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Vibrant Gujarat summit on Manufacturing sector

The document outlines the manufacturing sector in Gujarat, highlighting its contribution of 28.21% to the state's GDP and its leadership in producing textiles, chemicals, and pharmaceuticals. The government has identified key sectors for growth, including textiles, engineering, and auto components, with policies aimed at increasing manufacturing’s share of the economy. Gujarat's manufacturing industry has shown significant growth, with plans to enhance its capabilities and infrastructure over the coming years.

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Vibrant Gujarat Manufacturing: Sector Profile Gandhinagar
Table of Contents 1. Gujarat-Manufacturing Sector 1.1 Textile Sector 1.2 Engineering Sector 1.3 Automobile and Auto Ancillaries 1.4 Chemical Sector 1.5 Gems and Jewellery 1.6 Pharmaceutical Sector 1.7 Electronics & System Design
1. Gujarat-Manufacturing Sector
Gujarat-Manufacturing Industry Overview Banaskantha Sabarkantha Patan Mehsana The manufacturing industry of Gujarat can be categorized in following industries. Kutch Gandhinagar Surendranagar Ahmedabad Panchmahal Kheda N di d Textile and Pharmaceutical Textile Jamnagar Porbandar Nadiad Anand Bhavnagar Rajkot A li Vadodara Bharuch Machinery Engineering Industry d Industry Junagadh Amreli Textiles and textile Machinery Chemical machinery Surat Navsari Dang and Valsad V l d Gems and Jewellery Manufacturing Industry Chemical Auto parts Engineering Industry Automobile & auto parts Gems and jewellery Auto Ancillaries Machinery Parts 4 j y Pharmaceutical
Gujarat-Manufacturing Industry Overview Gujarat’s Manufacturing sector contributes 28.21% of state GSDP as per 2011‐12 100% Gujarat ‐ Major contributor to India's manufacturing sector (2012 13) Contribution of Manufacturing S i GSDP 98% 80% 60% 40% 80% 75% 2012‐28.02% 28.21% Sector in 62% 53% 51% 37% 35% 31% 30% 20% 0% 27.16% 27.57% 2008-09 2009-10 2010-11 2011-12 • Manufacturing sector output of Gujarat stands at 13% of the total output of the total national output. • The state is leader in production of Soda ash, Salt, Petrochemical downstream products and Export of Diamonds • With the Manufacturing Policy – 2011, Gujarat aims to increase the share of manufacturing sector in total GSDP from 28 21% to in the 28.21% 32% next five years • Manufacturing Sector of Gujarat has shown almost 216% growth with CAGR of 10.11% over last 8 years Sources : CMIE, ASI 2010‐11 & Economic survey 2011‐12 5
Gujarat Manufacturing Industry – Focus Sectors The focus sectors identified by the Government for supporting the growth of manufacturing industry in Gujarat is broadly classified into Textiles, Engineering, Automobile and Auto Ancillaries, Chemical, Gems & Jewellery and Pharmaceutical. Focus Sector in the Manufacturing Industry of Gujarat Textiles Engineering Auto and Auto Ancillaries Chemical Gems and Jewellery Pharmaceutical P ii • Conventional Textiles • Precision Engineering including defense offsets • Automobiles and auto parts • Research and • Chemical Products • Specialty Chemicals • Precious gems and stones • Diamond, • Pharma machinery • Biotechnology • Technical Textiles • Fabricated metal products • machinery and equipment Development • Process and Design • Coke refined petroleum products Gold and Silver Jewellery • APIs (active pharmaceutic al ingredient) 6 These focus sectors contribute to ~ 80% of manufacturing sector output
Gujarat Industrial Policy 2009 Major schemes and incentives to boost Manufacturing Sector in Gujarat Assistance to MSMEs • Interest Subsidy • Venture capital Improving Industrial Infrastructure • Assistance to Critical infrastructure Projects • Infrastructure support • Venture Capital and Patent Assistance • Support for R&D institutions • Quality Certification • Skill Enhancement • Technology Acquisition Fund • Patent Assistance • Energy and water conservation • Financial Assistance to Industrial Park Assistance to Textiles and apparels • Interest Subsidy • Technical Textiles pp Enhancement of Technical Competence and Man Power • Assistance to State Level Anchor Institute • Market Development Support • Support for Ancillary/ Vendor Development • Support to Auxiliary industries for value addition A i t t R & D • Technology Acquisition • Apparel Training Institutions and Trainees • Training in Power loom Sector • Technological acquisition for value chain • Support for development of Textile & Assistance for Technical Competence and Man Power • Extension Training Centres • Specialized Skill Development Centre • Assistance to • Cluster Development • Rehabilitation of Sick Units Assistance Apparel Park Assistance to Gems & Jewellery Sector • Interest Subsidy • Hall Mark Certification and Gems Testing Assistance for Environment Protection Measures and Infrastructure • Assistance to Common Environment for Environment Infrastructure Facilities (CEIFs) in PPP Protection Measures‐MSME units • Assistance Environment Management to MSMEs • Assistance for encouraging green practices and Environmental Audit to Centre • Assistance for Health & Safety Measures • Support for development of Jewellery Park Assistance to Chemical Industries • Financial Assistance under Non PPP Projects • Assistance for clean carbon credits (CERs and VERs) and reducing carbon footprints 7 MSMEs • Subsidy on electrical duty • Labour law flexibility • Assistance for strengthening the Regulation and Environmental Compliance
Gujarat Industrial Policy 2009 Cluster Development in PPP M k D l S Mode Interest Subsidy T h l A iiti F d Market Development Support Support to R&D Institutions Patent Assistance to MSMEs Technology Acquisition Fund Venture capital Assistance Energy and water conservation Support to Auxiliary industries for value addition Promotion of Specific Sector Quality Certification Rehabilitation of Sick Units Awards to best MSMEs Support for Ancillary/ Vendor Development Skill Enhancement 8
1.1 Textile Sector
1.1.1 Textile Sector : Global Scenario
Textile Industry Global Scenario Global textile and clothing industry is estimated to be worth about USD 4,395 billion as of 2012. • With China leading the global textile trade, India ranks second World Technical Textile Market Structure with 8 per cent of the total textile trade 7% 7% 5% Agrotech Packtech Clothtech Hometech • Technical Textiles/Industrial Textiles account for over 27 percent of all fiber consumed and more than 50 percent of the total textile activity in certain industrialized countries • Global Technical Textiles market was estimated ~ USD 127 billion 81% World production of Synthetic Fiber in 2012 • Global market for textile machinery is estimated to reach USD 22.9 billion by 2017 Global Textile Production (Million tonnes) 11% 8% 3.5 7.7 Composites 20.50% 27% 8% Non Woven 6% 20% 3% 2.50% 1.50% 27% 9% 8% 6% 31% 12% WEU incl. TR USA & Canada Japan 59 22 10.8 Woven, Braided, knitted etc 44% 52% 56% 5% 20% 22% Rest of World India Chi Technical Textile Traditional Textile etc. 1970 2005 2008 2015E China Source: ICTN 2010, IBEF, Global Industry Analysts, Inc., D&B 11
1.1.2 Textile Sector : India Scenario
Textile Industry India Scenario India is the 2nd largest textile economy by production in the world after China and contributes ~14 percent to the total industrial production in India India Textile Market Size (USD billion) • India’s position in the global market 250 200 150 100 70 78 89 143 223 CAGR: 10.1% • 2nd largest producer of cotton (18 percent of global production) • 2nd largest producer of silk • 3rd largest producer of cellulosic fibre / yarn 50 0 2009 2010 2011 2016E 2021E India Textile Market Size (USD billion) • Largest producer of jute • The size of India’s textile market in 2011 was USD 89 billion; the market is expected to expand at a CAGR 150 Demand for Apparel (USD billions) CAGR: 11.1% of 10.1 percent over 2009‐21 to reach at USD 223 in 2021 100 50 0 65 122 13 2010‐11 2016‐17E Demand for Apparel (USD billions) Source: Ministry of Textiles, The Cotton Corporation of India Ltd., Technopak
Textile Industry India Technical Textile Technical textiles, which has been growing at around twice the rate of textiles for clothing applications over the past few years, is now expected to post a CAGR of 20 per cent over FY11-17 I di T h i lt til /I • Indian Technical textile/Industrial Textile market today is mainly focusing on Packtech, Clothtech and Hometech; while higher value added products like Medtech & Indutech still have to be expanded • The government has supported this industry with USD 1 billion help for SMEs and an exemption in custom duty for raw materials used by the sector as of 2012‐13 G t l t l h 44 2 illi i i f th ti ft h i lt til /i d t i l • Government plans to launch a USD 44.2 million mission for the promotion of technical textiles/industrial textiles, and cleared plans to set up a new research centre for the industry Technical Textile Industry (USD billion) Indian Technical Textile Market Structure (2012 13) 40 30 31 3 CAGR: 21.3% 33% 15% 13% 2012‐Agrotech, Geotech etc. Packtech 20 10 0 11.9 31.3 2011 2011‐12 2016 2016‐17E Technical Textile Industry (USD billion) Clothtech Hometech 39% Source: The Indian Textile Journal, Ministry of Textile 14
Textile Industry Exports and Planned Outlay In the 12th Five Year Plan, the Government of India plans to spend USD 9.1 billion against USD 4 billion in the 11th Five Year Plan on textiles • Rising government focus and favorable policies to t th i d t Textile Exports (USD billion) support the industry • The industry accounts for nearly 11 per cent of 40 total exports of the country 30 • Exports grew to USD 33.3 billion in FY12 from USD 17 6 billi i FY06 i l i f 11 2 20 19.2 CAGR: 11.6% 33.3 22.2 21.1 22.4 27.8 17.6 billion in FY06, implying a CAGR of 11.2 per cent • India’s textiles products are exported to more than a hundred countries; of which USA and EU account f l t2/3rd 10 0 for almost 2/2006 2006‐07 2007 2007‐08 2008 2008‐09 2009 2009‐10 2010 2010‐11 2011 2011‐12 Planned outlay (USD billion) CAGR: Shares in textile exports (2011‐12P) 4% 3%3% Readymade Garments Cotton 10 5 4 9.1 258% 17% Textiles 39% 34% Manmade Textiles Handicrafts Silk & Handlooms Woolen 0 11 th five year plan 12 th five year plan & others Source: GHERZI research, Ministry of Textile 15
1.1.3 Textile Sector : Gujarat Scenario 16
Textile Sector Gujarat: Textile Hub of India Map 1: Important locations in Gujarat Gujarat is the leader in textile comprising of 1,560 medium and large textile unit • Gujarat is the largest producer (33%) and exporter (60%) of cotton in the country Kutch ‐ Textile Handicrafts Textile Hubs in Gujarat • Around 50% of the country's art silk fabric is produced in Surat alone • Gujarat is the largest producer of denim in India (65%) the largest in the world Surendranagar, Manavadar and third and Gondal: • About 24‐28% of fixed investment, production of Small Scale Industries are from textiles sector • Gujarat has the highest number Cotton inning Saurashtra: Jetpur for Hand printing Ahmedabad of medium and large textile processing houses (over 600) and is home to more than 50% of India's processing machinery manufacturers and 90% of weaving and processing units – Manchester of the east / Denim city Surat – Silk city Gujarat has 18 textile related machinery manufacturers • Gujarat contributes to over one‐fourth of the country's technical textile output • It is also the largest manufacturer of man made and filament fabric and the second Ankaleshwar and Tapi: Technical Textiles 17 textile‐product clusters largest manufacturer of cotton Source: Industries Commissionerate, iNDEXTb; Gujarat Chamber of Commerce and Industry; IBEF; GCCI
Textile Sector Gujarat’s Strength Gujarat has leveraged the advantage of capital intensity in textile industry triggering capital and human productivity • High raw material availability • Gujarat contributes to 62% of the overall petrochemical output of India and thus has facility to produce almost all varieties of man‐made fibres • Gujarat is the 2nd largest decentralized power loom concentrating state and doubled its capacity during last 8 Years (50,000 looms (cotton)/8lakh filament) • Gujarat is the largest producer of cotton in the country with production of 93 lac bales in 2012‐13 utilizing 24.97 lac hectares of land • Present Capacity • Ginning – 1200 units • Spinning – 1.2 million working Spindle •Weaving – 50,000 looms • Processing (medium & large) – 600 Units (Yarn, Fabric & Garments) • Knitting & Apparel (small & medium) – 2,00,000 hi 18 machines • Hand Printing – 1500 units in Jetpur alone Source: Industries Commissionerate, iNDEXTb
Textile Sector Gujarat’s Technical Textile 1,000 plus Technical Textiles units with presence in all the 12 sub-sectors of Technical Textiles • Gujarat Technical Textiles market is estimated End usage by sub sector of technical around Rs. 7737 crore in 2011‐12 at current k market t i in G j t Gujarat prices; contributing around 10% to the national 7% Technical Textiles output 3% 8% • Major units of technical textiles are mainly Packtech H h concentrated in Ahmedabad, Surat, Vadodara and Kutch • There are more than 200 products classified as T h i lT til d P t ti T til A 9% 10% 63% Hometech Clothtech Indutech Buildtech Technical Textiles under Protective Textiles, Agro O h Textiles, Geo Textiles, Automotive Textiles and Home Textiles Others Technical Textiles find application/usage in a variety of day‐to‐day applications as well as industrial applications. The large quantum end users of Technical Textiles are cement industry, • Gujarat is the 5th largest cement producer in India. The sector is expected to grow in line with the growing Infrastructure in the state/country • Gujarat is the Chemical hub of India; b h f h ll 19 horticulture industry, automobile industry, chemical industry, infrastructure etc Source: Industries Commissionerate, iNDEXTb; IBEF contributing to more than 50% of the overall Indian chemical output
Textile Sector Present Infrastructure and Textile Clusters (SMEs) • Three dedicated textile SEZ are planned Infrastructure for Textile Industry in Gujarat to be developed in Ahmedabad; while one such SEZ, Surat Apparel Park is functional Mehsana Sabarkantha Kutch Ahmedabad: Cotton and blended fabric, denim, made‐ups, ladies’ garments, textile machinery and its parts Jamnagar Ahmedabad Bhavnagar Rajkot Amreli Vadodara Bharuch Surat Surat for Art silk fabric, Synthetic textiles, Jari manufacturing, embroidery, textile machinery and its parts Junagadh Navsari Valsad Umargaon: Modern power looms, Synthetic suiting and shirting Kutch Handicrafts Textile & Apparel SEZ (4) Integrated textile parks (7) P d t l t (18) Kutch: Textile Saurashtra: Jetpur for Hand printing and processing units and Manavadar for Cotton Research & testing facility (2) Educational infrastructure 20 ginning Product clusters DMIC influence area
Textile Sector Major Players in Gujarat Leading Industry players in Gujarat are spread across the state 21
Textile Sector Educational Infrastructure 28 ITI’s in Gujarat provide industrial training courses on Textile and Garment industry with an approximate intake of 5,876 • Major academic institutions that are offering training Gandhinagar Ahmedabad Vadodara Rajkot Bh programmes include  Ahmedabad Textile Industrial Research Association (ATIRA)  Man‐made Textile Research Association (MANTRA), Surat  National Institute of Fashion Technology (NIFT), Surat Gandhinagar Bhavnagar  Apparel and Leather Technics (ALT) Training College, Ahmedabad  National Institute of Design (NID), Ahmedabad Location of Major Educational Institutes  Surat Education and Research Society • Gujarat has three engineering colleges in Ahmedabad, Vadodara and Surat, offering courses in Textile technology, Textile processing and Textile engineering Specific textile courses offered by ITIs • Cutting and sewing • Cutting and Embroidery and needle • NTC (National Textile Corporation) is planning to set up two CoE (Center of Excellences) in Guajrat • Government provides assistance to apparel training institutions and trainees as well as training support to work • Computer‐aided dress making and dress design • tailoring • Pattern 22 powerloom sector making • Finishing garment checking Source: Gujarat Chamber of Commerce and Industries
Textile Sector Textile Composite Centre • Composites are materials made from two or more substances with different physical or chemical properties • Union ministry of textiles, has declared ATIRA as a Centre of Excellence (CoE) for composites • Composite Centre – key components will help in the development of entire value chain • R & D Centre (Product Development): The R & D centre would have a pilot project for new product Spinning development. It would include machines for Marketing Weaving complete value chain • Production centre: It would serve 2 purposes: • To produce the 1st batch of the product developed in the R&D centre • It shall generate revenue for the centre Composite centre of Garmenting Knitting Textile Industry • Testing and certification: Help test the products developed and provide certification. It would also provide testing for raw materials • Design studio: Development of new designs Designing Processing • Branding and Marketing: Help industry participate in National and International Exhibitions and organize conferences, seminars, workshops etc to educate the industry Testing Finishing 23 • Skill development: Training manpower with the latest technology
Textile Sector Gujarat Scenario: 2017 Attract at least 2,000 new units with an investment worth Rs. 10,000 crore by introducing Technical Textile Mission Government of Gujarat’s development agenda l h i l h i f h il d Government of Gujarat planned to invest • Develop the entire value chain of the Textile Industry S 3 28 billi i il i d • Value addition through focus on Technical Textiles • Textile market in Gujarat by 2017 ~USD 25 billion • Growth is envisaged to be driven by Technical Textiles hi h h i h 200 diff d ~ USD 3.28 billion in textile industry which will also create 1 million jobs in the sector which has use in more than different products across sectors • Technical Textiles of Gujarat will strive to capture 50% of the Indian market C i ddi i i 5 Investment in next 5 years 4% Spinning • Capacity addition in next years • Ginning – Additional 200 modernized units • Spinning – Tripling Capacity with additional 25 lakhs Spindle with modern technology W i Additi l 1 00 000 Sh ttl l d 43% 6% 5% 13% Weaving Processing • Weaving – Additional 1,00,000 Shuttle less and K itti Automatic shuttle looms • Processing – Additional 60 Units (Yarn, Fabric & Garments) 29% K itti & A l Additi l 2 00 000 tit hi & Knitting & Apparel Technical Textile Textile 24 • Knitting Apparel ‐ Additional 2,00,000 stitching supporting machines & Spinning Park Source: Industries Commissionerate, iNDEXTb
Textile Sector Interventions in Technical Textile Sector Key Interventions Technology Mission on Technical Textiles (TMTT) focuses on standardization, creating common testing facilities with national / international accreditation and to provide support for the development of domestic & export markets for technical textiles Expert group will develop strategy for the development of Technical Textiles sector 2 new Composite Centres for the development of Technical Textiles to be set up in Ahmedabad (existing centre in Ahmedabad to strengthened) and Surat district. (existing Government of India scheme for the development of such Composite Centres will be improved) An International level CoE (Centre of Excellence) to be set up in the state focusing on technical textiles by NTC (National Textile Corporation) in collaboration with international firms from Japan, USA and Germany 2 new Technical Textile zones to be developed in Ahmedabad and Surat district Additional 6% interest subsidy in addition to 5% interest subsidy and 10% capital subsidy by 25 Government of India
Textile Sector Gujarat Initiatives Key Government Initiatives Textile Industry Promotion Policy 2012 Interest subsidy of 5% will be given without a ceiling for the period of five years on new plant and machinery for ginning and processing 7% on new plant and machinery for cotton spinning as well as for second‐hand imported cotton spinning machinery with certain conditions without a ceiling for five years. Power tariff concession on new investment for cotton spinning will be provided at Rs 1 per unit for five years and there will be refund of VAT paid by the unit on the purchase of raw material Financial assistance to skill development centers for textile industry Financial assistance for technology acquisition for value chain Assistance for energy conservation, water conservation and environment compliance The new policy is expected to attract an investment of over INR 20,000 crore creating new employment opportunities for over 2.5 million people, 50% of them being rural women, during the next five years Support for establishing Textile & Apparel Park : 50% (max. 1) INR 30 crore) for Spinning Park and 2) 50% 26 (max. INR 10 crore) for Other Textile Park
Textile Sector Investment Opportunities Conventional Textile High valued garment manufacturing Cotton and synthetic based spinning, Hometech High quality upholstery fabric, narrow width fabric for furniture application, wipes for house hold use, fiber foam Indutech Glass fiber battery separator, fusing belts, high mesh filters. Industry felt, weaving and processing units woolen felt fabric Agrotech Agro net & wadding, fiberfill products like quit & pillows Geotech Clothtech Narrow width felt, fire resistant fabric, slings for bulk handling shading net, packing net for agro products Buildtech Scaffolding net Woven & non‐woven geotextiles fabric as fashion accessories like belt Mobiltech Interior carpets & NVH components Protech Fire retardant clothes Meditech Nonwoven disposables like apron, mask, caps, draper etc Packtech Jumbo bags, FIBC, coated fabric for soft luggage Oekotech PP nonwoven liners for land fill sites of MSW Infrastructure Development Cotton integrated textile and apparel park • Modern Cotton Spinning • Cotton based shuttleless weaving • Energy efficient modern process house • Made‐ups and garments 27 p g
FOR ADDITIONAL INFORMATION CONNECT US @ Industries Commissionerate Block No. 1, 2nd Floor, Udyog Bhavan, Gandhinagar, Gujarat, India ‐ 382 010 http://ic.gujarat.gov.in/ Phone: 079‐23252683 E‐mail: iccord@gujarat.gov.in Gujarat Industrial Development Corporation Block No. 4, 2nd floor, Udyog Bhavan, Gandhinagar, Gujarat, India – 382 010 http://www.gidc.gov.in/ Phone: 079‐23250583 E‐mail: vcmd@gidcgujarat.org 28
1.2 Engineering Sector 29
1.2.1 Engineering Sector: Global Scenario 30
Engineering Industry Global Scenario Engineering Industry can be classified in to following sectors 120 Key global engineering segment output (in USD billion) • Asia is the largest production center; contributing ~40% of the global 100 market • Asia‐Pacific is the largest producer; 7 6 14.7 15.64 17.65 17.65 18.77 19.95 estimates Electrical equipments Asia contributing 38.4% of the global market • America and Asia Pacific region are the largest producers; contributing 80 60 9.48 9 93 9.93 dust a 8.6 9 7.82 8.2 29.75 31.1 32.4 33.85 35.3 36.9 5.64 7.6 Machine Tools Industrial ~71% of the overall global production • Globally, China is the largest producer and consumer of machine tools; contributing ~42% and ~30% of global consumption & production 40 44 1 44.1 45 9 45.9 47.54 q p 39.1 40.33 42.2 Machinery Heavy Electrical equipments respectively • North America, Europe, and North Asia are the largest service providers; contributing 91% of the overall global market k t 20 0 2010 2011 2012 2013E 2014E 2015E Engineering Services Source: 2012 World Machine Tools Output & Consumption Survey, IBISWorld Pvt Ltd, Datamonitor Plc 31
1.2.2 Engineering Sector: India Scenario 32
Engineering Industry India Scenario Capital goods & engineering turnover is expected to reach USD 125.4 billion by 2017 from USD 57.6 billion in 2012 • Due to fast pace industrialization & economic Construction equipment market revenue d l h i d d d f 30 22.7 20 (USD billion) CAGR: 28.8% development there is a tremendous demand of capital goods & engineering market • Indian construction equipment market to grow sevenfold from 2012 to 2020 E i i h & d i 10 0 3 2012 2020E Construction revenue billion) • Engineering research design segment revenues to increase fourfold by 2020 • Electrical equipment market size is expected to increase fourfold by 2022 equipment market (USD Electrical equipment market size (USD billion) Engineering Research & Design revenue 150 105 (USD billion) CAGR 100 50 24.2 CAGR: 14.2% 60 40 20 11.2 45 CAGR: 19% 0 2011 2022E Electrical equipment market size (USD billion) 0 2012 2020E Engineering Research & Design revenue (USD billion) Source: Department of heavy industries, NASSCOM 33
Engineering Industry India Scenario: Industry Structure Engineering Heavy Engineering Light Engineering • Textile machinery industry • Rolling Bearing Industry • Medical and surgical • Cement machinery industry • Sugar machinery industry • Rubber machinery industry instruments • Process control instruments • Industrial fasteners • Ferrous castings • Material handling equipment industry • Oil field equipment industry • Metallurgical industry • Steel forgings • Seamless steel pipes and tubes • Electrical resistance welded (ERW) steel pipes and • Mining machinery industry • Dairy machinery industry • Machine tool industry tubes • Submerged‐arc welded (SAW) pipes • cyc Bicycle e dust y industry Source: Ministry of Heavy Industries & Department of Industrial Policy & Promotion 34
Engineering Industry India Scenario: Exports Engineering exports include transport equipment, capital goods, other machinery/equipment and light engineering products such as castings, forgings and fasteners • The engineering sector retained its 18 per cent share in overall exports from the country which is the maximum in terms of sectoral contribution • Over 2007‐08 to 2012‐13, exports registered a CAGR of 12.6 per cent • Exports target for 2013‐14 is estimated at USD 125 billion • p Transport q p equipment is the g leading contributor to g engineering g p exports. The g segment accounted for 32.5 p per cent of the total engineering exports during 2012‐13 Engineering Exports (USD billion) Exports of principal 80 60 40 31 3 45.3 38.3 58.1 67.1 56.7 CAGR: 12.6% commodities (2012‐13) 32.50% 9% 14.10% Transport equipment Machinery & instruments 20 0 31.3 17.70% Manufacturers of metals Primary & semi furnished iron & steel 2007‐08 2008‐09 2009‐10 2010‐11 2011‐12 2012‐13 26.80% Others Source: Engineering Export promotion Council 35
1.2.3 Engineering Sector: Gujarat Scenario 36
Engineering Industry Gujarat Scenario Industrial Clusters 30 17 Engineering Textiles Food • Engineering sector of Gujarat contributes around 18% to state’s total industrial production and around 9% to the national engineering output. • Engineering sector in 300 units in 6 Processing 10 13 7 Chemicals Minerals Others Gujarat comprises more than large sector and 75,00 units in small and medium (SMEs) enterprises. Sh fG j i i l i i 10.40% 12.70% 16.20% Share of Gujarat in national engineering goods production • The small‐scale industry is a significant contributor to the production of brass parts, foundry, forging and machine tools, 6% 6.70% 9% p , y, g g , oil engines and electric motors, submersible pumps and industrial valves and bearings. • Gujarat houses 83 product clusters; out of which 30 clusters Electronics Electrical Equipment Transport Equipment Basic Metals Machinery and Equipment Fabrication of Metal Products are engineering product clusters. • The brass parts cluster at Jamnagar has over 5,000 small units and meets almost 70% of the entire requirement for brass parts in India. Source: IBEF 37
Engineering Industry Gujarat Scenario: Engineering SME clusters The Engineering SME cluster of Gujarat is mainly concentrated at Ahmedabad, Anand, Rajkot, Vadodara, Surendranagar, Jamnagar, Mehsana, Panchmahal and Kutch k h Foundry & Forgings Steel Pipes and tubes Steel re-rolled products Brass parts Kutch Banaskantha Sabarkantha Patan Mehsana Fabricated metal products Steel & Aluminium Furniture Electric motors Power driven pumps Jamnagar Surendranagar Gandhinagar Ahmedabad Kheda Anand Panchmahal Nadiad Textile machinery parts Chemical machinery parts Food processing machinery Machine tools Porbandar Amreli Bhavnagar Rajkot Vadodara Bharuch Diesel engine & parts Ball & Roller bearings Automobile & auto parts Earth Moving Machinery Junagadh Surat Navsari Valsad Dang • Alang, a port in Bhavnagar, is the largest 38 Pumps and Valves g, p g , g ship recycling yard in the world.
