Mercedes rolls out first SUV made in India

Pune: Mercedes Benz India (MBI) rolled out the first locally assembled SUV, the ML 250, from its Chakan plant on Wednesday and also announced the start of operations of its new, start-of-the-art paint shop that is capable of water-based painting.

"This is the first Mercedes Benz SUV model (made) in India and we will further increase the range. We look forward to being a long term player and be prepared to take a large piece of the pie," Ralf Mungenast, Director, International Productions, Daimler AG said.

India is the only country outside of the USA where the German luxury car maker has begun production out of the new ML-Class.

Piyush Arora, Director, Technical, Mercedes-BenzIndia, said that the company had started with the ML 250 CDI, and production of the ML 350 CDI, as well as the GL-Class will follow in the next one year or so.

Built from CKD units, the ML 250 is currently localised to a degree of around 30%, with the power train and axles being sourced locally and is priced at Rs 46.5 lakh ex-showroom, Delhi. MBI launched a CBU version of the ML 350 earlier this year, as well as a revamped model in June after which demand has doubled to 100 units per month, Debasis Mitra, head, sales and marketing said. The recently launched B-Class is also sold out till December, and will re-open for booking next year, he added.

Built with an investment of Rs 200 crore, the paint shop has an annual capacity of 20,000 units annually which is extendable to 40,000 units. At present, the C, E and S-Class passenger cars that are made locally will be painted here.

Karnataka Bank signs MoU with management consultant KPMG

Mangalore: The Karnataka Bank Ltd has engaged management consultant KPMG for its business process re-engineering initiative. The initiative named as Project Tejas will be rolled out across its 510 branches and is aimed at high quality growth across its assets, liabilities, products and services. The bank aims at doubling its business turnover in the next three years.

KPMG will provide hand holding support with its dedicated team positioned at the bank's headquarters here. High growth and superior quality is the mandate given to KPMG as the bank is aiming to clock an annual growth rate of 25% to 30%.

P Jayarama Bhat, managing director and CEO of the bank and Narayanan Ramaswamy, partner of KPMG Advisory Services Pvt Ltd, Chennai signed a memorandum of understanding to this effect. Under the project, the bank will comprehensively reengineer and reposition its marketing efforts, sector prioritization, delivery channels, employee reskilling, brand building with optimum utilization of all resources at its disposal.

Indian engineering services in demand, says Nasscom

Bangalore: Despite a slowdown in the world economy, Indian engineering service providers will see growth due to availability of skilled talent pool coupled with a shortage of engineers in the developed markets.

According to a report released by Nasscom and Booz and Company, the growth is attributed to flexible business models, shorter product life cycles of engineering companies, decreasing time to market and flexibility in offering end products.

Indian engineering research and development (ER&D) market is expected to add to future growth with automotive, consumer electronics and telecom contributing by over 50 per cent to offshoring revenues by 2020, the report said.

Ravi Pandit, Chairman, Nasscom Engineering Forum, Pune and Group CEO, KPIT Cummins, told Business Line that the future growth will be driven by a need for IP and co-innovation, to meet the growing demand in emerging economies as well as fast evolving customer preferences.

“Global automotive or aerospace companies are increasingly asking Indian companies to co-develop a product instead of working on specifications set by them such as building infotainment systems inside a car or new wing technology for an aircraft,” said Suvojoy Sengupta, Managing Director, India, Booz and Co.

Indian engineering research and development outsourcing industry is set to reach $37- 45 billion by 2020, according to the report. This will be about 35 per cent of the overall ER&D market, which is estimated to reach $118 billion by 2020. Currently, this market is pegged at $10.2 billion.

This will be driven by companies in sectors such as chemical, medical and automotive. In addition, the Government is expected to provide a boost to engineering in India through investments in infrastructure development in 2012-17 in telecom and energy and construction sector, the report added.

IT spending will rise 7.7% to $71.5 b in 2013: Gartner

Mumbai: Information Technology spending in India is projected to $71.5 billion in 2013, a 7.7 per cent increase from the $66.4 billion projected for 2012, according to a report by research firm Gartner.

“India like other emerging markets continues exercising strong momentum despite inflationary pressures and appreciation of local currencies, which are expected in rising economies,” Peter Sondergaard, Senior vice-president and global head of research at Gartner said.

The telecommunications market is the largest IT segment in India with IT spending forecast to reach $47.8 billion in 2013, followed by the IT services market with a spending of $10.3 billion.

The hardware market in India is projected to reach $9.5 billion in 2013 and software spending will be at $4.0 billion.

While, Software will record the strongest revenue growth at 15 per cent, IT services will grow at 12 per cent. The telecom segment, which accounts for 67 per cent of the Indian information and communications technology market, is set to grow at 7 per cent revenue growth in 2013.

