Ashok Leyland wins order for buses from Sri Lanka

Chennai: Ashok Leyland has bagged an order for 1,000 buses from the People's Leasing Company in Sri Lanka, according to a press release from Ashok Leyland. The $26-million order represents Ashok Leyland's largest single order for buses from Sri Lanka.

The delivery of the ‘Viking' model buses, of 42-58 seats, is to commence immediately and is to be completed before March 2011. The order is being part funded by the Asian Development Bank.

Ashok Leyland of the Hinduja group is a leader in the Sri Lankan bus market with sales of more than 8,000 over the past six-seven years.

Tata-Sikorsky venture to roll out aerospace components from Nov

Hyderabad: The Tata-Sikorsky joint venture to manufacture aerospace components and systems at the Aerospace Park on the outskirts of Hyderabad will start rolling out products from November.

Announcing this at MAN'EXE, the 7th leadership series on manufacturing excellence organised by the CII here on Wednesday, Mr Kanna Lakshminarayana, Minister of Industries, Andhra Pradesh, said the new industrial policy (2010-15) announced by the State would give a big thrust to manufacturing.

The State has come up with several incentives, has the lowest power tariff for industries and the largest number of notified SEZs (Special Economic Zones), over 50. It is also looking at the National Manufacturing Investment Zones, being proposed by the Centre, he said.

Tata Advanced Systems, the Tata Group company, formed the venture with Sikorsky Aircraft, US, to manufacture aerospace components in India. As part of it, they set up a manufacturing unit at the Aerospace & Precision Engineering SEZ (special economic zone) at Adibatla village to begin making components and assembling Sikorsky S-92 helicopter cabins. It will also make components for other aerospace OEMs.

Transforming india

In his keynote address, Dr V. Sumantran, Executive Vice-Chairman, Hinduja Automotive and Board of Director of Ashok Leyland said a “Combination of planning and entrepreneurship was a must for India to achieve the goal of transforming into a happy, developed country.”

He cited two recent headlines: By 2015, Indian GDP will cross China's and India to emerge a Detroit of the East.

While they read great and achievable, there is cause of concern, because we tend to celebrate too early. These are goals which need tremendous work and effort to achieve. India needs relentless investments in infrastructure, especially power and energy to drive the high growth rates.

He listed several advantages the country has in terms of the large youth force and low cost demand driving innovation and frugality, an old world virtue internalised amongst the people that could be channelized for the growth story.

Trump card

Dr Sumantran said India's trump card would be IT-enabled manufacturing. Cloud competing, he said, makes small and medium enterprises competitive. However, he expressed concern about the general lack of high quality across industries. This has to be addressed.

Earlier, the Chairman of CII-AP, Mr Shakthi Sagar, in his welcome, said India was emerging as a manufacturing hub with more companies shifting their units.

The national manufacturing policy and the manufacturing investment zones should provide an impetus.

Domestic airlines registered a 17 per cent growth during January-July 2010

New Delhi: India’s domestic airlines witnessed a surge of nearly 500,000 passengers in July 2010 in comparison to the corresponding period in 2009.

It is the 7th consecutive month for the domestic airline industry to report an increase in the passengers flown in comparison with the same period in 2009.

As per the latest data collated by the Directorate-General of Civil Aviation (DGCA), the domestic airlines flew 17.56 million passengers during January-July 2010 as against 14.53 million passengers carried during the same period in 2009, thereby, registering a 17 per cent growth.

India to witness 9-9.5 per cent growth rate over 2013-15: Morgan Stanley

New Delhi: Witnessing continuing structural reforms, globalisation and a sterling demographic dividend, India is bound to increase its growth rate to 9-9.5 per cent over 2013-15, even as China will moderate down to 9 per cent by 2012 and to 8 per cent by 2015, as per a new report by Morgan Stanley, authored by Chetan Ahya (managing director for Asia and India economist) and Tanvee Gupta.

India has one of the lowest median ages among the major economies and with the large working age population, India is bound to reap twin effects. One, it will allow people to save a large proportion of their income, thereby increasing the country’s rate of savings and two, it will boost the number of people who work and contribute to growth. With structural reforms the additional workers will find work and the sheer rise in the number of workers would increase gross domestic product (GDP) growth. Also with reforms, productivity per worker would increase raising the GDP even faster.

