|
COVER STORY: WTC FALLOUT
3 MAKE MOST OF
THE BARGAINS
Airlines, including Swissair, Continental and
United, have been struck by turbulent economic weather as have the aircraft
manufacturers.That didn't stop China from ordering 30 Boeing aircraft
on October 2 in a deal worth $1.2 billion (Rs 5,760 crore). Air-India
and Indian Airlines, both of which need to expand their fleets, could
take a hint. Especially now that their privatisation isn't going to take
place any time soon.
It's not just the aviation sector. Excess capacity
afflicts virtually every capital goods sector across the globe. That presents
an opportunity to import machines and equipment at bargain prices. Last
fortnight Videocon Chairman V.N. Dhoot revealed that his company was "seriously
considering bidding for French white goods giant Moulinex" which
has filed for creditor protection. A few years ago, Videocon had bought
a plant from the Italian white goods component manufacturer Neichi Compressori
and integrated it with its existing production line to produce cheaper
components. Reeling under the twin impact of the economic slowdown and
increasing competition, many companies may find it lucrative to restructure
and modernise their production lines by importing capital goods available
at bargain prices.
4 LURE FOREIGN
INVESTORS
The global slowdown makes India stand out as
one of the very few high-growth markets. Even if India's gross domestic
product grows by less than 6 per cent in 2001-2, it will be the world's
second or third fastest growing economy. A recent McKinsey survey predicts
that with the right policy environment, India can attract $12 billion
in energy, $4 billion in telecom, $4 billion in financial services and
$1.5 billion in the food sector. "This is a good opportunity to attract
global investors. With interest rates falling, investors would be looking
for markets registering high growth," points out BPL Telecom Chairman
Rajeev Chandrashekar. But before that, the Government will have to sort
out the negative policy environment. A good start could be to settle the
Enron issue. The financial institutions could borrow afresh, alter the
debt structure and part-fund potential acquirers like the National Thermal
Power Corporation.
5 BREED INDIAN
MNCS
The time is also right for India Inc to broach
new pastures. DSP Merill Lynch Managing Director Shitin Desai believes
that "this is the right time for Indian software giants like TCS,
Infosys, Wipro and others to go out aggressively and look for acquisitions
that will serve as front ends for the highly competitive Indian software
companies".
The costs could be high, but Kamath has a solution.
"With interest rates at a historical low, Indian financial institutions
could look at raising funds from the US market to support the Indian companies'
forays in the international markets," he says. For this the Government
will have to allow Indian financial institutions to fund such acquisitions
overseas.
Kamath believes that the financial institutes
that have a presence as borrowers in the international markets "could
utilise their brand equity to raise funds overseas for loans to Indian
corporates looking to exploit emerging opportunities, particularly in
Europe and South-East Asia".
7 REVERSE BRAIN DRAIN
Knowledge capital is the future and Reliance
Industries Vice-Chairman Mukesh Ambani feels this is the time to "aggregate
Indian intellectual capital and reverse the brain drain". The spectre
of the return of racism along with shrinking job opportunities could drive
some professionals back from the West, not just from infotech but from
emerging fields like biotech too. Kamath suggests a few specific business
ventures to lure and keep professionals in India: bidding for outsourcing
businesses like disaster-management systems and back-up data centres.
"The back-up systems can be housed and maintained cheaply and safely
in India and can be up and running within no time in case of a disaster
in the US or any other country." If the US tightens its immigration
laws further, the already thriving it-enabled services-call centres, back-office
operations, transcription and payroll accounting services-will get a boost.
These aren't the only measures required to neutralise
the fallout of the global economic uncertainty. But the lesson is to look
beyond the obvious for opportunities. And make the most of them.
|
METRO TODAY
Web
Exclusives
