Indian Rubber Industry Non Tyre: An Overview Mr Vinod Simon International Rubber Conference Kovalam, India 29 th October 2012 AGENDA Indian Economy Snapshot Indian Rubber Industry Overview Advantages and Disadvantages Conclusion 1
India is the 2 nd largest populated Country and has the 11 th largest GDP in the World Population Economy Forecast 2nd fastest growing economy globally with very young population; yet to reach its full potential in various sectors CAGR 50% Sectorial Contribution of GDP 2011 and 2015 Services Sector dominates the GDP as India is a Information Technology PowerHouse More than 80% of the products manufactured are consumed domestically 2
Middle Class Population to Account for 70% of India s Population in 2020 with disposable income of US$ 735 billion India to have the Highest Increase in Working Age Population (18 64 years) Globally (2010 2020) at 119 million Key Drivers of India s Growth 3
India: A Vibrant Economy Largest Democracy: 1.2 billion people, Growing Middle Class 4 th largest GDP (PPP) and 10 th largest GDP (Nominal, USD 1.8 trillion) One of the fastest growing economies Estimates for 2011 2012: 7.6% India s average GDP growth rate: 7.3% over past 10 yrs Expected to outpace China in the next decade 3 rd largest investor base in the world contd India: A Vibrant Economy contd Robust Legal and Banking Infrastructure Demographics advantage: Youth Driven economy Sub Urbanization & Rural to Urban migration 140 million by 2020; 700 million by 2025 2nd largest pool of certified professionals and highest number of qualified engineers in the world Investment in Infrastructure 4
Indian Rubber Industry Indian Rubber Industry The Industry has approximately 5000 manufacturing units mostly belonging to MSME sector manufacturing 35000 highly diversified items having direct employment of half a million people and more than 5 million people depend on the industry for their livelihood. The Industry has large potential for employment generation and contributes sizably to the national coffer The Industry plays a core sector role in the National economy 5
Indian Rubber Industry has certain basic advantages: Indian Rubber Industry Status: Condition Benefits Standardization Testing & Research Capability India has its own International Standards Institute, Bureau of Indian Standards (BIS) India has several test centers of International Repute & Educational Institutes. It also has research Laboratories such as NCL, Pune; AIRI, Pune; IRMRA, Mumbai; HASTERI, JK Gram, etc. Institutes such as IIT Kharagpur; UICT, Mumbai, etc. have world class research centers in polymers 6
Indian Rubber Industry Status: Condition Benefits Established Industry Base Huge product range varying from tires, belting, cables, hoses, automotive components, molded products and latex products Product Acceptability Indian rubber products have reached global standards with many organizations having quality certification such as ISO 9000, 14000, QS & TQM etc. Indian Rubber Industry Status: Condition Resources Benefits India has tremendous resources with respect to Rubber Raw Material, Manpower, Machineries, Test Houses, Rubber Chemicals, Carbon Black, Zinc Oxide etc. It has the worlds widest Rail Network & Well Connected to the Global Market by extensive Air & Sea Links Technological Maturity The Indian Rubber Industry has reached the World Class Standards of Sophistication with World Class equipment 7
Indian Rubber Industry Non Tyre Advantages & Disadvantages Advantages for the Indian Rubber Industry - Non Tyre o Large Domestic Market for its products India with a population of over a billion offers a large domestic market to the local manufacturing industry. There is a domestic demand for almost all the rubber products manufactured within the country o Availability of a large pool of young employable people Morethana100 million young employable people in the age group of 20 55 will be available in India in the next decade. This is going to be a GDP driver for the country s growth and no other country will enjoy this advantage as much as India will. o Wide range of products manufactured The Indian rubber industry has become a base for manufacture of almost all kinds of rubber products. More than 35000 different kinds of products are manufactured in India o Best Technologists / Engineers in the World With a large number of leading educational institutions available across the country, these institutes bring out one of the best technologists and engineers in the world 8
Disadvantages for the Indian Rubber Industry - Non Tyre o o Availability of Skilled Manpower Although India has the highest employable population availability of skilled manpower however still remains a challenge. The National Skill Development Corporation promoted by the Govt. of India is setting up sector skill councils to help the industry to meet the growing demand of skilled manpower. The sector skill councils are empowered to create their own standards and impart training to meet the end result. Availability of Raw Material especially Natural Rubber With the increasing gap between the consumption and production, wherein the consumption is growing at a much higher rate than production, shortage of Natural rubber and also other forms of rubber is going to be a big challenge for the industry. contd Disadvantages for the Indian Rubber Industry - Non Tyre o o o contd 85% of the units are in the MSME sector and technology for most still not the latest This sector unlike the Tyre and the large rubber industry have not updated technology and machinery at the time they were required to do so. Today most of the MSME sector are still having old and outdated machinery and technology whereby the productivity is less and the cost is high making them less competitive Better Infrastructure required One of the biggest challenges faced in the infrastructure area is the lack of power and also lack of good roads and connectivity Delayed and many at times lack of decision making and right policies by the Govt. This has been a problem for a very long time and has hurt the interest of the industry most of the time. Sometimes the decisions are so late that the very essence of the decision is lost. 9
Conclusion India : The Gateway of Growth Vibrant Indian Economy growing at 7.6% Automotive Industry Double Digit Growth in all segments India fast emerging as hub for Global Vehicle Programs 2020: USD 113 billion Auto Component Industry Growing Engineering and IT capability for Designing and Manufacturing Respect for IPR Opportunity to Partner in Product & Process Innovation 10
ADVANTAGE INDIA India is fast becoming a favoured investment destination Large and growing domestic demand Respect for intellectual property Product development capabilities High quality standards Indian Rubber Industry Conversant with global automotive standards Flexibility in small batch production Export capabilities Strong Entrepreneurship Availability of skilled manpower Growing IT capabilities All these plus factors have led the experts to believe that India will be the second largest global player in rubber by the year 2020 next only to china 11
THANK YOU 12