PandG to build largest Indian plant in Hyderabad

Hyderabad/ Mumbai: Procter & Gamble, the world's largest consumer goods company, will build its largest manufacturing plant in the Indian sub-continent in Hyderabad by investing 345 crore.

The plant, to be spread across 170 acres at Mahbubnagar district, will make products across categories such as laundry, personal and baby care, a person, who is the know said on condition of anonymity.

P&G India's associate director, product supply, Madhav Rao confirmed that the maker of Tide detergent and Head & Shoulder shampoo will build a manufacturing facility in Hyderabad. The plant will start commercial production in two years.

Andhra Pradesh industries secretary TS Appa Rao said P&G has awarded the construction contract to L&T. "They have asked for a tailor made package of tax breaks and the state investment promotion board is considering it," Rao said.

The $82.6-billion (sales in FY11) US giant had considered Chennai too as a possible site for its plant. Building the plant in Hyderabad will make it eligible for a 100% stamp duty reimbursement and fixed power allocation as per Andhra Pradesh's newly-revised industrial policy. The company has also asked for a 75% reimbursement on VAT for five years.

The move is in line with the Cincinatti-based firm's global mandate to set up over 20 production centres and acquire one billion new consumers in emerging markets by 2015. P&G is looking to catch up with archrival Unilever in India and most emerging markets. Making more products locally and reducing imports will help it speed up product launches and cut costs.

It currently has five plants and over nine contract manufacturing sites in India.

Last year, P&G approved an investment plan of over 900 crore in its unlisted arm Procter & Gamble Home Products. Most of this money will go into powering P&G's 'Project 2-3-4,' which is aimed at doubling the number of Indians who use its products, trebling per capita spending by Indians on its products and quadrupling net sales of its India operations by 2015.

Anand Mour, senior analyst at brokerage firm Ambit Capital, said P&G will need to spruce up production to quadruple its sales. "Making products locally will help P&G in economies of scale to localise and price their products aggressively," he said.

P&G is also expanding its existing multi-product manufacturing facility in Bhopal. It has doubled its distribution reach over the past couple of years and now has a direct reach of 1.3 million outlets, against HUL's direct reach of 2 million outlets.

At present, India is one of the smallest markets for P&G with just $1-billion sales across three subsidiaries -Procter & Gamble Health & Hygiene, Gillette India and Procter & Gamble Home Products.

Intel enters smartphone market in India with Xolo

New Delhi: At last, there is 'Intel Inside' in a smartphone. Intel entered the smartphone market on Thursday, launching Xolo X900 in partnership with India's Lava Mobiles. The company, dubbed 'chipzill', makes processors that power over 80% computers in the world.

Xolo X900 is the world's first Android phone powered by an Intel processor and represents the chip manufacturer's first attempt to take on ARM Holdings, a British firm that makes technology, powering virtually all smartphone and tablets in the world.

The launch of Xolo X900 is a significant moment for both Lava and Intel. While Lava, which is better known for its budget phones, is trying to enter the premium segment, for Intel it's the beginning of the company's new future where traditional computers may not matter much. "The boundaries of personal computing are expanding. Xolo X900 showcases rich capabilities of Intel computing and highlights possibilities of what's still to come," said Mike Bell, Intel's corporate V-P.

The Xolo X900 is based on Intel's reference design and features Atom processor (Z2460) running at 1.6Ghz. It will be available in the market from April 23 at Rs 22,000.

"We know that we can't be big overnight but we believe that in Xolo X900 we have a smartphone that is faster compared to the competition due to Intel processor," said Vishal Sehgal, director of Lava International. Lower-priced Xolo phones would come in future and Xolo owners will get premium support, including onsite warranty, a first for phones in India, Sehgal added.

Despite smartphones and tablets becoming a force to reckon with, so far Intel has failed to get a foothold in the market. Patrick Moorhead, who recently started his consulting firm Moor Insights & Strategy after decade-long stint with AMD, Intel's lead rival, said the 'chipzilla' has a good chance of success.

"I believe Intel can attain at least 10-20% unit share in smartphones and 50% unit share in tablets costing $299 and above by 2014," said Moorhead. "Medfield (the processor that powers Xolo X900) is very competitive on delivering a good experience at low power and will get even more competitive as Intel moves to 22nm and new architectures. At 14nm, the company will be aforce to reckon with."