Engineering Industry Gujarat Scenario: Presence across value chain Heavy engineering Heavy electrical Heavy engineering and machine tools Automotive • Boilers • Turbines and generator sets T f • Textile machinery • Ceramic machinery • Sugar machinery • Passenger and utility vehicles • Auto components and auto • Transformers ancillaries • Switchgear and control gear • Rubber machinery • Material handling equipment • Oil field equipment • Metallurgical machinery • Dairy machinery • Earth moving and construction machinery • Agricultural machinery 39
Engineering Industry Gujarat Scenario: Presence across value chain Light engineering Low technology products High technology products Plastic Machineries • Roller bearings • Welding • Medical and surgical instruments • Injection moulding equipment and • Extrusion consumables • Casting and forging • Pipes and tubes • Fasteners • Process control instruments • Domestic appliances • Electronics • Blow moulding • Reprocessing • Extrusion coating 40
Engineering Industry Gujarat Scenario: Industrial Infrastructure Particular Units Symbol Special economic zones 2 Industrial Parks 18 DMIC influence area Upcoming modern sector specific Kutch clusters planned on PPP mode Engineering Plastics & Plastic Processing at Ahmedabad Viramgam‐ Surendranagar Halol Dahej Auto Components & Light Engineering at H l l Dahej Halol Precision & Light Engineering at Sanand Source: GIDC 41
Engineering Industry Gujarat: Educational Infrastructure Number of Seats in Degree Engineering 8,970 Colleges, Gujarat, 2013 1,194 16 3 540 Number of Degree Engineering Colleges, Gujarat, 2013 • At the end of 2013, Gujarat is projected to have an intake capacity of 60,883 degree students in engineering • More than 3,060 seats have been added in 2 95 Government Colleges Grant-in-Aid 2013 alone along with 4 new engineering colleges and institutions • The tally leads for Mechanical Engineering with 16, 230 seats, followed by Civil, 50,17 9 Colleges y Electrical and others M h i l Seat Matrix Year- • A healthy increase in seats offered is projected in coming years, with Mechanical Engineering increasing 130% 18000 (16230) 16000 14000 12000 2010 2011 2012 2013 Mechanical Engineering Civil Engg. Electrical Engg. Computer Engg. Electronic s & Comm Information Wise from 2010 to 2013 • Civil and Electrical Engineering seats more than doubled during 4000 10000 8000 6000 (9950) (9839) (8160) (7080) (3555) Comm.Technology 42 the same period Source: Gujarat Technical University 2000 0
Skilled Manpower availability in Gujarat Gujarat Scenario: Skilled Man Power Availability 160000 140000 120000 Sanctioned Seats in the ITIs 800 700 600 Number of ITIs in Gujarat 100000 80000 60000 40000 500 400 300 20000 0 200 100 0 Private Government Total Private Government Total • Gujarat Government has also encouraged skill development programs programs. Skill development budget has increased from INR 107 crore in 2001‐02 to INR 1000 crore in 2013‐14. • Government of Gujarat has also introduced number of effective schemes such as CTS (Craftsmen Training Scheme) Scheme), ATS (Apprenticeship Training Scheme) Scheme), KVK (Kaushalya Vardhan Kendra) Kendra), short term courses. Under these schemes around 7,80,000 people have been trained. Source: Socio Economic Review 2012‐13 43
Engineering Industry Gujarat Scenario: Interventions and Initiatives 5 precision engineering clusters will be developed in Jamnagar, Halol, Sanand, Lodhika, Mandal – these clusters will be developed Development of state‐of‐the‐art industrial clusters and industry‐focused investment regions by GIDC Centres of Excellence will be developed in each of these clusters Introduction of reforms and flexible labor laws Initiatives The benefits of existing industrial park scheme will be extended to the tune of USD 3 2 million Promotion and development of small and medium enterprises through various innovative Interventions 3.2 Units coming in these clusters will be provided single window clearances and streamlined & hassle‐free procedures for initiatives Introduction of cluster development measures to support and strengthen obtaining various approvals growth h of f h the sector p Government will identify and provide large tracts of land for specialized trials of Promotion of institutions, such as Space Application Centre, Indo‐German Tool Room, and Electronics & Quality Development Centre 44 p equipment Centre, which provide support to the engineering sector
1.2.4 Engineering Sector: Investment Opportunities 45
Engineering Industry Gujarat Scenario: Investment Opportunities Engineering service outsourcing Material handling equipment Transformers & Boiler manufacturing Power equipment manufacturing Auto components Infrastructure equipment Defence offset Modern cement and textile machinery Material handling equipment Turbines, transformers, generators 46
FOR ADDITIONAL INFORMATION CONNECT US @ Industries Commissionerate Block No. 1, 2nd Floor, Udyog Bhavan, Gandhinagar, Gujarat, India ‐ 382 010 http://ic.gujarat.gov.in/ Phone: 079‐23252683 E‐mail: iccord@gujarat.gov.in Gujarat Industrial Development Corporation Block No. 4, 2nd floor, Udyog Bhavan, Gandhinagar, Gujarat, India – 382 010 http://www.gidc.gov.in/ Phone: 079‐23250583 E‐mail: vcmd@gidcgujarat.org 47
1.3 Automobile & Auto Ancillaries
1.3.1 Automobile & Auto Ancillaries: Global Scenario
Automobile & Auto Ancillaries Global Scenario As the global economy recovers from the financial shocks of the last five years, the automotive industry is playing a huge role in bringing it back to life. • On present, the global automotive industry is production million i d h S billi vehicles) China 19.27 22.12 14.8 USA 10.33 11.05 6.9 • According to the World Bank just 18 people in World car d i ( illi 2012 2013 Change (%) estimated to worth USD 800 billion • The global market for cars and other light vehicles will expand from 80 million units a year now to well over 100 million by 2020 A di h W ldB kj l i every 1,000 own a car in India, while in China the figure is 58; hence there is huge untapped potential in this sector E i k ’ h f l b l l ill i Japan 9.94 9.63 ‐3.1 Germany 5.65 5.72 1.2 South Korea 4.56 4.52 ‐0.9 • Emerging markets’ share of global sales will rise from 50 percent in 2012 to 60 percent by 2020 Brazil 3.34 3.74 9.9 40 30 Global Car Sales Outlook (In millions) 27.25 29.98 32.38 2.68 4 47 24 41 4 72 4.87 5.07 20 10 0 4.47 4.72 16.36 17.97 15.22 17.11 18.33 18.89 1.64 14.29 17.01 16.7 15.9 15.6 16 6.91 13.05 24.41 1990‐99 2000‐10 2011 2012 2013e 2014f North America South America Eurpoe Asia Source: Clear Water Report, McKinsey; OICA 50
1.3.2 Automobile & Auto Ancillaries: India Scenario
Automobile & Auto Ancillaries Indian Scenario: Automobile By 2020, India's share in the global passenger vehicle market to double to 8 per cent from 4.8 per cent over 2013 • India is the world’s second largest two wheeler manufacturer Market share by volume (2012‐13) in world the largest three market the second 15% 4%4% Two Wheelers Passenger Vehicle the world, wheeler market, largest tractor manufacturer in the world, the fourth largest car market and fifth largest commercial vehicle manufacturer in the world • Automobiles production increased at a CAGR of 12.2 per cent 77% g Commercial Vehicle Three Wheelers over FY05‐13 • Passenger vehicle sales to nearly triple by 2020E • The gross turnover of automobile manufacturers in India expanded at a CAGR of 17.7% over FY07‐11 60 40 30 5 36.6 33 3 43.3 58.6 Revenue Generated (USD billion) CAGR: 17.7% Market Break Up by Revenue (2011) 20.40% Tr cks 20 0 30.5 33.3 47.80% 31.80% Trucks Cars Two Wheelers 2006‐07 2007‐08 2008‐09 2009‐10 2010‐11 Source: SIAM; OICA 52
Automobile & Auto Ancillaries Indian Scenario: Automobile Exports Automobile export volumes increased at a CAGR of 19.1 per cent over FY05–13 • Two‐wheeler segment reported the fastest growth (22.2 Exports share by volume (FY 13) per cent) followed by three‐wheelers ( 16.3 per cent) 19% 3% 11% Passenger Vehicle Commercial Vehicle Th Wh l p ) y p ) over FY05–13 • Exports of passenger vehicles registered the highest growth at 9.02 per cent in FY13 P hi l i d i bl t f 67% Three Wheelers Two Wheelers • Passenger vehicles comprised a sizeable 19 per cent of overall exports • Two wheelers accounted for the largest share in exports (by volume) at 67 per cent in FY13 2 1.5 1 1 1.5 2 2 Passenger Vehicle Exports of Automobiles from India (Million Units) CAGR: 19.1% 1 0.5 0.2 0.2 0.2 0.2 0.3 0.5 0.5 0.5 0.5 0.2 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0 0 0.1 0.1 0 0 0.3 0.4 0.3 0.4 0.5 0.6 0.8 1 1.1 Commercial Vehicle Three Wheelers Two 0 2004‐05 2005‐06 2006‐07 2007‐08 2008‐09 2009‐10 2010‐11 2011‐12 2012‐13 Wheelers Source: SIAM 53
Auto & Auto Ancillary Indian Scenario: Auto Ancillary Turnover of the Indian auto component sector increased 20 per cent to USD 43.5 billion in FY 2011–12; growth is likely to remain robust at 8–10 per cent in FY 2012–13 with the auto component industry expected to reach USD 113 billion by 2020 • L Large fi firms l play a dominant role in the organized Production volume by market range sector; of the total production in the sector in FY10, 15% large Indian firms accounted for a major share (at 43 per cent); MNCs formed 15 per cent Th b f f t i it i th OEM • The number of manufacturing units in the unorganized sector are far higher than those in the organized one Production breakup 25% Replacements 60% Exports 30% Production Breakup in Organized Sector Large Indian 70% Organized Unorganized 42% 43% Players MNCs Others 54 15% Source: ACMA
Auto & Auto Ancillary Indian Scenario: Auto Ancillary Exports India’s exports of auto components increased at a CAGR of 17.4 per cent to USD 6.9 billion during 2006‐07 to 2011‐12 • Exports will account for as much as 20 per cent of Export Market potential (USD billion) 30 h l k f ill i b 25 20 15 4 12.9 Other Markets Western Europe the total market of auto ancillaries by 2020 • Both domestic and export markets are almost similar in terms of potential share by different product types E f h l h fI di • Europe accounts for the largest share of Indian 10 1.7 North America auto components exports (36.0 per cent) followed 4.2 5 10.6 2.3 0.4 3.6 by Asia (28.0 per cent) and North America (23.0 1.1 0 per cent) 2009 2015(E) 2020(E) 8 Value of auto component exports (USD 5 2 6.9 billion) Export market potential by components (2020E) 15.80% Transmission & steering CAGR: 17.4% 6 4 2 0 3.1 3.8 4 3.4 5.2 10.50% 7.90% 31.60% Suspension & Braking Interior 55 2006‐07 2007‐08 2008‐09 2009‐10 2010‐11 2011‐12 Value of auto component exports (USD billion) 15.80% Engine & Exhaust 18.40% Source:ACMA
1.3.3 Automobile & Auto Ancillaries: Gujarat Scenario
Auto & Auto Ancillary Gujarat Scenario: Emerging Automobile Hub Gujarat is emerging as a key investment destination for the major automobile players Gujarat has a strong educational infrastructure in automobile sector. 27 colleges provide technical education in automobiles sector with annual ta e intake capac capacity ty o of 1,980. Additionally 111 colleges provide technical education in mechanical field with annual intake capacity of 57 p y 13,650.
Auto & Auto Ancillary Gujarat Scenario: Auto Industry Structure Gujarat is one of the leading states in owning vehicles with 1,44,13,717 total vehicles in FY 2011‐12 • Gujarat is one of the top three states in India in terms of the number of registered vehicles • Low transaction cost for i k i h Becharaji accessing market in the western and northern India. • The Delhi‐Mumbai Dedicated Freight Corridor project will Ahmedabad Kutch Sanand Mehsana g p j provide excellent rail connectivity for the auto sector in Sanand and for other industries. Rajkot Halol Vadodara • Cluster development approach and strengthening emerging clusters will add to the state’s ability to attract further 58 industrial investments Source: Commissionerate of Transport, Government of Gujarat Automobile Clusters in Gujarat
Auto & Auto Ancillary Gujarat Scenario: Auto Ancillaries in Gujarat Sound base : 30 clusters comprising castings & machine tools, brass parts, oil engines & electric motors, bearings, auto‐ancillaries In Gujarat, Auto and auto ancillary industry d covers, • Assembling and manufacturing automobiles • Manufacture of auto components for Rajkot Sanand Halol p all types of vehicles • CNG kits for automobiles • Industrial automotive bearings • Sheet Metal Parts • Automotive casting and other precision parts • Automobile gears • Automobile design centre • Auto ancillary SEZ/Park Cluster development approach and strengthening emerging clusters will add to the strength of the state 59 p pp g g g g g in attracting further industrial investments Source: Government of Gujarat
Auto & Auto Ancillary Gujarat Scenario: Major Auto Clusters Connectivity element Location Distance/ Connectivity S A N port 300 Airport Ahmedabad 30 Km/SH Nearest Kandla/Mundra 300‐400 Km Nearest City Ahmedabad 30 kms/SH NH/ State Highway NH 8A/ SH 20 kms/ On 4 lane SH Nearest Railway junction Ahmedabad 30 Kms/ SH A N Nearest Railway line Viramgam‐ Sanand < 5 km Connectivity element Location Distance/ Connectivity D H A L Nearest City Vadodara SH 87 Airport Vadodara Domestic Airport 35 Km Nearest port Dahej Cargo Port 185 Km NH/ State Highway NH 8 & NE 1 On 4 lane SH No 87 Nearest Railway line Vadodara to Godhra < 5 km Freight Corridor Delhi Mumbai Industrial 35 O L Corridor (DMIC) Km through SH 87 Source: GIDC 60
Auto & Auto Ancillary Gujarat Scenario: Major Automobile Players •GMI Pvt Ltd has invested ~ USD 327.86 million in its plant in Halol • Added investment of ~ USD 163.93 million to increase capacity to 1,10,000 units • Tata Motors Ltd has invested ~ USD 475 million for its Nano plant in Sanand •The plant has the capacity to manufacture 250,000 units per year •Atul Auto Ltd, a Rajkot based three‐wheeler company has invested ~ USD 10.33 million for setting up a 24,000 per annum capacity in Shapar near Rajkot •Bombardier Transportation India Ltd. has invested ~ USD 33.93 million to set up its wagon manufacturing plant at Savli in Vadodara district •Asia MotorWorks Ltd, manufacturer of heavy commercial trucks has invested ~ USD 229.5 million to set up its factory at Bhuj with an annual capacity of 50,000 vehicles •CEAT Ltd, the flagship company of RPG Enterprises Ltd setting up a tyre making facility in Halol with an estimated investment of ~ USD 245.9 million •The Company set up a plant with a capacity of 6.75 lakh tyres per annum at Limda, Baroda 61
Auto & Auto Ancillary Gujarat Scenario: Upcoming / Proposed Investments Maruti Suzuki's Rs 4,000‐crore Ford India has set up its second Honda Motorcycles and Hero MotoCorp is 4,000 plant in at Bechraji in Mehsana district of north Gujarat is likely to be manufacturing facility in the country at Sanand in Gujarat for a Scooters India (HMSI) plans to invest over 1,000 crore to set up a the final stages of acquiring land at Halol, Gujarat. It will invest INR 1,100 crore in the commissioned by fiscal year 2016‐17 total investment of USD 1 billion (INR 6000 crore). The plant will be commissioned by manufacturing unit near Mandal region and has already acquired 200 acres land new project, with annual capacity will be 12 lakh units, going up to 18 lakh units in 2014 the second phase 62
1.3.4 Automobile & Auto Ancillaries: Gujarat Scenario- 2020
Auto & Auto Ancillary Gujarat Scenario: 2020 By 2020, Gujarat aims to achieve 10% of Engineering output from Auto and auto components from current level of 3.7% Anjar Sanand Particular Symbol E i ti A t Cl t Navlakhi Savli Okha Rajkot Halol Existing Auto Clusters Emerging auto clusters in SIRs by 2015 Dholera Emerging auto clusters in Simar SIRs by 2020 DMIC influence area Investment Regions (SIR) will act as global investment destinations supported by 64 The upcoming Special destinations, modern infrastructure, premium civic amenities, centers of excellence and proactive policy framework.
