Success in my Habit

Thursday, June 7, 2012

Group FMG acquires New York-based advertising agency Pod1

Mumbai: Group FMG, the digital advertising venture promoted by Neeraj Bhargava's Zodius and India Value Fund, has acquired a New York-based advertising agency, Pod1, which develops campaigns for the online world. Group FMG is seeking to redefine the advertising model by leveraging skills and competencies across different locations globally much in the same way the software industry has done.

"The world of marketing has changed because of the advent of technology. Where you take the brand to the consumer is different from what it was a few years ago," said Dilip Keshu, the firm's CEO, about how advertisers are engaging with consumers on social media platforms such as Facebook and Linkedin.

Keshu's typical day starts at 4 am with calls to Group FMG's office in Chennai, India, and by 9 am he heads to his office in Manhattan. Through the Pod1 acquisition, the venture gets about 30 employees in New York that do work for clients like Tag Heuer.

Its first acquisition was FMG through which it got a presence in London and Chennai. "Pod1 will create the brand strategy and our Chennai facility will do the production," said Keshu. What Group FMG is building is the ability to splash digital assets to any channel, guide brands through social media, local content, mobile apps and commerce, he said.

It also plans to acquire firms in gaming, advertorial and packaging. Its clients so far include companies like Microsoft and Staples.

GE Energy to localise products for India's wind energy sector

Bangalore: The US-based GE Energy is focusing on localising products for the Indian wind energy sector.

The company will be launching products of larger capacities to capture low wind speeds as prevalent in India, Mr Banmali Agrawala, President & CEO, GE Energy, told Business Line. “The products will be coming out in a year's time and have been developed here,” he said. Also, the company is seeing interest in these localised products from other emerging markets as well, Mr Agrawala added. GE at present makes wind turbines of 1.5 MW and 1.6 MW capacities.

Going forward, apart from manufacturing products, GE Energy would be open to providing support to customers in the development phase of the project. “ o take our products to customers if it needed to extend and provide additional services, we will do so,” Mr Agrawala said. Support would be in things like financial structuring or helping with development model and also installation, transportation or commissioning of projects.

However, the company, unlike many others in the business like Suzlon or Gamesa, will not provide “packaged services” of providing land along with wind assets. “It does create uncertainties for the business, but we recommend to customers that the land should be acquired by them,” Mr Agrawala said. (Typically, developers find it easier to sell packaged wind assets rather than individual equipment without land for the projects.)

According to Mr Agrawala, renewable energy especially wind is a “critical part of our business and therefore we are increasingly localising products for the Indian market.” In the renewable energy sector, the company currently manufacturers equipment for power projects, like wind turbines, inverters and switch gears.

The products are manufactured at its plant in Pune and the company is in the process of expanding its facility there. While the products will be made for the Indian market but will also use it as a base for exports, Mr Agrawala said.

Airtel joins hands with Opera

New Delhi: Bharti Airtel, India’s largest mobile operator, on Wednesday entered into an agreement with Opera Software, under which its customers across India, Africa, Sri Lanka and Bangladesh will be able to access a customised version of the latter’s internet browser on their mobiles.

This will help the Norwegian browser maker for mobiles to gain access to over 253 million more customers and enhance its value, as it is reportedly being wooed by Facebook and Google for a possible acquisition.

Oslo-based Opera Software has agreements with 13 of the top 30 operators globally. Its Opera Mini browser is used by over 168 million active users, though it gives access to over 1.6 billion users.

The customised browser will have Google search engine, Gmail and YouTube, apart from various applications of Airtel that include Airtel Self Care, Airtel.com and Airtel Life, on the default page. Even Facebook will be available on the introduction page.

This was the second deal signed by Opera in a month. Earlier this month, it signed a deal with Latin American telecom company America Movil, which has 242 million users.

Opera Software is known for its technology in offering browsers, specifically made for the requirements of the mobile customer. Opera Mini’s unique proxy-server-based technology can compress data by up to 90 per cent and decrease the user’s data transfer costs.

