Manufacturing and Construction Sector in India Monthly Update August 2012

7/29/2019 Manufacturing and Construction Sector in India Monthly Update August 2012

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Manufacturing Sector in India

Monthly Update

August 2012



Top Story

Polymer price to remain high in the Indian market Increase in price of naptha and crude oil has significantly contributed towards the hike in

polymer prices. Naptha is the primary input used in the production of polymer. Polymer

manufacturers have raised the price of polymer by INR 1‐2 per kg across the different

ariants of polymer. Even though the global manufacturers attempted to reduce pricesv

domestic manufacturers raised the price owing to a depreciation of the rupee.

However the depreciation of rupee has proved to be a boon the Indian polymer industry

as no polymer has been imported over the last two months. The whole demand of the

domestic market is being catered by the Indian manufacturers of polymer. Haldia

etrochemicals, Reliance Industries and Indian Oil Corporation are the primaryPproducers of Polypropylene in India.

Companies may increase the prices of polypropylene (PP) and polyethylene (PE) next

month. Rise in price of polymer has led to the processors shifting towards cheaper

processed polymer.

News Update

General L&T to bring in an investor for L&T IDPL

Larsen & Toubro has announced plans to bring in an investor for its infrastructure

development unit L&T IDP. Earlier the company had planned an IPO which however did

ot happen owing to unfavorable market conditions. Company also plans to sell its equityn

shares in the port project Dhamra in Odisha.

Company has set a target to increase its turnover from infrastructure projects in West

Asia from INR 82.95 bn to INR 110.60 bn by the end of this year. International projects

are expected to compensate for the slowdown in construction contracts being awarded in

India.

Construction equipment major Caterpillar to launch “remanufactured” p oducts in

India

Construction Equipment company Caterpillar Inc has announced plans to launch its

financial services and remanufactured products in the Indian market. In case of

remanufactured products salvage technology is utilized to repair damaged components

to yield performance similar to new products.

r

Manufacturing – Monthly Update



Substantial investments are being made to ensure that India emerges as an important

export base for the company. It offers integrated solutions customized to meet the

requirements of the Indian customers. Government’s emphasis on infrastructure

evelopment has presented great opportunities to the company to ensure high growth inhe Indian market.

dt

Pellet production forced to increase following drop in iron ore fines export

Decline in exports of iron ore due to high taxes and high transportation costs have led to a

shift towards the production of iron ore pellets for the domestic market. Following the

drop in exports since last year many miners engaged in overseas exports of iron ore have

conveyed interests to set up pellet plants in India. Major miners and traders who have

xpressed an interest to set up pellet plants include KJS Ahluwalia, MGM Minerals ande

Indrani Patnaik.

Iron ore pellets are used as an alternative of lumpy iron ore that can be directly fed tolast furnaces. They are formed of powdery iron ore fines and were primarily imported

rom China.

b

f

Pipe orders worth INR 4 bn bagged by Essar Steel

Flat carbon steel manufacturer Essar Steel has obtained orders from Middle East and

Africa for manufacturing steel pipes worth INR 4 bn. The order in Africa involves the

construction of offshore line pipe of length 4,000 mts to be used for the Chevron project.

he order from the Middle East entails the supply of 45,000 mt of 48 inch high gradeT

coated pipes in the coming quarter.

The total order for pipes of the company has reached INR 10 bn. The two major globalrders are expected to strengthen the company’s position in the pipe market segment

cross the world.

o

a

Mumbai to host International Packaging Expo 2013

The Indian Institute of Packaging is slated to organize the “India Pack 2013”, in the month

of Jan next year. The packaging industry is on the lookout for latest technologies.

The Expo will provide a major platform to the companies that provide end to end

packaging solutions to the various end users hailing from pharmaceuticals to toys, sports

ood and allied industry. Live demonstration of packaging equipment, machineries,g

plants will be shown to the visitors.

arge and eminent industry exhibitors from, France, China, Korea, Taiwan, Thailand and

any other countries is slated to participate in the Expo.

