Client White template

1 / 41
About This Presentation
Title:

Client White template

Description:

... are SKF in ball bearings (a 41 per cent marketshare); FAG in spherical roller ... cent); NBC in taper roller bearings (23) and NRB in needle roller bearings (100) ... – PowerPoint PPT presentation

Number of Views:177
Avg rating:3.0/5.0
Slides: 42
Provided by: trace57

less

Transcript and Presenter's Notes

Title: Client White template


1
Emerging India Capturing Opportunities Presentat
ion to Mr. James W Griffith, President CEO,
The Timken Company by Apoorv R Sharma, GM,
Amity Innovation Incubator Sumit Rambani,
Consultant Ashraf Virk, Consultant
14th April 2008
2
AMITY
  • Amity is currently a leading education provider
    in India with programs ranging from pre-nursery
    to post-doctoral levels in almost all areas
    including management, engineering, law,
    communication, insurance, behavioural science,
    fine arts etc
  • Presently, more than 50,000 students study in 130
    programs across 22 campuses spread over 700 acres
    of land with 4.1 million sq. ft. of built area. 
  • One of the first to launch programs like Cyber
    Law, Bioinformatics and Nanotechnology among many
    others in India. 

Source http//www.amity.edu
3
AMITY INNOVATION INCUBATOR
  • Amity Innovation Incubator (AII) which is a
    registered society supported by an advisory body
    consisting of industrialists, venture
    capitalists, technical specialists and managers
    established to help entrepreneurs realize their
    dreams.
  • The core team of AII has decades of experience in
    assisting entrepreneurs through Incubation and
    Venture Capital Financing
  • AII offers a range of incubation services to
    nourish entrepreneurial talent such as
  • Investment Advisory
  • Business Advisory
  • IP Advisory
  • Mentoring
  • Soft landing of Overseas Companies in India
  •  

Source www.amity.edu/aii
4
Why India ?
  • Broad based economic growth
  • Accelerating reform process
  • Stable macroeconomic indicators
  • Changing consumer demographics and lifestyles

Why India?
5
Acceleration of reforms
Tight government controls 1947-1991
Early Reforms 1991-1996
  • IMF program established
  • Reduction of budget deficit
  • Tariffs lowered and simplified
  • Currency made fully convertible for current
    account
  • Automatic approval for foreign stakes of up to
    51
  • Capacity controls abolished
  • Privatization program initiated
  • Public control of key sectors
  • Planning Commission created
  • Administered prices for commodities
  • Capacity controls
  • Nationalization of financial sector
  • Foreign exchange control
  • High taxation (a max. marginal rate of 90)

Corporate reforms 1996-1998
Reforms accelerate 1998-present
  • FDI encouraged
  • Share buybacks allowed
  • Insurance system reformed
  • Patent law enacted
  • New trademark law enacted
  • New foreign exchange law enacted
  • New telecom policy adopted
  • Major privatization initiative implemented
  • Legal reforms undertaken
  • New takeover code
  • 100 stakes allowed for foreign investors
  • Deregulation of financial institutions
  • India signatory to WTO

6
(No Transcript)
7
India will become
with the fastest growth rate
Source Goldman Sachs BRIC Report, Merrill Lynch
8
(No Transcript)
9
(No Transcript)
10
(No Transcript)
11
(No Transcript)
12
Long Term Market Performance Last 5 years
CAGR 40
Source BSE India
13
Improving country currency ratings
India is now more than ever a focus for
international investors, who are eager to take
part in a new India. - Rodrigo de Rato, M.D.,
International Monetary Fund. "India's external
balance sheet has strengthened markedly, due to
reserves accumulation and prudent debt
management, which should lower the external
liquidity risk from its fiscal vulnerability.
- Ping Chew, Director, Sovereign
and International Public Finance Group, SP.
14
Stable currency, favorable outlook
Average depreciation over Last 10 Years 0.4
Over the long term, India's exchange rate will
surely appreciate and massively - as it catches
up with the rest of the world in
productivity. - Kenneth Rogoff,
Harvard University Economics Professor.
Source Reserve Bank of India
15
India is a red-hot FDI Destination AT Kearney
FDI Confidence Index 2007
16
Over USD 45 Bn FDI Inflow since FY01 Country
Break-up Centers of Action
17
Growth led by services manufacturing..
GDP in Rs. BN
Source India Infoline, CIA, World Bank Data
18
Highly diversified services growth
Financial Services Banking Sector In banking,
deposits saw a 19 CAGR over 2002-07, hitting
US650bn. Since the sector was opened up to
private players in 1990s, banks such as ICICI
Bank and HDFC Bank have acquired meaningful size.
India has close to 71,000 bank branches. Mutual
Funds Insurance Sector With the advent of
private players in areas like mutual funds and
insurance, penetration levels have started to
inch upwards. The insurance sector was opened up
in 2002, and foreign majors like Prudential, New
York Life, Allianz, etc, have entered the market
through joint ventures. Insurance premium rose
22 over 2002-07, reflecting the sectors
momentum and growing size. In recent years,
non-banking financial-services companies in
broking, personal loans and financial-products
distribution have been scaling up rapidly.
Source Indian Brand Equity Foundation
(www.ibef.org)
19
Highly diversified industrial growth
Source Indian Brand Equity Foundation
(www.ibef.org)
20
Highly diversified industrial growth
9 BN
  • Auto Components
  • A robust component industry has developed around
    the auto clusters and exports have crossed US1bn
    in 2006.

