IT can solve Public Distribution System mess, says Nandan Nilekani

A panel headed by Unique ID Authority chairman Nandan Nilekani has suggested computerisation of public distribution system (PDS) and use of cash transfers and coupons to streamline subsidy distribution. "The large focus of the report is to make system more efficient (and) to make sure people have choice," Nilekani told reporters on Wednesday after submitting the report to finance minister Pranab Mukherjee. The first phase of PDS revamp will focus on supply chain improvement while the second on direct transfer of subsidy, according to the task force. Nilekani has proposed use of coupons, smartcards, and direct cash transfers, along with GPS tracking of trucks carrying ration, as some methods of cleaning the system. It has suggested creation of a National Information Utility or Public Distribution System Network (PSDN) by April 2012 and initiation of pilot projects by December 2012. There are about 4.62 lakh fair price shops (FPS) that distribute commodities, like wheat, rice, sugar and kerosene, worth over Rs 30,000 crore every year to 18 crore families. The government has accepted the report of the Task Force in principle, Nilekani said adding that it will now process it and take appropriate action. "We have serious issues in terms of leakages in subsidy transfers and any system that controls these leakages is a good idea...The only issue is with execution and as long as that is taken care of, it's a smart way of dealing with the problem," said Sonalde Desai, Senior fellow, National Council for Applied Economic Research. "A significant proportion of subsidised fuel does not reach the targeted beneficiaries and there is largescale diversion of subsidised kerosene...to ensure greater efficiency, cost effectiveness and better delivery...the goevrnment will move towards direct transfer of cash subsidy...," Mukherjee had said in the last budget. PDS is fraught with problems. "The PDS suffers due to wholesale problems such as largescale pilferage and diversion, duplicates and ghost beneficiaries, wrongful exclusion and inclusion," the report said. About 29 lakh fake ration cards were seized in Maharashtra alone, while Tamil Nadu is estimated to have about 15 lakh fake cards in circulation.

Adobe buys Auditude reportedly for about $100 million

Adobe Systems has acquired Palo Alto-based Auditude, the two companies jointly announced today. Auditude is a video ad management and analytics platform, which now becomes part of Adobe’s efforts to enter contemporary and fast growing markets such as video and mobile devices. While the two companies didn’t disclose the terms of the deal, our sources familiar with the deal put the value of the acquisition at around $100 million. Auditude had raised a total of $38 million from Redpoint Ventures and Greylock Partners. It works with companies such as Comcast, MLB, Starz & Fox News. Auditude started out as video fingerprinting technology company but later morphed into a company that balanced“who owns the rights to make money from a video with what ads are available.”

IBM India develops solar-powered data centre

One of the biggest costs in adata centre is power cost. Power is needed to fire the servers and storage systems. And since these systems heat up, power is again required to cool the systems with airconditioning. In the dot-com era, data centres consumed 1 or 2 MW. Now it's common to find facilities that require 20 MW, and already some of them expect to use ten times as much in the years to come. For countries, data centre power consumption is expected to put an enormous burden on their power grids. Not surprisingly, an enormous amount of innovation, right from the semiconductor level, is today going into finding solutions to reduce power consumption in computing systems. IBM's India Software Lab in Bangalore has just contributed towards that. It has developed a system to run data centres on solar power, and is making it commercially available, perhaps the first such commercial offering in the world. "Until now, no one has engineered solar power for efficient use in IT," said Rod Adkins, senior VP of IBM's systems and technology group, who was in Bangalore last week. "We've designed a solar solution to bring a new source of clean, reliable and efficient power to energy-intensive, industrial-scale electronics." The first implementation is being done at the Bangalore lab itself. A solar power array has been installed, spread over more than 6,000 sft of the lab's rooftop. Kota Murali, chief scientist at IBMIndia, says the installation is capable of providing a 50-kilowatt of electricity for up to 330 days a year, for an average of five hours a day. The advantage of solar power is that it is DC (direct current), unlike grid power that is AC (alternating current). Processors run on DC, so when you use grid power, you need to convert AC to DC. In the process of that conversion, you lose about 13% of power. On the other hand, when you do a DC to DC conversion, the loss is only 4%. So you have a saving of close to 10%. Adkins said while the solution could bring a 10% saving in developed markets, it could be even better in emerging markets, where there are many places that are not served or inadequately served by the grid. Murali says his facility in Bangalore suffers a 3 to 6 hour power cut on average every day, forcing them to depend on diesel generators. "The per unit cost of that is much higher than even solar," he says. The India team's innovation has been in integrating DC IT systems, water-cooled systems and solar power. Water-cooled systems are also a relatively new phenomenon; water is far more efficient at cooling than is air. "These technologies were developed in silos, but we are seeing huge benefits when we connect them," Adkins says. He says the history of solar-power shows that its biggest commercial successes come when the technology is tuned for specific uses, as was being done now by creating a preengineered solution for future data centres. "The first solar calculator hit store shelves in 1978 and was an instant hit. This is a solar solution for a slightly bigger calculator, a 30 teraflop datacentre."