L

m


India to import coal from Kentucky

FJS LLC has signed a deal worth INR 388 mn with India based Abhijeet Group to export

coal from West Virginia, Kentucky. Under the deal Kentucky will supply 9 mn tonnes of

coal per year to Abhijeet Group. Around 70% of the electricity in India is generated from



coal fired power plants. The power plants operate at around 70 to 80% of their total

apacity. Domestic production cannot meet the rising demand for coal. Import of coal will

elp the company to meet the growing demand from energy and steel sectors in India.

c

h

Ghatkuri mines to be allotted to Public Sector Undertakings

Steel Authority of India Limited (SAIL) is trying to enter into a mining joint venture with

Jharkhand State Mineral Development Corporation (JSMDC) and obtain the lease for the

Ghatkuri iron ore mine in West Singhbhum district. Company is trying to enter into the JV

following the Supreme Court directive that the Ghatkuri mines can be leased only to

public sector companies. The joint venture is expected to meet the raw material

equirements of SAIL for around 60 years. The Ghatkuri mine is a major virgin iron orer

mine spread over 2580 acres and has an estimated reserve of 600 mn tonnes.

ther major public sector companies aiming to obtain the lease include Rashtriya Ispat

igam Limited (RINL) and National Mineral Development Corporation (NMDC).

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IECIAL to be known as ICEMA

Indian Earthmoving and Construction Industry Association Ltd (IECIAL) have been

renamed as Indian Construction Equipment Manufacturers Association. Through this

change the association expects to align itself with global industry bodies and expand the

cope of its activities. The construction industry is expected to witness robust growth but s

it needs to be globally competitive.

ICEMA is affiliated to CII. It represents 44 leading companies who manufacture, trade and

inance a variety of construction equipments such as hydraulic excavators, wheel loaders,

ackhoe loaders, motor graders, vibratory compactors, etc.

f

b

News Update

Expansion Plans Putzmeister plans to expand its market base

Major German construction equipment manufacturer Putzmeister is planning to expand

its base in the tier II cities of Uttar Pradesh. Company is entering into contracts with real

estate developers, contractors and builders in order to market its concrete pumpingachines. The Putzmeister factory in Goa has a localization percentage of around 80%m

and caters to demand from countries such as Bangladesh, Bhutan, Sri Lanka etc.

Other potential towns identified by the company in India include Lucknow, Kanpur, Agra,

Allahabad, Varanasi as well as Noida and Ghaziabad.

West India starts a new packaging plant in India




A new packaging plant will be set up by West Pharmaceutical Services in Sri City, India.

The new plant will produce elastomeric pharmaceutical packaging components. The new

plant is expected to start production by 2015. Total manufacturing space is planned to be

xtended to 37,700 sq mts by 2023. The new facility construction in India is a part of theirm’s business expansion in Asia.

ef

Monier to set up a new roofing tile plant in India

A new concrete tile plant will be set up by the Monier Group in Mumbai. The step is taken

by the company to strengthen its presence in the Asian market. The initial work for the

plant has already been started and production is due to start from next year.

The Monier Group is a major producer of roofing products and has a concrete tile plant in

Bangalore and a glazing facility for clay tiles in Calicut , Kerala.

Arvind Ltd

sets

up

glass

fabric

manufacturing

unit

Arvind Ltd. Has entered into a joint venture with PD Fibre Glass Group to manufacture

glass fabrics in India. The new manufacturing facility would require investments worth

INR 0.8 bn and is expected to provide business worth INR 2.5 bn within the first three

ears and INR 5 bn by the fifth year. The new facility will have a production capacity of y

30,000 tonnes of fabric after five years.

The market for glass composite is valued at INR 5 bn. The production will be exported

uring the initial years and focus will be diverted on the Indian market following the

ountry’s emphasis towards green energy.

d

c

Briggs and

Stratton

to

expand

Indian

business

US based Briggs and Stratton has announced plans to expand production capacity of the

Coimbatore plant. Owing to the growing agricultural mechanization market the company

expects its sales revenue to reach INR 2,343 mn over the next three years. The current

roduction capacity of the plant is around 7,800 units which will be increased to 22,000p

units by 2015‐16.

Company is also planning to achieve inorganic growth in the Indian market through the

acquisition of small and mid‐sized companies that are engaged in the manufacturing of

agriculture and construction equipment and generators.

Zoomilion to

set

up

a joint

venture

plant

in

India

Electromech, the largest crane maker in India has entered into a deal with China based

Zoomlion Heavy Indus. Scien. & Tech Co for a joint venture plant in India. Zoomilion will

hold 70% stake in the tower crane factory which will be Zoomilion’s first overseas

nvestment project. Zoomilion plans to invest around INR 4,687 mn to develop its

usiness in the Indian market.

