Engineering Industry in Punjabmaking the big leap forward2012CII – Valcon Report
Message by Mrs Kamna Raj Aggarwalla                               Chairperson, CII Destination Punjab 2012                ...
CII – Valcon ReportMessage by Ms Sandeep RiatChairperson, CII Ludhiana Zonal CouncilIt is a matter of great privilege for ...
Message by Mr Deepak Mittal                             Chairman, CII Punjab State Council                             On ...
CII – Valcon ReportMessage by Mr Krishnan NaganathanCEO, Valcon Management ConsultantsThe engineering sector in Punjab is ...
Table of contents    Punjab’s economy                                                           7    Engineering sector an...
CII – Valcon ReportPunjab’s economyDemographics: Punjab has been one of the richest states in India sinceindependence. Wit...
Engineering sector and its relevance to    growth of Punjab’s economy    Figure 2: Share of total output by industry secto...
CII – Valcon Reportbeen responsible for a big proportion of the industrial growth in Punjab in past10 years due to its rel...
(5% of output) in this large sector is due to the low value adding nature of the                                          ...
CII – Valcon ReportOpportunities in engineering sectorEngineering sector overview in IndiaThe engineering sector is the la...
Figure 7: All-India engineering industry output by sub-sector in 2009-2010                                              0%...
CII – Valcon Report Figure 8: Growth and profitability of engineering sub-sectors in India                                ...
* The growth scale has been made linear         Figure 9: RoGFA vs. avg. capital deployed per factorybetween the lowest an...
CII – Valcon ReportEngineering sub-sectorsMedical equipmentIndia’s medical equipment market – valued at $4.9 billion (INR ...
Figure 11: Key segments of medical equipment                           15.20%                   25.10%          Medical in...
CII – Valcon Reportƒƒ 	 se of technology to reduce cost, increase penetration such as telemedicine,   U   remote monitorin...
CII – Valcon report on enginnering industry in Punjab                                        Figure 13: Region wise tracto...
CII – Valcon ReportThe government has estimated that investment worth INR 40 lakh crores will bemade over the 12th five ye...
CII – Valcon report on enginnering industry in Punjab     Figure 14: Major players                                        ...
CII – Valcon ReportMetal fabricationThis is a highly fragmented and labour intensive sector with medium and smallscale ind...
Key drivers     ƒƒ 	 roject based – core industry sector plays a major role and effects upstream        P        and downs...
CII – Valcon ReportIndustrial equipment and componentsThis sector consists of varied set of equipment with application acr...
Engines and turbines     The main sector that this segment caters to is the power generation sector and     generally grou...
CII – Valcon ReportThe key challenge facing the sector is the delay in project execution whichimpacts the order flow and c...
Compressor design complexity implies a fewer number of domestic                                     manufacturers while pu...
CII – Valcon ReportThere are large number of Indian and international firms which have a strongpresence in this sector suc...
Figure 26: Growth of Indian auto components industry     Indian auto component     industry comprises of round            ...
CII – Valcon ReportAltogether top five players account for ~9.24% of the market while top tencompanies corner ~11.93% of t...
Figure 28: Growth of auto components relative to growth of auto industry                40%     % growth                20...
CII – Valcon Reportƒƒ The government has allowed 100% foreign equity investment in the sector,   through the automatic rou...
Aerospace and defence – Sunrise sector with       strong long term potential       Overview       This sector is currently...
CII – Valcon ReportPotential for Punjab’s engineeringindustryStrengths and weaknessesThough Punjab has been an agriculture...
CII - Valcon Report on Engineering Industry in Punjab 2012
CII - Valcon Report on Engineering Industry in Punjab 2012
CII - Valcon Report on Engineering Industry in Punjab 2012
CII - Valcon Report on Engineering Industry in Punjab 2012
CII - Valcon Report on Engineering Industry in Punjab 2012
CII - Valcon Report on Engineering Industry in Punjab 2012
CII - Valcon Report on Engineering Industry in Punjab 2012
CII - Valcon Report on Engineering Industry in Punjab 2012
CII - Valcon Report on Engineering Industry in Punjab 2012
CII - Valcon Report on Engineering Industry in Punjab 2012
CII - Valcon Report on Engineering Industry in Punjab 2012
CII - Valcon Report on Engineering Industry in Punjab 2012
CII - Valcon Report on Engineering Industry in Punjab 2012
CII - Valcon Report on Engineering Industry in Punjab 2012
CII - Valcon Report on Engineering Industry in Punjab 2012
CII - Valcon Report on Engineering Industry in Punjab 2012
CII - Valcon Report on Engineering Industry in Punjab 2012
CII - Valcon Report on Engineering Industry in Punjab 2012
CII - Valcon Report on Engineering Industry in Punjab 2012
CII - Valcon Report on Engineering Industry in Punjab 2012
CII - Valcon Report on Engineering Industry in Punjab 2012
CII - Valcon Report on Engineering Industry in Punjab 2012
CII - Valcon Report on Engineering Industry in Punjab 2012
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CII - Valcon Report on Engineering Industry in Punjab 2012

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“CII-Valcon report on Engineering Industry in Punjab - making the big leap forward” was released at the event 'Destination Punjab 2012', Ludhiana, held from 1-3 Nov at Ludhiana, Punjab (India). The report focuses on the emerging opportunities in the sunrise engineering sectors and also an assessment of how Punjab’s companies can gain from this.

