Breaking Down the Doors of Society

Society as we know it today has changed day by day as the world around us advances in many different ways. Advancements in science, technology, education, politics, human rights and many other areas have led to the shifts of culture in society to mold what we recognize society as today. Over the next 37 years, by year 2050, I foresee many changes that will occur that will impact society significantly. I believe a few changes that will cause the culture changes will be: the AffordableCare Act, the raises that are going to take place in the minimum wage, but most importantly, I believe society is going to take a shift for progressive and accepting views. First of all, a hot topic today and a conversation that will be occurring over the next 30 years will be health care in the United States and in the entire world. In my opinion, the changes that we are going to see take place in the United States under the Patient Protection and Affordable Care Act are going to be numerous.Not only wil l there be plenty of changes behind the scenes with insurance companies and lath care providers, but there will be a major culture change in America as we see these changes take place. I believe this due to the fact that since an estimated 105 million Americans will no longer have lifetime dollar limits on their coverage and that 17. 6 million children will no longer be denied coverage due to pre-existing conditions, then individuals and families will no longer, hopefully, be driven into poverty due to medical bills that they cannot handle.Additionally, due to the fact that people will be covered and be able to have preventative care, then I hope to see hat people will no longer be flooding the emergency rooms whenever they get sick, which the taxpayer previously had to foot the bill. Moreover, there are many great changes that will take place, but the most visible changes, in my opinion, are going to be the cultural ones.First, I believe that with the new extension that children wi ll be able to stay under their parents' coverage until the age of 26, then I believe that will create some major stress relief on young adults trying to receive college educations and establish their careers. Not only that, but it may create a sort of extended adolescence that we normally saw up until the age of 22 or so, but now that may change to about 25 or 26. Finally, I feel the major cultural shift that the new health care law will create is that people will no longer be belittled or embarrassed to seek health care that they cannot afford.Additionally, due to the education that many people learned about their struggling counterparts, they will begin to respect and care for their less fortunate counterparts since many Americans learned that there re way more people struggling to afford basic health care than there should be. Secondly, I believe that a major change is in order now that the federal minimum wage is receiving heavy criticism. Now that people in the United States ar e beginning to see and understand how terrible life is as a minimum wage worker, a culture change is already occurring.People across all walks of life: rich, poor, liberal, conservative, religious and non-religious alike are beginning to support a raise to the federal minimum wage out of the care and sympathy they all have for the nation's resorts families. The major changes that can take place if the federal minimum wage was changed to nine or ten dollars an hour would be exceedingly significant, in my opinion. Not only will the estimated 3. 8 million workers that were paid at or below the federal minimum wage see relief in their daily lives, but also the poverty level will decrease.Based on the new money that will be injected into the economy, businesses will be more profitable, hiring could increase, and the government will collect more in taxes from workers who now live above the poverty line and from reparations. Furthermore, there will be a radical shift in America's poor. Les s people will be reliant on federal programs such as SNAP and WICK and less people will have a disapproving attitude towards the nation's poor who rely on these programs and are, unfortunately, seen as â€Å"moochers† or â€Å"leaches. The final and most important culture change that I believe is going to take place by the year 2050 will be the major progressive and accepting shift in individual's attitudes. What I mean by this is that people throughout the world are going to begin to accept everyone no tater their walk of life. Less and less people are going to be looking down upon the poor, minorities, women in the workplace, atheists, homosexuals and other less mainstream lifestyles. I feel like this shift is already taking place today, but we are seeing major resistance that I believe is going to end over the next decade or two.Personally, I feel that individuals who desire to break the social norms are going to have more courage to do so since an increasing number of pe ople will be supportive of their lives. For instance, more women will be seeking political and business oriented Jobs, homosexuals will no longer try to hide their true identities from their families, people will stop using stereotypes and offensive names, all religions will be accepted no matter their history and many other great changes. Moreover, families will no longer push their child towards social norms, in my outlook.Families will be closer, in my estimation, for a couple of reasons: parents will accept their children no longer who they desire to grow up to be, bigoted ideas will no longer tear families apart based on who they marry and children will be less likely to dislike their parents u to the fact that they will no longer be pushed to forget their dream and pursue a social norm. Also, I feel like these progressive shifts will lead too much smaller schism in society that disapproves of these lifestyles and way of thinking.Those that disapprove of equal marriage, interra cial marriage, atheism, Islam, and many other things will be reduced to a much smaller population since others will begin to see that loving and caring for each other is most important. Lastly, I believe that this change that is taking place in more developed countries will begin to take place wrought the world, which will make the world a much better place to live in, especially in developing nations.I believe this due to the fact that people will no longer be not allowed to have Jobs based on gender, sexual orientation, race or anything else not related to work. Additionally, countries may begin to stop having laws against freedom of religion or homosexuality. All in all, I believe the sky is the limit for equality and open-mindedness in the world based on the progressive shifts in the eyes of the people.All in all, although there are many culture changes that are going to take place by the year 2050, I believe health care, the minimum wage, and the progressive shift in opinions w ill be the most important. Not only will these changes improve the lives of many in America and the world, but also I believe the progressive shift that is taking place already will begin to take place in a large population of people, to the relief of many. I believe that equality of everyone will become a priority, like it should've been forever, and by 2050 1 think it will happen.

Chapter 18 Solutions

EXERCISE 18-1 (10-15 minutes) Add or deduct from accounting income (a)2deduct (b)1add (c)3add (d)1add (e)2deduct (f)2deduct (g)1add (h3deduct (i)3deduct (j)1add (k)1add (l)1add EXERCISE 18-3 (15-20 minutes) (a) Accounting income$105,000 Permanent differences: Non-deductible fines 11,000 116,000 Timing differences: Excess of CCA over amortization (16,000) Excess rent collected over rent earned? 24,000 Taxable income$124,000 Current income taxes – 30% $37,200 (b) Deductible Balance(Taxable)Future TaxCurrent SheetTemporaryTax AssetLong- AccountDifferencesXRate(Liability)TermPP & E($16,000)*30%($4,800) LT Unearned Rent revenue 24,00030% 7,200C Future income tax asset, Dec. 31, 20092,400 Future income tax asset before adjustment 0 Incr. in future income tax asset and future income tax benefit for 2009$2,400 *Carrying amount and tax basis are not given in the exercise, only the net difference (c)Current Income Tax Expense37,200 Income Tax Payable37,200 Future Income Tax Asset? 7,200 * Future Income Tax Benefit2,400 Future Income Tax Liability? 4,800* *or a net debit to Future Income Tax Asset of $2,400 Because of a flat tax rate, these totals can be reconciled: $24,000 – $16,000) X 30% = $7,200 + ($4,800). EXERCISE 18-3 (Continued) (d)Income before income taxes$105,000 Income tax expense Current$37,200 Future benefit? (2,400)? 34,800 Net income$70,200 (e) Divided by Accounting @ 30% Income Accounting income $ 105,000 31,500 30. 0% Non-deductible fines 11,000 3,300 3. 1% 34,800 33. 1% Effective tax rate ($34,800/$105,000)33. 1% (f)Current assets Future income tax asset$7,200 Non-Current liabilities Future Income Tax Liability4,800 EXERCISE 18-9 (15-20 minutes) (a) Balance Deductible Sheet (Taxable) Future Tax AccountCarryingTaxTemporaryTaxAssetDec. 31, 2008AmountBasisDifferencesRate(Liability) Warranty liability($130,000)$0 $130,000 25%$32,500 Future income tax asset, December 31, 200832,500 Future income tax asset before adjustment 0 Increase in future i ncome tax asset and future income tax benefit for 2008$32,500 Future years Total200920102011 Deductible temporary difference Warranty liability $130,000 $50,000 $35,000 $45,000 Tax rate enacted for the year 25%25%25% Future tax asset $32,500 $12,500 $8,750 $11,250 EXERCISE 18-9 (Continued) (b)2008 Accounting income$135,000Permanent differences:-0- Timing difference: Warranty expense > warranty costs incurred 130,000 Taxable income 265,000 Current income taxes – 25%$66,250 (c) Current Income Tax Expense66,250 Income Tax Payable 66,250 Future Income Tax Asset32,500 Future Income Tax Benefit32,500 (d)Income before income taxes$135,000 Income tax expense Current$66,250 Future benefit? (32,500) 33,750 Net income$101,250 EXERCISE 18-15 (40-45 minutes) (a) Basic Calculations of Capital Cost Allowance, Amounts and Balances: C-B (A)(B)A – B(C)Timing YearBaseCCAUCCAmort. NBVDifference 2007 $600,000 X 40 % X . $ 120,000 $ 480,000 $120,000$480,000$0 2008 480,000 X 40 % 192,000 288 ,000 120,000360,000(72,000) 2009 288,000 X 40 % 115,200 172,800 120,000240,0004,800 2010 172,800 X 40 % 69,120 103,680 120,000120,00050,880 2011 103,680 X 40 % 41,472 62,208120,000078,528 $537,792 (b) 20072008200920102011 Accounting income $ 340,000 $340,000 $340,000 $340,000 $ 340,000 Timing difference – (72,000) 4,800 50,880 78,528 Taxable income $ 340,000 $268,000 $344,800 $390,880 $ 418,528 X 34 %X 34 %X 34 %X 34 %X 34 %Income taxes payable$115,600$91,120$117,232$132,899$142,300 EXERCISE 18-15 (Continued) (c) and (d) 2007 Balance Deductible Sheet (Taxable) Future Tax AccountCarryingTaxTemporaryTaxAsset Dec. 31, 2007AmountBasisDifferencesRate(Liability) Property Plant & Equipment$480,000 $480,000 034%$0 Future income tax asset/liability, December 31, 20070 Future income tax asset/liability before adjustment 0 Increase in future income tax liability and future income tax expense for 2007$0 Current Income Tax Expense115,600 Income Taxes Payable? 