Auto & Auto Ancillary Government Initiatives & Interventions and Key Government Bodies • An initiative by Government of India, provides automatic approval for foreign equity investment up to 100 per cent; no minimum investment criteria • Encourage R&D by offering rebates on R&D expenditure Auto Policy 2002 • Setting up of a technology modernization fund focused on SMEs • Establishment of automotive training institutes, auto design centers and special auto parks Automotive Mission Plan (AMP) 2006–16 • Set up at a total cost of USD 388.5 million to enable the industry to be on par with global standards • Nine R&D centers of excellence with focus on low‐cost manufacturing and product development solutions NATRiPs • Worked towards reduction of excise duty on small cars and increase budgetary allocation for R&D • Weighted increase in R&D expenditure to 200 per cent from 150 per cent in‐house) and 175 per cent from 125 per cent (outsourced) Encouragement by Dept. of Heavy Industries & Public Enterprises (in • Proposal to allocate USD2.7 billion for JNNURM to bolster sales Union Budget FY14 volumes of Medium and Heavy Commercial Vehicles (MHCV) 65
1.3.5 Automobile & Auto Ancillaries: Investment Opportunities
Auto & Auto Ancillary Investment Opportunities: Automobiles • Strong support from the government; setting up of NATRiP centres • Private players, such as Hyundai, Suzuki, GM, keen to set up R&D base in India S d i b l kill d li h ki India is fast emerging as a l b l & h b • Strong education base, large skilled English‐speaking manpower • Comparative advantage in terms of cost global R&D hub O t iti • The world’s cheapest car (Tata Nano) has directed focus on the low‐income market • Bajaj Auto, Hero MotoCorp and M&M plan to jointly develop a technology for two‐wheelers to run on natural gas l i lik l b i bl k i h i Opportunities for creating sizeable market segments h h • Electric cars likely to be a sizeable market segment in the coming decade through innovations • General Motors, Nissan and Toyota announced plans to make India their global hub for small cars • Light vehicle sales estimated to cross 3 million by the end of 2012 • Strong export potential in ultra low‐cost cars segment (to d l i d i k t ) Small‐car manufacturing hub 67 developing and emerging markets) Source: IBEF
Auto & Auto Ancillary Investment Opportunities: Auto Ancillaries R&D • Joint R&D with Indian companies for new product development and process innovation Process & • Partnerships with Indian SMEs to address product and process technologies • Off shoring manufacturing design work to JVs or partners based in India Design • Greenfield manufacturing facilities in India to meet the robust domestic demand Manufact uring potential • Establish India as a key link in the global auto components supply chain Customer service • Opportunity for strategic alliance to cover global customers Source: IBEF 68
FOR ADDITIONAL INFORMATION CONNECT US @ Industries Commissionerate Block No. 1, 2nd Floor, Udyog Bhavan, Gandhinagar, Gujarat, India ‐ 382 010 http://ic.gujarat.gov.in/ Phone: 079‐23252683 E‐mail: iccord@gujarat.gov.in Gujarat Industrial Development Corporation Block No. 4, 2nd floor, Udyog Bhavan, Gandhinagar, Gujarat, India – 382 010 http://www.gidc.gov.in/ Phone: 079‐23250583 E‐mail: vcmd@gidcgujarat.org 69
1.4 Chemical Industry
1.4.1 Chemical Industry : Global Scenario 71
Chemical Sector Global Chemical Industry: 2020 By 2020, developing countries would be home to 31 per cent of global chemical production, and 33 per cent of global chemical consumption Segment CAGR – 2010 15E CAGR – 2015 20E Industry Growth ‐ USD billion 2010‐2015‐Specialty Chemicals 5% 5% Petrochemicals 7% 7% 5,000 4,000 3,000 Commodity Chemicals 8% 7% 2,000 1,000 2413 3260 4362 0 Polymers 6% 6% 2010 2015E 2020E Others 5% 5% Industry Growth ‐ USD billion • Global market of chemical industry was estimated to be worth USD 3 trillion in 2012 excluding pharmaceuticals • Future growth of chemical industry is linked with demand in Asia, Middle East and Latin America • Europe, North America are likely to report modest growth (~2%), lower than anticipated global GDP growth • China is likely to emerge as the largest chemical region in the world by 2020 • India and other Asian countries are also indicating promising potential • For the emerging markets commodity chemicals is one of the promising sectors Specialty segment will 72 markets, sectors. chemicals be triggered by some companies having multiple business models across various markets Source: OECD, UNEP, IHS
1.4.2 Chemical Industry : India Scenario
Chemical Sector India Scenario Chemical industry's current turnover is about USD 30.8 billion which is 14 % of the total manufacturing output of the country • Indian chemical industry ranks 12th in the world by volume in the production of chemicals • Total production in the Indian chemical industry was 8,374 MT in FY12, a 2.5 per cent rise over FY11 • With 74 per cent of the total production share, alkali chemicals form the largest segment in the Indian chemical industry • India’s growing per capita consumption and demand for agriculture‐related chemicals offers huge scope of growth for the sector in the future • In India consumption of products lowest in the world; there is a huge India, petrochemical is still one of the hence untapped potential in this sector 8400 8374 Production of major chemicals (000'MT) Production share of major chemicals FY13 2% 8170 7% 8200 8000 7800 7600 7605 7823 7423 7651 16% 1% Dye & dyestuff Inorganic chemicals organic 7400 7200 7000 6800 2006‐07 2007‐08 2008‐09 2009‐10 2010‐11 2011‐12 74% chemicals Pesticides Alkali chemicals 74 Production of major chemicals (000'MT) Source: Department of Chemicals & Petrochemicals
Chemical Sector Segments & Characteristics of India chemical sector Key segments of India Chemical Industry Base chemicals Petrochemicals, man‐made fibres, industrial gases, fertilizers, chlor‐lk li d h i Specialty chemicals Dyes and pigments, leather chemicals, construction h i l l Pharmaceuticals Active Pharmaceutical Ingredients (APIs) df lti Agrochemicals Insecticides, herbicides, fungicides and h Biotechnology Bio‐pharma, bio‐agri and bio‐industrial products alkali and other organic and inorganic chemicals chemicals, personal care and other specialty chemicals and formulations other crop protection chemicals Characteristics of India Chemical Industry High domestic demand potential Focus on new segments such as specialty and knowledge chemicals Gujarat and Maharashtra have emerged as most favored zones Fragmented industry Increase in focus on R&D Source: KPMG, TSMG 75
Chemical Sector India scenario: Chemical Exports & Imports Exports have been rising over the year but still India is a net importer of chemicals • Total exports of chemicals grew from USD 3.5 billion in FY03 to USD 16.1 billion in FY12, a CAGR of 18.7 per cent • India has been a major importer of chemicals; the sector made up 5 per cent of India’s total imports in FY12 • Total imports of chemicals grew from USD 3.7 billion in FY03 to USD 24.0 billion in FY12, a CAGR of 23 per cent • During FY13 FY13, organic chemicals constituted 70 per cent of India India’s s total chemical exports exports, followed by dyes & dyestuff at 11 per cent Chemical exports of India (USD billion) India's chemical imports (USD billion) 18 16 14 12 10 7.7 9.1 11.2 11.4 13 16.1 CAGR: 18.7% 25 20 15 11.3 15.6 16 19.5 24 India s CAGR: 23% 0 2 4 6 8 3.5 4.1 5.1 6.3 10 5 0 3.7 4.7 6.1 7.5 8.8 76 Chemical exports of India (USD billion) India's chemical imports (USD billion) Source: FICCI, Department of Chemicals & Petrochemicals – Gov. of India
1.4.3 Chemical Industry: Gujarat Scenario
Chemical sector Gujarat: The hub for chemical industry Gujarat, the hub of chemical industry in India, accounts for 62 % of India’s petrochemical production, 53% of other chemicals production and 18% of India’s chemical exports • The chemical industry in Gujarat is a significant component of State's economy with revenues at ~ INR 4,50,000 crore in 2012 • Gujarat's chemical & petrochemicals industry comprises of about 500 large and medium scale industrial units, about 16,000 of small scale industrial units and other factory units and provides 16% of employment • Government support, world class infrastructure, strategic location, availability of skilled workforce and raw material makes Gujarat a preferred location for chemical plants • About 6600 chemicals & petrochemicals are produced in the state • Largest supplier of bio fertilizers, seeds, urea and other fertilizers • Also Gujarat has taken the lead to promote environment friendly practices through Effluent Treatment Plant; currently 28 such plants a re operational and further 6 are proposed 90% Pharmaceut 35% 51% 62% 65% 80% 80% 70% 60% 50% icals Chemicals Regional concentration of basic chemical industry 21% Gujarat 40% 30% 20% 10% 0% Petrochemic als Plastic Industry Industry contribution Gujarat to India 53% 5% 6% 6% Maharashtra UP Tamil Nadu Madhya Pradesh 78 wise of India, 2012 Salt Processing 9% Others Source: FICCI, Department of Chemicals & Petrochemicals – Gov. of Gujarat; GPCB
Chemical sector Gujarat: Chemicals & Petrochemicals Complexes Some of the largest chemicals & petrochemicals complexes of World are present in Gujarat Ch i l Refineries (87MTPA) Chemical and LNG terminal (15MTPA) Petrochemi cal complexes Chlor Alkali plants (1MMTPA) Soda Ash plants (3 MMTPA) Chemical Fertilizer plants Agro Chemicals IOCL Petronet LNG terminal Dahej IPCL GACL IPCL Tata Chemicals Gujarat Heavy IFFCO UPL Baroda Agro A i t RIL LNG Hazira RIL UPL Shriram y Chemicals Nirma Saurashtra GSFC Aristo Biotech Super Crop Safe Essar Chemical port terminal Dahej ONGC Atul Indian Rayon Chemicals Dhrangad hra Chemicals GNFC KRIBHCO Ltd Excel Crop Care Figures indicate capacities in MTPA as of 2012 79 Source: Department of Chemicals & Petrochemicals – Gov. of India, MOPNG
Chemical sector Gujarat: Petroleum, Chemical & Petrochemical Investment Region (PCPIR) PCPIR is a specifically delineated Investment Region planned for the establishment of production facilities for petroleum, chemicals and petrochemicals • Spread over 453 sq km of brown‐field area in the coastal belt of Gulf of Khambhat in Bharuch District Vi i it f • Vicinity of other existing GIDC chemical estates, viz. Jhagadia, Ankleshwar, Panoli and onsite chemical port terminal & LNG terminal at Dahej • The proposed SEZ in PCPIR includes, petrochemical and downstream petrochemical industries, synthetic organic chemicals, industrial gas producing industry, packaging industry, shipbuilding/fabricating unit and other small chemical industries Abundance of Natural Resources Location Quality Resources Export Promotion Measure PCPIR: Unique Legal Selling Proposition F k Well Defined I f t t 80 Infrastructure Framework Source: Gujarat Industrial Development Corporation
Chemical sector Gujarat: PCPIR Advantage Export promotion measures Well established infrastructure Notified and Regulatory Framework Gujarat SIR Act, 2009 Gujarat SEZ Act 2004 Availability of natural resources Concentration of Chemical port terminal and chemical storage facility at Dahej Operational Dahej SEZ Formally approved Ceramics SEZ at Jhagadia Quality work force, f l l b l Notified Area Authority under GIDC Act, 1962 Gujarat Town Planning and Urban Development Act 1976 Petroleum, Chemical and Petrochemical estates across the district Rich natural resources peaceful labour, least and feedstock man days lost Act, Gujarat Infrastructure Development Act, 1999 availability Location advantage Road and rail Airport connectivity Support infrastructure • With a capacity of 22MMTPA, Dahej port is present in the region • The anchorage is a • National Highway 8 passes through the district, connecting it with Ahmedabad • The nearest airport is present in Vadodara which is 100 km away from the region • LNG terminal, liquid fuel jetty and solid cargo jetty at • Two 220 KV power sub distance of 5 km from the old port and 6 km from a container terminal in Jageshwar, Bharuch (182 km) and Mumbai (362 km), along with the DMIC • Delhi‐Mumbai broad gauge railway line, region. • Ahmedabad International Airport is 200 km sub‐stations at Dahej and Vilayat, three 66 KV sub‐stations at Dahej, Luna and Vilayat • Water Supply by GIDC g g y , Bharuch‐Dahej railway line pp y y and GWSSB; Gas Supply by GGCL Source: Gujarat Industrial Development Corporation 81
Chemical sector Gujarat: Policy Interventions Gujarat aspires to become a beacon of comprehensive social and economic development Industrial Policy 2009 Thrust Sectors Manufacturing Services I f t t Incentives Various Sector specific Subsidy on electricity duty HR/Labour Labour law flexibility Industry‐academia collaboration Business Environment Single window clearance Marketing Infrastructure Support for Urban Infrastructure Regional Focus FDI/NRI Up gradation of industrial estates support for development of specialized institutes support Grievance redressal Information centers Physical Industrial •In Chemical Sector, 100% FDI is permissible. Manufacture of most chemical products inter‐alia covering organic / inorganic, dyestuffs & Pesticides is de‐licensed •The entrepreneurs need to submit only IEM with the Department of Industrial Policy & Promotion. •Hazardous products come under compulsory licensing policy Licensing Policy • Customs Duty on most Organic, C t D t Inorganic Chemicals, Pharmaceuticals, Fertilizers and other miscellaneous Custom Duty chemicals is 7‐10% Excise Duty • On almost all chemicals the excise duty is 16% VAT Duty • VAT on most chemicals reduced to 5% in Gujarat Source: Industries Commissionerate – Government of Gujarat 82
Chemical sector Gujarat: Policy Interventions As per Industrial Policy, 2009 Government of Gujarat has developed SEZs, SIRs and Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) to encourage the investments in chemicals sector. Interest Subsidy on eligible parameters Venture Capital & Patent Assistance Quality Certification & Skill Enhancement Technology Acquisition Fund Support to R&D Institutions Market Development Support Support for Vendor Development Support to auxiliary industries for value addition Cluster Development p Rehabilitation of Sick Promotion of specific in PPP mode Units p sectors For modernization program one can avail of 5% subsidy on the applicable interest 83 over the loan period Source: Industries Commissionerate – Government of Gujarat
1.4.4 Chemical Industry : Gujarat 2017
Chemical sector Gujarat : Vision 2017 Chemical industry in Gujarat has the potential to reach ~USD 70 billion by 2017 Contribution of Specialty and Fine Chemicals will be doubled by 2017 Development Agenda: • Development of this sector will lead to value Chemical centers in Gujarat addition • Development of linkages with user sectors and increasing product portfolio – meet the needs of other sector (Textiles and Auto industry are Ahmedabad key industrial users that need the development of specialty and fine chemicals for their growth) • Identify competitive advantages existing within Jamnagar Dahej Vadodara Bharuch the State – Gujarat is one of the largest producers of castor and guar seeds in India. Potential of application of these crops in specialty and fine chemicals is immense Valsad Hazira 85
Chemical sector Gujarat: Proposed Interventions New chemical zones for Specialty and Fine Chemicals • 3 speciality chemical zones to be developed in Jambusar, Padra and Dahej Infrastructure management • Facilitate provisioning of modern infrastructure Efficiency – energy and water • Centralized waste management institution evaluation and institution. • Shift philosophy from end of pipe line to self treatment eliminating reliance on CETPs • Industry‐academia‐government collaboration – to set standards and for enforcement Promoting R & D and Centre of Excellence • Centre of Excellence for Specialty and Fine Chemicals will be set up in Ankaleshwar and Dahej Ensuring Safety, Health and Environment • Encouraging practices that ensures health, safety and environment • 28 Common Effluent Treatment Plant (CEPT) 86 are operational and six are proposed for the same
Chemical sector Gujarat: Leading Players and Investment Opportunities Textiles Chemicals High Performance Pigments and Coating Products Chemicals Engineering Polymers oducts Bio Refineries Feedstock Linkages PP Filament Yarn Acrylic Fibres 87
FOR ADDITIONAL INFORMATION CONNECT US @ Industries Commissionerate Block No. 1, 2nd Floor, Udyog Bhavan, Gandhinagar, Gujarat, India ‐ 382 010 http://ic.gujarat.gov.in/ Phone: 079‐23252683 E‐mail: iccord@gujarat.gov.in Gujarat Industrial Development Corporation Block No. 4, 2nd floor, Udyog Bhavan, Gandhinagar, Gujarat, India – 382 010 http://www.gidc.gov.in/ Phone: 079 079‐23250583 E‐mail: vcmd@gidcgujarat.org Energy and Petrochemicals Department Bl k Block N No. 5 5, 5th fl floor, S hi l Sachivalaya, Gandhinagar, Gujarat, India – 382 010 http://guj‐epd.gov.in/ Phone: 079‐23250771 E‐mail: secepd@gujarat.gov.in 88
1.5 Gems & Jewellery Industry
1.5.1 Gems & Jewellery Industry : Global Scenario
Gems & Jewellery sector Global Scenario Given the geographic dispersion of the value chain, Gold & Jewellery Industry is extremely global in nature • Global jewellery sales is likely at to grow a CAGR of 4.6 per cent from USD 185 billion in 2010 to USD 230 billion in 2015 • Accelerating economic growth in Asian countries like China and India will enhance the market potential for jewellery • Gold jewellery will ride on demand from traditional markets like India, Turkey, and China to touch USD 94 billion by 2015 • Global jewellery fabrication output will grow at a CAGR of 5.1 percent to reach USD 95 billion by 2015 Projected global jewellery sales (USD billion) 344 % Share of key markets in global jewellery sales, by value, 2015 350 300 250 200 150 146 185 230 CAGR: 4.6% US, 25.6% ROW, 28.4% 100 50 0 2005 2010 2015E 2020E Projected global jewellery sales (USD billion) China, 13.4% India, 12.3% Middle UK, 2.1% Italy, 2.7% Turkey, 3.2% Japan, 3.7% 91 Source: KPMG analysis, GJEPC, McKinsey Report East, 8.7%
1.5.2 Gems & Jewellery Industry: India Scenario
Gems & Jewellery sector India Scenario The domestic gems & jewellery market is estimated to be USD 40 billion and is predicted to grow at a rate of ~13 percent per annum by 2015 to reach USD 45‐50 billion mark. • The sector contributes around 6 – 7 percent to the country’s GDP • It p provides p y employment to y nearly 2.5 million p p people with the p potential to g generate employment of 0.7 to 1.5 million over the next five years • It is one of the fastest growing sectors and the size of the industry is expected to double in the next five years • There are more than 3,00,000 Gems & Jewellery players across the country, with majority being small players • Globally, India is considered as one of the major hubs for diamonds and jewellery manufacturing and is an important source of supply to the world • India is the largest consumer of gold, accounting for nearly 29 percent of the total world gold consumption • Gold jewellery forms around 80 per cent of the Indian jewellery market Share of India Demand in Global Demand 100% 29% 25% India 80% CAGR= 13% – Range on) 20 40 60% 40% 20% 0% 71% 75% Rest of world Estimated Size (USD billio 18 35 93 Jewellery Bar & Coins Source: FICCI, GJEPC, Technopak Analysts, ONICRA, Millennium Post 2009 2015
Gems & Jewellery sector India Scenario: Exports & Imports G J ll i Gems & Jewellery is the second highest earner of FOREX in India and accounted for ~15 percent of the India’s total merchandise exports in FY 13 • The gems and jewellery industry significantly contributes to the growth of the Indian economy • The total exports of Gems and Jewellery for FY 13 was around USD 39.03 billion, including that of cut and polished diamonds at USD 17.41 billion, gold at USD 18.28 billion and colored gemstones at USD 0.65 billion • In 2012‐13, jewellery exports outperformed textiles and apparel exports by 25 per cent • Gems and Jewellery industry is highly dependent on imports of raw materials, of which rough diamonds account for almost 50 percent of the imports • There is immense dependence on import of gold due to its little/ limited production in the country. This has made the industry extremely vulnerable to any regulations that constrain gold supply • India is also one of the largest importer and consumer of silver in the world Major Destinations of and Jewellery 33.20% 6.20% Gems Export OECD Countries OPEC Countries 58 80 60 Gems and Jewellery Exports (USD billion 1.10% 21.30% 38.20% Eastern Europe Developing Countries Others 25 40 20 0 2009 2015E Source: GJEPC, Technopak Analysts, DGCI&S (Kolkata) 94
Gems & Jewellery sector India Scenario: Growth and Demand Drivers With per capita consumption almost 1/10th that of any matured market India presents a very large potential market With the growing economy spending power the people is also rising a Increasing purchasing and spending power economy, of with CAGR of 17% since last 3 years, leading to growth of jewellery demand in India Investment led There is a substantial investment demand demand, in both jewellery bar and coin demand form, due to the great attractiveness of gold as an investment option E t f N l It is anticipated that large investments of about USD 1 billion in the coming Entry of New players ld b d b l t il /b d hi h ld t l th in retail sector years would be made by large retailers/brands which would catalyze the growth of the industry, set higher standards and create value across the value chain. Traditional Domestic Tradition of buying jewellery during important festivals like Diwali and Demand Dhanteras and during weddings Foreign Demand The sector is the second largest foreign exchange earner in the Indian economy; contributing ~15 percent to the total export earnings of the country Source: FICCI, Onicra, Millennium Post 95
1.5.3 Gems & Jewellery Industry: Gujarat Scenario
Gems & Jewellery sector Gujarat Scenario Gujarat has the highest share (nearly 85 percent) in the total national Jewellery production and accounts for 72 percent of the world’s share of processed diamonds. Surat has 65% share in India's diamond trade. • Gujarat accounts for about 80 percent of diamonds Some of the leading players in Gujarat processed and 95 percent of diamonds export from India • Almost 8 out of 10 diamonds in the world are processed in Gujarat • 90 percent of the total diamonds in Gujarat are processed by about 10,000 diamond units located in and around Surat • Gujarat is also internationally renowned for the production of unique hand‐made silver ornaments (85 percent of total silver Jewellery production of India) • A jewellery manufacturing Gujarat's Gems & Jewellery sector is expected to grow at a rate of 15 percent gold cluster in Ahmedabad has a productivity of around 50 gm of production /day, highest in the country • Diamond processing and trading unit are spread across the State in cities such as Surat, Ahmedabad, Palanpur, Bhavnagar, Valsad and Navsari Source: Industries Commissionerate ‐ Government of Gujarat, IBEF 97
Gems & Jewellery sector Gujarat Scenario: Value Chain Analysis Gujarat has widespread presence across the whole of value chain Mining Gemstone Processing Jewellery Manufacturing Jewellery Retailing Diamond, Gemstone, Gold, Platinum Cutting & Polishing Design & Fabrication Studded Jewellery Expanded Diamond Value Chain Mining Sourcing Rough Trade Processing Gujarat’’s Presence in the Gems & Jewellery Value Chain Mining Processing Fabrication Consumption Diamond Gold Platinum Silver & Others Established Presence Emerging Centre/ Market Not Applicable in Gujarat Source: Industries Commissionerate ‐ Government of Gujarat 98
Gems & Jewellery sector Gujarat Scenario: Growth Drivers The growth of this industry is primarily attributed to the increase in the demand driven by expansion of the middle class and support from the government in increasing the competitiveness Low Labour Cost F bl • Gujarat has identified Gems & Jewellery sector as one of the thrust areas for development • One of the important factors Growth Drivers of Availability of skilled craftsmen Favorable Government Policies contributing to the growth has been the development of SEZ’s by the state • A single product SEZ specially Gems & Jewellery Sector in Gujarat Cost Competitive‐ Development of SEZ’s and Gems & single‐product, dedicated to gems and Jewellery with available infrastructure, Gujarat Hera Bourse (GHB), is Competitive located very near Surat city ness Rising disposable income & consumer jewellery Parks ocated e y ea Su at c ty • There is also a multi product SEZ, Surat SEZ (SurSEZ), which also aids the growth of gems and jewellery sector 99 demand Source: Industries Commissionerate ‐ Government of Gujarat
Gems & Jewellery sector Gujarat Scenario: Gems &Jewellery Clusters To leverage on the progressive industrial sector of the state, the government has initiated a “Cluster development” model to increase cost competitiveness and efficiency through collaborative efforts and knowledge sharing Region Activity Surat Diamond Processing, Jewellery Gems & Jewellery Clusters in Gujarat Palanpur Diamond Processing Ahmedabad Diamond Processing, Gold & Silver Jewellery Bhavnagar Diamond Processing Navsari Diamond Processing Rajkot Gold & Silver Jewellery Khambhat Gemstone (Agate) Valsad Jewellery S i h l di d i l i h ld d i ll d Silk Ci S kli i h Di d ” 100 Surat is the largest diamond processing cluster in the world and is called “A Silky City Sparkling with Diamonds” Source: Industries Commissionerate ‐ Government of Gujarat
Gems & Jewellery sector Gujarat Scenario: Assaying & Hallmarking Centers in Gujarat Center Name District Gujarat Gold Centre Ahmedabad Assaying & Hallmarking centres in Gujarat Kesar Hallmarking Centre Ahmedabad MMTC Ltd. Ahmedabad Parkar Ahmedabad Kachcha Gold Shradha Assaying & Hallmarking Centre Ahmedabad Gujarat Gold Centre Vadodara Ahmedabad Vadodara Rajkot National Center for Hallmarking Surat VG Assaying & Surat Gold Hallmarking Centre Rajkot Rajkot is internationally known for its unique hand made gold and silver ornaments which constitute 85% of the total jewellery production in India” Source: Industries Commissionerate ‐ Government of Gujarat 101
Gems & Jewellery sector Gujarat Scenario: Educational Infrastructure Entrepreneurship merged with skilled craftsmanship is the key enabling factor for Gems & Jewellery courses Labour cost per carat in USD sector in Gujarat Major institutions offering specific to 160 140 120 Gems & Jewellery Indian Diamond I tit t (IDI) National Institute of Fashion T h l National Institute fD i NID) 100 80 60 Institute IDI), Surat Technology (NIFT), Gandhinagar of Design (NID), Ahmedabad Graduate and Diploma Level programmes offered 40 20 0 dia ium ina rael p p g by Indian Diamond Institute include: • Diamond Sorting and Grading • Gemology Gujarat/In Antwerp/Belgi Shenzen/Ch Telaviv/Isr gy • Jewellery Designing, Manufacturing and Appraising • Jewellery Business Management • Gem Diamond Identification and Grading 102
Gems & Jewellery sector Gujarat Scenario: Government Initiatives and Interventions (1/2) Gems & Jewellery is an important sector in Gujarat due to its immense contribution to the state’s economy and employment of a sizeable population Policy Support for fostering growth in Gems & Jewellery Sector Additional interest subsidy at 3% to a maximum f 1 5 illi f t t hi h th 5 • The objectives of the schemes of INR 1.5 million for a term not higher than years Assistance for setting up Hallmark Certification centers for Jewellery and testing centers for Gems are :  To promote new centers for Gems & Jewellery activities in the State Support for setting up of Training Institute for the development of Gems & Jewellery sector Scheme for supporting safety measures and protection  Focus on studded jewellery to expand processing base for higher value from occupational hazards  Establish a strong presence Assistance of viability gap funding of 20% of the total project cost to private developer intending to develop Jewellery park on PPP basis g p of Gujarat Gems & Jewellery industry in International market Source: Industries Commissionerate ‐ Government of Gujarat 103
