Persistent Systems to open facility in Bangalore

Pune: Software product and technology services major Persistent Systems has announced that it will open a new facility in Bangalore at Sarjapur Road. This is in-line with on-going expansion strategy.

“We are excited about opening our new office in Bangalore, as the city is India’s IT capital and it is time for Persistent to be there,” said Dr Anand Deshpande, Chairman and Managing Director, Persistent Systems.

The Bangalore facility will house over 150 employees and support product development, client delivery and sales. The company plans to recruit locally, leveraging the Silicon Valley-like combination of talent and partnership opportunities.

This will be Persistent Systems’ fifth office in India adding to its presence in Pune, Goa, Nagpur and Hyderabad.

Tech Mahindra expands presence in Turkey

Mumbai: Tech Mahindra has expanded its presence in Turkey by setting up a new branch in Istanbul. Tech Mahindra Turkey will serve as a hub for Turkey and Central Asia.

The move was necessitated after Tech Mahindra won a contract for implementing a billing solution for a large telecom operator.

“We look forward to the support from local Government as we grow our footprint in the region. As a part of our journey in Turkey, we aim to recruit local resources and train them to support Tech Mahindra services over the years to come,” said Girish Bhat, Vice-President, Sales, Tech Mahindra.

Going forward, Tech Mahindra expects Turkey to emerge as a near shore delivery location for clients in the region.

The investment by Tech Mahindra has been facilitated by the Turkish Government which intends to expand the country’s information communication and technology sector to $160 billion by 2023 from $30 billion in 2011.

A dedicated Talent Exchange Program for transfer of skills between India and Turkey will also be initiated in due course of time, M. İlker Aycı, President of Turkey’s Investment Support and Promotion Agency, said.

SAIL sets up Joint venture for titanium sponge production

Thiruvananthapuram: Public sector steel producer Steel Authority of India Limited (SAIL) on Thursday reached an agreement with Kerala State Industrial Development Corp (KSIDC) and Kerala Minerals and Metals Ltd (KMML) to set up a Rs 2,500-crore joint venture to produce titanium sponge and metals.

A memorandum of understanding (MoU) has been signed by the officials of SAIL, KSIDC and KMML in the presence of chief Minister Oommen Chandy, industries minister PK Kunhalikutty, steel ministry special secretary E K Bharat Bhushan, SAIL chairman CS Verma and industries department additional chief secretary V Somasundaran.

The new JV will be second major titanium project in Kerala after the titanium sponge plant at KMML in Chavara in Kollam district. In the first phase of the project, the plant will have the capacity to produce 10,000 tonnes of titanium sponge per year. KMML will supply the titanium tetrachloride required for the production of the titanium sponge, which will be molded to produce titanium metal and other alloys such as rutile and zircon, KSIDC officials said.

The project is also expected to create about 2,000 employment opportunities in the state.

India emerging as an export hub for SUVs

New Delhi: Soon, sports utility vehicles (SUVs) made in India would burn rubber in developed markets such as Europe, Japan, Latin America and Australia. Global automobile majors are looking to leverage India’s cost-competitive manufacturing practices and turn the country into an export hub for utility vehicles.

Domestic automobile major Mahindra & Mahindra (M&M) and French car maker Renault started exporting the XUV500 and the Duster, respectively, to Europe in December 2012. Now, Fiat and Ford India are assessing opportunities to export SUVs to Europe, South Africa and Southeast Asia.

Joginder Singh, president and managing director, Ford India, said, “The European equation works well with the EcoSport. We already export the Figo to 38 countries from India. We would look at a similar scale for the SUV.” While Singh didn’t specify the number of EcoSport units the company had earmarked for exports, industry sources indicated it was planned about 40 per cent of the scheduled annual production of 1,50,000 units would be sold in foreign markets. Overall, 380 variants of the SUV, manufactured at Ford’s Maraimalai Nagar facility, would be shipped to 40 countries.

Italian car maker Fiat, which plans to launch nine new models in the Indian market by 2016, is firming up plans to export some of these to right-hand drive markets abroad. Recently, Enrico Atanasio, former managing director, Fiat Group Automobiles India, told Business Standard, “We are looking at leveraging India as an export hub for right-hand drive models. We have excess capacity available in India and are looking at exporting vehicles from here to the UK, Japan, Australia and South Africa.”

Through the next three years, Fiat plans to introduce the Jeep, the Grand Cherokee and at least two compact utility vehicles with the Fiat badge in India.

Fiat and Tata Motors share a production facility at Ranjangaon (Maharashtra).

Together, the two companies utilise about half the factory’s capacity of 180,000 units.

“India is growing out of a portfolio of small cars for exports and the trend is being driven increasingly by global automobile manufacturers. Sedans and utility vehicles are gaining acceptance among consumers in the Indian market. To gain the requisite volumes for producing a model cost-effectively, companies have started shipping out larger vehicles from India,” said V G Ramakrishnan, senior director (automotive and transportation), Frost & Sullivan.

In the last financial year, M&M exported about 2,000 units of the XUV500 to Africa and Europe. By the first half of this financial year, it plans to raise exports to Latin America.