115,600 ($340,000 X 34%) part (a) EXERCISE 18-15 (Continued) (c) and (d) continued 008 Balance Deductible Sheet (Taxable) Future Tax AccountCarryingTaxTemporaryTaxAsset Dec. 31, 2008AmountBasisDifferencesRate(Liability) Property Plant & Equipment$360,000$288,000 (72,000)34%($24,480) Future income tax liability, December 31, 2008(24,480) Future income tax liability before adjustment 0 Increase in future income tax liability and future income tax expense for 2008($24,480) Current Income Tax Expense91,120 Income Taxes Payable? 91,120 ($268,000 X 34%) part (a) Future Income Tax Expense24,480 Future Income Tax Liability? 24,480 EXERCISE 18-15 (Continued) (c) and (d) continued 2009Balance Deductible Sheet (Taxable) Future Tax AccountCarryingTaxTemporaryTaxAsset Dec. 31, 2009AmountBasisDifferencesRate(Liability) Property Plant & Equipment$240,000$172,800 ($67,200)34%($22,848) Future income tax liability, December 31, 2009(22,848) Future income tax liability before adjustment (24,480) Decrease in future income tax liab ility and future income tax benefit for 2009$1,632 2009 Current Income Tax Expense117,232 Income Taxes Payable? 117,232 ($344,800 X 34%) part (a) Future Income Tax Liability1,632 Future Income Tax Benefit? 1,632 EXERCISE 18-15 (Continued) (c) and (d) continued 2010 Balance DeductibleSheet (Taxable) Future Tax AccountCarryingTaxTemporaryTaxAsset Dec. 31, 2010AmountBasisDifferencesRate(Liability) Property Plant & Equipment$120,000$103,680 ($16,320)34%($5,549) Future income tax liability, December 31, 2010(5,549) Future income tax liability before adjustment (22,848) Decrease in future income tax liability and future income tax benefit for 2010$17,299 2010 Current Income Tax Expense132,899 Income Taxes Payable? 132,899 ($390,880 X 34%) part (a) Future Income Tax Liability17,299 Future Income Tax Benefit? 17,299 EXERCISE 18-15 (Continued) (c) and (d) continued 2011 Balance DeductibleSheet (Taxable) Future Tax AccountCarryingTaxTemporaryTaxAsset Dec. 31, 2011AmountBasisDifferencesRate(Li ability) Property Plant & Equipment$0$62,208 $62,20834%$21,151 Future income tax asset, December 31, 201121,151 Future income tax liability before adjustment (5,549) Increase in future income tax asset and future income tax benefit for 2011$26,700 2011 Current Income Tax Expense142,300 Income Taxes Payable? 142,300 ($418,528 X 34%) part (a) Future Income Tax Liability5,549* Future Income Tax Asset21,151* Future Income Tax Benefit? 26,700 *Alternately, a debit to Future Tax Asset26,700 EXERCISE 18-15 (Continued) (e) 2007Current Income Tax Expense115,600 Income Taxes Payable? 115,600 ($340,000 X 34%) 2008 Current Income Tax Expense91,120 Income Taxes Payable? 91,120 ($268,000 X 34%) 2009 Current Income Tax Expense117,232 Income Taxes Payable? 117,232 ($344,800 X 34%) 2010 Current Income Tax Expense132,899 Income Taxes Payable? 132,899 ($390,880 X 34%) 2011 Current Income Tax Expense142,300 Income Taxes Payable? 142,300 ($418,528 X 34%) PROBLEM 18-9 Part 1. (a) Mixed tax rates Future y ears 20092010201120122013Total Future taxable amounts ($300) ($300) ($300) ($200) ($100) ($1,200) Tax rate enacted for the year 30%30%30%35%35%Future tax (liability) ($90) ($90) ($90) ($70) ($35) ($375) Future years 20092010201120122013Total Future deductible amounts $1,800 $1,800 Tax rate enacted for the year 30%30%30%35%35% Future tax asset – – – $ 630 – $ 630 PROBLEM 18-9 (Continued) Part 1. (a) Balance Deductible Sheet (Taxable) Future Tax AccountCarryingTaxTemporaryTaxAsset Dec. 31, 2008Amount*Basis*DifferencesRate(Liability) Property Plant & Equipment($1,200)Mixed($375) Litigation Liability1,800Mixed630 Future income tax asset, December 31, 2008255Future income tax liability before adjustment (500) Increase in future income tax asset and future income tax benefit for 2008$755 * not given in the problem Part 1. part (b) Current Income Tax Expense1,200 Income Tax Payable1,200 ($4,000 X 30%) Future Income Tax Asset/Liability755 Future Income Tax Benefi t755* *Alternately: Future Income Tax Asset630 Future Income Tax Liability125 Future Income Tax Benefit755 PROBLEM 18-9 (Continued) Part 2. (a) Mixed tax rates Future years 2009201020112012Total Future taxable amounts ($400) ($400) ($400) ($400) ($1,600) Tax rate enacted for the year 30%30%30%35%Future tax (liability) ($120) ($120) ($120) ($140) ($500) Future years 2009201020112012Total Future deductible amounts $3,000 $3,000 Tax rate enacted for the year 30%30%30%35% Future tax asset – – $900 – $900 PROBLEM 18-9 (Continued) Part 2. (a) Balance Deductible Sheet (Taxable) Future Tax AccountCarryingTaxTemporaryTaxAsset Dec. 31, 2008Amount*Basis*DifferencesRate(Liability) Property Plant & Equipment($1,600)Mixed($500) Litigation Liability3,000Mixed900 Future income tax asset, December 31, 2008400 Future income tax asset before adjustment 600Decrease in future income tax asset and future income tax expense for 2008$200 * not given in the problem Part 2. part (b) Curr ent Income Tax Expense1,200 Income Tax Payable1,200 ($4,000 X 30%) Future Income Tax Expense200* Future Income Tax Asset200* *Alternately: Future Income Tax Expense200 Future Income Tax Asset300 Future Income Tax Liability500 PROBLEM 18-9 (Continued) (c) Part 1 – All balance sheet related accounts are non-current Pirates Corp. Balance Sheet December 31, 2008 Non-current assets Future income tax asset$255 Part 2 – All balance sheet related accounts are non-current Eagles Corp. Balance Sheet December 31, 2008Non-current assets Future income tax asset$400 PROBLEM 18-12 (a)2007 Income Tax Refund Receivable—20047,500 ($25,000 X 30%) Income Tax Refund Receivable—200518,000 ?($60,000 X 30%) Income Tax Refund Receivable—200632,000 ($80,000 X 40%) Current Income Tax Benefit (Due to Loss Carryback)57,500 Note:An acceptable alternative is to record only one Income Tax Refund Receivable account for the amount of $57,500. Future Income Tax Asset18,000 Future I ncome Tax Benefit (Due to Loss Carryforward)18,000 ($210,000 – $25,000 – $60,000 – $80,000 = $45,000) ($45,000 X 40% = $18,000) 2008 Current Income Tax Expense10,000Income Tax Payable? 10,000 [($70,000 – $45,000) X 40%] Future Income Tax Expense18,000 Future Income Tax Asset18,000 ($18,000 – $0) 2009 Current Income Tax Expense31,500 Income Tax Payable ($90,000 X 35%)31,500 PROBLEM 18-12 (Continued) (b)One or more income tax refund receivable accounts totalling $57,500 will be reported under current assets on the balance sheet at December 31, 2007. This type of receivable is usually listed immediately above inventory in the current asset section. This receivable is normally collec ¬tible within two months of filing the amendment to the tax returns reflecting the carryback.A future income tax asset of $18,000 should also be classified as a current asset because the benefits of the loss carryforward are expected to be realized in the year that im mediately follows the loss year, which means the benefits are expected to be realized in 2008. A current future income tax asset is usually listed at or near the end of the list of current assets on the balance sheet. Also, retained earnings is increased by $75,500 ($57,500 + $18,000) as a result of the entries to record the benefits of the loss carryback and the loss carryforward. (c)2007 Income StatementOperating loss before income taxes($210,000) Income tax benefit Current benefit due to loss carryback$57,500 Future benefit due to loss carryforward? 18,000 75,500 Net loss($134,500) (d)2008 Income Statement Income before income taxes$70,000 Income tax expense Current$10,000a Future? 18,000? 28,000 Net income$42,000 a [($70,000 – $45,000) X 40%] PROBLEM 18-12 (Continued) (e)2007 Income Tax Refund Receivable—20047,500 ($25,000 X 30%) Income Tax Refund Receivable—200518,000 ($60,000 X 30%) Income Tax Refund Receivable—200632,000 ?($80,000 X 40%) Current Income Tax Benefit (Due to Loss Carryback)57,500Note:An acceptable alternative is to record only one Income Tax Refund Receivable account for the amount of $57,500. Although the tax benefit is not recognized in the accounts, Mearat Inc. has a tax loss carryforward of $45,000 which should be disclosed. 2008 Current Income Tax Expense10,000 Income Tax Payable? 10,000 [($70,000 – $45,000) X 40%] 2009 Current Income Tax Expense31,500 Income Tax Payable ($90,000 X 35%)31,500 (f)2007: entry for current taxes – no change 2007: if a valuation allowance is used, the full benefit and future tax asset related to the tax loss carryforward is recognized and then offset by the allowance, as follows.Future Income Tax Asset18,000 Future Income Tax Benefit (Due to Loss Carryforward)18,000 ($45,000 X 40% = $18,000) Problem 18-12 (f) (Continued) Future Income Tax Expense18,000 Allowance to Reduce Future Income Tax Asset to Realizable Value)18,000 ($18,000 – $0) 2008: entry for cu rrent taxes – no change 2008: because the tax loss carryforward has now been used, both the amount in the future tax account and in its allowance account must be removed, as follows. Future Income Tax Expense (Due to Use of Loss Carryforward)18,000 Future Income Tax Asset18,000 Allowance to Reduce Future IncomeTax Asset to Realizable Value18,000 Future Income Tax Benefit (from Adjustment of Allowance)18,000 Alternatively, one entry could have been made: Allowance to Reduce Future Income Tax Asset to Realizable Value18,000 Future Income Tax Asset18,000 2009: No change to part (e) entry. (g)2007 Income Statement Operating loss before income taxes($200,000) Income tax benefit Current benefit due to loss carryback? 57,500 Net loss($142,500) 2008 Income Statement Income before income taxes$70,000 Income tax expense – Current a 14,000 Net income$56,000 a [($70,000 – $35,000) X 40%] PROBLEM 18-12 (Continued) h)Using the valuation allowance instead of applying the redu ction in value directly does not have any impact on cash flows. The use of the contra allowance simply permits the recording of the full benefits associated with all future deductible amounts in the asset account. This facilitates tracking for management purposes. It has no use for financial reporting purposes except, perhaps, for the transparency of the information. Readers can see the total possible benefits and the extent to which management has judged they will not be realized. Use of the allowance has no impact on cash flows.

