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Open Trade
Quarterly
Jan-Mar 2009
 
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Hamburg
An Emerging Leader in
Wind Power Generation


Both India and Germany are better positioned than most other countries in the world to get over the current financial crisis, thanks to the robust banking system and higher domestic savings rate. That's what Senator Axel Gedaschko, Minister for Economics & Labour of the Free and Hanseatic City of Hamburg says. Speaking to Open Trade here during the 'India Week'.

All countries including Germany is eventually getting affected by the current economic meltdown and liquidity crisis. We are in a better position to combat the crisis, thanks to our strong banking system and a very high domestic savings rate. He further adds, We had meetings with the leading bankers and insurance companies in Germany and got the feeling that there is no reason to press the panic button. And my knowledge is that the same is true with India.

We should go ahead with our development plans.

At this time when Tulsi Tanti-owned Suzlon Energy GmbH is well set to raise its stake in RE Power from 75 per cent to 100 per cent in order to fortify its European design and development center even further, which is already dedicated to the design and development of state-of-the-art Wind Turbine Generator, Hamburg - An emerging leader in wind power generation model to the rest of the world, particularly India, the Minister for Economics said.

Hamburg-based companies are also keen on developing major ports in India and discussions are on to this effect between different Indian and German companies. "Hamburg being one of the largest ports in the world, we just have the right expertise and technical knowledge base to offer such services. Hamburg Port Consultants, the largest company, has already initiated moves to mark its presence in India. But what is standing in the way is lack of co-ordination among various ministries and also lack of linkages among railways, roadways and waterways," Gedaschko said.

More than 35 Indian companies in various sectors like IT, energy, trading and bio-chem, are present in Hamburg while nearly 500 Hamburg companies are active in India. But the potentials are much more and to tap the potentials, Hamburg Senate Hamburg Business Development Corporation, Hamburg Chamber of Commerce, KPMG and the German Indian Round Table have been organizing India Week since last year.

Indian Indusry should explore possibilities to tap the large European market through Hamburg, as Hamburg is the gateway to Europe.
   
 
Great Scope for Mid-Sized Companies
Providing Specialized Services


In 1942, Subhash Chandra Bose escaped his Elgin Road residence in Kolkata (where he was under house arrest) to reach Germany. With cooperation of Germany and Japan against British Empire, he began his regular broadcasts from Radio Berlin, which aroused tremendous enthusiasm in India. Bose also founded the Free India Centre in Berlin, and created the Indian Legion (consisting of some 4500 soldiers) out of Indian prisoners of war who had previously fought for the British in North Africa prior to their capture by Axis forces.

Sixty six years down the line, Netaji's grand nephew is also building his business empire, seeking German cooperation. Meet Surya Bose (59), grand nephew of Netaji and Founder and Managing Director of Bose Information Technologies. Bose's Hamburg-based company happens to be the first set of companies, which designed and developed the initial processing system of the Airspares division of Airbus. Airbus has its Airspares divisions in Washington, Tokyo, Tullos and Hamburg. "There have been many other companies including some of the IT biggies, which have designed and worked on this system since then. But our system is still in place at Airbus and they are quite happy with it," says an upbeat Bose.

Quite like his grand uncle, Surya Bose is also facilitating and fostering Indo-German cooperation, albeit in the field of business (and also in cultural areas, the junior Bose hastens to add). He is one of the men instrumental in organizing India Week in Hamburg, Germany.

Bose, who has led several business and particularly IT delegation from Germany to India, feels that there is enormous scope for mid-sized Indian IT companies to set up shops in Hamburg. "Most of the IT biggies including Infosys, Wipro, Satyam and TCS had preferred to acquire smaller and mid-sized IT companies here to start off their German operations. They are mostly into body leasing and look at mass market business. But I think there are some mid-sized IT companies in India, which offer outstanding specialized services. There is a great scope for company providing specialized IT services here and these mid-sized companies can come and team up with their counterparts here. Geological System, for one, is one such area," Bose added.