Abdul Majeed, partner (automotive practice), Pricewaterhouse Coopers, said, “Some exports markets do not have the volumes to justify setting up a manufacturing or assembly unit. India is a low-cost manufacturing hub and automobile makers are leveraging it as a base to grow in derivative markets.”

Renault India’s export strategy adheres to Majeed’s views. The company plans to export 1,000-3,000 units of the Duster to the UK, where it is sold under the ‘Dacia’ brand.

“Like India, the UK is a right-hand drive market. Sourcing the vehicle from here enables us to leverage synergies in manufacturing,” said a senior Renault India executive. The company, which shipped the first consignment of 350 vehicles from India to the UK and Ireland in December 2012, is considering exporting the car to other right-hand drive markets such as Malaysia, Indonesia and South Africa.

Becoming an SUV mart
India can emerge as a supply hub to feed the world demand for SUVs

Fiat
* Fiat is looking at leveraging excess capacity in India to develop it as an export hub for right-hand drive vehicles

* The company is firming up plans to export utility vehicles from India to markets in the UK, Japan, Australia and South Africa

Ford
* Ford EcoSport to be exported to 40 countries out of India

* More than 40% of annual production of 150,000 units of the vehicle is earmarked for exports, say industry sources

M&M
* M&M has exported 2,151 units of XUV500 to South Africa and Europe between April and February FY13

* It is set to start sales in Latin America by September 2014

Renault
* Renault is shipping the Duster to UK and Ireland from India

* It is looking to ship the product to right-hand drive markets in Malaysia, Indonesia and Africa

IRDA removes limit on insurers reverse repo transactions in G-Secs

Mumbai: The Insurance Regulatory and Development Authority (IRDA) has removed the 10 per cent exposure limit on reverse repo transactions by insurers.

Insurance companies will now be free to invest in reverse repo transactions in government securities as per their discretion.

IRDA said reverse repo transactions in Government securities were treated on a par with collateralised borrowing and lending obligation transactions and the 10 per cent investment limit wasn’t applicable to this category, in a circular to the chief executives of all insurance companies

However, in case of corporate bonds, the investment limit would be 10 per cent of all the funds.

ITD Cementation bags Rs 1,500 cr worth orders

Mumbai: ITD Cementation has bagged orders worth Rs 1,500 crore in the March quarter.

The company received two orders from the Public Works Department, New Delhi, for comprehensive development of corridor (Outer Ring Road) between Mangolpuri to Madhuban Chowk valued at Rs 290 crore and between Madhuban Chowk and Mukarba Chowk valued at Rs 280 crore.

Other orders include construction of a six-lane link road and flyover connecting NH 24 with NH 58 for Ghaziabad Vikas Pradhikaran worth Rs 115 crore while IIC, a Indiabulls group company, has given a contract worth Rs 123 crore for complete civil and structural work for a raw water pump house at Eklahara Barrage for their 1350 MW power plant being set up at Sinnar, SEZ, Nasik.

In addition, ITD Cementation in joint venture with its parent, Italian-Thai Development Public Company, Thailand has received Rs 752- crore order from the Delhi Metro Rail Corporation.

Finolex plans fourth plant for PVC pipes

Pune: Finolex Industries, a manufacturer of PVC resin and pipes, is planning to set up a fourth facility to make pipes in India, said Executive Chairman Prakash Chhabria.

The company’s third plant at Masar in Gujarat, and its first outside of Maharashtra has just begun commercial production.

It will cater to the requirements of Gujarat and the North Indian states.

Built with an investment of Rs 100 crore, the second phase of new plant will get commissioned during the current fiscal, after which it will add 50,000 tonnes a year to Finolex’s current capacity of 150,000 tonnes.

“We are planning to set up a fourth plant for PVC pipes, and this should be up and about in the next 24-30 months,” Chhabria said.

He added that the locations being considered for it were Nagpur, Masar or a place in North-East.

The annual capacity of this plant too, will be around 50,000 tonnes and will cater to domestic requirements, he said.

Finolex Industries, which has a pan-India presence, currently has a share of around 20 per cent in the PVC pipes market. Chhabria said that amongst the new products being considered is window profiles to replace wood or aluminium.

The company has two other plants for PVC pipes located in Urse near Pune and Ratnagiri on the western coast where it also has a plant to make its main raw material - PVC resin - mostly for its own consumption.

Crompton Greaves bags Dutch order

Mumbai: Crompton Greaves (CG), in consortium, has received a Rs 239-crore order for the construction of an offshore high voltage substation for a wind farm in the Netherlands. The contract is from Van Oord Offshore Wind Projects. The partners in the consortium are Cofely Fabricom and Iemants. Crompton Greaves said it will design, engineer and manufacture the overall electrical system.

The project is expected to be completed by August 2015. Laurent Demortier, Chief Executive Officer and Managing Director, CG, said: “The development of reliable and cost-effective grid connection solutions for the rapidly growing renewable sector is one of the key priorities for CG. We not only have developed a unique design, but also a cost-efficient supply chain for serving this growing market segment.”

