New norms for FII investments in govt, corporate bonds

New Delhi: The Finance Ministry has created two new sub-limits to enable foreign institutional investors (FIIs) park their funds in short-term papers of Government securities (G-secs) and corporate bonds.

In the G-sec bucket, where the overall FII investment limit is now pegged at $25 billion, the Finance Ministry has now carved out a sub-limit of $5.5 billion for foreign investment in short-term papers such as treasury bills.

Similarly, in the case of corporate bonds, a new sub-limit of $3.5 billion has been created for foreign investment in short-term papers such as commercial papers. This sub-limit has been carved out of the overall $51 billion limit for corporate bonds.

These sub-limits have been carved out based on the current holdings of such short-term instruments by FIIs and have been provided so that existing investments are not adversely affected.

The two sub-limits form part of the new investment policy for foreign investment in G-secs and corporate bonds.

Finance Minister P. Chidambaram announced the new policy on March 23 at the National Editors’ conference in the capital.

To encourage greater foreign investments in rupee-denominated debt instruments, the Government has simplified the framework of FII debt limits and also drawn a perspective plan for enhancement of these debt limits in the future. All the existing debt-limits have been merged into the two broad categories. The new approach has come into effect from April 1.

India to be Third Largest Aviation Market by 2020

New Delhi: Speaking at a function in the capital on the occasion of Aviation Day, the Minister for Civil Aviation, Shri Ajit Singh said that, India would be the third largest aviation market by 2020. Addressing senior representatives of the aviation industry, Shri Ajit Singh informed that studies suggest, the countries airports would be handling 336 million domestic and 85 million international passengers with projected investment to the tune of US$ 120 billion by 2020.

The Minister reminded the gathering that recently he took a decision to liberalize the process for airlines to aquire aircrafts by doing away with the Aircraft Acquisition Committee. He added that the Government has also taken steps to liberalize and grant traffic rights to Indian carriers to fly to new destinations around the globe .

Following is the entire text of the Minister’s speech----

“Smt. Sheila Dixit, Chief Minister of Delhi, Mr. Tony Tyler, DG of International Air Transport Association (IATA), Mr. S.Bomiddala, Chairman of GMR Airports, Shri Hari Bhartia, former President CII, Shri Chandrajit Banerjee, DG, CII, representatives of industry, members of media, friends, ladies and gentlemen.

I am delighted to be here amongst this august gathering, the confluence of best minds in aviation industry from across India and abroad and welcome you all on the occasion of ‘Aviation Day’.

It is really heartening to see that the first-off “Aviation Day” in India is being organized with the focus on economic benefits that aviation brings to the Indian economy. I am told that the most important branches of the Aviation value chain which are critically linked and interdependent including the airline industry, the airports and manufacturing, engineering and service industry through the CII are jointly organizing today’s session. I hope this realization of interdependencies among airlines, airport and the industry will also reflect in a growing shared agenda among the three; and reflect the growing areas of synergies between key players from the industry, to work towards the development of the aviation sector in India. To quote Henry Ford, “Coming together is a beginning; keeping together is progress; working together is success.” I congratulate the organizers for bringing you all together on the “Aviation Day”, a new beginning which I am sure will progress into success.

As we know, aviation sector brings enormous benefits to communities and economies around the globe. It is a key enabler of economic growth, social development and tourism providing connectivity and access to markets globally.Air transport currently supports 56.6 million jobs and over US$2.2 trillion of Global GDP.

India is among the countries witnessing highest growth in air passenger traffic. Its airport infrastructure is undergoing modernisation with the installation of state-of-the-art facilities. New Greenfield airports are under construction and security, surveillance and air traffic navigation systems have been modernized. India, a growing Asian economy, is amongst the fastest growing and currently the 9th largest aviation market handling 121 million domestic and 41 million international passengers. Today, more than 85 international airlines operate to India and 5 Indian carriers connect over 40 countries.

The studies suggest that by the year 2020, India is likely to become the 3rd largest aviation market handling 336 million domestic and 85 million international passengers with projected investment to the tune of US$ 120 billion. Indian Aviation Industry has been instrumental in the overall economic development of the country. I am told that Oxford Economics report commissioned by IATA indicates that Aviation accounts for 1.5% of India’s GDP and supports 1.7 million jobs – with a further 7.1 million employed in other sectors including tourism through the catalytic effects of aviation.

The prospects and possibilities of growth of Indian aviation markets are huge.The gap between potential and current air travel penetration shows that India is presently at 0.04 air trips per capita per annum which is far behind developed countries like US and Australia (more than 2 air trips per capita per annum), China and Brazil (0.3 air trips per capita per annum). The Low ratio of per capita air trips in India suggests a huge potential for the air traffic growth considering a relatively higher trajectory of economic growth in the country coupled with necessary Government support.

“The journey of a thousand miles begins with small steps.”We have taken number of initiatives to create an enabling environment for rapid growth of civil aviation sector in India. The single most important policy decision which may transform the civil aviation sector in India has been, to allow 49% FDI by the foreign carriers in domestic airlines. The ceiling of 49% is quite high as compared to other foreign countries where on an average it is kept as 26%. This also shows the Government’s firm commitment towards reforms in this sector. I am happy to know that some Indian carriers have already started exploring the possibilities of foreign collaboration which will boost civil aviation not only in India but in other parts of the world.

