Nissan to make India export hub

New Delhi: Japanese auto major Nissan Motor wants to become the largest car exporter from India, a senior executive said.

The second largest carmaker in Japan is also planning to make India the launch pad for its entry level low-cost brand Datsun.

Nissan is the fastest growing exporter of cars from India, in a country where South Korean Hyundai Motor and Maruti Suzuki India are now the leading car exporters. Nissan exports have doubled to 1,00,909 cars in the last fiscal driven by strong demand for compact cars from Europe and Latin American markets.

Nissan began to export cars in 2010 from Chennai and currently ships 85% of its production to overseas markets. Its wholly-owned Indian subsidiary, Nissan Motor India (NMIPL), has now started shipping its sedan model Nissan Sunny after the huge success of its 'made in India' Micra hatchback, which is now sold in over 100 countries.

It exports fully-built cars such as Micra from Chennai, its strategic production hub for Africa, Europe and other Western markets. The company has now started exporting completely knocked down kits of its sedan, Sunny, to Egypt. These kits from India would be assembled by the local Nissan subsidiary abroad.

Speaking to ET, NMIPL Managing Director Takayuki Ishida said: "We have ambitious plans for India. Exports from India have been a huge success so far, and we want to increase it with new models, as trans-continental markets post stronger demand for smaller cars. We plan to increase our production to over four lakh cars, most of which would be meant for exports."

Currently, the company produces three lakh units under the Renault-Nissan global alliance joint plant in Chennai. About 85% of the production is meant to be exported to markets in Europe, Asia and Africa. It eventually aims to pip South Korean carmaker Hyundai as the largest exporter from India, which has shipped 2.37 lakh last fiscal.

"We are readying several markets to increase export of cars manufactured in India. We will also expand our product portfolio by launching several new cars. Many of these would be targeting overseas market and India could be the sole production centre in Asia," Ishida said.

Analysts say that many car companies in India have great potential to tap overseas markets. "India enjoys tremendous advantages of cost competitiveness due to cheaper labour. The added advantage of huge volumes enjoyed by Hyundai and Maruti Suzuki allow them to export more and take competitive advantage in overseas market. Likewise, Nissan also has a huge product portfolio and eventually would become a major player in exports market," said a Mumbai-based auto analyst with a brokerage firm.

Nissan is currently developing a small car of Rs 2-4 lakh to take on models such as Maruti Suzuki Alto and Hyundai Eon. Its manufacturing plant at Oragadam in Chennai would make Datsun cars for local and export markets, even as the company is considering a new factory to manufacture the new low-cost brand.

Datsun, expected to be a high-volume product targeting emerging economies, is expected to roll out by mid-2014. "We are developing the car keeping in mind the needs of emerging markets such as India, Brazil and Russia. The production base here is expected to meet the overseas demand for Nissan cars," Ishida added.

Mini-trucks to drive commercial vehicles sales

Chennai: Commercial vehicle sales in India are set to double to 1.6 million units by 2016-17, driven by mini trucks, says Ernst & Young.

Last year, the commercial vehicle industry in the country grew at 8 per cent to 809,000 units. This year it is expected to post 10 per cent growth, said Mr Rakesh Batra, National Leader - Automotive Sector, Ernst & Young. “Things will pick up after the second quarter. The third and fourth quarters, especially, will see strong growth.”

In the next five years, the commercial vehicle industry is expected to grow at a CAGR of 15 per cent, according to an E&Y report ‘Mega trends shaping the Indian commercial vehicle industry’. A chunk of this growth will come from mini trucks or small commercial vehicles, said Mr Batra.

In the last three-four years, the SCV segment (sub 1-tonne load factor) has been growing at 30 per cent, though on a small base. The major players in the space are Tata Ace and Mahindra Maximo. Ashok Leyland too launched the light commercial vehicle Dost early this year (1.25 tonne).

“In the next few years, SCV growth will settle down to 20 per cent.”

The ratio of mini trucks to the overall number of trucks is 1.25 in India. In the developed countries, it is around 10:1, says Mr Batra. The ration is 4:1 in the emerging markets of Russia and Brazil.