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Critical Analysis of Two Ways a Woman Can Get Hurt by Jean Kilbourne Article

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Credit Crisis(Subprime) - Essay Example However, when interest rates began to rise and housing prices started to decline, refinancing became more difficult and subprime borrowers were unable to make their mortgage payments, which resulted in a continuous subprime cycle throughout all markets in the United States. Subprime borrowers were unable to pay their mortgage payments, so several financial institutions made the effective financing approach by issuing financial agreements called Collaterized Debt Obligation (CDO), mortgaged-backed securities (MBS) and a form of credit insurance called Credit Default Swaps (CDS) to sell to investors across the world to invest in the U.S. Graph 1 illustrates that the growth of CDOs issued increased dramatically from 2004 to 2006, then dropped slightly in 2007. These types of financial innovations derived value from increasing in mortgage payments and housing prices, becoming popular. The usages of the product expanded dramatically. The financial innovation was carried out by firms whose activities were not regulated. The transactions became too complex and the policies were inclined to support deregulation of the financial market, sometimes being loose of supervision. The subprime mortgage crisis thus became a full-fledged financial crisis, and turned to a collapse in financial markets. As the subprime crisis intensified, financial institutions faced difficulties in raising capital forced default protection, and sellers (such as Northern Rock and American International Group (AIG) were reducing credit ratings. This left depositors with no confidence in the stability of financial institutions and they began to withdraw their deposits, which was the main cause of bankruptcy of financial institutions. For example, due to the bankruptcy of one major institution like the AIG, it brought down the whole financial system. In the beginning of 2008, â€Å"The Bear Stearns Companies,

Amy Cuddy, TedTalk Assignment Example | Topics and Well Written Essays - 500 words

Amy Cuddy, TedTalk - Assignment Example Can you really fake it till you make it? This is true to some extent as it depends on the person and their motivation to achieve what they want. Actually what our body experiences can change what we think in our minds resulting in a change in our behaviors. The moment our behaviors change, the outcome is likely to be the ones we desire. There is so much faking that takes place in the business field. Most of the time people say some things about themselves that would be viewed as pure fiction. This practice is common among the entrepreneurs. People tend to exaggerate their experience, knowledge, compensation and accomplishments. They associate themselves with success in every area of their lives. They go to the extent of posting some of these online for the general public to read. These are made up allegations since they never have hard evidence to support whatever it is they write about. Some of these people actually end up achieving some of the things they fake if they focus very well. Fake it till you make it worked for my brother. When we were young he used to make toy cars and drive them around the neighborhood. He used to imitate the engine using his mouth. He would say that he had a real car that could take him where he wanted to go. The moment he got employed, he bought a car with the same model as the toys he used to

Obesity in Children Essay Example for Free

Obesity in Children Essay What parents allow their children to eat can affect their bodies and their life. Most children don’t realize the effects of long term illnesses such as obesity, type 2 diabetes, heart condition and high blood pressure. Taxing unhealthful foods and beverages could prove an important strategy to overconsumption and potentially aid in weight loss and reduced rates of diabetes among children and adults. Junk food should be taxed because it will reduce obesity, type 2 diabetes, and health care costs. First of all, taxing junk food will lower obesity among Americans. The increase in both soda and pizza found that many Americans would still buy junk food regardless of a price increase. Taxing of sugary beverages at a penny-per-ounce rate with the goal of decreasing consumption of obesity caused in drinks. The junk food tax would fund obesity related health initiatives such as diabetes care. Obesity has been acknowledged as a national problem, notion of taxing junk food doesn’t seem so bad. Secondly, Americans need to take better control over what they eat and what they feed their children. We must take a stand against obesity, type 2 diabetes, high blood pressure and heart disease in children and young adults. Most fast foods contain process meats and considered unhealthy in children. Americans don’t have an ideal what they are eating in fast food restaurants. How the government determined what foods should be served in schools. A couple of school systems such as Texas and California had a great idea to remove soft drinks, pop, soda, energy drinks and cola from the schools lunch rooms along with fast foods such as burgers, French fries, hot ogs and convenience stores, too fight the obesity epidemic among the United States and children. Replace drinks with orange juice, and water. Replace fast foods with fresh fruits, vegetables, salads and exercise. Obesity in the United States has risen from 48 percent to 65 percent within the last thirty years and so has health care which has sky racket. We need to be more proactive in saving our children by eating healthier f oods in the home and school. Schools need to change the vending machines to reflect eating healthy will help the body to become healthier. The school environment, nutrition, organizational support groups, school policies that take away things such as sweetened beverages, and replace them with water, juice, fruit, vegetables and less junk food. Availability of less healthful food and beverages in schools is worldwide. Despite changes in improving school food environment, availability of high fat food such things as pizza and hamburgers remain high in United States schools. Canadian elementary schools seem to have fewer vending machines, but less healthful food and beverages are available to all grades as they are made available through outlets such as cafeteria, school stores. It is said that schools may influence students into eating unhealthy by the lunches they provide and the vending machines that are in schools. Lastly, fast foods are not good because they have no nutrition value, most children that consume fast foods on a daily basic start to gain weight due to lack of exercise. Children watch more TV and play more video games than exercising. Less exercise in schools, have also been a major factor contributing to obesity in children. Fast foods make children tired, the more you eat the less energy you have. When you walk into a store whether it’s a large grocery store or a small convenience store the lack of fruits and vegetables are small. Most children and adults are unaware that they have high cholesterol and high blood pressure. Most children who suffer from obesity also have a high rate of asthma. It would be a good idea if governments would rate schools on lunches they are providing to students. The school should prohibit advertising of fast foods, sweets and pop, prohibit use of less healthful foods , provide advertising that deals with eating healthy and healthy foods such as fruits, vegetables, seek educational requirements for school food and include requirements for nutrition education. Include exercise in the diet each day that way children won’t feel tried after eating lunch. They will burn off fast and their bodies will feel better and become better in the long run. We need our children to be healthy. We need to avoid sickness, obesity, type 2 diabetes, heart disease and high blood pressure. Americans need to limit the intake of fast foods and start looking at healthy choices for themselves and their children. Medical bills have sky racket. If we plan to keep our generation of children around we better start looking at better ways of eating and providing nutrient in our everyday diet. Most people have cars, less people walk, ride bikes, or exercise. We have become lazy when it comes to exercise and eating healthy. Look at your children and ask yourself, do I want my child to continue looking like this, obese, sick and unhealthy.

Bridge to Terabithia by Katherine Paterson Essay Example for Free

Bridge to Terabithia by Katherine Paterson Essay Bridge to Terabithia is an ambitious, thrilling, and at times heartbreaking story about childhood, friendship, and individuality. Paterson begins the story by introducing Jess Aarons, an eleven ­year ­old boy living in a rural area of the South who loves to run. He dreams of being the fastest boy in the fifth grade when school starts up in the fall, feeling that this will for once give him a chance to stand in the spotlight among his five sisters, and win him the attention of his constantly preoccupied father. Jess is very insecure in his identity. He loves to paint and draw, but he knows that this labels him a sissy in most eyes, particularly his father. As Katherine Paterson said â€Å"Jess drew the way some people drink whiskey.† I enjoyed reading about Jess’s confliction between his masculinity and effeminacy. With his family stretched so tight by poverty he has little chance to really explore his own identity during this crucial period of adolescence. He is determined to win in doing something masculine that will rid the undesired label of â€Å"sissy† or â€Å"Girl† in the eyes of his father and schoolmates which will allow him to shine in his own right. He practices each morning, always dreaming of his upcoming victory. However, when the races come around at recess, a new girl, Leslie Burke, who just moved next door to Jess, boldly crosses to the boys’ side of the playground and beats everyone.

