MUMBAI: The Reserve Bank's mid-year tightening of the monetary policy is not likely to make home, car and

other loans more costly immediately, but pressure on interest rates is likely to build up in the coming months, according to top bankers. "There will be no immediate increase in interest rates after the (RBI) rate hike... There is an upward bias on interest rates which is due to a combination of many things, not just the (RBI) rate hike," ICICI Bank Chief Executive and Managing Director Chanda Kochhar said. According to State Bank of India Chairman O P Bhatt, it will take two to three months for the Reserve Bank rate hike to get reflected in lending rates. First, the deposit rates will be hiked, following which lending rates will go up, he said. The transmission mechanism between the RBI and rest of the financial system does not work very fast, the SBI chairman said. It always works with a time lag, he said. Continuing with its monetary tightening drive for the sixth consecutive meeting this year, the RBI today raised key short-term policy rates to rein in inflation. The RBI hiked the key short-term lending and borrowing rates by 25 basis points (0.25 per cent) each with immediate effect. Accordingly, the short-term lending (repo) rate has increased to 6.25 per cent and the borrowing (reverse repo) rate to 5.25 per cent. In a clear indication of a perceived asset bubble, the central bank tightened norms for housing loans by asking banks to keep aside more funds against home loans extended at "teaser" rates and decreasing the cap on loans made against realty buys by consumers, known as the loan-tovalue (LTV) ceiling. SBI, which was the first lender to introduce highly competitive teaser rates last year, is more likely to absorb the additional cost of funds that might result out of the RBI's move to increase provision ratios, Bhatt said. SBI will take a call on whether to extend its teaser scheme or not by end-December, he said. The additional measures taken by the RBI today will result in an increase of 0.05-0.10 per cent in the cost of funds, Bhatt said. The RBI's move to decrease the LTV will affect lenders in the premium segment and not SBI, whose average LTV is under 70 per cent, he said, adding that currently, nearly 13 per cent of the bank's total advances, or Rs 75,000 crore, were in the housing segment. Kochhar said ICICI, which had the popular "90:10" scheme under which it funded a majority of the home-buying amount, will not be affected much as the amounts allocated under the scheme are not la

NEW DELHI: An estimated annual savings of around Rs 1,00,000 crore makes a compelling case for the government to make a one-time investment of Rs 60,000-70 ,000 crore to build an electronic payment platform for all its transactions with individual households, says consulting firm McKinsey . Such a platform could help the government save Rs 71,000 crore a year, while benefiting individual beneficiaries to the tune of Rs 26,200 crore. Many of the beneficiaries would be from financially excluded households as most of the transactions between the government and households relate to welfare schemes, the consultancy said in a report Inclusive growth and financial security: The benefits of e-payments to Indian society released on Monday. The cost of building the e-platform is prohibitive, but benefits far outweigh the costs, as it would enhancing the efficiencies of the payment system by reducing leakages, increased the efficiency of delivery of services and lower administration costs. Leakages account for about 75-80 % of the losses that the government suffers due to the manual payment system, while share of transaction cost is estimated at 15-20 % of the losses, says the report. A National Rural Employment Guarantee Scheme worker loses as much as Rs 6-7 in wages and travel costs to redeem the Rs 100 she earned for a days work. The saving of Rs 1,00,000 crore is equivalent to about 10% of the total payment flow between the government and households, considering that in 2008-09, such payments in form of direct cash transactions, subsidies and public services such as education and healthcare amounted to Rs 13,30,000 crore. Savings would be maximum on welfare schemes such as targeted public distribution system and national rural employment guarantee programme where the government could save as much as Rs 82,700 crore, as payment inefficiencies are 30% or more. (See table) The savings of Rs 1,00,000 crore is equal to 20% of the fiscal deficit or 25% of the governments welfare spending. The amount is enough to meet the entire expenditure on Sarva Shiksha Abhiyan, the universal primary education programme, or double the outlay for fertiliser subsidy. However, the most significant gain from an e-payment platform in a country of 80-100 million poor households would be in the form of financial inclusion. An e-payment platform would enable the formal financial sector to more easily and efficiently reach disadvantaged Indian households and offer modern financial products, the report says. But getting to a point where the government can make this saving requires all its departments and agencies to be fully networked to ensure that all information transfer is electronic. It would require installation of accessible and convenient transaction points, with one in every village. The government would also need to ensure reliability of payment by making the system tamperproof. This would require installation of identity authentication infrastructure, especially at payment points that serve the poor, illiterate and rural sections of India. That apart, the e-payment investment can be made viable only if the financial service providers

and intermediaries align themselves as stakeholders in the set-up . The government would also need to ensure that the infrastructure created is put to use. This would entail transfer of all salaries is done electronically, and use of cash and cheques is eliminated. Similarly, all payments to vendors and

NEW YORK: US government-rescued General Motors hopes to raise 10 billion dollars when it relists its stock later this month, The Wall Street Journal reported on Tuesday. GM plans to disclose new figures about its initial public offering (IPO) on Tuesday, the newspaper said, citing people familiar with the plan. According to the new projections by GM, the largest US automaker could have a stock-market value at the start of trading of 50 billion dollars -- in line with the solidly profitable Ford Motor Co. -- and it could be as high as 60 billion dollars, the newspaper said. The plan would reduce the US government's stake in General Motors Co. below the symbolically important 50 per cent, to about 35 per cent. The IPO plan envisions the shares would be priced at 26 dollars to 29 dollars each, the sources told the Journal. The plan includes a stock split that will triple the number of GM common shares available to 1.5 billion. Outstanding warrants -- the right to buy shares -- boost the total to 1.8 billion. Through the IPO, GM plans to sell 24 per cent of its total shares, or about 10 billion dollars' worth, based on the midrange of the share-price estimate, The Wall Street Journal calculated. The actual price of the stock to be sold in the IPO would be set "about November 17, and the sale would take place the following day," it said. The shares to be sold are owned by the US Treasury, a union-run trust and Canadian federal and provincial governments, the newspaper said, citing the people familiar with the plan. Under the plan, the Treasury would sell seven billion dollars of its shares, paring its 61 per cent stake to about 35 per cent -- lower than many observers expected, it said. The United Auto Workers trust, which pays for retiree health care, would

BANGALORE: As the Chinese pitter-patter into IT services turns into a loud clatter, Indian majors are pushing hard to grab a bigger slice of that market. TCS, Infosys and Wipro plan to shift at least 10% of their new outsourcing projects to Chinese cities of Dalian and Chengdu, for the first time since Indias software exports industry took note of the Chinese threat a decade ago.

Top customers like GE and General Motors are demanding that Indian vendors deliver some services from locations outside India because of geo-political risks and location redundancy. Indias tech behemoths are also realising that by creating local jobs in China, they can gain a bigger share of the Dragonlands $10-billion-plus outsourcing market. While TCS plans to increase its existing 1,200-employee base by over five times in the next few years, Infosys will invest $100 million to build a 4,000-professional-strong team. Wipro, the third-biggest software exporter, will have around 1,000 professionals in a years time. A clear inflection point for China has been clients acceptance over the last few months. And despite some risk perceptions, we are selling Infosys China, and not just China, as a new location to customers, says SD Shibulal, chief operating officer, Infosys. Over 80% of the work we do in China is for our global customers, he added. Testing of software applications, engineering design for automobile and consumer durable firms are among projects set to get increasingly shipped to China. Clearly, China is no longer a pure rival for India Outsourcing Inc. Instead, it is increasingly helping Indian technology vendors position themselves better by offering a choice of delivery centres beyond India to customers. Its no more about being rivals, says Girija Pande, chairman of TCS Asia Pacific operations. We are now seeing more load that can be sent to China. In fact, we are already doing both IT and BPO projects, added Pande. Rising wages, attrition rates and increasing scarcity of employable labour are among the top reasons for this shift in the way Indian IT industry has been looking at China. A September report by Goldman Sachs says Infosys revenues from China could top $200 million in three years, from $100 million today. TCS China revenues are expected to reach $250 million from almost $100 million currently, the report added. While bidding for global outsourcing contracts, Indian vendors are beginning to break up a project into pure application development and software testing components. Of these, non customer-facing portions such as testing is increasingly going to China, says Amneet Singh, vice-president, global sourcing at consultant Everest Group. Some clients are also concerned about growing geo-political risks in India because of terrorist threats and delicate equations with neighbours such as Pakistan and China. We received calls from several customers after the 26/11 Mumbai attacks. Since then, we have noticed China come up more frequently in our discussions," said a CEO at one of the top Indian tech firms that has a development centre in Mumbai. Another inflection point for Chinas growing outsourcing industry is the rise of local firms like HiSoft, NeuSoft and VanceInfo. Some like HiSoft are looking at success stories of Infosys and Cognizant and globalising their operations. HiSoft, for one, got listed on Nasdaq in June and has already started getting customers like GE, UBS and Citibank to offshore work to China. Theres a growing need from CIOs to diversify and China is positioned as an ideal complement to India, says Ross Warner, a spokesman for HiSoft, based out of Beijing. The company started working with GE in Japan eight years ago. Its no secret that we look up to their (Infosys) journey and are now focussing to replicate some of that, adds Warner. Moreover, MNCs that aspire to sell into China are often requested by the government to purchase from China. This is a factor motivating MNCs like GE, 3M and Nokia to procure to China, says James Friedman, analyst at SIG. However, even as China is set to become a $30-billion outsourcing powerhouse in five years, there are hurdles it needs to overcome. While the country produces more engineers than India, lack of experience in handling large, complex projects remains a worry. Plus, Chinas wage rates are a higher than Indias because employers have to spend on social security. This is a common mistake which is made because in China, one would have to pay 50% tax to the government plus a premium of 10-15% if the person can speak English, says Frances Karamouzis, research.

2/11/10

NEW DELHI: Projecting a growth of 40 per cent in India's oil demand in next decade, Prime Minister Manmohan Singh on Monday stressed on securing energy supplies at affordable prices to meet requirement of rapidly expanding economy. "India needs adequate supplies of energy at affordable prices to meet the demand of its rapidly growing economy ," he said inaugurating the Petrotech-2010 oil and gas conference here. India , which consumed over 138 million tonnes of fuel in 2009-10, imports three-fourth of its oil needs and one-third of its gas requirement. It imported USD 79.5 billion worth of 159.2 million tonnes of crude oil. "Demand over the next 10 years will increase by over 40 per cent, whereas the increase in supply from the maturing (domestic) oilfields is expected to be around 12 per cent," he said. Domestic sources are inadequate to meet the increasing demand for energy. The nation's domestic oil production was about 34 million tonnes in the last fiscal. To bridge the shortfall, the government is encouraging national oil companies to acquire oil and gas fields abroad, Singh said. The Prime Minister stressed on building strong economic partnership with hydrocarbon-rich countries. Singh said oil and gas today are not seen as mere commodities to be traded freely. "They are often used by countries to meet their political objectives." In the last two decades, Asia's share in the growth in demand for hydrocarbons has risen substantially while that of the OECD countries and the European Union has declined. "This shift has been caused by high rates of economic growth and increasing populations in many Asian countries." "There are supply-side uncertainties. Many mature fields are declining in production. Some energy endowed countries have problems in augmenting production because of various reasons including lack of the required technology and political uncertainty," Singh said. Another challenge, he said, is climate change. "Because of this challenge, the demand on energy technologies goes beyond productivity and efficiency issues," he said, calling for a rethink on the traditional energy basket being loaded in favour of fossil fuels. "The concept of a Global Energy Equilibrium (the theme of Petrotech conference) suggests a matching of demand and supply of hydrocarbons in a manner which is optimum. However, apart from the difficulty of defining what an optimum balance would exactly mean, there are many other factors which have a bearing on how different countries meet their hydrocarbon demand," he added.

NEW DELHI: Indians could grow wealthier than the Chinese in the next 30 years if the government brings in fundamental changes, starting with clear property rights to farmers, says a renowned American economist. "When I say India would be richer than China in 2040, I don't necessarily mean India's GDP (gross domestic product) would be bigger," said Derek Scissors , fellow at the Asian Studies Centre at The Heritage Foundation, a Washington-based conservative think tank. "What I mean is household wealth of Indians would be bigger than that of the Chinese if the right policies

are adopted," Scissors, who was here to deliver a lecture at the invitation of the Aspen Institute India, told IANS in an interview. The senior research fellow, who focuses his studies on the economies of China and India, said the key to increasing wealth of Indians lay in granting property rights to farmers. "The original and vital aspect of China's economic progress was the granting of a very specific set of property rights to the farmers in the 1970s. That was the trigger. Agricultural productivity just absolutely soared," he said. In comparison, India has about 70 percent of its population in farms still producing much lower than potential. "By property rights, I mean the economic definition, which is not to say that Indian farmers do not have rights, but the extent of these are totally unclear," said Scissors, also the adjunct professor at George Washington University. "The land registration act, the state ownership of resources, the contest over title that undermines Indian agricultural productivity," he added. Indian agriculture largely consists of small farmers, who are either working as tenants on other big farms or have marginal holdings which curb productivity. Scissors was also critical of some of the rural population-centric, state-run social welfare programmes like the national rural employment scheme. He said such initiatives make the beneficiaries dependent on doles rather than be independent. "That's not the way to create wealth, that is a way to perpetuate the power of the government. It may have some political advantages, but they are myopic because you are not solving the problem of rural poverty. You are just alleviating it temporarily. It's a bandage solution," said Scissors. "These are poor substitutes. That's what you do; you make farmers into permanent dependents of the state. What you want is farmers to create wealth for themselves." Scissors said the granting of property rights would also resolve another serious, growing concern -- the acquisition of land by companies for various industrial and infrastructure projects. "If farmers want to take their land out of circulation because some companies have great projects, let them get paid a lot of money. Farmers own the land. Just have a bargaining process, where I own the land and you are making me an offer I want, yes, then I will take it. And if you are not, then you are out of luck," said Scissors. The other two key areas in which Scissors would like to see changes are infrastructure and education. "Infrastructure will develop and flourish in India, if there is a clear set of titles and a clear set of people who are to be compensated and not just everyone sticking their hands in the till." Though India has a number of programmes to widen the reach of primary and secondary education , Scissors said, the country needs to implement and monitor these in letter and spirit to ensure their effectiveness.

"If you get people who do not have to work on the farm, because agricultural productivity is higher, give them a secondary school education, they can move into manufacturing. Their wages will rise and India will have the capacity to have a flood of export income."

BEIJING: Made in America, imported by Asia. In a reversal of the trade flows that have so unbalanced the global economy, some of the dollars that the Federal Reserve is expected to start minting soon to buy U.S. Treasury bonds will wash up on Asia's shores, presenting a headache for policymakers already fretting about rising inflationary pressure. Resentment in emerging markets about the global spillover effects of easier U.S. monetary policy is likely to hang over next week's summit of the Group of 20 leading economies in Seoul. "What will happen with another round of quantitative easing by the Fed? It's creating inflation, alright. Just not necessarily in the U.S., but on the other side of the globe," said Frederic Neumann, an economist with HSBC in Hong Kong. In fact, a lot of investors are counting on the Fed to succeed where the Bank of Japan has long failed and generate inflation at home, too. U.S. core inflation of 0.8 percent is lower than it has been since the early 1960s, but asset managers have been snapping up Treasury Inflation Protected Securities and other hedges against rising prices. Gold scaled a record nominal peak last Friday. On the face of it, though, worries of inflation in the developed world any time soon are akin to a malnourished man refusing to eat more for fear of growing obese. In a world of substantial excess capacity, high unemployment and tightening fiscal policy, inflation is likely to remain low in rich countries, the International Monetary Fund said in its latest World Economic Outlook, published last month.

It saw deflation as a more pertinent threat and projected that excess supply in the United States and the euro zone would not be used up until 2014. "For high inflation to emerge, there would have to be multiple shocks, including a sudden move to financial or trade protectionism that would undo much of the integration of markets that has taken place over recent decades. Such a scenario seems remote," the IMF said. TOO MUCH SLACK Indeed, without significantly stronger financial and structural policies, potential output in rich economies is likely to remain appreciably below pre-crisis trends, the IMF said. And, it added, any mistakes by governments in rolling back public deficits could cause a long period of deflation or low inflation and disappointing economic growth. Jan Hatzius, chief U.S. economist at Goldman Sachs , said there was so much slack in the economy that U.S. interest rates might stay close to zero for several years: -- the capacity use rate in U.S. manufacturing is currently 72.2 percent, compared with a long-term average of 80.7 percent; for utilities, the rate is 79.4 percent versus 87.6 percent.

-- residential and commercial real estate vacancy rates are well above their long-run averages. -- the Labour Department's "underemployment" rate is 17.1 percent compared with an average since 1994 of 9.8 percent. In addition to the unemployed, the rate counts those who have given up looking for work and part-timers who want a full-time job. Against this background, Hatzius said a widely followed rule of thumb for the appropriate stance of monetary policy, named after economist John Taylor, points to the need for the fed funds rate to be around minus 5 percent now, not zero. As such, Hatzius expects the Fed to announce after its policy-setters meet on Wednesday a second asset-purchase programme initially worth $500 billion and eventually expanding to $2 trillion. The impact would be to add half a percentage point to U.S. growth through the stimulus of lower bond yields, a wealth effect from rising equity prices and a knock-on drop in the dollar. Speaking in Beijing this week, Hatzius said the impact of "QE2" would be benign for Europe, where growth is weak, because it would let monetary conditions stay looser for longer. "But in some parts of the world, it causes more problems. And Asia is probably in the latter camp," he said. "If there are spillovers into countries that are already on the verge of overheating, then domestic policymakers are going to tighten more than they otherwise would." WHAT'S THE POLICY MIX? Which leaves markets grappling with what form the tightening will take -- currency appreciation, tougher monetary policy or fiscal restraint. Australia and India both raised interest rates on Tuesday, as did China on Oct. 19. While the Reserve Bank of India signalled a pause in its tightening, the World Bank called on Wednesday for China to keep raising rates. Andrew Colquhoun, head of Asia-Pacific sovereign ratings at Fitch in Hong Kong, said China's capital controls help it keep out unwanted inflationary inflows -but only up to a point. "The Chinese authorities have many tools at their disposal with which to lean against these sorts of pressures. They're going to have to use those tools more aggressively than they otherwise would have done if the Fed goes for further quantitative easing," he said. The United States, of course, would like China to tighten by allowing its exchange rate to rise faster. While politicians focus on the nominal rate of the yuan against the dollar, China's higher inflation rate is already pushing up the economically more important real exchange rate. Indeed, Bank of America Merrill Lynch last week nudged up its forecast for inflation across emerging Asia in 2011 to 4.0 percent from 3.3 percent and said rising bond yields suggested investors were already on the scent. "This highlights one of the great ironies of QE2: it creates inflation in the region that least needs it," economists T.J. Bond and Marcella Chow said in a report.

3/11/2010

BANGALORE: Top consumer brands are realising that serious investment in social media tools beyond putting up a Facebook page or having a twitter account can help them gain a bigger share of the new-gen customers wallet. Companies have realised that they were callously investing in social media without expecting a return on investment.

Now clients have begun to demand more, said Advith Dhuddu, founder and CEO of AliveNow, a Bangalore-based social media management agency. FMCG company Capital Foods , which manufactures Chings Secret soups, sauces and instant noodles, uses Facebook extensively by discussing innovative recipes centred around the brand. Sales of Chings Secret over the year has grown 8-9% month-on-month. We spend 35% of our marketing budget on social media and believe that a substantial part of Chings growing sales is because of the connect with the Facebook generation, said Ajaay Gupta, MD and CEO, Capital Foods. To boot, for little over a year, the firm did not invest in above-the-line advertising channels like television. JustDial is using social media to expand sales despite having an online presence. Since the connect between buyers and sellers happens in real time, the seller gets an audience who wants to buy. This shortens his sales cycle, increases return on investment and makes them keep investing in JustDial, says VSS Mani, founder & CEO of JustDial. Till now, advertising through social media forms a small part of a brands marketing budget. But experts see this pie growing since the Indian social networking audience grew 250% (September, 2010, year-on-year) driven mainly by Facebook and Twitter. Brands themselves are calling us to manage their social media presence after seeing successful case studies elsewhere, said Mihir Karkare, assistant vice-president of Social Wavelength, a Mumbaibased social media agency. Lifestyle brands think users of social netoworking sites their target audience both by income and age. They reach out to increase frequency of sales from loyal consumers while adding new ones. Cafe chain Barista Lavazza too tied up with Google Maps to offer an e-coupon whenever consumers searched for directions to a Barista outlet. Plus, it also uploaded an album of cafe merchandise and beverages on its Facebook page. It invited consumers to tag themselves on the photographs, for example the fastest user could redeem a product at their outlet. The cafe also bagged sales from friends who accompanied the winners. We noticed that consumers who received coupons on Thursday drove a spike in deals over the weekend, said Saurabh Swarup, head of marketing at Barista Coffee Company, said. Earlier, search engine optimisation was a rage. Now it has been replaced by social media optimisation, added Dhuddu. Yet, others feel that brands still do not understand the potential of the medium. Only when the senior management starts looking at social media in a holistic way, will it become a medium for generating results, said Prasanth Mohanachandran, co-founder of AgencyDigi. Facebook which has 26.2 million Indian users while Twitter has around 3.02 million users according to Vizisense, an online audience measurement firm.

TOKYO: Panasonic Corp. said Thursday it has invested $30 million in Tesla Motors Inc., the US maker of electric sports cars, eyeing an expansion in the global market for electric vehicles. Panasonic, Japan's biggest home appliance maker, said it will acquire about a 2 percent stake in Tesla. Panasonic said the two firms will jointly market battery packs for electric cars. Shares in Panasonic jumped 3.7 per cent to 1,181 yen on Thursday following an announcement of the capital tie-up with Tesla. Apart from Panasonic, Toyota Motor Corp. already has invested $50 million in the high-end electric car maker. Toyota, the world's No. 1 automaker, has also signed a $60 million contract to have Tesla help develop an electric version of Toyota's RAV4 crossover vehicle. Tesla opened its first Asian showroom in a fashionable Tokyo neighborhood last month, hoping to woo rich buyers before eventually widening its appeal with cheaper models.

But the company has not turned a profit since it was founded in 2003, and so far Tesla has sold only about 1,000 of its high-end electric cars. It currently sells just one vehicle, the $109,000 Roadster sports car, which is popular among celebrities and performance-car enthusiasts.

4/11/10
SHANGHAI: US auto giant General Motors said on Thursday it had become the first international carmaker to sell two million vehicles in a year in China, now the world's largest auto market. The strong China sales further underlined the country's growing importance to GM, where it has been the market leader for five years and the carmaker's international operations are now based. "This is another important milestone for General Motors in China," GM China president and managing director Kevin Wale said in a statement. In a sign of GM's momentum, Wale pointed out it was only three years ago that GM -- along with its Chinese joint venture partners -became the first to sell one million vehicles a year. China overtook the United States last year to become the world's largest auto market for the first time and is on track to hold onto the top spot this year, analysts say. "Over the past decade, China's vehicle market has experienced unprecedented growth," Wale said. "GM has grown with it, working with our joint ventures to expand our lineup of vehicles and brands, adding to our portfolio of services, and increasing our production capacity to meet the changing needs of consumers," he added. The US car maker announced on Wednesday it had agreed to closer ties with partner Shanghai Automotive Industry Corporation (SAIC), China's biggest car company, including cooperation on the development of new energy vehicles. GM's other joint ventures in China are SAIC-GM-Wuling, a mini-commercial vehicle joint venture with SAIC and Liuzhou Wuling Automobile, and FAW-GM Light Duty Commercial Vehicle, a tie-up with China's FAW Group launched in August. The US company said it and its joint ventures have benefited from record monthly sales throughout the year. In October, GM sold 199,641 vehicles in China, a 19.6 percent rise year-on-year. SAIC Group, the biggest domestic carmaker which sold 2.7 million vehicles last year, has said it is closely watching GM's 13 billion-dollar US initial public offering. A spokeswoman for the Chinese automaker declined to comment on Thursday on reports that it would like to invest in the listing, saying only: "We hope their IPO will be successful". GM hopes the listing, one of the largest in US history, will allow it to break from government ownership. GM was forced into a state-backed bankruptcy reorganisation in June 2009 and emerged a little more than a month later. The US government owns a 60.8 percent stake in General Motors Company and the Canadian and Ontario governments have a combined 11.7-percent holding.

NEW DELHI: In a spectacular debut on the bourses, Coal India today became the country's fourth largest company in terms of valuation with a market capitalisation of Rs 2.16 lakh crore and pushed MMTC out from the club of top-10 most valued firms.

Coal India Ltd (CIL) witnessed a sparkling trading session and became the part of the elite club on the very first day of trade, causing setback to the public sector trading firm MMTC, which finished the day with m-cap of Rs 1.3 lakh crore. "The coal sector will continue to see growing demand and investors are keen to participate. The CIL deal opens up opportunities for other entities seeking to grow their business and take it to the next level," DSP Merrill Lynch Head of Global Capital Markets Saurabh Sonthalia said. CIL today listed on bourses with a handsome premium of 17 per cent and settled with a gain of 39.73 per cent at Rs 342.35 over its IPO issue price of Rs 245 a share on the Bombay Stock Exchange. State-run coal major emerged as the fourth most valued firm after Mukesh Ambani-led Reliance Industries, energy giant ONCG Corp and the country's largest lender State Bank of India . With a m-cap of Rs 3,61,516.18 crore, Reliance Industries remains the country's most valuable company, followed by ONGC at the second position with m-cap of Rs 2,93,239.08 crore and SBI at the third spot with the valuation of Rs 2,18,112.72 crore. Besides, IT giants TCS and Infosys Technologies were left behind by the world's largest coal firm CIL in terms of mcap. TCS ended with a total valuation of 2.09 lakh crore while Infosys finished the day with an m-cap of Rs 1.76 lakh crore. Others in the top 10 list included--NTPC (Rs 1,60,539.11 crore) at seventh spot, ICICI Bank ( Rs 1,44,932.24 crore) at eighth, ITC (Rs 1,35,997.95 crore) at ninth and L&T (Rs 1,31,968.58 ) at tenth position. Infrastructure giant L&T also today made a smart entry in the kitty of the country's ten most valued firms, replacing the telecom major Bharti Airtel, which grabbed the twelfth spot with a m-cap of Rs 1,23,951.05 crore.

MUMBAI: Durables-to-oil and gas conglomerate Videocon Group said on Thursday it is planning to split its various businesses, a move that could help them raise capital or induct strategic partners into some businesses. With the help of independent external consultants, the company will look at various options available to reorganise and segregate various business segments of the company, said Videocon in a statement to the Bombay Stock Exchange (BSE). This move will ensure greater focus on the operation of each of the companys diverse businesses and enhanced value for shareholders and improvement in the business prospects of the company, said the release. The company is run by three brothers, Venugopal, Rajkumar and Pradeepkumar but Venugopal has always the first among equals. On Thursday, the company announced a 7.1% increase in its net profit at Rs 159.9 crore in the quarter ended September 30, over the same period last fiscal. The company had a net profit of Rs 149.3 crore as on September 30, 2009, Videocon Industries said in a filing to the BSE. During the quarter, the companys income from operations stood at Rs 2,985.5 crore, a 13.9% jump from Rs 2,621.2 crore recorded in the corresponding period last fiscal. On Thursday evening, two of the scions of the Dhoot family, Anirudh, and Saurabh, said that only Mr Venugopal, the chairman, would be able to elucidate on the logic behind the announcement. But calls to Venugopal Dhoots mobile remained unanswered. The group had earlier indicated that it will separate a few of its businesses in order to have a more focused approach.

Earlier this week, Videocon had said it has appointed merchant bankers ICICI Securities and Morgan Stanley to help unlock value from its oil and gas assets, either through an initial public offering or a demerger. The company has recently discovered hydrocarbons in the Tarakan basin of Indonesia and had also announced a gas find in a second well in Mozambique in Africa. Exactly a decade ago, Videocon group had restructured its operations by forming eight strategic business units or profit centres. Since then, the $2-billion Videocon Industries has diversified into capital-intensive businesses such as power, telecom, media, oil and gas. Some experts feel such restructuring is an easy way to get new partners and financial options. A company, which is diversified, will generally get lesser value compared to a singlefocused company put together, said Avinash Gupta, VPresearch equity, Bonanza Portfolio. If the businesses are split, then it can help them get better valuation from each business and raise fresh resources from the market, he added. On the day of the announcement, the companys stock closed 0.25% up at Rs 260.50 on the BSE while the benchmark index Sensex closed 2.09% up to 20893.57. MIRANDOLA: Italian industrial group Fiat SpA intends to strengthen its home country roots and has no wish to delay investments, its chief executive said on Friday. CEO Sergio Marchionne has clashed with trade unions on his efforts to boost productivity at Fiat's Italian plants and the dispute has delayed its Fabrica Italia (Factory Italy) investment plan to boost production. Fiat's investment plans for Italy envisage spending 20 billion euros ($28.28 billion).

"After having enabled the company to compete at international level, we intend to strengthen our roots in Italy," Marchionne said, speaking at a prize-giving ceremony. "Whoever thinks this (row) is a way of gaining time and delaying investments is not aware of how much time we have already wasted. We ask that all those involved are available to work together in the same direction," he said. Fabrica Italia is our way of rolling up our sleeves and looking to resolve the problems, he said. Last month, Marchionne provoked an angry reaction when he said Fiat would perform better without its loss-making Italian plants, stressing Italy must boost efficiency to remain competitive. By 1142 GMT, Fiat shares were up 1.6 per cent at 12.7 euros. The auto sector index is down 0.12 per cent.

5/11/10
WASHINGTON: In a historic decision, the International Monetary Fund board agreed on Friday to boost the voting power of big emerging economies and make China the third leading voice in the global lender. "This historic agreement is the most fundamental governance overhaul in the fund's 65-year history and the biggest ever shift of influence in favor of emerging market and developing countries to recognize their growing role in the global economy," IMF Managing Director Dominique Strauss-Kahn told a news conference. Under the deal, first clinched by finance ministers of Group of 20 leading economies in South Korea last month, 6 percent of IMF voting shares will be transferred to "dynamic" emerging market countries from industrial economies. The move would vault China over Germany, France and Britain into third spot behind the United States and Japan. It would also lift other large emerging powers India, Brazil and Russia into the top 10 of the 187-member institution. Emerging economies have gained more clout in the IMF over the past five years, but Friday's shift is by far the most

significant, amounting to an overhaul of the global economic order established when the IMF was set up after World War Two. The IMF's member countries will vote on the reforms in the coming weeks, with 85 percent of support needed for the changes to pass. Some countries will also require legislative approval, including the United States. Strauss-Kahn said he did not believe this week's congressional elections in the United States, where Republicans won control of the House of Representatives, would delay approval in Washington. The move doubles IMF member quotas, or subscriptions, boosting the lender's resources by about $755.7 billion at current exchange rates, the fund said. The board also endorsed changes in its own makeup to reduce Europe's influence on the 24-member decisionmaking body. European countries will give up two of the eight or nine seats they hold at any given time to emerging countries at the end of two years. BIGGER SAY, BIGGER RESPONSIBILITY

U.S.-China tensions have flared this year over business and trade, but especially over China's undervalued currency that Washington argues gives Beijing an unfair trade advantage. Analysts believe that unless China allows its currency to rise significantly, the Obama administration may wait to submit the IMF vote changes to Congress for approval. Strauss-Kahn said having a bigger say in the IMF came with greater responsibility in the global economy and China recognized that. "I think (IMF reforms) may have an influence on the behavior of the Chinese authorities. They were willing to have this position, they were willing to be better represented in the IMF, which shows they do care about multilateral institutions," he said. "I expect they will behave, or have in mind the importance of their role." The IMF board's approval on Friday came before next week's G20 leaders' summit in South Korea where the United States is seeking agreement to limit global trade imbalances. Emerging economies are unlikely to be sympathetic after the U.S. Federal Reserve embarked on a new $600 billion bond-buying spree this week, sparking criticism from Brazil, China and South Africa that the Fed's money printing could weaken the dollar and send a surge of investor cash into their economies. NEW YORK: In signs of continuing financial woes, a staggering 141 American banks have gone belly up so far year, surpassing the total count of bank failures in 2009.

this

The world's largest economy saw the collapse of 140 banks last year, at a time when the country exited one of the worst recessions. Four banks -- Western Commercial Bank, Pierce Commercial Bank, First Vietnamese American Bank and K Bank -were shut down by the authorities on November 5. According to the Federal Deposit Insurance Corporation ( FDIC), which insures deposits at over 8,000 American banks, the latest failures would cost more than $254 million. In October alone, 12 banks went out of business. Seven banks were closed down in September, while August saw the failure of ten entities. The maximum number of failures this year happened in April, when 23 entities went belly up.

Official data showed that the count of 'problem' banks -- those at risk of failure -- climbed to a 17-year-high of 829 in the June quarter. Small and medium banks are facing the brunt due to rising defaults, triggered by high number of unemployed people. Notwithstanding massive stimulus measures, the jobless rate continues to hover near ten per cent. Last week, the US Federal Reserve announced that it would purchase government securities worth $600 billion in coming months, a move aimed at bolstering the national economy, which expanded at just two per cent in the September quarter.6/11/10 NEW DELHI: Industry body CII today said sourcing of infrastructure equipment, nuclear hardware and military aircraft from the US by India could create over seven lakh jobs in America in the next ten years. A CII survey of member firms with operations in the US clearly shows that Indian business is now engaged across a wide spectrum of sectors in America, and not just IT and ITeS. The Report, 'India - A Growth Partner in the Indian Economy', estimates that, "India sourcing of US military and nuclear hardware and civilian aircraft could create over 700,000 jobs in the US over the next ten years." Yesterday, US President Barack Obama had announced USD 10 billion worth of deals between Indian and US companies, including a USD 2 billion equipment order from Anil Ambani Group firm Reliance Power and the purchase of 30 Boeing 737 aircraft by low-cost carrier SpiceJet . These deals would create more than 50,000 jobs in the US. The report also said that Indian firms operating in the US have been aggressively hiring US workers and a large majority of the workforce for their America operations were local citizens. It further said that Indian firms having operations in the US are actively engaged as stakeholders in community development programmes for development of libraries, health research and imparting skills to college graduates. "These examples of deep integration... show that Indian business is in the US for the long-term and see themselves as partners in the resurgence of the US economy," CII Director General Chandrajit Banerjee said. The father-son duo of Deepak Puri and Ratul Puri know a thing or two about reinvention. For a good part of the last 15 years, Moser Baer India, their flagship, has soared and sunk with businesses that can be best characterised as here today, gone tomorrow. They started in 1984 with floppy disks, which made way for CDs, which made way for DVDs, which is now making way for Blu-Ray discs and pen drives, which will probably make way for, well, something. Much as they want to know what that might be, they also want to look beyond the fleeting nature of technology. The business they have identified to look beyond, power, is very different from everything they have done so far. If digital storage is new economy, power is as old economy as it gets. If digital storage is about engaging with global markets, power is about engaging with local governments. If digital storage is perpetually threatened by obsolescence, power is good to last for perpetuity. We wanted to do a business away from technology, says Deepak Puri, the 69-year-old patriarch of the group. As Moser Baer India strived to stay three steps ahead of technology, Deepak Puri and Ratul Puri, his 39-year-old son, conceptualised the power strategy. The energy sector always interested me, says Deepak Puri. This time around, the opportunity was there, and we thought it would be a good business to be in for 60-75 years. Its as big a reinvention the Puris have undertaken as any. Over the next five years, the Puris plan to invest Rs 34,000 crore, about 16 times the current revenues of Moser Baer India, to set up 5,000 MW of power capacity across

three mediums: thermal, hydro and solar. And they are doing all this outside the flagship company. But can entrepreneurs in the digital-storage business, even if they have been terrific there, crack the power business? Akhil Gupta of The Blackstone Group , one of the worlds largest private equity funds, thinks so. In August, Blackstone invested Rs 1,350 crore for a minority stake in Moser Baer Projects, the holding company set up by the Puris to drive this expansion into power. We looked at 14 projects they had implemented and found they were good in project management, says Gupta, CMD, Blackstone Advisors India . These are generic skills and you can apply them to any sector. This reinvention can also be seen as a rebirth. Back in the 1980s, Moser Baer began life in Kolkata by manufacturing electric cables. But it quit the business soon, as not much was happening in the power sector for private players. Although the power sector was opened to private players in 1992, the push came from the passage of the Electricity Act, 2003. For instance, private players could now sell power outside their state of location and buy coal mines. The IRR (internal rate of return) in the thermal business is 18-20%; if the fuel linkages are good, 25-30%, says Kameswara Rao, leader, energy, utilities and mining, PricewaterhouseCoopers.

BEIJING: Top European automaker Volkswagen AG plans to make electric vehicles at its two China car ventures, with the first locally made model available on the market as early as 2013, local media said on Monday. Volkswagen, which make cars in tieups with SAIC Motor Corp and FAW Group, will bring its hybrid sport utility vehicle Touareg to China this year, auto.huanqiu.com said, citing VW China president Karl-Thomas Neumann. From 2014 to 2018, Volkswagen plans to make and sell 10,000 electric vehicles in China, Neumann was quoted as saying during an electric vehicle forum in south China. Volkswagen is joining General Motors, Nissan Motor among others in the race for China's fledgling but potentially promising green car sector. GM has started making the electric version of its Chevrolet new Sail at its venture with SAIC. It will also bring its Chevrolet Volt, which runs about 40 miles on batteries before using engine power, to China in the second half of 2011. Nissan, which runs an auto venture with Dongfeng Motor Group , had earlier signed a deal with the municipal government of Wuhan to jointly promote its Leaf in the central Chinese city. In June, Beijing unveiled a pilot scheme to hand out subsidies to buyers of fuel-efficient cars in five Chinese cities as it moves to cut emissions in the world's most populous country and the world's largest producer of greenhouse gases.

China's output of electric vehicles is expected to reach 1 million units by 2020, Wan Gang, Minister of Science and Technology, was quoted as saying by State owned Xinhua news agency in October. China will account for less than 9 per cent of the total plug-in hybrid and electric car demand by 2020, according to a recent research report by industry consultancy J D Power & Associates .

8/11/10

SAN FRANCISCO: Google and Dell plan to push ahead with more acquisitions, helping maintain a takeover spree

thats

boosted

the

value

of

US

technology

mergers

to

more

than

$60

bn

this

year.

Google is likely to buy more companies about the size of YouTube and DoubleClick, its two largest deals, to help offer more online services, the companys head of mergers and acquisitions said in an interview last week. Dell plans more takeovers in its drive to double the size of its data-center business to $30 bn in sales, a company executive said. Internet and computer companies are increasingly relying on acquisitions to gain new technology and customers. Amazon.com is near an agreement to spend $540 mn for Quidsi, owner of Diapers.com, two people familiar with the matter said on Sunday. For Google, the largest Internet search company, absorbing more startups could provide fresh ways to sell ads and compete with social-networking sites such as Facebook. The world changes really quickly, and companies that were small two years ago are huge today, David Lawee, vice president of corporate development at Mountain View, California-based Google, said in a November 4 interview. It wouldnt surprise me to see more large opportunities for us. Google has stepped up its dealmaking in 2010, spending $1.6 bn on more than 20 companies in the first nine months of the year, according to regulatory filings. Its acquisition of mobile-ad service AdMob Inc. and a pending bid to acquire travel data aggregator ITA Software, for about $700 mn each, would be the companys third- and fourth-largest deals since it went public in 2004. Google paid $1.65 bn for YouTube, the worlds biggest video-sharing site, in 2006. It acquired DoubleClick, an online advertising company, for $3.2 bn in 2008. When asked if Google would buy more companies of the size of those businesses, Lawee said, Yes. Dell, meanwhile, is using deals to grab a bigger chunk of market for data centers large rooms of servers and storage systems that deliver software and information over the Internet. The company is racing with Hewlett-Packard, International Business Machines Corp. and Oracle Corp. to become one-stop shops for data-center technology.

SYDNEY: Investors gave stocks a wide berth on Wednesday on renewed worries China may hike interest rates this week and after top level meetings in Europe failed to produce a clear solution to tackle Ireland's debt crisis. Dublin has so far resisted pressure to request aid, although euro zone ministers have agreed to send a joint European-IMF mission to Ireland that could prepare the way for a bailout to prevent its debt crisis spreading to other countries. Asian stocks excluding Japan dropped to their lowest level in four weeks, while European bourses opened lower with the FTSEurofirst 300 index of top European shares down 0.2 percent. The rally in the dollar, meanwhile, briefly paused after two top Federal Reserve officials were reported by the Wall Street Journal as saying the central bank may need to go beyond its latest plan to pump $600 billion into the U.S. economy. The MSCI Asia stock index excluding Japan fell 1.5 percent to its lowest level since Oct. 20, on track to close lower for an eighth straight session. Among the worst performers, Australian shares slid 1.6 percent as BHP Billiton and Rio Tinto both suffered falls of more than 2 percent. Investors worry that China, Australia's largest export market, is preparing more aggressive steps to tame

inflation and thus risk slower growth. CHINA INFLATION Chinese Premier Wen Jiabao said his government was preparing steps to tame price rises, feeding into market expectations that China will intensify tightening policies. There is talk that it may do so as soon as Friday. "China wants to send a message to everybody that this time they are serious in fighting inflation, reducing excess liquidity and controlling speculative inflows," said Danny Yan, who helps manage more than $400 million at Tai Fook Asset Management. Hong Kong's Hang Seng index shed 2.2 percent, while Chinese shares fell 1.9 percent. Several other markets in Asia were closed for holidays, including Singapore, Indonesia, Malaysia and India. Japan's Nikkei average, however, eked out a small gain as shares in some exporters, such as car makers, benefited from the yen's softness against the dollar. The dollar hit a six-week high of 83.59 yen in New York, and was last at 83.44, while the euro, which fell as low as $1.3446 overnight, edged up to $1.3500. Worries about further policy moves in China also knocked commodity prices lower. Shanghai copper and zinc futures fell by their daily limit, chasing losses of 5 to 8.5 percent in London in the previous session. "We know it's coming, but we don't know when. The uncertainty is a risk-appetite killer, but like Rumsfeld once said, 'it's a known unknown'," a trader in Hong Kong said, referring to comments by former U.S. Defense Secretary Donald Rumsfeld. Three-month copper on the London Metal Exchange fell 1.1 percent to $8,060 a tonne, down about 10 percent from a record high of $8,966 set on Nov. 11. Spot gold was a touch lower on the day at $1,335.00 an ounce, having shed 2 percent the previous day to a two-week low, while crude oil slipped 0.5 percent to $81.95 a barrel, still shaky after Tuesday's 3 percent fall. U.S. Treasuries held on to most of the gains made on Tuesday, with the 10-year note yield flat at 2.84 percent, off a 3-1/2-month high near 3 percent set on Monday.
LONDON: Gold demand is being lifted this year by a recovery in jewellery buying in the key Indian market, and robust growth in Chinese gold consumption, the World Gold Council said on Wednesday. Releasing its third-quarter Gold Demand Trends report, which showed a 12 per cent year-on-year rise in gold demand in the third quarter, the WGC said jewellery consumption in particular looked set to improve on last year's level. "The main drivers for this year are the impact of the Indian and Chinese markets," said the WGC's research manager Eily Ong. "In 2010 in total, jewellery demand could actually exceed that of 2009." Concerns over the global economic outlook and currency market stability have supported investment in gold this year, helping it to a record $1,424.10 an ounce last week. But identifiable investment levels are below 2009's stellar levels.

Investment demand almost halved in the third quarter from the previous three months, during which concerns over euro zone sovereign debt levels fuelled a surge in investment in bullion. But Ong said jitters remain in the wider financial markets, caused by measures such as the United States' quantitative easing policy announced earlier this month, which could still lead to another jump in investment. "If there is continuing uncertainty over the impact of QE2 and uncertainty over what is happening with the Asian market -- whether they will continue to tighten policy, or whether whatever they are doing now will succeed in curbing inflation -- we could probably see what we saw in Q2 again," said Ong. "There could be more investors allocating their assets into gold as a store of value, and for capital preservation." Demand for investment products such as gold exchange-traded funds softened in the third quarter. ETF demand was down 7 per cent year-on-year to 38.7 tonnes, less than a seventh of the "exceptional" flows seen in the second quarter. INDIA BUYS But other forms of demand rose. Jewellery buying climbed 8 per cent to 529.8 tonnes in the last quarter, accounting for 57 per cent of total demand. In the second quarter jewellery buying accounted for just 40 per cent of overall consumption. India bought nearly 50 tonnes, or 36 per cent, more gold jewellery in the third quarter than in the same period of the previous year, bringing its jewellery consumption in the quarter to 184.5 tonnes.

NEW DELHI: The government has empowered boards of state-run Oil & Natural Gas Corp (ONGC) and Indian Oil Corp (IOC) to invest up to 5,000 crore in a project without its approval on Tuesday by certifying them as maharatna companies. Indias biggest fuel refining and marketing company IOC and countrys largest energy explorer ONGC are armed with greater financial powers just before their follow-on public offers (FPOs) expected in this fiscal year. The prestigious status of a maharatna will empower us to chart new and innovative strategies and inspire us to scale greater heights in the future, IOC chairman BM Bansal said. Earlier, IOC was a navratna with powers to invest in a project worth 1,000 crore or less. IOC and ONGC were among the four navratnas granted the maharatna tag in May. But they could not enjoy their new status because their board did not have required number of independent directors. Other two companies to get the elevated status were NTPC and SAIL. Maharatna status provides greater autonomy and operational flexibility to state-run companies. Only a public listed navratna company, having minimum average turnover of 25,000 crore and net profit of 5,000 crore in past three years is eligible for the status. Certificates were awarded to the companies by heavy industries & public enterprises minister Vilasrao Deshmukh, companies said in their statements. 18/11/10

NEW YORK: General Motors on Wednesday announced a hike in the number of shares in its stock listing, which puts the US auto maker on track to rebound from bankruptcy with the largest public share offering in US history. The largest US auto maker said it would sell 478 million shares instead of the 365 announced previously due to

strong interest by investors, for a price between 32 and 33 dollars per share. The offer could pull in 22.4 billion dollars for GM, making it the largest IPO in US history, taking into account options for issuing supplementary shares. Credit card giant Visa currently holds the record with its blockbuster IPO 19.7 billion dollars in 2008. GM is returning to public trading on the New York Stock Exchange after an 18-month hiatus. The NYSE delisted GM after the company filed for Chapter 11 bankruptcy protection on June 1, 2009. It emerged a month later with the government owning a controlling stake. The price range of 32 dollars to 33 dollars represents an increase of as much as 27 percent from the November 3 estimate of 26-29 dollars. Once the world's largest corporation, GM sold more vehicles than any other automaker from 1931 through 2007, after which it lost the crown to Japan's Toyota. Hit by falling sales amid a steep US recession, GM was forced into the government-backed bankruptcy reorganization after receiving billions in emergency aid. The auto maker transferred its main assets to a new government-supported car company under a plan financed by the Obama administration and the Canadian government. The US government owns a 60.8 per cent stake in General Motors Company, the Canadian and Ontario governments have an 11.7 per cent holding, and the United Auto Workers union's retiree health care trust fund owns a 19.93 per cent stake. With the IPO, the US Treasury's stake is expected to fall to 40.6 per cent. The embattled US auto industry has been showing consistent gains so far this year amid a US economic recovery that began in July 2009 from the worst recession since the 1930s. And a successful IPO would provide a victory for President Barack Obama as his administration moves beyond an election "shellacking" fueled -- in part -- by anger about economic policies, including the bailou

ZHUHAI: China is emerging as a competitor in the international arms market , offering increasingly sophisticated fighter jets , missiles and equipment that are beginning to rival Russia and other longtime exporters. With the same low-cost strategy that worked for toys and electronics, Chinese firms are targeting cost-conscious customers, albeit in an industry still dominated by the United States, Russia, France and Britain. ``China's share of the global market may never be that big, but it will have a growing niche with poorer countries such as African states,'' said Richard Bitzinger, a senior fellow at Singapore's Rajaratnam School of International Studies. The Chinese challenge has been on display at this week's Zhuhai air show, a biannual aviation industry event that wraps up Sunday. Pilots have given aerial displays of China's latest-generation J-10 fighter, and exhibition halls are stocked with models and mock-ups from military aircraft maker Aviation Industry Corp. of China. Sprinkled among the exhibits are a half dozen flight simulators, highlighting a push to offer not just aircraft but also

training

and

after-sales

service.

That all-encompassing approach will be key to further growth as Chinese firms seek to woo buyers for more sophisticated aircraft such as the J-10 and F-8T, which compete directly with products from the West. ``China is building a client base for the future,'' said Rob Hewson, London-based editor of Jane's Air-Launched Weapons, who was attending the air show. ``They hope to be servicing these customers for decades to come.'' That was not always the case. China's arms industry had long been known for cheap knockoffs of Russian hardware: East Timor's president once described the Chinese patrol boats his country was purchasing as a ``fake Gucci ship.'' These days, technological advances are driving expansion. Deliveries of big-ticket military hardware more than doubled between 2007 and last year, according to the Stockholm International Peace Research Institute, lifting China to seventh place among arms exporters. The institute tally excludes sales of small arms and ammunition, of which China has long been a major supplier. The FC-1 Xiaolong multirole fighter jet is an example of what's behind that growth.

