4. Incredible India
India
• Population (2010) 1,186,500mill
• Area 3,287,263 sq. km
• Capital New Delhi
• Capital’s population 12.3 mill
• GDP Growth (2009) 7.2%
• Inflation (2009) 7,0%
• GDP/Capita (2009) 1,017 USD
• GDP Composition
• Agriculture 18%
• Industry 29%
• Services 53%
Demographical data Age 0-14: 31%
• Age 15-65: 64%
Age > 65: 5%
Religions Hindus 80.5%
• Muslims 13.5%
Coastline 7,516 kilometers
5. Primary sectors share of GDP
Source :Statistics of India – TATA Services Limited (Dept. of Economics & Statistics)
5
7. India on Accelerated Growth Path
Investments Required Over Next 5 Years – More Than US$ 430 Billion
Source : Planning Commission Report / DGH / other sources
In $ Bn
7
20. NORWEGIAN VALUE LENS NEGATIVE
VALUE
ASPECT
Life
aligned Irrational
Honesty & Naive
with nature idelalist
Trust
Caring for Isolationist Overbearing
Self- Others
sufficiency
Self-
Self-confident & righteousness
Passion for
Independent Self-willed
fairness
Copyright: Innovation Norway & ICMC AB
21. INDIAN VALUE LENS
VALUE NEGATIVE ASPECT
Too Cautious
Security and Fearful
Favouritism Submissive and
Traditional Respect for Authority
and Lack of Initiative
Networks
Corruption
Romance over Superficiality &
Contextual Form Over Lack of
Worldview Raionality Attention to
Substance
Detail
Source: Innovation
Norway and ICMC
AB
25. Coverage details
Segment Sub segment Interviews
End users Pharma 18
FMCG 20 Baddi
Delhi
Food & 19
Beverages
Automotive 5 Kolkata
Baroda Indore
Consumer 7
Durables Ahemdabad
Nasik Nagpur
Silvassa
Retail chains 5 Daman Aurangabad
Pune
Mumbai
Paints & 7 Hyderabad
Lubricants
Bangalore Chennai
Label manufacturers 70
Raw material Label stock 7 Tirupur
supplier Sivakasi
Ink 3
Interviews conducted from January (21st onwards) to March 2009
Adhesive 2
Key cities covered : Mumbai , Bangalore, Delhi, Chennai, Kolkata,
Machinery 5 Pune, Hyderabad, Daman, Baddi and Ahemdabad
Other cities covered: Nasik, Aurangabad, Indore, Nagpur. Tirupur,
Total 168
Sivakasi and Silvassa
25
26. Market size of labels in India (2007-08)
Total Market
Area of interest
Value – USD 175 mn
SAL Segment split
Value – USD 114 mn Domestic Value – USD 104 mn
Labelstock consumption: 206 mn sqm
* Exchange rate: 1USD= INR 48
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27. Major label manufacturers in India
Company Category Total Revenue No of plants Plant location Machinery Other sources of
revenue from SAL & revenue
2007-08 2007-08 (capacity in
(mn USD) (mn USD) units)
Label Mumbai
Interlabel Ind. Kopack and Deals in labelling&
manufacturer 13.42 5.42 2 Kolkata
Pvt. Ltd. Gallus scanning machinery
(420 mn)
Mumbai
Webtech Label Gallus EM 280
Parwanoo /
industries Pvt. manufacturer 5.21 5.15 2 and Mark Andy -
Kalka
Ltd. LP3000 & 2200
(400 mn)
Deals in other types of
Daman (250mn) IWASAKI TR-25
Printing & labels and printing
Ajanta Packaging 3.96 3.13 2 Baddi (100mn) and Nilpeter FB
Packaging publicity products
Line
,cartons, etc.
Lottery printing,
Printing
Syndicate Labels 2.08 2.08 1 Delhi (120mn) Gallus EM-280 special card printing
company
etc
Label Mark Andy,
SEL Jegat manufacturer 2.71 2.08 1 Sivakasi (110) Heidelberg Offset -
SM – 52
Label Bangalore Auto dials, decals,
Image Labels 4.58 1.67 1 Flexo machines
manufacturer (100mn) panels.
Deals in other types of
Packaging &
Mumbai (50mn) labels and printing
Mudrika Labels printing 2.5 1 2 Kopack 250
Vasai (75mn) publicity products
,cartons, etc.
