NEW DELHI: After months of dilly-dallying, UPA mustered courage on Friday to throw open the gates to foreign investment in a host of sectors considered political no-go zones like multi-brand retail and civil aviation in a bid to dispel the perception of policy paralysis.
This will pave the way for the much-awaited entry of foreign retail giants such as Walmart, Tesco and Carrefour into the $450 billion retail market, although their footprint will be limited to million-plus cities in states which have agreed to back the measure.
The decisions on Friday, along with a go-ahead for disinvestment in four PSUs to mop up Rs 14,000 crore, come within a day of the ruling coalition's decision to raise diesel price by a stiff Rs 5 a litre and cap subsidized cooking gas cylinders to six a year for every household.Taken together, they mark the most ambitious reform rush by the beleaguered government which has been roundly attacked for drift and diminished will to take bold measures. Faced with dwindling political fortunes, the UPA appears to have finally resorted to a flurry of actions aimed at salvaging the government's precarious finances and retrieving the sinking reforms legacy of the Manmohan Singh regime.
There were loud protests from non-Congress parties which may shortly call for a countrywide shutdown.
Govt driven by perform or perish mantra
But the government, driven by a "perform or perish" mantra, asserted it will stick to its decisions which have been taken after factoring in the resistance of allies and opponents. There is a recognition that the cost of inaction will be far more severe, given the worsening finances and real threat of a ratings downgrade. With experts and its own top leadership feeling that the window for decision-making is shrinking fast, there was an air of determination in the government taking on allies and outside supporters who have crippled its options for months
On the upside, government can expect a roaring reception from the financial markets on Monday as a global rally triggered by monetary easing in the US and Germany's green signal to a Eurozone recovery package ties in with Friday's initiatives. This can prove to be a mood-enhancer for UPA as it heads into state polls in Himachal Pradesh and Gujarat.
The decision to leave it to states to allow foreign retailers is meant to blunt the opposition. However, it has been sought to be balanced by improving the terms for the foreign players. Riders such as sourcing norms and rules to open stores in cities with a population of over one million have been tweaked for the benefit of foreign players, who can now pick up 51% stake in Indian joint ventures. So far, these players could only set up single-brand stores or enter the wholesale segment and sell bulk buyers such as canteens, restaurants and kirana shops.
Bowing to pressure from foreign players such as IKEA, the government eased sourcing norms for single-brand retail and permitted them to buy at least 30% of the goods from Indian industry, instead of the earlier stipulation that made purchases mandatory from small and medium units.
In case of civil aviation, where FDI is already permitted, the government has relaxed rules to allow foreign carriers to buy up to 49% stake in Indian airlines, a decision that throws a lifeline to ailing Kingfisher and other smaller players. PM Manmohan Singh sought support for the decisions, saying they were needed to tide over difficult times and make India a more attractive destination for foreign investors.
Times View
Those who are opposing FDI in retail on the grounds that lakhs of small traders will lose out are making big mistake. They are forgetting that the loss for these traders will be more than compensated by the gains to hundreds of millions of consumers and farmers who will benefit from cutting out these middlemen. The big retailers that will result from letting FDI in should hugely improve efficiencies in the retail trade and the economy can only benefit from that. Political parties may have reason to focus on only one half of the picture, but the aam admi should not be misled by this. The gainers should vastly outnumber the losers.
Success in my Habit
Tuesday, September 18, 2012
Monday, September 17, 2012
Ranbaxy to start second facility in Malaysia with $40-m investment
New Delhi: Ranbaxy Malaysia Sdn Bhd (RMSB), a wholly owned subsidiary of Ranbaxy Laboratories on Thursday got the approval to set up a manufacturing facility in Malaysia as an entry point project (EPP).
The company will invest $40 million in this project that will provide employment to over 200 people. It will be Ranbaxy’s second manufacturing facility in Malaysia.
“In addition to serving the local market, the facility will also export products to markets such as Asean, West Asia, Europe, Sri Lanka, China and other select countries,” Arun Sawhney, Chief Executive Officer and Managing Director of Ranbaxy said.
He said the new facility will manufacture dosage forms including tablets and capsules in the cardiovascular, anti diabetic, anti-infective and gastrointestinal segments.