Developed in cooperation with the Pakistani air force, which calls it the JF-17 Thunder, the plane is being offered at the relatively low price of about $15 million, making it a cost-efficient replacement for aging workhorses such as the MiG-21 and Northrop F-5 Tiger. Other overseas successes include: _ The Hongdu K-8 trainer and ground-attack jet, also developed jointly with Pakistan. About 250 have been sold to countries such as Egypt, Ghana, Pakistan, Sudan and, most notably, Venezuela, beating out Russian competition for China's first major sale in South America. _ The F-7 jet fighter, based on the Russian MiG-21. About 100 have been sold to Bangladesh, Namibia, Nigeria and other developing countries. In Nigeria's case, the arrival of 12 of the planes in April did much to revive a fighter fleet that had become largely inoperable. _ The WZ-551 armored personnel carrier, sold to Argentina, Sudan and a half-dozen other countries. The growing sales coincide with a sharp decline in China's weapons imports, although it remains dependent on Russia for key components, including engines for the JF-17, G-10 and L-15. Deliveries of ships, submarines and fighter planes from Russia peaked in 2006 and then went into sharp decline. One reason was Russian wariness of Chinese reverse engineering: Stung by China's flagrant copying of the Su-27, the Chinese version is known as the J-11, Russian makers became increasingly reluctant to sell their most advanced technology to Beijing.

MUMBAI: Mahindra Samriddhi, an initiative of Mahindra Farm Equipment, eyes having 600 Mahindra Samriddhi centres and five million farmers under its ambit by 2020, a top company official said. "Mahindra Samriddhi, aimed at helping farmers get the maximum yield from their farms, aims to have around 600 centres and five million farmers under its ambit by 2020," Mahindra & Mahindra's Automotive and Farm Equipment Sectors President, Pawan Goenka, told PTI here. Presently, there are 96 Samriddhi centres pan-India with a strong concentration in Chhattisgarh, Gujarat and Maharashtra. Nearly 70,000 farmers are already being helped by the Samriddhi centres run by the automotive giant's

dealers. Going forward, the company plans to look at business beyond tractors in the form of selling seeds, crop-care materials and other agri-consulting through Samriddhi by making it a stand-alone business, but that is still some time away, "say, five years from now," Goenka said. The Mahindra Samriddhi stall was recently visited by US President, Barack Obama, in Mumbai, and he was impressed by the work done in the Indian agricultural sector. He also interacted with a farmer, Lalit Vairagade, who had been helped by Mahindra Samriddhi to enhance his crop-quality. Samriddhi's concept revolves around helping farmers enhance their yields. It helps them out with soil-testing, planning out their crop and providing them information on how much fertilisers and water should be used, etc. "In other words, we provide overall agri-consulting," Goenka said.

On an average, farmers helped by Samriddhi have reported a 15-20 per cent improvement in their yields after the first year, Goenka said. Mahindra Samriddhi, now operates from Mahindra tractor dealerships and helps them in bonding with farmers in rural areas. The dealers conduct soil-testing for a nominal charge and also sell them seeds and other crop-care materials. Apart from this, many non-Mahindra customers also come to these dealerships and quite a few of them get converted into a Mahindra tractor customer. "Apart from an additional income-stream through sale of seeds and crop-care materials, they also get new tractor customers," Goenka said, enumerating the benefits dealers get from Samriddhi.

21/11/10

NEW DELHI: China may be the biggest contributor to global growth as the world comes out of the recession , but it is India that is at the forefront of creating demand for countries battling slowdown. It was the second biggest net importer of goods and services in 2009, just behind the US, providing a market for countries battling contracting domestic demand. This is important in context of the current debate on global imbalances wherein the role of each country needs to be appreciated and appropriate action demanded. China had a huge net export of $349 billion in 2009, indicating that it was sucking up global demand through its cheaper mass produced goods. In contrast, India imported $69 billion of goods and services in 2009, while the US was a net importer of about $699 billion. This means that India injected demand into the global markets by creating a demand for products, helping in creating jobs and sustaining other economies. "Countries such as US and India are injecting demand into the global demand because we have deficits. Actually, India is second largest contributor to the global net demand. In 2009, India contributed something like 6.5% of the total net injection of demand," said Arvind Virmani, executive director-India , International Monetary Fund . Traditionally India has been a net importer, which earlier was seen as a sign of dependence on other countries. But globalization has changed this thinking as currently India is a big market for exporting nations. "India has provided markets for other countries," said Madan Sabnavis, chief economist, Care.

Most of the industrialized nations have grown to a level where they are net exporters in value terms, as they export high technology objects and in turn import the basic low value products. "Countries like China, Germany and Russia which are withdrawing demand from the system because they have surpluses," Mr Virmani said emphasizing on the need for balance in global growth. Hit hard by the global financial crisis in 2008 most of the developed world is still grappling with the problem of inadequate demand and growth, which is fueling joblessness. They have tried both a mix of fiscal monetary measures to expand their economies to get over the problem. The latest US Feds move to print money to buy $600 billion of government bonds has come under scathing attack from China and some other emerging economies. The decision is expected to depreciate the value of dollar by about 20% over next eight months when this cash will reach markets. China, under pressure from the US for keeping its exchange rate low to make its exports competitive, did not lose much time in criticising the Fed move seen largely targeted at keeping the dollar undervalued. "There is an imbalance in the global economy, which has to be removed if we are to have a sustainable global recovery especially in a period in which there is a huge shortage of demand," Mr Virmani said.

CHENNAI: Procter & Gamble, makers of Maggi noodles and Ariel detergent, is planning to build a manufacturing plant in Chennai, which will be the worlds largest consumer product companys hub for south India. A delegation from the American multinational has held talks with government officials and the due diligence, or detailed evaluation of financial and other aspects, is done, people familiar with the development told ET. While the investment into the venture is yet to be finalised, a company official said the plant will come up either at Cheyyar or Mahindra World City. A P&G India spokesperson refused to comment: As per company policy, we do not comment on speculation. A couple of sources within the company, however, confirmed the news on condition of anonymity. The facility will manufacture liquid detergent and will become an export hub to neighboring markets, they said. This will make P&G the first company to manufacture liquid detergent in the country where the . 12,000-crore detergent market is equally split between washing powder and detergent bars. P&G , which has only 15% share compared to Hindustan Unilevers 37% in the detergent market, is desperately trying to catch up. The company that entered the mass segment with Tide Naturals last year is set to become the first player in the niche liquid detergent. During his visit to India two years ago, Bob McDonald, the global CEO of P&G , said the company is looking at setting up 19 manufacturing facilities globally including India, which has become one of the largest growth markets for international marketers across segments. He had also said that P&G is looking to tap bottom and mid segment of the market for growth. The company is looking to flood Indian market with new products and penetrate into rural market, which has been traditionally dominated by its rival Hindustan Lever. The company recently said that it is looking at tripling its revenues in India within the next three to four years. P&G in India has a combined . 4,500-crore turnover between its three subsidiaries Procter & Gamble Health & Hygiene, Procter & Gamble Home Products and Gillette India . It has seen 30% year on year growth in India. Its focus categories include household care, healthcare and beauty & grooming.

MUMBAI: Mexicos Cemex SAB de CV , the worlds third-largest cement maker behind European giants Lafarge and Holcim, is close to buying the cement business of Nagpur-based Murli Industries for about $550 million. Cemex has made an offer of $550 million after several months of due diligence, said a person involved in the negotiations. However, the price is still being negotiated and the final figure would depend on the outlook for cement prices, the person added. Two other people involved in the talks confirmed that a transaction was imminent but did not comment on other details. The investment-banking unit of equity brokerage Motilal Oswal , which helped Shree Renuka Sugars in its Brazilian acquisition earlier this year, is advising Murli Industries which also makes paper and edible oils along with Macquarie Capital. Bank of America Merrill Lynch is advising Cemex, said the persons involved in the talks and others who are aware of the impending transaction. AM Chandak, chief financial officer of Murli Industries, declined to comment for the story, when reached on his mobile phone. This will be the first major deal in Indias cement sector after 2005 when Swiss major Holcim took control of two of Indias largest cement companies, ACC and Ambuja Cement India. Both companies had a common set of promoters, the Mumbai-based Sekhsaria and the Kolkata-based Neotia families. Earlier, Lafarge and Italcementi, the fifth-largest cement maker in the world, were also in discussions with Murli, according to one of the people. Murli Industries, which has a 3 million-tonne plant in Maharashtras Chandrapur, plans to build two more, one in Rajasthan and the other in Karnataka. The planned new units, with capacities of 3 million tonnes each, would be built in tandem with 50 mw captive power plants. But the company is yet to order any equipment for these plants, according to industry officials. These officials attributed the slow progress to Murlis debt of about Rs 600 crore, resulting in a debt to equity ratio of 2.5:1. Murli Industries is expected to completely exit the cement business through this deal. The deal would value Murli Industries cement operations at an enterprise value of over $180 per tonne as against a replacement cost, or the cost of building a new plant, of $120 a tonne, analysts said. This seems to be expensive for a 3 million-tonne plant with 40% utilisation, said an analyst with an institutional brokerage who did not wish to be named. But foreign cement companies have been willing to pay top dollar to enter India, the worlds second-largest cement market which is growing at close to 10%. In April, Frances Vicat acquired 51% in Andhra Pradesh-based 2.5 million-tonne cement maker Bharathi Cement. The financial details of this deal were not made public, but according to industry sources, the valuation was in the range of $200 a tonne, amounting to a deal size of $500 million. For 2009-10, Murli Industries reported a net profit of Rs 40.30 crore on the back of revenues worth Rs 571.68 crore. Shares of Murli Industries on Friday closed at Rs 78.30 on the Bombay Stock Exchange, down 3.1% from Thursdays close. Its highest in the previous 52 weeks was Rs 117 with a low of 40. Cemex has been aggressive in buying companies in the last five years. In 2005, it acquired London-based RMC Group for $5.8 billion, and later Australias Rinker Group for about $14.2 billion. Cemex, which employs more than 50,000 people, had sales of $15 billion in 2009. The company did not respond to e-mails sent to its corporate communications department. Globally, there is a huge interest in buying

Indian companies, but there are very few sellers here, said a senior investment banker, who did not wish to be named. Cemexs global competitors, Holcim, Lafarge and Germanys Heidelberg, have established themselves in the 270 million-tonne Indian cement market. While Holcim controls about a fifth of the market here through ACC and Ambuja, Lafarge operates a 6.5 million-tonne capacity. The Mexican major was earlier rumoured to be in talks with local companies, including Mehta Groups Gujarat Sidhee Cement. It had also initiated talks with the Birla Groups Mangalam Cement twice between 2002 and 2004. But differences over valuations led to these deals falling through, according to industry sources.22/11/10

NEW DELHI: The fast moving consumer goods market in rural India is tipped to touch $100 bn (around Rs 45,735 crore) by 2025 on the back of "unrelenting" demand driven by rising income levels , according to a study by research firm The Nielsen Company. "The Indian rural market is set to become a USD 100 billion opportunity for retail spending in the next fifteen years," according to a statement released by the company today. According to Nielsen, rural India accounts for more than half of sales in some of the largest FMCG categories. "While the ability of lower priced packs to improve accessibility is known, their pace and presence has been unrelenting," The Nielsen Company India Vice President Prashant Singh said. In addition, premium skin care brands typically associated with the urban population are growing nearly twice as fast in rural areas, he added. At present, rural consumers spend about USD 9 billion per annum on FMCG items and product categories such as instant noodles, deodorant and fabric, with the pace of consumption growing much faster than urban areas, as per the findings. The Nielsen study also suggests that the number of direct-to-home television connections in rural areas is already more than double that of urban centres and growing dramatically. "Today, two out of five new mobile telephone connections are in rural," the statement added. "These findings have wide-ranging, practical implications for creating successful portfolio strategies and packaging formats that recognise these traits and appeal to the rural consumers' senses," Singh said.

NEW DELHI: The government on Wednesday said that state-owned MOIL, which will hit the capital markets on November 26, would become the first PSU to come with a public offer where retail investors can invest up to Rs 2 lakh. "This would be the first issue by a PSU (MOIL issue) where retail investors will be able to invest up to Rs 2 lakh," Disinvestment Secretary Sumit Bose told reporters here. As per the new norms announced by the market regulator Sebi in October, investment limit for retail investors in initial share sale offer has been doubled to Rs 2 lakh as against Rs one lakh earlier. MOIL, formerly known as Manganese Ore (India) Ltd, will hit the capital market on November 26 with a public issue of 3.36 crore equity shares and the IPO would close on December 1.

The government has fixed the price band at Rs 340-375 a share for the issue, which is expected to raise up to Rs 1,238 crore through the share sale programme. The issue has been priced, taking into account number of factors including strength of the company, its management and assessment of its peer firms, Bose said. On roping in anchor investors, he said, "We are not going for anchor investors in this issue. There is adequate demand by FIIs." The IPO will have the Centre divest 10 per cent of its stake in the country's largest manganese manufacturer , while Madhya Pradesh and Maharashtra governments will shed five per cent each. The issue would raise a total of Rs 1,238 crore at the upper end of the price band, including 5 per cent discount to retail investors and MOIL employees. Steel Secretary Pradeep Kumar Misra said that the largest domestic producer of manganese ore was likely to be listed on domestic bourses by December 13. "Tentative date for listing will be 10-12 days after the issue closes," Misra said, adding, "Market for MOIL is fairly assured." "Market should take this issue enthusiastically. We also welcome retail investors. The basic objective of the government of India in disinvesting in PSUs is larger holding of public," he said. MOIL has a total employee strength of 6,734 and its about 3,000 employees have already opened demat accounts. For the half year ended September 30, the company's turnover was Rs 635 crore, as compared to Rs 430 crore in the first half of previous fiscal. Profit after tax for the first half of this year stood at Rs 330 crore against Rs 201 crore in the year-ago period. 24/11/10

NEW YORK: General Motors Co's underwriters exercised their full overallotment option, making the initial public offering of the US automaker the biggest in the world, at $23.1 billion. The underwriters, led by Morgan Stanley, JPMorgan Chase & Co, Bank of America Merrill Lynch and Citigroup Inc, exercised their option on an additional 71.7 million shares worth $2.37 billion. They also exercised their option to purchase 13 million shares of mandatory convertible junior preferred stock for $650 million, GM said on Friday. The US automaker last week raised $20.1 billion in an IPO of common and preferred shares in the biggest US IPO ever. With this full overallotment, GM has now raised $23.1 billion, outpacing Agricultural Bank of China's $22.1 billion July IPO and making GM the biggest IPO globally.

The

full

overallotment

exercise

reflects

strong

demand

for

the

stakes

in

the

company.

Barclays Capital, Deutsche Bank, Goldman Sachs, Credit Suisse and Royal Bank of Canada are GM's other major underwriters. Lazard and Boston Consulting Group served as advisers to the Treasury. Evercore Partners advised GM. The closing for the additional shares is expected to take place on Dec 2.

GM stock rose 32 cents, or nearly 1 percent, to close Friday at $33.80.

BANGALORE: The Mumbai terror attack of 2008 created a term that is increasingly coming into the lexicon of IT outsourcing, ' India plus one'. Some attribute the origin of that term to Forrester Research , which, following the terror attack and the Satyam scandal, recommended that companies should derisk by spreading their outsourcing operations beyond India, to at least one other country. Recently, Hewlett-Packard's VP of enterprise services Robb Rasmussen said in an interview to CIO.com that a lot of HP clients want an India-plus-one strategy. "Historically, they've had a presence in India, but to mitigate risk,they'd like to have some assets somewhere else," he said. Tom Georgens, CEO of storage company NetApp , told TOI last month that the company needed to diversify from India, which is currently its second biggest site, the first being its California headquarters. "There are risks of inflation, the infrastructure may not catch up, and there are any number of things that are beyond our control," he said. India currently dominates the outsourcing market. A survey by Capgemini, in partnership with Harris Interactive, which was released in September this year, found that more than 60% of the US companies surveyed were outsourcing to India. China came in second at 27% and Latin America at 25%. Most estimates indicate that India has well over a 50% share of the total outsourcing market. But current trends suggest this figure will come down. John C McCarthy, VP and principal analyst in Forrester Research, says clients are increasingly looking at an India-plus-one strategy to hedge geopolitical risks. Firms are also seen to need to curry favour with local governments for local licenses and business, and with more and more countries jumping on the offshoring bandwagon and offering themselves as competitive locations, global firms are being compelled to give some of the outsourcing business to those geographies. Siddharth A Pai, MD of IT consulting firm TPI, says many global customers are looking at an I2+1 strategy, two India locations (one a main city like Bangalore or Chennai and the other a tier II or tier III location like Mysore or Noida) and another geography. "Customers today are asking for such combinations. That's because costs are going up in India, and customers want to mitigate geopolitical risk. Besides, alternative geographies are emerging," he says. Amongst alternative geographies, a popular destination is China. Given that many companies are looking at tapping its massive domestic market, offering a share of the outsourcing pie is clearly a way to get the local government to make its entry smoother. NetApp's Georgens said China churns out a number of engineers, and it is a big market. "Though language is an issue, we have to pay attention to China," he said. Forrester recently put out a list of countries that are potential offshore alternatives to India. That list comprises of Argentina, Brazil, Mexico, Eastern Europe (Baltics, Poland, Czech Republic, Hungry, Romania, Bulgaria, Slovakia, Ukraine), Egypt, Russia, Malaysia, Philippines, Vietnam and China.\

CHENNAI: South Korean electronics major Samsung, which has announced Rs 350 crore fresh investments at its facility near here by 2016, is planning to make India its production hub for Middle East and other neighbouring markets in five years, a company official said Friday. Announcing commencement of Samsung's second refrigerator plant in India, J.S.Shin, president and CEO (South West Asia), told reporters: "All our future expansions will be at our Chennai plant. We will invest Rs.350 crore in Chennai plant and five years later, India may be the production hub for Middle East and other neighbouring markets."

Samsung's Indian subsidiary, Samsung India Electronics has signed a memorandum of understanding (MoU) with the Tamil Nadu government to expand its facility located on 80 acres near here to make mobile phones and accessories, consumer electronics and information technology hardware. Queried about the company's plans to develop a vendor base in the state, Samsung India's deputy managing director Ravinder Zutshi said efforts were on in this direction. He said the percentage of local content in the company's products varies from product to product. According to Shin, Samsung's Indian subsidiary contributes around 2.5 percent of the company's global turnover and this is expected to double by 2013. Samsung India posted revenue of $2.2 bn last year and this is expected to go up to $3.5 bn this calendar year. Samsung's global revenue is $116.8 bn. In order to increase its business, Samsung India has decided to design products for the Indian market rather than customising products designed and made in South Korea for the domestic market. The company has set up a five-member product innovation team at Delhi that will work on some product segments, an official told IANS while declining to comment on the products that Samsung India is planning to design and develop for the Indian market. Samsung India will Saturday commission its $75 million refrigerator plant (1.2 million capacity per annum) at Sriperumbudur near here to make frost free (Inspira brand) and direct cool (Pride brand). With the commissioning of the second plant, Samsung India's total refrigerator annual production capacity will go up to 2.6 million units. According to Zutshi, the refrigerator business contributes around $500 million to revenues.

Samsung India also makes flat panel televisions, front loading washing machines, liquid crystal display (LCD) monitors and split air conditioners at its Sriperumbudur facility and refrigerators will get added to the list Saturday. The company has invested in the plant over $100 million since 2007.

The company's other plant is located in Noida near Delhi making all the above products as well as mobile phones.

MUMBAI: Auto giant Mahindra & Mahindra today said it has agreed to acquire 5.5 per cent of IT firm Tech Mahindra's stake from UK-based British Telecommunications Plc (BT). UK's largest fixed-line phone company BT holds 30 per cent stake in Tech Mahindra.

"Pursuant to a proposal received from BT, the company has agreed to acquire 5.5 per cent of the equity shares of Tech Mahindra from BT over time through an inter-se transfer among qualifying promoters at a market related price, in accordance with the SEBI regulations," M&M said in a filing to the Bombay Stock Exchange. Financial details of the deal were not disclosed. M&M will also waiver rights to buy BT's remaining stake in the software services provider, and the agreement will automatically terminate if BT's stake in Tech Mahindra falls below 10 per cent, the filing said. The company has also agreed to consider further proposals from BT in this regard, it added. Meanwhile, M&M share was trading at Rs 759.80, down by 2.75 per cent from its previous close on the BSE.

27/11/2010
LONDON: Some of the leading technology companies such as Google are raising the compensation for its employees, which also reflects the entities' improving business performance. A newspaper reported that some of the world's largest technology firms are lifting pay rates apart from taking other measures to retain employees. This also reflects improved performance in the companies' businesses and heightened competition for workers with the right experience, the report added. "Hewlett-Packard said this week on an internal blog for employees that it would reverse across-the-board cuts to base salaries that had been ordered by former chief executive Mark Hurd in February 2009," the daily noted. According to the publication, Google earlier this month decided to hike the pay of its workforce by 10 per cent while Intel has given message to employees "that bonuses early in 2011 would be the highest in a decade". The newspaper noted that wireless and mobile-device expertise is especially sought after. Internet entities such as Facebook have been recruiting people from Google and other established companies. "Hewlett-Packard's about-face on salary cuts is the most dramatic in some respects, both because of the company's size - it has about 304,000 employees - and because it is one of the first acts by Leo Apotheker, who took over as chief executive in September," the daily said. In the wake of the global financial meltdown in 2008-09, many companies had resorted to layoffs and salary cuts, as part of efforts to bring down costs.

NEW DELHI: Indian technology companies are growing in confidence. New brands are launching thick and fast, determined to take on established Western names with help from cheap Chinese factories. Many of them have made significant inroads into the rocketing mobile phone market in India, and others already have their eye on bigger prizes in the international tablet computer and PC industry. The boss of Bangalore-based Notion Ink, Rohan Shravan, is a man in a hurry. The fast-talking 25-year-old cofounded the group three years ago and will start taking orders for his "Adam" tablet computer within weeks.

Shipping of the sleek iPad wannabee to the United States and Europe could begin at the end of the year, with domestic sales starting soon after. "What we want to do is set a standard in the international market with the Adam," Shravan, a graduate of one of India's prestigious technical universities, told AFP. "There's going to be exponential growth for us," he said, adding that an updated version of the device was already in development. Elsewhere, electronics group Olive and online Indian shopping site Infibeam -- which models itself on US-based Amazon, even down to its very similar logo -- have both launched their own tablet computers. Amazon has other admirers in India and the concept of its top-selling e-reader Kindle, designed specifically for reading books and magazines, has also been copied by another ambitious Bangalore-based company, EC Media. In August, it launched Wink, which is about 40 dollars cheaper than the Kindle in India, though it has received mixed reviews. EC Media has signed up deals with local publishers to supply books in English as well as 15 vernacular languages -a key part of their sales strategy. "We thought that even though the market is not there yet, if you are in the market then it has good scope for growth," Pradeep Palazhi, chief operating officer, told AFP at a launch event in New Delhi. "Wink is designed for the Indian reader. The Kindle is available here, but it's still dependent on the US store," he said.

In the mobile phone sector, competition is fierce and the impact of Indian companies could presage developments in other parts of the electronics market, where demand is being driven by India's rapidly expanding economy. Rising incomes, access to credit, and the falling costs of technology mean sales of electronic goods are booming across the country. In the mobile sector, Indian brands Micromax, Lava, Spice, Karbonn and Zen have mushroomed over the last 12 months, grabbing share from Nokia through aggressive marketing and products adapted for the local market. In a study published in September, research firm IDC estimated domestic handset makers had grabbed a market share of 33 percent from just 0.9 percent two years ago. Their road to success, like everyone else's in the electronics sector, reaches back into China where large-scale, hitech and cheap contract manufacturers have been tapped as suppliers. Though relations between the two Asian superpowers are prickly at a diplomatic level, collaboration between India's skilled software engineers and device designers and China's factories is developing at pace. "There are vendors in China that can do just about anything you want," said Amit Aggerwal, respected Indian technology writer and chief of the Digital Inspiration blog.

"You give them the price they are asking for and you get a product ready to go to stores. "If you have an idea, getting it executed is quite easy now, so that's helping a lot of vendors," he added.

Shravan from Notion Ink said getting his devices manufactured in India made no sense because production capacity is small, meaning prices are high, and factories lack the latest hi-tech equipment. "China is the one that has invested in nano technology. They have the scale," he told AFP. He says he would like to see his devices being assembled in India -- mobile phone firms such as Micromax and Nokia already have such facilities -- but manufacturing will not be a possibility for the "next five to ten years". "It takes a lot for the investment in the infrastructure in electronics," he said.

Consultancy Frost & Sullivan recently carried out a study of the Indian electronics market and concluded that the country had good prospects for manufacturing in several product areas. Mobile handsets and mobile phone base stations have potential, as well as computer desktops and laptops, memory products and screens for televisions and computer monitors, Frost said. Ameya Dalvi, editor of consumer electronics website techtree.com, says many in the industry expect a tablet PC boom after the success of the Apple iPad, which could present Indian companies with an opportunity. He says the mobile phone market has shown how Indian brands are capable of challenging international groups in the low-end mass market once demand has been established. "Indian companies are not pioneers. They'll wait, watch and then jump in at the right time if the market is sizeable," he says.

BANGALORE: Westside , the flagship retail chain of Tata Groups Trent, will add a gourmet food section and launch premium labels through designer collaborations and international licensing deals to take on peers such as Shoppers Stop and Lifestyle that are pulling away increasingly affluent consumers. We had been slipping towards the lower end of the middle band over a period of time but are now climbing back, says Westside COO Gaurav Mahajan . We do not want to vacate our current positioning by alienating existing consumers but want to spread upwards, he adds. The chain is already test marketing an upmarket food section, Gourmet West, in Mumbai. A first in the lifestyle retail segment in the country, Gourmet West sells packaged vegetables and will soon add a sushi, cheese and wine counter to upgrade the experience of its consumers and increase frequency of their visits. Industry analysts and officials say Westside has been lagging in terms of product innovation and fashion element in recent years when a slew of players Reliances Trends and Landmark Groups Max at the value end; Pantaloon in the mid-market segment and Shoppers Stop and Lifestyle in the premium market piped up competition in the lifestyle retail chain space. Westside has been a conservative company compared to players like Lifestyle and Shoppers Stop, which expanded quickly between 2005 and 2008, says a top retail executive, on condition of anonymity . Westside is the oldest and largest of Trents businesses that also include Star India Bazaar hypermarkets and Landmark book and music shops. Started in 1998 after Tatas acquired British retail chain Littlewoods and renamed it Westside, the lifestyle chain now has 49 outlets across 28 cities in India. Between financial year ended 2008 and 2009-10 , Trents stand-alone (largely Westside) revenue grew 8.6% to Rs 542.60 crore against Shoppers Stops 30% growth to Rs 1, 478 crore. However, Westside is ahead in profitability

because

85%

of

its

merchandise

is

in-house

brands.

Experts say Westside has lost out on sales productivity (due to lower ticket values) and footfalls in the past few years.

Westside started out with a great model of private brands but as competition increased they entered fast-selling categories such as watches and cosmetics , which were in most cases managed by third parties. The look and feel then became inconsistent with the overall format, says the retail executive. The chain wants to turn that around. It has signed up London-based retail design consultants Fitch to spruce up its store appeal. The shelf life of store design is 5-7 years. That is something we have not done for a very long time. We are in the process of jumping a few levels to catch up, says Mahajan. Westside is also tweaking its merchandise mix to suit micro locations. In its revamped Chandigarh outlet, for instance, a catchment with a high affinity to premium brands, Westsides private labels have lent more space to brands Vero Moda, US Polo, Ed Hardy and Chicco. The chain will open 11 large-format stores this fiscal and plans another 15 next fiscal to cash in on the boom in consumption, driven by rising incomes, booming economy and increased aspiration levels of a young consumer class. Westside is also signing exclusive licensing agreements with international brands such as Aerology in footwear to quickly advance into higher price points. There are lots of niche international brands that are looking at being housed inside a department store rather than on their own in India as quality real estate is very expensive, says Mahajan. It has tied up with designers such as Wendell Rodrigues and Priyadarshani Rao and introduced premium in-house brands, Ascot for men and Nuon to drive this premium positioning.

THIRUVANANTHAPURAM: If you've noticed a huddle around the food and fashion counters at large-format retail stores, take that as a trend extending across the country. It is barely a decade and a half since FoodWorld brought branded and organized food retailing into the country in 1996, but two verticals - food and apparel - seem to driving the overall India retail story on a fast clip. "Over the last 14 years since organized retail came to stay in India, the market has seen a euphoria and then a year of despondence in 2008-09, and then a reinvention in 2010. The industry is still young, considering that many countries took four decades to have a mature retail industry. What is perceptible, though, is that the food vertical is showing a sharp increase, propelling the organized retail format in the country", says K Radhakrishnan, president of Future Fresh Foods, part of the Future group. "After the setback in 2008-09, retailers are careful in rebuilding business, but the demand for food is distinctly adding volumes to the overall retail business", says Radhakrishnan. Former head of Walmart's India operations, Jagannath P, who has launched the Posh fashion brand, sees a similar boom in apparel and fashion retailing, with the demand picking up across small towns in the country, from Puri to Palakkad and Meerut to Mangalore. Radhakrishnan, who shared his views at the UST Global retail week, said eight top cities in the country accounted for 35% of the total income, 2,500 rural pockets accounted for another 35%, and the remaining 30% was shared by other towns in the country, thus providing a wide geographical base for retail to tap into.

Radhakrishnan said food was the vertical that showed the quickest offtake, and that the demand was so strong and genuine that the ongoing food inflation could be attributed to this phenomenon. "With bigger disposable incomes, consumers are upgrading themselves on food quality, distinguishing between Kashmir and Washington apples, and moving up from oil to ghee", says Radhakrishnan. He said this held the potential for a strong incentive for bigger production and investments in the farm sector, and a focus on mechanization and technological innovations. For food retailers, the challenges will lie in transportation logistics and wastage management. "Every state in the country has its diversity, and on the transportation front, too, there is some way to go, in terms of better roads, check post clearances, and refrigerated trucks, and innovation in areas like carton design will help enhance the margins", says Radhakrishnan. 1/12/10

NEW DELHI: The countrys economic growth is expected to remain strong despite sluggishness in the manufacturing sector as a rebound in agricultural output is expected to support overall growth. Growth in the key farm sector, which accounts for nearly 17% of the nations GDP, has been a concern for policymakers for the past few quarters. But, healthy monsoon has raised expectations of strong farm output during July-September 2010. In addition, the arrival of fresh crops has helped ease inflation to some extent though the overall price situation still remains worrisome at 8.58% in October. Official GDP data for the second quarter of the current financial year (2010-11) will be released on Tuesday. A quick survey of economists showed the economy probably grew around 8% during this period, with estimates ranging between 7.3% and 8.4%. Most economists said the farm sector will record strong growth during the quarterranging from 3.5% to 4%. While the expected Q2 GDP growth is lower than 8.8% in the first quarter, the forecast is in line with the governments calculations. Chief economic adviser Kaushik Basu had earlier said the economy would grow at under 8.8% in the second quarter, before gathering steam again in the third quarter. But for economists, as well as policymakers, industrial production is a concern with growth rate decelerating in recent months. During September, the sector grew by 4.4%. What is even worrisome is the slowdown in imports, which indicates that the growth in raw material and inputs for the manufacturing sector has not been significant. The government is keen on a strong show by the industrial sector, which accounts for around a quarter of the economy, as it is a large employer. Investment in the manufacturing sector is not picking up, said Sujan Hazra, chief economist at Anand Rathi Securities . High inflation, rising interest rates and faltering global economic recovery are factors impacting investments, economists said. Shubhada Rao, chief economist at Yes Bank , said the second quarter of the 2010-11 fiscal year may see some moderation in non-farm GDP but it will be offset by strong farm output and help the economy clock 8.5% growth. The government expects the domestic demand driven economy to grow by 8.5% in 2010-11. Consumption, both in urban and rural areas, remains strong. Auto sales, demand for home appliances, telecom subscriber additions and cement production have been on an upswing. On the consumption front, trends in rural consumption are supported by the Employment Guarantee Act. We see the National Rural Employment Guarantee Act as positive for rural incomes, raising risktaking abilities for the rural segment, Rohini Malkani, an economist at Citigroup , said in a research note. Evidence suggests that the

governments rural jobs scheme has helped raise purchasing capacity in villages. But inflation remains the dominant concern for the Indian economy. RBI has raised interest rates six times this year to check high inflation, but economists say RBI will remain watchful, considering the strong growth momentum and the uncertain global economic scenario. D K Joshi, chief economist at ratings agency Crisil , said overall growth will remain strong but there are several challenges ahead. Inflation, pace of global economic recovery and debt problems in Europe are the key factors which could impact growth in the months ahead. If inflation does not come down, monetary

BANGKOK: Honda Motor Company showcased Brio compact car at the Bangkok Motor Expo on Tuesday, the smallest and the cheapest in its portfolio, that is expected to cost less than . 5 lakh . The Brio could turnaround Japanese carmakers Indian operations, which has reported flat sales in the current fiscal, even as the domestic market grew 33%. Brio (originating from the Italian meaning energetic ) is likely to come with a 1.2 litre small engine that is expected to deliver fuel efficiency of around 20km/litre, close to Eco-Car another variant of the same car that would be sold in Thailand from March 2011 onwards. The Indian variant would hit the market around the festive season of September-October and would have high local content of around 80%. It would be pitted against other popular compact cars like the Volkswagen Polo, Maruti Swift and Hyundai i20 in India, which has emerged as the fastest growing segment in the Indian market. Honda sales increased merely 3% to 35,460 units in April to Oct this year. The Indian market is detrimental for the Honda's global operations. Brio would be the first car in the compact segment and has been developed keeping in view the Indian customer needs of space, comfort and high fuel efficiency. While the car would hit the Indian market next year, we are looking at expanding our local operations to match up for the Brio that would have large number of components made indigenously by Honda itself or by utilising its local vendors . We would exploit our bike and scooter manufacturing experiences to control production costs of Brio and keep it competitive for the India market, Honda Motor Company President & CEO Takanobu Ito said at Bangkok Motor Expo. Honda, which is the largest two wheeler maker in the world both by volume and turnover controls over 65% of the Indian two wheeler market with two subsidiaries. The fully owned Honda Motorcycle and Scooter India and the equal joint-venture with Munjal family of the Hero Group where it has a 26% stake. It also has two car plants operated through another joint-venture subsidiary, Honda Siel Cars India , which operates a plant at Greater Noida utilised for manufacturing popular sedans such as City and Civic while the second plant in Rajasthan is largely utilised to make automotive components. The company is looking at expanding its operations at the Rajasthan plant where a large number of critical engine spares for the Brio would be manufactured. We would be utilising the free trade agreement with Thaliand go export and import component. We have identified many critical spare parts that would be made at the Rajasthan plant and exported to our Thai

subsidiary,

Ito

added.

Honda has embarked on a expansion strategy to cash in the world's second-fastest growing car market . Its entry into the small-car segment with Brio comes after Jazz, a bigger hatchback, failed to log impressive sales. Launched in June 2009, Jazz was expected to sell around 1,000 units per month. However , its tag of around . 7 lakh (ex-showroom Delhi) made it too expensive for users who preferred other cars like Hyundai i20 and Maruti Swift, which are at least . 2 lakh cheaper. (The journalist is on a visit to Bangkok on the invitation of Honda Siel Cars India

PARIS: Aircraft manufacturer Boeing eclipsed European rival Airbus in net orders this year to the end November, when the US giant had received 484 against 388 for Airbus, data showed on Thursday. Airbus said it had received 440 orders overall, of which 52 were cancelled.

Boeing had 565 overall orders, of which 81 were cancelled as of November 23, according to figures on its website. Airbus did outstrip Boeing in terms of deliveries, with 461 since January against 386 for Boeing.

2/12/2010
Julia Roberts embracing Hinduism may not exactly be the best case study for reverse innovation, but 20 years after yoga and ayurveda went global, a medley of products built on Indian innovations are slowly finding their way into world markets. Ford and Toyota want to sell their India designed low-cost cars globally, Nestles high-nutrient and low-cost variant of Maggi noodles, a `2-a-packet product developed for the rural poor in India and Pakistan, is on its way to Australia and New Zealand, and General Electric , one of the early practitioners of reverse innovation has been making cheaper, stripped-down versions of its ECG and ultrasound machines in India and taking them to world markets. The list is long and growing Kentucky Fried Chickens (KFC) Krushers, a range of beverages developed here with a unique combination of chocolate, cookie bits, coffee, dairy and ice, a nifty learn-to-speak-English mobile phone application from Nokia, Pepsis Kurkure and Nimbooz, McDonalds Aloo Tikki Burger are among the innovated-inIndia value-for-money products that are now being sold to millions of global consumers. Innovation from India has moved on from culture (ayurveda and yoga) to packaged consumer goods and now to manufactured things such as the Tata Nano or the Swach (low-cost water purifier), says R Gopalkrishnan, executive director, Tata Sons. This is the tip of the iceberg, we are going to see a lot of innovations going out to developed markets from India, says KFCs marketing director Unnat Verma. In fact, Xerox has employed researchers in India to scout for inventions and products from start-ups here that it could use in North America. The company calls them innovation managers. Why the rush? Two reasons. First, multinational companies and global consumers are both hunting for value in the immediate aftermath of the worldwide recession. Slow growth in developed markets after the great recession is encouraging innovation in emerging markets, says Vijay Govindarajan, a leading expert on strategy and innovation and the founding director of the Center for Global Leadership at the Tuck School of Business at Dartmouth College. Historically, MNCs designed products in developed markets and adapted them for the rest of the world the

technology came first, the pricing followed. But reverse innovation or trickle-up innovation refers to the opposite. It refers to low-cost, but high value products developed primarily for emerging markets that eventually graduate to the developing world. The technology is tailor-made with an affordable price in mind. Multinationals are changing their business strategies: If any innovation helps reduce operational and manufacturing costs, it will go global. There is a permanent shift in consumer behaviour; there is a lifestyle change not to overspend and to seek the same value at lower prices, says KFCs Verma. Second, Indian innovation and frugal engineering skills are being taken seriously. The Nano, despite its many initial troubles, is seen as a breakthrough innovation that could eventually be launched as an upgraded version in developed markets. STOCKHOLM: Swedish car maker Volvo and its new Chinese owner Geely are in talks over new plants in China, a Volvo spokesman said Friday, amid a report that Volvo and its owner were at odds over expansion. Geely, which acquired the Swedish car maker from US giant Ford in August, said in September it planned to increase Volvo sales to 300,000 cars a year in China alone. Company chairman Li Shufu said he wanted three new Volvo plants in China to produce that volume. But Volvo's management wants to hold off on expansion for now, the Financial Times said Friday. Members of Volvo's Gothenburg-based management "will not decide about investing if they don't have a business case with black figures and good margin," a person familiar with the discussions the British newspaper. The person described the discussions as "heated, not acrimonious."

Volvo spokesman Per-Aake Froeberg said on Friday that Volvo and Geely were in talks over expansion in China and that management would take a decision on "the first step of localised production in China ... within a couple of months." "It's a natural thing that there are discussions about such an important matter as the Volvo car strategy for China," he said. When Geely and Ford closed Volvo's purchase in August, Li said Volvo would "remain true to its core values of safety, quality, environmental care and modern Scandinavian design." He added the brand would strengthen the existing European and North American markets and expand its presence in China and other emerging markets. Li "has a very strong belief in the future of Volvo in China and has a vision of up to three factories over a long period," Froeberg said. "That doesn't mean that he thinks decisions should not be based upon a firm and sustainable business plan," the spokesman said. Volvo already builds its S40 and S80 models in China, through a partnership between former owner Ford and China's Chang'an. The brand is set to sell around 30,000 Volvos in China this year, half of which are imported. Chinese state media said in October that China -- itself the world's largest auto market -- had become the third largest market for Volvo.

MUMBAI: Microfinance lending activities across the country will be "dead, absolutely" by January 1 unless banks release fresh credit to the cash-strapped sector, an umbrella body representing MFIs said today. If the current severe credit crunch continues till the end of December, "There will be no microfinance in 2011... Come first January, we are dead, absolutely... it will be finished," the president of the M-Fin Network, Vijay Mahajan, told reporters here today on the sidelines of the annual Bancon 2010 banking conference. Bank funding for MFIs has completely dried up ever since the Andhra Pradesh government issued an Ordinance to curb the activities and coercive recovery practices of certain lenders charging high interest rates, which were blamed for a spate of suicides in the state. The ordinance has led to massive defaults by borrowers in AP, forcing the industry to stop issuing fresh advances, Mahajan said, adding that the industry is now worried the trend will spread to other states. Mahajan said over 90 per cent of borrowers in the South Indian state have not been paying their EMIs for over a month now and it is only a matter of time before the news spreads to other parts of the country. "In the villages, news spread fast and since we have stopped fresh lending, people have come to believe that we are in crisis and so why to pay up?," Mahajan said, adding that this has aggravated industry's troubles. "Our (MFIs) total outstanding with banks is Rs 24,000 crore and we pay them about Rs 1,000 crore monthly. A substantial part of this is from AP and as of now, we are diverting the money from the rest of the country to repay their debt," Mahajan said. A dejected Mahajan criticised former Andhra Pradesh Chief Minister and Telugu Desam Party head Chandrababu Naidu for spearheading a campaign against the microfinance sector. This prompted the state government to issue the ordinance, he said. AP is the biggest market for MFIs in India, contributing over 35 per cent of the industry's revenues. It is also the state where microfinance lending first took off. The country's sole listed MFI, SKS Microfinance, is headquartered in Andhra Pradesh.

3/12/2010
NEW DELHI: Indian consumers buying binge, the envy of the rest of the world, could be a source of trouble if the government fails to take preventive steps, warns an influential report. Indias high domestic demand, with all its possibilities, has some potential perils, the key one being a return of boombust cycles, says leading global financial institution Goldman Sachs in a research note. However, there are few takers for this pessimistic view. The crux of the problem, according to the report authored by Tushar Poddar, is that strong domestic demand has resulted in a surge in imports and the country is increasingly relying on short-term inflows to finance it. The trade deficit or excess of imports over exports, during April-October period was $72.8 billion. The figure for the entire fiscal year is expected to cross $130 billon, approximately a tenth of Indias gross domestic product (GDP). Indias current account deficit has risen to unprecedented levels and may rise further, the report notes, adding that by FY2012 it may touch 4.3% of the GDP, higher than the level in 1991 when the country was facing a balance of payments crisis.

The risk in a scenario of domestic demand-driven growth is that a surge in capital-chasing growth and yield could drive asset and commodity prices higher, causing the real effective exchange rate to appreciate. This will further erode exports competitiveness, increasing the current account deficit further, particularly if commodity prices were to rise. In such a situation, a sudden reversal of capital flows can wreak havoc with bonds and equity markets, which can spill over to broader economy and derail growth, the report says. The key risk to the economy is of a boom-bust cycle reminiscent of emerging markets in 1980s and 1990s, the report says, adding forex reserves appear adequate as of now but the cover may drop sharply. Indias forex reserves of $265 billion can cover about 12 months of imports, but in the Goldman Sachs scenario for 2012 this could cover only six months imports. The GDP numbers for July-September showed private consumption rising 9.3% from a year ago and its share in GDP was 60.6%, making India a domestic demand-driven economy. There is some concern in the government as well, particularly after the emergence of fresh trouble in Europe. We are watching the developments in current account deficit carefully. It is true that this year deficit will be wider. But capital flows are adequate. So I dont expect a problem, Montek Singh Ahluwalia , Deputy Chairman of Planning Commission, had said recently. Pronab Sen, principal adviser to the apex planning body, says the current situation has to be seen in the right context. Last year when the world was going through a recession India was still growing at a fair clip, which meant that the exports declined but imports continued to grow, he said adding that as the world economy recovers exports will pick up and the scenario will change. We have to remain guarded against major global disruptive events, said Sunil Sinha, head of research at Crisil, adding that growth momentum can help India absorb shocks easily as it would keep capital flows steady. While this may be true, the nature of flows could be a problem if there is some turbulence. The report points out that the deficit is being financed by non-FDI, short-term flows that can go out quickly. It notes outstanding debt with a maturity of less than 1 year has risen to $115 billion, 42% of the gross reserves. Rajiv Kumar, DG of Ficci, says the nature of import demand suggests there was no need for worry as India was importing investment goods.

NEW DELHI: The International Monetary Fund (IMF) on Thursday cautioned India that its economy growing at a faster clip than the current level could aggravate inflation. IMF Managing Director Dominique Strauss-Kahn said if economy grows faster than the current pace, it could could create some risk in current account deficit situation as well. Observing that no one is certain when another crisis will hit the global economy, Strauss-Kahn also advised the government to use the higher tax collections for fiscal consolidation. Amid media reports that Planning Commission Deputy Chairman Montek Singh Ahluwalia may in the race for the top-most position in IMF, Strauss-Kahn said he favoured someone from outside the US and Europe to head the multilateral agencies --International Monetary Fund

(IMF)

and

the

World

Bank.

He met Prime Minister Manmohan Singh, Finance Minister Pranab Mukherjee and senior officials and industry leaders during his one-day visit to India. On the issue of sustained capital inflows, the he said the foreign money will help India improve its infrastructure. "The forecast we had in the IMF is exactly what you are following now which is probably the maximum that the Indian economy can provide these days so you are running as fast as you can. More will be probably too much because more will create some risk on inflation side, also on current account side," Strauss-Kahn said. The remarks assume importance in the back of India recording 8.9 per cent growth in the first half. The government is likely to revise upwards its growth projection for this fiscal from 8.5 per cent. "We had earlier given a projection of 8.5 per cent. We will revise it. It is very very likely that it will be revised a little bit (upwards)," Chief Economic Adviser Kaushik Basu said on sidelines of interactive session with the IMF head. On the other hand, inflation has also started coming down. Food inflation has softened to single digit after four months to 8.6 per cent during the week ended November 20. Overall inflation has also declined to 8.58 per cent in October from 8.62 in September. India's current account deficit, representing net flow of income out of the country barring capital movements, surged three-fold to 13.7 billion dollars in the April-June quarter over the same period last year. On fiscal consolidation, IMF Chief said, "The main challenge is to use fruits of high growth to come back to fiscal side. It is time to maintain fiscal buffer because you don't know when will another crisis will come." He said one of the lessons of this crisis is very clear-- that is the value of fiscal space. "That is very important for India because India's commitment to ambitious medium term deficit and debt reduction target is very important," he said. India's fiscal deficit targets went awry after the government gave a stimulus to insulate the economy from the impact of the global financial crisis.

The country's fiscal deficit more than doubled to over 6 per cent in 2008-09, as against the 3 per cent limit stipulated by the Fiscal Responsibility and Budget Management Act. The following year, the fiscal deficit crossed 6.5 per cent. After a partial roll-back of the stimulus, the government now expects the deficit to come down to 5.5 per cent this fiscal. Lauding India's approach on capital inflows as the right one, Strauss-Kahn said it will stimulate investment in infrastructure, which requires a whopping USD 1 trillion in the 12th Five-Year Plan (2012-2017). "So in my view, the Indian approach (on capital inflow) is the right one... so the capital inflows may prove even more useful (for infrastructure development)," Strauss-Kahn said. Amid reports that Ahluwalia may be among probables to head the IMF, he said, "Let us be candid. I think the so- called agreement between the US and Europe, whereby the IMF head was European and World Bank President was an American, is over. "So I think it would be just fair that the next leaders of the two institutions will come from somewhere else in the world," he said. The IMF Chief termed the debt problem in Ireland as serious, but exuded confidence that it would be fixed after European governments agreed on a plan to bailout the country. He also said though IMF did not forecast a double-dip recession, the possibility cannot be ruled out completely. Strauss-Kahn, who has served as France's Minister of Economy, Finance and Industry, did not give direct reply to a question on whether he would contest the next presidential poll in France. However, the IMF chief did mention that he does not give much significance to opinion polls, which have shown that Strauss-Kahn is more popular than incumbent French President Nicholas Sarkozy, who is facing social and political unrest over his pension reforms.

NEW DELHI: India's largest hospital chain, Apollo Hospitals Enterprises , plans to hive off its pharmacy retail chain ,

top

company

official

said.

The company is weighing the option of either a strategic sale of up to 49% stake or listing the unit, Suneeta Reddy, executive director-finance told reporters on the sidelines of industry body CII event on Thursday. A t present, Apollo Pharmacy is part of the listed parent company and has over 1,200 pharmacies. The business is growing at around 36% annually and is expected to post revenues of Rs 650 crore this fiscal. Apollo plans to add another 300-400 pharmacies next year. We would have to hive it off at some point," Shobana Kamineni , executive director (special initiatives) told ET. She said the pharmacy business has attained a critical mass and the stake sale would help it scale up the business, "We are looking to grow the company and wealth of shareholders." The company scrip closed at Rs 508, up 4.54% on the Bombay Stock Exchange on Thursday . She said the company would ideally like to execute its plan once there is a clarity on allowing foreign direct investment in multibrand retail. There are just a handful of pharmacy chains in the country such as Religare Wellness and Guardian Pharmacy. The Rs 42,000 crore Indian drug retail marketis dominated by over 5 lakh standalone chemists.

