New Delhi: India sees good potential in enhancing bilateral cooperation with Afghanistan in the small and medium enterprises, textiles and agro-processing sectors, the top commerce ministry official said here on Thursday.
Addressing a 12-member Afghanistan delegation organised by industry chamber FICCI , the Commerce Secretary, Mr Rahul Khullar said growth in imports from Afghanistan — at 16 per cent last year — was quite low. He said there was significant scope for greater co-operation.
Mr Khullar also emphasised that greater capital expenditure in Afghanistan's mining sector was a way forward for development.
On its part, the Afghanistan delegation lauded India's efforts in peace and rehabilitation in the trouble-torn country.
“In 2014, foreign troops will leave Afghanistan. We hope that India will help us bring peace, stability. We strongly support India's bid for permanent membership of the United Nations Security Council,” a spokesperson of the Parliamentary delegation, said.
Mr Vikramjit Singh Sahney, President, SAARC Chamber of Commerce and Industry, urged Afghanistan to engage more actively in the region to ensure its rightful place.
Mr Mohd Noor Akhbari, the spokesperson, assured Indian business about the safety of its investments in Afghanistan, and sought India's help in building its urban transport infrastructure and agriculture, mining and health sectors.
He also underlined the need for more scholarships to Afghan students to study medicine and engineering in India. The scholarships available today were in social sciences alone, he stated.
Success in my Habit
Saturday, May 12, 2012
Multi-national companies looking to expand R&D centres in tier-2 cities: Study
Bangalore: To cut costs and contain attrition, Indian MNCs are moving into tier-2 cities, says a Zinnov study.
Consulting firm Zinnov in its study said that while 96 per cent of MNC R&D companies are located in cities like Bangalore, increasingly they are moving to tier-2 cities such as Ahmedabad, Jaipur, Chandigarh, Coimbatore, Vadodara, Nagpur, Pune and Thiruvananthapuram. Further, the study highlighted that the MNC R&D talent pool in India for 2011 was 204,196.
R&D talent
This R&D talent pool is growing at the rate of 9 per cent every year and is expected to reach 2.5 lakh by 2015. Mr Chandramouli C.S., Senior Director-Globalization Advisory, Zinnov, said, “MNCs started expanding to tier-2 cities due to advantages like higher catchment area, lower attrition, cost arbitrage, etc.”
Typically, tier-2 cities were a preferred destination for IT and BPO companies which were grappling with commercial real estate and attrition costs. This trend is being seen now with multinationals such as Dell, Nokia, Amazon and others who are looking at tier-2 cities that would be in addition to their existing centres in major cities.
Cost of living in tier-2 cities is 10-25 per cent lower compared to tier-1 cities and provide cost advantage of 15-40 per cent in commercial real estate costs. “Salary costs and other expenses go up in a tier-1 city over a period of time,” said Mr Manohar Joshi, Director –Systems, IonIdea Inc.
Fresh talent
Also, fresh talent pool in tier-2 cities is estimated to form 35 per cent of the Indian R&D workforce going ahead. In the tier-2 cities, work such as testing, level 3 customer support and bug fixing are being undertaken.
These typically tend to be lower level work in terms of profile but which is critical to a company's operations, opine analysts. The study also pointed out that companies are looking at a hub-and-spoke model wherein these R&D centres are closer to their manufacturing business like automotive.
Consulting firm Zinnov in its study said that while 96 per cent of MNC R&D companies are located in cities like Bangalore, increasingly they are moving to tier-2 cities such as Ahmedabad, Jaipur, Chandigarh, Coimbatore, Vadodara, Nagpur, Pune and Thiruvananthapuram. Further, the study highlighted that the MNC R&D talent pool in India for 2011 was 204,196.
R&D talent
This R&D talent pool is growing at the rate of 9 per cent every year and is expected to reach 2.5 lakh by 2015. Mr Chandramouli C.S., Senior Director-Globalization Advisory, Zinnov, said, “MNCs started expanding to tier-2 cities due to advantages like higher catchment area, lower attrition, cost arbitrage, etc.”
