Mumbai: Indian companies raised $4.29 billion, through external commercial borrowings (ECBs) and foreign currency convertible bonds ( FCCBs) in October, to fund modernisation, foreign acquisitions, import of capital goods and onward lending.
This is highest since December last year. In December 2011, companies had raised $4.4 billion from the ECBs and FCCBs. The comparable figure for last month, according to Reserve Bank of India ( RBI) data, was $2.77 billion. Of the total, $2.40 billion was via automatic route while $1.89 billion was raised through the approval route, which requires case-by-case approval from RBI.
Reliance Industries Ltd alone contracted ECBs worth $1.5 billion for importing capital goods.
The loan tenure is 64 months under the approval route. October saw a number of ECBs raised by the government companies. Indian Oil Corporation, Bharat Petroleum, GAIL, Indian Railways Finance Corporation and Air India were the public sector enterprises that had borrowed through ECBs.
There were two FCCB transactions recorded in the month. Jain Irrigation Systems Ltd borrowed $40 million to fund its oversees acquisition while Gujarat NRE Coke Ltd funded its local capital goods expenditure.
Success in my Habit
Saturday, December 15, 2012
100% FDI Permitted in Power Sector
New Delhi: The Minister of State (Independent Charge) for Power Shri Jyotiraditya Scindia informed Lok Sabha today that as per extant policy, Foreign Direct Investment (FDI) up to 100% is permitted in the power sector, under the automatic route, for:
Generation and transmission of electric energy produced in hydro electric, coal/lignite based thermal, oil based thermal and gas based thermal power plants;
Non-Conventional Energy Generation and Distribution;
Distribution of elective energy to households, industrial, commercial and other users; and
Power Trading.
Accordingly, any foreign power company can enter power sector through FDI route. Further, several global power plant equipment manufacturing companies from Japan, Europe and USA have formed Joint Ventures with Indian Companies for establishing manufacturing base in India for the manufacture of supercritical boilers/turbine generators and technology transfer. The companies are Mitsubishi Heavy Industries Ltd., Japan with L&T at Gujarat; Hitachi, Japan with BGR at Tamil Nadu; Toshiba, Japan with JSW at Tamil Nadu; Alstom, France with Bharat Forge at Gujarat; Ansaldo Caldie, Italy with Gammon at Tamil Nadu; Babcock & Wilcox, USA with Thermax at Maharashtra; Hitachi Power Europe GmbH (Germany) with BGR at Tamil Nadu. Doosan, Korea (100% FDI) has come to establish its manufacturing facilities on their own strength in Tamil Nadu.
Besides, CLP India Pvt. Ltd., a wholly owned subsidiary of CLP Holdings has set up a 1320 MW thermal power project at Haryana. In addition, M/s. AES (Chhattisgarh Energy Pvt. Ltd.) proposes to setup 2x660 MW Thermal Power Project in Chhattisgarh and Odisha Power Generation Corporation Ltd. (A Joint Venture of Govt. of Odisha & AES Corp. USA) also proposes to setup a new Thermal Power Project (2x 660 MW) in Odisha.
Generation and transmission of electric energy produced in hydro electric, coal/lignite based thermal, oil based thermal and gas based thermal power plants;
Non-Conventional Energy Generation and Distribution;
Distribution of elective energy to households, industrial, commercial and other users; and
Power Trading.
Accordingly, any foreign power company can enter power sector through FDI route. Further, several global power plant equipment manufacturing companies from Japan, Europe and USA have formed Joint Ventures with Indian Companies for establishing manufacturing base in India for the manufacture of supercritical boilers/turbine generators and technology transfer. The companies are Mitsubishi Heavy Industries Ltd., Japan with L&T at Gujarat; Hitachi, Japan with BGR at Tamil Nadu; Toshiba, Japan with JSW at Tamil Nadu; Alstom, France with Bharat Forge at Gujarat; Ansaldo Caldie, Italy with Gammon at Tamil Nadu; Babcock & Wilcox, USA with Thermax at Maharashtra; Hitachi Power Europe GmbH (Germany) with BGR at Tamil Nadu. Doosan, Korea (100% FDI) has come to establish its manufacturing facilities on their own strength in Tamil Nadu.
