Bangalore: Toyota Kirloskar Auto Parts is setting up its third manufacturing plant for automotive components at Bidadi, about 32 km from Bangalore. The company is investing Rs 500 crore to set up the plant.
Toyota Kirloskar Auto Parts is a joint venture between Toyota Motor Corporation, Japan, Toyota Industries Corporation, Japan, and Kirloskar Systems, Bangalore. The Toyota group holds 90 per cent stake in the company, which already operates two manufacturing plants at Bidadi — for exports, as well as the domestic market. At these plants, the company manufactures manual transmissions for ‘Fortuner’ units manufactured in India, Thailand and Argentina. It also produces front and rear axles and propeller shafts for the ‘Innova’ units made in India.
According to an official notification issued by the Karnataka government, a high-level clearance committee, headed by Chief Minister D V Sadananda Gowda, had recently approved the company’s proposal to set up a third plant to manufacture castings and machine parts, the memorandum of understanding (MoU) for which was signed at the Global Investors’ Meet in Bangalore on June 7 and 8.
With the fresh investment, which would create 150 jobs in Bangalore, total investment in the company would rise to Rs 1,000 crore.
At the proposed plant, Toyota Kirloskar Auto Parts plans to manufacture 240,000 castings of engine parts and 120,000 units of machine parts. The company has sought an additional 17 acres from the government. The Karnataka Industrial Areas Development Board would acquire the land for the company, provided the company secures consent for this from 80 per cent of farmers who own the land. The board has also sanctioned 6,00,000 litres of water a day for the new plant.
“We have signed an MoU with the state government for an investment of Rs 500 crore for the new capacity. As part of the new investment, we would manufacture petrol engine parts and transmission units for Toyota’s small car, the Etios Liva, and the Etios sedan. We will export 55 per cent of the 2,40,000 transmission units to Toyota’s Brazil facility, while the remaining 45 per cent would be used for domestic consumption,” T R Parasuraman, senior vice-president (administration, finance and human resources) told Business Standard.
Toyota Kirloskar Auto Parts has about 50 acres adjacent to the Toyota car plant at Bidadi. In the export-oriented first unit here, the company manufactures 1,80,000 units of R-Type transmissions a year. The company’s axle plant, where it manufactures front and rear axles and propeller shafts for the Innova, has a capacity of 75,000 units a year. As a part of the company’s localisation project, the new plant would manufacture engines and expand its export-oriented unit to supply transmissions for the Etios. Production of transmissions for the Etios and Etios Liva models is scheduled to start by early 2013.
A senior company official said the new plant would start producing engines for the Etios and the Etios Liva by end of July or early August.
Two years ago, Toyota Kirloskar Auto Parts had announced the setting up of an engine plant, as well as the expansion of its export-oriented unit for transmissions.
The company serves as a production and supply base for manual transmissions for Toyota’s international multi-purpose vehicle series vehicles to India, Thailand and Argentina.
Success in my Habit
Tuesday, June 26, 2012
Sidbi to invest Rs 5,000 cr in MSME sector
New Delhi: The Small Industries Development Bank of India (Sidbi) on Monday said it would utilise the Rs 5,000 cr venture fund allocated to it for investments in micro, small and medium enterprises (MSME) in the next four years.
The Lucknow-based development bank said small and medium enterprises (SME) sector, which contributes around 17 per cent to India's GDP, was facing a slow down.
Sidbi chairman and managing director Sushil Muhnot told reporters that the utilisation of Rs 5,000 crore fund has started with a commitment of Rs 180 crores in the series one of the India Opportunities Fund. Sidbi Venture Capital Ltd, a subsidiary of SIDBI would float the fund that will have a corpus of Rs 600 crore.
“Sidbi Venture Capital has got commitments from various investors including domestic banks and insurance companies. The Rs 600-crore India Opportunity Fund would be operational soon,” Muhnoot said.
The fund would focus on development of the MSME sector and Sidbi is expecting returns of around 15 per cent from the fund. The government had allocated Rs 5,000 crore to the development bank for venture funding in MSME Sector in the budget for 2012-13.
Sidbi Venture Capital has two funds since its inception. The first one, the National Venture Fund for Software and IT Industry, had a corpus of Rs 100 crore.
The development bank's second fund, SME Growth Fund, has a corpus of Rs 500 crore and is under divestment phase at present.
When asked if Sidbi’s interaction with the SME sector gives an impression of a slowdown, the Sidbi chief said there were low business sentiments in many small industries which were postponing their expansion plans.
Talking about Sidbi, Muhnot said, the financial institution was working on a new business model in consultation with the government.
The new business model envisages to fill not only financial gap but also non-financial gaps for the MSME sector, he said. The non-financial gaps include, consultation, advisory services, loan syndication, etc.
Moreover, Sidbi is also looking at a three-level development and support plan for entrepreneurs.
At the first level, a website would be launched to guide a layman on how to start an industry. At the second level, these aspiring entrepreneurs are expected to approach Sidbi which would guide them through its credit facilitation centres on various nuances of setting up an industry including financing. In the last stage, Sidbi would assist them in preparing project reports that can help in getting loans for the project.
100 MSME clusters have already been identified for the establishment of credit facilitation centres, Muhnoot added.
The Lucknow-based development bank said small and medium enterprises (SME) sector, which contributes around 17 per cent to India's GDP, was facing a slow down.
Sidbi chairman and managing director Sushil Muhnot told reporters that the utilisation of Rs 5,000 crore fund has started with a commitment of Rs 180 crores in the series one of the India Opportunities Fund. Sidbi Venture Capital Ltd, a subsidiary of SIDBI would float the fund that will have a corpus of Rs 600 crore.
“Sidbi Venture Capital has got commitments from various investors including domestic banks and insurance companies. The Rs 600-crore India Opportunity Fund would be operational soon,” Muhnoot said.
The fund would focus on development of the MSME sector and Sidbi is expecting returns of around 15 per cent from the fund. The government had allocated Rs 5,000 crore to the development bank for venture funding in MSME Sector in the budget for 2012-13.
Sidbi Venture Capital has two funds since its inception. The first one, the National Venture Fund for Software and IT Industry, had a corpus of Rs 100 crore.
The development bank's second fund, SME Growth Fund, has a corpus of Rs 500 crore and is under divestment phase at present.
When asked if Sidbi’s interaction with the SME sector gives an impression of a slowdown, the Sidbi chief said there were low business sentiments in many small industries which were postponing their expansion plans.
Talking about Sidbi, Muhnot said, the financial institution was working on a new business model in consultation with the government.
The new business model envisages to fill not only financial gap but also non-financial gaps for the MSME sector, he said. The non-financial gaps include, consultation, advisory services, loan syndication, etc.
Moreover, Sidbi is also looking at a three-level development and support plan for entrepreneurs.
At the first level, a website would be launched to guide a layman on how to start an industry. At the second level, these aspiring entrepreneurs are expected to approach Sidbi which would guide them through its credit facilitation centres on various nuances of setting up an industry including financing. In the last stage, Sidbi would assist them in preparing project reports that can help in getting loans for the project.
100 MSME clusters have already been identified for the establishment of credit facilitation centres, Muhnoot added.
Infosys opens second development centre in Japan
Bangalore: Infosys has opened a second development centre in Japan as it prepared to have a more evenly distributed geographic spread across the globe.
In a statement on Monday, the IT major said its Japanese subsidiary is targeting the local manufacturing clients and accordingly, it has set up an office in Chibu.
Manufacturing sector
“We are aggressively targeting the manufacturing sector in Japan where at present we have 40 clients,” said Mr S.D. Shibulal, CEO and Managing Director, Infosys.
According to Infosys officials, apart from manufacturing, there are clients in financial services and consumer packaged goods sectors. This second development centre in Nagoya (apart from the one in Tokyo) is due to increasing business coming from Infosys’ Japanese clients.
Rising clients' list
In the last two years, the number of clients in Nagoya and Tokyo has gradually increased and the office in Nagoya will focus on addressing these clients’ requirements, as well as pursuing new business opportunities, according to Mr V Sriram, Head - Japan Operations, Infosys.
According to Japan Electronics and Information Technology Industries Association, in April, the electronics industry was estimated to be ¥4,162,813 million.
Infosys does not give out revenues from Japan, but reports it as a part of rest of world. In FY12, rest of world posted revenues of Rs 3,554 crore, a 30.5 per cent growth over FY11, which was higher than revenue growth from the US.
Big opportunity
With increasing globalisation, Japanese companies like Sony and others have operations in places like China for manufacturing, which, in turn, throws up a huge opportunity to offer after sales and support services. Indian IT companies are waking up to this opportunity and trying to crack the Japanese code, according to analysts.
“Indian companies have to look at offering services to Japanese markets and establish a toe hold first,” said Mr Sanjoy Sen, senior director at Deloitte.
Last year, Infosys had said that it plans to reduce its exposure to the US market and was looking at a 40:40:20 ratio across the US, Europe and the rest of the world. Currently, it is about 60:30:10, according to company data.
In a statement on Monday, the IT major said its Japanese subsidiary is targeting the local manufacturing clients and accordingly, it has set up an office in Chibu.
Manufacturing sector
“We are aggressively targeting the manufacturing sector in Japan where at present we have 40 clients,” said Mr S.D. Shibulal, CEO and Managing Director, Infosys.
According to Infosys officials, apart from manufacturing, there are clients in financial services and consumer packaged goods sectors. This second development centre in Nagoya (apart from the one in Tokyo) is due to increasing business coming from Infosys’ Japanese clients.
Rising clients' list
In the last two years, the number of clients in Nagoya and Tokyo has gradually increased and the office in Nagoya will focus on addressing these clients’ requirements, as well as pursuing new business opportunities, according to Mr V Sriram, Head - Japan Operations, Infosys.
According to Japan Electronics and Information Technology Industries Association, in April, the electronics industry was estimated to be ¥4,162,813 million.
Infosys does not give out revenues from Japan, but reports it as a part of rest of world. In FY12, rest of world posted revenues of Rs 3,554 crore, a 30.5 per cent growth over FY11, which was higher than revenue growth from the US.
Big opportunity
With increasing globalisation, Japanese companies like Sony and others have operations in places like China for manufacturing, which, in turn, throws up a huge opportunity to offer after sales and support services. Indian IT companies are waking up to this opportunity and trying to crack the Japanese code, according to analysts.
“Indian companies have to look at offering services to Japanese markets and establish a toe hold first,” said Mr Sanjoy Sen, senior director at Deloitte.
Last year, Infosys had said that it plans to reduce its exposure to the US market and was looking at a 40:40:20 ratio across the US, Europe and the rest of the world. Currently, it is about 60:30:10, according to company data.
German tourism beckons non-metro visitors
Mumbai: German National Tourism Board is launching its marketing campaigns for the Tier I and Tier II cities of the Indian market. For this, it has partnered with tour operators such as Kuoni, Thomas cook, Cox & Kings and Hi Tours.
The total budget earmarked for the marketing campaign is €2.4 lakh. “An online training programme will be a specially designed module to educate travel agents on the various offerings by Germany to reach out to our target customers,” said Mr Romit Theophilus, Director for India, German National Tourism Office.
In the first six months of the year, Germany recorded an increase of 17 per cent in visitors overnights, witnessing 1.73 lakh Indian tourist arrivals to Germany according to the latest statistics (Jan-April 2012 in comparison to the same period in 2011). Interestingly, Germany is second only to the UK in terms of visitors overnights.
“This year we will be adopting a 360 degree approach including TV, internet, radio as well as outdoor ad campaigns,” he said. It has also initiated social media campaigns across various platforms such as Facebook and Twitter.
GNTO is also planning campaigns to showcase the highlights of Germany apart from its main theme of “Affordable Hospitality.” These will include Culinary Germany, Wellness in Germany, Fairytale Land Germany, Oktoberfest, MICE in Germany, among others.
The total budget earmarked for the marketing campaign is €2.4 lakh. “An online training programme will be a specially designed module to educate travel agents on the various offerings by Germany to reach out to our target customers,” said Mr Romit Theophilus, Director for India, German National Tourism Office.
In the first six months of the year, Germany recorded an increase of 17 per cent in visitors overnights, witnessing 1.73 lakh Indian tourist arrivals to Germany according to the latest statistics (Jan-April 2012 in comparison to the same period in 2011). Interestingly, Germany is second only to the UK in terms of visitors overnights.
“This year we will be adopting a 360 degree approach including TV, internet, radio as well as outdoor ad campaigns,” he said. It has also initiated social media campaigns across various platforms such as Facebook and Twitter.
GNTO is also planning campaigns to showcase the highlights of Germany apart from its main theme of “Affordable Hospitality.” These will include Culinary Germany, Wellness in Germany, Fairytale Land Germany, Oktoberfest, MICE in Germany, among others.
RBI announces further liberalisation measures for Capital Account Transactions
The Reserve Bank of India (RBI), in consultation with the Government of India has decided to introduce the following measures with immediate effect:
It has been decided to allow Indian companies in manufacturing and infrastructure sector and having foreign exchange earnings to avail of external commercial borrowing (ECB) for repayment of outstanding Rupee loans towards capital expenditure and/or fresh Rupee capital expenditure under the approval route. The overall ceiling for such ECBs would be USD 10 billion.
The existing limit for investment by Securities and Exchange Board of India (SEBI) registered foreign institutional investors (FIIs) in Government securities (G-Secs) has been enhanced by a further amount of USD 5 billion. This would take the overall limit for FII investment in G-Secs from USD 15 billion to USD 20 billion. In order to broad base the non-resident investor base for G-Secs, it has also been decided to allow long term investors like Sovereign Wealth Funds (SWFs), multilateral agencies, endowment funds, insurance funds, pension funds and foreign central banks to be registered with SEBI, to also invest in G-Secs for the entire limit of USD 20 billion. The sub-limit of USD 10 billion (existing USD 5 billion with residual maturity of 5 years and additional limit of USD 5 billion) would have the residual maturity of three years.
The terms and conditions for the scheme for FII investment in infrastructure debt and the scheme for non-resident investment in Infrastructure Development Funds (IDFs) have been further rationalised in terms of lock-in period and residual maturity.
Further, Qualified Foreign Investors (QFIs) can now invest in those mutual fund (MF) schemes that hold at least 25 per cent of their assets (either in debt or in equity or both) in infrastructure sector under the current USD 3 billion sub-limit for investment in mutual funds related to infrastructure.
The operational/ regulatory guidelines for the above measures under Foreign Exchange Management Act (FEMA), 1999 are being issued separately.
It has been decided to allow Indian companies in manufacturing and infrastructure sector and having foreign exchange earnings to avail of external commercial borrowing (ECB) for repayment of outstanding Rupee loans towards capital expenditure and/or fresh Rupee capital expenditure under the approval route. The overall ceiling for such ECBs would be USD 10 billion.