Traditionally, Intel has held a massive advantage in manufacturing of silicon chip and has used it to the good effect in traditional computer market. This is something Prashanth Adiraju, director for new platforms at Intel (South Asia) highlighted. "Unlike competition (read ARM) we design, optimize and manufacture the complete chip. This is our competitive advantage," he said.

The world of technology is in state of flux. Last year, Microsoft had announced that Windows 8 would run on ARM processors, ending the decades-old Microsoft-Intel partnership, often dubbed Wintel by analysts. On the same day, Intel announced it would partner with Google to bring Android to X86 platform, something that set in motion the process which led to the launch of Xolo X900

Strides Arcolab unit gets USFDA nod for cancer injection

Bangalore: Onco Therapies, a subsidiary of Strides Arcolab, has received US Food and Drug Administration (FDA) approvals for anti-cancer Cisplatin injection.

The company's shares on the BSE rose slightly over 3 per cent to close at Rs 653 a share following the announcement.

Cisplatin is a chemotherapy drug and is used to treat various types of cancers, including sarcomas, some carcinomas (example small cell lung cancer, and ovarian cancer), lymphomas, and germ cell tumours. The company in a release said approvals is for Cisplatin injection of one mg/ml packages in 50 ml and 100 ml multiple dose vials.

It is amongst the products in the drug shortage list of USFDA. According to the IMS data, the US market for generic Cisplatin is about $10 million.

Aviation sector allowed to raise up to $1 bn in ECB

New Delhi: After clearing the implementation of relaxed external commercial borrowing (ECB) norms to meet capital requirements in the power and road sectors yesterday, the finance ministry today paved the way for implementing the measures announced in the Budget for the airline sector.

Keeping in mind the immediate financing concerns of the civil aviation sector, Finance Minister Pranab Mukherjee, in his Budget speech, had announced companies in the aviation sector would be allowed to avail of ECBs for one year for working capital and refinancing of working capital rupee loans.

ECBs under this provision would have a ceiling of $1 billion for the entire civil aviation sector. The cap for individual airline companies has been fixed at $300 million. This may be availed either in a lump sum or in tranches, depending upon the utilisation of the limit during a particular financial year.

Saying the Reserve Bank of India (RBI) would come out with the relevant circulars and notification for implementing these measures within a week, Joint Secretary, (capital markets), Thomas Mathew, said the proposals of individual companies would be considered by RBI under the approval route, based on parameters such as cash flows and the capacity of individual companies to repay these loans from their foreign exchange earnings.

To increase access to ECBs, RBI would consider relaxation in the average maturity period for ECBs above $20 million from five to three years, he said, adding the central bank would also keep a tab on the utilisation of the funds.

“Working capital loans are short-term and attract higher interest rates. Raising these through ECBs would reduce costs by 200 basis points,” said an Air India official, on condition of anonymity.

On the possibility of raising the $1-billion limit, Mathew said, “We will answer this issue when we reach such a situation.” The civil aviation ministry has already demanded this limit be raised to $2 billion.

India emerges as the most optimistic nation in Asia: Survey

New Delhi: India has been ranked as the most optimistic nation in Asia, according to a global consumer confidence survey, titled 'MasterCard Worldwide Index of Consumer Confidence'.

India at 81.2 - in an index which is calculated with 100 as the most optimistic - emerged as the leader in Asia.

The index is based on a survey which measures consumer confidence on prevailing expectations in the market over the next six months, based on indicators such a economic growth, employment, stock market, regular income and quality of life.

The survey was carried out between December 5, 2011 and February 8, 2012 and involved 12,915 respondents in 25 countries.

VA Tech Wabag launches pipeline to draw sea water

Chennai: Come September Chennai's residents will have a new source of drinking water, a 100-million litre a day desalination plant that will produce fresh water from sea water.

The Rs 1,000-crore plant being set up by VA Tech Wabag for the Chennai Metropolitan Water Supply and Sewerage Board, the public sector water utility, achieved an important milestone on April 16 when a km-long, 1.6-metre pipeline was launched into the sea to take in over 300 million litres of sea water a day.