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  1. 1. Engineering Industry in Punjabmaking the big leap forward2012CII – Valcon Report
  2. 2. Message by Mrs Kamna Raj Aggarwalla Chairperson, CII Destination Punjab 2012 It is my proud privilege to present CII Valcon report on “Engineering Industry in Punjab – Taking the Big Leap Forward” at the 2nd Edition of Destination Punjab – An Industrial & Engineering exposition. The report and this event is part of our endeavour to showcase to the world, the tremendous potential & promise that engineering sector in Punjab holds. CII and Valcon through this report have tried to come up with a holistic approach and practicable solutions which would help create capacity and also bring in concepts of competitiveness & automation that will help engineering sector gain momentum to become the true growth driver of our economy. While Destination Punjab 2012 seeks to provide a rare perfect platform to the engineering sector in Punjab to explore boundless opportunities which will help foster new partnerships & engineer profits. I would like to convey my sincere gratitude to Government of Punjab, ValconMrs Kamna Raj Aggarwalla Management Consulting and my dear friends from Industry as also ourChairperson, CII Destination exhibitors, buyers, sponsors and other stakeholders, who have supported us inPunjab 2012 this endeavour of reenergizing the engineering sector in the state. Wishing everyone a meaningful and productive Destination Punjab.2
  3. 3. CII – Valcon ReportMessage by Ms Sandeep RiatChairperson, CII Ludhiana Zonal CouncilIt is a matter of great privilege for me to extend a very warm welcome to all thestakeholders & participants of the 2nd edition of Destination Punjab beingorganized at Ludhiana.Our focus in this years’ edition is to revive & reenergize the engineering sectorin the state by showcasing the potential and opportunities existing in this sectorto our business fraternity across the country & globe.As Ludhiana has traditionally been known as the hub of engineeringentrepreneurship in this region & country, through Destination Punjab 2012 wehave also endeavored to expose local entrepreneur to newer clients, latesttechnologies & practices through a focused exposition and concurrent sessionswith experts and leaders from industry.Besides these, CII & Valcon Management Consultants have together compiled areport which highlights the tremendous opportunities waiting to be tapped in Ms Sandeep Riatengineering sector in the state. I am sure our stakeholders will find this report Chairperson, CII Ludhiana Zonalinformative & useful. CouncilI would also take this opportunity to thank the state Government and otherstakeholders who have put in their sustained efforts and helped us in building asuccessful Destination Punjab 2012.Wishing everyone a pleasant & fruitful stay at Destination Punjab 2012,Ludhiana. 3
  4. 4. Message by Mr Deepak Mittal Chairman, CII Punjab State Council On behalf of CII Punjab State Council, I take this opportunity to personally welcome you all to the 2nd edition of Destination Punjab at Ludhiana. After successfully organizing the 1st edition in Amritsar last year, this time we have adopted a more focused approach to highlight the strengths & opportunities existing in the engineering sector in the state. At Destination Punjab 2012, besides an exposition, an extensive schedule of Knowledge Sessions, Vendor Development Programs and a Conference on Automation have been scheduled over a period of 3 days which I am sure would help our business fraternity to expand its horizons by interacting with their prospective partners besides learning newer concepts, technologies & practices. I am also delighted to share that CII and Valcon Management Consultants have compiled a holistic report which aims to provide a bird’s eye view of the tremendous opportunities that exist for engineering Industry in Punjab as also itMr Deepak Mittal suggests the way forward to realize the full potential of this sector in the state.Chairman, CII Punjab StateCouncil This momentous effort would not have been possible without the unflinching support provided by Government of Punjab, colleagues from Industry and other stakeholders in this endeavour. I thank each and every one for their contribution. Wish you all a very fruitful Destination Punjab 2012.4
  5. 5. CII – Valcon ReportMessage by Mr Krishnan NaganathanCEO, Valcon Management ConsultantsThe engineering sector in Punjab is going through a tough phase – challengingbusiness environment coupled with traditional working style is a doublewhammy for many of the home grown companies. Growth – in these conditions– is possible only through a holistic approach of analysing the status quo, takingsteps to consolidate and diversify and leveraging the strengths to tap thepotential in this sector.In this backdrop, I believe that there could not have been a better time than nowto present this report to the industry. This report by Valcon and CII attempts tocreate a holistic view of the current status of Punjab’s engineering industry andits growth vis-a-vis the Indian engineering sector. Further, we have also providedthe possible way forward for Punjab’s engineering industry to make the next bigleap forward.This report also highlights the sunrise sub-sectors in the industry with long termpotential that are likely to emerge as key drivers for the engineering sector. The Mr Krishnan Naganathanpotential of the various sub sectors has been looked into both in terms of CEO, Valcon Managementprofitability and return on investment, thus providing a quantified assessment Consultants Pvt. Ltdfor the reader. The objective has been to make the reader aware of the emergingopportunities and possibly trigger interest for further study and action.We have also tried to identify and understand the strengths of Punjab’scompanies that have helped them survive and fend off challenges as also theirweaknesses that have kept them from growing faster. Our learning has beencomplemented by views of industry experts and by Valcon’s view points onleading practices that needs to be implemented to ride the next curve of growth.As is the case in any study, the views expressed pertain primarily to majority ofthe population studied. We realise that there are a number of companies whostand out from the general and have outperformed others. In many ways, thesecompanies also set examples of the good practices to be emulated by others.With a strong domestic market, untapped export potential and largeinfrastructure investment plans by the government, there is an immense growthopportunity waiting for the companies. I hope that CII and Valcon’s attempt insharing the collective insights benefit the readers and enables the sector todrive long term growth in this sector.In short: Taking you further. 5
  6. 6. Table of contents Punjab’s economy 7 Engineering sector and its relevance to growth of Punjab’s economy 8 Opportunities in engineering sector 11 Engineering sector overview in India 11 Classification of engineering sectors 11 Engineering sub-sectors 15 Medical equipment 15 Farm, construction and mining machinery 17 Metal fabrication 21 Industrial equipment and components 23 Auto components 27 Aerospace and defence - Sunrise sector with strong long term potential 32 Overall sector outlook 32 Potential for Punjab’s engineering industry 33 Strengths and weaknesses 33 Capability assessment 38 Skills 40 Marketing capabilities43 SWOT analysis of Punjab’s engineering industry 46 Key success factors for growth 48 Hurdles and roadblocks 49 Valcon’s view 50 Information sources acknowledgements 52 About CII About Valcon 536