Although one cannot predict the SCV density in India in the coming years, the experience of emerging markets suggests a similar story evolving here too, said Mr Batra.

Ranbaxy launches anti-malaria drug

New Delhi: Ranbaxy Laboratories, India’s top drug maker by sales, today launched a drug to treat malaria. Claimed to be the first original drug developed by an Indian entity, Synriam, the branded anti-malarial combination, will offer a more effective and shorter drug regimen to patients. The drug has been approved for use on adults.

According to Ranbaxy, the product is undergoing final stages of clinical trials in Africa, a region that accounts for 90 per cent of malaria-related deaths globally. India, however, accounts for 75 per cent of the 2.5 million cases of malaria reported in the Southeast Asia. Synriam would cost Rs 130 for a complete course (one tablet each for three days), Arun Sawhney, chief executive officer and managing director of Ranbaxy, said.

The company did not disclose the market potential of the medicine, as malaria medicines, by and large, are supplied through government channels. Ranbaxy expects the product to be included in government supplies soon. “We do not expect revenues from Synriam to have a major impact on our balance sheet. It is our CSR (corporate social responsibility) drug, as our prices will be the lowest among similar drugs,” Sawhney said.

Of the 17 medicines approved by the World Health Organisation for treatment of malaria, more than half are supplied by Indian drug companies such as Cipla, Ipca Laboratories and Ajanta Pharma. Other players include multinationals such as Sanofi Aventis and Novartis. A WHO pre-qualification is essential for including a malaria drug under any global programme. Ranbaxy also needs this international approval, if it has to supply its medicine for the treatment of one of the most fatal forms of malaria, falciparum malaria infection.

Ranbaxy got involved with the research project initiated by Medicines for Malaria Venture (MMV), a Geneva-based not-for-profit foundation, when Swiss drug multinational Roche, the original industry partner, decided to hand over the potential drug candidate to it.

Four years later, MMV stopped funding the project and transferred the rights for development and marketing of the medicine to Ranbaxy after it reviewed the progress of clinical trials in November 2006. According to MMV’s annual report for 2006, the decision was taken after “the review of the preliminary data and other portfolio priorities”. Ranbaxy roped in the department of science and technology (DST) to part fund the project.

Sawhney said the development cost of the drug was $30 million (Rs 150 crore). Of this, Rs 5 crore came in as DST grant.

The Ranbaxy-DST agreement necessitates the company supplying the medicine for use by government channels at a much lower rate. While Sawhney said the company was yet to work out the pricing formula with DST, government sources said Ranbaxy had to supply the drug at a price 10 per cent more than the actual cost of production. If the drug is exported, DST would be entitled to three per cent of the net profit earned by Ranbaxy.

Sudershan Arora, president of R&D, Ranbaxy, said the company expected to complete the final clinical trials by the first quarter of 2013.

Ports may get Rs 1.8 lakh crore investment in 12th plan

New Delhi: The government is looking at an investment of over Rs 1,83,000 crore in ports in the 12th Five-Year Plan, most of which will come from the private sector, for a capacity addition of 1,440 million tonnes. According to the shipping ministry, the country's 13 major ports will require about Rs 77,000 crore to raise capacity by 527 million tonnes.

The requirement of minor ports is estimated atRs 1,04,808 crore for a capacity addition of 913 million tonnes. The investment plan, which is double the funds the sector received in the 11th Plan period, is likely to be approved by the Planning Commission in a few weeks, an official told ET. Of the envisaged investment in major ports, Rs 15,000 crore is likely to be generated through internal resources, Rs 6,294 crore through extra budgetary resources and Rs 4,338 crore through government funding.

The private sector is expected to pump inRs 51,000 crore. The capacity of Indian ports at the end of fiscal 2011-12 stood at 1,247 million tonnes, which is likely to go up to 2,686 million tonnes by 2017, the end of current Five-year Plan period. Experts say that if policy and clearance issues do not play spoilsport, as was the case in the first three years of the 11th Plan, the government will be on track to add 3.2 billion tonnes in capacity by 2020, a target set under its Maritime Agenda 2020.

