intern@gates
TRANSCRIPT
Summer Training at Gates
Presented by:Amit Pathak
What is Hose?
Charles Gates, Sr. bought The Colorado Tyre and Leather Company in 1911 for $3,500.
In 1954, the company opened its first international manufacturing facility in Brantford, Ontario, Canada.
1958, the Rubber Company opened Gates Rubber de Mexico.
In 1963, Gates built a belt and hose plant in Belgium, the first of many European facilities.
Today, Gates is the only non-tyre producing Rubber Company with sales and manufacturing operations in all of the world's major markets, including North America, Europe, Asia, Australia and South America.
About Gates
In 1996, The Gates Rubber Company, became a wholly-owned subsidiary of Tomkins, ending 85 years of ownership by the Gates family.
At the time of the transaction Gates was the largest non-tyre rubber company in the world providing
Tomkins got a strong platform to build a global industrial and automotive components business.
Tomkins is a world class global engineering and manufacturing group with market and technical leadership across two businesses: Industrial & Automotive and Building Products
Tomkins & Gates Corporation
Vision - An enterprise of global presence with an entrepreneurial culture that accelerates growth.
Mission -Providing best results and be acknowledged as Gates connected.
Gates Corporation
Gates is organized into three product groups – ◦ Worldwide Power Transmission ◦ Worldwide Automotive Hoses◦ Worldwide Hydraulic and Industrial Hose &
Connectors The products are also reaching foreign
shores through markets in the U.S., Europe, South Africa, Japan, Singapore & other countries.
Facilities:
◦ Manufacturing unit at Lalru(Ambala).
◦ Assembly unit at Faridabad.
Gates India Private Limited
Flow of Operations
DEMAND PLANNING
PRODUCTION
WAREHOUSING
CALCULATION OF LANDING
COST
PUNCHING INFORMATION ON TO THE PRODUCT
SELLING
COLLECTION OF PAYMENTS
The Domestic market is divided into 5 segments i.e.:
North South East West Gujarat
Market Division
Spiral Hose Air Drill Hose
R1 Hose Mine Spray Hose
R2 Hose Air Water Hose
R3 Hose Gasoline Hose
R6 Hose Carbon Free Hose
R12 Hose Chemical Hose
R15 Hose CNG Hose
R17 Hose Concrete Transfer Hose
J2AT Hose Petrol Hose
Oil Hose Pneumatic Hose
Mining Hose Rockdrill Hose
Sandblast Hose
Steam Hose
Super Spray Hose
Wash Down Hose
Industrial
Organizational chart
PRESIDENT KARL MORTIZ
VICE PRESIDENT
RAJESH BHANDARI
FINANCE/ ACCOUNTS RECIEVABLES DEPT
VIRENDRA ARORA
HUMAN RESOURCE DEPARTMENT
PUNEET TUKAIT
Regional managers
CUSTOMER SERVICE DEPARTMENT
RISHI CHACHRA
LOGISTICS
VIJAY RANA
INFORMATION TECHNOLOGY C S SAI C S SAI
PURCHASE /MATERIAL DEPARTMENT
AMIT MAINDOLA
PRODUCTION DEPARTMENT
VIVEKANAND
QUALITY DEPARTMENT
ARUN YADAV
STORES
UDAM SINGH VIKRAM
RM EAST
ASHWIN
RM GUJRAT
ARUN SHARMA
RM NORTH
DINESH SHARMA
RM SOUTH
RAJ IYER
RM WEST
SHEKHAR SHETTY
Construction & Heavy Equipment Manufacturers
Mining Sector Oil Sector Steel Manufacturers Cement Plants
Indian Clients
Caterpillar Chrysler Ditch Witch Ford General Motors, Hitachi Ingersoll Rand JCB John Deere JLG, Komatsu Nissan Toyota
Global Clients
STRENGTH
GLOBAL MARKET PRESENCEHIGH QUALITY PRODUCTIVITYHIGH CORDINATION AMONG VARIOUS DEPARTMENTS
WEAKNESS
LOCATION TEMPERATURE REQUIREMENTTECHNICAL BREAKDOWNS
OPPORTUNITY
NEW MARKETSPRODUCT EXPANSION
THREATS
NEW ENTRANTSIMPORTS
SWOT
Current ratio:Amount in $
Millions
