Global Indian brands - strategies for globalization

Abstract

Post liberalization, Indian companies got several opportunities to grow beyond the national boundaries. With the Indian economy growing at a faster rate than the world average, and the buzz regarding Indian MNCs, it is heartening that many Indian companies seem to be expanding their frontiers aggressively. A snapshot of the global strides taken by Indian firms follows: • Indian companies have started venturing into other countries for marketing, production, acquisition, and even research and development. Investments abroad by Indian companies in 2004-05 was US$ 2.5 billion. • In 2003, there were 75 cross border M&A acquisitions by Indian firms, up from 36 deals in 2002. Between January - June 2004 the total number of such deals struck by Indian companies abroad was 195. • Indian firms have about 450 investments / joint ventures in UK, mostly technology oriented. India is the eighth largest investor in UK and 2nd largest from Asia. • There are 1441 Indian companies operating in Singapore. Of these more than 450 are technology enterprises. • Indian companies have acquired 120 foreign firms in the period 2001 - 2003 worth US$ 1.6 billion. • Eight Indian companies are listed in NYSE and three in NASDAQ. There are over 18 companies listed in LSE. • In January 2004, the Government removed the $100 million cap on foreign investment by Indian companies and raised it to the net worth of the company. • While the acquisition of foreign companies started off in the IT and related services sector, it has now spread to other areas. • V. Birla group has a presence in 18 countries and has overseas revenue of US$ 1.8 billion excluding their exports of US$ 900 . Their overseas employees total 12,000 in 20 countries. Their recent puchases include two copper mines in Australia for US$ 80 million and a Carbon black manufacturing unit in China. • ONGC Videsh Ltd.(OVL) is investing nearly US$ 3 billion in discovered / producing oil fields in Sudan, Russia and Angola and gas fields in Vietnam. Besides, OVL has acquired exploration assets in Myanmar, Libya, Iran, Iraq and Syria. OVL is interested in the acquisition of equity oil in Venezuela and West Africa. GAIL and IOC have also started investment and operations outside India. • Tata Motors paid US $ 118 million to buy South Korea's Daewoo Commercial Vehicle Unit. • Tata Tea has bought Tetley, world's biggest tea bag maker for US $ 430 million in 2000. With this acquisition, Tata Tea has become the second largest tea company in the world. • Tatas are keen to set up hotels in China. They have set up a software development centre in Uruguay with an investment of US $ 30 million. • Ranbaxy, the largest Indian pharmaceutical company, gets 70 per cent of its one billion dollar revenue from overseas operations with 40 per cent from USA. It exports to 70 countries, has local operations in 25 markets and manufacturing in seven countries including China. Recently it has bought a French Pharmaceutical Company, RPG Aventis, for US$80 million. It has earlier acquired companies in UK and Germany. • Dr. Reddy's Labs acquired a US firm in May 2004 dealing with specialty drugs in May 2004. • Wokhardt derives 55% of its revenue from international business. It acquired a German firm in 2004. • Bharat Forge acquired German firm Carl Dan Peddinghaus Gmbh for US$ 28 million. • Sundaram Fasteners has set up a manufacturing plant in Haiyan county, Zhejiang Province in China. Sundaram Fasteners is also buying a precision forging unit in UK. • Reliance has paid US$ 207 million for the acquisition of Bermuda based Flag Telecom, which gives its access to 50,000 KMs of fibre optic network worldwide. It is a NASDAQ and London Stock Exchange listed company. • TVS group has set up a motorcycle plant in China and is planning to set up two units in ASEAN region. • Mahindra & Mahindra has established a subsidiary in USA and is producing 8,000 tractors per year. They have a 20% market share in 25 States in the 20-60 HP segment. The company is planning to venture into Russian, Chinese and South African Markets besides setting up an assembly unit in Indonesia. It has recently acquired 80% stake in a Chinese tractor company. • Videocon is planning to set up a compressor unit in China, with an investment of US$ 30 million. • Indorama which already has resin plants in Indonesia, Thailand, USA and Romania is planning to set up another plant in Lithuania with an investment of US$ 80 million. • Aurobindo Pharma has bought a pharmaceutical unit in China. • Cadilla has bought the formulations business of a French company. • WIPRO has acquired a USA-based consulting company Nerve Wire for $ 18.7 million. • Amtek is negotiating the purchase of a UK auto parts company GWK for US$ 40 million. • Jindal steel has acquired a steel plant in Indonesia. • Moser Baer India, the third largest maker of recordable CDs in the world is setting up a plant In Germany • Taj and Oberoi Hotel Groups are expanding their overseas presence including in Dubai, Marrakesh, Shanghai and Beijing