"SME is the backbone of the German economy and Indian small and mid-sized companies can actually infiltrate into the German economy with some quality products and services if there is a proper coordination among the front-end, back-end and customers-end. Indian IT companies have technical know-how in abundance but in order to acquire the right user knowledge or particular domain knowledge of a particular industry, they have to be here," adds Bose.

Hamburg government knows that offshore works, if done properly and in a planned manner, can actually generate jobs locally and there it is not and will not be a contentions issue here, Bose assures.
By R. Mukherjee
   
 
India, an Important Strategic Partner
for Airbus Industry


The current economic challenges notwithstanding, the leading aircraft maker Airbus has identified India as "Strategically Important Country" for its business growth, which means India has been projected as one of the fastest emerging markets in world for the French aircraft maker. Airbus customers in India include Air India, Kingfisher Airlines, Jet Airways, GoAir and Indigo Airlines.

Airbus, which has a large assembly line set up in Hamburg, Germany, is keen on leveraging the "India Week" conference in the harbour city of Germany to strengthen its position further in India.

Speaking to Open Trade Magazine, the Airbus spokesman said, “Aviation Sector is growing in India adding to the growth of economy, which in turn, is expected to foster our growth further. And mind you that the latest Airbus Global Market Forecast predicts that India would have an average annual passenger traffic growth of 7.7 per cent until 2025, against a world average of 4.8 per cent over a 20 year period."

"The projected passenger traffic growth then translates into a demand for around one thousand aircraft from Indian carriers worth $105 billion over the next 17 years or so. More significantly, Indian carriers will also need nearly 40 large aircraft like A 380, which are high value products".

Airbus' association with India dates back 35 years ago when the first A300B2 from the Airbus' stable was delivered to Indian Airlines. Currently, Airbus has a market share of 70 per cent of all commercial aircraft in India with a delivery figure of atleast one aircraft per week to any International based carrier. "The best year in terms of orders received by Airbus was in 2005 when the French aircraft manufacturer bagged 229 orders from India, the spokesman said.

He further added that Airbus' partnerships in India covers various areas including engineering, IT services, training, technical publications, R&D and even manufacturing parts and sub-assemblies. More than 1000 Indian engineers chip in some contributions or the other in virtually all Airbus aircraft programmes, he mentioned.

The other reason for identifying India as a strategically important country has been that with a population of over a billion, India has around 80 fully functional airports, which regularly handle scheduled and charter flights. There are nearly seven major aviation gateways: Mumbai, Delhi, Kolkata, Chennai, Bangalore, Hyderabad and Pune and all of them are either already or will soon be ´made A380 compatible. Besides there are emerging gateways like Amritsar, Guwahati, Jaipur, Kochi and Nagpur he mentioned.
   
 
Hamburg, a Gateway to
European Market

RA Heinrich Lieser


For the State authorities, Hamburg is not just a city state but a brand, which they are keen on building and promoting and marketing to the rest of the world.

"For us Hamburg is a brand, which we are very carefully promoting, quite like any other strong brand. Hamburg has a positioning as a destination of civil aviation, logistics industries and port related business, anyways and now we are planning to position it as an ideal destination for SME sector, particularly the Indian SME sector," RA Heinrich Lieser, Chief Executive Officer (CEO), Hamburg Marketing GmbH, owned by the Hamburg Mayor and the State, told Open Trade.
“India Week 2008 in Hamburg”
India is a fast growing economy and an increasingly interesting trade partner for Hamburg. The attractiveness of the Indian domestic market is as much important as the cost-reducing advantages for the international buying markets. The Indian economy boasts of financially highly potential and innovative companies, who are global players on the world's markets. In total, approximately 35 Indian companies are present in the Hamburg Metropolitan Area, with figures rising. In return, some 500 Hamburg companies are active in India. To strengthen these business ties and to broaden the bilateral contacts the Hamburg Senate, HWF Hamburg Business Development Corporation, Hamburg Chamber of Commerce, KPMG, the German Indian Round Table, the Technical University Hamburg-Harburg, ELGA Biotech, and other institutions and organizations dealing with India launched ;last year the first “India Week” in Hamburg.