You are all aware, that the cost of ATF constitutes the major component of the cost of operations of airlines in India. One of the important reasons of higher cost of ATF in India is the added burden of sales tax levied by the State Governments. To reduce this burden, the Government has decided to allow direct import of ATF by Indian carriers. I am told that all major Indian airlines are exploring the possibilities of importing ATF. There are initial difficulties in putting the whole system in place for import of ATF in terms of sharing of on-site and off-site infrastructure for transport of ATF. We are in discussion with the Petroleum & Natural Gas Ministry in this regard to bring ATF notified under PNGRB Act. Besides, I am also trying to persuade various State Governments to bring down the rate of sales-tax on ATF.

Recently, we have taken an important decision to liberalise the acquisition of aircraft by the scheduled, non-scheduled airlines, flying institutes and for private use. At present prior permission from the Ministry of Civil Aviation is required before the acquisition of aircraft by them through Aircraft Acquisition Committee. Henceforth, no permission for acquisition of aircraft will be required from the Ministry of Civil Aviation and they will be free to acquire aircrafts as per their business plan and requirements. I am sure, this policy decision will give impetus to the growth and expansion of airlines in India.

To give a big boost to international air travel, the Government has taken substantial steps to liberalize and grant traffic rights to Indian carriers to fly to several new destinations across the globe. In order to ensure better advance planning on the part of airlines, the Ministry of Civil Aviation as a long term plan has already allocated the traffic rights to Indian carriers for next two years i.e. Summer-2013 and Winter-2013. The new traffic rights have opened up several new international sectors and increased the overall traffic entitlements of the airlines by approximately 60% over the existing traffic rights. Only in Gulf and South East Asian countries, there is an enhancement of approximately 81,000 seats per week in the entitlement of Indian carriers which is about 80% more than their present entitlements. Now with liberalised aircraft acquisition policy, I hope our airlines will be able to utilize all these bilateral rights bringing enormous benefits to the Indian public.

Another area which has given wings to the growth of Indian civil aviation is the privatization of four major airports under JV/PPP model and the policy of development of Greenfield airports which envisages synergy between the public and private sector. Keeping pace with the Government policy, the Airports Authority of India has also completed the expansion and upgradation of two metro airports at Kolkata and Chennai and has undertaken the development of 35 selected non-metro airports. The Government would like the AAI to run these airports including metro airports at Kolkata and Chennai by engaging professional airport operators on the management contract through a global competitive bidding process. Further accelerating the modernization and development process, Indian Government envisages an investment of US$ 12.1 billion at Indian airports under the 12th Five-Year Plan, of which a contribution of about US$ 9.3 billion is expected from the private sector.

The Government has also unleashed the potential of development around airports by simplifying the building regulations. Henceforth no prior permission will be required for construction activities around airports if the builder constructs the building within the permissible height limits which will be marked by AAI on coloured maps.

Despite rapid growth of civil aviation in India, the benefits of air transport have not reached the smaller cities and remote and difficult areas of the country. To make the growth in this sector equitable and inclusive, my top priority is to provide connectivity to these areas. Apart from the development of low-frill airports and modification of Route Dispersal Guidelines,the Government is in the process of formulation of a policy for promotion of regional and remote area connectivity in India incentivising the Indian carriers to operate on these routes including code sharing and seat credit mechanism.

While the aviation sector has undergone an exponential increase in traffic and aircraft movements, we have found that the safety regulatory apparatus has not kept pace with the requirements of the sector. The Directorate General of Civil Aviation (DGCA) has found itself constrained functionally and administratively to respond to the growing requirements of business. The Government is in the process of introducing a bill in Parliament which will enable replacing the existing DGCA with a more autonomous Civil Aviation Authority. The CAA will be a self-funding entity and shall have financial and operational autonomy.

India has the potential to be an MRO hub due to the growing aircraft fleet, location advantage and availability of technical manpower. To facilitate the growth of MRO Business and to make it competitive, the Government of India has recently announced several concessions in budget for 2013-14 which include extension of time period allowed for utilisation of aircraft parts and equipments from three months to one year, exemption of custom duty on parts, equipments, accessories, spares required for MRO purposes to private category aircraft also and inclusion of foreign airlines for the purpose of duty-free imports of parts etc. as applicable for scheduled air transport services. I am told these concessions have been widely welcomed by the industry.

The Government has recently cleared Flexi Use of Airspace by civil and military users. Implementation of FUA through civil and military coordination is an essential requirement to foster the air travel growth with ultimate benefit to our economy. I expect that there will be a reduction of carbon emission by about 7 million kg. per annum by direct routing between 7 major city pairs only because of FUA.

I am aware that airline industry in India is undergoing a very challenging period because of high cost structure coupled with global economic slowdown. I am sure, various initiatives the Civil Aviation Ministry has taken, will have a positive impact on the growth and competitiveness of the airlines in India. There are still number of policy issues which have drawn my attention and we are in process of taking decisions on these issues to further the process of reforms. Technology upgradation in the field of air navigation is one of the most important areas for the overall efficiency and safety of entire Indian civil aviation industry. The creation of ANS Corporation from the existing AAI is one of the top most priorities of the Government so as to boost the pace of modernisation and upgradation of technology in the field of air navigation.

