Project under the International ELP : ELP

- 070
Client Organization: Pennar Industries Limited (PIL)
Brief background of the organization:
Pennar Industries (PIL) www.pennarindia.com is an precision engineered
manufacturing and services company based out of India. The company has
capabilities in the manufacture of hydraulics, automotive components, preengineered buildings, water treatment, specialty chemicals and
infrastructure products. PIL also provides services in the design and detailing
of structurals to our customers.
Beginning in 1988, with the setting up of the first manufacturing plant near
Hyderabad with an installed capacity of 30,000 MTPA to manufacture Cold
Rolled Steel Strips (CRSS) and the company has grown at a rapid pace.
PIL embarked on a series of strategic acquisitions and expansion plans, most
notably among them being acquisition of Nagarjuna Steel Ltd.; Press Metal, a
unit of Tube Investment (TI) near Mumbai and the more recently the assets of
Wayne Burt Petrochemicals, USA (erstwhile Bailey Hydro), for venturing into
Hydraulic Cylinders segment. They also established a new manufacturing
facility at Chennai and set up an assembly unit at Hosur, near Bangalore to
meet the requirements of Auto Components.
Today, with an annual production capacity of more than 300,000 MTPA,
Pennar is a multi-location, multi-product company manufacturing precision
engineering products such as: Cold Rolled Steel Strips, Precision Tubes,
Railway wagons / Coaches, Pre-Engineered Building Systems, Sheet Metal
Components, Road Safety Systems ,etc. Recently we have also
added Hydraulics and Warehousing solutions as two new products in their
portfolio. PIL has a pan-India presence with six manufacturing facilities
situated across the country. These facilities include laser cutting, plasma
cutting, transfer presses and CNC machines that enable it to make products
of very high quality. All the plants are ISO certified.

PILs products have a significant presence in sectors like Infrastructure,

Automobiles, Power, General Engineering, and Building & Construction
among others. The customers are spread across India, UAE, and USA
Pennar has set up two subsidiaries - Pennar Engineered Building Systems
(PEBS) and Pennar Enviro Limited (PEL).
Pennar Engineered Building Systems (PEBS) - www.pebspennar.com is
engaged in the design, manufacture, supply and installation of preengineered steel buildings and building components. PEBS factory was the
first in India to receive a gold rating from the Indian Green Building Council
and thus is at the forefront of the movement for a sustainable future.
PEBS is a one-stop-solution for all building requirements of varied customers
- Building Components, Building Accessories, Building Additions, Building
Systems, and Design Services. The pre-engineered steel buildings are
uniquely designed and fabricated to suit customized requirements, built
strictly following the international standards,
PEBS cater to industrial, commercial and institutional requirements and
provide enhanced speed in delivery and erection and also provide flexibility
in expansion and withstand severest weather conditions to deliver the best
of pre-engineered solutions. These buildings are available in large
multidimensional spans; lean to roof at all required heights and side
claddings. They feature a structural steel framework of primary and
secondary members (rigid frame, beams, purlins and grits, trusses and
columns) on to which cladding and roofing components are attached
Pennar Enviro Limited (PEL) - www.pennarenviro.com deals with Water
and Environment Infrastructure business to provide turnkey solutions viz.,
Water Treatment Plants (WTPs), Sewage Treatment Plants (STPs), Effluent
Treatment Plants (ETPs), Effluent Recycling Plants (ERPs), Zero Liquid
Discharge Plants (ZLDPs) etc, thus providing environmental friendly
technologies for Industrial & Municipal segments. Plans are afoot to enter
into Sea/Brackish Water Desalination besides
Pennar Enviro Limited also has an extensive range of high performance
Specialty Water Treatment Chemicals under the brand name of PENNTREAT
for treatment of Boiler Water, Cooling Water, Raw and Effluent Water. Product
capabilities extend into all aspects of industrial water management such as
cooling water treatment, boiler Feed water treatment, raw water/waste water
treatment, reverse osmosis membrane treatment, apart from specialty
process additives for various process requirements

PEL is also a pioneer in the field of additives, supplying specific premium

high technology additives based on fuel characteristic requirements and
specific performance enhancements. It is the authorized manufacturer and
marketer of Elf Fuel Oil Additives, having a technical collaboration with
TOTAL, France (fourth largest petroleum company in the world).
PEL has diversified its product range into five different segments - Additives
for Heavy Fuels, Storage Stability Additives, Additives for Light Oils, Additives
for Solid Fuels, and Industrial and Agro Products