Label
Chennai Orthotec CN 250,
SK Labels manufacturer 4.17 2.29 1 -
(125mn) Mark Andy 2200
27
31. Harald Nævdal Rajeev Koul Marianne Jensen Asheeesh Aggarwal
Tejas Sharma Rekha Gupta Arti Bhatia Kumar Praveena Peter
Editor's Notes
My presentation has 3 parts. They are: 1, 2, 3 I will og quickly through the first part and try to spend more time on the 2nd and 3rd part.
This is where I talk about India and the opportunities for business. This is very general and I am not very enthusiastic about presenting general details. There is a saying that god lies in detail. So if you want to explore India, you have to og into the details of your very specific business.
India is the second largest country in terms of population but 7th largest in terms of area. Predominantly, most people (60 to 70%) are farmers. Mosty people are poor but has seen expansion of the middle and rich class of people in last 20 years. There are people of all religions. 80% are Hindus but it still has the second largest population of muslims.
India became independent country in 1947. At that time nearly 60% of the national income was generated from agriculture and very little from services. The situation has reversed now. Nearly 60% of revenues come from services i.e businesses like software, banking, transport, etc. Industrial component is the same and that is a cause of concern, especially from the employment point of view.
We are a country of paradoxes. A country with a 19th century body and 20th century mind. A country with terrible infrastructure and excellence in space technology.
And this creates tremendous opportunities. If you look at per capita consumption of anything, we fare very low. For example, per capita consumption of agri chemicals in USA and japan is 17 kilos and in India it is jus 0.7 kilo. The same story carries in most areas. This makes this economy very attractive for most businesses. The potential is the greatest when it comes to development of infrastructure. But there are no free lunches. There are significant challenges when it comes to meeting this potential but that has to be a subject of an entirely separate discussion.
But if there is one thing that is going to make the difference for India, then it has to be its millions of young educated people coming out of colleges. Nearly half of the population is young and ready to contribute to the growth.
And to sum it up, we are 1200 million people. 120 million farmer families. A poor country with nearly 500 million living on less than 2 dollars per day. There has been a growth of the middle class and this stands at any place between 2 to 3oo million people. We have officially 125 thousand dollar millionaires but if I add the unofficial ones the figure could easily og up to 3 to 400 thousand millionaires. 55 billionaires officially and a few more unofficiallyl.
Innovation norway is an organisation meant for Norwegian companies, especially the smes. My intention here is to Introduce the organisation (especially for those who are not familiar with it) and then focus on how we approach our work for our clients.
In
We are a global organisation with offices in all the counties in Norway and at more than 30 locations globally.
We believe in giving an international perspective to our clients. We work from a perspective of as we say Bodo to beijing or drammen to delhi
Our work is based on knowledge and research. Our value addition comes from the research and analysis which we do at the beginng which goes as a key input for strategic follow up. We provide support on formulating your entry strategy – i.e if you have found the market potential, then you have to have a legal presence to make profit from the market i.e establish a company and the first question that comes to your mind is how to do it?, a liasion office, a branch office or a wholly owned subsidiary. We take care of everything. All the practical matters. You just have to fill up an input form and send us some documents and rest is our headache. At the same time we will assist you if you need to find partners, if you need to buy a company, acquire a stake in setting up a company and so on. We play an important role as a door opener for you. Especially owing to us wearing the hat of being the commercial section of the Norwegian embassy. This is most useful when you are dealing with the government. And the key to success is to identify the right and relevant partner. After setting up your company, you need to hire people and we can do this for you very efficiently. We believe that hiring the first few employees can make all the difference to the success fo your company. Our cultural and sectoral understanding can be very helpful in this stage.
To sum it up we assist our clients through consultation, research, partner search, business meetings, negotiations with partners and service providers; act as a bridge to connect with state agencies; guide in understanding local culture and enable you to interpret responses and various business practices.
Now the most important thing…..how do we approach our work; how do we think when we are assisting you; but most importantly how we want you to think. Why should you come to India; there can be many reasons but I will touch on three: it is people and people and people only. The large population of Indians, which you may call as the market or the consumer or ultimately your customer. What you need to start with is by asking the following questions: How big is the market? How much is your potential consumer base out of this entire market. And many of these consumers can you convert into your customers The game is to gain customers and our task is to assist you in doing this in most efficient way.
The Market size Now will be differrent for different products and services. And that is where you have to begin it. Know it very very very well. How big is the potential for you now but not only that: those who succeed are the ones who can see things 5 years down the line, 10 years down the line and much better if you have a real long term perspective.