BEIJING: China has thrown open its health sector to foreign direct investment, inviting hospitals abroad to open their branches in the country, apparently to meet growing demand for medicare in the world's most populous nation. In its new policy, Chinese government said the health sector would be opened not only for private sector but also for investment abroad to meet the increasingly diversified demands on health care. The official guidelines carried by the state-run media said that overseas investments are now welcome to sponsor hospitals, while the procedures will be further simplified. The central government or the State Council asked the local governments to amend their documents accordingly and get rid of any policies that impede the development of non-governmental medical institutions. Also, the new policies encourage social funds to take part in governmental hospital reforms and convert some government-backed hospitals into non-governmental institutions to reduce the ratio of public hospitals, official Xinhua news agency reported. China will deepen the opening-up of medical institutions and turn the overseas-invested medical sector from the "limited (towards foreign investment)" category into a category that allows foreign investment, it quoted an official as saying. China will gradually cancel limits on the caps of shares for foreign investors in the jointly invested medical organisations, and solely foreign invested medical units will first be piloted and then gradually expanded, the official said. To achieve this, China will simplify the approval processes in opening hospitals.

According to the new guidelines, the provincial governments, instead of state authorities, will be able to approve jointventure hospitals, but the opening of solely foreign-owned hospitals will still be approved by the Ministry of Health and the Ministry of Commerce, he said. The news policy was announced as the public health system struggled to cope with complaints that the medicare was turning out to be the most costliest.

These policies are part of China's new round of medical reforms launched last year and the moves were expected to raise efficiency for investors in medical institutions, Liu Guo'en, a professor with the Guanghua Management College under the Beijing University. 5/12/10

To train its future leaders, General Electric has rising young stars study and visit an array of different organizations, from Google to West Point . What can managers at the 132-year-old industrial giant learn from Google? A corporate mindset that prizes constant entrepreneurship, says Jeffrey R. Immelt , GEs chairman and chief executive, during an interview at his corporate headquarters in Fairfield, Conn. And what wisdom is on tap at the US Military Academy? Adaptability and resiliency amid uncertainty, says Immelt skills as vital to surviving in business as they are on the battlefield. Strategies are useful, he says, but only if they can quickly adjust to nasty real-world surprises. In the words of the great philosopher Mike Tyson, Immelt says, smiling, everybody has a plan till they get punched in the mouth. Perhaps no company outside of the banking sector was hit as hard by the financial crisis as GE, certainly none that seemed healthy before the economic tailspin. Its big finance arm, GE Capital, long a cash machine that bolstered the mother ships bottom line, became an albatross, threatening to pull down the entire enterprise. GE cut its dividend for the first time since the Great Depression, lost its triple-A credit rating and hastily arranged a $3 billion investment from the billionaire Warren E. Buffett. Having skirted disaster, GE is recovering gradually these days. Its finance unit is on the mend, with the size of its debts and troubled loans trending downward. Mind you, middling recoveries are a relative matter at GE. After all, the company remains a colossus on track to deliver profits of more than $10 billion on sales of about $150 billion this year. But investors are used to getting more from GE, which earned $22 billion on revenue of $173 billion in 2007. So GE has revamped its strategy in the wake of the financial crisis. Its heritage of industrial innovation reaches back to Thomas Edison and the incandescent light bulb, and with that legacy in mind, GE is going back to basics. The company, Immelt insists, must rely more on making physical products and less on financial engineering a path that, he insists, is also necessary for the US economy as a whole. Immelt candidly acknowledges that GE was seduced by GE Capitals financial promise the lure of rapid-fire moneymaking unencumbered by the long-range planning, costs and headaches that go into producing heavy-duty material goods. Other industrial corporations were enthralled with finance, of course, but none as much as GE, which became the nations largest nonbank financial company. The big buildup of GE Capital occurred during the tenure of Immelts famous predecessor, Jack Welch. But while Immelt, who took over in 2001, spun off the units insurance business, he also bulked up on commercial real estate and other loans. In 2004, GE even bought a subprime lender in California, WMC Mortgage, which it shed in 2007 for a $1 billion loss. In the buoyant years before the credit crisis, the companys finance arm contributed nearly half of GEs overall profits. When Immelt had qualms about the units risks, he sought outside opinions, including ordering up a study by the consulting firm McKinsey & Co. in 2007. Sixty days later, the consulting team, he says, told GE that money from nations with a trade surplus, like China, and sovereign wealth funds, among other investors, would provide enough liquidity in the financial system to fuel lending and leverage for the foreseeable future. (McKinsey declined to comment on the study.)

Immelt

and

his

advisers

had

plenty

of

company

in

missing

the

gathering

storm.

But clearly, Immelt concedes, GE Capital was too big in the context of GE. Going back to the early 1990s, he explains, anticipated returns not so much market expertise guided investment decisions. If a deal looked like a money spinner, he says, it got the nod. And you dont have to build a factory, he adds. Today, the financial unit is becoming smaller and focusing on fields where GE believes it has a competitive advantage. Those specialty areas include industries in which GE has a strong manufacturing presence, like power generation, aviation and health-care equipment, and lending to midsize industrial companies. Unless a deal is in a business where GE has distinctive skills, Immelt says he wont let GE Capital dive in. Were not going to do it, whether there are supernormal returns or not, he says.

Hes most animated talking about heavyweight products that take patience and piles of cash to develop, weigh tons and last for years next-generation jet engines, power turbines, locomotives, nuclear plants, water-treatment systems, medical-imaging equipment, solar panels and windmills. Immelt notes, for example, that the cost of a goodsized solar-panel plant, about $70 million, is more than twice the total investment in Google in the six years before it went public in 2004. The costs and complexities of such businesses, he adds, make it hard for just any company to compete. These are markets, he says, that have big moats. Theyre tough to get in. The big-moat businesses can also be quite lucrative. Immelt points to GEs jet-engine business as an example, saying that it has higher profit margins and returns on capital than the leading banks. It doesnt happen every quarter or every year, he says. But over a 10- or 20-year time period, the businesses that are hard to do had the best returns. So the arithmetic works over time. Technology-based manufacturing of all sorts, Immelt says, has to be a central part of reinvigorating the economy. In speeches and position papers, Immelt, a member of the White Houses Economic Recovery Advisory Board, has called for doubling manufacturing employment in the United States, to 20 percent of the work force, which he concedes is an aspirational goal.

LONDON: Global power systems firm Rolls-Royce today said it has won new contracts worth over USD 110 million for energy projects in India, Europe, Africa and the Middle East. "We are pleased to announce these new contracts, which demonstrate the confidence customers have in our product technology and performance," Rolls-Royce, President-Energy Andrew Heath said in a regulatory filing to the London Stock Exchange . As part of these contracts, Rolls-Royce will deliver both power generation and pipeline transmission products and services in the afore-mentioned territories. The project entails supply of two RB211 gas turbine power generation packages to the Total Oil Company to provide power to an oil facility in the Middle East, according to the company. Two additional RB211 turbines, would be supplied to Slovensky plynarensky priemysel for their gas transmission network in Central Europe. Besides, Rolls-Royce would also provide Bergen reciprocating engines to customers in Tanzania, Madagascar, India

and Spain to efficiently generate electricity. In the energy markets, Rolls-Royce has supplied more than 15,000 units to customers in nearly 120 countries and is investing in new products and capabilities for the oil and gas industry and for distributed electricity generation, the company said

After a series of acquisitions in India and abroad, Godrej Consumer Products (GCPL) has become the largest Indian owned FMCG company. Last week, GCPL added two more brands, Swastik and Genteel, to its portfolio. It is poised to become a Rs 4,000-crore multinational consumer goods company. ET Intelligence Group caught up with P Ganesh , CFO of GCPL, to know more about the companys future plans. What are the synergies behind your latest acquisition of two brands?

Genteel is the second-largest brand after GCPLs Ezee in the liquid detergent category. Swastik gives us access to a very niche category of hair care. Using GCPLs strength, we are confident of taking these two brands into their next phase of growth. The acquisitions would allow GCPL to extract significant revenue and cost synergies. The acquisitions are financially accretive. We cannot share the deal price owing to the confidentiality agreement in the transaction. But the sales turnovers of these two brands this year are Rs 25-30 crore. In the past few years, the company has adopted an aggressive inorganic growth strategy. What has prompted this? This has not been unique to us. Earlier, investments used to happen in India, but now companies are going out for investments. In the past few years, we have seen a lot of companies in FMCG and non-FMCG sectors doing this. It reflects the soundness and the kind of maturity that these Indian businesses have reached which puts them in a situation that they are actively looking at going beyond India. Does this indicate that the domestic market has saturated for these businesses?

No, I dont agree with this. But yes, inorganic growth opportunities in India are limited and with these few opportunities, valuations tend to be high. From GCPLs perspective, we look at economic value-added (EVA) accretive acquisitions in the medium term (about a 2-3 year time frame), which you may not get in India. If better value can be achieved in other economies, it makes sense for us to scout for acquisitions outside. What is your strategy for the Indian market?

Historically, we have been urban centric. It has been our effort to increase our rural presence. Currently, 42% of our domestic sales come from rural areas and 58% from urban regions. So we believe that we still have a good scope to grow in rural areas. If we look at the soap category, the rural penetration is very high. But for hair colour and home insecticide segments, we have much more opportunities. What was the key trigger behind the 3x3 strategy?

We have been in the soap and hair colour business for decades and in the household insecticides business for 16 years now. In our understanding of the Indian consumer, these are the three categories we know very well. These are our core categories and we believe we can add tremendous value in these three categories. In terms of geographies, our focus is on the emerging markets in Asia, Africa and Latin America. Thus, we are looking at three categories and three geographies and that is what we internally call the 3x3 strategy. In the case of Keyline, this acquisition was done long back before this 3x3 strategy. Going forward, an acquisition like Keyline is unlikely.

NEW DELHI: Indians spend more on biscuits than on toothpastes, skin-care products, shampoos and instant noodles put together, and Parle Products has surged ahead of Britannia Industries to become a clear leader in the Rs 11,000crore-plus market, say Nielsen data. The country spent Rs 11,295 crore on biscuits in the 12 months ended March 2010 compared with Rs 2,300 crore on toothpastes, Rs 3,500 crore on skin-care products, Rs 2,400 crore on shampoos and Rs 1,300 crore on instant noodles. And in the first half of the current financial year, it has already spent Rs 6,320 crore on biscuits, according to

The

Nielsen

Company,

the

countrys

largest

market

researcher.

The largest piece of this big and growing cookie now belongs to Parle Products. The Mumbai-based, Rs 5,000-crore company, promoted by Vijay and Sharad Chauhan, has close to 45% share of the biscuits market while Nusli Wadias Britannia Industries has about 38% share. For years, the two largest cookie makers were neck-and-neck with about 35% share each in the market. Analysts and industry experts say Parle Products has played a better volumes game, backed by stronger distribution, especially in rural markets, and more competitive pricing. Historically, Parle has had stronger distribution and has the ability to reach consumers faster at lower distribution costs. They have also converted single pack size consumption into snacking options, says Pinakiranjan Mishra, partner, retail and consumer product practice, at consultancy firm Ernst & Young. Britannias decision to increase prices before competition when high sugar and milk prices hurt biscuit makers may also have affected its growth rate. Britannia had taken up pricing about three quarters ago, which had led to its volume growth shrinking to low single digitsbiscuits being an extremely price-sensitive segment, says Arnab Mitra, analyst at financial services firm IndiaInfoline. But over the last six months, Britannia has been reporting close to 20% volume growth, which we expect would lead it to regain market share since Nielsen typically has a lag time in reporting shares, adds Mitra. While Britannia managed to hold on to its overall market share, the cookie seems to be crumbling for one of its bigger brands, Good-Day. Its dominance in the sweet cookies segment is under threat. The challenge is led by Parle 20-20. Nielsen data shows that Good-Days share dropped from 31.6% in 2009-10 to 27.8% in the April-September period, while Parle 20-20s share increased from 11.3% to 17.9% during the same period. Parle also managed to push its share in the Rs 3,312-crore glucose biscuit segment where Parle G now accounts for more than three-fourths of the category. The share of Britannias Tiger glucose slipped from 12.2% in 2009-10 to 11.7% in April-September this year, while the share of the third significant player in the category, ITCs Sunfeast glucose, remained constant at 8.8% . In salted crackers, Britannia Time Pass is the only major brand that lost share, to 10.6% in the first half of current fiscal from 11.3% in the whole of last year, the Nielsen data shows.

MUMBAI: Priyanka Joshi, a schoolteacher in western Mumbai, buys her monthly provisions from a Big Bazaar outlet 2 km from her house, but gets bread, eggs and even rice from an old grocery just outside her society. There are usually great bargains for branded products in new retail formats. However, for the day-to-day grocery items such as bread, biscuits, sugar or pulses, we depend on neighborhood stores, where they understand specifications of our kind of rice and pulses. Such stuff is not available in modern retail chains, says the mother of two children. Most urban consumers in the country, like Priyanka, are crossover shoppers, frequenting both modern retail and neighbourhood groceries for different needs, says a new study by The Nielsen Company that strengthens the case for allowing multinationals such as Wal-Mart and Carrefour enter the $410-billion retail market in India .

Coming in at a time when the government has revived the debate over allowing foreign direct investment in multibrand retail by seeking feedback from various stakeholders that has ministries, opinion leaders and small and big businessmen lining up on either side, the one-year-long study clearly suggests that modern retail and pop-and-mom shops can coexist. "With the shopper moving fluidly between modern and traditional trade, both sides of the retail universe are well positioned to cultivate shopper loyalty and marketers have multiple points of sale to influence the same shopper," says Roosevelt DSouza , executive director at The Nielsen Company. The study, conducted among 3,000 plus shoppers across 11 cities and Nielsens national panel of retailers during the 12 months ended September last, suggests that the valuehunting Indian consumer visits modern trade formats such as Hypercity, Big Bazaar, Spencer's , DMart , More and Reliance Fresh for her monthly purchases, while frequenting traditional groceries for her daily purchases. I avoid going to the large formats to pick up a few daily essentials. I hate waiting in long queues and getting bar codes checked, says Sarita Joshi, a homemaker living in Nerul, an eastern suburb of Mumbai. It is equally tough returning products to big retailers or getting the money back which my neighbourhood kirana takes care of with just a phone call, she adds. Grocers are betting on their unique strengths such as customer relationships, home delivery and credit facilities, besides expanding product portfolio, to hold their ground against increasing competition from big retailers, which account for only 5% of the total retail market but are growing 30% a year. "Our services such as buying back sold goods, home delivery, monthly credit and customised groceries are very difficult for modern trade to replicate," says Ramniklal Jadavji Cheda, president of Retail Grain Dealers Cooperative Society, the biggest momand-pop association in Mumbai with around 9,200 members. Also, many grocers now place purchasing orders jointly to bargain better with suppliers and sell products at competitive rates. A Fair World

Allowing foreign direct investment in multi-brand retail has been a vexed issue for many years now. It returned to the public domain when the commerce ministry came up with a discussion paper in July, inviting views from all stakeholders. Last month, worlds largest retailer Wal-Marts CEO Mike Duke flew down to the country, days before US President Barack Obamas visit , to hard sell the benefits of international competition in multi-brand retailing to Indian consumers as well as small grocers. While commerce and industry minister Anand Sharma and the Planning Commission have supported FDI in retail, those opposing the idea include micro, small and medium enterprises (MSME) ministry and communications & IT ministry, besides different associations of small retailers. The biggest fear is that the arrival of the likes of Wal-Mart , Carrefour and Tesco will lead to a huge loss of jobs in traditional retail sector, which is considered the second-largest employer in the country after agriculture with more than 20 million people across some 12 million shops and accounting for more than 95% of total sales. The latest Nielsen study allays that fear.

The Indian shopper, it says, flits across formats to buy different items from each store type. For instance, they visit neighbourhood paan shops for salty snacks and chocolates, chemists for deodorants and milk beverages, and modern trade outlets for branded grocery and liquid toilet soap. While modern trade is driving sales of premium household and food categories, traditional trade has begun selling

more personal grooming products such as hair conditioners, fragrances, deodorants and hair dyes than ever before. Diapers, liquid soap, washing products and squashes are selling equally big from both the channels. Grocers Grow Smarter

Price is a big factor though. Of all the shoppers who participated in the Nielsen study, nearly 40% said they know the prices of most items in both modern and traditional trade formats, while 45% said they notice a difference in prices between the two formats. Big retailers have an edge here, thanks to their ability to check operational costs, bargain hard with suppliers and launch private labels. According to another Nielsen study, modern retail dropped prices by more, or increased them by less, for more product categories than traditional retailers, or kiranas, between the October-December 2009 quarter and the January-March 2010 quarter. Small grocers too now offer decent discounts to consumers, thanks to joint purchases and tieups with top consumer product companies such as Hindustan Unilever , Procter &Gamble , Godrej Consumer Products, Dabur and Marico . Bharatiya Udyog Vyapar Mandal, the biggest association of mom-and-pop stores in the country with more than 5 million members, has formed city-centric associations to negotiate directly with manufacturers and do away with any middlemen. This has helped kiranas offer 5-20 % discounts on MRP of branded products like detergents, shampoos, soaps, oil and atta. They are helped by FMCG players, which are facing increased competition from private labels, or own-brands , of big retailers and are under constant pressure to increase retailers margins. Programmes such as Hindustan Unilevers Perfect Store and Daburs Parivar adopt kiranas and teach them category management and effective merchandising to make them more engaging and presentable. "Stores are a reflection of the aspirations of any society," says Godrej Consumer Products executive vice-president , marketing, Tarun Arora. "Although modern trade is roughly around 6% of total retail, traditional stores have learnt a lot from it and consumer companies like us have become catalyst in the process , resulting in the emergence of crossover shoppers," he adds. All this has left consumer the winner. She gets never-before bargains from modern retail and never-before service from small grocers . "Attitude of kirana owners has changed a lot, especially in areas where catchments of modern retailers and mom & pop stores are the same," says Ashwin Merchant, a Mumbai-based independent marketing advisor. The countrys largest retailer Future Groups director, food strategy, Damodar Mall says that any format, whether traditional or modern, that meets consumer needs effectively will do well. "Modernisation of all trade is in favour of the consumer," he adds.

6/12/2010

THIRUCHIRAPALLI: Bangalore-based Wipro GE Healthcare , a joint venture between Wipro and GE''s healthcare business, plans to roll out at least 100 "cost-effective" health care equipment in the country over the next five years. "We are committed to launching cost-effective medical gadgets. We plan to launch at least 100 such products before 2015. The price of these gadgets would be 25 per cent lower than that of other brands," GM-Monitoring Solutions, Wipro GE Healthcare, R R Balaji said here. The equipments in the pipeline include products for paediatric cardiology care, diagnostic systems for cancer, babywarmer-cum-incubator, and two Xray systems of high frequency and minimised radiation exposure and computerised

tomography systems (CT scan), he said, adding the company had launched 11 products in India and 32 globally. Balaji, who was speaking to PTI after the launch of portable ECG system MAC 400, said: "It is a perfect screening tool for cardiac diseases. The unit is capable of screening 250 persons on fully charged batteries." He said the company would also come out with a digital X ray system with significant reduction in cost. He said the company''s R&D wing was also working on molecular imaging system for oncology at 40 per cent less price than the imported ones which cost about Rs eight crore. In India, the gadgets are designed and manufactured after studying specific requirements to create access to affordable high end technology to the masses, he said. The company is also eyeing public private partnerships (PPP) with government. GE Healthcare had already signed up for PPP models in West Bengal, Uttar Pradesh, Kerala and Andhra Pradesh. Manoj Menon, Communications Leader of the company, said about 80-100 direct sales officers would be added before the end of this fiscal to the existing strength of 2,500.

Easy Debt-errents that spiral into a trap

As a child when Amit Saxena would want something, his father would oblige him sooner or later, but only after he had enough money to buy it. Although there was no credit card available those days, Amits father, despite coming from a lower middle class family, was in such a position that he could have easily borrowed money from anyone he knew. He, however, never did so, which explains why he was never in debt and died without owing a single penny to anyone. Almost 30 years later, Amit has everything which his father never had a flat in Delhi, a swanky car and lots of other such things. But at the same time, Amit is neck-deep in debt and is bound to live paycheque to paycheque, without any savings for the future.
Debt has become an accepted way of life

This is not an exceptional case, however. There are numerous people around us today for whom debt has become an accepted way of life, with consumer finance schemes and credit cards fast

becoming big drivers of this devil. Rising disposable incomes, soaring aspirations and convenience in availing credit together have increased the debt that an average individual is carrying today. And one never knows when one really gets caught in the trap, until one has to start borrowing to make pressing interest payments and outstanding loans, which eventually leads to spiral from which it becomes difficult to get out of. True, sometimes, particularly in times of crisis and emergency, one may have to resort to borrowing. The problem , however, starts when people start taking debt for self-indulgence . No need to say that most financial disasters are of our own making and start with small bad habits that can be stopped only if we recognise them and do something to get rid of them. One such bad habit is living large or beyond ones means. In fact, whoever advised the world to cut its coat according to its cloth was surely not an insane person. After all, people lose more than they ever gain, simply by overspending or spending more than they can afford. Therefore, you should keep an eye on your regular expenses and manage them in a way so as to be aware of your regular monthly expenditure. This can help you determine how much you can spend without moving into the territory of living beyond your means, advises Anil Sahgal, founder of financial services portal i-save . Buying on impulse is another big problem. Do you often purchase something and then get it home to find you arent excited about it any longer? It happens with most of us. Therefore, if you are in the habit of spending on impulse, make an effort to have a moment of reflection before buying anything. Misusing your credit cards can also lead to debt disaster. True, its easy to purchase anything on credit these days, but it is always better to save up for the purchase , especially if you think you cant clear up the dues before the interest cost kicks in. Credit cards should largely be used for convenience and not for debt. The interest rates on credit card dues can be as high as 3-3 .5% a month, which is a high 36-42 % a year, says Sahgal. In a sure sign of debt getting out of control, people start using plastic money even for recurring expenses like getting the gas filled in the car, buying groceries and clothes, among others. Young men and women, pressed between small salaries and spiralling financial responsibilities , find it very easy to get tempted to go towards credit cards to help them get through the month, but eventually get caught in the debt trap. The greatest visible sign of uncontrolled debt is rolling payments on credit cards. This must be avoided at all costs, given the fact that credit card interest rates are the highest across all classes of borrowing in the world.

Any sane person wishing to save money must at the first instance get out of credit card debt. This alone can give him a big relief, financially and mentally, says Pawan Joseph, national sales head, Motilal Oswal Wealth Management. One should also avoid using personal loans to fund lifestyle purchases. Personal loans come with a fairly high interest rate and are best avoided to make expensive lifestyle purchases as it only adds up to your interest cost. These loans are best used for emergencies or to meet a shortterm liquidity crunch. Defaulting on loans or credit card payments also has the potential of being one of the root causes for financial disaster for a person. Defaults, in fact, can have a negative impact on ones personal credit history, making it difficult and at times impossible to borrow in the future or lead to you being charged a higher interest rate. Therefore, make sure you pay off your liabilities on time and maintain a good credit history. Typically, if your savings are deposited/ invested in options that provide you with a fixed return like your savings account or fixed deposits, what you earn on these savings is likely to be lower than the interest you would be paying on your loans. Therefore, if you have a loan and substantial available savings, it is always advisable to use part of the savings to pay off your loans if the interest rate on your loans is higher than your earnings on savings, says Sahgal.
NEW DELHI: Driven by the growth of organised retail coupled with changing consumer habits, food retail sector in India is set to be more than double to USD 150 billion (around Rs 6,70,870 crore) by 2025, according to a report by KPMG. India's food retail sector, which is currently estimated at USD 70 billion (around Rs 3,13,137 crore) will be more than double in the next fifteen years, the global audit and advisory firm KPMG said. "Evolution of innovative food processing capacity, emergence of organised retail and change in consumption patterns along with fast changing demographics and habits is fuelling the next growth trajectory for the food industry in India," KPMG said in a statement. Despite the potential, the sector has not yet seen sufficient investment, specially foreign direct investment (FDI), the report said. "The food sector, in spite of its large share of GDP and the consumer basket, only received 3.3 per cent out of the gross FDI flows in India between 2000 and 2010," KPMG Executive Director Ramesh Srinivas said. High growth in food retail is limited by sub-optimal supply chain caused by low investment in the sector, he added. Some players such as McDonalds, RK Foodland, Jubilant Food Works (Dominos) have, however, invested in backend processes, optimised supply chain management, according to KPMG. "There is also considerable investment in the cold chain industry by multinational corporations and private equity firms," Srinivas added. NEW DELHI: Large capital inflows leading to rupee appreciation can hit India's exports which have seen a smart recovery in the first six months of the current fiscal, a Finance Ministry analysis said today. "The main implication of large capital flows to India has been buoyancy in stock markets and appreciation of the rupee vis-a-vis the US dollar...the appreciating rupee can have adverse impact on the earnings of exporters and

makes

exports

less

competitive,"

mid-year

analysis

of

economy

said.

The analysis which was placed in Parliament said the widening trade deficit has also been a matter of some concern. India's exports during April-September aggregated to USD 103.65 billion registering a year-on-year growth of 28 per cent. However, cumulative value of imports during the same period was USD 166.48 billion showing an annual expansion of 29.9 per cent. The trade deficit for the first half of 2010-11 was USD 62.83 billion, up 33.2 per cent from the previous corresponding period. Total capital inflows were of the order of USD 37.4 billion in the first half of the current fiscal. In the previous fiscal as a whole, these inflows were USD 53.6 billion. "The surge in the capital inflows in recent years raises the question whether the inflows are in access of domestic absorptive capacity, which could lead to overheating of the economy," the review said. However, there is a positive side to the phenomenon. The appreciating rupee "is an anti-inflationary tool as it makes imports of oil, which form 30 per cent of India's total import basket, cheaper."

7/12/10
BANGALORE: Chinas manufacturing costs are reaching levels that are now forcing some companies that source products from the land of the dragon to reduce such sourcing and manufacture these in India more economically. Watch and jewellery major Titan Industries , which sources watch components from China, said it plans to restrict such sourcing and instead make additional investments in its manufacturing facility in Tamil Nadu. Similarly, it is now cheaper for Dell to supply PCs from India than from China, especially to countries in the Middle East, Africa and the CIS countries. Dell, which started exports of PCs from its Sriperumbudur plant near Chennai earlier this year, has become the first major PC brand to export out of India and is now exporting several thousand units every month to West Asia. Thats not all. Indian auto component major Sona Group also has considered sourcing parts from China in the past but sees no significant cost advantage in doing so. The tide therefore clearly appears to be changing. Bhaskar Bhat, MD of Titan Industries, puts it in perspective . According to him, the firm has been outsourcing a lot to Chinese manufacturers, but thats becoming a challenge as costs are going up. We want to derisk, he adds. Chinese costs have risen significantly, and more so in recent months as the country has eased its monetary and currency policies. Chinas central bank raised benchmark borrowing and deposit rates in October for the first time since 2007 and increased the reserve requirement for banks twice in November. Since June 19, when it introduced a more flexible exchange rate policy, Chinas currency renminbi has appreciated by 2.6% against the dollar , making Chinese exports more expensive. The expectation is that the currency will rise further in the coming months. Labour has become expensive, especially along the coastal belt, which has been the focus of Chinas developmental efforts in the past decades. In the past one year alone, labour cost is said to have gone up by 21%. China has also imposed stricter pollution control norms on its industries, compelling them to make relevant investments. Its perhaps for these reasons that the Sona Group, does not sees any significant cost advantage in sourcing from China. We do import a small portion of our forgings supplies from China for one of our group companies. However, because the prices of parts in India and China are similar and owing to the distance and lack of clarity about Chinas currency situation, most of our sourcing is done within India, said Surinder Kapur, chairman of Sona Koyo Steering Systems .

India has been second to China in Deloittes country ranking of manufacturing competitiveness in recent years, and from most accounts, the difference is narrowing. The rising costs, combined with Indias growing manufacturing prowess, partly explain why, as TOI reported recently, India exported more automobiles than China did between January and July this year. While India exported 2.3 lakh cars, vans, SUVs and trucks during this period, a growth of 18%, Chinas exports tumbled 60% to 1.65 lakh units. The same reasons explain why Nokia today exports mobile handsets to some 70 countries, including North America and Europe, from its Sriperumbudur facility. Aravind Melligeri, chairman of QuEST Global, which makes aircraft components in its SEZ in Belgaum, Karnataka, in joint ventures with foreign firms, said US and European firms are worried about labour unrests in China affecting delivery cycles and escalating costs. Chinas currency appreciation is also hurting costs, he said. Bhat estimates that the overall cost base (labour and fixed costs) of his Chinese vendors has gone up by 50%. They have not passed all of that on to us. But sooner or later they will have to ask for a further price increase. And thats when we will find it really difficult, he said. However, not everybody is rethinking China. Arvind Walia, MD of Gabriel India , which makes auto parts like shock absorbers and struts front forks, said China would remain a major sourcing destination for the company.

NEW DELHI: Riding on his popularity, Indian cricket team captain Mahindra Singh Dhoni has signed a Rs 29- crore endorsement deal with Maxx Mobile for a period of seven years. "Maxx believes in Dhoni's potential and the performance that he has delivered over the years is a testimony to his talent. The seven-year deal reaffirms our belief in him and is undoubtedly a big reinforcement for the Maxx brand," Maxx Group CMD Ajjay Agarwal told media. The deal comes within days of Dhoni signing Rs 26-crore deal with the world's second largest spirits firm, UB Group. Maxx Mobile, one of the recent entrants in India's mobile phone market, has emerged as a force to reckon with after having sold millions of handsets in less than two years. It has already captured over four per cent market share and has set an ambitious target of having 10 per cent market share by March 2012. Asked about the long periodicity of the deal (seven years), Agarwal said "this has been decided keeping in mind Dhoni's age and potential he has. He is 29 years old and the deal reflects his potential for the Indian cricket." Dhoni's existing one-year contract with Maxx comes to an end on December 31, 2010. The record-breaking sevenyear extension deal takes brand endorsement with cricket stars to a new high and provides Maxx Mobile, one of India's fastest growing brands the right connect with customers across the country. As part of the deal, Dhoni will be associated with multiple marketing initiatives planned by Maxx Mobile to promote the brand. The deal includes print and television advertising, outdoor campaigns, promotional events and mass engagement programmes across India. Dhoni is the face of 23 brands and charges over Rs 6 crore per endorsement. The pack of brands endorsed by Dhoni includes Reebok, Aircel, Godrej and TVS Motor. Agarwal said number 7 is a lucky number for Dhoni and incedently the deal was signed for 7 years and December 7. Dhoni's birthday also falls on 7th. Maxx Mobile offers more than 45 models for customers to choose from. Maxx Mobile has a pan-India presence and operates through its strong distribution network and a vast network of over 500 service centres, Agarwal said.

KOLKATA/NEW DELHI: Big retailers are pulling out their private labels or delaying launches in home appliances and

electronics

space,

failing to repeat

their

success

in apparel,

food

and personal

care segments.

Spencers Retail is withdrawing its durable private brand Gerat , while Future Group is pulling out of certain categories like headphones and computer peripherals. For others, caution is the word as they realise durables require after-sales service and brand-building support. Reliance Retail does not want to venture into durable private labels due to high associated costs and long gestation period, while Aditya Birla groups More wants to test the waters with small home appliances such as mixer & grinder, toasters and iron, before moving to the bigger products. Private labels are retail chains own brands manufactured by third parties and priced nearly 15-20 % lower than established branded products as they spend less on innovation, distribution and marketing, which is limited to in-store display and promotions. Launching private labels is not everyones cup of tea, especially when there is already a flurry of established brands, says Harminder Sahni, managing director at consultancy firm Wazir Advisors. Interestingly, private labels in the FMCG space were a huge success for retailers. In fact Future groups Tasty Treat tomato ketchup and Spencers Smart Choice instant noodles are well-known brands in their respective segments. But durables are different. They cannot be commoditised. They require backbone support, from setting up service centres to ensuring availability of spare parts to building the brand to take it to the same level of recall as an LG or Samsung. Also, in electronics, its a huge challenge to keep pace with the evolving technology. Retailers are learning it the hard way.

Without quality products and good service back-up , foraying into private labels is suicidal , says Sunil Mehta, CEO of Next Retail, the countrys largest durable retailing chain with 580 outlets. RPG group-owned Spencers Retail plans to pull out its durable private brand Gerat, after failing to create a back-end such as service support. It was sort of an experiment for us, a senior company official said, requesting anonymity. We may, however, re-enter with low-involvement products like mixer-grinders , iron and electricals, but plans are yet to be drawn up," the official said. Future Group, which sells durable private brands such as Koryo and Sensei across multiple formats like eZone and Big Bazaar, is rationalising its product mix and looking to pull out of segments like headphones and computer peripherals. But the company is still hopeful about its private labels and will focus on smaller towns where consumers are keener on price points rather than the brand name. Products like LCD TVs are promoted as the second or third TV where consumers are looking for a deal and not brand play, says eZone president Nitish Tipnis. Since quality is key, we are sourcing most of the products from manufacturers in Thailand and China from where brands like LG, Samsung and Panasonic even source their products, he adds. Private brands contribute some 10% of the total sales at eZone. In developed markets, durable retailers such as Best Buy use private labels to drive negotiations with the bigger brands and to fill up gaps in price points and product availability. Best Buy has its own brand of TV, accessories, flash drives and is expanding its portfolio rapidly as its private brand sales is growing at 40% a year. In India too, retailers see opportunity in the segment, though they are cautious.

Croma, the electronics retail chain of the Tata groups Infinity Retail, is trying to build consumer awareness for its private label portfolio as it scales up. The company, which ventured into private labels some two years ago with small

appliances,

entered

bigger

categories

like

LCD

and

LED

TV

and

refrigerators

only

recently.

Croma, which sources 55% of its products from China and Hong Kong, gets 6% of its revenues from private labels. It plans to launch laptop, mobile phones and digital cameras under its own label. And Next Retail, a Videocon group company , has entered into an exclusive licensing arrangement to develop Korean brand Hyundai as a private label in durables. When a private label has to compete with big brands like LG, Samsung, Sony and Videocon, a brand like Hyundai which has some recall in the market will help us, says Mehta. Next gets 12% of its turnover from private brands, up from 5-6 % a year ago.

The Aditya Birla groups retail chain More, too, plans to launch home appliances and electronic products under its own-label a year from now, starting with small home appliances . The only way by which a company can improve profit margins in consumer durables segment is by introducing private labels, says Aditya Birla Retail chief executive officer Thomas Varghese. Analyst feel private labels with attractive deals and prices can succeed.

Private labels success depends on the retailers strategy to position the product, says Sahni of Wazir Advisors. Indeed, some retailers have lost ground to those having a better sourcing and a services strategy. Interestingly, retailers had huge success with private labels in apparel and fast-moving consumer goods segments. PRIVATE Spencers To pull out durables private brand Gerat, after TROUBLES Retail failing to create back-end service support

Future

Group

To pull out of categories such as headphones and computer peripherals, rationalise product mix and focus on smaller towns Next Retail

Roped in Hyundai to develop it as a private brand that can match LG, Samsung in brand recall Reliance Retail

Not to venture into durable private labels due to high associated costs like setting up service centres and ensuring availability of spare parts 8/12/2010

MUMBAI: Tata Motors will offer a four-year manufacturers warranty on Nano to boost customers' confidence as the sales of the world's cheapest car sputtered to just 509 units in November. The auto major will offer the warranty for four years or 60,000 km, (whichever is earlier), to existing and new owners of the Nano, the company said in a statement. "The new buyers have the option of a comprehensive maintenance contract at Rs 99 a month."

The automaker was previously offering a warranty for 18 months or 24,000 km, with no maintenance on the car which cost Rs 1.23 lakh for the base model. The base model is now priced at Rs 1.37 lakh (ex showroom Delhi). A couple of spontaneous fires, lack of easy finance to purchase the cars and rising prices have hurt sales of the Nano, which was launched as a one-lakh car for the people wanting to upgrade from a two-wheeler. The company said it sold more than 71,000 Nano cars since July 2009. Analysts feel fire-catching incidents have raised safety issues in the minds of consumers. "The company should have introduced a scheme, a repurchase guarantee which will build confidence among the new customers," said an analyst at a Mumbai-based brokerage firm, not wanting to be identified. The company investigated the incidents and said that there were not any manufacturing defects in the car but offered additional protection in the exhaust and electrical systems. Tata Motors attributed the decline in sales to its inaccessibility to reach smaller towns. These new schemes will help attract the first time buyers and get an emotional connect' with the customers, said a senior official of the company. "For a first time buyer, a car is a significant purchase decision and these schemes will increase affordability of the car." The company is setting up special Nano access points for customers in the hinterlands to experience and testdrive the car. Through these reach-out initiatives, coupled with customer benefits, Tata Motors will cover the entire country with open sales by March 2011. On Wednesday, the company told its vendors that it will increase production of the Nano, hoping to restore confidence among the vendors. Nano vendors, concerned over falling sales and a cut in production, met the automobile major's top brass in Mumbai. Faced with huge pressure on margins, exclusive vendors of Nano are diverting production to other manufacturers as the domestic car market has been growing at a rate of 25-30% MUMBAI: Nissan Motor India is planning to launch a new multi-purpose vehicle (MPV) to compete with Toyota's Innova, along with key models from its global brands, a top company official said today. "We are launching a new multi-purpose vehicle (MPV) in joint venture with Ashok Leyland . The MPV model will be launched in line with the market leader Toyota Innova in 2012," Nissan Motor India Managing Director & CEO Kiminobu Tokuyama told reporters. He was speaking to the media after the launch of diesel-powered Nissan Micra here.

"We are committed to increase our footprint in India. We are adding five more models in our portfolio by 2012," Tokuyama said. The Japanese auto major also proposes to double its manufacturing capacity from the present 2 lakh units per annum, Tokuyama said, without giving any timeframe. On investment plans in India, Tokuyama said the company plans to invest additional Rs 2,200 crore in its Chennai unit. In February 2008, Nissan, with its global alliance partner Renault of France, signed an MoU with Tamil Nadu Government to set up a manufacturing plant at Oragadam, near Chennai with an investment of Rs 4,500 crore over a period of seven years. Several mid-sized fast moving consumer goods (FMCG) companies such as Godrej Consumer Products , Dabur India , Marico and Emami have outperformed their larger multi-national peers over several quarters during the year. Acquisitions abroad and consumers' shift from high-priced premium products to low-priced mass-market products have helped the companies post good performances. But results of the quarter to September indicate that this standout performance could be difficult to sustain. During the last quarter, Hindustan Unilever recovered smartly while ITC continued to register a strong growth in top

line as well as bottom line. However, the mid-sized companies disappointed. Strong performance of their international operations drove Marico and Dabur's revenue growth. GCPL's growth in sales was largely on account of the recent acquisitions made by the company. The company's standalone domestic business was marked by a decline in revenue from the soap business during the quarter. Emami, despite reporting strong volume growth, had to battle pressure on margins. Rising raw material costs, and advertising and promotion costs have adversely impacted the margins of all these firms. Given the intense competition, companies in the sector have to spend more on advertising their products. Crude oil prices have been inching up, leading to rising raw material costs for the industry. To combat this, most companies have hiked prices of their products. However, the large players are better placed in countering these challenges due to the economies of scale. The stocks of mid-sized companies were trading at higher valuations compared with their larger peers. But, of late, there has been a steady increase in the valuations of large companies' stocks. The stocks of midsized FMCG companies are trading at a price-to-earnings multiple of 30 and above, while the valuations of the big boys in the business - HUL and ITC - are close to 30. In the near term, investors are likely to benefit from the growth numbers of the larger firms rather than from the midsized firms, which are likely to be under pressure due to higher raw material prices, higher ad spend and decline in local business. Though recent global buyouts will enable most mid-sized companies to report good double-digit growth in the coming quarters, their standalone performance in the domestic market is likely to be muted. This could signal a further decline in valuations of the stocks of mid-sized firms

10/12/2010

Its the largest seller of mobile phones in India. It is, perhaps, the largest multinational in India. Yet, lately, Nokia India has looked like a follower, not a leader. When local player after local player was launching cheap handsets and dualSIM phones, Nokia scoffed at them and their price strategy. Now, two years late, its doing the same with a sense of urgency. One number shows why: market share. In the second quarter of 2010, Nokias market share dropped to 36%, from 54% a year ago, according to research firm IDC. It has company. PepsiCo Foods has a 55-60% share in the Rs 3,500 crore-branded salty snacks segment. Yet, it is putting together what it calls a low-cost food business, even as it brainstorms ways to take on persistent regional brands. Maruti, which built its market-leading status on small cars, is facing a situation where almost every manufacturer is lining up for a go. They are still leaders, but not the dominating figures they used to be. Not in their share of the industry, not in their responses. Where 70-90% share was the norm a decade ago, its down to 40-60% (See graphic). Take Nestle. Its instant noodles brand Maggi is jostling for shelf space with two new rivals ITCs Sunfeast Yipee and GSK Foodles. Maggi noodles share, on all-India basis, slipped to 86.5% in July 2010 from 90.7% in December 2009, according to research firm AC Nielsen. Nestle, however, disputes the numbers. Nestle is not just maintaining its leadership position, but is in fact, creating a much bigger cake where it will still be the leader, says Shivani Hegde, GM foods, Nestle India . Companies have no choice but to tone down expectations. With increasing competition and consumer choice, it is unrealistic to expect a market share of more than 50%, says Mayank Pareek, executive officer-marketing & sales, Maruti Suzuki. In the last decade, the number of car manufacturers has increased from 6 to 13, and models from 41 to 90. Market dynamics have changed, making the once-invincible players accept their vulnerability. Market leaders are reworking strategies, innovating and identifying new segments to grow. Nokia is bundling value-added services into its handsets, Maruti is driving into rural markets, PepsiCo Foods is going local, and LG is handing more decisionmaking powers to its employees.

Brands are finding it tough to hold on to market share, especially in categories with a high rate of innovation, like mobile phones, says Future Brands CEO Santosh Desai. In categories where theres a high degree of stability and predictability, like two-wheelers, the quest for market share is still sacrosanct and becomes the measure of success, he says. Typically, the dynamics of a consumer market centre around the pioneer, the early settlers and the late settlers. The brand that differentiates itself records early and quick market share gains, says brand expert Harish Bijoor. Riding on a solid edge for a while, their market share even hits 90% in some cases. But subsequently, it dwindles and settles at a more realistic 50%. It is here that most dominant brands settle down to fight every gain and loss of market share point. Thats the shifting spot these four leaders find themselves in. Chased down by competition and teased by a demanding consumer, these entrenched market leaders have to work harder than ever before just to stay where they are. And, they say, they have a plan. LG: Power To The People When LG entered India in the late-1990s, it executed a media blitz targeted at the mass market. The Korean consumer-durables company backed it up by offering dealers a larger product portfolio than its rivals, which increased their viability. This strategy worked back then. But things are different today, with local rivals stepping up like Onida launching products and Videocon playing the price card. LG plans to combat this with a major restructuring exercise, aimed at a push similar to when it entered the country. It wants to overhaul its organisational culture and people practices. We will be reborn next year, says LG India MD, Moon B Shin. It will be like gearing up to leapfrog once again. The company aims to double the Rs 17,000-crore revenues it hopes to earn this year, in the next five years. LGs new mantra will be self-management. Business heads and employees will define their roles, responsibilities and key performance indicators, assess their performance, and decide on bonuses and salary hikes. There is more employee autonomy, and the onus of proving that targets are met rests with them. Earlier, this was the HR teams prerogative. The thinking at LG is, now that the company has achieved scale, the complexity of business will grow, making it difficult for the CEO or business heads to drive growth. Once we make LG India a truly employee-driven company, profit, revenue and brand equity will naturally follow, says Shin.

NEW DELHI: The global economic crisis of 2008-09 had a blessing in disguise for India as far as its attractiveness for foreign investments in concerned, a Ficci survey showed. According to majority of the 108 foreign firms with operations in India, surveyed by Ficci, their priority towards India became stronger after the economic and financial crisis. "A widely held belief is that India is an important player in the world economy," Ficci said after releasing the survey. Most of the companies that have indicated their plans for expansion in India have pointed out that capitalising on the growing domestic market is the most important motivating factor for them to expand their Indian operation. "The global crisis has only made their outlook for India more positive and their priority towards an emerging country like India has become stronger, the survey said.

As per a latest World Bank report, the foreign direct inflows (FDI) into developing countries including India, is expected to recover over the next couple of years. Overall, FDI inflows to the developing world continues to be "overwhelmingly" concentrated in middle-income countries, with Brazil, the Russian Federation, India, and China (BRIC) alone absorbing about half, the report said. The Indian economy clocked 8.9 per cent growth rate during the April-September period.

Foreign institutional investors have pumped in around USD 39 billion (Rs 1,76,358 crore) in Indian capital markets so far this year. Besides, the country has received about USD 11 billion (Rs 49,742 crore) of FDI in the first half of 201011. The Ficci survey, however said the respondents felt that outreach activities of the government need to be stepped up to connect foreign investors with policy consolidation and reforms taking place in the country. They also felt the state of infrastructure facilities in the country stood out as a "major bottleneck" in way of smooth operations of foreign firms. Over 85 per cent of the respondents expressed dissatisfaction on the quality and quantity of power made available to them and three-fourth of them rated the quality of roads and highways in the country as "bad". A very high proportion of firms pointed out "procedural delays" at the ground level as a major problem area and highlighted the need for carrying out "reforms at the state level" so that the ease of doing business can be enhanced. On China loosing its attractiveness as FDI destinations in wake of series of strikes affecting operation of select MNCs and subsequent wage hikes, half of the respondents felt it would reduce it's attractiveness.

TOKYO: After a year in which Toyota's worst crisis saw the recall of millions of vehicles, a wave of lawsuits and a record fine, the troubles of the world's largest automaker are far from over, say analysts. Sales are sliding in the United States , the market worst-hit by the recalls, as Toyota faces a battle to regain consumer trust and market share despite efforts to tighten quality control. "Before the crisis, Toyota was by far the strongest auto company globally. Now the gap has narrowed," said Tatsuya Mizuno, an auto industry analyst with Mizuno Credit Advisory. "Toyota is weaker now than before, because of the impact of the recalls on brand image, reputation and profitability". In 2008 Toyota ended General Motors' 77-year reign as the world's largest automaker but the road has been a bumpy one for the Japanese giant, facing the impact of the economic crisis, recalls and recently a strong yen. Previously lauded for its vehicles' safety and reliability, a US recall of around four million vehicles in late 2009 swelled to nearly nine million units by February over brake and accelerator defects blamed for dozens of deaths. As criticism mounted of its slow response and bureaucratic inflexibility, Toyota tightened its recall policy and by November had pulled nearly 13 million vehicles over a range of issues. "We made mistakes," said Toyota spokesman Masami Doi. "Such as loosening our focus on the customer, not realising that our products were not fully in line with customer expectations. We have to do more. That is without a doubt." The crisis prompted US congressional investigations as Toyota was hit with a record 16.4-million-dollar fine to settle

claims

it

had

hidden

accelerator

pedal

defects

blamed

for

fatal

accidents.

It still faces lawsuits in the US, but Toyota lawyers argue most of the nearly 90 deaths blamed on sudden acceleration were a result of driver error. Sales in the US are falling, with the automaker slipping from second to third place this year behind reviving giants Ford and market leader GM. Toyota reported a 7.3 per cent sales drop in November and its market share could fall by 17 per cent to just over 15 per cent in 2010, according to IHS Automotive. "Toyota's sales in North America have radically dropped as a result of the recalls," said Mamoru Kato, auto analyst at Tokai Tokyo Research Centre. "This will be Toyota's biggest challenge in the coming year." The automaker has added an extra four weeks to new vehicle testing, sped up the decision-making process and appointed regional quality control officers. Analysts say it has become more aggressive in catching possible defects as part of a campaign to improve its consumer image, but warn that continued frequent recalls damage its branding as a quality carmaker. "We intend to continue to make every effort to recover the trust of our customers," Toyota's Doi said. But the company needs to adopt a more international mindset, analysts say.

Akio Toyoda, the publicity-shy grandson of the company's founder, was thrust into the spotlight by the recalls amid criticism that he had not been proactive enough, eventually appearing before US lawmakers in Washington. "The company remains very Japanese," said Mizuno. "Most of its leaders are Japanese and decision-making continues to be centralized in Toyota City," where the company headquarters near Nagoya are based. "That's one of the reasons why decisions were delayed during the crisis."

