Doing business in India: New Zealand case studies
We have put together two different examples, illustrating New Zealand businesses offering expertise to India in security management, and baggage and cargo airport systems. The case studies focus on the logistics and processes of establishing a New Zealand company's presence in the Indian market.
Glidepath
Glidepath, a New Zealand baggage, cargo and parcel automation company, is a world leader in manufacturing airport baggage systems with 500 completed projects in 61 countries under its belt. The company employs 220 staff and turns over NZ$80m annually.
First and foremost, Glidepath’s interest in India stemmed from enormous revenue potential offered by the country’s growing travel market and the desire by the Indian government to upgrade air and cargo facilities to world standards.
Photo: India, Chennai airport - installation of Glidepath arrival carousels
Focusing on India, this case study demonstrates the business opportunities available to New Zealand exporters as the country upgrades and modernises its air cargo and passenger infrastructure and demonstrates the huge potential offered by India’s travel market as the wealth of India’s citizens increases.
India has already proven a great success for Glidepath at what looks to be a very early development stage in India’s mass tourism and aviation markets. It now has the benefit of experience and a local office presence close to customers at a time when Indian spending on aviation infrastructure is accelerating rapidly. India also offers the company the option of establishing a fully fledged manufacturing hub in the region should future volumes justify investment.
Gallagher: partnerships in India
Solid local partnerships have been pivotal in Gallagher Security Management Systems’ success in markets like India, and this approach was cited as a major factor in the company’s win at the New Zealand International Business Awards in October 2010.
Gallagher SMS, part of the multi-faceted, Hamilton-based Gallagher Group, won the category Best Business $10m to $50m total annual revenue, with judges highlighting its partnership approach in 130 markets.
In India, Gallagher owns 37 percent of a joint venture with Bangalore-based Ibex, originally an agricultural fencing company. That’s a Gallagher PowerFence surround Lok Sahba, the Indian Parliament in New Delhi. One of the country’s largest conglomerates, Reliance, uses Gallagher’s Cardax security system to control the movements of 15,000 staff (and 1,000 doors) at one of its sites.
Elsewhere, a 9.5km “detection fence” protects the site where India’s much-hyped “people’s car”, the Nano, is being made, and Gallagher barriers keep animals inside India’s game parks and poachers out.
All of the joint venture’s intellectual property and technical know-how comes from New Zealand, says Curtis Edgecombe, general manager of Gallagher SMS. The Indian arm, which employs 100 Indians, is primarily a marketing and distribution business.
Ibex Gallagher has flourished on the back of population growth, massive infrastructure development and, post 9/11, more stringent security requirements around facilities such as airports. “It’s a really exciting market for us and it’s attractive because it’s an English-speaking market,” says Edgecombe.
What about protecting IP? “We are careful about the raw information we provide to any market – and that might be software code, or PC board designs,” he says. “But in terms of sending product, we don’t worry about things; the IP we have developed is embedded in the firmware.”
Photo: Reliance Infocomm - end user of Gallagher's security access system in India
Edgecombe says there are three critical steps for getting into Indian markets: “You need to have a strong business plan; find a reliable local partner who mirrors the company values and fits in with the business strategy; and invest in enabling and supporting these partners.”
Building and then nurturing a mutually supportive partnership is essential. “We rely on our Indian partners to bring marketing and local knowledge – we can’t do it from here,” he says. “And we commit from our end to provide resources and expertise.”
Gallagher Group founder Bill Gallagher started investigating India in the in the late 1980s. Every time he went to Europe, he says, he stopped off in India to check out business prospects. However, getting established was a slow process in those days: “we had no established market contacts, onerous import licenses were needed, and the initial products sent to India attracted 100% duty”.
As India started reducing red tape, and with New Zealand Trade and Enterprise support, Gallagher started making inroads. He came across Ibex, then an agricultural fencing company suffering reliability problems with its finished products. Ibex decided its own future rested with Gallagher products and hasn’t looked back; the joint venture dates from 1995.
Edgecombe says New Zealand companies looking to sell in India need to make “a long-term commitment and investment. And it’s not necessarily about money – you’ve got to be there regularly, supporting the local people, making sure they are comfortable with your products and up with the latest developments. Over time, that develops into a very solid relationship.”
- Glidepath case study by Matthew Roy. Gallagher case study by Julie Middleton.