Commerce Ministry approves proposals for packaging sector

Hyderabad: The $23-billion Indian packaging industry is expected to get a significant boost, with the Ministry of Commerce and Industry giving an in-principle approval to take up the 10 proposals submitted by the Indian Institute of Packaging to enhance industry standards. The 10 proposals, entailing an investment of about Rs 60 crore, include setting up of food packaging laboratory, flexible intermediate bulk container testing laboratory at Chennai and an international packaging centre in Mumbai. The proposals will also involve construction of a new education complex in Mumbai for B.Tech course on packaging, besides establishment of new centres in Guwahati and Ahmedabad. “We have just given our (Ministry's) approval, which will be submitted to the Ministry of Finance to decide on funding patterns. All the proposals will be completed during the 12 {+t} {+h} Plan Period,” Mr J.K. Dadoo, Joint Secretary to the Ministry of Commerce and Industry, told media persons on the sidelines of the Indipack 2011 event here. The domestic packaging sector, which has registered a 15 per cent growth, is expected to grow at 18 per cent in the next few years to touch $40 billion by 2015. Currently, it accounts for 10 per cent of the global market, constituting nearly 400 billion containers in terms of unit volumes. India imports about $125 million worth packaging machinery from Germany, Italy, Korea and China, with some 600-700 machinery manufacturers operating locally. Mr Dadoo said food consumption in India was expected to touch $240 billion by 2013, necessitating innovative packaging solutions, especially in the area of “heat and eat” food products. India's per capita packaging consumption is less than $15, against the world average of $100, he added. On the wastage of perishable food items due to inadequate packaging and transportation, he said the proposal to allow 51 per cent FDI in multi-brand retailing may reduce this wastage, as the foreign retailers will largely depend on primary producers for farm produces. They are expected to bring in better packaging and supply chain solutions. The three-day Indipack, which includes technical conferences and an exhibition, was inaugurated by the AP Minister for Civil Supplies and Food, Mr Sridhar Babu.

Cabinet approves Companies Bill

New Delhi: Seven years after it was first proposed, the cabinet on Thursday approved the Companies Bill 2011, a draft law to comprehensively amend the 55-year-old Companies Act 1956. It will be tabled in Parliament during the current session. The Bill aims at the modernisation of corporate regulation. It will herald an era of e-governance, enhanced accountability, and corporate social responsibility (CSR) among companies registered in the country. Several corporate governance and disclosure norms were included in the Bill to avoid recurrence of corporate scandals such as the alleged accounting fraud by the promoters of the erstwhile Satyam Computer in 2009. Additional disclosure norms for companies, mandatory rotation of auditors and audit firms, regulation of related-party transactions, protection of minority shareholders, provision for class action suits, enhancement of penalties and a mandatory slot for a woman director on company boards are all new proposals included in the Bill. Among other things, it also proposes to tighten the laws for raising money from the public. The Bill seeks to prohibit insider trading by company directors or key managerial personnel by treating such activities as a criminal offence. Further, it has proposed companies earmark two per cent of the average profit of the preceding three years for CSR activities and make a disclosure to shareholders about the policy adopted in the process. Class action suits will empower investors to sue a company for oppression and mismanagement, and claim damages. The Bill, referred to the cabinet a few weeks ago, was not cleared earlier due to some technical differences between the ministries of finance and corporate affairs over the delegation of powers to stock market regulator, Securities and Exchange Board of India. The differences were later resolved by finance minister Pranab Mukherjee, Planning Commission deputy chairman Montek Singh Ahluwalia and corporate affairs minister Veerappa Moily. Apparently, it has been decided Sebi's view will be upheld in cases of conflicting jurisdictions. The United Progressive Alliance government had introduced the Companies Bill, 2008 during its previous tenure, though it lapsed with the dissolution of the 14th Lok Sabha. It was re-introduced in August 2009 and was vetted by a parliamentary standing committee on finance. The 2011 Bill incorporates most of the changes recommended by the parliamentary panel. Industry chamber Confederation of Indian Industries (CII) welcomed the decision. “CII is very hopeful the cabinet has kept the concerns of the industry in mind while clearing this important legislation,” said CII director general Chandrajit Banerjee.