The development work of Navi Mumbai airport may not likely begin as envisaged. To ease the pressure on the existing Mumbai airport, Government has taken an initiative to develop Juhu airport which will augment the capacity of existing Mumbai airport. KPMG has already submitted a report in this regard and I have also discussed it with the Chief Minister of Maharashtra during my recent visit to Mumbai.

We also need to take all measures to facilitate operations by the airlines to bring efficiency and competitiveness in their operations. Hence, there is need to streamline and liberalise various procedures in DGCA in view of the development of modern technology and the changed civil aviation requirements without compromising safety and security of air travel. I have asked the DGCA to explore the possibilities in this regard.

I am extremely pleased to be a part of ‘Aviation Day’ function where the key-players of the industry including airline industry have gathered to jointly work towards the development of civil aviation sector in India. I am sure that the collective knowledge, wisdom and experience which all of you have brought here together will be of great help in improving and strengthening the civil aviation sector in India. Let me assure you all that the Government is committed for a liberal and enabling policy environment to provide safe, secure and affordable air services with world class aviation infrastructure in the coming years.

I would welcome new innovative suggestions in this regard.“A mind is like a parachute, it doesn’t work if it is not open.” Give us ideas and suggestions with open mind. I assure that my Ministry will also consider them with open mind. Once again, I extend my best wishes for the success of not just this Aviation Day, but also every single day where Aviation continues to play an important and critical role in our lives.

Costa Coffee to add 200 stores in India by 2015

Chennai: Costa Coffee, the coffee shop chain brand under the UK-based multinational hotel, coffee shop and restaurant company Whitbread, is looking at expanding its presence in India with another 200 outlets within 2015, which would require an investment of around Rs 200 crore. The company, which claims as the world's second largest coffee chain,is planning to add around 1,000 outlets across the country by 2015-16, according to company officials.

The company has already set up 100 coffee shops in various parts of the country through its master franchisee, Devyani International Ltd (DIL), a part of Rs 3000 crore RJ Corp.

"In the last two years, we have been growing faster, with expanding presence in overseas market (outside UK)," said Andy Marshall, managing director EMEI, Whitbread.

"We have 2,500 outlets as of now and our plans are to expand it to 3,500 outlets in the financial year 2015-16 in 28 countries. We see a great potential for the business in India," he added.

The master franchisee, Devyani International, which is also franchisee for PizzaHut and KFC in select regions in the country, said that it would focus on the major cities for expansion in the next two years and would look at the tier II markets for expansion after the two years.

Each Costa Coffee outlet would require an investment of around Rs 80 lakh to Rs 1 crore and in this proportion, DIL is expecting an investment of Rs 200 crore into the expansion in next two years.

"We dont believe in bringing in more franchisees into the business and all the new stores would be opened by us only. We will fund it through debt and equity," said Virag Joshi, president and CEO, DIL. He was speaking to the reporters during the inauguration of the second coffee shop in Chennai.

At present the coffee shop has presence in Delhi,Mumbai, Pune, Jaipur, Chennai and Bangalore. There are plans to open more shops in the South Indian major cities, Chennai and Bangalore, in near future, added Joshi.

The store opened in Chennai would serve over 25 varieties of hot and cold coffee and flavoured drinks along with a range of snacks and food items. The company has made supply chain arrangements with TajSats catering firm, added the company officials.

The UK-based Costa Coffee currently has a sales of One Billion Pound Sterling and plans are to double it in next four to five years through various plans including aggressive expansion overseas, added Marshall.

Cairn India to invest $2 b in Rajasthan in two years

Barmer: Cairn India, a Vedanta Group Company, on Saturday said it would invest $2 billion in the next two years to develop its Barmer block in Rajasthan.

“In the next couple of years, we are looking at around $2 billion investment. In the next five years, we are looking to drill at least 500 wells a year. The resource base allows production of 300,000 barrels per day ,” said P. Elango, member of the board, Cairn India.

Cairn India, promoted by London-based billionaire Anil Agarwal, said the exit production rate for 2013-14 is expected to be 200,000-215,000 bpd. The block is jointly held by Cairn India, which has 70 per cent stake, and public sector explorer ONGC, which holds the remaining 30 per cent.

In the long-run, output from Barmer may go up to 500,000 bpd and to drill that much oil, nearly Rs 10,000 crore of investments may be poured in, said Anil Agarwal, Executive Chairman, Vedanta Resources.

Gas and crude sales
Cairn India and ONGC on Saturday also announced the commercial sale of natural gas. They said production has started from the Aishwariya field .

“Initial commercial volumes will be about 5 mmscf per day,” Cairn said in a statement. Elango said the Government would nominate buyers for natural gas from the Barmer block.

Veeraapa Moily, Petroleum Minister, said gas would be sold at $5/mBtu.

The block produces about 30 mmscf of gas a day from the Raageshwari deep gas field and the Mangala and Bhagyam fields. The gas produced along with crude oil is used to fire its 48 MW captive power station at its Mangala processing terminal.

At its peak, Aishwariya is expected to add 10,000 barrels of oil per day (bpd) to the current output of 175,000 barrels from the Mangala, Saraswati and Bhagyam fields in the block.

Oil output from the Rajasthan block contributes over 20 per cent to the nation’s oil production. India meets close to 80 per cent of its crude oil requirement through imports.

