India Market TrendsIndia Market Trends

b h dRajabahadur V ArcotVice President & GNARC Advisory Groupraja@ARCweb.com

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AgendaAgenda

Overview

Growth Indicators

High Growth Industries

Growth Opportunities

Recommendations

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OverviewOverview

IndiaO th f t i hi h h d• One among the few countries which has emerged largely unscathed from the economic crisis

• Expected to achieve a growth rate of 7.4 percentExpected to achieve a growth rate of 7.4 percent during 2009-2010 (India’s fiscal year is from April to March) • Manufacturing Growth – 10.8 percent

• Projected growth rate for 2010 – 9.4 percent (IMF)(IMF)

India Offers Growth Opportunities for A t ti S li

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Automation Suppliers

Other Growth Indicators Other Growth Indicators

The Central Bank and the State have already initiated actions to withdraw economic stimulusinitiated actions to withdraw economic stimulus packages

PMI has been above 50 since April 2009

56.0

58.0

60.0

50.0

52.0

54.0

44.0

46.0

48.0

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Aug 09 Sept 09 Oct 09 Nov 09 Dec 09 Jan 10 Feb 10 March 10 April 10 May 10 June 10 July 10

High Growth IndustriesHigh Growth Industries

Automotive and Auto component Cement and Glass Cement and Glass Electric Power – Generation and Distribution Food and Beverage g Metal Industries – Particularly Steel Oil and Gas, Chemicals Pharmaceuticals and Biotech High tech (Consumer Electronics, Medical

i d l )Equipments, and Telecom)

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AutomotiveAutomotive

Expected to contribute 10 percent of India’s GDP in the next 5 6 yearsGDP in the next 5-6 years

Emerging as manufacturing and engineering hub for compact carsp• Tata Motor’s Nano

On the radar screen global players pursuing small car strategy• Examples: Suzuki, Hyundai, Renault-Nissan, and

GMGM Emerging as an exporter of automobiles and

auto components

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p

CementCement World's second largest producer of cement

after China Installed production capacity by end

September 2009– 231 million tons (MT) Capacity addition during April September 2009 Capacity addition during April-September 2009

- nearly 11 MT Capacity addition next year – 25 MTp y y Both domestic and global Players are active in

the market• Four of the top five global players are in India

(Lafarge, Holcim, Italicementi, and Heidelberg) Technology adoption and energy management

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Technology adoption and energy management gaining importance

Electric PowerElectric Power Demand for electric power outstrips supply Manufacturing companies constructing ‘captive’

power plants to meet in-house demand and sell the available excess power

Present generating capacity – around 150 GW Present generating capacity – around 150 GW According to ARC analysis, India needs to add

another 450-550 GW in the next ten years Some projections for the next decade:

• Wind power - 20,000 MW• Solar power – 20,000 MW• Nuclear Power – 20,000 MW

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Food and BeverageFood and Beverage Indian food and beverage market: Around $200

billion Agricultural product exports: Around $20 billion Processed Food industry: Less than $15 billion

and growing at a CAGR of around 14-15 percentand growing at a CAGR of around 14-15 percent Investment in the pipeline: More than 20

billion in the next three years

Changing lifestyles and increasing disposable incomes spur

food p ocessing ind st ’s g o th9

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food processing industry’s growth

PharmaceuticalsPharmaceuticals

$20.0 billion industry Ranks 3rd by volume and 14th in terms of value Meets 70 percent demand of country’s bulk drug

requirements and nearly all of formulations requirementsrequirements

Growth: 13 percent CAGR Highest number of the US Food and Drug g est u be o t e US ood a d ug

Administration (FDA) approved GMP manufacturing plants outside the US

Account for almost one out of four abbreviated Account for almost one out of four abbreviated new drug applications (ANDA) filed in the US

Files almost half of the DMFs in the US.

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Steel Steel

Fourth largest producer of steel in the world India accounts for 5 percent of global steel India accounts for 5 percent of global steel

consumption Last year steel consumption grew by 6.8

percent Projected growth of Steel consumption: more

than 10 percent per annum over the nextthan 10 percent per annum over the next decade

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Growth OpportunitiesGrowth Opportunities New investments in greenfield projects

• Process, batch, and discrete industries Renovation and modernization Increasing competitive pressures compel

i t k d ti it d ffi icompanies to seek productivity and efficiency improvements

Increasing awareness that automation is a c eas g a a e ess t at auto at o s abusiness enabler and a strategic asset

Automation moving beyond basic level• MES, EAM, Safety (process and Machine) Systems,

Digital Manufacturing Energy management imperatives

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Energy management imperatives

RecommendationsRecommendations

• Looking for growth oriented market? India is the answer

• Increase marketing and sales resources – market will reward especially in growing segments in emerging technologies (solar wind biomass & others)emerging technologies (solar, wind biomass & others)

• Invest in concept & value marketing, awareness creation, and solution selling

• Focus on growing industry verticals and develop appropriate strategies

Examples:• Examples: • Electric Power Industry - conventional and

renewal generation and distribution,

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g ,Pharmaceutical, and others

Thank You!Thank You!For more information, contact

raja@ARCweb.comor visit ARC Advisory Group ator visit ARC Advisory Group at

www.arcweb.com

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