Kolkata: The Small Industries Development Bank of India (SIDBI) has entered into agreements with eight regional rural banks (RRBs) and urban co-operative banks in West Bengal.
SIDBI has already signed memorandums of understanding with the RRBs and co-operative banks for increasing credit flow to the micro, small and medium enterprises (MSMEs) in the region, said a press statement issued by SIDBI.
The MoUs would aim at training the staff of RRBs and co-operative banks in project appraisal, monitoring and collection as also providing free access to software on a down-scaling methodology developed for lending to micro enterprises.
“The down-scaling model focuses on cash flow-based lending instead of the traditional security-based lending, which is important for small and tiny enterprises,” the release said.
Success in my Habit
Tuesday, December 25, 2012
FM radio sector may hit Rs 2,300-cr mark within 3 years
New Delhi: The FM radio sector is expected to touch the Rs 2,300-crore mark within three years of the roll-out of the much anticipated Phase III licences, according to estimates by CII and Ernst & Young. The sector is expected to close this fiscal year at Rs 1,400 crore with 245 private FM stations.
Currently, FM radio contributes 4 per cent to the total ad industry, lower than the global average share of 5 to10 per cent. The report stated that though radio is not considered as primary advertising platform currently, the implementation of Phase III with 839 frequencies will help the sector provide advertisers with a much deeper reach.
Listenership is largely driven by consumption at home followed by people tuning in when in transit. Around 25 per cent of total radio listenership is now on mobile phones, fuelled by handset manufacturers that have made FM radio a standard feature in most of their models.
The report said while the Phase III auctions of FM radio frequencies is expected to cover 294 cities with the auction for 839 licenses, only 52 of these licenses will be in the high revenue generating category A+, A and B cities. Experts believe though margins of the radio stations will decline in the short run they will stabilise in 3-5 years and rise subsequently.
“Phase III is also likely to make the industry more conducive to M&A due to proposals such as reduction of the license lock-in period from 5–3 years, an increase in the license period from 10 to 15 years, significantly more networking between all the stations to enable cost optimisation, ownership of multiple frequencies in a city and an increase in the foreign investment limit to 26 per cent from the current 20 per cent,” the report stated.
Ashish Pherwani, Partner, Ernst & Young, said that the growth of the FM radio industry revenues would depend on “enabling networking and cost management, development of a measurement metric which supports the industry, and ensuring license fee prices during Phase III auctions are not irrational.”
The growth in mobile and internet ad spends could, however, pose a threat to the rise of FM radio.
Some of the other key challenges highlighted by the report include limited inventory, inability to demonstrate return on investments and slow recovery of ad effective rates. “Therefore, the need of the hour is for radio industry is to collaborate and implement a measurement system that supports the growth of the industry,” the report stated.
According to IRS 2012 Q2 data, radio has an estimated audience of 158 million people, out of which FM radio accounts for 106 million. It also said that advertising revenues comprise nearly 90 per cent total revenue generated by FM radio companies.
Currently, FM radio contributes 4 per cent to the total ad industry, lower than the global average share of 5 to10 per cent. The report stated that though radio is not considered as primary advertising platform currently, the implementation of Phase III with 839 frequencies will help the sector provide advertisers with a much deeper reach.
Listenership is largely driven by consumption at home followed by people tuning in when in transit. Around 25 per cent of total radio listenership is now on mobile phones, fuelled by handset manufacturers that have made FM radio a standard feature in most of their models.
The report said while the Phase III auctions of FM radio frequencies is expected to cover 294 cities with the auction for 839 licenses, only 52 of these licenses will be in the high revenue generating category A+, A and B cities. Experts believe though margins of the radio stations will decline in the short run they will stabilise in 3-5 years and rise subsequently.
“Phase III is also likely to make the industry more conducive to M&A due to proposals such as reduction of the license lock-in period from 5–3 years, an increase in the license period from 10 to 15 years, significantly more networking between all the stations to enable cost optimisation, ownership of multiple frequencies in a city and an increase in the foreign investment limit to 26 per cent from the current 20 per cent,” the report stated.
Ashish Pherwani, Partner, Ernst & Young, said that the growth of the FM radio industry revenues would depend on “enabling networking and cost management, development of a measurement metric which supports the industry, and ensuring license fee prices during Phase III auctions are not irrational.”