It allows mobile users to enjoy more time online. Besides, since the data is compressed, it means faster downloads and better experience for users. It also reduces the pressure on the operator’s bandwidth.

Through the browser, Airtel will be able to direct traffic to its own desired sites. It would also help Airtel save data bandwidth and increase usage by customers, said Sunil Kamath, sales director for Opera (India and South Asian Association For Regional Cooperation).

Under the pact, Airtel will offer co-branded Opera Mini browsers to its customers across India and South Asia and South Africa.

Opera Software has also tie-ups with Vodafone and Idea for offering similar services. But these are limited and the number of customers who have adopted it is limited. “We are excited to bring a superior browsing platform to Airtel mobile customers across India and South Asia by leveraging Opera Mini’s tried-and-tested set of solutions,” Bharti Airtel President - consumer business, K Srinivas, said.

In India, Airtel charges Rs 98 a month for 1 Gb of data downloaded through its mobile internet facility on 2G network and Rs 45 for 150 MB to Rs 1,500 for 10 Gb on 3G network.

“There are millions of users with basic mobile phones instead of smartphones, and Opera Mini gives even the most basic phone a smartphone-like web experience,” Opera Software Chief Executive Officer Lars Boilesen said.

Mexico looking to boost avacado exports to India

Bangalore: The Mexican ‘King Avacado' (fruit) could soon be available in India. Buoyed by huge demand, Mexico is now trying to push avacado exports to India.

“We are working on the logistics aspects with the Government of Karnataka, and hope to use the State's knowledge or solution to reduce the transit time of shipments,” Mr Aldo Ruiz, Investment and Trade Commissioner, Ministry of Economy, Mexico, told Business Line on the sidelines of the Global Investors' Meet in Bangalore on Wednesday.

Avacado is a fruit native to Mexico, and is largely exported from there. It is very difficult to send fresh product exports to India because the transit time is long, he pointed out. “We are looking for better connectivity to India through Karnataka,” he said.

Currently, shipments from Mexico's Veracruz port take 44-50 days to reach Nhava Sheva container terminal in Mumbai. “We are trying to route shipments from Singapore to Mangalore port in Karnataka,” he said.

The preferred transit time would be 30-32 days, added Mr Ruiz. Other challenges in India would include cold storage facilities, which are not yet very well developed, and also ground transportation time which need to be reduced too.

Though Mr Ruiz declined to quantify the demand for avacado in India, he said that top retailers from India have shown interest in getting the fruit to the country and have been in touch with Mexican exporters and distributors.

European Business and Technology Centre plans 'smart city concept' project

Kolkata: The European Business and Technology Centre (EBTC) plans to initiate a pilot project to demonstrate “smart city concept” at the industrial town of Haldia in West Bengal.

The project would focus on lowering carbon footprint.

EBTC is an European Union initiative to assist business units in India and Europe on clean technology transfer.

EBTC has roped in the Bengal Chamber of Commerce and Industry for the pilot project.

According to Mr Poul V. Jensen, Director, EBTC, the pilot project would focus on bringing down environment related hurdles that the industrial units in Haldia face while expanding their operations. “We are planning to implement a pilot project to showcase smart city concepts in lowering carbon footprint. We have decided to carry out a feasibility study in Haldia,” Mr Jensen told newspersons on the sidelines of a seminar - ‘Water, Wastewater and Green Buildings Mission 2012' - here on Wednesday.

The estimated investment in the pilot project would be close to €10 million, according to Mr Suman Lahiri, EBTC's Regional Manager.

Meanwhile, EBTC has signed a memorandum of co-operation with the Copenhagen Cleantech Cluster to help bring clean technologies to address environmental issues from the European Union to India and encourage collaboration between the two countries.

According to Mr Jensen, Denmark is a leader in clean technologies and through its arrangement with the Copenhagen Cleantech Cluster will provide cleantech solutions to India.

