Manufacturing and Construction Sector in India Monthly Update July 2013
Top Story India grants coal mining rights to power producers Coal mining rights have been granted to the Indian power producers by the government after five years with a view to speed up production and attract investments. Right to mining has been awarded to 14 blocks and NTPC alone has obtained mining rights for 4 blocks. The 14 blocks allocated are estimated to yield around 159 mn tonnes of coal a year that would help to generate about 31,800 MW of power. The mines allocated to NTPC are estimated to have geological reserves of around 2 bn tonnes. The government plans to auction mining rights for seven explored coal blocks to private companies in order to increase production. The allocation process will be carried out through competitive bidding instead of recommendations from the state or central government.
News Update General Economic crisis affects Indian manufacturing sector Manufacturing sector activity for the month of June was broadly flat primarily owing to a decline in new orders coupled with power cuts and fragile economic conditions. Weak economic conditions have resulted in poor demand. The rupee depreciation was an all time low against dollar on heavy capital outflows and month‐end dollar demand from importers. Input prices registered a rise and output prices also rose slightly owing to the depreciation in rupee. However, June recorded the highest rise in employment as manufacturers increased the workforce due to the backlogs in work. Rise in wages in China expected to benefit India Wages are expected to register an increase in China as a result of which it is expected to evolve as a high cost economy. Companies who had established bases in China are beginning to reverse the process and have established bases in Brazil and Indonesia. The question arises whether India will be able to fill the gap and emerge as the global centre of manufacturing. The new manufacturing policy in India aims at increasing the share of manufacturing sector in India’s GDP to 25% in 2020 along with the creation of 100 mn jobs in the manufacturing sector. Establishment of large scale manufacturing base in India requires India to emerge as an attractive destination for investment. It should be characterized by the presence of easy land, Manufacturing and Construction – Monthly Update
labor and capital. Establishment and closing businesses should be less cumbersome, along with being less expensive and time consuming. Atlas Copco wins mining order in India Atlas Copco, a leading player in the global construction equipment industry has won repeat mining equipment order in India. The order includes face drilling rigs as well as loading and hauling machines and is expected to be delivered in 2013. The repeat order is from Hindustan Zinc, a company of Vedanta Resources PLC. The company engages in the production of zinc, lead and silver and has been investing in modern construction equipments with a view to boost productivity. In May 2013, the company announced about obtaining the order from Hindustan Zinc for use in the Rampura Agucha mine. Atlas Copco, based in Sweden was found in 1873 and has a global reach across 170 countries. Toshiba launches subwatt LEDs Toshiba has announced the launch of new white LED product. The white LEDs are fabricated with gallium nitride‐on‐silicon. The LED is of the sub‐watt type, mainly due to the reduction of forward voltage. The products that would be made available include the TL2FK series with 3.0 x 1.4mm package and the TL3GA series with 3.0 x 3.0mm package. Mass production of the product is expected to start from Aug 2013. The product will find widespread applications in general lighting, including straight tube lights, light bulbs, base lights and ceiling lights. Paper industry to register a moderate growth The paper industry in India is expected to register a moderate growth on the medium and long term basis owing to a rise in literacy levels and growth in print media industry. Government investments in education and change in urban lifestyles is expected to boost the development of the paper industry. However, with the rise in input costs, the favorable demand supply scenario for paper is unlikely to translate into higher profits for the companies operating in the industry. The paper industry in India has reported a robust growth in revenue over the last five years owing to steady growth in consumptions and increase in realizations.
Manufacturing and Construction – Monthly Update
Industry Expert Speak Atlas Copco wins mining contract in India – Bob Fassl, Business Area President, Atlas Copco Mining and Rock Excavation Technique “We share a valuable partnership with Vedanta, and this repeat order underlines our strong focus on customer satisfaction and ability to deliver products and solutions that boost customer productivity,”
Transactions (May 2013 – Jul 2013)
Date
Buyer
Target
Deal Size (INR mn)
% stake
Deal Status
Type of Transaction
16th Jul 2013
JSW Steel
Sandur Manganese & Iron Ore
N.A
N.A
Pending
M&A
28th Jun 2013
Jindal Steel & Power Ltd,
Wologizi Mine
N.A.
N.A.
Pending
M&A
22nd May 2013
JSW Ispat
Heidelberg Cement India Ltd.
N.A.
N.A.
Pending
M&A
22nd May 2013
Mitsubishi‐ Hitachi Metals Machinery, Inc.
Concast India Ltd.
N.A.
N.A.