The existing limit for investment by Securities and Exchange Board of India (SEBI) registered foreign institutional investors (FIIs) in Government securities (G-Secs) has been enhanced by a further amount of USD 5 billion. This would take the overall limit for FII investment in G-Secs from USD 15 billion to USD 20 billion. In order to broad base the non-resident investor base for G-Secs, it has also been decided to allow long term investors like Sovereign Wealth Funds (SWFs), multilateral agencies, endowment funds, insurance funds, pension funds and foreign central banks to be registered with SEBI, to also invest in G-Secs for the entire limit of USD 20 billion. The sub-limit of USD 10 billion (existing USD 5 billion with residual maturity of 5 years and additional limit of USD 5 billion) would have the residual maturity of three years.
The terms and conditions for the scheme for FII investment in infrastructure debt and the scheme for non-resident investment in Infrastructure Development Funds (IDFs) have been further rationalised in terms of lock-in period and residual maturity.
Further, Qualified Foreign Investors (QFIs) can now invest in those mutual fund (MF) schemes that hold at least 25 per cent of their assets (either in debt or in equity or both) in infrastructure sector under the current USD 3 billion sub-limit for investment in mutual funds related to infrastructure.
The operational/ regulatory guidelines for the above measures under Foreign Exchange Management Act (FEMA), 1999 are being issued separately.
Monday, June 25, 2012
Microsoft to buy Yammer for $1.2 billion
Microsoft Corp (MSFT.O) agreed to buy online social network firm Yammer Inc for $1.2 billion in cash, which will allow the software company to offer a service like Facebook Inc's (FB.O) to corporate customers.
Talk of a deal had circulated earlier this month, but the two companies only confirmed an agreement on Monday.
Four-year-old Yammer, which has 5 million users of its private, in-company social networks, helps companies' internal communications and collaboration by allowing employees to form groups and interact with each other freely. Companies such as Ford Motor Co (F.N), Supervalu (SVU.N) and Deloitte are customers.
The 400-employee firm will keep its headquarters in San Francisco but will become part of Microsoft's Office unit under Kurt DelBene in Seattle. Yammer will still be led by current CEO David Sacks, a former PayPal executive.
The service should fill a growing gap that Microsoft was struggling to fill with its SharePoint application for creating private websites for intra-company projects.
"This acquisition will immediately make Microsoft a strong competitor in the enterprise social market," said Larry Cannell, an analyst at tech research firm Gartner. "It was a stretch to call the capabilities in SharePoint's MySite feature a social network site."
With Yammer, employees can use a private, online company directory to contact co-workers, form networks, chat, share links and post news. A basic version of Yammer is free, but a subscription buys more security and integration with other company-wide software. Yammer's subscription-based business model makes it different from ad-driven network companies like Facebook or LinkedIn Corp (LNKD.N).
The deal, which values Yammer's users at about $240 each, may ignite interest in companies offering similar services, such as Salesforce.com Inc (CRM.N), Jive Software Inc (JIVE.O) and Telligent.
The area of internal networking for companies has attracted other big tech companies such as Cisco Systems Inc (CSCO.O), which has a similar offering to Yammer called WebEx Social, and International Business Machine Corp (IBM.N) with a rival product called Connections.
Microsoft, which owns a small fraction of Facebook shares, has been looking for ways to make its desktop-bound products more interactive and attractive to its core corporate users and home consumers, and has even been experimenting with its own social network called So.cl (pronounced 'social').
Last year it paid $8.5 billion to buy online chat company Skype, which it is integrating into its offerings, including the next version of Office.
Microsoft's Office suite of applications - including Outlook email, Excel spreadsheets and PowerPoint presentation program - is the bedrock of most companies' day-to-day working software.
The Office unit is Microsoft's most profitable, contributing 60 percent of its profit last year, and amassing more sales than its flagship Windows operating system.
Talk of a deal had circulated earlier this month, but the two companies only confirmed an agreement on Monday.
Four-year-old Yammer, which has 5 million users of its private, in-company social networks, helps companies' internal communications and collaboration by allowing employees to form groups and interact with each other freely. Companies such as Ford Motor Co (F.N), Supervalu (SVU.N) and Deloitte are customers.
The 400-employee firm will keep its headquarters in San Francisco but will become part of Microsoft's Office unit under Kurt DelBene in Seattle. Yammer will still be led by current CEO David Sacks, a former PayPal executive.
The service should fill a growing gap that Microsoft was struggling to fill with its SharePoint application for creating private websites for intra-company projects.
"This acquisition will immediately make Microsoft a strong competitor in the enterprise social market," said Larry Cannell, an analyst at tech research firm Gartner. "It was a stretch to call the capabilities in SharePoint's MySite feature a social network site."
With Yammer, employees can use a private, online company directory to contact co-workers, form networks, chat, share links and post news. A basic version of Yammer is free, but a subscription buys more security and integration with other company-wide software. Yammer's subscription-based business model makes it different from ad-driven network companies like Facebook or LinkedIn Corp (LNKD.N).
The deal, which values Yammer's users at about $240 each, may ignite interest in companies offering similar services, such as Salesforce.com Inc (CRM.N), Jive Software Inc (JIVE.O) and Telligent.
The area of internal networking for companies has attracted other big tech companies such as Cisco Systems Inc (CSCO.O), which has a similar offering to Yammer called WebEx Social, and International Business Machine Corp (IBM.N) with a rival product called Connections.
Microsoft, which owns a small fraction of Facebook shares, has been looking for ways to make its desktop-bound products more interactive and attractive to its core corporate users and home consumers, and has even been experimenting with its own social network called So.cl (pronounced 'social').
Last year it paid $8.5 billion to buy online chat company Skype, which it is integrating into its offerings, including the next version of Office.
Microsoft's Office suite of applications - including Outlook email, Excel spreadsheets and PowerPoint presentation program - is the bedrock of most companies' day-to-day working software.
The Office unit is Microsoft's most profitable, contributing 60 percent of its profit last year, and amassing more sales than its flagship Windows operating system.
TCS, Infosys line up to invest in Indore
Indore has emerged as an attractive investment destination for IT companies which are looking to expand operations amid global economic slowdown. According to industry experts, availability of workforce, incentives by the Madhya Pradesh government and availability of facilities are attracting IT companies to invest in the city, known as financial capital of the state.
"These days, five big companies including the likes of Infosys and TCS are investing crores in the IT Special Economic Zones (SEZ)," Madhya Pradesh SEZ Development Commissioner A K Rathore said.
He added that six years after notification as an SEZ in 2006, work has commenced recently at the Crystal IT Park.
A senior official in the Union Commerce Ministry said Crystal IT Park is the first SEZ in the IT sector in which production was commenced for exports. Madhya Pradesh Audyogik Kendra Vikas Nigam (MPAKVN) was given the responsibility of developing the SEZ.
"Impetus has recently begun exporting from the Crystal IT Park. Apart from Imptus, companies like Cleartrail and Intellicus have been given approval for investment," the official said.
Rathore said companies are increasingly looking at investing in Indore as, "There are a large number of engineering colleges from where thousands of talented engineers graduate every year. Apart from that, the air and rail connectivity to the city has improved significantly."
Meanwhile, the state government is also rolling out the red carpet to IT companies and is working towards developing Indore as the new IT destination.
Officials said Infosys has been given 52.64 hectare (130 acre land), while TCS has been given 40.47 hectare (100 acre) on the Super Corridor by the state government.
They said the two IT giants were given the land to develop SEZs at Rs 20 lakh per acre and added that Ruchi Realty Holdings, Impetus and Agroweb Online are also working on similar SEZ projects.
"These days, five big companies including the likes of Infosys and TCS are investing crores in the IT Special Economic Zones (SEZ)," Madhya Pradesh SEZ Development Commissioner A K Rathore said.
He added that six years after notification as an SEZ in 2006, work has commenced recently at the Crystal IT Park.
A senior official in the Union Commerce Ministry said Crystal IT Park is the first SEZ in the IT sector in which production was commenced for exports. Madhya Pradesh Audyogik Kendra Vikas Nigam (MPAKVN) was given the responsibility of developing the SEZ.
"Impetus has recently begun exporting from the Crystal IT Park. Apart from Imptus, companies like Cleartrail and Intellicus have been given approval for investment," the official said.
Rathore said companies are increasingly looking at investing in Indore as, "There are a large number of engineering colleges from where thousands of talented engineers graduate every year. Apart from that, the air and rail connectivity to the city has improved significantly."
Meanwhile, the state government is also rolling out the red carpet to IT companies and is working towards developing Indore as the new IT destination.
Officials said Infosys has been given 52.64 hectare (130 acre land), while TCS has been given 40.47 hectare (100 acre) on the Super Corridor by the state government.
They said the two IT giants were given the land to develop SEZs at Rs 20 lakh per acre and added that Ruchi Realty Holdings, Impetus and Agroweb Online are also working on similar SEZ projects.
Huawei to open global R&D centre in India
Despite uncertainties in the telecom sector, Chinese equipment makerHuawei will invest $2 billion over the next four years in India as it looks to aggressively market consumer devices and set up global R&D centre in the country.
The company, which clocked $1.5 billion in revenues from India in 2011-12, is also betting big on the roll out of 4G LTE services in India and is targeting more than 50 per cent share of the contracts coming in.
"2011 was a good year for Huawei because our revenue in India increased about 20 per cent... Last year, we began building a new R&D centre in Bangalore, which will house more than 5,000 people. From 2011, the plan is to invest $2 billion in five years in india," Huawei India chief executive officer Cai Liqun said.
This includes the R&D centre, manufacturing and marketing among others, he added.
The company began work on setting up a research and development centre in Bangalore last year, which is expected to house more than 5,000 professionals. It is investing $150 million in the facility, which is expected to become operational from June 2013.
Besides, it also has a global service resource centre (GSRC) in Bangalore along with a global network operations centre (GNOC), which is its largest such centre outside of China. These centres cater to its clients across 140 countries.
"We are also planning to set up a global technology centre (GTEC) along with the others (existing centres) in Bangalore maybe this year or the next (year). This Centre will focus on providing technical support to clients globally," Liqun said.
He added that GTEC will handle technical issues of customers globally but declined to comment on the number of people that would be hired.
"We have GTECs in China, but this will be first outside china. It is under discussion. Indians have language advantage as well as technology, that is what we want to capitalise on through this centre," Liqun said.
Of the company's $1.5 billion Indian revenues, $1.2 billion was contributed by its network business driven by 3G deployment and network expansion by operators, while the remaining $300 million came from devices like handsets, dongles and set top boxes.
"I think 2012 is a tough year for the whole telecom industry in India because the policy is not clear. Operators are waiting for licences. This period will see no major investment but after all this is solved, we are confident of the Indian market," Liqun said.
Asked about the targeted revenue for 2012-13, Liqun declined to comment but added, "we are in discussion with all players...this year, we are looking at more than 50 per cent of all LTE contracts coming to us".
The company has already deployed 4G LTE network for telecom major Bharti Airtel in Bangalore.
Huawei, which has a low single-digit market share in the mobile phones segment in the country, is also looking at ramping up its presence in the category.
"In three-five years, we want to become one of the top 3-4 players in the Android smartphone space," Huawei vice president (corporate media affairs) Scott Sykes said.
Globally, it is targeting sales of 60 million mobile phones this year and is hopeful that its 'Ascend P1' (launched at the Mobile World Congress in Barcelona) will make waves in India.
The company, which clocked $1.5 billion in revenues from India in 2011-12, is also betting big on the roll out of 4G LTE services in India and is targeting more than 50 per cent share of the contracts coming in.
"2011 was a good year for Huawei because our revenue in India increased about 20 per cent... Last year, we began building a new R&D centre in Bangalore, which will house more than 5,000 people. From 2011, the plan is to invest $2 billion in five years in india," Huawei India chief executive officer Cai Liqun said.
This includes the R&D centre, manufacturing and marketing among others, he added.
The company began work on setting up a research and development centre in Bangalore last year, which is expected to house more than 5,000 professionals. It is investing $150 million in the facility, which is expected to become operational from June 2013.
Besides, it also has a global service resource centre (GSRC) in Bangalore along with a global network operations centre (GNOC), which is its largest such centre outside of China. These centres cater to its clients across 140 countries.
"We are also planning to set up a global technology centre (GTEC) along with the others (existing centres) in Bangalore maybe this year or the next (year). This Centre will focus on providing technical support to clients globally," Liqun said.
He added that GTEC will handle technical issues of customers globally but declined to comment on the number of people that would be hired.
"We have GTECs in China, but this will be first outside china. It is under discussion. Indians have language advantage as well as technology, that is what we want to capitalise on through this centre," Liqun said.
Of the company's $1.5 billion Indian revenues, $1.2 billion was contributed by its network business driven by 3G deployment and network expansion by operators, while the remaining $300 million came from devices like handsets, dongles and set top boxes.
"I think 2012 is a tough year for the whole telecom industry in India because the policy is not clear. Operators are waiting for licences. This period will see no major investment but after all this is solved, we are confident of the Indian market," Liqun said.
Asked about the targeted revenue for 2012-13, Liqun declined to comment but added, "we are in discussion with all players...this year, we are looking at more than 50 per cent of all LTE contracts coming to us".
The company has already deployed 4G LTE network for telecom major Bharti Airtel in Bangalore.
Huawei, which has a low single-digit market share in the mobile phones segment in the country, is also looking at ramping up its presence in the category.
"In three-five years, we want to become one of the top 3-4 players in the Android smartphone space," Huawei vice president (corporate media affairs) Scott Sykes said.
Globally, it is targeting sales of 60 million mobile phones this year and is hopeful that its 'Ascend P1' (launched at the Mobile World Congress in Barcelona) will make waves in India.
Africa rolls out red carpet for Indian poultry industry
Hyderabad: African countries present significant business opportunities for the Indian poultry industry for setting up hatcheries through joint ventures or supplying feed and technology for value-addition.
In this context, the Andhra Pradesh chapter of the Confederation of Indian Industry (CII) will be taking a trade delegation to some African countries in September.
As a run-up to this, the CII organised an interactive session on ‘Doing Business with African Countries’, here.
Ms Jerusalem Amdemariam, Minister Counsellor — Economy and Business, Ethiopia; Ms Maria Fatima Phume, Deputy High Commissioner, Mozambique High Commission; and Ms Susan Sikaneta, High Commissioner, High Commission of the Republic of Zambia, extended a “red-carpet invitation” for Indian entrepreneurs to invest in these African countries.
Mr Suresh Chitturi, Chairman, CII —AP Task Force and Agriculture and MD of Srinivasa Hatcheries, who had been on an explorative visit to Africa recently, said the cost of an egg in many parts of Africa was Rs 8 each, almost three times that in India.
“There are enough opportunities for poultry firms and ago-tech companies in Africa. There have been some preliminary visits by the Indian poultry industry to Africa of late,” he said. Srinivasa Hatcheries, a leading poultry firm in the State, is also thinking of doing business in Africa, although plans have not been firmed up yet.