“Copanhagen Cleantech Cluster and EBTC will together work to identify projects, undertake their execution, and facilitate research and innovation related to green technology initiatives in the energy and environment sectors,” he added.

Wednesday, June 6, 2012

TV18-Viacom to take on STAR-Zee in distribution

Mumbai: MediaPro, the STAR-Zee joint venture that controls the distribution of 78 television channels, has some serious competition. TV18 and Viacom18 on Tuesday announced a 50:50 joint venture, IndiaCast, to create a platform to distribute nearly 57 channels.

The third large distribution consortium, the Sony-Discovery OneAlliance, controls around 26 channels. Before it was bought over, Eenadu used to distribute its 11 channels on its own. The TV18 and Viacom channels were distributed by another JV (joint venture) between Network18 and Sun TV.

This JV will now only distribute all the channels of Viacom, Eenadu and TV18, apart from Sun TV in Tamil Nadu. However in the north, Sun TV channels will be distributed by the new announced JV.

Unlike the other tie-ups, IndiaCast will consolidate domestic as well as international channel distribution (leveraging Viacom’s global clout), placement services and content syndication and also include other new media platforms like IPTV, mobile platforms and HITS.

MediaPro and OneAlliance have independent verticals for new media.

“The Indian distribution market is throwing up ample opportunities and we are uniquely poised to make the most of this proposed alliance in an increasingly digitised environment. Distribution is one of the high-growth areas in this industry and we are excited to have a presence in this part of the business as well,” said Sai Kumar, group chief executive officer, Network18 Group.

The move comes six months after Mukesh Ambani invested in Network18-Eenadu in a multi-layered deal. Experts say the move will also give Ambani, who is preparing for a major onslaught through 4G services, a distribution clout to offer broadcasting content combined with high-speed internet at home through a combination of broadband wireless connectivity at the last mile. It will also help him offer content to mobile customers using 4G services, which offer high-speed downloads.

Anuj Gandhi will be the group chief executive officer of IndiaCast and Gaurav Gandhi the chief operating officer.

“The company will be the focal point not only for content and media distribution but also to drive the content asset monetisation business of these channels. The growth and way forward for media brands in the journey ahead is through content asset monetisation — taking content across geographies, platforms and mediums,” said Gandhi.

IndiaCast will distribute all the channels of both media houses —CNBC TV18, CNN-IBN, CNBC Awaaz , IBN7, Colors, MTV, Nick, Sonic, VH1, Comedy Central, Colors HD — and all the channels of Eenadu. In addition to this, IndiaCast will distribute Sun Network channels and Disney channels in Hindi-speaking markets.

The Sun18 JV, formed in 2010 between Kalanithi Maran’s Sun networks and Raghav Bahl’s Network18 will be part of the JV in the Hindi-speaking markets while IndiaCast channels will be distributed by Sun Network in Tamil Nadu.

However, industry observers feel Sun will eventually move out from this and join hands with another distribution partner.

The Network18 Group is one of the largest diversified media conglomerates in the country and has two listed entities: Network18 Media and Investments, which acts as the holding company of the entire group, and TV18 Broadcast, which owns broadcasting assets like CNBC TV18, CNN-IBN, CNBC Awaaz and IBN7.

As of March 2012, Network18 Media and Investments owned 39.69 per cent in TV18. Other than owning a major chunk of its broadcasting news space, TV18 also owns 50 per cent in IBN Lokmat, the Marathi news channel, and 50 per cent in Viacom18, which runs Colors, Nickelodeon, MTV and VH1 and Viacom18 Motion Pictures.

The industry may see more such merged entities in distribution, said Jehil Thakkar, head of media and entertainment, KPMG. “Such joint ventures give synergies in distribution and cost savings. It ensures compliance from the cable operator and hence better rates,” he said. “Such collaborations also ensure a wide consumer base.”