"The proportion of investment in 10th Plan was only 50% of the target, as compared to 125% capacity addition. Given the delay in implementation of projects, capacity addition and investment is likely to be in the range of 70-80% of the target for next Plan," said Samir Kanabar, partner at Ernst and Young. Essar Ports, one of the biggest private players in the sector, plans to raise capacity by 70 million tonnes over the next two years with an investment of over Rs 4,000 crore.

"Government has to play a major role in materialisation of these planned investments, as its role will be more as a facilitator for formulating investment-friendly policies and in expediting process of clearances and approvals for port development," Essar Ports managing director Rajiv Agarwal said. He said that 80% of the funds required for capacity expansion in both major and minor ports is expected from the private sector.

Publicis Groupe acquires India's Indigo Consulting

Mumbai: Global communications giant Publicis Groupe has acquired Indigo Consulting, one of the leading digital marketing and web development agencies in India, for an undisclosed amount on Tuesday.

While Indigo will operate as a unit within the Leo Burnett Group in India and will retain its name, its founder, Vikas Tandon, will remain as MD and would report to Arvind Sharma, chairman of Leo Burnett for the Indian Subcontinent, said Publicis in an official statement.

"All the 150-plus people (size of Indigo) are happy and rich, is all I can say," said Sharma.

The agency founded by the IIM-A alumnus Tandon in 2000 has an impressive client roster that includes brands such as Thomas Cook, HDFC Bank, Tata AIG General Insurance, Asian Paints and DSP Blackrock Mutual Funds. The maverick entrepreneur also runs Cashcow, India's first blog on Financial Services marketing.

In fact, even before the formal deal was sealed, Indigo had started helping the Publicis agency in making joint pitches and workshops, according to sources.

An elated Tandon shares, "This deal would surely help us leapfrog our growth. Digital world is very amorphous and we have built our business from early on with a very consulting approach."

Jarek Ziebinski, President of Leo Burnett Asia Pacific said in the press release, "Our growth strategy for Leo Burnett in India and Asia Pacific is based on two core pillars: digital and shopper-marketing" We want to make sure Leo Burnett has the right infrastructure in place to meet the needs of tomorrow. I also see Indigo Consulting developing beyond India, to become an important player within our network in Asia Pacific and globally."

This acquisition could well be an important step for Leo Burnett India's roadmap towards becoming a fully integrated communications company including the digital capability.

According to Sharma, "After this acquisition, every fourth employee of The Leo Burnett Group in India will be from the digital background."

Indigo provides website design and development, search engine optimisation, usability research and testing, and online marketing, on mobiles and in social media.

Cipla to launch combination anti-malarial drug in Africa, South-East Asian countries

Mumbai: Drug-maker Cipla is set to launch a fixed-dose combination of Artesunate (AS) and Mefloquine (MQ) medicines for the treatment of falciparum malaria.

The two-in-one combination targeting drug-resistant falciparum malaria has been developed by Cipla in collaboration with the Drugs for Neglected Diseases Initiative (DNDi).

The combination therapy simplifies a patient's treatment to a single dose of one or two tablets for three days — ensuring that the patient adheres to the treatment regime and the medicines are taken in correct proportions.

In 2010, about 3.3 billion people — almost half of the world's population — were at risk of malaria. And every year, this leads to about 216 million malaria cases, and an estimated 6,55 000 deaths, said the World Health Organisation (WHO), adding that people living in the poorest countries are the most vulnerable.

Cipla's announcement on the combination drug comes on the eve of World Malaria Day on April 25th.

The combination drug awaits WHO approval, Cipla Chairman and Managing Director, Dr Y.K. Hamied, told Business Line. Cipla will sell the drug in African and the South-East Asian markets, he said, adding that it has already been purchased in Malaysia. It has also got regulatory approvals in India and will be available at the retail chemist shops by mid-May, he added.

The drug will be bought by private and other purchasing agencies and governments through the tender-process of sourcing, where medicines are bought at “humanitarian” prices, Dr Hamied said.