Ms Amdemariam said Ethopia provided a stable business environment for foreign investments. Incentives for foreign investors include full exemption from import customs duties and other taxes levied on imports, 100 per cent repatriation of profits and two to seven years’ exemption of Income Tax on manufacturing and agro-product ventures.
Ms Sikaneta said Zambia had enormous appetite for investments in poultry farming, besides maize, soybean, sugarcane and cotton farming.
“We need lot of storage capacity for milk. Currently, we have a capacity for six lakh tonnes, while the requirement is over 1.3 million tonnes,” she said.
In this context, the Andhra Pradesh chapter of the Confederation of Indian Industry (CII) will be taking a trade delegation to some African countries in September.
As a run-up to this, the CII organised an interactive session on ‘Doing Business with African Countries’, here.
Ms Jerusalem Amdemariam, Minister Counsellor — Economy and Business, Ethiopia; Ms Maria Fatima Phume, Deputy High Commissioner, Mozambique High Commission; and Ms Susan Sikaneta, High Commissioner, High Commission of the Republic of Zambia, extended a “red-carpet invitation” for Indian entrepreneurs to invest in these African countries.
Mr Suresh Chitturi, Chairman, CII —AP Task Force and Agriculture and MD of Srinivasa Hatcheries, who had been on an explorative visit to Africa recently, said the cost of an egg in many parts of Africa was Rs 8 each, almost three times that in India.
“There are enough opportunities for poultry firms and ago-tech companies in Africa. There have been some preliminary visits by the Indian poultry industry to Africa of late,” he said. Srinivasa Hatcheries, a leading poultry firm in the State, is also thinking of doing business in Africa, although plans have not been firmed up yet.
Ms Amdemariam said Ethopia provided a stable business environment for foreign investments. Incentives for foreign investors include full exemption from import customs duties and other taxes levied on imports, 100 per cent repatriation of profits and two to seven years’ exemption of Income Tax on manufacturing and agro-product ventures.
Ms Sikaneta said Zambia had enormous appetite for investments in poultry farming, besides maize, soybean, sugarcane and cotton farming.
“We need lot of storage capacity for milk. Currently, we have a capacity for six lakh tonnes, while the requirement is over 1.3 million tonnes,” she said.
After small cars, global auto companies like Nissan and Toyota start exporting sedans & SUVs from India
Mumbai: Japanese carmakers Nissan and Toyota have started exporting midsized cars made in India, spearheading a strategic change that seeks to make the most of the country's cost advantage and growing technical prowess.
In the next 12-18 months, Nissan plans to export 50,000 units of India-made sedan Sunny to the West, executives familiar with the matter said, adding that rival Toyota will ship Etios cars, made at its Indian unit, to South Africa.
Volkswagen, Ford and Renault are expected to join them soon. Experts say exports not only help in dealing with the slowdown in the domestic market, but also act as a hedge against costlier imports, which have turned dearer by 25-30% in recent months.
French carmaker Renault plans to export to the UK about 25,000 units of its sports utility vehicle Duster over 12-18 months. The shipments may start in October.
Similarly, Germany's Volkswagen is keen on producing left-hand drive Vento sedans in India for markets in the West. Volkswagen, which exports India-made Vento cars to South Africa and Malaysia, has mandated vendors to develop components for a left-hand drive version of the sedan.
The carmaker plans to export 8,000-10,000 such units by 2013, said an executive, who did not wish to be named.
"Our export of the Vento to South Africa confirms that we are able to produce high-quality cars in India at competitive costs," Volkswagen India's spokesperson said, adding, "This also shows our potential to further extend our exports to other markets. We are looking at various opportunities in the future, also in left-hand drive markets."
The Volkswagen spokesperson, however, declined comment on target markets and numbers.
Ford Motor, too, is likely to export its yet-to-be launched EcoSport SUV from India, according to people familiar with the company's plans.
Executives dealing with the projects of multinational carmakers say that over 100,000 sedans and SUVs manufactured in India are slated for export over the next 12 months. The depreciating rupee, which ended at a record low on Friday, is only likely to accelerate such plans.
Experts say the growth in exports, which comes at a time the global economy is slowing down, could accelerate once the economy picks up. There are not many right-hand drive manufacturing bases that are as cost competitive as India, said Kumar Kandaswami, director at Deloitte.
"The cost of engineering, both at the carmaker's end and supplier's level is very competitive, which gives India an edge. Manufacturers use exports as not only an opportunity to mitigate risk arising out of volatile currency, but even to balance the demand in the domestic market," said Kandaswami.
Toyota Kirloskar, the Indian subsidiary of the Japanese carmaker, has already received orders to export 20,000 units of the Etios sedan to South Africa. The company's deputy MD, marketing, Sandeep Singh, told ET the exports will help cut losses on account of the falling rupee.
Ford, too, is firming up plans to export its EcoSport SUV from India to South Africa next year.
In the next 12-18 months, Nissan plans to export 50,000 units of India-made sedan Sunny to the West, executives familiar with the matter said, adding that rival Toyota will ship Etios cars, made at its Indian unit, to South Africa.
Volkswagen, Ford and Renault are expected to join them soon. Experts say exports not only help in dealing with the slowdown in the domestic market, but also act as a hedge against costlier imports, which have turned dearer by 25-30% in recent months.
French carmaker Renault plans to export to the UK about 25,000 units of its sports utility vehicle Duster over 12-18 months. The shipments may start in October.
Similarly, Germany's Volkswagen is keen on producing left-hand drive Vento sedans in India for markets in the West. Volkswagen, which exports India-made Vento cars to South Africa and Malaysia, has mandated vendors to develop components for a left-hand drive version of the sedan.
The carmaker plans to export 8,000-10,000 such units by 2013, said an executive, who did not wish to be named.
"Our export of the Vento to South Africa confirms that we are able to produce high-quality cars in India at competitive costs," Volkswagen India's spokesperson said, adding, "This also shows our potential to further extend our exports to other markets. We are looking at various opportunities in the future, also in left-hand drive markets."
The Volkswagen spokesperson, however, declined comment on target markets and numbers.
Ford Motor, too, is likely to export its yet-to-be launched EcoSport SUV from India, according to people familiar with the company's plans.
Executives dealing with the projects of multinational carmakers say that over 100,000 sedans and SUVs manufactured in India are slated for export over the next 12 months. The depreciating rupee, which ended at a record low on Friday, is only likely to accelerate such plans.
Experts say the growth in exports, which comes at a time the global economy is slowing down, could accelerate once the economy picks up. There are not many right-hand drive manufacturing bases that are as cost competitive as India, said Kumar Kandaswami, director at Deloitte.
"The cost of engineering, both at the carmaker's end and supplier's level is very competitive, which gives India an edge. Manufacturers use exports as not only an opportunity to mitigate risk arising out of volatile currency, but even to balance the demand in the domestic market," said Kandaswami.
Toyota Kirloskar, the Indian subsidiary of the Japanese carmaker, has already received orders to export 20,000 units of the Etios sedan to South Africa. The company's deputy MD, marketing, Sandeep Singh, told ET the exports will help cut losses on account of the falling rupee.
Ford, too, is firming up plans to export its EcoSport SUV from India to South Africa next year.
IKEA to invest Rs 10,500 cr in India, to open 25 outlets
New Delhi: It took a meeting in St Petersburg, Russia, for the euro 25-billion Scandinavian furniture giant IKEA to commit its investment in the Indian retail sector, almost six months after the government allowed 100 per cent foreign direct investment (FDI) in single-brand retail.
IKEA chief, Mikael Ohlsson, today gave an assurance to Commerce Minister Anand Sharma at a luncheon meeting during the St Petersburg International Economic Forum that his company would invest euro 1.5 billion (Rs 10,500 crore) in India over the next 15-20 years. Besides 25 retail outlets, it plans to also set up restaurants, food mart, nursing home and publications under its brand name.
IKEA, which had earlier tried to enter India when 51 per cent FDI was allowed in single-brand retail, and, subsequently, decided to come on its own when the rules were relaxed, said it had filed an application with the Indian government for clearances to set up a fully-owned subsidiary. The company has filed the application through its advisor Titus and Co Advocates. The proposal needs to be finally approved by the Cabinet Committee on Economic Affairs, as the investment exceeds Rs 1,200 crore.
IKEA’s would be the second foreign investment so far since the government relaxed the rules for single-brand retail. UK-based footwear retailer, Pavers, was the first chain to apply under 100-per-cent FDI regime in April.
Even as the largest furniture chain of the world, with 287 stores, had earlier raised concerns over the sticky condition of sourcing 30 per cent of value from Indian small and medium enterprises for 100 per cent FDI, it has now decided to set up shop in India under the same norms.
An IKEA spokesperson told Business Standard that the “challenge related to 30 per cent sourcing remained”. A commerce ministry official pointed out “there are no changes made in the procurement conditions. There is no question of any dilution.”
“Having studied the guidelines, we believe we can live up to the guidelines and keep within the spirit of the policy,” the spokesperson said.
Arvind Singhal, founder and chairman, Technopak Advisors, said the IKEA move would give the much-needed confidence to the international investor community.
The company would invest euro 600 million (approximately Rs 4,200 crore) in the first stage and an additional Euro 900 million (about Rs 6,300 crore) later, totalling euro 1.5 billion, a commerce ministry statement said. It could initially open two-three stores, based on the current sourcing values, and raise the number to 10 over a 10-year year horizon, and around 25 over a longer period.
Among the other global brands that want to enter India on their own are GAP, Abercrombie, Prada, Hennes & Mauritz and Arcadia. Among global retailers that are already present in India, either through franchisee or local JVs, are Louis Vuitton, Christian Dior, Jimmy Choo, Zara, Marks & Spencer and Canali. French luxury brand Christian Louboutin recently got the government approval to operate in India.
FM clears advance pricing scheme
New Delhi: Finance minister Pranab Mukherjee has cleared the Advance Pricing Agreement (APA) scheme, pertaining to transfer pricing regulations before filing his nomination for the presidential election.
The APA scheme, proposed in Budget 2012-13, is seen as one of the major industry-friendly measures. The industry has been keenly waiting for the notification of its provisions. APA is an ahead-of-time agreement between a taxpayer and the taxing authority on an appropriate transfer pricing methodology.
A senior finance ministry official told Business Standard the finance minister’s approval to the provisions formulated by the Central Board of Direct Taxes (CBDT) would facilitate implementation of the APA scheme from July 1. CBDT will notify the scheme shortly, after taking approval of the law ministry, he added.
Mukherjee would be in Kolkata over the weekend and then he is slated to file his nomination some time next week. The official earlier quoted said the scheme would cover the norms for coverage of cases under APA and also forms for availing the facilities provided. He added as demanded by industry fees for availing the scheme had been kept reasonable. “The applicant has to pay a fee of Rs 10 lakh for international transactions not exceeding Rs 100 crore, Rs 15 lakh for transactions up to Rs 200 crore and Rs 20 lakh for transactions above Rs 200 crore,” said the official.
The Budget inserted new sections in the I-T Act to provide a framework for APA. It empowers CBDT to enter into an advance pricing agreement with any person undertaking an international transaction.
What is APA?
Advance Pricing Agreement is signed between a taxpayer and a taxing authority on an appropriate transfer pricing methodology for a set of transactions over a fixed period of time in future. The APAs offer better assurance on transfer pricing methods and are conducive in providing certainty and unanimity of approach.
The APA scheme, proposed in Budget 2012-13, is seen as one of the major industry-friendly measures. The industry has been keenly waiting for the notification of its provisions. APA is an ahead-of-time agreement between a taxpayer and the taxing authority on an appropriate transfer pricing methodology.
A senior finance ministry official told Business Standard the finance minister’s approval to the provisions formulated by the Central Board of Direct Taxes (CBDT) would facilitate implementation of the APA scheme from July 1. CBDT will notify the scheme shortly, after taking approval of the law ministry, he added.
Mukherjee would be in Kolkata over the weekend and then he is slated to file his nomination some time next week. The official earlier quoted said the scheme would cover the norms for coverage of cases under APA and also forms for availing the facilities provided. He added as demanded by industry fees for availing the scheme had been kept reasonable. “The applicant has to pay a fee of Rs 10 lakh for international transactions not exceeding Rs 100 crore, Rs 15 lakh for transactions up to Rs 200 crore and Rs 20 lakh for transactions above Rs 200 crore,” said the official.
The Budget inserted new sections in the I-T Act to provide a framework for APA. It empowers CBDT to enter into an advance pricing agreement with any person undertaking an international transaction.
What is APA?
Advance Pricing Agreement is signed between a taxpayer and a taxing authority on an appropriate transfer pricing methodology for a set of transactions over a fixed period of time in future. The APAs offer better assurance on transfer pricing methods and are conducive in providing certainty and unanimity of approach.
Venture capital investments hit record high in 2011
Venture capital funding in Indian companies stood at a record Rs 56,868 crore at the end of 2011.
Clearly, entrepreneurs with innovative ideas are having no difficulty in raising funds for their ventures.
This was 18.8 per cent higher than their cumulative investment of Rs 47,859 crore as of December 31, 2010, according to the latest SEBI data. In 2010, cumulative venture capital investment had declined by 7.4 per cent vis-à-vis the previous year.
Venture capital consists of equity, quasi equity or conditional loan in order to promote unlisted, high-risk or high-tech firms driven by technically or professionally qualified entrepreneurs.
The typical venture capital investment occurs after the seed funding round, with a view to generate returns through a subsequent realisation event, such as an IPO or trade sale of the company.
Among the big-ticket venture capital deals in 2011, online retailer Fashionandyou. com raised $40 million from a group of investors, while group buying portal Snapdeal.com attracted $40 million.
Among other notable deals, e-commerce retailer Flipkart secured $20 million and shopping site Naaptol.com raised $25 million.
Foreign VC investors
Both domestic as well as foreign venture capital companies are vying for a piece of the pie.
While foreign venture capital investors (FVCI) accounted for the bulk of the investment in the quarter ended December 31, 2011, at 65.8 per cent, venture capital funds (VCF) contributed the remaining 34.2 per cent. FVCI investments have been showing a steady growth over the last two years.
These investments increased by 16.5 per cent in 2011, compared with the previous year, while the increase was 23.9 per cent in 2010.
Sector break-up
In terms of individual sectors, the bulk of the investment was in the real estate sector, which attracted Rs 10,831 crore.
The telecommunications sector was the next biggest target, with Rs 7,516 crore. Information technology attracted Rs 4,322 crore and other industries have taken in a cumulative Rs 26,673 crore.
While some sectors saw an increase in VCF/FVCI investments to an all-time high in the quarter ended December 31, 2011, most saw the level of investment drop from previous peaks.
The telecommunications sector (-9.7 per cent), real estate (-4.4 per cent), services (-15.7 per cent) and media/entertainment (-31.8 per cent) have seen VCF and FVCI investments decline from their peaks.