The growth in mobile and internet ad spends could, however, pose a threat to the rise of FM radio.
Some of the other key challenges highlighted by the report include limited inventory, inability to demonstrate return on investments and slow recovery of ad effective rates. “Therefore, the need of the hour is for radio industry is to collaborate and implement a measurement system that supports the growth of the industry,” the report stated.
According to IRS 2012 Q2 data, radio has an estimated audience of 158 million people, out of which FM radio accounts for 106 million. It also said that advertising revenues comprise nearly 90 per cent total revenue generated by FM radio companies.
Number of Indians visiting Vienna has doubled in last 6 years
New Delhi: More and more Indians tourists are heading for Vienna, the Austrian capital which is also known to be the city with the world's best quality of living. According to the Vienna Tourist Board, the number of Indians visiting Vienna has doubled over the last six years — with an estimated 25,000 Indian tourists dropping by.
The board expects that in 2012, night stays in local hotels by Indian tourists will exceed the 2011 record of over 55,000 room nights.
Not surprising since Vienna, according to HR advisory firm Mercer's Quality of Living index, has been ranked the city with the best quality of living. And has retained the title for four years on the trot. This sort of reputation is bound to attract tourists from everywhere, not just India.
"By blending its unique imperial architectural heritage with a distinguished legacy of great artists and musicians like Mozart and Beethoven, Vienna offers one of Europe's most dynamic urban spaces," says Verena Hable, a Vienna Tourism Board official, during a recent visit to Delhi.
"With Vienna emerging as a favoured destination by Indian tourists, we look to welcoming a significantly larger inflow of tourists in the coming years."
India has several points of connect with the Austrian capital. India-born conductor Zubin Mehta, who has lived in Vienna for many years and still conducts the Vienna Philharmonic Orchestra, often has fellow countrymen include his performance in their itinerary.
Vienna also allows Indian tourists to do a triangular tour of the major cities of the former Hapsburg empire, by including Budapest and Prague during their visit.
The board expects that in 2012, night stays in local hotels by Indian tourists will exceed the 2011 record of over 55,000 room nights.
Not surprising since Vienna, according to HR advisory firm Mercer's Quality of Living index, has been ranked the city with the best quality of living. And has retained the title for four years on the trot. This sort of reputation is bound to attract tourists from everywhere, not just India.
"By blending its unique imperial architectural heritage with a distinguished legacy of great artists and musicians like Mozart and Beethoven, Vienna offers one of Europe's most dynamic urban spaces," says Verena Hable, a Vienna Tourism Board official, during a recent visit to Delhi.
"With Vienna emerging as a favoured destination by Indian tourists, we look to welcoming a significantly larger inflow of tourists in the coming years."
India has several points of connect with the Austrian capital. India-born conductor Zubin Mehta, who has lived in Vienna for many years and still conducts the Vienna Philharmonic Orchestra, often has fellow countrymen include his performance in their itinerary.
Vienna also allows Indian tourists to do a triangular tour of the major cities of the former Hapsburg empire, by including Budapest and Prague during their visit.
Friday, December 21, 2012
Mahindra to buy US partner's stakes in truck JVs
Mumbai: Utility and tractor manufacturer Mahindra & Mahindra (M&M) has decided to buy the stake held by its US-based partner, Navistar International Corporation, in the truck and engine making joint ventures (JV) — Mahindra Navistar Automotives Ltd (MNAL) and Mahindra Navistar Engines Pvt Ltd (MNEPL) — for about Rs 175 crore.
M&M will acquire the 49 per cent stake held in both the JVs by the Navistar Group and make them wholly-owned subsidiaries. The JV for trucks was formed in 2005, while the JV for engines was formed in 2007.
While neither of the companies explained the logic behind such a move, experts said that despite being in the market for over three years, the JVs did not witness the demand expected from them, forcing the US partner to reorganise its resources.
The truck JV is yet to generate profits and M&M’s estimates of turning cash break-even this financial year remains bleak, due to the on-going slump in demand for heavy trucks in the domestic market.
Following the stake buy, M&M would take complete ownership of operations and continue to sell MNEPL and MNAL products. The sale requires regulatory approvals in India, is subject to conclusion of definitive agreements, and is expected to be completed in early 2013, the Mumbai-based company said in a statement.