For VA Tech Wabag and the water business in India this is a major development, says Mr Rajiv Mittal, Managing Director, VA Tech Wabag.

It is the largest desalination plant in India and the largest contract for the company.

Others Exploring options
This is the first time a water utility is putting up the plant directly and this project is being watched by many coastal State Governments that are exploring options of setting up a desalination plant. States such as Gujarat, Andhra Pradesh and Maharashtra are water starved and considering desalination as an option.

VA Tech Wabag, the Chennai-based multinational player in water and waste water management, bagged the contract to set up the desalination plant and operate and maintain it for seven years after completion.

Mega project
Work on the project started early in 2010 and once implemented, in three months' time, it will put the company among the few with a capacity to handle mega projects.

Also, over the next seven years the company will handle the operation and maintenance which represents a steady revenue of about Rs 70 crore a year.

VA Tech Wabag, listed on the stock exchanges BSE and NSE, is collaborating with IDE Technologies of Israel to set up the project funded by the Government of India. The facility is coming up about 50 km south Chennai on the East Coast Road.

This is the second desalination plant to supply water to the city with the first in operation at Minjur to the North of Chennai as a private sector project on design-build-own-operate-transfer basis by IVRCL, Hyderabad.

Daimler sets up truck factory in TN

Chennai: German auto maker Daimler AG has decided to consolidate its truck manufacturing operations in India. As part of the plan, it will shift the production of Actros from Pune to Oragadam in Tamil Nadu.

The company launched the facility in Oragadam on Wednesday. It will manufacture the BharatBenz trucks and all commercial vehicles there.

The Rs 4,400-crore facility will have an initial capacity of 36,000 units, including 24,000 units for heavy duty trucks and 12,000 for light duty trucks under the BharatBenz brand.

The capacity could be raised to 70,000 units per annum, said Dieter Zetsche, chairman of the board of management of Daimler AG and head of Mercedes-Benz cars. The facility is spread over 400 acres.

Zetsche said India was not just emerging, but thriving. The exceptional role of the economy was a matter of fact — not next decade, not next year, but today. “If India’s economy were in Mercedes, it would have to be an SLS AMG super sports car.

“If you don’t make it here, you won’t make it at all. Because a strong position in the global market requires a strong position in India and at Daimler, we always go for the leading position in our industry. That’s why India will play an increasingly important role in our business”.

The company said it could join hands with the Renault-Nissan alliance for commercial vehicles in India, although there was no immediate plan.

Zetsche said, “Though we don’t have any plan now, we don’t rule out the possibility. Our partnership is not restricted to any region. It is possible to do something together in India as well”.

Daimler and Renault-Nissan build commercial vehicles together in Europe.

The Oragadam facility can roll out one heavy duty vehicle every 11 minutes and one light duty vehicle every 22 minutes. The new plant will make light and heavy duty trucks in the 7-49-tonne range and is meant for both domestic and international markets, including Asean and Africa.

“Our priority is the domestic market, once we address the domestic market, we will look at exports,” said Andres Renschler, member of the board of management at Daimler AG and head of Daimler Trucks and Daimler Buses.

The first of these trucks, used in construction, mining and on highways, will be rolled out in September, he added.

According to compay sources, the vehicles will have 85 per cent localisation. Besides assembling, the facility will also have a power train facility to cater to heavy duty trucks, with a capacity of 24,000 engines. For light duty vehciles, the engines will be manufactured at Pithampur in Madhya Pradesh.

A separate facility, within the Oragdam plant, will be created to manufacture the Actros trucks, which are high-end heavy duty trucks and the largest-selling truck model worldwide.

According to a Daimler India Commercial Vehicles (DICV) official, the company wants to have all truck manufacturing in one location while cars will be rolled out of the Pune plant.

DICV will also shift its research and development (R&D) team to the plant site though from a different location in Oragadam. Currently, the auto major employees around 1,000 people in its R&D unit.

The official said 85 per cent of the components were locally sourced.

Korean Woori Bank opens first India branch in Chennai

Chennai: Seoul-headquartered, South Korean Government-owned Woori Bank has opened its maiden India branch in Chennai with a capital of $35 million.

Mr Soon Woo Lee, president and CEO of the bank, told ET via a translator, "We will provide assistance to Korean companies that have entered the market ahead of us. Once that is done, we will focus on localisation, accommodating the needs of the India companies and customers."