Ranbaxy’s total output in Malaysia will be increased from one billion doses per annum to three billion doses per annum when the new facility gets into full operation, he said.
RMSB is a joint venture company of Ranbaxy Laboratories, India and Malaysian shareholders. Established in 1982, it has facility in Sungai Petani, Kedah, Malaysia that was commissioned in 1987. It employs over 300 employees.
Ranbaxy’s shares closed at Rs 550.20 on Thursday on the Bombay Stock Exchange, down 2.01 per cent from the previous close.
The company will invest $40 million in this project that will provide employment to over 200 people. It will be Ranbaxy’s second manufacturing facility in Malaysia.
“In addition to serving the local market, the facility will also export products to markets such as Asean, West Asia, Europe, Sri Lanka, China and other select countries,” Arun Sawhney, Chief Executive Officer and Managing Director of Ranbaxy said.
He said the new facility will manufacture dosage forms including tablets and capsules in the cardiovascular, anti diabetic, anti-infective and gastrointestinal segments.
Ranbaxy’s total output in Malaysia will be increased from one billion doses per annum to three billion doses per annum when the new facility gets into full operation, he said.
RMSB is a joint venture company of Ranbaxy Laboratories, India and Malaysian shareholders. Established in 1982, it has facility in Sungai Petani, Kedah, Malaysia that was commissioned in 1987. It employs over 300 employees.
Ranbaxy’s shares closed at Rs 550.20 on Thursday on the Bombay Stock Exchange, down 2.01 per cent from the previous close.
Grasim Industries ties up with Japan's Omikenshi Co to develop new international markets for rayon products.
Kolkata: Aditya Birla Group's Grasim IndustriesBSE 1.93 % has entered into an agreement with Japan's Omikenshi Co to jointly develop new international markets for several functional rayon products.
As per the agreement, Grasim and Omikenshi will develop the technology together and manage the increased production as they enter new markets.
""Synergies between Grasim and Omikenshi will be leveraged for delivering enhanced value to the customers. We look forward to build a strong long term relationship with Omikenshi,"" said KK Maheswari, managing director at Grasim Industries.
Omikenshi president Makoto Otomura said the combination of Grasim's considerable production capacity and Omikenshi's functional rayon technology will open market for both companies.
In addition to specific products at the core of the agreement, the two companies will also explore future collaboration through a joint R&D programme.
As per the agreement, Grasim and Omikenshi will develop the technology together and manage the increased production as they enter new markets.
""Synergies between Grasim and Omikenshi will be leveraged for delivering enhanced value to the customers. We look forward to build a strong long term relationship with Omikenshi,"" said KK Maheswari, managing director at Grasim Industries.
Omikenshi president Makoto Otomura said the combination of Grasim's considerable production capacity and Omikenshi's functional rayon technology will open market for both companies.
In addition to specific products at the core of the agreement, the two companies will also explore future collaboration through a joint R&D programme.
Wipro on 'Carbon Disclosure Leadership Index'
Bangalore: Wipro has been featured in Carbon Disclosure Project (CDP)’s ‘Carbon Disclosure Leadership Index’ for 2012.
The company scored 95 on 100 and is one of seven IT companies in the world to find a place in the listing. This index, a key component of CDP’s annual Global 500 report, highlights the constituent companies within the FTSE Global Equity Index Series (Global 500) which have displayed a strong approach to information disclosure regarding climate change.
Companies get points on their climate change disclosure and high scores indicate good internal data management and understanding of climate change related issues affecting the company. The index, compiled by PwC on behalf of CDP, provides a tool for institutional investors and other stakeholders.
In 2012 the index comprised 51 companies from the Global 500 based on analysis of the responses to CDP’s questionnaire which focused on greenhouse gas emissions, emission reduction targets and the risks and opportunities associated with climate change. Wipro's climate change programme addresses energy efficiency, renewable energy, travel and employee commuting and for this the company got kudos.
Anurag Behar, Chief Sustainability Officer, Wipro, said: “Climate change is as much a social issue as it is an ecological one, more so for a country like India with its unique set of challenges. Our commitment to carbon reduction is part of our larger engagement on sustainability issues — it is long-term by design and is integral to both, our vision of corporate citizenship and to our business strategy.”
