HPCL, Mittal Energy joint venture picks IBM solution

Bangalore: IBM today announced that HMEL, a joint venture between Hindustan Petroleum Corporation Ltd (HPCL) and Mittal Energy Investment Pte Ltd., Singapore, has adopted a new IBM analytics-based solution to transform the way the company manages its financial and operations data.

HMEL had earlier partnered with IBM for the design and implementation of manufacturing execution systems (MES) including the selection of select processes and applications, as well as managing the mechanics of the project. The new IBM solution integrates information from the various components of the MES, enterprise resource planning (ERP), and control systems within the refinery and delivers a consolidated, single view of the data.

The technology will enable HMEL to analyse key corporate business processes including planned versus actual investments, production, key performance indicators, among others. The system will generate near real-time information for HMEL business executives to make more intelligent decisions around optimising productivity and margins. HMEL has built the 9 MMTPA (million metric tonne per annum) Guru Gobind Singh Refinery in Bathinda, Punjab that has a capability of processing 180,000 barrels of crude oil per day.

The IBM analytics solution also equips the organisation with power to interpret, transform and derive process operation actions from the information. It provides an industry standards based information model and associated integration techniques, enabling HMEL to turn data into information that can be accessed and delivered through Web services.

"As a greenfield project, we wanted to leverage the best of technology to ensure world-class operations and efficiency. We needed a solution that would provide us with a centralised view of all our assets for operational management purposes," said Moiz Tankiwala, Chief Operating Officer, HMEL.

IBM has been working alongside HMEL as part of Project Prism, the umbrella programme to implement strategic applications for HMEL, to support the ERP system, manage master data (MDM), build key performance indicator (KPI) dashboards, and create an integration business application environment. The Cognos Business Intelligence solution helps HMEL in building an enterprise-class Performance Management platform closely aligned with their existing technical architecture.

Vanitha Narayanan, Managing Partner, Global Business Services, IBM India/South Asia said: “Amidst complex processes, like in a refinery, use of analytics can transform financial processes and improve operational efficiencies.”

GRI A+ rating for RIL's Corporate Sustainability Report

Mumbai: The Global Reporting Initiative (GRI) has awarded A+ level to Reliance Industries (RIL'd) sustainability report 2011-12, said the company in a statement on Monday. "This is the seventh year in a row that RIL has received the highest application level on sustainability reporting. RIL is also the first Indian company to adhere to the GRI 3.1 Oil & Gas Sector Supplement, released in February 2012," said the statement.

The statement also said, "RIL has received the coveted rating this year for its report titled 'Partnering India's New Future Sustainably. The company adheres to all sustainability reporting guidelines and allocates sufficient resources towards its environmental stewardship, product responsibility and social institution building efforts."

The report was presented to GRI, Amsterdam, the Netherlands for application level check, as per the New GRI 3.1 Guidelines. RIL's report also takes into account guidelines laid down by the American Petroleum Institute and the International Petroleum Industry Environmental Conservation Association.

The report is also aligned with the National Voluntary Guidelines for Social, Environmental and Economic Responsibilities of Business, released by the Ministry of Corporate Affairs, Government of India, in November 2011.

The Global Reporting Initiative (GRI) is a non-profit organization that promotes economic, environmental and social sustainability. GRI provides all companies and organizations with a comprehensive sustainability reporting framework that is widely used around the world.

IRDA unveils reforms, okays demat policies

Mumbai: Big bang reforms are set to take place in the insurance industry with the regulator's final nod to 'insurance repositories' — that will facilitate demat policies —coupled with major relaxations in investment guidelines for life companies.

IRDA chairman J Harinarayan announced on Monday the draft investment guidelines that allow insurance companies to buy credit protection through derivatives, lend up to 10% of their shares and carry out short-term repo transaction in bonds. The regulator is also set to ease investment limits that will give Life Insurance Corporation of India more leeway to invest in companies.