  7. 7. CII – Valcon ReportPunjab’s economyDemographics: Punjab has been one of the richest states in India sinceindependence. With a population of approximately 2.8 crores1 spread over afertile area of 50,362 km2 Punjab today is not only responsible for 15% of India’swheat and rice production2 but also contributes 2.5% of India’s industrial output.Size and growth: The net industrial production in Punjab is nearly INR 30,000crores. While agriculture and allied activities contribute 31% of state’s domesticproduct (2009-10), industrial activities and services contribute nearly 18% and51% respectively. The annualised growth in these sectors for last five years hadbeen 13.1%, 18.7% and 16.3% respectively indicating growing prominence ofindustrial activities in overall economy of Punjab4.Figure 1: Growth trends for components of economy in Punjab 100 State domestic product in Rs 1,000 Cr at current prices 90 80 70 60 50 40 30 20 10 0 2004 - 05 2005 - 06 2006 - 07 2007 - 08 2008 - 09 2009 - 10 Industry Agriculture Services Industry growth trendMajor industrial sectors: Registered factories contribute 56% of theindustrial output in Punjab. They accounted for around INR 17.5 thousand croresof gross value added in 2009-105. The major industry contributing to this outputwas engineering, accounting for 41% of gross value added while textiles,leather and apparels accounting for another 21%.1 Provisional Population Totals at a Glance Figure : 2011: Punjab (Census of India)2 RBI Handbook of Statistics 20113 Annual Survey of Industries 2009-20104 RBI Handbook of Statistics 2011. Growth rates have been calculated on Current Prices5 RBI Handbook of Statistics 2011 and Annual Survey of Industries 2009-10 Average 7
  8. 8. Engineering sector and its relevance to growth of Punjab’s economy Figure 2: Share of total output by industry sectors in Punjab 22.9% Engineering 26.4% Textiles leather Food beverages Chemicals pharmaceuticals Others 8.4% 22.4% 20% Source: Annual Survey of Industries 2009-2010 Engineering sector is a major contributor to the economy of Punjab. Over the last decade (2000 to 2010) it has grown at 16.4 % annually (CAGR). Today, while it represents about 23% of total industrial output of Punjab it only forms 2.9% of engineering industry contribution at the national level. This is in contrast with engineering output from neighbouring states like Haryana and Uttarakhand which share some of the same geographical advantages and disadvantages as Punjab but have raced ahead due to supportive industrial policies, availability of suitable infrastructure and better industrial climate in these states. Figure 3: Engineering sector contribution from Indian states 2012 2.4% 2.4% 11.6% 2.9% 3.2% West Bengal 4.7% Rajasthan Punjab 6.9% Andhra Pradesh 21.2% Uttarakhand 7% Karnataka Uttar Pradesh Gujarat 7.9% Haryana Tamil Nadu 17% Maharashtra 12.6% Others Source: Annual Survey of Industries 2009-2010 In the last decade (2000 to 2010) the growth in Punjab’s engineering industry has been behind the national average of 17.0% (CAGR)6. Nevertheless it has 6 CAGR (Compounded Annual Growth Rate) is the constant annually compounded rate of growth which would lead to output in 2010 starting from the respective industrial output in year 2000. These rates have been calculated using data from Annual Survey of Industries 2009-2010.8
  9. 9. CII – Valcon Reportbeen responsible for a big proportion of the industrial growth in Punjab in past10 years due to its relative size. ƒƒ While engineering sector accounts for nearly 23% ofMore than 90% of the engineering Industry output from Punjab is from three Punjab’s industrial output,subsectors. Automotive and auto components have the largest contribution with its share is a meagre 2.9%large number of component manufacturers supplying to OEMs around Delhi and amongst all statesin Uttarakhand. Several of the components manufacturers also supply to the ƒƒ Engineering industries inlocal tractor and farm equipment industry (classified under special purpose nearby states like Haryanamachinery). Profitability of the sector is relatively poor with average profits being and Uttarakhand are seen5% of total industrial output. to be doing better than Punjab in their contributionFigure 4: Respective size of engineering related industries in Punjab to national output Aerospace defence ƒƒ Most of engineering 5.63% 0.78% 4.88% Medical equipment industrial output in Punjab is 2.98% 0% 0.03% Automotive auto components from low margin industries Castings, forgings fabrication 38.26% Special purpose machinery 21.71% Industrial equipment components Consumer electrical electronic eqpt. including appliances Industrial electrical electronic eqpt. Heavy vehicles transportation 25.74%Source: Annual Survey of Industries 2009-2010; Valcon analysisFigure 5: Respective profit contribution of engineering related industries in Punjab 2.11% 0.35% Aerospace defence 6.82% Medical equipment 2.63% 27.67% Automotive auto components 0% 0.03% Castings, forgings fabrication Special purpose machinery Industrial equipment components Consumer electrical electronic eqpt. including appliances 41.93% Industrial electrical electronic eqpt. Heavy vehicles transportation 18.46%Source: Annual Survey of Industries 2009-2010; Valcon analysisThe second largest engineering subsector is castings, forgings and fabrication.This sector supplies to customers in metal and mineral processing, heavyvehicles and transportation, industrial equipment manufacturing, construction,automotive and other diverse industries. Customers are spread across thecountry as well as several businesses have significant exports. Poor profitability 9
  10. 10. (5% of output) in this large sector is due to the low value adding nature of the subsector. The third largest sector, special purpose machinery, is responsible for 23% of Punjab’s engineering sector output and has a high profitability (13% of output). It is responsible for nearly 43% of the profits from Punjab’s engineering sector making it the major source of profitability for Punjab’s engineering industry. This sector includes tractors and other farm equipment; machine tools, metal forming machinery, machinery for mining, quarrying and construction; machinery for processing of food and beverage, textile, apparel, leather, paper, rubber and plastics. Many of the machinery manufacturing businesses are profitable due to local prominence of their customer industries like agriculture; textiles and apparel manufacturing; leather, food, beverage, and rubber processing, etc. Consumer electronics, including household appliances, is the only other notable subsector contributing 7.2% of engineering industry profits in Punjab despite being responsible for less than 4% of output. This is due to high profitability of 13% generated by this sector.* The growth scale has been made linear Figure 6: Status of growth versus profitability of engineering sector in Punjabbetween the lowest and median values andmedian and highest values. The bubble Special purposeposition indicates the relative rank of the 10.0 machinerysub-sector on this scale. The size of the 9.0 Consumer/businessbubble indicates the size of the sub-sector in electrical terms of its gross output. 8.0 electronics 7.0 Medical equipment Industrial equipment Automotive auto 6.0 Castings forgings components components Profitability fabrication 5.0 4.0 3.0 Heavy vehicles Industrial electrical 2.0 transport electronic equipment 1.0 0.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 Growth Source: Annual Survey of Industries Data 2008-2009 and 2009-2010, Valcon analysis In summary, majority of engineering industry output from Punjab has poor profitability and hence there is significant opportunity to improve the sector performance. At this stage, we take a look at the performance of engineering sector in the country and the opportunities for growth available in various sub-sectors of the industry.10
