Having served as managing director of AkzoNobel India, maker of Dulux Paints, industry veteran Amit Jain moved to Amsterdam in 2014 to head its decorative paints business in North and West Europe. After three years, he is again taking up a leadership role in the local unit, assuming the post of chairman. Jain, who will continue to serve at Amsterdam, speaks to Arnab Dutta about the Indian business and future plans. Edited excerpts:
Where does the Indian business stand in AkzoNobel’s global portfolio?
In 2009, our business was about Rs 900 crore, almost the same as what it was in 1987, when I started working for ICI. I joined back as the managing director of AkzoNobel India in 2009 and over the past eight years, we have trebled the size of the company and our profit. Thanks to the fact that ICI got acquired by Dutch paints giant AkzoNobel in 2008 and the new team that the company had acquired.
Today, our Indian subsidiary is one of the fastest growing businesses for AkzoNobel globally and a very important market for us. Also, India has become a talent base for AkzoNobel. Six years back, we built a new team here and the only member of that team who is still in India is our current managing director, K Jayakumar. All other members are now handling global roles within the company.
The India business continues to be quite small, compared to AkzoNobel’s business globally...
The Indian paints market is one of the fastest growing in the world, with growth rates of 10-12 per cent. However, it is more competitive in terms of value chain, compared to many other large markets. We have one of the tightest value chains here. The cost of the same paint in India would be half of that in the Western markets.
The cost of manufacturing in India is a third. While distributor and retailer margins, put together, in India is 11-17 per cent, in the West it is 35-50 per cent. All these add to the cost elsewhere. This is also why Indian talent is getting exposure globally, as they are bred under such competitive circumstances.
How and in what ways is the market here unique...
First, the cost of distribution has to be maintained tightly. One has to reach thousands of outlets across a large country, unlike in most other markets. So, distribution is a huge challenge.
Second, unlike developed markets, people in India do not paint their houses themselves. Since consumers are less aware of the nature and quality of the product, the role of the brand becomes critical during their buying decision. So, brand building is more important here.
How has the slowing in industrial activities and real estate affected the company’s business in the country?
We have not felt the heat of slowdown in the industrial paints segment. While some sectors might have slowed, newer sectors have picked up. The slowdown in real estate hit us less, as 80 per cent of the decorative paints business comes from repainting. However, the industry is under margin pressure, as raw material prices have gone up sharply in one and a half years. The industry has taken a couple of price hikes but the pressure is still there.
When do you expect to see consolidation in the local market?
India is one of the few large countries which has significant scope for penetration and expansion, as a lot of people continue to use lime paints. We are already witnessing consolidation by the top four players. The organised players now hold 65 per cent of the market.
With high-cost efficiency and economies of scale, India is a more mature market than China, though penetration remains low. That is why all major paint multinationals have tried to get into this market.
Aiming to make India a manufacturing hub for electronics and semiconductors, the India Electronics and Semiconductor Association (IESA), a body representing the country’s Electronic System Design and Manufacturing (ESDM) industry, is opening its first overseas office in Taipei, Taiwan, today.
The office will be inaugurated by Ashwini K. Aggarwal, Chairman, IESA; Mignonne Chan, who will head the Taiwanese office and delegates from Andhra Pradesh, Chhattisgarh and Kerala – the first three States to promote investment opportunities among Taiwanese electronic manufacturers.
A memorandum of understanding (MoU) with Taiwan Electrical and Electronic Manufacturers’ Association (Teema) to promote co-operation and investment between Indian and Taiwanese companies in the ESDM industry was signed in 2015. Opening an office in Taipei comes as the next step of this co-operation.
Last week, 14 Taiwanese companies visited Bengaluru to meet local manufacturers and explore investment opportunities.
“The enthusiasm of Taiwanese companies is amazing. Earlier, they were looking at the countries that are their neighbours, but now they are looking at South Asia broadly and India is a focus country,” MN Vidyashankar, President, IESA, said, in an interview to BusinessLine. “With this initiative we are targeting $350 million investment in the next three years.”
