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Growth Strategy Why India Opportunities Attractive markets IP Protection Funding growth Strategies and Rationale for India market entry Benefits of cross border JV/Alliances India Focus Government Controls - India Indian Legal Framework ALCOR and Processes, Deliverables, Milestones Case studies Next Steps
ALCOR - Strategic India Market Entry 2
George Molakal
Education: MBA Harvard Business School, B.S. Eng. Univ. of Wisconsin India & China Lead Trader, GE: Tech transfers, JV, suppliers dev., acquisitions CEO, Ampere: established multiple JVs in Asia GM, MAT: largest Chinese PEG. Acquired companies India & worldwide Managing Partner, WHI: PEG acquired 21 companies. Asia Greenfields President, PPS: Indian Co. (Chicago) ops in India and U.S.
ERIC COHEN
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U.S. companies : low costs labor, high growth markets Indian companies: technology, brands, access to $16T U.S. market. Window of opportunity for value creation before equalization
Value Creation
Acquisitions
Joint Ventures
Greenfield partnerships
Sales Office
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Telecom- 4G network build out to serve high data expectations Infrastructure- High transaction costs arise from inadequate and inefficient infrastructure. Will be GDP bottleneck. Power- demand going up exponentially. Currently 2/3 coal based. Water- wastewater, agriculture, commercial purity Agriculture- food inflation faster than lower class wages, social issues Food processing- middle class growth Precision machining- turbine, close tolerance Private education- problem with cost & quality. 90% Univ grads unprepared. Soln: WIPRO, private, online, U.S. universities
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Advantage of India vs. others is rule of law. Ex. Office of The Controller General of Patents, Designs and Trade Marks.
Creative business structure (advisor can assist). Ex., supply controls/ electronics, ship to 3rd party company, multiple suppliers coming into final package.
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Funding Type
Indian Partner Cash flow U.S. Senior debt
Cost
Little to no capital if you bring value Low Low (L+300) but usually not available
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Education: MBA, PLDA, PEVC : Cardiff University and Harvard Business School. Fellow : Ashoka Innovators for the Public, and actively set up the National Organization for Tobacco Eradication(NOTE) in SAARC Region (7 Countries). CEO : ICAN Healthcare Ltd Built ICAN to a national organization spanning 20 cities in India pioneering managed GEORGE MOLAKAL care. International Director M&A: WORBUS Global Group of Companies. Completed 30 plus cross border transactions and worked in England, Kuwait, Toronto, Shanghai and Mumbai setting up cross border M&A deals globally. Directorship : In several companies globally such as KASA Anlagen, Emdet Neff, MDI India etc. Principal and CEO . ALCOR Fund US & India Operations, executing more than 15 global M&A transactions, and Investments above $250 million USD.
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By deploying a global growth strategy through Joint Ventures and Acquisitions, the sales revenues, the share price and the global brand value of American Company would grow higher, permitting American Company to serve more customers, hire more people, and maximize wealth for its shareholder and stakeholders
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INDIAN Merge
India
China
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The number of middle class population with high spending capacity is more than the population of America. Coupled with the low cost manufacturing ability, the market is out there in India.
All the global big names in industry are setting up presence in India
If your customers are in India, it is only prudent that you follow them as well.
