|
India - News
Editorial
Opinion
Overview
Infrastructure
Demographics
Entertainment
Site
Map
Search site
Subscribe
Karmayogi
|
|
News Updates - 31 December 2005
India , Inc. - Newsweek magazine (US)
India works to be a manufacturing hub - LA Times
Forging ahead - Forbes magaizne (US)
India, Inc.
19 December 2005,
Newsweek magazine (USA)
No longer just an outsourcing hub for low-level jobs, India is luring top
American talent and unprecedented new investments by tech giants like
Microsoft and Intel.
Erik Simonsen got his
M.B.A. at New York University, but the 28-year-old decided to go half a
world away for his internship. He chose India's Copal Partners, a small
technology company near New Delhi over similar companies on the East Coast
and in Silicon Valley. "I was drawn to India because while U.S. markets are
stagnating, so much is happening here," he explains. "It's a chance to
re-experience the dotcom environment of the 1990s. Companies are growing so
quickly here that opportunities to take on responsibility are greater."
Simonsen is at the
leading edge of an increasing number of science, business and technology
students from elite colleges and universities heading to
India, the world's third-largest economy,
to get global experience. "Internships have become a big deal in the last
five years and India is particularly attractive because of its huge language
advantage," says George Day, a professor at the University of
Pennsylvania's Wharton School of
Business. "We can't just drop students into China—there's a language
problem," says Day. "China is the big engine, but India is the place to ride
the curve upward.”
Silicon India (6
December 2005) reports that the debate over Indian professionals taking over
overseas jobs may lose some steam with indications of more and more
Europeans professionals are also seeking greener pastures in India.
According to Steller Search and Selection Ltd, “In the last six months, we
have received close to 500-600 resumes from people who are seeking openings
in India in sectors beyond IT such as healthcare, hospitality, aviation and
logistics. Of this, about 150 are from senior executives from Italy,
Germany, Spain and France, and a chunk from second and third generation
Indians and expatriate Indians.”
Universities are
responding to the demand for international experience, particularly in
emerging Asian markets. Last summer, Yale president Richard Levin took a
12-member team to set up joint ventures with several Indian universities.
The Ivy League school will send 30 interns over this year and expects to
send 50 next year. It also has 30 faculty collaboration projects underway in
a number of subjects ranging from public health, to management and forestry.
And this year, Massachusetts Institute of Technology's India program, funded
by the National Science Foundation, flew over 28 Ph.D.s to pursue their
research in science and economics.
As of last week, that
leap looked a lot less risky. Within days of each other, tech industry
giants Microsoft, Intel and Cisco announced unprecedented investments in
their Indian research and development facilities. On Dec. 7, Microsoft
chairman Bill Gates said that he was putting $1.7 billion into the company's
operations in India over four years. About half of that amount will go to
its research and development center in Hyderabad—Microsoft's largest
campus outside its headquarters in Redmond, Wash. "India has emerged as
the new mecca for high-technology investments," said Gates at the opening of
a sleek new facility in India's IT capital of Bangalore. And in October,
Cisco Systems Inc. announced that it would put more than $1 billion into
India over three years—its largest non-U.S. investment ever. A good chunk of
that money, like Microsoft's investment, is going for the kind of innovative
work that attracts world-class grad researchers and engineers, rather than
the low-level call center jobs stereotypically outsourced to India.
While research positions
with American companies based in India may soon be a draw for American
engineers, American students already in India are gathering professional
experience with Indian companies. Thirty-year-old Tim Hentzel is an M.B.A.
student at the Wharton School of Business who first went to India in 2004 on
his school’s three-week "global immersion" program. Infosys, an IT business
and consulting services firm traded on the Nasdaq, piqued his interest
because "their [106] interns come from all over the world—I needed the
international experience." Infosys also appealed to him because their
interns work on hands-on projects, are matched to mentors and have easy
access to the company's top executives. Of his stint at the company's
spa-like campus in Bangalore, Hentzel says, "it's the best decision I made.
India's on the cutting edge." He says he put in long hours and made
lasting personal and professional contacts because "I had gone to work, not
for a safari."
