09/11/2012 Fox behind the wheel again in India

Fox behind the wheel again in India

PUBLISHED: 09 Nov 2012 PRINT EDITION: 09 Nov 2012

Linfox has high expectations for its Asian businesses, including its prospects in India. Greg Earl Asia Pacific editor Mumbai India’s persistent traditions of the licence raj have curbed the ambitions of global giants from Vodafone to Walmart in recent times but the country might now be facing its own irresistible force in the form of Lindsay Fox. Fox used Prime Minister Julia Gillard’s visit to India last month to launch a campaign to overhaul a trucking regulation which means the world’s fourth-biggest economy is still hauling freight like it was in the 1960s. The boss says the success of the campaign might yet determine the future of his business in the subcontinent but it will also test the value of a new Australian approach to regional business engagement in the Asian century. Road transport has boomed since India embraced some economic reforms two decades ago and is on track to carry up to 85 per cent of the country’s goods, compared with 34 per cent 40 years ago when rail freight ruled supreme. Fox’s private transport company Linfox already has about 3000 employees in the country as part of its quiet rollout across Asia in recent years but is now running up against rules that prevent prime movers being separated from trailer units. “This is the last major country in the world where you can’t separate the trailers. They are still working in the horse and cart days,” Fox said in an interview with Financial Review during a recent visit to Mumbai. The rule means Linfox can’t provide valuable new customers like the Tata Group, which operates one of the world’s largest steel businesses, with the same efficient transport services it provides in . Fox used a meeting of a new CEO forum of top executives from Australia and India during Ms Gillard’s visit to outline what reform of the semi-trailer rules could do for India’s transport system. He seemed to get a quick response. The next day his Indian counterpart Naveen Jindal convened a meeting of nine transport companies with 5000 trucks to hear Fox’s arguments about how India could boost efficiency by allowing trailers to be loaded while prime movers were used elsewhere. And by the end of the visit he had managed to make the pitch to key ministers and senior economic officials, some of whom said they didn’t know about the trucking rules. af r.com/p/national/f ox_behind_the_wheel_again_in_india_AAiJJ114r3DJbVmBUdS9eJ 1/3 09/11/2012 Fox behind the wheel again in India This is not the first time the problem has been raised, with both the World Bank and the Indian Competition Commission highlighting how the country is highly dependent on small flatbed trucks due to old licence rules that benefit vested interests. The bank says semi-trailers constitute only about 10 per cent of the major highway market share and advocates tax incentives or reduced tolls to encourage their use to lessen road wear and transport costs. It highlighted how small truck operators were particularly prone to demands for bribes along the way which further increased costs – something that is likely to be reduced by Fox’s plan to modernise the truck fleets. He says this sort of change was once controversial in Australia but, when implemented, boosted productivity and reduced road wear. “This is a move which will do exactly the same thing in India. Once they become aware of it, they will have to act on it,” he says. After seven years in operation, Linfox is now the second largest Australian employer in India (after ANZ Banking Group), although its 165 truck fleet is smaller than in Thailand (800 trucks) because it has a large warehouse business in the country which doesn’t require trucks. Fox says doing business in India is tough compared with some other places but it is an important country to break into because of its long-term growth potential. He strongly praises Ms Gillard’s focus on improving ties with India by allowing uranium exports and describes her recent visit as “an excellent job”. Fox was first approached about the CEO Forum idea by former trade minister Simon Crean but the group only got going this year. However, it is seen by some government officials as a new way of fostering business relations in the region. The original idea was to get a small group of senior business figures from the two countries meeting regularly to build personal rapport and focus on some individual projects – like the trucking change – which could filter down to the bilateral business communities. Government officials hope this might be a way to use personal relationships to smooth business misunderstandings like those that have occurred with China and prove more powerful than broader business groups or conventional trade missions. The Australian group in New Delhi last month included Rio Tinto’s iron ore boss Sam Walsh, ANZ’s Mike Smith, Tourism Australia’s Geoff Dixon and Insurance Australia Group’s Mike Wilkins. The Indians were Ravi Vishwanathan of Tata Consultancy Services, Ganesa Natarajan of Ennore Coke and Sanjay Pattnaik of Tata Steel. The Australian participants have been pitching potential investment ideas in our country to their Indian counterparts to generate more confidence in Australia as an investment location and believe they are seeding a potentially important new source of foreign capital for Australian business. Fox likes to joke that he hasn’t run a business for 20 years and spends most of his time working for the government these days. But he can reel off the performance improvement statistics for the Indian business with all the enthusiasm of a start-up entrepreneur and is particularly proud of reductions in lost time due to accidents after the implementation of Linfox safety procedures. Linfox forecasts that its Asian business will grow twice as fast as its Australian business over the next five years and 70 per cent of the company’s employees are already located outside Australia. It says that, by 2015, overseas markets will make up more than a quarter of the company’s revenue and more than 15 of its major customers will be in Asia, which would be almost 20 per cent of the company’s total anticipated customer base. The Australian Financial Review

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People Lindsay Fox , Simon Crean , Mike Smith , Geoff Dixon Topics Transport/Trucking, Economy

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