Manufacturing India-I

India can compete with China only with a booming and competitive manufacturing sector. India has the talent and skill. A change of mindset among the techies will be necessary to appreciate its need. India can switch over to hardware sector with the ease it went into software. And it is happening.

India to challenge China as the manufacturing hub: A survey of 340 companies worldwide by consulting and outsourcing major Capgemini and ProLogis suggested that India could challenge China as the manufacturing hub of the world in the next three to five years. “India is on the threshold of an exciting opportunity in the manufacturing outsourcing space…respondents indicated that they see manufacturing activities as the primary activity to be offshored to India in the next 3 to 5 years, surpassing even IT and BPO activities.” India is all set to challenge China in manufacturing.

Firing Up India’s Factories: In the past two years manufacturing has emerged as the country’s new rising star. Industrial production jumped by 12.5% in the year ended in March, the highest rate in years. With its huge market, productive workers, and-finally-a government that is starting to help rather than hinder investment, India is becoming an attractive alternative to China for making everything from sneakers to SUVs. India generates fewer than 1 million new manufacturing jobs annually, but needs to create at least five times that. And to really lift hundreds of millions of people out of poverty, India, like China, must build up labor-intensive export industries such as textiles, toys, and electronics. Many of the new plants are intended to serve India’s growing market, but they’re also targeting sales overseas.

While technology giants build vast outsourcing operations in India, manufacturing investment far outweighs theirs. In the verdant hills near Mumbai, Volkswagen, Hyundai Motor, General Motors, and a joint venture of Fiat and local automaker Tata Motors are all building new factories, for a total investment of $4 billion. Korean steelmaker Posco is planning a $12 billion plant in the eastern state of Orissa, while Luxembourg-based ArcelorMittal plans to invest $20 billion in two steel mills in Orissa and neighboring Jharkhand. In March, Hewlett-Packard Co. opened a factory near Delhi, its second Indian operation. And bathtub, sink, and toilet maker Kohler Co. is planning a $200 million plant in Gujarat. 40% of 340 multinationals surveyed by consultant Capgemini plan to establish manufacturing operations in India by

Tata small car is not just about price: According to sources in the auto industry, the car will sport the world’s first 800 cc, turbo-charged, CRDi diesel engine. The company is working on two engine options for the Rs 1-lakh car. The petrol version with a 600 cc engine will debut first in 2008. The diesel version will follow later, probably in 2009. For Tata Motors, coming out with the Rs 1 lakh car is both a social and business responsibility. “The Rs 1 lakh small car would bring down the carbon dioxide emission.”

Cranking up a new growth engine: Bharat Forge will shortly become the world’s largest forging company. In five years, a burst of growth and globalisation will see it whiz past its German competitor as the No 1 maker of tough-to-make metal components like axles and crankshafts used in automobiles.

Auto majors race to India for component sourcing: The domestic auto component industry is expected to witness a boom with global car majors drawing up plans to source from Indian suppliers. The big players include DaimlerChrysler AG, Chrysler (owned by Cerberus), Volkswagen, General Motors, Renault-Nissan, Volvo, JCB, and Caterpillar amongst others. According to the Auto Component Manufacturers Association (ACMA), the apex body of component makers in India, global sourcing of components from the country will double from $2.95 billion to $5.9 billion in 2008-09, and is slated to hit $20 billion in seven years.Volvo may outsource components worth $99 m Volvo Car Corporation, Sweden, has forecasted outsourcing of components worth $99 million from India this year. According to ACMA, more than a third (36 per cent) of Indian auto component exports head for Europe, with North America a close second at 26 per cent.Auto component cos turn to product engg, design: With India increasingly becoming a hub for global car makers, companies are looking to enhance their component engineering and designing capabilities to increase their share in the automotive knowledge-based business.

India may become Sandvik’s global mfg base: Sandvik Asia, the Indian subsidiary of Swedish precision tools and mining equipment major Sandvik AB, confronted with significant opportunities thrown up by the Indian infrastructure sector – notably mining and petroleum – in addition to the boom in manufacturing sector, is poised to benefit from the latest technology of its $10 billion Swedish parent as the latter is preparing to introduce newer products in India and also considering the option of making India its global sourcing base.

Schneider plans big: Schneider Electric, a French global major in medium to low voltage electric equipment manufacturing, has planned a big part of industrial investments to come to India.

India base for Hyundai small car Pa: India will be the exclusive manufacturing hub for Hyundai’s small car code-named Pa. HMIL has also set an ambitious target of exporting 2.5 lakh cars from the country in the next two years, up from 1,13,339 units which were exported last year. Hyundai’s new manufacturing facility to be operationalised by October this year would have a production capacity of 3,00,000 units per annum, thereby scaling up HMIL’s overall capacity to 6,00,000 units per annum.

