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Big potential for electronics manufacture

At the Chennai International Centre (CIC) meet on The Making of Electronics in India – an all-hands approach, N Lakshminarayanan (LN) provided an overview of the electronics industry: “the top three industries that spend the largest amounts on R&D globally are the pharma, auto and electronics industries.” There is a direct correlation between the R&D spend and innovation leading to faster growth. China, Taiwan, South Korea, Japan, and the USA are the leaders in the electronics industry. We are not there even in the long list. Even an emerging economy like Vietnam produces and exports more electronic goods than India. “Can Sriperumbudur and Sri City be the model cities or clusters that can put us in the global manufacturing map?” asked LN.

Josh Foulger, heading Foxconn operations in India, points to the potential for India to produce a trillion-dollar worth of electronic goods with Tamil Nadu contributing a tenth of this, $ 100 billion. Foulger, educated in India and the US, has worked in China, Vietnam, Taiwan, and India during the heydays of Nokia. In a very short time, he has re-established Foxconn to manufacture, at two large assembly operations for cell phones, at Sriperumbudur in Tamil Nadu and Sri City across the border. Each of these employs around 15,000, mostly women were drawn from districts across the two states. At the two facilities, Foxconn assembles for Chinese manufacturers, cell phones at the rate of three per second.

In contrast to the flourishing Indian software sector, India has been lagging in hardware. In that light, it is indeed a piece of welcome news on Apple’s plan to invest a billion-dollar in India for the manufacture of iPhones for the globe, in partnership with Foxconn.

Apple has been working with another Taiwanese contract manufacturer Wistron Corporation, making iPhone 6s and 7. The tie-up with Foxconn Technology as an investment partner is bound to give a big fillip to electronics manufacture in the country.

At the CIC Meet, chief of Manufacturers’ Association for Information Technology’s (MAIT), George Paul, pointed to the lack of policy that keeps large production capacity for PCs idle (around 90 per cent).

The new thrust saw in recent weeks both at the Centre and the states (Tamil Nadu recently announced a comprehensive policy for electronics manufacture), holds the promise for big growth.

Increasing thrust on renewable sources

Energy giant NTPC has been ranked No.1 independent power producer and energy trader. In a little over four decades, NTPC has recorded spectacular expansion of its installed capacity to 55,786 MW: this includes 928 MW of renewables and 800 MW of hydro capacity. The company plans to add another 3500 MW of commercial capacity during the year.

Starting initially as a producer of thermal power, NTPC has expanded into hydro, wind and solar power as also as a producer of coal. Gurdeep Singh, Chairman and Managing Director, mentioned 7.31 million tonnes of coal was extracted last year. NTPC registered a turnover of Rs 90,307 crore on which it earned a profit of Rs 12,600 crore, an increase of over 20 per cent. It maintained its record for earning profits for the 26th consecutive year. The company stands first among PSUs ‘as a great place to work.’ NTPC also has an enviable record for efficiency. The plant load factor has been consistently higher, by an estimated 15 per cent, over the national average.

There is a tectonic shift from conventional, thermal generation to solar and wind. The close relations built with the US and France also indicate the prospects for big growth in nuclear power. Though India’s growth has been sizeable it is just a sixth of the capacity of China’s. There is thus huge scope for NTPC excelling on its excellent record.

Record steel production at SAIL

Steel major SAIL recorded a sale of Rs 66,267 crore resulting from higher production through continuous casting and improved product mix. The company earned after-tax profit of Rs 2179 crore in FY 2019 (it incurred a loss of Rs 482 crore in FY 2018).

SAIL achieved its highest production of crude steel of 16.3 million tonnes and saleable steel of 15.1 million tonnes. SAIL plants have been in production for close to six decades. These are kept in good trim by continuous modernisation and upgradation. The company also meets its entire requirement of iron ore from captive sources. Production of ore last year amounted to 28.35 million tonnes.

Chairman A K Chaudhary pointed to SAIL supplying steel to several prestigious projects of national importance like the Statue of Unity, Bogibeel bridge, several expressways and defence projects.

STC on the sunset

The State Trading Corporation (STC), launched with great fanfare and expectations in the 1950s, is reported to be on the verge of closure. STC handled imports and exports of a vast range of products and services. Its Projects and Equipment Corporation (PEC) also flourished for a while executing turn-key contracts in developing countries.

The earlier practice of appointing reputed chairmen of large multinationals like HindLever, ITC… vested STC with a lot of expertise and prestige. SVS Raghavan as the CMD of STC in 1990 worked to amalgamate STC and MMTC and founded the holding company Bharat Business International Limited (BBIL). He had impressive plans to develop it on the models of the sogasoshas of Japan. He also conceived of counter trading – buying goods from other countries and selling it to third countries. Sadly, his successors threw the concept out.

It is indeed tragic that at a time when large multinational companies of China, Japan and South Korea are flourishing with the massive expansion of foreign trade, the pioneering Indian trading giant should be put on the block.

Thomas was unaware of what was cooking

Over 178 years Thomas Cook built a reputation as the world-famous tour operator. The company excelled in offering affordable tour packages for the evolving middle-class spread across the globe. The services have been reliable and satisfactory. An estimated 600,000 customers, over a quarter of these from the UK, were on vacation when news on its going bankrupt surfaced on 22 September. Thomas Cook was operating its own aircraft and running hotels. Increased costs and intense competition and new techniques like Airbnb made deep inroads into its profits. There was an attempt to sell the company to the Chinese tourism operator, Fosun. It didn’t fructify and the company just crashed.

The British government promptly announced measures to pick up a large number of British tourists stranded across the globe. It shouldn’t be easy to help all the estimated six lakh customers struck in hotels and countries spread across the globe.

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