Paul Simpson, Chief Executive Officer of CDP, said: “Companies that make the Carbon Disclosure Leadership Index have demonstrated strong internal data management practices for the measurement of greenhouse gas emissions and energy use. They also give consideration to the business issues related to climate change and their exposure to climate-related risks and opportunities.”
The company scored 95 on 100 and is one of seven IT companies in the world to find a place in the listing. This index, a key component of CDP’s annual Global 500 report, highlights the constituent companies within the FTSE Global Equity Index Series (Global 500) which have displayed a strong approach to information disclosure regarding climate change.
Companies get points on their climate change disclosure and high scores indicate good internal data management and understanding of climate change related issues affecting the company. The index, compiled by PwC on behalf of CDP, provides a tool for institutional investors and other stakeholders.
In 2012 the index comprised 51 companies from the Global 500 based on analysis of the responses to CDP’s questionnaire which focused on greenhouse gas emissions, emission reduction targets and the risks and opportunities associated with climate change. Wipro's climate change programme addresses energy efficiency, renewable energy, travel and employee commuting and for this the company got kudos.
Anurag Behar, Chief Sustainability Officer, Wipro, said: “Climate change is as much a social issue as it is an ecological one, more so for a country like India with its unique set of challenges. Our commitment to carbon reduction is part of our larger engagement on sustainability issues — it is long-term by design and is integral to both, our vision of corporate citizenship and to our business strategy.”
Paul Simpson, Chief Executive Officer of CDP, said: “Companies that make the Carbon Disclosure Leadership Index have demonstrated strong internal data management practices for the measurement of greenhouse gas emissions and energy use. They also give consideration to the business issues related to climate change and their exposure to climate-related risks and opportunities.”
Record loading of coal boosts Eastern Railway earnings in April-Aug 2012
Record loading of coal by both public and private sector coal companies led to a substantial jump in total freight loading by Eastern Railway between April-August 2012.
Coal loading went up by 22.85% during April-August 2012 compared to the previous corresponding period last year (April-August 2011). Out of total loading in the first four months of this year, coal alone amounted to 17.244 million tonne as against 14.037 million tonne during the previous year (April-August 2011), a statement released by Eastern Railway on Thursday said.
General goods amounted to 7.873 million tonne this year. By carrying 25.117 million tonne of freight traffic during April-August 2012, Eastern Railway achieved a 15.34% growth in freight loading this year. In the process, it also surpassed the proportionate target set by the Railway Board of 24.370 million tonne for the period.
Compared to it, during the corresponding period last year (April-August 2011), Eastern Railway had carried 21.776 million tonne of freight traffic.
Total earnings of Eastern Railway from freight traffic also went up by 30.39% to Rs 1812.36 crore in first four months this year, compared to Rs 1389.90 crore in April-August 2011 last year.
This amounted to an increase of Rs 422.46 crore in earnings during the period this year, the statement added. end
Coal loading went up by 22.85% during April-August 2012 compared to the previous corresponding period last year (April-August 2011). Out of total loading in the first four months of this year, coal alone amounted to 17.244 million tonne as against 14.037 million tonne during the previous year (April-August 2011), a statement released by Eastern Railway on Thursday said.
General goods amounted to 7.873 million tonne this year. By carrying 25.117 million tonne of freight traffic during April-August 2012, Eastern Railway achieved a 15.34% growth in freight loading this year. In the process, it also surpassed the proportionate target set by the Railway Board of 24.370 million tonne for the period.
Compared to it, during the corresponding period last year (April-August 2011), Eastern Railway had carried 21.776 million tonne of freight traffic.
Total earnings of Eastern Railway from freight traffic also went up by 30.39% to Rs 1812.36 crore in first four months this year, compared to Rs 1389.90 crore in April-August 2011 last year.
This amounted to an increase of Rs 422.46 crore in earnings during the period this year, the statement added. end
India, Myanmar bilateral trade likely to double
Kolkata: The bilateral trade between India and Myanmar is expected to more than double by 2015. According to U Kyaw Swe Tint, Consul General of the Republic of the Union of Myanmar, the trade is likely to grow from $1.28 billion in 2010-11 to $3 billion in 2014-15.
Agriculture, health, education, mineral resources and pharmaceuticals could be key areas of co-operation to enhance trade between the two nations.
India and Myanmar have signed 12 MoUs for extending co-operation in areas like border area development, in the field of defence and analysis and the establishment of joint trade and investment fora among others.
