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MESSAGE

MESSAGE

It is a matter of great pleasure and pride to write this message for “INDIA CHEM rdGUJARAT 2013” 3 International Exhibition and Conference on Specialty Chemicals,

Fine Chemicals, Agrochemicals, Dyes and Colorants scheduled from October 24-26,

2013 at Mahatma Mandir, Gandhinagar, Gujarat.

I am grateful to Department of Chemicals and Petrochemicals, Government of India,

Government of Gujarat and iNDEXTb for their involvement and support in bringing

this event to a stage where we have large participation from the Indian and Foreign

industry.

I am sure “INDIA CHEM Gujarat 2013” will provide an excellent platform for

business-to-business contacts and help exhibiting companies to network with their

prospective buyers. We are expecting Buyers from more than 40 countries and this

would lead to productive interactions with Indian Chemical manufacturers keen to

boost their exports.

I wish all the exhibitors and visitors of INDIA CHEM Gujarat 2013 a fruitful

participation.

Dr A.Didar Singh

Secretary General

FICCI

MESSAGE

It is a matter of great pleasure and pride to write this message for “INDIA CHEM rdGUJARAT 2013” 3 International Exhibition and Conference on Specialty Chemicals,

Fine Chemicals, Agrochemicals, Dyes and Colorants scheduled from October 24-26,

2013 at Mahatma Mandir, Gandhinagar, Gujarat.

I am grateful to Department of Chemicals and Petrochemicals, Government of India,

Government of Gujarat and iNDEXTb for their involvement and support in bringing

this event to a stage where we have large participation from the Indian and Foreign

industry.

I am sure “INDIA CHEM Gujarat 2013” will provide an excellent platform for

business-to-business contacts and help exhibiting companies to network with their

prospective buyers. We are expecting Buyers from more than 40 countries and this

would lead to productive interactions with Indian Chemical manufacturers keen to

boost their exports.

I wish all the exhibitors and visitors of INDIA CHEM Gujarat 2013 a fruitful

participation.

Dr A.Didar Singh

Secretary General

FICCI

MESSAGE

It is great pleasure for me to send this message for the international conference on

pumps, valves & process equipments i.e. "Pumps, Valves & Process Equipments

2013" on 24 October in Gandhinagar, Gujarat.

I am confident that this conference "Pumps, Valves & Process Equipments 2013" will

provide an excellent platform for business-to-business contacts, brainstorming,

knowledge update, understanding the market overview, knowing the requirements

of the end users, updating on the technological up gradation and help delegates to

network with their prospective buyers and will create the right atmosphere for

exchange of ideas. We have invited key professionals as the Speakers, and their

deliberations would lead to productive interactions with Indian pumps and valves

manufacturers keen to boost their market.

The research report and background paper "Strategic Report on Pumps, Valves &

Process Equipments" by FICCI and TSMG being released during the conference will

definitely add value to the industry.

I wish all the participants of "Pumps, Valves & Process Equipments 2013" a fruitful

participation.

Aseem Srivastav

Chairman-

Organsing Committee (PVPE Expo 2013)

MESSAGE

It is great pleasure for me to send this message for the international conference on

pumps, valves & process equipments i.e. "Pumps, Valves & Process Equipments

2013" on 24 October in Gandhinagar, Gujarat.

I am confident that this conference "Pumps, Valves & Process Equipments 2013" will

provide an excellent platform for business-to-business contacts, brainstorming,

knowledge update, understanding the market overview, knowing the requirements

of the end users, updating on the technological up gradation and help delegates to

network with their prospective buyers and will create the right atmosphere for

exchange of ideas. We have invited key professionals as the Speakers, and their

deliberations would lead to productive interactions with Indian pumps and valves

manufacturers keen to boost their market.

The research report and background paper "Strategic Report on Pumps, Valves &

Process Equipments" by FICCI and TSMG being released during the conference will

definitely add value to the industry.

I wish all the participants of "Pumps, Valves & Process Equipments 2013" a fruitful

participation.

Aseem Srivastav

Chairman-

Organsing Committee (PVPE Expo 2013)

MESSAGE

Table of Contents

Executive summary .............................................................................................1

1. Indian pumps market ................................................................................3

2. Indian industrial valves market ..............................................................13

3. Process plant equipment:..............................................................................21

About Tata Strategic: .........................................................................................25

1.1 Overview: ..........................................................................................4

1.2 Market assessment:..........................................................................4

1.3 Market segmentation: .........................................................................5

1.5 Market growth drivers: ......................................................................8

1.6 Market restraints: ..............................................................................9

1.7 Competitive environment: ...............................................................10

1.8 Likely scenario of Pumps market over next five years: ....................11

2.1 Overview: ........................................................................................14

2.2 Market assessment: ........................................................................14

2.3 Market segmentation: .....................................................................15

2.4 End-use sector analysis: ..................................................................16


2.6 Market drivers:.................................................................................18

2.7 Market restraints: ............................................................................18

2.8 Likely scenario of industrial valves market in next five years:..........19

3.1 Overview: ........................................................................................22

3.2 Market assessment:........................................................................22


3.4 Likely scenario of process plant equipment market in ...................24next five years:

1.4 End-use sector analysis: ....................................................................7

Table of Contents

Executive summary .............................................................................................1

1. Indian pumps market ................................................................................3

2. Indian industrial valves market ..............................................................13

3. Process plant equipment:..............................................................................21

About Tata Strategic: .........................................................................................25

1.1 Overview: ..........................................................................................4

1.2 Market assessment:..........................................................................4

1.3 Market segmentation: .........................................................................5

1.5 Market growth drivers: ......................................................................8

1.6 Market restraints: ..............................................................................9


1.8 Likely scenario of Pumps market over next five years: ....................11

2.1 Overview: ........................................................................................14

2.2 Market assessment: ........................................................................14

2.3 Market segmentation: .....................................................................15

2.4 End-use sector analysis: ..................................................................16


2.6 Market drivers:.................................................................................18


2.8 Likely scenario of industrial valves market in next five years:..........19

3.1 Overview: ........................................................................................22

3.2 Market assessment:........................................................................22


3.4 Likely scenario of process plant equipment market in ...................24next five years:

1.4 End-use sector analysis: ....................................................................7

Executive summary

Table of Figures:

Figure 1: Break-up of Indian pumps market revenue by type (FY13) 4

Figure 2: Classification of pumps by type 5

Figure 3 : Segmentation of Positive Displacement Pumps by revenues (FY13) 6

Figure 4 : Segmentation of Centrifugal Pumps by revenues (FY13) 7

Figure 5: Split of Revenues of Indian pumps market (FY13) (by end-user) 8

Figure 6: Total industrial valves market (FY13) 14

Figure 7: On-off Valves: Split of Revenue by Product Type (FY13) 15

Figure 8: On-off Valves: Split of Volume by Product Type (FY13) 15

Figure 9: Control Volves : Split of Volume by Product Type (FY13) 16


Figure 11: Break-up of industrial valves demand by end-use segment 16

Figure 12: Market share of industrial valves manufacturers (FY13) 17

Figure 13: Projected production of process plant equipment in India 22

Figure 14: Segmentation of Pumps Industry 29

Figure 15 : Key Players (with focus sectors of operation) 29

Figure 16: Presence of pump manufacturing hubs 30

Figure 17: Forecasts for Domestic revenues and growth 30

Figure 18: Trends for exports-imports of pumps 31

Figure 19: Projections for growth in end-use sectors 31

Executive summary

Table of Figures:

Figure 1: Break-up of Indian pumps market revenue by type (FY13) 4

Figure 2: Classification of pumps by type 5

Figure 3 : Segmentation of Positive Displacement Pumps by revenues (FY13) 6

Figure 4 : Segmentation of Centrifugal Pumps by revenues (FY13) 7

Figure 5: Split of Revenues of Indian pumps market (FY13) (by end-user) 8

Figure 6: Total industrial valves market (FY13) 14

Figure 7: On-off Valves: Split of Revenue by Product Type (FY13) 15

Figure 8: On-off Valves: Split of Volume by Product Type (FY13) 15



Figure 11: Break-up of industrial valves demand by end-use segment 16

Figure 12: Market share of industrial valves manufacturers (FY13) 17

Figure 13: Projected production of process plant equipment in India 22

Figure 14: Segmentation of Pumps Industry 29

Figure 15 : Key Players (with focus sectors of operation) 29

Figure 16: Presence of pump manufacturing hubs 30

Figure 17: Forecasts for Domestic revenues and growth 30

Figure 18: Trends for exports-imports of pumps 31

Figure 19: Projections for growth in end-use sectors 31

The Indian economy continued to remain sluggish in FY14, though it still

maintained a pace faster than most of the emerging and developing economies.

Real GDP growth contracted to 4.4% in Q1FY14 against 5.4% in Q1FY13 and

7.5% in Q1FY12. Fiscal deficit in Q1FY14 ~50% of budget estimates as against

37% in Q1FY13. These Key macroeconomic parameters do not inspire

confidence.

However, recent policy measures by the government in various segments,

especially in the infrastructure sector, are likely to help improve production

activity. Timely, normal and well-spread rainfall is expected to have a positive

impact on agriculture production, which, in turn, may improve rural demand for

industrial goods and services. The improvement in water storage levels in

reservoirs due to heavy rainfall would enable the hydro power sector to enhance

capacity utilisation. The targets set in 12th FYP are expected to boost the power

sector and natural gas segment. We are expecting both industry and agriculture

to rebound in H2FY14. This will essentially have a positive impact on the demand

of pumps, valves and process plant equipment in Indian market.

All these three markets are highly linked with the trends in key end-use sectors

like oil and gas, power generation, waste and water treatment, agriculture and

building services. At this juncture of the economy it is imperative to relook at the

market for the key manufacturing segments like pumps, valves and process

equipment from end-user's perspective as well as from manufacturer's

perspective.