The block has contributed Rs 19,000 crore (cumulative) to the exchequer in the form of royalty and levies. The field, since it began production in August 2009, has replaced imports of about Rs 50,000 crore.

“Everyday, Cairn India pays a royalty of Rs 15 crore to Rajasthan,” Elango said.

Infrastructure
Elango said the explorer is in talks with the Government of Rajasthan to develop gas infrastructure in the State. “We have formally submitted our expression of interest. The State has a joint venture with GAIL. The new gas can push the project,” he added.

Government issues norms for setting up manufacturing zones

New Delhi: The government has issued norms for setting up of manufacturing zones under the national manufacturing policy, giving them many benefits, including tax sops.

Units located in the National Investment & Manufacturing Zones (NIMZs) will be exempt from capital gains tax on sale of plant and machinery, the guidelines issued by the Department of Industrial Policy and Promotion said on Friday.

NIMZs will be eligible for Viability Gap Funding, support from the government to make projects commercially viable, of up to 20% of the project cost.

The national manufacturing policy seeks to enhance the share of manufacturing in GDP to 25% from the current about 14% within a decade and in the process create 100 million jobs in this period.

To achieve these goals, the policy will largely rely on NIMZs, which are envisaged as integrated industrial townships of at least 50 sq km (5,000 hectares) with state-of- the-art infrastructure. A minimum of 30% of the total land area of NIMZs will be available to manufacturing units.

The capital gains tax exemption will be available only if the proceeds are re-invested within a period of three years for purchase of new plant and machinery in any other unit located in the same NIMZ or another NIMZ, the guidelines said. NIMZs will also be allowed to raise funds through external commercial borrowing for developing the internal infrastructure of the NIMZs. The government will also explore the possibility of soft loans from multilateral institutions for funding infrastructure development in NIMZ.

GVK, Aurizon to develop Oz basin infrastructure

Hyderabad: GVK Coal Infrastructure (Singapore) Pte Limited (GVK Hancock) and Aurizon, Australia's largest rail freight company, have signed an agreement on joint development of rail and port infrastructure to unlock the Galilee Basin reserves in that country, including GVK Hancock's Alpha, Kevin's Corner and Alpha West coal mines.

The agreement also envisages a process to support the next phase of coal growth in the Bowen Basin, which contains the largest coal reserves in Australia.

According to a GVK statement today, Aurizon would acquire a majority (51 per cent) interest in Hancock Coal Infrastructure, which owns GVK Hancock's rail and port projects. It would invest through an upfront consideration at completion of the transaction and deferred consideration at the financial close of each phase of the projects.

Both companies will have equal management rights and an equal representation on the board of all key committees. The chairman of the board will be G V K Reddy.

GVK Hancock and Aurizon are seeking development of a potential 60 mtpa (million tonne per annum) port and rail project to underpin the opening of reserves in the Galilee Basin and continued growth of the Bowen Basin.

Projects planned comprise a new rail project and development rights for a coal terminal at Abbot Point. GVK Hancock received the primary state and federal environmental approvals for the rail project in May and August 2012, respectively. GVK Hancock's port project received federal environmental approval in October 2012.

Collectively, the proposed development of the rail and port infrastructure, expected to deliver export capacity of 60 mtpa, could represent an investment for the state of Queensland of $6 billion, the staement said.

On completion of the transaction, Aurizon would gain the rights to operate and jointly manage with GVK the rail infrastructure and to exclusively provide the above rail haulage from GVK Hancock's Alpha and Kevin's Corner mines for up to 60 mtpa of coal.

"The proposed relationship with Aurizon would allow us to jointly develop the most cost and time-efficient rail and port solutions for the Galilee Basin. At full capacity, the proposed arrangement is intended to provide sufficient equity and debt funding for the projects to reach financial close," said G V Sanjay Reddy, vice-chairman of GVK.

Genpact signs deal with Diageo to offer FandA services

Bengaluru: Genpact, the business process outsourcing services provider has bagged a contract from Diageo, the world’s biggest distiller. This is to provide the company financial and accounting processing services, by establishing a near-shore shared services centre.

The company did not disclose the financial details of the contract. As part of the deal, Genpact has set up a shared services centre in Bogota, the capital of Colombia, where the employees of both the companies will work alongside.

The centre will initially house 65 employees and then gradually be ramped up to 200 by the end of 2013. According to Diageo Commercial Director Gregorio Gutierrez, by developing the shared services centre model in partnership with Genpact, the company will be able to consolidate and improve its F&A functions in Latin America. This will enable the company to focus on its core business.

The shared services centre is located in the Bogota Free Trade Zone, in the Zona Franca business park.

“Genpact and Diageo are partnering to optimise Diageo’s comprehensive F&A operations and consolidating these operations into the new centre in Bogotá, which to date have been managed across multiple Latin American countries,” a joint statement from both the companies said.

Six Indian energy firms in Platts’ top 50 global rankings

New Delhi: Indian firms have pride of place at the 2012 Platts Top 250 Global Energy Company RankingsTM.

Of the 12 Indian companies represented in the 250, six are have also made to the list of top 50 fastest growing companies.

All eyes were on China, India and the wider Asia-Pacific region when it came to rapid financial growth and fast rising energy companies. A statement said that 70 companies from the region were in the spotlight when the 2012 Platts 250 Global Energy Companies Rankings were released in Singapore on Tuesday.

