Rajesh Nath
VDMA Office India
If I were asked under what sky the human mind has most fully developed some of its choicest gifts, has most deeply pondered on the greatest problems of life and has found solution to some of them …. I should point to India.
Eminent personalities on the dais, friends from the industry and media, ladies and gentlemen:
This is what Max Mueller the great German scholar and indologist who lived in the nineteenth century had presaged over a century ago, the global role that Indian minds would come to don today. Infact Germany has been an important partner in this saga of Indian development.
Indo-German Trade
In 2010, the trade between India and Germany reached Euro 15.4 billion (ca INR 955 Billion) Exports to Germany Were to the tune of Euro 6.2 billion (INR 384 Billion), while imports from Germany stood at Euro 9.2 billion (INR 571 Billion) during the period. The top sectors of German exports to India were machinery, chemical products, data processing, electronic and optical equipment. With a value of 3.12 billion euros (INR 194 Billion),machinery took the lion’s share of 31 percent in Germany’s total exports to India.
The trade volume has increased nearly six times since 1991, with exports to Germany increasing five times, and imports from Germany to India almost seven times.
There are more than 1200 German companies in India as on today, which have created more than 200,000 jobs. German investment in India has always been accompanied by that ever faithful partner: technology. This adhesive bond has in fact strengthened with the passage of time.
Increased demand for German machinery in 2010
In 2010 the total import of machinery from Germany reached a volume of Euro 3.12 billion (INR 194 Billion). This was an increase by 22% compared with the same period of time of the previous year.
In 2010 among the machinery sectors, major demand of German equipment was for Power Transmission (11.5%), Machine Tools (7%), Material Handling (6.7%). Textile Machinery (5.7%) and Construction Equipment & Building Material Machinery (5.6%).
In 2009 out of approximately Euro 13.3 billion (INR 825 Billion) of machinery imported by India, Germany had a share of around 18%, marginally behind China (19.9%) and ahead of USA (11.8%) and Japan (8.3%).
Indo-German ties have come a long way in the past 500 years and both the countries have cooperated in number of areas right from machinery to space research upto marine science. Globalisation is imperative and engulfs all of us –India as well as Germany. India-with its growing geopolitical significance and its economic potential is of utmost importance to Germany and given Germany’s prominence in Europe and the EU, the reverse is also true.
Infact 2011 will be marked with ‘’Year of Germany’’ in India, followed by a ‘’Year of India’’ in Germany in 2012.
With the Indo-EU bilateral trade and investment agreement in the offing, India looks to closer cooperation with Germany not only in trade and investment but also in each others development as tolerant, democratic and thriving nations. Hence we can look forward to a qualitative, resilient and responsible strategic partnership between India and Germany.
The VDMA India office acts as a bridgehead among the German and Indian Industry and fosters closer business cooperation among the two countries. Besides servicing the member companies and enabling their successful market entry in India, we also help Indian Companies looking for German technology and help in supporting technical collaboration, joint venture, tie-up etc among the German and Indian companies. Further, the Indian office co-ordinates the bilateral forum for closer interaction among the two countries in the mining sector, infrastructure, energy and agriculture.
Maharashtra with 57% share of German investments remains to be the most attractive destination for German investments in India. Pune has lately become the hotbed for new German investments. Karnataka and Gujarat are other important destinations.
As per the demands of the industry, it was imperative for VDMA to have a presence in western region. Friends, today, I am happy to introduce you to our new colleague –Ms Sunali Agarwaal who would be responsible for the VDMA activities in Mumbai. However friends, only with your help and support this endeavor can be successful. Your cooperation here is solicited.
The elephant has been synonymous with India from time immemorial, through history, mythology and Indian economy too came to be likened to an elephant, but in a lumbering sence. Today, as the balance of global power shifts to the East, and India is regarded with awe for weathering the financial storm better than most; the elephant analogy is back-but with the positive attributes of size, stability, solidity and strength. With our economy projected to become the second largest in the world, after China and ahead of even the US, there’s a growing sense that we’re riding a quiet but powerful giant, one that needs to be taken care of if we want it to travel far and carry over a billion people on its back.
We would be seeing exciting and challenging times in the Indo-German trade ahead and we invite you to be part of this success story. Let us strive to raise the bar and set new goals-swifter, higher and stronger.
Stefan Prasse
VDMA Veriag GmbH
On behalf of the VDMA Verlag, I would like to welcome you to this press conference to mark the twentieth anniversary of our Managers Navigator publications in India. My name is Stefan Prasse; I am Managing Director of the VDMA Verlag, a wholly owned subsidiary of the VDMA, and it is my honour to host this event.
After my opening address, I also have the great pleasure of presenting three top class speakers, whom I will introduce briefly at this point:
Dr. Theodor Heldman
Aman Chadha
Rajesh Nath
At the end of ALL the presentations, we will hold an open discussion and question and answer session, during which you will have an opportunity to put your questions to the speakers.
