News and Views- Wednesday, September 15, 2004
Posted : September 15, 2004 at 12:35 pm [IST]
India and China To Top R&D Destinations
SINGAPORE, SEPT 14: China and India will be among the top global destinations of overseas spending by companies on research and development (R&D) in the next three years.
A global survey of 104 senior executives that was conducted by The London-based economist intelligence unit (EIU) showed that 52% of companies plan to increase R&D investment while 38% will maintain current spending levels.
Thirty-nine per cent of respondents said China will be the main destination of R&D investments over the next three years, followed by the United States at 29%, India at 28%, and Britain at 24%.
The presence of research talent, the size of the local markets and the opportunity to reduce research costs are important factors in deciding where investments will go.
But companies still feel safest placing their most innovative research projects in countries like the US, Britain and Germany.
This is because such countries boast “a sophisticated research infrastructure, strong links to some of the world’s leading universities, and robust legal protection for intellectual property..
India has all possibility to take a lead. With the number of graduates of professional courses far exceeding that of China, India only requires a thrust for research work. The number of PhDs per year from the technical and science streams is relatively very low. The respectability for PhD in the society and even the industrial concerns is another factor. Normally all these people are considered bookworms and not given their due place by management. India must create facilities to award more PhDs and some extra incentive to carry out PhD work.
Experts ask for Bold Steps that Can Make India Economic Giant
BEIJING, SEPT 14: Global business leaders opine that India in its quest for sustained economic growth needs to thrash out national political consensus soon on key issues like FDI and on building world-class infrastructure to catch up with China
The foreign investor puts his money where there is scope for growth and profits. Everybody knows India has the potential. But translating the potential into reality needs political will and bold decisions, which countries like China are willing to take. These are the opinions of business leaders at the time of the just-concluded China Summit 2004 organised by the world economic forum (WEF) in Beijing.
Senior executives of Indian companies who visited China recently also complained about the poor infrastructure that exists in India in terms of power, airports, roads and ports and stressed that unless the government took a bold initiative to quickly expand the basic infrastructure, the country might miss the bus yet again.
“China has gone ahead of India by over 20 years. We have a chance now to correct our mistakes by taking bold decisions to ensure faster economic growth.” “It is a pity that India does not have even one international airport which can match that in Beijing, Shanghai or in Guangzhou.”
For some of the Indian business executives, the first visit to China was a “big learning experience” which helped them to understand the Chinese market better. Indian businessmen hope that political leaders draw lesson from China’s experience in economic and social uplift.
Secretary, department of industrial policy and promotion, ministry of commerce and industry, Ashok Jha, who was a special guest at the session, said- “India and China is not a zero-sum game. It’s not India versus China, but India and China.”
We may go on wishing for a benchmarking with China, but with the present system of governance in India, it will all be futile exercise. Why can’t there be consensus in all parties that we shall not bring politics in economic development? Let all MPs of all parties visit in one lot, see the progress made by China, chalk out a plan to compete and follow it without any deviation. I was shocked when some one reacted in a poor language- ” Hum democracy ko chatate rahenge ve humshe aage nikalte rahenge.Kal phir hum Ethopia ko udharan banayenge.”"
Reserve Price For Daewoo Plant Set At Rs 300 Crore
NEW DELHI, SEPT 14: The reserve price of Daewoo Motors India car manufacturing plant has been pegged around Rs 250-300 crore. General Motors is in an advanced stage of negotiations with lenders for acquisition of the now-defunct company. It had bid for the car assembly unit of the company in March this year, and recently announced that it had completed due diligence of the facility. GM is interested only in the passenger car assembly facility, including the paint shop, press shop and assembly line near Noida (Surajpur,Uttar Pradesh), and does not include the engine, transmission and axle plant. Daewoo India had stopped production over two years back. The facility has an annual manufacturing capacity of 85,000 units and is expected to be utilised for assembly of a mini-car (Chevrolet Spark) for the domestic market.
The principal creditors of Daewoo Motors India - ICICI Bank, IDBI and Exim Bank together have an exposure of around Rs 1,500 crore. Further. the government’s dues are in the form of custom duty claims amounting to over Rs 1,000 crore. The creditors of Daewoo Motors had earlier tried to sell its manufacturing plant, in whole or in parts, to recover their dues, but their efforts did not bear fruit.
