Home / Knowledge / News / Textiles / Companies to re-train their investment guns at EU – FICCI

Companies to re-train their investment guns at EU – FICCI

23
Jun '09
The global economic slowdown may have impacted the EU severely but it still remains clearly visible on the radar screens of Indian corporates. True, Indian investments in the EU during the current year may not reach the 2008 mark of Euro 2.4 billion.

But there is a sense of optimism, that Indian companies will re-train their investment guns at the EU in the next six to 12 months, according to a FICCI survey on 'Impact of Global Economic Slowdown on Indian Investments in EU' through the acquisition route.

The FICCI survey was conducted among companies which have invested in the EU in the past.

The companies that participated in the survey were from various sectors like Auto/ Auto parts, Energy, Manufacturing, Chemicals and IT/ ITes. About 40% cent of the respondents have said that they are open to making fresh investments in the EU in the medium term, i.e. they would consider investing in the EU only in the next six to twelve months or after 12 months .

The survey respondents expect European markets to recover by then and the situation to stabilize. A majority of such companies have also said that the deal size they have in mind is less than US $ 100 million on an average . This clearly establishes that companies who want to invest are not willing to go for large sized buys. The reason for a cautious approach in terms of a longer time frame and smaller deal sizes could be because of the current economic environment but the fundamental reasons for investing in the EU still remain strong.

The rush to acquire companies in the EU reached its peak in 2007 when the total investments reached a high of Euro 9.5 billion. This figure dropped to Euro 2.4 billion in 2008 according to Eurostat, the statistical office of the European Union.

The FICCI survey reveals that EU countries emerged as a favoured destination for Indian companies who were seeking growth in size and scale of operations, increased market access, new customers, better technologies and R&D facilities, skilled manpower, buying established brands and access to distribution networks, and to move upwards in the value chain. The technological and other strengths of EU companies and factors like a large consumer base, political and social stability , established and transparent legal systems also influenced the decision of Indian companies to invest there.

Till date, the most preferred sectors have been Pharma & Biotech, Energy, Manufacturing, Auto & Auto Components and IT & ITes. The year 2007 also saw an increase in the value of the deal size in comparison to the previous year. Apart from the total value of deals, the number of deals also dropped in 2008.

About 60% of the respondents have also reported that post their acquisition, there has been a positive impact on their profitability. This could also one of the factors which makes Indian companies open to investing in the EU. Though more than 60% of the respondents have said that the present economic scenario has led to attractive valuations of the companies in the EU, they still prefer to be cautious in terms of the overall strategic fit and not invest immediately.


Must ReadView All

Pic: Shutterstock

Apparel/Garments | On 17th Aug 2019

EBA benefit withdrawal to hurt 4 mn Cambodians: GMAC

The Garment Manufacturers Association in Cambodia recently said the...

Pic: Infinited Fiber

Textiles | On 17th Aug 2019

Infinited Fiber receives lead investment from RGE

Singapore-based RGE Pte Ltd has joined a group of investors including ...

Pic: Macy's

Apparel/Garments | On 17th Aug 2019

Macy's net sales down to $5,546 mn in Q2 of 2019

Macy's Inc reported net sales of $5,546 million in Q2 of 2019 ending...

Interviews View All

Sonia Agarwal, Whitenife

Sonia Agarwal
Whitenife

‘The terms eco-friendly and organic are common but everyone perceives them ...

Asim Dalal, Indo Count Retail Ventures

Asim Dalal
Indo Count Retail Ventures

Today, there is no other emerging market as India, "we make in India and...

Karin Ekberg, Leadership & Sustainability

Karin Ekberg
Leadership & Sustainability

Sustainable models are beneficial for brands, retailers and manufacturers

Boban Charly,

Boban Charly

Bierrebi designs and manufactures automatic machines that cut fabric into...

Herbert Guebeli,

Herbert Guebeli

Switzerland-based Sedo Engineering develops technologies for the denim...

Urmil Arya,

Urmil Arya

Sushila International, a well established textile organisation established ...

Wolfgang Plasser, Lenzing AG

Wolfgang Plasser
Lenzing AG

The Lenzing Group is an international company headquartered in Austria...

Dave Rousse, INDA

Dave Rousse
INDA

INDA, a global association of the nonwoven fabrics industry, has been...

Robert Brookins, Alexium International

Robert Brookins
Alexium International

Alexium International is a specialty chemical development company...

Adriano Goldschmied, AG Jeans

Adriano Goldschmied
AG Jeans

The hype around 'designer jeans' was created by him. And the new wave of...

Madhu Jain, Madhu Jain

Madhu Jain
Madhu Jain

She grew up in the walled city of Old Delhi, completed her studies, and...

Sonam & Paras Modi, SVA

Sonam & Paras Modi
SVA

Sonam and Paras Modi's Sva Couture is synonymous with head-turning...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


August 2019

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Advanced Search