CHINA AIMS GLOBAL DOMINANCE THROUGH SEAPORT CONTROL - Business Guardian
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CHINA AIMS GLOBAL DOMINANCE THROUGH SEAPORT CONTROL

Presently, China is home to seven of the 10 busiest ports in the world

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China has been developing a strategy to take control of seaports across the globe in alignment with its Belt and Road Initiative (BRI) to achieve its geopolitical aims and acquire dominance in international shipping and global business. Experts believe that establishing ports in geo-strategically important countries, including those that are located near maritime chokepoints, is central to Beijing’s global strategy, the International Forum for Rights and Security stated. “These port linkages allow Beijing to exert political influence not only in the country hosting the port but in surrounding countries as well,” Craig Singleton, a China expert at the Foundation for Defense of Democracies, told VOA.

Growing Chinese investment in the maritime shipping industry, both domestically and abroad, should be a major source of concern for geopolitical rivals such as the US, Europe and India. Presently, China is home to seven of the 10 busiest ports in the world. According to IFRAS, China has become the leading manufacturer of shipping equipment as well, producing 96 per cent of the world’s shipping containers and 80 per cent of the world’s shipto-shore cranes and bagged 48 per cent of the world’s shipbuilding orders in 2020.

The country also boasts of world’s second-largest fleet of commercial shipping vessels and, if the US Naval Intelligence is to be believed, China has surpassed the US in terms of total battle-force ships. As a matter of fact, Beijing either controls or has major investments in all 15 of the world’s top 15 ports by container volume. Apart from this massive domestic shipping infrastructure, China has control over 100 ports spread across 63 countries and is looking for more. Radio Free Asia has reported that China is building a new military base at Bata on the West Coast of Africa in the Atlantic Ocean in Equatorial Guinea (EQG). The US is concerned over this development as the Chinese military presence is opposite the east coast of America. According to the World Bank, EQG is “well endowed with arable land and mineral/hydro-carbon resources ranging from timber oil, gold, uranium, diamond, bauxite and columbite-tantalite.”

In another recent opinion piece published by the Daily Mail, the experts pointed out that, of the 96 ports owned by Chinese companies around the world, several are at key locations for maritime trade, “giving Beijing strategic dominance without having to deploy a single soldier, ship or weapons.” It is estimated that China now controls almost onetenth of port capacity in Europe and the Mediterranean. The “Big Three” terminals operators, China Ocean Shipping Company (COSCO), China Merchants Group (CMG), and CK Hutchison Holdings are the key stakeholders in overseas ports with over 80 per cent of ports under their control. The first two are state-owned enterprises, while CK Hutchison is a private company based in Hong Kong with close ties to mainland China.

Notably, China’s Maritime Silk Road and BRI converge at the Greek Port and President Xi had personally pushed for the port with Greek leadership. Another Chinese shipping company, COSCO is poised to expand its footprint in Europe by taking a stake in the port of Hamburg which, if the ongoing negotiations succeed, would be its eighth port investment in Europe. Citing Radio Free Asia, India-Pacific Defense Forum reported that for years the Chinese Communist Party (CCP) has been funding the expansion of the maritime vessels to assert its claims in the South China Sea. 

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Nepalese Tycoon Binod Chaudhary who sold ‘WaiWai’ plans to list India unit by 2026

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The firm, boasting a 28% share in the local instant noodles market and generating an annual revenue of 8 billion rupees ($96.2 million), is in preliminary talks regarding its listing plans. The aims is to achieve a 15% revenue growth this year.”

Nepalese billionaire Binod Chaudhary, who made his fortune selling instant noodles, is seeking to list his conglomerate Chaudhary Group’s India food unit by 2026. The Gurgaon-based firm, known for its Wai Wai brand of noodles that rivals market leader Maggi from Nestle Ltd. and ITC Ltd.’s Yippee, “would be ready to go for a sizable listing” in the next two years after rolling out new products and acquiring smaller firms in the noodle-related industry, Manvendra Shukla, global chief executive officer at CG Foods India Pvt., said in an interview. He didn’t share any other details. The listing plans for the firm, which has a 28 per cent share in the local instant noodles market and an annual revenue of Rs 8 billion ($96.2 million), are still in the early stages of discussion, he added. It aims to grow its revenue by 15 per cent this year.

CG Foods India’s initial public offering plans follow a rush among foodmakers, including packaged food products maker Gopal Snacks Ltd. and animal protein maker Mukka Proteins Ltd., that have gone public in the past year. The sector has seen the second-highest number of IPOs in India in the past 12 months, data compiled by Bloomberg News show. The mini-IPO boom is being fueled by investors attracted to India’s relative political stability and its status as the fastest-growing major economy amid the slowing pace of expansion in China.