M.B.A.s aren't the only
ones seeking professional experience in India. Emily Hueske, who is
researching mutating proteins in mice for her Ph.D., spent two months at the
National Center for Biological Sciences in Bangalore. "Our lab at MIT wanted
to do the work that this excellent neuroscience lab is doing; I wanted to go
because India's religion, food, culture are so different." She valued
meeting Indian families, and the "real" people that casual visitors don't
see. "It was the most solid work time I had with a specific goal. The lab is
supremely set up—different from MIT because it's more conservationist,
there's more recycling."
Simonsen says that the
challenges of living in India are far outweighed by the chance to move up
fast in a national economy that's growing at seven or eight percent a year.
He started with Copal Partners as an intern and within a month he was
promoted to senior vice president of operations, in charge of IT, recruiting
and administration. Simonsen was thrilled. "I'd never have got such
responsibility in a U.S. company—Copal has grown 300 percent in manpower in
six months. You have doubts from home, but once you're here, it's
different."
Top of the page
India Works to Become a Manufacturing Hub
By Jo
Johnson,
Los Angeles Times
At
the Tata Motors Ltd. plant in Pune, near Bombay, a potholed "torture track"
simulates the spine-jarring conditions of Indian roads. In five years' time,
only half of Tata's cars may need to go through the painful ordeal of
preparing for life on the subcontinent's streets. With a car coming off the
end of the line about every 80 seconds, Tata sees itself as competitive
enough to make its biggest-ever push into export markets, which could make
its overseas revenue account for half of the total by the end of the decade
from a current 20%.
“Made in
India" is coming of age. With its call centers and software houses, India
leads the world in outsourced back-office services. India’s share of the
manufacturing pie could quadruple in a decade, according to consulting firm
McKinsey & Co. Such a shift would come just as the downsizing of blue-collar
America enters a new and brutal phase with job losses at General Motors
Corp. and the bankruptcy of Delphi Corp., its spun-off parts supplier. It
would have a big effect not just on India and its 1-billion-plus population
but also on the growing number of multinationals looking to shift production
to low-cost countries in a way that does not increase their exposure to
China.
In no
sector is India's emergence as a force in global manufacturing more evident
than mobile telecom equipment. It is not difficult to see why. With its
operators adding 2 million subscribers a month, India is the world's
fastest-growing big mobile telecom market, with 52 million subscribers today
and probably more than 300 million in 2009, analysts say. South Korea's LG
Electronics Inc. started a plant in Pune this March and Motorola this month
is starting to assemble phones in India, and Nokia plans to open its first
Indian manufacturing facility in Tamil Nadu in the first half of next year.
The
development has taken many by surprise. It was common until recently to hear
commentators dismiss Indian manufacturing as a lost cause. India had missed
the first wave of the industrial offshoring revolution, which saw
labor-intensive industries such as toy and shoe manufacturing migrate to
China, Thailand and other low-cost countries, and seemed likely to miss out
on the second, this time involving skill-intensive industries. "People have
been rapidly disabusing themselves of the idea that India was going to leave
manufacturing to China," said Jim Walker, chief economist at Credit Lyonnais
Securities Asia.
Top of the page
Forging Ahead
26
December 2005,
Forbes
magazine (cover story)
India's
commercial-vehicle market tanked in the mid-1990s after a false start during
the country's liberalization drive. Baba N. Kalyani, managing director of
one of the country's largest forging companies, decided that it was time to
accelerate his global push.
Baba Kalyani turned a family business that was bending metal for farm
tractors into a global comer, supplying demand from Detroit to Dusseldorf.
"We want to be the
world leader in our business," says the 56-year-old chairman and managing
director of Bharat Forge.
With $1.8 billion in
market capitalization, Bharat is now the second-largest forging combine
in the world. It manufactures forgings like crankshafts and axle beams.
The company supplies Ford, General Motors and Volvo,
among others.
Acquisitions have given it eight manufacturing locations across Asia, Europe
and the U.S.
That helps put
Kalyani--who with his
family holds 35% of the shares, $630 million worth--on our latest rundown of
the richest Indians.
Bharat's intense focus
on globalization has translated into big revenue gains. The company reported
$460 million in sales for the fiscal year ended in March--more than doubling
the previous year's. The overseas chunk has risen from $13.3 million in
1996-97 to $295 million in 2004-05--for a compounded annual growth rate of
47% in dollar terms. This year Bharat was again one of FORBES ASIA's 200
Best Under a Billion (dollar revenues) selections.