Despite its woes and the impact of a strong yen making it less competitive than overseas rivals with weaker domestic currencies, Toyota returned to the black with a 3.6-billion-dollar profit in the fiscal first half. But it now faces rivals who are competing for a slice of top market China and racing ahead with all-electric cars, analysts say. China, which has surpassed the US as world's largest auto market, is a priority for the automaker whose market share is expected to fall from 6.0 per cent in 2009 to 5.5 per cent in 2010, said IHS. Toyota will have to "launch low-cost models and vehicles tailored to Chinese customers' needs" to fend off challenges from local rivals, said Masatoshi Nishimoto, Japan and Korea vehicle analyst at IHS. It also plans to launch 11 new petrol-electric hybrid models by the end of 2012, contrary to rivals such as Nissan with its all-electric Leaf or Mitsubishi's i-MiEV. Despite developing for 2012 an all-electric version of Toyota's RAV4 sports utility vehicle with Tesla Motors, the US firm in which Toyota owns a 50-million-dollar stake, the company has been cautious in embracing such cars. Toyoda recently cited as a major obstacle the creation of a convenient recharging system, whereas Nissan has set about building its own recharging network. "Toyota is behind a company like Nissan when it comes to electric vehicles," said Mizuno. "If such cars become

mainstream, Toyota will be left even further behind."

12/12/2010

Looking back, Kwang Ro Kim would perchance wonder if he and India were predestined. When he landed here fourteen years ago, the country was opening up to the world. And he had the unenviable job of making a success out of a television brand hitherto unknown to consumers, who, until then, had to stay content with expensive Indian labels and were besotted by the more sophisticated Japanese giants, Sony and National . Korean brand, LG, wasnt even on the horizon and so Kims success got linked to a nations changing psyche and its growth prospects. It paid. When he packs off early next year, Kim will be leaving behind a legacy of success marked by two major milestonesmaking LG the largest selling white goods company in the country, from scratch, and forging a whole new identity for the countrys biggest local consumer electronics brand Videocon. In both cases, the odds were stacked against him. But he took them head on to craft a success saga of the sorts that management books are made of. And not so surprisingly, the Korean is planning to end his India sojourn with a book on his India experience. Unimaginatively titled Essence of Good Management and being published by Biztantra, the book is more than just a management tome. Its all about Kims strategies of success and his immeasurable India experience, he tells us. The soon-to-be-out-of-work CEO who now spends more time painting and reading books, calls the book an account of his 37 years of work experience under various business managementsbe it the US, Germany, UAE or India. So what prompted the book? I think my experience and knowledge in India and other countries could be a good guidance not just for the managers and students, but for the Indian CEOs, Kim says. The book deals with issues ranging from competitiveness, employee management, innovation and marketing. And also how the Indian corporate culture differs from the Korean and western management styles. And how is that? In Korea and Japan, the management lays more focus on manufacturing and export. In the western management, the focus is mainly on marketing which is imperative but not the sole option for growth therefore they are losing out on competitiveness and have lots of unemployment as a result, says Kim, who thinks that Indian management needs an all-round focus on manufacturing and export, coupled with aggressive marketing. Kim thinks Indian companies do not innovate and lack focus on quality of their products and employeesa void he thinks he has been able to fill in his 13-year stint as the head of a Korean company in India and an Indian company. Ive brought in innovation and quality in the structure at every level of management in both LG and Videocon and focused on R&D to come up with the best product and I think this has been one of my big successes in India. says Kim. But while carved his name as an astute manager, Kim proved his marketing mettle when he decided to take LG to the grassroots by personally networking with local dealers, even in small towns. But all thats part of marketing legend in India. His relaxed demeanour these days belies the hardworking chief executive that he was and is more fitting of a writer whos penning his memoirs. I am not getting into major decision-making at the moment for the company, says the soft spoken Kim, who thinks his stint (in Videocon) has sowed the seeds for growth and now it is up to his successor to water it well for it to grow faster. Going by Kims records, it is for sure that he would be a hard act to follow. His advice to his successor: Innovation and quality is the key to success. When I joined Videocon, I tried to inculcate these values to the system to make the corporation number one. Kim took over Videocon as vice-chairman and chief executive officer in 2008. His task: to pit the Videocon brands against the Korean chaebols and other multinationals in the Indian market. So how different or challenging was the transition from a multinational firm to a family-run business like Videocon, in which the Dhoot family controls majority shares. It was no different as I am comfortable working with Indian employees, he says. But yes, there are some ideological differences, he adds, reflectively, but holds his peace when asked to elaborate on the same.

Kim restructured Videocons entire marketing and branding strategy. The company went in for a complete makeover in its brand positioning with a new perky logo and advertising campaigns. Consolidation and control were the buzzwords he introduced in his reign in a highly segmented and decentralised system. He streamlined Videocons multi-brand strategy by getting all the brands under one umbrella to improve efficiency and competitiveness. It ticked! And how? Today, Videocons other brands like Electrolux , Kenstar and Kelvinator are enjoying customer pull in the market in tandem with the mother brand. But how did he find working with an Indian family-owned business that was undergoing a generational transition? It was a challenge changing the mindset of the company, but we all worked successfully towards achieving some set goals in the last two and a half years, says Kim, who made significant investments in technology and R&D. With his contract with Videocon coming to an end in May, Kim thinks he had time limitation to take the company to the targeted number one position. It took me ten years to get LG Electronics India to an enviable position that it is in today. My stint in Videocon was short. I tried to improve and improvise but I realised I cannot change much, he says. Any failures? Kim is taciturn. I do not think Ive failed in any attempts to bring in value to the companies I headed. But perhaps in his pursuits, he changed as much as the change that he brought about. A self-confessed Indophile, Kim looks at complete ease dressed in Indian attire for the cover his new book. I like Indian clothes as they are very comfortable to be in, says Kim who confesses his love for everything Indianbe it clothes, culture and food. I will come back to India sooner or later, says Kim. monica.behura@timesgroup.com

Come 2011, and Pune-based Force Motors will be gearing up for yet another new launch. But for the 52-year old company, this one is extra special. For the first time, the automaker will be moving out of the commercial vehicle space and launching a Sports Utility Vehicle (SUV). "As an organisation , this launch is a big step forward for us," says Managing Director Prasan Firodia who took over the reins of the company from father Abhay Firodia about a year ago. The project is the junior Firodia's baby, and a clear move towards changing the perception of the company which was responsible for the creation of the auto rickshaw but has traditionally maintained a low profile. Force Motors, which has launched iconic brands like the Tempo, Matador and Traveller in the commercial vehicles space is now looking at doing something different. "We wanted to change how the company is viewed, and it's not possible to do that by making changes to existing products . You are still dealing with the same people, the same clients," he says, explaining the reason behind the move. Additionally, the company had access to the technology from Mercedes Benz (Not many know that it is the sole manufacturer of engines, gear boxes and axles for Mercedes Benz in India) so it was just a matter of getting the softer aspects of design in place. Of course as a company best known for making commercial vehicles, aesthetics were hardly number one on its priority list. Abhay Firodia, chairman, Force Motors points out how looks are an important deciding factor when people buy vehicles for personal use. While fuel efficiency, a critical factor in the commercial vehicles business , does matter here too, looks and aesthetics rank far higher. To make sure that the SUV didn't suffer on this count, Force Motors roped in consultants from across Europe to work on the interiors and design elements of the car. But Firodia is clear that the SUV won't be a gas guzzler and will meet efficient emission norms. At the same time, it will be a modern highperformance vehicle. A further driving force behind that was Prasan Firodia's own passion for SUVs. "Personally , I love SUVs and prefer them over cars," he says. For Force Motors the move into the personal vehicles space required a complete change in approach. The company has brought in a whole new set of people across the organisation and has created a separate vertical. It has also made a conscious decision to bring in more professionals and younger people. "There have been changes across the

value chain and we have created a dedicated team for sales, service and branding. Similarly, the dealers for the product too will be distinct from our existing dealer network," says Prasan. He adds that while the company will be looking at further launches in the personal vehicles space, these would be larger, multiutility vehicles and not passenger cars. "In passenger cars you need to constantly upgrade your platform and offering every few years and it's a challenging business," he says. From a strategic point of view too, the move makes sense. The market for SUVs in India is currently pegged at about 70,000 units and growing rapidly, with demand coming from both the metros as well as smaller towns. With all its existing products targeted primarily at the rural markets, Force Motors has tremendous brand equity in these places, which it is hoping will work to its advantage when it launches the SUV mid next year. Additionally , if the new product is a success, it will in turn have a positive rub off on existing brands.

NEW DELHI: The government may look at easing investment norms for state-owned enterprises to enable them to pursue global acquisitions. It is looking at removing the cap on investment in a single project to facilitate such deals on a case-by-case basis, a government official has said. "The idea is not to constraint a PSUs expansion plans by putting limits. If a strategic asset is on the block, Indian PSUs should be allowed to go for it," said an official in the department of heavy industries. The proposal will be forwarded to other ministries, including finance and external affairs, once it has been fine tuned by the ministry of heavy industries, the official added. The move comes at a time when a number of PSUs are looking at buying stakes in foreign companies. Coal India, for instance, is looking at buying over 10% stake in one of the companies of Australia-based Peabody. Indian oil companies, such as ONGC and OIL India , have also been on the look out for energy assets abroad. As of now, a maharatna company can invest 15% of its networth in a single project for establishing a new venture or undertaking an acquisition activity with a cap of Rs 5,000 crore. The overall ceiling in investments of all projects should not exceed 30% of the net worth of the PSU. In case of navratna companies, the maximum investment cap is Rs 1,000 crore. "For global acquisitions, this is a paltry sum. We need to take a re-look at these limits keeping in mind that it should not lead to any change in the public sector character of the company," the official said. Some countries such as China have been backing their state-owned enterprises both financially and politically for forming joint ventures and taking over strategic assets in countries, especially in the African continent. The official added that the government need not remove caps completely, but may give exemptions on a case-tocase basis. "If there is a proposition that a PSU can bid for, the government can look at making special dispensation such as removing the limit for making investments in such cases," he said. Earlier this month, minister for heavy industries Vilasrao Deshmukh had also said that maharatna public sector units would now go all out for foreign acquisition of natural resources and technology companies to use their competitive abilities for global leadership. "Our companies will take full advantage of the enhanced powers delegated to them and emerge as global players by expanding their operations and enhancing their vision far beyond out national frontiers," he had said. At present, a PSU board can take the decision to go for a merger and acquisition activity but it has to inform the cabinet committee on economic affairs (CCEA) for any investment abroad.

NEW DELHI: Kia Motors has driven into the final lap of its India entry plans. A part of the Hyundai group, the South Korean auto major has begun talks to acquire land for its India foray and is understood to be in negotiations with states like Tamil Nadu and Gujarat for setting up its factory. A senior official confirmed the companys plans without providing any further details . We, at Kia Motors, are only in the initial feasibility study stage in terms of deciding if we will eventually enter the Indian market. Hence, it is too early at this point to comment on any specific question , Michael Choo from Kias international public relations team said from Korea. Sources, however, said Kia has decided to fast-track its India entry plans, considering the growing importance of the market globally. The company also wants to enter the market before the competition intensifies even further since existing players like Maruti , Hyundai, GM and Ford are launching new products and late entrants like Volkswagen expanding fast. Kia, South Koreas secondlargest automaker after Hyundai , has been growing rapidly and its sales in the 11 months ending November are up 28% at 19,08,096 units. The company could target India with its compacts, entry-level sedans and even compact SUVs. Its popular hatchbacks include Picanto and Proceed, besides sedans like Rio and Cerato . The word Kia derives from a Korean phrase that means to arise to the world from Asia and the company has identified design as its core future growth engine. Kia has a sizeable presence in almost all the key global markets like the US, Europe and China. Kias advantage lies in Hyundais strong presence in India . Hyundai is Indias secondbiggest carmaker and Kia would be looking at deriving a lot of synergies from its affiliate companys dominating presence . Joint component and raw material procurement could give them a huge advantage in buying stuff at a lower cost while there could be cooperation in areas like logistics and back-end operations. However, there would be no cooperation at the frontend and Hyundai would continue with its solo branding at dealerships while Kia finds its feet. Also, a joint manufacturing plant is not on the cards as this goes against the arrangement adopted in other markets and also as Hyundai India does not have enough capacity to accommodate another companys production. Kia, in which Hyundai acquired a majority stake in 1998 after it battled bankruptcy following the Asian financial crisis, has been making attempts to strike out a distinct identity for its vehicles globally, leading to the birth of the Tiger Face design language on the grille. Compact SUVs like Soul and Sorento could also make their way to India at some point, pitting them against models from Mahindra, Tata, Ford and Toyota.

13/12/2010

Vijay Mallyas stake in Kingfisher Airlines may fall below 50% after the debt restructuring is completed. Kingfisher Airlines is in the process of implementing the debt restructuring plan , which also includes raising $250 mn to $350 mn via GDR. Kingfisher Airlines has also zeroed on the Luxembourg stock exchange for the GDR listing and it would happen by

the

end

of

January,

according

to

sources

familiar

with

the

debt

restructuring

plan.

"The GDR price has still not been finalized, but considering the promoters will be infusing fresh equity in the company, the promoters' stake will fall below 50%," said the source. Kingfisher's loan funds have further increased to Rs 8,157 crore, as on September 2010, from Rs 7,926 crore in March 2010. The plan's broad contours include interest rate reduction to around 11 per cent from 12-12.5 per cent, moratorium period of two years and extended loan tenure of nine years. The Reserve Bank of India had cleared the debt restructuring proposal in September.

Kingfisher, controlled by United Breweries Holdings, will convert lenders' loans of up to Rs 1,355 crore into shares. It also plans to convert founders' debt of up to Rs 648 crore into share capital. The airline plans to issue convertible and redeemable shares to lending banks as well as founder entities in line with its debt recast plan. Chandrasekaran , CEO, TCS, in a conversation with ET Now talks about the deal with Deutsche Bank. How big is the deal with Deutsche Bank? What is the contract size and how many years is this deal for? This is the largest core banking deal in 2010 for TCS and to my knowledge, this is the largest core banking deal for the industry anywhere for this year. This deal is about replacing the core banking system in 30 plus countries for transaction banking for Deutsche Bank globally. On December 11, we successfully worked and implemented the deal in the first country - in Abu Dhabi. It has gone live, so we are announcing the deal now after we have successfully implemented in the first country. How big is the deal size?

The deal is large, significant and extremely strategic because you do not do deals of this nature of this size everyday. Also, it is truly remarkable that we have been able to go live in the first country in the very first year. But if you were to give us in terms of brackets, is it above 100 million-200 million? How big is it? We have confidentiality with the customer so I cannot really put a number. So please do not push me. Where does this put Deutsche Bank in the list of clients that you have? Has this deal taken it into the top 5 clients that TCS has? We do not give where and which bracket each client is but Deutsche Bank is a strategic client, a large client and a very significant client for TCS. We do lot of work for Deutsche Bank across services, application maintenance, transformation, product implementation and infrastructure operations across the board; we do lot of work for them and it is a very strategic relationship. How many years is this deal going to be spread across?

The deal between the implementation and the transformation and ongoing support will be for 10 years. Some time back, you did mention that you expect pick up in pricing by the year-end, we have reached calendar year-end. Do you think pricing has changed and what is your outlook on pricing in light of this deal that you have just signed? I think pricing is stable, it continues to be stable. What I had mentioned earlier was that towards the fiscal year-end, there is a slight uptick possible. I still believe so because the demand environment continues to be good. If it continues and the macro economic stability - at least the recovery of that happens, I think the pricing uptick will happen. I do not know whether it will happen by fiscal year-end but it will happen thereabout or in the few quarters

after that.

14/12/2010

TOKYO: Nissan Motor and Mitsubishi Motors will set up a 50-50 joint company next year to develop minicars that may become strategic models sold globally. The minicar would be available for sale in 2012 under the agreement, while Nissan will supply a light van and wagon to Mitsubishi in Japan. Mitsubishi will sell a sport-utility vehicle to Nissan in the Middle East, the automakers said today in a joint statement. This agreement is important for Nissan as it supports our expansion in emerging markets, meets immediate capacity needs overseas and enables us to grow our minicar business in Japan, Nissan Chief Executive Officer Carlos Ghosn said in a statement. The partnership gives the manufacturers greater economies of scale while allowing them to enter market segments with less investment. The two carmakers already co-operate by supplying minicars, with engines no larger than 660cc, and commercial vehicles. Nissan, which makes the Leaf electric car, and Mitsubishi, which sells the i-MiEV, are in talks about possibly co-operating on electric vehicles, the automakers said. The alliance of the two automakers seems to be a good one as we can expect more co-operation in electric vehicles going forward, said Takeshi Miyao, an analyst at consulting company Carnorama in Tokyo. Ghosn today said that no details have been decided on electric car co-operation with Mitsubishi Motors. Mitsubishi Motors President Osamu Masuko today said it is possible that the minicars could become a global strategic model. The alliance seems to help Mitsubishi Motors, and the market reacted ahead of the press conference, said Kenichi Hirano, general manager and strategist at Tachibana Securities Co. Mitsubishi Motors surged 8.5% to 128 yen at the 3 p.m. close of Tokyo trading, the biggest gain since Dec. 3, 2009. Nissan shares gained 0.3% to 809 yen. Nissan currently produces the Lancer Cargo commercial vehicle for Mitsubishi, which in turn builds the Minicab, Town Box, eKWagon and Pajero Mini models for the larger carmaker. Mitsubishi Motors plans to build Nissans Navara pickup truck at its factory in Thailand and the automakers are evaluating a plan to collaborate on manufacturing and engineering for a new one-ton pickup, they said today. The expansion of the agreement will complement each others regional characteristics and product lineup and the one- ton pickup and minicar projects will be the best solution to strengthen each others competitiveness, Mitsubishi Motors Masuko said today. Mitsubishi has a partnership with PSA Peugeot Citroen, while Nissan and Renault share projects with Daimler, the worlds second-biggest luxury carmaker. The Nikkei newspaper reported the Nissan-Mitsubishi agreement earlier today. The companies statement was released after markets closed in Japan.

NEW DELHI: A glitch has forced Nissan to go in for a correction in the India-made Micra minicar being exported to

Europe, though the company said it has not recalled the model. The glitch, which resulted in a mild noise from pump area while idling, was detected in some cars while they were being tested on arrival in Europe, prompting the company to take immediate corrective measures. During the pre-launch inspection, Nissan identified a mild noise occurring in the engine bay of some vehicles during start-up in extreme cold weather. As a result, Nissan has changed the oil specification of European cars in accordance with the requirements of the European climate , a spokesperson for Nissan India said from Chennai , adding, This issue does not affect the performance and operation of the engine. Asked whether the company was recalling the model, the spokesperson said, This is not a recall. A recall is done only when there are quality or reliability issues. Its not the case here. The issue appears to have affected the export plans of the Micra in the short run. We are revising the European distribution schedule accordingly . Once the oil is changed, cars are being distributed normally across Europe , the spokesperson said. Nissan said it was more of an engineering-related issue and not manufacturing related . There are no safety or reliability issues connected with the detected noise. Nissan has made India a manufacturing hub for the Micra and plans to export it to over 100 countries across Europe , Middle East and Africa. The company has a target to sell 1.1 lakh units abroad in first year, after starting exports in October this year.

MUMBAI: India's largest truck and bus maker Tata Motors will fast-track loans of upto 90 per cent to its small car Nano buyers through its vehicle financing arm Tata Motors Finance, the company said on Wednesday. Tata Motors Finance will provide the loans within 48 hours against verifiable documents for Nano -- touted as the world's cheapest small car at $2,500 at the time of its launch in April 2009 -- a Tata Motors statement said. "We are exploring similar options with others also," a Tata Motors spokesman said, referring to banks and other financial institutions. The financing offer comes close on the heels of a clutch of benefits announced last week, including a four-year warranty on the Nano and a maintenance contract option for only 99 rupees a month (about $2), amid plummeting sales. In November, Nano sales slid 85-per cent from a year earlier to an all-time low of 509 units despite an expanding auto market, hurt by safety concerns following reports of some spontaneous fires and financing difficulties. Tata Motors said this month financing had been an issue as car loan providers often rejected the profile of twowheeler owners for car purchases. The price of the car has also risen, to about $3,342 for the base model, only $2,062 less than the base model of the Alto, India's bestselling small car from market leader Maruti Suzuki. The Tata Motors spokesman said the new measures were not in response to falling sales but were part of the carmaker's marketing and financing arrangements as it expands bookings in multiple states. "Now that we are proactively booking the car, we are putting systems in place to provide ease of accessing, experiencing and buying the car," he said.

An analyst with a domestic brokerage also said that the new measures were merely to promote the car and should not be seen as damage control. "The product is still coming out, so this is only a marketing buildup as the Sanand plant production increases," said Vaishali Jajoo of Angel Broking, referring to the vehicle maker's plant in western Indian Gujarat state.

15/12/2010

NEW DELHI: The split between Hero and Honda is expected to kick-start a price war in the motorcycle market with companies expected to offer discounts and freebies, which the local customer had been missing for the past three years. Honda Motorcycle & Scooter India, the countrys fourth-largest two-wheeler maker, can now take on the market leader in every segment, while other companies will also try to make the most out of an expected weakening of Hero Hondas brand image, say analysts tracking the market. The competition to capture the market and maintain their share would now intensify, leading to price wars , PricewaterhouseCoopers auto analyst Abdul Majeed says. After selling off its 26% stake in Hero Honda to the Hero group, Japans Honda is expected to focus on growing its share in the Indian two-wheeler market, the second largest after China. Analysts expect the company to invest a part of the stake-sale bountyat market rates Hondas 26% would fetch about Rs 8,700 croreinto growing its business in the country. Hero Motors, which can use the Honda name until 2014, may have a tough time protecting its market share of 60% in the motorcycles and 43% in two-wheelers. One big challenge will be to keep its dealer network of 4,500 touch points under control. The split in Hero Honda partnership may affect the confidence of their dealers, who had enjoyed the market dominance for a long time, says Suzuki Motorcycle India vice-president (marketing & sales) Atul Gupta. Analysts also say rivals Bajaj Auto , TVS Motors, Yamaha Motors, Suzuki Motorcyle India and new entrant Mahindra 2Wheelers will all now try to use it as an opportunity to reduce the gap with the market leader. We will see several more bikes in the Rs 40,000-50,000 bracket, loaded with new features, something that was recently seen when Ford Figo and Volkswagen Polo added premium features at the compact car price levels, says PwCs Majeed. While nobody is willing to stick his neck out and predict who will make the most out of the split, one rider everybody expects to speed up is Honda. Honda Motorcycle & Scooter India is consistently increasing its market share through a series of launches. Now, there will be more. We would bring in several new platforms including the volumes-based 100cc bikes and the fast growing 150 cc premium segment, a senior Honda Motorcycle executive says. Indian companies are having a hard time with their dealers being poached by Japanese competitors. But the domestic players have an upper hand in pricing as they have developed indigenous technology with frugal engineering.

Japanese companies would have to spend heavily to compete on prices, says a Mumbai-based auto analyst. In the entire process, the Indian customer would benefit, he adds.

NEW DELHI: Hero Honda, India's largest motorcycle maker, sees royalty payments to Honda Motor remaining at the current level or going down in future after the split of their joint venture, its chief executive said. Hero Group said on Thursday it would buy Japanese automaker Honda Motor Co's entire 26 percent stake in the joint venture Hero Honda Motors. The media reports of royalty payments going up to 8 percent were incorrect, Pawan Munjal told reporters on Thursday, after Hero Group announced that it would buy Honda's 26 percent stake in the joint venture.

A company filing to BSE said that Hero Honda brand name to change over time; company is free to set up its own R&D and acquire technology. Hero Group said it would buy Honda's 26-percent stake in their joint venture Hero Honda Motors in a phased manner. The deal will initially be funded with debt, a senior Hero Honda official said, but financial details were not immediately available. Honda's 26 percent stake in Hero Honda, which was formed in 1984, has a market value of nearly $2 billion. Hero Honda, credited with putting the Indian middleclass on wheels, defied its humble beginnings to quickly emerge as the worlds biggest two-wheeler maker, also ending the stronghold of Bajaj scooters in the country. The stake sale will enable Honda to strike out on its own. Hondas immediate priority will be to expand its 100%-owned two-wheeler subsidiary Honda Motorcycle and Scooter India (HMSI) and enter the aggressively-priced entry-level motorcycle segment. Currently, it is the fourth-largest player in the twowheeler market with a 14% share though in case of scooters, it is the largest player with a 45% market share.

MUMBAI: As India and Japan get closer to signing a free trade pact, textile and clothing majors from both the countries are exploring opportunities for boosting bilateral trade. Japanese textile units are keen on building their India presence , shifting away from current favourite China due to a lull in Sino-Japan relations. Top Japanese industrialists are slated to meet Indian companies such as Future Group, Raymond , Alok Industries , Arvind Mills, Mafatlal and S Kumars. Encouraged by the prospect of duty free trade between Asia's second and third largest economies, Indian companies

are also eyeing Japan as a new, large destination for their products and for importing high-end fabrics into the local market, said Rahul Mehta, president of Clothing Manufacturers Association of India. India and Japan have already announced that the Comprehensive Economic Partnership Agreement will come into effect soon after being signed and the completion of necessary procedures. The free trade agreement is likely to significantly boost trade, which stood at around $11 billion in 2009-10 , between the two countries. "Currently , India has a very minimal trade of around 1% with Japan. However, growing trade prospects in India could increase it by many times in next couple of years," said Mr Mehta. India, one of the largest producers and consumers of textile products, exports more than 70% of total textile exports worth $25 billion to the US and European markets. On the other hand, Japan, one of the most technically advanced countries with highend luxury consumer market, imports more than $31 billion of textile products, of which over 90% comes from China, according to Japan Textile Import & Export Association. It has been recently observed that Japan is trying to shift away from China due to political and economic reasons and create more destinations in other parts of the Asian region, which includes India. "Japan is exploring possibilities of technical and manufacturing collaborations and direct market access between the two countries in the textile and apparel industry," said Shigeki Tanaka, international projects development director at Infinity Creations, an agency set up in Tokyo for exchange of Indian and Japanese creative talents and products. Even some Indian companies such as Mafatlal Denim and S Kumars Nationwide are willing to form a joint venture with Japanese companies to expand their reach in the country's premium apparel and fabric market. "Being in a very top-end market, Japanese companies have expertise in producing high quality fabrics and yarns. If we find a good deal, we would certainly look at forming a collaboration," said Rajiv Dayal, managing director of Mafatlal. Ashesh Amin, director at S Kumars, said: "We are talking to some top retailers and manufacturers in Japan for selling our branded products and bringing some of their brands to India." Unitica Fibers, Mitsubishi Rayon, Asahi Kasei, Teijin, Toray and Re Denim-Kaihara are some of the Japans top textile manufacturers. 17/12/2010 NEW DELHI: Amid projections of up to over 9 per cent growth in India . economy this fiscal, ratings firm Moody's has cautioned against overheating that can result in probable asset bubbles. "We see risks of an overheating economy given our expectation of continued strong economic and credit growth, while real estate prices in metropolitan areas and equity markets have already recaptured their pre-crisis peaks," Moody's Vice-President Nondas Nicolaides said. "We also see an increased risk of probable asset bubbles forming and posing a medium-to-longer-term challenge for the banking system," he said. Overheating refers to heightened demand unmatched by equivalent supply, that leads to increase in prices. This also gives rise to asset bubble. After recording low level of economic growth in two years of global financial crisis 2008-09 and 2009-10 Indian economic growth accelerated to 8.9 per cent in the first half. Mid-Year Analysis, tabled in Parliament recently, has projected the economy to grow by up to over 9 per cent this fiscal. Equity benchmark index Sensex is hovering around 20,000 points, and had gone very near earlier this year to the peak of over 21,000 points, recorded in pre-crisis level. Moody's said even real estate prices in metropolitan cities have recorded their pre-crisis level.

Even as probable asset bubbles pose a risk for banks, Moody's said regulatory limits on Indian banks' exposures to sensitive sectors, including capital markets, somewhat temper its concerns. Also, the asset quality pressures faced by Indian banks over the past two years will moderate, Nicolaides added. Besides, Moody's said said the outlook for the Indian banking sector is stable due to favourable operating conditions, good capital levels retail deposit funding base. It said that the credit outlook for the banking sector in the country is likely favourable for next 12-18 months. "The outlook for India's banking system remains stable, reflecting favourable operating conditions, solid capital levels that remain sound in stressed scenario analysis, a strong retail deposit funding base, and sound liquidity," Moody's Investors Service said in its new Banking System Outlook on India. "The banking system outlook expresses Moody's expectations for the fundamental credit conditions in this banking system over the next 12-18 months," it added. Moody's outlook comes at a time when the Reserve Bank has announced plans to inject Rs 48,000 crore into the system through purchase of government securities, technically called open market operations (OMO).

A symbiotic relationship is how Sanjeev Chadha, chairman and CEO of PepsiCo India, describes the work that the food and beverage multinational undertakes with thousands of farmers across India. We help them with progressive farming techniques and they are of huge benefit to us in securing a reliable supply chain, he says. Some observers would call what Pepsi is doing corporate social responsibility (CSR); others more cynically might say its simply another example of multinational corporations (MNCs) trying to figure out how to make inroads in Indias challenging, but potentially lucrative rural market. Whatever the words used by executives like Chadha for such initiatives, it is impossible to discuss multinational strategies in rural India without mentioning CSR. In its various forms, it is a critical part of their rural growth plans, often out of sheer necessity. Filling the gaps left by government, MNCs have built roads in rural India that help them deliver their goods, provide education and health care for communities whose workforces they rely upon, and implement environmental programs to protect precious natural resources needed to keep supply chains running smoothly. In some cases, I am sure CSR activities are mostly rhetoric, says Harbir Singh, Wharton management professor and co-author of a new book titled, The India Way: How Indias Top Business Leaders Are Revolutionizing Management. But CSR is more legitimate in India than in the U.S., where infrastructure has been built and government is seen as addressing societal development agendas, says Singh. Yet now theres a shift in how MNCs look at their entire rural India investments beyond CSR. With growth drying up in developed markets and their center of gravity shifting to emerging markets, MNC businesses in India are under pressure to prove that their rural strategies arent just about doing well from a CSR perspective. They also need to show head office that these strategies are doing well from a business perspective. In short, the strategies must start delivering top and bottom-line results. After years of false starts, missed opportunities and flawed strategies, a number of MNCs India businesses are getting close. Others already are there and are ramping up their rural investments. None can take that fine balance between doing good and doing business for granted, as Nokia, Coca-Cola and Max New York Life among the companies profiled in this special report show. And its for that reason that at PepsiCo India, our rural agenda has been driven by purpose and now is moving into performance, says Chadha.

Spending

Power

For many MNCs, theres a lot more riding on their rural India performance than there once was as Indias growth story spreads to the heartland. Two-thirds of the countrys one billion consumers live in rural India, where almost half of the national income is generated. A report by Technopak Consultants and the Confederation of Indian Industries, a trade body, estimates that the countrys rural consumer market generated US$425 billionof revenue, up from US$266 billion the previous year.

MUMBAI: Larsen & Toubro rose more than 1 per cent in early trade after the Economic Times reported the engineering and construction conglomerate would be split into nine independent companies. At 11:13 a.m., the stock was trading down 0.12% at Rs 1968.80. Twenty-one months before he retires, L&T Chairman AM Naik has kicked off a restructuring plan that will divide the Rs 37,000-crore engineering and infrastructure behemoth into nine virtual companies. Each of these, being called `independent companies, will have a full-fledged CEO, CFO and HR head, and will manage its own profit and loss account, Naik said. Each will even have its own board of directors with at least three independent directors. Some of these independent companies could be spun out of L&T and listed on the bourses before 2015, Naik said. By March 2012, each of these independent companies should by 75% ready to get listed, should we want to list them, Naik said. We will decide which ones get listed as we go along. I cant tell you now how many will be spun off by 2015. The nine boards that will soon be set up at the independent companies will not have any legal or statutory standing, but will merely advise the CEO and management of these entities. Ten of the 27 independent directors needed at these nine companies have already been identified. Naik declined to disclose any names. The independent companies will act as if they are listed entities, short of facing the shareholders, he said. The L&T board has approved this restructuring, and implementation of the plan is on in full swing. Power, hydrocarbon, machinery & product, switchgear, heavy engineering, infrastructure, building & factories, metals & minerals and electrical businesses make up the nine independent companies. Each is worth a billion dollars in revenues or has the potential to get there soon. Naik said the restructuring is part of an exercise to `make the job easier for his successor by streamlining L&Ts sprawling and complex web of 64 businesses ranging from power to roads to aerospace to switchgear. No other company in the world is as complex as L&T... not even General Electric, he said. No one chairman can manage such a complex operation. I was able to do it because I have been with L&T for 46 years and have started 60% of these businesses. Naik said this new structure for L&T is unique. It is different from models followed by other conglomerates like the Tata group, for instance. Chairman Ratan Tata guides the group, brings in vision and philosophy while the CEOs of the group companies run their operations. Its an easy task. L&T is a jungle where one man (chairman) manages all 64 businesses, he said. Most CEOs of these independent companies will be in the age bracket of 55-59 years, ensuring there are no succession challenges for 5 to 10 years, said Naik.

NEW DELHI: Shalini Sharma, a New Delhi-based homemaker, has started visiting large food retail stores for buying fruit and vegetables. Reason: rising vegetable prices and exorbitant rates charged by local vendors. She often goes to the nearby Safal store run by Mother Dairy and saves up to 20% on the total bill. Like Shalini, many residing in metros and large cities have started flocking to these outlets as high prices of vegetable and agricultural produce over the last few weeks have started taking a toll on their household budget. Walking down to the Safal store is inconvenient due to the chilly weather these days. But it's worth braving cold winds because I buy in bulk and save up to 20-25 %, Sharma said.

Food retail chains such as Future groups Food Bazaar , Safal and Reliance Fresh are selling fruit and vegetables up to 40% cheaper than the local vendors, as they manage to source products from farmers and wholesalers at lower prices due to economies of scale and easy availability of credit. Onions are selling at Rs 49 a kg at Big Bazaar compared to Rs 60-70 a kg available with the local vendor. The price of onions touched a record high of Rs 85-90 a kg last month. While retailers are charging Rs 6-7 a kg for potatoes, vendors are demanding Rs 10 a kg. Apples are selling between Rs 60-80 a kg at retail outlets while local vendors are charging Rs 80-100 for the same quantity. It is surely an opportunity for organised retailers to generate higher footfalls and better realisations, Future Fresh Foods president K Radhakrishnan said. This will help boost sales of other products too, he added. The effort is to aggregate front-end sales volume across stores to consolidate back-end buying directly from the farmers, said Radhakrishnan. Local vendors buy vegetables on a daily basis from wholesalers and choose to sell their products at the market where they can make maximum money, said a Delhi-based retail consultant. Although we are currently sourcing 80% of the stock from wholesalers, we have better handling and storage capabilities, which help reduce wastage, said Radhakrishnan . He said local vendors do not have sufficient means to prevent the vegetable and fruit from rotting. Soaring onion and other vegetable prices led to a sharp rise in inflation at 18.32% for the week ended December 25. The rise in food inflation has been mainly on account of 58.58% rise in prices of vegetables in the wholesale market. Industry insiders attribute price rise to increasing demand for food, rising transportation and labour cost. Crop failure due to unseasonal rains last year has also impacted supplies. Its clearly a supply-side issue. People are earning more and the first thing they want to have is good food, the consultant said. The government is making huge investments in rural areas for infrastructure development, which has created a shortage of farm labour and also made it expensive. Asked if the prices would ease going ahead, Radhakrishnan said prices of some vegetables may drop but prices overall may not be substantially lower than what they are currently.

NEW DELHI: Onion may have brought tears to the eyes of consumers; pricey tomato may have landed you in the soup and gingerly garlic may have taken you off guard. But for the makers of bhuna (roasted) masala and gingergarlic pastes, the rush for their products over last few weeks has set cash registers ringing. While Daburs cooking paste, Hommade, has witnessed a jump of 60% last month, Smith & Jones cooking paste has seen a 300% spurt in sales over the last three months. In fact, such is the scramble for cooking pastes among consumers that Nestle's Maggi bhuna masala, and pastes by Dabur, Capital Foods and Priya are running out of stock. The sale of Hommade range in December jumped 55-60 %, said Dabur marketing head, foods, K K Chutani. He attributed it to the recent spurt in prices of garlic, among other commodities , which resulted in a surge in demand for cooking pastes. In fact, Dabur marginally hiked the price of its Hommade range two weeks back, but that has not affected the demand. Daburs Hommade pastes and purees range includes garlic, ginger, ginger-garlic and tamarind pastes,

Lemoneez lime juice, tomato puree and coconut milk. Ditto is the case for Capital Foods, which makes Chings noodles and Smith & Jones cooking pastes. Our Smith & Jones brand of ginger, garlic and ginger-garlic pastes has seen a 300% growth over the last three months, said Capital Foods managing director Ajay Gupta. While prices of onion touched Rs 80 per kg last month from . 12-22 a kg in September, garlic is selling at an astronomical Rs 300 per kg as compared to Rs 35-40 per kg two months back. Tomato prices too have gone up to Rs 40 a kg against Rs 15-20 last month. Marketers say a combination of factors such as convenience, stable prices of pastes and heavy advertising contributed to the growth in cooking pastes and purees market, which is estimated at Rs 150 crore but is growing at a rapid pace. For working women, cooking pastes provide convenience by compressing cooking time and reducing labour. Though small, the category is growing very fast. In fact, in due course we are looking at entering this category through our private brands, said Future group business head (private brands) Devendra Chawla. Future group is Indias largest modern trade retailer which runs Big Bazaar and Food Bazaar stores. Despite diverse tastes preferences across the country, onion, tomatoes, ginger and garlic are a must in almost all Indian households. With shifting consumer preferences for convenience products, we see huge potential for penetration in the Indian market, with no compromise on taste and nutrition. We are planning to further widen the product portfolio in the coming years, said Daburs Chutani. He added that the Hommade range has reported over 40% growth all through 2010. In fact, what has helped these companies in keeping the prices of their products relatively stable despite a steep rise in retail price is the fact that they buy these agrigultural commodities in bulk and much in advance. So, it has helped them in insulating their products from such price hike aberrations. Nestle too has been consistently advertising its Maggi bhuna masala over the last few months. An email sent to Nestle India remained unanswered . Capital Foods Gupta says he expects a lot of Indian households to convert to pastes now. We have been focusing aggressively on the category and have kept prices stable, even at the cost of making some losses at times, said Gupta. Crop failure due to bad weather as well as hoarding by traders have led to an increase in agricultural prices. With traders predicting that prices of onion, garlic and tomatoes may come down only till the next crop yield comes into the market in two-three months, the paste and puree category seems to have struck gold.

7/1/2011

NEW DELHI: From fusion food to kebabs and freshly made sandwiches in live kitchens to gourmet finger food, multiplex chains are going beyond serving popcorn and cola to movie buffs, and in process fatten their own profits. The main objective is to grab a large piece of consumer's wallet and make them spend in the cinema theatre rather than at a fast food nook or a restaurant right outside the multiplex. Besides offering a movie goer an expanded menu spread over different cuisines to choose from, it also saves time for the consumer battling limited time for leisure specially during the weekdays. Arindam Chakravarti head food & beverages at the country's largest multiplex chain Big Cinemas, says young executives have little time to spend with their families after work. "Parking your car for food, movie and shopping at

different places is a nightmare and multiplexes are now one stop shop for entertainment and food," he said. Big Cinemas that successfully introduced popcorns under various flavours has gone a step ahead and has started offering finger food, kebab wraps and meal combos. Live kitchens that make sandwiches and burgers, hand tossed pizzas, salads besides steamed momos and roasted products for the diet conscious have all made an entry at various multiplex food counters in the country. It also makes business sense. Unlike ticket revenues, which is shared with movie producers, a large chunk of F&B revenues go straight into the multiplex operator's pocket. This is also a reason why cinema owners are developing their own products and moving away from the model where they used to outsource from other fast food chains. Another large multiplex operator, PVR Cinemas has a 60-member team developing menus and sourcing products. It has introduced nine new food options for patrons in the past two months and plans to completely take over the food and beverage segment under its control in the next three months. "Except certain menu options like branded coffee we see little sense in outsourcing or using other partners to sell food and beverages at our cinemas," says Pramod Arora president PVR Ltd. Other multiplex chains like Inox also have their in-house F&B team. "It helps keep a strict eye on the quality and packaging of the food," says Alok Tandon CEO Inox Leisure. The contribution of food and beverages to revenue of multiplexes has almost doubled from 10-15% over the past 3-4 years. Although it is expected to remain less than a third of revenues, cinema operators see huge potential in increasing volumes 20-30% every year as patrons spend more with a diverse menu. "Even as popcorn and cola remains the staple, revenues are growing due to the addition of new menu options," said Sunil Punjabi CEO of Cinemax . But challenges remain. There are problems in serving curry based food items, that makes an Indian meal complete. This is because there are restrictions on having fire-based cooking equipment within the multiplex premises, says Deepak Marda, JMD of Indian arm of Mexican cinema chain Cinepolis.

NEW YORK: Facebook says that it will begin reporting its financial results by April 2012, setting the stage for a likely public stock offering, according to a document sent by Goldman Sachs to potential investors. As investor interest builds in private shares of Facebook, stoked by news of Goldman Sachs' deal with the social networking giant, the Securities and Exchange Commission is stepping up its inquiry into the trading of shares in hot private Internet companies. The SEC has contacted Goldman about its private Facebook offering, according to the offering document, which calls the inquiry preliminary. Facebook's chief executive, Mark Zuckerberg, has insisted that he is in no rush to take his company public. But he will most likely have his hand forced by an arcane federal securities law that requires private companies to file financial information, typically prompting an initial public offering, if they have more than 499 shareholders. The company said it would cross the 499 shareholder limit by the end of the year in the offering memorandum sent to Goldman clients who are being given an opportunity to buy Facebook shares. The document also gave a snapshot of Facebook's financial performance. The company, based in Palo Alto, California, earned $355 million on $1.2 billion in revenue during the first nine months of 2010. On Sunday, The New York Times Deal-Book reported that Goldman Sachs had invested $450 million in Facebook in a deal that valued the company at $50 billion. The report said the firm was also raising about $1.5 billion from its wealthy clients through a special-purpose vehicle that would invest alongside the firm in the company.

Goldman's clients have flooded the firm with orders, making the deal heavily oversubscribed, people involved in the process said. In the middle of the fundraising, the SEC questioned Goldman. The SEC is interested in several issues surrounding Goldman's Facebook deal, including its structure and news media reports about the offering, which was supposed to remain private, according to people with direct knowledge of the inquiry who requested anonymity because they were not authorised to speak publicly about the matter. Federal regulators' interest in Goldman's Facebook deal adds a new twist to an inquiry that the agency began last month into the rapidly growing trading market for private shares of Facebook, Twitter, LinkedIn and Zynga, companies that are leading the social networking phenomenon. The Goldman document also acknowledged that Facebook was cooperating with the SEC's inquiry. The agency first contacted Facebook last month to discuss the forming of pooled investment funds to buy Facebook shares, according to people who spoke only on the condition of anonymity. In recent days, the discussion has also included the Goldman vehicle. The frenzied interest in Facebook and those other companies is evocative of the dot-com boom of the late 1990s.

DETROIT: Ford Motor Co. said Friday that an electric version of its Ford Focus sedan will go on sale in North America by the end of this year. Ford introduced the electric Focus at the Consumer Electronics Show in Las Vegas. The car is expected to go up to 100 miles (160 kilometers) on an electric charge. The automaker says the Focus can be fully charged in three to four hours using a 240-volt outlet. That's half the time it takes to charge the Nissan Leaf , a competitor that went on sale last month. Ford also said its fuel efficiency numbers will be competitive with the Leaf. Late last year, the US Environmental Protection Agency estimated the Leaf would get the equivalent of 106 miles per gallon (45 kilometers per liter) in city driving and 92 miles per gallon (39 kpl) on the highway. The EPA determined the figures by estimating it will cost $561 per year in electricity to charge the car. Ford said the Focus will have a unique, Microsoft-designed powering feature that will charge the vehicle during offpeak hours, when utility rates are cheapest, to save on electric bills. It also has a touchscreen with information such as the amount of charge left, the distance to the next charging station and the amount of gasoline saved. Pricing wasn't announced. The Leaf starts at $32,780, but it is eligible for a $7,500 federal tax credit that drops the price to $25,780. The electric Focus will be Ford's first electric car on the market. It began selling an electric version of the Transit Connect van last year. The Chevrolet Volt , an electric car with a small gas engine that takes over if the charge runs out, is the only other electric car on sale in the US right now, but other competitors are planning to introduce electrics soon. In 2012, Toyota plans to begin selling an electric RAV4 crossover, Chrysler plans an electric Fiat 500 minicar and Honda will sell an electric version of the Fit subcompact. Ford said it plans to introduce four other electric vehicles in North America and Europe over the next two years. The electric Focus will go on sale in Europe next year.

8/1/2011

NAIROBI: Millions of mobile phone subscribers in Africa saw the icon on their phone screens change from Kuwaiti company Zain to Indian company Airtel last fall. The change means little to the average customer, but for the continent, it's another sign that India is moving in. The expansion by Bharti Airtel into 16 African countries underscores the rise of India in Africa, at a time when much of the focus on foreign investment here has been on China. The Indian government is raising its diplomatic profile in Africa, with Prime Minister Manmohan Singh and his Cabinet leading several business delegations in recent years. And Indian companies are striving to keep up with China's business profile in Africa, taking advantage of historical ties with the continent. "I think one of the things that India doesn't want to allow to happen is that it doesn't want to get behind in this kind of engagement," said Sanusha Naidu, research director at the Britain-based Fahamu organization, an advocacy group tracking African issues. Naidu said India's renewed interest in Africa has not received as much attention as China's because India is not seen as a threat. "It is seen as a democratic state,'' Naidu, a South African, said. ``It doesn't have a communist regime. All that plays in favor of India.'' India and China are vying for Africa because of the bottom line: Africa represents new growth. ``This is the last growth continent in the world. Europe is a done industry. The U.S. is a done industry. Southeast Asia is old,'' said Sunil Mittal , founder and chairman of Bharti Airtel. ``Our model is not suitable for a matured market. We need growth and Africa is the right place to grow.'' The International Monetary Fund said in October that sub-Saharan Africa will register the second-highest growth rates in the world in 2011, behind only Asia. The IMF said sub-Saharan Africa's economic growth rate will be 5 percent in 2010, compared with 2.5 percent in 2009. This year, the IMF projects Africa's rate will be 5.5 percent.

DETROIT: Toyota Motor Corp said on Sunday it will open a new advanced safety research facility at its technical center in the U.S. state of Michigan, spending $50 million over the next five years. Toyota, the world's biggest automaker, said the center will work with leading North American universities, hospitals, research institutions, federal agencies, and others to reduce fatalities and injuries on the road. Toyota was the only major brand to post a drop in U.S. sales in 2010 as its safety image suffered from a recall of roughly 10 million vehicles in its biggest market since late 2009.

NEW DELHI: Describing India as a global player and rising economic power, World Bank President Robert Zoellick has said the high level of growth in the country is helping the international economy recover from the crippling effects

of

recent

financial

turmoil.

"India's return to high levels of growth is helping the global economy recover from the crisis," said Zoellick, who is scheduled to arrive in the country tomorrow on a four-day visit aimed at strengthening cooperation between the multilateral lender and Asia's second-fastest growing economy. India, he further said, "is a player on the global stage. The country's status as a rising economic power is closely connected with how it manages this next phase of growth, balancing rapid development with the environment and most importantly, the need to ensure all people have opportunity." As per a World Bank release, Zoellick will meet Prime Minister Manmohan Singh , Finance Minister Pranab Mukherjee and Planning Commission Deputy Chairman Montek Singh Ahluwalia during the trip. He will also visit Bihar. Having witnessed a slowdown in growth in the wake of the global financial crisis, India's growth rate picked up to 7.4 per cent in 2009-10 from 6.7 per cent a year ago. The economy expanded by 8.9 per cent in the first half of the current fiscal, making India one of the fastest growing economies in the world. According to the International Monetary Fund's ( IMF )) projections, the Indian economy is expected to record a growth rate of 8.8 per cent in 2010-11. Zoellick's discussions with the Prime Minister and government will also cover cooperation on global issues, including preparations for the upcoming G-20 meetings. During his visit, the World Bank President will sign agreements for two new projects in the road and disaster management sectors, as well as meet private sector representatives, self-employed women's associations and urban and water experts. The World Bank Group significantly boosted the support extended to India last year to help offset the impact of the global financial crisis. The Bank Group committed a record USD 11.1 billion to India during 2009-10.

NEW DELHI: Honda Siel Cars will expand its network to small cities and towns and tie up with state-run and regional banks to ensure its upcoming compact car Honda Brio does not repeat the failure of Honda Jazz hatchback. "We are not exactly focusing on the major metros with Brio," Honda Siel Cars vice-president Jnaneshwar Sen told ET. "It will cater to urban nucleus families, but will meet specific needs of larger family units in small towns." The Brio is expected be launched in September with a price tag of less than Rs 5 lakh.