Typically, tier-2 cities were a preferred destination for IT and BPO companies which were grappling with commercial real estate and attrition costs. This trend is being seen now with multinationals such as Dell, Nokia, Amazon and others who are looking at tier-2 cities that would be in addition to their existing centres in major cities.
Cost of living in tier-2 cities is 10-25 per cent lower compared to tier-1 cities and provide cost advantage of 15-40 per cent in commercial real estate costs. “Salary costs and other expenses go up in a tier-1 city over a period of time,” said Mr Manohar Joshi, Director –Systems, IonIdea Inc.
Fresh talent
Also, fresh talent pool in tier-2 cities is estimated to form 35 per cent of the Indian R&D workforce going ahead. In the tier-2 cities, work such as testing, level 3 customer support and bug fixing are being undertaken.
These typically tend to be lower level work in terms of profile but which is critical to a company's operations, opine analysts. The study also pointed out that companies are looking at a hub-and-spoke model wherein these R&D centres are closer to their manufacturing business like automotive.
Sweden's Flexenclosure floats India JV with Artheon; to expand pact with Bharti Airtel
Kolkata: Sweden's Flexenclosure, a global developer of environment-friendly energy solutions for telecom companies, has entered into a 51:49 joint venture in India with the Artheon Group to expand relations with Bharti Airtel and forge new ones with local companies looking to go green.
Flexenclosure has entered India at a time when tower companies are going green to cut diesel consumption and carbon emissions. It has named ex-Nokia Siemens Networks (NSN) business development head Mukesh Singh as CEO of its Indian arm and hired ex-Uninor COO Rohit Chandra into the leadership team, according to a top company executive.
Mumbai-based Artheon Group, which has interests in telecoms, IT and renewable energy, will hold 49% in the JV through its telecoms arm, Artheon Televentures.
One of the Swedish company's first major initiatives will be expanding its partnership with the country's biggest telco Bharti Airtel beyond Africa.
"We are in advanced talks to expand our relationship with Bharti Airtel by offering our green energy solution across its major South Asian operations in India, Sri Lanka and Bangladesh. We are in discussions with Airtel's tower arm Bharti Infratel and Indus Towers, in which Bharti is a stakeholder," Flexenclosure's global CEO David King told ET.
At present, Bharti Airtel has deployed Flexenclosure's green energy solution only in two African markets -- Ghana and Nigeria. Christened E-site, this environment-friendly solution allows off-grid mobile base stations to be powered by renewable energy sources like solar or wind instead of diesel.
At present, there are nearly 4 lakh telecom towers, and according to AT Kearney, the Indian tower industry spends a whopping Rs 8500 crore a year on diesel.
Green energy solutions have huge potential in India where most telecom towers are powered by expensive diesel. They can typically bring about a 90 per cent cut in diesel consumption, carbon emissions and energy operating expenses. However, they come at a significant capital cost.
Flexenclosure plans to undertake mass production of E-site green energy systems in India by early-2013. It will shortly enter into an outsourcing deal with a local partner who will assemble the devices based on the Swedish company's specifications.
"We are about to select a local partner who will assemble the power systems. Software, installation and logistics will be our responsibility," said Mukesh Singh, CEO, Flexenclosure Telecom India.
Flexenclosure has entered India at a time when tower companies are going green to cut diesel consumption and carbon emissions. It has named ex-Nokia Siemens Networks (NSN) business development head Mukesh Singh as CEO of its Indian arm and hired ex-Uninor COO Rohit Chandra into the leadership team, according to a top company executive.
Mumbai-based Artheon Group, which has interests in telecoms, IT and renewable energy, will hold 49% in the JV through its telecoms arm, Artheon Televentures.