The noodle maker, however, is not rushing to list and plans to bolster its market share and product portfolio first. The company is also looking to buy smaller companies that make seasonings, dips or ketchups, Shukla said.

‘Not Replicated’ Chaudhary Group launched the Wai Wai noodle four decades ago in Nepal’s capital Kathmandu, and has since grown to become India’s third-largest brand. Wai Wai is known for its preseasoned noodle — it comes with a layer of spice in addition to the seasoning pouches in the packet — which means it can also be munched on as a snack without cooking it. “We have something which is not replicated yet in the market,” Shukla said. CG Foods India currently has seven plants across the country, with Nepal and India contributing over 80 per cent to the group’s food sales. The firm expects to add production lines as volumes continue to grow in India where sales of snacks and soft drinks almost tripled over the past decade in India, exceeding 30 billion dollars. It launched two flavors last month, including a spicier variant called Dynamite, inspired by the Korean cuisine. More products are in the pipeline, including healthier noodle options, according to Shukla.

“It is a flavor battle,” he said.

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Summer Sizzles, Sales Rise, Indian Consumer Firms Gear Up

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Blue Star intensifies its product offerings with a plethora of new home air conditioner models, targeting a remarkable 25% revenue boost in the air conditioning segment, led by Managing Director B. Thiagarajan.

As temperatures soar across India, consumer goods companies are gearing up for what promises to be an exceptionally hot summer. With forecasts predicting an increase in heatwave days, reaching temperatures of at least 40 degrees Celsius in the plains, from April through June, businesses are seizing the opportunity to meet the rising demand for cooling solutions.

Blue Star, a leading appliances maker, has launched a myriad of new home air conditioner models to cater to the anticipated surge in demand. Managing Director B. Thiagarajan aims for a substantial 25% revenue growth from the air conditioning segment, a significant jump from last year’s 5%.

Similarly, renowned ice cream brand Baskin Robbins is rolling out 20 new products in India ahead of the scorching summer months.

Analysts foresee a substantial impact on consumer discretionary spending, particularly on products like air conditioners, fans, refrigerators, and cooling appliances. This surge in demand is expected to reflect robust growth numbers for the first quarter of the fiscal year for companies operating in this sector.

Traditionally, less than 10% of Indian households own air conditioners, but the combination of the hotter summer forecast and new product launches is expected to drive up this figure. Many first-time buyers are entering the market, driven by the desire for temperature-controlled comfort, particularly in light of the extreme temperatures experienced in various parts of the country.

Advertising expenditure is also on the rise, with companies like Blue Star and Baskin Robbins significantly increasing their budgets to capitalize on the heightened demand. Television and online advertising are key avenues for reaching consumers during this period.

Beyond manufacturers, delivery and service providers are also experiencing a surge in demand. Grocery delivery apps like Zepto, Swiggy, and Zomato’s Blinkit are witnessing increased orders for hydrating fruits, beverages, and ice creams as consumers seek relief from the heat.

With the summer months typically leading to increased beer consumption, breweries are gearing up for heightened production and distribution challenges. Carlsberg India’s Managing Director Nilesh Patel highlights the need for careful planning to meet the rising demand.

While the harsh weather may drive up vegetable prices and potentially curtail outdoor spending, analysts anticipate that consumers will continue to indulge in small luxuries like cold beverages and ice cream to find relief from the heat.

Overall, Indian consumer goods companies are bracing themselves for a lucrative summer season, with both manufacturers and service providers working tirelessly to meet the heightened demand for cooling products and refreshments.

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Aerospace parts maker JJG Aero raises $12 mn to hike capacity

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Bengaluru-based aerospace components manufacturer, JJG Aero, has secured USD 12 million (Rs100 crore) in inaugural funding from CX Partners which will be used primarily to increase its new facility’s manufacturing capacity, further vertical integration and other corporate initiatives.

Established in 2008, JJG Aero specializes in manufacturing build-to-print high-precision machined components, with in-house special process finishing capabilities. The funding comes at a time when the aerospace supply chain is facing all-time high demand from aircraft manufacturers, which legacy vendors in the Western world are struggling to meet. The global geopolitical issues, economic stability and Government support make India ideally placed to benefit from this deal.