Cipla, he pointed out, is a leading supplier of not just anti-retroviral (anti-AIDS) drugs, but anti-malarials, as well. Last year, Cipla supplied 50 million anti-malarial doses to Africa, he said. Also in the pipeline, in collaboration with the DNDi, are a couple of anti-retrovirals, he added. The drugs for the fixed-dose combination are being manufactured at Cipla's manufacturing unit in Patalganga.

Innovative partnership
The combination anti-malarial drug was developed through non-exclusive deals that DNDi had with Cipla and the Brazilian government-owned pharmaceutical company Farmanguinhos/Fiocruz, Dr Hamied said, adding that no royalty payments were involved.

Through an innovative partnership supported and facilitated by DNDi in 2008, Cipla entered into an agreement with the Brazilian pharmaceutical company to introduce the new fixed-dose combination in Asian and African countries.

Germany is India's first choice for business travel

New Delhi: Germany has emerged as the most preferred destination for India's corporate sector. According to a survey conducted by Synovate Business Consulting on the Indian outbound MICE (meetings, incentives, conferencing, exhibitions) market, which was commissioned by the German National Tourist Office (GNTO), India, 62% of the Indian corporate companies have chosen Germany as the most preferred destination for business-related travelling.

The report states that out of the mid-sized and large corporate companies who have organized MICE trips in Europe during 2010-11, 73% opted for Germany, followed by 52% for the United Kingdom. The most preferred city for business-related gatherings was Frankfurt with 54% companies voting for it, followed by Berlin at 51% and Munich at 44%.

The report highlights lower hotel rates and carrier options in Europe, robust infrastructure, reliable and professional partners, superior technology and good-quality service as key factors driving Germany's success as a business travel destination.

Indian outbound MICE market was estimated to be around USD 550-600 million in 2011. It grew strongly and resulted in an outbound trip volume of 6.2 million, with around 1.5-1.8 million passengers travelling outbound only for MICE. Industry verticals like Pharmaceutical, Cement, FMCG, IT and Financial services are the major contributors to the Indian outbound MICE sector.

Norms eased for setting up power units in SEZs

New Delhi: In a boost to power firms with plans to set up units in Special Economic Zones (SEZ), the Government has exempted them from the positive net foreign exchange (NFE) obligation applicable to regular units in such enclaves.

The decision will help power companies such as Torrent Energy, Welspun Energy and AES.

Most power firms have been reluctant to set up plants in SEZs due to feasibility concerns arising from the positive NFE norm. The positive net NFE norm stipulates that foreign exchange earned from exports should exceed foreign exchange spent on imports.

According to the new guidelines, power plants can be set up by developers and co-developers in the processing area (where export units are present) as well as in the non-processing area with social infrastructure, including houses, schools and hospitals.

Power plants in the processing area can also avail themselves of fiscal benefits under the SEZ Act. These include benefits for initial setting up, such as duty-free import of raw materials, components and consumables for operation and maintenance of the power plant as well as generation of power. According to the norms, power plants in both the processing and non-processing areas will have no obligation to achieve positive NFE status.

However, if a power plant is set up as part of infrastructure facility in the non-processing area, it will be entitled to fiscal benefits only for the initial setting up and not for operation and maintenance.

The new norms also allow transfer of surplus power to the Domes Tariff Area (the area outside the SEZ) on payment of duty as applicable on import of such power.

These activities — generation, transmission and distribution of power — will be governed by the Electricity Act and Electricity Rules as well as the Power Ministry's resolutions.

Ambiguity cleared
Reacting to the new guidelines, Mr Ashok Khurana, Director General, Association of Power Producers, said, “This circular clears the ambiguity regarding the benefits available to power units in the processing zone.” Earlier, the Revenue Department was treating a power plant in the processing area just as any other export unit and not as an infrastructure facility/developer/co-developer. This meant its output was considered as ‘goods' attracting the positive NFE obligation.

Power companies had claimed that unlike manufacturing/IT/ITES units, it is not possible for them to achieve a positive NFE. Though the supply of power to units within the SEZ is treated as exports and counted towards calculation of positive NFE, achieving economies of scale is difficult by just supplying to SEZ units.