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Owing to rising emphasis on infrastructure development the companies expect to earn

NR 2,345 mn annually from the joint venture. Earlier Chinese construction company,

any Heavy Industry Co Ltd had established a factory in 2009 to tap the Indian market.

I

S

Industry Expert Speak

CIL eyes overseas expansion – S. Narsing Rao, Chairman, CIL “My focus on overseas acquisitions is on government‐to‐government deals and the

developing and emerging market routes,” L&T to bring in an investor for L&T IDPL – A. M Naik, Larsen & Toubro (L&T) “Chinese equipment has been giving trouble, and the mindsets (of power developers) are

shifting towards better quality. With the rupee’s devaluation and costs goingdown…hoping Chinese imports go down,"

Transaction Detail (Jun – Aug 2012)

Buyer Target Deal Size

(INR mn)

%

stake

Deal

Status

Type of

Transaction

Date

26th Aug2012

Larsen andToubro Ltd

Flowserve Corp. NA 100% Expected M&A

24 gth Au

2012

Jindal Steel and

Power

Gujarat NRE

Coking Coal(GNCC)

430 2.67 Completed PE

27th Jul

2012

Crompton

Greaves LtdZIV Group 10,207 100% Completed M&A

Annual Financial Results – Revenue (INR mn)

FY ‘09 FY ‘10 FY ‘11 FY ‘12 Company

Oil and Natural Gas Corp. Ltd. 1,052,756.6 1,026,655.8 1,201,955.1 1,463,705.6




Hindalco Industries Ltd. 659,629.5 607,079.2 720,778.7 808,213.7

Coal India Ltd. 412,035.7 467,840.0 526,334.8 624,154.3

Gail India Ltd. 247,818.0 270,353.0 351,066.5 440,578.2

Sterlite Industries (India) Ltd. 212,636.6 244,903.0 302,472.0 412,063.0

Grasim Industries Ltd. 184,316.9 200,870.8 214,612.3 251,470.9

Aditya Birla Nuvo Ltd. 138,939.7 157,699.4 183,839.4 220,732.5

Pantaloons Retail (India) Ltd. 76,690.4 97,869.4 122,117.9 130,713.9

NMDC Ltd. 75,640.3 62,390.9 113,689.4 112,605.3

Ashok Leyland Ltd. 59,810.7 72,447.1 111,771.1 128,419.9

Crompton Greaves Limited 87,372.6 91,408.7 100,051.1 112,485.8

Welspun Corp Ltd. 57,395.3 73,636.7 80,236.4 89,765.8

Alok Industries Ltd. 30,907.8 44,243.4 66,149.0 89,008.6

JBF Industries Ltd. 43,099.1 49,409.1 64,655.7 71,673.6

National Aluminium Co. Ltd. 52,112.2 51,745.1 60,554.9 65,002.7

Havells India Ltd. 54,774.9 51,625.7 56,126.3 65,182.0

Voltas Ltd. 43,259.0 47,574.7 51,913.8 51,857.4

Jindal Saw Ltd NA* 56,947.1 45,948.9 60,263.9

Jain Irrigation Systems Ltd. 28,695.2 34,348.0 41,745.6 NA

DCM Shriram Consolidated Limited(DSCL)

35,580.7 35,704.5 41,678.3 50,062.1




Annual Financial Results – Income (INR mn)

FY

‘09

FY

‘10

FY

‘11

FY

‘12

Company

Oil and Natural Gas Corp. Ltd. 197,953.4 194,035.3 224,559.3 281,436.1

Hindalco Industries Ltd. 4,838.9 39,254.7 24,563.7 33,969.5

Coal India Ltd. 19,675.0 96,224.5 108,673.5 147,882.0

Gail India Ltd. 28,263.5 33,278.3 40,209.7 44,436.1



Aditya Birla Nuvo Ltd. (4,357.3) 1,545.6 8,221.0 8,901.3

Pantaloons Retail (India) Ltd. 100.7 674.9 1,212.1 880.8

NMDC Ltd. 43,723.8 34,472.6 64,992.2 72,653.9



Welspun Corp Ltd. 2,135.1 6,104.0 6,330.3 2,385.4

Alok Industries Ltd. 740.5 1,377.1 3,115.4 3,805.3



Havells India Ltd. (1,601.6) 695.6 3,035.7 3,699.2

Voltas Ltd. 2,514.0 3,809.9 3,572.4 1,620.6

Jindal Saw Ltd NA* 5,495.3 4,421.8 1,891.1

Jain Irrigation Systems Ltd. 1,294.4 2,475.9 2,807.1 NA




DCM Shriram Consolidated Limited

(DSCL)842.5 (142.7) 119.2 NA

*change in financial year

Quarterly Financial Results – Revenue (INR mn)

