Entries tagged with “supply-chain”

Articles

38 articles found for supply-chain:

  • Metaverse Powered Supply Chain of Future

    Companies are gearing up to integrate metaverse into their processes and systems. Supply chain management, one of the most important functions of an organization, would also see its effects. The metaverse would enable companies to predict market changes and identify supply chain-related risks before they occur. This would help in making smarter, better decisions and have a positive impact on profitability and sustainability.

  • Nurturing Sustainability Across the Supply Chain

    It has become increasingly imperative for companies to embed sustainability throughout the supply chain. Companies are recognizing the need to connect with their tier-1 and tier-2 suppliers, adopting measures such as decarbonization initiatives and incorporating green packaging materials. By doing so, they aim to reduce their environmental impact and create a more sustainable value chain. Through collaborative approaches and the involvement of experts, organizations are better positioned to navigate the complexities of sustainability and make meaningful progress in embedding sustainability across their entire supply chain.

  • Navigating Supply Chain Shifts in Fastener Industry

    Fasteners traverse a large and interconnected global supply chain due to their applicability across industries. The rise of supply hubs worldwide has significantly impacted the dynamics of fastener supply. The global strategy is leaning toward offshoring to Asia-Pacific (APAC) countries such as India and Taiwan, specifically as alternatives to China (China Plus One), for realizing cost advantages and enhancing supply chain resilience. Nearshoring, however, is gaining traction in North America and Europe for addressing supply chain downtime concerns and logistics inefficiency.

  • Mexico's Nearshoring Promise to Supply Chain Adversities

    As the world navigates a series of supply chain disruptions, staying ahead of the curve is crucial. Exploring nearshoring opportunities becomes increasingly important to mitigate risks and build resilience. Mexico is emerging as a promising nearshoring destination to global companies (especially in North America) due to inherent benefits such as logistical proximity, reduced lead times, cost efficiency, and strategic trade relations. Procurement organizations have actively embraced Mexico, making regular investments, expanding capacities, and fostering supplier partnerships to reap the benefits of nearshoring. Are you prepared for nearshoring to build a resilient supply chain strategy?

  • Friendshoring: Strategy to Reduce Supply Chain Dependency on China

    Supply chains globally have barely recovered from the unprecedented challenges posed by the pandemic. The Russia–Ukraine war has added to the woes of already fragile supply chains. The only silver lining is that companies realize the perils of relying on a select few countries for manufacturing, raw materials, and components. For decades, companies have followed strategies such as offshoring, nearshoring, and outsourcing business operations to low-cost countries. However, recent events accelerated the movement to safeguard supply chains and move away from depending entirely on countries like China. One such concept that could be a game-changer for global trade order is “Friendshoring.”

  • An Alternate Revenue Stream from Decarbonisation Techniques

    Most industries are now moving towards “reducing CO2 emissions and targeting to become carbon neutral by 2050”. Companies have already set sustainability targets to reduce CO2 emissions. Methane processing techniques are being evaluated as a potential decarbonisation process compared with commercially available CCS/CCU techniques. These techniques decarbonise natural gas and form a feasible business case for companies adopting it, as hydrogen produced can be re-titrated to natural gas stream to achieve up to 100% sequestration of carbon content and solid carbon (carbon black/graphene) produced can be traded in various end-use industries, including tyre, construction, and ink & coating industries.

    Carbon black is a mature and low-priced market ($1-2/kg) with the tyre industry contributing to >70% of the demand. While graphene is a high price point market ($100-1,000/kg), the actual demand of graphene is still optimistic and highly dependent upon the mass adoption by major end-use applications such as cement, concrete, etc.

  • Security of Natural Gas Supply (Europe)

    Prices of gas and electricity increased substantially across Europe in 2021–22 and are expected to rise further in 2022–23, as Russia began limiting gas supply to the region in response to the sanctions imposed. However, individual countries have taken several initiatives such as expanding storage capacity and coal and oil generation to reduce dependency on gas; reducing industrial, residential, and commercial demand; increasing imports from other countries; and investing in new infrastructure that would help secure supply and ultimately lead to stability in prices. 