  11. 11. CII – Valcon ReportOpportunities in engineering sectorEngineering sector overview in IndiaThe engineering sector is the largest segment of Indian industry and employsmore than 40 lakh1 skilled and semi-skilled workers. It forms a significant part ofthe manufacturing industry and is very diverse in nature.India is also a major exporter of engineered products and services which isestimated to touch ~USD 68 billion (~INR 360 thousand crores) by FY 20152. Thisis primarily due to its comparative advantage of lower design, research labourcost. The engineering sector is 100 per cent de-licensed and has accounted for8.9% of FDI inflow2 since April 2000.Classification of engineering sectorsThe key engineering sub-sectors which are part of the manufacturing sector inIndia and have been focused upon in this report are:ƒƒ Aerospace and defenceƒƒ Medical equipment and appliancesƒƒ Industrial electrical and electronicsƒƒ Special purpose machinery yy Farm and construction machinery yy Other process equipment yy Metal forming and machine toolsƒƒ Heavy vehicles and transportationƒƒ Industrial equipment and componentsƒƒ Castings, forgings and fabrication yy Castings and forgings yy Metal fabricationƒƒ Automotive and auto componentsƒƒ Consumer and business electrical and electronicsSome of these sub-sectors are inputs to others while some of them cater to theconsumers directly.In terms of the gross output from these engineering industries we find thatautomotive and auto parts and industrial electrical and electronics contributemore than 50% of the output. These sectors are also among the oldest sectorsalong with the castings, forgings and fabrication sectors. Some of the newersectors like aerospace and defence as well as medical equipment andappliances are seeing a lot of impetus from both private and public enterprises. 11
  12. 12. Figure 7: All-India engineering industry output by sub-sector in 2009-2010 0% 8% 1% 12% 2% Aerospace defence 19% Medical equipment appliances Consumer/business electrical 33% electronics Automotive auto parts Castings, forgings fabrication Industrial equipment components Industrial electrical electronics Heavy transport vehicles 10% Special purpose machinery 15% Source: ASI 2009-2010 In order to evaluate the business attractiveness of these sectors we have analysed them on the following business parameters: ƒƒ Net profit profitability ƒƒ Growth ƒƒ eturn on gross fixed asset (only plant and equipment). This measure is a R ratio of net profit to gross value of plant and machinery (RoGFA). ƒƒ Investment requirements. It has been evaluated using the measure of average capital deployed per factory. Evaluating the various sub-sectors for their performance on growth and profit- ability, we find that the following stand out as more attractive than others, in India: ƒƒ Heavy vehicles and transportation ƒƒ Medical equipment ƒƒ Farm and construction machinery ƒƒ Automotive and auto components ƒƒ Metal fabrication12
  13. 13. CII – Valcon Report Figure 8: Growth and profitability of engineering sub-sectors in India * The growth scale has been made linear between the lowest and median values and 10.0 median and highest values. The bubble Medical equipment Heavy transport position indicates the relative rank of the 9.0 vehicles sub-sector on this scale. The size of the Industrial equipment bubble indicates the size of the sub-sector 8.0 components in terms of its gross output. 7.0 Aerospace defence Consumer electrical Farm construction 6.0 electronics machineryProfitability 5.0 Other process equipment 4.0 Metal fabrication Industrial electrical 3.0 electronics Castings forgings Automotive auto 2.0 components 1.0 Metal forming machine tools 0.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 GrowthIn order to understand the attractiveness in terms of entering certain sub-sectors, we have compared on return on gross fixed assets† vs. average capitalemployed per factory. As can be seen from the graph (see figure {9} the mostattractive sectors where the return on gross fixed assets is high while theaverage capital employed per factory is low are:ƒƒ Farm and construction machineryƒƒ Heavy vehicles and transportationƒƒ Industrial equipment and componentsƒƒ Other process equipmentƒƒ Medical equipmentƒƒ Metal fabrication† It only includes plant and equipment 13
  14. 14. * The growth scale has been made linear Figure 9: RoGFA vs. avg. capital deployed per factorybetween the lowest and median values andmedian and highest values. The bubble 10.0position indicates the relative rank of the Heavy transportsub-sector on this scale. The size of the 9.0 vehiclesbubble indicates the size of the sub-sectorin terms of its gross output. 8.0 Automotive auto Avg. capital deployed per factory components Industrial electrical 7.0 electronics Industrial equipment components 6.0 Farm construction machinery 5.0 Consumer electrical 4.0 electronics Medical equipment Other process equipment 3.0 Castings forgings 2.0 Metal fabrication 1.0 Metal forming machine tools Aerospace defence 0.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 RoGFA In addition to the above parameters, it is also important to consider the size of the sectors since it indicates more opportunity. Automotive and auto components which is the largest sub-sector under engineering with a strong growth trajectory is an important sector to consider. Considering all the above mentioned parameters simultaneously and giving higher weightage to profitability and RoGFA, we identified the following sub-sectors for detailed study: Avg. capital employed per Sub-sector Growth rate Profitability RoGFA factory Farm construction High Medium High Medium machinery Heavy vehicles High Medium Medium-Low Medium-High transportation Medical equipment High High Medium-High Medium-Low Industrial equipment components Medium Medium-high Medium-High Medium Metal fabrication Medium Medium Medium-High Low Note: Lower avg. capital deployed per factory lowers the entry barriers for firms Some of these sub-sectors such as farm and construction machinery and automotive and auto components have a strong resonance to Punjab’s engineering sector The following section delves deeper into each of these sub-sectors and their typical characteristics.14
