially after the

Mogul Corporation and Denso contribute 15

Automatic

global economic downturn.

per cent.

investment

With the finalisation of the Automotive

Moreover, foreign direct investments (FDI)

manufacture

Mission Plan (AMP) India is expected to

inflow

components is permitted

become a preferred destination for design

components sector was recorded at US$

The automobile industry is delicensed

and manufacture of automobile. The plan

1.2 billion. FDI inflow in the same period

Import of components is freely allowed

envisaged an investment of US$ 40 billion

was 4 per cent of the total FDI inflow in the

The Ministry of Heavy Industries and Public

and provided a road map to help transform

country. Auto component exports from India

Enterprises has envisaged the Automotive

India into a global automobile player. The

were estimated at US$ 3.8 billion for 2009–

Mission Plan 2006-2016 to promote growth

AMP

that

2010, witnessing a CAGR of 17.5 per cent

in the sector. It targets to: Increase turnover

included making India a manufacturing and

over the last five years. Exports are

to US$ 122 billion–US$ 159 billion by 2016

export hub for small cars, multiutility

expected to grow to US$ 30 billion by 2020.

from US$ 34 billion in 2006, Increase

vehicles, two and three-wheelers, tractors

India‘s share in the global auto components

export revenue to US$ 35 billion by 2016

and components.

market is expected to rise from 0.9 per cent

and Provide employment to additional 25

in 2008–09 to 2.5 per cent in 2015.

million people by 2016

proposed

Furthermore,

a

Indian

25-point

plan

companies

are

in

2009–2010

for

the

auto

approval up

to of

for 100

foreign per

equity

cent

automobiles

of and

compliant with global automotive standards, e.g. the Japanese Industrial Standard Committee (JISC) and Deutsches Institut für

Normung

(DIN).

India

offers

the

advantage of low manufacturing costs due to economies of scale, low design, research and labour costs, and local sourcing of tools and components. Large Indian players

May 2011 - India-Austria Newsletter | 8


Trade Shows WHAT Leather Industry - Footwear Materials Manufacturing and Technology Exhibition 2011

WHEN May 12-14, 2011 WHERE New Delhi

MORE INFO www.ifcoma.org

WHAT Exhibition on Technologies for Automotive Manufacturing

WHEN June 10-12, 2011 WHERE Chennai

MORE INFO www.autoengineeringshow.com

WHAT International Exhibition on Telecommunication and IT

WHEN July 29-August 1, 2011 WHERE Bangalore

MORE INFO www.tradeshows.tradeindia.com/ indiaconnect2011

WHAT Expo on cutting edge research and technologies in the field of electric and plug-in hybrid vehicles

WHEN August 10-12, 2011 WHERE New Delhi

MORE INFO www.greenautomobil.com

May 2011 - India-Austria Newsletter | 9


Profile Big Players Sundram Fasteners Limited Sundram Fasteners Limited is a part of the US $5 billion TVS Group, headquartered in Chennai, India. The Company has established a track record of leadership over 40 years. With a diversified product line, world-class facilities in 4 countries and motivated team of talented people, Sundram Fasteners has become a supplier of choice to leading customers in the automotive and industrial segments worldwide. The product range consists of high-tensile fasteners, powder metal components, cold extruded parts, hot forged components, radiator caps, automotive pumps, gear shifters, gears and couplings, hubs and shafts, tappets and iron powder. Over the years, the Company has acquired cutting-edge technological competencies in forging, metal forming, close-tolerance machining, heat treatment, surface finishing and assembly.

stringent environment management standards. Products and processes are engineered to promote green technologies, and are compliant with the latest international norms for environmentfriendly operations. Among its many awards, the company is Winner of ―Supplier of the Year 2009‖ award from General Motors Corporation, USA for lean manufacturing, high productivity and high quality for manufacturing and supply of critical transmission parts namely output carrier shafts and reverse clutch hubs, with the Company being the only Indian Company out of the seventy-six suppliers to win the coveted award out of a supplier base of over twenty thousand.