The report covers a brief overview of all the three markets, their growth drivers

and restraints. Considering the current trends and expected economic outlook,

likely scenario of these markets in next five years is also built up.

Executive summary

2

Indian pumps market 1

The Indian economy continued to remain sluggish in FY14, though it still

maintained a pace faster than most of the emerging and developing economies.

Real GDP growth contracted to 4.4% in Q1FY14 against 5.4% in Q1FY13 and

7.5% in Q1FY12. Fiscal deficit in Q1FY14 ~50% of budget estimates as against

37% in Q1FY13. These Key macroeconomic parameters do not inspire

confidence.

However, recent policy measures by the government in various segments,

especially in the infrastructure sector, are likely to help improve production

activity. Timely, normal and well-spread rainfall is expected to have a positive

impact on agriculture production, which, in turn, may improve rural demand for

industrial goods and services. The improvement in water storage levels in

reservoirs due to heavy rainfall would enable the hydro power sector to enhance

capacity utilisation. The targets set in 12th FYP are expected to boost the power

sector and natural gas segment. We are expecting both industry and agriculture

to rebound in H2FY14. This will essentially have a positive impact on the demand

of pumps, valves and process plant equipment in Indian market.

All these three markets are highly linked with the trends in key end-use sectors

like oil and gas, power generation, waste and water treatment, agriculture and

building services. At this juncture of the economy it is imperative to relook at the

market for the key manufacturing segments like pumps, valves and process

equipment from end-user's perspective as well as from manufacturer's

perspective.

The report covers a brief overview of all the three markets, their growth drivers

and restraints. Considering the current trends and expected economic outlook,

likely scenario of these markets in next five years is also built up.

Executive summary

2

Indian pumps market 1

1.1 Overview:

1.2 Market assessment:

The Indian pumps market is fairly mature, with domestic sales expected to

increase at a rate of 16 to18 per cent per year, and exports projected to grow at

around 10 to 12 per cent over the next few years. The industry estimates annual

production of around 2 million units, with nearly 95 per cent of domestic

consumption being met through local production facilities.

In FY13, the total Indian pumps' market amounted to Rs.8,375 Cr grew by 19%

over FY12 demand. Banking on the ongoing infrastructure projects in the power

generation, building services, water and wastewater, as well as oil and gas

sectors, the total Indian pumps market is expected to continue growing at a

much faster pace than that of the world pumps market.

Indian pumps market1

5%

Centrifugal Pumps PD Pumps

95%

Figure 1: Break-up of Indian pumps market revenue by type (FY13)

4

The pumps market is broadly classified into two categories: industrial pumps,

which cater to infrastructure sectors; and agriculture and domestic pumps. Going

by the type of the pumps, the market is segmented into centrifugal pumps and

positive displacement pumps. Indian pumps market is dominated by centrifugal

pumps, accounting for over 95% of the market.

India produces more than 2.0 million units of pumps per annum for end user

sectors ranging from agriculture to nuclear power. Almost 95.0 percent of the

demand is met by domestic manufacturers, with imports accounting for the

remaining 5.0 percent.

With Indian pumps being exported to more than 70 countries, exports are

growing at an average rate of 10.0 percent annually. The total Indian pumps

market is highly fragmented with more than 800 large-, medium-, and small-

scale units catering to a wide range of end- user sectors. Most of the large-scale

domestic manufacturers and multinationals cater to a wide array of end-user

industries, while small- scale units in the unorganized sector predominantly

address the agriculture and domestic sectors. More than 50.0 percent of pumps'

demand in the agriculture and domestic sectors is met by these small- scale

units in the unorganized sector.

1.3 Market segmentation:

Figure 2: Classification of pumps by type

Centrifugal pumps Positive displacement pumps

•

•

•

•

Single-stage radial-flow pumps

Multi-stage radial-flow pumps

Axial- and mixed-flow pumps

Submersible pumps

•

•

•

Rotary pumps

Reciprocating pumps

Peristaltic pumps

Pumps

5

1.1 Overview:


The Indian pumps market is fairly mature, with domestic sales expected to

increase at a rate of 16 to18 per cent per year, and exports projected to grow at

around 10 to 12 per cent over the next few years. The industry estimates annual

production of around 2 million units, with nearly 95 per cent of domestic

consumption being met through local production facilities.

In FY13, the total Indian pumps' market amounted to Rs.8,375 Cr grew by 19%

over FY12 demand. Banking on the ongoing infrastructure projects in the power

generation, building services, water and wastewater, as well as oil and gas

sectors, the total Indian pumps market is expected to continue growing at a

much faster pace than that of the world pumps market.

Indian pumps market1

5%

Centrifugal Pumps PD Pumps

95%

Figure 1: Break-up of Indian pumps market revenue by type (FY13)

4

The pumps market is broadly classified into two categories: industrial pumps,

which cater to infrastructure sectors; and agriculture and domestic pumps. Going

by the type of the pumps, the market is segmented into centrifugal pumps and

positive displacement pumps. Indian pumps market is dominated by centrifugal

pumps, accounting for over 95% of the market.

India produces more than 2.0 million units of pumps per annum for end user

sectors ranging from agriculture to nuclear power. Almost 95.0 percent of the

demand is met by domestic manufacturers, with imports accounting for the

remaining 5.0 percent.

With Indian pumps being exported to more than 70 countries, exports are

growing at an average rate of 10.0 percent annually. The total Indian pumps

market is highly fragmented with more than 800 large-, medium-, and small-

scale units catering to a wide range of end- user sectors. Most of the large-scale

domestic manufacturers and multinationals cater to a wide array of end-user

industries, while small- scale units in the unorganized sector predominantly

address the agriculture and domestic sectors. More than 50.0 percent of pumps'

demand in the agriculture and domestic sectors is met by these small- scale

units in the unorganized sector.


Figure 2: Classification of pumps by type

Centrifugal pumps Positive displacement pumps

•

•

•

•

Single-stage radial-flow pumps

Multi-stage radial-flow pumps

Axial- and mixed-flow pumps

Submersible pumps

•

•

•

Rotary pumps

Reciprocating pumps

Peristaltic pumps

Pumps

5

In FY 13, centrifugal pumps dominated the total Indian pumps market accounting

for 95 percent of revenues. The ongoing/ upcoming large infrastructure projects

as planned in 12th FYP are ensuring the growth prospects of the centrifugal

pumps from various end use sectors. Some of the major end users such as

power generation, water and wastewater, building services, as well as oil and

gas are expected to account for majority of revenues for the centrifugal pumps

market in next 4-5 years. In FY 13, single-stage radial-flow pumps accounted for

35 percent of the centrifugal pumps market revenues, followed by submersible

pumps with 32 percent. The multi stage pumps, the axial- and mixed-flow

pumps, which are predominantly used for specific industrial applications,

accounted for the rest of the market revenues.

73%

24%

3%

Rotary Reciprocating Peristaltic

Figure 3 : Segmentation of Positive Displacement Pumps by revenues (FY13)

Investments in oil and gas, power generation, and water and wastewater are

expected to drive the positive displacement (PD) pumps market in India.The

presence of a large number of unorganized suppliers and the duplication of the

design and the spare parts of pumps by small-scale suppliers are expected to

restrain market growth.Rotary pump is the dominant product type among PD

pumps, which accounted for about three-fourth of revenues. Revenues from

reciprocating pumps are expected to witness growth during the forecast period

due to the increased demand for these pumps.

6

1.4 End-use sector analysis:

In FY 13, the agriculture sector was the largest source of demand for pumps in

India. It accounted for approximately 27 percent of the total revenues. The sector

is expected to grow at a compound annual growth rate (CAGR) of 16 percent

over next 3-4 years.

Figure 4 : Segmentation of Centrifugal Pumps by revenues (FY13)

Agriculture

Building Services

Water & Wastewater

Power Generation

Oil & gas

Metals & Mining

Others

39%

31%

18%

12%Single-Stage Radial

Submersible

Multi-Stage Radial

Axial & Mixed

27%

17%

17%

12%

8%

4%

12%

Figure 5: Split of Revenues of Indian pumps market (FY13) (by end-user)

7

In FY 13, centrifugal pumps dominated the total Indian pumps market accounting

for 95 percent of revenues. The ongoing/ upcoming large infrastructure projects

as planned in 12th FYP are ensuring the growth prospects of the centrifugal

pumps from various end use sectors. Some of the major end users such as

power generation, water and wastewater, building services, as well as oil and

gas are expected to account for majority of revenues for the centrifugal pumps

market in next 4-5 years. In FY 13, single-stage radial-flow pumps accounted for

35 percent of the centrifugal pumps market revenues, followed by submersible

pumps with 32 percent. The multi stage pumps, the axial- and mixed-flow

pumps, which are predominantly used for specific industrial applications,

accounted for the rest of the market revenues.

73%

24%

3%

Rotary Reciprocating Peristaltic

Figure 3 : Segmentation of Positive Displacement Pumps by revenues (FY13)

Investments in oil and gas, power generation, and water and wastewater are

expected to drive the positive displacement (PD) pumps market in India.The

presence of a large number of unorganized suppliers and the duplication of the

design and the spare parts of pumps by small-scale suppliers are expected to

restrain market growth.Rotary pump is the dominant product type among PD

pumps, which accounted for about three-fourth of revenues. Revenues from

reciprocating pumps are expected to witness growth during the forecast period

due to the increased demand for these pumps.

6


In FY 13, the agriculture sector was the largest source of demand for pumps in

India. It accounted for approximately 27 percent of the total revenues. The sector

is expected to grow at a compound annual growth rate (CAGR) of 16 percent

over next 3-4 years.

Figure 4 : Segmentation of Centrifugal Pumps by revenues (FY13)

Agriculture

Building Services

Water & Wastewater

Power Generation

Oil & gas

Metals & Mining

Others

39%

31%

18%

12%Single-Stage Radial

Submersible

Multi-Stage Radial

Axial & Mixed

27%

17%

17%

12%

8%

4%

12%

Figure 5: Split of Revenues of Indian pumps market (FY13) (by end-user)

7

The building services sector, with 17 percent revenue share, ranked second in FY

13. Expected recovery in the real estate segment would yield annual growth rate

of 20 percent in pumps demand for next 4 years.