Besides, CLP India Pvt. Ltd., a wholly owned subsidiary of CLP Holdings has set up a 1320 MW thermal power project at Haryana. In addition, M/s. AES (Chhattisgarh Energy Pvt. Ltd.) proposes to setup 2x660 MW Thermal Power Project in Chhattisgarh and Odisha Power Generation Corporation Ltd. (A Joint Venture of Govt. of Odisha & AES Corp. USA) also proposes to setup a new Thermal Power Project (2x 660 MW) in Odisha.
Wednesday, December 12, 2012
KEC International gets Rs 612 cr orders
Coimbatore: KEC International Ltd belonging to the RPG Group has secured new orders worth Rs 612 crore in transmission, power systems, cables and water businesses.
Bulk of the orders was for transmission business both within and outside the country. It has got an order for Rs 210 crore from Power Grid Corporation of India Ltd for erection of single circuit transmission lines between Meerut in Uttar Pradesh and Monga in Punjab on turnkey basis. KEC International claimed that so far in this financial year it had nearly 28 per cent share in PGCIL’s transmission line contracts.
KECIL’s wholly owned subsidiary SAE Towers has won orders for supply of lattice towers in Brazil, Mexico and the US valued Rs 224 crore.
In Uganda, it has secured an order worth Rs 53 crore for design and construction of distribution lines.
The orders for supply of power and telecom cables were estimated to be Rs 81 crore and order for water system civil works for thermal power project of NTPC in Solapur in Maharashtra was worth Rs 44 crore.
On Monday, the KEC stock was trading up 2.73 per cent at Rs 67.85 on the BSE in morning trade.
Bulk of the orders was for transmission business both within and outside the country. It has got an order for Rs 210 crore from Power Grid Corporation of India Ltd for erection of single circuit transmission lines between Meerut in Uttar Pradesh and Monga in Punjab on turnkey basis. KEC International claimed that so far in this financial year it had nearly 28 per cent share in PGCIL’s transmission line contracts.
KECIL’s wholly owned subsidiary SAE Towers has won orders for supply of lattice towers in Brazil, Mexico and the US valued Rs 224 crore.
In Uganda, it has secured an order worth Rs 53 crore for design and construction of distribution lines.
The orders for supply of power and telecom cables were estimated to be Rs 81 crore and order for water system civil works for thermal power project of NTPC in Solapur in Maharashtra was worth Rs 44 crore.
On Monday, the KEC stock was trading up 2.73 per cent at Rs 67.85 on the BSE in morning trade.
Railway Revenue Earnings up by 19.23 Per Cent During April- November 2012
New Delhi: The total approximate earnings of Indian Railways on originating basis during 1st April to 30th November 2012 were Rs.78868.17 crore compared to Rs. 66150.48 crore during the same period last year, registering an increase of 19.23 per cent.
The total goods earnings have gone up from Rs. 43891.25 crore during 1st April – 30th November 2011 to Rs. 54487.10 crore during 1st April – 30th November 2012, registering an increase of 24.14 per cent.
The total passenger revenue earnings during 1st April – 30th November 2012 were Rs. 20423.31 crore compared to Rs. 18742.83 crore during the same period last year, registering an increase of 8.97 per cent.
The revenue earnings from other coaching amounted to Rs. 2061.30 crore during April-November 2012 compared to Rs. 1860.49 crore during the same period last year, registering an increase of 10.79 per cent.
The total approximate numbers of passengers booked during 1st April – 30th November 2012 were 5700.57 million compared to 5517.86 million during the same period last year, showing an increase of 3.31 per cent. In the suburban and non-suburban sectors, the numbers of passengers booked during April-November 2012 were 2964.50 million and 2736.07 million compared to 2886.10 million and 2353.95 million during the same period last year, showing an increase of 2.72 per cent and 3.96 per cent respectively.
The total goods earnings have gone up from Rs. 43891.25 crore during 1st April – 30th November 2011 to Rs. 54487.10 crore during 1st April – 30th November 2012, registering an increase of 24.14 per cent.
The total passenger revenue earnings during 1st April – 30th November 2012 were Rs. 20423.31 crore compared to Rs. 18742.83 crore during the same period last year, registering an increase of 8.97 per cent.
The revenue earnings from other coaching amounted to Rs. 2061.30 crore during April-November 2012 compared to Rs. 1860.49 crore during the same period last year, registering an increase of 10.79 per cent.