Liquidity ratios:
Particulars 2009-2010 2008-2009 2006-2007
Current Assets 1,839 1882.4 1062.4
Current Liabilities 810.1 761.5 439
Current Ratio 2.27 2.47 2.42
Quick ratio:
Amount in $ Millions
Particulars 2009-2010 2008-2009 2006-2007
Quick Assets 1,249 1110 661
Current Liabilities 810 761 439
Quick Ratio 1.54 1.45 1.50
Absolute liquid ratio:
Amount in $ Millions
Particulars 2009-2010 2008-2009 2006-2007
Absolute Liquid Assets 445 291 148
Current Liabilities 810 761 439
Absolute liquid Ratio 0.54 0.38 0.33
Stock turnover ratio:
Operating ratios:
Amount in $ Millions
Particulars 2009-2010 2008-2009 2006-2007
COGS 2995 4023 4284
Average Inventory 681 586.5 397
Stock Turnover Ratio(in times) 4.39 6.85 10.79
Stock Conversion Period (in months) 2.72 1.74 1.11
Working capital turnover ratio:
Amount in $ Millions
Particulars 2009-2010 2008-2009 2006-2007
Sales 4180.1 5515.9 5886.1
Average Working Capital 1074.9 872.15 628.75
Working Capital Turnover Ratio 3.88 6.32 9.36
Fixed asset turnover ratio:
Amount in $ Millions
Particulars 2009-2010 2008-2009 2006-2007
Sales 4180.1 5515.9 5886.1
Net Fixed Assets 1678 1739.3 1131.4
FIXED ASSET TURNOVER RATIO 2.49 3.17 5.20
Gross profit ratio
Profitability ratios:
Amount in $ Millions
Particulars 2009-2010 2008-2009 2006-2007
Gross Profit 1184.2 1492.2 1601.5
Sales 4180.1 5515.9 5886.1
Gross Profit Ratio (%) 28.33% 27.05% 27.21%
Net profit ratio: Amount in $ Millions
Particulars 2009-2010 2008-2009 2006-2007
Net Profit 38.4 -8.1 525.1
Sales 4180.1 5515.9 5886.1
Net Profit Ratio (%) 0.92% -0.15% 8.92%
Operating ratio:
Amount in $ Millions
Particulars 2009-2010 2008-2009 2006-2007
Operating Cost 1099.5 1425.3 1015.5
Sales 4180.1 5515.9 5886.1
Operating Ratio (%) 26.30% 25.84% 17.25%
Operating profit ratio:
Amount in $ Millions
Particulars 2009-2010 2008-2009 2006-2007
Operating Profit 84.7 66.9 586
Sales 4180.1 5515.9 5886.1
Operating Profit Ratio (%) 2.03% 1.21% 9.96%
3 Years Trend In Sales
2006-2007 2008-2009 2009-20100.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
100.00%93.71%
71.02%
Sales
Sales
100.00%
-12.07% 2.57%
-20.00%
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
2006-2007 2008-2009 2009-2010
Profit after tax
Profit after tax
3 Years Trend In Profits After Tax
Business opportunity analysis for Gates Corporation
To provide a picture of competing products coming into the country.
Comparative analysis of the prices of the product in relation to its competitors
Providing a potential business opportunity analysis.
Need of the study:
Analyzing the imports of hose coming into the country at different ports.
Analyzing the major hoses produced by gates which are being imported, and determining the countries from where they are being imported.
Analyzing the price differences of hose produced by gates and its close competitors.
Analyzing the reasons for import of hoses and the ways through which it can be reduced.
Objectives:
Research Design - Descriptive research design
Universe – All the companies which are engaged with hose industry.
Population - The hose industry of India Sampling Unit – Employees of Gates India
private limited. Sample size - 15 Sampling Technique – Snowball Sampling. Data Collection – Primary and Secondary
source
Research methodology
Time constraint.
Distance constraint.
Unavailability of required information
Limitations
Figure 4.1All India import figures for eight months.