Nevertheless, the record VCF/FVCI investment in the information technology and ‘other’ category sectors, took the cumulative investment to an all-time high in the quarter ended December 31, 2011.
Clearly, entrepreneurs with innovative ideas are having no difficulty in raising funds for their ventures.
This was 18.8 per cent higher than their cumulative investment of Rs 47,859 crore as of December 31, 2010, according to the latest SEBI data. In 2010, cumulative venture capital investment had declined by 7.4 per cent vis-à-vis the previous year.
Venture capital consists of equity, quasi equity or conditional loan in order to promote unlisted, high-risk or high-tech firms driven by technically or professionally qualified entrepreneurs.
The typical venture capital investment occurs after the seed funding round, with a view to generate returns through a subsequent realisation event, such as an IPO or trade sale of the company.
Among the big-ticket venture capital deals in 2011, online retailer Fashionandyou. com raised $40 million from a group of investors, while group buying portal Snapdeal.com attracted $40 million.
Among other notable deals, e-commerce retailer Flipkart secured $20 million and shopping site Naaptol.com raised $25 million.
Foreign VC investors
Both domestic as well as foreign venture capital companies are vying for a piece of the pie.
While foreign venture capital investors (FVCI) accounted for the bulk of the investment in the quarter ended December 31, 2011, at 65.8 per cent, venture capital funds (VCF) contributed the remaining 34.2 per cent. FVCI investments have been showing a steady growth over the last two years.
These investments increased by 16.5 per cent in 2011, compared with the previous year, while the increase was 23.9 per cent in 2010.
Sector break-up
In terms of individual sectors, the bulk of the investment was in the real estate sector, which attracted Rs 10,831 crore.
The telecommunications sector was the next biggest target, with Rs 7,516 crore. Information technology attracted Rs 4,322 crore and other industries have taken in a cumulative Rs 26,673 crore.
While some sectors saw an increase in VCF/FVCI investments to an all-time high in the quarter ended December 31, 2011, most saw the level of investment drop from previous peaks.
The telecommunications sector (-9.7 per cent), real estate (-4.4 per cent), services (-15.7 per cent) and media/entertainment (-31.8 per cent) have seen VCF and FVCI investments decline from their peaks.
Nevertheless, the record VCF/FVCI investment in the information technology and ‘other’ category sectors, took the cumulative investment to an all-time high in the quarter ended December 31, 2011.
Saturday, June 23, 2012
V-Guard Industries targets 25% growth this fiscal
YDERABAD: Leading consumer electrical and electronics firm V-Guard Industries is targeting 25 per cent growth during the current financial year, a company official said Friday.
The company, which achieved a turnover of Rs.1,000 crore during 2011-12, has been growing at 35 to 40 per cent for last three years. "We set the modest target but achieved more," said V. Ramachandran, director, marketing and strategy, V-Guard.
He was talking to reporters on the occasion of launching Enviro, a high-speed pedestal fan with the unique magneto motive drive technology.
The fan can save up to 50 per cent energy. "A consumer with an average daily usage of eight to 10 hours can save Rs.1,000 annually on electricity bill," Ramachandran said. The key feature of Enviro is that it can perform better even in low voltage conditions.
Ramachandran said with the first-of-its-kind NMD technology, Enviro was introduced in Andhra market. The product will soon be introduced in other markets.
V-Guard hopes to sell 20,000 Enviro units in the Indian market and add Rs.5 crore revenues during 2012-13. Fans contribute to seven per cent of the company's total revenues.
V-Guard's revenues from the fan market was Rs.130 crore last year. The company, which forayed into fans only four years ago, is now one of the leading manufacturers.
The firms plans to invest Rs.25 crore this year in its Kashipur plant in Uttarakhand to double its wire capacity. The plant current capacity is 3.25 lakh coils per month.
The company, which achieved a turnover of Rs.1,000 crore during 2011-12, has been growing at 35 to 40 per cent for last three years. "We set the modest target but achieved more," said V. Ramachandran, director, marketing and strategy, V-Guard.
He was talking to reporters on the occasion of launching Enviro, a high-speed pedestal fan with the unique magneto motive drive technology.
The fan can save up to 50 per cent energy. "A consumer with an average daily usage of eight to 10 hours can save Rs.1,000 annually on electricity bill," Ramachandran said. The key feature of Enviro is that it can perform better even in low voltage conditions.
Ramachandran said with the first-of-its-kind NMD technology, Enviro was introduced in Andhra market. The product will soon be introduced in other markets.
V-Guard hopes to sell 20,000 Enviro units in the Indian market and add Rs.5 crore revenues during 2012-13. Fans contribute to seven per cent of the company's total revenues.
V-Guard's revenues from the fan market was Rs.130 crore last year. The company, which forayed into fans only four years ago, is now one of the leading manufacturers.
The firms plans to invest Rs.25 crore this year in its Kashipur plant in Uttarakhand to double its wire capacity. The plant current capacity is 3.25 lakh coils per month.
RIL to sell textiles business, appoints NM Rothschild to manage the sale
India's largest private sector company, Reliance Industries, has decided to sell its oldest business, textiles, along with its iconic brand `Only Vimal' in an effort to exit loss-making businesses. The Mukesh Ambani company has hired NM Rothschild to manage the sale, a top official directly involved with the sale said.
The textile business sale, which includes its Naroda factory, is expected to be concluded by the end of the year. The business was set up by the founder-Chairman of the group late Dhirubhai Ambani along with his brother Ramniklal Ambani way back in 1966. However, since then the group has diversified into energy and petrochemical businesses to become India's largest company with an annual turnover of Rs 85,000 crore. Its textile business contributes less than Rs 2,000 crore to the group's revenues.
According to the sale documents seen by ET Now, the textile business sale will also include the retail network of the Only Vimal brand of fabrics.
When contacted, a Reliance Industries spokesperson said: "We do not comment on market rumours."
The Reliance group is not interested in any business in which the annual returns are less than 12 percent, a source in the group said.
"We would rather invest that money in bank deposits," the source added, asking not to be identified.
The group's top management is also unhappy with the frequent labour trouble at the Naroda factory. In April this year, RIL's Naroda factory employees went on strike, seeking a 60 percent rise in wages. Although the Ambanis have an emotional connect with the business, the Only Vimal brand is being sold to sweeten the deal, the source noted.
In the annual general meeting of shareholders held early this month, Chairman Mukesh Ambani promised that the company will double its operating profits in five years and invest a massive Rs 100,000 crore in Indian businesses in the next five years. Most of this investment will go into expanding its petrochemicals operations, foraying to telecom as well as its oil and
gas business.
Even the retail business, the youngest baby in Reliance's family, is expected to double turnover from Rs 7,500 crore in FY 2012 to Rs 15,000 crore by March next year.
"The focus of the management is to invest in businesses where returns are around 25 percent. Hence, the textile business does not fit in the new strategy," the source said.
The Reliance stock was trading 2.47 percent down at Rs 719.40 when ET Now broke the story at 10 a.m. on Thursday.
In its annual report for the year 2012, Reliance said the textile industry was impacted due to volatile cotton markets. Within a span of around 5-6 months, international and domestic cotton prices saw a historic peak and, subsequently, a steep fall.
"The uptrend was primarily due to shortage of cotton availability across the world and certain government policies on cotton and cotton yarn exports, which were not receptive to textile industry growth. Consequently, the industry resorted to panic buying and stocked cotton. But with the beginning of a declining trend in cotton prices, the industry faced problems in sourcing cotton, impacting the downstream demand as well," it said.
The company further said the end-users moved into a strict wait-and-watch mode and the textile industry faced a huge pile-up of unused cotton and cotton yarn inventory, leading to severe stock losses.
Manmade fibre, especially polyester and yarn, fared relatively better as volatility in prices of polyester was much lower compared to cotton. Major textile production centres in Andhra Pradesh, Tamil Nadu and some northern states faced severe power shortage, adversely affecting output and profitability of mills. Labour shortage was another problem faced by the industry, the annual report noted.
The textile business sale, which includes its Naroda factory, is expected to be concluded by the end of the year. The business was set up by the founder-Chairman of the group late Dhirubhai Ambani along with his brother Ramniklal Ambani way back in 1966. However, since then the group has diversified into energy and petrochemical businesses to become India's largest company with an annual turnover of Rs 85,000 crore. Its textile business contributes less than Rs 2,000 crore to the group's revenues.
According to the sale documents seen by ET Now, the textile business sale will also include the retail network of the Only Vimal brand of fabrics.
When contacted, a Reliance Industries spokesperson said: "We do not comment on market rumours."
The Reliance group is not interested in any business in which the annual returns are less than 12 percent, a source in the group said.
"We would rather invest that money in bank deposits," the source added, asking not to be identified.
The group's top management is also unhappy with the frequent labour trouble at the Naroda factory. In April this year, RIL's Naroda factory employees went on strike, seeking a 60 percent rise in wages. Although the Ambanis have an emotional connect with the business, the Only Vimal brand is being sold to sweeten the deal, the source noted.
In the annual general meeting of shareholders held early this month, Chairman Mukesh Ambani promised that the company will double its operating profits in five years and invest a massive Rs 100,000 crore in Indian businesses in the next five years. Most of this investment will go into expanding its petrochemicals operations, foraying to telecom as well as its oil and
gas business.
Even the retail business, the youngest baby in Reliance's family, is expected to double turnover from Rs 7,500 crore in FY 2012 to Rs 15,000 crore by March next year.
"The focus of the management is to invest in businesses where returns are around 25 percent. Hence, the textile business does not fit in the new strategy," the source said.
The Reliance stock was trading 2.47 percent down at Rs 719.40 when ET Now broke the story at 10 a.m. on Thursday.
In its annual report for the year 2012, Reliance said the textile industry was impacted due to volatile cotton markets. Within a span of around 5-6 months, international and domestic cotton prices saw a historic peak and, subsequently, a steep fall.
"The uptrend was primarily due to shortage of cotton availability across the world and certain government policies on cotton and cotton yarn exports, which were not receptive to textile industry growth. Consequently, the industry resorted to panic buying and stocked cotton. But with the beginning of a declining trend in cotton prices, the industry faced problems in sourcing cotton, impacting the downstream demand as well," it said.
The company further said the end-users moved into a strict wait-and-watch mode and the textile industry faced a huge pile-up of unused cotton and cotton yarn inventory, leading to severe stock losses.
Manmade fibre, especially polyester and yarn, fared relatively better as volatility in prices of polyester was much lower compared to cotton. Major textile production centres in Andhra Pradesh, Tamil Nadu and some northern states faced severe power shortage, adversely affecting output and profitability of mills. Labour shortage was another problem faced by the industry, the annual report noted.
Indian businesses also affected as office printers hit globally by 'gibberish' computer virus
London, June 23 (ANI): Thousands of office printers around the world have been spewing out page after page of gibberish after being hit with a computer virus.
As several companies complained that thousands of pages of paper were wasted when the Windows virus hit their computers, security firms said the worst hit were large businesses in the US, India, Europe, and South America.
According to the BBC, the virus is learnt to be a malicious program called Milicenso, which has been re-used many times by hi-tech crime groups.
Security firm Symantec, in a blogpost analysing the virus, claimed that Milicenso was first seen in 2010 and because it was a "malware delivery vehicle for hire" had turned up regularly ever since, while its most recent incarnation was as a tool for distributing French language adware.
Symantec said one side effect of infection was to generate a file in a PC's printer queue, which turns the contents of the files in the virus's main directory into print jobs.
"The garbled printouts appear to be a side effect of the infection vector rather an intentional goal of the author," said Symantec.
As several companies complained that thousands of pages of paper were wasted when the Windows virus hit their computers, security firms said the worst hit were large businesses in the US, India, Europe, and South America.
According to the BBC, the virus is learnt to be a malicious program called Milicenso, which has been re-used many times by hi-tech crime groups.
Security firm Symantec, in a blogpost analysing the virus, claimed that Milicenso was first seen in 2010 and because it was a "malware delivery vehicle for hire" had turned up regularly ever since, while its most recent incarnation was as a tool for distributing French language adware.
Symantec said one side effect of infection was to generate a file in a PC's printer queue, which turns the contents of the files in the virus's main directory into print jobs.
"The garbled printouts appear to be a side effect of the infection vector rather an intentional goal of the author," said Symantec.
The power of Compound interest
“Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.” ― Albert Einstein
In the book, “Once Upon a Wall Street”, Peter Lynch, one of the most successful mutual fund managers the Wall Street has ever seen, narrates a story. “Consider the Indians of Manhattan, who in 1625 sold all their real estate to a group of immigrants for $24 in trinkets and beads. For 362 years the Indians have been the subjects of cruel jokes because of it – but it turns out that they may have made a better deal than the buyers who got the island. At 8% interest on $24 ( note: let’s suspend our disbelief and assume they converted the trinkets to cash) compounded over all those years, the Indians would have built up a net worth just short $30 trillion, while the latest tax records from the Borough of Manhattan show the real estate to be worth only $28.1 billion. Give Manhattan the benefit of doubt: That $28.1 billion is the assessed value, and for all anybody knows, it may be worth twice that on the open market. So Manhattan’s worth $56.2 billion. Either way, the Indians could be ahead by $29 trillion and change.
This little story shows you the power of compounding and the points out the fact that the earlier you start investing the better it gets.
Illustration
Let’s try and understand this through an example of two friends, Ram and Shyam. Both start working at the same time at the age of 23. Ram starts saving when he turns 25 and invests Rs 50,000 every year. Assuming that on this he earns a return of 10% every year, at the end of ten years, Ram would be able to accumulate Rs 8.77 lakh. After this, due to financial constraints Ram is not able to invest any more money. But at the same time he does not touch the fund that he has already accumulated, hoping to live of it when he retires.
He lets the Rs 8.77 lakh grow and assuming that it continues to earn a return of 10% p.a., he would be able to accumulate around Rs 95 lakh by the time he turns 60. So the Rs 5 lakh (Rs 50,000 x 10 years) he had invested in the first ten years of his working life would have grown to Rs 95 lakh. This even though he stopped investing entirely after the first ten years.
Now let’s take the case of Shyam. Shyam believed in enjoying life, spending freely rather than saving regularly. However, at the age of 35 as reality dawns, he starts putting aside Rs 50,000 every year. Unlike his friend Ram, who stopped after the first ten years, Shyam religiously invests the amount each year for all of next twenty five years i.e. till he turns 60. Now, assuming he also earns a return of 10% per year on his investments, in the end, Shyam would have managed to accumulate Rs 54.10 lakh.
Putting it differently, even after investing Rs 50,000 regularly for twenty five years, Shyam has managed to accumulate Rs. 41 lakh lesser in comparison to Ram. Remember Ram has ended up investing only Rs 5 lakh in total over the ten years that he invested. In comparison, Shyam over the twenty five years invested Rs 12.5 lakh (Rs 50,000 x 25 years). So even by saving two and half times more than Ram, Shyam has managed to build a corpus which is 43% lower! This happened because Ram started investing earlier which in turn allowed the money to compound for a greater period of time.
