India is one of the key markets for the manufacturing sector, and is becoming increasingly influential in the global marketplace. As an area of future growth, there is a continued shift of economic power to emerging markets.Bappa Bandyopadhyay, Director – Operations & Projects, Henkel Adhesives Technologies India Pvt Ltd
India’s manufacturing sector has evolved over the years from the initial industrialisation and the ‘license raj’ to liberalisation and the current phase of global competitiveness. Today, Indian manufacturing companies in several sectors are targeting global markets and are becoming one of the most challenging global competitors.
In an exclusive interview with OEM Update, Bappa Bandyopadhyay, Director – Operations & Projects, Henkel Adhesives Technologies India Pvt Ltd shares his views on the changes that is happening post ‘Make in India’ and Henkel’s initiatives in with ‘Make in India’.
‘Make in India’ attracts foreign investmentsSince its launch, the Government of India has been making an honest attempt to ensure success of the ‘Make in India’ initiative. The authorities have introduced several steps to improve the business environment by easing and streamlining processes to do business in the country including speed and ease to obtain statutory approvals, fostering innovation, developing skills and building best-in-class manufacturing infrastructure; thereby, attracting foreign investments.
The Government of India in 2015 cleared as many as 1,671 proposals by investors, which is double the number of approvals granted in 2014. Additionally, between the period of September 2014 and November 2015, the government received Rs 1.20 lakh crore in proposals from companies interested in manufacturing electronics in India as per businesstandard.com.
While the development has been hugely positive, the impact of this has been different in different states and in some cases this top down initiative is not fully evident ‘on the ground’.
Create sustainable solutions to boost investmentsConsidering the nominal GDP, India’s economy is the seventh-largest in the world, and is now classified as a newly industrialised country. India is one of the G-20 major economies, a member of BRICS and a developing economy with approximately 7 per cent average growth rate during the last two decades. This points to the Indian market’s potential in terms of investment and expansion. Currently, the manufacturing sector in India contributes over 15 per cent of the GDP. The government of India, under the ‘Make in India’ initiative, is trying to give a boost to the contribution made by the manufacturing sector and aims to take it up to 25 per cent of the GDP.
The large manufacturers, SMEs as well as MSMEs should take maximum advantage of this initiative. In today’s competitive and dynamic world, the end customer not only looks for solutions or products that will save their time but also products that are efficient, reliable and sustainable. Additionally, they demand products that are unique and attractive. Therefore, the manufacturing industry as a whole should focus on creating innovative and sustainable solutions that will create great demand and also boost investments.
Great potential for manufacturing sectorIndia is one of the key markets for the manufacturing sector, and is becoming increasingly influential in the global marketplace. As an area of future growth, there is a continued shift of economic power to emerging markets. India Brand Equity Foundation has estimated that the country’s manufacturing sector could touch $ 1 trillion by 2025. There is potential for the sector to account for 25-30 per cent of the country’s GDP and create up to 90 million domestic jobs by 2025. India’s stable political, social and economic factors add to it being a preferred destination for global investors. Rapid social and economic developments, including emerging megatrends such as the growth of the middle class, urbanisation and the need for improved energy management, among others, are factors supplementing the attractiveness of the country for investors.
Archaic taxing, regulatory laws among major roadblocks‘Make in India’ is a commendable initiative by the Indian government, but like every key reform, it too is accompanied by challenges. The major roadblocks are likely to be the archaic taxing and regulatory laws, power, infrastructure, the lack of quality in research and development and maximum use of unskilled labour. The stringent laws need to be simplified which will thus ease the turnaround time on approvals. Power sources such as nuclear, solar, wind, thermal, hydro are very crucial for this initiative. The infrastructure also requires attention with respect to building better roads, new ports, waterways and railways for smooth delivery of products within India. The R&D sector in India also needs a boost. It is important to note that most of India’s comparative advantage lies in using its unskilled labour. But manufacturing and services sectors are skill-intensive, which leaves unskilled labour short of decent jobs. Thus, the government has to generate ways in which the unskilled labour in India would be used to its maximum potential. Additionally, disinvestment of public sector undertakings and the success of the 100 smart cities project are equally important.
Henkel’s offerings in line with ‘Make in India’After the ‘Make in India’ initiative was launched, foreign direct investments and investments in industrial production have been surging. The investments by multi-national companies in India have also increased, as these companies see the potential that exists in the country. Henkel Adhesives Technologies India Pvt Ltd is one such multi-national, which is a strong votary of the ‘Make in India’ movement and has consistently been making investments and expanding its footprints in the country.
Headquartered in Düsseldorf, Germany, Henkel is one of the leading solution providers for adhesives, sealants and functional coatings, with operations in 120 countries. Henkel’s adhesive products provide solutions ranging from anaerobic adhesives, cyanoacrylate adhesives, silicone sealants, polymer composites, solvent based, solvent free to cold seal laminating adhesives used in flexible packaging industry. These are used in diverse segments, such as electronics, automotive, manufacturing, aerospace and biomedical industries. Henkel India’s well-known adhesive brands include Loctite, Teroson, Bonderite and Aquence. To better serve its growing customer base in a dynamic market like India, Henkel needs to provide local solutions, while leveraging global technologies and expertise. To meet the needs of a growing business in the country, Henkel has set up:• Innovation Centre at Pune to solve some of industries’ biggest design, efficiency and reliability challenges and develop innovations based on strong global consumer insights combined with a deep knowledge of specific local needs;• Flexible Packaging Academy in Mumbai to offer certified, hands-on training programmes on lamination technology to flexible packaging professionals in the IMEA region; and• Shoe Academy along with Footwear Design and Development Institute (FDDI) at Noida aimed at upgrading the Indian footwear industry by offering a certified training programme on shoe manufacturing.
Moreover, to meet the growing demand for adhesives, Henkel is in the process of setting up India’s largest adhesives plant at Kurkumbh, near Pune. The new plant will be a model for sustainability and efficiency. The plant will be LEED certified and will follow the highest SHE (Safety, Health & Environment) standards. This will ensure best-in-class services for its customers, and at the same time ensure quality, improve productivity and efficiency. The Kurkumbh plant is a very important milestone of Henkel’s journey in India. This plant will enable Henkel to further localise its product portfolio and reduce imports while bringing the best global technology to India, besides winning a greater market share in India. Considering the growth potential of the adhesives market in India, Henkel is poised to seize the opportunity to expand the market and find new applications for adhesives.
