Favourability Of Factors Of Fraenkische Production In India - Free Essay Example

Sample details Pages: 14 Words: 4192 Downloads: 9 Date added: 2017/06/26 Category Statistics Essay Did you like this example? 1.1 Pipe Industry Pipelines have been used since many decades. They were constructed in different parts of the world to convey water for drinking and irrigation. Perhaps the first use was by ancient agriculturalists. They used pipe like structures to divert water from streams and rivers into their fields. There is some evidence suggesting that the Chinese used reed pipe for transporting water, around 2000 B.C. Pipes made of clay that were used by other ancient civilizations have been discovered. In tropical countries, bamboo pipes were used to transport fluid that mainly consisted of water. The first lead pipes were constructed during the beginning of the A.D century in Europe. Colonial Americans used wood for a similar purpose. In 1652, the manufacturing of the first water transportation pipes was made in Boston using hollow logs. Don’t waste time! Our writers will create an original "Favourability Of Factors Of Fraenkische Production In India" essay for you Create order 1.2 History of Pipe Production Welded steel pipe can be traced back to the early 1800s during the dawn of the modern day. In 1815, William Murdock invented a coal burning lamp system. To fit the entire city of London with these lights, Murdock joined together the barrels from discarded muskets. He used this continuous pipeline to transport the coal gas. When his lighting system proved successful a greater demand was created for long metal tubes. To produce enough tubes to meet this demand, a variety of inventors set to work on developing new pipe making processes. An early notable method for producing metal tubes quickly and inexpensively was patented by James Russell in 1824. In his method, tubes were created by joining together opposite edges of a flat iron strip. The metal was first heated until it was malleable. Using a drop hammer, the edges folded together and welded. The pipe was finished by passing it through a groove and rolling mill. Russells method was not used long because in the next year, Comelius Whitehouse developed a better method for making metal tubes. This process, called the butt-weld process is the basis for our current pipe-making procedures. In his method, thin sheets of iron were heated and drawn through a cone-shaped opening. As the metal went through the opening, its edges curled up and created a pipe shape. The two ends were welded together to finish the pipe. The first manufacturing plant to use this process in the United States was opened in 1832 in Philadelphia. Gradually, improvements were made in the Whitehouse method. One of the most important innovations was introduced by John Moon in 1911. He suggested the continuous process method in which a manufacturing plant could produce pipe in an unending stream. He built machinery for this specific purpose and many pipe manufacturing facilities adopted it. While the welded tube processes were being developed, a need for seamless metal pipes arouse. Seamless pipes are those which do not have a welded seam. They were first made by drilling a hole through the center of a solid cylinder. This method was developed during the late 1800s. These types of pipes were perfect for bicycle frames because they have thin walls, are lightweight but are strong. In 1895, the first plant to produce seamless tubes was built. As bicycle manufacturing gave way to auto manufacturing, seamless tubes were still needed for gasoline and oil lines. This demand was made even greater as larger oil deposits were found. Various methods for manufacturing were developed as the ordinary steel pipes went on to be more improved in quality and quantity. A major milestone was the dawn into the century of steel pipe, which greatly increased the strength of pipes of all sizes. The development of high-strength steel pipes made it possible to transport natural gas and oil over long distances. The application of welding to join pipes in the 1920s made it possible to construct leak proof, high-pressure, large-diameter pipelines. Today, most high-pressure piping consists of steel pipe with welded joints. Major innovations since 1950 include introduction of ductile iron and large-diameter concrete pressure pipes for water; use of polyvinyl chloride (PVC) pipe for sewers. 1.3 Types of Pipes Pipes have 3 main classification based on material used Steel Pipes Cement pipes PVC pipes Steel Pipes Steel pipes are long, hollow tubes that are used for various application. They are produced by two distinct methods which result in either a welded or seamless pipe. The raw steel is first converted to a more workable form. The pipe is formed by stretching the steel out into a seamless tube or forcing the edges together and sealing the joint by welding. Steel pipe production processes were started in the early 18th century, and they have steadily evolved into the modern processes we use today. Steel pipes are produced in the millions and used either in the domestic market or exported. Steel pipes are found in a variety of places. Since they are strong, they are used underground for transporting water and gas throughout cities and towns. They are also employed in construction to protect electrical wires. While steel pipes are strong, they can also be lightweight. How is it Made? Steel pipes are made by two different processes. The