“The hardware segment will account for 14.1 per cent of all IT spending in India by 2016, driven by positive contributions from the storage and the client computing segment,“ said Partha Iyengar, head of research, Gartner India.

“Mobile phones will continue to be the fastest growing space within the Indian IT market. During the same time period, this segment will also account for nearly 42 per cent of all telecommunications revenue in India, and it will also account for nearly 26 per cent of the overall IT spending.”

India gaining importance in G20: Bernanke

Mumbai: India is gaining in importance among the G20 countries according to US Federal Reserve chairman Ben Bernanke, who was in Mumbai on Wednesday along with US treasury secretary Timothy Geithner.

Bernanke and Geithner had two meetings in Mumbai - a session with business leaders and a subsequent meeting with the top management of Reserve Bank of India (RBI). Addressing the media, Bernanke said, "India is clearly becoming a more and more important player on the world stage in G20 context, in terms of its role in the global economy. It is very useful for us to exchange ideas and build the basis for future collaboration."

The Fed chief said that in the RBI meeting, the central bankers discussed what is going on in the US economy and the Indian economy, and they also talked about monetary and regulatory policies. Bernanke's visit is the first by a sitting Fed chief.

Introducing Bernanke, the central bank's governor D Subbarao said that the US Fed chief stood for his aggressive use of quantitative easing (QE) and the use of innovations as he went along. "QE became 'credit easing' when private assets were bought to stabilize financial markets, followed by another unconventional move - 'operation twist'," said Subbarao. He added that the crisis has pushed central bank policy making into uncharted territory. "We will not know for many years whether the policy mix we have followed is right. Even so, in real time, all of us have to struggle with the challenge of managing the new trilemma - balancing fiscal sustainability, price stability and financial stability," Subbarao said.

Earlier in the day, US treasury secretary Geithner met industry captains in a meeting organized by CII. They discussed ways in which the US and India can deepen bilateral economic engagement. Other participants included CII president and Godrej Group chairman Adi Godrej, CII director general Chandrajit Banerjee, HDFC chairman Deepak Parekh, ICICI Bank MD Chanda Kochhar, Kotak Mahindra Bank MD Uday Kotak, Jubilant Life Sciences MD Hari Bhartia, TVS Motor Company CMD Venu Srinivasan, IDFC MD Rajiv Lall and Tata Sons director ( finance) Ishaat Hussain.

Ranbaxy launches cevimeline hydrochloride capsules in US market

New Delhi: Ranbaxy Pharmaceuticals on Tuesday launched the authorised generic cevimeline hydrochloride 30 mg capsules in the US market under an agreement with Daiichi Sankyo.

Cevimeline hydrochloride is meant for the treatment of symptoms of dry mouth associated with Sjogren’s syndrome, an autoimmune disorder affecting the moisture-producing glands. It is now distributed by Daiichi Sankyo under the brand name Evoxac.

“We see a continuing opportunity to leverage our combined strengths of innovation and the manufacture and marketing of affordable, high quality, generic medicines through this collaboration,” Arun Sawhney, Chief Executive Officer and Managing Director, Ranbaxy, said.

Evoxac generated total annualised sales of $62.4 million as of June 30, 2012 in the US market.

“This launch further underscores Ranbaxy’s resolve to bring high quality, affordable generic medicines to the US healthcare system to meet the growing needs of patients and prescribers,” Bill Winter, Vice-President - Trade Sales and Distribution, North America, Ranbaxy, said.

Ranbaxy Pharmaceuticals, based in Jacksonville, Florida, is a wholly owned subsidiary of Ranbaxy Laboratories Ltd. It is engaged in the sale and distribution of generic and branded prescription products in the US healthcare system.

Railway Revenue Earnings up by 19.78 per cent during April- September 2012

New Delhi: The total approximate earnings of Indian Railways on originating basis during first six months of the financial year 2012-13 i.e. 1st April to 30th September 2012 were Rs. 58649.83 crore compared to Rs. 48963.19 crore during the same period last year, registering an increase of 19.78 per cent.

The total goods earnings have gone up from Rs. 32425.41 crore during 1st April – 30th September 2011 to Rs. 40303.85 crore during 1st April – 30th September 2012, registering an increase of 24.30 per cent.

The total passenger revenue earnings during first six months of the financial year 2012-13 were Rs. 15581.44 crore compared to Rs. 14017.76 crore during the same period last year, registering an increase of 11.15 per cent.

The revenue earnings from other coaching amounted to Rs. 1510.38 crore during April-September 2012 compared to Rs. 1377.58 crore during the same period last year, an increase of 9.64 per cent.