Figures in meters
0
500000
1000000
1500000
2000000
2500000
555492 642403
1994656
1064894
2063525
763055636498 698609
ALL INDIA
ALL INDIA
Total imports8,419,132.40
Months
Quanti
ty
Figure: 4.2 Region wise bifurcation of imports (8 months total)
Figures in meters
1564966.07
3792856.709
36537.7
3024771.92
NORTH
WEST
EAST
SOUTH
45.05%
0.43%
35.93% 18.57%
Figure 4.3 Region wise bifurcations of imports (8 months average)
Figures in meters
195621
474107
4567
378096
NORTH
WEST
EAST
SOUTH
Figure 4.4 Bifurcation of imports at different ports in north.
Figures in meters
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
15,000 4,500 31,474
67,057
5,686
68,181 26,234 26,470
88,095 73,819
142,469
120,764 255,148
68,241
142,500 214,820
214,509
DELHI PPG
DELHI TDK
DELHI
Quanti
ty
Months
Figure 4.5 Bifurcation of imports at different ports in South.
Figures in meters
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
JNPT
MUMBAI
Months
Quanti
ty
Figure 4.6 Bifurcation of imports at different ports in East.
Figures in meters
0
5000
10000
15000
20000
25000
30000
35000
40000
KOLKATA
KOLKATA
Months
Quanti
ty
Figure 4.7 Bifurcation of imports at different ports in South.
Figures in meters
0
100000
200000
300000
400000
500000
600000
700000
800000
GRAND TOTAL BANGLORE
GRAND TOTAL HYDERABAD
GRAND TOTAL CHENNAI
GRAND TOTAL COCHIN
Months
Quanti
ty
Figure 4.8 Hose wise Bifurcation
Figures in meters
3,518,955
399537
967,100
577,034
684,296
232,318
207,734
85,772
79,996 18,691
AUTOMOTIVE
SPIRAL
R2
R1
INDUSTRIAL
PILOT
AIR WATER
HYDRAULICS
R6
R5
52%
5.90%
14.28%
8.52%
Figure 4.9 Analysis of spiral hose being imported
Figures in meters
0
20000
40000
60000
80000
100000
120000
6149.8
11912.610701.3
8033.7
16479
5075.2
42174.940766.5
100868.7
55962
26499.8
59172.89
13351.6
TOTAL SPIRAL HOSE IMPORTS=399537
Quanti
ty
Category
Figure 4.10 analysis of countries from where the spiral hose is being imported
Figures in meters
60160 7530
32110
38465.7
184319316
10178.6
223345
CHINAGERMANYISRAELITALYJAPANSINGAPORETHAILANDREST OF THE WORLD
15.14%
8.08%
9.08%
4.6%
Figure 4.11 analysis of imports of R1 hose
Figures in meters
0
20000
40000
60000
80000
100000
120000
140000
160000
10884.614401.4
31392.2
78973
61384.6
42824.1
146606
36673.5
39752.6
16672
32426.2
8514.619123.5
32209.1
5196.2
TOTAL R1 IMPORTS = 577,034
Quanti
ty
Category
Figure 4.12 analysis of countries from where R1 hose is being imported.
Figures in meters
69906.9 10080.72502
8220
89708.4
13877
68424.123427.9
18550
272336
CHINA
ITALY
JAPAN
SOUTH KOREA
MALAYSIA
NTHERLANDS
TAIWAN
THAILAND
TURKEY
REST OF THE WORLD4%
3.2%
12.11%
15.54%
11%
1" R
2 HO
SE
1/2"
R2A
T HO
SE
1/4"
R2A
T HO
SE
2" R
2AT
HOSE
3/4"
R2
HOSE
3/8"
R2A
T HO
SE
5/16
" R2
HOSE
5/8"
R2A
T HO
SE
ETER
NITY
HOSE
EQUATO
R HOSE
HYDRAU
LIC H
OSE
2SN
JC
B
RUBBER H
OSE
TRACTO
R HOSE
OTHER
S
0
50000
100000
150000
200000
250000
24541
246858.6
78789.9
3097.5
56561.9
227620.5
4029253676.9
44093.2
5294.7
78138.1
25247.2
38006.834857.6
10024.1
Total R2 Import 967,100
Figure 4.13 analysis of imports of R2 hose
Figures in meters
Quanti
ty
Category
Figure 4.14 Analysis of countries from where the R2 hose has been imported.