Speaking at the sidelines of the 15th insurance summit organized by the Confederation of Indian Industry, Harinarayan said dematerialized life insurance policies will soon become a reality with the insurance regulator set to grant certificate of registration to five entities for setting up insurance repositories. Demat policies will enable consumers to get their policies serviced anywhere and, more importantly, allow a one-time 'know your customer' process that will be valid for all insurance purchases across companies.

The six companies that have received IRDA approval for setting up insurance repositories are: NSDL, CDSL, Karvy, CAMS and STCI. According to Cams Repository Services CEO S V Ramanan, demat policies will benefit policyholders as they will not have to worry about losing the document which has to be preserved for 20-30 years and it will also do away with the need to transfer their policies if they shift their home. Repository services will also conduct basic policy servicing on behalf of insurance companies.

Harinarayan said that the regulator will also come out with a whistleblower policy on the lines of Reserve Bank of India. Addressing the insurance summit, Harinarayan flagged off the absence of annuities in the product portfolio of private companies , high level of attrition among insurance employees, and the complex languages in insurance contracts as a matter of concern.

Indo-Swiss trade expands from US$7.03 bn in 2005-06 to US$15.3 bn in 2009-10, more than doubling in 5 years

Despite the global economic slowdown, Indo-Swiss trade graph has been looking upwards. The two-way trade expanded from US$7.03 billion in 2005-06 to US$15.3 billion in 2009-10, that is, more than doubling in 5 years.

This was stated by Dr Linus von Castelmur, ambassador of Switzerland to India and Bhutan, at an interactive session fielded by the CII recently in Kolkata.

"Switzerland is taking an initiative to organise a CEOs conclave in September this year in Kolkata. This would indeed provide a strong, innovative platform to chalk out mutually beneficial trade strategies," he said.

"Swiss companies have been actively participating in providing modern technologies and high tech products to various industrial sectors in India for a long time. This is evident from the fact that now nearly 170 Swiss companies have their joint ventures or subsidiaries in India. Business collaboration between Swiss and Indian companies has been growing robustly for a long time.

Some of the main items of Indian exports to Switzerland are textiles and garments, organic chemicals, precious stones and jewellery, dyestuffs, machinery and parts and leather products. India's imports from the Swiss consist of machinery and equipment (electrical and mechanical), precision instruments, pharmaceutical products, dyes and chemicals, fertilizers, watches among other products," he added.

Dr Castelmur recalled that the emergence of friendship between India and Switzerland formally started with the Treaty of Friendship and Establishment of 1948 and was strengthened in various fields such as development, economy, and culture. The exchanges between the two countries have since increased manifold.

He ended by saying, "This is the opportune moment to capture the untapped opportunities lying ahead of the two countries

Sandhar Tech buys Mag Engineering, deal size seen at Rs 70-90 crore

Mumbai: Sandhar Technologies Ltd, an affiliate of Rs 1,200 crore Sandhar Group, a diversified auto component major has acquired 100% stake in Bangalore based Mag Engineering Pvt. Ltd, one of the largest driver cabin manufacturer in the country.

The senior management of Sandhar Technologies were in Bangalore on Thursday to complete the acquisition process. ET learns the size of the acquisition is in the range of Rs 70-90 crore and Sandhar Technologies will fund this deal through debt and internal accruals.

People close to the development said, Maple Capital Advisors and Right Horizons were advisors to the transaction.

Mag specializes in supply of sheet metal components for construction and engineering industry.

When contacted Jayant Davar, vice chairman and managing director of Sandhar Group confirmed the acquisition but declined to give specific details of the deal.

Davar explaining the rationale of the acquisition said, "Mag is an established player in specialized fabrication business and this acquisition will help us consolidate our sheet metal, and fabrication businesses helping us expand further in niche products."

The acquisition will give Sandhar an opportunity to offer new products to its existing and new customers.

