Indra’s Drishtikona (Viewpoint)

Indian ‘Globocorps’- many miles to go

Posted : March 30, 2005 at 12:02 am [IST]

Economic Times had a feature recently with this newly coined term ‘globocorps’. You feel happy when you go through such a feature. Many of our companies are getting global and attaining the scale-wise ranks in worldwide competition. Here are some of them and my suggestions to make them bigger.

· The UB group with the acquisition of ‘Shaw Wallacehas become the second-largest liquor company in the world after Diageo. I wish the UB group enhances their scale of production to that level and cut down its costs where the drinks become affordable and satisfy the need of that class of people in India who because of their habit go for country made unhygienic ones and kill themselves.

· Hero Honda with sales of 2.16m motorcycles a yearin the first 10 months of FY05 is set to end this fiscal as the largest two-wheeler company in the world for the fourth year in succession. However, Hero Honda doesnt design its products. I only wish they go for it, otherwise it will remain, for all practical purposes, more of a contract manufacturer.

· Bajaj Auto has all the capability to dethrone Hero Honda, if all any one can in near future. And as an advantage it designs its vehicles too. With some attractive and smart models and innovative market strategy including exports, it can make it happen.

· Hero Cycles- another Hero group company is the worlds largest cycle company with an annual production of 5.4m bicycles. It must come out with world-class design, features, and specials too with global appeal.

· Essel Propack is the worlds largest manufacturer of laminated tubes that are used to package toothpastes, cosmetics, drugs, and food. With a global market share of more than 30%, it has manufacturing facilities in China, the US, Germany, Mexico, Colombia, Venezuela, Philippines, Indonesia, Egypt and Nepal, apart from India. Last year, it acquired Arista Tubes, the leading manufacturer of seamless plastic tubes in the UK.

· Pune-based Bharat Forge, Indias largest auto component unit is the worlds second-largest forging company. With manufacturing capacities in India and Germany, the company is in the process of expanding its forging capacity from 2,20,000 tones to 3,20,000 tones. It is on the way to become world number one by 2010. Bharat Forge can become the largest source of components like crankshafts, axle-beams, etc for all types of vehicles and engines in the world. It must take a lead role to form a world-class marketing organization that helps to get the best out of the huge capacity in all thecompanies in India with forgings and machining facilities. It can also encourage some entrepreneurs to set up a world-class forge dies and tools manufacturing facility for domestic manufacturers and for exports to other countries.

· Sundaram Fasteners is another domestic auto component manufacturer that is today the worlds third-largest manufacturer of brake lining, fasteners and radiator caps. Its other group companies can merge in a single auto component corporation and be a global force. With its brand image of high quality that some of the units are building with Deming Prizes, it is an achievable target.

· Tata Tea and its subsidiary, Tata Tetley, together constitute the second-largest branded tea portfolio in the world. Tata Motors with its acquisition of Daewoo Commercial Vehicle manufacturing company in South Korea and bus body building plant in Europe has all the potentials to come in the first ten automobile companies of the world. And for that matter some other Tata companies such as Tata Steel, Tata Chemicals, Tata Power, and naturally TCS are in search of a global rank

· Moser Baer ranks among the top three optical storage media manufacturers in the world. Its product range includes floppy disks, CDs and DVDs, and it has a presence in over 40 countries. It must update its technology to compete with the technology change that is knocking the door in digital world.

· The AV Birla group has set up the worlds largest single-location copper smelter in India and is also one of the largest producers of carbon black. The group has a global presence too in different area. But it is to decide if it will pull all its energy to become one of the largest cement, aluminum or copper producer of the world.

· Reliance has one of the worlds largest refineries at Jamnagar and perhaps has a global rank in man-made fiber too. Reliance Power is setting up the worlds largest gas-based power plant in UP. Reliances dreams were of global sizes. It is to be seen if the rift between the two brothers makes it difficult to be realized.

Surely, the list is pretty small for a country of a size of India. There are many in public and private sector that has potential to get a global rank in its sector. I name some here- BHEL, NTPC, ISRO, HAL, Ranbaxy, L&T, Dr. Reddy Laboratories, Wipro, Infosys, and many more. We all are hopeful that many SMEs of today will promote themselves to higher ranks in next 10 years.

After all, if LN Mittal can build the worlds largest steel company from scratch in one generation, why cant some more from this land of billion do in other segments?

Again if China can plan strategies to have at least 100 companies in Fortune 500, why cant India and Indians think of at least 50 in it?

- Indra

Category: Industry/Management |