Industry Report

Skill development must to match western counterparts

Welding is a highly skill oriented profession and Kemppi stands committed in India to expand this skill with collaboration and cooperation of central and state governments, industry and universities.Rashmi Ranjan Mohapatra, Managing Director, Kemppi India
  Based in Finland, Kemppi is a manufacturer of Arc Welding Equipment and provides “Total Welding Solution” to its customers and has a manufacturing plant in Chennai. Kemppi, an ISO certified and CC compliant is one of the first companies to introduce inverters to the welding world and in 1992 it brought the digital welding machine to the welding world.
In an exclusive interview with OEM Update, Rashmi Ranjan Mohapatra, Managing Director of Kemppi India speaks about the future of ‘Make in India’.
FDI benefitted from ‘Make in India’Foreign direct investment (FDI) in India has received a dramatic boost from the launch of the ‘Make in India’ initiative, according to the latest economic survey. After the September 2014 launch of the initiative, which seeks to promote manufacturing and attract foreign investment, there was an almost 40 per cent increase in FDI inflows from October 2014 to June 2015 over the year-ago period. Under the programme, the government has awarded 56 defence manufacturing permits to private sector entities in the past one year, after allowing 49 per cent FDI in the defence sector in August 2014, compared with 47 granted in the preceding three years. Entities from several countries such as Japan, China, France and South Korea announced their intention to invest in India in various industrial and infrastructure projects.
The major objectives behind the ‘Make in India’ initiative are job creation and skill enhancement in 25 sectors of the economy, including automobiles, aviation, biotechnology, chemicals, construction, defence manufacturing, electrical machinery, electronic systems and mining. According to the Department of Industrial Policy and Promotion, FDI inflows under the approval route (which requires prior government permission) increased by 87 per cent during 2014-15 with an inflow of $2.22 billion. More than 90 per cent of FDI was through the automatic route. Singapore, Mauritius, the Netherlands and the US account for the major share of FDI inflows into India. Out of FDI equity inflows of $24.8 billion during 2015-16 (April-November), more than 60 per cent came from two geographically small countries — Singapore and Mauritius.
The major change post ‘Make in India’ has been on FDI and signing of MOU or showing intent in different greenfield sectors. However, it has to fructify to make an impact in the manufacturing sector.
Opportunities for Indian manufacturersWith the government pushing for the manufacturing sector to grow from 17 – 25 per cent in GDP by 2020; the prospect is very good. Besides this, the government has opened up 25 sectors to attract FDI and make an impact.
The major bottleneck in manufacturing has been the “skill factor” in the country. The Government has been astute enough to put the “skilling” in the forefront. That will help boost the productivity in a big way.
Right action at the right timeIndia has emerged as the most favoured destination for Foreign Direct Investment (FDI), outpacing China and the US. FDI inflows into India during January-June stood at $31 billion, ahead of China’s $28 billion and the US’s $27 billion in 2015. Separately, India also jumped 16 notches to 55 among 140 countries in the World Economic Forum’s Global Competitiveness Index that ranks countries on the basis of parameters such as institutions, macro-economic environment, education, market size and infrastructure among others.
A ranking of top destinations for greenfield investment (measured by estimated capital expenditure) in the first half of 2015 shows India at number one, having attracted roughly $3 billion more than China and $4 billion more than the US.
The government’s push for manufacturing comes at a time when many global companies are searching for an alternative to China as costs and risks there rise. India has also become the world’s fastest growing major economy ahead of China, where recent shocks have sent ripples across the world.
Last year, the government launched the ‘Make in India’ initiative vowing to remove bureaucratic sloth, make the country more investor-friendly and rectify processes that has kept the country almost at the bottom — ranked 142  of World Bank’s ‘ease of doing business’ index.
Obstacles & roadblocksThe manufacturing industry has been seized by obstacles. Bombarded with news of closing of factories, labour disputes between companies and their employees or reductions in force due to the shift of labour off-shore, the reputation of the industry has been marred by low wages and less than desirable working conditions, in addition to quality-control problems.
From the central government and state government perspective the manufacturing industry looks forward to their support in land acquisition, skilled labour, infrastructure and productivity.
Some reports peg the growth of manufacturing in India by six times till 2025 thus creating a job for 90 million and creating a business of $1 trillion.
This growth can come from two fronts – increased consumer demand in certain sectors and production plants by MNCs in other countries (other than China).
While these factors are primarily external; the first and foremost intent should come from the manufacturer themselves. Today manufacturing contributes 16 per cent to the GDP unlike the service sector which contributes 55 per cent to the Indian GDP. To fulfil the global aspirations Indian manufacturers need to increase labour, capital and process productivity.The labour productivity is critical as the “skill” level is very poor in comparison to their western and eastern counterparts. Skill development is must for India to bridge this gap and increase workmanship. Indian manufacturer must get in to an entrepreneurial mind set to make the best use of the capital available.
Industrial protectionism has to be shelved at the earliest to bring in more accountability and dynamism in the sector. The business process has to undergo a change when it is opened up to competition.
Kemppi committed to expand ‘skill’In 2014 Kemppi India brought the ‘Total Welding Management’ software to the welding world. Its products have been awarded for its design. The Red dot award for Minarc and Supersnake are a testimony on itself. KEMPACT RA has been awarded the “IF” design award in 2013.
Kemppi has been in the forefront in providing equipment, services and software as the solution to the customers. In India it manufactures the basic MIG/MAG and MMA machine known as HiArc. HiArc M 400R has become one of the market leaders in its segment within a short span of 3 years of its introduction.
32 products have been added to Kemppi’s product range in Chennai. These products are exported to Asian and Latin American countries.
Welding is a highly skill oriented profession and Kemppi stands committed in India to expand this skill with collaboration and cooperation of central and state governments, industry and universities.

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