  15. 15. CII – Valcon ReportEngineering sub-sectorsMedical equipmentIndia’s medical equipment market – valued at $4.9 billion (INR 25.8 thousand An estimated three-quarters of India’s demand for medicalcrores) – is Asia’s fourth-largest (behind Japan, China, and South Korea) and is devices is currently met byprojected to reach $8 billion (INR 42200 crores) by 2015, as health insurance imports, nearly 30% of whichbecomes more widely available and the country’s middle-class consumers are supplied by the Unitedcontinue to demand better healthcare services. States.India’s rapidly growing healthcare market is providing significant tradeopportunities for medical device firms. An estimated three-quarters of India’sdemand for medical devices is currently met by imports, nearly 30% of whichare supplied by the United StatesBy 2050, India is expected to overtake China as the world’s most populatedcountry, with a projected population of 170 crores. By 2025, India’s elderlypopulation (aged 60 and above) is expected to reach nearly 200 million.Figure 10: Medical devices market 6 5 4 US $ billion 3 2 1 0 2006 2009 2012Source: FICCI reportKey segmentsMedical instruments and appliances, orthopaedic and prosthetic appliances arethe key segments in this category with 25.10% and 20% share. Theconsumables such as bandages, medical supplies and syringes contribute closeto 20% to this category. 15
  16. 16. Figure 11: Key segments of medical equipment 15.20% 25.10% Medical instruments appliances X Ray apparatus Bandages other medical supplies 10.20% Orthopeadic, prosthetic appliances Syringes, needles Electromedical Others 9.5% 12% 7.6% 20% Source: www.aimedindia.com The Indian medical technology industry is highly competitive and fragmented, with domestic firms primarily manufacturing low technology products such as disposables/medical supplies, and MNCs primarily importing high end medical equipment. MNCs seeking to enter the industry typically form joint ventures with local manufacturers, establish subsidiaries or employ local agents to distribute their products. Key growth drivers ƒƒ Faster upgradation of existing technology and global new product innovation ƒƒ Availability of advanced and sophisticated medical technology ƒƒ Medical tourism is being promoted by the government and stimulated by the corporate boom in medical care driving private care providers to upgrade their medical technology infrastructure ƒƒ Increased penetration of health insurance leading to increased coverage of high cost treatment ƒƒ Rising disposable income/purchasing power Key challenges ƒƒ Penetration is very low in rural/towns/smaller towns due to affordability. Rural healthcare providers would want a cheaper and cost effective solution and don’t opt for high end products ƒƒ Unclear government regulation coupled with ambiguous quality standards is also a key challenge faced by this sector Way forward ƒƒ Financial engineering along with product sales can dramatically enlarge the market16
  17. 17. CII – Valcon Reportƒƒ se of technology to reduce cost, increase penetration such as telemedicine, U remote monitoring etc. Innovation is the keyƒƒ Sound regulatory framework is a key enabler for the growth of the medical Companies need to innovate technology and invest in RD to come out with cost effective solutions and think of economies ofFarm, construction and mining machinery scale so that they can reach more customers with the rightThis sub-sector caters to two significant sectors of the Indian economy; pricing.Agriculture and infrastructure which together contribute more than 25% toIndia’s GDP. Currently the farm and construction machinery sub-sector accountsfor only about 4% of the engineering sector output but has seen a growth rateof over 18% over the period FY2009 to FY2010.The farm machinery segment consists of diverse set of products across theagricultural value chain:Fig. 12: Agricultural value chain Weeding Tilling seeding Post harvest Sowing plant Harvesting preparation processing protection Tractors Seeders Harrow Harvester Seed extr. Levelers Planters Tiller Thresher Dehusker Ploughs Transplanter Sprayer Reaper Mill Duster DryerAmongst all the products, tractors are the largest segment in India and is alsoone of the main categories of products exported. Several Indian companies likeTractors Farm Equipment Ltd. (TAFE), Mahindra Mahindra, Escorts AgriMachinery Group, etc. have built successful business with tractors as their mainproduct category. India is the world’s largest producer of tractors and accountsfor a third of the world’s production. India is a net exporters of tractors, whichhas grown at a CAGR of 17% over the last 5 years. The domestic market hasgrown at a CAGR of ~15% over the last 5 years with North India being thelargest market. 17
  18. 18. CII – Valcon report on enginnering industry in Punjab Figure 13: Region wise tractor sale FY 2008 and FY 2009 Increased mechanisation and 9% 13% lower labour availability is driving the domestic demand 18% 21% for farm equipment. In addition, 38% 36% cost pressures in the international markets are forcing global players to 8% source components and assemblies from India in 10% growing volumes. Central 26% Central 19% West West East East South South North North Source: CMIE Prowess The tractor industry is very organised and also fairly consolidated as can be seen from the market share trends below: Sub sector FY 2008 FY 2011 FY 2012 Mahindra Mahindra Ltd. (MM Ltd.) 34% 39.6% 39.2% Tractors Farm Equipment Ltd. (TFEL) 21% 21% 24.0% Escorts Ltd. 13% 12.1% 10.3% John Deere Equipment Pvt. Ltd. 8% 9.8% 9.2% International Tractors Ltd. 8% 8.5% 8.3% Sources: CMIE Prowess, IAS Key drivers ƒƒ Increasing need for mechaniation. The difficulty in getting manual labour due to urbanisation and the need to improve productivity are driving the use of machinery to enable sustainable farming ƒƒ Emergence of corporate sourcing from farmers. This has led to an increase in margins available to the farmer enabling the drive for greater productivity ƒƒ Better financing and credit schemes in rural areas. Government subsidies and also organised money lending by co-operative banks has given avenues to the farmer to procure farm machinery18
  19. 19. CII – Valcon ReportThe government has estimated that investment worth INR 40 lakh crores will bemade over the 12th five year plan period in Infrastructure development in the Infrastructure growth hascountry. The key areas of infrastructure are rail, road, power, ports and airports slowed down but it is anwhich contribute about 66% to the construction sector in India while residential imperative if growth in Indiaand commercial account for 27% and 7% respectively. Private participation in needs to be sustained.the infrastructure sector is set to rise to 50% of the total infrastructure Increasing number ofinvestment. This growth is one of the primary drivers for the construction international firms are settingequipment sub-sector. up manufacturing and sourcing operations in India to cater toConstruction and mining equipment consists of machinery such as hydraulic domestic as well asexcavators, backhoe loaders, bull dozers, dump trucks, pavers, wet mix plants, international demand.cranes, fork lifts, dozers, etc. with an estimated market size of INR 14,740crores.A classification of this equipment is as shown below: Construction mining equipment Material handling Earth moving equipments Other machineries equipments Backhoe loaders Conveyors Concrete mixers Wheeled loaders Forklifts Road rollers Excavators Automated storage Pavers Trenchers Automated guided vehicle Spraying plastering M/C Bulldozers Cranes hoists Hot mix plants Dumpers Robots, etc. Crushers Graders Pumps (heavy duty) Compactors Slurry seal machines Scrappers, etc. Tunneling drilling Machines Tippers, etc.Source: Industry sources, DB ResearchBackhoe loader is the largest segment in the sector, in terms of volume followedby hydraulic excavators and mobile cranes.The Indian construction and mining equipment industry is estimated to havepresence of about 200 players, though can be considered as organised asplayers in the organised sector are estimated to account for about 80-85% ofthe revenue and the top four player s together account for ~85% of totalmarket share. JCB India Ltd. is the market leader in the Indian construction andmining equipment market, accounting for ~30% of total market share, followedby BEML Ltd (~18%). 19