overall production method for both processes involves five steps. They are Ingot production Producing blooms and slabs Further processing Pipe making Final processing USES Automobiles refrigeration units heating and plumbing systems street lamps support structures for billboards, signs boards, fence posts transportation of fluids like oil and gas etc Asbestos Pipes Asbestos cement pipes are made of a mixture of asbestos paste and cement compressed by steel rollers to form a laminated material of great strength and density. The asbestos fibres act as a reinforcing material to form an intrinsic part of the cement matrix. How is it Made? A/C pipe is manufactured by the Hatchek/ Mazza process from intimately mixed aqueous slurry of portland cement (80-85%) and a mixture of relatively long and medium grade chrysotile asbestos fibres (15-20%). The slurry is made more and more viscous by dewatering the mixture by a machine using a rotary sieve cylinder and a continuous felt to produce a very thin layer of asbestos cement which is wrapped around a mandrel (on which it will be forged on) under pressure until a pipe with the desired wall thickness is produced. The mandrel is then extracted and the pipe is cured by passing through a tunnel-like low temperature oven followed by immersion in or spraying with water, or by autoclaving. On completion of curing, once the pipe is strengthened the ends of the pipe lengths are cut and finished to receive couplings that are produced by cutting larg outer diameter pipe into sections. USES Drinking water supplies To aid the treatment of gastrointestinal and kidney cancer Drainage Process pipes PVC Pipes PVC pipes are made out of a material known as polyvinyl chloride, a durable, strong plastic-like substance. The variation of uses is all the way from plumbing to construction. The pipe is designed to be have a standard. All pipes are designed around specific requirements with better standardization so as to ensure that multiple pipe sections will fit together. The ends of the pipe can either be smooth or grooved (like a screw). Additionally, there are several different pipe sizes ranging from very small (one-fourth inch) to very large (10 feet). How is it Made? PVC pipes are created by starting with a molten mixture of the material and shaping them around a cast. The casts are made to be the exact width of the pipe so as to create a base of foundry. The mixture is poured into this cast and surrounded by an outer shell which will act as a light forge. The complete set is then placed into an oven to be baked. Once the pipe has solidified, it is cooled and moved into finishing where it is checked for quality. Sections of the pipe are then cut based on common sizes and needs. The sections are then coated in a chlorine solution to prevent harmful bacteria from growing and destroying the piped causing leaks in them, during shipping and use. Once the coating is dried, the ends of each section are finished. If the pipe is a smooth connection, the top of the pipe is sanded down to ensure a perfectly flat surface. For fitted pipes, a machine engraves a series of grooves into the pipe. As the grooves are cut, high-pressured water is sprayed on the pip e to remove excess PVC fragments. After the grooves are added, the ends are smooth and the sections are sent into testing. Uses Water Pipe Drain, Waste Vent Pipe Process Pipe Sewer Pipe Drain Pipe Folded PVC pipe 1.4 Pipe Products made by Fraenkische 1.4.1 Drainage Systems Applications a) Building Ventilation/ Building Drainage b) Storm Water Management/ Storm Water Treatment c) Road Drainage d) Underground Cable Protection e) Sewer Pipe Systems f) Agricultural Drainage 1.4.2 Electrical Systems 1.4.2.1 Buildings a) Installation in concrete b) Concealed Installation c) Exposed Installation d) Halogen-free products e) Installations in cavity walls f) Outdoor installation g) Corrugated plastic conduits h) Straight length plastic conduits i) Metal conduits j) Corrugated metal conduits 1.4.2.2 Underground a) Cable ducts b) Cable protectors c) Pole foundation conduits 1.4.2.3 Machines a) Metal hoses b) Corrugated plastic hoses c) Spiral plastic hoses 1.4.2.4 Accessories a) Corrugated plastic conduit accessories b) Straight length plastic conduit accessories c) Steel conduit accessories d) Aluminium conduit accessories e) Stainless steel conduit accessories f) Machine accessories 1.4.3 Building products a) alpex plus b) alpex systems c) ff-therm/alpex-therm XS radiant heating and cooling products 1.4.4 Industrial Pipes 1.4.4.1 Automotive Cable Protection Cable Protection In general Cable Protection Corrugated Tubing Cable Protection Accessories Fluid 1.4.4.2 INDUSTRIAL APPLICATION Cable Protection Corrugated tubing Standard profile Accessories Standard profile Corrugated tubing / Accessories Closable Co-flex Corrugated tubing- With special convolute design Air transport Household appliances Sanitary technology Pool technology Medical technology Geothermal and solar energy Specialty applications 1.5 Why India Indiaà ¢Ã¢â€š ¬Ã¢â€ž ¢s rise in recent years is the most recognized development in the world economy. India has emerged as one of the fastest growing economies in the world. With an increase in investment and robust macroeconomic fundamentals, the future outlook for India is definitely optimistic. The importance of infrastructure for sustained economic development is well known. India could reach its full potentials, if it improves the infrastructure facilities, which