The total approximate numbers of passengers booked during 1st April – 30th November 2012 were 5700.57 million compared to 5517.86 million during the same period last year, showing an increase of 3.31 per cent. In the suburban and non-suburban sectors, the numbers of passengers booked during April-November 2012 were 2964.50 million and 2736.07 million compared to 2886.10 million and 2353.95 million during the same period last year, showing an increase of 2.72 per cent and 3.96 per cent respectively.
Coffee exports to S. Korea up five-fold
Bengaluru: South Korea has become a key market in Far-East for Indian coffee exports.
“Indian coffee exports to South Korea have seen a five-fold jump in volume in the last three years,” Jawaid Akhtar, Coffee Board Chairman, told Business Line.
Exports to South Korea is expected to cross over 2,000 tonnes in crop year 2011-12 compared with 2,051 tonnes (in value terms Rs 33.87 crore) in 2010-11. In 2009-10, exports stood at 366.1 tonnes (Rs 3.51 crore).
Korea is a market for mild coffee and India fits well due to its geographical advantage compared to South American coffee-growing countries.
Also the success of Korean big business such as Hyundai, Samsung, LG and others brands in Indian market has added to the comfort level in doing business with Indian growers.
Aktar said: “Korea is a good follow-up country for us. Exports have been steadily going up. It rose sharply ever since we took part in ‘Seoul Cafe Show’ in Korea last year and this year.”
“We want to cultivate and build this emerging market. As a step towards achieving it, we have been taking exporters along with us to showcase our diverse coffees,” he said.
This year, three Indian exporters took part in the ‘Seoul Cafe Show’ as compared to five exporters last year.
Nishant Gurjer, KPA Chairman and managing partner of Kaapi Royale Coffee and the Sethuraman Estates, who took part at the ‘Seoul Cafe Show’ said: “Korea in terms of consumption has suddenly emerged as a big importer of coffees in the last five years.”
“Ever since I started exports to Korea, I am seeing home grown café chains like ‘Caffé Bene’, ‘Angles in Us Coffee’, ‘Hollys Coffee’ and ‘Paris Baguette’ expanding. In all they have over 1,000 stores,” he added.
South Korean coffee buyer is also well aware of coffee quality which he is buying as most of them are Q-certified tasters.
According to Gurjer, Indian coffee is also getting good prices as well. Indian coffees with quality cupping taste profile and certification has got good premium for they appreciate and have tasted good quality coffees.
“Indian coffee exports to South Korea have seen a five-fold jump in volume in the last three years,” Jawaid Akhtar, Coffee Board Chairman, told Business Line.
Exports to South Korea is expected to cross over 2,000 tonnes in crop year 2011-12 compared with 2,051 tonnes (in value terms Rs 33.87 crore) in 2010-11. In 2009-10, exports stood at 366.1 tonnes (Rs 3.51 crore).
Korea is a market for mild coffee and India fits well due to its geographical advantage compared to South American coffee-growing countries.
Also the success of Korean big business such as Hyundai, Samsung, LG and others brands in Indian market has added to the comfort level in doing business with Indian growers.
Aktar said: “Korea is a good follow-up country for us. Exports have been steadily going up. It rose sharply ever since we took part in ‘Seoul Cafe Show’ in Korea last year and this year.”
“We want to cultivate and build this emerging market. As a step towards achieving it, we have been taking exporters along with us to showcase our diverse coffees,” he said.
This year, three Indian exporters took part in the ‘Seoul Cafe Show’ as compared to five exporters last year.
Nishant Gurjer, KPA Chairman and managing partner of Kaapi Royale Coffee and the Sethuraman Estates, who took part at the ‘Seoul Cafe Show’ said: “Korea in terms of consumption has suddenly emerged as a big importer of coffees in the last five years.”
“Ever since I started exports to Korea, I am seeing home grown café chains like ‘Caffé Bene’, ‘Angles in Us Coffee’, ‘Hollys Coffee’ and ‘Paris Baguette’ expanding. In all they have over 1,000 stores,” he added.
South Korean coffee buyer is also well aware of coffee quality which he is buying as most of them are Q-certified tasters.
According to Gurjer, Indian coffee is also getting good prices as well. Indian coffees with quality cupping taste profile and certification has got good premium for they appreciate and have tasted good quality coffees.
RBI eases KYC norms for banks
Mumbai: The Reserve Bank of India ( RBI) today eased the mandatory know your customer (KYC) norms for banks so that opening a bank account will be simple and hassle-free.