  20. 20. CII – Valcon report on enginnering industry in Punjab Figure 14: Major players 16.3% JCB India Ltd. BEML Ltd. 30.6% Tecpro Systems Ltd. Mcnally Bharat Engg. Co. Ltd. 9.3% LT Komatsu Ltd. Others 12.1% 18.3% 13.6% Source: Industry Sources, CMIE Prowess, DB Research Raw material expense is the largest operating expense component in the sector, accounting for ~56.7% of total sales in FY 2012. Iron and steel are the two main raw materials used in the segment. Evaluating the farm and construction equipment sector on some of the operational parameters gives a better perspective of the governing factors for success in this sector. Here we have compared this against auto components to give greater clarity on their relative requirements. As we can see here the farm, construction and mining machinery industry has relatively similar product complexity but has a lower requirement for precision. Also given that on an average this sector has a larger product size it implies a higher value product. Figure 15: Product complexity and product size High High Auto components Product valueadd Farm construction Precision levels machinery Farm construction machinery Auto components Low Low Low High Light Heavy Product complexity Product size20
  21. 21. CII – Valcon ReportMetal fabricationThis is a highly fragmented and labour intensive sector with medium and smallscale industries heavily dependent on job work. Fabrication applies to thebuilding of machines, structures and other equipment, by cutting, shaping andassembling components made from raw materials by using various mechanicalprocesses such as welding, soldering, forging, brazing, forming, pressing,bending and stress removal. Welding is a major process input in mostfabrication jobs.Since the demand for fabrication sector comes from the engineering sector, Steel availability coupled withespecially capital goods, the growth of fabrication industry largely depends on labour availability enablesthe overall industrial scenario. The fabrication industry caters to many sectors Indian firms to deliversuch as transportation, construction and structures, industrial and heavy fabricated products which areequipment, packaging, consumer products, etc. The major user industry for the competitive globally. Domesticfabrication sector is the general structural fabrication followed by the railway demand for structural steeland shipping, machine building and construction. (on-site and off-site) is driven primarily by the coreRaw material is the primary cost driver of this industry and is easily available in infrastructure segments andIndia, only special steel needs to be imported. However, with prices of steel construction segmentsincreasing on global and domestic level, slowing demand and manufacturers in (residential and commercial).the engineering sector planning a reduction in production capacity, the growthof this industry is likely to undergo a moderation in the near term.Figure 16: Cost structure [%] (2011) 0% 3.1% Increase in stock 2% Raw materials 0% Power generation and distribution Other manufacturing expenses Employee cost 10.4% Selling and administration expenses Miscellaneous expenses Depreciation 7.1% 61.9% Other operational expenses 9.6% 5.8%Source: Ecotrends 21
  22. 22. Key drivers ƒƒ roject based – core industry sector plays a major role and effects upstream P and downstream fabricators ƒƒ edium and small scale industries heavily dependent on job work M ƒƒ More power dependant compared to a machining industry ƒƒ rowth also dependent on growth in the engineering sector, especially G capital goods industry ƒƒ Construction industry will drive the demand for small units and also on site fabrication for structural elements Future growth outlook ƒƒ General structural fabrication will continue to grow (example: cement, power, two-wheeler frames, etc.) ƒƒ ousing sector growth will affect performance of small and medium H fabricators ƒƒ lectrical and power projects – major impetus for future success E Evaluating the metal fabrication sector on some of the operational parameters, shows us that the precision requirements are far lower than auto components and also has lower product complexity. On the other hand it is more labour intensive and requires higher skill level since there are more manual intervention as compared to auto components. This gives a fair indication of the cost drivers and importance of skilled labour in this sector. Figure 17: Product complexity and operator skills High High Metal fabrication Auto components Labour intensiveness Precision levels Auto components Metal fabrication Low Low Low High Light Heavy Product complexity Operator skills22
  23. 23. CII – Valcon ReportIndustrial equipment and componentsThis sector consists of varied set of equipment with application across all majorindustries including power, automotive, construction, capital goods, etc. Thevarious categories which form this sub-sector are as shown below with enginesand turbines (33%) forming the largest category. Refrigeration, air-conditioningequipment (19%), pumps and compressors (14%) and bearings and gears (13%)constitutes the other key categories.Figure 18: Revenue share by segment Engines turbines 19% Hydraulics pneumatics 33% Pumps, compressions valves 0% Bearings gears Heating equipment 10% Lifting handling equipment Power driven hand tools 3% Refrigeration, air-conditioning, fire extinguishers weighing machinery 8% 13% 14%In terms of their profit contribution to the sector the main segments are enginesand turbines, pumps, compressor and valves and refrigeration and airconditioning.Figure 19: Profit share by segment 11% 0% Engines turbines 50% Fluid power equipment 7% Pumps, compressions valves 2% Bearings gears Heating equipment 10% Lifting handling equipment Power driven hand tools Refrigeration, air-conditioning, fire extinguishers weighing machinery 14% 6% 23
  24. 24. Engines and turbines The main sector that this segment caters to is the power generation sector and generally grouped under the boiler-turbine-generator (BTG) segment. Figure 20: Revenue share by segment 10% Boilers Turbines Generators 27% 63% Source: IBEF Report on Elecrical Machinery It is expected that about 40% increase in thermal power capacity will be seen in the 12th five-year plan period. Most of the equipment for the projects under execution is being supplied by Chinese OEM’s with BHEL and LT MHI being the other significant player. Figure 21: Share of OEMs for super-critical projects under execution 12% China-based OEMs BHEL LT-MHI 15% Others 57% 16% Source: ICRA Research With many bilateral nuclear agreements in place, India is expected to become a major hub for manufacturing nuclear reactors and associated components. The Indian Government proposes to add 3,380 MW of nuclear power capacity by 2012.There is a huge opportunity for players to re-orient and focus their efforts to develop technology for higher capacity thermal units and nuclear reactors.24
