Beruflich Dokumente
Kultur Dokumente
reflected the climate of the time. This book addresses three major changes that
have taken place in the last decade in a series of articles compiled by the
authors. First, the landscape of the global economy changed drastically in the
last decade or so. The Asian and Latin American financial crises, the further
expansion of the European Union (EU), and the emergence of the BRIC (Brazil,
Russia, India and China) as economic powerhouses have occurred during the
this period. And most recently, the global financial and economic crisis, caused
primarily by the U.S. subprime mortgage loan crisis since late 2008, is ravaging
the integrity of the global economy with unprecedented severity.
India has 18 refineries -- 17 in the public sector and one in the private, with
an installed capacity of 127.37 mmtpa. During balance period of the 10th
Plan, it is estimated that another 26.33 mmtpa capacity would be added,
raising it to 153.7 mmtpa in total. It includes HPCL Mumbai: 2.4, HPCL
Visakh: 0.83, BPCL Mumbai: 5.1, IOCL Panipat: 6.0 and Essar Oil
Jamnagar: 12.0. The information was disclosed in a recent meeting of the
Consultative Committee of the Members of Parliament for the ministry of
petroleum & natural gas.
India largely imports the sour variety. The overall basket is much cheaper
than Brent. Environmental standards in India permit higher sulphur content
in petrol and diesel.
The average price of Brent per barrel in October was $50, of Dubai crude
was $38.Approximately 72 million barrels per day. (7.33 barrels make one
tonne.) For petro products manufactured by them, oil refineries in India
are paid the ‘import parity price’, the international price plus the insurance
and freight cost plus the customs duty. Thus, higher the customs duty,
higher will be the gross refining margin.
If the customs duty is cut, say, to 10 per cent, the domestic company would
reduce its price from 15 per cent above the landed cost to 10 per cent above
the import parity price. In case it does not do so, the customer, that is the
marketing company, will import the product. India does not import petrol, but
a cut in customs duty on petrol reduces the domestic price of petrol.
Today crude has a customs duty of 10 per cent, but the customs duty on
petro products is 15 per cent. The value addition in the refinery business is
around 10 per cent; the duty differential of 5 per cent means that the ERP is
very roughly 50 per cent. When the customs duty was 20 per cent, before
the recent cuts, the effective rate of protection was even higher.
Cutting duties only on crude oil will not reduce the domestic price of
petroleum products. It will only increase the profit margin of domestic
refineries.
The first step should be to eliminate rate dispersion by bringing down the duties on
petro products. When the customs duty on crude oil and petroleum products is
equal, then this anomalous profitability of Indian refineries would be removed.
Duties on oil and petro products still involves penalising Indian consumers owing to
the presence of tariffs. Hence, for the consumer, the best thing is zero customs
duties. In this case, Indian refineries would have to compete with international
refineries.
Refineries in India are already major exporters of petro products. This shows that
they already have the engineering capability to compete with the best refineries of
the world. However, if after decades of protection, refineries in India are still not
efficient, there is no reason why consumers should bear the burden of their
inefficiency.
Nearly 50 per cent of the price of petrol that we pay at the petrol pump goes to the
Government as excise and sales tax. For diesel, nearly one-third goes as tax. The
discrepancy is because the excise on petrol is 63 per cent of import parity price (23
per cent + Rs 7.50 per litre) and on diesel is 16 per cent (14 per cent + Rs 1.50 per
litre).
No. The Government will not lose any customs revenue as India does not import
petrol or diesel. The custom duties unfairly protects the refineryand penalises the
Indian consumer, who has to pay prices higher than in the rest of the world.
Strength
Weaknesses
• Political interference
• Higher degree of competition
• Gap between demand and supply
• Changing government policies
Opportunities:
• Projected Gross Domestic Product (GDP) growth rate of 8% during the
tenth plan period and consequent growth of demand for petroleum products.
• Continued deficit for LPG and MS in the KRL supply Envelope.
• Expected growth of primary energy demand in the Asia-Pacific region at
a significantly faster rate that world demand.
• Additional opportunities due to the special Global investment Meet
organized by the Government of Kerala.
• Locational advantage of being a coastal Refinery.
Threats:
The Indian FMCG sector with a market size of US$13.1 billion is the fourth
largest sector in the economy. A well-established distribution network,
intense competition between the organized and unorganized segments
characterize the sector. FMCG Sector is expected to grow by over 60% by
2010. That will translate into an annual growth of 10% over a 5-year period. It
has been estimated that FMCG sector will rise from around Rs 56,500 crores
in 2005 to Rs 92,100 crores in 2010. Hair care, household care, male
grooming, female hygiene, and the chocolates and confectionery categories
are estimated to be the fastest growing segments, says an HSBC report.
Though the sector witnessed a slower growth in 2002-2004, it has been able
to make a fine recovery since then.