The deal allows Navistar to continue sourcing components from India, while M&M would keep providing engineering services to Navistar. The US company would continue to support M&M through a licence agreement and extend necessary support to MNAL and MNEPL for the purpose of business continuity.
As part of its ‘Drive to Deliver’ turnround plan launched in August, Navistar has been conducting an analysis of all of its businesses and programmes to determine their return on invested capital (ROIC) and identify areas for improvement. Based on this business environment, Navistar has determined that it needs to redirect its efforts to other initiatives that more quickly contribute to the company’s goal to improve its ROIC,” Navistar said in a release.
Until last year, MNAL had seen an investment of Rs 710 crore with M&M projecting a further infusion of Rs 250 crore during 2012-14 for production and distribution expansion. M&M had Rs 750 crore of equity and 50-50 invested by both the partners along with debt as of that date.
Troy Clarke, president and CEO of Navistar, said, “While the Indian market has not expanded as we had originally expected, and industry challenges there continue in the near-term, we still see promise in India going forward.”
The Indian truck market is witnessing a renewed thrust by not just traditional players such as Tata Motors, VE Commercial Vehicles and Ashok Leyland, but also by new players such as Daimler (Bharat-Benz) and MAN and Scania. M&M and Navistar planned to be present in each of the commercial vehicle segments ranging from 3.5 to 49 tonne.
This is not the first time that strategic changes are seen in partnership involving M&M. The company had bought the stake held by Renault in the car making joint venture Mahindra Renault (MRPL). Prior to that, M&M had exited a tripartite joint venture involving Renault and Nissan.
M&M will acquire the 49 per cent stake held in both the JVs by the Navistar Group and make them wholly-owned subsidiaries. The JV for trucks was formed in 2005, while the JV for engines was formed in 2007.
While neither of the companies explained the logic behind such a move, experts said that despite being in the market for over three years, the JVs did not witness the demand expected from them, forcing the US partner to reorganise its resources.
The truck JV is yet to generate profits and M&M’s estimates of turning cash break-even this financial year remains bleak, due to the on-going slump in demand for heavy trucks in the domestic market.
Following the stake buy, M&M would take complete ownership of operations and continue to sell MNEPL and MNAL products. The sale requires regulatory approvals in India, is subject to conclusion of definitive agreements, and is expected to be completed in early 2013, the Mumbai-based company said in a statement.
The deal allows Navistar to continue sourcing components from India, while M&M would keep providing engineering services to Navistar. The US company would continue to support M&M through a licence agreement and extend necessary support to MNAL and MNEPL for the purpose of business continuity.
As part of its ‘Drive to Deliver’ turnround plan launched in August, Navistar has been conducting an analysis of all of its businesses and programmes to determine their return on invested capital (ROIC) and identify areas for improvement. Based on this business environment, Navistar has determined that it needs to redirect its efforts to other initiatives that more quickly contribute to the company’s goal to improve its ROIC,” Navistar said in a release.
Until last year, MNAL had seen an investment of Rs 710 crore with M&M projecting a further infusion of Rs 250 crore during 2012-14 for production and distribution expansion. M&M had Rs 750 crore of equity and 50-50 invested by both the partners along with debt as of that date.
Troy Clarke, president and CEO of Navistar, said, “While the Indian market has not expanded as we had originally expected, and industry challenges there continue in the near-term, we still see promise in India going forward.”
The Indian truck market is witnessing a renewed thrust by not just traditional players such as Tata Motors, VE Commercial Vehicles and Ashok Leyland, but also by new players such as Daimler (Bharat-Benz) and MAN and Scania. M&M and Navistar planned to be present in each of the commercial vehicle segments ranging from 3.5 to 49 tonne.
This is not the first time that strategic changes are seen in partnership involving M&M. The company had bought the stake held by Renault in the car making joint venture Mahindra Renault (MRPL). Prior to that, M&M had exited a tripartite joint venture involving Renault and Nissan.
Real estate & housing finance cos allowed to raise $1bn from abroad
Mumbai: The Reserve Bank of India has allowed real estate developers and housing finance companies to raise funds overseas for low-cost housing projects.
Developers and housing finance companies will be permitted to borrow $1 billion in 2012-13 under the low-cost affordable housing scheme, RBI said in a notification on Monday. The regulator said it will review the borrowing limit every year.