According to Vidyashankar, the range of products that Taiwanese players are interested to manufacture in India, either on their own or in partnership with local manufacturers, is wide and targets mainly consumer, industrial, automotive electronics and mobile devices, among other verticals.
“Made in India” products and components will be supplied both to the domestic market and exported to third countries.
IESA is planning to set up its second overseas office in Japan, another leading ESDM market, Vidyashankar added.
India's ESDM industry stood at $82 billion in 2015, growing at a compound annual growth rate (CAGR) of 8 per cent since 2013, according to the IESA-EY report.
By the end of 2017, the sector will cross $100 billion, the report adds, and is expected to grow further at a CAGR of 16-23 per cent to reach $171-228 billion by 2020.
India is heavily dependent for components import on countries such as China, Taiwan, South Korea and Japan, although electronic manufacturing service companies in India have reached considerable maturity for final assembly, testing, packaging and distribution services, the report notes.
While value addition remains limited owing to the dominance of SKD (semi-knocked down) type of assembly, Indian companies are gaining scale and maturity and CKD (completely knocked down) manufacturing activities gain traction, and FDI from large foreign manufacturers is seen as a necessary boost for development of the entire value chain.
(FDI)into the country grew by 37 per cent to USD 10.4 billion during the first quarter of the current fiscal, DIPP said today
According to the figures of the Department of Industrial Policy and Promotion (DIPP), India had received USD 7.59 billion FDI during April-June 2016-17
The main sectors which attracted the highest foreign inflows include services, telecom, trading, computer hardware and software and automobile
Bulk of the FDI came in from Singapore, Mauritius, thethe Netherlands and Japan
The government has announced several steps to attract foreign inflows
The measures include liberalisation of FDI policy and improvement in business climate
Foreign investments are considered crucial for India, which needs around USD 1 trillion for overhauling its infrastructure sector such as ports, airports and highways to boost growth
A strong inflow of foreign investments will help improve the country s balance of payments situation and strengthen the rupee value against other global currencies, especially the US dollar
The DIPP through its 'Make in India' twitter handle also stated that FDI equity inflow in manufacturing sector grew by 31 per cent to USD 4.19 billion during April-June this fiscal
FDI equity inflow in glass, Leather cement & gypsum products, sea transport, air transport, construction development, mining, sugar and medical & surgical appliances recorded five fold jump during the quarter
It added that since the launch of 'Make in India' initiative (October 2014 - June this year), foreign inflows jumped 64 per cent to USD 110.12 billion from USD 67.26 billion in the same period last year.
On the 15th of August 2017, the world's largest democracy, India, celebrated 70 years of sovereignty and independence, 70 years of growth, revelry and optimism.
Over the course of the years, the newly liberated population has generally embraced changes, pushing for economic development and hoping for a better future and quality of life. Years of hard work, perseverance and sheer effort have today placed India at the global pedestal, a bright spot so to speak.
A recent assessment by the International Monetary Fund explicitly mentions the significant progress the country has made on important economic reforms, the benefits of which the country is now beginning to yield. In just the past few years itself the Indian economy has made a significant leap upward to be crowned the seventh largest economy in the world measured by nominal GDP and the third-largest by purchasing power parity.
Of course, to reach this point of recognition, India had to struggle, mostly with itself. Decades of poor governance fashioned a huge disparity and discord between the rich and the poor, educated and illiterate. The 1.3 billion population makes it a particularly difficult challenge to redistribute resources efficiently and fairly. This is compounded by a culture steeped in corruption, lack of accountability and an over-burdened judiciary system. India, therefore, remains at risk of sabotaging its progress.
There has been a visible change in the general mind-set with Modi's remarkable governance and the nation has its sights set on increased economic prowess and wellbeing. The future of India now lies in rational reforms that will shape its trajectory as one of the fastest growing economies in the world.
One of the key areas in need of amends is the Indian judicial system. Indeed, a large number of issues that the country currently faces can be resolved if the Indian judicial system administers important reforms. An example is the Judicial Standards and Accountability Bill, 2010 which requires judges to declare their assets, lays down judicial standards, and establishes processes for removal of judges of the Supreme Court and High Courts and the government plans to reform the way its judges are appointed.