Last year the second “India Week”, took place on November 9-16, which offered manifold business options between Hamburg and India.

"We know that the Indian SME sector is growing and has tremendous potential. If some of them are looking at the European markets, Hamburg is the gateway to European market and will be the best location for them to set their shops. We had an excellent response from the first India calling week and the second India calling week has evoked equally good response. There are more than 35 Indian companies which are already operating out of Hamburg like TCS, Satyam Computers, Teekay Marine, FSL Germany, Intrakonti etc.” Leiser mentioned.

“We have set up a single-window facilitation centre for foreign companies and investors. Hamburg is a nice city with excellent cosmopolitan work culture. There are excellent education and healthcare facilities available geographically and historically it is the gateway to the European markets and the government doesn't stand in the way. So you have everything. Hamburg's other strong points is its scientific research and innovation.” Leiser added while promoting a brand called Hamburg.

Science and technology institutes 'The Hansatic City of Hamburg has been the right place for research and development as industry strives to introduce new products, processes and services. And we are also keen on drawing more and more Indian students to these institutes and that too on a regular basis. Indian talent pool is in much demand here. As many as 200 Indian engineers are already working with Airbus here," he said.

 
Hotel Atlantic
Hospitality at its best


The Hotel Atlantic Kempinski Hamburg is beautifully located on lake Alster and is right in the heart of Hamburg. The high-ceilinged bedrooms and suites are exquisitely furnished with the needs of today's luxury traveller in mind, reflecting a new approach to elegant service.

Hotel Atlantic opened its doors almost a century ago in 1909, discerning travellers have appreciated the great Hanseatic tradition of the Hotel Atlantic Kempinski Hamburg.

An unique blend of classical cuisine and modern elements in the Atlantic Restaurant, genuine Chinese and Continental cuisine and other unique delicacies.

‘Private Max’ is a private cinema with original cinema technique and equipment available for installation in rooms from 12 square meters.

Movie pleasure in a completely equipped cinema that ranks a modern multiplex or a cinema centre. Its main difference to commercial movie theatres is its size, as it has been installed in a room of approximately 30 square meters and features the latest video techniques and premium DVD with the experience, the atmosphere and the technique of modern, big cinemas in an unique private setting. It is available 24 hours a day and can also play host to corporate presentations and any kind of television broadcasts.

September 11, 2006 will remain of special importance to the hotel as it is the date when the hotel's quality management system has been certified to DIN EN ISO 9001:2000. The famous hotel in Hamburg is the first German grand hotel with ISO 9001:2000 which is the standard for quality management systems (QM System) and defines the basic requirements expected in a QM System throughout the world and covering every type of industry. It applies to the processes that the hotel accomplishes its work and meets the customers' requirements.

“The way to certification meant an enormous challenge to us, but at the same time it was a kind of adventure with a lot of things to learn for our daily work and many opportunities to go from strength to strength”, says Sebastian Heinemann, Managing Director of the Hotel Atlantic Kempinski Hamburg.

Hotel Atlantic and BMW Group Niederlassung, Hamburg have presented the BMW Suite in an exclusive world premiere. The BMW Suite is located on the third floor of the hotel, directly under the suite known as the 'James Bond Suite', in which scenes from 'Tomorrow Never Dies' were filmed.

The extensive list of prestigious guests includes eminent leaders like Vladimir Putin, the Shah of Iran, Rabindranath Tagore and stars like Michael Jackson, Sean Connery, Kim Basinger, and Madonna to name a few.

The hotel has witnessed shootings of famous films like the James Bond movie “Tomorrow Never Dies” including many German and European films.

Ultimate comfort, perfect service and uncompromising culinary excellence: tradition demands efforts to result in nothing less. The fact that perfection often lies in the little things, even the smallest detail is considered important.
   
 
Engineering Technology Offers
Tremendous Scope for
Indo-German Collaboration


India and Germany have been enjoying great bilateral trade ties over the years and Engineering Technology Industry can be one of the major focus areas in which Germany has tremendous strength. Rajesh Nath, Managing Director of German Engineering Federation (VDMA), representative office in India, takes us through the significant features for this collaboration in an interview with Tripti Chakravorty.

