Breaking the Barriers for Growth

The Future of Emerging Markets Breaking the Barriers for Growth

06.10.2015Editor: Dominik Stephan

The growth of the Indian process sector – India is currently renewing her image with the world to promote itself as a base for investment. Industry stalwarts give their viewpoint on different global practices and how they see the Indian market play a role in the growth of their companies.

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EPC Group

R&D is the competitive edge that will make companies stand out and grow.
(Picture: Depositphotos.com/iqoncept)

Technology and development go hand-in-hand and play a crucial role in the growth of any country. In today’s world, it is the competitive edge that defines growth, be it a country, state or an industry. For quite a few years now, India has acknowledged the importance of Research and Development (R&D). The government has shown its keenness in encouraging R&D through the increase in R&D expenditure.

R&D in India

According to Managing Director, Burckhardt Compression India, Narasimha Rao, the engineering R&D market is estimated to grow at a CAGR of 14 per cent by 2020. “R&D is not uniform across sectors. While some sectors such as IT, automobile, electronics segments are at the forefront, there are some segments which have to go the extra mile,” continues Rao. Among process industries, currently there is a lot of innovation in the specialty chemicals segment. “Indian Oil which has one of the finest R&D centers in Asia has developed its own processes in the refining segment. Even world leaders in specialty chemicals are setting up their R&D and innovation centers in India,” informs Rao.

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An increased investment is being seen in India, especially in the process industries.

”India makes a considerable contribution to the Freudenberg Group’s innovative strength. We are therefore committed to systematic investment in this region over the long-term.“
Dr. Jörg Matthias Großmann
Regional Representative , Freudenberg Group

A representation of Freudenberg’s support towards the goals of the Make in India campaign

Investing in R&D will increase investment returns.

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”India is and will remain a key for our growth given the strategic location and the advantages that India provides to our firm specific strategy.“ Narashima Rao, Managing Director of Burckhardt Compression India
(Picture: Depositphotos.com/iqoncept)

Furthermore, India being an emerging economy with a higher amount of disposable income, the need arises for advanced low cost goods. This is turn, will require manufactures to increase the efficiency and productivity of their processes to bring about cost-effective high-quality goods.

Innovations are Key to Savings

Another aspect to this is that R&D leads to innovations that then leads to energy savings such as optimizing plant operations and increasing efficiency of processes. Speaking on how this can particularly help process plants, Regional Representative India, Freudenberg Group, Dr Jörg Matthias Großmann notes, “The power consumption of industrial plants is often enormous. Energy efficiency solutions can help to increase both their efficiency and cost-effectiveness.”

Top 10: The Highest Value Deals in Pharma

According to a study by the business consultants Ernst & Young, the pharma sector is in 2014 on the threshold of takeovers and fusions to the value of 265 billion dollars (205 billion euros).

Place 10 – Valeant/Allergan – 49 billion dollars (2014/outcome open): The Canadian pharma company wants to take over the US American Botox manufacturer Allergan for 49 billion dollars. The first takeover bid founders, however, on the veto of the Allergan management. Immediately afterwards, Valeant addresses the shareholders of Allergan with a public takeover bid. The first deadline, 15 August, passes without a conclusion. Only shareholders of 4% of the shares handled on the stock exchange are prepared to sell at this point in time. Valeant reacts by prolonging the deadline, under the same conditions, to the end of the year.

Place 9 – Abbvie/Shire – 54.7 billion dollars (2014/finalised): After long vacillation, the US American pharma company Abbvie takes over the British competitor Shire. Only after a total of five offers does the management of the Irish orphan drug specialists agree to sell to the US company. The takeover costs Abbvie 54.7 billion dollars.

Place 8 – Pfizer/Pharmacia – 60.7 billion dollars (2002/finalised): The US American pharma giant Pfizer, with three successful and one failed takeover, is by far the most active firm in this ranking. In 2002, Pfizer took over the Swedish competitor Pharmacia. The purchase price amounted to 60.7 billion dollars in shares. After the purchase, Pfizer held at that time 12 medicines with an annual turnover of more than billion dollars each.

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“To begin with, an innovative measurement and evaluation process identifies energy-saving potentials within the system. During a subsequent optimization process, accurately matched, smooth-running specialty lubricants are used in place of conventional oils. These advanced lubricants reduce friction between individual components, resulting in proven reduced energy consumption and increased performance.”

”Auma India is an important player in the Auma Group and it supports the supply of equipment by Indian EPCs and valve manufacturers for national and international projects.“ Arvind K Goel, Managing Director, Auma India
(Picture: Auma India)

Good times for Contract Manufactureres in India. .

Adding to this, Managing Director, Auma India, Arvind K Goel advises that research is key to finding ways to be sustainable and increase growth. He avers, “It also becomes important owing to special requirements for application in Indian industries as well as for import substitution. The industry is already aware of the need for more emphasis on R&D for a company to sustain and grow its business in the long term. It is seen that companies investing in R&D consistently tend to grow faster and gain market share.”

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