Indias Construction Equipment Industry Analysis

Indias Construction Equipment Industry Analysis Abstract This research was an attempt to assess the current status of Indian construction equipment industry and the underlying opportunities and challenges. However, the aspects and objectives that were dealt in the research are; the current structure, status, competition, financing opportunities and challenges of Indian construction equipment industry. The research was conducted wholly based on secondary data. Following are the key findings of the research. Indian construction industry has entered into a new phase, where prospect of the industry appears extraordinary bright. Indian construction equipment industry is passing through a phase of hurried renovation, where the shifting is taking place from low volume concentrated use of equipment structure to high volume explicit one. Apart from these, the current and future trend also shows that the key segments of construction equipment that will have potential market prospects are excavators, loaders, dozers, dumpers and cranes. The growth of Indian construction equipment industry is the outcome of the fast liberalization and globalization of the Indian economy and the construction sector. The real competition in Indian construction equipment industry has been created by foreign players such as Volvo, Komatsu and many others. These companies are leaving no stone unturned to exploit the opportunities in Indian industry. The industry is at the critical juncture (particularly for domestic players) and therefore companies need to equip with safety measures in relation to post WTO market setting. Introduction (Chapter 1) 1.1 Indian Construction Equipment Industry Background Historical Trends Construction and mining equipment cover a variety of machinery such as hydraulic excavators, wheel loaders, backhoe loaders, bull dozers, dump trucks, tippers, graders, pavers, asphalt drum / wet mix plants, breakers, vibratory compactors, cranes, fork lifts, dozers, off-highway dumpers (20T to 170T), drills, scrapers, motor graders, rope shovels etc. They perform a variety of functions like preparation of ground, excavation, haulage of material, dumping/laying in specified manner, material handling, road construction etc. These equipment are required for both construction and mining activity. With a wide production capacity base, India is perhaps the only developing country, which is totally self-reliant in such highly sophisticated equipment. India has only a few, mainly medium and large companies in the organized sector who manufacture these. The technology barriers are high, especially with respect to mining equipment and therefore the role of SME’s is restricted to manufacture of components and some sub-assemblies. Prior to the 1960s, domestic requirements of mining and construction equipment were entirely met by imports. Domestic production began in 1964 with the setting up of Bharat Earthmovers Ltd. (BEML), a public sector unit of the Ministry of Defence, at Kolar in South India to manufacture dozers, dumpers, graders, scrapers, etc. for defense requirements under licence from LeTorneau Westinghouse, USA and Komatsu, Japan. In the private sector, the Hindustan Motors’ Earthmoving Equipment Division, was established in 1969 at Tiruvallur, near Chennai with technical collaboration from Terex, UK for manufacture of wheel loaders, dozers dumpers. This factory has since been taken over by Caterpillar for their Indian operations. The machines manufactured by Caterpillar in the Tiruvallur factory are marketed by TIL and GMMCO. In 1974, LT started manufacturing hydraulic excavators under license from Poclain, France. In 1980 and 1981, two more units, Telcon and Escorts JCB commenced manufacture of hydraulic excavators (under license from Hitachi, Japan) and backhoe loaders (under license from JCB, UK) respectively. Escorts JCB has been taken over by JC Bamford Excavators Ltd. U.K. in 2003 and is now called JCB India Ltd. Volvo and Terex Vectra is the most recent entrants in the Indian market. Volvo has set up their manufacturing unit in Bangalore. At present they are only manufacturing tippers and the other equipment are imported from their parent company and marketed in India. Terex Corporation USA and Vectra Ltd. U.K. have formed a joint venture, which has started manufacturing construction equipment like backhoe loaders and skid steer loaders from May ’04 at Greater Noida with an investment of USD 12 million. Other equipment in the Terex range are being sold through their agents in India. Most of the technology leaders like Case, Caterpillar, Hitachi, Ingersoll-Rand, JCB, John Deere, Joy Mining Machinery, Komatsu, Lieberr, Poclain, Terex, Volvo are present in India as joint venture companies, or have set up their own manufacturing facilities, or marketing companies. The industry has made substantial investments in the recent past for setting up manufacturing bases, despite small volumes and uneconomic scales of production compared to global standards. 1.2 Aims and Objective and of The Study This research was aimed to assess the current status of Indian construction equipment industry and the underlying opportunities and challenges. The research was conducted on the foundation of following objectives To assess the current structure, status and direction of the Indian construction equipment industry. To assess the competition in Indian construction equipment industry To assess the financing of Indian construction equipment industry To assess the opportunities and challenges of Indian construction equipment industry To develop strategies for competitors (domestic players) in Indian construction equipment industry. To assess the technology, managerial, operational, of the Indian construction equipment industry. Literature Review Chapter 2 2.1 Introduction Construction equipment is machinery used to build and demolish bridges, buildings and other structures. These machines usually save labor, time and money. One of them can do more work in an hour than a hundred of workers using hand tools could do in a day. The chief kinds of building machines include earthmoving machineries hoisting, material handling machines and pumping machines. Other construction machinery used are for preparing the land and materials for construction. Demolishing machines are used to demolish structures and buildings. The Indian construction equipment industry today faces stiff competition, great opportunities and challenges, but India has a total command over all these things as according to confederation of the Indian industry report, 2005 as for engineering and capital goods base. The Indian engineering manufacturing sector has been growing at the rate of about 5.9% in the nineties. India today produces a variety of machinery whose range is quiet wide and deep. Rapidly increasing construction sector has been the indication of good times for companies manufacturing construction equipments. This project discusses the Construction Equipment industry in India. The structure of Construction Equipment industry in India has been well and truly detailed and mentioning all the requisite facts and figures. Also mentioned are all the factors influencing the Construction Equipment industry in India. A special mention of the suppliers list is made as suppliers are the inseparable part of the Construction Equipment industry in India. The important suppliers are JCB, Atlas, BEML, Caterpillar, Ditchwitch, Komatsu , Ashok Leyland, Escorts, Greaves Cotton, Ingersoll Rand, TETRA, Volvo, Besides all these Indian Equipment Financing companies such as Business Financing, SREI, HDFC , GE Capital, Indian Financial Services have also received requisite expression in this project. Also discussed at the end is about Construction Equipment industry in India facing problems, challenges and opportunities and its future. What India need is better infrastructure in order to progress. The government has also embarked upon massive road and pavement construction projects such GOLDEN QUADRILATERAL connecting / interlinking all four metro cities like Delhi, Mumbai. Kolkatta and Chennai The government decision to throw open the construction of roads, bridges, ports and airports to private sector and to allow 100% FII / FDI (Foreign Investments) in real estate projects like (EMAAR) has provided a boost to the industry thereby generating demand for construction machineries. Housing and infrastructure projects are expected to grow about 20% per annum for the next 15 years. 2.2 Current Status of The Industry Ramping up quality and quantity The Construction equipment industries are the biggest beneficiaries of the construction boom. Although the past few years have seen increased levels of mechanization and improved quality, Indian construction equipment and materials are still below international standards. The current status of the construction equipment industry is discussed below. The size of the construction equipment market current stands at between $2.5 billion and $3 billion and it is growing at an average rate of about 30 per cent year on year. It is expected that the industry will expand to $12-13 billion by 2015, including $2-3 billion of exports. This implies annual compounded growth rates in excess of 50 per cent between 2008 and 2015. The largest share of that growth will come from the domestic market driven on the demand side by increased infrastructure spending and on the supply side by the industry’s drive to increase mechanization and equipment penetration. The rest of the growth will come from the exports of components, services and equipment. The key infrastructure sectors that are expected to drive demand are roads, urban and residential construction and mining. Amongst the three modes of procuring equipment in India –that is, buying, leasing or renting – leasing is the most popular. While renting is suitable for projects of shorter duration, buying involves huge upfront payments. Constructions and mining equipment is manufactured by a few medium and large companies in the organised sector. The role of small and medium enterprises is restricted only to manufacturing of components and some sub-assemblies. Domestic production began in 1964 with the setting up of Bharat Earth Movers Limited (BEML), which is engaged in the manufacturing of dozers, dumpers, graders, scrapers, etc., for defence requirements. Some of the key players manufacturing equipment for the Indian market are LT, Telcon, Escorts, JCB India Limited, Ingersoll Rand, Greaves, Caterpiller, Komatsu, Joy Mining Machinery, Case, John Deere, Lieberr, Poclain, Volvo and Terex Vectra. These companies are present either through joint ventures, or have set up their own manu facturing facilities or have a marketing presence. BEML supplies equipment to nearly half the total market. Companies such as BEML and Caterpillar are leaders in dumpers and dozers while Larsen Toubro – Komatsu and Telcon lead in excavators and JCB India in backhoe loaders. In the last few years there has been some restructuring through acquisitions and joint ventures, which in turn, has reflected the interest of international majors in the domestic market. Many international players have also appointed selling agents for importing and selling equipment in India. Despite the growth, there are some inherent problems faced by the construction equipment industry. In India, the demand for construction equipment is more than the supply. Hence, most leading manufacturers have invested in India for manufacturing to meet this gap. The industry is trying to induct international levels of technology as demand and the scale of operations increases. However, the levels of mechanisation continue to be low compared to the international market. This is primarily because the Indian market cannot absorb the cost of latest technology. Since most the construction equipment is hydraulically operated, the Indian construction equipment industry has to predominantly depend on imports, primarily from European countries. The fluctuations of foreign exchange rates and the non-availability of adequate quantities of equipment are other constraints. Construction equipment manufacturers also struggle to cope with the low availability of trained manpower, not only for producing equipment but also for operation and maintenance. Manufacturers are doing their best to train not only their own employees but also customer’s operators and services technicians. Indirect taxes on construction equipment are quite high. These range between 21 