Knowing more about your consumers is to know more about the competition. Who else is present in your market. For example when Volkswagen enters the market in India, it has to know about Suzuki, Hyundai, Honda, Tata, Ford, GM and every other small or big supplier of the similar product or service. You have to understand the consumers: if you have to sell salmon then you need to know how many consume for example fish: how many of them live in cities and how many in villages; how many are young and how many are old; is it only the rich or even the poor who can afford it. Then look at the country specific questions for example how many are vegetarians and how many are non vegetarians. If you are selling an enigineered product or service, you need to know who is the customer; government or the private sector; large or small business; and most importantly again, who is the human face or the decision maker of the organisation.
Our office places huge emphasis on bridging the cultural gaps between Indian and Norwegian actors. When you do business with India, you will be interacting with the Indian culture. Without a proper understanding of the culture, you may end up misinterpreting what your partner is communicating. And we have seen this happening a lot and with serious financial implications for you. And we assist our clients by taking them through a workshop on Business culture. This has been developed on the concept of Cultural detective and is based on seeing your partners communication through his (i.e the indian value lens). As an Indian I have grown up looking at the world through my indian value lens and so would you. The key in our communication is to know each others value lens and look our transactions through that lens also. This is how a Norwegian Value lens looks like…each value with its negative counterpart. An Indian doing business with Norway Should be familiar with Norwegian emphasis on honestry, trust and fairness; a compulsive need for independence and self sufficiency etc.
And a Norwegian has to understand the Indian value lens. Introducing these values is done as a part of a half a day workshop that we conduct for Norwegian companies. We use an exhaustive case based approach to sensistise companies to this way of thinking… Traditionally, emphasis has been on educating new entrants with Dos and Donts. Like how to shake hands, how to greet women, where to sit and what and how to eat etc…but we believe that these are minor differences which can be overcome with very little effort. Or in many cases there is no need to overcome them. Such diversity is healthy. But it is the fundamental values that are critical for you. If you are making a serious investment, you should be aware of the Indian value for Form over substance…ie valuing form as against meticulous step by step detailed logical approach. A romantic versus rational way… A foreign company has to know the pros and cons of emphasis that we Indians put on security for there will 100s and 1000s of us competing for each new opportunity. And if an investor is betting on India for a intricate operation, he or she better be aware of these tendencies.
This is a list of companies with whom we have worked in last 7 months.
My aim now is to explain our work through an actual case study. This is a company which came to us first in 2008. Curious about the market. We discussed the potential in brief and the company concluded that it wanted to know more about the potential.
This is what we set out to find. Looks simple but is not as it looks. This product, i.e a label; can be seen on any product. A jam bottle, a beer bottle a wine bottle, medicine and what not. If I want to know the market for these labels, i need to know the consumption of each of these products where these kind of labels are used. And even better, nobody had done this before for the Indian market. We set out find the consumption of every product where labels are used, FMCG, liquor, automotive products and what not; next step was to projet the future consumption of these products followed by determining the per capita conxumption of labels in each end use. This is how we projected the potential market.
In all we, conducted 168 indepth interviews in nearly 20 locations across India. That is how we got information in addition to extensive desk research covering hundereds of company reports and databases.
Finally.we managed to estimate the overall size of market, various categorisation and segments
More importantly, who will our client have to compete with. What is there size location and strengths. But all this hard work has its own benefits. Later on when we were looking at potential acquisition targets, we had ready targets to acquire.
The conclusion of this market study was that our client wanted to be in this market. The best and the quickest way to do that was to takeover an already existing target. And nothing better than to og with the best. We selected the 3 best options and went ahead with negotiating the deal. Once we finalised on the best option, we pulled in a team of professionals (legal and taxation and others). We went through a rigourous process – meeting more than 10 consultants ending up with Ernst and young as the M&A partners. So what was our value addition. We got the best consultant at the most competitive fee.
And this is our most recent client. Agrinos, one of the most exciting companies I have worked with. A young and innovative company who had already a partner in India when it met us. It had already started doing market tests when it met us.
After some interactions, it decided to partner with us as their advisiors on everything they intended to do further. So we started with deciding on an entry strategy for them. What is the most suitable way for them to enter this market.. We concluded that it had to be a wholly owned subsidiary for various reasons. Next thing we did was to send them a list of information which we wanted from them..things like the name they want to have for the company, name of the directors, address etc. Based on this we prepared a set of documents which agrinos had to sign and send back to us alongwith their existing documents and that is it for the company. Rest is our headache. Next thing was to recruit the top management and we have spent a lot of effort in going through that.
Last of all our bright little team. Of course we have support of a large network of consultants nearly 150 people with whom we have long term contracts to act as our extended arms.
