Winning Bizness Economic Desk

Ford Motor Company plans to make a return to the country after stopping its operations here in 2021.

The automaker from the United States (US) has inked a Letter of Intent (LoI) with the Tamil Nadu government to explore resuming manufacturing at its Chennai plant, primarily for exporting vehicles to global markets.

The company now plans to focus on using India as a hub for exports rather than for domestic sales which had been dwindling before its exit a few years ago.

The American automaker plans to restart production at its Chennai facility located in Maraimalar Nagar, roughly 50-kilometres from Chennai.

Here, a point to note is that this move comes a few years after Ford ceased its operations at the site in the early-2020s.

The manufacturing unit, spread over 350-acres, previously produced models such as the Ford EcoSport and Ford Endeavour and exported vehicles to 37 countries.

The company’s leadership, including top executives from its global operations, recently met with the Tamil Nadu chief minister Mr M K Stalin, during his visit to the United States.

The discussion centred around reviving operations at the Chennai facility which has an annual capacity of two-lakh vehicles and 3,40,000 engines.

The Tamil Nadu government has been supportive of this move seeing it as an opportunity to bolster the state’s automotive sector.

India’s Ind Production Grows at 4.8 pc in July

The Index of Industrial Production (IIP) registered a growth of 4.8 per cent in July on an annual basis as against a 4.2 per cent growth in the previous month of June, as per data released by the Ministry of Statistics and Programme Implementation (MoSPI).

Here, it must be pointed out that the revised number for June is 4.7 per cent.

The three major components of the IIP including mining, manufacturing and electricity, grew at 3.7 per cent, 4.6 per cent and 7.9 per cent, respectively.

The capital goods segment clocked a growth of 12 per cent in July of this year, the used-based classification data suggested.

Consumer durables output slid to 8.2 per cent Month-on-Month (MoM) during July as against 8.6 per cent in June and non-durable goods contracted by 4.4 per cent.

Infrastructure and construction related goods slowed to 4.9 per cent in July of this year as against 11.4 per cent in the same month in 2023, on a Year-on-Year (YoY) basis.

The data showed that in contrast to last year, the output of primary goods contracted to 5.9 per cent in July of this year as against 7.6 per cent YoY.

Factory output growth measured in terms of IIP had registered a growth of 5.7 per cent in July 2023, according to the government data.

The previous high of IIP was recorded at 11.9 per cent in October of last year which slowed to 2.5 per cent in November, 4.2 per cent in December and 4.1 per cent in January of this year.

India’s Coal Output Up 5.85 Per Cent in FY 25

The country’s coal output grew 5.85 per cent to 411.62-million tonnes (MT) in the current fiscal year (up to September 12) over the year-ago period.

The country’s coal production was 388.86-million tonnes during the same period of last year.

“This marks a significant increase….reflecting a commendable growth rate of 5.85 per cent, despite adverse climatic conditions that challenged mining operations,” the coal ministry said in a statement.

Here, it must be pointed out that the figures are, however, provisional.

Production by state-owned Coal India Limited increased to 311-million tonnes during the same period, marking a growth of 2.80 per cent compared to 302.53 million tonnes in the corresponding period of the previous year.

This growth is even more remarkable, given the interruption in mining activities in CIL subsidiaries due to heavy rains, it stated.

An important point to note here is that coal dispatch has also registered a substantial uplift, reaching 442.24 million tonnes during 2024-25 (up to September 12) compared to 421.29-million tonnes in the same period last year, it said, adding that this reflects a robust growth rate of 4.97 per cent.

Gold Imports Surge in Apr-Aug 2024 Period

Gold imports into the country surged to USD 22.70-billion during the April-to-August period of this fiscal (FY 25), increasing from the USD 18.14-billion in the same period of the last year.

The surge this year can be attributed to increased demand.

The rise in gold imports can be attributed to increased buying by the central bank, jewellers buying to cater to the increased demand for the festive season and a reduction in duty in the union budget.

The increase in imports reflects the growing appetite for gold in India as consumers prepare for the festive and wedding season which are traditionally the peak time for gold purchases.

In contrast, the country’s export of gems and jewellery slid to USD 11.10-billion in the April-to-August period of this year as compared to USD 12.43-billion in the same year-ago period.

This dip comes even as the domestic demand for jewellery remains strong, propelled by rising gold imports and changing consumer buying patterns.

It must be pointed out here that the jewellery market in India has seen notable shifts in buying trends this year (in 2024).

Gold imports, a key indicator of the jewellery sector’s health have been moving northward.

In July and August of this year, gold imports were 11 per cent higher than in the same period of last year, showing a healthy recovery in demand.

The July-August period shows a positive sign of growth and with the peak wedding season approaching, the demand for jewellery is likely to increase further.

The World Gold Council (WGC) has projected that gold demand in the country for this calendar year (CY 24) would reach 850-tonnes, marking a 12 per cent Year-on-Year (YoY) growth.

The combination of a strong festive season, increased central bank buying and reduced customs duty is further expected to strengthen the domestic gold and jewellery markets in the coming months.

Carborundum Universal Acquires 100 Per Cent in US-based Company

Carborundum Universal, a company belonging to the Tamil Nadu-based Murugappa group has inked a binding Share Purchase Agreement (SPA) to acquire a 100 per cent state in Silicon Carbide Products Inc USA (SCP) from its current equity shareholders.

The deal values SCP at an enterprise value of USD 6.66-million (about Rs 56-crore).

The company plans to establish a wholly-owned subsidiary in the US which will serve as the Special Purpose Vehicle (SPV) for this acquisition.

The transaction is expected to be finalised by end-October 2024, according to a statement.

SCP ended 2023 with sales of USD 4.2-million and a strong profit and return profile.

Located in Horseheads, NY, SCP specialises in the production of high-quality Nitrite Silicon Carbide (NBSiC) products which cater to various industries including power generation, mining, material handling/processing, non-ferrous molten metal transfer and petrochemical refineries.