  • Agile Procurement – Need of the Hour

    With intensifying competitive dynamics, businesses need to be able to adapt quickly and efficiently to changing customer demands, technological advancements, and environmental and geopolitical factors. Traditional procurement methods, which are often rigid, bureaucratic, and slow, may hinder the ability of organizations to ensure a smooth flow of supply chain operations. Agile practices can help companies achieve better procurement outcome

  • Revamping R&D Strategies as Per the New Normal

    While countries struggle with macroeconomic issues and geopolitical tension, companies need to revamp themselves to maintain business continuity. Businesses are already fighting to survive, with pressure from economic downturn, global inflation, supply chain disruptions due to war situations, and climate changes. Is there a game plan that can help them not only ride out this tough time but also thrive?

  • Overcoming Limited Global Starch Supplies through Effective Contracting Strategy

    The price cushioning initiative by leading starch producers, coupled with market and climate conditions driven feedstock supplies constraints, would lead to a decline in starch supplies in the next 1-2 years. Amid such supply market situations, it becomes necessary for industrial starch buyers to better utilize global and regional starch suppliers to build resilience in their starch supply chain.

  • Reshoring in US: Need for Locally Resilient Supply Chains

    US companies are increasingly reshoring their operations from China in response to supply chain disruptions and global uncertainties. CEOs in the US are investing in emerging technologies to enhance productivity and gain a competitive edge. The reshoring movement aims to build locally resilient supply chains and mitigate future risks. By adopting reshoring, the US can strengthen its manufacturing sector, foster economic growth, and create sustainable jobs.

  • ONDC – Revolutionizing Indian E-commerce

    Open network for digital commerce (ONDC) is a set of protocols built on open network systems. It seeks to give Micro, Small & Medium Enterprises (MSMEs) equitable possibilities to participate in digital commerce. This will lead to increased digital transactions and separate the supply chain and credit markets. Through ONDC, democratization of the e-commerce ecosystem and thwarting monopolies of established platforms can be done. A recent communication shared by ONDC proves that it initiated control to help customers and level the playing field for small retailers.

  • Mexico – A Promising Sourcing Destination for US Procurement Organizations

    With the global supply chain disruptions, countries are looking to develop strong supply base near to them. For the US, Mexico has emerged as a strong contender. Many drivers contribute to the country being a preferred option. The number of collaborations and trading transactions between the two countries rose in the past year, and this will only increase further. In this article, we discuss why sourcing from Mexico is an attractive option for large US organizations to procure key categories such as metal & electronics components, automotive parts, and other manufacturing products.

  • Thematic Investing on the Rise

    Disruptive technology is constantly reshaping the world. Despite the pandemic-induced lockdown, seamless internet connectivity enabled access to a virtual world where we could work, shop, and even meet people. Due to mobility restriction, labor shortage, and supply chain disruption, manufacturers have turned to robotics. Breakthrough treatments and medical advances in healthcare have helped combat the pandemic crisis. Climate change has shed light on vehicle electrification and the shift to renewable energy. Consequently, technological advancements such as AI, machine learning, blockchain, robotics, and data analytics are gaining popularity. The benefits of these disruptions, or rather “trends” and “themes,” are manifold. These trends are increasingly changing the way investors manage their portfolios.


  • How are Logistics Companies Redefining their Procurement Processes with AI?

    Artificial Intelligence (AI) is leveraged by various sectors and companies to automate and streamline their procurement processes. The logistics sector, in particular, has adopted this technology on a massive scale, with some major companies using it to optimize their solutions. While the initial adoption cost and need for skill set upgrades may seem high, the advantages and cost-saving potential of this technology compensate for them.

  • Role of Technology in Building Resilient Companies of the Future

    In a volatile world, with economic recessions, technological disruptions, and global crises like COVID-19, many businesses falter, unable to adapt. Resilience emerges as the cornerstone of corporate strategy, distinguishing between mere survival and thriving. It's about bouncing forward, integrating resilience into a company's DNA. Anticipating threats, withstanding shocks, and adapting are key. Technology plays a pivotal role in bolstering adaptability, streamline operations, and foster innovation. In essence, resilience coupled with advanced technology defines the blueprint for thriving amidst uncertainty.