“These areas have to be well explored and developed to enhance trade relations between India and Myanmar,” Kyaw Swe told newspersons on the sidelines of an interactive session organised by the Bengal Chamber of Commerce and Industry here on Wednesday.
India was one of the major export markets for the pulses and beans produced in Myanmar. “However, the export of pulses and beans to India has decreased in recent years. There is a need for co-operation to shore up the exports of pulses and beans to previous levels,” he pointed out.
Border Trade
Despite being neighbours and sharing a common border, Myanmar and India have not been able to make optimal use of border trade, he said.
“Even while the bilateral trade stood at $1.28 billion, the border trade was just about $13 million. Border trade volume is just a little over one per cent of total trade. We have to seek ways and means to co-operate for the promotion of border trade,” he said.
Agriculture, health, education, mineral resources and pharmaceuticals could be key areas of co-operation to enhance trade between the two nations.
India and Myanmar have signed 12 MoUs for extending co-operation in areas like border area development, in the field of defence and analysis and the establishment of joint trade and investment fora among others.
“These areas have to be well explored and developed to enhance trade relations between India and Myanmar,” Kyaw Swe told newspersons on the sidelines of an interactive session organised by the Bengal Chamber of Commerce and Industry here on Wednesday.
India was one of the major export markets for the pulses and beans produced in Myanmar. “However, the export of pulses and beans to India has decreased in recent years. There is a need for co-operation to shore up the exports of pulses and beans to previous levels,” he pointed out.
Border Trade
Despite being neighbours and sharing a common border, Myanmar and India have not been able to make optimal use of border trade, he said.
“Even while the bilateral trade stood at $1.28 billion, the border trade was just about $13 million. Border trade volume is just a little over one per cent of total trade. We have to seek ways and means to co-operate for the promotion of border trade,” he said.
Tech Mahindra sets up three 4G labs
Mumbai: Tech Mahindra has set up three laboratories for Long Term Evolution technology, one in Delhi and one each in Pune and Bangalore.
The software services provider, in which vehicle manufacturer Mahindra & Mahindra holds about 48 per cent stake, intends to work along with companies readying to launch the services in the country.
Long Term Evolution (LTE), commonly called 4G, is a standard for high-speed data communication for mobile phones and data networks.
In India, 4G (which is 4-10 times faster than 3G) licences were issued to six operators, with four of them actively looking to deploy the services.
Will Support Operators
“We will support the operators to deploy the services. We have been working with telecom operators in many countries, including the major ones, and we intend to provide this expertise here in India,” Tech Mahindra Head of Mobility Business Jagdish Mitra said.
However, Mitra declined to names the companies, citing confidential clauses. He also did not disclose the investments Tech Mahindra has committed for the technology, nor the expected returns.
Tech Mahindra has set up a device lab in Delhi. It has also set up an application and network integration lab each in Pune and Bangalore.
Tech Mahindra would provide system and network integration services, security services and configuring of new and emerging devices for 4G services.
Other Players
Bharti Airtel, the country’s largest telecom operator, has already launched 4G services in two circles, Kolkata and Bangalore. Other three major players — Reliance Industries, Tikona Digital Networks and Aircel — are expected to launch the services by this year-end, or in early 2013.
The software services provider, in which vehicle manufacturer Mahindra & Mahindra holds about 48 per cent stake, intends to work along with companies readying to launch the services in the country.
Long Term Evolution (LTE), commonly called 4G, is a standard for high-speed data communication for mobile phones and data networks.
In India, 4G (which is 4-10 times faster than 3G) licences were issued to six operators, with four of them actively looking to deploy the services.
Will Support Operators
“We will support the operators to deploy the services. We have been working with telecom operators in many countries, including the major ones, and we intend to provide this expertise here in India,” Tech Mahindra Head of Mobility Business Jagdish Mitra said.
However, Mitra declined to names the companies, citing confidential clauses. He also did not disclose the investments Tech Mahindra has committed for the technology, nor the expected returns.
Tech Mahindra has set up a device lab in Delhi. It has also set up an application and network integration lab each in Pune and Bangalore.
Tech Mahindra would provide system and network integration services, security services and configuring of new and emerging devices for 4G services.