To begin with, let us turn to the latest figures from the mechanical and plant engineering sector in Germany. During the first six months of 2011, goods movements from Germany to India totaled 5,152 million. Of this, 1,663 million related to machine deliveries. This equates to 32.3% of the total goods movements from Germany to India, and it underlines the importance of this industry segment to trade relations between Germany and India. I am delighted to report that machine deliveries to India during the first half of 2011 jumped by 16.7% over with the same period last year.
Fundamentally different media markets
Today’s other speakers will examine the topic of mechanical engineering and German-Indian trade relations in detail. As managing director of a publishing company, the main emphasis of my presentation will be on the topic of media and communication, with a particular focus on the investment goods industry. The media markets in Germany and India differ fundamentally from one another in certain respects:
With advertising expenditure of 87.296 billion in 2010, sales volume for the entire German advertising market was roughly six times greater then that of the Indian advertising market- and this for a population less than ten percent the size of the Indian population. The greatest structural differences relate to the significance of the individual media categories to the advertising industry: In Germany, television remains the primary medium, while in India the print media still account for the biggest share of advertising expenditure. Within the print media, what is immediately striking is the dominant position of the daily newspapers, which account for 91% of print spending. Technical magazines berely feature as a separate category at all. This contrasts with gross sales of German technical journals of 1.8 billion in 2010. With reference to overall advertising spending in India, this figure exceeds the total expenditure on radio, Internet and out-of-home advertising in India for 2010.
As part of this brief comparison of the German and Indian advertising industries, I can also reveal that B2B media barely figures at all as a separate category. This fact immediately highlights one of the biggest challenges facing German companies in terms of advertising- and not just in relation to the Indian market. It is the ability to manage the increasing diversity of media which represents the greatest challenge for many German companies in the mechanical and plant engineering sector. When our VDMA Verlag business guides were first launched in target markets outside Germany twenty years ago, we were one of the few ambassadors conveying the product and brand messages of German companies to the export markets that were so vitally important to us. For interested parties in India, our printed business guides were likewise one of the few (and thus highly valued ) sources of information about products from the German mechanical and plant engineering sector. Numerous thank-you letters from India requesting further information bear testament to the importance of this information to prospective customers in India.
New media landscape
Since then, the media world has changed dramatically. Nowad: ys, companies communicate their product messages around the world via their websites. In addition to static information, these generally offer multilingual platforms, product videos and configurators and even web shops. In the meantime, prospective buyers can also download information about products and solutions virtually anywhere via smartphones.n And not just so that interested parties can access information quickly and easily. Customers also exchange information about products and companies –via forums, blogs and other tools from the vast social media milieu. Printed communication has also expanded dramatically thanks to advanced print and pre-press technology and easy access to transiation resources and workflows: the customer magazines of some German engineering companies are now published several times a year in sixteen or more languages.
What does this mean for our Managers Navigator series business guides at VDMA Verlag? If you will allow me to refer to an example from everyday private life. How do I go about showing respect to someone I care about- for example, giving thanks for a baptism or congratulations on the birth of a child? Even nowadays, I wouldn’t send a multimedia message or anything like that. Instead, I would reach for my pen and write a personal card or letter. The addressee receives a physical message that is both tangible and lasting- and not simply clicked away into the digital void.
Function of print media has changed
This also applies in the same way to the process of creating appreciative corporate and production communication. Information in printed from represents sustainability and permanence. This is because the age of the Internet has transformed the function of print media: the type of rapid information that was previously accessed via telephone or by post is now available everywhere online. To exaggerate, anyone who publishes printed information of relevance to sales or marketing nowadays is deciding between ‘’quick and easy’’ or ‘’high quality and lasting’’. Everything in between is being substituted increasingly by online channels. In this context, our business guides perform a changed but still essential role in conveying the brand messages of German mechanical and plant engineering companies whose technology ranks among the best in the world. More than ever, they stand for premium quality, reliability and stability.
For those in India interested in German engineering products, we aim to act as their guide to the German mechanical and plant engineering industry: rather like a straight road through what can sometimes be a very convoluted information landscape. The importance of our business guides is perhaps best described using an Indian proverb: ‘’No one was ever lost on a straight road’’.
And so, ladies and gentlemen: maintain a clear overview and continue travelling with us along this road! Thank you very much for your kind attention!
Dr. Leopold-Theodor Heldman Consulate General of the Federal Republic of Germany
I am happy to be here today, to celebrate with you 20 years of VDMA’s managers Navigator. Two decades, which show in itself VDMA’s long standing commitment to India.