Figures in meters
141150 303167063
109927
103232055.3
206418.8
33294
78596
347956
CHINAITALYJAPANMALAYSIANETHERLANDSINGAPORETAIWANTHAILANDTURKEYREST OF THE WORLD
11%
21%3%8%
14.59%
Figure 4.15 Price comparison of R1 type hose.
Figures in meters
0.00
500.00
1000.00
1500.00
2000.00
2500.00
3000.00
R1 3/16"
R1 1/4"
R1 5/16"
R1 3/8"
R1 1/2"
R1 5/8"
R1 3/4"
R1 1" R1 1 1/4"
R1 1 1/2"
R1 2" R1 2 1/2"
R1 3"
102.59110.51
118.02129.36
144.50 169.90206.08
312.87 361.33
446.98611.70
944.48
1194.60-7% -7% -9% -5% -7%-7%
-8%-5%
-9%
-5%
-5%
15%
-12%-18% -13% -16% -15%
-3%4%
1%
19%
8%
6%
MANULI
PARKER
GATES
Pri
ce
Category
Figure 4.16 Price comparisons of R2 hose
Figures in meters
0.00
500.00
1000.00
1500.00
2000.00
2500.00
3000.00
3500.00
4000.00
R2 3/16"
R2 1/4"
R2 5/16"
R2 3/8"
R2 1/2"
R2 5/8"
R2 3/4"
R2 1"
R2 1 1/4"
R2 1 1/2"
R2 2"
R2 2 1/2"
R2 3"
120.67 128.44139.21161.18
181.56226.71
268.36
395.74527.71
660.51
914.28
1205.64
1581.20
-6% -3% -10% -8%-5%
-10%
-4%
-5%
-8%
-5%
-10%
22%
-1%
-11% -1% -10%-7%
0%
-5%
-10%
17%
6%
-3%
MANULI
PARKER
GATES
Pri
ce
Category
Figure 4.17 Price comparisons of G1H hose
Figures in meters
0.00
100.00
200.00
300.00
400.00
500.00
600.00
700.00
800.00
G1H 1/4" G1H 5/16" G1H 3/8" G1H 1/2" G1H 3/4"
124.60 141.44 154.60 173.43246.65
2%1%
1%2%
1%
3%
3%8%
19%
23%
MANULI
PARKER
GATES
Pri
ce
Category
Figure 4.18 Price comparisons of G2H hose.
Figures in meters
0.00
500.00
1000.00
1500.00
2000.00
2500.00
3000.00
3500.00
1 1/2" 2"
795.541141.18
-17%
-14%
25%
12%
MANULI
PARKER
GATES
Pri
ce
Category
Figure 4.19 Price comparisons of C3 hose
Figures in meters
0.00
100.00
200.00
300.00
400.00
500.00
600.00
700.00
800.00
900.00
1/4" 5/16" 3/8" 1/2" 5/8" 3/4" 1"
94.00 102.92 115.10 136.19 159.01 190.57238.97
-3% -1% -1%-1%
-4%-6%
11%
38%
58%
72%
65%
MANULI
PARKER
GATES
Pri
ce
Category
Figure 4.20 Price comparisons of C6 hose.
Figures in meters
0.00
100.00
200.00
300.00
400.00
500.00
600.00
700.00
1/4" 5/16" 3/8" 1/2" 5/8" 3/4" 1"
67.75 79.57 88.57 106.56 135.50 161.78215.07-3% -4% -4%
-3%-4%
-5%
-4%
23%16%
18%
18%
13%
24%
20%
MANULI
PARKER
GATES
Pri
ce
Category
Figure 4.21 Price comparisons of J2AT hose
Figures in meters
0.00
100.00
200.00
300.00
400.00
500.00
600.00
700.00
1/4" 3/8"
148.21246.65
-7%
-1%-20%
-37%
MANULI
PARKER
GATES
Pri
ce
Category
Figure 4.22 Price comparisons of pilot line hose.