Also as the corpus grows, the impact of compounding is greater. Ram as we know had managed to accumulate Rs 8.77 lakh after ten years after which he stopped investing, allowing the accumulated corpus to compound for twenty years more. In other words, the total life of the investment was for thirty years. However, had his investment time frame been till he turned 55 i.e. had the money compounded for twenty five years instead of thirty then at the end Ram would have accumulated a corpus of around Rs 59 lakh. By choosing to let his investment run for just an additional five years, Ram managed to accumulate Rs 45 lakh more.
Real Life Illustration
In terms of a practical example, let’s take the case of HDFC Equity Fund. The five year return of this fund is around 9.31% p.a. On the other hand, from inception (December 1994), the fund has returned 20.2% p.a. Now, had an investor invested say Rs. 50,000 five years back, the investment would have grown to around Rs. 78,000. However, had the investment been made at inception (allowing the money to compound over a greater period of time) the investment would have grown over 24 times to around Rs. 12 lakh.
As mentioned in the beginning of the column, Albert Einstein himself has called the power of compounding the eighth wonder of the world. In this article we have given various examples of how potent this power is when combined with its ally --- Father Time. It’s never too early nor too late to begin investing. Or to put it differently, better late than later.
The writer is Director, Wonderland Consultants, a tax and financial planning firm. He may be contacted at sandeep.shanbhag@gmail.com
Friday, June 22, 2012
AP to extend e-governance initiative to all districts
Hyderabad: The Andhra Pradesh Government will be extending its e-Governance initiative, ‘Mee Seva’ to all the districts. This was disclosed by the Chief Minister, Mr N. Kiran Kumar Reddy, in his inaugural address at the annual IT summit, Advantage AP 2012, which began here on Thursday.
Launched in November 2011 with the help of latest technology tools such as digital signatures, ‘Mee Seva’ is now offering about 30 services such as offering birth and death certificates to people in 13 districts.
“Today, there are 28,000 requests being processed every day. This will be ramped up to over one lakh transactions a day covering at least 100 services soon,” Mr Reddy said.
The common man in the State was able to obtain essential certificates in a digital, encrypted and secured format across the counter with almost no human intervention at a nominal fee, he added.
The State has many advantages for the ICT industry including talent. “Andhra Pradesh alone generates close to 30 per cent of the country’s total engineering talent output. This is in addition to the ‘walk to work’ kind of physical infrastructure,” he said.
“The outer-ring road project will be completed by next year. For better security and law and order, 3,000 cameras are being installed in important locations,” the Chief Minister said.
The State should be considered by the Union Government as one of the states for the proposed pilot project on electronic system design and manufacturing clusters, he said, adding all the logistics would be kept in place for the project.
For the year 2011-12, the export and domestic turnover of the ICT industry in the State was estimated to be around Rs 53,000 crore with a direct employment of 3.5 lakh, Mr Reddy said.
Launched in November 2011 with the help of latest technology tools such as digital signatures, ‘Mee Seva’ is now offering about 30 services such as offering birth and death certificates to people in 13 districts.
“Today, there are 28,000 requests being processed every day. This will be ramped up to over one lakh transactions a day covering at least 100 services soon,” Mr Reddy said.
The common man in the State was able to obtain essential certificates in a digital, encrypted and secured format across the counter with almost no human intervention at a nominal fee, he added.
The State has many advantages for the ICT industry including talent. “Andhra Pradesh alone generates close to 30 per cent of the country’s total engineering talent output. This is in addition to the ‘walk to work’ kind of physical infrastructure,” he said.
“The outer-ring road project will be completed by next year. For better security and law and order, 3,000 cameras are being installed in important locations,” the Chief Minister said.
The State should be considered by the Union Government as one of the states for the proposed pilot project on electronic system design and manufacturing clusters, he said, adding all the logistics would be kept in place for the project.
For the year 2011-12, the export and domestic turnover of the ICT industry in the State was estimated to be around Rs 53,000 crore with a direct employment of 3.5 lakh, Mr Reddy said.
All panchayats to have fibre optic connectivity in three years
Hyderabad: All gram panchayats in the country will be linked with optical fibre connectivity in the next two to three years. It will entail an investment of Rs 20,000 crore.
“This process is already rolled out and about 2.50 lakh panchayats will be covered under this programme,’’ Mr Sachin Pilot, Union Minister of State for Electronics and IT said in his address at the inaugural session of IT summit ‘Advantage AP 2012’ here on Thursday.
About 110 million people had access to the Internet now making India the third largest country in the world in terms of access after the US and China, he said.
“Once we provide open access optical fibre connectivity and roll-out 4G, there will be a bigger transformation,’’ Mr Pilot said. He asked the State Governments to provide free right of way to lay the cables so that the cost of providing optical fibre connectivity could be brought down. Referring to Andhra Pradesh’s proposal for setting up IT Investment Region around the State capital, Mr Pilot said the project might be approved in about three months.
Mr K.V. Kamath, Chairman, Infosys and ICICI Bank said the next big wave for Indian IT industry should be innovation. With connectivity reaching over 700 million people and cost of devices coming down, it would be reality. Even now, 40 million plus people were online throught their hand-held device, he added.
Referring to Infosys operations in Hyderabad, Mr Kamath said the company’s manpower would continue to grow by 25 per cent per annum. Infosys has 22,000 employees here and has been hiring 6,000 every year.
The Chief Ministersaid the industry should make Andhra Prasesh as a preferred investment destination.
“This process is already rolled out and about 2.50 lakh panchayats will be covered under this programme,’’ Mr Sachin Pilot, Union Minister of State for Electronics and IT said in his address at the inaugural session of IT summit ‘Advantage AP 2012’ here on Thursday.
About 110 million people had access to the Internet now making India the third largest country in the world in terms of access after the US and China, he said.
“Once we provide open access optical fibre connectivity and roll-out 4G, there will be a bigger transformation,’’ Mr Pilot said. He asked the State Governments to provide free right of way to lay the cables so that the cost of providing optical fibre connectivity could be brought down. Referring to Andhra Pradesh’s proposal for setting up IT Investment Region around the State capital, Mr Pilot said the project might be approved in about three months.
Mr K.V. Kamath, Chairman, Infosys and ICICI Bank said the next big wave for Indian IT industry should be innovation. With connectivity reaching over 700 million people and cost of devices coming down, it would be reality. Even now, 40 million plus people were online throught their hand-held device, he added.
Referring to Infosys operations in Hyderabad, Mr Kamath said the company’s manpower would continue to grow by 25 per cent per annum. Infosys has 22,000 employees here and has been hiring 6,000 every year.
The Chief Ministersaid the industry should make Andhra Prasesh as a preferred investment destination.
Auto components maker Faurecia plans to grow Asia business
Pune: French auto components maker Faurecia has set up a new, expanded R&D facility at Pune to grow the Asia business.
The new Tech Centre will cater to conceptualising, designing and validation for products in automotive interior systems, automotive seating and auto exteriors, three of its four business groups.
Asia-Pacific is a top priority for Faurecia Interior Systems (FIS), Mr Christophe Schmitt, Executive Vice-President, FIS said. He added that in India, Pune, Chennai and Delhi are the three main clusters the company will follow.
The Group is targeting sales from the APAC region to touch €4 billion by 2015. While the main growth will come from China, India is also important, he said, adding, “Our goal is that 50 per cent of our global sales will come from outside Europe by 2015.” Currently, Europe accounts for 62 per cent of its business.
Faurecia’s R&D Centre at Pune has already been operational since 2004 and has filed two patents last year. This year the company has a target to file five patents. Set up with an investment of Rs 110 crore, the new Tech Centre is an autonomous, fully integrated facility designed to accommodate 800 engineers, of which 600 are already on board.
Mr Schmitt said that the company aims to develop products that are high on safety, quality and comfort here.
Globally, nearly 39 per cent of Faurecia’s revenues come from German automakers including VW, BMW and Daimler.
The premium brands represent 28 per cent of revenue worldwide. In India it supplies components to OEMs such as Mercedes, M&M, Hyundai and Ford.
The Pune Tech Centre is Faurecia’s second centre in India after Bangalore where Emission Control Technologies are developed. The company also has nine manufacturing plants in the country.
GSM telcos add 7.27 million users in May, Bharti Airtel leads
Kolkata: The country's top mobile carrier, Bharti Airtel, enrolled nearly 28% of the 7.27 million subscribers that GSM operators added in May, according to data released by the Cellular Operators Association of India ( COAI) on Thursday.
Airtel, which has a market share of 27.34 %, added 2.01 million subscribers in May, taking its total subscriber base to 185.30 million, the GSM industry lobby said. The country's total GSM user base climbed to 677.85 million at the end of May.
Maximum additions in excess of 1.44 million transpired in UP (East), accounting for nearly 20% of the total subscriber additions, the industry body said. The latest subscriber growth numbers come even as the Pranab Mukherjee-headed panel of ministers is slated to finalise all issues relating to the upcoming 2G spectrum auctions.
Vodafone India, with a market share of 22.50%, added 1.2 million customers during the month, taking its subscriber base to 152.48 million, while Aditya Birla group firm Idea Cellular added 1.75 million customers, taking its total subscriber base to nearly 116 million. Aircel, however, saw fewer customers additions at 0.8 million than 1.01 million recorded in April.
MTNL lost nearly 0.17 million customers causing its end-May subscriber base to plunge to 5.31 million from 5.48 million in April. Uninor, majority owned by Norway's Telenor, added 1.52 million customers last month, taking its user base to 45.07 million.
In fact, its market share climbed to 6.65% from 6.49% last month even though Uninor's future remains uncertain after the Supreme Court cancelled its pan-India mobile permit in February and has asked the government to issue fresh licences through an auction.
The latest spurt in subscriber numbers comes after all leading GSM operators like Bharti, Idea, Vodafone, Aircel and MTNL dropped their 3G price plans last month to woo more customers to take up high-end data services like video conferencing on mobiles, hitherto, considered exorbitant.
Airtel, which has a market share of 27.34 %, added 2.01 million subscribers in May, taking its total subscriber base to 185.30 million, the GSM industry lobby said. The country's total GSM user base climbed to 677.85 million at the end of May.
Maximum additions in excess of 1.44 million transpired in UP (East), accounting for nearly 20% of the total subscriber additions, the industry body said. The latest subscriber growth numbers come even as the Pranab Mukherjee-headed panel of ministers is slated to finalise all issues relating to the upcoming 2G spectrum auctions.
Vodafone India, with a market share of 22.50%, added 1.2 million customers during the month, taking its subscriber base to 152.48 million, while Aditya Birla group firm Idea Cellular added 1.75 million customers, taking its total subscriber base to nearly 116 million. Aircel, however, saw fewer customers additions at 0.8 million than 1.01 million recorded in April.
MTNL lost nearly 0.17 million customers causing its end-May subscriber base to plunge to 5.31 million from 5.48 million in April. Uninor, majority owned by Norway's Telenor, added 1.52 million customers last month, taking its user base to 45.07 million.
In fact, its market share climbed to 6.65% from 6.49% last month even though Uninor's future remains uncertain after the Supreme Court cancelled its pan-India mobile permit in February and has asked the government to issue fresh licences through an auction.
The latest spurt in subscriber numbers comes after all leading GSM operators like Bharti, Idea, Vodafone, Aircel and MTNL dropped their 3G price plans last month to woo more customers to take up high-end data services like video conferencing on mobiles, hitherto, considered exorbitant.
India has potential to become R&D hub
A study says India has become a key contributor in global research and of growth in the Asia-Pacific region, playing host to one-third of top 1000 R&D spenders in the world.
The study done by market advisory firm Zinnov, 'Global R&D Benchmarking Study: FY2011' analyzed trends in R&D investments globally.
After witnessing a decline in global R&D spending in FY2010, the study says the FY2011 has seen an increase in spending and the potential for India to be among the top nations for R&D has only gotten stronger.
Commenting on the study, Sidhant Rastogi, director - Globalization Advisory, Zinnov, said: "The sentiment on the role of R&D in driving the future continues to remain positive across geographies, supported by the significant increase in R&D spending in FY2011. Global R&D investments have grown by 8.2% as compared to previous year FY2010. This growth has been primarily driven by organizations in the semiconductor, industrial and consumer hardware and electrical & electronic sectors".
"India definitely has the right potential to become a key R&D hub, not only in software for which it has gained recognition globally, but also in other verticals such as aerospace, automotive and defense", he added. One of the key highlights of the report is that there is a talent pool of 220,000 in MNC subsidiaries in the country, and these MNCs have spent $7-7.5 billion on the headcount in India in FY2011 alone. The study also found that the opportunity areas for India to attract R&D investment span over 13 sectors, with software being the most invested-in sector. Global net sales and global R&D spending have grown at 13.55% and 8.2% respectively with the contribution of spend divided across North America, European Union and APAC regions.
The total R&D investment globally is on the rise, and the North America and EU region continue to dominate. The contribution of R&D investment from across geographies is 36% for North American companies, 34% for European Union headquartered companies and 7% for APAC companies. Though the APAC regions contribution (as a percentage of global R&D spend) is seemingly small, what is noteworthy is that within the region R&D investments have increased a significant 28% as against the previous year.
The study done by market advisory firm Zinnov, 'Global R&D Benchmarking Study: FY2011' analyzed trends in R&D investments globally.
After witnessing a decline in global R&D spending in FY2010, the study says the FY2011 has seen an increase in spending and the potential for India to be among the top nations for R&D has only gotten stronger.
Commenting on the study, Sidhant Rastogi, director - Globalization Advisory, Zinnov, said: "The sentiment on the role of R&D in driving the future continues to remain positive across geographies, supported by the significant increase in R&D spending in FY2011. Global R&D investments have grown by 8.2% as compared to previous year FY2010. This growth has been primarily driven by organizations in the semiconductor, industrial and consumer hardware and electrical & electronic sectors".
"India definitely has the right potential to become a key R&D hub, not only in software for which it has gained recognition globally, but also in other verticals such as aerospace, automotive and defense", he added. One of the key highlights of the report is that there is a talent pool of 220,000 in MNC subsidiaries in the country, and these MNCs have spent $7-7.5 billion on the headcount in India in FY2011 alone. The study also found that the opportunity areas for India to attract R&D investment span over 13 sectors, with software being the most invested-in sector. Global net sales and global R&D spending have grown at 13.55% and 8.2% respectively with the contribution of spend divided across North America, European Union and APAC regions.
The total R&D investment globally is on the rise, and the North America and EU region continue to dominate. The contribution of R&D investment from across geographies is 36% for North American companies, 34% for European Union headquartered companies and 7% for APAC companies. Though the APAC regions contribution (as a percentage of global R&D spend) is seemingly small, what is noteworthy is that within the region R&D investments have increased a significant 28% as against the previous year.