  • AI in Procurement – Industry Applications

    Industries across the globe are adopting emerging technologies to streamline complex processes such as procurement. However, the nature of business determines the level of adoption. For instance, the automobile and logistics sectors have widely implemented artificial intelligence (AI), an emerging technology, but other sectors are still seeking ways to implement it. Will procurement become an AI-enabled function across industries in the near future?

  • How Big Data Analytics Will Facilitate Procurement 4.0

    Procurement activities generate considerable amounts of data from systems, operations, and geographies. In the era of digitalization and Industry 4.0, big data analytics would be a boon to procurement professionals, helping derive insights across stages. With several potential use-cases, the synergy between procurement and big data analytics will help shape Procurement 4.0. Aligning business goals to choose suitable analytics tools will be the key toward realizing this transformation.

  • Logistics 5.0: Difference with a Human Touch

    The logistics industry is in the midst of a transformation with the integration of technologies and digital innovations in processes, which paves the way for Logistics 5.0, an extension of Industry 5.0. The goal is to digitalize the entire logistics process, making it simple and error-free, and thus creating a collaborative relationship between humans and machines. Will we now see a more productive and efficient logistics process?

  • Private Label Retail in F&B – A New Paradigm in Consumer Choice

    Private label retail, also known as store brand or own brand, posted remarkable growth in recent years globally. Retail giants, such as Walmart and Target, played a significant role in driving this surge, revolutionizing the way consumers perceive and engage with private label products, especially in the Food and Beverage(F&B) segment. While it can help increase the profit margin of retail stores, it comes with a set of challenges.

  • The Rise of Vertical Farming and Hydroponics

    Increasing demand for food, coupled with decreasing farmlands and fertile soils, has led to the emergence of alternative forms of farming, such as vertical farming, to boost food production. Countries that have long struggled with domestic production and supply constraints due to the lack of natural resources and favorable climatic conditions are implementing these technologies to achieve food self-sufficiency.

  • Industrial Bio-Oils Take Center Stage in Sustainable Shift from Synthetic Oils

    Organizational time-bound sustainability targets and attempt to build resilience by finding ways to minimize the impact of market/price volatility have been pushing companies to realign their business practices. It is time for chemicals, paints & coatings, CPG, and packaging companies to revisit their raw material sourcing spectrum by considering sustainable alternates - Industrial bio-oils! Global companies across industries have been actively transitioning from synthetic oils to bio-oils considering their performance is superior or comparable at the minimum. In lieu of the growing demand, the supply is poised to grow robustly with rising investments from prominent suppliers. Therefore, to drive sustainability across the sourcing value chain, it is imperative for procurement heads to leverage the expanding supply and gain a competitive position in the market.

  • 3D Printing in Dentistry: Challenges and Solutions

    3D printing in dentistry is seeing increased adoption due to its many advantages, but certain associated challenges hinder the wide-scale implementation of the technology. However, solutions are being developed to overcome these challenges and enable 3D to transform dentistry and help people get a beautiful smile.

  • US Pet Food Industry on the Rise

    Pet ownership increased during lockdown when people were confined to their homes. Pet humanization has led to owners treating pets as part of their family. Owners are increasingly concerned about their pets’ health and nutrition and are looking for high quality and nutrient-rich food products. Pet food manufactures have been quick to tap into this rising demand to develop organic, natural, and high nutrition products. According to the American Pet Products Association, pet food sales increased 19.3% year-on-year to USD123.6 billion in 2021. Large pet food and treat manufacturers are expanding their production lines to meet growing demand. The pet food industry has shown resilience during the recent economic downturn and is expected to grow further.

