A clutch of Indian companies have slogged hard to dig deep roots in China. They now look set to reap the rewards
M.S. Unnikrishnan remembers a strange phenomenon that began to affect his firm Thermax’ prospects in the international market in the early years of the last decade. Absorption chillers (used for cooling machinery) were one of Thermax’ biggest product lines and sold in 40 countries. All this while, the managing director of Thermax knew that his biggest competitors were either from Japan or the US. But gradually, a set of aggressive Chinese manufacturers had begun to take centre stage.
Getting a local ally like a provincial government or a government trade promotion agency can substantially ease the pains of starting up. When Essel Propack went to China, it set up base in Guangzhou province. When it applied for a business license to Guangzhou Economic Trade Development Agency, initially, it denied Essel 100 percent ownership. But after two months, it cleared the proposal on the ground that Essel was bringing in a technology that didn’t exist in China and 25 percent of the product would have to be exported. From this stage on, the government agency became like a foster parent for Essel. “We didn’t use any consultants — they started helping in a big way,” says Chandrasekhar. It went to the extent that they even helped Essel with niggling things — like looking for apartments and hiring interpreters!
(This story appears in the 30 April, 2010 issue of Forbes India. To visit our Archives, click here.)