Adani takes giant steps towards becoming the world’s leading renewables company

Adani Group taking giant steps towards becoming the world’s largest solar power player by 2025.

Adani is taking a massive lead in India into green energy renewables.

But in Australia it is still seen as “the Indian coal company” because of its activities in Queensland – in this market the Adani reputation has taken a hit as a result.

The reality is Adani is a leader in green energy and just got a lot bigger!

Adani Green Energy Limited (AGEL), this week signed share purchase agreements for the acquisition of 100% interest in SB Energy India from SBG (80%) and Bharti Group (20%). 

SB Energy India has a total renewable portfolio of 4,954 MW spread across four states in India.

Adani is super serious about renewables – the transaction marks the largest acquisition in the renewable energy sector in India. The transaction values SB Energy India at an enterprise valuation of approximately USD 3.5 billion.

The target portfolio consists large scale utility assets with 84% solar capacity (4,180 MW), 9% wind-solar hybrid capacity (450 MW) and 7% wind capacity (324 MW).

With this acquisition, AGEL will achieve total renewable capacity of 24.3 GW (1) and operating renewable capacity of 4.9 GW.

You’ve got to hand it to Gautam Adani who has the vision to be the leader in sustainable energy transition globally and makes it one of the largest renewable energy platforms in the world.

Mr Adani created a vision in January 2020, wherein he laid out our plans to become the world’s largest solar player by 2025 and thereafter the world’s largest renewable company by 2030.

UK and India pragmatic negotiators achieve a trade and investment deal

INTO INDIA has been advocating for Australia to do what deals can be done with India, and “park” a Free Trade Agreement for later on.

The UK-India Virtual Summit has done just that.

Their newly created Enhanced Trade Partnership (bureaucratic speak for “these are the things we can agree on now) will create immediate opportunities for British businesses in India across industries including food and drink, life sciences and the service sector.

Non-tariff barriers on fruit and medical devices will be lowered, allowing British businesses to export more of their products to India and boosting UK growth and jobs. It also commits both sides to addressing immediate market access barriers as well as continuing to seek further opportunities on the road to an FTA. That is, “parking” the FTA for later on – it is just too hard to achieve.

Prime ministers Narendra Modi and Boris Johnson held their Virtual Summit this week and agreed on a “Comprehensive Strategic Partnership” – the first European country to gain this status.

Australian PM Morrison achieved a CSP with India in 2020 and set out collaboration across science and technology, maritime issues, defence and more.

CSP deals are a sign that India is become more outward looking and – like everyone else – concerned about the behaviour of China.

The trade and investment package unveiled by the British government contains over £533 million of new Indian investment into the UK, covering areas such as healthcare and technology.

British businesses have also secured new export deals with India worth more than £446 million, which is expected to create more than 400 British jobs.

I hope our Australian trade officials are going through all the detail to see if any deals Australia has with India can now be updated on a deal-by-deal basis.

Come on India and Australia – time for an FTA to be number 1 priority

It is high time the close friendship between the PM’s Modi and Morrison led to an FTA.

It is great to see so much friendship and collaboration between India and Australia – but it is time to go to another level and have a serious shot at getting a free-trade agreement between the two countries.

Here’s 3 reasons why an FTA is now urgent:

India wants greater access to Australia’s resources.

Australia wants alternatives to China for resources and wine.

India wants investment and Australia has huge funds under management.

Patience around the FTA has been a good approach but now we have to step up the pace and get on with it.

We need some form of harvest agreements to take the heat out of agriculture – which is always a super-hot political topic in India.

Also, India seriously wants investment flows and Australia has not been forthcoming. Time for the Australian Government to lead our huge investment funds into India.

The reality is – close relations in trade mostly follow investment, and Australia has not invested heavily in India.

Wine barriers to India are huge – there is a 150% tariff – and yet wines like Orlando Jacob’s Creek have done well there.

One problem for India is they are encouraging their own wine industry, typically at the low end of the market. Perhaps they can free up tariffs on high end wine imports?

The relationship between Prime Ministers Modi and Morrison is close and could be a building block for an FTA.