  • USMCA - A Three-Year Retrospective and its impact

    The US–Mexico–Canada Agreement (USMCA), implemented in 2020, replaced North American Free Trade Agreement (NAFTA) and has significantly benefitted North American trade. It led to a substantial surge in trade, with North American trade volume exceeding USD 1.5 trillion in 2022 led by double-digit growth in trade since 2022. This free trade environment created 9.5 million jobs, and the three countries now account for one-third of the world's GDP. Investments in the region posted remarkable growth, with capital investments increasing 134% to reach USD 219 billion. However, USMCA faces challenges, such as trade disputes, and public opinion on international trade has shifted with 66% of Americans now supporting restrictions on imported foreign goods. The agreement's future will depend on addressing these issues before the joint review in 2026. If successful, the agreement could boost trade relations, enhance digital trade, and promote economic growth in North America.

  • Exploring Factors Affecting the Global Shipping Price Rise

    In early 2024, global shipping faced challenges due to attacks on key routes, like the Red Sea and Suez Canal, causing delays and raising costs. New environmental regulations added further complexity and expenses. Short-term solutions helped, but long-term resilience requires collaboration on security, compliance, technology, and finance.

  • Forging a Sustainable Future: A Look at Steel Companies' ESG Initiatives

    In 2022, worldwide production of crude steel totaled 1,885.02 million metric tons (mmt), and demand for steel is anticipated to increase significantly to meet future requirements. However, the steel industry is a major contributor to global greenhouse gas (GHG) emissions due to its reliance on fossil fuels and energy-intensive production processes. Currently, the industry accounts for approximately 8% of the global final energy demand and 7% of the energy sector’s CO2 emissions. Hence, there is pressure on the industry to reduce its carbon footprint. Consequently, it has been exploring various strategies, such as using renewable energy sources, adopting more efficient production methods, and implementing carbon capture and storage technologies to mitigate the environmental impact.

  • US Economic Slowdown – An Opportunity for India?

    As the US economy edges toward recession, equity investors are seeking opportunities in other countries. The focus is on emerging economies, specifically in Southeast Asia, and the main contenders are China and India. Both countries have positive and negative factors influencing investor decision. Which country would attract the bulk of the diverted investments is yet to be seen.

  • AI in Procurement – Expanding Horizons

    Emerging technology such as artificial intelligence (AI) is slowly gaining momentum across industries and processes. Companies worldwide are embracing this technology to realize efficiency and increase productivity in their procurement processes. AI algorithms can assist in analysis, prediction, and automation, thus helping to streamline the entire procurement process. However, organizations must understand the best use cases of implementing AI. In addition, the adoption of this technology across geographies remains uneven, where developed countries are moving ahead, while the developing ones are still taking cautious steps.

  • India's Newly Discovered Lithium Reserves – A Boon for the Domestic EV Industry

    India's domestic lithium battery manufacturing sector is in its infancy and mostly reliant on the imports of Li-ion cells, which are only assembled into lithium-ion batteries in India. In the next five to six years, demand for Li-ion batteries is anticipated to increase due to the government's goal of achieving widespread EV adoption by 2030. The recently discovered lithium reserve in J&K and Rajasthan is projected to reduce India's reliance on raw material imports and propel the domestic Li-ion battery manufacturing industry, which would ultimately have a beneficial impact on EV adoption.

  • Boron Revolution 2030 – Quest for Resilience Amidst Supply–Demand Disparity

    The decarbonization-led future with applications of e-mobility, wind energy, and solar energy is expected to drive an unprecedented rise in demand for boron and its derivatives. However, with no major supply expansions in the immediate pipeline, the supply–demand disparity is anticipated to widen, leading to a 25–40% projected price upsurge in the next 4–5 years. Therefore, reassessing supply chains and developing resilience to maintain competitiveness is crucial for companies in industries such as glass/composites, industrial manufacturing, automotive components, ceramics, and chemicals. It is imperative for procurement heads to secure future supplies by outlining forward-aligned sourcing strategies.

  • Lithium Price Drop – Accelerating EV Affordability

    The lithium market has seen a recent surge in demand as electrification initiatives have accelerated. Electric vehicle (EV) makers, such as Tesla, have been actively seeking resources due to the fast expansion of EVs and scarcity of lithium. As a result, lithium carbonate prices have shot up by over six times within the past few years. In 2022, lithium prices plummeted significantly, undoing several years of previous increases. In November the same year, lithium carbonate prices in China reached an all-time high before plunging to a new low of 35–40% in March 2023. This decline was triggered by a series of adverse events that ended the longest bull run in the history of lithium.