According to Platts, Cairn India took the top slot as the fastest-growing company not just in Asia but the world. With a 119.8 per cent three-year compounded growth rate (CGR), Cairn India was far ahead in the field.

The 2012 rankings reflect fiscal 2011 financial performance in four key areas: asset worth, revenues, profits and return on invested capital (ROIC).

Indian companies surged ahead in both the independent power producers (IPP) and gas utility categories, with NTPC Ltd and GAIL (India) topping their respective regional segments, Platts ranking showed.

A surprise entry at number two in ROIC rankings was Coal India Ltd with 35.3 per cent, it said. A new entrant to the rankings in 2010, when the company listed, Coal India has posted strong returns on invested capital in both years, an achievement given the challenges it faces, Platts said

China continues to grow in the energy business with 23 Chinese companies on the 2012 roster, giving it more companies in the Top 250 than any other country, except the US.

PetroChina Company Ltd took over the 9th position and China Petroleum & Chemical Corp acquired the 12th position in the global Top 250 list.

However, in an East-West comparison, Western majors still reign the rankings. Western companies took all top 10 spots on the 2012 list, except for one – ninth place – which went to PetroChina Co Ltd.

ExxonMobil retained the number one spot of the Top 250 roster for the eighth consecutive year. Anglo-Dutch major Royal Dutch Shell moved up from sixth position to second, displacing US major Chevron to third. ConocoPhillips dropped one place from seventh to eighth.

Of all the Indian companies in the top 250, Power Grid Corp improved its overall ranking, rising from 232 {+n} {+d} in 2010 to 172 {+n} {+d} in 2011. Other significant moves include a rise of 21 places for power producer NHPC Ltd to 195 {+t} {+h} {+.}

Among electric utilities, Reliance Infrastructure Ltd gained 17 places to 215 {+t} {+h}.

“India’s enormous growth in energy demand has led to its rise as the emerging energy leader on the global front,” said Vandana Hari, Asia Editorial Director, Platts. “Although these represent the bright spots for financial performance in 2011, 2012 may prove more challenging for India’s power generators,” she added. richa.mishra

India seeks Israeli expertise in renewable energy sector

Mumbai: Almost 12 per cent of the energy generated in India is through renewable sources, comprising small hydro, bio-mass, wind and solar power. Now, the Government is keen that electricity produced from large hydro should be included in this category so that the share of renewables in the overall energy mix rises to about 31 per cent, stressed Gireesh Pradhan, Secretary, Ministry of New and Renewable Energy.

He was addressing officials from about 50 Israeli renewable energy companies and members of the Federation of Israeli Chambers of Commerce in Tel Aviv, on his maiden visit to the country.

At the meet, with representatives from both the Indian and Israeli Governments, India has sought Israel’s expertise in the renewable energy sector to meet its ambitious target of 30,000 MW of power over the next five years.

Stating that 40 per cent of the Indian population does not have access to energy, Pradhan spoke about India’s ambitious plans to generate another 30,000 MW of grid-connected projects by 2017, which would take the country to 55,000 MW from renewable sources of energy.

Italy's Maschio Gaspardo Group enters India

Italy based agricultural machinery manufacturing company Maschio Gaspardo Group has entered in India and set up a new facility at Ranjangaon near Pune.

The company has invested Rs 200 crore in this facility and will invest additional Rs 100 crore in the next five years.

At the beginning the Pune plant will manufacture at the beginning rotary tillers, mulchers and seeders for the domestic market.
The annual capacity of this plant is 20,000 units. Initially, it will manufacture over 500 machines per month. Maschio Gaspardo group specializes in the production of agricultural machinery for tillage, sowing, seeding, landscaping, forage-making, sprayers and crop care. It has also set up an R & D centre in India. Over 60 per cent localization has been achieved in this plant and remaining will be imported from Italy and China. The Pune plant will currently employ 120 people and will be increased to 250.

To start with, the new plant will manufacture products for Mahindra & Mahindra and New Holland India. Plans are also underway to serve the needs of Maschio Gaspardo Group's other global customers, by providing local supply to their India and Asia Pacific facilities. It has already sold over 17 thousand units to Mahindra and Mahindra since 2010. Gaspardo had a partnership with M & M for its OEMs.

Commenting on this, Alessio Riulini, director, Maschio Gaspardo India, said, “The growing importance of Indian agricultural market gives this country a central position in Maschio Gaspardo Group’s global strategy. Pune is an ideal location for our new plant because the city provides a strong infrastructure and a rich talent pool of skilled workforce in the manufacturing sector. Our new plant represents a key milestone in Maschio Gaspardo Group’s long-term vision of investing in fast growing markets and aligning our manufacturing footprint with the needs of our global customer base.”

He added, “Indian market requirements are very limited as compare to USA or Europe as field sizes, conditions of soil, power of tractors are lesser than other markets. The new plant will aid Maschio Gaspardo Group to achieve its aim for 2012; to exceed 280 million USD turn over.”

Dr Reddy’s launches Amoxicillin tablets, capsules in US market

Hyderabad: Dr. Reddy’s Laboratories has launched Amoxicillin tablets, capsules, and oral suspension in the US market.

The product is a bio-equivalent generic version of Amoxil (Amoxicillin) tablets, capsules, and oral suspension.