Founded in 1984, Mag Engineering has three manufacturing units in Bangalore which produces operator cabins, canopies, housings, panels, switchboards, control cabinets and all types of hi-precision sheet metal components. Its major customers are L&T Komatsu, Telcon, Caterpillar,Volvo Construction, Bharat Fritz Werner, Komatsu India, GE Healthcare, Faiveley Transport etc. It also exports to GE Medical and Caterpillar

"While Mag will continue to build stronger relationships with its own customers, the Sandhar umbrella will help it get scale, access to newer customers and corporate systems, leading to faster growth," added Davar.

Sandhar Group is an auto component major with diversified presence across 21 manufacturing units. It manufactures handles, latches, hinges, stamped & tubular components, plastic injected components, zinc & aluminum pressure die castings, moulds & dies and structural parts for Off Highway vehicles.

It also has a separate vertical which focuses on supplies of steel wheel rims & assemblies, handle bars, clutch and brake panels to the two wheeler manufacturers. Some of its major customers include auto majors like Hero MotoCorp, Honda Seil Cars, Tata Motors, TVS Motors, Ashok Leyland, GM, Mahindra Navister, Toyota, Volvo Eicher amongst others.

Voice messages transforming face of rural India

Coimbatore: Mobile voice messages seem to be transforming the Indian rural landscape. Rural community groups now have a reason to believe that the green SIM Card conceptualised by IKSL is an effective communication tool.

Anbu, a fisherman in Vairavan Kuppam Village in Pulicat Area of Thiruvallur district in Tamil Nadu, for instance recalls the alerts (voice messages) he received about ‘Cyclone Lila’ in May 2011.

“I immediately passed on the news to other fishermen in the village. But for this advice, we would have left for fishing that fateful day. Two days later, a relative of mine called to say that those who ignored the caution and went fishing that day had a tough time returning to the shore.”

Another fisherman, Maniveeran of Nadukuppam village, said he had little idea about fishing zone and used to return with no catch on many days. “I enrolled to become a member of IKSL last February. Now, with the help of the messages on potential fishing zone, I come back with bountiful catches. I am more than able to make both ends meet.”

Yet another farmer, Govindaswamy of Thirukovilur in Villupuram district, explained how his futile attempts at controlling the Brown Plant Hopper (BPH) infestation on paddy crop bore no result, until he contacted the IKSL helpline. “I have since switched over to sugarcane. I no longer wait to listen to the agri-news bulletins aired every evening. IKSL’s messages are more focused and crop specific.”

IFFCO (Indian Farmers’ Fertiliser Co-operative Ltd) Kisan Sanchar Ltd (IKSL), which conceptualised the green SIM Card to empower farmers and the people living in rural India, works with allied groups to develop content and services for providing the information.

IKSL has tied-up with Airtel to provide this service.

Content managers, experts
According to Jinnah, State Manager, IKSL, there are 18 content managers supported by 59 experts, catering to the requirements of farmers. “A peer panel comprising eminent scientists monitor the overall activities,” he said.

IKSL operates across 18 States. These States have been divided into 53 agro-climatic zones. The subscriber receives five free voice messages every day, covering diverse areas from best farm practices to availability of fertiliser and pesticides, market price of agri-commodities, Government schemes and so on.

“The base of active users has since picked up from around 33000 in 2007-08 to around 14 lakhs as at end March 2012. Of these, 1.30 users are from Tamil Nadu,” Jinnah said.

The voice messages are available in 18 languages. The subscriber can choose the language and community (such as sugar, goat rearing, poultry, paddy, banana etc) for getting related information, he said.

Local outsourcing on rise in US; Indian IT cos taking advantage of the trend: Forrester report

Domestic outsourcing or outsourcing locally such as from US to the US is on the rise, according to a recent research report by Forrester analyst Stephanie Moore, who listed five reasons why the trend is accelerating.

"First, clients, who today depend on software to differentiate and grow their businesses, require contextually sophisticated developers who can communicate synchronously, interpret their fuzzy and constantly changing requirements, and build software solutions to meet those requirements. Second, clients require agility and also lightning-fast time-to-market," Ms Moore said in the report.