Thursday, June 21, 2012
Green buildings gain momentum in India
An R&D centre gives back more power than it takes; a residential complex and a hospital have cut power and water consumption by 40-60 per cent. Green buildings are gaining momentum and could account for 20 per cent of all construction by 2030.
If you want a taste of the green building movement in India, there are plenty of interesting places to visit in cities. ZedEarth, a residential enclave being developed about 20 km from the heart of Bangalore, is as good a place as any if your interest is in green homes. This 20-acre enclave is being developed for around 130 villas that do not rely on the external world for basic needs, barring 15 per cent of its power requirements. It does not use deep bore wells but would have sufficient fresh water. No sewage or water or waste is let out of the enclave, except things like old electronic equipment or some recyclable items.
Zed Earth is not sold at a premium. It does not use sophisticated technology either. It uses instead a sophisticated mindset to analyse the finer points of living and save resources. Most of its electricity needs are met by solar panels, and unused electricity is given to the grid. All the water is recycled, bio waste composted, and clinical waste used in 'scientific landfills' inside the enclave. Recycling agencies take care of the rest of the waste. The villas themselves are marvels of low-footprint design, bringing nature inside as much as possible. It restricts water and energy use by nearly 60 per cent of non-green homes.
ZedEarth is built by Biodiversity Conservation India Ltd (BCIL), which had built India's first platinum-rated green home in the city. Set up in 1995, BCIL has remained small and has focused on developing deeplyresearched and intensely-specific homes for different locations. "We consider ourselves pioneers rather than leaders," says its founder-chairman Chandrashekar Hariharan. This is because BCIL's efforts are increasingly being muffled by the din of larger and more ambitious projects now sprouting around the country. According to the India Green Building Council (IGBC), 450 million square feet of green homes have come up in India now. This is apart from the green homes certified by Griha, the agency managed by the Ministry of New and Renewable Energy (MNRE).
The Indian green building movement is now so deep and vast that it promises to change the course of its construction industry. The country has 1.2 billion square feet of green buildings being built or ready, and pre-certified by Leadership in Energy and Environmental Design (LEED), of which IGBC is the representative in India. It has another 105 million square feet of Griha-certified buildings ready or being built. India's total built-up space is 25 billion square feet, and it is expected to increase to 80 billion by 2030. The share of green buildings in this construction boom could be as high as 20 per cent. New cities, such as those coming up along the Delhi Mumbai Industrial Corridor (DMIC), would have a substantially higher green building component. Says Prem Jain, chairman of IGBC: "Since 60 per cent of the buildings that would exist in 2030 are yet to be built, we have a big opportunity to develop environment-friendly cities in the country." IGBC estimates that green building products provide a $100-billion opportunity by 2015.
The country's green buildings span a large variety. They include corporate campuses, residential complexes, R&D units, commercial complexes, universities, hospitals, factories, schools, hotels and so on. The truly environment-conscious aim for nothing less than a platinum rating, and sometimes exceed even all LEED requirements. The government, aided by the National Building Code and energy efficiency laws, has been pushing all builders to confirm to minimum standards in cities and towns. Some municipalities (Pimpri in Maharashtra is an example), seeing the reduced need for services in green buildings, now offer incentives in the form of lower taxes. New campuses of the Indian Institutes of Science Education and Research (IISER) are being developed as zero waste campuses. The green building movement has penetrated even slums, as is evident from the slum rehabilitation at Lonar in Maharashtra. Says Priyanka Kochhar, programme manager of Griha: "We develop ratings for green buildings right from slums to large multistoried complexes."
Noida near Delhi is one of the nodes of the green building movement. The builder 3C was an early mover. 3C built what was the country's largest green apartment complex. Called Lotus Boulevard, this was planned as a 500-unit complex, but all of it was immediately sold out and the enclave ended with 3000 units. The success of this project and some incentives by the Uttar Pradesh government have led to a rush of green building development in Noida. None of them is probably more impressive than the Bayer ECB Centre of Excellence. It claims to have bagged highest number of points in its LEED certification process, making it the greenest LEED certified building in the world.
The building is the R&D centre of Bayer Material Science. It is inside a larger campus of Bayer, with buildings that are attached to it electrically. The R&D centre, which has solar panels, draws power from the other building at night but gives it back during the day. Last year it gave back more than it took, thus making it a net-positive energy building, but Bayer claims it to be only a net-zero energy building. "We have ensured that we get segment-wise energy consumption data from each part of the building," says Ram Sai Yelaminchili, head of the centre. "That helps us monitor and control energy consumption efficiently."
The R&D centre becomes a net zero energy building not by generating a lot of electricity but by incorporating features that are now becoming common in many platinum-rated green buildings in the country. It uses natural light during the day, and through good design - that uses a mixture of wall and glass - and orientation ensure that light gets through without heat. High quality foams insulate the building, making sure that heat is not let in during summer and not let out during winter. "It does not need very high technology to make a building energy efficient," says Jain. But high technology helps sometimes, and ingenuity helps even more than technology.
Take the Beary Golden Research Triangle (BGRT) in Bangalore, a name inspired by both the triangular nature of the land and the Research Triangle in North Carolina. This building, when ready for occupation in four months, would be let out mostly to R&D units of companies. Two major multinational companies have taken up space for global R&D centres. BGRT has been pre-certified as a platinum-rated building - the final certification is usually given after the construction is complete and occupants have moved in - and it has design features that will become common in many large buildings across the country.
Visitors would note from a distance the unusual alignment of the building. It slopes on one side, thus keeping out direct sunlight till late afternoon. The glazing lets light through but not heat. The air-conditioning is extremely efficient; the outgoing air partly cools the incoming air without mixing, and water cools it further and minimizes the energy consumption. It is designed to use air from outside for cooling when outside temperature is below a certain level, a feature that is very useful in the salubrious climate of Bangalore. Says Syed Mohammed Beary, chairman of the Beary Group: "This is the first time a private developer has built a platinum-certified commercial R&D space."
Such features are part of many buildings certified by LEED or Griha. Technology comes in handy too, especially in large corporate offices. You could have the most energy-efficient lighting in the world, but leaving the lights on all the time defeats the original purpose. In the year 2008, a study commissioned by the US non-profit New Buildings Institute showed that some green buildings do not save energy as much as planned. Many green buildings now avoid this problem by becoming smart. "Smart technologies are necessary to minimise energy consumption," says Sandeep Dave, principal of Booz & Company, who studies smart buildings in the country.
Many green buildings now use Intelligent Building Management Systems (IBMS) to optimise energy consumption. "IBMS is not just about controlling the entry and exit of people," says Srimanikandan Ramamoorthy, assistant vice-president of administration at Cognizant, who is overseeing the development of a large green campus in Chennai. In three other gold-rated campuses in the country, Cognizant has reduced per capita carbon dioxide emissions by 35 per cent and energy use by 34 per cent. "Many buildings are over-optimised," says Honeywell Automation India managing director Anant Maheswari. "IBMS can save 20-30 per cent of energy used." Honeywell and other IBMS companies have been involved in a large number of green buildings in the country.
While smart technologies are useful, smart strategy works even well after certification. That is how Kohinoor Hospital in Mumbai, Asia's only LEED-certified and platinum-rated hospital, slashed its electricity bills by a third, its water taxes by a fourth and substantially increased patient footfall after certification. "When we save on water and electricity costs, these benefits get passed on to patients who pay less for their treatment," says Rajeev Boudhankar, vice president of Kohinoor Hospital. Because of the nature of their business, which requires round-the-clock operation, hospitals find it hard to get LEED certifications.
"You are open day and night, running facilities that are highly energy-consuming," says Sandeep Shikre of SSA Architects and IGBC member. This puts tremendous pressure on your power resources." The IGBC also awarded points to the hospital for some of its human resource initiatives, like encouraging employees to car-pool to work and limiting the total parking area to only 10 per cent of the plan.
Such extensions of the green concept are not uncommon in other green buildings. Wipro, which has the largest number of LEED-certified office campuses in the world, has now started looking 20 years ahead and merge its building futures with the master plan of the area. Its aim is to build an ecological plan that fits with the master plan. "We are linking sustainability across the supply chain," says Hari Hegde, Wipro's global head of operations. It is now studying the impact on the surroundings of a Bangalore campus that is being built. Companies now want to see how their campuses influence the life around them. Being green is acquiring a new meaning, which will drive the growth of sustainable cities.
If you want a taste of the green building movement in India, there are plenty of interesting places to visit in cities. ZedEarth, a residential enclave being developed about 20 km from the heart of Bangalore, is as good a place as any if your interest is in green homes. This 20-acre enclave is being developed for around 130 villas that do not rely on the external world for basic needs, barring 15 per cent of its power requirements. It does not use deep bore wells but would have sufficient fresh water. No sewage or water or waste is let out of the enclave, except things like old electronic equipment or some recyclable items.
Zed Earth is not sold at a premium. It does not use sophisticated technology either. It uses instead a sophisticated mindset to analyse the finer points of living and save resources. Most of its electricity needs are met by solar panels, and unused electricity is given to the grid. All the water is recycled, bio waste composted, and clinical waste used in 'scientific landfills' inside the enclave. Recycling agencies take care of the rest of the waste. The villas themselves are marvels of low-footprint design, bringing nature inside as much as possible. It restricts water and energy use by nearly 60 per cent of non-green homes.
ZedEarth is built by Biodiversity Conservation India Ltd (BCIL), which had built India's first platinum-rated green home in the city. Set up in 1995, BCIL has remained small and has focused on developing deeplyresearched and intensely-specific homes for different locations. "We consider ourselves pioneers rather than leaders," says its founder-chairman Chandrashekar Hariharan. This is because BCIL's efforts are increasingly being muffled by the din of larger and more ambitious projects now sprouting around the country. According to the India Green Building Council (IGBC), 450 million square feet of green homes have come up in India now. This is apart from the green homes certified by Griha, the agency managed by the Ministry of New and Renewable Energy (MNRE).
The Indian green building movement is now so deep and vast that it promises to change the course of its construction industry. The country has 1.2 billion square feet of green buildings being built or ready, and pre-certified by Leadership in Energy and Environmental Design (LEED), of which IGBC is the representative in India. It has another 105 million square feet of Griha-certified buildings ready or being built. India's total built-up space is 25 billion square feet, and it is expected to increase to 80 billion by 2030. The share of green buildings in this construction boom could be as high as 20 per cent. New cities, such as those coming up along the Delhi Mumbai Industrial Corridor (DMIC), would have a substantially higher green building component. Says Prem Jain, chairman of IGBC: "Since 60 per cent of the buildings that would exist in 2030 are yet to be built, we have a big opportunity to develop environment-friendly cities in the country." IGBC estimates that green building products provide a $100-billion opportunity by 2015.
The country's green buildings span a large variety. They include corporate campuses, residential complexes, R&D units, commercial complexes, universities, hospitals, factories, schools, hotels and so on. The truly environment-conscious aim for nothing less than a platinum rating, and sometimes exceed even all LEED requirements. The government, aided by the National Building Code and energy efficiency laws, has been pushing all builders to confirm to minimum standards in cities and towns. Some municipalities (Pimpri in Maharashtra is an example), seeing the reduced need for services in green buildings, now offer incentives in the form of lower taxes. New campuses of the Indian Institutes of Science Education and Research (IISER) are being developed as zero waste campuses. The green building movement has penetrated even slums, as is evident from the slum rehabilitation at Lonar in Maharashtra. Says Priyanka Kochhar, programme manager of Griha: "We develop ratings for green buildings right from slums to large multistoried complexes."
Noida near Delhi is one of the nodes of the green building movement. The builder 3C was an early mover. 3C built what was the country's largest green apartment complex. Called Lotus Boulevard, this was planned as a 500-unit complex, but all of it was immediately sold out and the enclave ended with 3000 units. The success of this project and some incentives by the Uttar Pradesh government have led to a rush of green building development in Noida. None of them is probably more impressive than the Bayer ECB Centre of Excellence. It claims to have bagged highest number of points in its LEED certification process, making it the greenest LEED certified building in the world.
The building is the R&D centre of Bayer Material Science. It is inside a larger campus of Bayer, with buildings that are attached to it electrically. The R&D centre, which has solar panels, draws power from the other building at night but gives it back during the day. Last year it gave back more than it took, thus making it a net-positive energy building, but Bayer claims it to be only a net-zero energy building. "We have ensured that we get segment-wise energy consumption data from each part of the building," says Ram Sai Yelaminchili, head of the centre. "That helps us monitor and control energy consumption efficiently."
The R&D centre becomes a net zero energy building not by generating a lot of electricity but by incorporating features that are now becoming common in many platinum-rated green buildings in the country. It uses natural light during the day, and through good design - that uses a mixture of wall and glass - and orientation ensure that light gets through without heat. High quality foams insulate the building, making sure that heat is not let in during summer and not let out during winter. "It does not need very high technology to make a building energy efficient," says Jain. But high technology helps sometimes, and ingenuity helps even more than technology.
Take the Beary Golden Research Triangle (BGRT) in Bangalore, a name inspired by both the triangular nature of the land and the Research Triangle in North Carolina. This building, when ready for occupation in four months, would be let out mostly to R&D units of companies. Two major multinational companies have taken up space for global R&D centres. BGRT has been pre-certified as a platinum-rated building - the final certification is usually given after the construction is complete and occupants have moved in - and it has design features that will become common in many large buildings across the country.
Visitors would note from a distance the unusual alignment of the building. It slopes on one side, thus keeping out direct sunlight till late afternoon. The glazing lets light through but not heat. The air-conditioning is extremely efficient; the outgoing air partly cools the incoming air without mixing, and water cools it further and minimizes the energy consumption. It is designed to use air from outside for cooling when outside temperature is below a certain level, a feature that is very useful in the salubrious climate of Bangalore. Says Syed Mohammed Beary, chairman of the Beary Group: "This is the first time a private developer has built a platinum-certified commercial R&D space."
Such features are part of many buildings certified by LEED or Griha. Technology comes in handy too, especially in large corporate offices. You could have the most energy-efficient lighting in the world, but leaving the lights on all the time defeats the original purpose. In the year 2008, a study commissioned by the US non-profit New Buildings Institute showed that some green buildings do not save energy as much as planned. Many green buildings now avoid this problem by becoming smart. "Smart technologies are necessary to minimise energy consumption," says Sandeep Dave, principal of Booz & Company, who studies smart buildings in the country.
Many green buildings now use Intelligent Building Management Systems (IBMS) to optimise energy consumption. "IBMS is not just about controlling the entry and exit of people," says Srimanikandan Ramamoorthy, assistant vice-president of administration at Cognizant, who is overseeing the development of a large green campus in Chennai. In three other gold-rated campuses in the country, Cognizant has reduced per capita carbon dioxide emissions by 35 per cent and energy use by 34 per cent. "Many buildings are over-optimised," says Honeywell Automation India managing director Anant Maheswari. "IBMS can save 20-30 per cent of energy used." Honeywell and other IBMS companies have been involved in a large number of green buildings in the country.