One of the Swedish company's first major initiatives will be expanding its partnership with the country's biggest telco Bharti Airtel beyond Africa.
"We are in advanced talks to expand our relationship with Bharti Airtel by offering our green energy solution across its major South Asian operations in India, Sri Lanka and Bangladesh. We are in discussions with Airtel's tower arm Bharti Infratel and Indus Towers, in which Bharti is a stakeholder," Flexenclosure's global CEO David King told ET.
At present, Bharti Airtel has deployed Flexenclosure's green energy solution only in two African markets -- Ghana and Nigeria. Christened E-site, this environment-friendly solution allows off-grid mobile base stations to be powered by renewable energy sources like solar or wind instead of diesel.
At present, there are nearly 4 lakh telecom towers, and according to AT Kearney, the Indian tower industry spends a whopping Rs 8500 crore a year on diesel.
Green energy solutions have huge potential in India where most telecom towers are powered by expensive diesel. They can typically bring about a 90 per cent cut in diesel consumption, carbon emissions and energy operating expenses. However, they come at a significant capital cost.
Flexenclosure plans to undertake mass production of E-site green energy systems in India by early-2013. It will shortly enter into an outsourcing deal with a local partner who will assemble the devices based on the Swedish company's specifications.
"We are about to select a local partner who will assemble the power systems. Software, installation and logistics will be our responsibility," said Mukesh Singh, CEO, Flexenclosure Telecom India.
Potential seen for setting up 30 spice parks
Hyderabad: Spices Board sees a potential to set up 25-30 spices parks in different parts of the country. “Each park will have export potential of Rs 500 crore. This will help us achieve export of spices worth Rs 30,000 crore by 2020,” Dr G.K. Vidyashankar, Deputy Director (Marketing) of Spices Board, told Business Line.
These parks would give a common platform for farmers, traders and exporters to accumulate quality produce in large quantities, while conforming to international standards. He said that it was time to diversify the product portfolio and look at opportunities in pharmaceuticals and neutraceuticals to yield better incomes.
The Parks would come up at Chhindwara (Madhya Pradesh), Puttady (Kerala), Guntur (Andhra Pradesh), Sivaganga (Tamil Nadu), Jodhpur (Rajasthan), Mehsana (Gujarat), Kota (Rajasthan) and Guna (Madhya Pradesh).
The Spices Park in Guntur would be operational in two months. Coming up on 125 acres near Mydavolu village in Edlapadu mandal, it would have common processing, testing and certification facilities. It will have mass chilli-drying capacity of 10 tonnes a day.
“It will specialise in chillies. It will produce value-added commodities such as oil, oleoresins, curry powder and crushed chillies. This will help the board to monitor and guide farmers and exporters,” he said.
Dr Vidyashankar was here to address a seminar on value addition to Spices and marketing at Federation of Andhra Pradesh Chambers of Commerce and Industry (FAPCCI) on Wednesday.
These parks would give a common platform for farmers, traders and exporters to accumulate quality produce in large quantities, while conforming to international standards. He said that it was time to diversify the product portfolio and look at opportunities in pharmaceuticals and neutraceuticals to yield better incomes.
The Parks would come up at Chhindwara (Madhya Pradesh), Puttady (Kerala), Guntur (Andhra Pradesh), Sivaganga (Tamil Nadu), Jodhpur (Rajasthan), Mehsana (Gujarat), Kota (Rajasthan) and Guna (Madhya Pradesh).
The Spices Park in Guntur would be operational in two months. Coming up on 125 acres near Mydavolu village in Edlapadu mandal, it would have common processing, testing and certification facilities. It will have mass chilli-drying capacity of 10 tonnes a day.
“It will specialise in chillies. It will produce value-added commodities such as oil, oleoresins, curry powder and crushed chillies. This will help the board to monitor and guide farmers and exporters,” he said.
Dr Vidyashankar was here to address a seminar on value addition to Spices and marketing at Federation of Andhra Pradesh Chambers of Commerce and Industry (FAPCCI) on Wednesday.