Gems & Jewellery sector Gujarat Scenario: Government Initiatives and Interventions (2/2) The government has implemented such an FDI policy which allows 100% FDI and 74% in exploration and mining of diamonds and precious stones and 100% for gold and silver and minerals' exploration, mining, metallurgy and processing. 100% FDI through automatic route Exemption for rough coloured precious p g p gems from custom duty Duty free import of consumables for metals other than gold and platinum up to 2% on Freight on board Duty free import entitlement for rejected jewellery up to 2% of FOB value of exports Import of gold of 18 carat and above under the replenishment scheme No import duty on polished diamonds The limit value of jewellery parcels for exports through foreign post office raised from $50k to $75k Establishing ‘ Diamond Bourses’ to make India and international diamond trading hub Source: Industries Commissionerate ‐ Government of Gujarat 104
1.5.4 Gems & Jewellery Industry: Investment Opportunities
Gems & Jewellery sector Gujarat Scenario: Investment Opportunities Gems and Jewellery is one of the fastest growing Industries in the country. Following are some of the identified projects to venture: Jewellery Fabrication &Retail Infrastructure Development Tools &Machinery • Diamond studded jewellery • Gold jewellery • Silver jewellery • Jewellery Parks • Modern Jewellery units • Educational institutes focusing on Gems & • Diamond blade • Diamond cutting & tools • Platinum jewellery Jewellery sector d l h l • Rings • Establishing Hallmark • Studded Gold & Silver Center jewellery chains and • Gemology institute with • Diamond tools & wheels • Gem cutting & j y processing unit ornaments testing facility • Hand made Gold and Silver ornaments • Technology Upgradation 106
FOR ADDITIONAL INFORMATION CONNECT US @ Industries Commissionerate Block No. 1, 2nd Floor, Udyog Bhavan, Gandhinagar, Gujarat, India ‐ 382 010 http://ic.gujarat.gov.in/ Phone: 079‐23252683 E‐mail: iccord@gujarat.gov.in Gujarat Industrial Development Corporation Block No. 4, 2nd floor, Udyog Bhavan, Gandhinagar, Gujarat, India – 382 010 http://www.gidc.gov.in/ Phone: 079‐23250583 E‐mail: vcmd@gidcgujarat.org 107
1.6 Pharmaceutical Sector 108
1.6.1 Pharmaceutical Sector : Global Scenario 109
Pharmaceutical Industry Global Scenario The world pharmaceutical market was worth approximately USD 1094 billion in 2013 Breakdown of World Pharma Market (2012) 14.7% 5.9% USA & Canada • Riding on the wave of advances of science and technology, the research based pharma industry is entering an exciting new era in medicines development. 11.7% Europe Japan • Global market of generic medicines was worth approximately USD 274 billion in 2013 • 17 high growth emerging markets including China, India, Brazil, Russia and Mexico will contribute 28 per cent of total spending by 41% [VALUE] Africa, Asia (Excluding Japan) and Austrailia Latin America 2015, up from 12 per cent in 2005 • Major pharmaceutical companies include Pfizer, Novartis, Sanofi, Merck and Co., Roche, GlexoSmithKline, Abbot, AstraZeneca, Amgen and Eli Lilly & Co. On an average out of 10,000 substances synthesized in laboratories, only one or two will successfully pass all phases of development and enter the market as medicine R & D in Pharmaceutical When a new active substance is synthesized in laboratory, it takes average 12‐13 years for it to clear all stages to become a marketable product For a research and development of a single medicine and unveil to the market, approximately USD 1.5 billion is spent Source: The Pharmaceutical Industry in Figures by EFPIA; IMS MIDAS, 2013 110
1.6.2 Pharmaceutical Sector : India Scenario 111
Pharmaceutical Industry India Scenario India is among the top five pharmaceutical emerging markets with healthcare market expected to reach approximately USD 31.59 billion by 2020 • Domestic market for the Financial year 2013‐14 was approximately USD 13.18 billion • Domestic market of generic drugs for the financial year 2013‐14‐ stood at USD 11.0 billion • India stands 3rd in the world in terms of volume of production. • India’s share in World Generic Market is 4%. (excluding India’s domestic market). Indian Pharma Industry Enablers Competent Workforce Information & Technology Cost Effective Chemical Synthesis Globalization Legal & Financial Framework Consolidation Source: FDCA 112
Pharmaceutical Industry India Scenario • Indian pharmaceutical industry covers very wide spectrum of products ranging from simple healthcare pills to intricate products like vaccines, r‐DNA products and hi‐tech cardiac stents etc. • Pharma sector in India is highly fragmented with over 20,000 registered units; which meets 70% of domestic demand • India houses around 8000 manufacturing units, producing approximately 1500 APIs (Active Pharmaceutical Ingredients) • India is likely to offer a USD 8 billion market for MNCs across the world • India’s exports stood at USD 15.04 billion in 2013‐14, which is approximately 4% of the global share. Over 55% exports of India are to highly regulated markets • Pharma products are exported to over 200 countries with largest destination being US followed by UK Pharmaceutical R&D and Product Value Chain Research Drug Substance Production Formulated Pre‐Clinical Development Clinical Development Primary Process Development Drug Substance Production Dosage Form Development Dosage Form Production Discovery Research and Development Drug Production Packaging Assembly Logistics Source: Report by Corporate Catalyst India; DGCIS 113
1.6.3 Pharmaceutical Sector : Gujarat Scenario 114
Gujarat – The Pharmaceutical Hub 109 years of excellence Only manufacturer of Doxorubicin HCL Liposome injection in the World at present 70% of India’s 50% of India’s 80% of world’s Isoniazid (used for treatment of tuberculosis) is produced in Gujarat Only manufacturer of Vitamin C and Dapsone in India India s cardiac stents manufactured is from Gujarat India s intraocular lenses manufactured is from Gujarat ~40% of India’s machinery for pharma sector manufactured is from 58% India’s orthopedic implants manufactured is from Gujarat Gujarat 40% of 3324 manufacturing 33% of India’s pharma Produces 35% of CRAMS Companies India’s Diagonistic Re‐agent sector turnover; 28% of India’s pharma export licenses; Home to ~40% of CRO in the country Gujarat, an established manufacturing base for bulk drugs and formulations, is poised to capture global 115 opportunities to become a Global Pharmaceuticals Hub
Pharmaceutical Sector Gujarat: Facts The State manufactures and exports different dosage forms including generic drugs, intricate vaccines, r‐DNA products, cytotoxic drugs external preparations, sex hormone drugs small and large Total sales units in Gujarat are 30,335* ; out of which 48% units are retailers and 42% are wholesalers and rest 10% serve in Manufacturing Units in Gujarat* 3 8 8 drugs, volume parenteral, APIs, hi‐tech cardiac stents bio‐pharma products etc both categories 639 378 Gujarat is the first state in the country to issue license through I.T. application. 10 states have adopted L. M. Pharmacy College, India’s first pharmacy college, was established in Gujarat in 1947. B. V. Patel PERD Center, NIPER, MS 2299 this model. University are other major pharmacy colleges in the state. Allopathic Ayurvedic Cosmetics Homeopathic Source: FDCA; IBEF 117 * Data as of 1st July, 2014
Pharmaceutical Sector Pharma Clusters in Gujarat (1/2) Ahmedabad cluster Manufacturing Base: Formulations APIs Vadodara cluster Manufacturing Base: Formulations  Biogenerics  Biologicals  Contract manufacturing Bharuch and Ankleshwar Vapi/ Valsad cluster cluster Manufacturing Base:  APIs  Formulations Manufacturing Base: Formulations  APIs Device and Diagnostics 118  Vaccines g
Pharmaceutical Sector Pharma Clusters in Gujarat (2/2) Characteristic of Pharma clusters in Gujarat Location Existing Products Export Potential Market‐based/ Resource‐based/ Infrastructure‐based Potential future products Infrastructure Ahmedabad • API • Finished Dosages High Market and Infrastructure • Biological Manufacturing • Biological Products • Contract Manufacturing • Medical Devices • CRO • CRAMS Vadodara • Finished Dosages High Market and • API • Bio‐generics Infrastructure • CRAMS • Biological Manufacturing Bharuch & • APIs High Resource • APIs for global Ankleshwar • Formulations • Vaccines g g companies Vapi & Valsad • APIs • Formulations High Resource • Intermediate & Finished Dosages 119 • Device and Diagnostics Source: KPMG Analysis
Pharmaceutical Sector Special Economic Zones (“SEZ”) and Special Investment Regions (“SIR”) Zydus Infrastructure Pvt. Ltd. Location: Ahmedabad Area: 49 hectare Likely activities: Pharmaceuticals CPL Infrastructure Pvt. Ltd. Location: Ahmedabad Area: 122 hectare Likely activities: Biologicals, APIs & Pharmaceuticals Dishman Infrastructure Ltd. Location: Ahmedabad Area: 106 hectare HBS Pharmaceuticals SEZ Location: Bharuch Area: 125 hectare Likely activities: R&D SEZs SIRs Likely Activities: Bulk drugs D, Bulk drugs, Intermediates & Contract manufacturing Pharmaceuticals are identified potential Dahej SEZ Location: Dahej Area: 1125 as a sector in 3 SIRs hectares Pharma related activities: APIs, Intermediates, bulk drugs and various pharmaceutical formulations Industrial Parks: Name District Area ( sq q ) km) Changodar Ahmedabad 319 Viramgam Ahmedabad 190 Gujarat Pharma Techno Park Location: Ahmedabad Area: 17.07 hectare 120 Okha Jamnagar 206 Likely activities: Pharmaceutical Source: GIDC, GIDB
Pharmaceutical Sector Gujarat: Major Companies (1/3) ■ Key business areas ‐ Finished formulations, APIs ■ Key therapeutic areas ‐ CVS, CNS, diabetology, gastroenterology, oncology, pain management, anti allergic ■ Key research areas ‐ generics, process development and complex generics ■ Has 23 manufacturing plants across the world and reported revenues of USD 2 billion during 2012‐13. ■ Sun Pharmaceutical Advanced Research Centre (SPARC) is situated in Vadodara (Baroda). Manufacturing plants in Gujarat are located at Halol, Ankleshwar and Vadodara. ■ Key business areas – Finished formulations, APIs, fine chemicals, animal health and cosmeceuticals ■ Key therapeutic areas ‐ CVS, CNS, women health, respiratory, pain management, anti infective, oncology, nephrology, neuroscience and dermatology ■ Key research areas – New molecular entities, novel drug delivery system, identification & validation of therapeutic targets, therapeutic proteins and vaccines by r‐DNA technology ■ Leader in Cardiology, Gynecology, Gastro Intestinal and Respiratory therapy segments ■ Formulations business in India posted sales of USD 387.2 million in 2012‐13 ■ Launched more than 30 new products in the key markets of Asia Pacific, Africa and Middle East during 2012‐13 ■ Key business areas ‐ Finished formulations and APIs ■ Key therapeutic areas ‐ Cardiovascular, central nervous system, gastro‐intestinal, diabetology, anti infective and pain management ■ Key research areas ‐ Discovery research, generic drug development, new drug delivery system and value added generics ■ Research Plant is located in Bhat Village in Gandhinagar with investment of USD 40 million Source: IBEF; FDCA 121
Pharmaceutical Sector Gujarat: Major Companies (2/3) ■ Key business areas – Formulations, APIs, hospital products ■ Key therapeutic areas ‐ CVS, gastro intestinal, analgesic, anti‐infective, antidiabetic, vitamins, haemostatic, immunomodulators ■ Key research areas ‐ New drug discovery, new drug delivery, plant tissue culture, genetic engineering, biosynthesis, phytochemistry ■ Cadila Pharmaceutical has strategic collaboration with Europe based pharma companies including Pergamum AB and Bactiguard from Sweden ■ Key business areas – Finished formulations formulations, APIs APIs, contract research ■ Key therapeutic areas ‐ CNS, CVS, diabetology, oncology, gastroenterology, r‐DNA, urology and pain management ■ Key research areas ‐ NDDS for formulations, API capabilities for Anti cancer agents, oral formulations, NDDS and drug delivery mechanisms ■ As of 31st of March 2013, Intas has grown to be a ~ USD 650 million organization with a revenue growth over 30% CAGR over the last 5 years and a profit growth of ~50% CAGR over the same period ■ Intas has developed 10 manufacturing facilities globally ■ Key business areas ‐ APIs, intermediates, y , , fine chemicals, quaternary compounds ■ Specialised services ‐ Contract manufacturing and contract research ■ Key research areas ‐ Research for contract manufactured products, pilot studies of new molecules, process optimisation and improvement, research for in‐house applications (APIs, intermediates, fine chemicals) ■ Provides a range of solutions at locations in Europe and China besides India Source: IBEF; FDCA 122
Pharmaceutical Sector Gujarat: Major Companies (3/3) ■ Key business areas – Finished formulations, APIs, Chemicals, herbal nutraceuticals and veterinary ■ Key therapeutic areas ‐ CVS, gynecological, gastrointestinal, NSAIDS, antibacterial, antihistamine, hypoglycemic, vitamins, antiulcerant ■ Key research areas ‐ Chemistry and synthesis, formulations development, contract/Collaborated Research ■ Vadodara based plant has the India ■ Key business areas – APIS, Branded generic medicines ■ Key therapeutic areas ‐ Dermatology, hormones, controlled substances, oncology and modified release products largest fermentation capacity in ■ The company has a state of the art Research Centre at Vadodara. ■ Key research areas ‐ Process research development, formulations development, analytical research and clinical research ■ The Ankleshwar API manufacturing facility, which is approved by the US‐FDA, MHRA, KFDA and WHO, caters to the regulated markets of US, Europe and Japan ■ Key business areas – APIs, Generic drugs, injectables (LVP, SVP) ■ Key therapeutic areas‐ Anesthesia, critical care, renal care, enteral nutrition and oncology ■ Key research areas ‐ Product development, formulation studies, method development and validation and stability studies ■ Having presence across 100 countries, the company manufactures and markets products across multiple markets ■ Key business areas – Generic drugs and OTC (Over‐the‐Counter Drugs), APIs ■ Key therapeutic areas‐ CNS, respiratory, oncology, pain women's health therapeutic areas, biologics ■ Key research areas ‐ High‐barrier generics, NTEs (New Therapeutic Entities), CNS (Central Nervous System) ■ The Teva Sanand OTC facility represents a critical component of PGT Healthcare (headquarters in Geneva), Teva’s international partnership and joint venture with Procter & Gamble. Source: FDCA 123
Pharmaceutical Sector Gujarat: Educational Infrastructure ll f h h d b d Education / research institutes Research and  L M College of Pharmacy, Ahmedabad  Institute of Pharmacy ‐ Nirma University, Ahmedabad  National Institute for Pharmaceutical Education and Research (NIPER) ‐ Ahmedabad  Faculty of Pharmacy, MS University, Vadodara development Manufacturing  Zydus Cadila Healthcare Ltd.  Claris Life sciences Ltd.  Cadila Pharmaceuticals Ltd.  Intas Pharmaceutical Ltd.  Sun Pharma  Torrent Pharmaceuticals Ltd.  Dishman Pharmaceuticals  Abott Laboratories  Wyeth  Jubilant Organosys Marketing and exports Contract research organizations  Lambda Therapeutics  Quintiles Research (India) Private Limited  Kendle INC Research  Thermofisher Biopharma Services (i) Pvt. Ltd.  Synchron Research Services Private Limited  B A Research India Limited Provisional Intake Capacity of Pharmacy Colleges in Gujarat (2013‐14) Govt./GIA or Self Financed No. of Colleges Intake Capacity Govt./GIA 4 235 Self Financed 78 4890 Total 82 5125 Source: The Admission Committee for Professional Courses 124
Pharmaceutical Sector Gujarat: Government Policies and Initiatives (1/2) Gujarat Industrial Policy 2009 Government Initiatives Promotion of Establishment of Presence of National Institute Scheme for assistance to Mega / Innovative projects Interest Subsidy to MSMEs generic drugs by giving them preference in Government purchases for Pharmaceutical Education and Research (NIPER) for Human resource development Pharmaceutical Export Promotion Council (Pharmexcil) Venture Capital Assistance for skill enhancement and Establishment of Gujarat Genomics Initiative, The State has allowed setting up of Special Economic Zones in Incentives to encourage R&D in p the Assistance up‐gradation programs Genetic Diagnostic centers and Gene Banks the sector which will boost pharmaceutical investments sector in terms of various tax benefits I T application Financial Assistance for improving industrial infrastructure Support to R&D institutes For quick disposal of various documents like CoPP, NCC and FSC, FDCA has started the process Establishment of Center of Excellence for Clinical Research and various sectors fb h l I.T. for issuance of manufacturing license, sales license and product license i l db of I.T. application of biotechnology implemented by FDCA Source: Gujarat Industrial Policy 2009 125
Pharmaceutical Sector Gujarat: Government Policies and Initiatives (2/2) Graded interest subsidy for five years New Industrial Park will be provided at 7% for MSMEs and 2% for large industries having an actual investment up to INR 100 crore (USD 16.67 million) incentive of 50% of total expenditure up to INR 20 crore (USD 33.33 million) for core infrastructure development within the Industrial Park Interest Subsidy Assistance for core infrastructure Scheme for Assistance to Manufacturing Sector‐2013 Assistance for Centre of Excellence (CoE) Assistance for setting up the core facilities Assistance up to 80% of the total expenditure up to INR 10 crore (USD 16.67 Assistance of 70% of the total expenditure including recurring di expenditure f of 3 years up to INR 20 crore (USD 33.33 million) for national million) for the cost of core facilities needed level CoE Source: Scheme for Assistance to Manufacturing Sector‐2013 126
Pharmaceutical Sector Globalization model for Gujarat’s Pharmaceuticals Industry Source: KPMG Studies 127
Pharmaceutical Sector Gujarat: Emerging Areas • Enhanced level of investment in R&D by local industry to provide research‐driven and high value services • A large pool of patients and hospitals WHO GMP complaint and internationally accredited manufacturing facilities to augment demand for contract f Contract manufacturing Contract Research and Clinical conducting clinical research at economical cost research manufacturing Among the leading states in the V i Sound base of diagnostic kits manufacturing; t t t ib t 35% f th ti l Diagnostic Kit d production of vaccines and therapeutic devices Kits and Devices state contributes ~of the national Vaccines production The State Government of Gujarat has identified Biotechnology as most potential tool for development and has formed a dedicated department for R&D in the sector, Gujarat State h l BioTechnology Mission design and development. Medical device companies in Gujarat are competent enough to take care of all critical aspects like biocompatibility, toxicological & stability testing, validation process as well as d i dd l t Biotechnology products Medical devices Strong base of Pharma Retailing in the state • Strong base of pharma machinery Pharma Pharma production in the state with over 18,000 retail stores present • ~40% of India's pharmaceutical machinery is produced in Gujarat 128 retailing machinery
Pharmaceutical Sector Gujarat: Investment Opportunities • Contract manufacturing organisation (CMO) • Manufacturing of ayurvedic preparations • Manufacturing of new dosage forms like patches • Manufacturing of active pharmaceutical ingredient Manufacturing • Manufacturing of recombinant DNA based products • Manufacturing of • Manufacturing of allopathic products • Manufacturing of cosmetic products M f t i f intermediates and fine chemicals • Manufacturing of medical devices • Manufacturing of biopharmaceuticals • Manufacturing of oncology products • In Research and Development, opportunities for investment lies in Contract research organisation ( CRO), Clinical research, Genetic engineering and Setting of R&D centres & CoEs 129 ), , g g g • There are opportunities for investment in Retail Stores and Pharmacy Chain too.
Pharmaceutical Sector FDCA: Food and Drugs Control Administration XLN is a software for transparent and speedy disposal of various Licensing applications and reducing the time lag between the Collection of Samples to declaration of Results to dissemination of information to stake holders. Daily Statistics can be checked • End‐to‐end online system. No physical file required. • Auto reminder for renewal of licenses • Centralized approval system for licenses • One database accessed by states • Single SignOn for multiple states Gujarat model replicated in 10 states and declared as rapid DeiTY GoI roll out for all states by DeiTY, GoI. FDCA – Laboratory Capabilities • Food and Drug Laboratory (FDL) – Vadodara and Patan; Regional Food Laboratory ‐ Rajkot and Bhuj can carry out i testing of f All hi Allopathic D Drugs, A di Ayurvedic D Drugs, H hi Homoeopathic D Drugs, C i Cosmetics, F Food dA i l Articles. • These laboratories are equipped with state of the art testing facilities AAS, Spark emission, spectrophotometers, HPLC with Auto Sampler, Gas/Liquid chromatography, Spectrophotometers, FTIR • FDCA is equipped with Mobile Drug Testing Lab having key sophisticated instruments like Raman Spectrophotometer, Near Infrared, XRS (X‐Ray Spectrometer). These Mobile Labs (India’s first Mobile Drug Testing Lab) have facility of detecting any spurious drugs on spot. 130
Pharmaceutical Sector FDCA: Awards and Accolades Award for Swarnim Swanthah Sukhaya Project – 2012 in Category “To make more competent and incorruptive system of public C S I ‐ IT Excellence Award 2012 (Health – Infra & Solutions) National e‐Governance Gold Award 2013, by Government of India e‐INDIA Gold Award in Health Sector, Hyderabad, 2013 Selected for National Rapid Roll‐Out Programme in by DeiTY, Government of India 131 2013
FOR ADDITIONAL INFORMATION CONNECT US @ Health and Family Welfare Department Health and Family Welfare Department 7th Floor, Block 7, Sardar Patel Bhavan, Sachivalaya, Gandhinagar, Gujarat, India ‐ 382010 http://www.gujhealth.gov.in/ Phone: 079‐23251401 E‐mail: sechfwd@gujarat.gov.in Food and Drugs Control Administration Block No 8, Dr. Jivraj Mehta Bhavan, Gandhinagar, Gujarat, India – 382010 http://www.gujhealth.gov.in/food‐and‐drug‐control‐administration.htm Phone: 079‐23253417 E‐mail: comfdca@gujarat.gov.in 132
1.7 Electronics & System Design 133
ESDM Industry India Scenario – Electronics Demand & Production Projected demand‐supply gap in electronics 400 industry (USD billion) wth e Rapidly increasing purchasing power of burgeoning middle class 45 125 20 42 104 nd Grow ardwar Strong growth in electronics consuming sectors such as Automotive, Telecom, Medical Devices etc. FY09 FY14 FY20 Total Demand Domestic Production ( at current CAGR) Deman nics Ha Government policy frameworks for increased digitization ) India is poised to be a USD 400 billion Electronics Hardware market by 2020. nable D Electro Increased utilization of STBs, LEDs, Electronics Equipment etc. Sustai for E q p Huge IT & ITeS industry, growing at a id li k Gap between current and expected domestic production presenting significant opportunities for investment 134 rapid click investment. Sources : India Electronics & Semiconductor Association
ESDM Industry Policy, Interventions and Initiatives Assistance provided by Central Government (1/2) National Policy on Electronics Vision 2020: ““To create a globally competitive electronics design and manufacturing industry to meet the country’s needs and serve the international market” Electronics Manufacturing Cluster Scheme (EMC) Modified Special Incentive Scheme (M‐SIPS) Semiconductor FAB Electronics Development Fund Human Resource Development and Skilling ‐2500 PhDs in ‐Subsidy upto USD 10 Mn per 100 acres ‐Target 200 clusters by 2020 ‐Substantial Capex Subsidy of 20‐25% ‐Central Taxes and Duties reimbursements ‐Leading Players expressed interest ‐Two FABs approved ‐USD 2 billion fund for Innovation, IP and R&D funding electronics by 2020 ‐Electronics and Telecom Sector Skill Council ‐Skill Development for 135 p 1 million persons Sources : National Policy on Electronics
ESDM Industry Policy, Interventions and Initiatives Assistance provided by Central Government 2/2) ( / ) • 25% of capital expenditure if the ESDM unit is in non‐SEZ and 20 % of capital Modified Special Incentive Package Scheme (M‐SIPS) expenditure if the ESDM unit is within SEZ. This capex subsidy is available for investments made within 10 years from the date of approval of the project. • Reimbursement of CVD/excise on capital equipment for non‐SEZ units. • Reimbursement of central taxes and duties like custom duties, excise duties and service tax) for 10 years in select high‐ tech units like Fabs, Semiconductor Logic and Memory chips, LCD fabrication. Policy notified by R i b t f t l t d d ti (lik t d ti i d ti Government of India Grant‐in‐Aid provided under • Financial assistance of upto ~USD 16 thousand per cluster for development of electronic manufacturing clusters by MSMEs scheme for supporting MSMEs in Electronics Sector • Financial assistance of upto ~USD 2 thousand for reimbursement of expenses for testing and certification required for export • Financial assistance of upto ~USD 1637 for reimbursement of expenses related to compliance with Indian Standards 136 Sources : National Policy on Electronics USD 1 = INR 61.09 as on 3rd Aug, 2014
ESDM Industry Policy, Interventions and Initiatives Assistance provided by Government of Gujarat Assistance of up to 25% of the project cost to EMC SPVs in the Greenfield subject Greenfield, to a ceiling of • Special Scheme to assist training INR 20 crores p g institutions and trainees in the ESDM industry. Incentives to MSME ESDM units • Design City to be setup in the state and Gujarat Electronic New units and existing units as per the policy will be entitled for exemption of 100% VAT on products manufactured and sold in Gujarat for a period of five years Mission to be Launched To establish Gujarat as a globally‐recognized hub for the ESDM industry, the state government Creation of Intellectual Property (IP) by contributing more funds to R&D A highly empowered ‘Single Window Clearance System’ towards the plans to introduce “Electronics Policy 2014‐2019”. for start‐ups and development of Centers of Excellence (CoEs) in the ESDM sector establishment of the Electronics manufacturing units in the State for granting approvals and clearances Setting up of at least five Brownfield and three Greenfield Electronics Manufacturing 137 Clusters Sources : Department of Science & Technology
ESDM Industry Electronics Manufacturing Clusters in Gujarat Brownfield EMC Greenfield EMC Upcoming Greenfield EMC Vithalapur Gandhinagar Ahmedabad Sanand Halol Vadodara Jambusar 138 Sources : SEMT, Department of Science & Technology, Government of Gujarat Bharuch
ESDM Industry Destination Gujarat Skilled Talent Availability Investment Opportunities Strategic Electronics Telecom Products & Equipments Presence of Key Enablers Conducive Policy Environment Robust Physical, Social and industrial Industrial Electronics infrastructure Automotive Electronics Consumer Electronics Skilled human resource and lower cost of manpower Electronic Components 139
FOR ADDITIONAL INFORMATION CONNECT US @ Department of Science and Technology Department of Science and Technology Block No.7, 5th Floor, New Sachivalaya, Gandhinagar, Gujarat, India ‐ 382010 http://dst.gujarat.gov.in/ Phone: 079‐23259999 E‐mail: secdst@gujarat.gov.in 140
Organized By Knowledge Partner National Partner Visit us at www.vibrantgujarat.com 141

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Vibrant Gujarat summit on Manufacturing sector

  • 1.
    Vibrant Gujarat Manufacturing:Sector Profile Gandhinagar
  • 2.
    Table of Contents 1. Gujarat-Manufacturing Sector 1.1 Textile Sector 1.2 Engineering Sector 1.3 Automobile and Auto Ancillaries 1.4 Chemical Sector 1.5 Gems and Jewellery 1.6 Pharmaceutical Sector 1.7 Electronics & System Design
  • 3.
  • 4.
    Gujarat-Manufacturing Industry Overview Banaskantha Sabarkantha Patan Mehsana The manufacturing industry of Gujarat can be categorized in following industries. Kutch Gandhinagar Surendranagar Ahmedabad Panchmahal Kheda N di d Textile and Pharmaceutical Textile Jamnagar Porbandar Nadiad Anand Bhavnagar Rajkot A li Vadodara Bharuch Machinery Engineering Industry d Industry Junagadh Amreli Textiles and textile Machinery Chemical machinery Surat Navsari Dang and Valsad V l d Gems and Jewellery Manufacturing Industry Chemical Auto parts Engineering Industry Automobile & auto parts Gems and jewellery Auto Ancillaries Machinery Parts 4 j y Pharmaceutical
  • 5.
