Zindia [Indian Business Sector]
Wood exports show India trade potential
by Robert Smith [NBR]
New Zealand’s population might be 0.37% the size of India’s, but an exporter of Kiwi wood to the Indian market says there are enough similarities to make the two countries natural trading partners.
Jacob Mani Mannothra - managing director at Marlborough-based Zindia - said the free trade agreement now being negotiated between the two nations could have a massive impact.
“India could be New Zealand’s biggest trading ally in the coming years, because we have so many things in common.
“There is synergy in thought and language, as well as similar legal systems and a love of cricket."
"The owner/operator style of business is also a significant part of both economies, with India and New Zealand both producing people who would rather own the business than just work for it.”
Zindia was named the top business operating in the Indian business sector in NBR’s monthly Exciting Companies series with an 85.8 excitement index rating in surveys conducted by strategic business consultancy New River. It was followed by Relianz Forex, Masala Indian Restaurant in Wellington and fast food retailer Bikanervala.
The business was established in 2004 and ships logs and other timber products out of Marlborough, with one ship making the trip to the subcontinent every month, generating about $US4 million in turnover each voyage.
It’s a competitive industry with other New Zealand timber companies keeping an eye on India, while there is also competition from low-cost businesses from countries such as Malaysia or Korea.
Mr Mannothra — who co-owns Zindia with Rick Osborne — said Zindia had sidestepped its competitors by focusing on that shared trait for small businesses.
“As a rule, in India we only sell to small sawmillers, so there are no middlemen.
By going directly to the small guys who actually use the product, we cut all the middlemen speculators right out of the picture.”
He said having a sales channel to India also helped Zindia make the logging business more viable, as the company found a willing market for wood that wasn’t always wanted in New Zealand.
“India takes the industry-grade logs, for which there is a limited market for in New Zealand. For a forest owner, to be really viable, you need to sell every single grade and you can get a reasonable return by shipping that material to India.”
With India’s economy emerging from the global recession relatively unscathed, Mr Mannothra said he had no doubt the business links between the two countries were only going to strengthen.
“India is a growing market with one billion people and a younger population than any other country. It’s a natural fit for New Zealand in the future.”
INDIAN BUSINESSES LOOK FORWARD TO FTA
With more than 5000 businesses run by Indian New Zealanders, the Indian business sector is not confined to any one industry.
Along with Zindia, the list of the 10 most exciting Indian companies compiled by New River included several restaurants, financial services companies, health care businesses, film and television outlets, vending machine operators and the owner of three Mitre 10 Mega stores.
Indian-owned businesses, like others, struggled through the recession and remain cautious about the future, with 60% business people surveyed rating business as “difficult.” Just 15% described the current situation as “buoyant,” with another 25% remaining neutral, while none rated it as either “very buoyant” or “very difficult.”
Despite this caution, there is widespread optimism on the potential of the proposed FTA, with respondents pointing to opportunities in wine, leather, cotton and aviation training.
With India now the world’s second fastest growing economy, the removal of trade barriers and a growing middle class will make it a prime export target of the future but Indian businesses are also
finding opportunities in the domestic scene.
Other businesses that rely on more discretionary spending have found success by specifically targeting an Indian customer base, with firms such as Mind Blowing Films making inroads into the
Auckland cinema scene in recent years.
Top 10 Indian companies
Rank / Company/ Excitement rating
1 Zindia
2 Relianz Forex
3 Masala Indian Restaurant
4 Bikanervala
5 Mitre 10 Mega (Lincoln, Botany, Westgate)
6 East Tamaki Health Caie
7 Mind Blowing Films
8 Moshims Discount House Group
9 Vision Asia
10 Sri Vishnu Enterprises
Indian business facts
* 90-95% of New Zealand Indian businesses are owner-operators
* 105,000 ethnic Indian population in New Zealand (2006 census)
* 68% growth in Indian population in New Zealand between 2001 and 2006
* 1.1 billion — population of India