World Bank signs $ 975 mn loan agreement for Eastern Dedicated Freight Corridor Project

NEW DELHI: The World Bank has signed a US$ 975 million loan agreement with the Indian government to set-up the Eastern Dedicated Freight Corridor that will help faster and more efficient movement of raw materials and finished goods between the Northern and Eastern parts of India. "The Indian Railways urgently needs to add freight routes to meet the growing freight traffic in India, which is projected to increase more than 7 percent annually. Dedicated freight corridors (DFC) will not only meet this growing freight demand, but also decongest the already saturated rail network and promote the shifting of freight transport from road to more efficient rail transport," said Venu Rajamony, Joint Secretary, Department of Economic Affairs, Ministry of Finance. "Augmenting its transport systems is a crucial element of India's trillion-dollar infrastructure agenda for the next Five-Year Plan (XIIth Plan) which starts in 2012. Since the 1990s, road transport has advanced more rapidly than the railways, and now accounts for about 65 percent of the freight market and 90 percent of the passenger market in India, and those shares are growing," he added. The Eastern Dedicated Freight Corridor Project will ease congestion choking the railway system and reduce travel-time for passenger trains on the arterial Ludhiana-Delhi-Mughal Sarai railway route. The corridor will add additional rail transport capacity, improve service quality and create higher freight capacity. World Bank financing will cover a route length of 1,130 kilometers (out of a total corridor length of 1,839 kilometers) and will be provided in three phases. The Project signed today will finance the first phase for the 343 kilometer section. "Implementing the DFC program will provide India the opportunity to create one of the world's largest freight operations, adopting proven international technologies and approaches which can progressively be extended to other important freight routes throughout the network," said Roberto Zagha, World Bank's Country Director in India. Unlike the existing rail network, which runs on a combination of diesel and electrical locomotives, the proposed DFC corridor will operate entirely through electric locomotives, thereby further reducing greenhouse gas emissions.

Tamil Nadu Cement Corporation Ltd (TANCEM) to offload 25 per cent cement production in open market

TIRUCHIRAPALLI: In a boon to public reeling under spiralling construction cost, state-owned Tamil Nadu Cement Corporation Ltd (TANCEM) has decided to sell at least 25 per cent of its total production in the open market at competitive price. TANCEM, which usually supplies cement to state government departments like PWD, Electricity Board and DRDA, has two factories in the state with a total installed capacity of eight lakh tonnes per annum, company sources said. The company had sold cement in open market for a brief period between December 2009 and July 2010 but reverted back to direct sales to government departments. However, cement sales to departmental works had come down of late due to various reasons including suspension of civil works, following which the management of TANCEM had decided to sell cement in open market, company sources at its plant in Ariyalur, about 60 km from here, said. It has been now decided to market cement to both bulk and retail cusomers in the private sectors, according to sources. Besides Ariyalur factory with an annual production capacity of six lakh tonnes, TANCEM has a unit at Alangulam in Virudhunagar District with a two lakh tonnes capacity. In 2010-11, the Ariyalur unit recorded a production of 4.90 lakh tonnes, the sources said. They said the company would be able to sell its 'Super Star brand' ordinary portland cement (43 grade) at Rs 270 per bag (50 kg) as against the prevailing market price of Rs 300.