What are the steps that India needs to take to come up to International standards in the Engineering Technology Industry as commanded by the present German market? How can India compete with China which is far ahead?
The Indian Manufacturing sector has huge potential. The growth can be accelerated by favourable government policies, infrastructure development, reforms in labor laws, easing out of bureaucracy and regulatory burdens.

The Manufacturing Industry should leverage on the advantage of low-cost qualified work force. However to be global players and to cater to the international market, issues like productivity and quality have to be sorted out.

Alongside investment in modern technology and best practices in manufacturing, it is also necessary to make products of international standards.

In the automobile components sector, India is seen as a favourable outsourcing destination. We should use this advantage to make the world look favourably at India as a source for machine building and quality production.

The Manufacturing Industry is like a ball which has started rolling. If the government agencies and industry best practices can provide it with a favourable incline, the ball can only gain momentum.

In future, India should develop itself as a hub for advanced manufacturing, requiring engineering inputs and technical skills in comparison to China which has its strength in bulk manufacturing and economies of scale

What are the risks and opportunities that German companies have when investing in the Indian market and vice versa?
Instead of the terminology ‘risks’ I prefer to mention ‘challenges’.
Some of the major challenges faced by German companies in India:
• Approaches to Indian Markets: Whether to look out for Partners or to set up own subsidiary
• Optimal location within the country due to the geographical and cultural diversity
• Flexible concept of time and lack of commitment to time bound projects
• Infrastructure hurdles and logistic challenges
• Bureaucracy, complex taxes and duties structure

Opportunities for German Companies in India

• Availability of qualified technical manpower
• Low-cost production
• Increased requirement of specialized machinery
• Outsourcing and vendor development for global requirement
• Structured legal and patent system

Presently, which are the areas where German Engineering Technology is being put to use in India and how can this gamut be stretched to areas that have not ever been explored before?
There is good demand for German Technology in sectors like Mechanical Power Transmission, Textile Machinery, Machine Tool and Construction Equipment.

The growth in automotive and automotive component industry will trigger the demand in Automation and Robotic sectors. Application of industrial robots will expand beyond automotive industry to sectors such as Steel and Metallurgy, Glass and even heavy engineering.

Due to the government incentive and support, the Food Processing Sector is considered as a sunrise industry. Here, I foresee increased cooperation among German Technology Providers and Indian Industry. This will in turn lead to requirement of better and healthier packaging and improved logistic. Since German Machinery Manufacturers are the world leaders in Packaging Technology, they can offer the Indian Industry optimal and economical solutions to meet the increasing demand.

Presently, which way does VDMA foresee the future of bilateral trade relations between both countries and what role can VDMA and such organizations play in stepping it up further?
The bilateral trade between India and Germany has been experiencing a dynamic growth in the past few years. It recorded a growth of about 15% to reach 12.07 billion euros in 2007 against 10.54 billion euros in 2006.

In 2007 exports to Germany grew by 13% to reach 4.72 billion euros while imports from Germany stood at 7.34 billion euros which increased by 15.5 %

In future years also, we expect the rising trend to continue.

With around 3000 members divided into 38 industrial sectors, the German Engineering Federation (VDMA) is the largest industrial association not only in Germany but in the whole of Europe.

The Indian office of VDMA acts as a bridge-head between the German Machinery Manufacturers and the Indian Industry. We help our German member companies in identifying Indian partners, be it for manufacturing, service, sales or marketing. On the other hand we support the Indian companies looking for German technology.

Besides this, VDMA is instrumental in participation of German companies in the Industrial fairs in India through the German Pavilion.

We also organize business meets among the German and Indian Industry which helps in closer interaction and enhances the business relation between the two countries in the Industrial sector.

Further there are the bilateral groups which are coordinated by VDMA such as Indo-German Working Group on Coal and Indo-German Energy Forum.