The only option is to sell the surplus electricity generated to units in the domestic tariff area (area outside the SEZs where all taxes and duties apply) by paying the applicable levies.

Power companies were not bothered about paying levies, but were concerned about the positive NFE condition. Even if all their supplies to the SEZ units are deemed as exports, it would have been difficult for them to meet the positive NFE norm due to the high capex.

New Zealand keen on free trade pact with India

Kolkata: Mr Richard White, New Zealand Trade Commissioner to India, has said his country is expecting to conclude the Free Trade Agreement (FTA) with India by next year.

FTA is a treaty between two or more countries to create a free trade zone. According to Mr White, New Zealand was not only “determined to conclude a successful FTA in the next year or so”, but also develop a collaborative and coordinated strategy for political, economic and trade ties between the two countries.

Mr White was here to address an interactive session organised by the Bengal National Chamber of Commerce and Industry.

The bilateral trade between India and New Zealand, which stood at $1 billion in 2011-12, is expected to double by 2015, Mr White said.

In view of India's growing demand for information and communication technology (ICT) services, many ICT companies have been eyeing to enter the Indian marketplace, he said. A number of New Zealand-based companies were also planning to partner with major Indian firms like CMC Ltd and HCL, he added.

LinkedIn: India becomes second largest market

Social networking site LinkedIn's Indian user base has grown 300% in the three years it has had a marketing presence in India. The firm, today, has about 14 million users from India, which has quickly become its second-largest market globally, bigger than China and only behind the United States, according to Jeff Weiner, LinkedIn's chief executive.

Those 14 million Indian users join another 135 million-odd who are tapping into some 2 million companies and many more individuals to seek out jobs (or be sought out for one), organise conferences and network with a broad spectrum of people. On a recent trip to India to keynote his firm's B2B conference in Mumbai, Weiner-the 42-year-old former executive-in-residence, with two venture capital firms in Silicon Valley-said the firm's mobile business accounts for a fifth of its user base today, compared to 8% in January 2011.

"Mobile is our fastest-growing business," says Weiner. "LinkedIn connects talent with opportunity at a massive scale. Ultimately, our vision is to create an economic opportunity for every professional," he adds. The stage may now be set for monetisation. In February, on an earnings call after announcing the company's fourth-quarter results of 2011, Weiner had said that now that LinkedIn had got the product and user experience right, the time was ripe to test ads in the mobile environment.

India's booming mobile user base-around 700-plus million and growing rapidly-is a clear opportunity for LinkedIn. More importantly, according to estimates of GSMA, a global mobile services lobby, India is expected to become the second-largest mobile broadband market globally, with 367 million connections in four years, compared to 20-30 million today.

"The Indian market has shown a real propensity for social connectivity," says Weiner. "So, in that regard, it is not surprising." He adds that LinkedIn has been able to reach critical mass with English - unlike other markets such as China, where local language is the key to building a successful Internet business.

That may explain why India is a larger market for LinkedIn than China, where it has barely a million members. LinkedIn has also been trying to promote its B2B business. Homegrown firms such as Wipro and the Indian arm of multinationals such as Cisco, SAP and Huawei use LinkedIn as a platform to connect with employees, vendors and business partners. Weiner will be keen to press home this advantage as he seeks a stronger foothold in this market.

Unlike many other software firms that hire in the hundreds, if not thousands, LinkedIn has been flying below the radar in India. It barely has a 100 people across its offices in Mumbai, Delhi and its R&D unit in Bangalore. This number will only rise incrementally, rather than in the dozens. The strategy is not to focus on R&D (like many of its larger rivals), but on India as a market.

For the moment, the US accounts for two-thirds of LinkedIn's business and "international", including fast-growing businesses in India, account for the rest. To drive its international business, LinkedIn wants to not just increase the number of users, but also deepen its relationships with them.

For example, this February, it launched India-specific pricing for some of its recruitment products such as LinkedIn Recruiter, Jobs Network and Talent Direct. LinkedIn wants to mine the mountain of data it generates to improve the quality of its recommendations (who to connect to on the site), as well as convert its recruiting business-the firm's mainstay in India-into a more dynamic one.