Officially launched on September 17 in the US, Amoxicillin tablets (500 mg and 875 mg), capsules (250 mg and 500 mg), and oral suspension (125 mg/5 ml, 200 mg/5 ml, 250 mg/5 ml, and 400 mg/5 ml) are approved by the United States Food and Drug Administration (US FDA).

In a press release, the Hyderabad-based pharma major said the Amoxil brand and generic tablets (875 mg) has US sales of approximately $22.2 million, capsules ($67.2 m), and oral suspension ($89.5 m), for the 12 months ended June 30, 2012 quoting IMS Health.

Dr. Reddy’s Amoxicillin tablets will be available in bottle counts of 20 and 100; Amoxicillin capsules in bottle counts of 100 and 500 and oral suspension in 200 mg/5 ml and 400 mg/5 ml, in three counts of 50 ml, 75 ml, and 100 ml.

Amoxicillin oral suspension in 125 mg/5 ml and 250 mg/5 ml will be available in bottle sizes of 80 ml, 100 ml, and 150 ml.

9 road projects of Rs 11,600 cr get nod

New Delhi: Government on Thursday approved nine road projects, which are estimated to cost around Rs 11,600 crore and to be executed by state governments on public private partnership (PPP) mode. These projects, which add up to 1,226 km, are at an advance stage of bidding in Andhra Pradesh, Uttar Pradesh and Bihar.

The finance ministry provides 20% of the total project cost, and another 20% assistance comes from the highways ministry to make these ventures financially viable in the form of viability gap funding (VGF), which was devised by the Centre in 2005. The finance ministry has approved Rs 2,295 crore under VGF and Rs 500 crore will be disbursed this fiscal.

The approval was granted by the Empowered Committee headed by economic affairs secretary Arvind Mayaram. Sources said raising concern on poor bidding of highway projects, Planning Commission's deputy chairman Montek Singh Ahluwalia has recently written to the highways ministry to hold talks with the contractors. Government has set an ambitious task of awarding 9,500 km highway during this fiscal. Construction is on track, but awarding has left a lot to be desired.

India and United Kingdom ink MoU on Urban Regeneration and Development

Shri Kamal Nath, Union Minister of Urban Development and Dr. Vince Cable, the British Secretary of State for Business, Innovation and Skills signed an MoU on Urban Regeneration and Development in London today.

Speaking on the occasion, Shri Kamal Nath expressed appreciation of the urban regeneration works carried out in London and felt that India could benefit from the British experience. The Minister also highlighted the immense challenges and opportunities in the urban sector in India. He informed that India would soon launch the next phase of the Jawaharlal Nehru Urban Renewal Mission and that the Government of India is keen to encourage PPP in urban sector especially in larger cities. He invited the international firms including British firms to participate in the process.

Shri Kamal Nath stated that both India and Britain would benefit from the MoU, as it would provide an enabling platform for the officials, professionals and business leaders to meet and share knowledge and best practices in the urban sector. He expressed the hope that this joint declaration would lead to enhanced cooperation and deepen the engagement between the two countries.

The MoU envisages promotion of cooperation in the areas of sustainable master planning; transport planning; land economics; heritage management; regeneration governance; Regeneration capacity building and public private partnership financing arrangements.

Shri Kamal Nath also participated in a business roundtable organized by the UK India Business Council. The roundtable was attended by leading infrastructure companies such as Aecom, Arup, Balfour Beatty Plc, HOK, JCB, Mott MacDonald etc. Shri Kamal Nath also met Mr. George Osborne, Chancellor of the Exchequer UK.

International calls set to become cheaper on new TRAI rule

New Delhi: International long distance call charges are set to come down with the telecom regulator introducing a new measure that will intensify competition in this segment. TRAI has allowed telephone users of one operator to use calling cards issued by another operator.

For example, a Vodafone user will now be able to make calls to the US or UK using Reliance’s global calling card. Until now, a Vodafone subscriber was forced to make ISD calls using only Airtel’s network.

The new system also opens up the game for foreign giants such as BT, AT&T and Orange which can now sell their voice calling cards to retail and enterprise users in India. These multinational firms, at present are offering only data services to large corporates.

TRAI has directed all operators to open up their access networks to enable customers to make the choice and use calling cards of other players.

According to industry watchers, this could trigger a price war in a segment, where tariffs have remained flat over the past few years. In addition, consumers could also get dynamic pricing on various international routes. An operator with more traffic to the Gulf region could offer cheaper calls than another player which has heavy traffic on the US route. Although there are 27 companies in the country with a licence to offer international long distance services, most of them are not offering voice calling facility to retail users. That’s because the telecom company which owns the subscriber does not allow another operator to give access to their services. As a result, ISD tariffs in the country have not declined for many years. A call to the US, for instance, is priced at around Rs 7, which has been at the same level since 2008.

The TRAI is examining a number of other aspects in the long distance telephony segment, including ways to bring competition in the cable landing station segment. There are 12 undersea cables landing on Indian shores but most of the landing stations are controlled by just two players — Bharti Airtel and Tata Communications. According to other ILD players, this has kept the landing charges artificially high which in turn is adding to the bandwidth cost.