The total approximate numbers of passengers booked during 1st April - 30th September 2012 were 4274.87 million compared to 4121.99 million during the same period last year, showing an increase of 3.71 per cent. In the suburban and non-suburban sectors, the numbers of passengers booked during April-September 2012 were 2215.51 million and 2059.36 million compared to 2154 million and 1967.71 million during the same period last year, showing an increase of 2.84 per cent and 4.86 per cent respectively.

RBI continues with enhanced all-in-cost ceiling for overseas borrowing

New Delhi: The Reserve Bank of India has decided to continue the enhanced all in cost ceiling for external commercial borrowing or ECBs and trade credits. The all-in-cost ceiling includes arranger fee, upfront fee, management fee, handling/ processing charges, out of pocket and legal expenses, if any.

It may be recalled that the all-in-cost ceiling for ECBs with average maturity of three and up to five years was enhanced to 6 months Libor + 350 bps (one bps is 0.01%) with effect from November 23, 2011 after the crisis in the global markets folowingthe problems in the Euro area, which made it difficult for Indian companies to raise funds abroad.

For loans with a maturity of over five years, this ceiling was enhanced to 6 months libor plus 500bps. All-in-cost ceiling for trade credit was enhanced to 6 months Libor + 350 bps.

Iraq set to become India's strategic energy partner: IEA Chief Economist

New Delhi: Iraq, which is set to become one of the major oil producers in the world, could also become India’s strategic energy partner, International Energy Agency’s (IEA) Chief Economist Fatih Birol said.

Speaking to Business Line after the release of IEA’s report on ‘Iraq Energy Outlook’ Birol said Iraq’s role in the global oil market was growing rapidly.

Currently, half of Iraq’s oil exports go to Asia. This situation will change by 2020, when exports to Asia will account for 80 per cent of Iraq’s oil exports.

Two major oil importers in Asia – China and India – will have the largest share by end of this decade. Today, Iraq produces three million barrels a day of crude oil and, according to IEA’s Iraq Energy Outlook, the country's oil production is expected to grow by over 5 million barrels a day to 2035, he said. Incidentally, Iraq recently replaced Iran as India’s second largest crude oil supplier.

According to IEA Iraq Energy Outlook, by 2020, crude oil production is expected to more than double to 6.1 million barrels a day to reach 8.3 million barrels a day by 2035.

Birol said by 2020, China will account for almost 2 million barrels of oil a day sourcing from Iraq, while India will be getting close to 1.5 million barrels a day. Twenty years down the line, Iraq will have reached GDP levels of what Saudi Arabia is today, he said.

On whether Iraq will be able to meet the demand shortfall created due to geo-political issues in Iran, he said, “Iraq will be able to sustain it, because it has vast and low-cost oil resources. Iraq is on its way to become the second largest exporter of oil globally. The largest exporters today are Saudi Arabia, followed by Russia.”

Asked if the flush of oil from Iraq will result in bringing down prices, Birol said, “If Iraq is able to sustain the developments, then it will. But, if it remains lower than expectations or developments weaken due to any kind of political uncertainty, the prices may be $15 a barrel higher than expected in 2035.” International crude oil prices are well over $105 a barrel today.

On becoming a gas supplier to the world, Birol said natural gas could play a more important role in Iraq’s future for its power generation.

He said there was a huge potential for Indian companies to invest in Iraq in not only oil and gas exploration but also in areas such petrochemicals, IT, engineering and infrastructure.

The overseas investment arm of ONGC, ONGC Videsh Ltd, is the sole licensee of Block-8, a large on-land exploration Block in Western Desert, Iraq. The company is currently re-negotiating the contract with Iraq.

Affordable electricity to all households in 5 years: PM

New Delhi: Prime Minister Manmohan Singh on Tuesday said the Government plans to offer affordable electricity to all households in the country in the next five years.

"More than 1,00,000 villages in the country have been provided in recent years," Singh said while addressing a seminar on Energy Access organised by the CII and Ministry of New and Renewable Energy.

Prime Minister Singh also said that the Government is taking steps to offer cooking gas to all rural households.

At present, 12 per cent of 119 million rural households use LPG for cooking. All 240 million households, using six subsidised cylinders in year, would require about 25 million tonnes of LPG.

"Extending of distribution network may require some time. Rural households would need subsidy for electricity and LPG," Singh added.

The Government is working on a mechanism to provide subsidy to targeted individual.

Singh said that the Government is looking to put in place a mechanism where subsidy would be directly transferred to bank accounts of the beneficiary.

In addition, solar power contributes 12 per cent to India's total electricity installed capacity.

"We hope to light up around 20 million rural homes by using solar power by 2022," Singh said.

India targets to install 55 GW of renewable energy capacity by 2017.