Success in my Habit

Wednesday, March 16, 2011

Hero's new identity costs Rs 100 cr; new name and logo on products

MUMBAI/NEW DELHI: Hero Honda has set aside a kitty of Rs 100 crore to create a new brand identity that will lead to a new company name and corporate logo to be etched on every bike and scooter it sells in the Indian market, people familiar with the matter told ET.

The company has shortlisted five agencies -JWT, Draftfcb Ulka, Mudra, Law & Kenneth , and Percept H - to create the new brand identity, sources said. JWT, Draftfcb Ulka, and Percept H already handle various brands in the Hero Honda portfolio. These five agencies will join London-based design agency Wolff Olins to work on the brand repositioning, including new name and logo.

The new logo, expected to have a direct connect with its mass customers and to be unveiled in the next few months, will drop the Honda name from its corporate identity. Hero Honda has not yet replied to an e-mail query by ET on the rebranding plans.

The 27-year-old Indo-Japanese venture, which is the world's largest two-wheeler maker by volume, is awaiting regulatory approvals to break its joint venture with Honda and pursue operations independently.

Hero Honda managing director Pawan Munjal is taking a personal interest in the presentation made by these agencies, as he wants to ensure no stone is left unturned to announce a new brand post the separation from Honda, people close to the matter said. "The final call on the selection of the agency to work with Wolff Olins could get delayed as senior officials from Hero Honda are in Japan and their arrival back to India has got delayed due to the earthquake," sources said.

The Hero group's new brand would also have a global presence as the company intends to ship its bikes and scooters to markets such as Latin America, Africa, Middle East, and South East Asia.

"Hero Honda wants to ensure that the announcement of the new brand identity and the subsequent communication is high decibel and is in line with the recent brand re-launches, if not better," sources said.

The agencies in fray to undertake the rebranding exercise will also present their assessment of recent brand revamps such as Airtel and entry strategies used by new brands like Tata Docomo - which were also developed by the Wolff Olins.

Analysts tracking the market said that the new brand positioning is likely to be India-centric and will take into account the independent technology strength the company aims to acquire. "Hero has to take its customer connect to the next level. It primarily operates at the entry-level of the two-wheeler market and the new branding has to synergise technology and masculinity associated with the automotive world. It should have a stronger marketing participation at its sales points that will drive customer interest in the company," Shravani Sen, director of Delhi-based marketing firm Synovates , said. A similar rebranding exercise was seen during the divorce of Bajaj Auto from Kawasaki and TVS Motors from Suzuki, he added.

Hero Honda has been one of the largest spenders in the Indian marketing space and has been actively associated with top-notch events such as ICC World Cup, Indian Open Golf Tournament, IPL , and Commonwealth Games . The company likely spends over Rs 300 crore annually on marketing and product promotions.

Toyota, Nissan reopen plants in Japan

NEW DELHI: In early signs of recovery for the Japanese auto industry, Toyota , Nissan and Mitsubishi have decided to reopen some plants. However, full-fledged production is still some time off.

The fate of a large number of component vendors as well as power supply shortages are the biggest concerns for Japanese auto companies like Toyota, Honda, Suzuki and Nissan. This is also an irritant for their Indian subsidiaries, which depend in varying degrees on the parent for crucial component and technology support.

Toyota, which closed down all plants in Japan after the March 11 quake, decided to reopen seven plants in Aichi prefecture from Thursday, a spokesman said in Tokyo. However, it will keep 21 plants shut until March 22. On the other hand, Nissan and an affiliate would reopen one plant on Thursday and another on March 18. Two factories, however, will remain closed until March 20, while another will operate partially. No decision has been made on reopening a sixth plant.

Mitsubishi also resumed production at its three plants in central and western Japan. These will continue running through Thursday, though no decision has been made about continuing output thereafter. But the plants of auto giants like Honda and Suzuki are still closed. Honda and Mazda said plants will be closed until March 20. Suzuki, the parent of Maruti, also said that all Japanese factories will be shut until March 21.