  • National Health Stack - A Feasible Reality or Distant Dream?

    The Government of India has designed healthcare initiatives under Ayushman Bharat Yojna to help the low-income households get medical treatments at nominal cost. National Health Stack (NHS) has been designed to support these initiatives and aid implementation of digital health infrastructure. While NHS had many benefits, its enactment involves certain challenges. It is essential to overcome hurdles and ensure that this plan is correctly implemented nationwide.

  • Mass Production to Mass Customization: Pharma Production at Crossroads

    The pharmaceutical industry, traditionally based on mass production to meet global medication demands, is now experiencing a transformation due to technological advancements, changing consumer preferences, and the rise of personalized medicine. This shift is challenging the traditional mass production model as the industry moves towards mass customization, aiming to provide tailored drugs for individual patients' requirements.

  • The Rise of High-Pressure Processing

    High pressure processing (HPP) technology is witnessing rapid growth in the food and beverage industry. Consumer demand for fresh, minimally processed foods with longer shelf life; the need for safer and healthier food products; and the rise of HPP-processed functional foods are driving the HPP market.

  • The Ripple Effect: Innovation Disrupting Industries

    The last decade has witnessed that innovation in one industry has transcended traditional industry boundaries and disrupted businesses across industries. The pace of trans-industry disruptive innovations is expected to accelerate in the coming decades, blur the lines between sectors, and emphasize the importance of cross-industry collaboration and adaptability for sustained success.

  • PFAS Sourcing Challenges – Alternatives on the Rise

    Per- and polyfluoroalkyl substances (PFAS), widely used for their unique properties, face heightened scrutiny due to health and environmental concerns. Their persistence in the environment and links to adverse health effects have led to regulatory actions globally. Industries such as food packaging, coatings and paints, chemicals, cosmetics and personal care, and electronics using PFAS are recommended to adopt safer alternatives, stay up to date on regulations, and follow responsible management practices. Proactive measures can mitigate the environmental impact, safeguard public health, and ensure business sustainability amid increasing PFAS challenges.

  • The Future of Internal Combustion Engine

    In 2021, the worldwide internal combustion engine (ICE) market was approximately worth USD 58,514.15 billion and is predicted to reach USD 93,615.18 billion by 2029, growing at a CAGR of 6.05% between 2022 and 2029 showing tremendous growth. It is likely to expand further as demand for passenger and commercial vehicles rise in both established and emerging markets. Electric powertrains are increasingly coupled with ICE to enhance vehicle fuel efficiency, which is driving industry development. The demand for ICE is growing exponentially in industries such as agriculture, construction, mining, and power generation. The global lack of EV infrastructure availability is partly responsible for the ICE market's growth.


Special Reports

11 special reports found for supply-chain:

  • Semiconductor Supply Chain Analysis

    Heavy dependence on Asia for semiconductor manufacturing has put undue stress on the whole supply chain in recent years. Demand–supply imbalance across the world has led to chip shortages, compelling various governments and corporates to take immediate steps to address the supply shocks. While policy makers are focusing on promoting localization, various semiconductor companies are ramping up investments to expand capacity. Notwithstanding the heightened efforts on the policy as well as investment front, supply constraints are expected to prevail in the near term.

  • Hurricanes 2022- Facing Supply Chain Adversities with Resilience

    In the US, besides global disruptions (COVID-19-led volatilities, geopolitical instabilities, etc.), natural disasters such as hurricanes have exacerbated supply chain issues. Over 300 hurricanes made landfall in the US during 1851–2021, causing damage worth more than USD1 trillion across supply chains of key industries. Such events are expected to intensify in the coming years, leading to a sustained negative impact on supply chains. Is your supply chain ready to navigate the potential risks of the hurricane season 2022? Our special report can help you quickly understand the value chain of key industries susceptible to hurricane risks, the potential impact, and risks of hurricanes across supply chains, and the best practices for effective risk mitigation.