Future Group buys convenience store chain Big Apple for Rs 62 crore

Kolkata: Future Group has acquired Delhi's convenience store chain Big Apple which operates 65 stores in the National Capital Region (NCR) for around Rs 62 crore in an all-cash deal. The group is likely to re-brand the Big
Apple stores into its KB's Fair Price stores - the group's neighbourhood store format - to consolidate its operations in the NCR, one of its largest market in the country. The country's largest retailer closed the deal through Future Ventures India LtdBSE -0.88 %, the investment arm of the group which builds and operates innovative and emerging businesses.

"The acquisition will help Future Group to significantly grow presence in the convenience store format in NCR where it already operates 100 KB's Fair Price neighborhood stores and have a ready operational and administrative infrastructure," a person close to the deal said, requesting anonymity.

Big Apple is owned by Express Retail Services Ltd, which sells groceries and food products for over six years. The Big Apple stores generate annual revenue of around Rs 120 crore and is a debt-free company.

Incidentally, Future group has recently transferred its 180-plus KB's Fair Price stores from Pantaloon Retail India to Future Consumer Enterprises, which is a wholly-owned subsidiary of Future Ventures. While Express Retail Services will become a wholly-owned subsidiary of Future Ventures, there are possibilities that it might be later merged into Future Consumer Enterprises to consolidate the convenience store operations under a single holding company.

Big Apple has direct tie-up with farmers in Haryana, Rajasthan, HP and Uttar Pradesh, which provides consumers with uninterrupted and qualitative product supply, according to the company website.

HCL Tech signs five-year deal with Freescale

New Delhi: HCL Technologies on Wednesday entered into a five-year deal with Freescale Semiconductor, manufacturer of embedded processing solutions. The companies declined to give the deal value but sources said that it was a multi-million dollar deal.

HCL will be managing desktop support, computer, storage, database, telecom (network and security) and process automation. It will deliver services to Freescale across 20 countries, handling a user base of 19,000 employees spread across 80 locations.

Freescale will also leverage HCL’s global delivery centres in Poland and Shanghai for multilingual helpdesk support. It will develop more resilient systems, optimise its operational costs, increase visibility into IT operations, experience reduced technology complexity and drive innovation to existing and new initiatives.

“HCL will be sharing our vision of building a robust and agile IT environment required to keep pace with the growing technological innovation demands of the business and creating new ideas and technologies for the next generation opportunities,” Hal Yarbrough, Director of IT Infrastructure at Freescale Semiconductor, said.

HCL Technologies infrastructure services division (ISD) manages mission critical environments and handles over three million devices for over 1.7 million end users.

The ISD business contributes 26 per cent to the overall revenue of $4.2 billion as of June 30.

Aurobindo gets US FDA nod for anti-asthma, chewable tablets

Chennai: Aurobindo Pharma today announced that it has received the final approvals from the US Food and Drug Administration to manufacture and market ‘montelukast sodium tablets’ and montelukast sodium chewable tablets in the US market.

Montelukast Sodium is used for treating prophylaxis and chronic treatment of asthma, prevention of exercise-induced broncho-constriction in patients older than 15 years of age.

The annual sales of Montelukast Sodium tablets were about $3.5 billion and that of the chewable tablets is $1.1 billion, in the twelve months ending March 2012, says a press release from Aurobindo.

The products are made in Hyderabad.

Aurobindo now has a total of 157 bulk drug approvals from the US FDA, the release said.

In 2011-12, Aurobindo achieved a turnover of Rs 4,281 crore and made a net loss of Rs 42 crore. On the BSE today, the Aurobindo share is trading at around Rs 114.

Mankind Pharma set to tap core drugs market

New Delhi: Mankind Pharma is set for a major turnaround over the next two to three years. The Rs 2,000-crore company, best known for its consumer brands like Prega News, Manforce, Unwanted-72 and Kaloree-1, is now eyeing the market for diabetes and cardiovascular drugs to record growth in both turnover and profit.

Mankind Pharma, India’s seventh-largest drug maker, aims to rise to the second or third position over three to four years, says chief executive and Chairman R C Juneja. “We are planning to launch 15-16 products in the chronic therapy segment this financial year. Currently, our profit margins are very low compared to the industry, primarily because most of our products are in the low-margin segments, and these are priced low. Introducing drugs in the chronic segment would not only contribute to the turnover, but also boost profit,” he told Business Standard.

The acute segment includes diseases that usually last for a short duration and require therapies like anti-infectives, pain-killers or analgesics. The chronic segment includes diseases that are recurring in nature and include lifestyle diseases. It includes therapies anti-diabetics, cardiovascular, cancer etc.

The company is targeting a growth of 28-30 per cent this financial year, which would raise its turnover to about Rs 2,500 crore, Juneja said. Driven by robust growth in the consumer brand segment, the company’s pharmaceutical business has been growing about 18 per cent annually, compared with the industry average of 13-14 per cent. However, the company’s net profit margins, growing at 12-13 per cent, are slightly below the industry average of about 20 per cent. The chronic segment foray would help boost this, Juneja adds.

Ashish Mehra, managing director, Strategic Decisions Group, says Mankind’s entry into chronic therapy is essential for it to expand beyond small town to big cities. “It started with acute therapy in rural areas, and then moved to towns. Now, when it wishes to enter big cities, there are big players dominating the market. These companies are already strong in the acute segment. So, to compete with these, Mankind needs to tap the chronic segment,” he said.