In a communication to banks, RBI asked them not to insist on introduction by an existing customer while opening a new account, as it is not mandatory under any rule of the central bank. If the identity proof has an address that is the same as the address on which an account is being opened, then there is no need for a separate address proof, said the RBI.
Currently, banks ask for separate documents for the identification and address verification process. But, in the case the address on the account opening form is different from the address stated in the identity proof document, then the banks should obtain a separate proof of address. The banking regulator has allowed rent agreements registered with the state government or any other registration authority as a proof of address.
The central bank has asked banks to accept Aadhaar cards, as both identity and address proof, if the address on the account opening form and Aadhaar are the same. RBI said the Unique Identification Authority of India ( UIDAI) had conveyed that banks are accepting the Aadhaar letter issued by it as a proof of identity, but not of the address.
The regulator had earlier advised banks to satisfy themselves with the current address of the customer even if he files Aadhaar as proof of identity. It also said job cards given under the rural job scheme should be accepted as a valid document to open bank accounts. Earlier, accounts opened using job cards were subject to the limitations applicable to small accounts.
In a communication to banks, RBI asked them not to insist on introduction by an existing customer while opening a new account, as it is not mandatory under any rule of the central bank. If the identity proof has an address that is the same as the address on which an account is being opened, then there is no need for a separate address proof, said the RBI.
Currently, banks ask for separate documents for the identification and address verification process. But, in the case the address on the account opening form is different from the address stated in the identity proof document, then the banks should obtain a separate proof of address. The banking regulator has allowed rent agreements registered with the state government or any other registration authority as a proof of address.
The central bank has asked banks to accept Aadhaar cards, as both identity and address proof, if the address on the account opening form and Aadhaar are the same. RBI said the Unique Identification Authority of India ( UIDAI) had conveyed that banks are accepting the Aadhaar letter issued by it as a proof of identity, but not of the address.
The regulator had earlier advised banks to satisfy themselves with the current address of the customer even if he files Aadhaar as proof of identity. It also said job cards given under the rural job scheme should be accepted as a valid document to open bank accounts. Earlier, accounts opened using job cards were subject to the limitations applicable to small accounts.
India, Ukraine sign 5 pacts to boost ties
New Delhi: India and Ukraine have agreed to forge a comprehensive partnership and have identified areas for commercial ties, Prime Minister Manmohan Singh announced on Monday.
Addressing the media after a meeting with visiting Ukraine President Viktor Yanukovych, the Prime Minister said, “We have identified a number of areas such as fertilisers, pharmaceuticals, information technology, mining and heavy machinery for special attention.”
The Prime Minister also conveyed to Yanukovych, India’s interest in visa arrangements to facilitate travel by businessmen, professionals, students and people.
The two countries signed five documents during the visit, including an agreement on co-operation in defence. The agreement will provide the framework for expanding military technical co-operation on an institutionalised basis.
An agreement was also signed between the Atomic Energy Regulatory Board and the State Nuclear Regulatory Inspector of Ukraine for exchange of technical information and co-operation on nuclear safety and radiation protection.
The agreement envisages co-operation in some important regulatory activities including legislative regulations, safety guides and technical criteria on nuclear safety, design, construction, operation decommissioning of nuclear facilities waste management and environmental impact, among others.
Addressing the media after a meeting with visiting Ukraine President Viktor Yanukovych, the Prime Minister said, “We have identified a number of areas such as fertilisers, pharmaceuticals, information technology, mining and heavy machinery for special attention.”
The Prime Minister also conveyed to Yanukovych, India’s interest in visa arrangements to facilitate travel by businessmen, professionals, students and people.
The two countries signed five documents during the visit, including an agreement on co-operation in defence. The agreement will provide the framework for expanding military technical co-operation on an institutionalised basis.
An agreement was also signed between the Atomic Energy Regulatory Board and the State Nuclear Regulatory Inspector of Ukraine for exchange of technical information and co-operation on nuclear safety and radiation protection.
The agreement envisages co-operation in some important regulatory activities including legislative regulations, safety guides and technical criteria on nuclear safety, design, construction, operation decommissioning of nuclear facilities waste management and environmental impact, among others.