Auto companies have been focusing more on smaller cities, which have given huge incremental volumes and helped car sales to zoom over 30% in 2010. Honda, maker of City, Civic, Accord, Jazz and CR-V, has mostly been confined to metros even as other carmakers have hit the country roads to gain huge incremental volumes that helped car sales rise more than 30% in 2010. Honda wants to tap the huge potential in smaller cities to ensure the Brio takes on competitors such as Maruti Swift , Ford Figo and Hyundai i20, and revive its flattening sales. The carmaker has also initiated talks with government-owned as well as regional banks to offer structure finance for its cars. "As we moved to small cities and settlements, we have enrolled these financial institutions including cooperative banks, who have the ability to cater to profiles of potential customers for Brio," Sen said Clearly, the Japanese carmaker does not want Brio to take the same route that Jazz took.

Sales of Jazz, coming at a huge premium over its competitors, slumped 40% to 3,731 cars in the April-December period from 6,247 cars sold in the year earlier. Honda has developed Brio after five years of painstaking research of the Indian market, keeping in view the local conditions and specifically catering the car to typical Indian families. It accommodates five adults, but falls in Indian government's small car category that is taxed 10% compared to 22% for bigger vehicles. Cars with less than 4-metres of length and 1200 cc petrol and 1500 cc diesel engines are considered small cars. "This will help Brio to priced competitively against other popular models such as Swift, i20, Figo and Polo, and not fare badly like the overpriced Honda Jazz premium hatchback," said a Mumbai-based consultant. After price comes the reach. Honda will speed up its expansion to emerging centres ahead of Brio's launch. It has already grown its network to 150 outlets in 72 cities now from 120 outlets last year as the Honda brand was extended to towns such as Asansol, Hubli , Gorakpur , Mandi, Nellore, Alwar, Coonoor and Dibrugarh in recent months. Honda is currently facing tough times as sales have been flat. Brio would be the first high-volume Honda car to hit the Indian market.

JAIPUR: Tata Motors today launched its new multi-purpose diesel vehicle 'Venture' in Rajathan. "We are launching the product first in Rajathan and later it will be launched in other states. The vehicle is with the footprint and manoeuvrability of a hatchback car, but the interior space of a utility vehicle," the company's Head Marketing and Sales S Saxena told reporters here. "We have focused on safety and luxury features in the vehicle. This the safest van among others (vans)...A collapsible steering and side impact beams protect occupants in an exigency. It meets crash safety norms applicable in the domestic market," he said. "This is cost effective and customer friendly and we hope that it will be a great success in the Rajasthan market ," Saxena said.

CHENNAI: Malaysian national car maker Proton Holdings Bhd is close to tying up with Hindustan Motors for a contract manufacturing agreement to assemble their cars for the Indian market. According to two people close to the development, the decision is likely to be announced end-February . Proton is in talks for using HMs Chennai plantset up for assembling the Mitsubishi Lancerto locally produce its multi-purpose vehicle Exora . Sources also said the arrangement could extend to other plants belonging to HM including the longailing ones in Uttarpara and Indore . Top Proton executives have visited the Chennai plant of HM on several occasions in the past three months, said sources. The discussions between the Proton team and HM have focused on the Exora to begin with but Proton is interested in a larger involvement with HM. According to top sources in the Chennai component industry , Proton is interested in sourcing engine and transmission systems from HMs group company Avtec.

When contacted, former Hyundai president BVR Subbu , currently a director on the Proton board, said: Its true Proton has been speaking to some Indian manufacturers but I would not like to comment on the matter. Hindustan Motors MD Manoj Jha, however, denied the talks with Proton, saying: In the automobile business, there are all kinds of discussions with all sorts of companies at all points of time but the discussions with Proton that you are talking about is not taking place. On Wednesday, Malaysian press quoted Protons group MD Datuk Syed Zainal Abidin Syed Mohamed Tahir saying that his company wants to launch the Saga, Persona, Exora and Emas hybrid models in India. He also said that Proton would tap the experience of a local Indian company that already had its own plant for assembling vehicles and that the final announcement would be made this quarter. Proton has been in talks with Indian companies for over a decade now, including HM. It has also reportedly been in talks with the Hero group and Mahindra & Mahindra . It was also in touch with Argentum Motors , a company that was co-founded by Subbu, for a contract manufacturing arrangement . However, none of these deals worked out for the Malaysian car maker. Sources say in an effort to keep costs down, Protons India foray will be on a tight budget with a small investment in an assembly operation . Thats why it is looking for a contract manufacturing partner, said a Chennai component maker with direct knowledge of the matter. Protons global MD has also disclosed plans of tying up with a European car maker for diesel engines. Malaysian reports have speculated that talks could be on with Renault . Diesel vehicles are in big demand in the Indian market as well. DRIVING IN

Top Proton executives have visited the Chennai plant of HM on several occasions in the past three months According to sources, Proton is interested in sourcing engine and transmission systems from HMs group company Avtec

10/1/2011

The integration of Patni Computer Systems with iGATE, expected to be completed in 12 months, offers multifold synergies to the combined entity. This should trigger a re-rating of Patni's stock during the period. iGATE has offered 503.5 per share to purchase a nearly 63% stake in Patni. This values the seventh-largest IT exporter listed in India at 6,614 crore, or nearly 10 times its expected 2011 earnings. Most other top-tier players command a P/E of more than 20. The wide discount in Patni's valuations is on account of its lower growth and dwindling margins in the last few quarters. It has not been able to take advantage of the global IT outsourcing demand recovery due to internal issues. iGATE's entry is expected to change Patni's fortunes. First, it settles the long pending ownership woes of Patni, thereby offering focused leadership. Second, iGATE will strengthen Patni's banking and financial vertical. Patni has traditionally focused on insurance, manufacturing, retail and distribution segments. These verticals account for nearly two-thirds of its revenue.

In the last few quarters, the banking and finance vertical has seen a sharp turnaround globally. But this has not benefited Patni; the domain makes up for just over 11% of its revenue. For its larger peers, BFSI contributes more than 40% of total revenues. iGATE enjoys a higher exposure to BFSI vertical, which should strengthen Patni's offerings. iGATE has shown a higher double-digit growth in the last few quarters in both sales and profits. Its operating profitability has also been stable during the period. This could boost Patni's growth, which languishes in the lower single digits. "So far, Patni's quarterly growth has been low. With iGATE, banking and finance should become a major revenue spinner for the combined entity," feels Elara Capital's IT analyst Pralay Das. For investors, it makes sense to hold on to the stock even beyond iGATE's open offer for another 20% stake in Patni. However, in the medium term, the improved cash flows due to the synergies may be utilised to repay the debt of over $700 million (approximately 3,200 crore) taken by iGATE to finance the deal. This could impact Patni's dividend payout in the near term. In August, it had declared a special interim dividend of 63 per share. Another challenge will be for iGATE to integrate the operations of Patni, which are three times bigger. But this could be the least of the worries given the experienced management teams on both the sides.

NEW DELHI: The Hero group, which has agreed to buy out its Japanese partner Hondas 26% stake in the twowheeler joint venture Hero Honda, plans to enter the three-wheeler business, pitting itself against market leader Bajaj Auto. The BM Munjal-controlled group may launch a passenger carrier followed by a commercial goods mover, according to people familiar with its strategy. These plans were discussed at a meeting with vendors in Delhi, the people said. The group is examining the option of re-engineering its bigger two-wheeler engines to make three-wheelers. We have been asked to prepare for the entry into three-wheelers and other segments, said a Delhi-based vendor who attended the meeting. Executives from over 50 companies, which supply critical parts to Hero Honda, took part. Hero Honda uses 150cc engines for premium bikes such as Hunk while its top-end model Karizma is fired by a 225cc engine. TVS Motors rode piggyback on its two-wheeler technology to venture into three-wheelers in 2007, helping it to spread costs. The Hero group will start implementing these plans once it signs a definitive agreement with Honda Motor Company. The Hero Honda spokesperson said there were no immediate plans to enter the three-wheeler segment. Threewheelers are referred to as autorickshaws in India. Under the proposed new arrangement, several opportunities may exist in terms of new segments and product categories, but currently there is no such plan on the anvil, the Hero Honda spokesperson said. Diversified businesses help rivals Bajaj Auto and TVS improve profitability and the Hero group will have to drive down the same road, analysts said. Bajaj Autos net profit margins are around 20% in the three-wheeler business, higher than 15-17% in the two-wheeler segment. Exports (of three-wheelers) fetch higher prices than in the domestic market, leading to better margins. Export volumes are steadily growing, helping players such as Bajaj and TVS to post better profitability, said Vaishali Jajoo, Analyst with Mumbai-based Angel Broking. Three-wheelers are mainly shipped to neighbouring countries such as Sri Lanka, Bangladesh, Nepal and South East

Asia. Markets such as Africa are also showing buoyant growth, signalling rising prospects for exports. Pune-based Bajaj Auto, which is Hero groups biggest rival in the two-wheeler business, is the largest manufacturer and exporter of three-wheelers. It dominates the domestic market with 40% share followed by Italian major DiMaggio Vehicles, with 38%. The domestic market grew 18.4% to 3.39 lakh three-wheelers in this fiscal till November. The existing pact with Honda Motor which will soon be scrapped did not allow the Hero group to manufacture three-wheelers and export products except to neighbouring countries.

11/1/2011
BEIJING: China, where gridlocks on highways and cities have become a major source of public concern, continues to be the world's biggest car producer and market for the second year, as its auto sales hit 18.06 million last year, registering a 32.37 per cent increase. China's car output topped 18.26 million last year, an annual increase of 32.44 per cent, Zhu Yiping, associate secretary-general China Association of Automobile Manufacturers (CAAM) said today. The sales record last year was achieved because of China's stable economic growth, car consumption policies and the country's accelerated industrialisation and urbanisation, said Gu Xianghua, deputy secretary-general of the CAAM. China's auto sales in December topped 1.67 million, up 17.9 per cent year on year. Output in December stood at 1.87 million vehicles, up 22.3 per cent year on year, official media reported. Sales of passenger vehicles rose 33.17 per cent year on year to 13.76 million last year, while sales of commercial vehicles were up 29.9 per cent year on year to 4.3 million. China overtook the United States in 2009 for the first time to become the world's largest auto market by selling 13.65 million vehicles, up 46 per cent year on year, while production jumped 48 per cent to 13.79 million. But Chinese apparently were in no mood to celebrate their high rating in car sales as Beijing and Shanghai have already imposed heavy restrictions on buying cars as a measure to ease recurring gridlocks. Beijing which already has about 5.10 million cars restricted new car sales to 2.40 lakh per year. Shanghai also has a similar policy. About 215,425 people applied for car purchase licences in Beijing in January alone, but only 20,000 will be issued through a monthly lottery. Beijing's measures to tame traffic jams would not affect car sales markedly as the city accounted for only a fraction of the country's annual sales, said Xiong Chuanlin, deputy secretary-general of the CAAM. But other cities could follow suit in taming traffic by limiting car purchases or raising the cost of keeping cars, said Dong Yang, deputy director of the CAAM , adding these policies would affect sales of low-end, especially domestically-produced, brands.

NEW DELHI: Singapore Telecommunications (SingTel), has increased its stake in the country's largest telecoms company by both revenues and customers Bharti Airtel by an additional 0.11% after it acquired shares worth 136 crore from the open market. As a result, SingTel's interest in Airtel has increased to 32.15% from 32.04%.

SingTel is the largest shareholder in Bharti Airtel, which offers mobile services in India , Sri Lanka, Bangladesh and several countries in Africa. SingTel through its wholly-owned subsidiary, Viridian, has purchased 40.75 lakh shares of Bharti Airtel for 136 crore (S$39 million), SingTel said in a regulatory filing to the Singapore Stock Exchange . "The purchase consideration was determined by the prevailing market price of Airtel on the relevant stock exchange," the company added. Scrips of the Singtel Communications increased by 0.66% and closed at S$3.07 on Wednesday. Shares of Bharti Airtel closed at 339.20 on the BSE, up 0.10% from the previous close.

NEW DELHI: The countrys first airport city, Durgapur Aertropolis , a Rs 10,000-crore project, will create 90,000 jobs over the next 8-9 years. The promoter of the project, Bengal Aerotropolis Projects Ltd (BAPL), is also looking to construct a MRO facility for narrow-bodied aircraft by 2013. Over the next 8-9 years, the airport city will have a residential population of 68,000 persons, 90,000 visitors from catchment areas like Asansole and Raniganj, and will create 90,000 jobs," BAPL CEO Subrata Paul told ET. The airport-city project aims at combining infrastructure and urban development together , he added. The greefield project will be spread across 930 hectares that will include a 220 hectare industrial and IT park, a logisitics hub and a 263 hectare township. The total land required for the project is about 2,300 acres. The first phase of the project till June 2012 will cost . 600 crore. This includes putting up of social infrastructure like hospitals, educational institutes and shopping malls by the end of this year. We are in talks with Apollo for setting up a hospital, Taiwanese companies for setting up the IT Park and Singaporean hospitality chains to set up a hotel. Talks with developers are also on for housing projects, an educational institute and a shopping mall to attract traffic, Paul said. Hard investments on all these are expected to come by year-end , he added. The greenfield airport complex with a capacity of half a million passengers, expects to see traffic of 350,000 in its first year of operations, as the first flight takes off from the facility in June. The airport would have a 2,800-feet long runway to accommodate aircraft like Boeing B-737 s and Airbus A-320 s. It can be extended to 3,300 feet to meet the needs of larger aircraft. BAPL is currently scouting for a South-East Asian partner to build a maintain-repair-overhaul (MRO) facility for narrow-bodied aircraft like Boeing 737, Airbus 320 and 319s. Construction of the MRO is expected to be complete by 2013. "For any company to set up their initial MRO operations in the Aerotropolis region an investment of . 30 crore would be required, Paul said. According to sector experts, India will be the largest aircraft purchaser in the next five years and currently, planes go to South-East Asia for maintenance. "We have enough land, infrastructure and are geographically well positioned to cash-in on this opportunity. We'll also look to cater to business jets later, Paul added. A plan to create a logistics hub to support the MRO is also in the works. BAPL is also trying to create a Free Trade Warehousing Zone, from where airline companies can easily access spare parts. Changi Airport Group (CAG), which has also developed an aerotropolis in Singapore, holds a 26% stake in the project.

TOKYO: Japan's Mitsubishi Motors announced Friday that it had started selling its zero-emission electric minicar in Europe as it tries to cash in on the growing popularity of eco-friendly autos. The automaker said it has produced its "i-MiEV" -- Mitsubishi Innovative Electric Vehicle -- electric car for Europe since October and has shipped about 2,500 units so far. Mitsubishi said it had stared selling the car in 15 countries including Britain, Spain, Sweden, Denmark, France and Belgium and would begin shipping to four more European countries soon. "Later on, the i-MiEV shall be sequentially introduced further within Mitsubishi Motors Europe's territory," the company said in a statement. Mitsubishi, which rolled out the car in Japan in 2009, has said the car runs quietly but accelerates quickly, and the running cost is one third of that of a petrol-powered car.

14/1/2011 TOKYO: Toyota Motor will consider shifting factories overseas if the yen stays high and puts pressure on its profits, the company president said. "We do not wish to relocate production sites because of currencies and foreign exchange alone," Akio Toyoda said in a Japanese-language online message dated Friday. However, he added, "if profits cannot be generated" despite efforts towards efficient, good-quality manufacturing and training, "we have no choice but to consider relocation of production sites as a real possibility." The company plans to release a fresh medium-term business plan in April, he added.

Japanese exporters, led by automakers and electronics producers, have come under pressure from the rising yen in recent months. A strong yen makes Japanese exports relatively more expensive in foreign markets, while shrinking the value of Japanese firms' overseas earnings when repatriated. Meanwhile, Japanese automakers have been shifting more of their production and sales overseas -- particularly to growing Asian markets -- as younger Japanese motorists avoid car purchases due to the high costs of fuel, maintenance and tax. Toyota Motor had already announced in late 2010 a plan to reduce domestic production while boosting output in foreign countries in 2011. "Unfortunately, we have to brace ourselves for more difficulty and uncertainty to come, like last year," Toyoda said in his message, adding that the business plan would outline a corporate vision for the decade to 2020. "In April we hope to be able to show you the vision, including the directions and targets for a medium-term business structure reform plan to achieve the vision's goals," Toyoda said.

China overtook the US last year as the worlds biggest economy when measured in terms of purchasing power, according to Arvind Subramanian , senior fellow at the Peterson Institute for International Economics in Washington.

The size of Chinas economy in 2010 was $14.8 trillion, compared with the USs $14.6 trillion, when accounting for the countries differing costs of living, Subramanian wrote in a note published Thursday, a week before president Hu Jintao visits Washington. So-called purchasing power parity calculates gross domestic product using exchange rates that adjusts for price differences of the same goods between nations. Growth in the worlds most populous nation has averaged 10.3% a year over the past decade, nearly six times faster than the US. China was the biggest auto market for the second year running, created the worlds fastest supercomputer and was ranked the biggest user of energy in 2010. A poll of Americans ahead of a summit of Hu and President Barack Obama next week, found some 47% said China is the leading economic power with 31% naming the US, according to the Washington-based Pew Research Center for the People and the Press . A February 2008 Pew Poll found 41% of Americans considered the US the top economic power, with 30% naming China. Subramanian said his calculations are based on new estimates of GDP that will soon be published by the Penn World Tables, which correct biases in previous estimates by the International Comparison of Prices project and the World Bank that underestimated Chinas purchasing power. Adjustments have also been made to take account of a different estimate for appreciation in Chinas currency compared with that made by the International Monetary Fund , Subramanian said. Chinas GDP per capita, which reflects the average standard of living, would increase to $11,047 from the $7,518 estimated by the IMF in its World Economic Outlook , according to Subramanians calculations. That would still leave the USs GDP per capita 4.3 times higher than Chinas, he said. In nominal terms, Chinas output in 2009 was 34 trillion yuan, or $5 trillion, at average exchange rates that year, trailing the USs $12.9 trillion.

NEW DELHI: French auto major Renault's proposed small car to be launched in India post 2013 will be positioned above the ultra low cost car (ULC) that Bajaj Auto is developing for it and alliance partner Nissan, according to a top company official. "Bajaj's (the ULC) will be much cheaper (compared to the small car that Renault is developing)," Renault executive vice president (Sales and Marketing) Jerome Stoll said. Pune-based Bajaj Auto is developing an ULC to be tagged around $2,500, which will be marketed by the RenaultNissan alliance and is scheduled to hit the market in 2012. Stoll, however, said Renault's small car project is still in the early stages and too premature to talk about details. The company had earlier said that the small car is being designed to meet the requirements of the Indian market though it could be exported to similar global markets. Renault is planning to launch five models between 2011 and 2013, including a premium hatchback. It will start with sedan Fluence and multi-purpose vehicle Koleos later this year. "Considering the total market of India, we think there is a room for another small car, which can be more affordable than the one we are already planning to launch," Stoll said. Identifying India as one of the top three most important markets after Brazil and Russia for Renault's global market

development strategy, he said it is important for the company to deliver the right products at the right value here. "The Indian car market is projected to be about six million plus by 2020 and the potential is very high here. We want to concentrate here and that's why we are focussing in Indian instead of China," he added. The key for the company will be to deliver products, which provide a host of features that differentiate from rivals but at a price which is competitive. "It is important for Indian customers to feel that he has got a good deal after buying a car, which is not necessarily cheap," Stoll said, adding Renault's efforts would be to address that requirement. Globally, Renault had posted 14 per cent increase in sales touching 2.6 million units in 2010, with nearly a million units coming from outside Europe. Stoll, however, declined to comment on what kind of sales the company is expecting from the Indian market. The Renault-Nissan alliance is investing Rs 4,500 crore in setting up their plant in Chennai, which will have an annual capacity of four lakh units. Nissan is already rolling out its hatchback Micra from there.

WASHINGTON: The United States just passed a dubious milestone: Government debt surged to an all-time high, more than $14 trillion. That means Congress soon will have to lift legal debt limit to give the nearly maxed-out government an even higher credit limit or dramatically cut spending to stay within the current cap. Either way, a fight is ahead on Capitol Hill, inflamed by the passions of tea party activists and deficit hawks. Already, both sides are blaming each other for an approaching economic mess as Washington wrestles over how to keep the government in business and avoid default on global financial obligations. Bills increasing the debt limit are among the most unpopular to come before Congress , serving as pawns for decades in high-stakes bargaining games. Every time until now, the ending has been the same: We go to the brink before raising the ceiling.

16/1/2011

NEW DELHI: Indian information technology (IT) companies have reportedly ramped up efforts to win the confidence of more Chinese companies in a bid to consolidate their foothold. Tata Consultancy Services Ltd (TCS), India's largest IT services company by sales, is leading the effort to expand the presence of the Indian IT industry in China - although cracking the Chinese market may not be an easy job. "Chinese companies are still used to the traditional global brands. They have not yet seen us. So it is also a question of brand-building for us," Girija P. Pande, head of the Asia-Pacific region of TCS, told the China Daily. India exported 50 billion dollars in IT services to China in 2009 and industry analysts expect the number to exceed 100 billion dollars annually in the next five years. In recent years, TCS has emerged as the largest Indian software business company servicing large Chinese Staterun companies.

Four major Chinese banks including Bank of China and Hua Xia Bank have been clients of TCS' core banking system. "I think we have to get more Chinese large companies to see our capability," Pande said.

TCS currently hires more than 170,000 people in 40 countries around the world, but it only has 1,200 people in China. Pande said the company plans to increase its workforce in China to 5,000 people in the next three years. Wipro Technologies Ltd, a leading Indian software company, is also following TCS' step in expanding into the growing markets. "China has become our preferred delivery center for our Japanese customers. We want to build our biggest research and development center in Asia in the city of Chengdu," said Gangadharaiah C.P., vice-president and global head of Wipro Technologies' testing services. Rajan Kohli, Wipro's chief marketing officer, said that the company plans to reduce reliance on the mature markets in the US and Europe as demand in emerging markets such as China is booming. According to a survey by accountancy firm KPMG , China's total outsourcing market will grow to 43.9 billion dollars by 2014, more than double its 20 billion dollars in 2009.

When They They We We

had closed had

missionaries came to the Bible and we had said, Let us our eyes. When we the Bible and they had Bishop Desmond

Africa, the pray opened the Tutu

land them land.

Agricultural land around the world has become a new magnet for speculative financial flows . Efficiency, wastage reduction and supply chain bottlenecks have become latest gospels to grab land. Soaring farmland values have generated new investment vehicles and increased participation in existing vehicles by institutional investors. With food prices rising again, interest in farmland is on the rise. The private investors believe the trend will continue, given that the world needs to increase food production by 70% by 2050 to feed a rising and wealthier population. The influx of financial investment into agricultural land is global. A few years back, agrifood giant Louis Dreyfus Commodities raised $65 million for Aclyx Agro Ltd, its vehicle established to buy, operate and sell land in Latin America (chiefly Brazil). The influx gained notoriety after an attempt in 2008 by South Koreas Daewoo Logistics to secure a large chunk of land in Madagascar for a very low price and vague promises of investment. In India, land banks are also being created. Driven by the huge opportunities, Indian corporations too are aggressively expanding into the agriculture and retail sector (both with the ultimate objective of land bank). In a few states, pitch for APMC land by a few corporates has already been made in the name of modernization. The cause for concern is that this is happening without a proper regulatory framework and lack of comprehensive understanding of the likely impact on agriculture in general. Agriculture, land use, real estate, tax and labour policies and laws are being changed to facilitate the entry and growth of big corporate agencies into agriculture and retail. Under the financial imperatives, firms in the food processing and agricultural service sector have essentially become bundle of assets to be deployed or redeployed depending on the short-run rates of returns that can be earned. Investors in the food processing and agricultural services sectors are now demanding rates of return equal to those obtainable in global financial and stock markets at the rates unthinkable even a decade ago. In the absence of a high

operating

margin,

the

land

valuation

game

is

being

played.

Agricultural service sector has already moved into the high cost trajectory. Prices of agricultural products are in a long-term upward trend due to factors like increasing land cost and high input cost (e.g. fertilizer price driven by crude). It is likely to go up even further, with further pumping of private funds into agriculture, food processing industry, warehousing and agriculture infrastructure. Productivity continues to grow but wages no longer keep pace with profits and productivity. Focus has shifted from increasing productivity to deployment and distribution. While we dont have the luxury of philosophizing about food, the bottleneck in food supply chain is the latest whipping boy of the government to be blamed for the price rise. Under the grab of the supply chain bottlenecks, large investments are likely to be approved in the coming months which will benefit a selected few with incentives (subsidies) and the land bank creation opportunities. First it was the floods of North and now it is the food price rise which is being cited as the reason for the need for increased investment. While there is a need it is only going to benefit a selected few with policy incentives. Mark Twain once said buy land, theyre not making it any more and it seems that corporate and private investors share his view. (Shyamal Gupta is chief business officer of NCMSL. Views are personal)

BANGALORE/ NEW DELHI: Big Bazaar outlets at Chikkadpally and Ameerpet in Hyderabad are fixed in Rachael Daniel's routine. While lugging shopping bags past the cash counter three months ago, the 25-year-old working at St Francis Women's College was presented with an offer: she could claim a mobile SIM card with 70 talk time if she spent 3,000 at Big Bazaar. And she could increase this talk time by shopping at any of Future Group chains, including Pantaloon and Ezone. Daniel was elated. "Getting talk time for shopping is like saving pocket money," she says. As competition in the retail sector intensifies, retailers and marketers are making their loyalty programmes - that offer special discounts and easy rewards to regular customers - even more attractive by taking them to the mobile phone platform and even adopting a gender-based approach. Loyalty or privilege club programmes are structured marketing efforts to encourage customers to frequent a company's outlets and spend more by offering them attractive rewards and discounts. Retailers such as Future Group, Landmark Group, Reliance Retail, Indus League and Shoppers Stop are now experimenting with mobile-based mechanisms to relieve consumers of the pain of carrying loyalty cards every time they visit a shop. Madura Fashion & Lifestyle's Van Heusen brand has gone a step ahead by tweaking its approach by gender. "Loyalty cards are getting boring for the customer," says Bijou Kurien, president & chief executive-lifestyle at Reliance Retail. "This is why we are evaluating methods of using the growth of mobile phone usage to understand and connect with our consumers far more effectively," he adds. Landmark Group-owned Lifestyle too now allows customers to accrue and redeem points through an SMS short code service even if they are not carrying loyalty cards. The Raheja Group-owned Shoppers Stop allows customers to redeem points directly into cash instead of changing it into vouchers first. "With technology advancing by the day, more non-card based initiatives are soon to come," says Shoppers Stop vice-president (marketing) Vinay Bhatia. Loyalty programmes have already become a key to the revenue growth of several marketers, particularly big retail

chains. Lifestyle, for example, draws 50% of its annual revenue from about 2 million members of its 'The Inner Circle' programme, while Shoppers Stop derives 73% of its business from its more than 1.9-million 'First Citizen' members. Industry players estimate that there are about 20 million loyalty programme members in India. This is nowhere near the US where there are more than 700 million loyalty club members across retail stores, according to a 2009 study by loyalty marketing firm Colloquy. Most retailers in India base their loyalty programmes on points. If a customer shops to a certain limit, then she gets reward points that can be redeemed as products through a loyalty card. But now they are experimenting with new products and offers to attract the aspirational Indian consumer. Future Group has partnered with Tata Teleservices for T24, a special mobile connection supported by Tata DoCoMo. T24 already has 3 lakh subscribers across Andhra Pradesh, West Bengal and Uttar Pradesh and it will be extended to 10 more telecom circles this month. Or, take the case of Van Heusen. The American apparel brand has launched a loyalty programme called the Diva club for women, based on discounts unlike the points system used for men. "Women are more emotional. They do not really want to be bothered by calculating points and tend to be happier with discounts," says Van Heusen's strategy and planning head Shivaraj Subramanium. The attempt to personalise relationships with customers is also becoming a focus area. Shoppers Stop, for instance, allows its club members to choose a day within the year when they could shop on discount unlike other customers who buy at full price. Other non-monetary initiatives such as valet parking, free home delivery, dedicated lounges and billing counters with specialised staff assistance too are making a difference.

17/1/2011

NEW DELHI: Low-cost carrier ( LCC )) IndiGo became the third largest domestic passenger airline in the country for the fourth quarter of 2010. The sector was led by full-fledged carriers Kingfisher and Jet. Aviation ministry figures showed that in the last calendar year quarter, IndiGo carried 25.89 lakh (2.589 million) passengers, followed by Air India's domestic arm (formerly Indian Airlines) at 25.42 lakh passengers and LCCs like Spice Jet (20.01 lakh), Jet Lite (10.85 lakh) and Go Air (9.79 lakh), a ministry statement said Tuesday. The market leader in the last calender year quarter Kingfisher carried 27.81 lakh passengers, closely followed by Jet Airways with 27.28 lakh passengers. The entire domestic airline industry carried 14.70 million passengers in the fourth quarter of the last calender year. "Total domestic passengers carried by the scheduled airlines of India in the fourth quarter of 2010 - October to December, 2010 - was 147.05 lakh," the ministry said. The figures also show an upbeat domestic passenger trend with the total domestic passengers carried in the fourth quarter growing by 22.70 percent over the third quarter of July to September, 2010, which stood at 119.84 lakh

passengers. Market share for the last quarter was led by Kingfisher Airlines at 18.9 percent, followed by Jet Airways at 18.6 percent and IndiGo at 17.6 percent.

NEW DELHI: Keeping with its global ambition, homegrown farm equipment-to-software group Mahindra & Mahindra today said it will embark on a new brand positioning to project a singular voice for various entities under its umbrella. The group, which has decided to use 'Rise' as the new brand position, said it will be spending Rs 120 crore in the next three years towards promoting the new initiative. "For Mahindra, 'Rise' means achieving world class standards in everything we do, setting new benchmarks of excellence and conquering tough global markets," M&M Vice- Chairman and Managing Director Anand Mahindra said in a statement. The idea behind the move is "to communicate with one brand voice, one face and one 'Mahindra' core purpose", M&M said. The USD 7.1 billion group had hired New York-based advertising agency StrawberryFrog two years back to create the new brand positioning. Explaining reasons for choosing the word 'Rise', M&M Executive Vice-President Corporate Strategy, Ruzbeh Irani said the group had spoken to its customers across the world and they expressed a common optimism about future and shared a common desire to rise , to succeed and create a better future for themselves. "We strongly believe that the Mahindra brand epitomises what our customers want -- a company that empowers them to 'Rise'," he added. Besides being in the bracket of top tractor makers in the world, M&M has a full range in the automotive sector from two wheelers, SUVs to electric vehicles. In the IT sector, it had expanded when Tech Mahindra acquired Satyam Computer Services , which is now known as Mahindra Satyam. It had forayed into the aerospace segment in 2009 when it acquired up 75.1 per cent stake each in Australia's Gippsland Aeronautics and Aerostaff Australia for Rs 175-crore to make aircraft and allied components to service the global market. Last year, the group's automotive division had signed definitive agreement with Ssangyong Motor Company Limited (SYMC) to acquire 70 per cent stake in the ailing South Korean auto maker at a total cost of USD 463 million (about Rs 2105 crore).

18/1/2011
MUMBAI\NEW DELHI: Tata Motors plans to combine distribution platforms for passenger cars and light trucks capable of carrying passengers , as it seeks to boost margins for dealers and bring retailing for products such as the Winger Platinum, Venture and the Xenon under one umbrella, three people familiar with the development said. India's largest automobile major is looking to sell Nano, which posted an upsurge in sales in December after successive decline in growth, through truck and passenger car services centres. The company's multi- purpose

vehicle, Venture, which is part of the Ace family of commercial vehicle platform, will be sold along with Indica and Indigo by month-end, said automobile industry executives. "We have started selling Platinum in passenger vehicle dealerships. This will help in expanding distribution apart from combining financial strength," said a Mumbai-based passenger vehicle dealer of Tata Motors. An email sent to the company did not elicit any response. Tata Motors' officials declined to comment. The move reflects a change in marketing plan in tandem with the changing times. Faced with rising overhead costs, dealers have been demanding better profitability from sales and vehicle service operations. New model line-up will help the dealers to extend the customer base. "The margins have taken a hit as sales of models like Indica and its variants have not grown and Nano is yet to bring in volumes. Fiat Auto (Tata Motors JV partner) is also facing tough times as sales of its cars are not so encouraging. So, the extension of vehicles like Venture will add to our sales and service operations," said a New Delhi-based Tata Motors dealer. Passenger cars and commercial vehicle dealerships normally function independently.

In the early 90s, passenger cars Estate and Sierra did not bring much volume and were retailed as part of the truck division. With the launch of Indica in 1998, the company moved the Sumo, Safari, Estate and Sierra to the passenger car division. While between April and December last year, Tata Motors vehicle sales grew by 28% at 5.24 lakh units, the passenger vehicle sales posted 30% growth at 2.48 lakh units.

MUMBAI: Bajaj Auto is going at full throttle to challenge market leader Hero Honda in rural and semi-urban markets that account for more than half of two-wheelers sold in the country. The countrys second largest two-wheeler maker has appointed 135 dealers in small towns and mini metros, where it had only 25 dealers, and will offer special finance scheme for rural customers even if they have no bank account. We are reinventing our marketing and distribution strategy to keep up our growth momentum, said Bajaj Auto motorcycle business president S Sridhar. The key lies in addressing a bigger market, he added. New dealerships will be operational by March end. Six out of every 10 new dealers are in small towns such as Hingoli in Maharashtras Nanded district, with the rest in mini metros such as Pune and Nagpur . They will offer a special financing scheme backed by Bajaj Auto Finance with a direct cash collection facility. That is, customers need not provide post-dated cheques to avail of finance ; they can pay the instalments in cash. The loans will be given on the basis of trust and initial verification and there will be no collateral , Sridhar said. The company has already tried this out in select areas and, according to him, default rate is much less than in the postdated cheque system. Bajaj Auto is also considering a seasonal collection strategy for rural areas, Sridhar said. This would mean that instead of monthly instalments , rural customers can time their loan repayment to crop cycle, which is 2-3 months for rice and wheat. Experts feel that the rural initiative will make an immediate impact on the companys business. Bajaj Auto will be able to improve its market share to more than 30% with the rural push, said Fortune Financials analyst Mahantesh Sabarad. But the rising input cost will put pressure on margins, he added. At present, Bajaj Auto holds a 27% share in the two-wheeler market, dominated by Hero Honda with 54%share. Hero Honda does almost two-thirds of its sales in rural areas, while Bajajs most popular bike in rural areas, Discover , gets

45%

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This number will increase soon. The new initiative will help Bajaj tap the huge potential in rural India much better. Good rains, increasing crop productivity, high farm product prices have pushed disposable incomes up in rural India. So did the rural job guarantee scheme and development projects that also ensured improved accessibility.

19/1/2011
NEW DELHI: The government is working on a policy to encourage manufacturing of hybrid cars in India through excise duty concessions, to protect environment and reduce the country's dependence on fossil fuel. The proposal will be piloted by Heavy Industries and Public Enterprises Minister Praful Patel , an official said. Besides, the fiscal sops like differential excise on the car, the policy is likely to incentivise research and development for development of the hybrid vehicle, he said. "To encourage the production of these cars (hybrids), there is a need to upgrade the laboratory knowledge," he said. The Department of Heavy Industry would also be seeking the Cabinet nod to form a high-level panel on the issue. If approved, the panel is expected to come out with a clear-cut policy by September, the official said. Hybrid cars, which runs both on the conventional fuel as also electricity charged battery, are at present imported in India. But the costs are quite high, as these cars are priced at least 25 per cent more than the regular petrol or diesel fuelled vehicles. Toyota Prius Hybrid, which is being imported in the country is priced at over Rs 25 lakh. In 2008, Honda had launched its Civic Hybrid Priced at Rs 21.5 lakh, which was slashed to Rs 13.36 lakh but has since stopped selling the car due to cost ineffectiveness. "We have to see as to how to reduce the price to a reasonable level," the official said. The department is also conducting a study to assess the infrastructure availability and sops needed for the promotion of these cars in the domestic market. Cars, which run on conventional fuel, attract excise duty ranging from 10 per cent (for small vehicles) to 22 per cent for sedans. During 2010, India produced 1.87 million cars. The hybrid technology is pioneered by Japan , the US and Europe.

BANGALORE: After years of hiring experienced professionals to serve top customers in the US, Indian tech firms are now seeking to hire fresh engineering graduates from American universities, as stricter immigration norms and high unemployment rate make local hiring attractive in the country. In a year when Indias top outsourcing firms are under pressure to position themselves as more global companies not necessarily responsible for Americas jobless economic recovery, experts and company officials say a war for local US talent is set to become a priority. Apart from stricter and costlier visa permits in the US, outsourcing customers such as GE are also asking Indian vendors to play a role in addressing high unemployment rates.

India-based tech firms including Wipro, Tata Consultancy Services , Infosys and Cognizant are now battling it out to hire hundreds of fresh engineering graduates from campuses of Pennsylvania State University , Rutgers, University of Massachusetts , University of Connecticut , North Carolina State University and University of Michigan , among many others. Companies such as Infosys, which counts JP Morgan among its top customers, say they have started hiring from US campuses. We have a target of hiring 250 local employees every quarter in the US for the next four quarters, said S Gopalakrishnan, CEO of Infosys. As we develop our consulting and systems integration services, we need to hire more at all levels in the United States. Brand recall for companies like ours is improving every year, we are slowly getting there, he said. US talent pool much smaller

There is no big cost difference because we have to pay American salaries even to our Indian employees going there, he added. However, unlike India, which produces nearly 600,000 engineering graduates every year, the US pool is much smaller, ensuring a much more intense fight for whatever talent is available. Though IT is a popular choice, compared to Indian colleges, the pool of students looking out for a career in IT is smaller and all tech firms are tapping into this pool; so definitely, the war for talent is there, said Priti Rajora , global head, talent acquisition, Wipro Technologies . On their part, Indias top outsourcing companies TCS, Infosys, Wipro and HCL have already started setting up development centres in locations such as Atlanta and Michigan. While TCS aims to double its foreign workforce from 10,000 currently to 20,000 over the next five years, Infosys and Wipro could see non-Indians account for 10-15% of their total employee base in next 3-5 years, from around 5% currently. 18/2/2011 MUMBAI: Entering into a strategic alliance with Bhutan's High 92.7 FM radio channel, Reliance Broadcast Network's radio arm 92.7 BIG FM has become the first-ever Indian radio station to enter Bhutan. Boasting a 45 city network in India, BIG FM has now extended its reach to Siliguri town of West Bengal and Bhutan, company officials said on Friday. "This relationship infuses further strength into our offerings, as we solidify our presence in the east, giving us the highest reach and ensuring superlative market penetration," said Pankaj Chandra, BIG FM's vice president (sales). The alliance will see the packaging of non-competing stations of BIG FM across Siliguri, West Bengal and Bhutan to offer marketers unmatched reach in the region. High FM will cover Darjeeling, Jalpaiguri, Coochbehar and Uttar Dinajpur making inroads into the interiors of West Bengal facilitating its further penetration into the tier II and tier III cities. "We are very excited about this new venture and are looking forward to an extremely productive union. We are optimistic about this association taking us to greater heights of profitability," said Gautam Banerjee, chief operations officer of 92.7 High FM.

The change of fortunes for the airlines industry in the past one-and-ahalf years seems to have evaded Bangalorebased Kingfisher Airlines. The company continues to be beset with problems that have squeezed its earnings and left it lossmaking. The December 2010 quarter proved to be its sixteenth consecutive quarter of losses, as the company reported a net loss of Rs 252 crore, a bit lower than the year ago number. In spite of its recent debt recast, sustainable growth will depend on the success of its equity infusion plan. The companys most critical problem is its debt, which is mammoth and still rising. During the past oneand-a-half year, for example, the interest payment took away an average 21% of its revenues, which was sub-stantially higher compared with less than 10% for its peers like Jet Air-ways or SpiceJet. Kingfisher Airlines has been making cash losses year after year, which has resulted in rising loans to fund losses. The problem of perennial losses has been, no doubt, its origin in the companys operational problems. For the past six quarters, 14 out of 66 its aircraft remained out of action nine on account of technical problems and five due to companys inability to pay lease rentals. This meant a huge loss of opportunity as the industrys growth momentum picked up. This also resulted in the company losing its market share to smaller players, like Indigo. Kingfishers market share dipped to 18.9% in December 2010 from a peak of 23% in March 2010 while its competitors such as Jet Airways, SpiceJet and Indigo gained. In fact, Indigo Airlines, which was the smallest of the lot, now commands market share on par with Kingfisher.

No wonder then that the company also proved to be a value destructor for its investors. In the past one-anda-half years, the companys stock has fallen by 11% while the stocks of Jet Airways India and SpiceJet have given returns of 110% and 154%, respectively. However, the company is now trying hard for a revival. It has kicked off a debt-recast plan with its lenders in the December quarter, which is estimated to reduce its annual interest burden by Rs 450 crore. It converted loans of nearly Rs 1,950 crore into preference shares, rescheduled repayment of remaining loans and reduced interest rates, besides securing further funding worth Rs 1,200 crore from banks. At the same time, the company is planning to raise $250 million through issue of global depository receipts (GDRs) by March 2011. If successful, this will further reduce the companys debt and interest burden. Recently, the company brought back seven of the 14 grounded aircraft, which will lift its March 2011 quarter numbers. However, for a sustainable recovery, a lot would depend on the success of its GDR issue.

NEW DELHI/MUMBAI: Marico India has acquired Vietnamese firm International Consumer Products Corporation as the maker of Parachute hair oil and Saffola cooking oil continued Indian consumer products makers' recent buying spree in Asia and Africa. Marico bought an 85% stake in the maker of Vietnam's top male-grooming brand X-Men in a deal estimated at $5560 million. "The acquisition strengths our presence in the male grooming space and is a good strategic fit," Marico's International Business Group CEO Vijay Subramaniam said. "It also gives us lots of headroom for growth." Marico officials declined to confirm the deal size. International Consumer Products Corporation (ICP), set up in 2001, is one of the fastest-growing personal care and home care companies in Vietnam, growing at a rate of 23% per year. Its revenues increased by one-third in 2009 to $26.4 million. Its brands include Vegy, OCleen , X-Men, Dr.Men, TeenX, L'Ovit and Quoc Nhi. While X-Men holds more than 35% share in Vietnam's male-grooming market, L'Ovite ranks among the top five premium cosmetics brands.

Marico has acquired the shares of PE players Mekong Enterprise Fund II , BankInvest Vietnam and few individual shareholders. ICP promoter Phan Quoc Cong will continue to hold 15% in the firm for three years and will head its operations as CEO. This is Marico's eighth global acquisition in about five years, some of the others being Code 10 brand in Malaysia, Hair code & Fiancee in Egypt and Enaleni Pharmaceuticals in South Africa. The firm's international portfolio contributes to 23% of the group's overall revenues. Overseas acquisitions in MiddleEast, South Asia and Africa have become a trend among Indian companies because they give easy access to several unexplored global markets and also because there are very few acquisition targets in the sector within India. Wipro Consumer Care acquired Singapore-based personal care products maker Unza Holdings in 2007 and Yardley in Asia, West Asia, Australasia and certain African markets from the UK-based Lornamead Group two years later. Godrej Consumer Products' list of acquisition includes Kinky in South Africa, Tura in Nigeria, Indonesia-based Megasari, and Argentina-based Issue Group and Argencos. Dabur has also sealed two global acquisitions in the last one year - Turkey's Hobi Kozmetik and US-based Namaste Labs .

MUMBAI: The auto major Mahindra Group plans to launch the Airvan, an 8-seater utility aircraft shortly in the domestic market. "We plan to launch the aircraft - the Mahindra GrippsAero GA8 TC 320 Airvan - in the domestic market shortly," Mahindra Aerospace executive director and chief executive Arvind Mehra told reporters here today. The company has already applied for regulatory approvals like certification, etc, Mehra told newsmen after GrippsAero GA8 TC 320 Airvan, which has already circumnavigated 21 countries, made its maiden landing at the Juhu air-strip here. The company has an ambitious plan of launching a range of small segment aircraft such as a 5-seater, 8-seater, 10seater and an 18-seater in the country, Mehra said, adding there is good potential for these aircraft here. Aircraft like the GA8 TC 320 Airvan are quite useful for difficult terrains because of their capability to take off or land at very small air-strips, he said. "Besides, we are also looking at this aircraft for emergency medical evacuation services and point-to-point connectivity as well as in other operations like charter and surveillance services," Mehra said. Last year, Mahindra Aerospace jointly with Kotak PE had acquired a controlling stake in two Australian aerospace companies--Gippsland Aeronautics (Gipps Aero) and Aerostaff Australia. While Gippsland Aeronautics is into aircraft manufacturing, Aerostaff is into manufacturing aircraft components. The Airvan is a unique 8-seater multi-role aircraft that can be deployed both in passenger and freight services.

CHENNAI: The market for commercial vehicles in India is set to see new action as Daimler, the world's biggest truck maker by sales, unveiled an allnew brand 'BharatBenz' as it invest Rs 4,400 crore for a factory in Oragadam near Chennai. Daimler joins other global biggies like Sweden's Volvo, Germany's Man and America's Navistar, all of whom have already set foot in the Indian market. "We would have liked to come to the country earlier but there was a slowdown," Daimler chairman Dieter Zetsche said here after unveiling the company's India branding, its fifth truck brand globally. "We are very clear that we want to take a leadership position in India. We have chosen a very promising product for this market."

Daimler had initially joined hands with the Munjals of the Hero group for its India entry and they had originally formed a joint venture in 2008. But this fell apart in April 2009 as Hero pulled out. Daimler had then purchased Hero Group's 40% stake in the joint venture and said it will go ahead with the project independently. Zetsche said the company does not intend to have a new equity partnership with any Indian company for its commercial vehicle business, though it may partner Tata Motors for components . The Stuttgart-based auto maker that has been assembling its Mercedes-Benz Actros brand of heavy-duty trucks as well as buses at a factory near Pune since November 2007 will offer trucks from six to 49 tonnes under the BharatBenz brand. These would be produced at the Oragadam factory and the first model will be introduced in June 2012. The plant will have an initial production capacity of 36,000 vehicles a year. Stating that India has become the world's second-largest market for medium- and heavy-duty trucks, Andreas Renschler, head of Daimler Trucks and Daimler Buses, said the company expects the local truck market to double by 2020. "We will play a significant role in this leap," Renschler said. Truck and bus sales grew 45% to 652,692 vehicles in 2010, according to Siam. Daimler has a growing car business in India through its passenger vehicle unit, Mercedes Benz India, which also assembles C-Class, E-Class and S-Class luxury sedans. The company currently sells trucks under the MercedesBenz, Freightliner, Western Star and Fuso brands worldwide. But while it has entered the market alone, other international players have forged alliances with local companies. Volvo has partnered the Eicher group while Man is coming with Force Motors of the Firodias. Navistar has partnered another local heavyweight , Mahindra and Mahindra. Investments in road infrastructure as well as rising economic activity are the reasons that make the companies bullish on the Indian market.

20/2/2011

Once, the term 'multinational' was synonymous with the likes of Hindustan Unilever (HUL), Coca-Cola, PepsiCo and Cadbury. Given that they deal in fast-moving consumer goods, these companies still enjoy top-of-the-mind recall. But a look at turnovers tells a different story. The changing Indian market has caused a churn in the pecking order of MNCs. As new names ascend to the top 10, most of the old timers have been relegated to the lower rungs some not even featuring in the billion-dollar club (Rs 4,550 crore turnover). So which MNC enjoys the biggest sales in India? The name will come as a surprise to many who still recall the time it was half-owned by the Indian government. But with Japanese company Suzuki Motor holding a 54% stake in it, Maruti Suzuki qualifies as an MNC arm in fact, the biggest in India, with annual sales of around Rs 30,000 crore. Nokia (Rs 23,000 crore) and Vodafone (Rs 22,000 crore) follow, reflecting India's status as the world's fastest growing mobile phones market. "India is a truly global market today where you, as a marketer have to provide quality products at clever prices. Today, leaders across categories be it FMCG, auto or any other sector must have the ability to learn and unlearn to stay ahead of the curve," said D Shivakumar, MD & vice-president, Nokia India.

HUL, which ruled the roost for years, has now been pushed down to No. 6. But when it comes to reach in rural India, it remains the undisputed leader. Over the years, South Korean conglomerates have worked hard to woo Indian consumers, and their efforts seem to have paid off with three Korean companies in the Indian top 10 automobiles major Hyundai (No.4) and consumer electronics giants LG (No. 7) and Samsung (No. 8). "The reason we have been able to do well in India is because we have been able to meet the needs of Indian consumers with products customized to meet their needs. We are looking at notching up sales of $10 billion in India by the year 2013 and to achieve this business, we will be making the necessary investments," said J S Shin , president & CEO (South West Asia), Samsung Electronics . The IT industry has been in overdrive. Not surprisingly, there are two biggies Hewlett Packard at No. 5 and IBM rounding off the top 10, based on revenue figures from Dataquest. Cement multinational Holcim, which has two operating companies, Ambuja Cements and ACC , with combined sales of over Rs 16,000 crore, is No. 9. Growth in manufacturing and infrastructure is expected to fuel its sales in future too.