The water and wastewater sector was the third-highest revenue generator, with

a revenue share of 17 percent in FY 13. Rising demand for drinking water supply

and high level of food production has led to a slew of water and wastewater

treatment plants and large-scale irrigation projects. This sector is expected to

witness a persistent demand for pumps and is expected to grow at a CAGR of 17

percent over next 4 years

Power generation is another key end-user sector, which accounted for 12 percent

of revenue share. Going by the planned power additions in the 12th FYP, this

sector is likely to drive the growth of the total pumps market.

Other key end-user sectors include oil and gas, metals and mining, chemical

process, food and beverage, as well as few others.

1. Growth of infrastructure sector due to focused government initiatives

• XIIth Plan's focus on infrastructure sector and proposed investments to the tune of $1Tn would provide a strong boost to the growth of pumps manufacturers

2. Projected high growth in key end-user sectors like metals and mining, cement, power, water supply and wastewater

3. Increased investments in large-scale irrigation and the oil & gas sector

• Refining capacity is expected to rise by 22% in next 3 years

• Newer irrigation models like “Lift irrigation” projects are expected to boost the growth of the pumps industry

4. Growing dependence on groundwater, particularly in urban settlements and industrial zones

• India is one of the largest consumers of groundwater in the world (~ 230 cub km on an annual basis)

• Falling groundwater levels will boost the growth of deep well submersible pumps as a replacement for the current pumps

• Growing urbanization will necessitate the need of pumps in water supply and wastewater transport

1.5 Market growth drivers:

8

5. Setting up of manufacturing facilities of foreign players

• India has emerged as an attractive destination for manufacturing of

pumps with the entry of foreign players E.g. Grundfos, Flowserve,

etc.

• Besides catering to domestic market, these manufacturing units

meet the growing export demand emanating from neighbouring

markets

6. Increased demand for energy efficient pumps

• Large usage of energy inefficient pumps in agricultural sector has

created a potential replacement market for improved technology

offerings. The replacement market is expected to be supported by

proposed government initiatives driven by Ministry of Power

• The energy efficient pumps are finding favor in new residential and

commercial projects

1. High degree of price sensitivity of the market

• High level of fragmentation in the Indian market, with a large

presence of unorganized, small-scale units has created a price

sensitive market, as these players are able to offer substantial

differences in price in comparison to large manufacturers

2. Inefficient allocation of subsidies obstructing introduction of newer

technologies

• Subsidies in the power supply offered to the agriculture sector (that

accounts for 30% power supply) is hindering the faster growth of

energy efficient pumps, as the farmers do not see any value in

purchasing costlier, energy-efficient pumps and rely on the cheap,

inefficient pumps

3. Availability of low-cost manufacturers / suppliers

• Revenues of foreign players are lowered by the presence of

domestic manufacturers, that provide low cost solutions while

replicating the desig of these large players. A number of

unorganized units provide cheap spare parts reducing replacement

market revenues for the large players

1.6 Market restraints:

9

The building services sector, with 17 percent revenue share, ranked second in FY

13. Expected recovery in the real estate segment would yield annual growth rate

of 20 percent in pumps demand for next 4 years.

The water and wastewater sector was the third-highest revenue generator, with

a revenue share of 17 percent in FY 13. Rising demand for drinking water supply

and high level of food production has led to a slew of water and wastewater

treatment plants and large-scale irrigation projects. This sector is expected to

witness a persistent demand for pumps and is expected to grow at a CAGR of 17

percent over next 4 years

Power generation is another key end-user sector, which accounted for 12 percent

of revenue share. Going by the planned power additions in the 12th FYP, this

sector is likely to drive the growth of the total pumps market.

Other key end-user sectors include oil and gas, metals and mining, chemical

process, food and beverage, as well as few others.

1. Growth of infrastructure sector due to focused government initiatives

• XIIth Plan's focus on infrastructure sector and proposed investments to the tune of $1Tn would provide a strong boost to the growth of pumps manufacturers

2. Projected high growth in key end-user sectors like metals and mining, cement, power, water supply and wastewater

3. Increased investments in large-scale irrigation and the oil & gas sector

• Refining capacity is expected to rise by 22% in next 3 years

• Newer irrigation models like “Lift irrigation” projects are expected to boost the growth of the pumps industry

4. Growing dependence on groundwater, particularly in urban settlements and industrial zones

• India is one of the largest consumers of groundwater in the world (~ 230 cub km on an annual basis)

• Falling groundwater levels will boost the growth of deep well submersible pumps as a replacement for the current pumps

• Growing urbanization will necessitate the need of pumps in water supply and wastewater transport

1.5 Market growth drivers:

8

5. Setting up of manufacturing facilities of foreign players

• India has emerged as an attractive destination for manufacturing of

pumps with the entry of foreign players E.g. Grundfos, Flowserve,

etc.

• Besides catering to domestic market, these manufacturing units

meet the growing export demand emanating from neighbouring

markets

6. Increased demand for energy efficient pumps

• Large usage of energy inefficient pumps in agricultural sector has

created a potential replacement market for improved technology

offerings. The replacement market is expected to be supported by

proposed government initiatives driven by Ministry of Power

• The energy efficient pumps are finding favor in new residential and

commercial projects

1. High degree of price sensitivity of the market

• High level of fragmentation in the Indian market, with a large

presence of unorganized, small-scale units has created a price

sensitive market, as these players are able to offer substantial

differences in price in comparison to large manufacturers

2. Inefficient allocation of subsidies obstructing introduction of newer

technologies

• Subsidies in the power supply offered to the agriculture sector (that

accounts for 30% power supply) is hindering the faster growth of

energy efficient pumps, as the farmers do not see any value in

purchasing costlier, energy-efficient pumps and rely on the cheap,

inefficient pumps

3. Availability of low-cost manufacturers / suppliers

• Revenues of foreign players are lowered by the presence of

domestic manufacturers, that provide low cost solutions while

replicating the desig of these large players. A number of

unorganized units provide cheap spare parts reducing replacement

market revenues for the large players


9

1.7 Competitive environment:

Key suppliers of centrifugal pumps are - Kirloskar Brothers Ltd (KBL), KSB,

Crompton Greaves(CG), AquaSub Engineering, CRI, Grundfos, Flowmore,

Mather&Platt, Sulzer, Sharp pumps, Flowserve, ITT,Suguna, and Jyoti

Company End-use sector presence

Kirloskar Brothers Ltd (KBL) Water and wastewater, power generation, buildingservices, as well as oil and gas

CRI Pumps Agriculture and building services

Crompton Greaves Agriculture and building services

KSB Power generation, water and wastewater, buildingservices, and chemical process

AquaSub Engineering Building services and agriculture

Sharp Group Building services and agriculture(includes brands such as Ventura, Fisher, and Point)

Grundfos Building services, municipal water supply, and process industries

Mather & Platt (M&P) Power generation, municipal water supply, irrigation, (part of WILO Group) and chemical process

Flowmore Irrigation, water supply boards, wastewater treatmentplants, power generation, chemical process

Flowserve Oil and gas, chemical process, power generation, and pharmaceuticals

WPIL Power plants, irrigation, water and wastewater, as well as metals and mining

Sulzer Oil and gas, petrochemicals, chemical process, power generation, as well as pulp and paper

Jyoti Ltd Power generation, irrigation, municipal water supply, as well as navy and marine

Shakti Pumps Agriculture and building services

Key players of positive displacement pumps are: Colfax Corporation, SPX

Corporation, Seepex India Pvt Ltd, Alfa Laval Corporation, Dover Corporation,

Ingersoll Rand Corporation, NETZSCH, and Roto Pumps

10

1.8 Likely scenario of Pumps market over next five years:

11

Minimal technological advancements; low R&D investment

Reduction in profit margins due to increasing raw material prices and operation in a price sensitive market

Competition from low-cost Chinese Imports

Growing customer demand for cost-effective lifecycle solutions necessitates integrated solutions (motors, seals, valves, drives, after-sales services, technical support) from pump manufacturers

Some degree of consolidation of the market

1

2

3

4

5


Key suppliers of centrifugal pumps are - Kirloskar Brothers Ltd (KBL), KSB,

Crompton Greaves(CG), AquaSub Engineering, CRI, Grundfos, Flowmore,

Mather&Platt, Sulzer, Sharp pumps, Flowserve, ITT,Suguna, and Jyoti

Company End-use sector presence

Kirloskar Brothers Ltd (KBL) Water and wastewater, power generation, buildingservices, as well as oil and gas

CRI Pumps Agriculture and building services

Crompton Greaves Agriculture and building services

KSB Power generation, water and wastewater, buildingservices, and chemical process

AquaSub Engineering Building services and agriculture

Sharp Group Building services and agriculture(includes brands such as Ventura, Fisher, and Point)

Grundfos Building services, municipal water supply, and process industries

Mather & Platt (M&P) Power generation, municipal water supply, irrigation, (part of WILO Group) and chemical process

Flowmore Irrigation, water supply boards, wastewater treatmentplants, power generation, chemical process

Flowserve Oil and gas, chemical process, power generation, and pharmaceuticals

WPIL Power plants, irrigation, water and wastewater, as well as metals and mining

Sulzer Oil and gas, petrochemicals, chemical process, power generation, as well as pulp and paper

Jyoti Ltd Power generation, irrigation, municipal water supply, as well as navy and marine

Shakti Pumps Agriculture and building services

Key players of positive displacement pumps are: Colfax Corporation, SPX

Corporation, Seepex India Pvt Ltd, Alfa Laval Corporation, Dover Corporation,

Ingersoll Rand Corporation, NETZSCH, and Roto Pumps

10

1.8 Likely scenario of Pumps market over next five years:

11

Minimal technological advancements; low R&D investment

Reduction in profit margins due to increasing raw material prices and operation in a price sensitive market

Competition from low-cost Chinese Imports

Growing customer demand for cost-effective lifecycle solutions necessitates integrated solutions (motors, seals, valves, drives, after-sales services, technical support) from pump manufacturers

Some degree of consolidation of the market

1

2

3

4

5

Indian industrial valves market 2

Indian industrial valves market 2

2.1 Overview:


The Indian Industrial Valve market is highly fragmented and is continuing to be an

unorganized sector with about 40.0 percent of Tier III companies not part of the

tax net, thus decreasing the profit margin and valuation of the market. In FY13

the Industrial valves market was approximately 2.5 million units which amounted

to Rs.4,460Crs. End-user companies in India prefer importing large size valves

for critical applications.Both domestic and multinational industrial valve

manufacturers are currently focusing on expanding their manufacturing

capacities in India to gain market share.