Claris Lifesciences inks JV with Japanese drug maker Otsuka Pharma & Mitsui for Indian market
Ahmedabad: Ahmedabad-based Claris Lifesciences Ltd, entered into Joint Venture agreement with two Japan-based drug makers Otsuka Pharmaceutical and Mitsui & Co Ltd for its injectable business in India and Emerging Markets.
The business is valued at Rs. 1,313 Crores and Claris to receive total cash consideration of Rs. 1050 Crores over multiple agreements. As per the deal, Claris will transfer Common Solutions, Anti-Infectives, Plasma Volume Expanders and Parenteral Nutrition therapies business for India and the emerging markets to new joint venture Claris-Otsuka. The shareholding of Claris-Otsuka will be Claris 20%, Otsuka Pharma 60% and Mitsui 20%. Claris will transfer two out of the five plants to its new Joint Venture company, Claris-Otsuka.
The JV will be subject to Board and Shareholders' approval. Claris plans to utilize the cash to fuel its existing business growth, deleveraging, and reward shareholders. Barclays was the sole advisor for Claris. The new joint venture will work on expanding product basket with speciality Infusion and Clinical Nutrition Products.
Current managing director of Claris Lifesciences, Mr Arjun Handa to be Chairman of the new joint venture and later Claris to appoint the CEO of Claris-Otsuka. In a press statement, Claris's managing director Arjun Handa said "This partnership as both Otsuka; with its global expertise in the Infusions business and their speciality products; and Mitsui; with its global trading and financial expertise; will add significant value to the Joint Venture."
According to the company the infusions business is growing very well in India and the emerging markets, this business needs a broad product portfolio and a commitment towards long term capital investments in addition to technical and global expertise.
Ichiro Otsuka, President of Otsuka Pharma said: "We are pleased to have entered into a partnership with Claris and Mitsui for the full fledge entry into the IV solution/clinical nutrition business in India." He further added that Mitsui has a long history on conducting business in India that will contribute in smooth operation of the new joint venture.
Claris believes that this partnership will enable it to focus and intensify its efforts to build out its speciality injectables business globally. Claris-Otsuka shall co-brand its products in India and across Emerging Markets utilizing the manufacturing and marketing competence of Claris. The new joint venture will introduce Otsuka Pharma's specialty products in India and Emerging Markets. Otsuka Pharma will leverage Claris-Otsuka's manufacturing infrastructure and supply chain for its global business.
As per press statement, Claris claims that its growth plans strategy will be to remain focused on its speciality generic injectables business. Company shall intensify its growth in all international markets, especially the regulated markets of USA and EU via new product launches. Company to continue to increase its focus on bag products and other niche difficult to manufacture products. Company to work on fast track growth opportunities via organic and inorganic routes.
The business is valued at Rs. 1,313 Crores and Claris to receive total cash consideration of Rs. 1050 Crores over multiple agreements. As per the deal, Claris will transfer Common Solutions, Anti-Infectives, Plasma Volume Expanders and Parenteral Nutrition therapies business for India and the emerging markets to new joint venture Claris-Otsuka. The shareholding of Claris-Otsuka will be Claris 20%, Otsuka Pharma 60% and Mitsui 20%. Claris will transfer two out of the five plants to its new Joint Venture company, Claris-Otsuka.
The JV will be subject to Board and Shareholders' approval. Claris plans to utilize the cash to fuel its existing business growth, deleveraging, and reward shareholders. Barclays was the sole advisor for Claris. The new joint venture will work on expanding product basket with speciality Infusion and Clinical Nutrition Products.
Current managing director of Claris Lifesciences, Mr Arjun Handa to be Chairman of the new joint venture and later Claris to appoint the CEO of Claris-Otsuka. In a press statement, Claris's managing director Arjun Handa said "This partnership as both Otsuka; with its global expertise in the Infusions business and their speciality products; and Mitsui; with its global trading and financial expertise; will add significant value to the Joint Venture."
According to the company the infusions business is growing very well in India and the emerging markets, this business needs a broad product portfolio and a commitment towards long term capital investments in addition to technical and global expertise.
Ichiro Otsuka, President of Otsuka Pharma said: "We are pleased to have entered into a partnership with Claris and Mitsui for the full fledge entry into the IV solution/clinical nutrition business in India." He further added that Mitsui has a long history on conducting business in India that will contribute in smooth operation of the new joint venture.