Indian co gets the FT ArcelorMittal Environment Award for 2011

LONDON: Mumbai-based Jain Irrigation Systems that specialises in drip irrigation technology has won the FT (Financial Times) ArcelorMittal Environment Award for 2011 for its contribution to the agriculture sector in India.

Anil B Jain, Managing Director of the company received the award from Lakshmi Mital, Chairman and CEO, ArcelorMittal and Lionel Barber, Editor Financial Times at the FT Arcelor Mittal Boldness in Business Awards at Saatchi Gallery here last night.

"Jain was the first company to introduce drip irrigation technology to India in the 1980s. Since then it has greatly increased agricultural yields and this year the Government of India has increased subsidies for micro-irrigation to USD 221 million up 133 per cent from last year," the citation said.

Receiving the Award Anil Jain said "This award belongs to farmers of India who take so much risk against the vagories of nature."

With over 8,000 employees including 1,000 abroad, the company has achieved a turnover of 1 billion dollars this year.

"We have serviced over 25 lakh farmers in India, mostly in western and souther parts of the country and slowing its growing in northern parts as well, he said.

"The Award is a recognition of the work done by farmers. According to Jain, the company at present has 7 drip irrigation manufacturing plants and it is planning to add more such plants.

Drip irrigation systems, sprinkler irrigation systems, automation systems, valves, water filters, fertigation, equipment, green houses, plant tissue culture, nursery plants and systems, bio fertilisers are some of the manufacturing products of the company.

The company also has its operations in the USA, Europe and Brazil.

India's High Commissioner to the UK Nalin Suri, leading NRI businessman G P Hinduja, President of the Hinduja Group were among the dignitaries who attended the awards ceremony.

Allen Mulally, President and CEO of Ford was declared Person of the Year 2011 for turning around the Ford motors. The company earned a profit of USD 6.8 billion last year.

Groupon that offers daily 'money-off' deals activated if a required number of participants sign up won the best Newcomer prize, while Free, France's third-largest broadband provider won the award for entrepreneurship .

Tuesday, March 8, 2011

Green-building council launches rating system

Hyderabad: The Confederation of Indian Industry (CII) and Indian Green Building Council (IGBC) have launched LEED (Leadership in Energy and Environmental Design) 2011 Green Building Rating System for India, signifying a milestone in the green-building movement in India.

Mr Prem C. Jain, Chairman of the Indian council, Ms Lynn Bellenger, President, ASHRAE, Mr Mark MacCracken, Chair of the US Green Building Council , and the board of directors launched the LEED 2011 initiative, according to a statement from CII-IGBC.

The LEED-India, which was launched in 2007, received overwhelming response from the industry. Based on the feedback and experiences of its implementation, the rating system has now been upgraded and called LEED 2011 for India.

With these proposals, LEED 2011 seeks to enhance awareness in energy and water-efficiency baselines, promotes naturally ventilated buildings and encourages passive technologies. It also seeks to align with local regulations and standards, apart from adopting latest standards.

According to CII-IGBC, India has over 995 registered green-building projects with a total footprint of 606 million sq. ft. With this, India is among the top three countries to have a large green-building footprint. This has largely been possible because of the involvement of stakeholders of the building sector — architects, builders, developers, manufacturers and consultants.

The rating system of IGBC covers homes, commercial interiors, factory buildings, schools, special economic zones and townships.

Mr S. Raghupathy, Senior Director and Head of CII-Godrej GBC, said the launch of LEED 2011 green-buildings rating system would pave way for design and construction of some of the best green buildings in India.

Bank of India to open subsidiaries overseas

Bengaluru: Bank of India plans to acquire small-sized or mid-sized banks in African countries, New Zealand, and Canada. The bank is also looking at the organic route in other countries, said a top official.

“We are shortly opening subsidiaries in New Zealand, Canada and a few countries in Africa. We want to consolidate in countries where there are opportunities,” Mr N. Seshadri, Executive Director, Bank of India, told Business Line. Explaining that the RBI also advocated the subsidiary route for overseas locations, he said that the bank plans to acquire small-sized and mid-sized banks in these countries.

“If at a reasonable size we can acquire and grow inorganically, we could do that,” he added. The bank is currently present in 18 locations with over 30 branches. The bank already has permission for setting up operations in Botswana, and would actively pursue the inorganic route for this country.