Let’s put it top of the agenda!

Adani group transforms from coal empire to infrastructure, renewables and data

Gautam Adani is transforming his business

After spending two decades building a business empire centred on coal, Indian billionaire Gautam Adani is now looking at a different future. His ambitious plans are getting a boost from close friend Indian Prime Minister Narendra Modi.

Mr Adani is diversifying into airports, data centres and defence – sectors Mr Modi considers crucial to meeting India’s economic goals. Investors are rewarding the pivot.

In less than two years, Mr Adani has gained control of seven airports and almost a quarter of India’s air traffic.

Adani will boost his renewable energy capacity almost eightfold by 2025.

Last week, he won a contract to co-develop a port terminal in Sri Lanka, a neighbour India is courting to check China’s influence in the region.

Adani Enterprises last month signed a deal with Edge- ConneX to develop and operate data centres across India.

After starting out as a commodities trader in the late 1980s, Mr Adani is now India’s second-wealthiest person, with a net worth of US$56 billion. He has added US$50 billion to his fortune in the past year, about US$5 billion more than Mr Ambani, Asia’s richest man, according to the Bloomberg Billionaires Index.

How did India miss out on being part of the world’s biggest trading bloc?

India is missing from the world’s biggest trade bloc which has just been formed – 15 countries representing 2.2 billion people have signed on to a Regional Comprehensive Economic Partnership (RCEP). Talks on RCEP began in 2012 and it has now created a bloc which accounts for about one third of the world economy.

This is a massive new initiative for global trade.

India and the USA have missed out – India because of concerns for farmers produce, and the USA because President Trump pulled the pin on the concept.

India is the mystery case in the region because opting out of RCEP is not going to help its economy. Concerns over lower tariffs hurting local producers won the day and India moved out of the deal.

Did India also withdraw because the relations between India and China are sour, with border disputes and other issues on the rise?

But India could ultimately join RCEP – the doors for India to join the bloc will remain open in future, according to the participant countries.

Otherwise, India looks like being one of the two big losers in this move.

The RCEP group is composed of the 10 Southeast Asian (ASEAN) countries along with China, South Korea, Japan, New Zealand and Australia.

Vietnam “hosted” the final deal online and said the deal will help to lower trade tariffs between the participant countries, over time, and is less comprehensive than the Trans-Pacific Partnership (TPP).

“RCEP will soon be ratified by signatory countries and take effect, contributing to the post-COVID pandemic economic recovery,” said Nguyen Xuan Phuc, prime minister of Vietnam.

The actual legacy of President Donald Trump’s “America First” withdrawal from multilateralism and deals like TPP and RCEP could be a declining US role in world trade.

In contrast, China could be the big winner – experts say that this pact is a testament of China’s strong influence in the region.

The RCEP will lower or eliminate tariffs on various goods and services, although the scope of the agreement—essentially an extension of free trade under existing frameworks—is limited.

So, what is the biggest benefit of RCEP? The pact will create so-called rules of origin, which make it easier for companies to set up supply chains spanning multiple countries.

This is super important – it will be much easier to manufacture and sell goods in the region once RCEP comes into force.

India and Australia have a trade relationship that can grow

A great source of information about Asia is ASIALINK here in Australia – and for those interested in India their INDIA STARTER PACK is valuable.

Australia’s economic relationship with India has expanded significantly in recent years – particularly exports of minerals and energy, as well as our provision of education services to tens of thousands of Indian students.

We now have the basis to do more. It will take some marketing creativity and a realisation that brand “Australia” goes down well in India.

Two-way goods and services trade between Australia and India totalled AUD 27.4 billion in 2017. Major Australian exports to India included coal (AUD 9.2 billion), education-related travel (AUD 3.4 billion) and vegetables (AUD 1.38 billion). Our main imports from India were refined petroleum (AUD 1.6 billion), medicines (AUD 335 million), pearls and gems (AUD 274 million) railway vehicles (AUD 199 million). 

