NANO’S drive from Singur to Sanand singur sanand OPERATIONS MANAGEMENT AMITY BUSINESS SCHOOL, Noida
Group members <ul><li>V.Karthik </li></ul><ul><li>Himanshu Ahuja </li></ul><ul><li>Avi Kapoor </li></ul><ul><li>Dishant Aggarwal </li></ul><ul><li>Kshitij Khanna </li></ul>
a dream that every eye had dreamt . . . a dream seen by many of us but only TATA thought about fulfilling . . . . . a dream that could have changed the fate of all connected to it . . . . .
• 3.2 million shareholders Tata Group • India’s largest business group • 5.3% of India’s GDP • Operations in 80 countries, exports to 85 countries • 61% of all revenue from abroad • Group revenue: Rs. 250,000 crores, US $ 62.5 bill • Group Profit: Rs 21,000 crores, US $ 5.4 bill
Introduction Of Tata Nano <ul><li>“ Dream-dream and dream, because dream gives vision, vision gives thoughts and finally thoughts lead to the action ". </li></ul><ul><li>Each letter of these motivational words said by India's former President Dr. A.P.J. Abdul Kalam goes exactly with Mr. Ratan Tata, Chairman of Tata group, who in the year 2003, dreamt of producing a safe, affordable Car for the common man. Finally after the wait of five years, crossing all financial and technological barriers, Ratan Tata kept his promise and unveiled Tata 'Nano' on 10th January 2007 </li></ul>
What makes it so cheap ! <ul><li>The Tata Nano uses plastics & adhesives rather than welding. </li></ul><ul><li>Introducing the car with an artificially low price through govt-subsidies and tax-breaks </li></ul><ul><li>Using vertical-integration </li></ul><ul><li>Partially using inexpensive polymers or biodegradable plastics instead of a full metal-body. </li></ul><ul><li>It has no AC, no power steering, no power windows, no power bells and whistles. </li></ul>
<ul><li>Tata Motors started constructing a factory to manufacture their $2,500 car, the Tata Nano at Singur </li></ul><ul><li>The project faced massive opposition from 2,000 of the 12,000 displaced farmers </li></ul><ul><li>The problem has been raised by those farmers who maintain that their land has been taken away from them by force against their will. </li></ul><ul><li>The unwilling farmers were given political support by West Bengal's firebrand opposition leader Miss Mamata Bannerjee with an eye to the upcoming Lok Sabha (Parliamentary) elections </li></ul>Where was the problem
Contd…… <ul><li>Miss Bannerjee's "Save Farmland" movement was supported by celebrity anti-development activists & farmers </li></ul><ul><li>The issue had turned into a power show. Where one party claimed to be fighting for poor of Bengal while other says whatsoever is being done is for growth of state </li></ul><ul><li>The Tatas finally decided to move out of Singur on 3rd October, 2008 </li></ul><ul><li>The pullout decision meant, loss of huge investment for the state of West Bengal </li></ul><ul><li>On 7th October, 2008, the Tatas announced that they would be setting up the Tata Nano plant in Sanand, Gujarat. </li></ul>
What were the alternatives available <ul><li>Several states that had offered to help include Haryana, Maharashtra, Orissa, Andhra Pradesh. </li></ul><ul><li>Even Sri Lanka had made up suitable plans for TATA’S relocation. </li></ul><ul><li>Finally Gujarat is basking in the glory of rescuing the plant & is at present providing shelter to the car which had been every common man’s dream. </li></ul>
Gujarat Economy With 5% of India’s population, Gujarat has 16% of industrial production. Gujarat had an annual average growth of 9% in the last 3 years and an average industrial growth of 15%. 50.5 million (5%) Population 196,000 sq. km. (6%) Area Figures in brackets show % share of India ( Source: ASI ) 14% of India Exports US$ 39.72 billion (16.2%) Industrial Production US$ 17.9 billion (18.5%) Fixed Capital Investment US$ 5.17 billion Manufacturing sector Business friendly state policies, responsive local administration, extensive network of roads, ports, railways and telecom in most parts, well developed financial structure. Investment Strengths
Economic Infrastructure of Gujarat <ul><li>Roads The road network in Gujarat is one of the best in the country, with 73,600 km of road length. </li></ul><ul><li>Power By the year 2006-07. power generation is targeted to reach to a level of 14.937 MW in Gujarat from the current level of 8.615 MW. Airport Ahmedabad is the International Airport while Keshod, Bhuj, Kandla, Jamnagar, Porbandar, Rajkot and Bhavnagar are the domestic airports. Telecommunication Efficient telecommunication network is a prerequisite for modern life and in this area too, Gujarat has not lagged behind. </li></ul><ul><li>Ports Gujarat has the longest coastline - 1600 km - in the country dotted with 41 ports. Under the Port Policy. 10 ports at new green field locations are proposed to be developed. The total investment in the port development is now estimated at Rs. 23,594 crore. This sector thus offers enormous opportunities not only for direct investments. Gas Grid To cater to the huge demand of natural gas, Gujarat State Petroleum Corporation Ltd. (GSPCL) has been entrusted with the task of creating gas grid infrastructure in the form of a high-pressure pipeline network for transportation of natural gas through its subsidiary company Gujarat State Petronet Ltd. </li></ul>
Vadodara Surat Sanand Gujarat Strengths: Infrastructure <ul><li>Longest coastline in India – 1600 km. </li></ul><ul><li>First state to privatize ports, railways and road transport </li></ul><ul><li>41 Ports </li></ul><ul><li>Cargo handled at Kandla, a major port </li></ul><ul><li>Container Handling at Mundra & at Pipavav </li></ul><ul><li>11 Airports with an International Airport at Ahmedabad </li></ul><ul><li>Pioneering work in Energy, Water, Urban Development, Industrial Parks </li></ul>AHMEDABAD