Developers with minimum five years of experience in residential projects and those who have not defaulted in any of their financial commitments to banks or any other agencies will be eligible to raise funds overseas.
The project for which the builder is raising funds should not be involved in any litigation. RBI has also made it mandatory that the project should be in conformity with the provisions of master plan/ development plan of the area.
"The layout should conform to the land use stipulated by the town and country planning department for housing projects," RBI said. "All necessary clearances from various bodies including revenue department with respect to land usage/environment clearance, etc are available on record."
Housing finance companies that are registered with the National Housing Bank and have a minimum capital of Rs 50 crore are eligible to raise funds overseas, RBI said. Bad loans of such companies should not exceed 2.5% of the net advances and it should have minimum net owned funds of about Rs 300 crore for the past three years to borrow overseas.
Developers and housing finance companies will be permitted to borrow $1 billion in 2012-13 under the low-cost affordable housing scheme, RBI said in a notification on Monday. The regulator said it will review the borrowing limit every year.
Developers with minimum five years of experience in residential projects and those who have not defaulted in any of their financial commitments to banks or any other agencies will be eligible to raise funds overseas.
The project for which the builder is raising funds should not be involved in any litigation. RBI has also made it mandatory that the project should be in conformity with the provisions of master plan/ development plan of the area.
"The layout should conform to the land use stipulated by the town and country planning department for housing projects," RBI said. "All necessary clearances from various bodies including revenue department with respect to land usage/environment clearance, etc are available on record."
Housing finance companies that are registered with the National Housing Bank and have a minimum capital of Rs 50 crore are eligible to raise funds overseas, RBI said. Bad loans of such companies should not exceed 2.5% of the net advances and it should have minimum net owned funds of about Rs 300 crore for the past three years to borrow overseas.
Banking Bill paves way for new banks, foreign investment
New Delhi: The government on Tuesday cleared the decks for the Reserve Bank of India ( RBI) to initiate the process to issue new banking licences and widened the window for infusion of capital into the banking sector.
The Lok Sabha cleared the Banking Laws (Amendment) Bill, 2011, after Finance Minister P Chidambaram agreed to drop the contentious proposal on allowing banks to do futures trading. He also clarified status quo would be maintained on the jurisdictions of RBI and the Competition Commission of India ( CCI) in the banking sector.
“Since it is important that the Bill is passed, I am dropping the controversial clauses.” While the central bank would regulate the banking sector, the competition watchdog would look at anti-competitive practices, Chidambaram said.
Most provisions in the Bill are to strengthen RBI. In Parliamentary democracy, give and take was required and rest of the Bill was important as RBI was awaiting more powers, the finance minister added.
Changes to the Bill would pave the way for RBI to issue new bank licences. The central bank had been insisting the enabling legislation be put in place before applications were invited for new bank licences.
As the Bill has provisions to increase investors’ voting rights in private banks to 26 per cent from the current 10 per cent, it is expected to bring in more foreign investment in the banking sector. In case of public sector banks, voting rights have been enhanced from one per cent to 10 per cent.
The Bill was passed by voice vote after the amendments proposed by the Left parties were rejected by the House. The Bill would now be taken up in the Rajya Sabha.
The insurance Bill, which seeks to raise the cap on foreign direct investment in insurance firms to 49 per cent from the present 26 per cent, would not be taken up for consideration in the ongoing session of Parliament, Chidambaram told reporters after the passage of the Banking Bill.
Earlier, during the discussion on the Banking Bill, he highlighted the need for consolidation in the banking sector so that India could have two- three large public sector banks that could compete globally.
He also said about 6,000 new bank branches would be opened and that banks planned to recruit around 84,000 people this year. He reiterated the government was committed to infusing Rs 15,000 crore into public sector banks in the current financial year and more next year. Capital might be infused now through rights issues and bonus shares.
Earlier, Bharatiya Janata Party leader Yashwant Sinha, who heads the standing committee on finance, had opposed the two contentious clauses in the Banking Bill, saying those were not considered by his panel. He had said the provisions would allow banks to put their money in speculative trading.
The Lok Sabha cleared the Banking Laws (Amendment) Bill, 2011, after Finance Minister P Chidambaram agreed to drop the contentious proposal on allowing banks to do futures trading. He also clarified status quo would be maintained on the jurisdictions of RBI and the Competition Commission of India ( CCI) in the banking sector.