A source close to the company said Mankind also planned to divest stake in its personal care business, which primarily comprises products like ‘Adiction’ deodorant and ‘Don’t Worry’ sanitary napkins. The move would help the company concentrate on the pharmaceuticals and the over-the-counter (OTC) businesses, he said.

Juneja, however, said this was a “tentative plan”. “We have decided to watch for a year and then take a final call,” he added. For now, the company is not adding any product to the segment.

Analysts say the personal care business could be a roadblock to the company’s ambitious plans and this could be a reason why it is considering selling the business.

Sanjiv D Kaul, Managing Director, ChrysCapital, which holds 11 per cent stake in the company, agrees. “After pharmaceuticals and OTC, personal care was an obvious move. This was also complemented by the company’s huge sales network. However, it does not want to be diverted from its aim of becoming a leading pharmaceutical company. So, at some point it may divest the personal care business,” he says.

Currently, Mankind has a sales force of about 7,000, and the company is steadily increasing this number. “We would hire about 700 people by March,” says Juneja. “We would record growth only by introducing new products and strengthening sales and marketing,” he adds.

Juneja started his career in 1975 as a medical representative with Lupin. In 1984, he, along with two of his brothers, decided to start a formulation business called Bestochem. In 1995, Juneja and his brother, Rajeev, set up Mankind Pharma. Rajeev Juneja now looks after the company’s marketing division.

“I started the company with merely Rs 5,00,000 and no loan,” says Juneja. His son, Arjun Juneja, has now joined the company’s operations team.

Unlike its counterparts, Mankind started by focusing on rural areas, tier-II and tier-III cities. “They understood the DNA of the Indian pharmaceutical market very well. That is why their business model is very unique. At a time when no pharmaceutical company saw value at the bottom of the pyramid, Mankind started from the outskirts, and gradually moved to the centre. They created the market there and later, others joined the bandwagon,” says Kaul.

However, some feel the transition to selling products in the chronic segment in big cities may not be easy, and the company may have to put in place a stronger and more effective strategy. “So far, Mankind has opted for a price-penetration strategy. They launched most of their products with very low prices compared to others, acquiring a significant market share. But gradually, they increased prices. However, this strategy may not work for essential products in the chronic segment,” said a sector analyst. He added the company would have to develop innovative therapies, backed with science and quality, to capture the chronic market.

While the company has received offers from major multinational companies for its pharmaceutical business, Juneja asserts there was absolutely no reason or plan to sell, even if the valuation was huge. “I do not want to leave money for my kids. I would like to leave an asset which they can run and serve the country with,” he says.

The company has 10 manufacturing plants in the country. Recently, it built a research and development centre in Manesar.

Saint-Gobain plans solar energy solutions

Chennai: Saint-Gobain India is looking at supplying solar systems here, backed by the group’s solar energy equipment production facilities in Europe.

A division of the company, Saint-Gobain Solar Solutions, will offer and set up rooftop solar photovoltaic systems of a wide range of capacities, according to Mr S. Eisenhower, Director-Operations, Saint Gobain India.

The Indian subsidiary of the multinational Saint-Gobain will import the solar modules from group company Avancis Solar in Torgau, Germany. The facility makes thin film photovoltaic modules.

In recent years, the factory’s capacity has increased from about 30 MW to over 200 MW and is growing, he said.

The factory is being expanded to produce about 300 MW of solar modules annually.

Mr Eisenhower was speaking to Business Line on the sidelines of a seminar on renewable energy on Tuesday.

A company official said the solar division is in talks with integrators – people assembling solar energy rooftop equipment – to offer the Avancis range of modules. The company hopes to build a network of integrators who will use the modules, besides acting as a distribution chain. Saint-Gobain sees particular potential in the hospitality and healthcare segment, where there is keen interest for solar photovoltaic and solar powered-steam generation applications.

The policy environment for distributed energy generation capacity is slowly falling in place, with support for solar power generation as a part of renewable energy options. Also, grid power shortage in many States is driving residential and industrial consumers to set up backup power.

The company is also a major supplier of components the for solar power generation capacities being set up under the Jawaharlal Nehru National Urban Renewal Mission.

It manufactures curved mirrors for solar concentrators and flat mirrors used in solar thermal applications. It has supplied mirrors to power over 150 MW of such applications under the scheme, the official said.

Mahindra rolls out utility vehicles in Kenya

New Delhi: Mahindra & Mahindra (M&M), reportedly the fastest-growing auto brand in South Africa, has now launched its range of vehicles in Kenya.

The company has appointed Simba Corporation as the sole dealer for Kenya. The dealership, which will trade under Xylon Motors, will sell models such as the XUV500 SUV, the Scorpio SUV and the pick-up range — the Genio Pick-Up and the Maxximo mini-truck.

Simba Corporation has invested close to 600 milion shillings in Xylon Motors. The dealership will also provide complete servicing facilities and an extensive after sales department supplying parts and accessories.

“Our range of utility vehicles and pick-ups have carved a distinct niche for themselves in markets across the world including Europe, South Africa, Egypt, South and Central America and Australia and I’m sure Kenya will be no exception,” said Mr Sanjay Jadhav, Senior General Manager, Exports (Africa & Middle East), M&M.

M&M’s tractors are sold in Kenya through Timsales, a part of the Rai Group. Its African footprint extends to Egypt, Algeria, Morocco, Tunisia, Ghana, Nigeria, Sudan and South Africa where the company has a joint venture.