For example, Hindustan Levers Limited (HLL) has shown a healthy growth in
the last quarter. An estimated double-digit growth over the next few years
shows that the good times are likely to continue.
Growth Prospects
With the presence of 12.2% of the world population in the villages of India,
the Indian rural FMCG market is something no one can overlook. Increased
focus on farm sector will boost rural incomes, hence providing better growth
prospects to the FMCG companies. Better infrastructure facilities will improve
their supply chain. FMCG sector is also likely to benefit from growing demand
in the market. Because of the low per capita consumption for almost all the
products in the country, FMCG companies have immense possibilities for
growth. And if the companies are able to change the mindset of the
consumers, i.e. if they are able to take the consumers to branded products
and offer new generation products, they would be able to generate higher
growth in the near future. It is expected that the rural income will rise in
2007, boosting purchasing power in the countryside. However, the demand in
urban areas would be the key growth driver over the long term. Also, increase
in the urban population, along with increase in income levels and the
availability of new categories, would help the urban areas maintain their
position in terms of consumption. At present, urban India accounts for 66% of
total FMCG consumption, with rural India accounting for the remaining 34%.
However, rural India accounts for more than 40% consumption in major FMCG
categories such as personal care, fabric care, and hot beverages. In urban
areas, home and personal care category, including skin care, household care
and feminine hygiene, will keep growing at relatively attractive rates. Within
the foods segment, it is estimated that processed foods, bakery, and dairy
are long-term growth categories in both rural and urban areas.
Low cost labor gives India a competitive advantage. India's labor cost is
amongst the lowest in the world, after China & Indonesia. Low labor costs
give the advantage of low cost of production. Many MNC's have established
their plants in India to outsource for domestic and export markets.
Retail Sector is the most booming sector in the Indian economy. Some of the
biggest players of the world are going to enter into the industry soon. It is on
the threshold of a big revolution after the IT sector. Although organized retail
market is not so strong as of now, but it is expected to grow manifolds by the
year 2010. The sector contributes 10% of the GDP, and is estimated to show
20% annual growth rate by the end of the decade. The current growth rate is
estimated to be 8.5%, but CRISIL report says that the retail market is most
fragmented in the world and only 2% of the entire retailing business is in the
organized sector. There are about 300 new malls, 1500 supermarkets and
325 departmental stores being built in the cities very soon.
The retail boom will face a strong competition from the 12 million mom-and-
pop stores, which are easily accessible and approachable and provide
services like free home delivery and goods at credit. But buying from Malls,
Supermarkets and Department stores like Subhiksha, Marks & Spencers, etc
gives a different feeling and the environment of pick and choose from a
variety of products. A number of retail giants are also going to explore the
market such as Reliance Retail Ltd and Wal-mart. The revolution is driven by
large expectations where both domestic and international players will be
channel through which other large stores in India are spreading themselves
across the country.
Bata India Ltd, Big Bazaar, Crossword, Ebony Retail Holdings Ltd., Food
Bazaar, Globus Stores Pvt. Ltd., Liberty shoes Ltd., Music World
Entertainment Ltd., Pantaloon Retail India Ltd., Shoppers Stop, Subhiksha,
Titan Industries, Trent and the new entrants penetrating the market soon will
include Reliance Retail Ltd, Wal-Mart Stores, Carrefour, Tesco, Boots Group,
etc.
Current Scenario
USA - 85%
Taiwan - 81%
Malaysia - 55%
Thailand - 40%
Brazil - 36%
Indonesia - 30%
Poland - 20%
China - 20%
India - 3%
Key Trends
The existing players like Big Bazaar, Shoppers' Stop, Piramyd are expanding
to smaller towns and cities. Many other business houses are planning to enter
the retail sector either on their own or through partnerships. New entrants
like Reliance Retail Ltd and Wal-Mart are going to enter the market soon.
Even rural areas will provide a huge opportunity to be explored.
Indian Consumerism
The Indian consumer behaviour is rapidly changing with a shift in new
generation's preference towards luxury commodities
As it is seen, the total sales of passenger vehicles - cars, utility vehicles and
multi-utility vehicles - in the year 2005 reached the mark of 1.06 million. The
current growth rate indicates that by 2012 India will overtake Germany and
Japan in sales volumes.
The automobile exports are increasing year by year. According to the Society
of Indian Automobile Manufactures (SIAM) automobile exports in the last five
years are as follows:
NEW LAUNCHES
The Indian automobile sector is experiencing changes in every arena.
Changes in the looks of the vehicles are taking place; the vehicles are being
made more user-friendly. Each and every firm is competing to give the
customers more customized vehicles with respect to speed, mileage, and
maintenance. At present there are many new models entering the Indian
market. To name a few, Suzuki Heat 125 and Suzuki Zeus 125X are the two
bikes in the motorcycle segment; Kinetic Blaze and Honda DIO in the scooter
segment; Maruti's Zen Estillo in the car segment, so on and so forth.