Jul-Sep

2011

Oct -Dec

2011

Jan- Mar

2012

Mar-Jun

2012

Company

Oil and Natural Gas Corp. Ltd. NA 185,171.3 NA NA

Hindalco Industries Ltd. NA 66,469.7 NA NA

Coal India Ltd. 131,480.8 153,492.8 194,189.9 165,005.9

Gail India Ltd. NA 112,597.8 NA NA




Pantaloons Retail (India) Ltd. 31,802.6 31,748.0 32,772.8 35,524.5

NMDC Ltd. 30,623.2 28,219.5 25,936.5 28,379.0



Welspun Corp Ltd. 20,345.0 24,496.8 26,997.8 25,497.2

Alok Industries Ltd. NA NA NA NA



Havells India Ltd. 15,850.0 16,596.0 17,777.0 17,778.0




Voltas Ltd. 11,019.3 11,646.4 15,841.8 16,766.5

Jindal Saw Ltd NA 10,967.1 NA NA

Jain Irrigation Systems Ltd. 7,711.1 NA NA NA


10,601.9 13,996.9 13,312.8 NA

Quarterly Financial Results – Income (INR mn)

Jul-Sep

2011

Oct -Dec

2011

Jan- Mar

2012

Apr-Jun

2012

Company

Oil and Natural Gas Corp. Ltd. NA 67,414.1 NA NA

Hindalco Industries Ltd. NA 4,506.9 NA NA

Coal India Ltd. 25,931.1 40,377.6 40,134.1 44,692.6

Gail India Ltd. NA 10,914.2 NA NA


Grasim Industries Ltd. 4,179.4 6,690.7 8,087.8 7,180


Pantaloons Retail (India) Ltd. 150.5 (79.6) (0.6) 227.1

NMDC Ltd. 19,631.5 18,588.1 16,422.8 19,060.0

Ashok Leyland Ltd. 1,540.8 669.0 2,587.4 669.4

Crompton Greaves Limited 1,166.6 771.4 1,003.2 859.0

Welspun Corp Ltd. 710.8 (701.9) 1,185.5 74.7

Alok Industries Ltd. NA NA NA NA




JBF Industries Ltd. 760.1 711.8 235.4 337.0

National Aluminium Co. Ltd. 1,393.4 512.2 2,821.0 2,230.8

Havells India Ltd. 808.0 886.0 1,208.2 713.0

Voltas Ltd. 418.7 (1,154.1) 1,038.1 640.1

Jindal Saw Ltd NA 365.4 NA NA

Jain Irrigation Systems Ltd. 115.7 NA NA NA


(384.1) (252.0) 494.9 NA

Events Calendar

Confer nce on “Lae test Trends in

Construction Industry” Date: 3rd Sep 2012

u,Venue: Hotel Club Melange, Erode, Tamil Nad

an IndustryIndiaOrganizer: Confederation of Indi

Website: www.cii.in Contact ID: [email protected]

Contact No: +91‐424‐4272460

Confer nce on "Sue stainable Mining - The

Road Ahead"

Date: 8th Sep, 2012

Venue: Radisson Blu, Main Road Kadruarkhand, India

ndustry

Diversion, Ranchi, Jh

Organizer: Confederation of Indian I

Website: www.cii.in Contact ID: [email protected]

Contact No: + 91‐33‐22315576

Conference on Infrastructure Project

Management

Date: 20th Sep, 2012,Venue: Hotel Leela Palace, Diplomatic Enclave

lhi, Delhi, India

ian Industry

Chankyapuri, New De

Organizer: Confederation of IndWebsite: www.cii.in

ontact ID:C [email protected] ontact No: +91‐11‐45772037C

Lean Manufacturing for Releasing Hidden

Capacity

Date: 26th ‐27th Sep, 2012 Venue: CII Naoroji Godrej Centre of Excellence,

jCII Naoroji Godrej Centre of Excellence, Godre

Mumbai, Maharashtra,dian Industry

Station‐Side Colony,Organizer: Confederation of In

Website: www.cii.in Contact ID: [email protected] Contact No: + 91‐22‐2574 5146




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Manufacturing and Construction Sector in India Monthly Update August 2012

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