Figures in meters
0.00
50.00
100.00
150.00
200.00
250.00
300.00
1/4" 3/8"
93.00 99.40
-1%5%
5%
MANULI
PARKER
GATES
Pri
ce
Category
Figure 4.23 Price comparisons of Spiral4SP range
Figures in meters
0.00
200.00
400.00
600.00
800.00
1000.00
1200.00
1400.00
1600.00
1800.00
3/4" 1"
433.87554.57
0%
1%
6%
7%
MANULI
PARKER
GATES
Pri
ce
Category
Figure 4.24 price comparison of Spiral4SH
Figures in meters
0.00
200.00
400.00
600.00
800.00
1000.00
1200.00
1400.00
1600.00
1800.00
2000.00
3/4" 1"
476.27 588.27
3%
1%
8%
5%
MANULI
PARKER
GATES
Pri
ce
Category
Figure 4.25 Price comparisons of R12 hose
Figures in meters
0.00
200.00
400.00
600.00
800.00
1000.00
1200.00
1400.00
1600.00
1800.00
2000.00
3/4" 1"
524.12651.34
0%
0%
-3%
1%
MANULI
PARKER
GATES
Pri
ce
Category
Figure 4.26 Price comparisons of R13 hose
Figures in meters
0.00
500.00
1000.00
1500.00
2000.00
2500.00
3/4" 1"
539.34685.05
1%
1%
12%
10%
MANULI
PARKER
GATES
Pri
ce
Category
Figure 4.27 Price comparisons of R15 hose.
Figures in meters
0.00
200.00
400.00
600.00
800.00
1000.00
1200.00
1400.00
1600.00
3/4" 1"
552.39695.93
0%
1%
MANULI
PARKER
GATES
Pri
ce
Category
Mr. Rajesh BhandariQ: Reasons for the imports of hose coming to
India. The products which are a reason of concern
for Gates which are being imported in the country.
Steps that Gates is taking to counter the top imported automotive hoses segment.
Increasing prices of competitors product, does this means it’s a good sign for Gates.
Your future plans.
Round Of Interview With Vice President
Mr. Rishi ChachraQ: Customer response for Gates with respect
to the customer satisfaction survey. The problem that customer might be facing
while dealing with Gates.
Round Of Interview With CSD Head
Figure 4.28 Tenure of being linked with Gates India Private Limited
0
4
6
5
0 to 1 yr
1 to 3yrs
3 to 5 yrs
above 5 yrs
Figure 4.29 Are customers satisfied with Gates as per the customer satisfaction survey.
15
0
YES
NO
Figure 4.30 Does import of hose effect the domestic hose market.
15
0
YES
NO
Figure 4.31 Reasons for importing of hose.
0
2
4
6
8
10
12
0 0 0 0
7
11
1
Figure 4.32 Ways to reduce imports of hoses.
0
2
4
6
8
10
12
0 1
6
12
Figure 4.33 Can promotion of hose be helpful.
15
0
YES
NO
Figure 4.35 The ways by which the hose can be promoted.
0123456789
10
03
10
4 3
Figure 4.36 Need for product expansion
02468
1012
11
3 1 1
Total of 8,419,132 meters of hose have come to India from October 2009 to march2010(excluding november2010)
March 2010 onwards the imports of hoses has fallen which means either the demand is fulfilled by gates India private limited or any other local producer
China is the top exporter of hose to India. Manuli is operating through imported hoses only. It does not have a manufacturing
plant in India and thereby is importing from its manufacturing units situated in east Asia.
Gates corporation is following a price skimming strategy whereby the its competitors are charging competitive prices.
Two Indian ports needs attention i.e. JNPT port and Chennai Port. The prices Manuli and Parker have been revised a number of times since 2008, and
are following latest price list W.E.F. July 2010, where gates have not revised their prices from 2008 as a result the prices of Manuli and Parker in certain products proves out to be greater.
The customers of Gates are satisfied with its performance. The reasons for imports of hose is either the lower price of Imported hose or the
Gates is not producing that commodity. Promotions are a good way to increase the market and the best way is to take part in
product line exhibitions.
Findings
The maximum import is made of automotive hoses, where Gates Corporation is not producing much of the automotive hoses as they do not yield a high return but these can be imported from international gates manufacturing plant to keep a hold on the market.
Even though the imports of hoses has fallen down after march 2010 but they have come to a standstill, therefore steps should be taken to further disturb the import flow of hoses before it takes up another hike.
Promotion activities should be conducted to spread awareness about the product range, prices, and qualities to attract new customers.
To enhance the market size by launching its product in untouched regions.
Suggestions
Conclusion..