The company has spent a decade in building best-in-class capabilities, processes, compliance standards, and customer relationships and obtaining requisite approvals and certifications, and we are now in the right place to grow rapidly. Anuj Jhunjhunwala, CEO, JJG Aero sees the company’s strengths and value proposition enabling them to emerge as a key player in the aerospace ecosystem. “India has emerged as an attractive destination for sourcing components and parts by global leaders and we are excited to be selected by so many marquee clients as a strategic growth vendor” says Jhunjhunwala. This investment will enable JJG Aero not only to continue on its growth path through capacity addition but also to upgrade the quality of earnings by focusing on higher value-added components.

Vivek Chhachhi, Managing Partner, CX Partners also notes that with its foray into the manufacture of aero-engine components, JJG Aero is well-positioned to capitalize on these opportunities and further solidify its presence in the market.

From simple 2-axis to complex 5-axis machining, JJG Aero offers a wide range of manufacturing services, complemented by over 30 NADCAP-approved special processes, including electroplating, anodizing, paint, and NDT. Moreover, the company provides assembly, testing, and other value-added services to its esteemed client base.

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Tesla eyes India market as Elon Musk makes bold AI prediction

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In a recent X Spaces session with Nicolai Tangen, CEO of Norges Bank Investment Management, Tesla CEO Elon Musk emphasized the importance of electric vehicles (EVs) in India, stating that it’s a natural progression for every country to embrace them. Musk highlighted India’s status as the most populous country globally and stressed that electric cars should be accessible to Indian consumers like they are in other parts of the world.

Musk’s comments coincide with Tesla’s intensified efforts to expand its presence in the Indian market. Sources reveal that the state governments of Maharashtra and Gujarat have extended enticing land offers to Tesla for the establishment of a cutting-edge EV manufacturing plant. The proposed investment for this venture ranges between USD 2 billion to USD 3 billion, demonstrating Tesla’s commitment to both domestic and international markets.

This move aligns with India’s new EV policy, which aims to attract investments from global EV manufacturers and promote the adoption of advanced EV technology among Indian consumers. The policy emphasizes the importance of domestic value addition (DVA) and sets specific localization targets for manufacturers establishing operations in India.

To incentivize investment, the government has introduced measures such as customs duty exemptions and import quotas for EVs based on the level of investment made by manufacturers. These initiatives aim to position India as a preferred destination for EV manufacturing and contribute to the country’s Make in India initiative.

In anticipation of these developments, Tesla plans to dispatch a team of experts to explore suitable locations across India for the proposed manufacturing facility. Musk’s previous statement about visiting India in 2024 further underscores the company’s eagerness to enter the Indian market and collaborate with local stakeholders.

Tesla’s expansion into India represents a significant step forward in the global EV landscape and underscores the company’s commitment to sustainable transportation solutions. With India poised to become a key market for electric vehicles, Tesla’s entry is expected to drive innovation and accelerate the adoption of EVs in the country.

As the electric vehicle market continues to evolve, Tesla’s entry into India holds the potential to reshape the automotive industry and contribute to India’s transition towards a greener and more sustainable future.

Tesla’s entry into the Indian market not only signifies a pivotal moment for the country’s automotive industry but also presents an opportunity for Tesla to capitalize on India’s growing demand for electric vehicles. With the Indian government’s focus on promoting clean energy initiatives and reducing carbon emissions, Tesla’s electric vehicles align perfectly with India’s sustainable development goals.

Moreover, Tesla’s presence in India is expected to stimulate job creation and economic growth, particularly in the manufacturing sector. The establishment of a state-of-the-art manufacturing plant will not only provide employment opportunities for local residents but also foster the development of ancillary industries and supply chains.

In addition to manufacturing, Tesla’s entry into India is poised to catalyze advancements in EV infrastructure and technology. As Tesla vehicles become more accessible to Indian consumers, there will be a corresponding need for charging infrastructure and support services. This presents opportunities for collaboration with local businesses and government agencies to build a robust EV ecosystem.

Furthermore, Tesla’s entry into India could spur competition and innovation in the domestic automotive market, encouraging other manufacturers to invest in electric vehicle technology. This competition could lead to advancements in battery technology, vehicle performance, and affordability, ultimately benefiting consumers.

Overall, Tesla’s decision to establish a manufacturing presence in India reflects the country’s growing importance in the global automotive industry and underscores India’s potential as a key market for electric vehicles. As Tesla’s footprint expands across the country, its impact on India’s economy, environment, and technological landscape is expected to be profound.

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Air India, BIAL Partner to Create South India’s Top Aviation Hub

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Air India and Tata Group airlines will partner with BIAL to improve airport services and connectivity at Bengaluru’s Kempegowda International Airport, including setting up an exclusive lounge for premium passengers.