and 38 per cent, based on interstate differences, compared to 20 per cent in France and Germany and between 12 and 17 per cent in Indonesia. The government could reduce this tax burden by eventually replacing all indirect taxes such as excise, sales tax, octroi and entry tax with a single tax. It is true construction companies have ramped up significant capacities in terms of equipment over the past few years. However, due to rapid growth, there is still a mismatch of supply and demand in terms of construction equipment. Delays in deliveries of equipment result in delayed mobilization and completion of projects. Further, prices of construction equipment have steadily increased over the past few years, partly due to the high demand, and partly due to increase in input costs. Domestic equipment has a 10-15 per cent higher downturn than imported machines. There is also a lack of skilled manpower to operate and maintain machines as the industry is largely dependent on unskilled labour. Another major issue that has becomes apparent is the financing of construction equipment. The concept of renting equipment has been mooted but the rental market in India is not very well developed. At present, there are very few players and tax issues also play a major role in this industry. The very first equipment bank in India –Quipo- has been fairly successful. However, with more world leaders expected to enter the renting domain and various models being worked out by rental companies, the situation is expected to improve in the future. In the future, one can expect major global manufacturers to enter the equipment arena by producing India-specific products while addressing factors such as quality, cost to customer and delivery. It is also essential to make available the easy hiring of equipment through a ready stock of good quality equipment. The last few years have witnessed a phase of restructuring in the industry through acquisitions and joint ventures. This also reflects the active interest of international majors in the domestic market. Many international players have also appointed selling agents for importing and selling complete equipment in India. The construction and mining equipment industry is dominated by a few large manufacturers in each product segment. BEML supplies to nearly half the total market. BEML and Caterpillar lead in dumpers and dozers while LT-Komatsu and Telcon lead in excavators and JCB India in backhoe loaders. 2.3 Structure of The Industry 71% of the sector comprises of public limited companies including PSU’s and 29% private limited, or joint ventures including closely held private limited companies.75% of the companies manufacturing in India were involved in the entire range of activities like design and engineering, manufacturing, erection, servicing and commissioning. There are only a few companies who act as selling agents for international players. There are others who manufacture and also import complete equipment or in SKD condition from their principals abroad and market them. Since each piece of the equipment in this product category has substantial value, a number of companies have a turnover of over 100 crores and the larger ones have a turnover above Rs.1000 crores. The technology barriers have made the industry less fragmented in the mining machinery sector whereas it is fragmented in the road construction equipment and the material-handling segments. The international trend in the earthmoving and mining segment is one of consolidation. This trend is also beginning to be seen in India. Some international companies are looking at the prospects of enhancing their market presence based on higher investment in mining and infrastructure and also using their Indian operations to meet demand in South and South East Asia. The industry’s expectations of the likely future evolution in this sector is represented here in graphical form. Most of the current players expect that new players will enter the Indian market. There is great need for improving infrastructure as it has been accentuated by the rapid growth in economy. Of late many development authorities, State government and even companies have started investing in infrastructure development projects. Though the volume of construction equipment in India is far too small compared to countries like china and also by global standards, India does produce a variety of construction equipments such as the earthmoving machinery used to excavate, land and level earth and rock, tractors, trailers, wagons, crawler tractors, bulldozers, scrapers, shovels, draglines, heisting and material handling machinery such as cranes and derricks, material lifts, pumping machines, demolition machinery and machinery used to prepare land and materials for construction. Today, there is much emphasis on infrastructure development. The government spends very little on infrastructure with the result India sells very little of any category of construction equipment. It is shocking to learn that china sells 10,000 excavators energy year but in India, we sell only about 1500. In terms of volume, the construction equipment industry is worth Rs. 4,000 crore. Whether it is roads, bridges, ports, airports, urban infrastructure, or power plants- civil construction has a very important role to play. The use of modern tools enables productive work. The rapidly increasing construction sector has been the forerunner of good times for companies manufacturing construction machineries and equipment. There has been a flow of demand for transit concrete mixers, bar- bending and cutting machines, excavators and backhoes and earth rammers on account of the substantial increase in real estate and construction activities. New and expanding housing and infrastructure construction ventures have generated a considerable demand for construction machinery manufacturing and servicing together with erection, commissioning and maintenance. More and more multinational companies are now entering the Indian market on their own strength, whereas previously the trend was to forge joint venture associations with Indian companies. Also, a major portion of the annual budget has been invested by the Central government in infrastructure, irrigation and mining projects across the country. Due to all these factors these has been a substantial increase in the utilization of construction machinery. The boom in the requirement of construction machinery has brought us several large orders from west Asian and African countries. Thus the exporters of construction machineries too have a boom period. Most of them have made huge profits due to the threefold increase. The demand for construction equipments has also risen because of major Indian construction works working on overseas projects. 2.4 Technology The construction equipment sector has a wide range of products The technology leaders in the construction equipment sector are: Komatsu,Caterpillar, Hitachi, Terex, Volvo, Case, Ingersoll-Rand, HAMM, Bomag, John Deere, JCB, Poclain, Bitelli, Kobelco, Hyundai and Daewoo. Except for the last 3, all the other companies are present in India either as joint ventures, or have set up their own manufacturing facilities, or marketing companies. In the mining sector, the leaders are: Wrigten, Atlas Copco, Liebherr, Joy Mining Machinery, Hitachi, Komatsu, Terex, Ranson Rappier, Bucyrus Erie and DBT. Out of these companies, DBT does not have any technology transfer and neither is it manufacturing in India. Joy Mining Machinery has a small operation in India to manufacture spares and provide sales support. However, these are the two leaders in continuous mining and long wall equipment in the world. In the construction equipment sector, the level of technology prevalent internationally can be made available in India through joint ventures. However, the equipment currently being manufactured in India is not of the same size. For example for a 15 Cu.M. hydraulic shovel, the manufacturers do not feel the need to bring in the technology due to low volumes and uncertain demand though the companies have the manufacturing facilities and design capabilities to manufacture the same in India. Some of the other reasons for not manufacturing the latest equipment are: The Indian market cannot absorb the cost of the latest technology If manufactured in India for export markets, most of the components will have to be imported Equipment adhering to the latest emission norms cannot be used since the quality of fuel required for them is yet to be made available here. At the same time, off highway construction and mining equipment do not need stringent emission norms in India. The construction equipment sector in India has evolved over the years and is at present in an intermediate stage of development. The industry is trying to bring in international levels of technology as demand and the scale of operation increases. The users are now not looking at only the initial cost of the equipment, but focusing on total costing, or cost per ton of usage. It is anticipated that 5 years hence, the need for more and more mechanization and enhancement of scale may lead to change in the level of technology in use. Advances in technology have allowed an increase in haul truck and rope shovel size. For example haul trucks are now being manufactured upto 400 tons capacity. Here the increased machine size has provided an opportunity for increased production. 2.5 Management Effieciency The industry is quite mature in terms of marketing abilities as compared to the other sectors of the capital goods industry. Majority of the companies have strategic planning programmes in place and have well chalked out business strategies at all levels. In order to enhance their market share, companies need to improve quality and service followed by reduction in costs, increase in product range and finally adopt more aggressive marketing strategies. The competitive edge lies in satisfying customers by delivering higher quality products at lower prices. Strategic alliances are already in place among 60% of the companies surveyed. These are primarily focused on developing and combining competencies with the help of other organizations in terms of marketing, after sales service etc. Only 45% of the companies are interested in growth through mergers and acquisitions. The level of quality consciousness is on an average higher than the other sectors probably ecause the companies are larger and many of them are associated with international companies either for manufacturing or marketing their products. Another reason for higher quality consciousness is that more companies in this sector are well versed with the soft technologies being used worldwide for enhancing competitiveness and quality. Approximately 90% of the companies covered under the study have either implemented, or are implementing soft technologies like six sigma, lean manufacturing etc. 100% of the companies manufacturing in India are ISO certified. It was noticed that the percentage of scrap due to errors in manufacturing is between 2% 5% and the percentage of labour hours spent on reworking was 4%. All the manufacturing companies train their workers on quality concepts. However the percentage of workers who received company sponsored training on quality concepts in the past two years varied from 20% to 100% in some companies. The average number of hours per person of training provided was approximately 16 hours per person varying from 6 hours to 35 hours per person per annum. Most of the companies were quite responsive to customer complaints and the average number of days taken to respond varied from  ½ a day to 5 days in some companies. More than 70% of the companies have undergone business process reengineering for higher customer satisfaction. It has been observed that the majority of the companies in this sector are between medium and high users of computerization. This level of computerization is also comparatively high compared to the other sectors of the capital goods industry. Yet the percentage of IT expenditure to sales in the last one year i.e. 2004-05 was a meagre 0.5% of the total sales i.e. Rs.32 crores was invested by the industry towards computerization either for ERP / SCM / CRM. ERP or enterprise resource planning is an industry term for the broad set of activities supported by multi product application software that helps a manufacturer to manage the important functions of its business including product planning, parts purchasing, maintaining inventories, interaction with suppliers, providing customer