Aakash to get more features, prices may go down 1 day ago

If the Rs 3,000 tablet Aakash by Datawind was not enough, the company feels that it would be able to lower the price still further and also add more features or applications every six months. CEO, Datawind, Suneet Singh Tuli who launched the worlds cheapest tablet a few weeks back said on Friday that the Aakash tablet would be available in the market from January onwards. It is being currently rolled out by the government to targeted students across the country at a subsidised price of about Rs 1,500. Tuli said that while Aakash has been called a pathbreaking product and the cheapest tablet in the world at Rs 3,000, they were hopeful of reducing the cost a little lower as sales ramp up over the next year. He said that the tablet could become a little cheaper in the coming year and more features can be added to it every six months. "Processing power, battery life many such things can be increased over a period of time and we hope that every six months there would be something new in the Aakash tablet" said Suneet Singh Tuli. Aakash has already received 3 lakh pre launch bookings and Datawind has entered into a manufacturing agreement with companies at two more places in Cochin and Noida for meeting the demand. It is currently being manufactured near Hyderabad but with sales expected to hit 50 lakh units by end 2012, the company has entered into fresh manufacturing contracts to meet the huge demand. Suneet Singh Tuli said that to spur entrepreneurship among the youth and also to identify useful apps for their tablet they have started a national contest for students to submit their innovative software applications for collaboration with Datawind. "We hope to create entrepreneurial instincts among the student community. Several money-spinners like Facebook etc were started by students still in college. Students think unconventionally unlike large corporates. If they design a useful application which is selected by the jury it would be pre-burned in millions of tablets to be shipped out by us" said Tuli. He said that while it could be a money spinner for the student who will get a royalty from the usage of application on Aakash tablet, they would also gain by offering a useful application to their users. Tuli was here to attend the Entrepreneurial Summit organized by the Indian Institute of Management, Lucknow.

Indian IT companies like Cognizant, Infosys play down gains from rupee free fall

A sharp decline in the rupee means Indian IT services exporters are getting more bang for their buck, but most top executives are wary of the sudden dip as it adds to the current uncertainty. The rupee -- Asia's worst-performing currency this year -- has skidded nearly 17 percent from a 2011 high reached in late July as risk-averse investors flee emerging markets. It rebounded as much as 1.7 percent on Wednesday, a day after it touched an all-time low of 52.73. "If the change is gradual we can manage, but if the change happens at the end of the quarter, either way, we will have a big shift. We will not have the time to adjust," Infosys Ltd's Chief Executive S.D. Shibulal said at the Reuters India Investment Summit in Bangalore on Wednesday. Indian IT companies may also not reap the full benefits of a strong dollar as many of them hedge their positions against forex fluctuations. "By the end of September, we had $3 billion hedges in rupee expenses. About 60 percent of our rupee expenses were hedged," a Cognizant executive told Reuters. India's biggest listed biotechnology company Biocon , which receives licensing revenue from its partners Mylan and Pfizer, is not upbeat on the falling rupee either, as gains will be offset by imports getting dearer. "The Reserve Bank of India and the regulators have to rein in the free falling rupee because if you don't do that your imports are just going to cripple the economy," Biocon founder and Chairman Kiran Mazumdar-Shaw said. The rapidly falling rupee is also putting pressure on sectors like autos, infrastructure and realty at a time when high interest rates have already made borrowing more expensive.