Indian industrial valvles market is in the growth phase and the revenue growth is

fueled by the demand from power and oil & gas sector. The market witnessed

the growth of 7.5 percent in FY13. The overall market is expected to grow at 8.5

percent over next five years by value and 6.5 percent by volume. Increasing

recognition of Indian valve manufacturers in the international markets has

opened doors for the export market. Demand from power and oil and gas

industries drives the Industrial valves market in India throughout the forecast

period. Significantly higher investments lined up in power generation sector, city

gas distribution (CGD) projects, pipeline projects and refining projects are some

of the growth drivers.

Indian industrial valves market2

Figure 6: Total industrial valves market (FY13)

0

1

2

3

4

0

2000

4000

6000

8000

FY13 FY14 FY15 FY16 FY17

Un

its

(mil

lio

n)

Rs.

Cr

Value Volume

14

Ball, 37.5%

Butterfly, 16.5%

Plug, 4.8%

Gate, 29.4%

Diaphragm, 4.7%

Knige Gate, 3.3%

Globe, 3.8%


Industrial valves market is divided into two segments - On-Off valves and control

valves.

On-Off valves accounts for 98 percent of the valves market by volume and 80

percent by. On-off valves market is further segmented into seven types of

valves. About 90.0 percent of on-off valve revenue is from project, while 10.0

percent of revenue is from replacement, similarly 88.0 percent of the volume is

from project, while 12.0 percent is from replacement.

Butterfly, 30.9%

Plug, 5.9%

Gate, 30.9%

Ball, 24.4%

Globe, 4.4%

Knige Gate,1.4%

Diaphragm, 2.1%

Figure 8: On-off Valves: Split of Volume

by Product Type (FY13)

Figure 7: On-off Valves: Split of Revenue


Control valves contribute around 20 percent of the total industrial valves revenue

and 2 percent of the total volume throughout the forecast period. In FY13,

control valves generated a revenue of about Rs. 899Cr with a YoY growth rate of

7percent and is forecast to reach INR 1,332crore by FY17 with a CAGR of 8.0

percent. Control valves with sizes up to 6 inches contribute about 60.0 percent

of the total volume in the Indian Control vales market.About 87.0 percent of

control valves revenue is from projects and 13.0 percent from replacements,

while 85.0 percent of the volume is contributed by projects and 15.0 percent

through replacements.

15

2.1 Overview:


The Indian Industrial Valve market is highly fragmented and is continuing to be an

unorganized sector with about 40.0 percent of Tier III companies not part of the

tax net, thus decreasing the profit margin and valuation of the market. In FY13

the Industrial valves market was approximately 2.5 million units which amounted

to Rs.4,460Crs. End-user companies in India prefer importing large size valves

for critical applications.Both domestic and multinational industrial valve

manufacturers are currently focusing on expanding their manufacturing

capacities in India to gain market share.

Indian industrial valvles market is in the growth phase and the revenue growth is

fueled by the demand from power and oil & gas sector. The market witnessed

the growth of 7.5 percent in FY13. The overall market is expected to grow at 8.5

percent over next five years by value and 6.5 percent by volume. Increasing

recognition of Indian valve manufacturers in the international markets has

opened doors for the export market. Demand from power and oil and gas

industries drives the Industrial valves market in India throughout the forecast

period. Significantly higher investments lined up in power generation sector, city

gas distribution (CGD) projects, pipeline projects and refining projects are some

of the growth drivers.

Indian industrial valves market2

Figure 6: Total industrial valves market (FY13)

0

1

2

3

4

0

2000

4000

6000

8000


Un

its

(mil

lio

n)

Rs.

Cr

Value Volume

14

Ball, 37.5%

Butterfly, 16.5%

Plug, 4.8%

Gate, 29.4%

Diaphragm, 4.7%

Knige Gate, 3.3%

Globe, 3.8%


Industrial valves market is divided into two segments - On-Off valves and control

valves.

On-Off valves accounts for 98 percent of the valves market by volume and 80

percent by. On-off valves market is further segmented into seven types of

valves. About 90.0 percent of on-off valve revenue is from project, while 10.0

percent of revenue is from replacement, similarly 88.0 percent of the volume is

from project, while 12.0 percent is from replacement.

Butterfly, 30.9%

Plug, 5.9%

Gate, 30.9%

Ball, 24.4%

Globe, 4.4%

Knige Gate,1.4%

Diaphragm, 2.1%

Figure 8: On-off Valves: Split of Volume


Figure 7: On-off Valves: Split of Revenue


Control valves contribute around 20 percent of the total industrial valves revenue

and 2 percent of the total volume throughout the forecast period. In FY13,

control valves generated a revenue of about Rs. 899Cr with a YoY growth rate of

7percent and is forecast to reach INR 1,332crore by FY17 with a CAGR of 8.0

percent. Control valves with sizes up to 6 inches contribute about 60.0 percent

of the total volume in the Indian Control vales market.About 87.0 percent of

control valves revenue is from projects and 13.0 percent from replacements,

while 85.0 percent of the volume is contributed by projects and 15.0 percent

through replacements.

15


Oil and gas followed by power, petrochemicals, chemicals, and fertilizers (PCF)

contributed to around 55.0 percent of the total Industrial valves revenue in FY13.

These segments are expected to sustain their high growth rates. Exploration and

Production (E&P) investments in the next ten years will drive the market for oil

and gas equipment and services.Twelfth five year plan projects and completion

of spill over projects from eleventh five year plan by FY14 is a significant

contributor.India's emergence as a refining hub of Asia and the geographic

advantage are key factors driving growth in the refining sector, which would drive

the growth of Industrial valves market.With the adherence to EURO norms and

with several cities mandating EURO 4 or 3, there is a still a potential for

investments focused on refinery up-gradation.

O&G midstream,

10.8%

O&G upstream,

10.5%Others, 23.8%

PCF, 14.3%

O&G downstream,

26.1%

Power, 14.6%

Figure 11: Break-up of industrial valves demand by end-use segment

16

Another key factor that is expected to drive the valves market in India is the need

to improve the refining margins by enhancing the ability to process various low

cost crude more efficiently.The power sector's contribution to Industrial valves

revenue is expected to grow at a CAGR of 10 percent from FY13 to FY17 due to

the introduction of 100 percent FDI in all power projects.

There are more than 350 companies operating in Indian industrial valves market.

Audco India Limited, Tyco, Virgo Engineers Limited, BDK Weir, Emerson Process

Management, MIL, NSSL, Microfinish are amongst the key players in the

market. Top 10 players contribute to approximately 45.0percent of the market. As

far as the distribution structure is concerned, 30.0 percentis by direct sales; 65.0

percent are sold by OEMs/LSTKs while remaining 5.0 percentare sold through by

distributors/agents. On-off valves are the major revenue contributor in the Indian

industrial valves market; companies with a strong foothold in this segment

generate more revenue than control valve manufacturers.


Figure 12: Market share of industrial valves manufacturers (FY13)

AIL with its strong distributor/dealer network caters to OTS/commodity valve

demand and has the backing of Larsen &Tubro Limited (L&T) while bidding for

projects. Tyco with its portfolio of trusted brands manages to serve the needs of

end users in flow management and gains the second-largest market share. Virgo

Engineers Limited has always been a reliable supplier of valves for critical

applications in the oil and gas industry with the third-largest market share.

17

Choke, 0.9%

Butterfly, 14.2%

Ball, 5.5%

Diaphragm, 0.9%

Angle 3.0%

Globe 75.6%

Figure 9: Control Volves : Split of Volume by Product Type (FY13)

Choke, 5.6%

Butterfly, 14.5%

Ball, 6.1%Diaphrag

m, 0.8%Angle 7.5% Globe

65.5%


Audco India Ltd.

Tyco

Virgo engineers

BDK weir

Emerson process management

NSSL

Microfinish

MIL

IL

Others

12.5%

7.0%

6.4%

3.7%

3.0%

2.9%

2.6%

2.8%

3.3%

55.8%


Oil and gas followed by power, petrochemicals, chemicals, and fertilizers (PCF)

contributed to around 55.0 percent of the total Industrial valves revenue in FY13.

These segments are expected to sustain their high growth rates. Exploration and

Production (E&P) investments in the next ten years will drive the market for oil

and gas equipment and services.Twelfth five year plan projects and completion

of spill over projects from eleventh five year plan by FY14 is a significant

contributor.India's emergence as a refining hub of Asia and the geographic

advantage are key factors driving growth in the refining sector, which would drive

the growth of Industrial valves market.With the adherence to EURO norms and

with several cities mandating EURO 4 or 3, there is a still a potential for

investments focused on refinery up-gradation.