Manufacturing locations are supported by engineering and design personnel working on new product design and development. Understanding the global nature of business and the need to provide quality products on ―just in time‖ basis to customers, the company has established supply chain logistics networks spanning several continents. To meet the increasing requirements of its global customers, Sundram Fasteners is continuously expanding its global network of manufacturing facilities and customer service centers. The Company currently has manufacturing operations located in India, Germany, the UK and China. These locations are supported by sales, engineering and logistics capabilities, so as to maximise customer satisfaction. The Company has also established sales and warehousing operations in the US. The corporate headquarters are located at Chennai, India. Sundram Fasteners recognizes the importance of ‗green‘ business practices. The company‘s manufacturing facilities across the globe are all certified to ISO 14001 and adhere to the most Sundram Fasteners Limited Address: 98 - A, VII Floor, Dr.Radhakrishnan Salai, Mylapore, Chennai - 600 004, India Phone: +91 44 28478500 / Fax: +91 44 28478508 / Email: kr@corp.sfl.co.in / Web: www.sundram.com

Emerging SME HGS ( India ) Limited HGS (India) Ltd, a part of the Sowar group, was established in

cables, connectors and accessories are the choice of the seismic

1986 in technical collaboration with SENSOR Nederlands.

industry worldwide. HGS is accredited with the ISO 9001:2008

Having established itself as a global supplier for geophone strings,

quality management system issued by TUV SUD which includes

HGS boasts of a product line which offers the geophysical industry

design and engineering of specialty cables and connectors.

a wide range of telemetry, shallow refraction and multi pair cables

HGS is the holder of the CNBC TV 18 Emerging India Award for

and connectors. Manufactured by using the best materials , HGS

engineering in 2009.

HGS ( India ) Limited Address: LTG Building, Copernicus Marg, New Delhi-110 001 INDIA Phone: +91(011)23073189 / Fax: +91(011)23073195 / Email: sales@hgsindia.com / Web: www.hgsindia.com

May 2011 - India-Austria Newsletter | 10


Tourism State Profile West Bengal There are three distinct types of landscape in West Bengal. In the

Calcutta ranks as the intellectual capital. Poets, thinkers and film

west, the red soil gives itsrich colour to the terracotta temple of

directors of international renown hail from this city where avant

Bishnupur. The Ganges delta in lower Bengal has dense tangled

garde plays and art exhibitions go on show practically every day of

mangrove swamp where the Bengal tigers meander. The third is

the year.

the charming Raj-era hill stations of Darjeeling and Kalimpong

Calcutta was the first headquarters of the East India Company,

which are located in the foothills of the Himalayas in the northern

and some of its best known monuments were built by this British

part of the state.

trading house. However, the city has, within its 300 years‘ history,

The state has been subjected to a variety of influences from di-

hosted other communities both from other parts of India as well as

verse cultures. Since time immemorial, the culmination of these

abroad – Chinese, Armenians, Jews – all of whom have left their

varied cultures along with Bengal's very own ever-growing rich-

imprint in pockets of Calcutta. Sightseeing in this fascinating city

ness has given birth to a unique Bengali culture. Bengal has sev-

includes Raj Bhawan, the residence of the Governor of Bengal;

eral temples and monuments which are symbols of this great Ben-

Victoria Memorial, the city‘s landmark; Botanical Gardens, which

gali culture.

are notable for the oldest banyan tree, and orchid house; Armeni-

Kolkata is the capital of the state and is an old city of worth visit-

an Church; Marble Palace, one family‘s collection of memorabilia;

ing. There are few other placeslike Gaur, Pandua and Murshida-

and the Birla Planetarium. Darjeeling, the state‘s most popular hill

bad which are of historic importance. If someone wants to realize

resort, is a slice of England 2,134 metres above sea level. Sur-

spirituality then visit to Belur Math or Dakshineshwar where you

rounded by tea gardens growing the prized leaf known as Darjee-

will find the living deity Mother Goddess Kali.

ling, the little town faces some of the Himalaya‘s highest peaks. Darjeeling is an abrupt variation from the lowlands of West Bengal.