I don’t think GM has a big plan for India. Moreover, GM is already have its own manufacturing facilities in Vadodara that is still not being fully utilized. Gm must assemble some commercial vehicles in Daewoo plant. Daewoo Motors has a good facility for steel stampings for body panels.. GM may produce the panels for other cars too. Some ancillary auto component manufacturers such as Hi-Tech Gears or Bharat Gears may think of buying the transmission plant. It has latest machine tools and equipment. The company can look for exporting the transmission gears.
8 Indian firms in Forbes A-list
Eight Indian firms figure in this year’s Forbes A-List, featuring 400 of “the world’s best big companies”. The list includes the most attractive public companies for investors.
Bharti Televentures and ITC have made it to the list this year. Reliance Industries, Infosys Technologies, Wipro, Bharat Petroleum, the Oil and Natural Gas Corporation (ONGC) and the State Bank of India (SBI) -had been listed last year as well. Three big Indian companies- Indian Oil, Hindustan Petroleum and Hindustan Lever which were featured last year, have failed to find a place this time.
Three of the chosen Indian companies have achieved a sales turnover in the region of $12 billion - the SBI ($12.1 billion), Bharat Petroleum ($12 billion) and Reliance ($11.8 billion). In terms of market capitalisation, the ONGC leads the table with $21.3 billion, followed by Reliance ($14.4 billion) and Infosys ($8.6 billion).
The A-List, which is dominated by American companies as usual (142 of them this time), features only corporates with either sales or a market capitalisation of $5 billion or more. It looks at the past five years’ return on capital, sales growth and profit growth. It also analyses stock market performance and takes into account earnings expectations for the coming year.
Many more private companies must come in the list. Indian companies must think big to be globally competitive. India must go ahead of China in manufacturing sector, if the grim unemployment is to be tackled effectively. Left must agree for certain changes in labour laws that make the labour union irresponsible. Latest management practices are no more repressive as it used to be in old days, so the union must contribute in making the industry compete globally.
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MICO to make CDRI for truck engines
MICO is gearing up to manufacture common rail direct injection (CRDI) for truck engines. The company, which has already developed prototypes and supplied about 448 of the test models to truck majors, targets serial production of these power units from 2005. MICO is also betting on its new engine and exhausts components like dousing systems for truck exhausts and particulate injection valves for passenger cars to drive its growth. The dousing systems will be rolled into the market by 2006 with particulate injections expected to be introduced even earlier. MICO proposes to invest about Rs 1,000 crore to manufacture CRDI engines in India. While, India is one of the six distribution injection manufacturing locations for MICO Bosch, it is also the global R&D centre for the distribution injection systems. With Euro III emissions norms set to be implemented by 2005, auto majors will certainly catch on with the evolving systems like CRDI.
The manufacturing activities of MICO prove that India can be a manufacturing hub of precision component too. Automobile related high-end components with the modern technology can be manufactured in India. News below about Cummins and the auto components will be interesting in that context.
Cummins invests for export
Cummins Inc is planning to export more than $150 million in components and engines from India and more than 50 per cent ($80 million) is related to auto components during this fiscal year.
CIL has now become the sole source for three of high capacity engines - V28, K38 and K58 - for Cummins Inc. These high capacity engines are meant for power generation applications. Until recently, the V28 engines were made in the US and the K38 and K58 engines were made in the UK. no plants .
Auto Components predicted to bring job boom
NEW DELHI: The country’s auto parts industry has the potential to expand fivefold by 2015 to $33-40 billion from $6.7 billion in 2003-04 by exploiting local cost advantages, as per a recent report from consulting firm McKinsey & Co. Indian industry sales in 2015 would include exports of $20-25 billion and $13-15 billion in the domestic market and indirect exports. McKinsey estimates the sales of auto parts in 2015 would be $1.6 trillion. The Indian firms could address 40 per cent of that market valued at about $650-700 billion. The potential growth could create 2.5-3 million additional direct and indirect jobs and provide significant employment opportunity for people in rural areas and small towns.
Indian companies would need to create strong foundations in operational performance to meet global benchmarks on cost, delivery and quality. ACMA represents over 400 firms making auto parts for the country’s $14.3-billion vehicle industry.
- Indra
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