are at present not adequate to meet the escalating demand of the economy. Pipelines are very important for the development of a countryà ¢Ã¢â€š ¬Ã¢â€ž ¢s infrastructure. Pipelines are used in transportation of oil, gas and water and it is cheaper and faster as compared to conventional modes of transport like rail and road. With the increasing oil prices, cheaper transportation will add to the feasibility of use of oil and gas. The Indian Pipe Industry is among the top three manufacturing centres after Japan and Europe. With the rapidly increasing economic growth, providing adequate infrastructure facilities to a heavily populated country like India becomes extremely important. Failure to meet the countryà ¢Ã¢â€š ¬Ã¢â€ž ¢s infrastructure demand will retard Indiaà ¢Ã¢â€š ¬Ã¢â€ž ¢s growth process. However, the penetration level of pipelines in oil and gas transportation is very low compared globally. The pipeline network of India for oil and gas transport stood at 13,517 kms in April 2006. Sanitation levels are also lower at 33% in India compared to 100% in France. Of 140 mn hectares of cultivable land, only 40% of the land is irrigated. The low penetration levels represent the huge opportunity for the growth of the pipe industry in India making it favourable for Fraenkische. When Exploration Production projects for oil and gas companies which were previously slowed down because of the global financial crisis resume their operations then there will be tremendous increase in the demand for new pipelines. This new surge in demand will be promising for the future growth of Indian pipe industry. The upward trend in the Indian pipe industry is expected to persist in the next 3-5 years on the basis of high oil and gas discoveries worldwide and also the increased efforts by Government of India on infrastructure development for laying pipelines for oil and gas transport, water and sewage transport and irrigation facilities. 1.6 Purpose of the Study: A comparative analysis of pipelines production in India vis-a-vis another nation (like China or a European nation) With the final result of a rating of India as a production location (a) In general and (b) In particular for plastic pipes 1.7 Research Questions (Targets): What are hurdles for setting up a production in India versus the other country (which probably China would be a good comparative)? Is it difficult to set up a plant (i.e. get money into India, get permissions for production, ease of employing people and difficulty to potentially firing them)?   Are there local producers in India, or would one have to import; if we have to import then are there high tariffs on the goods (Ease of access to PE / PP raw materials)? Are there points which are especially in favour or to the detriment of plastic production (load share and no continuous electricity supply)? Are there relative cost advantages (with respect to labour or is the gap narrowing vis a vis China)? Are many plastic pipe companies producing in India à ¢Ã¢â€š ¬Ã¢â‚¬Å" why / why not? CHAPTER 2 : LITERATURE REVIEW 2.1 Starting operations in India A foreign company willing to launch business operations in India has the following two options AS AN INDIAN COMPANY AS A FOREIGN COMPANY A foreign company can start operations in India by incorporating a company under the Companies Act of 1956 through i) Joint Ventures ii) Wholly Owned Subsidiaries i) Liaison Office/Representative Office ii) Project Office iii) Branch Office After a company has been duly registered and incorporated as an Indian company, it is subject to as any other domestic Indian companies to Indian laws and regulations. Such offices can undertake any permitted activities. Companies have to register themselves with Registrar of Companies (ROC) within 30 days of setting up a place of business in India. 2.1.1 As an Indian Company 2.1.1.1 Joint Venture Company Foreign Companies can set up their operations in India by forging strategic alliances with Indian partners. A joint venture is also the preferred route for foreign investors who wish to invest in any sector where 100% foreign direct investment is not permitted. 2.1.1.2 Wholly Owned Subsidiary Company Foreign companies can set up wholly-owned subsidiary in the form of a private limited with foreign equity in such Indian companies up to 100%, subject to equity caps in respect of the area of activities under the Foreign Direct Investment (FDI) policy. 2.1.2 As a Foreign Company 2.1.2.1 Liaison Office/Representative Office Liaison office acts as a channel of communication between the principal place of business or head office and entities in India. Liaison office can not undertake any commercial activity directly or indirectly and can not, therefore, earn any income in India. Its role is limited to collecting information about possible market opportunities and providing information about the company and its products to prospective Indian customers. It can promote export/import from/to India and also facilitate technical/financial collaboration between parent company and companies in India. Approval for establishing a liaison office in India is granted by Reserve Bank of India (RBI). 