Not everyone agrees. Cable industry officials say while there is no clarity on the deal yet, big distributors can squeeze cable operators and extract more subscription revenues and negotiate the carriage fee. “Things are bound to shake up with consolidation in the distribution business. This is cartelisation of broadcasters. It is negative for the viewer and negative for the industry,” said a cable operator on condition of anonymity.

Media analysts feel there are four things the deal could lead to: an increase in pay revenues and a fall in carriage costs, cable industry consolidation, improved access to non-Hindi markets and a push for media regulation. If these happen, the deal could end up being a positive but if it just arm-twists cable operators and competing channels, there could be litigation and signal switch-offs, they say.

The Rs 30,000-crore Indian TV broadcasting industry is in deep trouble. Of the total revenue, Rs 19,000 crore is the amount cable operators collect from subscribers. Subscription revenue is expected to grow 17 per cent a year to reach Rs 41,600 crore by 2015, according to KPMG India. Only 20 per cent of this amount goes to TV channels, though the share is expected to rise to 30 per cent by 2015, KPMG India has projected.

Suzlon launches turbine for low wind speed sites

Pune: Wind turbine maker, Suzlon, has launched a new machine designed for low wind speed sites.

Featuring a rotor diameter of 111 metres and a swept area of more than 9,500 square metres, the S111 is the latest generation of Suzlon’s 2.1 MW fleet.

The new product was launched at Windpower 2012 in Atlanta.

“With the industry increasingly looking to lower wind speed sites, the S111 represents a major step forward in our strategy to create products that deliver ever-increasing output from lower wind speeds, delivering solutions that precisely fit our customers’ needs,” Mr Tulsi Tanti, Chairman, Suzlon Group, said.

Mr Duncan Koerbel, Suzlon Wind Energy Corporation’s interim CEO and Global Head of OMS, added: “We will offer the S111 with tower heights of 95 and 120 metres, and combined with our all new third generation rotor, the S111 will deliver a 20 to 29 per cent increase in annual energy production over our S97 design in a 90-metre configuration.”

The S111 programme will have its first prototype operational in late 2013 and serial production will begin in 2014.

Britannia plans to go West, targets Indian diaspora

Bangalore: Britannia Industries, which has a near dominant control in the Indian biscuits market, is embarking on a global expansion to shore up its growth story. The company, which logged 19 per cent growth in top line at Rs 5,400 crore, derives around Rs 250 crore from global operations and is looking at all vectors to expand its presence overseas.

“Several of our bakery and dairy brands are available in approximately 30 countries, and we want to open up new geographies with new offerings,” Managing Director Vinita Bali said. Britannia, in addition to a decent presence in West Asia, Southeast Asia, Africa and Australia, has entered mature North American and UK markets. “We are targeting the Indian diaspora in the United States, Canada and the UK. It is indeed a highly competitive market, but is a large one, as well,” Bali said about sales prospects there. According to her, Britannia has hardly touched the tip of the iceberg in reaching out to the Indian diaspora, and intends to reach beyond this target segment pretty soon and rely on the distributor model.

Britannia intends to ride on the established organised retail market in mature markets and go for the hard sell at the point-of-sale terminals to reach out to the consumer.

“We support our brands selectively, depending on the market, and this consists of in-market and some media support. The radio there is a very targeted medium and we are riding on that. Some of the Indian television networks beam Indian content to the people there and we are leveraging on that, as well,” Bali said.

According to her, a key challenge in building a brand in an overseas market with an abundance of choice, is in establishing its relevance and specialty. “In our experience, consumers around the world buy brands and not companies or the way they are structured. To compete effectively, quality and its consistent delivery is a given. Being global is the way companies look at the world and their businesses. Consumers look for brands that satisfy their needs and are different, better and special,” Bali noted.

Bali should know. She has worked in global roles at Cadbury and The Coca-Cola Company. During her stint as the worldwide marketing director in The Coca-Cola Company, she was one of the key players in doubling its historical growth rate.

Apart from its expansive manufacturing capacity in India, Britannia has some facilities in West Asia after it acquired two bakery companies there.