However, even many MNCs which are not in the top 10 are part of the billion-dollar club, including PepsiCo ($1.5 billion), Coca-Cola ($1.1 billion) and Nestle ($ 1.1 billion) and the list is only going to grow. "There are very few growth markets in the world and India is clearly one of them, especially for several of these consumer facing companies," said Ashish Singh , managing director for India of global consulting firm, Bain & Company. "Most MNC boards are asking the question today as to whether their companies have looked at India and, if not, then why not?" (With inputs from Samidha Sharma ( Mumbai), Pranav Nambiar ( Bangalore), Reeba Zachariah (Mumbai) & Pankaj Doval ( New Delhi)

MUMBAI: McDonald's Corp's Indian franchisee plans to set up 30 new restaurants in the southern and western parts of the country this year, as part of the restaurant chain's expansion plans in Asia's third-largest economy, a top executive said. Speaking to Reuters in an interview, Hardcastle Restaurants Private Ltd Vice Chairman Amit Jatia also said the franchisee would invest $111 million in India over the next three to four years. Hardcastle will have a total of 250 McDonald's restaurants in three to four years in the two regions, up from 106 now, Jatia said. Hardcastle Restaurants is now a licensee of McDonald's in India, after the world's biggest restaurant chain sold its 50 percent stake in the joint venture to its local partner last year, Jatia said.

21/2/2011 SUZHOU (China): Last week, when Apple released its annual review of labor conditions at its global suppliers, one startling revelation stood out: 137 workers at a factory here had been seriously injured by a toxic chemical used in making the signature slick glass screens of the iPhone . Apple, describing it as a core violation of worker safety, said that it had ordered the contractor to stop using the

chemical and to improve safety conditions at the plant. Apple also said that it would monitor the medical conditions of those workers. But in interviews last weekend, nearly a dozen employees who say they were harmed by the chemical said they had never heard from anyone at Apple. Instead, they said the contractor a Taiwanese-owned company called Wintek had pressed them and many other affected workers to resign and accept cash settlements that would absolve the factory of future liability, charges the company denied. We hope Apple will heed to its corporate social responsibility, said Jia Jingchuan, 27. He said exposure at the Wintek plant to the chemical, known as n-hexane, had left him with nerve damage and made him so hypersensitive to cold that he now must wear down-insulated clothing even indoors. Usually someone my age doesnt wear this type of pants, he said raising his voice. Only 50- or 60-year-old men wear something like this. On Monday, however, a Wintek spokesman denied that the company was pressing workers to resign or sign papers absolving the company of future liability. The company said it was working with medical professionals to assess the health of workers. Jay Huang, the spokesman, even suggested that Wintek would pay for medical care should the symptoms persist after workers resign. Winteks policy of handling this is to put workers benefit as the first priority, he said.

Kristin Huguet, a spokeswoman at Apples headquarters in Cupertino, Calif., declined to discuss the Wintek case but said the company was committed to the highest standards of social responsibility in its supply chain. We require our suppliers to provide safe working conditions, treat workers with dignity and respect and use environmentally friendly manufacturing processes whenever our products are made, she said. Many workers, though, say they do not trust the factory because some managers continue to press injured workers to resign, sometimes by insisting they work longer hours even though their health is impaired. Jia, a stocky machine repair worker, was among a group of Wintek employees who gathered Sunday to discuss the case in a workers bare, unheated one-room apartment a few miles from the factory. Some members of the group said they were still suffering health problems while working at the factory, which employs 18,000 workers at an average monthly wage of about $200, after overtime. Wang Mei, 37, a quality inspection supervisor at Wintek, said she was hospitalized for 10 months because of nhexane poisoning. She said she would like to leave the factory, but only after receiving assurances that Wintek would cover her medical bills if her health problems persisted. Its not that we want to work here, she said Sunday, as she tried to explain why she remains at the factory despite recurring symptoms, such as soreness in her limbs and fatigue. We want to fight for our legal rights. Another woman came into the room waving a letter from a Chinese insurance company, turning her down for life insurance because she had been poisoned at the Wintek factory. Although many workers said they had not heard from Apple and had been pressed to leave Wintek, one worker said that an Apple employee had arrived at the Suzhou factory on Tuesday and had met with a few affected workers. The workers also said Wintek managers appeared to be softening their position early this week by telling several injured workers that they would no longer be required to sign documents if they choose to resign. The Wintek injuries underscore the challenges Apple faces in trying to source goods from China, which dominates electronics manufacturing

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About 18 months ago, workers at the Wintek factory started complaining of sore limbs and extreme weakness. Some employees had difficulty climbing stairs or even buttoning a shirt; others said they had dizzy spells and pounding headaches. My palms started sweating and my legs got numb, Jia said. At first, I didnt think it was related to work.

According to Wintek, doctors later discovered that the factorys workers, scores of them, were suffering from heavy exposure to n-hexane, a toxic agent the factory had begun using to clean the sophisticated touch-screen glass panels it makes for the Apple iPhone. Some workers said they were hospitalized for months with what doctors told them was nerve damage. Because the workers had insurance, Wintek and the government paid the medical costs and some compensation during their sick leave. Wintek said it began using n-hexane in early 2009, after the factory received a large order for the screens. The company says n-hexane evaporates quickly and was considered more efficient than other cleaning agents. But the compound is also considered a narcotic, which in high concentrations can disrupt the central nervous system of humans and induce vertigo and muscular atrophy, according to the Occupational Safety and Health Administration, a division of the United States Department of Labor. To draw attention to their plight, some affected workers organized a protest early last year. They also hired a lawyer, lobbied local government officials and even set up a microblogging site with links to their medical records. In its report, Apple said n-hexane was no longer being used at the Suzhou factory and that Wintek had repaired its ventilation system. But Debby Chan, project officer at Students and Scholars Against Corporate Misbehavior, a labor rights group in Hong Kong, said Apple and Wintek were slow to address the problem. We heard rumors about the poisoning in 2009, and after a strike at the factory in January 2010, we went to the No. 5 hospital and found some of the workers, Chan said. When I visited workers in the hospital they said the Wintek management did not care about the situation. And after this case was exposed by the media, Apple never approached the workers or made an apology for their suffering. Apples first mention of the case came last week, in its annual overseas supplier assessment, which the company has released since 2007. This years review was particularly sensitive because it was the first since several suicides last year among workers at Foxconn Technologies, one of Apples biggest suppliers in China. Some labor rights advocates had attributed the suicides to harsh working conditions at its huge factory compounds, some of which employ 300,000 people. In the report, Apple praised Foxconn for its response to the deaths. Foxconn hired counselors, raised salaries and even put up nets on some of its buildings to prevent suicide attempts. But Apple also said it had discovered that some of its other Chinese suppliers had employees younger than 16, the legal working age. One supplier factory had 42 underage workers, the company said. Well aware of the pitfalls of outsourcing manufacturing to China, Apple and other global brands often hire independent auditors to make surprise visits to supplier factories. They also press factories to agree to strict codes of conduct and to ensure worker safety and compliance with Chinas labor and environmental laws. One of the injured Wintek workers who agreed to be interviewed Sunday, Yao Xiaoping, a 22-year-old migrant worker from Shaanxi province, in the west, said he had already left the factory and had accepted compensation of about $12,000 but now feared for his future because of the n-hexane poisoning that he said had left him with sweaty palms and weak limbs.

I went back to my village but everyone knows what happened to me, he said, fighting back tears. So it has made it difficult for me to find a wife there.

MUMBAI: Consumers may have to shell out more on electronics , appliances and fast moving goods. Talks of a rollback of the stimulus and increase in excise duty are making consumer goods companies apprehensive. Already reeling under the surge in input costs over the year, companies will be forced to pass the excise duty burden, leading to higher retail prices for consumers. It looks almost certain that excise will be hiked in the auto sector, experts say. Durable and electronic companies like Samsung and LG India say the move will hit growth of the industry, while FMCG firms, including beverage companies feel that the move will squeeze their profitability and impact margins. There is speculation that the duty benefit given earlier may be rolled back, which will lead to a 2% increase in the excise levy. We hope this does not happen. The move will be detrimental , and pull down growth , a top executive with a consumer durable company told TOI. Recently, speculation about the increase has been rife, with the PMEAC also making a strong case for the stimulus withdrawal in view of the robust growth in the economy. The stimulus and tax cuts given to the industry in 2009 had provided a fillip to the sagging economy, with the consumer durable industry growing at strong double digit in 2010. Flat panel TVs grew 80%, while refrigerators, airconditioners and washing machines showed a 12.5%, 44% and 10% growth respectively, during January-December 2010. The industry has been suffering due to hike in metal prices with the increase in copper at 45%, steel 16%, resins 18% and aluminium 23% over August last year. At a time when the industry is reeling under the impact of rising input costs, one is looking at support from the government by way of policies that will boost domestic manufacturing , R Zutshi, deputy MD, Samsung India . Consumer goods, including durable firms, have implemented price hikes across the board over the last few months up to 10-15 %. Says LG India COO YV Verma: Such a move will adversely impact the industry, already suffering with high costs . The upped tags will be bad news for consumers, who are already burdened by a surge in food inflation even as their overall expenses have shot up. If the budget announces an increase in duties it will affect the end consumer who is already stretched as far his budgets go. There has to be some caution exercised by the government to curb further price hikes, said KK Modi, chairman, Godfrey Phillips India . The group, which has interests in diverse businesses such as confectionery, cosmetics and tea along with its mainstay tobacco, hopes that there no excise duty increases for tobacco . Cigarette prices have gone up by about 25% in the last one year. The $2-billion soft-drinks market, largely comprising the two cola majorsPepsiCo and Coca-Colais also expected to be hit with the rise in excise duty. At present, the levy at about 8%, if rolled back, along with other increases in manufacturing costs, will hurt their bottom lines. Also, FMCG companies which have facilities located outside of excise duty-free zones, will be impacted . Says Siddhartha Sanyal, chief India economist, Barclays Capital: ... A small hike in excise duties cannot be ruled out as the government is trying to boost revenue collection and the current excise rates are still below the prestimulus levels for a number of industries. 23/2/2011

Tokyo/New Delhi: The Japanese economy contracted more than expected at 1.3 per cent in the last three months of 2010, as sluggish exports and lower consumer spending took a toll on the Asian major.

Going by official projections released last month, the economy shrank by 1.1 per cent in the December, 2010, quarter. The downward revision comes less than a month after Japan lost its position as the world's second largest economy to neighbouring China. Data released by the Japanese Cabinet Office today showed that the national GDP shrank 1.3 per cent in the last three months of 2010. The steeper-than-expected fall was mainly on account of lesser domestic consumption and falling exports. The soaring yen impacted the fortunes of Japanese exporters. In addition, the end of certain government subsidies for the car industry also hurt the economy in December quarter. Nevertheless, the Japanese GDP clocked an overall growth of 3.9 per cent in 2010. Unlike neighbouring China -- one of the growth engines for the global economy -- Japan has been beset by economic woes for most part of the past decade. Also, an ageing population is another major concern for the country's future growth prospects. Japan, which is grappling with slow growth in recent times, has been the second largest economy in the world since 1967 till it was displaced by China last month.

NEW DELHI: Each time you open a new Word file in Microsoft Word, from now on, there won't be any need to save your work every few seconds, for fear of losing all your data with a power cut or a computer hang. Google's newly launched Cloud Connect toolbar for Microsoft apps, sits inside a MS Word, Excel, or Powerpoint application. Available for free download, the toolbar enables users to directly save their MS Office work into Google's server farms located all over the world, from any device. Google's strategy to embed its apps inside MS Office suite, which forms almost a third of its $62 billion annual sales will be a direct hit into Microsoft's prime bread source after Windows, if successful. Once logged in to a Google account, the toolbar automatically keeps saving any document being currently worked upon on to a Google server farm. The catch is that your PC should once in a while be connected to the internet, to get it synced with the cloud. "We will keep documents on the cloud till eternity for a user, as long as his or her Google account is active," Shan Sinha, Product Manager, Google Apps told ET from Google's Mountain View headquarters. Won't saving a large amount of private documents of users, create legal issues for Google? "All documents are stored in an encrypted fashion, and only people with the document's weblink would be allowed to view or edit," he says. The Cloud Connect initiative by Google is a step ahead of its Docs offering, which failed to pick up enthusiasm in many markets, as people are still hooked on to MS Office applications. Microsoft holds almost 90% market share in Office applications. The advantadge Cloud Connect toolbar offers users is that, once synced, all MS Office data sitting in a home or office PC, can be accessed from anywhere in the world through iPads , smartphones or PCs. " It's a conversion strategy, get people hooked on the capability so that they move completely to Google Apps and stop paying for two licenses (one Microsoft, one Google)," says Forrester analyst TJ Keitt.

Microsoft's Office applications generates a Google weblink for each document saved on Google's servers, once embedded with a toolbar. For groups, wanting to share work, Cloud Connect offers collaborative editing. All revisions by each user of the document is saved. "Every 5 seconds, someone in the world is downloading a cloud connect toolbar, since it got launched on Feb 25th, this year," says Mr Sinha. "There is no need for enterprises now to install costly Microsoft Office upgrades. They can directly work and store on the cloud," he adds. Google's strategy behind launching a Cloud initiative for MS Office, is a direct challenge to Microsoft, and its supremacy in the world of Office documents, which none have been able to challenge as yet. Open Office , Neo Office , IBM Lotus Symphony have not been able to succeed in the market despite being free. "We also have our Office Live service on the cloud much before than Google's offerings," says James Utzschneider, General Manager for Strategy in Microsoft's Sales, Marketing, and Services Group at Redmond. He defends the desktop computing model as well. "A large number of PC users in the world are unconnected. Though cloud is becoming a phenomenon, a large number of users will be desktop based." Mr Utzschneider leads a team responsible for Microsoft's worldwide marketing efforts around open source and emerging technologies.

FRANKFURT: The head of Volkswagen reiterated Thursday his intention to merge Europe's biggest carmaker with Porsche but said the luxury sports car company had to resolve its financial problems first. "Alliances and partnerships are an important instrument" as the group works towards becoming the world's biggest car maker by 2018, VW boss Martin Winterkorn said during an annual press conference. And his intentions towards Porsche "have not changed," Winterkorn added.

VW owns 49.9 per cent of Porsche AG , the company that builds the iconic 911 sports cars, and it wants to acquire the rest to make it the group's 10th brand alongside Audi, Bentley and Lamborghini. Integrating Porsche would help VW achieve economies of scale and provide access to handsome profits from Porsche's operations. But Porsche must improve its overall financial situation first, the VW boss stressed.

"A first step towards a merger was taken with the purchase of Porsche Holding ... the next is a Porsche capital increase," Winterkorn said. VW bought Austria-based Porsche Holding earlier this month for 3.3 billion euros ($4.5 billion).

That money is to be used by the Porsche and Piech families to take part in a capital increase aimed at cutting the debt of six billion euros that Porsche Holding racked up during a failed attempt to take over the much larger VW in 2008. A five-billion euro capital increase is supposed to take place by the end of May, though it could be pushed back until the end of August. A full merger might be delayed until 2012 owing to legal proceedings against two former Porsche executives in connection with the failed takeover attempt. Meanwhile, VW also plans to build a strong heavy truck unit with stakes it owns in the Scania and MAN brands.

That division "is a strategic activity for Volkswagen," Winterkorn said, and recorded a 50 per cent increase in sales last year.

10/3/2011 MUMBAI: Japan's largest life insurer Nippon Life Insurance is in talks with financial services firm Reliance Capital , controlled by Anil Ambani, to acquire a 26% stake into the Indian company's life insurance subsidiary for $724 million.

According to a person with knowledge of the deal, the two companies have been in talks for more than six months now. " Reliance Life and Nippon Life have been in talks for more than six months. The deal was not going through because of some valuation issues. The talks got revived in the last two weeks," said the person, who declined to be identified as he is not authorised to talk to the media. Reliance Life is the only life insurance company in which an Indian promoter owns 100% unlike many other ventures where overseas life insurers are partners. India's insurance sector laws have capped FDI at 26% although successive governments have attempted to raise the foreign investment threshold. Reliance Life MD and CEO Sam Ghosh declined to comment on the deal.

The life insurance business is highly capital intensive and takes close to 10 years for an insurer to break-even. That would mean only companies which have a cash pile or financial muscle can last the course. There have been reports of the Indian insurer planning an initial public offering and bringing in a strategic investor ahead of the planned share sale. Earlier, Reliance Life was in talks with Swiss Life and China Life, but failed to close the deal. The company even tried to divest its stake through a public offer last year. It had approached the government to allow companies to list after completing five years of operation against the norm which stipulates that insurers can launch an IPO only after 10 years. Insurance companies are awaiting an amendment to the Insurance Act, which will raise FDI to 49%. Dai-ichi Life and Tokio Marine Life Insurance are the Japanese companies operating in India. Dai-ichi Life has tied up with Bank of India and Union Bank of India while Tokio Marine has partnered with Edelweiss for India foray.

NEW DELHI: India's largest two-wheeler maker Hero Honda has roped in London-based consultancy firm Wolff Olins to create a new brand identity following the exit of Japanese joint venture partner Honda Motor . The new brand identity will include a new logo, brand name and brand positioning, said a company release. The Hero group, which plans to part ways with Honda by March-end, plans to drop the Honda brand name. ET had reported on February 5 about the Hero's plan to remove the Honda brand name from its flagship products Splendor and Passion - by June as its owners, the Munjals, want to carve out an independent identity at the earliest. "We are looking for exciting times amid strong fundamental of the rapidly transforming economy, backed by sustained GDP growth and the increased spending power of its strong middle-class," said Hero Honda MD & CEO Pawan Munjal. The Hero Group's new identity will help them to ramp up presence in global markets such as Latin America, Africa, the Middle East and South East Asia. According to Hero Honda officials, Wolff Olins has been mandated to spell the strategy to harness the potential of these brands for the domestic and international markets. London-based

consultancy firm has worked for Indian firms such as Airtel in the past.

12/3/2011 NEW DELHI: Tata Group firm Voltas today said it expects a 50 per cent jump in air conditioners sales by the end of the next fiscal at 12 lakh units. The company, which is likely to close this fiscal with 8 lakh units, said it plans to increase production capacity to meet demand while also ramping up research and development. It has earmarked an investment of up Rs 65 crore to expand its manufacturing facilities and on marketing activities during the upcoming fiscal. "We plan to sell around 1.2 million units of ACs by the next fiscal. By 2015, our aim is to sell 3 million units," Voltas Ltd Chief Operating Officer ( Units Products Business Group )) Pradeep Bakshi told reporters here. The company is also gearing up to expand its production capacity to 8 lakh units from 5 lakh units in its two facilities at Pantnagar in Uttarakhand, besides upgrading its R&D centre. "To expand our facilities and to build a separate R&D hub we will require an investment of Rs 15 crore to Rs 20 crore...Another Rs 50 crore will be our marketing budget for the year," he said. Besides, Voltas is also enhancing its distribution channels particularly in the Tier-II and Tier-III cities besides improving its after-sales services. "We have around 5,000 channel partners across the country. We want to increase it by 20 per cent this year," Bakshi said, adding the total number of brand shops would be increased to 100 within the fiscal from the current 80. The company, which introduced 70 new models of air conditioners for this summer season, is betting on the newly launched 5-star rated products to push its sales during the year. Voltas had a turnover of over Rs 4,600 crore in last fiscal, of which around Rs 1,300 crore came from its unitary products division which comprises mostly its air conditioner business.

NEW DELHI: Japanese investments in the rest of the world will slow in the next few months as the nation and companies affected by the earthquake and tsunami last week rebuild their lost plants and infrastructure, says a senior Japanese banker. "In the short term, it (investment outside Japan) will be affected as the focus has changed to the home country," says Takashi Morisaki, managing executive officer (MD) for Asia and Oceania, Bank of TokyoMitsubishi UFJ . "In the long term, Japanese companies will invest in fast-growing economies particular in Asia." Japan is grappling with the worst ever natural calamity in more than 15 years after last week's earthquake is feared to have killed more than 10,000 people and left millions homeless. Japan's benchmark stock index Nikkei-225 plunged more than 6% with shares of companies such as Tokyo Electric and Toshiba plunging more than 10%. More than 500 Japanese companies are in India including drug maker Daiichi Sankyo , Nippon Life and Matsushita Electric. But the nation that rebuilt itself from the nuclear ashes of the Second World War has the resilience to re-emerge. "In the immediate future, the situation in Japan may deteriorate further, but we have the expertise of last 20-30 years and financial strength to rebuild it fast," said Mr Morisaki of the island nation's biggest bank. "We do not know how much it (rebuilding) would cost, it may be $50 billion or even $100 billion. Currently, our household saving is over $1.5 trillion,

therefore,

financing

would

not

be

problem."

The flipside of the calamity could be that the rebuilding efforts could trigger demand for goods and services which the Japanese government and the Bank of Japan have been trying to promote for nearly two decades in vain. "The government and private companies are going to invest heavily to resurrect the economy. The fresh investment is going to generate fresh employment and would accelerate the economy growth," said Mr Morisaki. The Japanese economy has been ailing for 20 years, barely managing to eke out weak growth between slowdowns, saddled by a massive public debt at 200% of the GDP, the biggest among industrialised nations. The bank would look to buy a non-banking finance company and is eager to take the opportunity to convert its operations into a wholly-owned subsidiary as suggested by RBI. "The bank will convert into wholly-owned subsidiary once RBI allows," he said. The bank's total exposure, including lending from overseas offices in Indian companies, has registered a growth of over 50% annually over the last two years to around Rs 30,000 crore in 2010-11. The bank was one of the biggest lender to Bharti's acquisition of Zain African telecom business. The bank that has three branches has sought licences for two more branches in India.

KOLKATA/MUMBAI/KOCHI/AHMEDABAD: The earthquake in Japan has knocked the bottom out of India's iron ore, animal protein and seafood exports as ports shut down in the island country, and increased volatility in Indian commodity markets as jittery investors try to gauge damage. But the disruption may be temporary. Once the world's third-largest economy starts rebuilding its homes, factories and cities, traders are expecting demand for everything from metals and coal to timber, rubber, food and animal feed to zoom. That would create a mega market for Indian exporters seeking an alternative to faltering Chinese demand. The ensuing spiral in global commodity prices would boost profits for Indian raw material producers, although that may come at the cost of local user industries such as automobiles, construction, power and infrastructure. Iron ore prices have been amongst the most volatile. Prices dropped to a three-month low after the quake on estimates that up to 18 million tonnes of Japanese steel-making capacity could have been hit by the quake. This could affect demand for 25 million tonnes iron ore and 10 million tonnes coking coal in a year. Iron ore continued to lose ground on Monday, with a shutdown in some Japanese steel plants expected to further reduce demand. "The offtake by Japanese steel mills will be under pressure," said Basant Poddar , managing director of Banglaore-based mining company Mineral Enterprises . Even so, iron ore exporters are confident of business booming. RK Sharma, secretary general of industry body Federation of Indian Mineral Industries , said outlook is bullish in the long run as reconstruction will require large amounts of copper, aluminium and steel. "This augurs well for Indian companies," he said. Agri-commodities too are feeling the pressure of the Friday's catastrophe. Spice processors are bracing for slower exports to Japan. "Spice exports in the short term could be down by up to Rs 70 crore. But Japan's economy is resilient and could bounce back in a few months,'' said Geemon Korah , chairman of Kochi-based All India Spices Exporters Forum . An official at Ambika Healthcare , a Mumbai-based company which exports Indian food and herbal products exclusively to Japan, said: "We ship about 10 containers per month. After the earthquake, all the consignments have been postponed. We expect the demand to go up sharply once the country returns to normalcy." Seafood exporters are equally on tenterhooks as Japan buys a fifth of their produce. "It is too early to comment on the impact of the earthquake. We are assessing the situation", said Anwar Hashim , president of industry body Seafood Exporters Association of India . The price of oilmeals or proteins fed to animals, is also likely to remain depressed for the next two weeks, say traders. Up to 20% of India's total soyameal export of 4.5 million tonne goes to Japan. "Prices have come down to

$395 per tonne from $405 per tonne after the tsunami," said Rajesh Agarwal, coordinator, Soyabean Processors Association of India . "Prices were already under pressure in line with global commodity markets and the Japan crisis has further dented them. We are yet to evaluate port operations in Japan, which might increase logistics cost," said Atul Chaturvedi, CEO of Adani Wilmar , among India's top three edible oil companies. With a large automobile industry base, Japan is the fourth-largest consumer of rubber in the world. Rubber prices plunged to Rs 180 per kg in the spot market Monday before recovering to Rs 185 per kg on reports that rubber crashed on the Tokyo commodity exchange TOCOM. August delivery contract took a 4.5 % hit on TOCOM while the sharp fall in April contract led to the suspension of trade in all contracts. "The initial panic in the market was to be expected," said C P Krishnan , head of commodities trading at brokerage Geojit Comtrade. "In short term, the country's economic and manufacturing activities may be affected and it may impact rubber demand. But it won't be very substantial," said Jom Jacob , senior economist Natural Rubber Producing Countries. User industries within India are material costs. Indian power companies, for instance, may have to pay six months if Japan shuts down its nuclear plants and at international industry body Association of bracing for further rise to already steep raw significantly more for thermal coal in the next increases thermal power generation.

Debasish Mishra, senior director at consultancy Deloitte Touche Tohmatsu India said: "India imports 100 million tonne of thermal coal to meet its energy demand. If there is a spurt in demand of thermal coal from Japan, prices may go up." At present spot price of thermal coal is hovering around $130/tonne. "Over the coming weeks, LNG imports is likely to see a jump if gas-generated plants in Japan come back online and/or ramp up to replace the nuclear capacity which is likely to be offline for months, or more likely, years," he added.

MUMBAI: Coca-Cola India is readying itself for a big summer push as it enters the pure juices market dominated by arch-rival PepsiCo's Tropicana and Dabur's Real. The world's biggest beverage maker will take a plunge into the high-growth juice market with three variants of Minute Maid juices-orange, apple and grape. It currently sells two juice brands-the mango juice-based drink Maaza and Minute Maid, which are all fruit-based but not pure juices. Coca-Cola India has recently formed a separate division for juices to focus on its non-carbonated portfolio as all major food and beverage companies increasingly fortify their health portfolio in a market which is annually growing at 20%. Health products and juices have been at the top of these companies' bucket list since they have launched new products and categories to capture a share of the pie. With an increased focus on the juice category, Coca-Cola India recently appointed Andriy Avramenko as its general manager of the juice business . Avramenko, who came from Coke's global juice centre (GJC) in Atlanta , heads a team that is focused exclusively on advancing the company's pulp-based beverages. Confirming the launch, Atul Singh , president & CEO, Coca-Cola India and South West Asia, told TOI that the company sees an enormous opportunity in the packaged beverage market and, therefore, the launch is aimed at establishing the company's juice footprint after introducing Minute Maid Nimbu Fresh and Pulpy Orange. Coca-Cola India is partnering with Future Group's Big Bazaar wherein the country's largest retailer will stock the product exclusively for a day before it hits the shelves of other retail outlets. Priced at Rs 85 for a litre and Rs 20 for a 200 ml pack, the company is looking to first target modern retailers considering the premium attached to the 100% juice category.

Recently, the country's largest consumer goods company, Hindustan Unilever (HUL), launched its first fruit-based drink under the Kissan brand to strengthen its foods portfolio. Estimated to be around Rs 700 crore, the juice market is divided into two categories-100 % (pure) and sweetened. While Dabur's Real is the biggest player in the juices market with about half of the market share, PepsiCo's Tropicana brand enjoys about 35% of this market. Other players include Parle Agro's Saint which has about 6-8 % besides a slew of regional players. Both PepsiCo and Coca-Cola have been investing heavily in their non-carbonated portfolio with the increasing demand of healthbased drinks in India. To make a dent in this highly competitive market, Coca-Cola India, which is a late entrant into this category, has got Leo Burnett on board to handle its creative push. The cola major has been expanding its non-carbonated beverage portfolio with launches like Maaza Milky Delite, its entry into the dairy segment, the ice tea brand Nestea with its joint venture partner Nestle, besides the fruit-based drinks Minute Maid Pulpy Orange and Minute Maid Nimbu Fresh. 24 3 2011

BANGALORE: Infosys Technologies is planting the seeds for a long-term IT services play in the African continent. The company's CFO V Balakrishnan told Times of India that the company is now looking at a broader play in the continent as they see greater potential demand for IT services there. Currently the company's offerings in Africa are limited to the banking solutions product Finacle. Finacle solutions address the core banking, ebanking , Islamic banking, treasury, wealth management and customer relationship management (CRM) requirements of retail, corporate and universal banks. The company is now laying the groundwork to expand its offerings to include Infosys's various offshore IT services that it offers in larger markets. This includes application services, infrastructure management, package implementation and architecture services. "This would not entail substantial investments in Africa. We would look to set up a marketing office in the region in the near future," Balakrishnan said. Infosys currently doesn't have any development centre in Africa. The company's closest office to Africa is its business continuity centre off the African coast in Mauritius. Infosys operates across Africa through a distribution network of business alliance partners. These partners are based in South Africa, Nigeria , Kenya, Zimbabwe, Tanzania , Egypt and Ethiopia. The company has less than 100 people working in Africa. B Ramaswamy, MD of mid-sized IT firm Sonata Software , said that though Africa is not a major market today, there are certain pockets in the country where economic

growth is leading to higher levels of technology adoption . South Africa, Nigeria and Kenya in particular have large banks, telcos and manufacturing sectors where the potential to make inroads is substantial , he added. Sonata, which opened its Dubai subsidiary in 2009, plans to service the African markets in future through this centre. According to a recent report by global sourcing advisory firm Technology Partners International (TPI), South Africa is facing a shortage of IT skills. The report adds that Microsoft is in the midst of a seven-year , $67 million investment that is credited with creating 22,000 IT jobs in the country. The government projects that 95,000 new IT jobs will be created and filled between 2009 and 2013. Siddharth Pai, MD of TPI India , said that it makes sense for Infosys to extend its offerings as it already has a presence in Africa and understands the region. Opportunities for cross selling arise along with Finacle. BPO services like transaction processing, which are in high demand, could be offered. The other top-tier Indian IT vendors like TCS, Wipro and HCL are also attempting to make inroads to the African market. TCS, which offers its TCS BaNCS suite of banking products in Africa, has two subsidiaries based in Morocco and South Africa. A Dow Jones Newswires report in February said that Wipro Infotech was close to signing deals with two African telecom companies.

NEW DELHI: Warren Buffett-led Berkshire Hathaway is looking at direct entry into the growing insurance sector and is keenly watching the developments regarding further opening of the sector to foreign investment. The US conglomerate Berkshire Hathaway had recently forayed into the Indian non-life insurance sector as a corporate agent of Bajaj Allianz General . When asked about company's plan to directly enter the Indian insurance market, Berkshire Hathaway head re-insurance Ajit Jain told media, "(everything) depends on regulation." India-origin Jain, long rumoured to succeed Buffet, looks after the conglomerate's multi-billion dollar re-insurance business. Billionaire investor Buffett, Chairman and CEO of Berkshire Hathaway, earlier this week said he was looking at investments in large economies like India. On his maiden visit to India, Buffett had said that an foreign investment cap of 26 per cent in insurance sector here was a deterrent. India currently allows only 26 per cent foreign investment in insurance business, but a proposal is underway to hike it to 49 per cent. A bill pertaining to raising FDI ceiling in the sector is pending before Parliament. India allowed foreign players to have insurance joint venture in both life and non-life segments with a maximum stake of up to 26 per cent in 2000.

As part of its India entry, the American conglomerate has incorporated a company 'Berkshire India' to sell and distribute general insurance products in India. Berkshire Hathaway is a sprawling conglomerate that has interests in various businesses, including property, casualty insurance and reinsurance, finance, manufacturing, and retailing. The 80-year-old Buffett, who is in India as part of his philanthropic initiatives, is also expected to look at possible investment opportunities in the country.

25/3/2011

AHMEDABAD: General Motors India said it would not hesitate to cut down on the number of employees in the wake of the current downturn in the auto industry. The remarks from its senior official came at a time when no end was in sight to its nine-day strike. The strike was called against unfair labour practices and the workers have submitted medical reports of 269 colleagues with back injury to National Human Rights Commission seeking its intervention. The company's Friday deadline evoked lukewarm response and 250 out of 900 workers continued to stay away from company's Halol plant, its largest India facility. "In the wake of the current downturn in the auto industry, we might even continue with just one shift (and discontinue the second shift altogether)," said GM India vice-president P Balendran . Halol has a capacity to produce 85,000 units per annum and manufactures Chevrolet Cruze, Aveo, U-VA and Optra models. Close to 900 workers manufactured about 100 units per day in two shifts before 250 permanent workers went on flash strike from March 16. Since then, the production dropped to 70 units in one shift. "Workers cannot earn their wages at the cost of their lives - they are popping pain-killers owing to workload," said INTUC general secretary Nihil Mehta spearheading the strike. He claims GM increased the workload at Halol from 176 units to 208 units per day. While wages were revised in December 2010, allowances including bonus, PF, gratuity, ESI were not included in the overtime wages in violation of The Factories Act, he adds. GM is alleged to have transferred handful workers who complained of injuries to their back owing to the workload. Rubbishing the charges, Balendran said, "GM is a global corporation and have been following the best industry practices. We are in fact, underutilising the capacities of our workforce by making just 190 units per day. About 70% of the striking workers reported to work today and we should be able to produce about a 100 units per day fromMonday."

WASHINGTON: Sales of new homes in the United States have slumped to the lowest level since the 1960's, official data showed Wednesday, offering more evidence of an lingering real estate crisis. Sales tumbled nearly 17 percent in February, the Commerce Department said, to a seasonally adjusted total of 250,000 sales during the month. That marked the lowest number of units sold since 1963, when records began.

At the current rate it would take almost nine months for the all the new homes on the US market to be sold -- if no

more

homes

are

built.

The biggest slowdown in turnover was seen in the country's populous northeast, with sales down 57 percent from January. "Nothing good can be said about the February report," said Steven Ricchiuto , an economist with Mizuho describing it as "several times worse that the markets expected." The figures compounded a week of bad news for homeowners and the massive US real estate industry. The National Association of Realtors on Tuesday said sales of already-owned homes fell 9.6 percent in February. Despite low home prices and ultra-low interest rates the market has faltered as banks have tightened up loan requirements, ending years of profligate consumer borrowing. "(Today's) report and the existing home sales data released yesterday confirm that the housing market is still in free fall," said Ricchiuto. But Wednesday's Commerce Department's report contained the prospect of a slight -- and perhaps only statistical -reprieve for struggling homeowners. John Ryding and Conrad DeQuadros of RDQ Economics explained the low-level of real sales meant vast swings were possible. According to non-seasonally adjusted figures only 19,000 new homes were sold in February, or 380 homes on average in each US state, the RDQ economists said. "The actual level of new home sales is so small that modest variations in the level of sales have a huge impact on percentage changes," they warned clients.

"When you go to a doctor, there are some very strict, disciplinarian ones and there are some who make light of the illness. Lifebuoy is the second kind of doctor", says Amer Jaleel, NCD, Lowe Lintas. Lifebuoy, for long, has been associated with a big, red, chunky bar of soap that keeps one healthy. The heritage brand, which has been around for more than a 100 years now (the first container with Lifebuoy soaps landed on Indian shores in 1895 at Bombay Harbour), was once touted to be the soap that was everything male and sporty. It has now become a family brand. One of the market leaders - Nielsen data for the last quarter pegs Lifebuoy at 14.5% market share, a close second to Lux's 14.6% - the name of the brand came from the life-saving buoy thrown out to people at sea to prevent them from drowning, literally meaning that the brand saves lives. A global brand, it lost its original moorings in the 50s and the 60s in many markets, except in India. "It was first targeted at men and masculine health. The promise of Lifebuoy was 'You will remain healthy if you use Lifebuoy. You will be able to play hockey or football well'. It was sporty", says Sudhir Sitapati, category head - personal wash, HUL. Agrees Jaleel: "When it started, the focus was on men as the role of the man was prime. The symbolism of health, at the time, was the huge, sporty, macho man." The jingle, 'Lifebuoy hai jahan tandurusti hai wahan' was catchy and did the trick.

Now, the brand targets women, especially mothers. "In the late 90s and early 00s we realised that the consumer had changed from what he or she was in the 50s to the 70s. Women were the decision makers, when it came to shopping, be it urban or rural. We had to communicate to women and focus on the woman's role in the family", says Sitapati. The proposition of the brand didn't change - health was still the focus - but the advertising did. "We changed our communication from 'You will be healthy if you use Lifebuoy' to 'You will not fall ill if you use Lifebuoy'." The appearance of the soap too underwent a change. Though the red bar remains, it is now more perfumed and less carbolic. At this point, commercials directed at mothers came on screen, a very popular one being how kids could get full attendance, thanks to Lifebuoy. Hand wash, an extension of the parent brand, is one of their fastest growing categories. "We're planning to do small films on 'hand-health', we are one of the sponsors of 'Global Handwashing Day'. In Kerala, we have now started unbranded education in schools, saying that "You must wash your hands five times a day", says Sitapati. The brand now, wants to adopt a friendlier tone. "There are two ways to make people aware of health. One is to scaremonger and the other is to empower. This is the only brand that can converse with you about health in such a manner that it won't scare you", says Jaleel. The most recent commercial for Lifebuoy was one where it was pitched as the 'fastest soap'. "It was treated in a very friendly voice. The way to go about this is that we know that health is a serious concern, but we try not to treat it so seriously", he adds. 26/3/2011

MUMBAI: Retail food chain company McDonald's India today said it has joined hands with Indian Oil Corporation (IOC) to increase its presence in petrol stations in West and South and aims to more than double its sales by 2014 from both these regions. Under the agreement, IOC will provide space to McDonald's for opening 'Drive Thru' restaurants in the West and South India, McDonald's India Vice-chairman Amit Jatia told PTI here. IOC has more than 8,000 fuel outlets in South and West India, and this agreement will support McDonald's expansion plans and help it double its presence in the regions by 2014, Jatia said. "We plan to open about 30-50 Drive-Thru outlets in five years mostly in Tier II destinations in the south and west at an approximate investment of Rs 175 crore. This increase in presence will also more than double our sales (from both the regions)," Jatia said, adding that the company is already scouting for locations. Presently, McDonald's has 108 outlets in the South and West and a total 211 across the country. By 2014, the fast food giant plans to up its headcount by another 10,000 in the south and west where, by then, it aims to have a chain-network of 216, he said. McDonald's already operates restaurants under the oil alliance programme with Hindustan Petroleum Corporation Ltd (HPCL) and Bharat Petroleum Corporation Ltd (BPCL).

In India, McDonald's is a joint-venture company managed by two Indians, while Amit Jatia, from Hardcastle Restaurants owns and spearheads McDonalds in the West and South, in the North and East Vikram Bakshi's Connaught Plaza Restaurants do the same.

HOUSTON: Subway has surpassed McDonalds to become the largest restaurant chain on the planet and is now spread out more globally than McDonald's. The sandwich chain surpassed the world's largest hamburger chain in terms of number of stores in the US in 2002 and now it has taken the global lead. According to information released by the Securities and Exchange Commission last month, Subway has 33,749 restaurants around the world, compared to McDonald's 32,737. The number of Subway restaurants is expected to increase, since the company plans to establish other branches in strategic locations around the world. One of these locations is in China, since the company views this country as one of the greatest consumer markets on the globe right now. The expansion was also brought about by growing unemployment in the US. As a result, Subway has targeted overseas markets in order to ensure that the company's welfare is preserved. Since the demand for sandwiches in the US is limited, Subway continues to look for other locations where they can set up additional chains. However, the growing number of Subway restaurant overseas does not earn enough revenue to outpace McDonald's , which still holds the top position as the world's largest restaurant chain in terms of sales. "We've been on a great run," said Tony Pace , the chief marketing officer of Subway's Franchisee Advertising Fund Trust, the franchisees organization under the company's umbrella. Subway is entirely franchisee-owned . That has been part of its success, Pace said. McDonald's , however, remains the industry's revenue champion. The company reported $24 billion in revenue for the last fiscal year. Subway generated $15.2 billion, according to a report by the Wall Street Journal.

NEW DELHI: Retail food chain company McDonald's India and IT hardware company HCL Infosystems have come up with offer for kids. McDonalds has tied up with HCL Infosystems to give kids patrons a chance to win the HCL ME Kids Educational Laptops with the purchase of Happy Meal. A coupon will be given to every customer who buys an Air Toy Happy Meal . The customer will have to answer a simple question printed on the coupon and send the answer, name and first three letters of their city to 56767 and lucky winners will get the HCL ME Kids Educational Laptops. The prizes will be announced every hour. "With this initiative we are delighted to serve them quality food, entertainment through fun toys and education through educative HCL ME Kids Education laptops," said Rameet Arora , senior director marketing, McDonald's India in a statement. This offer is valid across all McDonald's outlets in West and South India till March 27, 2011 and is going to be

available

in

the

other

parts

of

the

country

shortly,

the

statement

said.

"This initiative will witness a new mode of learning for kids with an innovative delivery tool that the HCL ME Kids Educational Laptops have to offer," said Rothin Bhattacharyya , Executive Vice President, HCL Infosystems. 27/3/2011

NEW DELHI: Global automobile major Volkswagen's Indian finance subsidiary Monday said that it has been granted non-banking finance company (NBFC) licence by the Reserve Bank of India (RBI). "The RBI license enables the company to offer customers of Volkswagen, Skoda and Audi cars the opportunity of a wide range of financial services," Volkswagen Finance Private Limited said in a statement. The company said the licence would enable it to offer three product lines, including VW Finance, Skoda Finance and Audi Finance. "VWF India wants to present itself in the Indian market as a mobility provider with products which fully respect the needs of customers," said Joern Achim Kurzrock, chairman of the board of Volkswagen Financial Services India . According to Kurzrock, the company would focus on specific needs of each customer segment by offering financing options including 3-in-1 bundled packages consisting of financing, insurance and maintenance. The Mumbai-based company would be making an initial investment of over $24 million (Rs.120 crore) in the country. The statement added that the company's customers can avail of financing options at any of the 164 dealer outlets of its brands.

Soon www could stand for world wide watching. Unknown to most, YouTube-the six-year-old video-sharing websitehas become the second-largest search engine in the world after Google. It gets two billion views a day, up 50% since 2009. A startup set up by three PayPal employees in 2005, YouTube was bought by Google in 2006 for $1.65 billion. Now it is gearing up to compete with TV. "We believe that the distinction between internet and TV viewing will fast disappear as on-demand video takes centre stage," says Gautam Anand, director, Google (Asia-Pacific Japan). YouTube is adding new streams of content and figuring new ways to make money. In the US it has signed up with MGM and CBS to let them upload films and TV serials with advertisements. Last year, it launched an online film rental service in the US. But online video services like Netflix, Hulu-and even Facebookpresent formidable competition. The India journey: It has nearly 20 million unique users in India. Top hits here mirror what works globally-movies and sports. So Bollywood content dominates and cricket isn't far behind. Dabangg premiered on YouTube in India. Google says Indian content producers lead in adopting and experimenting with YouTube. Monetisation: Google isn't ready to disclose if YouTube is profitable yet, but the company says it will continue to offer free content and monetise the traffic to generate ad revenues. It is monetising over 2 billion video views in the US every week and has more than 1,000 partners. Advertisers like Samsung say YouTube's 24/7 availability, specially to office goers is a big draw. HSBC, SBI , HUL,

Coca-Cola, Hero Honda, GM, Airtel and Nokia are among the advertisers on YouTube India. For now, YouTube and its rivals could hope that www will also stand for world wide wealth.

28/3/2011

MUMBAI: At a time momentum is building to allow foreign players into front-end retail , senior officials of the Future group and Walmart have met at least five times in the past four months, raising the possibility of an alliance between India's largest retailer and the world's largest retailer. If the alliance fructifies, it could reconfigure organised retail in India. Four executives from the two camps with knowledge of the talks confirmed that Future Group owner Kishore Biyani visited Walmart's headquarters in Bentonville, US, last December where he met Doug McMillon, president and CEO of the American company. Biyani was accompanied by B Anand, director of finance, and Damodar Mall, director of integrated food strategy at the Future group. Since then, Hong Kong-based Leigh Hopkins, vice-president (M&A Asia) of Walmart, has visited the Future group's office in South Mumbai at least thrice, the latest being last week, said three of those officials. Biyani declined comment on the talks with Walmart saying, "There are too many issues". "There is nothing there," he added. Walmart India President Raj Jain denied the talks. "At the moment, we are not in any alliance talks with the Future group," he said after a long pause, carefully measuring his words. Walmart US did not respond to an email sent last Friday. The meetings between the two sides could have an impact on their respective partnerships in India - an existing one for Walmart and a prospective one for the Future group, both of which have been beset by issues. Walmart has had an equal joint venture with the Bharti group since 2006: Bharti Walmart. However, this partnership is 'non-exclusive' in nature, which means Walmart can forge other alliances in India. Bharti Walmart operates in the wholesale and back-end segments - the two areas in retail where foreign players are currently allowed. Walmart, the world's largest company with revenues of $408 billion in 2010, has reportedly been frustrated by the joint venture's slow pace of expansion. So far, it has opened five wholesale stores under the brand name 'Best Price Modern Wholesale'. In calendar 2009, according to data from the Registrar of Companies, the JV lost Rs 151 crore on revenues of Rs 198 crore. "Maybe Bharti is not investing so much as Walmart would like it to do," said Harminder Sahni, founder, Wazir Advisors, a boutique consultancy. "So, there is a possibility of Walmart bringing another equity partner to ramp up." Walmart India, another company, also provides technical support to Bharti Retail, a wholly owned subsidiary of Bharti Enterprises that runs retail stores under the brand name 'Easy Day'. There are 117 Easy Day stores, largely in North India and mostly small, neighbourhood stores. This is in contrast with Walmart's global strategy - as well as that of the Future Group - to open large stores. "Smallstore formats are yet to prove themselves in India as compared to hypermarkets, which are becoming profitable at an operational level," said Kumar Rajagopalan, CEO of Retailers Association of India, an industry body that represents several retailers. Rajan Mittal, joint MD of Bharti Enterprises, initially declined comment on the Future Group-Walmart talks. Later, he said he had spoken to Jain about the talks. "We (Bharti and Walmart) are happy with each other," he said. "There is a lot of kite-flying on this." Walmart's Jain, who is also the MD and CEO of the JV with Bharti, said their partnership was 'non-exclusive' in nature. The Future Group, meanwhile, has been talking to France's Carrefour, the world's secondlargest retailer, for a JV in India for over two years now. Biyani is keen on an equity partnership with a global retailer

for the cash and expertise it would bring to his retail business.

JOHANNESBURG: Microsoft South Africa , a unit of the world's largest software firm, will invest 475 million rand ($69 million) in four black-owned software firms to meet black economic empowerment (BEE) rules. The deal is in place of selling a stake to black investors, as most foreign and local firms in Africa's biggest economy have to do. "One of the metrics we will be using to measure our success is in how many countries are these companies selling their products," South Africa managing director Mteto Nyati said in an interview on Tuesday. "After the end of the seven-year period, we want them to be in Russia, China, Brazil, etc," he added. BEE is designed to widen ownership of the South African economy, which is still mainly in white hands 17 years after the end of apartheid. A number of global and local firms have sold portions of their local units to black investors to meet the regulations. But Microsoft has opted to invest in local businesses because, as with other U.S firms, it cannot sell a stake in its South Africa unit for regulatory and other reasons. Some BEE deals have been criticized by unions and opposition politicians who say they benefit a small group of politically connected black businessmen to the exclusion of the vast majority of poor black South Africans. When asked whether opting to invest in local firms as opposed to selling a stake to local black investors, Nyati said the chance of this deal succeeding was very high. "They are partnering people with experience and expertise and Microsoft is committed to making this work," he said, adding that Microsoft was investing into the country rather than selling shares. "If we can make it to be successful and make sure that other companies are doing the same, we will be able to address the key challenges facing South Africa, largely youth unemployment," said Nyati. Microsoft said the four firms were involved in public heath software, consumer applications for mobile phones, security solutions and software integration. "For years, we have been growing organically, where our pace of growth was largely constrained by finances and access to markets," Anujah Powell , chief executive of Chillisoft , one of the selected partners, said. Microsoft aims to select more companies before the end of this year, depending on market conditions.

Big Bazaar helps Tata Motors drive Nano sales

MUMBAI: Kishore Biyani's discounted retail format Big Bazaar, which started the concept of 'Sabse Sasta Din' a few years ago, is now selling the sabse sasta car-the Tata Nano.

In a novel move, Tata Motors has tied up with Future Group to sell the Nano in Big Bazaar outlets.