Which are the sectors that Germany is strong in and how can India benefit from it and vice-versa?
The strength of the German Industry lies in the machinery manufacturing industry. The total turnover of the German mechanical and plant engineering sector in 2007 was a whooping 191 billion euros. Out of this more than 77% was exported making Germany the market leader in export of plant and machinery.
The robust growth in India generates substantial demand for modern investment good for manufacture of capital and consumer goods. Looking to the future, this means increased opportunity for imports of plant and machinery. Modern and specialized 'Made in Germany' systems and technology are increasingly finding acceptance in Indian plants for good and high quality products which are suitable for domestic market and the competitive international markets.

In 2006 of the almost 11 billion euros worth of machinery and plants imported by India, Germany was the market leader with a share of 21% followed by China with 13% and Japan with around 10%.

Are there strategic partnerships or technological co-operations between India and Germany with special reference to institutes and universities? How do they translate to the industrial levels?
Although there has been technical co-operation between Indian and German institutes and universities, however there is certainly scope for closer interaction and exchange in the future.

Within the framework of Indo-German bilateral Science and Technology Cooperation (STC), the Federal Ministry of Education and Research (BMBF), Germany, and the Department of Science and Technology (DST), India, there has been an interest to promote project based application oriented / technology development / R&D proposals involving both scientific and industrial partners.

Proposals should help to stimulate new collaborations, e.g. the preparation of joint project proposals supplementing or complementing under national funding programmes as well as European research programmes, wherever mutual interest exists. Proposals can address the preparation of joint research project proposals, the organization of bilateral (or multilateral) workshops/seminars, exploratory visits of scientists, scientific delegations and composite (scientific and industrial) delegations.

Nodal Implementing Agencies
Department of Science & Technology (DST), Government of India, New Delhi and the International Bureau of the Federal Ministry of Education and Research (IB-BMBF), Bonn are the nodal implementing agencies from the Indian and German sides respectively.

Areas of cooperation
Proposals submitted in national priority areas would be preferred:
• Nanotechnologies, intelligent materials and new production technology (new production processes) and other innovative physical and chemical technologies leading to wide technical and commercial utilization
• Information and communication technologies
• Environmental research and sustainability research
• Disaster and security research
• Other promising fields (depending on the total number of applications received)

Why is German technology sought after worldwide? What is so specific about them?
The most important features of the German manufacturing industry which gives them the cutting edge in technology are as follows:
• Intelligent Products: Future products will provide cognitive aspects and will be able to receive and handle manifold information.
• High Performance: Integration of highly dynamic components into the production facilities and the maximisation of performance, flexibility and quality of the associated production equipment.
• Energy Efficiency: Alternative technologies to generate, distribute and use energy.
• Product Design and Configuration: Product designs with half of the development time and directly resulting in the construction of customer-specific products with highest reliability.
• Adaptive Production: Adaptive production systems will continuously adapt their structure and configuration to their tasks and environment.

You would agree that the SME sector is the backbone of every economy and therefore cannot be overlooked. How can this sector come together from both the Indian and German sides and rise up to the occasion of further improvement and strengthening?
The Small and Medium Enterprises (SME) play an important role in the economic progress of not only the developing countries but also for the developed countries. This holds true for the manufacturing Industry in Germany and India.

Successful SMEs drive inclusive growth resulting in overall prosperity and balanced development. Certainly, the strength of both German and Indian Manufacturing industries lies in the SMEs.

SMEs sector in India contribute around 38% of the nations manufacturing output and 35% of the exports. Even within the 6000 odd German Mechanical and Plant Engineering companies, predominant are the SMEs.

Further, both German and Indian manufacturing industry boasts of the availability of well-qualified technicians and engineers.

The difference in the Manufacturing Industry in both the countries lie in the economies of scale, investment in research & development and labour productivity. Whereas Germany has one of the highest productivity rates in the World, India lags below the world average in productivity.

However the Indian SMEs are gearing up their technologies and production capacities and are keen to provide a sourcing hub to their German counterparts. An increasing number of Indian SMEs are showing keenness for strategic tie-ups with German firms for technology transfer as well as joint ventures to set up manufacturing facilities in India