According to industry estimates, a small-sized bank in the African continent would typically have 5-6 branches and could be acquired at anywhere between $5 million and $10 million. Though a location like New Zealand could be expensive , “it would add a lot of value and make business sense, since we can cover Australia too. Both the countries have a substantial Indian population,” pointed out Mr Seshadri. The bank also plans to convert its representative office in Johannesburg, South Africa, into a branch, he said.

In order to grow its balance sheet and augment future credit needs, Bank of India is looking at raising funds in the first half of the next fiscal. The bank had recently raised $750 million through the medium-term note (MTN) route and also expects about Rs 1,000-crore capital infusion from the government. With this infusion, the government holding in the bank would go up to 66 per cent from the current 64 per cent.

In addition to this, “we would also be raising additional capital in the first half of this fiscal, though we have not firmed up our budgeting plans yet,” said Mr Seshadri. As an international bank, he pointed out that Bank of India is required to maintain a tier-I capital of 8 per cent, and “there is enough headroom available in tier-II also,” he added, indicating that a dual issue is possible.

India’s domestic market for IT set to grow three times faster

Bangalore: For India’s top technology firms focused on the markets of US and Europe, the country’s $15-billion-plus domestic market for IT services is the latest battleground. In a year when top markets for software exports are recovering and expected to grow at less than 5%, India’s domestic market for IT is set to grow three times faster, mainly on the back of higher government spending on IT and new outsourcing projects from local banks.

“We will be looking at IT to aid customer acquisition and financial inclusion. The attempt will be to take banking to remote areas using technology services,” says Pushpinder Singh, DGM-IT, Bank of India , which plans to spend Rs 600 crore on technology this year. “For some of the contracts, we will continue with existing vendors. We will be evaluating others for new projects,” he added.

Indian government departments and public sector units are going to spend the most on IT this year. The biggest driver for higher government spending on IT and related areas is India’s UID project, which according to CLSA Research will lead to $10 billion worth of investments in IT consulting, system integration, and computer hardware over the next five to six years. CLSA sees an $1-billion business opportunity for consultants in the first five years and a need to raise manpower by 15% for their services. Some 18,000 systems specialists and programmers will drive a $2.4-billion pie for integration of UID into existing software systems.

“As this sets in, business process re-engineering (BPR) activities should pick up, as the full benefits of UID for businesses become clear. We expect 36,000 people to join the BPR wave around UID, creating a $6-billion market over the first five years,” CLSA researchers said in their report last year.

“Apart from UID, IT hardware growth will get a fillip with $1.1 billion worth of equipment sold to the government and another $1.8 billion of incremental demand from the private sector and government-owned companies,” the report adds. What’s critical is that vendors like IBM, TCS, Infosys and Wipro see newer opportunities emerging even during a global slowdown in software spending because state-owned enterprises like BSNL and ONGC — and other ministries too — seek to become more efficient.

Experts tracking this sector say India Post, Indian Railways and LIC will spend $3 billion on information technology this year, and the government’s share of total IT spend in India will cross 10% over the next two years from 6% right now. Praveen Bhadada, manager-consulting, Zinnov Management Consulting says: “In the 10th five-year-plan (2002- 2007) 0.3% was spent on IT. In the 11th five-year-plan, IT spend increased to 0.5 %. If we extrapolate this, government is going to spend about 2 % on IT. If today, $1.5 billion is spent annually, it could easily go up to $ 7-8 billion over the next three to five years.”

For one, India’s department of posts (DoP) is set to spend up to $1 billion on its IT-led business revamp over the next five years with top tech firms like IBM, TCS, Infosys and Wipro pursuing several outsourcing contracts for helping the postal department automate and integrate its business processes with a standard software solution. Accenture is in the process of developing a plan for this revamp.

Fortis buys hospital in Singapore for S$33 mn

Singapore: Seven months after pulling out of the race for Singapore’s Parkway, Fortis Healthcare, India’s second-largest hospital chain, on Thursday announced its first venture in the city-state, with a S$33-million (about Rs 118 crore) acquisition of an under-construction specialised cancer hospital.