6.7 BN
Telecommunications Indias telecom sector is the
poster boy of Indian reforms and the country is
among the fastest-growing mobile markets in the
world.
. As of December 2007, there are 229
million mobile subscribers and monthly mobile net
adds, at eight million, are the highest in the
world
The auto-component export opportunity is
estimated at US25bn by 2012.
24 BN
According to a CII-McKinsey report, manufacturing
exports from India are likely to grow to 300BN
in 2015 from 48BN in 2003.
Source Indian Brand Equity Foundation
(www.ibef.org), Business Monitor International
India Oil and Gas Report 2004.
21
Real Estate Revenue Pool USD 300 600 BN over
next 5 years
USD 25 BN
USD 30 BN
USD 592 BN
USD 537 BN
Revenue Pool (USD BN)
USD 290 BN
USD 13 BN
USD 9 BN
USD 268 BN
USD 50 100BN FDI potential in next 5 years
Source CBRE, FIRE Capital, Merrill Lynch.
22
Increasing housing shortage
Urban 6.7M Rural 12.7M
Source Merrill Lynch
23
Service sector boom BPO
CAGR 56
Source NASSCOM-McKinsey Study 2003, NASSCOM
Indian Software and Services 2002-03, IDC, JMS
Research
24
Service sector boom IT
Source NASSCOM-McKinsey Study 2003, NASSCOM
Indian Software and Services 2002-03, IDC, JMS
Research For the period 2002-2007
25
Lack of infrastructure has been a major concern
The issue that has to be dealt with in India,
first and foremost, is infrastructure - ahead of
everything else. It's important that folks
outside India see an effort and willingness (from
the Indian government) to invest in
infrastructure. - Brett White, President, CB
Richard Ellis.
26
Rural backbone is being built
  • PMGSY (Pradhan Mantri Gram Sadak Yojna or Prime
    Minister rural roads program) would forge the
    farm-to-market link that entails upgrading the
    entire rural network.
  • The budget outlay for the rural roads program
    has been more than doubled to USD 30 BN
  • Land prices along the roads have gone up
    significantly

Source India Today (11th April, 2005)
27
strong infrastructure development underway
28
Growing middle class
Number of households (population), millions
Household Income Class
2001 - 02
FY2009(E)
1995 - 96
Rich gt Rs 0.5 Mn CAGR 15
1.2 (7)
2.6 (15)
7 (40)
Upper Middle Rs 0.3 0.5 Mn CAGR 10
32.5 (186)
46.4 (265)
91 (525)
Middle Income Rs 0.1 0.3 Mn CAGR 2
54.1 (312)
74.4 (429)
85 (490)
Lower Income lt Rs 0.1 Mn CAGR (8)
77.0 (444)
57.2 (332)
30 (177)
55 million families (320 million people) added in
the middle income group
Source ICICI Venture Fund
29
that has more than ever to spend!
CAGR 7
Source National statistical offices/UN/Euromonito
r
30
India has the largest young population
Highest proportion of population below 35 years
(70) in India
Source ICICI Venture Fund
31
which means many more workers
? working population
130 m plus people get added to working population
by 2009!
Source ICICI Venture Fund
32
Growing Urbanisation

Urban population as of Total
Source Geo Hive, Census data GOI

33
Changing ConsumerStatus Acquisition, Indulge,
Consume, Credit
  • New Age
  • Rapid advances witnessed by India in areas like
    education, communication, information technology
    and transportation have created a sense of
    freedom in the minds of consumers.
  • More is less
  • Urbanization producing more and younger families
    with both the spending power and the desire to
    spend.
  • Similar mindsets
  • Growing media penetration is leading to a
    convergence of aspirations of various classes of
    consumers, bridging the rural-urban divide.
  • Indulgence
  • Younger population tends to have higher
    aspirations and spends more as it enters the
    earning phase.
  • Brand / Price sensitivity
  • Urban consumers today are relatively less price
    sensitive than a few years earlier
  • Urban households spending 2.5x more than rural
    families.
  • Growing number of double-income households
  • Decrease in the average size of the family.
  • Credit no more a feared entity