"There is a lot of commonality between Big Bazaar consumers and prospective Nano buyers. Big Bazaar as a concept appeals to the masses and with over 150 million footfalls every year, we are trying to see how we can sell Nano, which has a similar positioning," said Future group's Customer Strategy president Sandip Tarkas, who heads this initiative at Big Bazaar. This is the first time a retail chain is selling a car in the country. Industry officials say Big Bazaar has already sold more than 450 Nanos since the experiment began a month ago. That is more than 5% of Nano sales in February. "Tata Motors may have now realised that for a product like Nano, conventional distribution system such as car showrooms can only help to an extent," said IDBI Securities research head Sonam Udasi. "Big Bazaar's customers, mostly value conscious people, will directly fit in the profile of Nano buyers." Market experts say the decision to tieup with the country's largest retailer is a brilliant move that will help Tata Motors push Nano sales. Tata Motors has been quite aggressive to attract more buyers for the world's cheapest car after sales declined consistently last year, hitting an all-time low of 509 units in November. Since then, it has been selling Nanos off the shelves from around 874 sales outlets and 1,000 odd kiosks across India, instead of the earlier system of having to book and wait for delivery.
29/3/2011
NEW DELHI | MUMBAI: PepsiCo India's joint venture with Tata Global Beverages is set to launch a glucose-based beverage next week. 'Lehar Gluco Plus' , a lemon-flavoured , noncarbonated drink, will be rolled out in pockets of Maharashtra through a pilot project and will be priced at Rs 5. "We are creating a new category with this product in the affordable packaged beverage space. The product works like an instant re-charger ," said Geetu Verma, PepsiCo India executive director (innovation).

The beverage is being brought under PepsiCo's Lehar umbrella label. It will be the second product after Himalayan packaged water to be manufactured and marketed under the 50:50 joint venture NourishCo Beverages Ltd. India's health and wellness segment is seen touching . 55,000 crore by financial year 2015, up from the current Rs 10,150 crore, according to a report by management consulting firm Tata Strategic Management Group. PepsiCo has an alliance with Unilever under which it sells Lipton ice tea, but the firm has maintained that both JVs will not overlap. PepsiCo Tata JV CEO Punita Lal told ET that plans were underway to roll out more health and wellness beverages this year. "We are looking to unlock the value segment in the mass hydration space. It is a very large opportunity," she said. Lal said the JV was exploring options across categories for healthier beverages, but did not give details. PepsiCo and Tata had signed an MoU last April to set up the joint venture for non-aerated beverages. The JV seeks to leverage the Tata brand and expertise in low-cost consumer products and couple it with PepsiCo's distribution muscle, go-tomarket expertise and R&D strength. Gluco Plus will target segment B and C consumers , which according to Verma, has a base of 600-700 million. Through the alliance, PepsiCo hopes to be seen as a wholesome beverages company while Tata Global Beverages gets a larger foothold in the segment . Although Tata Global Beverages has acquired Tetley, Eight O'clock Coffee and Good Earth, its wellness and health beverages portfolio in India is limited to Himalayan packaged water and Tion.

NEW DELHI: IT spending worldwide is projected to touch $ 3.6 trillion this year, much higher than in 2010, says Gartner. The higher spending is expected to be bolstered by media tablets such as iPad .

"Worldwide IT spending is forecast to total $ 3.6 trillion in 2011, a 5.6 per cent increase from $ 3.4 trillion in 2010," global research group Gartner said today. The outlook has been revised higher from earlier growth projection of 5.1 per cent.

The inclusion of expenses on media tablets has increased this year's computing hardware growth outlook to 9.5 per cent from 7.5 per cent. "Worldwide media tablet spending is projected to reach $ 29.4 billion in 2011, up from $ 9.6 billion in 2010," Gartner said. Globally, spending on media tablets is expected to rise at an annual average rate of 52 per cent through 2015. India is a major player in the global IT industry, especially in the services segment.

According to Gartner, the impact of political unrest in the Middle East would be "insignificant at the global level". This region accounts for about two per cent of the global IT spending. Gartner's research vice president Richard Gordon said the likely impact to the forecast due to the Japanese disaster is still being evaluated. "We are looking at two potential effects on IT markets as a result of the earthquake and tsunami in Japan: consequences of disruptions in the global electronics supply chain and impacts on IT demand," Gordon noted in a statement.

The spectacular earnings growth seen in the past couple of years is set to sustain for India's leading ceramic tile manufacturer Kajaria Ceramics in FY12 as well. The company has aggressively added capacities and taken steps to improve margins that will maintain its growth momentum. After recording three years of stagnating profits between FY07 and FY09, the company moved on to a strong growth path in FY10 with a four-fold profit jump over FY09. The growth momentum has continued in FY11, with the company posting a 83% profit growth in the first nine months to Rs 42.2 crore. The company now appears set to cross Rs 1,000 crore of turnover and Rs 60 crore of net profit in FY11. Due to rising demand and capacity constraints, the company currently depends significantly on trading, which constitutes 45% of total revenues. The manufacturing business typically earns higher operating profit margins around 20% while the trading business has 8-10 % margins . The company's combined operating profit margin stood at 15.8% in the first nine months of FY11. The company recently completed expansion at its Rajasthan facility to add 6-million square meters (MSM) of vitrified tiles at a cost of Rs 130 crore. At the same time, it also completed conversion of 2.6 MSM ceramic tiles capacity to vitrified. Earlier in February 2011, it had acquired a 51% stake in Soriso Ceramics with around 2 MSM capacity of ceramic tiles. All these steps are expected to add another . 300 crore to total revenues in FY12 while improving margins as the share of manufactured products in its overall sales goes up. Expansions were mainly funded from the company's internal accruals, which means its debtto-equity ratio has, in fact, improved , of late. From 1.67 at the end of FY10, the debt-to-equity ratio improved to 1.3 by end-September 2010 and is expected at 1.2 for end-FY 11. In January, the company also tied up with a Turkish manufacturer of 'VitrA' brand of sanitaryware and bathroom fittings. Kajaria will be its exclusive importer and sole distributor for India. Trading in these valueadded products will also help the company improve its operating margins. Kajaria's scrip has widely outperformed broader markets consistently over the past one year. The scrip gained 34% in past one year against around 8% gain in the BSE Sensex. Its current market price, which is just 10% below its 52-week high, is around 10 times its earnings for trailing twelve months. 30/3/2011 BANGALORE: Wipro Ltd , India's No. 3 software services exporter, on Friday said it would acquire SAIC's global oil and gas technology services business for $150 million. SAIC's Global Oil and Gas Information Technology practice provides consulting, system integration and outsourcing services to global oil majors, Wipro said in a statement. Wipro will add about 1,450 employees across North America , Europe, India and the Middle East following the deal, it added. Top Indian software companies are looking for acquisitions in key business segments and geographies in an effort to ride a recovering global demand for IT services.

KOLKATA: In a big push to vocational training in India, Future Group and NIIT are planning to partner

with the National Skill Development Corporation (NSDC), looking to train 7million people each over 10 years. NSDC is a not-for-profit company set up by the Union finance ministry to undertake skill development for 500 million people by 2022. While Future Group is planning to enter into a joint venture with NSDC with 73% equity, NIIT is looking at funding assistance of around Rs 200 crore to start a IT vocational training initiative to reach out to semi-skilled people, a senior NSDC official said, requesting anonymity. Both the partnerships are currently undergoing due diligence and will be soon placed before the NSDC board for approval. While Future Group and NIIT confirmed their interest in partnering with NSDC without sharing details, an NSDC spokesman said: "We don't wish to comment on specific deals till the arrangements are approved by our board." India's largest retailer, Future Group plans to set up a chain of 3,000 training centres as part of its JV with NSDC. The proposed JV will be inked by the group's education arm, Future Learning. It is looking at this venture both for talent backward integration and creating skilled manpower. "We are specifically looking at areas where we can contribute with our expertise such as retail, food and cold chain, fashion and clothing, furniture and furnishing, financial services, tourism and hospitality, and transportation and logistics," Future Group HR head Sanjay Jog told ET. An NIIT spokesman said: "We have a number of discussions going on with NSDC for possible engagements including helping them with their IT & learning infrastructure. These are at preliminary stages and therefore it will be too premature to comment now."

NEW DELHI: NEW DELHI: Vodafone Essar has existed in various forms since the mid-90 s, when it started operations as Max Touch. It has since metamorphosed through various avtars and was renamed first as Orange and subsequently as Hutch, before Vodafone took a controlling interest. The deal leaves the Ruias with at least $1 billion in cash after paying off debts raised using their Vodafone shareholding as collateral. The cash and the fresh leverage available would see Essar unveiling some strong investment moves in the coming weeks. UK-headquartered Vodafone Plc will hold a 75.4% stake in the Indian unit after today's transaction, while entities controlled by Indian shareholders IDFC and Analjit Singh (of Max Group) will hold the balance 24.6%. A Vodafone spokesperson in London said in an email response to TOI, "We will comply with FDI thresholds . Basically 24.6% is Indian-owned and we need to get to 26% to comply with FDI." Essar said it was restrained by non-disclosure agreements with Vodafone and would not comment on the deal. Meanwhile, an IDFC spokesman said they did not have details of the transaction and therefore refrained from commenting on it. This means Vodafone would have to shed 1.4% to comply with India's telecom FDI regulations that allows only 74% direct foreign shareholding . Vodafone will be a minority shareholder in the investment vehicles which are controlled by IDFC and Analjit Singh, for taking care of this sectoral cap of 74 % FDI in telecom. Vodafone has the option of divesting a further stake - as required to fall in line with local guidelines - to entities which are majority owned by Indian shareholders , or opt for an IPO in the near future. TOI had first reported in its January 20 edition that Vodafone, along with its Indian shareholders, may jointly buy

Essar's

33%

stake

in

Vodafone

Essar.

A Vodafone spokesperson said there has been shareholding changes effected in the past one year whereby Indian shareholders controlled 24.6% stake out of the 67% which the global telecom giant owned till now. Vodafone's foreign shareholding stood at little over 42% giving it flexibility to snap up most of the Essar stake. The latest deal was struck after Vodafone and Essar sparred publicly over the valuation of the JV. Vodafone argued that India's hyper competitive telecom market and 3G costs had impacted sectoral valuations, while the Ruias wanted to discover a fair price before offloading their shares. The Madras High Court will be hearing a petition to merge Essar Telecom into the listed arm of the group - India Securities Limited - on Friday. Essar Telecom held 11 % in the JV. The proposal, which sought to arrive at a fair market value of its investments in the JV, was opposed by Vodafone. The sale of Essar's 33% interest in the JV is, however, unlikely to have an impact on the Essar group's merger plans. =============================== The deal leaves the Ruias with at least $1 billion in cash after paying off debts raised using their Vodafone shareholding as collateral. The cash and the fresh leverage available would see Essar unveiling some strong investment moves in the coming weeks. UK-headquartered Vodafone Plc will hold a 75.4% stake in the Indian unit after today's transaction, while entities controlled by Indian shareholders IDFC and Analjit Singh (of Max Group) will hold the balance 24.6%. A Vodafone spokesperson in London said in an email response to TOI, "We will comply with FDI thresholds . Basically 24.6% is Indian-owned and we need to get to 26% to comply with FDI." Essar said it was restrained by non-disclosure agreements with Vodafone and would not comment on the deal. Meanwhile, an IDFC spokesman said they did not have details of the transaction and therefore refrained from commenting on it. This means Vodafone would have to shed 1.4% to comply with India's telecom FDI regulations that allows only 74% direct foreign shareholding . Vodafone will be a minority shareholder in the investment vehicles which are controlled by IDFC and Analjit Singh, for taking care of this sectoral cap of 74 % FDI in telecom. Vodafone has the option of divesting a further stake - as required to fall in line with local guidelines - to entities which are majority owned by Indian shareholders , or opt for an IPO in the near future. TOI had first reported in its January 20 edition that Vodafone, along with its Indian shareholders, may jointly buy Essar's 33% stake in Vodafone Essar. A Vodafone spokesperson said there has been shareholding changes effected in the past one year whereby Indian shareholders controlled 24.6% stake out of the 67% which the global telecom giant owned till now. Vodafone's foreign shareholding stood at little over 42% giving it flexibility to snap up most of the Essar stake. The latest deal was struck after Vodafone and Essar sparred publicly over the valuation of the JV. Vodafone argued that India's hyper competitive telecom market and 3G costs had impacted sectoral valuations, while the Ruias wanted to discover a fair price before offloading their shares. The Madras High Court will be hearing a petition to merge Essar Telecom into the listed arm of the group - India Securities Limited - on Friday. Essar Telecom held 11 % in the JV. The proposal, which sought to arrive at a fair market value of its investments in the JV, was opposed by Vodafone. The sale of Essar's 33% interest in the JV is, however, unlikely to have an impact on the Essar group's merger plans. ===============================

NEW DELHI: One of the last remnants of government stranglehold on foreign direct investment (FDI) was removed on Thursday with the industry ministry doing away with the need for overseas investors to get a no-objection from their joint venture partner before venturing out on their own or roping in another local ally. The same rules would also apply to technical collaborations in the same sphere of activity. "There is a need to attract fresh investment and technology inflows into the country, as also to reduce the levels of state intervention in the commercial sphere... It is expected that this measure will promote the competitiveness of India as an investment destination and be instrumental in attracting higher levels of FDI and technology inflows into the country," a statement from the industry department that administers the FDI regime said. In December 1998, seven years after the liberalization process kicked off, the government through a press release (called Press Note 18) mandated that a foreign investor intending to set up a competing venture in the same or allied area needed to get a no-objection certificate from his Indian partner. This was necessitated due to protests from the Indian industry which feared that multinationals would take them over. Subsequently, Indian promoters started using the tool to block the entry of partners once relations soured. As a result, several foreign players had trouble re-entering India. So, in January 2005, Prime Minister Manmohan Singh decided to end the applicability of Press Note 18 on future cases. The latest change means that all cases would be outside the ambit of Press Note 18. But unlike the past when local players opposed green-channel entry for foreign investors, on Thursday, industry chambers, once strong advocates of the Press Note, supported the move. "Industry has now reached a stage of commercial and economic maturity and can negotiate joint venture contracts with its foreign counterparts on an equal footing, without compromising its interests in any manner," CII said in a statement. PricewaterhouseCoopers executive director Akash Gupt said the control did not make sense any longer. "With free trade agreements becoming commonplace, foreign companies were setting up plants in countries with which India was signing agreements. So, the regime was discouraging domestic value addition and encouraging imports," he added. "Times have changed and we certainly need a more liberal FDI policy framework to attract larger amounts of foreign investments. This is especially needed in the context of declining FDI flows in the past few months. Ficci is examining the implications of this announcement, particularly in context of global competitiveness and technological development of Indian industry," Ficci director-general Rajiv Kumar said.

BANGALORE: Cognizant, which counts Walmart among its top retail customers, has doubled its revenues from the segment in the last two years, and is set to challenge rivals like TCS , Infosys in increasing business from top retailers in the world. Earlier this week, the Nasdaq-listed IT company extended its contract with UK's largest clothing retailer Marks and

Spencer and now counts eight of the top 30 global retailers among its clients. Some other recent deal wins include the likes of the US-based office supply chain Staples . In the past two years, Cognizant has almost doubled revenues from the retail, manufacturing and logistics segment. While the Cognizant does not give retail revenue separately, the manufacturing, retail and logistics segment contributed $849.6 million in 2010 compared to $443.2 million in 2008. This vertical contributed almost 19% to Cognizant's overall revenues in 2010. Although Cognizant's rapid growth has widely been credited to turbo-charged growth in the banking and financial segment and its strong positioning in the healthcare segment, the retail, manufacturing and logistics segment has been the fastest growing for the company in 2010 at over 50.4% revenue growth. According to Nirav Patel, vice-president, retail practice, Cognizant, focus on strategic initiatives has been increasing as retailers come out of the recession. "Over the last two years, retailers have lived through one of the most challenging phases in history. Most of their IT spends were focused on optimisation, offshoring of IT services, and so on, aimed at bringing greater efficiency in their IT function. While the UK and Europe have yet to recover completely, we continue to see deals with integrated and end-to-end service management services," Patel said. Experts say Cognizant is slowly inching its way to be one of the largest IT services providers to the world's largest retailer Walmart, which works with several players, including Infosys and Wipro . IT services for retail has been a stronghold of Infosys and Cognizant is widely being seen as stealing a march. "If you look at the way these large retailers are working their margins tend to be low so they have to cut all extra costs to survive and this will continue to drive outsourcing. Overall Cognizant has been growing well and the difference lies in how it approaches clients. They are fostering relationships and have been the first to create the concept of client partnerships. They are also able to give completely integrated services," Pradeep Mukherji, President and Partner at IT advisory firm Avasant India said. "We have been witnessing great traction around solutions that support structural changes, help build next generation stores and help strategic initiatives like expansion into new geographies and supply chain optimisation. We are also seeing demand for practices around e-commerce and retail packages," Patel said. The company also built retail capabilities with the acquisition of Active Intelligence in 2009, a systems integration company providing consulting and implementation services around Oracle Retail's solution portfolio. "Cognizant has traditionally done a lot of work in the US with large retailers there and so they have built a lot of intellectual property and they have lot of first hand experience and existing relationships. This is clearly helping them," a retail sector expert said. Most of the world's top retailers have been outsourcing projects to Indian third-party service providers apart from their own captive centres to support their existing IT systems and develop newer applications. India's top technology firms are chasing nearly $4 billion worth of outsourcing projects from retailers this year, say analysts. Typically retailers are able to drive the operational expense costs down by 25-30% over a 3-5 year period.

1/4/2011

CHENNAI: Nasdaq-listed Cognizant has been selected to provide finance and accounting services to luxury car maker Volvo Car Corporation. "As part of the deal, Cognizant would operate and optimise Volvo Car Corporation's Finance and Accounting processes, while improving cost effectiveness and service delivery," Cognizant said

in

statement.

"We are pleased to have been selected by Volvo Car Corporation for their entire range of Finance and Accounting services," Cognizant Senior Vice-President and Continental European Operations Head Santosh Thomas said. Cognizant would participate in entire value chain of Finance and Accounting services to Volvo Car Corporation in ranging from accounts payables, receivables and fixed assets, to accounting and periodic end closing along with procurement services for production and non-production materials, it said.

NEW DELHI: Multiplex chain PVR Ltd today said it has tied-up with US-based IMAX Corporation to set up the latter's theatres at four locations in India. Besides, the company will also invest Rs 100 crore in 2011-12 to set up up to 80 new screens across the country. "We have tied up with IMAX to set up high technology screens in India. The initial agreement is for four screens, but as we progress, we will explore taking this partnership to a bigger level," PVR Chief Financial Officer Nitin Sood told PTI. As a part of the tie-up, PVR will set up new IMAX screens as well as convert the existing screens into IMAX screens. "We will set up a new IMAX technology screen in Bangalore, while the one in Mumbai will be converted. This technology requires more investment as compared to the normal screens," Sood added without sharing details. Under the terms of the sales deal, which is subject to Indian regulatory approvals, the first two systems are scheduled to be installed within the next 12 months at Mumbai and Bangalore. Besides bringing the IMAX technology, PVR that currently operates about 142 screens across India has plans to open upto 80 new screens in 2011-12. "We have plans to invest around Rs 100 crore to set up about 60 to 80 new screens next in the new fiscal," he added.

Commenting on the IMAX tie-up, PVR Chairman Ajay Bijli said: "There is a growing appetite for premium entertainment in India and with the massive popularity of the IMAX brand worldwide, it has become very clear to us that now is the ideal time for us to enter into the IMAX business. In a statement, IMAX CEO Richard L Gelfond said: "India has a vibrant movie-going culture and it is one of our most important and largely untapped growth markets." IMAX digital projection system helps drive profitability for studios, exhibitors and theatres by eliminating the need for film prints, increasing programme flexibility and ultimately increasing the number of movies shown on screens, according to the statement. 4/4/2011

NEW DELHI: Several Indian companies have planned huge investments in the African mining and agriculture sectors , buoyed by the prospects of high returns, on the back of rich resources and low labour and input costs, stakeholders maintain. "Africa offers the most attractive returns when it comes to mining and agriculture. A lot of Indian companies are already there, and a massive investment is in the pipeline," K.S. Aswathanarayana, chief executive of Jaguar Overseas, told IANS. Jaguar Overseas, a unit of the diversified DP Jindal Group, has interests in areas such as mining, engineering, construction, and power projects in six African countries, including the Democratic Republic of Congo, Mozambique and the Central African Republic. Aswathanarayana said Jindal Group had already invested nearly $500 million in different African countries and planned to boost the investment in the coming years. "Africa and Latin America are the two main areas left for mining. Big Indian companies like Tata and Jindal Group are investing heavily in Africa. These two companies have invested almost $500 million each in the African continent," he said. He said cost of production of mines in most African countries was almost half that of India because of the easy availability of resources, cheap labour and relatively high selling price. "Investment decisions are made on hard facts. Those who want to invest rely on numbers and the numbers are very good in Africa. Say you want to set up a cement unit plant, in India the pay back period is about seven to eight years; in Africa you can get your money back in two-three years," Aswathanarayana said. He pointed out that a bag of cement (50 kg) is sold for $5-6 in India, while its price in some African countries is as high as $25. Jaguar Overseas is building a cement plant in central African country Democratic Republic of Congo. Aswathanarayana said most African countries were wooing Indian investments as they consider it critically important to give an initial push to their economies. Expressing a similar view, Vice-Chairman of Tata Steel B. Muthuraman said Indian government and private firms were playing an increasingly important role in growth and development of the African continent. "Bilateral cooperation has deepened both at the government and business levels. The challenge here is to ensure that the dividends of this partnership reaches to the significant numbers of the 1.2 billion people of India and the near 1 billion people of Africa," said Muthuraman. "In the new world which is economically re-balancing itself, India and Africa will play an increasingly important role," he added. On investment in the agriculture sector, officials said Indian companies were attracted to Africa because cost of farming in that region was almost half that in India. "Cost of agricultural production in Africa is almost half that in India. There is less requirement of fertiliser and pesticides, labour is cheap and overall output is higher," S.N. Pandey, director of Agro Technology Division at Lucky Group, told IANS. Pandey said his firm had already bought 3,000 hectares of land in Ethiopia and 1,500 hectares of land in Sudan. "We

are already operating in eight African countries and plan to increase investment and operation in the region." Ethiopia has offered 1.8 million hectares of farmland to Indian investors.

Pandey pointed out that the cost of production of cotton in India was around $900 per hectare while it was about $400-500 per hectare in most African countries. "Development of modern agriculture in Africa is crucially important for global food security. Majority of fertile land in Africa is still left untouched. There is a lot India can do in it," he added.

In the same website as it used to attract new customer in the US, Japanese car manufacturer Honda also sold used cars. Now, for a potential used car buyer, it was confusing because when he searched for the brand on a popular search engine, the first site that came up was the main site. The customer then had to navigate through reams of information before he could reach the used cars page. Honda had its search optimised but what they came up with was a 'one size fits all' solution. Enter SEO (search engine optimisation) experts. A microsite was created for used cars only and the traffic redirected to it. A map was created based on user's location. For instance, if there was a user in New York city, the map would list out used cars near the location and would put the potential buyer in touch with the current owner. In a few months, search queries for the microsite shot up from tens to thousands. SEO and Search Engine Marketing (SEM) has fast gained importance as a part of owned media. The online advertising market in India, according to IMRB for 2009-10 was estimated at 785 crore and is expected to grow to almost 1,000 crore in 2010-11 . Of this, search advertising was estimated at 368 crore in 2009-10 and is expected to touch 460 crore in 2010-11 . Despite the impressive numbers, userdefined search optimisation however is still nascent in India. Madan Sanglekar, principal partner - invention, Mindshare calls SEO the "behind-the-scene , boring cousin" of the digital world. "This is a small but growing market. Since it is more process oriented and tool driven, it isn't given as much importance as, say, websites or microsites or apps are." He adds that brand managers tend to give 90% of their attention to the site itself and only about 10% to SEO. "Website decisions are taken by brand managers and not the IT staff in an organisation. But when it comes to SEO, it is relegated to the IT staff." Agrees Gulshan Varma, head, ad network India & ME, Komli Media: "The average Indian makes about 30 searches a month and 70-80 million people in the country have access to the internet. With those kind of numbers, SEO needs to be given more importance." Agencies may rue the lack of attention, but brands like HDFC Life and Volkswagen use SEO to maximise their brands' presence online. For HDFC Life, SEO is a core activity in its marketing pie and though it takes only 0.1% of the entire marketing budget, it has given the brand through targeted efforts an increase in organic traffic to its website at around 20%. Sanjay Tripathy , EVP & head, marketing & direct channels, HDFC Life says, "More than 50% of our traffic comes in through the search engines on a month-on-month basis where as on an average we have around 4.5 lakh visitors on our website monthly." Volkswagen has a dedicated team monitoring the search results, volumes and analytics and their cutomer management system (CMS) system that ensures high ranking of its corporate site on major keywords . "It would be wrong to say that the SEO is only meant for online companies. We have experienced in the past that offline activities are also driving the online searches even for companies that are primarily using mainline media e.g. the Vento 'Talking newspaper' was the second most searched word on that particular day" , says Lutz Kothe, head-marketing & PR, Volkswagen Passenger Cars, Volkswagen Group India. For matrimony portal Shaadi.com, SEO is a long-term strategy. "Over the last several years, we have put in time and effort to make sure that we rank high on keywords related to our area of business including our brand name itself. This not only helps drive traffic to Shaadi.com but also helps increase our brand exposure and awareness. Every month, we get thousands of new members to our site through organic search (SEO) results" , says Ram Bhamidi, VP - online marketing, Shaadi.com.

5/4/2011

MUMBAI: State Bank of India and ICICI Bank have together picked up close to 11 per cent stake in debt- trapped Kingfisher Airlines as part of debt recast process. SBI was allotted 2.8 crore equity shares on preferential basis on account of conversion of compulsorily convertible preference shares under corporate debt restructuring, the bank informed the Bombay Stock Exchange. By virtue of the allotment of shares, the SBI stake in the airline was 5.67 per cent and the value of the holding was Rs 182.25 crore. At the same time, another lender ICICI Bank was also allotted 2.6 crore shares against the loan it had given to the airline. With the allotment the bank's equity holding in the airline stands at 5.3 per cent worth Rs 169.9 crore in value terms. In aggregate, the holding of both the banks in the airline was about 10.97 per cent and the allotment of shares to the banks was done on March 31, 2011. This cashless transaction is a part of corporate debt restructuring agreed by banks and the airline company. Even other large lenders like IDBI Bank , Bank of Baroda and Punjab National Bank have also got some stake in the airline company owing to conversion of a portion of debt. Under the plan, Kingfisher, controlled by United Breweries Holdings, had agreed to convert Rs 1,355 crore worth loan into shares, besides a plan to convert the founders' debt of up to Rs 648 crore into share capital. The airline had mandated SBI Caps for the debt restructuring. With this conversion, the lenders together now hold around about 24 per cent stake in the company. With the allotment, the paid-up equity capital of the company has increased to Rs 497 crore from Rs 265 crore. This move by the lenders follows a decision taken during end-November 2010 on a debt recast package, effected after a one-time relaxation in restructuring guidelines sanctioned by the Reserve Bank of India . A consortium of 13 banks led by SBI had given debt to UB Group's Kingfisher Airlines which was restructured as the airline company found difficulty in payment on schedule. Shares of Kingfisher Airlines were trading at 47.6, up 3.59 per cent on the Bombay Stock Exchange. Banks converted part of loans at Rs 64.48 per share.

The dot-com boom in early 2000s saw a number of companies being set up online with varied models. Today the space is once again getting inundated by Indian entrepreneurs looking to make their millions. Different portals are

coming

up

with

different

business

models.

One such new player in the space is LetsBuy.com, co-founded by Hitesh Dhingra and Amanpreet Bajaj, that has positioned itself as an online retailer of computers, consumer electronics and communication products. The portal aims to be an online equivalent of an electronics retailer. A research conducted by Internet & Mobile Association of India (IAMAI) about online commerce in India shows that the purchase of computer and computer peripherals, cameras, mobiles and MP3 players is the second largest category, after the online travel industry and is pegged to be a 950 crore market. It is this pie of the e-commerce market that LetsBuy.com is eyeing. The portal recently received funds worth $6 million from venture capitalists and is targeting to close this year with 100 crore turnover.Talking about the opportunity in the space, Dhingra, CEO, LetsBuy.com says, "In mature markets like the US, most customers prefer buying electronics online and even in India, upto 65% of consumers buying electronic products research it online. Many purchase decisions are also being taken online," he says. LetsBuy.com claims to have 600 transactions happening on the site per day and about 20,000 transactions per month. About 60% of these transactions are done by customers and the rest are done by small time retailers in smaller towns. The site also offers special discounts on 'end of life' inventory sales and recently helped a camera brand liquidate its stock of 500 cameras. Special deals that were offered on Valentine's day this year led to an increase of about 30% in the number of transactions. In the last 18 months, the site has offered more than 10,000 SKUs from over 175 brands across all categories , says Dhingra. LetsBuy.com not only allows purchase of electronic products, but like offline retailers, also stocks and delivers the product. "We stock and sell all products from our own warehouses, thereby maintaining complete control over supply chain and quality of products and services. We thereby ensure that our customers get the best products at the best price and in the shortest possible time," says Dhingra. This model of business gives the customers the option of paying on delivery and not everyone who buys from the site needs to have a credit card. They are looking at alliances with banks, credit card companies and travel portals to attract customers to the site. The site deals mostly in branded electronic products and customers get one year manufacturer warranty on every purchase. "We have partnered with brands like Samsung, Western Digital, Dish TV etc to be their preferred ecommerce partner," says Dhingra. As a value addition, they also offer post sales-service to increase stickiness. While currently, the site provides only a shopping option, going forward, customers can also look forward to check out product reviews by technology experts before making their purchase decision. With the tranche of VC funding, LetsBuy.com is now looking at creating a better brand salience through advertising for the site, and is targetting an increase of 30%-40 % transactions through the marketing initiatives.

CHENNAI: The 100-year-old Chennai-based business house TVS group, known for its expertise in auto, auto components and finance, is planning to take a plunge into low-cost housing. It will do so through TVS Housing, a 100% arm of TVS Motor Company , which would debut through a pilot lowincome housing project at Nanmangalam, near Sriperumbudur, 50 km from Chennai. The broad plan is to sell flats, of sizes 385-500 sq ft, at rates between Rs 7 lakh and Rs 10 lakh, sources close to the

matter

said.

That's

an

area

where

prices

easily

go

upwards

of

3,500

sq

ft.

About 2,500 flats would come up at on a 28-acre land at Nanmangalam, according to a TVS Housing presentation accessed by ET. The immediate goal is to develop one more project in Chennai. Sources said the company is as of now building land banks for future projects. "The vision is to build 20,000 affordable dwellings and achieve a turnover of Rs 1,000 cr in the fifth full year of operation," a source said. In recent times, low-cost or budget housing segment has attracted professionals such as Jerry Rao (who founded Mphasis), Ramesh Ramanathan (ex-Citibank) besides the Tata group. Also, more players have emerged in the affordable housing finance segment. In December 2009, M Anandan, former MD, Cholamandalam Investment and Finance co, promoted Aptus Value Housing Finance along with V P Nandakumar of the Manappuram Group, to focus on low-income and affordable housing finance segment in the suburbs and semi-urban centres in the south. Other players include Muthoot Papachan Group and Chennai-based Shriam Group. Interestingly, this isn't the first time the TVS group is venturing into the housing space. It's the first commercial venture, though. In 1958, the group had established the TVS Co-operative Building Society to cater to the housing needs of its workers. As of March 2007, it had over 1,700 members and a share capital of 56 lakh. It had developed two major sites in Madurai. TVS Housing was incorporated on March 22, 2010. The TVS Group acquired the entire paid up capital of Rs 5 lakh of TVS Housing and it became a wholly owned subsidiary of the company effective June 21, 2010. The TVS group, with a combined turnover of more than $4 billion, has of late ventured into new areas such as nonconventional power and venture capital.

6/4/2011

KOLKATA: Godrej Consumer Products Ltd (GCPL) Thursday said it was looking for acquisitions in Asia, Africa and South America. "If you ask about our company's stand in terms of overseas acquisitions, we are looking at right opportunities in basically three continents - Asia, Africa and South America," GCPL's executive vice president (marketing) Tarun Arora told reporters. The company was focussing on home care, hair care and personal wash categories, he said. "Moreover, in the domestic market , we are looking at more organic growth. Some of our acquired overseas products

might

be

introduced

in

the

Indian

market.

"Our growth in India will be based on innovations, relaunching and restaging of our products. Our focus will be more on those sectors since, soaps, insecticides and hair care constitute 90 percent of our revenue," Arora added.

NEW DELHI | KOLKATA: At least five homegrown mobile-handset makers are in talks with private equity (PE) funds to raise about $1 billion to ramp up the size and sophistication of their operations. If successful, it would be only the second PE deal in the fast-growing handset industry - after Micromax in September 2009 - and would give homegrown players new ammunition to wrest more market share from their multinational peers such as Nokia and Samsung. Top officials of five companies - Gee Pee Infotech, Karbonn Mobile, Lava Mobile, Olive Telecom and Spice Telecom have confirmed they are at various stages of talks with PE firms to sell equity. "We are about to raise over $300 million by selling a minority stake to a clutch of global PE funds," Sudhir Hasija, chairman of Karbonn, told ET about a fortnight ago. He, however , declined to name the PE firms, citing "non-disclosure pacts". Kolkata-based Gee Pee Infotech is in advanced talks with the Motilal Oswal Group, SBI Caps, Srei Infrastructure Finance and the PE arm of Deloitte Touche, to raise about $50 million over the next two months, says Bijay Agarwal, the company chairman. R Sony, head of the Motilal Oswal PE practice, declined comment on the Gee Pee deal. However, he said: "PE investments in domestic handset companies will, typically, range between $30 million and $100 million over the next six months. Some companies may secure more." "The deep affinity between PEs and domestic handset makers had to happen ," says Jaideep Ghosh, executive director of KPMG's telecom practice. "For PEs, it's a decent opportunity to maximise returns in a short span." According to KPMG, 120 million handsets (excluding grey market) were sold in India in 2010; the consultancy expects this to double in 2014 on the back of increasing rural subscribers and greater replacement demand. Proposition for Handset Makers

This bout of fund-raising is an expression of the growing ambition of homegrown handset makers. They burst on the scene, one by one, beginning 2008. Their business model centred around trading: buy handsets from China, brand them in India and undercut the multinationals. It was an asset-light model, funded largely by revenues. Expansion is Imminent According to IDC data for the last quarter of calendar 2010, 68 Indian and Chinese companies had a 40% market share. Encouraged by this flush of success , they are looking to grow further and, in the process, transition from traders to manufacturers. "Expansion is imminent," says Mohit Ralhan, head of media and telecom at Baring Private Equity. "Otherwise, they will lose even before gaining market share." "We are in talks with PE funds and other players as we are going in for a QIB (qualified institutional buyers ) placement of Rs 300-500 crore," says Dilip Modi, managing director of Spice Mobility , which houses the group's various telecom businesses. A director of Olive Telecom, who did not want to be identified, said his company was close to a $300-million deal with PE investors. A director of Lava Mobile also confirmed the company was talking to three PE funds to raise $50 million. For most homegrown handset makers, this is their first serious effort at raising external capital. "Since they don't have hard assets like factories, they find it difficult to secure bank finance," says Sony of Motilal Oswal. "Hence, they depend on PE funds, more so since there is no credit mechanism in China." The companies plan to use the money raised to set up or expand their handset manufacturing capacity , acquire research and design capabilities , spend more on brandbuilding , increase their retail presence, and even go abroad. Karbonn, for instance, is

reportedly looking to buy a South Korean cellphone design house for $40 million, and increase the capacity of its Chennai and Bangalore units. "We are also looking to sell 3G phones in key Latin American, African and South Asian markets," says chairman Hasija. In calendar 2010, Karbonn sold 10 million handsets. Similarly, the Rs 300-crore Gee Pee Infotech is about to ink technology partnerships with three Chinese and Taiwanese wireless chipset suppliers - Spreadtrum, LongCheer and MTK - in the run-up to formalising plans for a Rs 1,000-crore manufacturing unit near Kolkata. In the interim, it plans to use the money on what it has been doing this far. "Demand is surging," says company chairman Agarwal. "We need funds to maintain an inventory of at least two months." Mumbai-based MAXX mobiles, India's largest manufacturer of mobile-phone batteries and chargers, plans to invest about Rs 2,500 crore in the business. Much of it will go towards expanding its existing manufacturing facility for batteries and chargers, and in building a new mobile-phone plant. "We are working out projects for expansion," says Managing Director Ajjay Agarwal. "It is too early to comment on the funding ." Proposition for PE

Industry officials with knowledge of the talks say the PE funds that are interested include Advent International, Blackstone, HSBC Direct Principal Investments (Asia), KKR, Motilal Oswal, Norwest Venture Partners, Temasek Holdings and SBI Caps. In an email response, Blackstone denied having any interest in the Indian telecom sector. Other international firms did not respond to e-mail inquiries. Ralhan of Baring Private Equity says PE firms are "definitely interested" in the new breed of handset makers. So far, there has only been one PE deal in an Indian handset company: Micromax, the leader among homegrown handset manufacturers, with a market share of about 7.2% in the third quarter (July-September ) of 2010, the latest available, according to IDC. Micromax raised $90 million by selling 20% to four PE funds - Sandstone Capital, Sequoia Capital, Madison Capital Management and TA Associates - in two tranches, in September 2009 and January 2010. That financial year, the company posted a four-fold increase in revenues and a six-fold increase in net profit. In 2009-10 , Micromax recorded revenues and net profit of Rs 1,600 crore and Rs 200 crore, respectively; in 2008-09 , the corresponding figures were Rs 350 crore and Rs 35 crore, respectively . An exit option might not be far away. Micromax has filed for an initial public offering (IPO) of $104 million and began road shows in the US last week. Baring's Ralhan says a company's ability to follow up with an IPO in the immediate future will make it more attractive for PEs. "Companies that can do an IPO in the next two years have an edge because they will be raising capital in line with the growth cycle." Company officials that ET spoke with, both named and unnamed, iterated the importance of an exit route in the PE thinking. "They want to exit within three to five years," says Agarwal of Gee Pee. "That's why they prefer investing only after a company freezes the IPO timeline." The typical PE investing time frame also coincides with the aboveaverage growth window likely in the Indian handset market - three to five years. "When the industry is doing well, even average teams tend to survive. But when there are headwinds , even great teams have a 50% chance of winning," says Ralhan of Baring. "Funds with an investing cycle of three to five years will be happy. Those with a cycle of seven to eight years will face a challenge." KPMG says the Indian handset market, which is expected to double in size in the next three years, will account for about 14% of the global handset market by 2014, driven by an expanding rural subscriber base and replacement demand. "India's share of the replacement market is about 7%," says KPMG's Ghosh. "Replacement demand is set to increase exponentially as user sophistication increases, especially in urban centres, where people move from entry-level to feature-rich smart phones ." The proof is the $1 billion deal pipeline.

NEW DELHI: Digital imaging firm Fujifilm today said it will more than double its marketing budget to Rs 60 crore this fiscal as it looks to increase its share in the Indian camera market and enhance its reach in the country. "We invested around Rs 20-25 crore last fiscal. This fiscal we will invest around Rs 60 crore. We are going for aggressive marketing initiatives to increase our share and penetration," Fujifilm India Country General Manager A Rajkumar told reporters here.

The company, which sold 1.6 lakh units last year, said it plans to sell around 4.2 lakh units this year and is aiming to garner a share of of 17 per cent by 2013. At present, Fujifilm has a share of 7 per cent of the Indian digital compact camera market estimated to be 25 lakh units. It expects to achieve around 12 per cent by the end of this year. The Indian digital compact camera market is growing at the rate of 40 per cent and is likely to touch around 39 lakh units by the end of this year. The company said the increase in marketing spend is in line with its global trend of doubling marketing spend to USD 600 million in the next three years. "We are doubling our marketing investment to USD 600 million. We have not been investing in the past years. We now plan to go aggressive with marketing initiatives," Fujifilm Corp Director Takeshi Higuchi. The company, which introduced 12 new products in the FinePix X100 range, said it is looking at penetrating deeper into the existing markets and increase its presence in small cities and towns. Asked if there has been any impact of the recent earthquake and tsunami in Japan, Rajkumar said one of the plants was shutdown due to the natural disaster but it has been resumed now. "Apart from a few models of X100, most of them are imported from China. So there was no shortage of products. We did not have any impact," he said.

8/4/2011 BEIJING: Playing down a billion dollar trade deficit in China in the first quarter of fiscal year 2011, economists said the country would return to surplus path from April-June quarter. China reported its first quarterly trade deficit in seven years, registering a deficit of USD 1.02 billion in the first quarter, compared with a surplus of USD 13.9 billion last year. The deficit was chiefly attributed to efforts to promote imports and the soaring prices of key imported commodities. "Reduced export growth due to the rising costs of labour, land and oil, along with yuan appreciation and rising interest rates also contributed (to the deficit)," Zhang Yansheng, director of the Institute for International Economics Research under the National Development and Reform Commission (NDRC) was quoted by China Daily. According to the General Administration of Customs, this is the first deficit since the first quarter of 2004 when a deficit of USD 8 billion was reported. Dong Xian'an, chief economist at Peking First Advisory, attributed two reasons behind the deficit. "Chinese manufacturers hoarding commodities helped push up prices because of their anticipation of inflation, (along with) the Japanese earthquake and the turmoil in some Arab nations," he said. Dong also cited China's increasing overseas purchases, including high-tech equipment, planes, raw materials, and soybean toward the end of 2010 as another reason for the trade deficit. However, economists believe the trade deficit would not last amid efforts to control capital flow and combat inflation.

"The tightening policies will hold back import growth by both volume and value," said senior economist Stephen Green, head of research at Standard Chartered Shanghai. "The second and third quarters will see trade surpluses. So pressure to appreciate the yuan will remain," he said. China increased the benchmark one-year lending rate to 6. 31 percent on April 6, the second rise this year. Also, the consumer price index, due on Friday, is predicted to grow by more than 5 percent in March. Zhou Shijian, senior researcher on China-US relations at Tsinghua University, said the trade surplus will return, as "exports usually see strong growth during the second half" of the year. "A full-year surplus of around USD 100 billion is comfortable for China and its economic growth," he said. The trade surplus dropped to USD 196 billion in 2009, down from a record USD 295 billion in 2008. The figure further shrank to USD 183.1 billion last year.

NEW DELHI: Coal India Ltd (CIL) has been conferred the coveted Maharatna status, giving the world's largest coal producer greater autonomy for taking investment decisions. Along with CIL , Neyveli Lignite Ltd has also been awarded Navratna status, it was announced at a PSUs' function attended by President Pratibha Patil here. Another PSU Pawan Hans Helicopters has received Mini-ratna tag. "I take this opportunity to compliment the management and employees of CPSEs, who have been felicitated and conferred with Maharatna and Navratna status today," Patil said. She said that the honour given to these PSUs recognises their performance over the years. Once a company gets the Maharatna status, its board would not be required to take the government's permission for investments up to Rs 5,000 crore in a joint venture project or wholly-owned subsidiary. For the Navratna companies, the limit is Rs 1,000 crore.

11/4/2011

NEW DELHI: Online shopping portal eBay India today said it has joined hands with leading apparel brands Adidas , Reebok among others, to sell IPL merchandise of all the 10 teams on its website. The entity has partnered with the apparel brands such as Adidas, Reebok, Puma and Lotto Sports to provide avid cricket fans a one stop shop for the official Indian Premier League (IPL) merchandise from all 10 teams, eBay India said in a statement. The official IPL merchandise, which have been available from April 8 on eBay India, will continue throughout the IPL season till May 29. Merchandise will include T-shirts, Jerseys, caps, footwear, collectibles and fan gear, mugs, wrist bands, key chains and miniature bats.

Besides, eBay India has also tied up with many of its charity partners to auction one unique autographed memorabilia every week during the IPL season. Further, this week, a bat autographed by Rahul Dravid is on auction with bidding starting at Re 1, whose proceeds will benefit Children's Movement for Civic Awareness(CMCA). The auction would end on April 21, 2011. "With the recent win of the World Cup, cricket enthusiasts are going all out to cheer their favourite players. Continuing our tradition of successful IPL partnerships for the last three seasons, eBay India has partnered with brands Adidas, Reebok, Puma & Lotto to provide all cricket buffs an opportunity to own their favourite IPL merchandise," eBay India Senior Manager (Pop Culture) Deepa Thomas said.

NEW DELHI: Leading bicycle maker Hero Cycles on Monday said it has tied up with Pantaloon Retail India (PRIL) under which its premium products will be sold at Future Group's different stores. As part of the agreement, the company will sell its high -end bicycles at PRIL's Planet Sports outlets along with other shop-in-shop formats within other retail points of the Future Group such as Central, Pantaloons, Brand Factory and Sports Warehouse across all metros and tier one cities. "The tie-up is aligned with Hero Cycle's strategy to address the premium bicycle market, while continuing to be the market leader in the mass segment through its established brand loyalty," Hero Cycles Managing Director S K Rai said in a statement. With annual production capacity of 5.5 million cycles, Hero Cycles caters to Indian consumers with 3,000 dealerships across the country. Meanwhile, Planet Sports is also expanding its brand portfolio in the country and has recently introduced outdoor footwear brand Salomon from the Amer Sports Group. "We see demand growing in India for footwear used in outdoor activities such as running, trekking and backpacking. To support the launch the company is also organising two running events in India in the next 45 days," Pantaloon Retail CEO (Sports Division) Ravdeep Singh told PTI. Planet Sports is a retail format of PRIL with 80 specialty stores spread across 30 cities that sell a large range of sports and lifestyle brands such as Converse, Speedo, Wilson , Skechers, Salomon, Reebok , Nike, Adidas, Puma, Spalding and Spunk.

NEW DELHI: Dell, the world's third largest personal computer maker, today said it has launched a programme to provide financing option to small and medium businesses, large commercial customers and public sector in India for its products. Dell has entered into an agreement with financial services provider Macquarie to provide easy financing options for its products. "Dell Financial Services India is the first financing programme for Dell in India to address the comprehensive financing needs of our enterprise, public sector and small and medium business customers by providing a dedicated

sales team to structure the most effective financing arrangements available in the marketplace," Dell said in a statement. The financing options would include low interest rate and promotional financing on key Dell products and other range of solutions that Dell offers. However, the interest rate and finance limit under this program has not been fixed by the company. "Macquarie's expertise in this area, combined with Dell's existing products and programmes, will provide customers with robust technology solutions and structured financing capability," Dell India general manager Consumer and Small-Medium Business Mahesh Bhalla said in statement. "The proposal of financing products will be evaluated by Dell and Macquaire. It will depend from company to company, relationship of customer with Dell," a Dell spokesperson said. Customers will get a lease for 12-60 months to benefit from fixed regular payments, the statement said. "The Dell relationship is strategic for Macquarie and consistent with our focus of providing solutions to premier global vendors in growing and emerging markets," Macquarie Equipment Finance, global head of vendor programmes, Nicholas Holmes commented on his company's agreement with Dell.

12/04/2011

MUMBAI/NEW DELHI: Hindustan Unilever and PepsiCo are reviving their seven-year-old joint venture to sell readyto-drink teas and tea beverages by relaunching Lipton ice tea, four months after Nestle and Coca-Cola brought Nestea ice tea. Lipton tea will be rolled out in ready-to-drink bottles next week in Delhi and the NCR region, PepsiCo Executive Director, Innovation, Geetu Verma said. It will be sold in two flavours for 25 each and be taken to other cities in the course of the year, she said. The move is in line with the cola rivals PepsiCo and Coca-Cola's drive to broadbase their portfolios with rapidly growing functional beverages such as fortified juices, teas, vitamin water and milk-based drinks, as consumers begin preferring healthier beverages over aerated drinks. The PepsiCo-HUL alliance launched Lipton ice tea in 2004, but the product was withdrawn within a year for lack of demand. "The concept was ahead of its time. Consumer insights told us there was a gap between intent and action when it came to consumption of health beverages," Verma said. "But that's changing and there's increasing consumer readiness for such products. Ice tea is a niche but growing category," she said. Brand consultancy firm DMA Yellow World CEO Alpana Parida said the product will take its time to establish in India. "Iced tea has still not caught the imagination in India despite being there for some time now. While people are shifting from fizzy drinks to healthy alternative, each cola brand stands for something in the minds of consumers, but ice-tea has no such positioning," she said. It's still early days for Coca-Cola-Nestle combine's Nestea ice tea, which has yet to go national. Trade insiders say early response from select cities is encouraging. Unilever and PepsiCo created Pepsi Lipton Partnership in 1991 to market ready-to-drink teas in North America. This was followed in 2003 by a second venture, Pepsi-Lipton International , covering many non-US markets.