2.1.2.2 Project Office Foreign Companies planning to execute specific projects in India can set up temporary project/site offices in India. RBI has now granted general permission to foreign entities to establish Project Offices subject to specified conditions. Such offices can not undertake or carry on any activity other than the activity relating and incidental to execution of the project. Project Offices may remit outside India the surplus of the project on its completion, general permission for which has been granted by the RBI. 2.1.2.3 Branch Office Foreign companies engaged in manufacturing and trading activities abroad are allowed to set up Branch Offices in India for the following purposes: i) Export/Import of goods ii) Rendering professional or consultancy services iii) Carrying out research work, in which the parent company is engaged. iv) Promoting technical or financial collaborations between Indian companies and parent or overseas group company. v) Representing the parent company in India and acting as buying/selling agents in India. vi) Rendering technical support to the products supplied by the parent/ group companies. vii) Foreign airline/shipping company. A branch office is not allowed to carry out manufacturing activities on its own but is permitted to subcontract these to an Indian manufacturer. Branch Offices established with the approval of RBI, may remit outside India profit of the branch, net of applicable Indian taxes and subject to RBI guidelines Permission for setting up branch offices is granted by the Reserve Bank of India (RBI). Branch Office on à ¢Ã¢â€š ¬Ã…“Stand Alone Basisà ¢Ã¢â€š ¬? Such Branch Offices would be isolated and restricted to the Special Economic zone (SEZ) alone and no business activity/transaction will be allowed outside the SEZs in India, which include branches/subsidiaries of its parent office in India. No approval shall be necessary from RBI for a company to establish a branch/unit in SEZs to undertake manufacturing and service activities subject to specified conditions. Source: Ministry of Commerce, Govt of India 2.2 Company Formation START  ¯ Obtaining approval for the proposed name of the Company from the ROC  ¯ Drawing up the Memorandum of Association  ¯ Drawing up the Articles of Association  ¯ Getting the appropriate persons to subscribe to the Memorandum (a minimum of 7 for a public company and 2 for a private company  ¯ Payment of Registration Fee to the ROC  ¯ Receipt of Certificate of Incorporation  ¯ Obtain a certificate of commencement of business from the ROC in case of a public company  ¯ END Source: Ministry of Commerce, Govt of India 2.3 Industrial Growth in India After Independence After Independence in 1947, rapid industrialization of the economy was the need of the hour, which was the key to economic development as well as to economic independence. In the following years, Indias Industrial Policy evolved through successive Industrial Policy Resolutions and Industrial Policy Statements. The Indian government has removed bureaucratic controls on industry, under its liberalization policy. Industrial Policy Measures Since 1991 Since 1991, industrial policy measures and procedure have been simplified on a regular basis. Presently, only six industries require compulsory licensing and only three industries are reserved for the public sector. Few important policy measures initiated since 1991 are listed below: Since 1991, promotion of foreign direct investment has been an integral part of Indiaà ¢Ã¢â€š ¬Ã¢â€ž ¢s economic policy. The Government has ensured a liberal and transparent foreign investment regime where most activities are opened to foreign investment on automatic route without any limit on the extent of foreign ownership. FDI up to 100 per cent has also been allowed under automatic route for most manufacturing activities in Special Economic Zones (SEZs). More recently, in 2004, the FDI limits were raised in the petroleum product pipelines (up to 100 per cent), natural gas and LNG pipelines (up to 100 per cent). In an effort to mitigate regional imbalances, the Government announced a new North-East Industrial Policy in December 1997 for promoting industrialization in the North-Eastern region. This policy is applicable for the States of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura. The Policy has provided various concessions to industrial units in the North Eastern Region, e.g., development of industrial infrastructure, subsidies under various schemes, excise and income-tax exemption for a period of 10 years, etc. North Eastern Development Finance Corporation Ltd. has been designated as the nodal disbursing agency under the Scheme. Till the onset of reform process in 1991, industrial licensing played a crucial role in channeling investments, controlling entry and expansion of capacity in the Indian industrial sector. As such industrialization occurred in a protected environment, which led to various distortions. Tariffs and quantitative controls largely kept foreign competition out of the domestic market, and most Indian manufacturers looked on exports only as a residual possibility. Little attention was paid to ensure product quality, undertaking RD for technological development and achieving economies of scale. The industrial policy announced in 1991, however, substantially dispensed with industrial licensing and facilitated foreign investment and technology transfers, and threw open the areas hitherto reserved for the public sector. The policy focus in the recent years has been on deregulating the Indian industry, enabling industrial restructuring, allowing the industry freedom and flexibility in responding to market forces and providing a business environment that facilitates and fosters overall industrial growth. By provding exemption from licensing for all