Fortis Global Healthcare that handles the international business interests of promoters Malvinder Mohan Singh and Shivinder Mohan Singh, acquired the facility from Singapore-listed realty company First Real Estate Investment Trust, thereby completing three acquisitions in the last five months. The construction of the hospital is expected to be complete by the second quarter of 2012.

In November 2010, Fortis Global Healthcare had acquired Hong Kong-based primary healthcare network Quality Healthcare and in January this year, picked up a 30 per cent stake in Australia’s largest dentistry network, Dental Corporation. “Through this hospital, we are making a beginning in the highly recognised and competent healthcare delivery system of Singapore. Our group incorporates more than 25 years of experience in healthcare delivery and this hospital will benefit from that experience, to meet patient expectations in Singapore. We will continue to look for opportunities to further expand our presence in the region,” Fortis Global Healthcare Executive Chairman Malvinder Singh said in a statement.

Although the under-construction facility was valued at S$28.2 million at the end of last year, Fortis will be paying 17 per cent, or S$4.8 million, more for the property and will develop it into a specialty oncology and surgical hospital, with new generation critical and intensive care services. The acquisition also caps Fortis Healthcare’s extended struggle to establish a proper footprint in Singapore, dubbed as a hub for its plans of creating an integrated healthcare delivery system in Asia and Australia region.

Last July, Fortis was engaged with Malaysian state investor Khazanah in a takeover battle for Singapore-listed hospital operator Parkway, but finally backed out after about two months of wrangling over the asset. Subsequently, though, Fortis had said that it would look for a real estate investment trust or secondary listing on the Singapore stock exchange.

Exports from SEZs rise 47% in Apr-Dec

New Delhi: Exports from special economic zones (SEZs) stood at at Rs 2,23,132 crore in the April-December 2010 period, a rise of 47 per cent, compared with Rs 1,51,785 crore in the same period of the last financial year, according to data released by the Export Promotion Council for export-oriented units (EOUs) and SEZs.

So far, the government has approved 582 SEZs, of which, 374 have been notified. Currently, a total of 130 SEZs are under operation and these contribute to exports from these zones. As on December 31, 2010, the total investment in SEZs stood at Rs 1,95,348 crore, according to the data. During 2009-10, total exports from SEZs stood at over Rs 2,20,711 crore. Exports from EOUs and SEZs account for 36 per cent of the country’s total exports.

Although exports from SEZs have been rising steadily, the ministry of commerce and industry had expressed concerns over the sustainability of such a growth rate, especially with the introduction of the Direct Taxes Code. The draft DTC bill has suggested the continuation of the 15-year tax holiday for units which would be operational on or before March 31, 2014.

Economy grows 8.2% in Q3 on good agri show

New Delhi: Indian economy expAnded 8.2% in the third quarter of the current financial year on the back of robust growth in agriculture and services sectors . The growth number was in line with expectations, but lower than 8.9% growth recorded in the previous two quarters, government data showed.

Farm output grew 8.9% over the year-ago period, boosted by strong monsoon rains, while the manufacturing sector experienced a slowdown at 5.6%. The decline in investments, which grew 5.99% in the quarter compared with 17.84% in the previous quarter, remained a concern.

Core sector output rises 7.1% in Jan

New Delhi: The output of the country’s six core infrastructure industries grew 7.1 per cent in January, on the back of healthy production of crude oil, petroleum refinery products and electricity.

The six core sectors — crude oil, petroleum refinery products, coal, electricity, cement and finished steel — had expanded by 9.8 per cent in the same month last year.

In December 2010, the output of these infrastructure industries rose by 6.1 per cent. The six core industries account for 26.68 per cent of the country’s total industrial output. Petroleum refinery and crude oil output grew by 8.7 per cent and 10.8 per cent respectively in January, up from 3.8 per cent and 9.8 per cent in the same period last year, a statement released by the Ministry of Commerce and Industry showed.

Electricity generation grew by a healthy 9.3 per cent, compared to 6.4 per cent growth in the corresponding month last year, the data said. However, coal output dropped by 1.2 per cent as against 5.4 per cent expansion during the same month last year.