Completed
M&A
Annual Financial Results – Revenue (INR mn) Companies
FY ‘10
FY ‘11
FY ‘12
FY ‘13
1,026,655.8
1,201,338.7
1,473,057.2
1,614,491.5
Hindalco Industries Ltd.
607,079.2
722,022.7
808,213.7
801,928.0
Coal India Ltd.
467,840.0
502,292.8
624,154.3
683,027.4
Gail India Ltd.
270,353.0
351,916.1
441,821.4
508,927.1
Bharat Heavy Electricals Ltd.
331,991.9
418,975.5
476,109.0
481,063.1
Oil and Natural Gas Corp. Ltd.
Manufacturing and Construction – Monthly Update
Sterlite Industries (India) Ltd.
244,903.0
302,472.0
412,063.0
451,622.9
Grasim Industries Ltd.
200,870.8
214,612.3
251,470.9
279,043.2
Aditya Birla Nuvo Ltd.
157,699.4
183,839.4
220,732.5
251,804.5
Alok Industries Ltd.
44,243.4
66,149.0
97,847.2
135,630.0
Ashok Leyland Ltd.
72,447.1
111,771.1
128,419.9
122,030.8
Crompton Greaves Ltd.
91,408.7
100,051.1
112,485.8
120,944.4
Welspun Corp Ltd.
73,636.7
80,220.8
89,765.8
108,700.5
NMDC Ltd.
62,390.9
113,693.1
112,618.9
106,986.7
JBF Industries Ltd.
49,409.1
64,711.2
71,792.5
74,496.7
Havells India Ltd.
51,625.7
56,126.3
65,182.0
72,218.0
National Aluminium Co. Ltd.
51,745.1
60,565.7
66,115.7
68,094.5
Jindal Saw Ltd
56,947.1
45,863.3
60,364.0
67,559.7
DCM Shriram Consolidated Ltd. (DSCL)
35,704.5
41,345.1
50,067.2
55,169.0
Voltas Ltd.
47,574.7
51,913.8
51,857.4
55,140.6
Jain Irrigation Systems Ltd.
34,348.0
41,745.6
49,384.6
49,168.8
Annual Financial Results – Income (INR mn) Companies
FY ‘10
FY ‘11
FY ‘12
FY ‘13
Oil and Natural Gas Corp. Ltd.
194,035.3
224,559.3
281,436.2
242,196.4
Hindalco Industries Ltd.
39,254.7
24,563.7
33,969.5
30,268.9
Manufacturing and Construction – Monthly Update
Coal India Ltd.
96,224.5
108,673.5
147,882.0
173,563.6
Gail India Ltd.
33,278.3
40,209.7
44,436.1
43,736.0
Bharat Heavy Electricals Ltd.
43,269.2
60,533.6
70,874.4
66,933.7
Sterlite Industries (India) Ltd.
39,263.0
48,898.0
38,998.0
60,603.2
Grasim Industries Ltd.
30,955.3
22,790.1
26,474.6
27,043.9
Aditya Birla Nuvo Ltd.
1,545.6
8,221.0
8,901.3
10,588.9
Alok Industries Ltd.
1,377.1
3,115.4
929.9
N.A.
Ashok Leyland Ltd.
4,236.7
6,313.0
5,659.8
4,337.1
Crompton Greaves Ltd.
8,598.7
8,886.7
3,735.9
(361.4)
Welspun Corp Ltd.
6,104.0
6,330.3
2,385.4
(703.2)
NMDC Ltd.
34,472.6
64,992.2
72,653.9
63,423.7
JBF Industries Ltd.
1,864.0
5,460.0
2,228.8
1,134.8
Havells India Ltd.
695.6
3,035.7
3,699.2
5,814.3
National Aluminium Co. Ltd.
8,142.2
10,693.0
8,495.0
5,928.3
Jindal Saw Ltd
5,495.3
4,446.6
1,891.1
(188.7)
842.5
(142.7)
119.2
2,028.9
Voltas Ltd.
3,809.9
3,572.4
1,620.6
2,077.8
Jain Irrigation Systems Ltd.
2,475.9
2,807.1
2,235.0
30.8
DCM Shriram Consolidated Ltd. (DSCL)
Manufacturing and Construction – Monthly Update
Quarterly Financial Results – Revenue (INR mn) AprJun 2012
JulSep 2012
OctDec 2012
Jan Mar 2013
Oil and Natural Gas Corp. Ltd.
N.A.
N.A.
N.A.
1,614,491.5
Hindalco Industries Ltd.
N.A.