  25. 25. CII – Valcon ReportThe key challenge facing the sector is the delay in project execution whichimpacts the order flow and cash flow. Also transport of this equipment facesmajor issues due to the absence of good quality infrastructure.Raw material is the primary cost driver followed by employee cost.Figure 22: Cost structure [%] (2011) 0.1% 2.2% 2.9% 5.5% Increase in stock Raw materials 12.7% 0% Power generation and distribution Other manufacturing expenses Employee cost 5.4% Selling and administration expenses Miscellaneous expenses 1.1% Depreciation 70.2% Other operational expensesSource: EcotrendsKey driversƒƒ Increasing demand for energy and large investments in the energy sector The BTG as well as pumps andƒƒ Civilian nuclear deals between India and other nations will encourage compressor segments are growth in the nuclear power generation sector driven by the growth in power and oil and gas sectors.Pumps, compressors and valves Technology capabilities play an important role in the highThis category of products is used across multiple sectors like oil and gas and value/performance sectorsagriculture and power generation. Pumps and valves comprise of more than Table 10 Pumps valves compressors and there is a need fortwo-thirds of this INR 12,000-14,000 crore sector while compressors is the domestic companies to investother category. in RD to build more profitableSome of the major players in the Indian market are: businesses. Pumps Valves Compressors Kirloskar Brothers Ltd. Flowserve Corporation BHEL CRI Pumps Tyco Flow Siemens Crompton Greaves LT Audco Ingersoll Rand KSB Fisher Sanmar Atlas Copco Bharat Bijlee BHEL Dresser Rand 25
  26. 26. Compressor design complexity implies a fewer number of domestic manufacturers while pumps and valves market has a significant unorganised segment. In India the Rotary compressors dominate the market with 85% share. Figure 23: Pumps market share - organised vs unorganised Organised retail and processed food sectors will Unorganised drive a wave of growth in the Organised cold chain infrastructure across the country. A large number of domestic and 56% 44% international players are gearing up for it. Source: Netscribes – Pumps Market 2011 Key drivers ƒƒ Growth in oil and gas sector with large number of projects ƒƒ Irrigation projects with the government’s increased focus on agriculture Refrigeration and air conditioning equipment This sector is seeing a boost in its growth with increased need for cold chains to be established. The process of storing, transporting and displaying food at appropriate temperatures will gain more significance. Refrigeration segment is expected to grow at about 10-15% over the next 3 years while the air conditioning segment is poised for a 15-20% growth over the same period. Figure 24: Market share by segment 8% Air conditioning systems Commercial refrigeration 14% ACR servicing 78% Source: AIACRA26
  27. 27. CII – Valcon ReportThere are large number of Indian and international firms which have a strongpresence in this sector such as Blue Star, Carrier, Haier, Voltas. The keycomponent of refrigeration and air conditioning systems are compressorwhich has been described in the previous section.Key driversƒƒ Growth in organised retailƒƒ Growth in processed food sectorƒƒ Increased need for air conditioned commercial establishmentsAuto componentsGrowth in automobile sector has been one of the key drivers of the economicgrowth of the country. However, Indian auto components industry has beenwitnessing a moderation in its revenue growth to 16% in FY 2012 as comparedto the average growth of above 30% in previous two fiscal on the back ofslowing automobile sales.Figure 25: Comprehensive product range 7% 9% Electrical parts 10% Equipment Suspension braking parts Body chassis 31% Drive transmission steering parts 12% Engine parts Others 12% 19%Source: www.acmainfo.comAs compared to the auto component market overseas, India focuses primarily onthe ancillary and equipment segments rather than engine and suspension parts,due to its developing RD capabilities. Contribution of suspension and brakingparts and Equipment is going to improve in the years to come due to use of 4wheel drive and increase in replacement market.India is one of the largest auto components market with a production turnover ofINR 226 thousand crores in FY 2012. It has grown at a CAGR of ~18.7% over FY2008-12. Growth in domestic auto industry and demand from export market ledto the growth of auto component industry. 27
  28. 28. Figure 26: Growth of Indian auto components industry Indian auto component industry comprises of round 7000 600 companies in the E % 5876 6000 13 organised sector which wt h gro account 85% of the production ted 5000 tima whereas more than 6,000 Es INR (billion) companies involved in the 4000 3447.6 unorganised market. 3000 2262 2074.8 2000 1565.2 1378 1196 1000 0 2007 - 08 2008 - 09 2009 - 10 2010 - 11 2011 - 12 2015 - 16(E) 2020 - 21(E) Year Source: www.acmainfo.com As per industry estimates, out of the total turnover of the Indian auto components industry, around 60% is derived from sales to domestic OEMs, around 25% comes from sales to the domestic replacement market and around 15% is derived from exports Competitive scenario Indian auto components industry apart from being categorised into OEMs and replacements market is organised but highly fragmented in nature. Table 11 Competitive scenario Indian auto component industry comprises of round 600 companies in the organised sector which account 85% of the production whereas more than 6,000 companies involved in the unorganised market. Company Number of companies Turnover range (INR Bn) classification in organised sector Medium 10 14 Small 2.50 - 10 85 Mini 0.50 - 2.50 200 Micro 0.50 30528
  29. 29. CII – Valcon ReportAltogether top five players account for ~9.24% of the market while top tencompanies corner ~11.93% of the market. Low share of leading companiesindicate the fragmented nature of the industry.India has been a net importer of auto components during FY 2008-12 and whileimports continue to grow at 25%. However, exports continue to be the beaconof hope despite the slow-down in the global economy.Export-import dynamicsExports to European region accounted for highest share in auto component India remained a net importerexports from India of 39% in FY 2012, followed by America region (30%), Asia of auto components during FY(19%). However, the exports to Africa region recorded highest y-o-y growth of 2008-12. Imports continued toabout 55% followed by over 39% growth in exports to European region during grow at 25%, exceeding USDthe similar period. 10.5 billion compared to USD 8.5 billion in the previous yearFigure 27: Growth of exports vs imports as compared to growth of exports at 18%. 28 Exports 334 FY 2012 14 514.4 Imports 237.1 FY 2011 387.6 160 FY 2010 306.8 184 FY 2009 312.8 159.6 FY 2008 260.4 0 100 200 300 400 500 600Source: crisil.com www.acmainfo.com 50Key driversƒƒ The performance of auto component industry is totally dependent on the performance of automobile sector. The future outlook is still better with auto component mirroring the auto industry growth at a rate of 13-15%ƒƒ Increasing focus on localisation of vendor baseƒƒ Sourcing of auto components by international automobile companies to cut costsƒƒ Increasing focus towards quality certification which has now led to increased purchase of parts from the organised market 29