    Gujarat-Manufacturing Industry Overview Gujarat’s Manufacturing sector contributes 28.21% of state GSDP as per 2011‐12 100% Gujarat ‐ Major contributor to India's manufacturing sector (2012 13) Contribution of Manufacturing S i GSDP 98% 80% 60% 40% 80% 75% 2012‐28.02% 28.21% Sector in 62% 53% 51% 37% 35% 31% 30% 20% 0% 27.16% 27.57% 2008-09 2009-10 2010-11 2011-12 • Manufacturing sector output of Gujarat stands at 13% of the total output of the total national output. • The state is leader in production of Soda ash, Salt, Petrochemical downstream products and Export of Diamonds • With the Manufacturing Policy – 2011, Gujarat aims to increase the share of manufacturing sector in total GSDP from 28 21% to in the 28.21% 32% next five years • Manufacturing Sector of Gujarat has shown almost 216% growth with CAGR of 10.11% over last 8 years Sources : CMIE, ASI 2010‐11 & Economic survey 2011‐12 5
  • 6.
    Gujarat Manufacturing Industry– Focus Sectors The focus sectors identified by the Government for supporting the growth of manufacturing industry in Gujarat is broadly classified into Textiles, Engineering, Automobile and Auto Ancillaries, Chemical, Gems & Jewellery and Pharmaceutical. Focus Sector in the Manufacturing Industry of Gujarat Textiles Engineering Auto and Auto Ancillaries Chemical Gems and Jewellery Pharmaceutical P ii • Conventional Textiles • Precision Engineering including defense offsets • Automobiles and auto parts • Research and • Chemical Products • Specialty Chemicals • Precious gems and stones • Diamond, • Pharma machinery • Biotechnology • Technical Textiles • Fabricated metal products • machinery and equipment Development • Process and Design • Coke refined petroleum products Gold and Silver Jewellery • APIs (active pharmaceutic al ingredient) 6 These focus sectors contribute to ~ 80% of manufacturing sector output
  • 7.
    Gujarat Industrial Policy2009 Major schemes and incentives to boost Manufacturing Sector in Gujarat Assistance to MSMEs • Interest Subsidy • Venture capital Improving Industrial Infrastructure • Assistance to Critical infrastructure Projects • Infrastructure support • Venture Capital and Patent Assistance • Support for R&D institutions • Quality Certification • Skill Enhancement • Technology Acquisition Fund • Patent Assistance • Energy and water conservation • Financial Assistance to Industrial Park Assistance to Textiles and apparels • Interest Subsidy • Technical Textiles pp Enhancement of Technical Competence and Man Power • Assistance to State Level Anchor Institute • Market Development Support • Support for Ancillary/ Vendor Development • Support to Auxiliary industries for value addition A i t t R & D • Technology Acquisition • Apparel Training Institutions and Trainees • Training in Power loom Sector • Technological acquisition for value chain • Support for development of Textile & Assistance for Technical Competence and Man Power • Extension Training Centres • Specialized Skill Development Centre • Assistance to • Cluster Development • Rehabilitation of Sick Units Assistance Apparel Park Assistance to Gems & Jewellery Sector • Interest Subsidy • Hall Mark Certification and Gems Testing Assistance for Environment Protection Measures and Infrastructure • Assistance to Common Environment for Environment Infrastructure Facilities (CEIFs) in PPP Protection Measures‐MSME units • Assistance Environment Management to MSMEs • Assistance for encouraging green practices and Environmental Audit to Centre • Assistance for Health & Safety Measures • Support for development of Jewellery Park Assistance to Chemical Industries • Financial Assistance under Non PPP Projects • Assistance for clean carbon credits (CERs and VERs) and reducing carbon footprints 7 MSMEs • Subsidy on electrical duty • Labour law flexibility • Assistance for strengthening the Regulation and Environmental Compliance
  • 8.
    Gujarat Industrial Policy2009 Cluster Development in PPP M k D l S Mode Interest Subsidy T h l A iiti F d Market Development Support Support to R&D Institutions Patent Assistance to MSMEs Technology Acquisition Fund Venture capital Assistance Energy and water conservation Support to Auxiliary industries for value addition Promotion of Specific Sector Quality Certification Rehabilitation of Sick Units Awards to best MSMEs Support for Ancillary/ Vendor Development Skill Enhancement 8
  • 9.
  • 10.
    1.1.1 Textile Sector: Global Scenario
  • 11.
    Textile Industry GlobalScenario Global textile and clothing industry is estimated to be worth about USD 4,395 billion as of 2012. • With China leading the global textile trade, India ranks second World Technical Textile Market Structure with 8 per cent of the total textile trade 7% 7% 5% Agrotech Packtech Clothtech Hometech • Technical Textiles/Industrial Textiles account for over 27 percent of all fiber consumed and more than 50 percent of the total textile activity in certain industrialized countries • Global Technical Textiles market was estimated ~ USD 127 billion 81% World production of Synthetic Fiber in 2012 • Global market for textile machinery is estimated to reach USD 22.9 billion by 2017 Global Textile Production (Million tonnes) 11% 8% 3.5 7.7 Composites 20.50% 27% 8% Non Woven 6% 20% 3% 2.50% 1.50% 27% 9% 8% 6% 31% 12% WEU incl. TR USA & Canada Japan 59 22 10.8 Woven, Braided, knitted etc 44% 52% 56% 5% 20% 22% Rest of World India Chi Technical Textile Traditional Textile etc. 1970 2005 2008 2015E China Source: ICTN 2010, IBEF, Global Industry Analysts, Inc., D&B 11
  • 12.
    1.1.2 Textile Sector: India Scenario
  • 13.
    Textile Industry IndiaScenario India is the 2nd largest textile economy by production in the world after China and contributes ~14 percent to the total industrial production in India India Textile Market Size (USD billion) • India’s position in the global market 250 200 150 100 70 78 89 143 223 CAGR: 10.1% • 2nd largest producer of cotton (18 percent of global production) • 2nd largest producer of silk • 3rd largest producer of cellulosic fibre / yarn 50 0 2009 2010 2011 2016E 2021E India Textile Market Size (USD billion) • Largest producer of jute • The size of India’s textile market in 2011 was USD 89 billion; the market is expected to expand at a CAGR 150 Demand for Apparel (USD billions) CAGR: 11.1% of 10.1 percent over 2009‐21 to reach at USD 223 in 2021 100 50 0 65 122 13 2010‐11 2016‐17E Demand for Apparel (USD billions) Source: Ministry of Textiles, The Cotton Corporation of India Ltd., Technopak
  • 14.
    Textile Industry IndiaTechnical Textile Technical textiles, which has been growing at around twice the rate of textiles for clothing applications over the past few years, is now expected to post a CAGR of 20 per cent over FY11-17 I di T h i lt til /I • Indian Technical textile/Industrial Textile market today is mainly focusing on Packtech, Clothtech and Hometech; while higher value added products like Medtech & Indutech still have to be expanded • The government has supported this industry with USD 1 billion help for SMEs and an exemption in custom duty for raw materials used by the sector as of 2012‐13 G t l t l h 44 2 illi i i f th ti ft h i lt til /i d t i l • Government plans to launch a USD 44.2 million mission for the promotion of technical textiles/industrial textiles, and cleared plans to set up a new research centre for the industry Technical Textile Industry (USD billion) Indian Technical Textile Market Structure (2012 13) 40 30 31 3 CAGR: 21.3% 33% 15% 13% 2012‐Agrotech, Geotech etc. Packtech 20 10 0 11.9 31.3 2011 2011‐12 2016 2016‐17E Technical Textile Industry (USD billion) Clothtech Hometech 39% Source: The Indian Textile Journal, Ministry of Textile 14
  • 15.
    Textile Industry Exportsand Planned Outlay In the 12th Five Year Plan, the Government of India plans to spend USD 9.1 billion against USD 4 billion in the 11th Five Year Plan on textiles • Rising government focus and favorable policies to t th i d t Textile Exports (USD billion) support the industry • The industry accounts for nearly 11 per cent of 40 total exports of the country 30 • Exports grew to USD 33.3 billion in FY12 from USD 17 6 billi i FY06 i l i f 11 2 20 19.2 CAGR: 11.6% 33.3 22.2 21.1 22.4 27.8 17.6 billion in FY06, implying a CAGR of 11.2 per cent • India’s textiles products are exported to more than a hundred countries; of which USA and EU account f l t2/3rd 10 0 for almost 2/2006 2006‐07 2007 2007‐08 2008 2008‐09 2009 2009‐10 2010 2010‐11 2011 2011‐12 Planned outlay (USD billion) CAGR: Shares in textile exports (2011‐12P) 4% 3%3% Readymade Garments Cotton 10 5 4 9.1 258% 17% Textiles 39% 34% Manmade Textiles Handicrafts Silk & Handlooms Woolen 0 11 th five year plan 12 th five year plan & others Source: GHERZI research, Ministry of Textile 15
  • 16.
    1.1.3 Textile Sector: Gujarat Scenario 16
  • 17.
    Textile Sector Gujarat:Textile Hub of India Map 1: Important locations in Gujarat Gujarat is the leader in textile comprising of 1,560 medium and large textile unit • Gujarat is the largest producer (33%) and exporter (60%) of cotton in the country Kutch ‐ Textile Handicrafts Textile Hubs in Gujarat • Around 50% of the country's art silk fabric is produced in Surat alone • Gujarat is the largest producer of denim in India (65%) the largest in the world Surendranagar, Manavadar and third and Gondal: • About 24‐28% of fixed investment, production of Small Scale Industries are from textiles sector • Gujarat has the highest number Cotton inning Saurashtra: Jetpur for Hand printing Ahmedabad of medium and large textile processing houses (over 600) and is home to more than 50% of India's processing machinery manufacturers and 90% of weaving and processing units – Manchester of the east / Denim city Surat – Silk city Gujarat has 18 textile related machinery manufacturers • Gujarat contributes to over one‐fourth of the country's technical textile output • It is also the largest manufacturer of man made and filament fabric and the second Ankaleshwar and Tapi: Technical Textiles 17 textile‐product clusters largest manufacturer of cotton Source: Industries Commissionerate, iNDEXTb; Gujarat Chamber of Commerce and Industry; IBEF; GCCI
  • 18.
    Textile Sector Gujarat’sStrength Gujarat has leveraged the advantage of capital intensity in textile industry triggering capital and human productivity • High raw material availability • Gujarat contributes to 62% of the overall petrochemical output of India and thus has facility to produce almost all varieties of man‐made fibres • Gujarat is the 2nd largest decentralized power loom concentrating state and doubled its capacity during last 8 Years (50,000 looms (cotton)/8lakh filament) • Gujarat is the largest producer of cotton in the country with production of 93 lac bales in 2012‐13 utilizing 24.97 lac hectares of land • Present Capacity • Ginning – 1200 units • Spinning – 1.2 million working Spindle •Weaving – 50,000 looms • Processing (medium & large) – 600 Units (Yarn, Fabric & Garments) • Knitting & Apparel (small & medium) – 2,00,000 hi 18 machines • Hand Printing – 1500 units in Jetpur alone Source: Industries Commissionerate, iNDEXTb
  • 19.
    Textile Sector Gujarat’sTechnical Textile 1,000 plus Technical Textiles units with presence in all the 12 sub-sectors of Technical Textiles • Gujarat Technical Textiles market is estimated End usage by sub sector of technical around Rs. 7737 crore in 2011‐12 at current k market t i in G j t Gujarat prices; contributing around 10% to the national 7% Technical Textiles output 3% 8% • Major units of technical textiles are mainly Packtech H h concentrated in Ahmedabad, Surat, Vadodara and Kutch • There are more than 200 products classified as T h i lT til d P t ti T til A 9% 10% 63% Hometech Clothtech Indutech Buildtech Technical Textiles under Protective Textiles, Agro O h Textiles, Geo Textiles, Automotive Textiles and Home Textiles Others Technical Textiles find application/usage in a variety of day‐to‐day applications as well as industrial applications. The large quantum end users of Technical Textiles are cement industry, • Gujarat is the 5th largest cement producer in India. The sector is expected to grow in line with the growing Infrastructure in the state/country • Gujarat is the Chemical hub of India; b h f h ll 19 horticulture industry, automobile industry, chemical industry, infrastructure etc Source: Industries Commissionerate, iNDEXTb; IBEF contributing to more than 50% of the overall Indian chemical output
  • 20.
    Textile Sector PresentInfrastructure and Textile Clusters (SMEs) • Three dedicated textile SEZ are planned Infrastructure for Textile Industry in Gujarat to be developed in Ahmedabad; while one such SEZ, Surat Apparel Park is functional Mehsana Sabarkantha Kutch Ahmedabad: Cotton and blended fabric, denim, made‐ups, ladies’ garments, textile machinery and its parts Jamnagar Ahmedabad Bhavnagar Rajkot Amreli Vadodara Bharuch Surat Surat for Art silk fabric, Synthetic textiles, Jari manufacturing, embroidery, textile machinery and its parts Junagadh Navsari Valsad Umargaon: Modern power looms, Synthetic suiting and shirting Kutch Handicrafts Textile & Apparel SEZ (4) Integrated textile parks (7) P d t l t (18) Kutch: Textile Saurashtra: Jetpur for Hand printing and processing units and Manavadar for Cotton Research & testing facility (2) Educational infrastructure 20 ginning Product clusters DMIC influence area
  • 21.
    Textile Sector MajorPlayers in Gujarat Leading Industry players in Gujarat are spread across the state 21
  • 22.
    Textile Sector EducationalInfrastructure 28 ITI’s in Gujarat provide industrial training courses on Textile and Garment industry with an approximate intake of 5,876 • Major academic institutions that are offering training Gandhinagar Ahmedabad Vadodara Rajkot Bh programmes include  Ahmedabad Textile Industrial Research Association (ATIRA)  Man‐made Textile Research Association (MANTRA), Surat  National Institute of Fashion Technology (NIFT), Surat Gandhinagar Bhavnagar  Apparel and Leather Technics (ALT) Training College, Ahmedabad  National Institute of Design (NID), Ahmedabad Location of Major Educational Institutes  Surat Education and Research Society • Gujarat has three engineering colleges in Ahmedabad, Vadodara and Surat, offering courses in Textile technology, Textile processing and Textile engineering Specific textile courses offered by ITIs • Cutting and sewing • Cutting and Embroidery and needle • NTC (National Textile Corporation) is planning to set up two CoE (Center of Excellences) in Guajrat • Government provides assistance to apparel training institutions and trainees as well as training support to work • Computer‐aided dress making and dress design • tailoring • Pattern 22 powerloom sector making • Finishing garment checking Source: Gujarat Chamber of Commerce and Industries
  • 23.
    Textile Sector TextileComposite Centre • Composites are materials made from two or more substances with different physical or chemical properties • Union ministry of textiles, has declared ATIRA as a Centre of Excellence (CoE) for composites • Composite Centre – key components will help in the development of entire value chain • R & D Centre (Product Development): The R & D centre would have a pilot project for new product Spinning development. It would include machines for Marketing Weaving complete value chain • Production centre: It would serve 2 purposes: • To produce the 1st batch of the product developed in the R&D centre • It shall generate revenue for the centre Composite centre of Garmenting Knitting Textile Industry • Testing and certification: Help test the products developed and provide certification. It would also provide testing for raw materials • Design studio: Development of new designs Designing Processing • Branding and Marketing: Help industry participate in National and International Exhibitions and organize conferences, seminars, workshops etc to educate the industry Testing Finishing 23 • Skill development: Training manpower with the latest technology
  • 24.
    Textile Sector GujaratScenario: 2017 Attract at least 2,000 new units with an investment worth Rs. 10,000 crore by introducing Technical Textile Mission Government of Gujarat’s development agenda l h i l h i f h il d Government of Gujarat planned to invest • Develop the entire value chain of the Textile Industry S 3 28 billi i il i d • Value addition through focus on Technical Textiles • Textile market in Gujarat by 2017 ~USD 25 billion • Growth is envisaged to be driven by Technical Textiles hi h h i h 200 diff d ~ USD 3.28 billion in textile industry which will also create 1 million jobs in the sector which has use in more than different products across sectors • Technical Textiles of Gujarat will strive to capture 50% of the Indian market C i ddi i i 5 Investment in next 5 years 4% Spinning • Capacity addition in next years • Ginning – Additional 200 modernized units • Spinning – Tripling Capacity with additional 25 lakhs Spindle with modern technology W i Additi l 1 00 000 Sh ttl l d 43% 6% 5% 13% Weaving Processing • Weaving – Additional 1,00,000 Shuttle less and K itti Automatic shuttle looms • Processing – Additional 60 Units (Yarn, Fabric & Garments) 29% K itti & A l Additi l 2 00 000 tit hi & Knitting & Apparel Technical Textile Textile 24 • Knitting Apparel ‐ Additional 2,00,000 stitching supporting machines & Spinning Park Source: Industries Commissionerate, iNDEXTb
  • 25.
    Textile Sector Interventionsin Technical Textile Sector Key Interventions Technology Mission on Technical Textiles (TMTT) focuses on standardization, creating common testing facilities with national / international accreditation and to provide support for the development of domestic & export markets for technical textiles Expert group will develop strategy for the development of Technical Textiles sector 2 new Composite Centres for the development of Technical Textiles to be set up in Ahmedabad (existing centre in Ahmedabad to strengthened) and Surat district. (existing Government of India scheme for the development of such Composite Centres will be improved) An International level CoE (Centre of Excellence) to be set up in the state focusing on technical textiles by NTC (National Textile Corporation) in collaboration with international firms from Japan, USA and Germany 2 new Technical Textile zones to be developed in Ahmedabad and Surat district Additional 6% interest subsidy in addition to 5% interest subsidy and 10% capital subsidy by 25 Government of India
  • 26.
    Textile Sector GujaratInitiatives Key Government Initiatives Textile Industry Promotion Policy 2012 Interest subsidy of 5% will be given without a ceiling for the period of five years on new plant and machinery for ginning and processing 7% on new plant and machinery for cotton spinning as well as for second‐hand imported cotton spinning machinery with certain conditions without a ceiling for five years. Power tariff concession on new investment for cotton spinning will be provided at Rs 1 per unit for five years and there will be refund of VAT paid by the unit on the purchase of raw material Financial assistance to skill development centers for textile industry Financial assistance for technology acquisition for value chain Assistance for energy conservation, water conservation and environment compliance The new policy is expected to attract an investment of over INR 20,000 crore creating new employment opportunities for over 2.5 million people, 50% of them being rural women, during the next five years Support for establishing Textile & Apparel Park : 50% (max. 1) INR 30 crore) for Spinning Park and 2) 50% 26 (max. INR 10 crore) for Other Textile Park
  • 27.
    Textile Sector InvestmentOpportunities Conventional Textile High valued garment manufacturing Cotton and synthetic based spinning, Hometech High quality upholstery fabric, narrow width fabric for furniture application, wipes for house hold use, fiber foam Indutech Glass fiber battery separator, fusing belts, high mesh filters. Industry felt, weaving and processing units woolen felt fabric Agrotech Agro net & wadding, fiberfill products like quit & pillows Geotech Clothtech Narrow width felt, fire resistant fabric, slings for bulk handling shading net, packing net for agro products Buildtech Scaffolding net Woven & non‐woven geotextiles fabric as fashion accessories like belt Mobiltech Interior carpets & NVH components Protech Fire retardant clothes Meditech Nonwoven disposables like apron, mask, caps, draper etc Packtech Jumbo bags, FIBC, coated fabric for soft luggage Oekotech PP nonwoven liners for land fill sites of MSW Infrastructure Development Cotton integrated textile and apparel park • Modern Cotton Spinning • Cotton based shuttleless weaving • Energy efficient modern process house • Made‐ups and garments 27 p g
  • 28.
    FOR ADDITIONAL INFORMATIONCONNECT US @ Industries Commissionerate Block No. 1, 2nd Floor, Udyog Bhavan, Gandhinagar, Gujarat, India ‐ 382 010 http://ic.gujarat.gov.in/ Phone: 079‐23252683 E‐mail: iccord@gujarat.gov.in Gujarat Industrial Development Corporation Block No. 4, 2nd floor, Udyog Bhavan, Gandhinagar, Gujarat, India – 382 010 http://www.gidc.gov.in/ Phone: 079‐23250583 E‐mail: vcmd@gidcgujarat.org 28
  • 29.
  • 30.
    1.2.1 Engineering Sector:Global Scenario 30
  • 31.
    Engineering Industry GlobalScenario Engineering Industry can be classified in to following sectors 120 Key global engineering segment output (in USD billion) • Asia is the largest production center; contributing ~40% of the global 100 market • Asia‐Pacific is the largest producer; 7 6 14.7 15.64 17.65 17.65 18.77 19.95 estimates Electrical equipments Asia contributing 38.4% of the global market • America and Asia Pacific region are the largest producers; contributing 80 60 9.48 9 93 9.93 dust a 8.6 9 7.82 8.2 29.75 31.1 32.4 33.85 35.3 36.9 5.64 7.6 Machine Tools Industrial ~71% of the overall global production • Globally, China is the largest producer and consumer of machine tools; contributing ~42% and ~30% of global consumption & production 40 44 1 44.1 45 9 45.9 47.54 q p 39.1 40.33 42.2 Machinery Heavy Electrical equipments respectively • North America, Europe, and North Asia are the largest service providers; contributing 91% of the overall global market k t 20 0 2010 2011 2012 2013E 2014E 2015E Engineering Services Source: 2012 World Machine Tools Output & Consumption Survey, IBISWorld Pvt Ltd, Datamonitor Plc 31
  • 32.
    1.2.2 Engineering Sector:India Scenario 32
  • 33.
    Engineering Industry IndiaScenario Capital goods & engineering turnover is expected to reach USD 125.4 billion by 2017 from USD 57.6 billion in 2012 • Due to fast pace industrialization & economic Construction equipment market revenue d l h i d d d f 30 22.7 20 (USD billion) CAGR: 28.8% development there is a tremendous demand of capital goods & engineering market • Indian construction equipment market to grow sevenfold from 2012 to 2020 E i i h & d i 10 0 3 2012 2020E Construction revenue billion) • Engineering research design segment revenues to increase fourfold by 2020 • Electrical equipment market size is expected to increase fourfold by 2022 equipment market (USD Electrical equipment market size (USD billion) Engineering Research & Design revenue 150 105 (USD billion) CAGR 100 50 24.2 CAGR: 14.2% 60 40 20 11.2 45 CAGR: 19% 0 2011 2022E Electrical equipment market size (USD billion) 0 2012 2020E Engineering Research & Design revenue (USD billion) Source: Department of heavy industries, NASSCOM 33
  • 34.
    Engineering Industry IndiaScenario: Industry Structure Engineering Heavy Engineering Light Engineering • Textile machinery industry • Rolling Bearing Industry • Medical and surgical • Cement machinery industry • Sugar machinery industry • Rubber machinery industry instruments • Process control instruments • Industrial fasteners • Ferrous castings • Material handling equipment industry • Oil field equipment industry • Metallurgical industry • Steel forgings • Seamless steel pipes and tubes • Electrical resistance welded (ERW) steel pipes and • Mining machinery industry • Dairy machinery industry • Machine tool industry tubes • Submerged‐arc welded (SAW) pipes • cyc Bicycle e dust y industry Source: Ministry of Heavy Industries & Department of Industrial Policy & Promotion 34
  • 35.
    Engineering Industry IndiaScenario: Exports Engineering exports include transport equipment, capital goods, other machinery/equipment and light engineering products such as castings, forgings and fasteners • The engineering sector retained its 18 per cent share in overall exports from the country which is the maximum in terms of sectoral contribution • Over 2007‐08 to 2012‐13, exports registered a CAGR of 12.6 per cent • Exports target for 2013‐14 is estimated at USD 125 billion • p Transport q p equipment is the g leading contributor to g engineering g p exports. The g segment accounted for 32.5 p per cent of the total engineering exports during 2012‐13 Engineering Exports (USD billion) Exports of principal 80 60 40 31 3 45.3 38.3 58.1 67.1 56.7 CAGR: 12.6% commodities (2012‐13) 32.50% 9% 14.10% Transport equipment Machinery & instruments 20 0 31.3 17.70% Manufacturers of metals Primary & semi furnished iron & steel 2007‐08 2008‐09 2009‐10 2010‐11 2011‐12 2012‐13 26.80% Others Source: Engineering Export promotion Council 35
  • 36.
    1.2.3 Engineering Sector:Gujarat Scenario 36
  • 37.