O&G midstream,

10.8%

O&G upstream,

10.5%Others, 23.8%

PCF, 14.3%

O&G downstream,

26.1%

Power, 14.6%

Figure 11: Break-up of industrial valves demand by end-use segment

16

Another key factor that is expected to drive the valves market in India is the need

to improve the refining margins by enhancing the ability to process various low

cost crude more efficiently.The power sector's contribution to Industrial valves

revenue is expected to grow at a CAGR of 10 percent from FY13 to FY17 due to

the introduction of 100 percent FDI in all power projects.

There are more than 350 companies operating in Indian industrial valves market.

Audco India Limited, Tyco, Virgo Engineers Limited, BDK Weir, Emerson Process

Management, MIL, NSSL, Microfinish are amongst the key players in the

market. Top 10 players contribute to approximately 45.0percent of the market. As

far as the distribution structure is concerned, 30.0 percentis by direct sales; 65.0

percent are sold by OEMs/LSTKs while remaining 5.0 percentare sold through by

distributors/agents. On-off valves are the major revenue contributor in the Indian

industrial valves market; companies with a strong foothold in this segment

generate more revenue than control valve manufacturers.


Figure 12: Market share of industrial valves manufacturers (FY13)

AIL with its strong distributor/dealer network caters to OTS/commodity valve

demand and has the backing of Larsen &Tubro Limited (L&T) while bidding for

projects. Tyco with its portfolio of trusted brands manages to serve the needs of

end users in flow management and gains the second-largest market share. Virgo

Engineers Limited has always been a reliable supplier of valves for critical

applications in the oil and gas industry with the third-largest market share.

17

Choke, 0.9%

Butterfly, 14.2%

Ball, 5.5%

Diaphragm, 0.9%

Angle 3.0%

Globe 75.6%


Choke, 5.6%

Butterfly, 14.5%

Ball, 6.1%Diaphrag

m, 0.8%Angle 7.5% Globe

65.5%


Audco India Ltd.

Tyco

Virgo engineers

BDK weir

Emerson process management

NSSL

Microfinish

MIL

IL

Others

12.5%

7.0%

6.4%

3.7%

3.0%

2.9%

2.6%

2.8%

3.3%

55.8%

2.6 Market drivers:


1. High growth in the Pipelines Sector, especially in Gas Pipelines: As a

thumb of rule, valves are regularly placed at a less than 10% of pipeline

distance for easy and efficient control of gas.IOCL is planning to increase its

natural gas pipeline network from 10,900 km to 15,000 km by 2015 with an

investment of $1.5 bn.Various incentives linked with investments made by

companies operating across natural gas or petroleum lines are expected to

boost the growth of Industrial valves.

2. Widening Demand Supply Gap: The spillovers from the 11th plan and the

expected new capacity addition will drive opportunities for valves in the short

term. The Restructured Accelerated Power Development and Reforms

Programme (R-APDRP) and the Rajiv Gandhi GrameenVidyutikaranYojana

(RGGVY) along with the twelfth 5-year plan will impact key investments.

3. Process Plant Modernization Focused on Efficiency Improvements: In the

process industry, industrial valve is one of the critical components which

determines the plant efficiency. The strive for efficiency improvements Is

expected to drive the demand for actuated valves in new installations as well

as demand for retrofitting manual valves with actuation in the brownfield

installations

4. Private Sector Participation Provides Impetus for Growth: Favourable

policy towards private sector and foreign direct investments has been a major

boost to the sectors such as power and oil and gas. This will have direct impact

on demand of industrial valves.

5. Increasing Investment in City Gas Distribution (CGD) Projects in India:

CGD is expected to grow at a rate of 28.8 percent during 12th FYP and is

expected to reach 45-46 MMSCMD by 2017. The impact of this driver would be

maximum on the growth rate of industrial valves

1. Increasing Competition: Due to increased competition, the profit marginsare

getting reduced and market share is diluted. Presence of a large number of

unorganized manufacturers hinders the entry of national and international valve

suppliers.

2. Increasing raw material cost and lack of innovation: Raw material

constitutes as 60% of the product cost. R&D spends in Indian valves industry

stands to be mere 2% of the revenue. These issues restrain the ability of valve

manufacturers to meet the market demand at the right time.

18

3. Large sized complex valves are mostly imported: low research and

development spend, lack of sophisticated manufacturing set-up and

success stories demonstrating the credibility of local organizations in

catering to such critical applications has led to import of complex and

large sized valves.

4. Choke Valves or Christmas Tree Valves Continue to be Difficult to

Address: Upstream O&G sector is dependent on exploration and

production (E&P) equipment suppliers such as National Oil well Varco

(NOV), and BHEL to address their need for choke valves or Christmas tree

valves. The ability of other Indian valve manufacturers to supply API choke

valves of larger size is limited because of the stringent norms, frequency

of procurement and procurement procedures followed by oil and gas

upstream sector. The substantial time and effort required for addressing

these requirements are considered as deterrents by several valve

suppliers.

2.8 Likely scenario of industrial valves market in next five years:

19

O&G sector demand: Players with ability to manufacture customized valves would be in demand Ball valves demand in this sector will increase

Indian customers are increasingly looking for best suitable products to control process efficiency This will push the manufactures to cater to demand of both on-off and control valves

On-off valve will witness heavy competition with many smal valve manufacturers entering the market, thus reducing profit margin and decreasing market valuation.

1

2

3

2.6 Market drivers:


1. High growth in the Pipelines Sector, especially in Gas Pipelines: As a

thumb of rule, valves are regularly placed at a less than 10% of pipeline

distance for easy and efficient control of gas.IOCL is planning to increase its

natural gas pipeline network from 10,900 km to 15,000 km by 2015 with an

investment of $1.5 bn.Various incentives linked with investments made by

companies operating across natural gas or petroleum lines are expected to

boost the growth of Industrial valves.

2. Widening Demand Supply Gap: The spillovers from the 11th plan and the

expected new capacity addition will drive opportunities for valves in the short

term. The Restructured Accelerated Power Development and Reforms

Programme (R-APDRP) and the Rajiv Gandhi GrameenVidyutikaranYojana

(RGGVY) along with the twelfth 5-year plan will impact key investments.

3. Process Plant Modernization Focused on Efficiency Improvements: In the

process industry, industrial valve is one of the critical components which

determines the plant efficiency. The strive for efficiency improvements Is

expected to drive the demand for actuated valves in new installations as well

as demand for retrofitting manual valves with actuation in the brownfield

installations

4. Private Sector Participation Provides Impetus for Growth: Favourable

policy towards private sector and foreign direct investments has been a major

boost to the sectors such as power and oil and gas. This will have direct impact

on demand of industrial valves.

5. Increasing Investment in City Gas Distribution (CGD) Projects in India:

CGD is expected to grow at a rate of 28.8 percent during 12th FYP and is

expected to reach 45-46 MMSCMD by 2017. The impact of this driver would be

maximum on the growth rate of industrial valves

1. Increasing Competition: Due to increased competition, the profit marginsare

getting reduced and market share is diluted. Presence of a large number of

unorganized manufacturers hinders the entry of national and international valve

suppliers.

2. Increasing raw material cost and lack of innovation: Raw material

constitutes as 60% of the product cost. R&D spends in Indian valves industry

stands to be mere 2% of the revenue. These issues restrain the ability of valve

manufacturers to meet the market demand at the right time.

18

3. Large sized complex valves are mostly imported: low research and

development spend, lack of sophisticated manufacturing set-up and

success stories demonstrating the credibility of local organizations in

catering to such critical applications has led to import of complex and

large sized valves.

4. Choke Valves or Christmas Tree Valves Continue to be Difficult to

Address: Upstream O&G sector is dependent on exploration and

production (E&P) equipment suppliers such as National Oil well Varco

(NOV), and BHEL to address their need for choke valves or Christmas tree

valves. The ability of other Indian valve manufacturers to supply API choke

valves of larger size is limited because of the stringent norms, frequency

of procurement and procurement procedures followed by oil and gas

upstream sector. The substantial time and effort required for addressing

these requirements are considered as deterrents by several valve

suppliers.

2.8 Likely scenario of industrial valves market in next five years:

19

O&G sector demand: Players with ability to manufacture customized valves would be in demand Ball valves demand in this sector will increase

Indian customers are increasingly looking for best suitable products to control process efficiency This will push the manufactures to cater to demand of both on-off and control valves

On-off valve will witness heavy competition with many smal valve manufacturers entering the market, thus reducing profit margin and decreasing market valuation.

1

2

3

Process plant equipment: 3

Process plant equipment: 3

3.1 Overview:


Major process plant machineries which include tanks, pressure vessels,

evaporators, stirrers, heat exchangers, towers & columns, crystallizer, furnace,

etc. are used in energy sector, gas, oil, refinery, chemical & petrochemical,

fertilizer, paper & pulp, sugar, cement, dairy industry, etc. There are over 200

units engaged in the manufacturer of process plant machinery in the country out

of which 65% are small & medium manufacturers.This sector provides

employment to 128,000 persons directly and 240,000 persons indirectly.

Estimated size of Process Plant Machinery sector in India is Rs. 22,244 Cr in

FY13. Process Plant machinery sector has grown with a CAGR of 12.5 % in last

five years. Exports to the tune of Rs.4,510Cr have been realized for major

equipment covering Fertilizers, Refinery, Petrochemicals, Oil and gas sectors etc.

and growing at a CAGR of 18.3%. Imports stood at Rs.2,100Cr during FY13 and

growing at a CAGR of 16.5%.

Process plant equipment:3

Figure 13: Projected production of process plant equipment in India

22

The Process plants have gone up in sizes. Large facilities have been developed

along our coastal areas. Technology infusion from sectors like Defence,

Aerospace and Nuclear, into the Process Plant equipment industry, has helped

our industry leapfrog in technology utilization and quality control. The industry

today is equipped with state of the art processes to engineer and fabricate

complexprocess equipment across different materials of construction. The plant

sizes of these companies have also increased and at times are comparable or

even larger than global plant companies.