India has had a
beachhead in auto parts. In Chennai, TVS Group (with revenues over $3
billion) makes everything from radiator caps to gears, while Rane Group
manufactures components like brake linings and steering systems. Bharat
primarily supplies engine and chassis components.
Kalyani was born into
an agricultural family in the western state of Maharashtra. His father,
Neelkanth Kalyani, owned about 60 acres of sugarcane land and ran what for
India was a midsize farm. But in the 1960s he decided to venture into
manufacturing and set up a unit to forge parts for diesel engine makers,
mostly for tractors and agricultural pump sets. Kalyani, who was away at a
boarding school, spent summer vacations watching the family business grow.
He got an engineering degree from Birla Institute of Technology & Science,
Pilani, one of India's premier engineering institutes. He then earned a
master's in mechanical engineering from Boston's MIT.
The experience changed
him. "It taught me to look at the broader picture," he says. "I was struck
by the openness in the
U.S. economy and often
wondered what our country could achieve if we were to transform into a
full-fledged, market-driven economy."
In the 1980s Kalyani
turned his attention to technology. "We were a lot like traditional Indian
companies where we had low technology and lots of labor, and we had this
notion that we could be very competitive doing that," he says. "But nobody
in the world has really been able to get a sustained advantage because of
low-cost labor. If it's just low-cost labor, ten other guys can do it. But
if you have innovation and technology, it's not so easy for ten other guys
to do it."
So in the late 1980s
and early 1990s Bharat Forge made investments to the tune of $55 million to
modernize the Pune plant--at a time when the company's annual sales were
$120 million. Also, interest rates were higher than 20%. Critics were
aghast. But Kalyani was convinced that the factory had to be upgraded. He
set up a new, largely automated plant alongside the old one. The move paid
off. In 1993 Bharat Forge got its first big U.S. order--$5 million for front
axle beams--from ArvinMeritor of Troy, Michigan. The client signed on after
visiting Bharat's high-tech factory.
Soon orders started
flowing from elsewhere in the
U.S., and Bharat Forge
became a major supplier to the heavy truck industry. Passenger cars were
added to the commercial vehicle trade, with Pune still the factory base.
But Kalyani began to
see he could entice more business abroad if he produced nearer to his
customers. He also wanted to diversify his risk geographically. After a
small move in 2000, he began buying operations in Europe and the U.S. last
year. The prize catch was Carl Dan Peddinghaus [acquired for 29 million
euros], Germany's second-largest forging company, situated near the
industry's world leader, ThyssenKrupp, headquartered in Dusseldorf.
Kalyani says that
Bharat can operate a forge business more profitably in Europe or the U.S. by
using back-end manufacturing from its Indian operation to bring down costs.
For instance, it can churn out forgings at its Pune factory while staff in
Germany work with clients in designing and engineering products. Having a
front end "gives you the ability to get involved in the design and
development of new products for your customers, which is not possible from a
long distance," says Kalyani.
"Bharat Forge has
world-class management," says Hans-Michael Huber, managing director of
DaimlerChrysler
India.
Now Bharat Forge is
making inroads in China. It already supplies machined crankshafts for diesel
trucks there. Bharat also sells to two big Chinese enginemakers, Wuxi First
Auto Works and Yuchai. But it wants to establish a global supply base and
perhaps show the Chinese a thing or two about manufacturing. To that end,
Bharat has acquired a majority stake in FAW Forging Ltd., China's largest
forging company.
Inside the factory the
company relies heavily on automation. For instance, die-making machines
receive programs from an engineering center and manufacture dies with
virtually no manual involvement. The company also has fully automated press
lines that convert a raw piece of steel into finished crankshafts, using
robotic arms. Kalyani is keen on hiring more engineers to run his plant.
Already 1,500 of his 3,500 employees have engineering degrees. He's also
sponsoring a special program for his employees to get an engineering
education through his alma mater, Birla Institute. "The endgame is to have
technology front ends in the developed world and manufacturing front ends in
low-cost destinations," says Kalyani.
Top of the page |
|
31 Jul'06
15 Jul'06
30 Jun'06
26 Jun '06
15 Jun '06
News Updates
31 May '06
15 May '06
30 Apr '06
15 Apr '06
31 Mar '06
15 Mar '06
28 Feb '06
31 Jan '06
15 Jan '06
|