ABG Shipyard completes Rs1, 439 cr German order; ABG Shipyard has completed the construction order for 12 Handysize bulk carriers from a German company for $360 million (Rs1, 439 crore). With this order from Germany’s Bereederungsgesellschaft H Vogemann GmbH & Co KG, the company’s aggregate order book now stands at Rs7,121 crore, ABG Shipyard said in a filing to the Bombay Stock Exchange. Bharati Shipyard, Apeejay in shipbuilding JV: Bharati Shipyard and the Apeejay Surendra group have proposed to set up a ship-manufacturing unit in Orissa ar an estimated investment of Rs 2,200 crore in the project.

Godrej targets Rs1, 000 cr turnover by 2012 from security biz: Gordrej Security Equipment, a division of Godrej and Boyce Mfg Co, is the largest manufacturer of security gadgets in the country and has over 75% share in the domestic market and dominates the banking segment for physical security products.

Videocon plans semiconductor, LCD complex near Mumbai: Videocon Industries Ltd is planning to set up a semiconductor and LCD complex near Mumbai that is estimated to entail an investment of Rs 8,000 crore.

BHEL strategises to take on Chinese competition: BHEL is already in the process of expanding its manufacturing capacity by spending Rs 1,000 crore and has asked its sub-contractors too to go for capacity addition to match its capability.BHEL will up headcount by 20,000: Bharat Heavy Electricals Ltd will raise its headcount by a massive 20,000 in the next five years as part of its expansion programme to increase manufacturing capacity. “We shall be inducting 18,000-20,000 people in the next five years in almost all product lines at our various plants QCs Spread: At present, the QCs cover 14 areas like manufacturing and production, quality improvement productivity, cycle time and cost reduction, and safety. QCs would also be set up in non-manufacturing areas such as outsourcing, human resources activities, vendor development, engineering and design and also for canteens and medical services.

Honda plans powertrain facility in Rajasthan: Honda Siel Cars India (HSCI) is planning to set up a powertrain facility in the country. The Japanese company has got allotted 600 acres for this unit. According to market estimates, the cost for building a powertrain facility will be over Rs 600 crore.

Suzuki to make India export hub: Suzuki Motorcycles India (SMI), a 100% subsidiary of Japanese auto major Suzuki Motor Corporation, will make India an export hub for two-wheelers, both motorcycles and scooters to emerging two-wheeler markets where the annual demand is over a million units.

Car that will drive you crazy: First things first… German Tier One component major Bosch is developing “a brand new” common rail direct injection (CRDi) solution that will be compatible with the Tata Rs 1 lakh car. “For the first time, Bosch is developing CRDi systems at that cost to suit the configuration of an extremely low cost vehicle.” The company, he said, is supplying “alternators, brakes and gasoline and diesel en-gine management systems for the one-lakh car from Tata” and in four months, Bosch’s local engineers have “developed viable technical concepts and solutions” for the project.

Japan and India: The two countries have complementary skills and needs. With 1.13 billion people, India will always have a large manufacturing sector and an abundance of low-cost labour. Japan, on the other hand, has superb skills concentrated in manufacturing sectors, ample surplus capital and an aging population that is beginning to decline.

Foundry Industry: The foundry industry, considered the mother of all industries such as engineering, automobile, oil and cement, is expected to post around 9 per cent annual growth. Over 5,000 foundry units are currently operational in the country, with installed capacity of around 7.5 million tonnes a year

Moser plans Rs 2,000cr PV plant near Chennai: New Delhi-based leading optical storage media manufacturer Moser Baer (India) has chosen Chennai to set up a Rs 2,000 crore solar photovoltaic fabrication facility.

Caparo to set up manufacturing base in TN for Rs 750 cr.: Caparo group, which has acquired several companies in the UK and India, is all set to establish a manufacturing base in the upcoming 125-acre Caparo industrial complex at Sriperumbudur in Tamil Nadu at a cost of Rs 750 crore.

Skoda to set up turbine facility: Czech power company Skoda Power AS is setting up a turbine manufacturing facility at Hyderabad at an investment of around Rs2, 000 crore that will be set up in four phases, and will be completed by 2011 to help the fast growing power generation sector on the equipment supply front, as India has been coping with shortfalls in power generation equipment.

Benetton to make India major hub: Apparel major the Benetton Group, which has a presence in 120 countries around the world and produces 130 million garments every year, will make India its major sourcing hub for fabrics to cater to markets like South America, Russia, Eastern Europe, Southeast Asia and Japan.

Louis Vuitton to build shoe plant in India: French luxury goods label Louis Vuitton is considering building a shoe plant in India and will have the manufacturing facility located near Pondicherry.

India new launchpad for auto giants: India is turning out to be the new launch pad for global car models as major carmakers prefer India to Europe and the American markets.

Electronics hardware exports up 30% in FY07: The country exported electronics hardware worth Rs12,500 crore in 2006-07, up 30% from 2005-06, with North America accounting for more than a quarter of it at Rs3,410.95 crore.As per estimates of Department of Information Technology, 125 countries imported software while 191 countries imported hardware from India in 2006-07. In 2005-06, the electronics hardware export was worth Rs9,625 crore.

India must build its manufacturing right from grassroots level using the innovative talents of the people.

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