Engineering Services include Industrial Design, Mechanical Design, Electronic System Design
(including Chip/Board and Embedded Software Design), Design Validation Testing , Industrialization and
Prototyping.
IT Enabled Services are services that use telecom networks or the Internet. For example, Remote
Maintenance, Back Office Operations, Data Processing, Call Centers, Business Process Outsourcing, etc.
E Business (electronic business) is carrying out business on the Internet; it includes buying and selling,
serving customers and collaborating with business partners.
Major Trends
Trends in Hiring
The bar chart shows that the recruitment of engineers and IT professionals in the industry is growing at the
Compound Annual Rate of 14.5% approximately.
In the FY06, the direct employment in the IT-ITES sector was 1.3 million people and the indirect
employment was 3 million approximately.
Trends in Salary Hikes
Along with abundant growth opportunities, IT sector is one of the highest paying sectors. The average
increase in salary in IT sector across the levels was around 16% and the average increase in the ITeS BPO
sector across the levels was in between 16%-18% Requisites for balanced salaries -
End to poaching
Review of compensation according to the skills
Developing talent in-house
Entry of talented freshers in the industry
Swot Analysis
Strengths Weaknesses
Opportunities Threats
The insurance business is one of the most rapidly growing areas in the financial sector. As an economy
grows over the years, insurance sector intensifies and broadens its reach. Every practical and futuristic
individual would want himself, his family and his assets to be insured. Insurance deals mainly with life
and general insurance. India has a large insurance market commensurate with its population. The IRDA
Act 1999 (Insurance Regulatory and Development Authority of India Act) has given new opportunities to
private players to enter into the market on the fulfillment of certain prerequisites. The IRDA is the
licensing authority in the sector; the current FDI cap/Equity in the sector stands at 26 percent. There is
no doubt the challenges ahead will become tougher with more companies competing both in general
and life Insurance. Also mortgage insurance will soon be coming into the industry. New players have
contributed to the launch of innovative products, services and value-added benefits. Major foreign
players have entered the country and announced joint ventures in both life and non-life areas. These
include New York Life, Aviva, Tokio Marine, Allianz, Standard Life, Lombard General, AIG, AMP and Sun
Life among others.
Commercial banks are coming up with more and more vacancies, and the banking sector now has more
new jobs than any other sector. Right from the branch level to the highest level, there is tremendous
range of opportunities available in the sector. Jobs in this sector can be both rewarding and enjoyable,
as you get opportunities to learn about business, interact with people and build up clientele. The same
is the case with insurance, as it is the fastest growing industry under the financial sector. Both
government and private players are currently offering a plenty of jobs in this sector. So, this is great
news for you if you are thinking to go into the banking & insurance streams.
Over the last two years the pharmaceutical market value has increased to about US
$ 355 million because of the launch of new products. According to an estimate,
3900 new generic products have been launched in the past two years. These have
been by and large launched by big brands in the pharma sector. And in the year
2005 Indian pharmaceutical companies captured around 70% of the domestic
market.
As in the present scenario, only a few people can afford costly drugs, which have increased price sensitivity
in the pharmaceutical market. Now the companies are trying to capture the market by introducing high
quality and low price medicines and drugs.
With the Product Patent Act, which came into action in January 2005, this industry is able to attract big
MNCs to India. Earlier these big firms had apprehensions in launching new drugs in the Indian market.
At present, a large number of Indian pharmaceuticals companies are looking for tie-ups with foreign firms
for in-license drugs. GlaxoSmithKline is among the top choices for the firms that wish to launch their
product in India, but do not have any branch over here.
Contract research and pharmaceutical outsourcing are the new avenues in the pharmaceutical market.
Contract manufacturing is growing at a very fast pace and is estimated to grow to US $30billion, whereas
contract research is estimated to reach US$6-10 billion.
Indian multinational companies like Dr.Reddy's Lab, Cipla, Ranbaxy, etc have created awareness about the
Indian market prospects in the international pharmaceutical market. Approvals given by Foods and Drugs
Administration (FDA) and ANDA (Abbreviated New Drug Application)/DMF (Drug Master File) have played an
important role in making India a cost-effective and high quality product manufacturer. Furthermore, the
changes that took place in the patent law, change of process patent to product patent, have helped in
reducing the risk of loss for intellectual property.
Industry Strengths:
Capital Investment in Technology: Owing to the availability of advanced technology at low costs, t
companies can produce drugs at lower costs.
Cost Effective: The filing cost of ANDAS and DMFs is comparatively low for the Indian companies.
Manpower: There is a large pool of technical experts available at modest salaries.
Contract Research & Contract Manufacturing: There is a good scope for contract research and contra
manufacturing.
Infrastructure: There is a well-developed infrastructure for the pharmaceutical industry.
Generic Drugs: In the last few years, the generic drug-manufacturing segment has received hu
investments, in the process making it more competitive and efficient.
Strengths
Opportunities
Threats