Air India and Bangalore International Airport Limited (BIAL) have entered into an agreement aimed at bolstering Bengaluru’s status as a premier aviation hub for southern India. The collaboration seeks to enhance air travel connectivity to and from India over the next five years.

Under the agreement, Air India, along with other Tata Group airlines such as AIX and Vistara, will work closely with BIAL to improve international connectivity, operational efficiency, and passenger experience at Kempegowda International Airport, Bengaluru (KIAB or BLR airport). This includes plans to strengthen the group’s presence at the airport and establish a dedicated domestic lounge for premium and frequent travelers of Tata Group airlines.

Furthermore, Air India has signed a memorandum of understanding (MOU) with the Government of Karnataka to develop maintenance, repair, and overhaul (MRO) facilities at the Bengaluru airport. This partnership aims to stimulate the MRO ecosystem and create over 1,200 new job opportunities in the state.

Campbell Wilson, CEO and MD of Air India, emphasized the importance of airline-airport synergy in enhancing customer experience and operational efficiency. He expressed enthusiasm for strengthening Air India’s relationship with BIAL and expanding its presence at the airport, as well as establishing a major MRO center.

Hari Marar, MD and CEO of Bangalore International Airport Limited, highlighted the BLR airport’s commitment to becoming the international gateway in Southern and Central India. He stated that the collaboration with Air India aligns with the Ministry of Civil Aviation’s vision of developing Indian airports as hubs and aims to enhance the passenger experience. Marar also expressed ambitions to capture a significant share of long-haul routes from Bengaluru Airport over the next five years.

In related news, Air India announced the appointment of Jayaraj Shanmugam as its Head of Global Airport Operations, effective April 15. Shanmugam, who previously served as the chief operating officer (COO) at BIAL, brings extensive experience to his new role.

The collaboration between Air India and BIAL represents a significant milestone in the transformation of Bengaluru into a key aviation hub in the region. By leveraging each other’s strengths and resources, the partnership aims to not only enhance air connectivity but also contribute to the economic growth of Karnataka by generating job opportunities through the establishment of MRO facilities.

Jayaraj Shanmugam’s appointment as the Head of Global Airport Operations further solidifies Air India’s commitment to optimizing its airport operations and providing a seamless travel experience for passengers. His extensive experience in airport management, coupled with his previous role at BIAL, positions him well to drive operational excellence and efficiency within the airline.

As the aviation industry continues to evolve, alliances between airlines and airports are becoming increasingly vital to meet the growing demands of travelers and enhance overall competitiveness. The strategic collaboration between Air India and BIAL sets a precedent for future partnerships in the aviation sector, emphasizing the importance of cooperation and synergy to achieve common goals.

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March sees strong growth in Indian pharma market, up by 9.5%

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The Indian pharmaceutical market (IPM) experienced a notable 9.5 percent increase in sales in March, reflecting robust value growth across various therapy segments, except for respiratory. According to data from research firm Pharmarack, all therapies demonstrated positive value growth, contributing to the overall expansion of the market.

Sheetal Sapale, Vice President-Commercial at Pharmarack, noted that while many pharmaceutical companies showed double-digit value growth, unit growth remained a challenge. The growth in sales during March was primarily driven by value growth and new introductions, particularly in the anti-diabetic segment.

Several factors contributed to the uptick in sales, including new product introductions and patent expiries. For instance, there were multiple launches in the hematinic market following the loss of exclusivity rights for iron supplement Orofer FCM in October 2023. Additionally, patent expiries for drugs like Linagliptin and Dulaglutide further fueled competition in the anti-diabetic segment.

In March, Alkem emerged as one of the few companies reporting positive unit and value growth, with a 15.1 percent increase in value and an 11.3 percent increase in units sold. Other key players such as Cadilla, Fourrts, and Natco Pharma also witnessed double-digit value and unit growth during the month.

The top-selling medicine brands in March included Glaxo Smith Kline’s Augmentin and USV’s Glycomet GP, with Augmentin achieving sales of Rs 73 crore. Despite facing challenges in unit growth, Augmentin reported a 10 percent increase in value sales. Mankind’s Manforce condom brand retained its position as the third top-selling brand, despite negative unit and value growth.

Cipla’s Foracort inhaler maintained its fourth position in the respiratory segment, with sales totaling Rs 50 crore. Abbott’s Type 2 diabetes/weight management drug Rybelsus demonstrated remarkable growth, with a double-digit value growth rate of 7 percent and a staggering 75 percent increase in units sold in March.

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