  30. 30. Figure 28: Growth of auto components relative to growth of auto industry 40% % growth 20% 0 0 1 2 .. .. -1 -1 -1 -. -. 15 20 09 10 11 20 20 20 20 20 Auto component Auto industry Source: CMIE IAS Key challegens Though in the long term, auto component’s growth prospects are strong, it is facing challenges and bottlenecks to growth: ƒƒ Financial viability in face of ever increasing cost pressures ƒƒ Tier 2/3 companies also face challenges of low return on investment which prevents scaling up of operations ƒƒ Economic condition. High interest rates coupled with inflation and weakening of the rupee ƒƒ Work force management ƒƒ Government’s move to push for more multilateral and bilateral trade Government initiatives to promote growth and innovation ƒƒ The government has proposed to formulate a sequel of AMP II (2018-27) to put in place a framework for the long term growth trajectory for auto and auto ancillary sector ƒƒ Creation of Technology Up-gradation Development Scheme (TUDS) for auto components and setting up of Auto Component Technology Development Fund (ATDF) which will help auto component companies in accessing loans at reduced rates of interest for research and development activities, upgradation of process and technology acquisition ƒƒ Auto Component Manufacturers Association (ACMA) has identified the long term investment requirement by auto component industry during 2012-16 of about ~INR 15,000 crores of which ~INR 7,500 crores are proposed to be financed through soft loans with interest subvention30
  31. 31. CII – Valcon Reportƒƒ The government has allowed 100% foreign equity investment in the sector, through the automatic route, without any minimum investment criteria The auto components industry in India is around two-thirdsFuture growth outlook the size of the OEM segment.There is no doubt the medium to long-term growth story of India remains intact, This proportion is around onehowever auto component industry will have to get used to such transient to two times in mature marketsups-and-downs arising from the difficult economic situation. Significant of Europe, America and Japan.opportunities exist to enhance share in the global automotive market. Industriesneed to invest in design and development to move up the value chain.Currently, the auto components industry in India is around two-thirds the size ofthe OEM segment. This proportion is around one to two times in mature marketsof Europe, America and Japan. This indicates:ƒƒ Higher proportion of imports of auto components in India by OEMs andƒƒ Lower replacement market salesOther sub-sectorsThe following sub-sectors also appear to have a larger scope for businessgrowth over the medium term:Electronics (engine-side and body-side) – The localisation proportion ofelectronic components in Indian cars remains low as of now. Given the growingneed to offer driver information systems, engine management systems andemission control systems in cars to meet the advancing safety and emissionregulations, the use of electronics in Indian cars is likely to see a proliferation inthe times to come. This should translate into strong growth for auto ancillarieshaving capabilities in this segment.Plastics – Although this segment is already quite competition intensive,considering OEMs’ focus on adopting light-weighting technologies and alreadyseveral instances where material of components has been changed by OEMsfrom sheet metal to plastic; it augurs well for auto component manufacturershaving strong capability in the plastics space. Sheet moulded composites, bulkmoulded composites and long fibre thermoplastics are some of the newmaterials being used to replace metal and conventional plastics.Aluminium die-casting – In the boom period of 2009-10 and 2010-11, the autoindustry had experienced significant capacity constraints for aluminium die-castcomponents. The capacity shortage was more severe at tier-2 suppliers’ end andthis had prompted few tier-1 players to backward integrate not just for captiveconsumption but also for selling to other customers. Also, for select enginecomponents, OEMs are likely to demand tighter product tolerances to meet thestringent emission control norms which in turn is likely to increase per unitrealisation for auto ancillaries manufacturing such components (although at thecost of higher capital investments). 31
  32. 32. Aerospace and defence – Sunrise sector with strong long term potential Overview This sector is currently in its nascent stages in India but presents a large opportunity. Until now, most projects are executed by PSU or government research agencies which have the RD and technological expertise. But with more private players acquiring technological capability by way of JV’s, acquisitions or talent inflow have begun to play a more significant role not just domestically but also on the international stage. Key drivers ƒƒ 100% private sector participation with defence having a restriction of 26% FDI ƒƒ Offset policy from large defence spend ƒƒ Strong maintenance, repair and overhaul (MRO) capabilities ƒƒ Continued growth of civil aviation ƒƒ Investments in the Indian space programme – INR 40,000 crores during the period 2007-2012 Key challenges ƒƒ Moving up the value chain from being tier 2-3 suppliers to tier 1 suppliers ƒƒ Building design and integration capabilities ƒƒ Availability of highly skilled workforce ƒƒ High import duties on imported components ƒƒ Access to funding for high initial capital investment Overall sector outlook Demand in the engineering sector is expected to remain healthy primarily on account of the government increased thrust on infrastructure development in turn having positive impact on various sub-sectors. Favourable government policies and regulations would enable the sector to scale up its growth potential. Increased spend in defence, improving medical infrastructure, indigenisation of auto components to tap export potential, farm and construction equipment are going to be critical drivers for growth of this engineering industry. The next section analyses Punjab’s strength in leveraging the growth potential.32
  33. 33. CII – Valcon ReportPotential for Punjab’s engineeringindustryStrengths and weaknessesThough Punjab has been an agriculture dominated economy sinceIndependence, the state occupied an important position in the engineeringsector of the country. The industrial towns like Ludhiana, Amritsar, Jalandhar,Mohali, etc. host several small, medium and large industrial units. Dominatedby small and medium enterprises, Punjab excels in production of leather goods,textiles, machine and hand tools and paper packaging.Local availability of raw material, skills and market demand have contributed tosignificant growth of these industries. All of this was adequately supported bythe enterprising spirit of Punjab’s businessmen who instilled flexibility in runningtheir operations to meet diverse customisation requests and customerexpectations.The success of the engineering industry is primarily due two reasons: the spurtof agricultural growth that aided the manufacturing to move out of infancythrough sustained local demand, and the ability of the businessmen to thinkahead of time and ahead of competition.Examples of such forward thinking include use of automation in textilemanufacturing, development of machine tools industry, leadership in highvolume bicycle market and so on.However, it would not be prudent to say that all local companies have adoptedinnovative thinking and best practices. Companies have usually focussed on oneor two strengths that would set them apart from the competition. This is alsoreflected by inputs received during our discussions across industries in Punjab(see figure {29}). 33

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