34
Proof of spending power
The urban Indian is developing a wannabe
attitude, matching the consumer thought process
in developed markets
CAGR calculated for the period 2003 2007.
Source CB Richard Ellis
35
Demographics Literacy
  • Government spend on education, at about 1 of
    GDP, remains low (10 in China) and the country
    intends to push this up to 6 with an enhanced
    focus on primary education and vocational
    training.
  • The private sector is increasingly involved in
    education and training, estimated to be a US40bn
    opportunity.
  • An estimated 350,000 engineers and 60,000 MBA
    candidates graduate every year

36
The Steel Industry
  • At 45 million tonnes per year, India is the
    worlds fifth-largest steel producer, and at
    44kg, its per-capita steel consumption is sharply
    lower than the world average of 150kg.
  • India has vast iron-ore reserves (17-18bn
    tonnes), but coking-coal reserves are limited and
    is primarily imported. The country now exports
    around 90 million tonnes of iron ore (20 of
    Chinas imports).
  • Indias steel industry is consolidated, with 67
    of production from the six largest players (42
    from the top two), and modernised. Apart from
    mild steel, India is a large producer of pig iron
    (mini blast furnace), sponge iron and alloy steel
    (electric arc furnace).
  • India now targets 100 million tonnes of steel
    production by 2012, and Arcelor Mittal, Posco,
    Tata Steel and other steel majors have proposed
    large investments.

Source CMIE, CLSA
37
The Bearings Industry India Overview
  • The Indian bearing industry is 670 million in
    size, where the organised sector accounts for 53
    per cent of the market.
  • Imports account for the next 23 per cent and the
    rest is smuggled into the country.
  • There are 12 large and medium units which
    together turn out over 100 million bearings every
    year.
  • Since the bearing industry is technology
    intensive and brand conscious, most Indian
    players have so far worked in collaboration or as
    joint venture partners with other more
    established global players
  • Leaders in this market are SKF in ball bearings
    (a 41 per cent marketshare) FAG in spherical
    roller bearing (60 per cent) NBC in taper roller
    bearings (23) and NRB in needle roller bearings
    (100).

Source Emkay, IBEF
38
Foreign companies Taking a keen interest in the
Indian market
  • Glacier Garlock Bearings, now part of the
    US-based EnPro group, opened up its firstoffice
    in India.
  • GGB's focus in India will be to penetrate the OEM
    markets as a bearing supplier for automotive and
    industrial products.
  • European Bearing Company plans to build a bearing
    manufacturing plant in Hyderabad at a cost of 27
    million.
  • Production in Hyderabad will cater to India's
    industrial manufacturing and mining sectors, and
    the rail industry.
  • Germany's INA Bearings too has begun an expansion
    programme in Pune which will double its
    manufacturing capacity there by 2008.
  • Although INA has had a direct presence in India
    since 1990, it begun manufacturing bearings since
    2002.
  • INA will spend 34 million on the new facility.
  • Magnum Engineers and Germany's Diamant
    MetalPlastic formed a consortium to develop and
    manufacture molded polymer air bearings last
    year.
  • Their target is to reduce manufacturing costs for
    a line of specialty-engineered air bearings by as
    much as 50 per cent.
  • The consortium will receive the bulk of its
    funding from INTEC.

Source Emkay, IBEF
39
Shift with Clients Overseas manufacturing
  • While there continues to be a large domestic
    market to cater to, the need to go overseas has
    never been higher.

"Our traditional Indian customers are setting up
plants overseas. Bajaj Auto has plans to go to
Nigeria and Argentina. It has already set up a
manufacturing base in Indonesia. TVS Motors too
is planning expansion there. Tata Motors has
acquired facilities in Spain and South Korea for
its large commercial vehicle segment. Earlier our
customers were here, so we stuck to the market
but now with Indian companies going abroad, we
have to move with them." - Harshbeena Zaveri,
President, NRB Bearings.
Source Emkay, IBEF
40
Chinese Manufacturers Stiff Competition
  • Dumping is a common offence, where Chinese
    bearings are sold in the local market under fake
    brand names.

"This is a technology-intensive industry and
there is a significant difference in the quality
of both products, which works in India's
favour. -Umesh Karne, Analyst, Emkay Brokers
Research.
Source Emkay, IBEF
41
Contact Us
Amity University Campus, E3, First Floor, Sector
125, Noida-201301 (INDIA) Tel No. 0120-4659000,
4392330 FaxNo. 0120-4659009 Email
info_at_aii.amity.edu
Write a Comment
User Comments (0)