While smart technologies are useful, smart strategy works even well after certification. That is how Kohinoor Hospital in Mumbai, Asia's only LEED-certified and platinum-rated hospital, slashed its electricity bills by a third, its water taxes by a fourth and substantially increased patient footfall after certification. "When we save on water and electricity costs, these benefits get passed on to patients who pay less for their treatment," says Rajeev Boudhankar, vice president of Kohinoor Hospital. Because of the nature of their business, which requires round-the-clock operation, hospitals find it hard to get LEED certifications.
"You are open day and night, running facilities that are highly energy-consuming," says Sandeep Shikre of SSA Architects and IGBC member. This puts tremendous pressure on your power resources." The IGBC also awarded points to the hospital for some of its human resource initiatives, like encouraging employees to car-pool to work and limiting the total parking area to only 10 per cent of the plan.
Such extensions of the green concept are not uncommon in other green buildings. Wipro, which has the largest number of LEED-certified office campuses in the world, has now started looking 20 years ahead and merge its building futures with the master plan of the area. Its aim is to build an ecological plan that fits with the master plan. "We are linking sustainability across the supply chain," says Hari Hegde, Wipro's global head of operations. It is now studying the impact on the surroundings of a Bangalore campus that is being built. Companies now want to see how their campuses influence the life around them. Being green is acquiring a new meaning, which will drive the growth of sustainable cities.
RBI issues norms for non-bank entities to set up ATMs
Mumbai: An ATM at every nook and cranny may become a reality in a couple of years.
The Reserve Bank of India has issued final guidelines permitting permit non-bank entities to set up, own and operate ATMs in India. This is to ensure the expansion of ATMs in smaller centres across the country.
The ATM roll-out conditions stipulated for the non-bank entities, which will be christened as white label ATM operators (WLAOs), are stiff. It has prescribed three schemes under which the roll-out of white label ATMs (WLAs) can happen.
Three schemes
Under the first scheme, WLAOs have to install at least 1000 WLAs in the first year; in the second year install at least twice the number installed in the first year; and in the third year install at least thrice the number installed in the second year.
Under the aforementioned scheme, for every three WLAs installed in Tier III to VI centres, one WLA can be installed in Tier I (metros) to II centres (big cities).
Under the second scheme, WLAOs have to install at least 5000 WLAs every year for three years. For every two WLAs installed in Tier III to VI centres, one WLA can be installed in Tier I to II centres.
Under the third scheme, WLAOs have to install at least 25,000 WLAs in the first year and at least another 25,000 in the next two years. For every one WLA installed in Tier III to VI centres, one WLA can be installed in Tier I to II centres.
What is common under the three schemes is that out of the WLAs installed in Tier III to VI centres, a minimum of 10 per cent should be installed in Tier V and VI centres.
No switchover possible
The RBI has stipulated that no switchover of schemes is permissible. The date for determining the time line for implementation would commence 30 days after issuance of the authorisation.
Non-bank entities intending to set up WLAs may approach the RBI within four months from the date of issuance of these guidelines, beyond which the authorisation-seeking window will be closed.
Only cards issued by banks in India (domestic cards) will be permitted to be used at the WLAs in the initial stage
The RBI observed that although there has been 23-25 per cent year-on-year growth in the number of ATMs (over 90,000 currently), their deployment has been predominantly in Tier I and II centres.
The regulator said that there is a need to expand the reach of ATMs in Tier III to VI centres. In spite of banks’ pioneering efforts in this direction, much needs to be done. Hence, the need for WLAs.
Indian drug outlook favourable: ICRA & Moody's
Ahmedabad: Outlook on the Indian pharmaceutical industry remains favourable, says ICRA & Moody report released on Wednesday. Domestic formulation market grew by 13-16% per annum in last five years.
According to the report, domestic formulation market size stood at Rs 58,300 crore, ranked third in terms of volume and tenth in terms of value, globally. The domestic growth was driven mainly by expansion in volumes and new introductions. Lifestyle-related disorders are driving growth at faster pace in chronic segments along with increasing healthcare spending.
Product patent regime was not a major constraint currently, as companies have however, not been affected as existing products continue to exhibit extended life cycle and companies continue to launch novel combinations to support growth. Lastly, limited number of products have been launched under patent protection in India. Compulsory licensing route also provides faster access to market
However, domestic companies will face challenges and competition from regulatory driven price cuts, smaller players aggression and MNCs generic majors are setting an eye on the $12-13 billion market growing at 14-15% per annum.
From 2011, trends are changing, MNCs has stepped up their focus on the Indian market as they are pursuing a comprehensive strategy. They are focusing on chronics, branded generics and launching patented products from portfolio of parent companies. Expanding their field force and focusing on Tier -II as well as Tier - IV towns. Domestic market grew at 15%, while MNC pharma revenue grew at 18.7%.
For Indian companies eyeing US generics market, seven out of the top 20 innovators products will face generic competition in 2012 with $35 billion in value. Key products losing patent protections in 2012 include - Lexapro, Geodon, Seroquel, Plavix, Tricor, Singulair and Actos. Branded drugs worth $70 billion are likely to loose patent protections between 2013-17, the report indicates.
According to the report, domestic formulation market size stood at Rs 58,300 crore, ranked third in terms of volume and tenth in terms of value, globally. The domestic growth was driven mainly by expansion in volumes and new introductions. Lifestyle-related disorders are driving growth at faster pace in chronic segments along with increasing healthcare spending.
Product patent regime was not a major constraint currently, as companies have however, not been affected as existing products continue to exhibit extended life cycle and companies continue to launch novel combinations to support growth. Lastly, limited number of products have been launched under patent protection in India. Compulsory licensing route also provides faster access to market
However, domestic companies will face challenges and competition from regulatory driven price cuts, smaller players aggression and MNCs generic majors are setting an eye on the $12-13 billion market growing at 14-15% per annum.
From 2011, trends are changing, MNCs has stepped up their focus on the Indian market as they are pursuing a comprehensive strategy. They are focusing on chronics, branded generics and launching patented products from portfolio of parent companies. Expanding their field force and focusing on Tier -II as well as Tier - IV towns. Domestic market grew at 15%, while MNC pharma revenue grew at 18.7%.
For Indian companies eyeing US generics market, seven out of the top 20 innovators products will face generic competition in 2012 with $35 billion in value. Key products losing patent protections in 2012 include - Lexapro, Geodon, Seroquel, Plavix, Tricor, Singulair and Actos. Branded drugs worth $70 billion are likely to loose patent protections between 2013-17, the report indicates.
Malaysia and India bi-lateral trade at an all time high
The growth in the merchandise trade between Malaysia and India has reached an all-time high, with over US$10 billion worth of trade transacted for the year 2011. Total trade between Malaysia and India for 2011 was US$12.54 billion, an increase of 40% compared to US$8.98 billion in 2010. This impressive growth has been predominantly attributed to the burgeoning economies of both nations and the strengthening of bilateral trade between the two countries.
Beginning with an exponential rise in the tourism, the relationship between the two countries has been further enhanced, opening new avenues for Malaysia and India to benefit mutually from each other's economies. Over the past 10 years, trade between Malaysia and India has seen a healthy average growth rate of over 15.6% p.a.
In spite of a slowdown in the global trading scenario, Malaysia has shown signs of rapid growth, recording a total trade value of US$415 billion in 2011 - the highest ever achieved. For the 14 thconsecutive year, Malaysia has recorded a trade surplusfigure of US$39 billion - a growth rate of 9.4% for the year 2011. The merchandising trade has registered an impressive growth of 8.7% p.a. with exports from Malaysia growing to US$226.98 billion, while imports recorded a figure of US$187.66 billion - an 8.6% rise. This notable feat is at par with other developed countries in the region, like Singapore and ROK, which have registered similar records.
According to the World Competitiveness Yearbook 2011 Report by the Institute for Management Development (IMD), Malaysia has been ranked among the Top 5 countries in terms of international trade, after Singapore and Hong Kong. Malaysia has now surpassed most of the developed countries such as the USA, Switzerland, Australia, Canada and the United Kingdom, in terms of international trade
Leaders agree policies must shift to boost growth: PM
Los Cabos: India today said the heads of G-20 nations agreed policies in these countries must target growth. It also expressed satisfaction on the fact that the leaders agreed to India’s appeal to augment resources of multi-lateral development banks to fund infrastructure needs in developing and poor countries.
Prime Minister Manmohan Singh said, “My overall assessment of the meeting is there was a general agreement that policies in all countries must shift to strengthening growth. There are many things that have to be done to achieve this. There was also a general agreement that the most urgent problem we must tackle is reducing uncertainty about the Euro zone.”
He said the G-20 summit was held amid very difficult circumstances. “Faltering growth in most countries was overshadowed by the threat of uncertainty in the Euro zone, arising from a combination of excessive sovereign debt and banking weakness. The summit provided a very valuable opportunity for G-20 leaders to share their concerns.”
The prime minister said the Los Cabos Declaration fully reflected India’s demand that infrastructure investment in developing countries could play a major role in stimulating a global recovery. The declaration indicates multilateral development banks should be strengthened for this purpose. “We would work with G-20 countries to transform their commitment to specific action,” Singh said.
At the opening of the summit on June 18, Singh had suggested resources of multi lateral development banks be enhanced for lending to infrastructure needs of both poor, as well as developing countries to stimulate growth there, as the Euro zone crisis had choked capital inflow into these nations.
He said Euro zone leaders had assured other G-20 countries they were committed to protecting the integrity of the Euro zone. “They recognise the need to move beyond the present monetary union towards unified banking supervision and adoption of common and enforceable fiscal rules,” he said.
However, this would be a gradual process.” Making changes in treaties involving 17 parliaments (for the Euro zone) and 27 (for the European Union) is a time-consuming process,” Singh said.
Euro zone leaders indicated a strong commitment to take whatever action was needed to protect the Euro area, as long-term institutional structures were built, Singh said, adding they would be able to give more specific indications after the European Summit.
He added India’s contribution of $10 billion to the International Monetary Fund reflected its recognition of the fact that it should play its part as a responsible player in the global community.
The IMF has assured contributors it would be available whenever needed, he said, adding, “It will, therefore, continue to form part of our reserves.”
Many leaders had also emphasised the importance of accelerating governance reforms in the IMF, including a change in the quota formula to reflect economic weight, he said.
He added the summit also reiterated the stand against new protectionist measures.
“This is an important statement of intent by G-20 leaders to resist protectionist tendencies, which, typically, increase in periods of high unemployment and low growth,” he said.
Wednesday, June 20, 2012
Diabetes, skin care will hold key for drug makers' growth: Credit Suisse
Mumbai: The next round of growth for Indian pharma companies will be driven by the fastest growing molecules in the diabetes, skincare and eye care segment according to a report by research firm Credit Suisse.
The market share of a drug company is directly related to the number of fast growing molecules in the company's pipeline, the report said.
"Every company wants to be present in the fastest-growing and high-margin molecules and launching products in the high growth segment in India is not difficult. However, in our view, execution on high growth molecules holds key" said Anubhav Agarwal, research analyst Credit Suisse in the report titled 'Does bottom analysis matter?'
According to the report 15% of sales of Indian drug makers is driven by molecules which are growing at less than 5% , and 1/6 thof sales are contributed by molecules that are growing at more than 30%, these are primarily the diabetes and cardiac products.
Credit Suisse is betting on the diabetes therapy that would play significant role in pushing the company's revenues. It says that half of diabetes segment in India is growing is a rate of 30% with maximum chunk of revenue coming from the high growing molecules. This is followed by dermatology where 70% of sales come from molecules that are growing above 15% followed by eye care molecules.
The report has given a buy call on Sun Pharma, Lupin and Glenmark, as according to the firm these companies have the best overall portfolio in the fast growing segments.
BhartiSoftBank ,Yahoo! Japan tie-up to provide mobile internet
New Delhi: BhartiSoftbank (BSB), a 50:50 joint venture (JV) between Bharti Enterprises and SoftBank, on Tuesday partnered with Yahoo! Japan for developing mobile internet portal for the Indian market.
The companies have formed a JV company christened BSY Pte Ltd for this purpose. The new company would combine Bharti’s Indian market with SofBank group’s (Japan) experience in internet portal space.
BSB was launched in October 2011 to focus on mobile internet in India.
“This will be an important piece in our strategy to drive the uptake of mobile internet and data services,” Mr Kavin Bharti Mittal, Head of Strategy & New Product Development, BSB said.
Yahoo! Japan, with over 84 per cent internet users using it, has largest user base on mobile in Japan driven by its mobile internet portal.
“The Indian market will see growth of data usage on mobile. Through this partnership we hope to contribute to enhance people’s lives through mobile internet,” Mr Shin Murakami, Chief Mobile Officer of Yahoo! Japan said.
Tommy Hilfiger on expansion spree in India; other retailers entering the market through joint ventures
New Delhi/Bangalore: American apparel-maker Tommy Hilfiger plans to add 500 stores in India over the next five years to capitalize on the brand's surging popularity, the company has told the Department of Industrial Policy and Promotion (DIPP), the nodal agency that clears such foreign investments.
Tommy Hilfiger Arvind Fashion Pvt Ltd, a 50:50 joint venture between the US premium lifestyle brand and Ahmedabad-based Arvind Ltd, will invest Rs 60 crore in 45 company-owned stores; a significant number of the stores will be opened through franchisees, according to a foreign investment application filed by the company and reviewed by ET.
Currently, Tommy Hilfiger operates 58 franchisee outlets and over 60 shop-in-shops in other department stores. The expansion will take Tommy Hilfiger's presence to 631 points of sale by 2016-17.
Both partners will invest Rs 15 crore each, whilst Rs 30 crore will come from the company's internal accruals, the alliance said in its application to the DIPP.
"Engaging in retail operations directly would enable the applicant company to set up retail stores in locations all over the country including in those which at present are found commercially unfeasible by our franchisee partners," the application said.
"The company will announce its concrete plans in due course," Jayesh Shah, director & CFO of Arvind said, without commenting on specific queries.
A year ago, Tommy Hilfiger had bought out the 50% stake of the Murjani group in a joint venture called Arvind Murjani Brands, which owned the franchisee rights for the American brand in India. The Murjani group held the Tommy Hilfiger trademark licence in India.
In 2011 the JV applied to the Registrar of Companies for a change of name from Arvind Murjani Brands to Tommy Hilfiger Arvind Fashion with an authorized share capital of Rs 20 crores. Now, the alliance has filed an application with the DIPP seeking approval to open Tommy Hilfiger branded stores in India via the window for single-brand retailing.
Tommy Hilfiger Arvind Fashion is bullish on India as the brand has shown "robust financial performance" over the years and clocked total sales of Rs 80 crore for the fiscal year ending March 2011. Revenue is expected to have swelled four times to Rs 320 crores for the fiscal year ended March 2012, the documents filed by the company to the DIPP said.