Moreover, globalisation gives additional job opportunities, extra capital to augment rising domestic savings and additional know-how. Basing its analysis on the above cited factors, the report expects India to become the world's fastest-growing economy. Kaushik Basu, Chief Economic Advisor to the Government has also been forecasting similar formats of development.

Underlying the forecast is the assumption that India will significantly increase its expenditure on infrastructure and in plant and machinery. Infrastructure expenditure has gone up from 5.4 per cent of GDP in 2005 to 7.5 per cent in 2009 and is poised to go up to 8 per cent of GDP in 2010. Over 2012-17, the forecast is that India's infrastructure spend would be US$ 1 trillion as compared with US$ 530 million over the previous five-year period.

Another assumption is on the quantity and quality of the young people coming into the workforce. While India will be the largest contributor to the world's workforce — all of 136 million people — over the next 10 years (fully a quarter of the entire world's additional workforce) in comparison China will add just 23 million.

The report also assumes that there would be an increase in the number of young people completing their education, making India the largest contributor to the pool of tertiary educated workforce in the world.

All these changes would be supported and complemented by further reform by the government in fiscal consolidation, opening up of retail to foreign direct investment, public sector reform and divestment, and improvement in governance that would reduce transaction costs.

Steelmaker Corus to invest 185 million pounds in Britain

LONDON: Indian-owned steelmaker Corus will invest 185 million pounds to rebuild a blast furnace in south Wales, the company announced on Monday in a move that is set to safe-guard jobs.

The investment at the Port Talbot steelworks, equivalent to 225 million euros or $289 million, will begin in July 2012 and aims to increase the facility's output by up to 400,000 tonnes a year, Corus said in a statement.

The company is owned by India's Tata Steel -- the world's eighth-biggest steelmaker.

"This investment is a major step in achieving Tata Steel's ambition to position Port Talbot as a producer of high-quality strip products on a global scale and an internationally competitive cost base," said Kirby Adams, chief executive of Tata Steel Europe.

Union bosses welcomed the move.

"This investment shows that Corus believe that there is a strong future for the British steel industry," said Michael Leahy, head of the Community union.

A Corus spokesman added that the investment may see building contractors take on new staff.

Tata Steel, part of India's sprawling Tata Group conglomerate, bought Anglo-Dutch company Corus for $13.7 billion in 2007.

Transgene Biotek acquires US-based Marillion

Hyderabad: Transgene Biotek Ltd has said that it has entered into an agreement to acquire Marillion Pharmaceuticals Inc, a US Oncology Biopharmaceuticals company based in Exton, Pennsylvania, in an all-share deal.

The Director of the Hyderabad-based Transgene Biotek, Mr S.S. Marthi, in a statement to the stock exchange, said the transaction would accelerate growth of the company business and broaden scope of drug development.

Marillion Pharmaceuticals, a clinical stage bio-pharmaceuticals company, engaged in development and commercialisation of novel therapeutics in oncology, has presence in the US and manufacturing and licensing partners in the UK and Europe.

New entity

The merger of the two companies and Marillion's products with Transgene's own drug pipeline are expected to create an oncology platform and products for the new merged company. The new entity will be able to play a role in licensing deals with multinational pharmaceutical companies as also develop and commercialise drugs. The revenues are likely to come from Marillion's presence in the US and network of collaborators in Europe. Both the companies see significant expansion of drug development right from the early stage and pre-clinical trials to late stage clinical trials. The merged entity will have a research and business platform and an expanded presence in major markets.

According to the statement, Marillion's portfolio includes three clinical stage products useful in oncology and complements Transgene's portfolio. The latter has earlier out-licensed a manufacturing process to Dr Reddy's Laboratories and its recombinant Hepatitis B vaccine technology to vaccine producer Serum Institute of India.

Adani buys Aussie coal assets in $2.7 bn deal

Ahmedabad/New Delhi: Entire 50 mt yearly output for its power projects here; looking for more mine buys

India’s biggest coal importer, Adani Enterprises, has acquired an Australian coal asset of Linc Energy in a cash and royalty deal worth $2.7 billion (Rs 12,500 crore). This would be the largest single investment by an Indian company in Australia and a second coal acquisition abroad for Adani. It owns a coal mine on Indonesia's Bunyu island that produces six million tonnes per annum (mtpa).

