Enhancing India’s Exports
Transcript of Enhancing India’s Exports
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E nh anc ing I nd ia snha nc ing I nd ia sE xpo r t sxpo r t s
Reliances Experience - Focus Polymer Exports
By
Kamal P Nanavaty
ETIG Knowledge Forum
January 15th, 2004
Mumbai
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Reliance : AnReliance : AnOverviewOverview
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Reliance - Businesses
Materials and energy value chains and infrastructure
Textiles
PolyesterPlastics &
Polyester PetroleumProducts
Oil & GasInfrastructure
NarodaPatalganga
HaziraJamnagar
Bombay High
KG Basin
Suiting PSF LLDPE LPG Crude Oil Power
Shirting PFY PP Gasoline Natural Gas Telecom
Furnishings POY PVC Naphtha
Pillows P. Chips MEG ATF
Fabrics PTA Ethylene Kerosene
PX Propylene Diesel
LAB VCM Petcoke
EO Sulphur
Ducts
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Reliance FinancialsReliance Financials
0
10000
20000
30000
40000
50000
60000
70000
98-99 99-00 00-01 01-02 02-03
Rs. Crs.
0
500
1000
1500
2000
2500
3000
3500
4000
4500
Rs. Crs.
Turnover
PAT
Over 30% CARG in Turnover & PAT over the last 12 years
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Reliance Key Facts
s
Gross turnover of Rs. 65,061 crs. ( US $ 13.7 billion)
s Gross Profit of Rs. 9,366 crs. ( US $ 1.97 billion)
s
Net Profit of Rs. 4,104 crs. ( US $ 0.864 billion)s Compounded annual net profit growth over 5 years ~
19%
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Reliance in Numbers
s
5% of Indias total exports
s 30% of the total profits of the private sector in India
s 10% of the Govt.s indirect tax revenues
s 5th largest single location oil refinery in the world
s 2nd largest producer of polyester fibre & yarn in the world
s 3rd largest producer of paraxylene (PX) in the world
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Reliance - Product FlowReliance - Product Flow
Products exported :
Oil Products Diesel, Gasoline, ATF, Naphtha TAME, VGO, Petcoke
Polyester POY, PSF, PTY, PET Chips
Intermediates
PTA, PX, MEG, DEG, TEG Polymers
PP, PE Chemicals
OX, LAB, Benzene Textiles
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Enhancing Indias ExportsEnhancing Indias Exports
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Indias Top Exporters (2002 03)Indias Top Exporters (2002 03)
Company Exports (Rs. Crs.)
1. Reliance Industries 11510
2. TCS 4545
3. Infosys 3376
4. Wipro 2882
5. Videsh Sanchar Nigam 2847
6. Indian Oil Corp. 2626
7. MMTC 2294
8. BHEL 1923
9. Ranbaxy 1902
10. MRPL 1875
Source : ETIG, Company Annual Reports & websites
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Reliances Export MarketReliances Export Market
8 overseas sales officesExports to over 100 countries
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Focus : Po lym er Expo r tsocus : Po lym er Expo r tsPEs
PPPVCPS
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Inter Regional Polymer Trade FlowsInter Regional Polymer Trade Flows
1.2
1.2
0.3
3.0
1.0
5.0
2.0
1.2
(Million MT)
China is the key driver for world polymer trade
Global Trade : 35 MMT
Asian Trade : 18 MMT
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Asia Pacific Polymer Trade (2002)Asia Pacific Polymer Trade (2002)
Exporters ImportersCountry Exports (KT) Country Imports (KT)
1. South Korea 4617 China 11516
2. Saudi Arabia 3281 Taiwan 452
3. Japan 2082 Indonesia 444
4. Thailand 1851 Vietnam 368
5. Singapore 1701 Pakistan 325
6. Taiwan 1696 Australia 323
7. India 925 Japan 312
8. Indonesia 505 Israel 309
9. Kuwait 490 Thailand 300
10. Malaysia 470 Iran 225
11. Qatar 370 Philippines 201
12. Others 649 Others 96918637 15744
Asian Polymer Trade value ~ USD 13 billion1.1 million TEUs required to move this volume
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As ia Pac i fi c Conta ine r Ba lances ia Pac i f i c Conta ine r Ba lance
s Current global container demand ~ 61 million TEU
s Huge imbalance in container demand / supply in Asia Pacific
s Asia to Europe (west bound) and Asia to N. America (east bound)
demand is outstripping supply, despite record capacity addition of 640 K
TEUs in 2002
s Situation expected to ease only by 2006
Source : Mitsui OSK Shipping Research
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Polymers Exported by ReliancePolymers Exported by Reliance
Polymer HS Code
High Density Polyethylene ( HDPE) 390120
Linear low Density Polyethylene ( LLDPE ) 390110
Polypropylene (PP ) 390210
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Reliance Polymer ExportsReliance Polymer Exports
s Reliance is one of Asias largest exporters of polymers
s Accounts for ~ 70% of Indias total polymer exports
s Bulk of polymer exports are manufactured at Jamnagar, Gujarat
s 27% of polymer production is exported
s Exports from JNPT / NSICT, Kandla , Mundra, Sikka
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Indian Polymer Producers Export SharesIndian Polymer Producers Export Shares
RIL + IPCL
64%
Haldia
17%
GAIL
7%
Supreme
8%
Others
4%
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Reliance Polymer ExportsReliance Polymer Exports
Manufacturing Site Port Mode Products
Jamnagar Kandla Containers PP
Sikka Break Bulk PP
Hazira JNPT Containers PP, PE
NSICT Containers PP, PE
Vadodara JNPT Containers PP
NSICT Containers PP
Nagothane JNPT Containers PP, PE
NSICT Containers PP, PE
Gandhar JNPT Containers PE
NSICT Containers PE
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Logistics Constraints - Reliance ExperienceLogistics Constraints - Reliance Experience
s Major exporting Plant for Reliance at Jamnagar
s Nearest gateway port Kandla
s Capacity constraints ex-Kandla limited export evacuation to ~ 1/3 of
required volume.s Necessitated Innovation initiated direct break bulk movement via
Sikka jetty.