service and tracking orders. Supply Chain Management (SCM) is the management of the entire value added chain, from the supplier to manufacturer right through to the retailer and the final customer.SCM has the primary goal of reducing inventory, increasing the transaction speed by exchanging data in real time and increasing sales by implementing customer requirements more efficiently. CRM (Customer Relationship Management) entails all aspects of interaction a company has with its customers, whether it be sales or service related. CRM is an information industry term for methodologies, software and usually internet capabilities that help an enterprise manage customer relationships in an organized way. Companies need to be in constant touch with their customers over the electronic media. The percentage of companies using ERP solutions is high with quite a significant number also using CRM for better customer relationship management. However, all the players need to be better integrated with both their suppliers and customers to strive to be the market leader. After-sales service is an important aspect of a company’s successful business strategy because all customers would like higher productivity and utilization from their machines in order to be cost competitive. Hence this is an area no company can afford to ignore or accord a lower priority to. All the companies surveyed whether manufacturing, or trading, offered after-sales service to their customer and it was also noted that 70% of them have entered into this field in the last ten years. Equipment manufactured by the industry is mostly mobile and hence subjected to higher wear and tear and consequently maintenance requirements are higher. Users rate machines with lower downtime higher. Hence, training of maintenance personnel both of manufacturers as well as users’ is a very important aspect of managing customer relationships. This is also evident from the fact that all the companies spent on training and the majority of them (60%) spent more than Rs.1 lakh per month. O nly 40% of the companies spent less than Rs.10 lakh per annum on employee training. The average response time for responding to customer calls is 24 to 48 hours and in premium service contracts it varied between 12 to 36 hours. 91% of the maintenance calls were completed within the specified time frame. From the user feedback, it emerged that the deliveries of most of the companies were delayed. Hence many customers preferred to import second hand machines. Scheduling is therefore required to be strictly followed by all the companies for manufacturing, and approximately 90% of them use one, or the other software to enhance efficiency in manufacturing. Yet the percentage of companies where the shipments are before/within the due date is very low at only 50%. A clear distinction was noticed in terms of reasons for late delivery. Companies predominantly manufacturing construction equipment have attributed more than 70% of their late deliveries to delay in customer clearance. The reason for late deliveries is attributed mainly to the growth in domestic demand, which was not foreseen earlier by the companies. Delays were therefore mainly attributed to capacity constraints. A fall out of delayed delivery has been higher imports both for new machines, as well as second hand machines. This issue can be tackled by enhancing capacity of both the manufacturers and their sub-suppliers, tighter monitoring and scheduling and by greater usage of ERP / SCM. Benchmarking With International Companies Some broad indications in terms of benchmarking of the industry on the basis of financial parameters have been done against a few global players. The companies against which Indian companies have been benchmarked are Caterpillar, Komatsu and Volvo. They are the leaders in their respective fields. 2.6 Operational Efficiency Financial Parameters The CII survey results showed that there has been a good growth rate in terms of sales due to the higher investments by the user sectors. Though exports have also risen, the percentage of exports to sales is low due to lack of competitive advantage of machines built with indigenous technology. Wherever machines are built under technology transfer, companies face restrictions on the export market territory from the technology provider. The power consumed to sales has shown a decline because all companies are now conscious about energy conservation and use various methods like automatic switching of systems and higher efficiency / low consumption electrical appliances etc. Value added for an industry is the difference between the value of the output and the value of the input namely raw materials bought outs. In other words we can attribute this difference to the value added to the product by the company. The value addition has risen over the years because more manufacturing has taken place in 2003-04 in place of trading as compared to the earlier years. It has again shown a fall due to the rising raw material prices in 2004-05. Inventory on an average was found to be 26 percent of net sales. Average Turnover of Inventory for 2004-05 was found to be 4. The international benchmark is between 5 7. The number of days sales outstanding is on an average within 90 days, which is at par with the engineering industry. This is also in keeping with international trends. Cost of wages to sales was found to be 11.8 percent in 2004-05. The range varied from a low of 3 percent to a high of 28 percent. For Caterpillar Inc. the ratio was 19.8 percent. The employee productivity is fairly low as compared to international companies. Sales per employee on an average for the industry was found to be Rs.35 lakhs but for the manufacturing companies it was found to be Rs.32.5 lakhs. This is the reason why though the cost of wages per employee is very low at Rs.4 lakhs, the lower productivity of the employee offsets the advantage. The value added per employee was only Rs.11 lakhs. The global standards for employee productivity i.e. sales per employee is in the range of Rs.160-175 lakhs. Profitability The industry in India witnessed a tremendous jump in profitability in 2004-05 over 2003-04. The return on capital employed is 24 percent and has increased by 85 percent over 2003-04. The PBIT has increased Indias Construction Equipment Industry Analysis Indias Construction Equipment Industry Analysis Abstract This research was an attempt to assess the current status of Indian construction equipment industry and the underlying opportunities and challenges. However, the aspects and objectives that were dealt in the research are; the current structure, status, competition, financing opportunities and challenges of Indian construction equipment industry. The research was conducted wholly based on secondary data. Following are the key findings of the research. Indian construction industry has entered into a new phase, where prospect of the industry appears extraordinary bright. Indian construction equipment industry is passing through a phase of hurried renovation, where the shifting is taking place from low volume concentrated use of equipment structure to high volume explicit one. Apart from these, the current and future trend also shows that the key segments of construction equipment that will have potential market prospects are excavators, loaders, dozers, dumpers and cranes. The growth of Indian construction equipment industry is the outcome of the fast liberalization and globalization of the Indian economy and the construction sector. The real competition in Indian construction equipment industry has been created by foreign players such as Volvo, Komatsu and many others. These companies are leaving no stone unturned to exploit the opportunities in Indian industry. The industry is at the critical juncture (particularly for domestic players) and therefore companies need to equip with safety measures in relation to post WTO market setting. Introduction (Chapter 1) 1.1 Indian Construction Equipment Industry Background Historical Trends Construction and mining equipment cover a variety of machinery such as hydraulic excavators, wheel loaders, backhoe loaders, bull dozers, dump trucks, tippers, graders, pavers, asphalt drum / wet mix plants, breakers, vibratory compactors, cranes, fork lifts, dozers, off-highway dumpers (20T to 170T), drills, scrapers, motor graders, rope shovels etc. They perform a variety of functions like preparation of ground, excavation, haulage of material, dumping/laying in specified manner, material handling, road construction etc. These equipment are required for both construction and mining activity. With a wide production capacity base, India is perhaps the only developing country, which is totally self-reliant in such highly sophisticated equipment. India has only a few, mainly medium and large companies in the organized sector who manufacture these. The technology barriers are high, especially with respect to mining equipment and therefore the role of SME’s is restricted to manufacture of components and some sub-assemblies. Prior to the 1960s, domestic requirements of mining and construction equipment were entirely met by imports. Domestic production began in 1964 with the setting up of Bharat Earthmovers Ltd. (BEML), a public sector unit of the Ministry of Defence, at Kolar in South India to manufacture dozers, dumpers, graders, scrapers, etc. for defense requirements under licence from LeTorneau Westinghouse, USA and Komatsu, Japan. In the private sector, the Hindustan Motors’ Earthmoving Equipment Division, was established in 1969 at Tiruvallur, near Chennai with technical collaboration from Terex, UK for manufacture of wheel loaders, dozers dumpers. This factory has since been taken over by Caterpillar for their Indian operations. The machines manufactured by Caterpillar in the Tiruvallur factory are marketed by TIL and GMMCO. In 1974, LT started manufacturing hydraulic excavators under license from Poclain, France. In 1980 and 1981, two more units, Telcon and Escorts JCB commenced manufacture of hydraulic excavators (under license from Hitachi, Japan) and backhoe loaders (under license from JCB, UK) respectively. Escorts JCB has been taken over by JC Bamford Excavators Ltd. U.K. in 2003 and is now called JCB India Ltd. Volvo and Terex Vectra is the most recent entrants in the Indian market. Volvo has set up their manufacturing unit in Bangalore. At present they are only manufacturing tippers and the other equipment are imported from their parent company and marketed in India. Terex Corporation USA and Vectra Ltd. U.K. have formed a joint venture, which has started manufacturing construction equipment like backhoe loaders and skid steer loaders from May ’04 at Greater Noida with an investment of USD 12 million. Other equipment in the Terex range are being sold through their agents in India. Most of the technology leaders like Case, Caterpillar, Hitachi, Ingersoll-Rand, JCB, John Deere, Joy Mining Machinery, Komatsu, Lieberr, Poclain, Terex, Volvo are present in India as joint venture companies, or have set up their own manufacturing facilities, or marketing companies. The industry has made substantial investments in the recent past for setting up manufacturing bases, despite small volumes and uneconomic scales of production compared to global standards. 