The capital Calcutta is the major entry point. Three hundred years old, it traces its history to the landing of Robert Clive on the banks of the Hooghly beside three villages. It was from here the monu-

Buddhism, being a major faith here, Darjeeling and the nearby town of Kalimpong have, between them, several Buddhist monasteries, chiefly of the Yellow Hat sect.

mental British Raj was launched in India. If Delhi is the elegant capital of the nation, and Bombay its major industrial city, then

MORE INFO AT INDIA-TOURISM.COM

Landscape Scenery, West Bengal

IndiaTourism Frankfurt Baseler Str. 48 / D-60329 Frankfurt Tel: +49 (69) 242949-0 / Fax: +49 (69) 242949-77 www.india-tourism.com / info@india-tourism.com

May 2011 - India-Austria Newsletter | 11


Culture Article Indian Handicrafts Fair brings the Indian Ambience to the Centre of Vienna

T

he Indian handicrafts fair was one of the numerous highlights of the ―Festival of India‖. It took place at the Heldenplatz and in the Museum für Völkerkunde (Museum of Ethnology) from 25 to 30 March. It presented many facets of the Indian handicrafts. The products of the exhibitors fascinated Austrians and tourists of all age groups alike. The fair was opened with an event revolving around an impressive dance performance and traditional music from Rajasthan. The event attracted a very positive response. Applause from the guests accompanied Ambassador Dinkar Khullar and Mrs. Rita Menon, Secretary in the Indian Ministry of Textiles, as they cut the ribbon, thus officially opening the handicrafts fair at the Heldenplatz in Vienna at 1200 hrs on 25th March. A tent was erected in the square in front of the Museum of Ethnology, housing rows of more than 35 stalls of select Indian handicrafts companies coming primarily from three areas – fashion jewellery and accessories, textile products and decorative items. Entering the tent was free of charge, and so the visitors were given the opportunity to experience a feel of India for six days. After the official cutting of the ribbon, the delegation with the Ambassador and the Secretary at its heart moved inside of the Museum. The distinctive stand of India Tourism and Air India was placed at the entrance, with friendly young ladies in Indian dresses welcoming the guests – India was successfully promoted as a tourism destination there. After inspecting the stand, the Ambassador and the Secretary visited the workstations of Indian craftsmen inside: for example an astrologer, a maker of shadow leather puppets, a producer of lac bangles. Mr. Waseem Ahmed, a Zari weaver, demonstrated live his craft to the visitors. A couple of metres away, a potter was shaping clay into the form of small pots at a pottery wheel – fascinated, the visitors were watching the hypnotically turning wheel creating the small pieces of craft. Having inspected the activities of all artists, Ambassador Dinkar Khullar and Secretary Rita Menon, held their opening speeches.

In this speech, Ambassador expressed his great satisfaction with the success of the individual events in the context of the ―Festival of India‖; he said that all the events have attracted many visitors and the offer has been very diverse. The academic seminars at the University of Vienna had to be closed at some point because the interest of the attendees was simply too great for the short time that was at their disposal. ―We are grateful for this enthusiastic reaction of the Viennese‖, Khullar said in his speech. ―Nothing is missing here at the handicrafts fair. We even have food.‖ In her speech, Rita Menon praised the crossover between Indian handicrafts and the traditional Viennese architecture in the Hofburg. She stressed that the events optimally fit this wonderful ambiance.

Breath-taking performance The hall was completely filled with guests, most of them Austrian. Following the speeches, a Rajsthani Langa group commenced their performance of music and dance, entrancing the audience. The audience listened with great interest to the sound of the exotic melodies, many of them with dreamy expressions on their faces. Some guests tapped their feet to the tune during the musical performance. The seven musicians with their various traditional instruments started the first song at a slow pace, growing louder as the composition progressed, eventually drowning the room with their acoustic performance – rewarded with friendly applause from an audience which had yet to experience the highlight of the performance. After the first song, a dancer dressed in traditional garments stepped on the stage, supporting six pots on her head. She balanced the stack on her head, accompanied by a swift drum beat, radiating selfconfidence while dancing with a smile on her lips – the audience was fascinated and the people immediately produced their cameras and cell phones to take pictures of the performance. As the lady bowed with the stack of pots on her head to remove a piece of paper from a glass with her mouth, she was rewarded

May 2011 - India-Austria Newsletter | 12


Culture with roaring applause. The audience was thrilled when another woman placed two glasses in front of the dancer and the dancer stood on the glasses barefoot! The fear of the audience that the glasses might break under the weight of the dancer and the pots on her head turned out to have been unfounded – no harm came to the lady as she was rewarded with roaring applause for her extraordinary performance.

piece of India in the centre of old Vienna.