The report lists oversubscription to India, the top offshore location, resulting in inflated prices, high attrition and declining quality as the third reason. Tighter enforcement of visa regulation and unemployment in the US were the fourth and fifth reasons for the rise in domestic outsourcing, according to the report.

The report quoted a Forrester client using domestic outsourcing as saying productivity and time-to-market was greater with its domestic outsourcer, and although the labour rate was double, the number of people and amount of time needed was lesser.

"Companies that look at their total cost as opposed to their unit costs may realize that domestic outsourcing can be less expensive than offshore outsourcing - especially for application development work," Ms Moore wrote. Productivity gains, lower on-site labour costs, lower client travel and oversight costs, lower staff costs and lower retained staff costs were among the benefits the report listed for outsourcing domestically.

"On-site staff members from offshore vendors are more expensive (averaging from $68 to $100 per hour) than staff in a domestic outsourcing center (averaging from $40 to $60 per hour)," Ms Moore wrote.

In an exclusive e-mail to ET, Ms Moore said there were no legitimate growth numbers yet on the growth of domestic outsourcing because they had not estimated the market size yet but that Forrester would be doing on this soon. "However, it is safe to say that the so-called domestic outsourcing market will grow at least 100% in 2013 over 2012," she said in the e-mail.

Visa rejection was a common client complaint, she added, "One client told me that their visa rejection rates have gone from 20% to 80% during 2012. Another client told me that she has to hire local contractors for onsite staff sometimes because her Tier One Indian vendor cannot get enough visas approved quickly enough."

Another analyst, who requested anonymity, tole ET that while it was true that rural outsourcing rates in US were less expensive and around $ 40, these vendors lacked the same quality and training that Indian offshoring vendors could provide, and they were usually small centres employing few hundreds of people.

""I don't expect offshoring to come down,"" the analyst said. However, many companies in the US had outsourced much more than they originally intended or anticipated and this was creating demand for newer kinds of jobs for IT within US, he added. He cited the recent General Motors decision to outsource less as an example. General Electric and other US firms were also taking advantage of tax and other benefits given by certain states for creating employment. Most often, the benefits are also a matter of negotiation, he said.

Indian vendors were also taking advantage of the trend to hire more in the US, he said. "Domestic outsourcing should complement, not replace offshore outsourcing. But, it will certainly impact the number of people that clients require to be onsite with them from offshore," Ms Moore agreed, in her e-mail to ET.

"In the near term, the small domestic outsourcing provider will gain since they are the most focused on this market and will not be cannibalizing any offshore revenues. This reminds me of the pureplay Indian vendors in the 1990s -- they were best at delivering and capitalizing on the offshore outsourcing market because vendors like IBM and Accenture did not believe in the model yet," she said.

MCX exchange gets nod to launch currency options

Mumbai: The MCX Stock Exchange (MCX-SX) has been granted permission to launch currency options on its platform by SEBI and the RBI.

This approval will allow MCX-SX to expand its offerings in the currency derivatives segment by introducing currency options in the dollar-rupee currency pair, said a release from the exchange on Sunday.

The exchange held a mock-trading session on Saturday. It is yet to announce when it will rollout live trading of currency options.

“Options have the comparative advantage of maintaining a certain degree of flexibility in hedging. Introduction of this product completes the spectrum of hedging instruments available on the MCX-SX currency segment and adds further efficiency to risk mitigation mechanism in USD-INR,” said Joseph Massey, MD and CEO, MCX-SX.

This makes MCX-SX, the third exchange to offer trading in this segment after the NSE and the USE (2010). “With the introduction of one more player, there will definitely be better competition. It is good for the industry and will have a positive impact on costs also. At present, the rupee is very volatile so it looks like it’s a good time to launch another currency options platform,” said Naveen Mathur, Director, Angel Broking.

At the beginning of the calendar, the NSE had a turnover of Rs 98,530 crore and the USE Rs 273.63 crore in the currency options segment.