Rs 125-cr grant for Indo-US clean energy research
Hyderabad: The Union Ministry of Science and Technology has selected three consortia that will receive a grant of Rs 125 crore from the Centre. The funding will be over five years, under the Indo-US Joint Clean Energy Research and Development Centre.
The consortia are led in India by the Indian Institute of Science, Bangalore; Indian Institute of Chemical Technology, Hyderabad; and the Centre for Environmental Planning & Technology, Ahmedabad. In the US it will be led by National Renewable Energy Laboratory, the University of Florida and the Lawrence Berkeley National Laboratory, respectively.
The Indian and US Governments have provided $5 million a year, to the Indian and US institutions. This will be for joint research and development in solar energy, advanced biofuels and building energy efficiency. In addition, US and Indian consortia members have pledged over $75 million in matching funds, to add up to the total of $125 million. The Joint Clean Energy is part of the US-India Partnership to Advance Clean Energy announced by the Prime Minister, Dr Manmohan Singh, and the President, Mr Barack Obama, in November 2011, which aims to accelerate the transition to high performing, low emissions, and energy secure economies.
The CSIR-IICT and University of Florida led consortium will focus on development of sustainable advanced biofuel systems. The total funding for the project is about 28 crores, including 14 crores from India. Similar amount is contributed by US DoE to the University of Florida lead consortium, according to a press release from the IICT here.
According to Dr. Ahmed Kamal, Project Coordinator from IICT the objective is to develop and optimize several crops such as high-yield biomass sorghum, bmr-sorghum, pearl millet, bamboo and switch grass as lignocellulosic biofuel feedstocks, which will be efficiently converted to biofuels besides optimizing our capacity to utilize waste streams in the cellulosic ethanol conversion process.
The consortia are led in India by the Indian Institute of Science, Bangalore; Indian Institute of Chemical Technology, Hyderabad; and the Centre for Environmental Planning & Technology, Ahmedabad. In the US it will be led by National Renewable Energy Laboratory, the University of Florida and the Lawrence Berkeley National Laboratory, respectively.
The Indian and US Governments have provided $5 million a year, to the Indian and US institutions. This will be for joint research and development in solar energy, advanced biofuels and building energy efficiency. In addition, US and Indian consortia members have pledged over $75 million in matching funds, to add up to the total of $125 million. The Joint Clean Energy is part of the US-India Partnership to Advance Clean Energy announced by the Prime Minister, Dr Manmohan Singh, and the President, Mr Barack Obama, in November 2011, which aims to accelerate the transition to high performing, low emissions, and energy secure economies.
The CSIR-IICT and University of Florida led consortium will focus on development of sustainable advanced biofuel systems. The total funding for the project is about 28 crores, including 14 crores from India. Similar amount is contributed by US DoE to the University of Florida lead consortium, according to a press release from the IICT here.
According to Dr. Ahmed Kamal, Project Coordinator from IICT the objective is to develop and optimize several crops such as high-yield biomass sorghum, bmr-sorghum, pearl millet, bamboo and switch grass as lignocellulosic biofuel feedstocks, which will be efficiently converted to biofuels besides optimizing our capacity to utilize waste streams in the cellulosic ethanol conversion process.
Govt signs pacts with 47 investors
Mangalore: Over 47 investors have signed memoranda of understanding to invest in coastal Karnataka, according to a Government official.
Mr S.G. Hegde, Joint Director, District Industries Centre, Mangalore, told Business Line that the Government signed MoUs with 47 investors attracting investments of Rs 243.67 crore on Tuesday. These investments are spread over Dakshina Kannada and Udupi districts.
He said that 21 MoUs were signed attracting investments of Rs 149.95 crore in Dakshina Kannada district. As many as 26 investments worth Rs 93.72 crore are envisaged in Udupi district.
