Competition Issues in Manufacturing Sector.ppt

Competition Issues in Manufacturing Sector Based on: - Ch 12, State of Competition in the Indian Manufacturing Industry (K.V. Ramaswamy) - Ch 13, Competition Issues in the Indian Cement Industry (Pradeep S Mehta Nitya Nanda) - Ch 14, Competition Scenario in Indian Steel Industry (A.S. Firoz) Contents Assessment of the extent of Competition in Markets in the 1990’s Case Study of Cement Industry Case Study of Steel Industry Economic Reforms during 1990’s What has happened to concentration levels in different industries, in the post-reform period? Concentration examined for selected industry groups: consumer non-durables, consumer durables, intermediate goods, and capital goods HHI Index Caveats (adjustment for imports, unorganised sector) Consumer Non-Durables Market concentration increased in certain key consumer goods: Biscuits (Britannia Industries: 32%) Synthetic Detergents (Hindustan Lever: 42%) Lamps Tubes (Philips India: 29%) Each of these industries have one or two dominant firms Many of these industries, dominated by MNCs (MA route) Consumer Durables Concentration level shows a marked increase in: Automobile tyres (MRF: 24%) Motorcycles (Hero Honda: 50%) Bicyles (Hero Cycles: 40%) Three-wheelers (Bajaj Auto: 75%) Each of these industries have one major firm with a high market share Intermediate Goods Concentration level shows a marked increase in : Polyester Staple Fibre (Reliance: 54%, world’s 5th largest producer of PSF) Viscose Staple Fibre (Grasim: 91%, world’s largest plant for producing VSF) Paints Varnishes (dominated by three firms) Storage Batteries (Exide Batteries: 62%) Capital Goods Concentration level shows a marked increase in : Boilers (dominated by the PSU, BHEL) Chemical Machinery (LT) Portable Power Generation Sets (Honda Siel Power Products and Birla Power Solutions, 100%) Summary of Findings One or Two large firms dominate industries, which experienced increase in concentration level Both domestic and foreign owned firms have taken do