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CommonFeederto JNPT
Via Singapore/UAE / to finaldestination
(S.E. Asia)
Ahmedabad
Jamnagar
Logistics InnovationLogistics Innovation
Break Bulkto China & S.E.Asia
BreakBulkto
Jebel Ali
ContainersFrom Kandla
ContainersFrom Kandla
Jamnagar
Break Bulk movement initiated
MOVEMENT - THEN MOVEMENT - NOW
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Exports General ConcernsExports General Concerns
s Infrastructure
s
Logistics
s Regulatory
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InfrastructureInfrastructure
Sub optimal operations at major gateway ports
Lack of timely development of new ports at
suitable locations - no container port betweenMumbai and Chennai
Lack of connectivity by expressways to ports
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Infrastructure ComparisonInfrastructure Comparison
JNPT Kandla Jebel AliLaem Cha
BangSingapore Busan
Container Terminals 2 1 6 5 3 6
No.of Berths 5 4 10 5 20 31
Draft (m) 12 10 12 14 17 15
Volume - '000 TEUs PA 1,573 126 4,194 1,110 16,800 9,436
Max. size of Vessels (DWT 50,000 30,000 80,000 50,000 150,000 50,000
* Export hub near Bangkok
Indian ports need urgent upgradation
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Asian Container Ports Global Ranking (2001)Asian Container Ports Global Ranking (2001)
Port Country TEU's ('000) Rank in Asia 2001 World Rank 1996 World Rank
Hong Kong China 17900 1 1 1
Singapore Singapore 15520 2 2 2
Busan Korea 8073 3 3 5
Kaohsiung Taiwan 7541 4 4 3
Shanghai China 6340 5 5 18
Shenzen China 5076 6 8 < 130
Port Klang Malaysia 3760 7 12 26
Jebel Ali UAE 3502 8 13 14
Yantian China 2700 9 17 88
Qingdao China 2640 10 18 42
JNPT India 1190 26 49 93
Chennai India 352 43 123 128Mumbai India 321 45 130 69
Chinese ports have upgraded and grown at amazing speeds !
Source : Containerization International
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Logistics - JNPTLogistics - JNPT
Inadequate equipment
Lack of modernisation
Inadequate productivity
Fewer shipping lines calling
Infrastructure not in line with volume growth
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JNPT..JNPT..
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Logistics - NSICTLogistics - NSICT
Acute congestion with frequent gate closure
Capacity constraint to store containers
Infrastructure not in line with volume growth
Sharp increase in ICD outbound traffic crowding out factory stuffed export traffic
CONCOR unable to cope with onbound traffic -> congestion at port
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NSICT..NSICT..
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Logistics - KandlaLogistics - Kandla
Draft restrictions limiting larger vessels call
Only feeders can operate restricted to Indian flag
Higher Feedering cost monopoly of Indian ship owners, lack of global competition
Smaller vessel capacity resulting in lower container throughput
Weekly vessel call limiting export evacuation
L i i M d
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Logistics - MundraLogistics - Mundra
Full fledged operation yet to start
All major lines yet to call
Port hinterland yet to be developed
L i tiL i ti
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LogisticsLogistics
Higher Fuel Cost in India leading to high Inland
movement cost.
Poor condition & load bearing capacity of roads
more wear and tear of vehicles
slower movement
Ad hoc local regulations - Imposition of load restrictions,issuance / removal of Golden Pass system, permits for
inter state movement
R l tR l t
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RegulatoryRegulatory
Lengthy and cumbersome documentation procedure.
- Number of documents per shipment - 17 nos.
- Number of govt. agencies 4 nos.
- Number of signatures ~ 150
EDI still to be fully implemented at all major ports.
Public holidays
India 17 + 7 addl. Bank holidays
Jebel Ali 13 Days
Thailand 16 Days
China 15 Days
Vietnam 9 Days
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C St dCase Study
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Case StudyCase Study
ACTIVITY NO OF DAYS CUM DAYS NO OF DAYS CUM DAYS
L/C --> PRESHIPMENT 5 5 3 3
PRESHIPMENT --> DESPATCH 7 12 1 4
DESPATCH --> INVOICE 7 19 2 6
TOTAL DAYS 19 19 6 6
KOREAINDIA
Typical Export Cycle Time PolymersIndian Port : Kandla
Korean Port : Pusan
Destination : China
Speed essential to ensure competitiveness
Wish listWish list
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Wish listWish list
Infrastructure
Modernization of existing ports and facilities
Govt. grants and facilitation for development of new ports.
Linking all major ports with expressways to existing / planned trunk
highways
Regulatory
24 X 7 operations - Online customs clearance EDI Electronic Data
Interchange at all ports
Single window and single paper clearance for pre / post shipment
procedures & benefits
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Wish ListWish List
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Wish List.Wish List.
Regulatory
Limited Port & Customs Holidays.
Simplified procedure for refund of excise duty paid on inputs used
in exported product
Facility to import catalyst for replacement under EPCG scheme
and export of spent catalyst for reprocessing
Govt. to exempt export profits from Income Tax, instead of theformula being followed currently
Wish ListWish List
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Wish List.Wish List.
Regulatory
For ISFTA shipments, dispensing with inspection of
production site by Export Inspection Agency (EIA) which is
currently required after every 10 shipments
Deemed exports supplies to be exempted from Sales Tax
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