Most of these investments are expected in cashew processing units, ice-block making units, cold storage units and general engineering projects.
Of the 26 investments expected in Ududpi district, nearly half of them are in cashew processing units. Many investors have shown interest in setting up these units in Karkala and Kundapur taluks of Udupi district.
Mr Hegde expressed hopes that some more investment proposals are expected before the global investors' meet, which is scheduled to be held at Bangalore in June.
As a precursor to the global investors meet, a Coastal Business Development Summit was conducted in Mangalore in January. In that meet, 18 MoUs were signed with investment proposals worth Rs 1393.25 crore in Dakshina Kannada district. It attracted investments to the tune of Rs 100 crore from five investors in Udupi district, he said.
If all these investment proposals are put together, coastal districts of Dakshina Kannada and Udupi are likely to attract more than Rs 1,700 crore investments in the global investors meet, he added.
Mr S.G. Hegde, Joint Director, District Industries Centre, Mangalore, told Business Line that the Government signed MoUs with 47 investors attracting investments of Rs 243.67 crore on Tuesday. These investments are spread over Dakshina Kannada and Udupi districts.
He said that 21 MoUs were signed attracting investments of Rs 149.95 crore in Dakshina Kannada district. As many as 26 investments worth Rs 93.72 crore are envisaged in Udupi district.
Most of these investments are expected in cashew processing units, ice-block making units, cold storage units and general engineering projects.
Of the 26 investments expected in Ududpi district, nearly half of them are in cashew processing units. Many investors have shown interest in setting up these units in Karkala and Kundapur taluks of Udupi district.
Mr Hegde expressed hopes that some more investment proposals are expected before the global investors' meet, which is scheduled to be held at Bangalore in June.
As a precursor to the global investors meet, a Coastal Business Development Summit was conducted in Mangalore in January. In that meet, 18 MoUs were signed with investment proposals worth Rs 1393.25 crore in Dakshina Kannada district. It attracted investments to the tune of Rs 100 crore from five investors in Udupi district, he said.
If all these investment proposals are put together, coastal districts of Dakshina Kannada and Udupi are likely to attract more than Rs 1,700 crore investments in the global investors meet, he added.
Wednesday, May 9, 2012
Tata coffee brand to brew in US, Canada
Bangalore: Green Mountain Coffee Roasters, a specialty coffee roaster, and Eight O'Clock Coffee Company (a Tata Global Beverages brand) have announced a multi-year agreement to make Eight O'Clock coffee, Tetley tea, and Good Earth tea available in different formats.
Financial terms of the agreement were not disclosed.
Eight O'Clock Coffee Company and Green Mountain also plan to make a select offering of Eight O'Clock coffee ‘K-Cup' packs available through in-home and away-from-home channels, as well as on GMCR's consumer direct Web sites (www.Keurig.com and www.GreenMountainCoffee.com) throughout the US and Canada beginning in fall this year.
In the US market, Tetley teas, and in the US and Canada markets, Good Earth teas is to join the ‘K-Cup' pack collection next year.
In a release, Mr David Allen, Senior Vice-President, Sales and Marketing, Tata Global Beverages' US Region said, “For generations, millions of coffee lovers have enjoyed brewing the fresh taste of high-quality Eight O'Clock coffee. Now they will have a whole new, convenient way to make America's original gourmet coffee with Keurig, America's favourite single cup brewing system.”
“We look forward to working with GMCR to make the top-selling whole bean coffee brand into a successful single cup coffee,” he added.
Financial terms of the agreement were not disclosed.
Eight O'Clock Coffee Company and Green Mountain also plan to make a select offering of Eight O'Clock coffee ‘K-Cup' packs available through in-home and away-from-home channels, as well as on GMCR's consumer direct Web sites (www.Keurig.com and www.GreenMountainCoffee.com) throughout the US and Canada beginning in fall this year.