Hindustan Dorr-Oliver eyes more acquisitions in UK after Davy Markham

HYDERABAD: Engineering firm Hindustan Dorr-Oliver (HDO), a listed subsidiary of Hyderabad-based infrastructure firm IVRCL, is eying more acquisitions in Europe, group chairman E Sudhir Reddy said. HDO had acquired Davy Markham, a Sheffield, UK-based engineering firm for £9.5 million (Rs 64.5 crore) in March 2010. Davy Markham is into design, manufacturing and fabrication of heavy and complex engineering components and assemblies in the mining, nuclear, power generation and steel sectors. The move comes at a time when analysts were expressing concerns over the fall in revenues and profits of HDO and the weak revenue visibility from the order backlog. "We want to expand our base in the UK and have aggressively started looking at 4-5 more acquisitions, each costing £5-10 million," Reddy told ET. The target companies are in a radius of 50 km from the Sheffield facility of Davy Markham. HDO has shortlisted proprietary engineering firms specialising in the manufacture of components for mining, defence and nuclear sectors in and around Sheffield. "These acquisitions should support the growth of Davy Markham and expand its bouquet of offerings." The strategy is to get the manufacturing capabilities of the acquired engineering firms and set up their engineering design and manufacturing centres back in India, he said. "Majority of the works on behalf of Davy Markham and its associated firms subsequent to the acquisitions will be executed at the Indian facilities and the balance works and finishing touches will be handled at the UK facility. The idea is to be cost effective with the help of India design and manufacturing base," he said. Aimed at expanding the manufacturing infrastructure at Davy Markham, the company is in the process of acquiring 20 acre at the Sheffield facility for around £17 million, he said. Reddy added that Davy Markham is emerging as a £50-million company, and the 4-5 acquisitions and their merger into Davy Markham should enable it evolve into a £100 million to £150 million entity over 2-3 years. "The opportunities and product offerings from Davy Markham after the acquisitions will significantly increase and the growth of the UK firm will be faster. Davy Markham will be positioned as a uniquely focussed engineering design company with manufacturing bases both in Sheffield and India." Davy Markham, which used to bid for projects in the UK and Canadian markets, has expanded to Peru, Chili, Mexico and the US under the new management. It has also started bidding for underground mining projects in India, Reddy said. On Monday, HDO's shares fell 0.66% at Rs 37.60 on Bombay Stock Exchange. The exchange's benchmark Sensex lost 0.34% to close at 17,025 points.

Saint Gobain under CCI scanner for abusing its dominant position in the market

NEW DELHI: India's competition watchdog has launched a full-fledged investigation against French glassmaker Saint Gobain after a preliminary review found that the company's Indian unit deliberately lowered prices of its products to drive out competition. "We have substantial evidence that Saint Gobain Glass India Ltd (SGGIL) engaged in limit pricing to make entry into the float glass segment unprofitable for others," a senior official at the Competition Commission of India said. Limit pricing, a monopolist practice in which an incumbent firm deliberately cuts the price of its products to discourage other potential entrants, is considered anti-competitive in India and could attract penal action under anti-trust laws. But Chennai-based Saint Gobain Glass said the charge was baseless. "No clear case of dominance can be found against us," a director on SGGIL board said. The Commission, in June, opened a preliminary enquiry against the company on a complaint alleging that Saint Gobain had abused its dominant position in the market by lowering prices between October 2010 and June 2011.

Mudra sold to global giant Omnicom

New Delhi: Omnicom Group Inc, the world’s second largest advertising group after WPP, on Monday announced an agreement to acquire a majority equity stake in Mudra Group, controlled by the Reliance ADA Group. With annual revenue of nearly Rs 200 crore, Mudra is among the top five advertising agency groups in the country. Omnicom earlier had a 10 per cent stake in the company. The move is being seen by advertising pundits as part of Omnicom’s aggressive strategy to become a key player in the country, where it is much behind rivals WPP, Publicis and Interpublic. The Mudra acquisition will catapult it into the top three advertising networks in the country. Mudra was the only Indian majority-controlled agency in the top five. The others JWT, O&M, Draft FCB and Lowe are all majority or entirely foreign-controlled. Reliance ADA Group chairman Anil Ambani will also join the Omnicom International Advisory Committee as part of the agreement. Mudra Group consists of four agencies: branding and communications agency Mudra India, marketing and advertising agency DDB Mudra, integrated engagement and experiential agency Mudra Max, and Ignite Mudra, India's only agency that caters to entrepreneurs.Mudra has 26 offices across the country and an extensive field activation network. Its leading clients include Godrej Group, Future Group, LIC, United Spirits, Emirates, Dabur, Aditya Birla Nuvo, CavinKare, Union Bank of India, Bank of Baroda, Amrutanjan, HCC and Bennett Coleman & Co. "This acquisition is an important step in achieving Omnicom's strategy to extend and deepen our presence in rapidly growing markets," said John Wren, president and CEO of Omnicom Group. "DDB has been an excellent partner over the years. We have benefited immensely from the collaboration and transfer of knowledge from around the globe. We are proud to belong to such a storied network," Mudra Group CEO Madhukar Kamath said. "Omnicom and DDB have clearly been the inspiration for Mudra Group's transformative growth over the last five years. My colleagues and I look forward to the next decade of explosive growth in the Indian market."