    Engineering Industry GujaratScenario Industrial Clusters 30 17 Engineering Textiles Food • Engineering sector of Gujarat contributes around 18% to state’s total industrial production and around 9% to the national engineering output. • Engineering sector in 300 units in 6 Processing 10 13 7 Chemicals Minerals Others Gujarat comprises more than large sector and 75,00 units in small and medium (SMEs) enterprises. Sh fG j i i l i i 10.40% 12.70% 16.20% Share of Gujarat in national engineering goods production • The small‐scale industry is a significant contributor to the production of brass parts, foundry, forging and machine tools, 6% 6.70% 9% p , y, g g , oil engines and electric motors, submersible pumps and industrial valves and bearings. • Gujarat houses 83 product clusters; out of which 30 clusters Electronics Electrical Equipment Transport Equipment Basic Metals Machinery and Equipment Fabrication of Metal Products are engineering product clusters. • The brass parts cluster at Jamnagar has over 5,000 small units and meets almost 70% of the entire requirement for brass parts in India. Source: IBEF 37
  • 38.
    Engineering Industry GujaratScenario: Engineering SME clusters The Engineering SME cluster of Gujarat is mainly concentrated at Ahmedabad, Anand, Rajkot, Vadodara, Surendranagar, Jamnagar, Mehsana, Panchmahal and Kutch k h Foundry & Forgings Steel Pipes and tubes Steel re-rolled products Brass parts Kutch Banaskantha Sabarkantha Patan Mehsana Fabricated metal products Steel & Aluminium Furniture Electric motors Power driven pumps Jamnagar Surendranagar Gandhinagar Ahmedabad Kheda Anand Panchmahal Nadiad Textile machinery parts Chemical machinery parts Food processing machinery Machine tools Porbandar Amreli Bhavnagar Rajkot Vadodara Bharuch Diesel engine & parts Ball & Roller bearings Automobile & auto parts Earth Moving Machinery Junagadh Surat Navsari Valsad Dang • Alang, a port in Bhavnagar, is the largest 38 Pumps and Valves g, p g , g ship recycling yard in the world.
  • 39.
    Engineering Industry GujaratScenario: Presence across value chain Heavy engineering Heavy electrical Heavy engineering and machine tools Automotive • Boilers • Turbines and generator sets T f • Textile machinery • Ceramic machinery • Sugar machinery • Passenger and utility vehicles • Auto components and auto • Transformers ancillaries • Switchgear and control gear • Rubber machinery • Material handling equipment • Oil field equipment • Metallurgical machinery • Dairy machinery • Earth moving and construction machinery • Agricultural machinery 39
  • 40.
    Engineering Industry GujaratScenario: Presence across value chain Light engineering Low technology products High technology products Plastic Machineries • Roller bearings • Welding • Medical and surgical instruments • Injection moulding equipment and • Extrusion consumables • Casting and forging • Pipes and tubes • Fasteners • Process control instruments • Domestic appliances • Electronics • Blow moulding • Reprocessing • Extrusion coating 40
  • 41.
    Engineering Industry GujaratScenario: Industrial Infrastructure Particular Units Symbol Special economic zones 2 Industrial Parks 18 DMIC influence area Upcoming modern sector specific Kutch clusters planned on PPP mode Engineering Plastics & Plastic Processing at Ahmedabad Viramgam‐ Surendranagar Halol Dahej Auto Components & Light Engineering at H l l Dahej Halol Precision & Light Engineering at Sanand Source: GIDC 41
  • 42.
    Engineering Industry Gujarat:Educational Infrastructure Number of Seats in Degree Engineering 8,970 Colleges, Gujarat, 2013 1,194 16 3 540 Number of Degree Engineering Colleges, Gujarat, 2013 • At the end of 2013, Gujarat is projected to have an intake capacity of 60,883 degree students in engineering • More than 3,060 seats have been added in 2 95 Government Colleges Grant-in-Aid 2013 alone along with 4 new engineering colleges and institutions • The tally leads for Mechanical Engineering with 16, 230 seats, followed by Civil, 50,17 9 Colleges y Electrical and others M h i l Seat Matrix Year- • A healthy increase in seats offered is projected in coming years, with Mechanical Engineering increasing 130% 18000 (16230) 16000 14000 12000 2010 2011 2012 2013 Mechanical Engineering Civil Engg. Electrical Engg. Computer Engg. Electronic s & Comm Information Wise from 2010 to 2013 • Civil and Electrical Engineering seats more than doubled during 4000 10000 8000 6000 (9950) (9839) (8160) (7080) (3555) Comm.Technology 42 the same period Source: Gujarat Technical University 2000 0
  • 43.
    Skilled Manpower availabilityin Gujarat Gujarat Scenario: Skilled Man Power Availability 160000 140000 120000 Sanctioned Seats in the ITIs 800 700 600 Number of ITIs in Gujarat 100000 80000 60000 40000 500 400 300 20000 0 200 100 0 Private Government Total Private Government Total • Gujarat Government has also encouraged skill development programs programs. Skill development budget has increased from INR 107 crore in 2001‐02 to INR 1000 crore in 2013‐14. • Government of Gujarat has also introduced number of effective schemes such as CTS (Craftsmen Training Scheme) Scheme), ATS (Apprenticeship Training Scheme) Scheme), KVK (Kaushalya Vardhan Kendra) Kendra), short term courses. Under these schemes around 7,80,000 people have been trained. Source: Socio Economic Review 2012‐13 43
  • 44.
    Engineering Industry GujaratScenario: Interventions and Initiatives 5 precision engineering clusters will be developed in Jamnagar, Halol, Sanand, Lodhika, Mandal – these clusters will be developed Development of state‐of‐the‐art industrial clusters and industry‐focused investment regions by GIDC Centres of Excellence will be developed in each of these clusters Introduction of reforms and flexible labor laws Initiatives The benefits of existing industrial park scheme will be extended to the tune of USD 3 2 million Promotion and development of small and medium enterprises through various innovative Interventions 3.2 Units coming in these clusters will be provided single window clearances and streamlined & hassle‐free procedures for initiatives Introduction of cluster development measures to support and strengthen obtaining various approvals growth h of f h the sector p Government will identify and provide large tracts of land for specialized trials of Promotion of institutions, such as Space Application Centre, Indo‐German Tool Room, and Electronics & Quality Development Centre 44 p equipment Centre, which provide support to the engineering sector
  • 45.
    1.2.4 Engineering Sector:Investment Opportunities 45
  • 46.
    Engineering Industry GujaratScenario: Investment Opportunities Engineering service outsourcing Material handling equipment Transformers & Boiler manufacturing Power equipment manufacturing Auto components Infrastructure equipment Defence offset Modern cement and textile machinery Material handling equipment Turbines, transformers, generators 46
  • 47.
    FOR ADDITIONAL INFORMATIONCONNECT US @ Industries Commissionerate Block No. 1, 2nd Floor, Udyog Bhavan, Gandhinagar, Gujarat, India ‐ 382 010 http://ic.gujarat.gov.in/ Phone: 079‐23252683 E‐mail: iccord@gujarat.gov.in Gujarat Industrial Development Corporation Block No. 4, 2nd floor, Udyog Bhavan, Gandhinagar, Gujarat, India – 382 010 http://www.gidc.gov.in/ Phone: 079‐23250583 E‐mail: vcmd@gidcgujarat.org 47
  • 48.
    1.3 Automobile &Auto Ancillaries
  • 49.
    1.3.1 Automobile &Auto Ancillaries: Global Scenario
  • 50.
    Automobile & AutoAncillaries Global Scenario As the global economy recovers from the financial shocks of the last five years, the automotive industry is playing a huge role in bringing it back to life. • On present, the global automotive industry is production million i d h S billi vehicles) China 19.27 22.12 14.8 USA 10.33 11.05 6.9 • According to the World Bank just 18 people in World car d i ( illi 2012 2013 Change (%) estimated to worth USD 800 billion • The global market for cars and other light vehicles will expand from 80 million units a year now to well over 100 million by 2020 A di h W ldB kj l i every 1,000 own a car in India, while in China the figure is 58; hence there is huge untapped potential in this sector E i k ’ h f l b l l ill i Japan 9.94 9.63 ‐3.1 Germany 5.65 5.72 1.2 South Korea 4.56 4.52 ‐0.9 • Emerging markets’ share of global sales will rise from 50 percent in 2012 to 60 percent by 2020 Brazil 3.34 3.74 9.9 40 30 Global Car Sales Outlook (In millions) 27.25 29.98 32.38 2.68 4 47 24 41 4 72 4.87 5.07 20 10 0 4.47 4.72 16.36 17.97 15.22 17.11 18.33 18.89 1.64 14.29 17.01 16.7 15.9 15.6 16 6.91 13.05 24.41 1990‐99 2000‐10 2011 2012 2013e 2014f North America South America Eurpoe Asia Source: Clear Water Report, McKinsey; OICA 50
  • 51.
    1.3.2 Automobile &Auto Ancillaries: India Scenario
  • 52.
    Automobile & AutoAncillaries Indian Scenario: Automobile By 2020, India's share in the global passenger vehicle market to double to 8 per cent from 4.8 per cent over 2013 • India is the world’s second largest two wheeler manufacturer Market share by volume (2012‐13) in world the largest three market the second 15% 4%4% Two Wheelers Passenger Vehicle the world, wheeler market, largest tractor manufacturer in the world, the fourth largest car market and fifth largest commercial vehicle manufacturer in the world • Automobiles production increased at a CAGR of 12.2 per cent 77% g Commercial Vehicle Three Wheelers over FY05‐13 • Passenger vehicle sales to nearly triple by 2020E • The gross turnover of automobile manufacturers in India expanded at a CAGR of 17.7% over FY07‐11 60 40 30 5 36.6 33 3 43.3 58.6 Revenue Generated (USD billion) CAGR: 17.7% Market Break Up by Revenue (2011) 20.40% Tr cks 20 0 30.5 33.3 47.80% 31.80% Trucks Cars Two Wheelers 2006‐07 2007‐08 2008‐09 2009‐10 2010‐11 Source: SIAM; OICA 52
  • 53.
    Automobile & AutoAncillaries Indian Scenario: Automobile Exports Automobile export volumes increased at a CAGR of 19.1 per cent over FY05–13 • Two‐wheeler segment reported the fastest growth (22.2 Exports share by volume (FY 13) per cent) followed by three‐wheelers ( 16.3 per cent) 19% 3% 11% Passenger Vehicle Commercial Vehicle Th Wh l p ) y p ) over FY05–13 • Exports of passenger vehicles registered the highest growth at 9.02 per cent in FY13 P hi l i d i bl t f 67% Three Wheelers Two Wheelers • Passenger vehicles comprised a sizeable 19 per cent of overall exports • Two wheelers accounted for the largest share in exports (by volume) at 67 per cent in FY13 2 1.5 1 1 1.5 2 2 Passenger Vehicle Exports of Automobiles from India (Million Units) CAGR: 19.1% 1 0.5 0.2 0.2 0.2 0.2 0.3 0.5 0.5 0.5 0.5 0.2 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0 0 0.1 0.1 0 0 0.3 0.4 0.3 0.4 0.5 0.6 0.8 1 1.1 Commercial Vehicle Three Wheelers Two 0 2004‐05 2005‐06 2006‐07 2007‐08 2008‐09 2009‐10 2010‐11 2011‐12 2012‐13 Wheelers Source: SIAM 53
  • 54.
    Auto & AutoAncillary Indian Scenario: Auto Ancillary Turnover of the Indian auto component sector increased 20 per cent to USD 43.5 billion in FY 2011–12; growth is likely to remain robust at 8–10 per cent in FY 2012–13 with the auto component industry expected to reach USD 113 billion by 2020 • L Large fi firms l play a dominant role in the organized Production volume by market range sector; of the total production in the sector in FY10, 15% large Indian firms accounted for a major share (at 43 per cent); MNCs formed 15 per cent Th b f f t i it i th OEM • The number of manufacturing units in the unorganized sector are far higher than those in the organized one Production breakup 25% Replacements 60% Exports 30% Production Breakup in Organized Sector Large Indian 70% Organized Unorganized 42% 43% Players MNCs Others 54 15% Source: ACMA
  • 55.
    Auto & AutoAncillary Indian Scenario: Auto Ancillary Exports India’s exports of auto components increased at a CAGR of 17.4 per cent to USD 6.9 billion during 2006‐07 to 2011‐12 • Exports will account for as much as 20 per cent of Export Market potential (USD billion) 30 h l k f ill i b 25 20 15 4 12.9 Other Markets Western Europe the total market of auto ancillaries by 2020 • Both domestic and export markets are almost similar in terms of potential share by different product types E f h l h fI di • Europe accounts for the largest share of Indian 10 1.7 North America auto components exports (36.0 per cent) followed 4.2 5 10.6 2.3 0.4 3.6 by Asia (28.0 per cent) and North America (23.0 1.1 0 per cent) 2009 2015(E) 2020(E) 8 Value of auto component exports (USD 5 2 6.9 billion) Export market potential by components (2020E) 15.80% Transmission & steering CAGR: 17.4% 6 4 2 0 3.1 3.8 4 3.4 5.2 10.50% 7.90% 31.60% Suspension & Braking Interior 55 2006‐07 2007‐08 2008‐09 2009‐10 2010‐11 2011‐12 Value of auto component exports (USD billion) 15.80% Engine & Exhaust 18.40% Source:ACMA
  • 56.
    1.3.3 Automobile &Auto Ancillaries: Gujarat Scenario
  • 57.
    Auto & AutoAncillary Gujarat Scenario: Emerging Automobile Hub Gujarat is emerging as a key investment destination for the major automobile players Gujarat has a strong educational infrastructure in automobile sector. 27 colleges provide technical education in automobiles sector with annual ta e intake capac capacity ty o of 1,980. Additionally 111 colleges provide technical education in mechanical field with annual intake capacity of 57 p y 13,650.
  • 58.
    Auto & AutoAncillary Gujarat Scenario: Auto Industry Structure Gujarat is one of the leading states in owning vehicles with 1,44,13,717 total vehicles in FY 2011‐12 • Gujarat is one of the top three states in India in terms of the number of registered vehicles • Low transaction cost for i k i h Becharaji accessing market in the western and northern India. • The Delhi‐Mumbai Dedicated Freight Corridor project will Ahmedabad Kutch Sanand Mehsana g p j provide excellent rail connectivity for the auto sector in Sanand and for other industries. Rajkot Halol Vadodara • Cluster development approach and strengthening emerging clusters will add to the state’s ability to attract further 58 industrial investments Source: Commissionerate of Transport, Government of Gujarat Automobile Clusters in Gujarat
  • 59.
    Auto & AutoAncillary Gujarat Scenario: Auto Ancillaries in Gujarat Sound base : 30 clusters comprising castings & machine tools, brass parts, oil engines & electric motors, bearings, auto‐ancillaries In Gujarat, Auto and auto ancillary industry d covers, • Assembling and manufacturing automobiles • Manufacture of auto components for Rajkot Sanand Halol p all types of vehicles • CNG kits for automobiles • Industrial automotive bearings • Sheet Metal Parts • Automotive casting and other precision parts • Automobile gears • Automobile design centre • Auto ancillary SEZ/Park Cluster development approach and strengthening emerging clusters will add to the strength of the state 59 p pp g g g g g in attracting further industrial investments Source: Government of Gujarat
  • 60.
    Auto & AutoAncillary Gujarat Scenario: Major Auto Clusters Connectivity element Location Distance/ Connectivity S A N port 300 Airport Ahmedabad 30 Km/SH Nearest Kandla/Mundra 300‐400 Km Nearest City Ahmedabad 30 kms/SH NH/ State Highway NH 8A/ SH 20 kms/ On 4 lane SH Nearest Railway junction Ahmedabad 30 Kms/ SH A N Nearest Railway line Viramgam‐ Sanand < 5 km Connectivity element Location Distance/ Connectivity D H A L Nearest City Vadodara SH 87 Airport Vadodara Domestic Airport 35 Km Nearest port Dahej Cargo Port 185 Km NH/ State Highway NH 8 & NE 1 On 4 lane SH No 87 Nearest Railway line Vadodara to Godhra < 5 km Freight Corridor Delhi Mumbai Industrial 35 O L Corridor (DMIC) Km through SH 87 Source: GIDC 60
  • 61.
    Auto & AutoAncillary Gujarat Scenario: Major Automobile Players •GMI Pvt Ltd has invested ~ USD 327.86 million in its plant in Halol • Added investment of ~ USD 163.93 million to increase capacity to 1,10,000 units • Tata Motors Ltd has invested ~ USD 475 million for its Nano plant in Sanand •The plant has the capacity to manufacture 250,000 units per year •Atul Auto Ltd, a Rajkot based three‐wheeler company has invested ~ USD 10.33 million for setting up a 24,000 per annum capacity in Shapar near Rajkot •Bombardier Transportation India Ltd. has invested ~ USD 33.93 million to set up its wagon manufacturing plant at Savli in Vadodara district •Asia MotorWorks Ltd, manufacturer of heavy commercial trucks has invested ~ USD 229.5 million to set up its factory at Bhuj with an annual capacity of 50,000 vehicles •CEAT Ltd, the flagship company of RPG Enterprises Ltd setting up a tyre making facility in Halol with an estimated investment of ~ USD 245.9 million •The Company set up a plant with a capacity of 6.75 lakh tyres per annum at Limda, Baroda 61
  • 62.
    Auto & AutoAncillary Gujarat Scenario: Upcoming / Proposed Investments Maruti Suzuki's Rs 4,000‐crore Ford India has set up its second Honda Motorcycles and Hero MotoCorp is 4,000 plant in at Bechraji in Mehsana district of north Gujarat is likely to be manufacturing facility in the country at Sanand in Gujarat for a Scooters India (HMSI) plans to invest over 1,000 crore to set up a the final stages of acquiring land at Halol, Gujarat. It will invest INR 1,100 crore in the commissioned by fiscal year 2016‐17 total investment of USD 1 billion (INR 6000 crore). The plant will be commissioned by manufacturing unit near Mandal region and has already acquired 200 acres land new project, with annual capacity will be 12 lakh units, going up to 18 lakh units in 2014 the second phase 62
  • 63.
    1.3.4 Automobile &Auto Ancillaries: Gujarat Scenario- 2020
  • 64.
    Auto & AutoAncillary Gujarat Scenario: 2020 By 2020, Gujarat aims to achieve 10% of Engineering output from Auto and auto components from current level of 3.7% Anjar Sanand Particular Symbol E i ti A t Cl t Navlakhi Savli Okha Rajkot Halol Existing Auto Clusters Emerging auto clusters in SIRs by 2015 Dholera Emerging auto clusters in Simar SIRs by 2020 DMIC influence area Investment Regions (SIR) will act as global investment destinations supported by 64 The upcoming Special destinations, modern infrastructure, premium civic amenities, centers of excellence and proactive policy framework.
  • 65.
    Auto & AutoAncillary Government Initiatives & Interventions and Key Government Bodies • An initiative by Government of India, provides automatic approval for foreign equity investment up to 100 per cent; no minimum investment criteria • Encourage R&D by offering rebates on R&D expenditure Auto Policy 2002 • Setting up of a technology modernization fund focused on SMEs • Establishment of automotive training institutes, auto design centers and special auto parks Automotive Mission Plan (AMP) 2006–16 • Set up at a total cost of USD 388.5 million to enable the industry to be on par with global standards • Nine R&D centers of excellence with focus on low‐cost manufacturing and product development solutions NATRiPs • Worked towards reduction of excise duty on small cars and increase budgetary allocation for R&D • Weighted increase in R&D expenditure to 200 per cent from 150 per cent in‐house) and 175 per cent from 125 per cent (outsourced) Encouragement by Dept. of Heavy Industries & Public Enterprises (in • Proposal to allocate USD2.7 billion for JNNURM to bolster sales Union Budget FY14 volumes of Medium and Heavy Commercial Vehicles (MHCV) 65
  • 66.
    1.3.5 Automobile &Auto Ancillaries: Investment Opportunities
  • 67.
    Auto & AutoAncillary Investment Opportunities: Automobiles • Strong support from the government; setting up of NATRiP centres • Private players, such as Hyundai, Suzuki, GM, keen to set up R&D base in India S d i b l kill d li h ki India is fast emerging as a l b l & h b • Strong education base, large skilled English‐speaking manpower • Comparative advantage in terms of cost global R&D hub O t iti • The world’s cheapest car (Tata Nano) has directed focus on the low‐income market • Bajaj Auto, Hero MotoCorp and M&M plan to jointly develop a technology for two‐wheelers to run on natural gas l i lik l b i bl k i h i Opportunities for creating sizeable market segments h h • Electric cars likely to be a sizeable market segment in the coming decade through innovations • General Motors, Nissan and Toyota announced plans to make India their global hub for small cars • Light vehicle sales estimated to cross 3 million by the end of 2012 • Strong export potential in ultra low‐cost cars segment (to d l i d i k t ) Small‐car manufacturing hub 67 developing and emerging markets) Source: IBEF
  • 68.
    Auto & AutoAncillary Investment Opportunities: Auto Ancillaries R&D • Joint R&D with Indian companies for new product development and process innovation Process & • Partnerships with Indian SMEs to address product and process technologies • Off shoring manufacturing design work to JVs or partners based in India Design • Greenfield manufacturing facilities in India to meet the robust domestic demand Manufact uring potential • Establish India as a key link in the global auto components supply chain Customer service • Opportunity for strategic alliance to cover global customers Source: IBEF 68
  • 69.
    FOR ADDITIONAL INFORMATIONCONNECT US @ Industries Commissionerate Block No. 1, 2nd Floor, Udyog Bhavan, Gandhinagar, Gujarat, India ‐ 382 010 http://ic.gujarat.gov.in/ Phone: 079‐23252683 E‐mail: iccord@gujarat.gov.in Gujarat Industrial Development Corporation Block No. 4, 2nd floor, Udyog Bhavan, Gandhinagar, Gujarat, India – 382 010 http://www.gidc.gov.in/ Phone: 079‐23250583 E‐mail: vcmd@gidcgujarat.org 69
  • 70.
  • 71.
    1.4.1 Chemical Industry: Global Scenario 71
  • 72.
    Chemical Sector GlobalChemical Industry: 2020 By 2020, developing countries would be home to 31 per cent of global chemical production, and 33 per cent of global chemical consumption Segment CAGR – 2010 15E CAGR – 2015 20E Industry Growth ‐ USD billion 2010‐2015‐Specialty Chemicals 5% 5% Petrochemicals 7% 7% 5,000 4,000 3,000 Commodity Chemicals 8% 7% 2,000 1,000 2413 3260 4362 0 Polymers 6% 6% 2010 2015E 2020E Others 5% 5% Industry Growth ‐ USD billion • Global market of chemical industry was estimated to be worth USD 3 trillion in 2012 excluding pharmaceuticals • Future growth of chemical industry is linked with demand in Asia, Middle East and Latin America • Europe, North America are likely to report modest growth (~2%), lower than anticipated global GDP growth • China is likely to emerge as the largest chemical region in the world by 2020 • India and other Asian countries are also indicating promising potential • For the emerging markets commodity chemicals is one of the promising sectors Specialty segment will 72 markets, sectors. chemicals be triggered by some companies having multiple business models across various markets Source: OECD, UNEP, IHS
  • 73.
    1.4.2 Chemical Industry: India Scenario
  • 74.
    Chemical Sector IndiaScenario Chemical industry's current turnover is about USD 30.8 billion which is 14 % of the total manufacturing output of the country • Indian chemical industry ranks 12th in the world by volume in the production of chemicals • Total production in the Indian chemical industry was 8,374 MT in FY12, a 2.5 per cent rise over FY11 • With 74 per cent of the total production share, alkali chemicals form the largest segment in the Indian chemical industry • India’s growing per capita consumption and demand for agriculture‐related chemicals offers huge scope of growth for the sector in the future • In India consumption of products lowest in the world; there is a huge India, petrochemical is still one of the hence untapped potential in this sector 8400 8374 Production of major chemicals (000'MT) Production share of major chemicals FY13 2% 8170 7% 8200 8000 7800 7600 7605 7823 7423 7651 16% 1% Dye & dyestuff Inorganic chemicals organic 7400 7200 7000 6800 2006‐07 2007‐08 2008‐09 2009‐10 2010‐11 2011‐12 74% chemicals Pesticides Alkali chemicals 74 Production of major chemicals (000'MT) Source: Department of Chemicals & Petrochemicals
  • 75.