In the US market, Tetley teas, and in the US and Canada markets, Good Earth teas is to join the ‘K-Cup' pack collection next year.
In a release, Mr David Allen, Senior Vice-President, Sales and Marketing, Tata Global Beverages' US Region said, “For generations, millions of coffee lovers have enjoyed brewing the fresh taste of high-quality Eight O'Clock coffee. Now they will have a whole new, convenient way to make America's original gourmet coffee with Keurig, America's favourite single cup brewing system.”
“We look forward to working with GMCR to make the top-selling whole bean coffee brand into a successful single cup coffee,” he added.
Dunkin' Donuts enters India
New Delhi: US-based foods chain Dunkin’ Donuts has come to India just a few months ahead of the arrival of its global archrival Starbucks, by launching its first store in the national capital on Tuesday. Starbucks is expected to launch in September this year.
The company, headquartered at Canton in Massachusetts, plans to set up eight to 10 stores this financial year — all in Delhi. That, it says, would earmark its journey to slowly turn out to be a pan-India player with about 100 stores in the country in the next five years. Its strategy is to be an “affordable” eating place that would bring in the moolah from food. This would thus be unlike the case in the US, where coffee reigns supreme in terms of revenue.
Hari S Bhartia, co-chairman and founder of Jubilant Bhartia Group, said the aim was to launch an affordable brand in India. “Our products like coffee are priced 10 per cent to 15 per cent lower than competitors,” he noted. “We want more customers to come in so that we get scale in the business.”
The stores will be wholly owned by Jubilant FoodWorks, which also has the rights for Domino’s Pizza and replicate the same model of affordibility. It will pay a royalty fee to Dunkin. Globally, Dunkin’ Donuts has over 10,000 restaurants across 32 countries. It recorded a sales of $6.4 billion in 2011. The 1950-founded company, which is scaling up presence in Asia, is planning to open 300 restaurants in the region over the next few years.
Bhartia wants to clearly differentiate Dunkin from its rivals, especially that of Starbucks. “There are 1,800 coffee cafes in the country and diverse brands; Starbucks will be one of them,” he points out. “Our effort will be to differentiate between other coffee players by offering all-day services.”
To achieve that, Dunkin Donuts & More’ will offer a diverse food options ranging from donuts (or doughnuts, at Rs 45) to cabiatta sandwiches (Rs 90-110) and, of course, donuts. However, Dunkin is the market leader in the US in regular, decaf ice and hot flavoured coffee in the US.
To keep a tab on costs as well as on the quality, 90 per cent of the ingredients are being sourced locally. “We took a year to develop our vendor base,” Bhartia said. “We only import items, for which we didn’t find the right quality.”
The company will leverage Domino vendors. It is also synergising many departments like human resources, finance, IT and supply-chain operations between both the brands to ensure profitability in the store-level operations by the year-end. Also, Bhartia said he would be looking for a third foods brand once he consolidates on Dunkin.
Suprisingly, Bhartia does not think that the US model for the chain would work in India. “In India, the coffee culture is growing. We expect 60 per cent to 70 per cent of our revenues to come from sale of food products. That is why we have worked hard on our menu,” he revealed. “In the US, coffee is the biggest revenue earner.”
Dunkin’ Donuts like its pizza business is being targeted at urban consumers aged up to 35 years.
The company, headquartered at Canton in Massachusetts, plans to set up eight to 10 stores this financial year — all in Delhi. That, it says, would earmark its journey to slowly turn out to be a pan-India player with about 100 stores in the country in the next five years. Its strategy is to be an “affordable” eating place that would bring in the moolah from food. This would thus be unlike the case in the US, where coffee reigns supreme in terms of revenue.
Hari S Bhartia, co-chairman and founder of Jubilant Bhartia Group, said the aim was to launch an affordable brand in India. “Our products like coffee are priced 10 per cent to 15 per cent lower than competitors,” he noted. “We want more customers to come in so that we get scale in the business.”