Hero MotoCorp aims export of 10 lakh units in 5-6 yrs

NEW DELHI: Free from export restrictions imposed by its ex-promoter Honda, India's largest two-wheeler maker Hero MotoCorp today said it aims to sell 10 lakh units in the overseas markets in the next 5-6 years. The company, earlier known as Hero Honda, has already shortlisted some players to expand its export markets in a big way in the future. On the domestic front, the company is looking to invest about Rs 1,000 crore to set up two new facilities besides expanding the output of three existing plants. Addressing analysts in a conference call, Hero MotoCorp Senior Vice President (Marketing and Sales) Anil Dua said: "We are looking at an exponential increase in export numbers ... In 5-6 years of time, we aim to sell a million bikes (every year) in international markets, which will be 10 per cent of our total business." Currently, exports contribute less than 2 per cent of total sales, he added. The company had sold a total of 54,02,444 units during 2010-11 financial year. "We have been approached by several partners for distribution and assembly. We have already shortlisted some partners," Dua said without giving further details. The company is looking at exporting its products to Latin America, Africa and South East Asian nations, he added. Asked about investment that Hero MotoCorp might put into develop its export bases, Dua said the firm will invest in future, but now it will not financially support its channel partners. On the plans for setting up of two new factories and expanding the existing capacities, Hero MotoCorp Chief Financial Officer Ravi Sud said : "When we talk of capacity, we talk in slabs of 7,50,000 units. So, 1.5 million units capacity plants. In a phased manner, it will cost close to around Rs 1,000 crore."

Bajaj plans Rs 500-cr capex in 18 months; new Pulsar by January

MUMBAI: The country's second-largest motorcycle-maker Bajaj Auto will invest Rs 500 crore to add capacity and develop a new variant of the flagship Pulsar over the next 18 months. "We are investing Rs 500 crore till FY'13 for expansion. We had already spent Rs 150 crore last year," Bajaj Auto Finance President Kevin D'sa told reporters here today. The proposed capex will include development cost of the new Pulsar, which will be based on a new technology, and will be launched in December/January, the company Managing Director Rajiv Bajaj told reporters a day after announcing the Q2 numbers. The company reported a muted 6 per cent rise in net income to Rs 726 crore for the September quarter on a revenue of Rs 5,342 crore, which rose 21 per cent as its sales volume grew 16 per cent to 1,164,137 units. The lower numbers were primarily due to a forex loss of Rs 95 crore on valuation of forward contracts that were charged to the profit and loss account in this quarter. With production of over 2.25 million units in the first half, the Pune-based company believes the momentum is in place to end the year at around 4.5 million units. "We expect to produce about 4.5 million vehicles and hope exports will surpass 1.5 million units this fiscal," Bajaj said. Exports make up 35 per cent of total sales, he added. Bajaj pointed out that there are concerns, specifically in terms of domestic motorcycle market share. "Our market share is going to stay at 27 per cent for now, but as the Boxer catches on and as we introduce the new Pulsar in January, I certainly hope that we will gain market share. I hope for 30 per cent market share by the time we finish this year," he said. As to exports, he said Latin America and African markets will be the future growth drivers. Bajaj is present in Argentina, Columbia and Peru, and is looking at entering into Brazil. "Brazil is a very competitive market and we are looking at devising business model there," International Business Head Rakesh Sharma said. It is also eyeing Thailand and Vietnam, but has no plans to enter into the Chinese market due to intellectual property rights issues, Bajaj said. Bajaj received Rs 860 crore in August and is expected to get another Rs 240 crore in the next couple of days, out of Rs 1,100-crore outstanding VAT refunds, D'sa said. The Bajaj counter gained 1.72 per cent to Rs 1,641.30 on the BSE.