The Challenges for Resource based industries in developing markets are multi-dimensional.
Balancing social responsibilities and innovation in market models will play an important role.
A large part of so called slow down in the infrastructure investments can be traced to these issues; and they will continue to exist despite changes in governments
7.pdf This presentation captures many uses and the significance of the number...
Inclusive industrialization
1. Model & Responsibility
A necessity in resource-based
Industrialization
1
Manufacturing
Growth
Model for Integration
Responsibilities
Suhas Baxi; 27th Nov 2010
3. World Business… in blocks
Brazil, Russia, India, China
Growth, Investments, Returns, Wealth
Creation
3
Suhas Baxi; 27th Nov 2010
4. BRIChina: Reserves,Infrastructure, Manufacturing...
4
Fastest growing sectors
(next 5 years)
1. Electricity, gas & water (13,8%)
2. Paints, varnishes &c. (13,6%)
3. Telecommunication equipment
(12,6%)
4. Pharmaceuticals (11,6%)
5. Man-made fibres (11,5%)
6. Special purpose machinery (11,4%)
7. Electric components (11,4%)
China Sector Shares % of GDP
Services 31%
Agriculture 9%
Extraction 4%
Utilities 4%
Construction 6%
Manf of non durable consumer
goods 9%
Manf of durable consumer goods
3%
Manf of investment goods 16%
Manf of intermediate goods 18%
Sectoral GDP Split
Source: Oxford Economics 06/2009. 1) Sector Split: % of GDP 2008
Services 31%
(General Service including: Insurance,
Banking, Consulting etc.)
Suhas Baxi; 27th Nov 2010
5. BRIndiaC:
Domestic Consumption & Infrastructure growth
5
India Sector Shares % of GDP
Services 59%
Agriculture 16%
Extraction 2%
Utilities 2%
Construction 7%
Manf of non durable consumer
goods 3%
Manf of durable consumer goods
0%
Manf of investment goods 2%
Manf of intermediate goods 9%
Fastest growing sectors
(next 5 years)
1. Motor Vehicles (10,9%)
2. Other manufacturing (10,0%)
3. General purpose machinery
(9,9%)
4. Machine tools (9,2%)
5. Pharmaceuticals (9,2%)
6. Coke,petroleum & nuclear fuel
(8,7%)
7. Iron & steel (8,5%)
Source: Oxford Economics 06/2009. 1) Sector Split: % of GDP 2008
Sectoral GDP Split1)
%
Services 59 %
(General Service including:
Insurance, Banking, Consulting
etc.)
Suhas Baxi; 27th Nov 2010
6. India’s Challenges to achieve 18%
GROWTH in manufacturing sector
Sustaining Growth Create Growth
1. Automotive
2. Other manufacturing
3. General purpose machinery and
Machine tools
4. Pharmaceuticals
5. Coke, petroleum & nuclear fuel
6. Iron & steel
1. Electricity, gas & water
2. Hightech, Electronics
Mineral Resources, Fossil
Fuels, Wind & Solar Power
will play a crucial role in
driving this growth
18% annual growth will need a
wider growth base
6
Suhas Baxi; 27th Nov 2010
7. Integrated Industry Structure
with certain limitations
Iron/ Coal
Mines
Iron & Steel &
Mineral
Intermediates
Steel & Mineral
Products Machinery
Ancillaries
Other
Intermediate
Goods
Automobile
White & Brown
Goods
Consumables
• Utility & Commodity
companies have been able
to create fully integrated
businesses around the
world
• Food Industry in India
has also been able to
create a successful model
for integrated businesses
• Conventional
manufacturing companies
need competencies in
technology, markets and
business model that may
not allow them to create
fully integrated models
7
Suhas Baxi; 27th Nov 2010
9. 9
Integrating the industry thru
efficient markets
Power & Gas Convergence: Price Discovery, Availability, Risk Mitigation
Production
Company
Transport
Company
Distribution
Company
Retailer
Trader
Energy
Exchange
Consumer
Service
Provider
Generation
Company
Transmission
Company
Distribution
Company
Gas
Power
ISO / RTO
Storage
Suhas Baxi; 27th Nov 2010
10. Posed by Resource based Industrialization
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Suhas Baxi; 27th Nov 2010
11. Environment & Traditional Livelihood
• Government Role
▫ Proactive
▫ Building Consensus
• People Aspect
▫ Displacement
▫ Education
▫ Future generations
• Environmental Impact
▫ Growth at what cost
▫ For whom
▫ Mining is a necessity for
growth; how do we minimize
the negatives
11
Suhas Baxi; 27th Nov 2010
12. A Socially Conscious & Innovative model
for integration
12
Suhas Baxi; 27th Nov 2010
13. 13
Today, ~400M people are employed, primarily
in unorganized sectors
Note: *limited to employees who receive provident fund and social security benefits;
^consists of those in the working age group (15-59) actively seeking employment;
Source: Registrar General of India; NSSO; Indiastat; Labour Bureau of India
0
250
500
750
1,000
1,250
Total pop.
~1,100
Population
(age 15-59)
687
Employable^
450
Employed
402
Non
agricultural
Casual
Regular
Self employed
201
Organised
32
Working population breakup (M), FY 2007
62%
66%
89%
50%
16%
Of the ~400M,
• ~200M people employed in
agriculture
• ~90M people self employed in
non-agricultural sectors
• ~70M people employed in regular
sector
• ~40M people employed in casual
sector
*
Suhas Baxi; 27th Nov 2010
14. Resource based Industrialization
“Creating Organized sector jobs
that benefit large sections of our
population will be the best way
to achieve resource based
industrialization”
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Suhas Baxi; 27th Nov 2010