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Market Outlook 2018: A Sunnier Mood with a Few Caveats

Market Outlook 2018: A Sunnier Mood with a Few Caveats

The atmosphere at VMA’s 2018 Marke...

Is it Time to Toss Those Commissions?

Is it Time to Toss Those Commissions?

It’s tough to pinpoint exactly wha...

Cybersecurity for Process Control

Cybersecurity for Process Control

Security for any process plant has alway...

Young Valve Professionals: Megan Johnston

Young Valve Professionals: Megan Johnston

In 2014, VMA's leadership created the Val...

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Industry Headlines

Crude Oil, Petroleum Product Exports Reach Record Levels

Thursday, 19 October 2017  |  Chris Guy

According to the U.S. Energy Information Administration ( EIA ), crude oil exports in the first half of 2017 increased by more than 300,000 barrels per ...

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Industry Headlines

Emerson Agrees to Acquire Paradigm

3 DAYS AGO

Emerson has agreed to acquire Paradigm for a purchase price of $510 million, reflecting a multiple of 13 times expected 2017 EBITDA. Paradigm will be joined with Emerson’s existing Roxar automation software. The acquisition is expected to close within the next 60 days, subject to various regulat...

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ValvTechnologies Receives ISO 15848 Certification

4 DAYS AGO

ValvTechnologies’ EcoPack technology has received ISO 15848-1:2015 certification from Odin Heavy Industries. To earn ISO 15848 certification, ValvTechnologies underwent a stringent evaluation process that included a series of 17 helium leak tests and eight thermal cycles on a fully assembled v...

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Crude Oil, Petroleum Product Exports Reach Record Levels

2 DAYS AGO

According to the U.S. Energy Information Administration ( EIA ), crude oil exports in the first half of 2017 increased by more than 300,000 barrels per day (b/d) from the first half of 2016, reaching a record high of 0.9 million b/d. Petroleum product exports also grew over the same period with propan...

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Energy Intensity in U.S. Manufacturing Decreased

2 DAYS AGO

Energy intensity in manufacturing in the U.S. decreased from 2010 to 2014. U.S. manufacturing overall fuel intensity decreased by 4.4% from 3.016 thousand British thermal units (Btu) per dollar of output in 2010 to 2.882 thousand Btu in 2014. According to the Manufacturing Energy Consumption Survey (M...

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Fed Reports Economy Growth in September, Early October

2 DAYS AGO

Reports from all 12 Federal Reserve Districts indicated that economic activity increased in September through early October, with the pace of growth split between modest and moderate. The Richmond, Atlanta, and Dallas Districts reported major disruptions from Hurricanes Harvey and Irma in some areas a...

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Industrial Production Up 0.3% in September

3 DAYS AGO

Industrial production rose 0.3% in September. The rates of change for July and August were notably revised; the current estimate for July, a decrease of 0.1%, was 0.5% lower than previously reported, while the estimate for August, a decrease of 0.7%, was 0.2% higher than before. Manufacturing output...

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A Conversation with Ravi Krishnan on Doing Business in India

vmfall11_krishnanAlthough this year’s Market Outlook had its share of gloomy news regarding international economic woes, a bright spot in many of the speakers’ comments was India. That country, which did not have nearly the magnitude of problems during the Great Recession as the rest of the world, has seen consistently large year-over-year gains in the last decade and a half as it has learned to deal with the major economic reforms that began in the early 1990s.

 

The country now has one of the highest Gross Domestic Product (GDP) growth rates on the globe (about 7.5% to 8% at the time of the market outlook), with a strong demand for flow control and a current market of about $2 billion in valves, according to outlook speaker Ravi Krishnan, president of Krishnan and Associates.

 

Krishnan’s company is a technical and energy consulting firm located in the U.S. that specializes in helping countries here with their dealings in major Indian industries such as power and infrastructure. Krishnan himself was born in India, though he has made his home here in the U.S. for the last 20 years.

According to Krishnan, the growth that has occurred in his native country has not been without its challenges.

For example, “India still deals with infrastructure problems,” Krishnan explained. “There are many regions that are very well developed with manufacturing activities running smoothly. But there are other parts of the country with shortages of labor, power supplies and other essential commodities needed for a successful business operation,” he adds. Finding skilled labor or contractors skilled in western standards to execute a job can also be a challenge, as can finding the right equipment, he said.

Still, in the six years since starting his consulting business, he says an enormous change has occurred in the business world and that change permeates the Indian culture.

“The Indian entrepreneur of today is lot different than the businessman of the 1990s. Today’s companies have access to capital, knowledge of the technology, access to resources, and they have learned to do business in a global environment,” Krishnan says.

That is a critical development for anyone who wants to do business there because to be successful as an outsider requires forming good partnerships and cooperative arrangements with people and companies on the inside, he points out.

Other Challenges

One of the reasons good partnerships are so critical is price sensitivity within India’s borders, Krishnan says. “The government and industry in general have a high focus on low capital costs, even if it means moderately higher life-cycle costs,” Krishnan explains. Competition for technology is tough in India so “suppliers to the Indian industry may have to either set up operations in low-cost regions of the world such as Viet Nam or China or try to manufacture the products or most of the components of the products in India itself,” he said.

However, it does not mean quality isn’t important or is not receiving increased attention as the country learns the hard lessons that come from buying cheaper products and finding out how unsafe they can be or how expensive short life cycles can be.

“Today, you can go into that country at higher prices if you have a premium product, but it has to have demonstrable value,” he said. In the case of valves, that translates into efficiency or performance improvements over standard commodity valves.

But this value also needs strong intellectual property (IP) protection.

“Products that come into India that don’t have a strong IP position could easily be reverse engineered,” he said. At the same time, Krishnan pointed out that the country has come a long way in this area. “There has been a lot of progress in relation to IP issues in India’s court system, though damages awarded there might not be as high as in western markets,” Krishnan says. The country has aligned itself with the World Intellectual Property Organization and has patent offices in its major cities with a system design to protect both domestic and foreign technology—all of which “are positive trends towards enforcement of stronger IP situations,” he said.

Finally, a requirement for success in India is learning to recognize cultural issues with respect to the working environment.

For example, “in a small village, if there is a safety or environmental incident at a plant site, it’s likely to start a riot if a person is hurt—these issues could delay project schedules and construction activity,” Krishnan says. The country feels strongly about its communities, local customs and labor relations.

For all of these reasons, “it’s a good idea to enter the country through a joint venture, a licensing arrangement, an agency relationship or some other form of collaborative partnership with parties that know how to deal with local manufacturing issues, personnel issues, sales and marketing issues, plant siting or construction or project management issues,” he concludes.


Genilee Parente is managing editor of Valve Magazine. Reach her at This email address is being protected from spambots. You need JavaScript enabled to view it..

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