He said the bank was on the verge of starting operations in 2007 but had to put it off after the global financial crisis struck.

Chennai houses more than 170 Korean companies, including big names such as Hyundai Motors, Lotte and Samsung. Apart from this, many local Indian vendors in Chennai are working together with Korean companies. The number of Koreans in Chennai has also doubled in the last three years. It has gone up to 4,000 from 1,500.

A lot of Korean shops and restaurants have also emerged in and around Sriperumbudur, the industrial hub.

"Two Korean firmsDoosan and Mando are opening operations in India and they focus on infrastructure. We see the opportunity in taking up state or government projects through them," said Lee.

Moo Soo Kim, chief executive officer of the bank's Indian operations, said," The opening of Woori Bank will also ensure that there is mutual development and cooperation between Korea and India. We would also be of good support in the local development of Tamil Nadu with the help of Korean firms."

West Bengal government joins hand with UK to develop fiscal instruments for climate change

Kolkata: British Deputy High Commission-Kolkata and CII along with West Bengal Industrial Development Corporation (WBIDC) are working with technical partners CII-Sohrabji Godrej Green Business Centre, Eunomia Research and Consulting, UK and Jadavpur University on a first-of-its-kind project in India titled "Fiscal Instruments for Climate - Friendly Industrial Development in West Bengal and Odisha."

This project is being funded by UK FCO's Prosperity Fund India programme, to help develop low carbon industrial policies of the states. The project objective is to help West Bengal and other states adopt appropriate fiscal instruments by 2013 to mobilize low carbon investment and facilitate low carbon industrial development.

In this regard, CII together with British Deputy High Commission, Kolkata, will be organising a session on UK-India partnership: Fiscal Instruments for Low Carbon Business to launch the project reports on national and international review of lessons learnt from fiscal instruments for low carbon industrial development.

Mr Gregory Barker minister of department of energy and climate change, UK, Mr Partha Chatterjee, West Bengal commerce and industry minister and Dr Sudarsan Ghosh Dastidar, the state environment minister will hold a discussion on this issue.

Budget proposals on ECBs for power, road sectors take off

New Delhi: The Union finance ministry on Wednesday began implementing the Budget proposals on external commercial borrowing (ECB) for capital needs of the power and roads sectors. It also indicated the same thing would be done for the airline sector later this month.

This comes a day after Finance Minister Pranab Mukherjee’s assertion that the 50-basis-point repo rate cut by the Reserve Bank of India (RBI) would be followed by policy steps in tandem. RBI, too, had made it publicly clear that its monetary policy initiatives needed to be backed by government policy action.

On on Wednesday’s changes, the ministry’s joint secretary, capital markets, Thomas Mathew, said RBI would be issuing the relevant circulars and notifications within a week.

Power companies have now been allowed ECB to finance their rupee debt up to a maximum of 40 per cent, provided the remaining 60 per cent of ECB raised is utilised for investment in a new project. “This would increase access to cheaper funds for companies in the power sector,” said Mathew.

Currently, Indian companies in the infrastructure sector are permitted to use 25 per cent of fresh ECB raised by them towards refinancing of rupee loans under the approval route.

To also provide a fillip to road construction, the Budget for 2012-13 proposed allowing ECB for capital expenditure on the maintenance and operations of toll systems, provided these were part of the original project. “Implementation of this policy decision will provide an additional source of low-cost capital,” said Mathew on Wednesday.

Other measures proposed in this year’s Budget included permitting ECB for working capital requirements of the airline industry for a year, subject to a ceiling of $1 billion and allowing ECB for low-cost affordable housing projects. Also proposed were reduction in the rate of withholding tax on interest payments on ECB from 20 per cent to five per cent for three years for power, airlines, roads and bridges, ports and shipyards, affordable housing, fertilisers and dam projects.

Mathew said implementation of the step proposed for meeting the capital requirement of the airline sector was next. And, all the other measures announced in the Budget would be implemented soon.

He said there was no proposal to raise the ECB ceiling for 2012-13 but the existing limit would be adequate, not a hindrance. The ECB ceiling for 2011-12 had been enhanced from $20 bn to $30 bn.