The total value of Australian goods exports to India for 2017 was AUD 15.7 billion, making it our fifth-largest goods export market. We exported an additional AUD 4.4 billion in services to India, a figure primarily made up of education-related travel services and other personal travel.

Time to review your India market entry strategy? Let’s talk.

Australia shows what happens when you get the Chinese offside

There is a covert diplomatic trade war between Australia and China, and it is showing the world how China responds when it takes offence or simply does not like your diplomatic stance.

First, responses from China are random and arbitrary – making it hard to respond.

Second, communication about trade bans is always informal and difficult to clarify.

Third, unexplained checks on products slow trade down or lead to damaged goods.

Examples of this use of checks to pursue trade reprisals include looking for weeds in barley, questionable metallic levels in lobsters, or bugs in timber. An aligned strategy includes the Chinese allegations of Australian producers dumping wine, tariff threats on cotton and talk of curbs on Australian copper and coal.

Iron ore – Australia’s major export – is so far not involved.

For Australia, exports to China dominate the economy. Consider these figures of “the top 5” where Australia exports:

China A$150 billion

Japan $52 billion

South Korea $25 Billion

USA $17 billion

UK $15 billion

The world is watching this trade dispute – and learning how China goes about it.

Suzlon Group appoints new CEO for next stage of renewable energy

Suzlon Group, India’s largest renewable energy provider, has announced that it has appointed Mr. Ashwani Kumar as its Group CEO.

This is a significant announcement for sustainable energy and India in particular.

The Suzlon Group is one of the leading renewable energy solutions providers in the world with a global presence across 18 countries in Asia, Australia, Europe, Africa and Americas. Headquartered at Suzlon One Earth in Pune, India; the Group is comprised of Suzlon Energy Limited (NSE & BSE: SUZLON) and its subsidiaries.

Ashwani Kumar, with over three decades of experience in the areas of projects, business development and finance at leading Indian Power and Infrastructure companies is a Mechanical Engineer, and an alumnus of IIM Bangalore and The Harvard Business School.

Mr Tulsi Tanti

Mr Tulsi Tanti, Chairman and Managing Director, Suzlon Group, is the driving force who has built Suzlon into a major global wind energy player.

Mr Tanti is picture sixth from left when he presented the Australia India Address in Melbourne.

Covid19 could lead us to a cleaner more innovative world – if we rethink what we do

About seven million people are killed by air pollution every year. The current model of modern society is unsustainable.

Two leading Professors say that looking through a COVID-19 lens provides us an amazing picture outside and shows some innovative pathways on living in harmony with nature, i.e. new-modern society.

bhargava3

They are Professor Suresh Bhargava, RMIT University, Australia (pictured above) and Professor Seeram Ramakrishnan, National University of Singapore (below).

seeramrama

Here are some points from their recent paper on the topic:

Contrary to devastating effects, the COVID19 had positive outcomes in terms of air pollution and greenhouse gas emissions, depletion of natural resources, and climate change.  Satellite imageries confirm the reduction of NOx, SOx and other pollutants in all cities of the world.

COVID19 provides an opportunity to rethink everything humans do. The current model of modern society is unsustainable. Reversing the clock and going back to pre-modern society built on fulfilling just the needs of humans is not realistic.

Pollution

Sustaining the modern society built on fulfilling the needs and wants of humans requires out of the box thinking. In the current climate of COVID, companies are struggling to survive on top of challenges in industry 4.0 or digitalization of products and services. How will they be able to think about sustainability while their worry is about resilience, and make the necessary adjustments to their business for the long term?

Sustainability has tended to be a secondary priority for many industries and especially SME businesses. Now faced with business survival and viability concerns, what is the status of existing sustainability initiatives in companies and across industries? How has the pandemic affected existing initiatives and longer-term targets, plans and ambitions on the sustainability front?  How can organisations get back on track with regard to their sustainability ambitions e.g. are there synergistic business-led propositions that can serve these aims? What countries can do in terms of sustainability, circular economy and Paris agreement to decarbonize while growing shrink economies and rising employment opportunities?