Currency options grants the holder the right, but not the obligation, to buy or sell currency at a specified exchange rate during a specified period of time.

At present, MCX-SX offers trading only in the currency futures segment. Last month, MCX-SX received permission from SEBI to launch its equity trading platform.

On its currency futures segment, contracts are traded in dollar-rupee, euro-rupee, yen-rupee, and pound- rupee.

In FY 2011-12, the exchange had a market share of 43.7 per cent in currency futures. The average daily turnover has increased to Rs 13,530.47 crore (July 2012) from Rs 324.78 crore in its first month of operation.

The exchange is used by SMEs, treasury of large corporates (importers and exporters), banks, institutions and individuals involved in forex transactions.

IT spending in Indian manufacturing to double by 2016: IDC Manufacturing Insights

Chennai: As costs increase, and competition intensifies, manufacturers are updating and automating their business processes. IDC Manufacturing Insight predicts the India manufacturing IT spending to grow to $8.78 billion by 2016, which will be double the manufacturing IT spending of 2011. This represents a cumulative average growth rate of 14.5% between 2012 and 2016. The sector with the highest IT spends in the Indian manufacturing sector in 2012 is automotive, which is followed by chemicals and consumer products.

The report covered 13 industry sectors within 14 countries across the Asia/Pacific (excluding Japan) region.

"With increasing costs and uncertainty in the world economy, manufacturers across the region are increasingly focusing their efforts on productivity and efficiency in 2012,"said Dr. Christopher Holmes, head - international, IDC Manufacturing Insights.

"There is increased interest in looking beyond ERP, as companies seek to leverage technology to deliver value to the enterprise. We are also seeing increased interest in newer technologies such as business intelligence and mobile within manufacturing enterprises, as companies seek to leverage these for enhanced productivity."

Hero MotoCorp invests $20 m in Erik Buell of US for R&D

New Delhi: In what is likely to be Hero MotoCorp’s first investment in an overseas company, the two-wheeler maker is believed to have invested $20 million (about Rs 110 crore) into US-based Erik Buell Racing (EBR).

With the fresh funds, EBR is expected to bolster Hero’s R&D efforts in modifying existing products and work on new bike design and development. This is critical for Hero to maintain its leadership in the local market and expand globally - the technology support from erstwhile partner Honda ends in June 2014.

According to industry sources, the investment will also help EBR expand its Milwaukee production capacity and hire more people in its own R&D team.

Hero had entered into a strategic agreement with EBR this February, and had also announced sponsorship of two EBR-powered teams in a US superbike racing championship.

“An investment in EBR was expected as Hero is set to receive a lot of technological support for more powerful bikes. Till now, they’ve only sponsored the EBR racing team, which helping them by spreading the brand awareness overseas.

“The question is if Hero has picked up a minority stake in return of the investment,” an analyst with a leading brokerage said.

When asked about the developments, Hero MotoCorp did not reply to e-mailed queries.

The investment in EBR is believed to be a part of the Rs 2,575-crore funding plan announced by the company in June. While a chunk of the funds (Rs 2,000 crore) are to go into the two new plants being set up in Gujarat and Rajasthan and expansion of the three existing facilities, the rest is expected to go into R&D efforts, including a new 250-acre facility for the purpose at Jaipur.

The company has already hired 300 engineers, including expats, to boost its own R&D. Apart from EBR, it has also tied up with Austrian auto engineering firm AVL for engine development.

“In our efforts to spruce up our R&D and to build the capability for the kind of aggressive product launch plans and international expansion that we have in mind, we are looking at both organic and inorganic sources of technology capability growth,” Anil Dua, Hero’s Senior Vice-President, Marketing and Sales, had said in a investor call recently.

After separating ties with Honda in March last year, Hero for the first time started its own R&D spends. Currently, it stands at up to 0.35 per cent of the top line, but as work on its self-developed models speed up, it is expected to go to one per cent of the net turnover.