From the Executive Director's Desk

"With more experience in overseas M&A markets and largely successful attempts to integrate overseas acquisitions into their businesses, Indian companies are expected to explore Europe more boldly in 2010."

Robert V. Schipper, Executive Director, Netherlands Foreign Investment Agency (NFIA) India

The year gone by saw the brunt of a worldwide economic recession, which was felt with force in late 2008 and has ruled corporate decisions the world over for the past fifteen months. However, there is a distinct feeling of hope as we enter 2010, with economies in Europe and Asia picking up. For Indian investments in the Netherlands, the coming twelve months will be critical in recreating a climate of confidence. At the NFIA, we are keen to reach out to Indian companies with distinct messages about the advantages that the Netherlands offers in their quest to reach out to global markets.
There is reason for us to be optimistic. The global economic recession did make Indian companies cautious, but many merely put their merger and acquisition (M&A) plans on hold. In the wake of an early economic recovery for India, with the Index of Industrial Production (IIP) growing at 11.7 percent in November 2009 as compared to a mere 2.5 percent in November 2008 and a GDP growth of 6.4 percent predicted by the International Monetary Fund (IMF), companies are re-looking overseas acquisitions. What this means is a distinct change in the outlook of India-based companies that are now truly looking at a global playing field rather than considering the domestic market as the primary one. With more experience in overseas M&A markets and largely successful attempts to integrate overseas acquisitions into their businesses, Indian companies are expected to explore Europe more boldly in 2010. In my view, Indian companies will specifically eye distressed assets and niche technology and design centres in sectors like oil and gas, metals and minerals, technology and telecom. With European markets experiencing further consolidation, Indian companies would have opportunities for strategic acquisitions in EU countries.
Research and development (R&D) is the other area where I expect Indian companies to see a distinct advantage in partnering with Dutch institutions. Several regions and cities in the Netherlands are actively developing bio-business parks and clusters that involve the public sector, private companies as well as academic departments in renowned educational institutions to do cutting edge R&D in biotechnology, food technology, pharmaceuticals, industrial biotech and many other fields within the lifesciences banner. Significant bioscience parks, like the Leiden Biosciences Park and Food Valley in Wageningen, as well as consortiums like the Kluyver Centre for Genomics of Industrial Fermentation and B-Basic, both located in Delft, offer opportunities for foreign companies to partner with Dutch experts in an open innovation model.
India is rapidly becoming a major hub for production of auto components and is also emerging as one of the world’s fastest growing markets for the automotive segment. Expertise in automotive technology offered by leading Netherlands-based players can help Indian companies to develop better products and solutions for the Indian automobile market. For instance, Indian companies can use Dutch R&D expertise to develop automobiles more suited to Indian road conditions or to excel in areas like clean technology and fuel efficiency.
As the global economy recovers, companies will re-examine their supply chains and logistics. As business picks up, the question of how to get goods to European customers in a cost-effective and efficient manner will present itself to Indian companies operating in the European space. Here again, the Netherlands has unparalleled expertise and infrastructure and the year ahead will see more Indian companies taking advantage of the excellent logistics services and solutions on offer when companies use the Netherlands as a hub.
The India office of the NFIA will focus this year on creating increased awareness of the areas of Dutch expertise that will most benefit Indian companies looking Europe-wards for sales and distribution, partnerships as well as acquisitions.