Adani will pay A$500 million (Rs 2,100 crore) in cash and A$2 (Rs 41.60) per tonne in royalty for the first 20 years of production from the mine in Galilee Basin of Queensland state. Australia's Foreign Investment Review Board has approved the deal and the provisional Queensland government has given “an indicative approval”.

The Galilee tenement has a thermal coal resource of 7.8 billion tonnes, making it the largest single tenement in Australia. Adani estimates an annual production of 50 mtpa from the mine. “The entire quantity will be imported into India. We are using the integrated play of coal, mining and port, which is available within the group,” Devang Desai, group chief financial officer, told Business Standard. He said the company was looking to buy more coal assets in Indonesia and Australia.

The group is also planning to set up an import terminal at Mackay, which will enable the company to ship the coal to India. "While multiple evacuation routes are available for mined coal, Adani (through Mundra Port and Special Economic Zone) has recently been awarded Preferred Proponent Status for the development of Dudgeon Point Terminal at Mackay, Queensland, which entitles Adani the right (subject to technical and commercial feasibility) to develop a coal terminal of 30-60 mtpa capacity," the company said in the statement.

The coal from Galilee would support the rapid expansion of sister firm Adani Power Ltd, which is developing power projects at Mundra, Dahej and Bhadreshwar in Gujarat, Tiroda and Kawai in Maharashtra and Chhindwara in Madhya Pradesh. The combined capacity of these projects is estimated to be 13,000 Mw.

"Adani Group aims to achieve 20,000 Mw power generation capacity by 2020, of which 13,000 Mw power projects are being implemented by the company. There is a clear need for securing coal supply and the Australian coal asset will help us reach to the target," an executive said.

The group has tied up the entire quantity needed for 6,600 Mw power capacity through domestic linkages. Some of its present requirement is also being met from its captive mine in Indonesia. The additional imports will be used for its capacity addition plan in the power sector, besides trading. “We have a two-pronged play in the coal sector. We have 50 per cent share in total coal imports into the country and we need coal for captive use. So, the Australian coal will be used for both the purposes,” said Desai.

Coal Grab

Galilee tenement has coal reserves of 7.8 bn tonnes
Adani will take 4 years to begin operations
Plans to import coal to feed its power projects in India
Adani aims to produce 20,000 Mw of power by 2020
Adani Enterprise shares gained 2.11% to close at Rs 622.55 on BSE
The company imported about 25 mt of coal in 2009-10, as against 18 mt in 2008-09. According to Desai, about a 10th of their imports were from Australia. Since it has its own mine in Indonesia, the company is importing 70 per cent from that country.

While the group is looking for mines in Australia to ensure supplies for domestic sale and its own power projects, Linc Energy wanted to exit the thermal coal mining business, since this was not part of its core activity of coal gasification.

The markets cheered the news of the acquisition, with the Adani share gaining 3.9 per cent to touch an intra-day high of Rs 633.40 on the Bombay Stock Exchange. It later shed some weight, to close the day up by 2.1 per cent, at Rs 622.55.

Indian law firm forms ventures with UAE, Saudi counterparts

New Delhi: In a first of its kind venture, an Indian corporate law firm has tied up with its counterparts in UAE and Saudi Arabia seeking to leverage the fast growing India-Gulf trade, investment and people-to-people ties.

The Indian law firm Kochhar & Co has formed separate joint ventures with the Law Offices of Mohammad Issa Odeh (MIO) in UAE, and with the Law Offices of Khalid Alnowaiser in Saudi Arabia.

“These are pioneering JVs. Since we are the only such Indian law firm, we hope to attract a lot of legal work especially in big-ticket infrastructure ventures in the Gulf, as a majority of the work in the sector in the region is supported by Indian construction companies,” Mr Rohit Kochhar, Chairman and Managing Partner, Kochhar & Co, said.

“The focus will also be on arbitration as well as legal documentation work for large commercial contracts, investment funds and even outbound investments for the Royal families there. With our JVs, we aim to be the largest legal services player in the Gulf within five years,” Mr Kochhar said.

Noting that some of the world's largest sovereign wealth funds, including the Abu Dhabi Investment Authority, are in the region, he said that through these JVs, his law firm was looking at representing these funds, not just for their investments in India, but globally.

These JVs will also look at providing legal support to Indians who have lost money to Gulf-based companies during the recent real estate crisis in that region, he said.

“The Arab world has a major shortage of high quality legal talent that are English speaking. We have such lawyers and at prices at least 50 per cent cheaper than the English-speaking lawyers from developed countries,” he said.