1.2 Aims and Objective and of The Study This research was aimed to assess the current status of Indian construction equipment industry and the underlying opportunities and challenges. The research was conducted on the foundation of following objectives To assess the current structure, status and direction of the Indian construction equipment industry. To assess the competition in Indian construction equipment industry To assess the financing of Indian construction equipment industry To assess the opportunities and challenges of Indian construction equipment industry To develop strategies for competitors (domestic players) in Indian construction equipment industry. To assess the technology, managerial, operational, of the Indian construction equipment industry. Literature Review Chapter 2 2.1 Introduction Construction equipment is machinery used to build and demolish bridges, buildings and other structures. These machines usually save labor, time and money. One of them can do more work in an hour than a hundred of workers using hand tools could do in a day. The chief kinds of building machines include earthmoving machineries hoisting, material handling machines and pumping machines. Other construction machinery used are for preparing the land and materials for construction. Demolishing machines are used to demolish structures and buildings. The Indian construction equipment industry today faces stiff competition, great opportunities and challenges, but India has a total command over all these things as according to confederation of the Indian industry report, 2005 as for engineering and capital goods base. The Indian engineering manufacturing sector has been growing at the rate of about 5.9% in the nineties. India today produces a variety of machinery whose range is quiet wide and deep. Rapidly increasing construction sector has been the indication of good times for companies manufacturing construction equipments. This project discusses the Construction Equipment industry in India. The structure of Construction Equipment industry in India has been well and truly detailed and mentioning all the requisite facts and figures. Also mentioned are all the factors influencing the Construction Equipment industry in India. A special mention of the suppliers list is made as suppliers are the inseparable part of the Construction Equipment industry in India. The important suppliers are JCB, Atlas, BEML, Caterpillar, Ditchwitch, Komatsu , Ashok Leyland, Escorts, Greaves Cotton, Ingersoll Rand, TETRA, Volvo, Besides all these Indian Equipment Financing companies such as Business Financing, SREI, HDFC , GE Capital, Indian Financial Services have also received requisite expression in this project. Also discussed at the end is about Construction Equipment industry in India facing problems, challenges and opportunities and its future. What India need is better infrastructure in order to progress. The government has also embarked upon massive road and pavement construction projects such GOLDEN QUADRILATERAL connecting / interlinking all four metro cities like Delhi, Mumbai. Kolkatta and Chennai The government decision to throw open the construction of roads, bridges, ports and airports to private sector and to allow 100% FII / FDI (Foreign Investments) in real estate projects like (EMAAR) has provided a boost to the industry thereby generating demand for construction machineries. Housing and infrastructure projects are expected to grow about 20% per annum for the next 15 years. 2.2 Current Status of The Industry Ramping up quality and quantity The Construction equipment industries are the biggest beneficiaries of the construction boom. Although the past few years have seen increased levels of mechanization and improved quality, Indian construction equipment and materials are still below international standards. The current status of the construction equipment industry is discussed below. The size of the construction equipment market current stands at between $2.5 billion and $3 billion and it is growing at an average rate of about 30 per cent year on year. It is expected that the industry will expand to $12-13 billion by 2015, including $2-3 billion of exports. This implies annual compounded growth rates in excess of 50 per cent between 2008 and 2015. The largest share of that growth will come from the domestic market driven on the demand side by increased infrastructure spending and on the supply side by the industry’s drive to increase mechanization and equipment penetration. The rest of the growth will come from the exports of components, services and equipment. The key infrastructure sectors that are expected to drive demand are roads, urban and residential construction and mining. Amongst the three modes of procuring equipment in India –that is, buying, leasing or renting – leasing is the most popular. While renting is suitable for projects of shorter duration, buying involves huge upfront payments. Constructions and mining equipment is manufactured by a few medium and large companies in the organised sector. The role of small and medium enterprises is restricted only to manufacturing of components and some sub-assemblies. Domestic production began in 1964 with the setting up of Bharat Earth Movers Limited (BEML), which is engaged in the manufacturing of dozers, dumpers, graders, scrapers, etc., for defence requirements. Some of the key players manufacturing equipment for the Indian market are LT, Telcon, Escorts, JCB India Limited, Ingersoll Rand, Greaves, Caterpiller, Komatsu, Joy Mining Machinery, Case, John Deere, Lieberr, Poclain, Volvo and Terex Vectra. These companies are present either through joint ventures, or have set up their own manu facturing facilities or have a marketing presence. BEML supplies equipment to nearly half the total market. Companies such as BEML and Caterpillar are leaders in dumpers and dozers while Larsen Toubro – Komatsu and Telcon lead in excavators and JCB India in backhoe loaders. In the last few years there has been some restructuring through acquisitions and joint ventures, which in turn, has reflected the interest of international majors in the domestic market. Many international players have also appointed selling agents for importing and selling equipment in India. Despite the growth, there are some inherent problems faced by the construction equipment industry. In India, the demand for construction equipment is more than the supply. Hence, most leading manufacturers have invested in India for manufacturing to meet this gap. The industry is trying to induct international levels of technology as demand and the scale of operations increases. However, the levels of mechanisation continue to be low compared to the international market. This is primarily because the Indian market cannot absorb the cost of latest technology. Since most the construction equipment is hydraulically operated, the Indian construction equipment industry has to predominantly depend on imports, primarily from European countries. The fluctuations of foreign exchange rates and the non-availability of adequate quantities of equipment are other constraints. Construction equipment manufacturers also struggle to cope with the low availability of trained manpower, not only for producing equipment but also for operation and maintenance. Manufacturers are doing their best to train not only their own employees but also customer’s operators and services technicians. Indirect taxes on construction equipment are quite high. These range between 21 and 38 per cent, based on interstate differences, compared to 20 per cent in France and Germany and between 12 and 17 per cent in Indonesia. The government could reduce this tax burden by eventually replacing all indirect taxes such as excise, sales tax, octroi and entry tax with a single tax. It is true construction companies have ramped up significant capacities in terms of equipment over the past few years. However, due to rapid growth, there is still a mismatch of supply and demand in terms of construction equipment. Delays in deliveries of equipment result in delayed mobilization and completion of projects. Further, prices of construction equipment have steadily increased over the past few years, partly due to the high demand, and partly due to increase in input costs. Domestic equipment has a 10-15 per cent higher downturn than imported machines. There is also a lack of skilled manpower to operate and maintain machines as the industry is largely dependent on unskilled labour. Another major issue that has becomes apparent is the financing of construction equipment. The concept of renting equipment has been mooted but the rental market in India is not very well developed. At present, there are very few players and tax issues also play a major role in this industry. The very first equipment bank in India –Quipo- has been fairly successful. However, with more world leaders expected to enter the renting domain and various models being worked out by rental companies, the situation is expected to improve in the future. In the future, one can expect major global manufacturers to enter the equipment arena by producing India-specific products while addressing factors such as quality, cost to customer and delivery. It is also essential to make available the easy hiring of equipment through a ready stock of good quality equipment. The last few years have witnessed a phase of restructuring in the industry through acquisitions and joint ventures. This also reflects the active interest of international majors in the domestic market. Many international players have also appointed selling agents for importing and selling complete equipment in India. The construction and mining equipment industry is dominated by a few large manufacturers in each product segment. BEML supplies to nearly half the total market. BEML and Caterpillar lead in dumpers and dozers while LT-Komatsu and Telcon lead in excavators and JCB India in backhoe loaders. 2.3 Structure of The Industry 71% of the sector comprises of public limited companies including PSU’s and 29% private limited, or joint ventures including closely held private limited companies.75% of the companies manufacturing in India were involved in the entire range of activities like design and engineering, manufacturing, erection, servicing and commissioning. There are only a few companies who act as selling agents for international players. There are others who manufacture and also import complete equipment or in SKD condition from their principals abroad and market them. Since each piece of the equipment in this product category has substantial value, a number of companies have a turnover of over 100 crores and the larger ones have a turnover above Rs.1000 crores. The technology barriers have made the industry less fragmented in the mining machinery sector whereas it is fragmented in the road construction equipment and the material-handling segments. The international trend in the earthmoving and mining segment is one of consolidation. This trend is also beginning to be seen in India. Some international companies are looking at the prospects of enhancing their market presence based on higher investment in mining and infrastructure and also using their Indian operations to meet demand in South and South East Asia. The industry’s expectations of the likely future evolution in this sector is represented here in graphical form. Most of the current players expect that new players will enter the Indian market. There is great need for improving infrastructure as it has been accentuated by the rapid growth in economy. Of late many development authorities, State government and even companies have started investing in infrastructure development projects. Though the volume of construction equipment in India is far too small compared to countries like china and also by global standards, India does produce a variety of construction equipments such as the earthmoving machinery used to excavate, land and level earth and rock, tractors, trailers, wagons, crawler tractors, bulldozers, scrapers, shovels, draglines, heisting and material handling machinery such as cranes and derricks, material lifts, pumping machines, demolition machinery and machinery used to prepare land and materials for construction. Today, there is much emphasis on infrastructure development. The government spends very little on infrastructure with the result India sells very little of any category of construction equipment. It is shocking to learn that china sells 10,000 excavators energy year but in India, we sell only about 1500. In terms of volume, the construction equipment industry is worth Rs. 4,000 crore. Whether it is roads, bridges, ports, airports, urban infrastructure, or power plants- civil construction has a very important role to play. The use of modern tools enables productive work. The rapidly increasing construction sector has been the forerunner of good times for companies manufacturing construction machineries and equipment. There has been a flow of demand for transit concrete mixers, bar- bending and cutting machines, excavators and backhoes and earth rammers on account of the substantial increase in real estate and construction activities. New and expanding housing and infrastructure construction ventures have generated a considerable demand for construction machinery manufacturing and servicing together with erection, commissioning and maintenance. More and more multinational companies are now entering the Indian market on their own strength, whereas previously the trend was to forge joint venture associations with Indian companies. Also, a major portion of the annual budget has been invested by the Central government in infrastructure, irrigation and mining projects across the country. Due to all these factors these has been a substantial increase in the utilization of construction machinery. The boom in the requirement of construction machinery has brought us several large orders from west Asian and African countries. Thus the exporters of construction machineries too have a boom period. Most of them have made huge profits due to the threefold increase. The demand for construction equipments has also risen because of major Indian construction works working on overseas projects. 