    Chemical Sector Segments& Characteristics of India chemical sector Key segments of India Chemical Industry Base chemicals Petrochemicals, man‐made fibres, industrial gases, fertilizers, chlor‐lk li d h i Specialty chemicals Dyes and pigments, leather chemicals, construction h i l l Pharmaceuticals Active Pharmaceutical Ingredients (APIs) df lti Agrochemicals Insecticides, herbicides, fungicides and h Biotechnology Bio‐pharma, bio‐agri and bio‐industrial products alkali and other organic and inorganic chemicals chemicals, personal care and other specialty chemicals and formulations other crop protection chemicals Characteristics of India Chemical Industry High domestic demand potential Focus on new segments such as specialty and knowledge chemicals Gujarat and Maharashtra have emerged as most favored zones Fragmented industry Increase in focus on R&D Source: KPMG, TSMG 75
  • 76.
    Chemical Sector Indiascenario: Chemical Exports & Imports Exports have been rising over the year but still India is a net importer of chemicals • Total exports of chemicals grew from USD 3.5 billion in FY03 to USD 16.1 billion in FY12, a CAGR of 18.7 per cent • India has been a major importer of chemicals; the sector made up 5 per cent of India’s total imports in FY12 • Total imports of chemicals grew from USD 3.7 billion in FY03 to USD 24.0 billion in FY12, a CAGR of 23 per cent • During FY13 FY13, organic chemicals constituted 70 per cent of India India’s s total chemical exports exports, followed by dyes & dyestuff at 11 per cent Chemical exports of India (USD billion) India's chemical imports (USD billion) 18 16 14 12 10 7.7 9.1 11.2 11.4 13 16.1 CAGR: 18.7% 25 20 15 11.3 15.6 16 19.5 24 India s CAGR: 23% 0 2 4 6 8 3.5 4.1 5.1 6.3 10 5 0 3.7 4.7 6.1 7.5 8.8 76 Chemical exports of India (USD billion) India's chemical imports (USD billion) Source: FICCI, Department of Chemicals & Petrochemicals – Gov. of India
  • 77.
    1.4.3 Chemical Industry: Gujarat Scenario
  • 78.
    Chemical sector Gujarat:The hub for chemical industry Gujarat, the hub of chemical industry in India, accounts for 62 % of India’s petrochemical production, 53% of other chemicals production and 18% of India’s chemical exports • The chemical industry in Gujarat is a significant component of State's economy with revenues at ~ INR 4,50,000 crore in 2012 • Gujarat's chemical & petrochemicals industry comprises of about 500 large and medium scale industrial units, about 16,000 of small scale industrial units and other factory units and provides 16% of employment • Government support, world class infrastructure, strategic location, availability of skilled workforce and raw material makes Gujarat a preferred location for chemical plants • About 6600 chemicals & petrochemicals are produced in the state • Largest supplier of bio fertilizers, seeds, urea and other fertilizers • Also Gujarat has taken the lead to promote environment friendly practices through Effluent Treatment Plant; currently 28 such plants a re operational and further 6 are proposed 90% Pharmaceut 35% 51% 62% 65% 80% 80% 70% 60% 50% icals Chemicals Regional concentration of basic chemical industry 21% Gujarat 40% 30% 20% 10% 0% Petrochemic als Plastic Industry Industry contribution Gujarat to India 53% 5% 6% 6% Maharashtra UP Tamil Nadu Madhya Pradesh 78 wise of India, 2012 Salt Processing 9% Others Source: FICCI, Department of Chemicals & Petrochemicals – Gov. of Gujarat; GPCB
  • 79.
    Chemical sector Gujarat:Chemicals & Petrochemicals Complexes Some of the largest chemicals & petrochemicals complexes of World are present in Gujarat Ch i l Refineries (87MTPA) Chemical and LNG terminal (15MTPA) Petrochemi cal complexes Chlor Alkali plants (1MMTPA) Soda Ash plants (3 MMTPA) Chemical Fertilizer plants Agro Chemicals IOCL Petronet LNG terminal Dahej IPCL GACL IPCL Tata Chemicals Gujarat Heavy IFFCO UPL Baroda Agro A i t RIL LNG Hazira RIL UPL Shriram y Chemicals Nirma Saurashtra GSFC Aristo Biotech Super Crop Safe Essar Chemical port terminal Dahej ONGC Atul Indian Rayon Chemicals Dhrangad hra Chemicals GNFC KRIBHCO Ltd Excel Crop Care Figures indicate capacities in MTPA as of 2012 79 Source: Department of Chemicals & Petrochemicals – Gov. of India, MOPNG
  • 80.
    Chemical sector Gujarat:Petroleum, Chemical & Petrochemical Investment Region (PCPIR) PCPIR is a specifically delineated Investment Region planned for the establishment of production facilities for petroleum, chemicals and petrochemicals • Spread over 453 sq km of brown‐field area in the coastal belt of Gulf of Khambhat in Bharuch District Vi i it f • Vicinity of other existing GIDC chemical estates, viz. Jhagadia, Ankleshwar, Panoli and onsite chemical port terminal & LNG terminal at Dahej • The proposed SEZ in PCPIR includes, petrochemical and downstream petrochemical industries, synthetic organic chemicals, industrial gas producing industry, packaging industry, shipbuilding/fabricating unit and other small chemical industries Abundance of Natural Resources Location Quality Resources Export Promotion Measure PCPIR: Unique Legal Selling Proposition F k Well Defined I f t t 80 Infrastructure Framework Source: Gujarat Industrial Development Corporation
  • 81.
    Chemical sector Gujarat:PCPIR Advantage Export promotion measures Well established infrastructure Notified and Regulatory Framework Gujarat SIR Act, 2009 Gujarat SEZ Act 2004 Availability of natural resources Concentration of Chemical port terminal and chemical storage facility at Dahej Operational Dahej SEZ Formally approved Ceramics SEZ at Jhagadia Quality work force, f l l b l Notified Area Authority under GIDC Act, 1962 Gujarat Town Planning and Urban Development Act 1976 Petroleum, Chemical and Petrochemical estates across the district Rich natural resources peaceful labour, least and feedstock man days lost Act, Gujarat Infrastructure Development Act, 1999 availability Location advantage Road and rail Airport connectivity Support infrastructure • With a capacity of 22MMTPA, Dahej port is present in the region • The anchorage is a • National Highway 8 passes through the district, connecting it with Ahmedabad • The nearest airport is present in Vadodara which is 100 km away from the region • LNG terminal, liquid fuel jetty and solid cargo jetty at • Two 220 KV power sub distance of 5 km from the old port and 6 km from a container terminal in Jageshwar, Bharuch (182 km) and Mumbai (362 km), along with the DMIC • Delhi‐Mumbai broad gauge railway line, region. • Ahmedabad International Airport is 200 km sub‐stations at Dahej and Vilayat, three 66 KV sub‐stations at Dahej, Luna and Vilayat • Water Supply by GIDC g g y , Bharuch‐Dahej railway line pp y y and GWSSB; Gas Supply by GGCL Source: Gujarat Industrial Development Corporation 81
  • 82.
    Chemical sector Gujarat:Policy Interventions Gujarat aspires to become a beacon of comprehensive social and economic development Industrial Policy 2009 Thrust Sectors Manufacturing Services I f t t Incentives Various Sector specific Subsidy on electricity duty HR/Labour Labour law flexibility Industry‐academia collaboration Business Environment Single window clearance Marketing Infrastructure Support for Urban Infrastructure Regional Focus FDI/NRI Up gradation of industrial estates support for development of specialized institutes support Grievance redressal Information centers Physical Industrial •In Chemical Sector, 100% FDI is permissible. Manufacture of most chemical products inter‐alia covering organic / inorganic, dyestuffs & Pesticides is de‐licensed •The entrepreneurs need to submit only IEM with the Department of Industrial Policy & Promotion. •Hazardous products come under compulsory licensing policy Licensing Policy • Customs Duty on most Organic, C t D t Inorganic Chemicals, Pharmaceuticals, Fertilizers and other miscellaneous Custom Duty chemicals is 7‐10% Excise Duty • On almost all chemicals the excise duty is 16% VAT Duty • VAT on most chemicals reduced to 5% in Gujarat Source: Industries Commissionerate – Government of Gujarat 82
  • 83.
    Chemical sector Gujarat:Policy Interventions As per Industrial Policy, 2009 Government of Gujarat has developed SEZs, SIRs and Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) to encourage the investments in chemicals sector. Interest Subsidy on eligible parameters Venture Capital & Patent Assistance Quality Certification & Skill Enhancement Technology Acquisition Fund Support to R&D Institutions Market Development Support Support for Vendor Development Support to auxiliary industries for value addition Cluster Development p Rehabilitation of Sick Promotion of specific in PPP mode Units p sectors For modernization program one can avail of 5% subsidy on the applicable interest 83 over the loan period Source: Industries Commissionerate – Government of Gujarat
  • 84.
  • 85.
    Chemical sector Gujarat: Vision 2017 Chemical industry in Gujarat has the potential to reach ~USD 70 billion by 2017 Contribution of Specialty and Fine Chemicals will be doubled by 2017 Development Agenda: • Development of this sector will lead to value Chemical centers in Gujarat addition • Development of linkages with user sectors and increasing product portfolio – meet the needs of other sector (Textiles and Auto industry are Ahmedabad key industrial users that need the development of specialty and fine chemicals for their growth) • Identify competitive advantages existing within Jamnagar Dahej Vadodara Bharuch the State – Gujarat is one of the largest producers of castor and guar seeds in India. Potential of application of these crops in specialty and fine chemicals is immense Valsad Hazira 85
  • 86.
    Chemical sector Gujarat:Proposed Interventions New chemical zones for Specialty and Fine Chemicals • 3 speciality chemical zones to be developed in Jambusar, Padra and Dahej Infrastructure management • Facilitate provisioning of modern infrastructure Efficiency – energy and water • Centralized waste management institution evaluation and institution. • Shift philosophy from end of pipe line to self treatment eliminating reliance on CETPs • Industry‐academia‐government collaboration – to set standards and for enforcement Promoting R & D and Centre of Excellence • Centre of Excellence for Specialty and Fine Chemicals will be set up in Ankaleshwar and Dahej Ensuring Safety, Health and Environment • Encouraging practices that ensures health, safety and environment • 28 Common Effluent Treatment Plant (CEPT) 86 are operational and six are proposed for the same
  • 87.
    Chemical sector Gujarat:Leading Players and Investment Opportunities Textiles Chemicals High Performance Pigments and Coating Products Chemicals Engineering Polymers oducts Bio Refineries Feedstock Linkages PP Filament Yarn Acrylic Fibres 87
  • 88.
    FOR ADDITIONAL INFORMATIONCONNECT US @ Industries Commissionerate Block No. 1, 2nd Floor, Udyog Bhavan, Gandhinagar, Gujarat, India ‐ 382 010 http://ic.gujarat.gov.in/ Phone: 079‐23252683 E‐mail: iccord@gujarat.gov.in Gujarat Industrial Development Corporation Block No. 4, 2nd floor, Udyog Bhavan, Gandhinagar, Gujarat, India – 382 010 http://www.gidc.gov.in/ Phone: 079 079‐23250583 E‐mail: vcmd@gidcgujarat.org Energy and Petrochemicals Department Bl k Block N No. 5 5, 5th fl floor, S hi l Sachivalaya, Gandhinagar, Gujarat, India – 382 010 http://guj‐epd.gov.in/ Phone: 079‐23250771 E‐mail: secepd@gujarat.gov.in 88
  • 89.
    1.5 Gems &Jewellery Industry
  • 90.
    1.5.1 Gems &Jewellery Industry : Global Scenario
  • 91.
    Gems & Jewellerysector Global Scenario Given the geographic dispersion of the value chain, Gold & Jewellery Industry is extremely global in nature • Global jewellery sales is likely at to grow a CAGR of 4.6 per cent from USD 185 billion in 2010 to USD 230 billion in 2015 • Accelerating economic growth in Asian countries like China and India will enhance the market potential for jewellery • Gold jewellery will ride on demand from traditional markets like India, Turkey, and China to touch USD 94 billion by 2015 • Global jewellery fabrication output will grow at a CAGR of 5.1 percent to reach USD 95 billion by 2015 Projected global jewellery sales (USD billion) 344 % Share of key markets in global jewellery sales, by value, 2015 350 300 250 200 150 146 185 230 CAGR: 4.6% US, 25.6% ROW, 28.4% 100 50 0 2005 2010 2015E 2020E Projected global jewellery sales (USD billion) China, 13.4% India, 12.3% Middle UK, 2.1% Italy, 2.7% Turkey, 3.2% Japan, 3.7% 91 Source: KPMG analysis, GJEPC, McKinsey Report East, 8.7%
  • 92.
    1.5.2 Gems &Jewellery Industry: India Scenario
  • 93.
    Gems & Jewellerysector India Scenario The domestic gems & jewellery market is estimated to be USD 40 billion and is predicted to grow at a rate of ~13 percent per annum by 2015 to reach USD 45‐50 billion mark. • The sector contributes around 6 – 7 percent to the country’s GDP • It p provides p y employment to y nearly 2.5 million p p people with the p potential to g generate employment of 0.7 to 1.5 million over the next five years • It is one of the fastest growing sectors and the size of the industry is expected to double in the next five years • There are more than 3,00,000 Gems & Jewellery players across the country, with majority being small players • Globally, India is considered as one of the major hubs for diamonds and jewellery manufacturing and is an important source of supply to the world • India is the largest consumer of gold, accounting for nearly 29 percent of the total world gold consumption • Gold jewellery forms around 80 per cent of the Indian jewellery market Share of India Demand in Global Demand 100% 29% 25% India 80% CAGR= 13% – Range on) 20 40 60% 40% 20% 0% 71% 75% Rest of world Estimated Size (USD billio 18 35 93 Jewellery Bar & Coins Source: FICCI, GJEPC, Technopak Analysts, ONICRA, Millennium Post 2009 2015
  • 94.
    Gems & Jewellerysector India Scenario: Exports & Imports G J ll i Gems & Jewellery is the second highest earner of FOREX in India and accounted for ~15 percent of the India’s total merchandise exports in FY 13 • The gems and jewellery industry significantly contributes to the growth of the Indian economy • The total exports of Gems and Jewellery for FY 13 was around USD 39.03 billion, including that of cut and polished diamonds at USD 17.41 billion, gold at USD 18.28 billion and colored gemstones at USD 0.65 billion • In 2012‐13, jewellery exports outperformed textiles and apparel exports by 25 per cent • Gems and Jewellery industry is highly dependent on imports of raw materials, of which rough diamonds account for almost 50 percent of the imports • There is immense dependence on import of gold due to its little/ limited production in the country. This has made the industry extremely vulnerable to any regulations that constrain gold supply • India is also one of the largest importer and consumer of silver in the world Major Destinations of and Jewellery 33.20% 6.20% Gems Export OECD Countries OPEC Countries 58 80 60 Gems and Jewellery Exports (USD billion 1.10% 21.30% 38.20% Eastern Europe Developing Countries Others 25 40 20 0 2009 2015E Source: GJEPC, Technopak Analysts, DGCI&S (Kolkata) 94
  • 95.
    Gems & Jewellerysector India Scenario: Growth and Demand Drivers With per capita consumption almost 1/10th that of any matured market India presents a very large potential market With the growing economy spending power the people is also rising a Increasing purchasing and spending power economy, of with CAGR of 17% since last 3 years, leading to growth of jewellery demand in India Investment led There is a substantial investment demand demand, in both jewellery bar and coin demand form, due to the great attractiveness of gold as an investment option E t f N l It is anticipated that large investments of about USD 1 billion in the coming Entry of New players ld b d b l t il /b d hi h ld t l th in retail sector years would be made by large retailers/brands which would catalyze the growth of the industry, set higher standards and create value across the value chain. Traditional Domestic Tradition of buying jewellery during important festivals like Diwali and Demand Dhanteras and during weddings Foreign Demand The sector is the second largest foreign exchange earner in the Indian economy; contributing ~15 percent to the total export earnings of the country Source: FICCI, Onicra, Millennium Post 95
  • 96.
    1.5.3 Gems &Jewellery Industry: Gujarat Scenario
  • 97.
    Gems & Jewellerysector Gujarat Scenario Gujarat has the highest share (nearly 85 percent) in the total national Jewellery production and accounts for 72 percent of the world’s share of processed diamonds. Surat has 65% share in India's diamond trade. • Gujarat accounts for about 80 percent of diamonds Some of the leading players in Gujarat processed and 95 percent of diamonds export from India • Almost 8 out of 10 diamonds in the world are processed in Gujarat • 90 percent of the total diamonds in Gujarat are processed by about 10,000 diamond units located in and around Surat • Gujarat is also internationally renowned for the production of unique hand‐made silver ornaments (85 percent of total silver Jewellery production of India) • A jewellery manufacturing Gujarat's Gems & Jewellery sector is expected to grow at a rate of 15 percent gold cluster in Ahmedabad has a productivity of around 50 gm of production /day, highest in the country • Diamond processing and trading unit are spread across the State in cities such as Surat, Ahmedabad, Palanpur, Bhavnagar, Valsad and Navsari Source: Industries Commissionerate ‐ Government of Gujarat, IBEF 97
  • 98.
    Gems & Jewellerysector Gujarat Scenario: Value Chain Analysis Gujarat has widespread presence across the whole of value chain Mining Gemstone Processing Jewellery Manufacturing Jewellery Retailing Diamond, Gemstone, Gold, Platinum Cutting & Polishing Design & Fabrication Studded Jewellery Expanded Diamond Value Chain Mining Sourcing Rough Trade Processing Gujarat’’s Presence in the Gems & Jewellery Value Chain Mining Processing Fabrication Consumption Diamond Gold Platinum Silver & Others Established Presence Emerging Centre/ Market Not Applicable in Gujarat Source: Industries Commissionerate ‐ Government of Gujarat 98
  • 99.
    Gems & Jewellerysector Gujarat Scenario: Growth Drivers The growth of this industry is primarily attributed to the increase in the demand driven by expansion of the middle class and support from the government in increasing the competitiveness Low Labour Cost F bl • Gujarat has identified Gems & Jewellery sector as one of the thrust areas for development • One of the important factors Growth Drivers of Availability of skilled craftsmen Favorable Government Policies contributing to the growth has been the development of SEZ’s by the state • A single product SEZ specially Gems & Jewellery Sector in Gujarat Cost Competitive‐ Development of SEZ’s and Gems & single‐product, dedicated to gems and Jewellery with available infrastructure, Gujarat Hera Bourse (GHB), is Competitive located very near Surat city ness Rising disposable income & consumer jewellery Parks ocated e y ea Su at c ty • There is also a multi product SEZ, Surat SEZ (SurSEZ), which also aids the growth of gems and jewellery sector 99 demand Source: Industries Commissionerate ‐ Government of Gujarat
  • 100.
    Gems & Jewellerysector Gujarat Scenario: Gems &Jewellery Clusters To leverage on the progressive industrial sector of the state, the government has initiated a “Cluster development” model to increase cost competitiveness and efficiency through collaborative efforts and knowledge sharing Region Activity Surat Diamond Processing, Jewellery Gems & Jewellery Clusters in Gujarat Palanpur Diamond Processing Ahmedabad Diamond Processing, Gold & Silver Jewellery Bhavnagar Diamond Processing Navsari Diamond Processing Rajkot Gold & Silver Jewellery Khambhat Gemstone (Agate) Valsad Jewellery S i h l di d i l i h ld d i ll d Silk Ci S kli i h Di d ” 100 Surat is the largest diamond processing cluster in the world and is called “A Silky City Sparkling with Diamonds” Source: Industries Commissionerate ‐ Government of Gujarat
  • 101.
    Gems & Jewellerysector Gujarat Scenario: Assaying & Hallmarking Centers in Gujarat Center Name District Gujarat Gold Centre Ahmedabad Assaying & Hallmarking centres in Gujarat Kesar Hallmarking Centre Ahmedabad MMTC Ltd. Ahmedabad Parkar Ahmedabad Kachcha Gold Shradha Assaying & Hallmarking Centre Ahmedabad Gujarat Gold Centre Vadodara Ahmedabad Vadodara Rajkot National Center for Hallmarking Surat VG Assaying & Surat Gold Hallmarking Centre Rajkot Rajkot is internationally known for its unique hand made gold and silver ornaments which constitute 85% of the total jewellery production in India” Source: Industries Commissionerate ‐ Government of Gujarat 101
  • 102.
    Gems & Jewellerysector Gujarat Scenario: Educational Infrastructure Entrepreneurship merged with skilled craftsmanship is the key enabling factor for Gems & Jewellery courses Labour cost per carat in USD sector in Gujarat Major institutions offering specific to 160 140 120 Gems & Jewellery Indian Diamond I tit t (IDI) National Institute of Fashion T h l National Institute fD i NID) 100 80 60 Institute IDI), Surat Technology (NIFT), Gandhinagar of Design (NID), Ahmedabad Graduate and Diploma Level programmes offered 40 20 0 dia ium ina rael p p g by Indian Diamond Institute include: • Diamond Sorting and Grading • Gemology Gujarat/In Antwerp/Belgi Shenzen/Ch Telaviv/Isr gy • Jewellery Designing, Manufacturing and Appraising • Jewellery Business Management • Gem Diamond Identification and Grading 102
  • 103.
    Gems & Jewellerysector Gujarat Scenario: Government Initiatives and Interventions (1/2) Gems & Jewellery is an important sector in Gujarat due to its immense contribution to the state’s economy and employment of a sizeable population Policy Support for fostering growth in Gems & Jewellery Sector Additional interest subsidy at 3% to a maximum f 1 5 illi f t t hi h th 5 • The objectives of the schemes of INR 1.5 million for a term not higher than years Assistance for setting up Hallmark Certification centers for Jewellery and testing centers for Gems are :  To promote new centers for Gems & Jewellery activities in the State Support for setting up of Training Institute for the development of Gems & Jewellery sector Scheme for supporting safety measures and protection  Focus on studded jewellery to expand processing base for higher value from occupational hazards  Establish a strong presence Assistance of viability gap funding of 20% of the total project cost to private developer intending to develop Jewellery park on PPP basis g p of Gujarat Gems & Jewellery industry in International market Source: Industries Commissionerate ‐ Government of Gujarat 103
  • 104.
    Gems & Jewellerysector Gujarat Scenario: Government Initiatives and Interventions (2/2) The government has implemented such an FDI policy which allows 100% FDI and 74% in exploration and mining of diamonds and precious stones and 100% for gold and silver and minerals' exploration, mining, metallurgy and processing. 100% FDI through automatic route Exemption for rough coloured precious p g p gems from custom duty Duty free import of consumables for metals other than gold and platinum up to 2% on Freight on board Duty free import entitlement for rejected jewellery up to 2% of FOB value of exports Import of gold of 18 carat and above under the replenishment scheme No import duty on polished diamonds The limit value of jewellery parcels for exports through foreign post office raised from $50k to $75k Establishing ‘ Diamond Bourses’ to make India and international diamond trading hub Source: Industries Commissionerate ‐ Government of Gujarat 104
  • 105.
    1.5.4 Gems &Jewellery Industry: Investment Opportunities
  • 106.
    Gems & Jewellerysector Gujarat Scenario: Investment Opportunities Gems and Jewellery is one of the fastest growing Industries in the country. Following are some of the identified projects to venture: Jewellery Fabrication &Retail Infrastructure Development Tools &Machinery • Diamond studded jewellery • Gold jewellery • Silver jewellery • Jewellery Parks • Modern Jewellery units • Educational institutes focusing on Gems & • Diamond blade • Diamond cutting & tools • Platinum jewellery Jewellery sector d l h l • Rings • Establishing Hallmark • Studded Gold & Silver Center jewellery chains and • Gemology institute with • Diamond tools & wheels • Gem cutting & j y processing unit ornaments testing facility • Hand made Gold and Silver ornaments • Technology Upgradation 106
  • 107.
    FOR ADDITIONAL INFORMATIONCONNECT US @ Industries Commissionerate Block No. 1, 2nd Floor, Udyog Bhavan, Gandhinagar, Gujarat, India ‐ 382 010 http://ic.gujarat.gov.in/ Phone: 079‐23252683 E‐mail: iccord@gujarat.gov.in Gujarat Industrial Development Corporation Block No. 4, 2nd floor, Udyog Bhavan, Gandhinagar, Gujarat, India – 382 010 http://www.gidc.gov.in/ Phone: 079‐23250583 E‐mail: vcmd@gidcgujarat.org 107
  • 108.
  • 109.
    1.6.1 Pharmaceutical Sector: Global Scenario 109
  • 110.