“Since it is important that the Bill is passed, I am dropping the controversial clauses.” While the central bank would regulate the banking sector, the competition watchdog would look at anti-competitive practices, Chidambaram said.
Most provisions in the Bill are to strengthen RBI. In Parliamentary democracy, give and take was required and rest of the Bill was important as RBI was awaiting more powers, the finance minister added.
Changes to the Bill would pave the way for RBI to issue new bank licences. The central bank had been insisting the enabling legislation be put in place before applications were invited for new bank licences.
As the Bill has provisions to increase investors’ voting rights in private banks to 26 per cent from the current 10 per cent, it is expected to bring in more foreign investment in the banking sector. In case of public sector banks, voting rights have been enhanced from one per cent to 10 per cent.
The Bill was passed by voice vote after the amendments proposed by the Left parties were rejected by the House. The Bill would now be taken up in the Rajya Sabha.
The insurance Bill, which seeks to raise the cap on foreign direct investment in insurance firms to 49 per cent from the present 26 per cent, would not be taken up for consideration in the ongoing session of Parliament, Chidambaram told reporters after the passage of the Banking Bill.
Earlier, during the discussion on the Banking Bill, he highlighted the need for consolidation in the banking sector so that India could have two- three large public sector banks that could compete globally.
He also said about 6,000 new bank branches would be opened and that banks planned to recruit around 84,000 people this year. He reiterated the government was committed to infusing Rs 15,000 crore into public sector banks in the current financial year and more next year. Capital might be infused now through rights issues and bonus shares.
Earlier, Bharatiya Janata Party leader Yashwant Sinha, who heads the standing committee on finance, had opposed the two contentious clauses in the Banking Bill, saying those were not considered by his panel. He had said the provisions would allow banks to put their money in speculative trading.
India-Asean Trade to Reach $100 Billion Mark by 2015, Says Anand Sharma
New Delhi: Inaugurating the 2nd India- ASEAN Business Fair- 2012 in New Delhi today, the Union Minister for Commerce, Industry & Textiles Shri Anand Sharma expressed confidence that the two-way trade between India and the ASEAN countries “will be able to reach USD 100 billion mark by 2015”. He also added that the early operationalisation of the Services and Investment Agreement would provide greater impetus to the trade and investment flows.
Welcoming the Trade Minister from the ASEAN countries, Shri Sharma urged the Trade Ministers that they should diversify the trade basket and that the economic gains on both sides would be substantial only if we develop supply chains with a focus on intra-industry trade. He also said that in order to realise the true potential of the economies, we should give a concerted push to strengthen the regional connectivity with ASEAN.
Shri Sharma said that India views its partnership with ASEAN as a crucial block in sustaining the growth momentum. “We would like to benefit from ASEAN experience in key sectors of economy such as infrastructure, agro-processing, retail and value added manufacturing. Equally, Indian companies can be invaluable partners for ASEAN economies in augmenting their productivity,” said Shri Sharma.
Speaking on Regional Comprehensive Economic Partnership, Shri Sharma said that the negotiations would be a momentous step. “The fruition of the Regional Comprehensive Economic Partnership which will have in its embrace ASEAN and the six countries including India, China, Republic of Korea, New Zealand, Japan and Australia, will truly have a defining influence on the global economic architecture,” Shri Sharma further added.
Later addressing media persons, Shri Sharma said that the FTA negotiations on Services and Investment would be concluded by tomorrow when ASEAN Ministerial will take place after the formal negotiations. “The senior officers have been meeting and we the Ministers have given them a very clear message and mandate at the recent ASEAN-India summit at Phnom Penh in Cambodia and senior officials and negotiators thereafter met in Jakarta… So the final round of negotiations is taking place between the senior officers of India, the Chief negotiator and his team and the ASEAN officials, and they will be formally reporting to the Ministerial meeting tomorrow. And the Ministers are committed. I can say for all of us to bring this negotiations to closure and carry on with our journey of partnership, added Shri Sharma.
Welcoming the Trade Minister from the ASEAN countries, Shri Sharma urged the Trade Ministers that they should diversify the trade basket and that the economic gains on both sides would be substantial only if we develop supply chains with a focus on intra-industry trade. He also said that in order to realise the true potential of the economies, we should give a concerted push to strengthen the regional connectivity with ASEAN.