Nearly 17 per cent of the $40-billion Indian apparel market is organised, management consulting firm Technopak Advisors estimates.
The $4.6-billion Tommy Hilfiger, a unit of PVH Corp, also owns brands such as Calvin Klein, Van Heusen (the Indian rights are owned by Madura Fashion & Lifestyle), and operates more than 1,000 stores in over 90 countries in North and South America, Europe, Asia Pacific among others.
Tommy Hilfiger has been one of the early movers among international lifestyle brands, having entered India in 2003. "It has stayed away from much discounting and created a loyal following across metro cities," Arun Sirdeshmukh, former CEO of Reliance Trends and co-founder of portal Fashionara, says. "But given their premium positioning it remains to be seen if there is a market for an additional 500 stores," he adds.
Meantime, in a separate DIPP application, French fashion brand Promod SAS has filed for a 51 per cent stake in a joint venture with local Modex Trading Pvt. Ltd. Modex is co-owned by Tushar Ved, the promoter of Major Brands, which currently owns Promod's franchisee rights in India.
Retail analysts say the brand had low recall value before it launched in India and a limited footprint, which is slated to change with the JV. "Promod has done fairly well in India also on the back of its mall locations, being a part of Major Brands' portfolio that includes Mango, Charles & Keith and Aldo," a rival retailer, said seeking anonymity.
The four-decade old brand, which claims to refresh its collection with 100 new products every two weeks, competes with women-centric, trendy brands such as Zara, s.Oliver and Esprit.
Incidentally, Madura Fashion & Lifestyle (MF&L) too is in the process of converting the distribution agreement it signed with Esprit in 2005 into a joint venture. "We have been in talks with Esprit and are trying to fine-tune things," Ashish Dikshit, CEO of MF&L said, without divulging details. "Our approach is to look for deep and long-term alignments," he added.
A study by management consulting firm Booz & Co revealed that around 100 multinational retail & consumer companies had entered India between 1990 and 2010. As many as 86 companies entered before 2009, and a little over a fifth of this lot (or 18 companies) changed their partnership model.
"Over the past few years, consumer brands that had followed the low-risk and low-return model through franchisees and distribution agreements, have gained confidence in the market and increased commitment," Raghav Gupta, principal at Booz & Co, says. Take for instance, UK-based retailers Clarks, and Marks & Spencer, which extended their distribution or franchise agreements into joint ventures with Future Group and Reliance Retail respectively.
India's economic outlook is positive: Zinnov
Zinnov Management Consulting, a market globalization Advisory firm, today presented a positive & robust outlook on the Indian economy as opposed to the sentiments that are doing rounds in the industry. In a striking contrast to Fitch's recent downgrade of India's credit rating outlook to negative, Zinnov believes this to be a momentary phase and showcased reasons for it to be a promising decade.
Praveen Bhadada director (market expansion) Zinnov said, India is no longer an emerging market but a happening one, where such market ups and downs should be acceptable. Both multinationals as well as Indian companies aspiring for growth should continue to take focus on the long-term view, with which they established their presence in country.
"While quarterly numbers are important, it is also equally essential to focus on market creation activities and opportunity realization to reap benefits in the next five-year horizon. With the rapidly growing internet and mobile user base and increasing demand for services through new technology challenges, investors should not be deterred by a temporary phase when the fundamentals continue to remain strong," he added.
Showcasing and listing some of the strong reasons why various spokes of the ecosystem need to keep faith in these turbulent times, Zinnov brought to light some of the factors on which, we should be betting high on:
India technology consumption is exploding:India currently has over 123 million internet users, over 600 million people use mobile phones, 15 million people do online transactions and over 51 million people log on to Facebook. Over 170 million UID numbers have already been allocated to Indian residents. The $30 B+ domestic IT market is growing at a much faster rate than the exports market. India is already seeing $B+ start-ups emerging. E-commerce market is expected to reach $23 B+ in the next 4 years. Cloud computing is expected to see revenues of the order of $5 B in the next 5 years.
GST implementation will accelerate economic growth:While GST implementation has been long delayed, but once implemented, GST is expected to increase India's GDP by 0.9% to 1.7% as per NCAER. This will also result in export gains of 3.2-6.3% and import gains of 2.4-4.7%. GST along with FDI in retail segment will increase the FMCG industry size by $50 Billion.
Indian MNCs and vast base of SMBs will be impossible to ignore:61 Indian companies feature in the Forbes list of top 2,000 global companies. Over 175 companies can potentially feature in the list by 2020. India also has 45 million SMBs, making India the second-largest country in terms of SMB potential, next only to China.
Large states in India are already booming: India's top 5 most populous states can hold the combined population of Brazil, Mexico, Philippines, Vietnam and Egypt. Maharashtra's GDP is equivalent to that of Singapore. GDP of states such as Delhi, Bihar, Chattisgarh, and Goa has grown over 10% in FY12. Over 2,700 investor MOUs were signed in Gujarat in just one day as part of the global investors' summit in 2012.
Praveen Bhadada director (market expansion) Zinnov said, India is no longer an emerging market but a happening one, where such market ups and downs should be acceptable. Both multinationals as well as Indian companies aspiring for growth should continue to take focus on the long-term view, with which they established their presence in country.
"While quarterly numbers are important, it is also equally essential to focus on market creation activities and opportunity realization to reap benefits in the next five-year horizon. With the rapidly growing internet and mobile user base and increasing demand for services through new technology challenges, investors should not be deterred by a temporary phase when the fundamentals continue to remain strong," he added.
Showcasing and listing some of the strong reasons why various spokes of the ecosystem need to keep faith in these turbulent times, Zinnov brought to light some of the factors on which, we should be betting high on:
India technology consumption is exploding:India currently has over 123 million internet users, over 600 million people use mobile phones, 15 million people do online transactions and over 51 million people log on to Facebook. Over 170 million UID numbers have already been allocated to Indian residents. The $30 B+ domestic IT market is growing at a much faster rate than the exports market. India is already seeing $B+ start-ups emerging. E-commerce market is expected to reach $23 B+ in the next 4 years. Cloud computing is expected to see revenues of the order of $5 B in the next 5 years.
GST implementation will accelerate economic growth:While GST implementation has been long delayed, but once implemented, GST is expected to increase India's GDP by 0.9% to 1.7% as per NCAER. This will also result in export gains of 3.2-6.3% and import gains of 2.4-4.7%. GST along with FDI in retail segment will increase the FMCG industry size by $50 Billion.
Indian MNCs and vast base of SMBs will be impossible to ignore:61 Indian companies feature in the Forbes list of top 2,000 global companies. Over 175 companies can potentially feature in the list by 2020. India also has 45 million SMBs, making India the second-largest country in terms of SMB potential, next only to China.
Large states in India are already booming: India's top 5 most populous states can hold the combined population of Brazil, Mexico, Philippines, Vietnam and Egypt. Maharashtra's GDP is equivalent to that of Singapore. GDP of states such as Delhi, Bihar, Chattisgarh, and Goa has grown over 10% in FY12. Over 2,700 investor MOUs were signed in Gujarat in just one day as part of the global investors' summit in 2012.
Govt to promote IT SEZ in smaller towns
New Delhi: The government is likely to announce incentives to promote IT-related export hubs in small towns as part of its effort to woo back investors to special economic zones.
The commerce ministry is amending the rules for special economic zones (SEZs), which have become unattractive to investors following imposition of minimum alternative tax (MAT) and dividend distribution tax (DDT) in 2010-11. Earlier, SEZs were exempted from most levies.
While SEZs across sectors will benefit from the new rules, IT SEZs stand to gain the most as their contribution to exports is more than that of others, an official said.
"As IT accounts for more than a fourth of the exports from SEZs, the reforms will have a special dispensation for the sector," the official said, adding, "It would streamline incentives in a way that it encourages such zones to come up in tier-II and tier-III cities."
After imposition of MAT and DDT, growth in exports from SEZs slowed to 15.4% in 2011-12, from 43.1% in 2010-11 and 121% in 2009-10.
The proposals being considered include a sharp reduction in the mandatory minimum area requirement for different categories of SEZs, easier norms for building social infrastructure like schools, shopping complexes and residential blocks in SEZs in smaller cities, besides relaxation in vacancy and contiguity or continuity norms that have often proved to be hurdles for proposed zones.
The government may also allow broadbanding of sectors, which will allow ancillary units to come up in sector-specific SEZs. To factor in more certainty for investors, the government is also planning to issue clarifications in advance on investment and regulatory issues.
"Investors got a jolt when the finance ministry decided to impose minimum alternate tax and dividend distribution tax on SEZs in 2011, as the investment decisions had been taken keeping the initial tax-free status in mind," the official said.
The incentives, however, will mostly be aimed at simplifying rules for setting up SEZs and not have any direct revenue implications. "The revenue department has made it clear that it does not want to take on additional financial burden. We respect that and are ready to stay within the mandate specified by the SEZ Act," the official said.
Interestingly, the revenue department had given a list of objections to the proposed changes, many of which the commerce department has chosen to ignore. However, experts say the SEZ Act gives the commerce department enough powers to make significant changes in rules.
"The SEZ Act allows the government to make amendments, either for all or a particular class of zones, and it can come out with notifications on provisions that it finds appropriate," said Hitender Mehta, co-chairman of industry body Assocham's SEZ council. Plans are afoot to simplify contiguity or continuity norms, which often require developers to build infrastructure to by-pass public structures.
"IT SEZs need not have the same nature of physical fencing as required for a manufacturing SEZ. Even for manufacturing SEZs, contiguity issues can be examined on a case-to-case basis," the official said.
Several developers in the country have already written to the government for relaxation in these rules.
The commerce ministry is amending the rules for special economic zones (SEZs), which have become unattractive to investors following imposition of minimum alternative tax (MAT) and dividend distribution tax (DDT) in 2010-11. Earlier, SEZs were exempted from most levies.
While SEZs across sectors will benefit from the new rules, IT SEZs stand to gain the most as their contribution to exports is more than that of others, an official said.
"As IT accounts for more than a fourth of the exports from SEZs, the reforms will have a special dispensation for the sector," the official said, adding, "It would streamline incentives in a way that it encourages such zones to come up in tier-II and tier-III cities."
After imposition of MAT and DDT, growth in exports from SEZs slowed to 15.4% in 2011-12, from 43.1% in 2010-11 and 121% in 2009-10.
The proposals being considered include a sharp reduction in the mandatory minimum area requirement for different categories of SEZs, easier norms for building social infrastructure like schools, shopping complexes and residential blocks in SEZs in smaller cities, besides relaxation in vacancy and contiguity or continuity norms that have often proved to be hurdles for proposed zones.
The government may also allow broadbanding of sectors, which will allow ancillary units to come up in sector-specific SEZs. To factor in more certainty for investors, the government is also planning to issue clarifications in advance on investment and regulatory issues.
"Investors got a jolt when the finance ministry decided to impose minimum alternate tax and dividend distribution tax on SEZs in 2011, as the investment decisions had been taken keeping the initial tax-free status in mind," the official said.
The incentives, however, will mostly be aimed at simplifying rules for setting up SEZs and not have any direct revenue implications. "The revenue department has made it clear that it does not want to take on additional financial burden. We respect that and are ready to stay within the mandate specified by the SEZ Act," the official said.
Interestingly, the revenue department had given a list of objections to the proposed changes, many of which the commerce department has chosen to ignore. However, experts say the SEZ Act gives the commerce department enough powers to make significant changes in rules.
"The SEZ Act allows the government to make amendments, either for all or a particular class of zones, and it can come out with notifications on provisions that it finds appropriate," said Hitender Mehta, co-chairman of industry body Assocham's SEZ council. Plans are afoot to simplify contiguity or continuity norms, which often require developers to build infrastructure to by-pass public structures.
"IT SEZs need not have the same nature of physical fencing as required for a manufacturing SEZ. Even for manufacturing SEZs, contiguity issues can be examined on a case-to-case basis," the official said.
Several developers in the country have already written to the government for relaxation in these rules.
Tuesday, June 19, 2012
Air Works, Empire Aviation team up to service business jets
New Delhi: Owners of private business jets in India can soon look forward to a one-stop shop for meeting all their travel needs. This follows Air Works making a Rs 120 crore strategic investment in Dubai-based private aviation company Empire Aviation Group. The new company will offer end-to-end aircraft asset management services for private business jet owners.
The strategic investment is through a mix of internal accruals and structured debt finance of Rs 120 crore from KKR & Co, officials said.
“If there is a owner of a private business jet who does not want to have the headache of maintaining a staff for managing the aircraft we can help them not only operating their flights but also getting clearance for the operations,” officials said. The new company expects to open the first office in the next 30-45 days in Bangalore followed by Delhi and Mumbai. Initially staff will be brought from the UAE base, officials said.
Declining to give details of the companies that have already signed up with Empire Aviation, officials said, “In the United Arab Emirates we operate for some former prime ministers and wealthiest of the wealthy.”
On how much a business jet owner would have to pay for the services, officials said: “The management model will depend on the type of aircraft. You might have some one who flies 20 per cent of the time and offers the aircraft for charter services 80 per cent of the time. The amount such a customer will pay will be different from what another customer pays,” officials said.
Air Works may look to raise between $ 35-50 million capital but there is no talk to divest at the moment, officials said. While GTI has a stake holding of about 25 per cent, Punj Lloyd holds about 19 per cent stake in Air Works. The funds will be raised primarily to create an engine Maintenance, Repair and Overhaul facility, officials said.
PowerGrid plans to diversify into distribution abroad
New Delhi: Power transmission monopoly PowerGrid Corporation of India is planning to get into distribution business. The company that cannot directly trade power in the domestic market due to regulatory restrictions, is scouting for power distribution opportunities overseas. Besides, it is trying to branch into EPC (engineering, procurement and construction) business in other countries.
The company currently has 19 overseas projects that mainly involve consultancy in power transmission. It has international projects of around Rs 10,500 crore under execution.
Chairman and Managing Director R N Nayak told Business Standard that they were not only looking for transmission, but also distribution business. “We have executed around 33 per cent of rural electrification where we are distributing power as franchisee. Though we have experience, we can enter distribution business provided we are able to buy and trade power in the domestic market,” he said.
Nayak said the company wanted to expand its overseas portfolio by going beyond consultancy. Besides consultancy, the company’s international foray is also focusing on asset management, EPC and joint venture/acquisition. The consultancy business contributes about Rs 290 crore to the company’s overall income of Rs 10,785 crore at the end of financial year 2011-12.
PowerGrid already offers consultancy services in overseas markets, such as Nepal, Bangladesh, Sri Lanka, Afghanistan, Nigeria and Bhutan, among others. The company is still exploring opportunities in this sector in other countries.
The company’s focus areas outside India are SAARC (South Asian Association For Regional Cooperation), Africa and Gulf countries. It has added four new countries — Myanmar, Kenya, Ethiopia and Tajikistan — in the last financial year. The number of orders from international sector increased to nine in FY12 from six in FY11.
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