Other Players
Bharti Airtel, the country’s largest telecom operator, has already launched 4G services in two circles, Kolkata and Bangalore. Other three major players — Reliance Industries, Tikona Digital Networks and Aircel — are expected to launch the services by this year-end, or in early 2013.
Aurbobindo Pharma gets USFDA nod for anti-depressant tablets
Hyderabad: Aurobindo Pharma Ltd has received final approval from the US Food & Drug Administration (USFDA) to manufacture and market Escitalopram Oxalate tablets in dosages of 5mg, 10mg and 20mg.
The product is ready for launch. The abbreviated new drug application (ANDA) was earlier tentatively approved, the Hyderabad-based pharma company said in a press release.
Escitalopram Oxalate tablets are the generic equivalent of Forest Laboratories Inc’s Lexapro tablets in similar dosages. It is an anti-depressant and falls under the Central Nervous System (CNS) segment.
The drug is indicated for the treatment of depression associated with mood disorders and has a market size of approximately $2.8 billion for the 12 months ended March 31, 2012 according to IMS.
The product has been approved out of Unit III formulations facility in Hyderabad. Aurobindo now has a total of 158 ANDA approvals (133 final approvals including one from Aurolife Pharma LLC and 25 tentative approvals) from USFDA, the release added.
The product is ready for launch. The abbreviated new drug application (ANDA) was earlier tentatively approved, the Hyderabad-based pharma company said in a press release.
Escitalopram Oxalate tablets are the generic equivalent of Forest Laboratories Inc’s Lexapro tablets in similar dosages. It is an anti-depressant and falls under the Central Nervous System (CNS) segment.
The drug is indicated for the treatment of depression associated with mood disorders and has a market size of approximately $2.8 billion for the 12 months ended March 31, 2012 according to IMS.
The product has been approved out of Unit III formulations facility in Hyderabad. Aurobindo now has a total of 158 ANDA approvals (133 final approvals including one from Aurolife Pharma LLC and 25 tentative approvals) from USFDA, the release added.
August sees highest PE deal value of year at $1.8 b
Private equity activity in India witnessed an uptick in August with a combined deal value ofhighlight, accounting for over half the cumulative deal value, according to research and consultancy firm Grant Thornton’s latest ‘Dealtracker’ report.
IT, ITeS lead
The Bain-Genpact deal enabled the part-exit of Genpact’s existing investors, General Atlantic Partners and Oak Hill Partners. Two other large PE deals that took place during the month were SBI Macquire Private Equity’s $150 million investment in Ashok Concessions and Nasper and Tiger Global’s $150 million investment in Flipkart, which contributed over 16 per cent of the total deal value. A break-up of the deal activity indicates that 68 per cent of PE investments were focused on the IT and ITeS sector, while eight per cent went to infrastructure management and another eight per cent on travel and tourism. While four per cent of the deal tally was accounted for by the pharma, healthcare and biotech sector, two per cent of the deals were in the manufacturing space.
The PE deal value in August 2012 was three times higher than in the corresponding month of the previous year and nearly six times higher than the level seen in 2010. In contrast, merger and acquisition activity was muted during the month.
The total value of inbound M&A during August 2012 was $0.3 billion from 11 deals, compared to $1.5 billion from 11 deals in August 2011 and $1.15 billion from seven deals in August 2010.
Indian companies were also cautious on outbound M&A during the period, with just nine deals valued at $40 million recorded during the period under review. In comparison, 11 deals worth $0.8 billion and 15 deals worth $140 million were inked during the same month of 2011 and 2010, respectively.
Domestic deal activity involving Indian companies stood at $0.6 billion from 17 deals in August. This was a 33 per cent decline from $0.9 billion in the corresponding month of the previous year, but a significant improvement from $90 million from 15 deals in 2010.
The top sector for M&A was real estate, accounting for 49 per cent of the deal value, followed by pharma, healthcare and biotech with a 20 per cent share. While 11 per cent of the M&A deal value was enjoyed by the IT and ITeS sector, the shipping and ports and manufacturing sector cornered four per cent each.