The stores will be wholly owned by Jubilant FoodWorks, which also has the rights for Domino’s Pizza and replicate the same model of affordibility. It will pay a royalty fee to Dunkin. Globally, Dunkin’ Donuts has over 10,000 restaurants across 32 countries. It recorded a sales of $6.4 billion in 2011. The 1950-founded company, which is scaling up presence in Asia, is planning to open 300 restaurants in the region over the next few years.
Bhartia wants to clearly differentiate Dunkin from its rivals, especially that of Starbucks. “There are 1,800 coffee cafes in the country and diverse brands; Starbucks will be one of them,” he points out. “Our effort will be to differentiate between other coffee players by offering all-day services.”
To achieve that, Dunkin Donuts & More’ will offer a diverse food options ranging from donuts (or doughnuts, at Rs 45) to cabiatta sandwiches (Rs 90-110) and, of course, donuts. However, Dunkin is the market leader in the US in regular, decaf ice and hot flavoured coffee in the US.
To keep a tab on costs as well as on the quality, 90 per cent of the ingredients are being sourced locally. “We took a year to develop our vendor base,” Bhartia said. “We only import items, for which we didn’t find the right quality.”
The company will leverage Domino vendors. It is also synergising many departments like human resources, finance, IT and supply-chain operations between both the brands to ensure profitability in the store-level operations by the year-end. Also, Bhartia said he would be looking for a third foods brand once he consolidates on Dunkin.
Suprisingly, Bhartia does not think that the US model for the chain would work in India. “In India, the coffee culture is growing. We expect 60 per cent to 70 per cent of our revenues to come from sale of food products. That is why we have worked hard on our menu,” he revealed. “In the US, coffee is the biggest revenue earner.”
Dunkin’ Donuts like its pizza business is being targeted at urban consumers aged up to 35 years.
ICRA arm picks up majority stake in US tech firm
Kolkata: ICRA Techno Analytics Ltd (ICTEAS), a wholly owned subsidiary of ICRA Ltd, on Tuesday signed an agreement here to pick up a 50.5 per cent stake for about $8 million in BPA Technologies, Inc., a California-based global business consulting and software technology services firm.
In the next two calendar years, ICTEAS will buyout remaining stake in tranches, Mr P.K. Choudhury, Vice-Chairman and group CEO of ICRA, said.
The equity valuation is based on earnings.
Mr R. Raghuttama Rao, MD of ICRA Management Consulting Services, told Business Line: “The upfront payment for BPA Tech's controlling stake was in relation to its 2011 turnover of $10 billion. Since it has very limited debt (only working capital loan), equity valuation got precedence over enterprise valuation. The earn-out principle and competitive deal valuation were behind agreed upon pricing exercise. If expected earnings are achieved by 2014, the complete buyout cost would be something around $16 million.”
BPA Tech has development centres in Chennai and Visakhapatnam, employing around 700 people. It also has a sales and customer service centre in Singapore. The deal would lend city-headquartered ICTEAS greater access to the US market.
BPA Tech was promoted by two-India born Americans in 2004 with equity support (of around 15 per cent) by a private equity firm Tradewind Capital Group.
Ms Vijji Suryadevara, promoter and CEO of BPA Tech, said that in terms of complementarities in domain competence, the deal was a strategic fit.
Mr Prateep Guha, MD of ICTEAS, said the acquisition would synergise BPA's strength in enterprise content management and ICTEAS' focus area of business intelligence and analytics. Both firms have Fortune (10 and 500) companies on their existing client lists.
In the next two calendar years, ICTEAS will buyout remaining stake in tranches, Mr P.K. Choudhury, Vice-Chairman and group CEO of ICRA, said.
The equity valuation is based on earnings.