The artist had truly ensorcelled the audience when she stepped on a bowl and danced to the beat of the tabla on its rim, accompanied by the clapping of the audience. When the partners of the previous dancer stepped on the stage, the audience was already warmed up and highly motivated: Accompanied by the clapping of Austrian hands, the two ladies danced to the beat of the tabla, wearing glimmering folk dresses adorned with tiny mirrors. The guests kept on taking pictures and applauding – for example when the dancers were turning in a circle, precisely following the beat of the tabla. The Austrian audience watched impressed as the dancers leaned far back in their long dresses during their dance.

How does a musician from Rajasthan feel in Vienna? ―This is the first time we are here‖, a young musician from the group said. ―And we are enjoying the festival and the whole concept.‖ Diverse forms of handicrafts gathered in one place, with the stage of the musicians in the middle. The young musician said that he had had no time to explore the city yet, for the schedule was a tight one. ―But when we are invited the next time, we will enjoy coming again‖, he said. And what is his impression of the Austrian audience? ―They are very serious, silently sitting in their places and showing little emotion‖, he said. ―But they have a smile on their lips. And so I think they like it.‖ He said that there are standing ovations after every performance. And one visitor was especially enthusiastic: While leaving, she thanked to the employees at the stand of India Tourism at the entrance: ―I really enjoyed it.‖

After the breath-taking performance, the audience was treated to another merger of cultures: They talked and processed the experience while enjoying Indian snacks and Austrian wine.

Numerous visitors During the following weekend, the tent was visited by numerous people. Unsurprisingly, for the ―Festival of India‖ had enjoyed attention and was announced in numerous media; furthermore, the Embassy of India had been advertising the event with posters on numerous advertising pillars in whole Vienna, 530 to be precise. And the location was perfect as well: The prominent site in one of Vienna‘s hotspots which constantly attracted audience – Austrians and foreign tourists alike. While strolling around the tent, the guests were impressed by the individual offers. There were young couples, with the ladies heading straight for the Indian jewellery. One of the craftsmen had an old gramophone next to his stall, playing an Indian gramophone record – attracting additional attention from the visitors. Tourists strolling around in the tent took pictures of the little

―We have a good flow‖, a representative of Air India said – the stand of the company was located prominently right at the entrance to the museum. Inside, the chairs were now arranged in a half-circle, with the music group from Rajasthan continuing their performances before the Austrian audience.

The handicrafts received the feedback they deserved as well. ―There is so much to see here. One doesn‘t even know where to start‖, an elderly woman said. She marvelled at the maker of cashmere shawls: ―He works five months to make one shawl. That‘s something very special.‖ Visitor Ursula Benesch was impressed by the shadow puppets – she acquired a shadow puppet of the deity Ganesha made of handpainted leather. The special thing: The tradesman speaks neither English nor Hindi, only his local dialect. He communicated with the guests using gestures, facial expressions and his presence. The old man sitting on the floor of the historical Viennese building was radiating tranquillity and happiness. ―That‘s a kind of content and energy that has become very rare in our Western world‖, Benesch said. ―I will gladly come here again to soak up his energy.‖ He received some translation assistance from Nibu Sunny, an Indian working in Vienna: He translated the most important

things for the visitors. ―The festival is well organised with these colourful works of art and dances‖, he said. ―And the Austrians are enjoying watching traditional dances from Rajasthan.‖