start ups and for those with an investment worth of Rs2.5 crores in fixed assets and a right to import up to 30% of the total value of plant and machinery and allowing foreign equity investment was allowed up to 40%. The future growth of the Indian industry as widely believed, is crucially dependent upon improving the overall productivity of the manufacturing sector, rationalisation of the duty structure, technological upgradation, the search for export markets through promotional efforts and trade agreements and creating an enabling legal environment. DOING BUSINESS ANALYSIS-WORLD BANK Starting a Business in India India is ranked 169 overall for Starting a Business. Ranking of India in Starting a Business Compared to good practice and selected economies: The following table shows Starting a Business data for India compared to China: Procedures (number) Time (days) Cost (% of income per capita) Min. capital (% of income per capita) INDIA 13 30 66.1 210.9 CHINA 14 37 4.9 130.9 ANALYSIS: Even though India lags behind China in the ease of starting a business but it is almost neck-to-neck in terms of procedures and time taken. Construction Permits in India India is ranked 175 overall for Dealing with Construction Permits. Ranking of India in Dealing with Construction Permits Compared to good practice and selected economies: The following table shows Dealing with Construction Permits data for India compared to China Procedures (number) Time (days) Cost (% of income per capita) INDIA 37 195 2394.9 CHINA 37 336 579.2 ANALYSIS: India is better than China in terms of dealing with construction permits, however the cost is far more than China. Employing Workers in India : India is ranked 104 overall for Employing Workers. Ranking of India in Employing Workers Compared to good practice and selected economies The following table shows Employing Workers data for India compared to China: Rigidity of employment index (0-100 Redundancy costs (weeks of salary) INDIA 30 56 CHINA 31 91 ANALYSIS: In terms of employing workers (hiring and firing) India is little bit more flexible than China whereas in terms of employerà ¢Ã¢â€š ¬Ã¢â€ž ¢s wages and working hours India is far more flexible than China. Registering Property in India India is ranked 93 overall for Registering Property. Ranking of India in Registering Property Compared to good practice and selected economies: The following table shows Registering Property data for India compared to China: Procedures (number) Time (days) Cost (% of property value) INDIA 5 44 7.4 CHINA 4 29 3.1 ANALYSIS: Registering Property in India is much more time taking and costlier than China. Getting Credit in India India is ranked 30 overall for Getting Credit. Ranking of India in Getting Credit Compared to good practice and selected economies: The following table shows Getting Credit data for India compared to China: Strength of legal rights index (0-10) Depth of credit information index (0-6) Public registry coverage (% of adults) Private bureau coverage (% of adults) INDIA 8 4 0.0 10.2 CHINA 6 4 62.1 0.0 ANALYSIS: In terms of getting credit India is lot better than China. Protecting Investors in India India is ranked 41 overall for Protecting Investors. Ranking of India in Protecting Investors Compared to good practice and selected economies: The following table shows Protecting Investors data for India compared to China: Strength of investor protection index (0-10) INDIA 6.0 CHINA 5.0 ANALYSIS: India is far better place for investors than China. Paying Taxes India is ranked 169 overall for Paying Taxes. Ranking of India in Paying Taxes Compared to good practice and selected economies: The following table shows Paying Taxes data for India compared to good practice and comparator economies: Payments (number per year) Time (hours per year) Total tax rate (% profit) INDIA 59 271 64.7 CHINA 7 504 78.5 ANALYSIS: Even though Indiaà ¢Ã¢â€š ¬Ã¢â€ž ¢s rank is far higher than China in terms of paying taxes but its less time taking and even total tax rate is less than China. Trading Across Borders India is ranked 94 overall for Trading Across Borders. Ranking of India in Trading Across Borders Compared to good practice and selected economies: The following table shows Trading Across Borders data for India compared to China: Documents to export (number) Time to export (days) Cost to export (US$ per container) Documents to import (number) Time to import (days) Cost to import (US$ per container) INDIA 8 17 945 9 20 960 CHINA 7 21 500 5 24 545 ANALYSIS: In terms of trading across borders India is far behind China in ranking however time to export is lesser than China. Enforcing Contracts India is ranked 182 overall for Enforcing Contracts. Ranking of India in Enforcing Contracts Compared to good practice and selected economies: The following table shows Enforcing Contracts data for India compared China: Procedures (number) Time (days) Cost (% of claim) INDIA 46 1420 39.6 CHINA 34 406 11.1 ANALYSIS: In terms of enforcing contracts India is far behind China. Closing Business India is ranked 138 overall for Closing a Business. Ranking of India in Closing Business Compared to good practice and selected economies: The following table shows Closing Business data for India compared to China: Recovery rate (cents on the dollar) Time (years) Cost (% of estate) INDIA 15.1 7.0 9 CHINA 35.3 1.7 22 ANALYSIS: Even though India lags far behind China in terms of closing business but the cost involved in doing so is far less than China.