Claris believes that this partnership will enable it to focus and intensify its efforts to build out its speciality injectables business globally. Claris-Otsuka shall co-brand its products in India and across Emerging Markets utilizing the manufacturing and marketing competence of Claris. The new joint venture will introduce Otsuka Pharma's specialty products in India and Emerging Markets. Otsuka Pharma will leverage Claris-Otsuka's manufacturing infrastructure and supply chain for its global business.
As per press statement, Claris claims that its growth plans strategy will be to remain focused on its speciality generic injectables business. Company shall intensify its growth in all international markets, especially the regulated markets of USA and EU via new product launches. Company to continue to increase its focus on bag products and other niche difficult to manufacture products. Company to work on fast track growth opportunities via organic and inorganic routes.
Biomax sets up venture with Jeddah firm for bio-fuel unit
Hyderabad: Bio-fuel maker Biomax Fuels has set up a 50:50 joint venture with the Jeddah-based Middle East Environment Protection Co to set up the first bio-fuel plant in Saudi Arabia.
The $40-million plant, which is expected to be commissioned by 2013-end, will use used cooking oil as feedstock, one of the few plants in the world to use this non-food waste feedstock.
Hyderabad-based Biomax operates a similar plant in Visakhapatnam, which produces 25,000 tonnes of bio-diesel a month for export to Europe. Besides this, it runs a R&D unit in Chennai, which is working on unitisation of different waste oil, including algae oil, for fuel production.
MEEP is a diversified company headquartered in Jeddah having interest in waste management, real estate and healthcare.
M. Ravinder, Chairman of Biomax, said the Saudi Arabian firm will collect and supply the required used cooking oil, while Biomax would set up and operate the plant. “At present, we use feedstock supplied by the Saudi Arabian firm for our Vizag unit. We took this partnership forward to form the joint venture,” he said.
MEEP supplies about 3,000 tonnes of used cooking oil a month to the Vizag unit. While the raw material cost works out to between $ 800-900 a tonne, the unit sells its bio-diesel at about $1100 a tonne.
Europe and the US are the biggest consumers of bio-diesel, as it is mandatory there to blend regular fossil fuel with bio-fuel at a stipulated percentage.
Bader Bin Abdullah Bin Saud, Chairman of MEEP, said the company has a strong collection infrastructure in Saudi Arabia. “Depending on the requirement, we can supply up to a maximum of 2.5 million tonnes per annum. After the first unit, we will be looking at setting up similar units across West Asia and North Africa region,” he said.
Ravinder said the technology being used in the plant was developed in-house by Biomax, which has the flexibility to use alternative feedstock such as crude palm oil, sunflower oil and even acid oil.
The $40-million plant, which is expected to be commissioned by 2013-end, will use used cooking oil as feedstock, one of the few plants in the world to use this non-food waste feedstock.
Hyderabad-based Biomax operates a similar plant in Visakhapatnam, which produces 25,000 tonnes of bio-diesel a month for export to Europe. Besides this, it runs a R&D unit in Chennai, which is working on unitisation of different waste oil, including algae oil, for fuel production.
MEEP is a diversified company headquartered in Jeddah having interest in waste management, real estate and healthcare.
M. Ravinder, Chairman of Biomax, said the Saudi Arabian firm will collect and supply the required used cooking oil, while Biomax would set up and operate the plant. “At present, we use feedstock supplied by the Saudi Arabian firm for our Vizag unit. We took this partnership forward to form the joint venture,” he said.
MEEP supplies about 3,000 tonnes of used cooking oil a month to the Vizag unit. While the raw material cost works out to between $ 800-900 a tonne, the unit sells its bio-diesel at about $1100 a tonne.
Europe and the US are the biggest consumers of bio-diesel, as it is mandatory there to blend regular fossil fuel with bio-fuel at a stipulated percentage.
Bader Bin Abdullah Bin Saud, Chairman of MEEP, said the company has a strong collection infrastructure in Saudi Arabia. “Depending on the requirement, we can supply up to a maximum of 2.5 million tonnes per annum. After the first unit, we will be looking at setting up similar units across West Asia and North Africa region,” he said.
Ravinder said the technology being used in the plant was developed in-house by Biomax, which has the flexibility to use alternative feedstock such as crude palm oil, sunflower oil and even acid oil.