Indian manufacturers are no longer confined to fabrication alone and have a

strong presence, across the entire value chain. They are catering to the needs of

the customers, from design and engineering at the back-end to erection and

commissioning at the front end and are competing with global majors for

Engineering, Procurement and Commissioning (EPC) contracts.

However what domestic industry is lacking is the know-how on process

technology, owing to which, we are dependent on Overseas process Licensors.

However China, on the other hand has attempted to get the knowhow on

process technology, by setting up research institutes and labs, and acquiring such

expertise from other regions.

• Large projects funded on limited recourse basis /Indian Export Credit

Agency is not mature to take up large projects.

• Lack of focused/ mass manufacturing mainly due to taxation related

paperwork which affects the manufacture of components in the value

chain

• Lack of network development

• Lack of Mass manufacturing

• Lack of Know-how on Process technology; Dependant on overseas

process licensors

• Import of second hand machinery: As per the present policy, old

machinery can be imported without any restriction of age, resulting into

huge import of second hand machinery into India. Old machinery is also

being imported to various SEZs without payment of tax and duties. This

machinery is refurbished later for use. This is adversely affecting the

domestic capital goods industry


23

2224424913

27902

31250

35000


12%

3.1 Overview:


Major process plant machineries which include tanks, pressure vessels,

evaporators, stirrers, heat exchangers, towers & columns, crystallizer, furnace,

etc. are used in energy sector, gas, oil, refinery, chemical & petrochemical,

fertilizer, paper & pulp, sugar, cement, dairy industry, etc. There are over 200

units engaged in the manufacturer of process plant machinery in the country out

of which 65% are small & medium manufacturers.This sector provides

employment to 128,000 persons directly and 240,000 persons indirectly.

Estimated size of Process Plant Machinery sector in India is Rs. 22,244 Cr in

FY13. Process Plant machinery sector has grown with a CAGR of 12.5 % in last

five years. Exports to the tune of Rs.4,510Cr have been realized for major

equipment covering Fertilizers, Refinery, Petrochemicals, Oil and gas sectors etc.

and growing at a CAGR of 18.3%. Imports stood at Rs.2,100Cr during FY13 and

growing at a CAGR of 16.5%.

Process plant equipment:3

Figure 13: Projected production of process plant equipment in India

22

The Process plants have gone up in sizes. Large facilities have been developed

along our coastal areas. Technology infusion from sectors like Defence,

Aerospace and Nuclear, into the Process Plant equipment industry, has helped

our industry leapfrog in technology utilization and quality control. The industry

today is equipped with state of the art processes to engineer and fabricate

complexprocess equipment across different materials of construction. The plant

sizes of these companies have also increased and at times are comparable or

even larger than global plant companies.

Indian manufacturers are no longer confined to fabrication alone and have a

strong presence, across the entire value chain. They are catering to the needs of

the customers, from design and engineering at the back-end to erection and

commissioning at the front end and are competing with global majors for

Engineering, Procurement and Commissioning (EPC) contracts.

However what domestic industry is lacking is the know-how on process

technology, owing to which, we are dependent on Overseas process Licensors.

However China, on the other hand has attempted to get the knowhow on

process technology, by setting up research institutes and labs, and acquiring such

expertise from other regions.

• Large projects funded on limited recourse basis /Indian Export Credit

Agency is not mature to take up large projects.

• Lack of focused/ mass manufacturing mainly due to taxation related

paperwork which affects the manufacture of components in the value

chain

• Lack of network development

• Lack of Mass manufacturing

• Lack of Know-how on Process technology; Dependant on overseas

process licensors

• Import of second hand machinery: As per the present policy, old

machinery can be imported without any restriction of age, resulting into

huge import of second hand machinery into India. Old machinery is also

being imported to various SEZs without payment of tax and duties. This

machinery is refurbished later for use. This is adversely affecting the

domestic capital goods industry


23

2224424913

27902

31250

35000


12%

• Export Credit Agency (ECA) funding: There is a tendency for mega

projects to be funded on limited re-course basis, supported by funding

from ECAs.

• Logistics: Infrastructure constraints make it risky to move large size

equipment. Need for global competitiveness demands setting up of

process plant of large capacity. This necessitates large size equipment.

Unfortunately it takes far less time to import goods from Middle East &

Europe than to move the equipment over 200 km on Indian roads.

3.4 Likely scenario of process plant equipment market in next five years:

24

About Tata Strategic

The growth in the chemical, food, pharmaceutical and power sectors in India is bound to put a good spin into the process equipment industry

The major thrust of research and development in the agri-food sector has been on the primary processing of food rather on developing equipment. This would lead to increase in imports

The multinational consumer products' manufacturers are increasing their investments in emerging markets like India. This is expected to drive demand for manufacturing of packaging equipment in India.

1

2

3

• Export Credit Agency (ECA) funding: There is a tendency for mega

projects to be funded on limited re-course basis, supported by funding

from ECAs.

• Logistics: Infrastructure constraints make it risky to move large size

equipment. Need for global competitiveness demands setting up of

process plant of large capacity. This necessitates large size equipment.

Unfortunately it takes far less time to import goods from Middle East &

Europe than to move the equipment over 200 km on Indian roads.

3.4 Likely scenario of process plant equipment market in next five years:

24

About Tata Strategic

The growth in the chemical, food, pharmaceutical and power sectors in India is bound to put a good spin into the process equipment industry

The major thrust of research and development in the agri-food sector has been on the primary processing of food rather on developing equipment. This would lead to increase in imports

The multinational consumer products' manufacturers are increasing their investments in emerging markets like India. This is expected to drive demand for manufacturing of packaging equipment in India.

1

2

3

Founded in 1991 as a division of Tata Industries Ltd, Tata Strategic Management

Group is the largest Indian own management consulting firm. It has a 70

member strong consulting team supported by a panel of domain experts. Tata

Strategic has undertaken 500+ engagements, with over 100 clients, across

countries and sectors.

It has a growing client base outside India with increasing presence outside the

Tata Group. A majority of revenues now come from outside the group and more

than 20% revenues from clients outside India.

Tata Strategic offers a comprehensive range of solutions covering Direction

Setting, Driving Strategic Initiatives and Implementation Support

About Tata Strategic:

26

Our Offerings

Report co-authored by Manish Panchal, ShripadRanade and Vijay Khairnar

27

•

•

•

•

•

Vision

Market insights

Growth Strategy/Business

Rural Strategy

Digital Strategy

•

•

•

•

•

India Entry

Alliance & Acquisition Planning

Strategic due dilligence

Scenario Planning

Manufacturing Strtegy

•

•

•

•

•

•

•

Organization Structure

Corporate Center Design

Roles & Decision rules

Performance Management

Capability Assessment

Talent Management

Delegation & MIS

•

•

•

•

•

Revenue Enhancement

Product Innovation

Market Share-Rural/Urban

Go to Market

Dealer Effectiveness

•

•

•

•

•

•

•

Supply Chain Optimization

Throughput enhancement

Superior Fulfillment

Project Excellence

Procurement Transformation

Strategic Cost Reduction

Vendor Compliance

Strategy

Set Direction

Drive Strategic Initiatives

Support Implementation

Operations Marketing & SalesOrganization Effcetiveness

•

•

•

Implementation Plan

Program Management

Refinements/Course Corrections

Implementation Support

Founded in 1991 as a division of Tata Industries Ltd, Tata Strategic Management

Group is the largest Indian own management consulting firm. It has a 70

member strong consulting team supported by a panel of domain experts. Tata

Strategic has undertaken 500+ engagements, with over 100 clients, across

countries and sectors.

It has a growing client base outside India with increasing presence outside the

Tata Group. A majority of revenues now come from outside the group and more

than 20% revenues from clients outside India.

Tata Strategic offers a comprehensive range of solutions covering Direction

Setting, Driving Strategic Initiatives and Implementation Support

About Tata Strategic:

26

Our Offerings

Report co-authored by Manish Panchal, ShripadRanade and Vijay Khairnar

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Market insights

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India Entry

Alliance & Acquisition Planning

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Support Implementation

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(This article was published in Manufacturing Today May 2012 issue)

Pumping up the DemandOverview of the Indian Pumps Industry

The Indian pumps industry, is the throes of an uncertain present but the key to

grow, despite the tough times, is to provide integrated solutions that help

enhance efficiencies, promote innovation and optimize lifecycle ownership

costs of customers, say - Atish Mukhopadhyaya (Principal – Delivery

Excellence) & Anirudh Reddy (Consultant – Infrastructure & EPC Practice)

of Tata Strategic Management Group.

Introduction

State of Market

India has a strong base of pump manufacturing with both Indian and international

players. The planned investments in sectors like power, water, oil & gas augur

well for high growth for this sector. Domestic sales are expected to grow at 16-

18% pa while exports are projected to grow at ~10-12% pa in the next few

years.

Indian pumps market is fairly mature with an estimated annual production of ~2

million units (of various types) with nearly 95% of domestic consumption being

met through local production facilities.

The pumps market is broadly classified into two categories:

1) Industrial Pumps – catering to the infrastructure sectors

2) Agriculture / Domestic Pumps

There are a number of international players like KSB Pumps, Flowserve, Aquasub

etc. which have manufacturing bases in India. Moreover the ability of low cost

manufacturing and domestic demand has created an attractive environment for

most international players. These companies have also introduced latest

technologies in energy efficiency and high performance in the Indian market.

28

Segmentation

Centrifugal pumps dominate the Indian market with ~ 95% of total sales. Within

centrifugal pumps, single-stage radial flow pumps and submersible pumps are

market leaders. Positive displacement pumps account for the remaining 5% of

market revenues.

Figure 14: Segmentation of Pumps Industry

Competitive Landscape

In India, there are over 800 pump manufacturers. There are a few large players

(Indian and MNCs with revenues above INR 100 Cr), and plenty of Small &

Medium Enterprise (SME) players. Some of the large players, like Kirloskar and

FlowMore have expanded into the EPC space and are providing turnkey

solutions.