Furthermore, another reform that has been under discussion includes the establishment of "fast-track courts" and the appointment of an increased number of judges in order to resolve the backlog that the system is exposed to. Establishing an average of five to six FTCs in each district, with priority accorded to those states and districts with large pendency would effective in clearing pending backlogs.
The judicial system can also take a cue from other countries. For instance, in English court procedures a losing party in litigation pays a substantial amount, if not the complete amount, of the costs to the winning party. An enactment of such procedures in India can act as a deterrent for those who see litigation not as a dispute-resolution process, but as a means to delay their obligations. This will also help stop litigants filling frivolous lawsuits and promote out-of-court settlement between parties.
Such reforms are crucial to investor confidence and will ensure that the Indian judiciary is seen to be independent and adhering to the upmost standards of integrity. A healthy judicial system is the backbone of any growing economy as investors demand their investment to be protected by a pro-active, fair and truly independent judicial system.
In the current era, there appear to be a few more roadblocks that can considerably slow down the rally of great ideas unless they are addressed, assessed and effectively dealt with in a systemic manner.
Prime Minster Narendra Modi has made a laudable effort of driving India's identity as an ideas factory, receiving remarkable praise from around the world. The big test, however, would be to receive the same reaction from the Indian public as his five years as the premier leader come to a close.
Even though the immediate moments of freedom were marred by mass migration and the displacement of thousands, decades on, the dust settled, India is finally finding its footing. Similarly, the Modi-machine, whose narrative has been tainted by allegations of being misaligned with the crux of the Indian Constitution, needs to set the tone right for the future of the country—perhaps by fixating the nation's vision on economically beneficial solutions through programs that harness ease of business and reap economic benefits from around the world.
The government must address the veiled, tacit yet persistent issues that act as roadblocks to its own policies. The government must understand the sentiments of the nation and justly debate these issues. Regardless, the end of identity politics will eliminate a prolonged issue that could slowly erode the innards of India's democratic system and pluralistic secular fabric.
India is currently at the cusp of a cultural and economic revolution. How we utilise this force of progress and what direction it takes from here onwards is in the hands of the common citizen. What we choose as our future, be it exclusivity or acceptance rather than tolerance, remains to be seen. But one thing is clear—this is the age of India's ascendance into a power never before witnessed by this world.
BJP president Amit Shah on Saturday said that India’s economy has become the fastest growing in the world after Prime Minister Narendra Modi came to power in 2014. “Under the leadership of Prime Minister Narendra Modi, the country’s economy has become the fastest growing economy in the world,” said Shah while addressing a function in Bhopal. Shah also blamed the previous UPA rule for putting the economy in a bad shape. During its rule the economy was in a state of paralysis and the development was stranded, said Shah
Speaking at a function to distribute certificates to meritorious students, Shah said that recognising the potential of the youth of the country, the government has launched schemes like Start-Up India, Stand-Up India and Skill India to provide forum to them. He said it was the responsibility of the youth to ensure development of the country as they comprise 65 per cent of the total young population. “Therefore, it is the duty of the government to provide a forum to the youth-power and their immense potential so that they can stand up to ensure the country’s development at the world level,” he said. The Modi-led government at the Centre has focused on skill development and started the ‘Skill India’ scheme, he said
Besides, to give wings to the youth potential, the government also launched Start-Up India and Stand-Up India schemes so that they get associated with the country’s development process, the BJP chief said. By taking advantage of these schemes, the youth of the country would be in a position to offer jobs rather than seeking it, he said. Shah said he sees immense potential in Chief Minister Shivraj Singh Chouhan’s meritorious students’ scheme and that it will give boost to the state’s development
“Shivraj’s government has framed schemes for the welfare of all sections of the society and ensured that its benefits reach to the bottom level. Because of this only, Madhya Pradesh had come out of the BIMARU (laggard) state category and is standing among the developed states,” he said.On the occasion, Chouhan said his government wants to create industrialists like Tata, Birla and Ambanis in the state and that is why his government is providing guarantee to the banks for providing loans to youth. The prime minister wants to make India a “vishwa guru” (world leader), he said, adding that his government is also making all possible efforts for it.
Source:- Indian Express