Wipro to buy FMCG firm for $144 mn
Bengaluru: Bangalore-based Wipro, which has interests in consumer care goods and lighting, besides IT services, on Saturday said it had signed a definitive agreement to acquire 100 per cent ownership in LD Waxsons, a Singapore-based FMCG company. The acquisition will be done for an all-cash consideration of $144 million (about Rs 784 crore), which is 2.1 times the Singapore company’s expected 2012 sales turnover of $68 million.
The funding will be done via internal accruals. As on September 30, Wipro had Rs 6,657. 4 crore of cash and cash equivalents.
This will be Wipro’s second-biggest acquisition for its consumer care business — the largest being Unza, another Singapore-headquartered company it had acquired in 2007 for about $246 million (Rs 1,010 crore). This will also be Wipro’s second acquisition in Southeast Asia and the fourth globally in the FMCG space.
The acquisition, expected to be closed within 60 days, will give Wipro the ownership of LD Waxsons’ skincare brands Bio-essence and Ginvera, and health care brand Ebene. These skincare brands have a strong presence in Singapore and Malaysia, with market shares of nine per cent and 8.5 per cent, respectively. The brands also have a sizeable presence in markets such as China, Taiwan, Hong Kong and Thailand. Bio-essence Bird’s Nest, a popular skincare brand, is quite popular in China and among ethnic Chinese in other parts of the world.
LD Waxsons has manufacturing facilities in China’s Xiamen province and Malaysia’s Kuala Lumpur — employing about 1,500 people. The latest acquisition will help Wipro, which already owns two manufacturing units in Kuala Lumpur and one in China’s Guangdong province from its previous buys, expand its global manufacturing capability for its consumer care business.
Vineet Agrawal, president of Wipro Consumer Care & Lighting, says the acquisition will help his company improve its market share to 26 per cent from 16 per cent at present, and its position from eighth to second, in Malaysia’s skincare segment. Besides, it will also give the company entry into the Taiwanese market, where it currently does not have any presence.
“We see LD Waxsons as a good strategic fit. This transaction helps us consolidate our successful facial skincare business in Malaysia to a dominant leadership position, and moves us to market leadership in Singapore as well,” Agrawal adds.
He said the acquired entity was expected to post an operating margin of 10-11 per cent, in line with Wipro Consumer’s.
After the acquisition is completed, Wipro’s consumer care business will derive over 50 per cent of its revenues from foreign markets, compared with about 45 per cent at present, and will have about 5,500 employees located outside India.
The funding will be done via internal accruals. As on September 30, Wipro had Rs 6,657. 4 crore of cash and cash equivalents.
This will be Wipro’s second-biggest acquisition for its consumer care business — the largest being Unza, another Singapore-headquartered company it had acquired in 2007 for about $246 million (Rs 1,010 crore). This will also be Wipro’s second acquisition in Southeast Asia and the fourth globally in the FMCG space.
The acquisition, expected to be closed within 60 days, will give Wipro the ownership of LD Waxsons’ skincare brands Bio-essence and Ginvera, and health care brand Ebene. These skincare brands have a strong presence in Singapore and Malaysia, with market shares of nine per cent and 8.5 per cent, respectively. The brands also have a sizeable presence in markets such as China, Taiwan, Hong Kong and Thailand. Bio-essence Bird’s Nest, a popular skincare brand, is quite popular in China and among ethnic Chinese in other parts of the world.
LD Waxsons has manufacturing facilities in China’s Xiamen province and Malaysia’s Kuala Lumpur — employing about 1,500 people. The latest acquisition will help Wipro, which already owns two manufacturing units in Kuala Lumpur and one in China’s Guangdong province from its previous buys, expand its global manufacturing capability for its consumer care business.
Vineet Agrawal, president of Wipro Consumer Care & Lighting, says the acquisition will help his company improve its market share to 26 per cent from 16 per cent at present, and its position from eighth to second, in Malaysia’s skincare segment. Besides, it will also give the company entry into the Taiwanese market, where it currently does not have any presence.
“We see LD Waxsons as a good strategic fit. This transaction helps us consolidate our successful facial skincare business in Malaysia to a dominant leadership position, and moves us to market leadership in Singapore as well,” Agrawal adds.
He said the acquired entity was expected to post an operating margin of 10-11 per cent, in line with Wipro Consumer’s.
After the acquisition is completed, Wipro’s consumer care business will derive over 50 per cent of its revenues from foreign markets, compared with about 45 per cent at present, and will have about 5,500 employees located outside India.
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