Suzlon eyes $1-billion worth of new orders every quarter

MUMBAI: Wind power major Suzlon Energy, which recently took complete control of its German subsidiary REpower, has said it will focus on value engineering to remain competitive and has set a target of bagging USD 1 billion worth of new orders every quarter for the next few years. "We are working on value engineering by introducing new products like the S9X series of turbines that will not only enable us reduce cost, but also give us a competitive advantage in the market. With the new technology, we aim to bag orders worth USD 1 billion every quarter, every year," Suzlon Energy chairman and managing director Tulsi R Tanti told PTI in an interview here. Currently, the Pune-based world's fifth largest wind turbine maker's order-book stands at USD 7 billion and has a topline of USD 5 billion. The company has created the S9X suite of low wind speed turbines - S95 and 7, with a 2.1 MW rating for all markets, which is an advancement over the successful S88 wind turbines. "The smart S9X innovation and comprehensive design increases energy yield by 14-19 per cent, improves service ability and ease of maintenance," Tanti said. The 2 MW-class turbines come in two variants of 90-m and 100-m hub heights and the rotor diameter of 95 m and 97 m. "The wind industry is rapidly evolving. The center of gravity has shifted to emerging markets, which are re-shaping the renwable energy sector. This shift is also dictating the direction of technology development, as more moderate and low wind sites become available in these new markets. The S9X suite of turbines has been developed to take advantage of these emerging opportunities," Tanti said, adding Suzlon has already received orders for 800 MW for its this new turbine. Suzlon has also started working on manufacturing products in the 9X suite, with a capacity of 3 MW and 6 MW. While the 2 MW turbines are designed for developing markets, the 3 MW will cater to the developed markets and the 6 MW for the offshore markets, he said. "By brining in these new technologies, we expect to bring down material consumption in all the three platforms by 10 per cent each. The S9X product suite is designed to provide higher return on investment for our customers through higher generation, greater efficiency and improved technology," the company chairman said. "We are working on bringing down further the cost per energy through the technology. We expect to reduce the cost per energy by 25 per cent over the next two years through technology," Tanti said. On its USD 1.28-billion order from Britain's Caparo Group to generate 1000 MW, he said, "500 MW worth of capacity will be commissioned in this fiscal, while another 500 MW will be commissioned within the following year." Suzlon to save Tanti has also said with REpower coming fully under its control, Suzlon expects to shave off 200 million euros from its overall cost structure next fiscal, which primarily involves sourcing more components from India and China. "Nearly 65 per cent of our spends are on components, a majority of which comes from Europe. But given the current scenario, we plan to concentrate on the domestic market as well as China for components. This will help in reducing our material cost by nearly 100 million euros in FY13 and another similar amount from other heads," Tanti said. The cost-saving will be on the back of acquisition of the REepower. "With the successful acquisition of the complete stake in REpower, we see ourselves well-placed in the market. We will be focusing on market positioning, joint procurement and joint technology development for all our current and future projects. REpower, which was otherwise buying components from Europe will now import it mostly from India," Tanti added. Suzlon, present in 32 markets with an installed capacity of 18,000 MW (7000 MW in the country), recently bagged USD 6.5-billion worth orders for the next three years, making it the biggest order in the area. It can be noted that Suzlon stocks fell nearly 40 per cent in the past one week. Capping lack of investor confidence was the report that promoters sold 2 per cent stake to address margin calls to bankers. When asked about this, Tanti said, the current debt of nearly Rs 9,000 crore is not a problem, considering our healthy order-book of USD 6.5 billion. "With a USD 7 billion order-book and USD 5 billion topline, USD 2 billion in debt is not a big deal." On whether the company will be in a position to pay back the USD 550 million FCB redemption due for next June and September, he said "Of course. I am not seeking any extension." The company has Rs 10,000 crore debt, out of which, around Rs 6000 crore is working a capital loan, and Rs 4000 crore is a long-term debt, which is to be re-paid over 5-7 years. Over the next 12 months, it has a repayment obligation is USD 750 million. Tanti said, "As of the September quarter, the net debt to equity ratio is 1.6 times, which we want to bring down to 1.4 by the end of the year and by March 2013, it will be be at 1:1, and that too, without raising any equity."

Indian tea to come under one brand

JORHAT: The Tea Board has decided to on focus Indian tea under one brand and launch aggressive marketing in five big markets to increase sale. "We talk of Assam, Darjeeling and Nilgiri teas but as a whole Indian tea is not focused. Its high time we focus Indian tea under one umbrella as one brand," Tea Board Deputy Chairperson Roshni Sen said here today. Speaking on the concluding day of the three-day World Tea Science Congress, Sen said the Tea Board's main focus in the 12th Plan was to brand Indian tea under one umbrella and one logo. "We will give permission for the premium teas to use the logo." As the country was losing out major markets due to inadequate promotions, she said, an aggressive programme called "555" would be introduced five focus countries for five years and for five identified activities. "The five countries are Russia, Kazakhstan, USA, Iraq and Egypt which are the biggest buyers of Indian tea. We want to build up a Brand India image there because though they are buying tea from India but branding of our tea has really not happened," she said. Dan Bolton, a tea expert from the USA, said the movement for popularising Indian tea needed more investments and stress should be on quality for the retailers to tell their customers about the quality of tea they were selling. Assam Chief Sectary Naba Kumar Das, speaking as the chief guest at the closing function, said, small tea growers needed to be given special attention for quality control. He called upon the traditional tea growing countries to share their experiences with the small tea growers.