Incidentally, India is the largest trading partner of the Gulf Cooperation Council that includes Saudi Arabia and the UAE. In 2008, India-GCC trade crossed $91 billion.

Saudi Arabia is India's fourth-largest trading partner with bilateral trade at over $25 billion. Besides, over four million Indian workers in the Gulf, including about two million in Saudi Arabia, remit to India around $5 billion annually.

Indian IT firms top Europe survey

London: Cognizant first, TCS third, Infosys fourth in Performance and Satisfaction study.

Indian information technology (IT) service providers Cognizant, TCS and Infosys have topped the latest ranking of service providers in Europe, in a survey done by EquaTerra, an IT advisory service provider.

In the Performance and Satisfaction (SPPS) study by EquaTerra for 2009-10, Cognizant has captured the first position, with a 79 per cent score. TCS and Infosys have taken the third and fourth position, with 75 per cent and 74 per cent scores, respectively. The second place was taken by US company Compuctacenter, with 78 per cent.

The study evaluates client satisfaction by surveying over 2,000 client relationships from 750 top IT spending organisations across Europe, covering 12 countries. The ranking covers 25 IT service providers in all. Cognizant topped the rankings in seven of the eight parameters the study focused on. These include Relationship Management (actively managing the relationship at the operational and strategic levels), Innovation (actively identifying innovation opportunities), Transition (completing the transition successfully on time and budget and with the required functionality), Quality (meeting the service levels as set out in the Service Level Agreement), Price (charging for services in line with current market price) and Risk (shouldering reasonable commercial risk and making necessary investments to reduce it).

Jef Loos, director, EquaTerra, said this ranking, based on two-thirds of all IT deals in Europe, gives a near-accurate evaluation of client satisfaction. “We choose the clients and do cross-reference where the same client is serviced by more than one IT service provider,” Loos said.

He further said, “Cognizant had not one dissatisfied client, which makes the company the best performer among the top 25 IT outsourcing service providers that we evaluated.”

Apart from Cognizant, TCS and Infosys, the other major IT companies to appear in the top 25 list are Wipro (15), Mahindra Satyam (17) and HCL (18).

Francisco D’Souza, President and CEO, Cognizant, said,“Over the years, we have made significant investments in bringing our industry-leading, client-focused processes to Europe. Our high-touch relationship model, deep domain expertise and consulting skills, our unique reinvestment philosophy, and our ability to build strong multicultural teams around the globe have helped our customers navigate structural changes in the economy and their businesses, enabling them to stay efficient, effective and innovative.”

Manufacturing expands for the 16th consecutive month in July 2010

New Delhi: India's manufacturing witnessed an upswing trend in July 2010 on the back of new orders and better export demand, as per a private survey. The HSBC Markit Purchasing Managers' Index (PMI) went up to 57.6 in July 2010 from 57.3 in June 2010, marking 16th consecutive month of expansion in manufacturing.

The factory output index of the PMI rose to a four-month high of 62.3 in July 2010, raising expectations of further expansion in India's manufacturing growth story.

"India is on a roll. The economy was given another leg up in July as new orders continued to pour in. Even the export sector appears to be holding up well, despite worries over cooling demand abroad," according to Frederic Neumann, co-head of Asian Economics Research, HSBC.

PMI, a survey-based compilation of key manufacturing data, is considered a good leading indicator of manufacturing activity. An index level above 50 indicates expansion in manufacturing, whereas a PMI reading of below 50 indicates a contraction in manufacturing. The HSBC India Report on Manufacturing is based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 500 manufacturing companies. The variables in the survey include employment, output, new orders, suppliers' delivery times, and stock of items purchased.

Even as India saw an expansion in its manufacturing sector, China's PMI dropped to 51.2 in July 2010, as per official data released on August 1, 2010. "It's a good reading, especially compared to China where production was a bit softer," said Sonal Varma, Economist at Nomura Holdings.

The Centre for Monitoring Indian Economy (CMIE) expects Indian industry to start fresh projects that will entail an investment of about US$ 140.6 billion in 2010-11.
In his monetary policy review for April 2010, D Subbarao, Governor, Reserve Bank of India (RBI) on July 27, 2010 revised the gross domestic product (GDP) growth target for 2010 to 8.5 per cent, said "Domestic drivers of growth are robust."