“Some of the products catering to the global markets are sourced from these units, while the bulk of the supply is from India as it is more cost effective,” Bali said. In 2011-12, Britannia spent as much as Rs 200 crore to expand capacities and put up two greenfield units. Industry analysts indicate Britannia may be scouting West Asian markets for another acquisition, an aspect on which Bali declined to comment.

Nalco gets nod for Rs 12,000-crore investment to set up JV plants with GMDC

Ahmedabad: Gujarat government, last week, okayed the Rs 12,000-crore investment plan by National Aluminium Company in Gujarat to set up an alumina and smelter plant. The approval has cleared the way for Nalco and state-owned Gujarat Mineral Development Corporation to set up a joint venture, a senior official from Gujarat's department of industries and mines said. GMDC will have a 26% stake in the joint venture.

The project is expected to be set up on the lines units installed by the UK-based Vedanta group in Orissa, but will use better technology, the GMDC official said.

The project will be set up in two phases. In the first phase, Nalco will invest Rs 4,400 crore in an alumina plant with a capacity of 10 lakh tonnes per annum. The remaining investment will come in the second phase that will also see setting up of a five lakh per annum capacity smelter plant. GMDC will supply 30 lakh tonnes of bauxite sourced from Gadshisa and surrounding mines in Kutch to Nalco. In addition to the price of bauxite, GMDC will also get a 26% share from the profit, earned by Nalco from the sale of the final product.

"Till now bauxite mined from Gujarat was sold to buyers outside the state. Now, the mineral will stay in the state and generate employment through value-addition," said GMDC mnaging director VS Gadhvi.

Kutch has 63 million tonnes of non-plant grade bauxite reserves. GMDC has reserves of plant grade and non plant Bauxite at Gadhsisa in Kutch and Kalyanpur in Jamnagar (Saurashtra region). While Gadhsisa has a potential of mining one million TPA Bauxite, Kalyanpur has a capacity of 1.25 million TPA. Plant grade bauxite is used in refractories and chemical industries, while non plant grade bauxite is exported.

Bauxite miner and exporter Ashapura Minechem had earlier signed a memorandum of understanding with GMDC for the plant but did not execute it. Fresh EoIs were then invited. Companies who had expressed interest include US-based AluChem Inc, Russia-based UC RUSAL, Dubai-based Dubai Aluminium Limited (DUBAL), and Indian companies like Adani Enterprise, Aditya Birla group, NALCO, JSW steel and Jaiprakash Industries.

The proposals were examined by Nagpur-based Jawaharlal Nehru Aluminium Research Development and Design Centre of the Government of India. After a comparative analysis, NALCO was selected for the project.

Trade policy boost for e-commerce biz

New Delhi: In a boost for e-commerce businesses, the Centre has agreed to provide fiscal incentives for exports shipped through e-commerce platforms.

To begin with, this facility will be available for shipments effected from Delhi and Mumbai, the Commerce and Industry minister, Mr Anand Sharma, announced here today, as part of the annual supplement to the trade policy.

Mr Sharma also said that an inter-ministerial task force constituted by the Finance Ministry would expeditiously look into various aspects of e-commerce to enable shipments through designated ports.

The latest initiative could boost exports of handicrafts, gems & jewellery, carpets, music CDs and electronic items from the country, said Mr Ajai Sahai, Director-General and CEO, Federation of Indian Export Organisations (FIEO).

Exports thru courier
It is not only exports through e-commerce platforms, even exports through posts and couriers would be eligible for export incentives for shipments effected from Delhi and Mumbai.

Reacting to the announcement, Mr Malcolm Monteiro, CEO, South Asia, DHL Express, said, “We in the express logistics industry warmly welcome the decision to make exports shipped through Express and E-Commerce from Delhi and Mumbai eligible for export benefits.”

“We look forward to the logical next step from Customs to allow commercial export shipments through courier giving the Indian exporter the choice to use the best logistic platform as per their requirements,” he added.