Bottom line: Spread of happiness On Wednesday, the last day of the festival, the tradesmen were satisfied with the success: ―Business went very well‖, Vikas Baid of Welpro Exports summed up his experiences. ―The Austrians are true gentlemen. And I hope they enjoy what they have bought from us.‖ He sold especially picture frames, hand-made in India. ―If we are invited again next year, we will gladly come‖, Baid said. Imrad Mohammed Khan of Meritorious Continental was not selling to individuals; he was looking for the B2B-approach: He wanted to send to wholesale dealers who would distribute his wares in Europe. ―The visitors were impressed by our goods, but the wares were merely exhibits‖, he said. But he will gladly come again. Iqbal Sheikh had his workstation inside the Museum – he is a ―Choori-wala‖, a producer of hand-made bangles. ―The people are keenly watching me form the bangles in front of their eyes‖, he said. The traditional method of shaping the bangle involves the use of charcoal; due to the fire regulations, he was using a hot plate to make the items – he needed approximately 20 minutes to make one bangle. ―Many watch, some buy‖, he said. Sheikh‘s business is a traditional one: His father was a Choori-wala, and so was his grandfather. For the man from Rajasthan, the ―Festival of India‖ was part of a longer trip through some other countries, with Vienna being the last station: ―I like Vienna very much‖, he said. ―And when the organisers ask me the next time, I will definitely come again.‖ In the end, all persons involved were happy. The Austrians were happy because they acquired new products. The Indians were happy because they did good business in a foreign country and develop the goodwill that is invaluable. And the musicians were happy because with a little exoticism, they put a smile on the lips of the Viennese.

LEARN MORE @ CRAFTSININDIA.COM

May 2011 - India-Austria Newsletter | 13


India in Austria Agenda May 2011 Aus den indischen TagebĂźchern Gujarat 2010 - Vier Digitalfilme von Angela B. May 17th, 2011 - 19:30 Natya Mandir Studio BĂśrseplatz 3, 1010 Wien More Info at 0676 312 57 36

SHIKHANDI - Ein indisches trans-gender Tanztheater May 8th and 15th, 2011 - 18:30 Interkulttheater, 1060 Wien Fillgradergasse 16 More Info and Tickets at www.interkulttheater.at

Request your FREE copy at marketingassistant@indianembassy.at

On the occasion of the India-Austria Round Table, the Indian Embassy released the publication

"Innovation and Technology - for a Successful India-Austria Partnership" The Publication highlights three sectors namely Environmental Technology, Infrastructure and Automotive Industry as the areas of high potential for mutually beneficial business relationship between the two countries. Among other information, it also provides glimpses on some of the niche technology companies from Austria in these sectors.

After its successful conclusion, the Festival of India 2011 shows its results with the publication

"Festival of India 2011 - From Concept to Sucess" The report highlights minute details of all the events that made part of the Festival of India. It includes interviews with the visitors as well as valuable 'behind the scenes' highlights. Dozens of pictures complete the experience and make this the official "Festival of India" Guide for those who experienced it and those looking forward to bringing India to the spotlight in Austria once more. (This publication is available in German)

Around Europe Zurich: European IT Conference 2011 - Innovate & Collaborate with India

Because creating ever new innovative solutions has become a key driver in the business of information technology. Even companies and institutions active in other market segments, such as trade promotion, business advisory, human resources, legal and tax arechallenged to innovate if they want to grow. Clearly, there is a call for collaborating across geographic, time, technical or mental boundaries. From a European perspective, innovating and collaborating with India is a good idea. Indian IT companies have innovated a whole breadth of business models as well as technologies. Equally, IT companies in European countries continuously innovate. They maintain a leading position with solutions for financial services, industrial automation, mobility, telecommunication and remote infrastructure management, just to name a few. Indian companies show great interest in such innovation. The conference programme includes a wealth of insights, knowledge sharing, business development and networking.

Among the presenters, Mr. Rajendra S Pawar, Vice Chairman of NASSCOM, Chairman & Co-Founder of NIIT Group and Founder of NIIT University and Mr. Franz Probst, Chairman of the Swiss-Indian Chamber of Commerce.

A UNIQUE EVENT IN THE GERMAN-SPEAKING REGION BENEFIT OF A DISCOUNTED TICKET BY ENTERING THE PROMOTION CODE BELOW WHEN REGISTERING

Datow8 MORE INFORMATION AT WWW.EUROPEAN-IT-CONFERENCE.CH

Published by the commercial section at the Embassy of India, Vienna. www.indianembassy.at Contact: marketingofficer@indianembassy.at

May 2011 - India-Austria Newsletter | 14

India Newsletter 05.2011  

India Newsletter published by the commercial section at the Indian Embassy in Vienna

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