Thinking about Doing Business in India?

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MUMBAI, India – Executives from Fuchs and Total offered international perspectives on doing business in India at last months ICIS Indian Base Oils & Lubricants Conference, agreeing that India is a huge and important market that poses some special challenges.

Yves Jassaud, CEO and executive director of Total Oil Indias Lubricants Division, told the ICIS conference here that in India, most important is the right attitude and mind set. Total is an international marketer, active in more than 130 countries. Lubricants are just one part of Totals activities in India, where Total has located its technical center for the entire Asia-Pacific region.

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The first issue, said Jassaud, is the decision about whether or not to do business in India at all. Ethical issues are a big question to address, he noted. In addition, can you access the market? Can you select the right partners? Your business must be profitable, so you need a robust business model, Jassaud continued. You must consider all these before deciding whether to do business in India.

Once a company has decided to enter the Indian market, you cannot impose your western point of view, especially your management style, Jassaud cautioned. There is a lot of talent and skill in India, a lot of innovation, but there are also weaknesses. Its better to combine talents than to have them against one another.

He noted attrition rates as an example of a difference between India and Europe. In Europe, you focus on staff loyalty to keep staff attrition low, Jassaud said. But in India, you need to accept staff turnover and plan for it.

Jassaud said its better to be highly patient rather than impatient. Spend time in India and youll see the complexity. Be an ambassador of India in your multinational company.

Eric Nerlinger, regional vice president for India and Southeast Asia with Fuchs Petrolub, noted that his company is the worlds ninth largest lubricant supplier, with 2012 sales of 12 billion; nearly 26 percent of Fuchs sales are in the Asia-Pacific region. Asia-Pacific is the largest regional market with the highest growth, Nerlinger told the ICIS conference on April 23. And India is extremely important, as the worlds third largest lubricant market, after the United States and China.

Fuchs has a 25,000 ton per year lubricant plant in Mumbai, and has made a big push to grow in India, but is still very small, Nerlinger said. The company sold 4,300 metric tons of lubricants in India in 2012, and its goal for 2013 is 5,500 tons, with a focus on performance products.

The challenges, said Nerlinger, include recruiting and retaining people. Logistics is a challenge; Fuchs is trying to source locally, but supply and quality are problems. Fuchs imports most of its raw materials and finished products, so costs and lead times are high. In addition, competitors are often state-owned companies.

In India, Nerlinger continued, there is often a low-cost culture, and low levels of environmental awareness and safety.

External challenges include volatile domestic demand, highly complex regulations and taxation, regulated markets, and changes to additive and base oil requirements.

India is on a downward spiral because of internal challenges and conditions, Nerlinger concluded. But we believe in India. We will satisfy key customers. Its a key country, and a major export hub to Southeast Asia. We will continue to invest in plants and people in India.

Related Topics

Asia    India    Region