Inclusive industrialization

Model & Responsibility A necessity in resource-based Industrialization

1

Manufacturing Growth

Model for Integration

Responsibilities

Suhas Baxi; 27th Nov 2010

In India

2


World Business… in blocks

Brazil, Russia, India, China Growth, Investments, Returns, Wealth Creation

3


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.)


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.)


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


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


Efficient Markets

8


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


Posed by Resource based Industrialization

10


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


A Socially Conscious & Innovative model for integration

12


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

Nonagricultural

CasualRegular

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

*


Resource based Industrialization “Creating Organized sector jobs that benefit large sections of our population will be the best way to achieve resource based industrialization”

14


Inclusive industrialization

Business

Transcript of Inclusive industrialization