Shri Sharma said that India views its partnership with ASEAN as a crucial block in sustaining the growth momentum. “We would like to benefit from ASEAN experience in key sectors of economy such as infrastructure, agro-processing, retail and value added manufacturing. Equally, Indian companies can be invaluable partners for ASEAN economies in augmenting their productivity,” said Shri Sharma.
Speaking on Regional Comprehensive Economic Partnership, Shri Sharma said that the negotiations would be a momentous step. “The fruition of the Regional Comprehensive Economic Partnership which will have in its embrace ASEAN and the six countries including India, China, Republic of Korea, New Zealand, Japan and Australia, will truly have a defining influence on the global economic architecture,” Shri Sharma further added.
Later addressing media persons, Shri Sharma said that the FTA negotiations on Services and Investment would be concluded by tomorrow when ASEAN Ministerial will take place after the formal negotiations. “The senior officers have been meeting and we the Ministers have given them a very clear message and mandate at the recent ASEAN-India summit at Phnom Penh in Cambodia and senior officials and negotiators thereafter met in Jakarta… So the final round of negotiations is taking place between the senior officers of India, the Chief negotiator and his team and the ASEAN officials, and they will be formally reporting to the Ministerial meeting tomorrow. And the Ministers are committed. I can say for all of us to bring this negotiations to closure and carry on with our journey of partnership, added Shri Sharma.
Temasek to put in Rs 572 cr for second Godrej investment
Mumbai: Making its second investment in the Godrej Group, Singapore-government owned sovereign fund Temasek has entered into an agreement to acquire a 19.99 per cent stake in Godrej Agrovet Limited (GAVL), a subsidiary of Godrej Industries Limited (GIL), for Rs 572 crore.
In January this year, Temasek had acquired 4.9 per cent stake in Godrej Consumer Products Ltd (GCPL) for Rs 685 crore through its wholly owned subsidiary, Baytree. Baytree had bought 16.7 million shares in GCPL at Rs 410 a share.
On Monday, shares of Godrej Industries went down 0.60 per cent to close at Rs 308.15 on the Bombay Stock Exchange. The investment will be a combination of primary and secondary investment, with the primary investment intended to support GAVL’s future expansion plans, said a company statement.
The Rs 2,460-crore Godrej Agrovet Limited is a leading manufacturer of agriculture and poultry-based products, with well-known brands such as Real Good Chicken and Yummiez. Godrej Agrovet has 45 manufacturing facilities, a network of over 10,000 rural distributors and over 2,000 employees across the country.
The poultry division has joined hands with Tyson Foods, a US-based leading meat processor and marketer.
Nadir Godrej, chairman of GAVL, said: “We welcome Temasek as a partner. We believe that their global credentials, knowledge of agribusiness and excellent track record will be beneficial to GAVL. Indian agriculture is at an inflection point and with GAVL’s focus on R&D and operational excellence, we believe that the future looks very bright for the business.”
In the past five years, Indian agriculture sector saw 35 private equity/venture capital deals, worth $356 million.
Earlier, Rohit Sipahimalani, head of Temasek India, had said that the Indian consumption story remained intact and the Singapore firm is keen on the space. Temasek's major portfolio companies in India include Bharti Airtel, Tata Sky, NSE, GMR Energy and Tata Teleservices.
In January this year, Temasek had acquired 4.9 per cent stake in Godrej Consumer Products Ltd (GCPL) for Rs 685 crore through its wholly owned subsidiary, Baytree. Baytree had bought 16.7 million shares in GCPL at Rs 410 a share.
On Monday, shares of Godrej Industries went down 0.60 per cent to close at Rs 308.15 on the Bombay Stock Exchange. The investment will be a combination of primary and secondary investment, with the primary investment intended to support GAVL’s future expansion plans, said a company statement.
The Rs 2,460-crore Godrej Agrovet Limited is a leading manufacturer of agriculture and poultry-based products, with well-known brands such as Real Good Chicken and Yummiez. Godrej Agrovet has 45 manufacturing facilities, a network of over 10,000 rural distributors and over 2,000 employees across the country.