Using a COVID19 lens, there are opportunities for decarbonisation while not compromising the modern ways of living and economic growth.

pollution2

Countries and companies will shorten the supply chains and value chains.  Globalization will take newer form relying more on digital technologies and internet.  This will be facilitated by yet to emerge innovations in finance and commerce.

COVID19 has unexpected effect on food industry. Clean meat is touted as a solution to zoonotic diseases associated with current methods of producing meat from the animals.  Clean meat is made from plant based, cultivated cells.  Hence the carbon footprint is lower than animal sourced meat.

Critics will argue for slow and careful introduction of clean meat to the mass population.  Therein lies huge opportunities for innovations, technologies, new jobs and new pathways of economic growth while caring for the Earth.

Importance of safe water and its adequate supply is highlighted by the COVID19.  Sustainable future lies in the zero-waste water innovations and technologies.

The single use plastic wastes have been identified for their pollution of the marine ecology and subsequent negative effects on the food chain and human health.  Science, business, standards, and policy innovations are needed to replace the petrochemical derived plastics with degradable bioplastics derived from the renewable sources.  Designing products with end-of-life considerations and life cycle engineering opens up opportunities for economy growth and new jobs creation while improving the quality of environment.

The Energy sector is also affected by the COVID19.  Oil futures went into negative. It is an opportune time for the governments to eliminate the fossil fuel subsidies and invest in renewable energy infrastructure as long-term nation building.

Perhaps, governments and companies should together accelerate the electrification of transportation.  New jobs and new economic growth to happen in vehicle design and manufacturing, digitization, as well as charging infrastructure.

COVID19 transformed shopping and brought almost the whole of humanity to on-line shopping.  The on-line shopping for groceries and food deliveries are on par with electronic goods and accessories.

Similarly, work has moved to telework, and the Education moved to on-line learning and assessment.

Digital services for virtual meetings, online learning, telemedical diagnostics, government services, ecommerce, grocery delivery, e-banking, and entertainment all experienced unprecedented growth in demand. The hyper scale data centres with their 24x7x365 resilient operation, are the heart of digital transformation.

Looking to the coming decade, the introduction of 5G will further accelerate the digital transformation era with its clear alignment with Industrial 4.0, in which real time data and automation will power more of the industrial world.

Clear messages emerged from the COVID19 pandemic include, the digital transformation is a necessity to keep society running; mental health is important for the general well-being and productivity of a person; and a healthy living environment is a basic human right.

The circular economy vision, decarbonisation and sustainability efforts mitigate climate change thus create opportunities for sustained economic growth and new jobs creation. 

Amazing research work by the two and continues the innovative and collaborative approaches of my friend Professor Suresh Bhargava – well done!

Bhargava5

 

 

How India is different from China – insights from Asialink Business

Asialink Business has a wonderful Asian Market Update Series and a recent one focused on India.

One of the speakers was Mary Manning – Portfolio Manager at Ellerston Capital.

Dr Manning manages the Ellerston India Fund among other Asian investments.

She detailed why India is unique and not the next China. For example, the structures of the two economies are very different and beyond coal, exporting bulk commodities is not going to be the bedrock of Australia’s relationship with India.

India is also at a very different stage of economic development to China, with different consumer preferences, price points and distribution channels. These factors give rise to a completely different set of sectoral opportunities, that will most likely require capital investment on the ground – but one size does not fit all when it comes allocating capital in India.

podcast

Dr Manning cited several examples of successful investment in India by multi-national corporations that cut across geographies, sectors, time frames and business models, such as majority stakes in listed companies, through to unlisted joint ventures and distribution agreements. These companies include household names in Unilever, Suzuki, Prudential, Macquarie, Facebook, Alibaba, McDonalds, Walmart, and QBE.

Dr Manning said the higher returns on equity that could be achieved in India were a major reason why Australian companies should be considering investment opportunities there.

She said there was currently an investor scramble for ‘new economy’ assets in India in key areas such as healthcare and infrastructure and while good buying opportunities could present over the next six to 12 months for equity investors – with the Indian economy weakened by COVID-19 – a long-term view was needed.

India_At_a_Glance_Country_Starter_Pack