Figure 15 : Key Players (with focus sectors of operation)

29

Types of Centrifugal Pumps

Key Sector - Imigation, Domestic, Power generatio, Water & Wastewater

Type of Positive Displacement Pumps

Key Sector - Oil & gas, Power generation, Food & beverages

Market Share by Domestic Revenues (FY10)

Single-Stage Radial

Submersible

Multi-stage Radial

Axial & Mixed

39%

31%

18%

12%


Rotary

Reciprocating

Peristaltic

73%

24%

3%

Water and wastewater, Power Generation, oil & gas

Irrigation & Domestic

Power generation, building services

SME players predominantly focus on agriculture sector

Oil & gas, Power Generation Food & beverages

Colfax India

KSB Pumps

CRI Pumps

Kirloskar

Centrifugal Pumps

Positive Displacement

Pumps

(This article was published in Manufacturing Today May 2012 issue)

Pumping up the DemandOverview of the Indian Pumps Industry

The Indian pumps industry, is the throes of an uncertain present but the key to

grow, despite the tough times, is to provide integrated solutions that help

enhance efficiencies, promote innovation and optimize lifecycle ownership

costs of customers, say - Atish Mukhopadhyaya (Principal – Delivery

Excellence) & Anirudh Reddy (Consultant – Infrastructure & EPC Practice)

of Tata Strategic Management Group.

Introduction

State of Market

India has a strong base of pump manufacturing with both Indian and international

players. The planned investments in sectors like power, water, oil & gas augur

well for high growth for this sector. Domestic sales are expected to grow at 16-

18% pa while exports are projected to grow at ~10-12% pa in the next few

years.

Indian pumps market is fairly mature with an estimated annual production of ~2

million units (of various types) with nearly 95% of domestic consumption being

met through local production facilities.

The pumps market is broadly classified into two categories:

1) Industrial Pumps – catering to the infrastructure sectors

2) Agriculture / Domestic Pumps

There are a number of international players like KSB Pumps, Flowserve, Aquasub

etc. which have manufacturing bases in India. Moreover the ability of low cost

manufacturing and domestic demand has created an attractive environment for

most international players. These companies have also introduced latest

technologies in energy efficiency and high performance in the Indian market.

28

Segmentation

Centrifugal pumps dominate the Indian market with ~ 95% of total sales. Within

centrifugal pumps, single-stage radial flow pumps and submersible pumps are

market leaders. Positive displacement pumps account for the remaining 5% of

market revenues.

Figure 14: Segmentation of Pumps Industry

Competitive Landscape

In India, there are over 800 pump manufacturers. There are a few large players

(Indian and MNCs with revenues above INR 100 Cr), and plenty of Small &

Medium Enterprise (SME) players. Some of the large players, like Kirloskar and

FlowMore have expanded into the EPC space and are providing turnkey

solutions.

Figure 15 : Key Players (with focus sectors of operation)

29

Types of Centrifugal Pumps

Key Sector - Imigation, Domestic, Power generatio, Water & Wastewater

Type of Positive Displacement Pumps

Key Sector - Oil & gas, Power generation, Food & beverages


Single-Stage Radial

Submersible

Multi-stage Radial

Axial & Mixed

39%

31%

18%

12%


Rotary

Reciprocating

Peristaltic

73%

24%

3%

Water and wastewater, Power Generation, oil & gas

Irrigation & Domestic

Power generation, building services

SME players predominantly focus on agriculture sector

Oil & gas, Power Generation Food & beverages

Colfax India

KSB Pumps

CRI Pumps

Kirloskar

Centrifugal Pumps

Positive Displacement

Pumps

The unorganized sector accounts for 60% of sales in agriculture where large

players have a particular disadvantage in targeting the price sensitive market.

Some levels of consolidation could occur among these deeply fragmented

players. It is interesting to note that Coimbatore houses the largest number of

pump manufacturers (Figure 16).

Figure 16: Presence of pump

manufacturing hubs

Figure 17: Forecasts for Domestic revenues

and growth

The pumps market had an estimated 16% pa growth over FY07-11 (for domestic

sales). If the investments in infrastructure sector move as per plan in the coming

years, the market could witness an optimistic growth of ~ 20% pa, while a

slowdown in economy would still result in a reduced y-o-y growth of ~12%

(Figure 17).

Pump manufacturers employ different channels in catering to the end-user

categories.

Industrial Segment (B2B Sales): Key influencing decisions for this segment are

the life-cycle costs and the sales service network (availability of spares and after-

sales service). Sales of these pumps are done either from manufacturers (or

dedicated dealers) or are clubbed with EPC packages. In this market, integrated

service, of providing the entire gamut of products / service offerings has a

distinct competitive advantage.

Agriculture / Domestic Segment (B2C Sales): Small pumps used in agriculture

and low-rise tenements are typically sold through a distributor network. Lowest

Sales Channel

30

price is the single most important factor influencing purchaser decision. The Star

BEE rating (for energy efficiency) also impact customer preferences increasingly.

So despite large players facing fierce price competition in this segment from

local SMEs, energy efficient products delivered through an optimized supply

chain is the key to success.

India exports pumps to nearly 90-100 countries, with countries like USA (~13%)

and Germany (~12%) being the largest destinations. International players, with

Indian presence, have buyback arrangements, i.e. pumps manufactured in their

Indian facilities are sold abroad. The total share of Indian pumps in global exports

is less than 3%. Exports registered a drop in FY10 (YoY drop by 8%) (Fig 18) due

to the recessionary pressures but have since picked up and are estimated to

grow ~10% pa in coming years.

Middle East has emerged as an attractive export destination as low priced Indian

pumpsets have an advantage over their European and American counterparts.

Middle East lacks a domestic manufacturing base ensuring dependence on

imports. Most of the sales occur as part of package of products meant for large

EPC projects. The entry of Indian EPC players in these markets could act as a

catalyst for future exports. Imports account for ~ 5% of the total domestic

consumption in India; USA, China and France are the largest sources. Low-cost

model of the local manufacturers has limited the scale of Chinese imports in

agriculture sector while the lack of an established after-sales service has limited

their expansion in industrial sectors.

Exports / Imports

Figure 18: Trends for exports-imports of

pumps

Figure 19: Projections for growth in

end-use sectors

31

16%

12%

16%

20%

5.835

3.250

10,280

12,250

14,520

FY07 FY11E FY16E

Scenario Analysis for revenue forecast for pumps market in india (FY11-FY16) INR Cr

Source : Industry Reports, Analysis by Tata Strategic

Conservative Current Scenario Optimistic

Export-Import Trends for Pumps (In INR Cr)

2,400

3,2302,850

3,450

1,2751,740 1,590

1,900

FY08 FY09 FY10 FY11

Exports Imports

SOURCE : EXIM DATABASE

1.140

85%

2,110

11th Plan 12th Plan

Water & Supply

Oil & Gas

Power

Irrigation

Source : Planning Commission, Analysis by Tata Strategic

Growth in projected investments in end-use sectors (INR '000Cr)

110125

245

660

1290

390

260170

The unorganized sector accounts for 60% of sales in agriculture where large

players have a particular disadvantage in targeting the price sensitive market.

Some levels of consolidation could occur among these deeply fragmented

players. It is interesting to note that Coimbatore houses the largest number of

pump manufacturers (Figure 16).

Figure 16: Presence of pump

manufacturing hubs

Figure 17: Forecasts for Domestic revenues

and growth

The pumps market had an estimated 16% pa growth over FY07-11 (for domestic

sales). If the investments in infrastructure sector move as per plan in the coming

years, the market could witness an optimistic growth of ~ 20% pa, while a

slowdown in economy would still result in a reduced y-o-y growth of ~12%

(Figure 17).

Pump manufacturers employ different channels in catering to the end-user

categories.

Industrial Segment (B2B Sales): Key influencing decisions for this segment are

the life-cycle costs and the sales service network (availability of spares and after-

sales service). Sales of these pumps are done either from manufacturers (or

dedicated dealers) or are clubbed with EPC packages. In this market, integrated

service, of providing the entire gamut of products / service offerings has a

distinct competitive advantage.

Agriculture / Domestic Segment (B2C Sales): Small pumps used in agriculture

and low-rise tenements are typically sold through a distributor network. Lowest

Sales Channel

30

price is the single most important factor influencing purchaser decision. The Star

BEE rating (for energy efficiency) also impact customer preferences increasingly.

So despite large players facing fierce price competition in this segment from

local SMEs, energy efficient products delivered through an optimized supply

chain is the key to success.

India exports pumps to nearly 90-100 countries, with countries like USA (~13%)

and Germany (~12%) being the largest destinations. International players, with

Indian presence, have buyback arrangements, i.e. pumps manufactured in their

Indian facilities are sold abroad. The total share of Indian pumps in global exports

is less than 3%. Exports registered a drop in FY10 (YoY drop by 8%) (Fig 18) due

to the recessionary pressures but have since picked up and are estimated to

grow ~10% pa in coming years.

Middle East has emerged as an attractive export destination as low priced Indian

pumpsets have an advantage over their European and American counterparts.

Middle East lacks a domestic manufacturing base ensuring dependence on

imports. Most of the sales occur as part of package of products meant for large

EPC projects. The entry of Indian EPC players in these markets could act as a

catalyst for future exports. Imports account for ~ 5% of the total domestic

consumption in India; USA, China and France are the largest sources. Low-cost

model of the local manufacturers has limited the scale of Chinese imports in

agriculture sector while the lack of an established after-sales service has limited

their expansion in industrial sectors.