The poultry division has joined hands with Tyson Foods, a US-based leading meat processor and marketer.
Nadir Godrej, chairman of GAVL, said: “We welcome Temasek as a partner. We believe that their global credentials, knowledge of agribusiness and excellent track record will be beneficial to GAVL. Indian agriculture is at an inflection point and with GAVL’s focus on R&D and operational excellence, we believe that the future looks very bright for the business.”
In the past five years, Indian agriculture sector saw 35 private equity/venture capital deals, worth $356 million.
Earlier, Rohit Sipahimalani, head of Temasek India, had said that the Indian consumption story remained intact and the Singapore firm is keen on the space. Temasek's major portfolio companies in India include Bharti Airtel, Tata Sky, NSE, GMR Energy and Tata Teleservices.
Gujarat pharma SMEs bet on Africa, LatAm for exports
Ahmedabad: With an eye on higher margins, Gujarat-based small and medium-sized pharmaceutical manufacturers are focusing on export markets, especially emerging economies such as African and Latin American nations.
While overall exports from pharma SMEs are growing by 12-15 per cent a year, exports to these markets are clocking a compound annual growth rate of 30-35 per cent, say industry insiders.
SMEs based in Gujarat exported pharma products worth Rs 400-500 crore in 2011-12. The figure is expected to grow by 15 per cent this year. Of the net exports by SMEs, the share of emerging markets is 50-60 per cent, and it is rising yearly by 30-35 per cent, said a senior official of the Gujarat chapter of the Indian Drug Manufacturers’ Association.
Export markets offer better margins than domestic sales, said V Shah of Saga Laboratories, which exports oral dosage forms to countries in Africa, Latin America and the Commonwealth of Independent States. Emerging markets are becoming popular export destinations because they are relatively easier to penetrate.
Mahendra G Patel, managing director, Lincoln Pharmaceuticals, said: “Regulatory documentation work is relatively less in these countries. For small and mid-sized companies which do not have adequate infrastructure to meet the European Union or United States Food and Drugs Administration standards, countries in Africa and Latin America offer good business opportunities. The regulatory authorities are liberal and the organised sector is not well developed.”
While authorities from these countries do conduct site inspections of manufacturing facilities, getting approvals is much easier compared to regulated markets, he said.
The average cost of clinical trials to generate safety-related data required by a particular country for a specific drug is in the range of Rs 3-5 crore. This is in addition to the cost of development of the drug, as well as overhead costs.
After tasting success in export markets, Saga Laboratories reduced its focus on domestic sales. “When we had started in 1994, the proportion of domestic sales was 90-95 per cent of our net turnover. Gradually, this share has come down, and exports started rising. At the moment, we are exporting our entire production,” Shah explained.
He further added that the domestic market is cost-competitive, and margins are lower. In comparison, while exporters need to make greater investments in plant and machinery to ensure that quality parameters are met, the returns are also higher, he claimed.
Saga Laboratories has already received approval from the Gujarat State Food and Drugs Control Administration to set up a new formulations plant at its Changodar site near Ahmedabad.
Yash Medicare, another Ahmedabad-based firm, which makes generic formulations, and currently supplies countries like Mozambique, Congo, Ghana, Nigeria, Trinidad and Tobago, has registered its products in South East Asian geographies like Vietnam, Sri Lanka and Myanmar recently.
“We are expecting to get our first orders from these new geographies by January-February,” said Chirag Doshi, managing director of Yash Medicare.
His company is adding two new lines at its Himmatnagar facility to make pharmaceutical aerosol, a spray-based skin application. “For the new product, we will focus on the export market. We expect this new product range to contribute around Rs 1.5 crore towards our turnover. Our turnover is around Rs 8.5 crore at present,” Doshi explained.
Doshi, who is a senior IDMA official as well, added that there are around 125 units in the state that are World Health Organisation-Good Manufacturing Practices certified.
While overall exports from pharma SMEs are growing by 12-15 per cent a year, exports to these markets are clocking a compound annual growth rate of 30-35 per cent, say industry insiders.
SMEs based in Gujarat exported pharma products worth Rs 400-500 crore in 2011-12. The figure is expected to grow by 15 per cent this year. Of the net exports by SMEs, the share of emerging markets is 50-60 per cent, and it is rising yearly by 30-35 per cent, said a senior official of the Gujarat chapter of the Indian Drug Manufacturers’ Association.