  • Commodity Outlook Report – Q1’2024

    Commodity prices fell sharply by 20-25% across the board in 2023, are further expected to decline by 4% in 2024. These trends, coupled with an anticipated 5% decline in energy prices in 2024, will have notable implications for procurement and supply chain decision-makers across industries.





  • Global Fertilizer Industry: Emerging Stronger Post-Plunge

    The global fertilizer industry witnessed significant challenges during 2022 due to the high natural gas prices. The key raw material got costlier because of supply chain bottlenecks arising from the Russia–Ukraine conflict. The worldwide farmers’ affordability took a hit despite an increase in crop prices and hence the fertilizers’ demand suffered. The industry is on a path to recovery as the natural gas prices pull back from their peak and the long-term drivers such as population and economic growth remain resilient.





  • Impact of China–Taiwan Geopolitical Risks on Semiconductor Sector

    Geopolitical risks on the global semiconductor industry increased after a recent visit by US diplomats to Taiwan, which triggered stark political opposition and military responses by China. In this report, we discuss the possible impact on the global supply chain of semiconductors if the geopolitical tensions between China and Taiwan increase. We focus on (a) the global importance of the semiconductor industry of Taiwan, as the region is home to the world’s largest foundry operations; (b) possible risks from the disruptions of the world’s leading and Taiwan’s largest semiconductor foundry company – TSMC; and (c) potential winners and losers from the disruption of TSMC’s operations. 


  • Manufacturing on the Move: Reshoring Trends in Mexico and Vietnam

    In a world shaped by the seismic shifts of the COVID-19 pandemic, the Ukraine-Russia conflict, and the Red Sea crisis, a new narrative of resilience and adaptation is unfolding. Major companies are navigating through turbulent waters as supply chain disruptions cast a spotlight on the imperative of diversification. The World Container Index echoes this tumultuous journey, soaring to US$3,659 amidst the Red Sea crisis, symbolizing the challenges and opportunities in global trade. In a surprising turn of events, Mexico has emerged as a formidable contender, outpacing China as the leading importer to the US in 2023. This shift reflects a paradigm where unfavorable sentiments towards Chinese trade practices have paved the way for Mexico's ascent. With significantly lower average wages and strategic advantages stemming from the USMCA trade agreement and proximity to the United States, Mexico stands tall as a beacon of opportunity in the trade landscape. Meanwhile, Vietnam's ascent in labor productivity adds a new dimension to the global manufacturing stage, drawing attention and admiration from investors worldwide. As the allure of countries like India, Indonesia, and Thailand grows stronger, fueled by their proximity to China, competitive labor costs, and demographic advantages, a new era of exploration and innovation beckons. These nations stand at the crossroads of possibility, offering a canvas for companies to paint their supply chain futures with hues of diversity and resilience.

  • Europe & North America MedTech strengthens in 1H23

    In a notable development, most MedTech companies in Europe and the US topped consensus estimates in 1H23 earnings, largely on a rewind in procedure volume and efficient execution of cost-saving strategy. Patient count surged in hospitals as people opted for non-urgent surgical treatment after delaying care during the pandemic, thereby accelerating demand for medical devices. This trend bodes well for MedTech giants Stryker, Zimmer Biomet, and Philips. Moreover, the decrease in supply chain constraints eased pressure on margins. Contrarily, extra retention charges of nursing staff pressured Fresenius Medical Care and Fresenius SE. Further, companies such as Philips, Stryker, and Baxter have lifted their 2023 guidance on improved surgery volumes. Conversely, on continuation of a softer environment for biopharma services, Danaher, and its peer ThermoFisher have narrowed their this year estimates. 

  • Impact of Russia–Ukraine War on Global Commodity Markets

    The Russia-Ukraine conflict has had rapid and extensive effects on global commodity markets. Both nations stand amongst the world's largest commodity exporters, with global influence over critical commodities such as natural gas, oil, metals, wheat, etc. Whereas Russia is a key supplier of oil, natural gas, coal, aluminum and wheat, Ukraine is a key exporter of wheat and oilseeds

    The ongoing conflict and unprecedented sanctions towards Russia have resulted in record-high inflation levels across developed and developing regions, disrupted supply chain, and severely impacted global economic recovery from the COVID-19 pandemic. Notably, prices of many essential and industrial commodities have been skyrocketing since February 2022, surpassing the peak in 2008 during the global financial crisis.