IT, ITeS lead
The Bain-Genpact deal enabled the part-exit of Genpact’s existing investors, General Atlantic Partners and Oak Hill Partners. Two other large PE deals that took place during the month were SBI Macquire Private Equity’s $150 million investment in Ashok Concessions and Nasper and Tiger Global’s $150 million investment in Flipkart, which contributed over 16 per cent of the total deal value. A break-up of the deal activity indicates that 68 per cent of PE investments were focused on the IT and ITeS sector, while eight per cent went to infrastructure management and another eight per cent on travel and tourism. While four per cent of the deal tally was accounted for by the pharma, healthcare and biotech sector, two per cent of the deals were in the manufacturing space.
The PE deal value in August 2012 was three times higher than in the corresponding month of the previous year and nearly six times higher than the level seen in 2010. In contrast, merger and acquisition activity was muted during the month.
The total value of inbound M&A during August 2012 was $0.3 billion from 11 deals, compared to $1.5 billion from 11 deals in August 2011 and $1.15 billion from seven deals in August 2010.
Indian companies were also cautious on outbound M&A during the period, with just nine deals valued at $40 million recorded during the period under review. In comparison, 11 deals worth $0.8 billion and 15 deals worth $140 million were inked during the same month of 2011 and 2010, respectively.
Domestic deal activity involving Indian companies stood at $0.6 billion from 17 deals in August. This was a 33 per cent decline from $0.9 billion in the corresponding month of the previous year, but a significant improvement from $90 million from 15 deals in 2010.
The top sector for M&A was real estate, accounting for 49 per cent of the deal value, followed by pharma, healthcare and biotech with a 20 per cent share. While 11 per cent of the M&A deal value was enjoyed by the IT and ITeS sector, the shipping and ports and manufacturing sector cornered four per cent each.
'FDI in insurance, retail to create lakhs of jobs'
Mumbai: Opening up retail and insurance sectors will generate lakhs of additional jobs in India, global human resource consultancy Mercer has said. According to the firm, labour statistics continue to be positive in the country, although not as positive as a year and a half ago.
Speaking to TOI, Mercer's newly appointed growth markets head Gaurav Garg said, "If retail foreign direct investment gets through, it will start a whole new industry and generate huge employment and bring in investments without eating into anyone's share. The domino effect will be such that it will create lakhs of ancillary jobs from rural employment to jobs in cold chains and transportation," he said.
Similarly in insurance, the passage of the bill amending the act would result in new companies setting up shop. "The insurance amendment bill also allows foreign reinsurers to start operations here. This will again result in the creation of a new industry," he said.
Garg, who has taken charge as region leader, growth markets, incorporating Mercer's businesses in Asia, Middle East, Africa and Latin America — where Mercer has operations in 20 countries at present — said that India continued to be seen as a high growth market in terms of jobs.
"India has this huge demographic advantage, which will result in a lot of investments coming in. Although growth in India is less than what was expected, a 7% growth would be still better than most other markets," he said.
In India, the hiring is expected to be industry specific. In sectors such as life insurance, some of the large companies have reduced staff but general insurance industry is bouncing back into profitability and is expanding. Similarly, in telecom, the established players are still trying to grow market share. "Going ahead, the challenge for companies will be, how to keep young employees motivated, as the choices before them will only increase," he said.
Speaking to TOI, Mercer's newly appointed growth markets head Gaurav Garg said, "If retail foreign direct investment gets through, it will start a whole new industry and generate huge employment and bring in investments without eating into anyone's share. The domino effect will be such that it will create lakhs of ancillary jobs from rural employment to jobs in cold chains and transportation," he said.
Similarly in insurance, the passage of the bill amending the act would result in new companies setting up shop. "The insurance amendment bill also allows foreign reinsurers to start operations here. This will again result in the creation of a new industry," he said.
Garg, who has taken charge as region leader, growth markets, incorporating Mercer's businesses in Asia, Middle East, Africa and Latin America — where Mercer has operations in 20 countries at present — said that India continued to be seen as a high growth market in terms of jobs.
"India has this huge demographic advantage, which will result in a lot of investments coming in. Although growth in India is less than what was expected, a 7% growth would be still better than most other markets," he said.
In India, the hiring is expected to be industry specific. In sectors such as life insurance, some of the large companies have reduced staff but general insurance industry is bouncing back into profitability and is expanding. Similarly, in telecom, the established players are still trying to grow market share. "Going ahead, the challenge for companies will be, how to keep young employees motivated, as the choices before them will only increase," he said.
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