Export markets offer better margins than domestic sales, said V Shah of Saga Laboratories, which exports oral dosage forms to countries in Africa, Latin America and the Commonwealth of Independent States. Emerging markets are becoming popular export destinations because they are relatively easier to penetrate.
Mahendra G Patel, managing director, Lincoln Pharmaceuticals, said: “Regulatory documentation work is relatively less in these countries. For small and mid-sized companies which do not have adequate infrastructure to meet the European Union or United States Food and Drugs Administration standards, countries in Africa and Latin America offer good business opportunities. The regulatory authorities are liberal and the organised sector is not well developed.”
While authorities from these countries do conduct site inspections of manufacturing facilities, getting approvals is much easier compared to regulated markets, he said.
The average cost of clinical trials to generate safety-related data required by a particular country for a specific drug is in the range of Rs 3-5 crore. This is in addition to the cost of development of the drug, as well as overhead costs.
After tasting success in export markets, Saga Laboratories reduced its focus on domestic sales. “When we had started in 1994, the proportion of domestic sales was 90-95 per cent of our net turnover. Gradually, this share has come down, and exports started rising. At the moment, we are exporting our entire production,” Shah explained.
He further added that the domestic market is cost-competitive, and margins are lower. In comparison, while exporters need to make greater investments in plant and machinery to ensure that quality parameters are met, the returns are also higher, he claimed.
Saga Laboratories has already received approval from the Gujarat State Food and Drugs Control Administration to set up a new formulations plant at its Changodar site near Ahmedabad.
Yash Medicare, another Ahmedabad-based firm, which makes generic formulations, and currently supplies countries like Mozambique, Congo, Ghana, Nigeria, Trinidad and Tobago, has registered its products in South East Asian geographies like Vietnam, Sri Lanka and Myanmar recently.
“We are expecting to get our first orders from these new geographies by January-February,” said Chirag Doshi, managing director of Yash Medicare.
His company is adding two new lines at its Himmatnagar facility to make pharmaceutical aerosol, a spray-based skin application. “For the new product, we will focus on the export market. We expect this new product range to contribute around Rs 1.5 crore towards our turnover. Our turnover is around Rs 8.5 crore at present,” Doshi explained.
Doshi, who is a senior IDMA official as well, added that there are around 125 units in the state that are World Health Organisation-Good Manufacturing Practices certified.
JSW Steel signs technology agreement with Japan's JFE to make electrical steels
Kolkata: JSW Steel, one of the county's largest private steel producers and Japan's JFE Steel Corporation have signed a joint agreement where JFE will provide technology for the production of non-oriented electrical steel sheets (CRNGO) at the JSW Steel's Vijayanagar plant in Karnataka.
By leveraging JFE Steel's well-established manufacturing technology for electrical steel, JSW will produce CRNGO grade electrical steel and supply to its customers, including local companies as well as Japanese, European and US-affiliated companies doing business in India.
The electrical steel sheet products are primarily imported in India due to technological constraints and JSW Steel shall be in a position to cater to fast growing consumer and industrial applications market.
JSW Steel plans to start up its new annealing and coating line for electrical steel sheets in latter half of 2014. The initial annual output is projected to be 200,000 tonnes, which will be increased to 0.6 million tons per year in phases.
The company will also take sight on the production of Cold Rolled Grain Oriented (CRGO) grade in future. To be implemented in phased manner, JSW hopes the move will enable it to emerge as the largest producer of electrical steels in the country.
By leveraging JFE Steel's well-established manufacturing technology for electrical steel, JSW will produce CRNGO grade electrical steel and supply to its customers, including local companies as well as Japanese, European and US-affiliated companies doing business in India.
The electrical steel sheet products are primarily imported in India due to technological constraints and JSW Steel shall be in a position to cater to fast growing consumer and industrial applications market.
JSW Steel plans to start up its new annealing and coating line for electrical steel sheets in latter half of 2014. The initial annual output is projected to be 200,000 tonnes, which will be increased to 0.6 million tons per year in phases.
The company will also take sight on the production of Cold Rolled Grain Oriented (CRGO) grade in future. To be implemented in phased manner, JSW hopes the move will enable it to emerge as the largest producer of electrical steels in the country.
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