Why Sanand??? <ul><li>Conditions did not improve at Singur </li></ul><ul><li>Land available in plenty </li></ul><ul><li>The overall climate in Gujarat has been extremely favorable to industry </li></ul><ul><li>The general populace of the state is in favour of industrialization </li></ul><ul><li>The strategic location of Sanand, </li></ul><ul><ul><li>some 30 km from Ahmedabad and </li></ul></ul><ul><ul><li>its proximity to the Ahmedabad-Rajkot highway made the new site attractive </li></ul></ul><ul><ul><li>close to the Charodi railway station </li></ul></ul><ul><li>Setting up the Nano plant in Gujarat is advantageous for the group because nearly 50 % of the car parts are produced in Rajkot , and the extensive coastline of the state could be beneficial for imports and exports </li></ul><ul><li>The location was, it was just 200 km from Rajkot, where the best engineering workforce can be found. </li></ul>
<ul><li>Then there is the ultra mega power project of 4,000 mw that the Tatas are setting up at Mundra port . The Tatas could draw on power from their own plant in Mundra </li></ul><ul><li>Mundra Port would allow them to import steel and other raw materials at very low cost even from overseas. Transporting the same over land would cost thrice as much. </li></ul><ul><li>Mundra had the edge given its container depots for vehicles and a huge roll on, roll off terminal for loading and unloading vehicles </li></ul><ul><li>Then there was a 6-lane highway just 1 km away from the land earmarked for Tata Motors </li></ul><ul><li>When the Tata Motors team visited Andhra Pradesh, they were confronted by agitated farmers who did not want to part with their land. That was scary for the Tata folk. Maharashtra automatically became the choice, but the Tatas got mixed signals from several quarters </li></ul>Contd….
POLITICAL FACTORS <ul><li>There is no Mamata in Gujarat </li></ul><ul><li>As far as development of Gujarat is concerned all political leaders of Gujarat seem to be united as on the name of industrialization no protest has ever seen in Gujarat. </li></ul><ul><li>WB is the worst state as far as industrialization is concerned. Half of the year is closed for union activities </li></ul><ul><li>And the left has squeezed the industrial environment </li></ul><ul><li>And as far as industrialization is concerned, Gujarat is one of the best. Gujaratis are known for their business skill around the world </li></ul><ul><li>They always seem to think about development and as a result no bandh is observed as sincerely as in West Bengal </li></ul>
Modi, Tata drive Nano to its new home in 4 days
Contd… <ul><li>“ I have to say that today there is no state like Gujarat. Under Mr Modi’s leadership, Gujarat is head and shoulders above any state. A state would normally take 90 to 180 days to clear a new plant but in the Nano case, we had our land and approval in just two days.’’ </li></ul>
Current Scenario <ul><li>Tata Motors Ratan Tata chose Sanand , 30 kms away from Ahmedabad, for the Tata Nano project . </li></ul><ul><li>The mother plant, will come up on an area of about 1100 acres in Sanand. </li></ul><ul><li>The new Nano Plant could have a capacity of 5,00,000 units, compared to 3,00,000 for Singur. </li></ul><ul><li>Gujarat has also agreed to match all the incentives offered by West Bengal government. </li></ul>
Modi PM material for Anil Ambani, Sunil Mittal ADAG chairman Anil Ambani “ Narendrabhai has done good for Gujarat and what will happen if he leads the nation. Gujarat has seen progress in all the fields under his leadership. Now, imagine what will happen to the country if he gets the opportunity to lead it. Person like him should be the next leader of the country.’’ Bharti Group CMD Sunil Mittal also showered encomiums. ``Chief minister Modi is known as a CEO, but he is actually not a CEO, because he is not running a company or a sector. He is running a state and can also run the nation,’’ he said.
In his eloquent speech Chief Minister Narendra Modi said that in last five years Gujarat has traversed a journey from “Why Gujarat? to why not Gujarat?”
Impact <ul><li>on TATA - </li></ul><ul><li>Selection of a suitable location for setting up plant took its due time </li></ul><ul><li>Full scale production of NANO got delayed </li></ul><ul><li>Company had to invest several hundreds of crore for relocation </li></ul><ul><li>It is difficult being in the price tag </li></ul><ul><li>This has not only affected TATA group but has instilled fear among the other entrepreneurs. </li></ul>
<ul><li>On India - </li></ul><ul><li>This has not affected only TATA but also those who were getting employment from this project. This project was providing jobs to a no. of people directly and to a lot many indirectly </li></ul><ul><li>Investors from both, within and foreign would now consider Indian plans as a treacherous investment. </li></ul><ul><li>This would lead an already economically weak Bengal to stay in the shadows of poverty for longer till such an opportunity knocks at its door again. </li></ul><ul><li>This would also result in increasing regional economic disparities. </li></ul>
<ul><li>In the light of what has happened at Singur its time that we wake up and decide for ourselves what do we need ? Such leaders who for their desires or in order to show their power misguide masses or those leaders who genuinely think about wellbeing of people. </li></ul><ul><li>‘ Leaders that are building blocks of developing India or leaders that are blocks in the way of developing India .’ </li></ul>