2.4 Technology The construction equipment sector has a wide range of products The technology leaders in the construction equipment sector are: Komatsu,Caterpillar, Hitachi, Terex, Volvo, Case, Ingersoll-Rand, HAMM, Bomag, John Deere, JCB, Poclain, Bitelli, Kobelco, Hyundai and Daewoo. Except for the last 3, all the other companies are present in India either as joint ventures, or have set up their own manufacturing facilities, or marketing companies. In the mining sector, the leaders are: Wrigten, Atlas Copco, Liebherr, Joy Mining Machinery, Hitachi, Komatsu, Terex, Ranson Rappier, Bucyrus Erie and DBT. Out of these companies, DBT does not have any technology transfer and neither is it manufacturing in India. Joy Mining Machinery has a small operation in India to manufacture spares and provide sales support. However, these are the two leaders in continuous mining and long wall equipment in the world. In the construction equipment sector, the level of technology prevalent internationally can be made available in India through joint ventures. However, the equipment currently being manufactured in India is not of the same size. For example for a 15 Cu.M. hydraulic shovel, the manufacturers do not feel the need to bring in the technology due to low volumes and uncertain demand though the companies have the manufacturing facilities and design capabilities to manufacture the same in India. Some of the other reasons for not manufacturing the latest equipment are: The Indian market cannot absorb the cost of the latest technology If manufactured in India for export markets, most of the components will have to be imported Equipment adhering to the latest emission norms cannot be used since the quality of fuel required for them is yet to be made available here. At the same time, off highway construction and mining equipment do not need stringent emission norms in India. The construction equipment sector in India has evolved over the years and is at present in an intermediate stage of development. The industry is trying to bring in international levels of technology as demand and the scale of operation increases. The users are now not looking at only the initial cost of the equipment, but focusing on total costing, or cost per ton of usage. It is anticipated that 5 years hence, the need for more and more mechanization and enhancement of scale may lead to change in the level of technology in use. Advances in technology have allowed an increase in haul truck and rope shovel size. For example haul trucks are now being manufactured upto 400 tons capacity. Here the increased machine size has provided an opportunity for increased production. 2.5 Management Effieciency The industry is quite mature in terms of marketing abilities as compared to the other sectors of the capital goods industry. Majority of the companies have strategic planning programmes in place and have well chalked out business strategies at all levels. In order to enhance their market share, companies need to improve quality and service followed by reduction in costs, increase in product range and finally adopt more aggressive marketing strategies. The competitive edge lies in satisfying customers by delivering higher quality products at lower prices. Strategic alliances are already in place among 60% of the companies surveyed. These are primarily focused on developing and combining competencies with the help of other organizations in terms of marketing, after sales service etc. Only 45% of the companies are interested in growth through mergers and acquisitions. The level of quality consciousness is on an average higher than the other sectors probably ecause the companies are larger and many of them are associated with international companies either for manufacturing or marketing their products. Another reason for higher quality consciousness is that more companies in this sector are well versed with the soft technologies being used worldwide for enhancing competitiveness and quality. Approximately 90% of the companies covered under the study have either implemented, or are implementing soft technologies like six sigma, lean manufacturing etc. 100% of the companies manufacturing in India are ISO certified. It was noticed that the percentage of scrap due to errors in manufacturing is between 2% 5% and the percentage of labour hours spent on reworking was 4%. All the manufacturing companies train their workers on quality concepts. However the percentage of workers who received company sponsored training on quality concepts in the past two years varied from 20% to 100% in some companies. The average number of hours per person of training provided was approximately 16 hours per person varying from 6 hours to 35 hours per person per annum. Most of the companies were quite responsive to customer complaints and the average number of days taken to respond varied from  ½ a day to 5 days in some companies. More than 70% of the companies have undergone business process reengineering for higher customer satisfaction. It has been observed that the majority of the companies in this sector are between medium and high users of computerization. This level of computerization is also comparatively high compared to the other sectors of the capital goods industry. Yet the percentage of IT expenditure to sales in the last one year i.e. 2004-05 was a meagre 0.5% of the total sales i.e. Rs.32 crores was invested by the industry towards computerization either for ERP / SCM / CRM. ERP or enterprise resource planning is an industry term for the broad set of activities supported by multi product application software that helps a manufacturer to manage the important functions of its business including product planning, parts purchasing, maintaining inventories, interaction with suppliers, providing customer service and tracking orders. Supply Chain Management (SCM) is the management of the entire value added chain, from the supplier to manufacturer right through to the retailer and the final customer.SCM has the primary goal of reducing inventory, increasing the transaction speed by exchanging data in real time and increasing sales by implementing customer requirements more efficiently. CRM (Customer Relationship Management) entails all aspects of interaction a company has with its customers, whether it be sales or service related. CRM is an information industry term for methodologies, software and usually internet capabilities that help an enterprise manage customer relationships in an organized way. Companies need to be in constant touch with their customers over the electronic media. The percentage of companies using ERP solutions is high with quite a significant number also using CRM for better customer relationship management. However, all the players need to be better integrated with both their suppliers and customers to strive to be the market leader. After-sales service is an important aspect of a company’s successful business strategy because all customers would like higher productivity and utilization from their machines in order to be cost competitive. Hence this is an area no company can afford to ignore or accord a lower priority to. All the companies surveyed whether manufacturing, or trading, offered after-sales service to their customer and it was also noted that 70% of them have entered into this field in the last ten years. Equipment manufactured by the industry is mostly mobile and hence subjected to higher wear and tear and consequently maintenance requirements are higher. Users rate machines with lower downtime higher. Hence, training of maintenance personnel both of manufacturers as well as users’ is a very important aspect of managing customer relationships. This is also evident from the fact that all the companies spent on training and the majority of them (60%) spent more than Rs.1 lakh per month. O nly 40% of the companies spent less than Rs.10 lakh per annum on employee training. The average response time for responding to customer calls is 24 to 48 hours and in premium service contracts it varied between 12 to 36 hours. 91% of the maintenance calls were completed within the specified time frame. From the user feedback, it emerged that the deliveries of most of the companies were delayed. Hence many customers preferred to import second hand machines. Scheduling is therefore required to be strictly followed by all the companies for manufacturing, and approximately 90% of them use one, or the other software to enhance efficiency in manufacturing. Yet the percentage of companies where the shipments are before/within the due date is very low at only 50%. A clear distinction was noticed in terms of reasons for late delivery. Companies predominantly manufacturing construction equipment have attributed more than 70% of their late deliveries to delay in customer clearance. The reason for late deliveries is attributed mainly to the growth in domestic demand, which was not foreseen earlier by the companies. Delays were therefore mainly attributed to capacity constraints. A fall out of delayed delivery has been higher imports both for new machines, as well as second hand machines. This issue can be tackled by enhancing capacity of both the manufacturers and their sub-suppliers, tighter monitoring and scheduling and by greater usage of ERP / SCM. Benchmarking With International Companies Some broad indications in terms of benchmarking of the industry on the basis of financial parameters have been done against a few global players. The companies against which Indian companies have been benchmarked are Caterpillar, Komatsu and Volvo. They are the leaders in their respective fields. 2.6 Operational Efficiency Financial Parameters The CII survey results showed that there has been a good growth rate in terms of sales due to the higher investments by the user sectors. Though exports have also risen, the percentage of exports to sales is low due to lack of competitive advantage of machines built with indigenous technology. Wherever machines are built under technology transfer, companies face restrictions on the export market territory from the technology provider. The power consumed to sales has shown a decline because all companies are now conscious about energy conservation and use various methods like automatic switching of systems and higher efficiency / low consumption electrical appliances etc. Value added for an industry is the difference between the value of the output and the value of the input namely raw materials bought outs. In other words we can attribute this difference to the value added to the product by the company. The value addition has risen over the years because more manufacturing has taken place in 2003-04 in place of trading as compared to the earlier years. It has again shown a fall due to the rising raw material prices in 2004-05. Inventory on an average was found to be 26 percent of net sales. Average Turnover of Inventory for 2004-05 was found to be 4. The international benchmark is between 5 7. The number of days sales outstanding is on an average within 90 days, which is at par with the engineering industry. This is also in keeping with international trends. Cost of wages to sales was found to be 11.8 percent in 2004-05. The range varied from a low of 3 percent to a high of 28 percent. For Caterpillar Inc. the ratio was 19.8 percent. The employee productivity is fairly low as compared to international companies. Sales per employee on an average for the industry was found to be Rs.35 lakhs but for the manufacturing companies it was found to be Rs.32.5 lakhs. This is the reason why though the cost of wages per employee is very low at Rs.4 lakhs, the lower productivity of the employee offsets the advantage. The value added per employee was only Rs.11 lakhs. The global standards for employee productivity i.e. sales per employee is in the range of Rs.160-175 lakhs. Profitability The industry in India witnessed a tremendous jump in profitability in 2004-05 over 2003-04. The return on capital employed is 24 percent and has increased by 85 percent over 2003-04. The PBIT has increased