    With expectations of these geopolitical tensions to continue, energy and food prices are forecasted to stay elevated in short to medium term period. This is evident as global growth forecasts have been cut and economic indicators suggest a drop in activity as nations grapple with tightening markets.

  • Rising Resource Nationalism in Metals Critical for EV Batteries

    The commodities markets, renowned for their inherent volatility, are poised for a substantial surge in demand for battery metals. This is primarily due to the exponential growth of electric vehicles and the need for energy storage solutions to enable a greater share of intermittent renewable energy sources in the energy matrix. The pivotal battery minerals encompass lithium, nickel, cobalt, graphite, manganese, vanadium, and copper. Presently, the anticipated scarcity of lithium, nickel, and cobalt emerges as the most pressing concern in the landscape of new supply. The demand for nickel is expected to rise 44% globally by 2030 compared to 2022, while the growth of lithium-ion batteries is anticipated to accelerate at a 30% annual compound rate and the production of cobalt is projected to rise by 13% yearly over the following five years. Heightened concerns about energy and resource security, coupled with supply-chain resilience, have been exacerbated by extreme weather events and elevated inflation in numerous countries. Consequently, nations reliant on these minerals for the energy transition are taking proactive measures to secure their supply. Concurrently, there is a resurgence of resource nationalism, with key producing nations strategically positioning themselves to garner a greater share of value from their mineral reserves.


  • India's EMS Sector in Full Momentum

    COVID-19 pandemic and higher China dependency led to supply chain disruptions in electronic components and finished goods. Consequently, the global electronic manufacturing giants reduced dependency on China by shifting their manufacturing bases to countries such as India, Vietnam, Indonesia, which have better unit economics. We believe India will benefit from this electronics manufacturing (EMS) wave, given its: i) digitized economy driving domestic demand; ii) 1.8–6x cost effective and skilled labor vs Vietnam and China; iii) high import bill (53% of total electronics market) leading to import substitution; iv) China+1 strategy; and v) robust government initiatives to push local manufacturing.  The EMS wave kick-started in India following government announcements to push local manufacturing in FY20. As a result, the electronics import/export ratio reduced sharply from 8.3x in FY18 to 3.2x in FY23. This has resulted in a 2–5x increase in book-to-bill ratio of major India-based EMS companies, along with a rise in the entry of global manufacturing giants; Foxconn and Pegatron have announced plans to double operations in India over the next couple of years. 

    We believe that India is ready to be the next EMS hub. India’s EMS market of $20bn (2.3% of global market) is poised to expand at 32% CAGR over CY21–26E and outpace global/USA/China/Europe markets. Kaynes, Syrma, Avalon and Dixon, which are some of the leading listed EMS players in India, are likely to benefit from this EMS wave.




  • High Yield – US Spotlight

    Rising Inflation, supply-chain disruptions, and tightening financial conditions have created a negative sentiment amongst the investors. In Year-To-Date 2022, the US High Yield funds witnessed net outflows of $33.8 billion. Year-To-Date July 2022 returns of major asset classes, including HY, were significantly negative. Equities and Emerging Markets have underperformed, compared to debt and developed markets, respectively, while oil markets are a clear winner. On the risk front, spreads have widened highlighting the rising credit risk. The spreads of CCC & lower rated bonds are trending over 1,200 bps. As cost of borrowing increases, corporates have struggled to refinance and/or issue new debt resulting in a substantial decline in high yield issuances in YTD 2022. Furthermore, Federal Reserves’ aggressive stance to hike rates and abate inflation, could have negative implications on growth. The most widely tracked 10Y-2Y US Treasury spread has entered negative territory in July as fears of recessions grip the market. High financing costs and weak cash flows could lead to increased number of companies filing for relief under Chapter 11 bankruptcy protection. The high-risk scenario, however, represents high return opportunities. Investors might stay away from riskier CCC & lower rated bonds and diligently look towards BB / B rated bond for higher yields.