Mr R. Raghuttama Rao, MD of ICRA Management Consulting Services, told Business Line: “The upfront payment for BPA Tech's controlling stake was in relation to its 2011 turnover of $10 billion. Since it has very limited debt (only working capital loan), equity valuation got precedence over enterprise valuation. The earn-out principle and competitive deal valuation were behind agreed upon pricing exercise. If expected earnings are achieved by 2014, the complete buyout cost would be something around $16 million.”
BPA Tech has development centres in Chennai and Visakhapatnam, employing around 700 people. It also has a sales and customer service centre in Singapore. The deal would lend city-headquartered ICTEAS greater access to the US market.
BPA Tech was promoted by two-India born Americans in 2004 with equity support (of around 15 per cent) by a private equity firm Tradewind Capital Group.
Ms Vijji Suryadevara, promoter and CEO of BPA Tech, said that in terms of complementarities in domain competence, the deal was a strategic fit.
Mr Prateep Guha, MD of ICTEAS, said the acquisition would synergise BPA's strength in enterprise content management and ICTEAS' focus area of business intelligence and analytics. Both firms have Fortune (10 and 500) companies on their existing client lists.
New procedure by DGFT to speed up cotton exports
Mumbai: To speed applications from interested cotton exporters, the Directorate General of Foreign Trade (DGFT), under the Ministry of Commerce, has modified the procedure for obtaining registration certifications (RCs).
As against the earlier procedure of personal visits to the respective departments dealing in RCs, DGFT has mandated sending of all documents and associated papers through an e-mail. The purpose is to keep queries, if any, ready by the time an exporter sends hard copy of the applications and other relevant papers.
According to the current practice, an exporter applies with all valid documents in physical form. After these papers are assessed by DGFT, queries are raised. An RC takes weeks and, sometimes, months to obtain. With the new format of application, the RC can be issued within a couple of days.
The procedure is required to be speeded, especially when DGFT issued revised guidelines early this month for cotton exporters. In fact, DGFT clarified through a notification on May 4, that an exporter would be issued a second RC only on filing proof for executing at least 50 per cent of the quantity of exports mentioned in the first RC.
Generally, from the date of RC an exporter requires at least a month to physically ship the quantity of exports. The 50 per cent mandatory shipment clause, therefore, requires executing export orders fast to obtain another RC for the next consignment.
Welcoming the move, M B Lal, an industry veteran, said, “With the revised procedure, only genuine traders would be able to execute export orders fast.”
The price of the benchmark Shankar 6 variety remained stable at Rs 35,000 a candy (one candy = 356 kg) in the Ahmedabad spot market, despite exports being allowed by the government. So far, 16 million bales have been exported. By the end of this month, exporters expect this figure to move up to 20 million bales.
As against the earlier procedure of personal visits to the respective departments dealing in RCs, DGFT has mandated sending of all documents and associated papers through an e-mail. The purpose is to keep queries, if any, ready by the time an exporter sends hard copy of the applications and other relevant papers.
According to the current practice, an exporter applies with all valid documents in physical form. After these papers are assessed by DGFT, queries are raised. An RC takes weeks and, sometimes, months to obtain. With the new format of application, the RC can be issued within a couple of days.
The procedure is required to be speeded, especially when DGFT issued revised guidelines early this month for cotton exporters. In fact, DGFT clarified through a notification on May 4, that an exporter would be issued a second RC only on filing proof for executing at least 50 per cent of the quantity of exports mentioned in the first RC.
Generally, from the date of RC an exporter requires at least a month to physically ship the quantity of exports. The 50 per cent mandatory shipment clause, therefore, requires executing export orders fast to obtain another RC for the next consignment.
Welcoming the move, M B Lal, an industry veteran, said, “With the revised procedure, only genuine traders would be able to execute export orders fast.”
The price of the benchmark Shankar 6 variety remained stable at Rs 35,000 a candy (one candy = 356 kg) in the Ahmedabad spot market, despite exports being allowed by the government. So far, 16 million bales have been exported. By the end of this month, exporters expect this figure to move up to 20 million bales.
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