Vodafone, HDFC Bank launch mobile banking in Rajasthan

CHOMU (RAJASTHAN): Leading telecom service provider Vodafone India and private lender HDFC Bank Saturday launched "m-paisa", a mobile banking service in Rajasthan to enable millions of unbanked Indians perform basic banking transactions on their mobile phone. "It is a great oppotunity for a country like India to improve financial inclusion through mobile banking. It is a pioneering initiative modeled on the lines of Vodafone's m-pesa product running in three different countries of Africa, offering to more than 17 million people basic financial services beyond the reach of traditional banking," said Sunil Sood, director, business operations, Vodafone India. "With our reach and ability to connect customers, we expect many million people to come into the banking fold through this service," he added. This initiative will allow Vodafone's select retailers to act as HDFC's sub-agents through which customers can deposit and withdraw cash through their mobile phone without having to go to bank branches. In Rajasthan where this national partnership has been implemented, over 2,200 retailers across 320 villages and 54 towns are operational in opening HDFC Bank mobile bank accounts with Vodafone m-paisa. "There are 6,00,000 habitations but only about 89,000 bank branches in the country, making access to banking services difficult in remote areas. We feel that Vodafone's significant distribution reach will provide customers the security of financial transaction offered by bank," said Rahul Bhagat, country head, retail liabilities, marketing and direct banking channels, HDFC Bank. The companies will expand the service pan-India in a phased manner by March-April next year and also have plans to deliver it in all the major languages gradually. Currently it is available only in English. In order to open an account, a customer will have fill in a KYC (know your customer) form and submit it to the retail outlet authorised by Vodafone and then start availing service on fulfilment of the bank's formalities by dialing *135#. Speaking about the security of the service, Reserve Bank of India deputy governor K.C. Chakrabarty, who launched the service, said: "We will be supervising HDFC Bank ... we have issued mobile banking guidelines. We want to ensure that efficient use of mobile technology takes place in financial inclusion."

Global retail firms may face hurdle in 28 of 53 cities opened for FDI

NEW DELHI: With BJP, JD(U), AIADMK, BSP and Trinamool Congress strongly opposing FDI in multi-brand retail, global chains may face problems in opening stores in 28 of the 53 cities which have been thrown open to retailers like Walmart and Carrefour. The parties and alliances ruling in 11 major states have strongly opposed the decision of the Central government to allow foreign direct investment (FDI) in multi-brand retail which is dominated by small traders. According to 2011 Census, there are 28 cities in 11 states ruled by the parties opposed to the decision. These include big cities like Bangalore, Kolkata, Ahmedabad, Patna, Allahabad and Bhopal which have over one million population, the threshold set by Cabinet while approving FDI in retail on November 24. Excluding Punjab, BJP and NDA rule in eight states, including Madhya Pradesh, Gujarat, Karnataka, Chattisgarh, Chennai, Coimbatore, Jharkhand, Uttarakhand, Bihar and Himachal Pradesh. BJP indicated that states where the party is in power may not permit foreign stores. Besides, Uttar Pradesh Chief Minister Mayawati has already stated that no foreign retailers would be allowed in her state. The final authority for granting the trade licence rests with the states under their respective shops and establishment Acts. Bihar Chief Minister Nitish Kumar yesterday vehemently opposed the decision to allow 51 per cent FDI in retail saying "It will ruin the retailers and lead to a point of unemployment".