N.A.
N.A.
N.A.
Coal India Ltd.
165,005.9
145,725.4
173,250.4
199,045.7
Gail India Ltd.
N.A.
N.A.
N.A.
N.A.
Bharat Heavy Electricals Ltd.
N.A.
N.A.
N.A.
N.A.
Sterlite Industries (India) Ltd.
105,913.9
112,877.1
106,924.0
126,091.8
Grasim Industries Ltd.
68,319.6
66,021.4
67,678.3
76,724.1
Aditya Birla Nuvo Ltd.
52,535.8
59,213.9
62,347.4
69,069.2
Alok Industries Ltd.
N.A.
N.A.
N.A.
N.A.
Ashok Leyland Ltd.
29,409.8
32,960.5
23,225.0
36,484.1
Crompton Greaves Ltd.
28,111.4
29,241.7
29,718.3
33,873.0
Welspun Corp Ltd.
25,497.2
20,606.3
28,518.8
33,163.5
NMDC Ltd.
28,379.0
26,118.4
20,468.3
32,021.0
JBF Industries Ltd.
17,965.3
18,093.3
17,406.7
21,031.4
Havells India Ltd.
17,778.0
16,992.0
18,143.0
19,305.0
National Aluminium Co. Ltd.
17,480.7
16,083.2
16,700.6
18,351.7
Jindal Saw Ltd
N.A.
N.A.
N.A.
N.A.
DCM Shriram Consolidated Ltd. (DSCL)
N.A.
3,144.1
3,635.8
4,339.3
16,766.5
11,601.0
11,501.7
15,922.2
Companies
Voltas Ltd.
Manufacturing and Construction – Monthly Update
Jain Irrigation Systems Ltd.
N.A.
N.A.
N.A.
N.A.
Quarterly Financial Results – Income (INR mn) AprJun 2012
JulSep 2012
OctDec 2012
Jan Mar 2013
Oil and Natural Gas Corp. Ltd.
N.A.
N.A.
N.A.
242,196.4
Hindalco Industries Ltd.
N.A.
N.A.
N.A.
N.A.
Coal India Ltd.
44,692.6
30,780.8
43,951.1
54,139.1
Gail India Ltd.
N.A.
N.A.
N.A.
N.A.
Bharat Heavy Electricals Ltd.
N.A.
N.A.
N.A.
N.A.
Sterlite Industries (India) Ltd.
12,015.9
12,547.1
11,914.1
19,246.3
Grasim Industries Ltd.
7,180.0
6,195.8
5,491.7
8,176.4
Aditya Birla Nuvo Ltd.
2,668.4
3,041.8
3,232.1
1,988.7
Alok Industries Ltd.
N.A.
N.A.
N.A.
N.A.
Ashok Leyland Ltd.
669.4
1,426.0
741.4
1,500.3
Crompton Greaves Ltd.
859.0
420.5
(1,893.6)
252.7
Welspun Corp Ltd.
74.7
43.6
(805.9)
(15.7)
19,060.0
16,786.2
12,928.0
14,649.5
JBF Industries Ltd.
337.0
494.3
298.4
5.1
Havells India Ltd.
713.0
2,423.0
1,178.0
1,500.3
2,230.8
47.8
1,189.4
2,460.3
Companies
NMDC Ltd.
National Aluminium Co. Ltd.
Manufacturing and Construction – Monthly Update
Jindal Saw Ltd
N.A.
N.A.
N.A.
N.A.
DCM Shriram Consolidated Ltd. (DSCL)
N.A.
288.8
607.5
823.3
640.1
429.3
768.1
89.2
N.A.
N.A.
N.A.
N.A.
Voltas Ltd. Jain Irrigation Systems Ltd.
Events Calendar Manufacturing Excellence Mission, Indore Date: 6th ‐ 7th Aug 2013 Venue: VE Commercial Vehicles Ltd, Force Motors Ltd, Cummins Turbo Technologies & Kirloskar Brothers, Indore, Madhya Pradesh, India Contact Person: Mr Gaurav Lamba Contact No: + 91‐135‐2745120 Organizer: Confederation of Indian Industry Website: http://www.cii.in
North East MSME Conclave2013 Date: 22nd ‐ 23rd Aug 2013 Venue: NEDFi House, Guwahati, Assam, India Contact Person: Ms. Nandinee Kalita Contact No: +91‐361‐2731966 Organizer: Confederation of Indian Industry Website: http://www.cii.in
Manufacturing and Construction – Monthly Update
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Manufacturing and Construction – Monthly Update