Production units in India are best in the world, say car manufacturers

Chennai: Multinational automotive plants in India rank among the top across the world in terms of their productivity and quality. Top auto MNCs like Hyundai, Toyota and Suzuki rank their Indian production facilities right on top of their global pecking order. Despite fighting it out with factories in much larger markets - including the US and China - some of these plants fare better cranking out cars at upwards of 98-99% efficiency.

Take Hyundai Motor India (HMI) which has two plants in its Sriperumbudur facility near Chennai. The newer, second plant actually ranks number one in terms of productivity and quality according to Bo Shin Seo, CEO & MD, Hyundai Motor India (HMI). "Hyundai has plants in China, Russia, Brazil, the US (Alabama), Turkey and Czech Republic and in terms of operational average productivity ratio we are number one," he added. HMI's second plant makes two models and routinely hits average productivity ratio of upwards of 99.7%.

Of course a number of the bigger plants crank out many more volumes - Hyundai's China plant for example produces 4-5 different models while the newest factory in Brazil cranks out just one model but at "very high productivity ratio," he added. Between its two plants Hyundai can expand its production to hit 700,000 units on a three-shift basis though currently the volumes are lower due to the demand skid in the marketplace.

Hyundai isn't the only MNC to hit top spot with its Indian factory. Take Toyota Kirloskar Motor (TKM) which has invested around Rs 4700 crore to build two plants at its facility near Bangalore. Like HMI, TKM's plants too rank right up there among Toyota's global pecking order. "In the last three years we have had an internal shipping quality audit wherein a global team comes and checks vehicles randomly at the shipping yard for defects. On that basis, they have come to conclusion that TKM plants are the number one alongside Toyota's China and Thailand facilities," stated Shekar Vishwanathan, vice chairman, TKM.

Like the Hyundai plant, the TKM factories too run at 98-99% efficiency. "Efficiency is measured by both the speed of the conveyor belt as well as the ability to change the speed of the line according to demand variation," said Vishwanathan. "We make 600 vehicles per day over two shifts." The total capacity in the two plants is around 310,000 units over 278 working days in a year.

In terms of pecking order ranks though car marketleader Maruti hogs the lion's share of parent Suzuki's global production. With its 1.5 million unit a year current manufacturing capacity, Maruti is Suzuki International's largest production centre worldwide.

India comprises just short of half of Suzuki's global sales volumes and commands around 25% of its total sales revenue, said a Maruti executive. Maruti Suzuki plans to add another 250,000 units this year, with its new factory in Manesar at a cost of Rs 2100 crore. That plus the proposed Rs 4000 crore Gujarat plant - which will add another 250,000 unit capacity by 2015 - will take Maruti's total production numbers to two million units a year. Already Maruti's India sales are more than what the Japanese company sells in its home market in Japan.

AMCs' average assets rise 19.5% in FY13

Mumbai: India’s asset management companies (AMCs) have seen a rise of 19.5 per cent in their average assets under management (AUM) in FY13. After dipping to less than Rs 7 lakh crore in the previous financial year, the sector has made a smart comeback —thanks to the high inflows in the debt funds and gains in the stock indices.

Interestingly, majority of the top 10 players have outperformed the industry's growth with a wide margin. For instance, Birla Sun Life Mutual Fund, ICICI Prudential MF, Kotak MF, IDFC MF and SBI MF, among others, registered a growth of between 25 and 40 per cent during the year. On the other hand, giants such as HDFC MF and Reliance MF managed to post a growth of 13 per cent and 21 per cent, respectively.

Srinivas Jain, chief marketing officer of SBI Mutual Fund, the sixth largest fund house with an average AUM of close to Rs 55,000 crore, says, “In FY13, we had good flows into our long-term fixed income funds and I believe that is true with the overall industry as well.” The fund house registered a whopping rise of 30.6 per cent in its AUM during the year.

According to the latest statistics available from industry body Association of Mutual Funds in India (Amfi), the sector’s average assets stood at Rs 8.16 lakh crore as on March 31, 2013, compared to Rs 6.64 lakh crore a year ago. Whereas in the quarter ended March 31, 2013, average assets grew a little less than a percentage point.

Reliance Mutual Fund, whose assets had dipped to below Rs 80,000 crore, came back strongly and inched close to its lost Rs 1-lakh crore mark with assets at Rs 94,580 crore.

Top officials at Reliance MF told Business Standard the fund house’s continued focus on retail has helped. “Our focus on non-liquid is helping us improve,” said an official.

According to Dhruva Chatterji, senior research analyst at Morningstar India, high flows in the intermediate to long-term bond funds in the debt category pushed up assets of the industry.

“Till February, our study shows there is a rise of 600 per cent in the assets of bond funds (year-on-year). Most of the assets inflows came in the second half of FY13 as expectations built up for rate cuts.”

Gilt funds, which invest primarily in government securities, attracted a consistent sum of Rs 1,000 crore for several months in the second half. “Of late, with a rise of one per cent point in short-term rates, we are also witnessing money flowing into the liquid funds with duration of three to six months,” added Chatterji.

According to experts, despite 11 months of net outflows from the equity segment during the year, rise in stock markets also helped push up the average assets of equity funds to a certain extent.