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Local Management
Manufacturing
Capacities
Cultural Mix
Newer product verticals & Industry Verticals Revenue Enhancement Varied range of products
Commercial Excellence
Low Cost
Manufacturing
American Company
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Pricing Index Currently catering to markets that afford higher pricing Sometimes gets awarded, sometimes lost
High Price
Current Market
Medium Price
May be
Low Price
Lost Market
American companies target the small market ( red) because of its technical strengths and its capabilities of producing high quality critical parts. Easy parts are low priced and are picked up by others, but do add a lot of value for sales revenues
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Sheet Metal
Mechanical Design
Plastics
Fans
Mechanical Assembly
EMI
End-User Configuration
Software
Cables
Electromechanical Integration
Power Supplies
Sub-Assembly Test
Makers
Integrators
Component Manufacturers
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Sheet Metal
Fans
Mechanical Design
Plastics
Drives and Peripherals
Mechanical Assembly
EMI
End-User Configuration
Software
Cables
Electromechanical Integration
Power Supplies Final Systems Test Backplanes * Up to three Opportunities for Margin Stacking
* By consolidating the supply chain into a single source for all parts and services, a majority of the margin stacking is eliminated, resulting in significant cost savings
Sub-Assembly Test
Innovators
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US/ India;
ALCOR - Strategic India Market Entry
Component Manufacturers
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In d
A marketing team will visit these potential targets pitch for the Joint Venture MNC customers in India Various Product Verticals International Procurement Offices IPOs Captive Exports American Company as platform to NA Global markets through JV
I P O Customers
ers stom
an Br
n Cu
U hn S ol og
di ng
India
Te c
MN C
US- India JV
d i ze om on st luti C u So Pr i ce ia s
N Am A P er latf i ca o r nC mv om ide pa ny
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Worldwide sales / Global Customer Base Multi Geographical presence Ability to manufacture low cost and high complex products. Benefit from the higher multiples applicable in India
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US Company
Design
Core parts manufacture Manufacturing of parts
7%
8% 7%
Assembly of components
Integration and Tests Packing and logistics
Assembly of components
Integration and Tests Packing and logistics
6%
6% 5%
Customer Service
Did you create a competitor ?
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Customer Service
YES !! YOU DID
ALCOR - Strategic India Market Entry
5%
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Risk Mitigation
If sourcing : You must have equity partnership for the intangible value of knowhow being transferred, unless it is very simple part (commodity) Joint Venture for captive sourcing mitigates these risks.
Finding the right factory Negotiating prices & intangible equity with convertible options to JV or Strategic Alliance. Oversees the tooling Monitors the factory production Conducts quality inspections, financing, insurance, customs clearance Executes delivery right to your warehouse.
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Intangibles Technology and Process Business Commitment in India Global and Captive Business Commitment
Cash Investment
Typical JV Contribution
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1
India Co
50 US/EU Co
SWITCH
51%
Mbi Model Minority Buy In Intangible + some cash 26% Year 1 Bc/ C India Co Bc/ C 49% Year 3 Year 4 Bc/ C
Contract TBi Customers U1 U2 U3 U4
35%
Year 2 US/EU Co
50%
3
India Co
US/EU Co
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Details on ALCOR
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ECB S2 Global Board S3 T3 Equity Capital T2 Corporate Finance Complex Debt Project Finance
S4
T4
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India Head Office in Pune Metro offices through Associates -Delhi (North ) -Mumbai (West & Financial Capital) -Chennai (South) -Kolkata (East) Direct Employees : 30 Associate offices (Business
Development : Chartered Accountants private offices )
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Automotive
Power
Telecom Electronics Software Real Estate
Education
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CA First Rank holder and Graduate of Harvard Business School. Founder Managing Director of The Credit Rating Information Services of India Limited (CRISIL), Indias first and largest credit rating agency Prior to founding CRISIL, Mr. Shah assisted in founding Housing Development Finance Corporation (HDFC), Indias first retail housing finance company, in 1977. Holds Directorship positions across several listed companies, charities and government boards. Floated the first PE fund for India and has wide track experience in funding PE projects.
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Team Biographies
Art Holbrook MBA - Board
Graduate of Harvard Business School. Has over 30 years of entrepreneurial experience in multiple businesses serving in various capacities as President, Principal and General Manager. Member of the Board of Directors of several private equity owned ventures. Founded multiple private equity startups. Led a successful acquisition of privately held investment in the Cable TV and Satellite Communication industry. (successfully operating, horizontally expanding and ultimately selling the businesses)
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India/China Market
ALCOR receives commitment and co-engaged for 5 years. Research Team identifies companies who can partner with agreed American/Europe-an companies.
Research team identifies companies who can use ALCOR Growth Strategies.
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We are local, and we know the market conditions, the players and the opportunities.
We have feet on the ground in 50 plus cities, coupled with our experience and growth strategies with dynamic execution , makes ALCOR ideal choice
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Assist the Company to leverage globally Deploy Private Capital through Finance or Equity Provide end-to-end solutions. Develop Growth Strategies & mitigate risks. Evaluate Opportunity and Potential. Conduct Due-diligence.
Win-Win to build fair and mutually rewarding long term solution.
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Alcor Fund
www.alcorfund.com
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