Project Title:
Develop entry strategy into Philippines for two of the subsidiaries of Pennar
Industries

PEBS Pennar (PEBS) in the business of custom designed building

systems
Pennar Enviro Limited (PEL), in the business of providing solutions
for water treatment, including desalinization plants

Primary focus of the study:

The project is of high strategic importance to PIL and hence the study should
focus on:

Market Assessment market structure, competition, growth

opportunities
Market Entry Strategy a way forward for PEBS and PEL

Regulatory framework/ requirements of Philippines in this sectors

Joint Venture or acquisition options
Overall roadmap for entry of PIL group into the Philippines

Project description:
PEBS provides turnkey design engineering, manufacture and site erection of
pre-engineered buildings to our customers in India. The company would like
to diversify its base of operations internationally and seek out markets in
South East Asia.
The company has strong engineering, technical, operational and project
management capabilities. The project would entail evaluation of the
opportunities for our products and services in these geographies by

evaluating the market and growth rates and to assist in building a

customized entry strategy for PEBS. The project can cover a sales entry
followed by build of large scale manufacturing assets in the target
geographies over a period of a few years
Pennar Enviro provides solutions for water treatment for industrial water
and waste water. The company also has strong capabilities in specialty
chemicals.
PEL would like to evaluate the opportunities in the South East Asian
geographies, specifically the Philippines for our products and services.

Project objectives:
To develop a strategy for PEBS and PEL (subsidiary companies of PIL) to enter
into the Philippines market
For PEBS:

Evaluation of market size and growth rates for pre-engineered

construction.
Understanding the local construction industry broadly to evaluate the
potential for our solutions.
An entry strategy that covers a sales entry followed by development of
production, engineering and project management capabilities.

For PEL:

Evaluation of market size and growth rates for water treatment and
specialty additives.
Overview of municipal and industrial water usage in these
geographies.
An entry strategy for these geographies.

Project deliverables:
This project will help us decide whether to invest in these geographies. A
good understanding of the market size along with a broad understanding of
our entry strategy will help us shape our plans for these countries
The objective is to develop effective and implementable recommendations
that serve to support as well as augment our business potential. To this end,
the iELP team will plan Go Ahead activities such as introductions to
potential customers, channel partners and consultants to help in the
execution of project recommendations by the Client
A. Project Charter/ Proposal - Overview of the project objectives, time
frame, scope and deliverables, as also detailed work plan. (July/ August
2014)
B. Interim Progress Report Summary of the progress made on the
study and the iELP Teams findings (September 2014)
C. Final Report Presentation to the top management of PIL, of a
marketing approach and service roadmap that is strategically sound
and fact based. (November 2014)

Nature of expected recommendations

A full scale business plan, covering

The structure of the market in Philippines

Market opportunity and sizing
Initial set of potential customers and their profiling
Regulatory framework/ restrictions in Philippines covering these two
sectors
Risk assessment
Recommendations for JV opportunity
Rough estimate of investment requirements and returns
Go-to-Business Roadmap

Project Impact
An entry by PEBS could result in a rapid expansion of our market share in
these countries which would drive revenue and profit growth
PEL is a new venture and has grown quickly over the past year. The division
is currently the smallest business unit within PIL, with revenues of a little
over 3 Million USD in the last fiscal. Entry into new geographies will have a
powerful impact on the divisions revenue and profitability

Team composition
The study is to be conducted by a team (of 4-5 MBA students) from the
Indian School of Business, Hyderabad/ Mohali, India and a team (of 4-5 MBA
students) from Asian Institute of Management, Manila, the Philippines, under
the guidance of a faculty member from each School.
The team should have some members with prior experience in the
construction/ infrastructure industry. Having one member with work
experience in the water treatment industry would be immensely helpful.
Team members who have previously worked on market surveys and entry
strategies will definitely be helpful.

Resources that will be available

1. Access to key management personnel
2. Access to the companys data bank
3. Use of company resources such as office space and other incidentals
4. One company person to attend calls between the teams, at least once
a fortnight