Exports / Imports

Figure 18: Trends for exports-imports of

pumps

Figure 19: Projections for growth in

end-use sectors

31

16%

12%

16%

20%

5.835

3.250

10,280

12,250

14,520

FY07 FY11E FY16E

Scenario Analysis for revenue forecast for pumps market in india (FY11-FY16) INR Cr

Source : Industry Reports, Analysis by Tata Strategic

Conservative Current Scenario Optimistic

Export-Import Trends for Pumps (In INR Cr)

2,400

3,2302,850

3,450

1,2751,740 1,590

1,900

FY08 FY09 FY10 FY11

Exports Imports

SOURCE : EXIM DATABASE

1.140

85%

2,110

11th Plan 12th Plan

Water & Supply

Oil & Gas

Power

Irrigation

Source : Planning Commission, Analysis by Tata Strategic

Growth in projected investments in end-use sectors (INR '000Cr)

110125

245

660

1290

390

260170

Key Drivers for Growth

Challenges

The pumps industry is projected to record high sales growth on the strength of

the following key drivers:

1) Growth in Infrastructure: Announced investments of $ 1 Tn in

infrastructure sector in 12th Five Year Plan, will boost the demand for

pumps in key end-use sectors (Fig 19)

2) New sources of water: Need for newer water sources (deep water

tables / desalination) will create demand for pumps offering increased

capacity and efficiency

3) Increase in urban density : Growth in (residential /commercial market,

expected at ~ 9-10%pa over next 5-6 years, will increase demand for

pumps

4) Energy Efficient Solutions : Rising costs of power and increasing

awareness about environment will create a demand for energy efficient

pumps

The pumps industry faces several challenges as outlined below:

1) Global Slowdown : Macroeconomic turbulence could negatively impact

infrastructure investments leading to a reduction in demand for pumps

and a pressure to reduce prices for manufacturers

2) Subsidies: Free power to farmers, act as a deterrent to adoption of

energy efficient solutions

3) Margin Pressures: Increases in prices of raw materials like steel have

increased input costs for manufacturers

4) Price Sensitivity: Presence of large number of SMEs offering low-priced

solutions puts pressure on market share growth of large players in the

agriculture sector

5) Low spending on R&D : Ability of SME units to replicate designs offered

by Indian / multi-national firms dampens introduction of new designs

6) Rising / Fluctuating Input Costs: Increase in steel prices has hiked the

input costs for manufacturers, who are unable to pass it on to end-

customers

32

Strategies for the Future

Leading pump players must clearly identify their priority segments, rather than

expend their energies across the entire industry. Large companies face the

critical challenge of having to compete on price while targeting the agriculture

segment. These companies must look at hedging their risks with focus on

growth opportunities in the industrial segment. The pumps sector must

collaborate with infrastructure players to cushion the overall impact of reduced

margins from the end-application points.

Enhancing of market share in the industrial sector will require pump

manufacturers to focus on strengthening all aspects of the value chain, from

customer-centric solutions to service offerings. Some of the strategies that could

be employed are:

1) Becoming a “One stop solution provider” - capable of providing

integrated offerings through diverse range of products and after-sales

service network to quality conscious customers

2) Emphasize on Lifecycle Costs - provide energy efficient solutions,

capable of reducing operating costs

3) Long-term Tie-ups with EPC players – This would allow greater leverage in

guarding against pricing pressures and also provide an entry vehicle into

export markets (as part of EPC packages)

• “Opportunities in

irrigation are limited due

to pricing constraints and

low margins”

• “Long-term tieups with

EPC players could ensure

greater spread of pumps

in select markets”

33

Enhance

Market Share

Industrial Segment

Integrated

Offerings

Lifecycle

Cost

Approach

Tie-ups

with EPC

players

Key Drivers for Growth

Challenges

The pumps industry is projected to record high sales growth on the strength of

the following key drivers:

1) Growth in Infrastructure: Announced investments of $ 1 Tn in

infrastructure sector in 12th Five Year Plan, will boost the demand for

pumps in key end-use sectors (Fig 19)

2) New sources of water: Need for newer water sources (deep water

tables / desalination) will create demand for pumps offering increased

capacity and efficiency

3) Increase in urban density : Growth in (residential /commercial market,

expected at ~ 9-10%pa over next 5-6 years, will increase demand for

pumps

4) Energy Efficient Solutions : Rising costs of power and increasing

awareness about environment will create a demand for energy efficient

pumps

The pumps industry faces several challenges as outlined below:

1) Global Slowdown : Macroeconomic turbulence could negatively impact

infrastructure investments leading to a reduction in demand for pumps

and a pressure to reduce prices for manufacturers

2) Subsidies: Free power to farmers, act as a deterrent to adoption of

energy efficient solutions

3) Margin Pressures: Increases in prices of raw materials like steel have

increased input costs for manufacturers

4) Price Sensitivity: Presence of large number of SMEs offering low-priced

solutions puts pressure on market share growth of large players in the

agriculture sector

5) Low spending on R&D : Ability of SME units to replicate designs offered

by Indian / multi-national firms dampens introduction of new designs

6) Rising / Fluctuating Input Costs: Increase in steel prices has hiked the

input costs for manufacturers, who are unable to pass it on to end-

customers

32

Strategies for the Future

Leading pump players must clearly identify their priority segments, rather than

expend their energies across the entire industry. Large companies face the

critical challenge of having to compete on price while targeting the agriculture

segment. These companies must look at hedging their risks with focus on

growth opportunities in the industrial segment. The pumps sector must

collaborate with infrastructure players to cushion the overall impact of reduced

margins from the end-application points.

Enhancing of market share in the industrial sector will require pump

manufacturers to focus on strengthening all aspects of the value chain, from

customer-centric solutions to service offerings. Some of the strategies that could

be employed are:

1) Becoming a “One stop solution provider” - capable of providing

integrated offerings through diverse range of products and after-sales

service network to quality conscious customers

2) Emphasize on Lifecycle Costs - provide energy efficient solutions,

capable of reducing operating costs

3) Long-term Tie-ups with EPC players – This would allow greater leverage in

guarding against pricing pressures and also provide an entry vehicle into

export markets (as part of EPC packages)

• “Opportunities in

irrigation are limited due

to pricing constraints and

low margins”

• “Long-term tieups with

EPC players could ensure

greater spread of pumps

in select markets”

33

Enhance

Market Share

Industrial Segment

Integrated

Offerings

Lifecycle

Cost

Approach

Tie-ups

with EPC

players

Expansion into rural markets is a difficult proposition. Therefore innovative sales

strategies like creating a sales channel in conjunction with Self-Help Groups or

micro-finance institutions is key to optimizing costs. Rationalizing distribution

channel structure and re-aligning channel incentives is the way forward to

increase access in these difficult markets.

The current mood in the industry alternates between restlessness and optimism

for growth. But the need of the hour is to create partnerships with priority

customers for an integrated sales & service play, while re-aligning the

distribution network for optimizing costs, enhancing service and understanding

customer needs better. The focus should also be on energy efficient products

and innovative route-to-market strategies. These measures will help increase the

latent demand for one-stop-shop services for both institutional and retail

customers, and enable companies to reap the India growth story.

Conclusion

© Tata Strategic Management Group, 2012. No part of it may be circulated or reproduced

for distribution without prior written approval from Tata Strategic Management Group.

34

Expansion into rural markets is a difficult proposition. Therefore innovative sales

strategies like creating a sales channel in conjunction with Self-Help Groups or

micro-finance institutions is key to optimizing costs. Rationalizing distribution

channel structure and re-aligning channel incentives is the way forward to

increase access in these difficult markets.

The current mood in the industry alternates between restlessness and optimism

for growth. But the need of the hour is to create partnerships with priority

customers for an integrated sales & service play, while re-aligning the

distribution network for optimizing costs, enhancing service and understanding

customer needs better. The focus should also be on energy efficient products

and innovative route-to-market strategies. These measures will help increase the

latent demand for one-stop-shop services for both institutional and retail

customers, and enable companies to reap the India growth story.

Conclusion

© Tata Strategic Management Group, 2012. No part of it may be circulated or reproduced

for distribution without prior written approval from Tata Strategic Management Group.

34

Manish Panchal – Practice Head

Chemicals, Logistics and Energy

Mobile : +91 98205 20303

E-mail : [email protected]

Phone : +91 22 6637 6713

Shripad Ranade – Senior Principal Auto and Engineering Mobile : +91 98203 05663E-mail : [email protected] : +91 22 6637 6731

Federation of Indian Chambers of Commerce & Industry

Federation House, Tansen Marg, New Delhi - 110001 (India)

T: +91 11 2348 7315 F: +91 11 2335 9734

W: www.ficci.com

Established in 1927, FICCI is the largest and oldest apex business organisation in India. Its history is closely interwoven with India’s struggle for independence, its industrialization, and its emergence as one of the most rapidly growing global economies. FICCI has contributed to this historical process by encouraging debate, articulating the private sector’s views and influencing policy.

A non-government, not-for-profit organisation, FICCI is the voice of India’s business and industry.

FICCI draws its membership from the corporate sector, both private and public, including SMEs and MNCs; FICCI enjoys an indirect membership of over 2,50,000 companies from various regional chambers of commerce.

FICCI provides a platform for sector specific consensus building and networking and as the first port of call for Indian industry and the international business community.

Our Vision : To be the thought leader for industry, its voice for policy change and its guardian for effective implementation.

Our Mission: To carry forward our initiatives in support of rapid, inclusive and sustainable growth that encompass health, education, livelihood, governance and skill development.

To enhance efficiency and global competitiveness of Indian industry and to expand business opportunities both in domestic and foreign markets through a range of specialised services and global linkages.

TATA Strategic Management Group is the largest Indian-owned management consulting firm. With over twenty years of management consulting experience, we operate in SAARC and West Asian countries. As an India based consulting firm, we help clients gain a perspective on India entry strategy, rural markets and other India insights.

We have helped clients across multiple industry sectors create competitive advantage and sustain superior performance. We weave together innovative advice, workable solutions and provide implementation support to enable our clients reach the pinnacle and stay there.

Manoj Mehta – Deputy Director

M: +91 9891098772

E: [email protected]

Mohit Ganglani – Sr. Asst. Director

M: +91 9999221199

E: [email protected]