I am even more delighted to have the opportunity to share some thoughs with you on bilateral relations, as this event is taking place at a time of booming economic relations between India and Germany. In the last five years bilateral trade between our countries has Increased by more then 100%, growing from a trade volume of 7,6 bn Euros in 2005 to 15,5 bn Euros in 2010. This is something which we can be proud of
The driving force behind this growth was very high demand in the Indian Market. The economic growth rate of India in 2010/11 was 8,5%, and for 2011/12 the Indian Government has predicted an even higher growth of 9% Personally I do not share this assessment: but even if some 8% seem more likely, even this is an impressive figure. Where else in the world have you seen such growth rates in recent years? Definitely neither in Europe nor in Japan, nor in North America. And with a new Indian middle class consuming more goods every year high growth in my opinion is far from over. This makes India a particularly attractive partner for German companies and for other international competitors.
There is another reason for such high bilateral growth: it is the competitiveness of the German economy: Germany for long years has been the No.1 export nation in the world. Now we have lost this position to be Nr.2, only a little behind China. What I want to stress with this is, that German companies are extremely competitive in technical innovation and client oriented, tailor made solutions with regard to machinery, equipment and lean procedures of production. One third of German exports today come from equipment and produced by companies, being members of the VDMA. Without this cutting edge of German business our bilateral relations would not have benefitted so much from India’s growing demand.
And at this point in time it is easy to shift the focus to the VDMA: this organization has always spearheaded the most modern, innovative and competitive part of the German economy. VDMA with more than 3000 member companies is Europe’s biggest industrial branch organization. It represents 39 subsectors with a particularly wide spectrum of technologies and products. And it represents the best of Germany’s exports, machinery and plant engineering. It employs more than 939.000 people in more than 6,000 companies, which is more than in any other German industrial sector. And if you take a closer look at its 30 subgroup of products in machinery and plant equipment, German producers are globally market leaders in 18 of them! Just to name a few I would refer to machine tools, agricultural engines, packaging machines and precision tools. But in most of the remaining other 11 product groups, where German companies are not direct leaders, they are at least amongst the top three. This makes the VDMA particularly relevant for Germany’s exports.
The strong position of Germany in this field is the result of a very high level of innovation: 70 to 80 % of these firms start a new product line or a new production process every 3 years. Taking this into account, it is easier to understand, why German products have a good reputation abroad And why the . ‘’Made in Germany’’ trade mark still stands for quality.
Obviously the proof of this claim for quality are our exportfigures. And the picture so far is quite clear: In 2000 the German machinery and engineering plant producers exported goods in the value of less than 80 bn Euros. Until 2008 these exports had risen to 144,8 bn Euros. In 2009 the international economic crisis hit this sector particularly hard: exports declined to 110 bn Euros. But since then and until now export has risen again to pre-crisis levels and is still on the rise. This steep recovery is due to the fact, that these producers offer exactly, what is most in demand internationally and in the most dynamic markets.
India is one of these dynamically growing markets. Here I can document this upswing in concrete figures: the export of machinery and equipment in the frist 4 months of 2011 grew by 16,6 % as compared to the previous year. This means that the real value of German machinery and plant engineering products exported to India reached a total of about 1,1 bn Euros, India, thus, for the first time ranks on the 12th position in this field, doing better than Brazil and Korea but still lagging behind China, the US and many traditional European partners. This shows, that we are fast advancing but there is still a hung potential for growth.
Do we have a realistic chance to achieve and maintain such growth rates? I think we have, if we find the right answers to the real challenges: these seem to me to be climate change, the scarcity of natural resources and of energy. We have to succeed in becoming more material and energy efficient and we also have to lower CO2 emissions. If we are successful in this, we are on the right track. The VDMA has core competences in all these areas.
Since years we have for instance developed energy-saving technologies for many industries, for the transport sector, the building industry etc. With all these new technologies Germany today already saves the power, which 10 years ago was consumed by some 48 million private homes in our country: I find this quite remarkable.
Furthermore, German technology is leading in the field of natural resource conservation: we can provide top technologies for clean water and clean air, for soild waste management and for recycling, for eco-friendly products and processes: we already have invested hung sums in regenerative energies such as solar and wind energy and much more will be invested, after the federal Government has decided to end Nuclear Energy production. This shows the level of our ambition. In all these fields we are today amongst the gobal leaders and this obviously includes export. And we have committed ourselves to improve our competitiveness in these fields.
When I speak of climate protection and the lowering of CO2 emission, I have the feeling, that we all, who are living in a city like Mumbai feel, that very much has still to be done to improve the situation and to give living in such a Megacity some living quality. Germany can and should play an important role in this field, too.
Here I would like to return to my starting point: India and Germany are strong partners and unbelievably complementary. Let us all benefit from this. In only 4 days I will have the honour and the pleasure to inaugurate ‘’Germany and India 2011/2012. Infinite opportunities’’, a hung project designed to showcase the potential of Germany as a partner for India in so many fields. His exhibition together with some 200 projects from politics to science, from economy to education, from culture to life quality will start in Mumbai in November and will then circulate through 6 great cities of India to end up in Delhi in November 2012. I hope, that it will give even more momentum to our vibrant relations and benefit India as well as Germany.
That is why I wish the VDMA good luck for its commitment to India. Thank you very much for your attention.
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