Cyrus Mistry to succeed Tata

Mumbai: The suspense is finally over. Mr Cyrus P. Mistry will take over from Mr Ratan Tata as Chairman of the Tata Group when he retires in December 2012. He was appointed Deputy Chairman of Tata Sons at the company's board meeting here on Wednesday and will work with Mr Tata over the next year. “This is as per the unanimous recommendation of the selection committee,” a press release said. The release quoted Mr Tata as saying, “The appointment of Mr Cyrus P. Mistry as Deputy Chairman of Tata Sons is a good and far-sighted choice. He has been on the Board of Tata Sons since August 2006 and I have been impressed with the quality and calibre of his participation, his astute observations and his humility. “He is intelligent and qualified to take on the responsibility being offered and I will be committed to working with him over the next year to give him the exposure, the involvement and the operating experience to equip him to undertake the full responsibility of the Group on my retirement.” Age has been a major factor that led to the selection of Mr Mistry, a person closely associated with the selection committee said. The 43-year-old son of Mr Pallonji Mistry, the largest single shareholder in Tata Sons with an 18 per cent stake, is a civil engineering graduate from Imperial College, London. He also has a Master of Science in Management from the London Business School. ‘Deeply honoured' Mr Mistry is currently Managing Director, Shapoorji Pallonji Group. “I feel deeply honoured by this appointment. I am aware that an enormous responsibility, with a great legacy, has been entrusted to me. I look forward to Mr Tata's guidance in the year ahead in meeting the expectations of the Group. “I take this responsibility very seriously, and in keeping with the values and ethics of the Tata Group I will undertake to legally disassociate myself from the management of my family businesses to avoid any issue of conflict of interest,” he said in a statement. Television crews had parked themselves outside Bombay House, the headquarters of the Tata Group in the busy Fort area, for hours. When Mr R. K. Krishna Kumar, Director of Tata Sons, emerged after the meeting, he quickly said, “This is great news and a great moment,” before getting into his car and driving off. Another Tata company official told Business Line that Mr Mistry's age would hold the Group in good stead for the future. “This is keeping in line with the current trend where a whole lot of top-level managers are in their 40s,” he added. Within industry circles, the appointment of Mr Mistry has come as a surprise especially when it seemed a near certainty that the other Tata, Noel, would take over the mantleThe five-member panel which had been on this exercise for more than a year had a tough task on hand, especially when it meant finding a successor to fill Mr Tata's boots. It had to be a person with the kind of global perspective that would take the Group into the next level of growth. Speculation was rife that an expatriate would also be considered and some of the names doing the rounds included Ms Indra Nooyi, CEO of PepsiCo, and Mr Carlos Ghosn, CEO of Renault-Nissan. “All this was complete conjecture,” an industry source said. Ratan’s letter to executives Mr Ratan Tata in a letter to executives said: "I am looking forward to working with Mr Mistry in the coming months and sharing with him the complexity, the challenges and the future vision of our group, and trust that you will extend the same wholehearted support to him as you have to me."

Indian Oil, BP in pact to set up 1 mt acetic acid plant

New Delhi: BP and Indian Oil Corporation are planning to set up a 50:50 joint venture acetic acid plant in Gujarat. The two companies entered a memorandum of understanding to invest in a one-million-tonne a year acetic acid plant with associated gasification facilities for production of synthesis gas. Acetic acid is used in petrochemicals and paints, apart from other products. A joint feasibility study is currently under way to confirm the exact configuration of the project, which is expected to be commissioned in 2015, separate statements issued by the two companies said. The proposed plant would employ BP's latest Cativa XL technology, whilst the gasification facilities would utilise petroleum coke feedstock from Indian Oil. On whether BP-Reliance Industries agreement will have any impact on this understanding, official sources said, “The BP-Reliance Industries agreement does not include venture into acetic acid business.” Sources said, currently, Gujarat Narmada Valley Fertilisers Company (GNFC) is producing acetic acid. GNFC's plant is unable to meet the entire domestic demand. GNFC capacity is 1.6 lakh tonnes a year. The current supply-demand gap is about six lakh tonnes, the official said, adding that the gap is met through imports. “By the time the joint venture plant is proposed to come up (in 2015), the gap would be about one million tonnes, which is the proposed capacity of this plant.” Indian Oil has recently commissioned a coker unit with one million tonne petcoke capacity at Gujarat Refinery. The acetic acid will be a good opportunity for enhanced value addition besides providing window for import substitution, the official said.