Holding Sites Products Inside look Industrial Treated Yarn Entry Barriers and how to Overcome through new initiatives Karthick Gnanasekharan, Managing Director, MEP-OLBO India Pvt Ltd. MEP-OLBO Page 1 MEHLER AG – 175 years of textile history Holding Sites Products Inside look 1837 Valentin Mehler started a craft enterprise for table linen with 53 employees and he generated a turnover of 66 422 “Goldmark”. Starting from this time the company moved progressively to a specialist of technical textile. MEP-OLBO Page 2 MEHLER AG Holding Sites Products Inside look • Products for the building industry and agriculture • Personal security • Textile reinforcement • Dipped yarns and cords • Tents, sun protection MEHLER AG • Ladies‘ fashion • Coated fabrics • Technical fabrics • Machine building and engineering services • Information technology MEP-OLBO Page 3 The world leading partner for your rubber goods MEP-OLBO Page 4 Locations MEP-OLBO – worldwide Holding Sites Products Inside look Fulda, D Wujiang, CN Hessisch Lichtenau, D Headquarters Kalefeld, D Martinsville, USA Famalicao, PT Bangalore, IND MEP-OLBO Jilemnice, CZ Page 5 Production possibilities and operating figures Holding Sites Products Inside look Technical possibilities Twisting possibilities : from dtex 50 to dtex 100.000 from dtex 220 to dtex 50.000 up to 3 m width Treatment possibilities : Weaving possibilities : Production capacities Yarn capacities worldwide : Fabric capacities worldwide : approx 19.000 tons = 36.376.279 lb approx 19.500 tons = 42.990.149 lb Operating figures Turnover 2009 worldwide : 120 million € = US $ 162 Mill Turnover 2010 worldwide : 155 million € = US $ 209 Mill Turnover 2011 worldwide : 158 million € = US $ 213 Mill Forecast 2012 wordwide: 170 million € = US $ 230 Mill Employees worldwide : approx. 1.000 MEP-OLBO Page 6 Entry Barriers 1 Market Overview In India manufacturing of Industrial treated yarns (ITY) is still a maturing concept. • Currently, in India manufacture of ITY is mainly for industrial application and not fully explored into automotive • Manufacturing of ITY for the automotive application – high potential is there. • The market today for ITY in India is still low and does not justify a large scale production MEP-OLBO Page 7 Entry Barriers 2 • • • Availability of land • Within 50km radius of city limits • High price even when compared to developed countries • Payment of all money through bank – limited options Government support • Unclear rules, laws & legislations • Single window system – limitations • Time frames for approvals – uncertainty • Red carpet welcome does not translate into reality • Poor cooperation from officials Infrastructure • Power – • unstable and huge shortages • Limitations to get uninterrupted power - minimum demand (KVA) restrictions for continuous process industries • Higher capital cost and revenue costs • Water • Roads – accessibility and travel time MEP-OLBO Page 8 Entry Barriers 3 • • • • Human resources • Well educated but poor skill levels – industry alignment missing • Long term engagement? • Values – commitment, work ethics, house keeping, safety……missing • Trade unions Equipment & local vendors • Non realistic time frames • Not aware of high standards of developed nations Raw materials • Filament imports • Chemical imports – largely Finance • Start up company – bank finance is almost impossible • Mortgage not possible • Repatriation is too expensive MEP-OLBO Page 9 New Initiatives 1 • Market Overview • With the global market in mind and in the reach of the group a global capacity is being implemented – not limited to domestic market • The latest technology is under implementation – new generation products • Highest level of automation is under implementation to acieve automotive volumes • High importance towards HSE topics • German engineering with Indian manufacturing • Availability of land • Pan India survey was done to choose the right location a. Technically b. Politically c. Financially – right vendor d. Business wise MEP-OLBO Page 10 New Initiatives 2 •Government support •Cushion for delays at various stages to be factored in project time plan – with regards to government clearances, local suppliers •Engagement of consultants to obtain clearances from statutory authorities •Infrastructure •Install captive generators with battery back up UPS – for continuous process machinery •Buy water at high cost from local suppliers MEP-OLBO Page 11 New Initiatives 3 •Human Resources •Recruiting of talented people – takes time and comes with candidate referrals • Plan for training programs which will improve the skill levels and other attributes of employees •Engagement of blue collar employees through manpower supply agencies on contract – assess and then may take good employees on rolls •Finance • Look for funding options with banks of foreign origin • ECB route for capital goods MEP-OLBO Page 12 India Office: Head Quarters: MEP-OLBO GmbH. Edelzeller Strasse 44 36043 Fulda Deutschland MEP-OLBO India Private Limited Plot Nos S10-S15, Intergrated Textile Park, KIADB Industrial Area, Doddabalapur, Bangalore 561 203, India. Tel.: +49 661 103- 0 Fax: +49 661 103- 666 E-Mail: [email protected] http://www.mep-olbo.de Tel. : +91 80 2763 0068 Fax : +91 80 2763 0008 E-Mail: [email protected] http://www.mep-olbo.de MEP-OLBO Page 13 Come to us and realize your product solutions with us Your world leading partner for the Rubber Industry Thankyou for your attention MEP-OLBO Page 14