    Pharmaceutical Industry GlobalScenario The world pharmaceutical market was worth approximately USD 1094 billion in 2013 Breakdown of World Pharma Market (2012) 14.7% 5.9% USA & Canada • Riding on the wave of advances of science and technology, the research based pharma industry is entering an exciting new era in medicines development. 11.7% Europe Japan • Global market of generic medicines was worth approximately USD 274 billion in 2013 • 17 high growth emerging markets including China, India, Brazil, Russia and Mexico will contribute 28 per cent of total spending by 41% [VALUE] Africa, Asia (Excluding Japan) and Austrailia Latin America 2015, up from 12 per cent in 2005 • Major pharmaceutical companies include Pfizer, Novartis, Sanofi, Merck and Co., Roche, GlexoSmithKline, Abbot, AstraZeneca, Amgen and Eli Lilly & Co. On an average out of 10,000 substances synthesized in laboratories, only one or two will successfully pass all phases of development and enter the market as medicine R & D in Pharmaceutical When a new active substance is synthesized in laboratory, it takes average 12‐13 years for it to clear all stages to become a marketable product For a research and development of a single medicine and unveil to the market, approximately USD 1.5 billion is spent Source: The Pharmaceutical Industry in Figures by EFPIA; IMS MIDAS, 2013 110
  • 111.
    1.6.2 Pharmaceutical Sector: India Scenario 111
  • 112.
    Pharmaceutical Industry IndiaScenario India is among the top five pharmaceutical emerging markets with healthcare market expected to reach approximately USD 31.59 billion by 2020 • Domestic market for the Financial year 2013‐14 was approximately USD 13.18 billion • Domestic market of generic drugs for the financial year 2013‐14‐ stood at USD 11.0 billion • India stands 3rd in the world in terms of volume of production. • India’s share in World Generic Market is 4%. (excluding India’s domestic market). Indian Pharma Industry Enablers Competent Workforce Information & Technology Cost Effective Chemical Synthesis Globalization Legal & Financial Framework Consolidation Source: FDCA 112
  • 113.
    Pharmaceutical Industry IndiaScenario • Indian pharmaceutical industry covers very wide spectrum of products ranging from simple healthcare pills to intricate products like vaccines, r‐DNA products and hi‐tech cardiac stents etc. • Pharma sector in India is highly fragmented with over 20,000 registered units; which meets 70% of domestic demand • India houses around 8000 manufacturing units, producing approximately 1500 APIs (Active Pharmaceutical Ingredients) • India is likely to offer a USD 8 billion market for MNCs across the world • India’s exports stood at USD 15.04 billion in 2013‐14, which is approximately 4% of the global share. Over 55% exports of India are to highly regulated markets • Pharma products are exported to over 200 countries with largest destination being US followed by UK Pharmaceutical R&D and Product Value Chain Research Drug Substance Production Formulated Pre‐Clinical Development Clinical Development Primary Process Development Drug Substance Production Dosage Form Development Dosage Form Production Discovery Research and Development Drug Production Packaging Assembly Logistics Source: Report by Corporate Catalyst India; DGCIS 113
  • 114.
    1.6.3 Pharmaceutical Sector: Gujarat Scenario 114
  • 115.
    Gujarat – ThePharmaceutical Hub 109 years of excellence Only manufacturer of Doxorubicin HCL Liposome injection in the World at present 70% of India’s 50% of India’s 80% of world’s Isoniazid (used for treatment of tuberculosis) is produced in Gujarat Only manufacturer of Vitamin C and Dapsone in India India s cardiac stents manufactured is from Gujarat India s intraocular lenses manufactured is from Gujarat ~40% of India’s machinery for pharma sector manufactured is from 58% India’s orthopedic implants manufactured is from Gujarat Gujarat 40% of 3324 manufacturing 33% of India’s pharma Produces 35% of CRAMS Companies India’s Diagonistic Re‐agent sector turnover; 28% of India’s pharma export licenses; Home to ~40% of CRO in the country Gujarat, an established manufacturing base for bulk drugs and formulations, is poised to capture global 115 opportunities to become a Global Pharmaceuticals Hub
  • 117.
    Pharmaceutical Sector Gujarat:Facts The State manufactures and exports different dosage forms including generic drugs, intricate vaccines, r‐DNA products, cytotoxic drugs external preparations, sex hormone drugs small and large Total sales units in Gujarat are 30,335* ; out of which 48% units are retailers and 42% are wholesalers and rest 10% serve in Manufacturing Units in Gujarat* 3 8 8 drugs, volume parenteral, APIs, hi‐tech cardiac stents bio‐pharma products etc both categories 639 378 Gujarat is the first state in the country to issue license through I.T. application. 10 states have adopted L. M. Pharmacy College, India’s first pharmacy college, was established in Gujarat in 1947. B. V. Patel PERD Center, NIPER, MS 2299 this model. University are other major pharmacy colleges in the state. Allopathic Ayurvedic Cosmetics Homeopathic Source: FDCA; IBEF 117 * Data as of 1st July, 2014
  • 118.
    Pharmaceutical Sector PharmaClusters in Gujarat (1/2) Ahmedabad cluster Manufacturing Base: Formulations APIs Vadodara cluster Manufacturing Base: Formulations  Biogenerics  Biologicals  Contract manufacturing Bharuch and Ankleshwar Vapi/ Valsad cluster cluster Manufacturing Base:  APIs  Formulations Manufacturing Base: Formulations  APIs Device and Diagnostics 118  Vaccines g
  • 119.
    Pharmaceutical Sector PharmaClusters in Gujarat (2/2) Characteristic of Pharma clusters in Gujarat Location Existing Products Export Potential Market‐based/ Resource‐based/ Infrastructure‐based Potential future products Infrastructure Ahmedabad • API • Finished Dosages High Market and Infrastructure • Biological Manufacturing • Biological Products • Contract Manufacturing • Medical Devices • CRO • CRAMS Vadodara • Finished Dosages High Market and • API • Bio‐generics Infrastructure • CRAMS • Biological Manufacturing Bharuch & • APIs High Resource • APIs for global Ankleshwar • Formulations • Vaccines g g companies Vapi & Valsad • APIs • Formulations High Resource • Intermediate & Finished Dosages 119 • Device and Diagnostics Source: KPMG Analysis
  • 120.
    Pharmaceutical Sector SpecialEconomic Zones (“SEZ”) and Special Investment Regions (“SIR”) Zydus Infrastructure Pvt. Ltd. Location: Ahmedabad Area: 49 hectare Likely activities: Pharmaceuticals CPL Infrastructure Pvt. Ltd. Location: Ahmedabad Area: 122 hectare Likely activities: Biologicals, APIs & Pharmaceuticals Dishman Infrastructure Ltd. Location: Ahmedabad Area: 106 hectare HBS Pharmaceuticals SEZ Location: Bharuch Area: 125 hectare Likely activities: R&D SEZs SIRs Likely Activities: Bulk drugs D, Bulk drugs, Intermediates & Contract manufacturing Pharmaceuticals are identified potential Dahej SEZ Location: Dahej Area: 1125 as a sector in 3 SIRs hectares Pharma related activities: APIs, Intermediates, bulk drugs and various pharmaceutical formulations Industrial Parks: Name District Area ( sq q ) km) Changodar Ahmedabad 319 Viramgam Ahmedabad 190 Gujarat Pharma Techno Park Location: Ahmedabad Area: 17.07 hectare 120 Okha Jamnagar 206 Likely activities: Pharmaceutical Source: GIDC, GIDB
  • 121.
    Pharmaceutical Sector Gujarat:Major Companies (1/3) ■ Key business areas ‐ Finished formulations, APIs ■ Key therapeutic areas ‐ CVS, CNS, diabetology, gastroenterology, oncology, pain management, anti allergic ■ Key research areas ‐ generics, process development and complex generics ■ Has 23 manufacturing plants across the world and reported revenues of USD 2 billion during 2012‐13. ■ Sun Pharmaceutical Advanced Research Centre (SPARC) is situated in Vadodara (Baroda). Manufacturing plants in Gujarat are located at Halol, Ankleshwar and Vadodara. ■ Key business areas – Finished formulations, APIs, fine chemicals, animal health and cosmeceuticals ■ Key therapeutic areas ‐ CVS, CNS, women health, respiratory, pain management, anti infective, oncology, nephrology, neuroscience and dermatology ■ Key research areas – New molecular entities, novel drug delivery system, identification & validation of therapeutic targets, therapeutic proteins and vaccines by r‐DNA technology ■ Leader in Cardiology, Gynecology, Gastro Intestinal and Respiratory therapy segments ■ Formulations business in India posted sales of USD 387.2 million in 2012‐13 ■ Launched more than 30 new products in the key markets of Asia Pacific, Africa and Middle East during 2012‐13 ■ Key business areas ‐ Finished formulations and APIs ■ Key therapeutic areas ‐ Cardiovascular, central nervous system, gastro‐intestinal, diabetology, anti infective and pain management ■ Key research areas ‐ Discovery research, generic drug development, new drug delivery system and value added generics ■ Research Plant is located in Bhat Village in Gandhinagar with investment of USD 40 million Source: IBEF; FDCA 121
  • 122.
    Pharmaceutical Sector Gujarat:Major Companies (2/3) ■ Key business areas – Formulations, APIs, hospital products ■ Key therapeutic areas ‐ CVS, gastro intestinal, analgesic, anti‐infective, antidiabetic, vitamins, haemostatic, immunomodulators ■ Key research areas ‐ New drug discovery, new drug delivery, plant tissue culture, genetic engineering, biosynthesis, phytochemistry ■ Cadila Pharmaceutical has strategic collaboration with Europe based pharma companies including Pergamum AB and Bactiguard from Sweden ■ Key business areas – Finished formulations formulations, APIs APIs, contract research ■ Key therapeutic areas ‐ CNS, CVS, diabetology, oncology, gastroenterology, r‐DNA, urology and pain management ■ Key research areas ‐ NDDS for formulations, API capabilities for Anti cancer agents, oral formulations, NDDS and drug delivery mechanisms ■ As of 31st of March 2013, Intas has grown to be a ~ USD 650 million organization with a revenue growth over 30% CAGR over the last 5 years and a profit growth of ~50% CAGR over the same period ■ Intas has developed 10 manufacturing facilities globally ■ Key business areas ‐ APIs, intermediates, y , , fine chemicals, quaternary compounds ■ Specialised services ‐ Contract manufacturing and contract research ■ Key research areas ‐ Research for contract manufactured products, pilot studies of new molecules, process optimisation and improvement, research for in‐house applications (APIs, intermediates, fine chemicals) ■ Provides a range of solutions at locations in Europe and China besides India Source: IBEF; FDCA 122
  • 123.
    Pharmaceutical Sector Gujarat:Major Companies (3/3) ■ Key business areas – Finished formulations, APIs, Chemicals, herbal nutraceuticals and veterinary ■ Key therapeutic areas ‐ CVS, gynecological, gastrointestinal, NSAIDS, antibacterial, antihistamine, hypoglycemic, vitamins, antiulcerant ■ Key research areas ‐ Chemistry and synthesis, formulations development, contract/Collaborated Research ■ Vadodara based plant has the India ■ Key business areas – APIS, Branded generic medicines ■ Key therapeutic areas ‐ Dermatology, hormones, controlled substances, oncology and modified release products largest fermentation capacity in ■ The company has a state of the art Research Centre at Vadodara. ■ Key research areas ‐ Process research development, formulations development, analytical research and clinical research ■ The Ankleshwar API manufacturing facility, which is approved by the US‐FDA, MHRA, KFDA and WHO, caters to the regulated markets of US, Europe and Japan ■ Key business areas – APIs, Generic drugs, injectables (LVP, SVP) ■ Key therapeutic areas‐ Anesthesia, critical care, renal care, enteral nutrition and oncology ■ Key research areas ‐ Product development, formulation studies, method development and validation and stability studies ■ Having presence across 100 countries, the company manufactures and markets products across multiple markets ■ Key business areas – Generic drugs and OTC (Over‐the‐Counter Drugs), APIs ■ Key therapeutic areas‐ CNS, respiratory, oncology, pain women's health therapeutic areas, biologics ■ Key research areas ‐ High‐barrier generics, NTEs (New Therapeutic Entities), CNS (Central Nervous System) ■ The Teva Sanand OTC facility represents a critical component of PGT Healthcare (headquarters in Geneva), Teva’s international partnership and joint venture with Procter & Gamble. Source: FDCA 123
  • 124.
    Pharmaceutical Sector Gujarat:Educational Infrastructure ll f h h d b d Education / research institutes Research and  L M College of Pharmacy, Ahmedabad  Institute of Pharmacy ‐ Nirma University, Ahmedabad  National Institute for Pharmaceutical Education and Research (NIPER) ‐ Ahmedabad  Faculty of Pharmacy, MS University, Vadodara development Manufacturing  Zydus Cadila Healthcare Ltd.  Claris Life sciences Ltd.  Cadila Pharmaceuticals Ltd.  Intas Pharmaceutical Ltd.  Sun Pharma  Torrent Pharmaceuticals Ltd.  Dishman Pharmaceuticals  Abott Laboratories  Wyeth  Jubilant Organosys Marketing and exports Contract research organizations  Lambda Therapeutics  Quintiles Research (India) Private Limited  Kendle INC Research  Thermofisher Biopharma Services (i) Pvt. Ltd.  Synchron Research Services Private Limited  B A Research India Limited Provisional Intake Capacity of Pharmacy Colleges in Gujarat (2013‐14) Govt./GIA or Self Financed No. of Colleges Intake Capacity Govt./GIA 4 235 Self Financed 78 4890 Total 82 5125 Source: The Admission Committee for Professional Courses 124
  • 125.
    Pharmaceutical Sector Gujarat:Government Policies and Initiatives (1/2) Gujarat Industrial Policy 2009 Government Initiatives Promotion of Establishment of Presence of National Institute Scheme for assistance to Mega / Innovative projects Interest Subsidy to MSMEs generic drugs by giving them preference in Government purchases for Pharmaceutical Education and Research (NIPER) for Human resource development Pharmaceutical Export Promotion Council (Pharmexcil) Venture Capital Assistance for skill enhancement and Establishment of Gujarat Genomics Initiative, The State has allowed setting up of Special Economic Zones in Incentives to encourage R&D in p the Assistance up‐gradation programs Genetic Diagnostic centers and Gene Banks the sector which will boost pharmaceutical investments sector in terms of various tax benefits I T application Financial Assistance for improving industrial infrastructure Support to R&D institutes For quick disposal of various documents like CoPP, NCC and FSC, FDCA has started the process Establishment of Center of Excellence for Clinical Research and various sectors fb h l I.T. for issuance of manufacturing license, sales license and product license i l db of I.T. application of biotechnology implemented by FDCA Source: Gujarat Industrial Policy 2009 125
  • 126.
    Pharmaceutical Sector Gujarat:Government Policies and Initiatives (2/2) Graded interest subsidy for five years New Industrial Park will be provided at 7% for MSMEs and 2% for large industries having an actual investment up to INR 100 crore (USD 16.67 million) incentive of 50% of total expenditure up to INR 20 crore (USD 33.33 million) for core infrastructure development within the Industrial Park Interest Subsidy Assistance for core infrastructure Scheme for Assistance to Manufacturing Sector‐2013 Assistance for Centre of Excellence (CoE) Assistance for setting up the core facilities Assistance up to 80% of the total expenditure up to INR 10 crore (USD 16.67 Assistance of 70% of the total expenditure including recurring di expenditure f of 3 years up to INR 20 crore (USD 33.33 million) for national million) for the cost of core facilities needed level CoE Source: Scheme for Assistance to Manufacturing Sector‐2013 126
  • 127.
    Pharmaceutical Sector Globalizationmodel for Gujarat’s Pharmaceuticals Industry Source: KPMG Studies 127
  • 128.
    Pharmaceutical Sector Gujarat:Emerging Areas • Enhanced level of investment in R&D by local industry to provide research‐driven and high value services • A large pool of patients and hospitals WHO GMP complaint and internationally accredited manufacturing facilities to augment demand for contract f Contract manufacturing Contract Research and Clinical conducting clinical research at economical cost research manufacturing Among the leading states in the V i Sound base of diagnostic kits manufacturing; t t t ib t 35% f th ti l Diagnostic Kit d production of vaccines and therapeutic devices Kits and Devices state contributes ~of the national Vaccines production The State Government of Gujarat has identified Biotechnology as most potential tool for development and has formed a dedicated department for R&D in the sector, Gujarat State h l BioTechnology Mission design and development. Medical device companies in Gujarat are competent enough to take care of all critical aspects like biocompatibility, toxicological & stability testing, validation process as well as d i dd l t Biotechnology products Medical devices Strong base of Pharma Retailing in the state • Strong base of pharma machinery Pharma Pharma production in the state with over 18,000 retail stores present • ~40% of India's pharmaceutical machinery is produced in Gujarat 128 retailing machinery
  • 129.
    Pharmaceutical Sector Gujarat:Investment Opportunities • Contract manufacturing organisation (CMO) • Manufacturing of ayurvedic preparations • Manufacturing of new dosage forms like patches • Manufacturing of active pharmaceutical ingredient Manufacturing • Manufacturing of recombinant DNA based products • Manufacturing of • Manufacturing of allopathic products • Manufacturing of cosmetic products M f t i f intermediates and fine chemicals • Manufacturing of medical devices • Manufacturing of biopharmaceuticals • Manufacturing of oncology products • In Research and Development, opportunities for investment lies in Contract research organisation ( CRO), Clinical research, Genetic engineering and Setting of R&D centres & CoEs 129 ), , g g g • There are opportunities for investment in Retail Stores and Pharmacy Chain too.
  • 130.
    Pharmaceutical Sector FDCA:Food and Drugs Control Administration XLN is a software for transparent and speedy disposal of various Licensing applications and reducing the time lag between the Collection of Samples to declaration of Results to dissemination of information to stake holders. Daily Statistics can be checked • End‐to‐end online system. No physical file required. • Auto reminder for renewal of licenses • Centralized approval system for licenses • One database accessed by states • Single SignOn for multiple states Gujarat model replicated in 10 states and declared as rapid DeiTY GoI roll out for all states by DeiTY, GoI. FDCA – Laboratory Capabilities • Food and Drug Laboratory (FDL) – Vadodara and Patan; Regional Food Laboratory ‐ Rajkot and Bhuj can carry out i testing of f All hi Allopathic D Drugs, A di Ayurvedic D Drugs, H hi Homoeopathic D Drugs, C i Cosmetics, F Food dA i l Articles. • These laboratories are equipped with state of the art testing facilities AAS, Spark emission, spectrophotometers, HPLC with Auto Sampler, Gas/Liquid chromatography, Spectrophotometers, FTIR • FDCA is equipped with Mobile Drug Testing Lab having key sophisticated instruments like Raman Spectrophotometer, Near Infrared, XRS (X‐Ray Spectrometer). These Mobile Labs (India’s first Mobile Drug Testing Lab) have facility of detecting any spurious drugs on spot. 130
  • 131.
    Pharmaceutical Sector FDCA:Awards and Accolades Award for Swarnim Swanthah Sukhaya Project – 2012 in Category “To make more competent and incorruptive system of public C S I ‐ IT Excellence Award 2012 (Health – Infra & Solutions) National e‐Governance Gold Award 2013, by Government of India e‐INDIA Gold Award in Health Sector, Hyderabad, 2013 Selected for National Rapid Roll‐Out Programme in by DeiTY, Government of India 131 2013
  • 132.
    FOR ADDITIONAL INFORMATIONCONNECT US @ Health and Family Welfare Department Health and Family Welfare Department 7th Floor, Block 7, Sardar Patel Bhavan, Sachivalaya, Gandhinagar, Gujarat, India ‐ 382010 http://www.gujhealth.gov.in/ Phone: 079‐23251401 E‐mail: sechfwd@gujarat.gov.in Food and Drugs Control Administration Block No 8, Dr. Jivraj Mehta Bhavan, Gandhinagar, Gujarat, India – 382010 http://www.gujhealth.gov.in/food‐and‐drug‐control‐administration.htm Phone: 079‐23253417 E‐mail: comfdca@gujarat.gov.in 132
  • 133.
    1.7 Electronics &System Design 133
  • 134.
    ESDM Industry IndiaScenario – Electronics Demand & Production Projected demand‐supply gap in electronics 400 industry (USD billion) wth e Rapidly increasing purchasing power of burgeoning middle class 45 125 20 42 104 nd Grow ardwar Strong growth in electronics consuming sectors such as Automotive, Telecom, Medical Devices etc. FY09 FY14 FY20 Total Demand Domestic Production ( at current CAGR) Deman nics Ha Government policy frameworks for increased digitization ) India is poised to be a USD 400 billion Electronics Hardware market by 2020. nable D Electro Increased utilization of STBs, LEDs, Electronics Equipment etc. Sustai for E q p Huge IT & ITeS industry, growing at a id li k Gap between current and expected domestic production presenting significant opportunities for investment 134 rapid click investment. Sources : India Electronics & Semiconductor Association
  • 135.
    ESDM Industry Policy,Interventions and Initiatives Assistance provided by Central Government (1/2) National Policy on Electronics Vision 2020: ““To create a globally competitive electronics design and manufacturing industry to meet the country’s needs and serve the international market” Electronics Manufacturing Cluster Scheme (EMC) Modified Special Incentive Scheme (M‐SIPS) Semiconductor FAB Electronics Development Fund Human Resource Development and Skilling ‐2500 PhDs in ‐Subsidy upto USD 10 Mn per 100 acres ‐Target 200 clusters by 2020 ‐Substantial Capex Subsidy of 20‐25% ‐Central Taxes and Duties reimbursements ‐Leading Players expressed interest ‐Two FABs approved ‐USD 2 billion fund for Innovation, IP and R&D funding electronics by 2020 ‐Electronics and Telecom Sector Skill Council ‐Skill Development for 135 p 1 million persons Sources : National Policy on Electronics
  • 136.
    ESDM Industry Policy,Interventions and Initiatives Assistance provided by Central Government 2/2) ( / ) • 25% of capital expenditure if the ESDM unit is in non‐SEZ and 20 % of capital Modified Special Incentive Package Scheme (M‐SIPS) expenditure if the ESDM unit is within SEZ. This capex subsidy is available for investments made within 10 years from the date of approval of the project. • Reimbursement of CVD/excise on capital equipment for non‐SEZ units. • Reimbursement of central taxes and duties like custom duties, excise duties and service tax) for 10 years in select high‐ tech units like Fabs, Semiconductor Logic and Memory chips, LCD fabrication. Policy notified by R i b t f t l t d d ti (lik t d ti i d ti Government of India Grant‐in‐Aid provided under • Financial assistance of upto ~USD 16 thousand per cluster for development of electronic manufacturing clusters by MSMEs scheme for supporting MSMEs in Electronics Sector • Financial assistance of upto ~USD 2 thousand for reimbursement of expenses for testing and certification required for export • Financial assistance of upto ~USD 1637 for reimbursement of expenses related to compliance with Indian Standards 136 Sources : National Policy on Electronics USD 1 = INR 61.09 as on 3rd Aug, 2014
  • 137.
    ESDM Industry Policy,Interventions and Initiatives Assistance provided by Government of Gujarat Assistance of up to 25% of the project cost to EMC SPVs in the Greenfield subject Greenfield, to a ceiling of • Special Scheme to assist training INR 20 crores p g institutions and trainees in the ESDM industry. Incentives to MSME ESDM units • Design City to be setup in the state and Gujarat Electronic New units and existing units as per the policy will be entitled for exemption of 100% VAT on products manufactured and sold in Gujarat for a period of five years Mission to be Launched To establish Gujarat as a globally‐recognized hub for the ESDM industry, the state government Creation of Intellectual Property (IP) by contributing more funds to R&D A highly empowered ‘Single Window Clearance System’ towards the plans to introduce “Electronics Policy 2014‐2019”. for start‐ups and development of Centers of Excellence (CoEs) in the ESDM sector establishment of the Electronics manufacturing units in the State for granting approvals and clearances Setting up of at least five Brownfield and three Greenfield Electronics Manufacturing 137 Clusters Sources : Department of Science & Technology
  • 138.
    ESDM Industry ElectronicsManufacturing Clusters in Gujarat Brownfield EMC Greenfield EMC Upcoming Greenfield EMC Vithalapur Gandhinagar Ahmedabad Sanand Halol Vadodara Jambusar 138 Sources : SEMT, Department of Science & Technology, Government of Gujarat Bharuch
  • 139.
    ESDM Industry DestinationGujarat Skilled Talent Availability Investment Opportunities Strategic Electronics Telecom Products & Equipments Presence of Key Enablers Conducive Policy Environment Robust Physical, Social and industrial Industrial Electronics infrastructure Automotive Electronics Consumer Electronics Skilled human resource and lower cost of manpower Electronic Components 139
  • 140.
    FOR ADDITIONAL INFORMATIONCONNECT US @ Department of Science and Technology Department of Science and Technology Block No.7, 5th Floor, New Sachivalaya, Gandhinagar, Gujarat, India ‐ 382010 http://dst.gujarat.gov.in/ Phone: 079‐23259999 E‐mail: secdst@gujarat.gov.in 140
  • 141.
    Organized By KnowledgePartner National Partner Visit us at www.vibrantgujarat.com 141