India's largest corporarte, Reliance Industries has hired business consultancy firm McKinsey to advice it on a business transformation plan which would catapult the company's enteprise value by another $ 80 billion in the next 10 years. RIL will also take help from its independent director and former dean of Kellogg's management school Dipak Jain to chart out the new business reorganisation plan. ET NOW has learnt from three independent sources that the new corporate structure would lead to changes in the top management team. Though the current core team of Chairman Mukesh Ambani comprising of Manoj Modi, PMS Prasad and Kamal Nanavati will remain untouched, a few new faces will be hired to head new economy businesses like telecom, retail and financial services. RIL has already sounded off head hunting firms to poach talent from rival companies. On the Bombay Stock Exchange, RIL's stock was trading at Rs 1021.70, up by over 1 percent since previous close. RIL is working in a plan to make a foray into new growth areas. The plan includes merger and acquitions apart from setting up new businesses. In the last one year, Reliance has made some big ticket acquistions in the United States to buy stake in shale gas assets. In India , Reliance bought 14.8 per cent stake in Oberoi Hotels and spent Rs 4500 crore in taking over Infotel Broadband to launch 4G telecom services in the country. The company recently sold 30 per cent stake in its Krishna Godavari based gas assets for $ 7.2 billion to BP. The new corporate restructuring is expected to enable RIL transform itself into one of tge world's biggest conglomerates. Last year, Mukesh Ambani's RIL and younger brother's Anil Dhirubhai Ambani Group (ADAG) dropped the earlier non-compete agreement and signed a new non-compete agreement. After this, RIL has been looking for opportunities in power sector across generation, transmission and distribution. The company is currently looking for strategic partners, such as service providers, infrastructure providers, device manufacturers and other participants to expand its infocomm business. Last month, RIL also announced to establish a joint venture with US-based investment and technology development firm DE Shaw group to build financial services business in India. ADAG is already present in telecom, power and financial services. RIL's main businesses under older Ambani brother have been exploration and production of oil and gas, petroleum refining and marketing, petrochemicals, textiles, retail and special economic zones. RIL has now become the world's largest producer of polyester yarn and fibre, is among the world's top ten producers of various petrochemicals and is the largest producer of gas in India.

MUMBAI: Aiming to double its sales by 2015, FMCG major Hindustan Unilever Ltd (HUL) is looking at a slew of strategies, including re-launches, to garner the largest pie in the consumer goods space by filling in white spaces in its product portfolio. While the company has re-launched its Lifebuoy talcum powder brand (in the prickly heat segment), it has also gone in for brand extensions in Knorr and Kissan, leaders in the soup and jams and ketchup categories, respectively. Scenting an opportunity in the prickly heat talc segment, especially with the summer season on, HUL launched its Lifebuoy talc in February this year. "We see an opportunity in the prickly heat talc segment. Germs are the root cause of prickly heat, and therefore, it is ideally suited for Lifebuoy, given the brand's strong germ-kill credentials, to enter this segment," HUL spokesperson told PTI here.

Besides this re-launch, the company had early this year entered the juice segment with Kissan fruit (apple, mango and orange) and soya drink in Delhi, Mumbai and Chennai. The brand will take on competitors like Real, Tropicana and Saint. The Indian arm of MNC Unilever Plc, had in 2003, launched Lifebuoy talc which was not a prickly heat powder. However, it had to pull out the brand within a short period. Asked about the reason for the pull-out, the company spokesperson simply said "we only had a soft launch in 2003 -we believe we were ahead of the curve." Analysts felt it is a good move by the consumer goods giant to fill in white spaces (sub-segments, where it is not present).

13/4/2011

Engineering giant Larsen & Toubro is looking to sell of its Electrical and Electronics business as part of the ongoing restructuring plans , at least two people familiar with the development said on condition of anonymity. The board of the company met on Wednesday where the approval for hiving off the vertical was given. The company is in talks with several companies in regards to the sale of the division. Schneider Electric and another US based company are in talks currently with L&T, said one of the sources mentioned above. The management of L&T declined to comment on the deal of selling off the division. The Electrical and Electronics division constitutes around 7% to the total revenues of L&T and makes products like switch gears, air circuit breakers, circuit breakers and switch boards . The division had revenues of Rs 2212 cr for the first 9 months of the year and has an EBITDA margin of around 11%. The division has manufacturing facilities in Powai, Ahmednagar, Mysore, Navi Mumbai and several locations abroad. An analyst who did not want to be identified said "The division would have revenues of around Rs 3000 - 3200 cr for the full year. This division is lagging in business for L&T and the company is now focusing on core businesses. L&T is the leader in switchgears and hence the deal could command a premium" The stock of L&T was up 3% after the story was broken on ET NOW.

BANGALORE: Infosys Technologies Ltd , India's No. 2 software services exporter, sparked worries about the sector's growth after it forecast annual sales lower than expected on slower client spending, knocking its shares down nearly 10 per cent. Infosys shares closed down 9.59 per cent on BSE at Rs 2988.80. Kicking off results for India's nearly $60 billion IT sector on Friday, Infosys estimated tepid revenue growth due to global economic uncertainty and said margins would decline for the year ending March 2012, highlighting currency risks for the export-focused sector. "Based on what Infosys has reported and forecast, people will taper down their earnings estimates for the top players in the sector," said Tejas Doshi, vice president of research at Sushil Finance in Mumbai. Bangalore-based Infosys, seen as a benchmark for the Indian outsourcing sector, has missed analysts' profit

estimates

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"You are seeing high fluctuations in the client spending due to global economic uncertainties. Margins will remain under pressure for the companies," Doshi said. Infosys, larger rival Tata Consultancy Services and No. 3 player Wipro have been battling a strengthening local currency and pay increases for staff as they fight to retain talent while competing with rivals such as IBM and Accenture . Infosys Chief Operating Officer S.D. Shibulal said the company expected to raise wages 10 to 12 per cent in fiscal year 2012, while likely not being able to raise pricing. "We have assumed for all our guidance purposes flat pricing," Shibulal said. Infosys, which has 130,820 staff, plans to add 45,000 more this year.

In the latest management shakeup in the sector, Infosys said its human resources chief, T.V. Mohandas Pai , had quit. Pai, the former CFO, was widely seen by analysts as the only non-founder who could become CEO. Pai joined Infosys in 1994 and was a member of the board since May 2000. "We have had transitions in the past...these things are part and parcel of a growth of a corporate and what is good is that we have the leadership required to manage these transitions," Chief Executive S. Gopalakrishnan said, referring to Pai's move. Infosys's chairman is slated to retire in August this year, prompting media reports he would be replaced by the current chief executive in a move that would create a vacancy for the top job. Infosys' board would meet on April 30 to discuss succession plans.

In January, Wipro replaced the chiefs of its key outsourcing business after struggling to keep up with peers. Indian companies are seeing a shakeup in top management as some founder-led firms seek to resolve succession issues and others look to revamp strategies amid intense competition from domestic and overseas rivals. Infosys shares ended 9.6 per cent lower on Friday, the biggest daily fall since May 19, 2009, and rival Wipro dropped as much as 5 per cent. The sector index fell 6.3 per cent in a broader market down 1.5 per cent. More than 10 million shares were provisionally traded on the National Stock Exchange, more than 10 times its 90-day daily average volume. ECONOMIC WORRY WEIGHS

"The biggest concern for Infosys' prospect this year is the slow recovery of the US and European economy," said Eric Lin, manager of the India fund at Prudential Plc's fund unit in Taipei.

HELSINKI: Nokia workers are bracing for what may be the steepest job cuts in al-most two decades as the world's largest maker of mobile phones pre-pares to start a partnership with Microsoft . A reduction in research and development activities is set to be announced by the end of the month, with as many as 6,000 jobs under threat, said Antti Rinne of Pro, Finland's biggest private-sector office-worker union. That would be equivalent to 38% of the Finnish company's global devices R&D work-force. Nokia declined to comment on the numbers. "We have said we are planning to say more about the impact on our personnel in the last week of April," said Nokia spokeswoman Paeivyt Tallqvist, adding that any announcement won't be restricted to Finland and the plans include

starting negotiations with employee representatives. "We have not given any figures or estimates." Chief executive officer Stephen Elop said on Feb. 11 that Nokia will adopt Microsoft's Windows Phone 7 as its main smartphone operating system over the next two years, a move triggering "substantial reductions in employment." As he phases out Nokia's homegrown Symbian and MeeGo systems, workers haven't been told who may hang onto their jobs. "This doesn't make for very efficient or creative working conditions," said Kalle Kiili, an engineer in Tampere, a research site that employs 3,000 workers, and represents the YTN union. "This waiting is expensive and we've already had a reorganization of R&D in 2009 and another reorganization of Symbian in the second half of 2010, just as the organisation was starting to work properly again." At 3 billion euros ($4.3 billion), Nokia's 2010 research budget for devices, which include products ranging from basic handsets to smart-phones that can edit documents and show movies, is more than twice Apple's entire $1.78 billion R&D budget. Nokia Tuesday unveiled an updated version of the Symbian smartphone software and two new smartphones that will run it. The E6 business phone combines a Qwerty keyboard and a touchscreen. The X7 entertainment phone has a large display to play games and an 8-megapixel camera for taking pictures and high-definition-quality videos. Both handsets will start ship-ping in the second quarter, Nokia said. Since Apple shipped its first iPhone in 2007, Nokia's share of smartphone sales by volume has shrunk 20 percentage points to 30.8% in the final quarter of 2010, according to researcher Gartner. At the end of last year, Nokia employed 16,134 people in R&D for devices and services, a company filing showed. "The reductions are likely to come gradually, over the next 12 months because they have some further development in the pipeline for Sym-bian," said Michael Schroeder, an analyst at FIM Bank in Helsinki who has a "reduce" rating on the stock. "The expectation is that after the transition period they would have cut a third of their device R&D spending compared to what it was in 2010, so that would mean 1 billion euros in total." Nokia has said the transition would extend into 2012. Under Finnish laws, companies must start negotiations with unions when they announce job-cut plans. Those talks typically last about six weeks. Finland's Ministry of Employment has a working group that meets weekly with Nokia and others to review options for helping people through the transition, said Paasivirta. Asked about the reorganisation, finance minister Jyrki Katainen told Bloomberg News Monday that he expects Nokia to do its best to create new opportunities for those who will lose their jobs. Nokia has about 21,000 workers in Finland, or 16% of its global headcount including the networks venture with Siemens, according to filings. The figure also includes a smartphone factory in Salo with about 2,000 employees. In November 2009, Nokia Siemens announced plans to eliminate 5,760 jobs. The venture cut as much as 15% of 60,000 positions when it was created in 2007. In 2008, Nokia closed a handset plant in Bochum, Germany, slashing about 2,300 jobs. Nokia announced reductions of 1,700 jobs in sales, marketing and management in March 2009 as consumer demand fell in the global recession. Nokia shut an R&D site in Jyvaskyla in 2009, leaving R&D groups in Salo near the factory as well as Tampere, Oulu and the capital area which includes Helsinki and Espoo. Other devices R&D locations in-clude Beijing, Bangalore, Copenhagen, and San Diego, as well as Ulm, Germany, and London and Farnborough in the UK Nokia also maintains a network of 13 research centers working on longer-term projects such as sensor technology and 3-D interaction.

15/4/2011

NEW DELHI: Just over a year after breaking up its joint venture with Renault, Mahindra & Mahindra today said it has renamed the 'Logan' sedan as ' Verito ., thus completely dropping the French automaker's badge from the entry level sedan. "We are delighted to announce that the Logan will now be called the Verito. It will sport the Mahindra badge and emblem," the company said in a statement. It, however, did not specify whether there has been a change in the price of the sedan.

Currently the Logan, which is available in both petrol and diesel variants, is priced between Rs 4.67 lakh and Rs 6.47 lakh (ex-showroom) as per the company's website. Last April, M&M and Renault had agreed to part ways from their joint venture -- Mahindra Renault Pvt Ltd -- that was formed in 2005 to produce and sell the Logan in India as the car failed to meet expectations. M&M had agreed to buy out Renault's 49 per cent stake in the JV for an undisclosed sum. The French auto major, however, agreed to continue to support M&M and Logan through a licence agreement and supply key components, including the engine and transmission. As per their understanding, M&M could use the Logan brand for 18 months after which it was to drop all the Renault badge from the product as well as dealerships. M&M's statement today did not elaborate on whether the Renault brand has also been dropped from the Logan showrooms.

Toyota Motor Co is set to lose its crown as the world's largest automaker after Japan's earthquake and nuclear disaster slashed local output by almost two-thirds in March. Japan's auto sector has been hit hard by the disaster due to a shortage mostly of electronic and resin-based parts in the wake of the magnitude-9.0 earthquake and resulting tsunami, as well as damage to a major nuclear plant which disrupted power supplies. Toyota said last week it could take until the end of the year before production fully recovered. The world's largest automaker said domestic production fell 62.7 percent to 129,491 units in March, while Japan's No.2 Nissan Motor Co said its corresponding figure fell 52.4 percent to 47,590 units. Honda Motor Co said domestic production shrank 62.9 percent to 34,754 vehicles. Toyota is now almost certain to lose the top producer ranking it has held since 2008 to General Motors this year. Toyota sold 8.42 million vehicles last year, topping GM's 8.39 million. Koji Endo, managing director of Advanced Research Japan in Tokyo, said Toyota was now on track to post sales of around 6.5 million units this year. "Most likely GM will produce 8 million-plus and Volkswagon will produce around 7 million, so most likely Toyota will be third, GM will be first," Endo said.

Toyota, criticised by some analysts and investors for its aggressive expansion in the early 2000s, played down the prospect of losing its top ranking. "When Toyota became No. 1 there were no champagne corks going off here," said Toyota spokesman Paul Nolasco. The March sales were the worst since records began in 1988, he added NO CLARITY Japanese automakers have not forecast what impact the production cuts will have on earnings, but analysts have been slashing their forecasts since the disaster. "In overseas markets consumers have choices and (non-Japanese makers) probably will take some share, but I think it is an open question if those will be sustainable or temporary share changes -- my guess is that they will tend to be temporary," said Christopher Richter, an auto analyst at CLSA Asia-Pacific Markets in Tokyo. "Probably the negative news is in the share prices and it is just a matter of time before some of this positive news starts to get imputed into share prices." Shares in the major automakers were slightly weaker on Monday, with Toyota down 0.5 percent, Honda down 1.3 percent and Nissan 1.7 percent lower. Tokyo's transport equipment sub-index has bounced about 14 percent from its post-quake low, but is still more than 6 percent below where it was before the disaster struck. In contrast, South Korea's Hyundai Motors has surged 30 percent over the same period, hitting a record high last week on expectations it will benefit from the woes of its Japanese rivals. "These are good times for South Korean carmakers. They will gain market share, raise utilization rates," said Park Jong-min, a fund manager at ING Investment Management in Seoul. "They will also reduce incentives, which will help cut costs." The disaster has been a major setback for the world's third-largest economy, with exports falling faster than forecast in March and industrial output data due on Thursday expected to show a record decline. Some economists expect industrial production to fall as much as a quarter, month-on-month, in March. Uncertainty on the earnings outlook is likely to linger well into the financial year which started on April 1. Many companies are expected to refrain from giving 2012 earnings guidance during the current fourth quarter reporting season and those that do are expected to paint a bleak picture. "One source of concern is that analysts have not cut their estimates for the current year by very much," said Koji Toda, chief fund manager at Resona Bank in Tokyo. "I think many are leaving their figures unchanged because they don't have enough information to decide how far to cut them." For Toyota, 11 analysts who revised their forecasts after the earthquake forecast an average operating profit of 281.9 billion yen for the year to March 2012. That is down 65 percent from the consensus of 804 billion yen from 21 analysts before the quake, according to Thomson Reuters I/B/E/S. Toyota announces its results on May 11, but it is not certain if it will provide its own forecast.

MUMBAI: India's leading software services exporter, Tata Consultancy Services , is eyeing acquisitions in Germany and Japan in the healthcare sector, its chief executive said on Monday, as it looks to expand beyond its core U.S. market. TCS and smaller rivals Infosys Technologies and Wipro have been looking for overseas acquisitions to boost growth amid growing competition from global rivals such as IBM and Accenture. "We want to look at opportunities for bringing some strategic capabilities, whether it is in platforms, whether it is in markets," N. Chandrasekaran told Reuters in an interview at the company's corporate headquarters in Mumbai. The firm, which has about $2 billion in cash, has not set aside a specific amount for acquisitions, said Chandrasekaran, who is an avid long-distance runner and has completed marathons in Mumbai, New York , Prague, Stockholm and Vienna. "As long as TCS goes in for acquisitions for skill sets or expanding geographies at a reasonable price, there is reason to believe an acquisition should prove to be positive," Jagannadham Thunuguntla, head of research at SMC Global Securities. TCS, a unit of the salt-to-steel Tata Group conglomerate, expects to see "marginal improvement" in pricing for the fiscal year that began in April and expects to sustain current operating margins, Chandrasekaran, who said. The company posted operating margins for fiscal year 2011 of 27.8 percent under U.S. accounting rules. TCS, whose clients include Citigroup and General Electric , last week reported a 23-percent rise in fourth-quarter profit, beating estimates on rising demand. But the firm flagged wage hikes and currency volatility as main threats to its profit margins for this fiscal year. The country's $60 billion outsourcing sector provides an array of services, including software coding and managing computer networks and call centres for overseas firms such as British Airways, BT Group Plc, and Sony Corp. The U.S. technology market, the largest for Indian technology firms, will expand 8 percent in 2011, up from 7.4 percent projected earlier, with software, IT consulting services and technology outsourcing growing faster than last year, research firm Forrester said earlier this month. TCS expects strong outsourcing demand from overseas clients, but the uncertainty in the global economic environment needs to be watched out for, Chandrasekaran said. "The macro is something we have to keep in the back of mind, but there are lot of signs of pick up in deal momentum," said the executive, a TCS veteran who took the top job at the country's No. 1 software exporter in 2009. The United States accounts for more than 50 percent of revenue at Indian technology firms. Still, Indian firms are looking to grow in Europe, where demand has long been tepid, and emerging markets like Latin America and Africa , where rapidly growing economies are spurring demand for outsourcing.

TECH BUDGETS ON THE RISE TCS expects technology budgets at top clients to rise 1 to 4 percent in the current fiscal year as companies boost

spending on technology to improve efficiency and meet new regulatory norms like Basel III for banks , Chandrasekaran said. TCS expects attrition to reduce by 1 to 2 percent points in the current fiscal year, he added. Attrition at TCS stood at 14.4 percent in the fourth quarter, lower than Infosys, which saw a 17 percent turnover rate in the same period. Chandrasekaran, who is also the managing director of TCS, said staff turnover was a challenge for TCS, and the company would be comfortable with a 10 percent attrition rate over the medium to long term. Indian technology firms are seeing high turnover rates as they battle to keep their staff from being poached by larger global rivals. TCS is seeing increased business opportunities in new services sector like pharma, retail and utilities while it expects its mainstay financial services sector to continue to grow, Chandrasekaran said. TCS is "investing a lot" on developing new platforms for supply chain and social media and on cloud computing, he said. Cloud computing, or the hosting of sites and services on the Internet, is viewed as the future of computing for consumers and corporations in an increasingly wireless world. Shares in TCS, valued at about $52 billion, closed on Monday up 0.5 percent i n the Mumbai market that fell 0.2 percent. Credit Suisse on Monday downgraded TCS to "neutral" from "outperform, " saying all positives were priced in.

SEOUL: S-LCD, a flat screen joint venture between Sony Corp and Samsung Electronics , said on Monday it would reduce capital by $555 million, as Sony struggles with perennial losses from its TV business and Samsung seeks to shift to a new type of display. Global liquid crystal display (LCD) market is struggling with faltering demand, with some forecasting that the $100 billion LCD TV industry had already picked last year and would shrink by 3-4 percent annually, as consumers in advanced countries have already traded their bulky tube TV sets to flat screens. LCD is widely expected to give way to new displays such as energy-efficient active matrix organic lightemitting diode (AMOLED), which is increasingly used in high-end smartphones and tablets and touted as a future large-sized TV display. The 50-50 LCD joint venture announced on Monday its first capital reduction of 600 billion won ($555 million) after more than tripling its capital to 3.9 trillion won since Sony and Samsung formed the venture in 2004 with 1.26 trillion won to ensure smooth supply of flat screens for Sony. "The decision reflects shrinking demand from Sony after the devastating earthquake in Japan last month and the sector's overall shift in focus to OLED display," said Kim Sung-in, an analyst at KB Investment

& Securities . "Sony has bought around 1.1-1.2 million units of LCD panels every month from the venture but it can't buy that much any more due to weak sales in Japan. With the overall demand for LCD displays set to shrink further, Samsung and Sony are likely to gradually wind up the business and focus instead on OLED," Kim said. Sony will not raise its stake in a separate LCD venture with Sharp Corp for at least a year, a Sony source said last week, a move that reflects the industry's growing caution over growing exposure to the LCD industry, which has been in a glut since last summer. Sony needs to slash costs as it heads for a seventh straight year of losses in its TV business. Highlighting soft demand from TV makers, Philips Electronics said this month it would transfer its TV business into a joint venture with TPV Technology. Panel makers have reduced production after the powerful earthquake on March 11 but demand from TV and computer makers is too weak to absorb even lowered supplies, sending prices of large-sized LCD panels down more than one third over the past year and most panel makers including sector leader Samsung are widely expected to report losses for January-March period. S-LCD, which supplies only to Samsung and Sony, said the move was aimed at improving its capital structure. The South Korean-based firm said on Monday it would cancel 120 million shares to reduce equity capital by 600 billion won to 3.3 trillion won, after having had strong cash flow last year. The company reported 11.4 trillion won in 2010 revenue and 204.6 billion won of net profit last year, up more than 12 times from 16.4 billion won a year ago, resulting in 747 billion won of positive cash inflow last year alone. Samsung, the world's top LCD maker, is planning a 5.4 trillion won investment each in LCD and AMOLED this year. Shares in Samsung, Asia's most valuable technology company with $136 billion in market value, closed down 1.7 percent and Sony fell 0.4 percent on Monday. 25/04/2011

FRANKFURT: Volkswagen, Europe's largest carmaker, tore through quarterly earnings forecasts with emerging markets fuelling a sharp rise in sales and taking it closer to its goal of overtaking Toyota. Carmakers have turned to booming markets such as Brazil , Russia and China -- now the world's largest auto market -- for growth as European markets stagnate. VW, whose stable of brands includes Audi , Skoda and Seat, sold 14 percent more vehicles in the first quarter of the year thanks to demand from abroad and a low exposure to supply-chain problems related to the crisis in Japan. "We continue to see the most dynamic growth prospects in the emerging markets of Asia and Latin America, whereas the industrialised nations will continue to experience only moderate growth," Volkswagen said on Wednesday.

Bernstein Research said VW's strong performance was part of a wider trend of demand for German marques. "The world wants to buy German vehicles, and BMW , Mercedes and VW are taking market share everywhere," Bernstein analysts said in a note on Wednesday. The country's car exports jumped by 24 percent in 2010, but German carmakers are already producing more vehicles abroad than in their home market to meet demand from countries such as the United States and China. Shares in Volkswagen, which has a 12 percent share of the global passenger car market, extended gains to trade 4.7 percent higher at 126.45 euros by 1500 GMT. The STOXX Europe 600 Automobiles & Parts index was up 2.5 percent. VW's operating profit, which does not include earnings from its lucrative China business, surged to 2.91 billion euros ($4.26 billion), surpassing the 2.19 billion estimated on average from a Reuters poll of 11 analysts. SURPASSING TOYOTA Some European carmakers such as PSA Peugeot Citroen have taken a hit after Japan's earthquake and nuclear crisis made it difficult to source car parts from there. Rival Renault on Tuesday predicted the impact of the Japan crisis on the auto industry supply chain could lead to slower production in the coming months. But German auto companies have so far remained relatively unscathed by supply chain problems, and the crisis may create an opportunity for Volkswagen to surpass its top rivals. VW has been aiming to surpass Toyota , the world's biggest carmaker, in terms of global auto sales, and the Japan crisis could hamper Toyota's production, pushing it temporarily to the No. 3 spot behind General Motors and VW. JAPAN VW warned that the crisis in Japan and its economic impact could adversely affect car production and sales but said it still expected to post higher 2011 revenue and operating profit and to top the record 7.14 million vehicles it sold last year. "The outlook is not aggressive, but that is understandable in the face of uncertainties such as the crisis in Japan, the European debt crisis and an uncertain development of raw material prices," said Michael Muders, a fund manager at Union Investment, 10th biggest holder of Volkswagen preference shares. Volkswagen's Chief Financial Officer Hans Dieter Poetsch told analysts during a conference call that the company should be able to get all the parts it needs for the next few weeks though he could not rule out problems later in the year. Porsche AG, the sportscar business jointly owned by Porsche SE and VW, earlier said it more than doubled its operating profit to 496 million euros in the first quarter, with a 10 percent increase in revenue.

NEW DELHI: Leading consumer good firms Dabur, Godrej, and Wipro Consumer Care & Lighting today said they will consider going for another round of price hike to offset high input cost as high raw material prices continue to be a challenge. "We have taken up prices of a few products in March, the impact of which is yet to flow in. Going forward, we will be watching the inflation very closely and will put in place calibrated price hikes wherever necessary," Dabur India Chief Executive Officer Sunil Duggal told PTI. He, however, did not provide further details by how much and by when it is likely to increase. In March, Dabur had increased the prices of some its products like hair oils, cooking pastes and fruit juices by around 4-5 per cent.

Similarly, Wipro Consumer Care & Lighting, which sells 'Santoor' brand of soaps, said it will look at raising the prices of its products in the near future. "Raw material prices are definitely a challenge for us. Commodity prices have not softened. We will wait and watch the situation," Wipro Consumer Care & Lighting (WCCLG) Vice-President Anil Chugh said. He said the company will decide based on how its rivals react to the rising input costs. WCCLG had effected a price hike of 5-6 per cent on soaps in January this year. On the other hand, Godrej Consumer Products Ltd (GCPL), which raised prices of its soap brands in January this year, also plans for another around of hike within the next three to four months. "We are looking at increasing the prices of soaps. It is one segment which is getting the impact of the rising commodity prices. We will raise the price in the next three to four months," GCPL Managing Director A Mahendran said. The company sells two soap brands -- 'Godrej No 1' and 'Cinthol' -- among other products.

HELSINKI: Nokia will axe 7,000 jobs and outsource its legacy Symbian activities to slash 1 billion euros ($1.46 billion) of costs as it struggles to compete in the fierce smartphone market. Nokia, the world's largest phone maker by volume, on Wednesday detailed an overhaul of its business that will include laying off 4,000 staff and transferring another 3,000 to technology services firm Accenture - a total 12 percent of its phone unit workforce. Accenture will take over Nokia's legacy Symbian software activities and support future smartphones, including those running on Microsoft's Windows platform. The deal enables Nokia to cut annual business research and development costs by 1 billion euros, or 18 percent, by 2013 from 5.65 billion in 2010. To turn around its fortunes, Nokia unveiled a deal in February to start using Microsoft software instead of its own Symbian platform. Its market share in smartphones has fallen sharply over the past few years as it loses out to Apple and other manufacturers of high-end handsets. "Restructuring had been widely expected but Nokia will be hoping that the transfer of 3,000 of jobs to Accenture will help cushion the blow as it ramps down its Symbian investments," said Ben Wood, head of research at CCS Insight. Nokia said most of the 4,000 layoffs will take place in Finland , Denmark and Britain, with all workers staying on the payroll through 2011. In its native Finland, Nokia will cut 1,400 jobs. "This went slightly better than expected, because Nokia transfers Symbian development. These 1,400 people to be laid off are mainly MeeGo coders and they should have quite good chances to find new jobs," said Pertti Porokari, chairman of the Union of Professional Engineers in Finland.

Nokia's telecom gear arm Nokia Siemens Networks cut around 9,000 jobs after it started operations in 2007.

27/4/2011

BANGALORE: In a major top-level management restructuring, India's second largest software firm Infosys today named veteran banker K V Kamath as the new chairman to succeed founder N R Narayana Murthy , who retires in August. The over $6 billion Infosys Technologies has also appointed current CEO S Gopalakrishnan as the Executive co-Chairman and promoted COO S D Shibulal as CEO and MD. Murthy, who turns 65 in August, would become Chairman Emeritus. These appointments, effective August 21, 2011 were approved at the company's board meeting held here today. Kamath, 63, is currently an independent director on the board of Infosys. He is the non-Executive Chairman of ICICI Bank, the country's largest private lender. "I am very very pleased with (all) these appointments," Murthy told reporters after the board meeting. "Kamath, Kris and Shibu will make an ideal team. I am grateful to the company for appointing me as Chairman Emeritus and providing me an opportunity to add value to the board...," he said. "I am free to pursue whatever I want to do after retirement," Murthy added. Infosys Technologies will now be renamed Infosys Limited. All new appointments would be effective from August 21, 2011. Kris Gopalakrishnan said that the company will name three new directors by June 11, 2011. He stressed that Infosys was aligning various units under four business groups. SD Shibulal said, "Objective is to build a next generation global services company and focus on strenghtening client relationships." Infosys would also be appointing three new directors before the annual general meeting in June. The major board recast comes at a time when Infosys is facing stiff competitive environment and tough business conditions. The names of Kamath, Gopalakrishnan and Shibulal were recommended by the three-member Nominations Committee, chaired by Jeffrey S Lehman. "These three leaders meld an extraordinary range of talents and experiences with a united commitment to drive the company... We could not be in better hands," Lehman said.

A well-known personality in the corporate circles, Kamath was the key driving force in the success of ICICI Bank. "I feel greatly honoured to have been asked to be the Chairman of Infosys by the board of directors and accept this responsibility with a deep sense of humility," Kamath said. Congratulating Kamath, Chanda Kochhar, CEO, ICICI Bank said that Kamath brought technology revolution to banking and his experience will help Infosys gain a lot. One of the co-founders, Kris Gopalakrishnan has been Infosys CEO since June 2007. Shibulal, another co-founder, is currently the Chief Operating Officer (COO). "We will ensure that this leadership transition is smooth... We are also making other organisational changes to strengthen our market position and ability to serve our clients better," Shibulal said. Commenting on the development, Suresh Senapaty, CFO, Wipro said, "Gen-Y needs to be part of decision making in IT companies." Headquartered in Bangalore, Infosys has 64 offices and 63 development centres across the US, the UK, China, Australia and Japan, among other countries. The company and its subsidiaries had a workforce of 1,30,820 employees as of March 31, 2011.

EW DELHI: Good old lemon is the new star of the 10,500-crore soft drinks industry. Lemon and limebased drinks like PepsiCo's 7 Up and Mountain Dew, and Coca-Cola's Sprite and Limca are the fastestgrowing category among fizzy drinks, overtaking colas and orange drinks. In the non-aerated drinks space too, packaged lemon juice doubled it sales in the country last year, thanks to increasing preference for healthy lifestyle as well as aggressive marketing campaigns. Market researcher Nielsen's data shows that the fizzy lime-lemon category grew 16-17% last year, while colas such as Thums Up, Pepsi and Coca-Cola grew about 11% and orange-flavoured drinks like Fanta and Mirinda grew 8%. "Lime and lemon is a familiar flavour to the Indian palate and had traditionally been strongly associated with thirst quench (nimbu paani)," PepsiCo Executive Marketing Director (Beverages) Deepika Warrier says. PepsiCo says its lime-based Mountain Dew has been the fastest-growing aerated drink in the country for the past three years. Packaged lemon juice too is catching up fast. Marketers say its sales doubled in 2010 and they expect annual sales to reach at least a billion cases within two years. Fresh lemon juice, or nimbu paani, is traditionally the most popular refreshment beverage in the country. PepsiCo was the first to launch packaged nimbu paani with its Nimbooz brand in February 2009.

Within weeks, Prakash Chauhan's Parle Agro, the maker of Frooti mango juice, too entered the market with LMN, which is 'lemon' in SMS language. World's largest beverages player Coca-Cola entered the category with Nimbu Fresh under the Minute Maid umbrella. Coca-Cola India Marketing director Srinivas Murthy says there is a big opportunity in converting traditional drinks to packaged drinks. "It will ensure that the beverage market continue to grow at a healthy clip," says Murthy. However, the biggest challenge for packaged nimbu paani is retaining freshness and original taste. Marketing experts such as top retailer Future Group's Business Head (Private brands) Devendra Chawla say lemon juice is an exciting category. "Consumer engagement and better fill rates can do wonders for this category," he says. Companies estimate that packaged nimbu paani market could be at least a billion cases by volume within a couple of years. Marketers say strong media investments on driving awareness, functionality and imagery over the last couple of years have helped the lemon and lime-based drinks in gaining momentum. PepsiCo has roped in Bollywood actors Salman Khan and Sharman Joshi to endorse its Mountain Dew and 7 Up brands. It has also launched 5 packs of Nimbooz fresh lime juice in 200-ml bottles. "This was advertised heavily across all media and it has been driving new users to the nimbu paani franchise," says Warrier. Coca-Cola too runs aggressive campaigns for its clear lime drink Sprite, the second largest soft drink brand in the country after Thums Up, and Limca, which the company says is leading the cloudy lemon segment growth. Advertisements of all nimbu paani brands play on the Indian association. While PepsiCo pushes its Nimbooz as 'ekdum asli Indian', Coca-Cola's Minute Maid Nimbu Fresh says 'bilkul ghar jaisa' (just like home).

UMBAI: Hindustan Unilever, India's largest household products maker, has formed customer care teams that will study product demand and customer behaviour at supermarkets. Modern retail stores account for about 12% of the company's total sales, but in value terms exceed the annual domestic sales of rivals Marico and Godrej Consumers. Hindustan Unilever's customer care teams will help boost efficiency and sales in this segment, as they will be authorised to take administrative decisions. "We are doing a project with some key retailers on creating a seamless supply chain, where information on any order placed in the store is triggered off to us, and we can start planning to service that need from the time the first product is picked up," said Hemant Bakshi, executive director for sales and customer development atHindustan Unilever (HUL). While the concept may not be new for parent company Unilever, it is the first time that a consumer company is tweaking its operating structure to team up with retailers in India.

About a decade ago, HUL moved from an operating structure of regional sales teams to account managers who worked for modern retail stores with support from the marketing and finance departments. The company's market share in modern retail stores is now higher than its share in neighbourhood stores in several categories. "We have now shifted that concept away from the key account manager to customer care team and they represent all functions. Very often, they work at the customer's location. It enables collaboration and ensures efficiency," Bakshi said. In contrast, most other consumer product companies have channel managers for modern trade chains across regions. HUL's move has not been sudden. The company, which hopes to raise sales of premium products through modern retail stores, has been sending officials to global retailers Wal-Mart, Tesco and Carrefour to learn how their retail system works. The officials return to become account managers for these retailers' India operations. "In India, it is a common practice in apparel retailing where retailers outsource most of their store layout and merchandise planning work to manufacturers. But, it's definitely something new in the food & grocery industry," said Amitabh Mall, Principal, Boston Consultancy Group. Experts say such tie-ups could help improve the relationship between consumer product firms and modern retailers.

30/4/2011

MUMBAI: FMCG major Hindustan Unilever Limited (HUL) today said that it will demerge its exports business into a separate entity--Unilever India Exports--soon. The board of the Indian arm of the global MNC, Unilever Plc , has already approved a proposal to spin-off its exports business, that currently contributes to around 5-6 per cent of its overall business at Rs 1,000-crore. "We have got the Board approval and are awaiting shareholder approval on the same. We have articulated our exports strategy and will transfer all the export related business to a wholly-owned subsidiary. "This move is to focus more on exports which contributes around 5-6 per cent of our overall business at Rs 1,000crore," HUL's Head (Investor Relation), Srini Srinivasan , told reporters over a conference call here. The company in a notice to the Bombay Stock Exchange had mentioned that the spin-off included specific exportsrelated manufacturing units of the company into Unilever India Exports Ltd with effect from April 1. HUL, which announced its financial results today, said though the company has posted a 6.46 per cent increase in consolidated net profit to Rs 2,296.05-crore for the year ended March 31, 2011, its net for the last quarter in FY 11

was marginally down by 2 per cent at Rs 569-crore.

LONDON: Apple has overtaken Google as the world's most valuable brand , ending a four-year reign by the Internet search leader, according to a new study by global brands agency Millward Brown. The iPhone and iPad maker's brand is now worth $153 billion, almost half Apple's market capitalization, says the annual BrandZ study of the world's top 100 brands. Apple's portfolio of coveted consumer goods propelled it past Microsoft to become the world's most valuable technology company last year. Peter Walshe, global brands director of Millward Brown, says Apple's meticulous attention to detail, along with an increasing presence of its gadgets in corporate environments, have allowed it to behave differently from other consumer-electronics makers. "Apple is breaking the rules in terms of its pricing model," he told Reuters by telephone. "It's doing what luxury brands do, where the higher price the brand is, the more it seems to underpin and reinforce the desire." "Obviously, it has to be allied to great products and a great experience, and Apple has nurtured that." Of the top 10 brands in Monday's report, six were technology and telecoms companies: Google at number two, IBM at number three, Microsoft at number five, AT&T at number seven and China Mobile at number nine. McDonald's rose two places to number four, as fast food became the fastest-growing category, Coca-Cola slipped one place to number six, Marlboro was also down one to number eight, and General Electric was number 10. Walshe said demand from China was a major factor in the rise of fast-food brands. "The Chinese have been discovering fast food and it's such a vast market -- Starbucks, McDonald's... and pizza has hit China," he said. "The way McDonald's has reinvented itself, adapted its menus, added healthy options, expanding the times of day it can be visited, for example oatmeal for breakfast... that allied with growth in developing markets has really helped that brand." Nineteen of the top 100 brands came from emerging markets, up from 13 last year. Facebook entered the top 100 at number 35 with a brand valued at $19.1 billion, while Chinese search engine Baidu rose to number 29 from 46. Toyota reclaimed its position as the world's most valuable car brand, as it recovered from a bungled 2010 product recall. The survey was carried out before the March earthquake that caused massive disruption to Japanese supply chains. The total value of the top 100 brands rose by 17 percent to $2.4 trillion, as the global economy shifted to growth. Millward Brown takes as a starting point the value that companies put on their own main brands as intangibles in their earnings reports. It combines that with the perceptions of more than 2 million consumers in relevant markets around the world whom it surveys over the course of the year, and then applies a multiple derived from the company's short-term future growth prospects.

NEW DELHI/BANGALORE: Global private equity major Warburg Pincus is in advanced talks to invest close to Rs 150 crore in India-MART.com - India's largest online B2B marketplace for small and medium size businesses. The investment will be in lieu of 10-20 % stake, said an investment banker familiar with the ongoing negotiations. This is not the first private equity infusion for the company. Intel Capital invested about $10 million in it in 2008, while Bennett, Coleman & Co Ltd pumped in close to $3.5 million in 2007. If the current round of funding fructifies, it could see the exit of BCCL , said another person privy to the company's plans. The Warburg Pincus spokesperson , however, declined to comment on the development. "We are unable to share any perspectives on your query, as the firm is bound by internal operational policies, which does not allow discussion of its investment activities in its portfolio companies," the spokesperson said in an email response. IndiaMART Founder and CEO Dinesh Agarwal confirmed that the company indeed plans to raise capital but added that neither the exact amount nor the quantum of stake have been finalised. Agarwal said the majority of the funds raised will be used for sales and marketing activities, while a portion will also be invested in technology. Another part of the capital will be set aside for inorganic growth. "We are looking to acquire companies that target our core segment-SMEs . We have not zeroed in on any such venture as yet," said Agarwal. One of the first e-comm sites in the country, IndiaMART was set up in 1996 to connect global buyers with suppliers and help them trade with each other on a common platform. The company claims to have over 2 million registered buyers and suppliers of which around half a million actively display and supply products . The company follows a leadgeneration business model. India-MART earns revenues from subscriptions for the listings and for premium listing services. The company is also experimenting with providing advertising space for corporates targeting small and medium businesses. "We are also exploring the pay per lead generation revenue model ," Agarwal said. He added that through the website, buyers source around $2billion worth of products annually. The company, which earned approximately $25 million in 2010-11 , is looking at doubling its revenues for 2011-12 . The fast growing e-commerce segment has been attracting significant investor interest over the past few months. In April this year, SAIF Partners pumped in $4 million in online kids and babycare product retailer , FirstCry.com, a Pune-based start-up . Before that, the private equity firm had closed a $3 million investment in e-commerce retailer InkFruit. In April, Accel Partners and Tiger Global invested $2.5 million in online babycare products retailer BabyOye.com. In other recent e-comm investments, online electronic goods retailer, Letsbuy, raised $6 million and etailer , Myntra, raised $14 million. There is a lot of euphoria in ecommerce right now and the industry is expected to grow by 47% to reach Rs 46,000 crore in 2011, according to a report published by Internet and Mobile Association of India (IMAI).

NEW DELHI: Inspired by purchases of buffaloes in villages through financing, the world's largest bicycle maker by volume Hero Cycles Ltd is looking to replicate the same for its products through micro finance firms to boost its rural sales. The company has tied up with Allahabad-based Sonata Finance for financing bicycle purchases, under which the micro finance firm will provide loans of Rs 100 per week to customers in the rural areas.

"This is a test case. We are starting in eastern UP. Once we are successful here, then we will look to enter Andhra Pradesh with the same concept," Hero Cycles Ltd Managing Director Pankaj Munjal told PTI. Sounding upbeat about the experiment, Munjal said: "When villagers can buy buffaloes on loan through micro finance firms, there is no reason why the same cannot be done for bicycles, which will add a lot of value to their lives". Munjal said the idea behind financing of bicycles is to make it available within the reach of villagers whose monthly income is far less than the overall cost of the product. "The monthly income of a villager can be as less as Rs 2,500 and in the absence of a financing scheme, he is unable to shell out over Rs 3,000 to buy a bicycle at one go. By staggering out the payment through financing, we are looking to make the product within his reach," Munjal said. Admitting that there are risks for default, he said: "There is a delinquency fund created (to overcome it)". Munjal said with the bicycle penetration in India as low as 18 per cent, with a total annual sales of 12.5 million units last year, there are lots of opportunities to be tapped, specially in the rural areas. "Out of our total sales of 5.3 million units last year, 65 per cent came from the rural areas and still there is a lot of potential for growth," he said. Even as the company focuses on the rural market, Munjal, said the company will not ignore its premium segment bicycles as the segment has also been showing good growth over the years. "We will be coming out with new range in the kids and premium segment which are in the prance range of Rs 4,000 and Rs 14,000," he said.

9/4/2011

NEW DELHI: BMW plans to drive in its 1Series hatchback and the Mini compact within two years to stay ahead of archrivals Mercedes Benz and Audi in the booming Indian luxury car market. "The Indian market is evolving fast and, as the leader of luxury car, we are looking at our compact range of cars to meet varied preferences of customers," BMW India President Andreas Schaaf said on Tuesday. "We are doing everything to stay ahead of the competition and drive into new segment that would keep the customers delighted," he said. Last week, Mercedes Benz India MD & CEO Peter T Honegg told ET that his company will bring its compact car range of A Class and B Class by 2013. BMW tops the luxury car market, which grew a record 70% last fiscal to more than 15,000 cars, closely followed by Mercedes and Audi. Other contenders include Porsche, Jaguar & Land Rover. Speaking to ET on the sidelines of the launch of a concept high fuel-efficient diesel car, Schaaf said, "We will get as many products from our global lineup depending upon the local demand including the best of technology and new concepts developed by our parent company." The list would include the new concept, the Efficient Dynamics. The car delivers fuel efficiency of 26.5 km/litre of diesel and emits only 99 gm of Co2 for the same distance. It has a top speed of 250km/hr and accelerates to 100km/hr in 4.8 seconds. The concept will hit the road around 2013.

Indian consumers have started to shift preferences to new concepts and niche products and that encouraged the world's largest maker of luxury cars to undertake a feasibility study to bring its small cars like 1Series hatchback and the highly popular Mini range. The cars are expected to be priced at 22-27 lakh. Since 2009, Europe's largest car company Volkswagen has sold more than 500 units of its 23-lakh Beetle, while Fiat has sold more than 100 Cinquecentos, priced 16 lakh. These expensive machines have created a small market for themselves, which will get a boost with the launch of BMW and Mercedes small cars. The luxury carmaker also announced that it would not hike the prices of its locally-produced models, 3 and 5 Series sedans and SUV X1, despite new import duty norms on completely knocked down units, as it has already been assembling the engines of the vehicles in the country. "At this point of time, our completely knocked down (CKD) operations are fully fulfilling the new regulations. We are paying 10% duty... There will be no price hike," BMW India president Andreas Schaaf said here. For pre-assembled engines, transmissions and gearboxes, customs duty was fixed at 30% in the 2011-12 Budget as against 10% earlier. However, other parts continue to attract a customs duty of 10%. "In our engines, about 50% of the assembly is done in India. So it is considered as locally produced," he said, adding, the company has been assmebling its engines and transmissions since the launch of these models in the country. (With inputs from PTI)

NEW YORK: YouTube is adding more than 3,000 mainstream movies for users to rent starting on Monday, along with the millions of free user-created videos the popular website is best known for. Google Inc owned YouTube is offering a mix of recent Hollywood blockbusters, independent and foreign movies for 99 cents up to $3.99 each. These include last year's Oscar winners "The King's Speech" and "Inception" alongside classics including "Scarface" and "Taxi Driver." Most of the movies on the site are priced around $2.99. In addition, hundreds of movies, including some offered before the latest launch, are available for free viewing as with other clips. YouTube signed deals with major studios including Time Warner Inc's Warner Bros, Sony Corp's J Sony Pictures, Comcast Corp's Universal Pictures and Lions Gate Entertainment. Once users have upgraded their YouTube accounts they can pay to watch a movie, which they have 30 days to begin viewing. Once users begin watching the movie, they typically have 24 hours to finish. Many of the movies, which will be streamed, will be available at the same time as DVD releases. Hollywood studios are slowly warming up to the idea of using social media not just for marketing but as a potential new distribution outlet like cable and theaters. Warner Bros recently started experimenting with some of its popular movies on Facebook for a rental fee which could be paid with Facebook credits. YouTube will allow users of movie rentals to share the movies on Facebook and Twitter but if the recipient clicks on the link they will see a trailer unless they have also rented the movie. Another feature is YouTube Movie Extras, similar to DVD extras with behind-the-scenes videos, cast interviews, parodies and remixes made by YouTube users. The new service is available only in the United States. YouTube has spent the last couple of years redeveloping the popular site, to tweak its image as a site for grainy 2-minute clips of users' pets and kids.

The goal for YouTube is to drive more views of its videos which, in a fast-evolving Web content sector, need to offer better production values to compete against paid professional offerings from the likes of Hulu, Netflix Inc and websites CBS, Walt Disney Co's ABC and other broadcasters.

NEW YORK: Microsoft Corp plans to buy Internet phone service Skype for $8.5 billion in cash, a rich price as it seeks to regain ground on growing rivals such as Google Inc. Microsoft's interest in the money-losing but popular service highlights a need to gain new customers for its Windows and Office software. Skype has 145 million users on average each month and has gained favour among small business users. Investors expressed scepticism over the deal, sending Microsoft shares down slightly . "It doesn't make sense at all as a financial investment," said Forrester Research analyst Andrew Bartels. "There's no way Microsoft will generate enough revenue and profit from Skype to compensate." The sale marks a big payday for Skype's owners, online auction site eBay Inc and a group of investors, including Silver Lake, the Canada Pension Plan Investment Board and Andreessen Horowitz. Skype delayed plans for an IPO that was expected to value the company at more than $3 billion. It had been looking at other options, including tie-ups with Facebook and Google. Such a deal was expected to value Skype at $3-4 billion. The Luxembourg-based company, which allows people to make calls at no charge but has also developed premium services, would give Microsoft a foothold in the potentially lucrative video-conferencing market as businesses shift to lower-cost ways of communicating. Why Microsoft Bought Skype Skype has 663 million user accounts, of which 9 million are paid users It gives MS a boost in the enterprise collaboration market, especially when competing with Cisco & Google Helps in making Windows Phone 7 (Mobile OS) compete with Google Voice and Apple's Facetime Another winner is Facebook - it gets access to Skype assets (MS is an investor in Facebook) and keeps Google away from Skype Skype New Biz Unit within MS Skype could be combined with Microsoft software such as Outlook to appeal to corporate users while the voice and video communications could link to Microsoft's Xbox live gaming. Longer-term , Skype would offer Microsoft another route to develop its mobile presence, an area it has already put more energy and resources into as PC usage comes under threat. Skype is set to become a new business division within Microsoft with Skype Chief Executive Tony Bates in charge and reporting directly to Microsoft CEO Steve Ballmer , Microsoft said. Microsoft shares were down 13 cents, or 0.5%, at $25.70 in early Nasdaq trading. The Skype deal is the biggest in the 36-year history of the world's largest software company. The $8.5-billion price tag was a surprise. Although the sum would not stretch cash-rich Microsoft , some said it was high for a company whose ownership has changed several times during its relatively short life. "In this atmosphere of Internet Bubble 2.0, picking up an unprofitable online company for roughly 10 times sales probably seems downright cheap," said Shanghai-based Michael Clendenin, Managing Director of consulting firm RedTech Advisors. "But if you consider (it) was just valued at about $2.5 billion 18 months ago when a chunk was sold off, then $8.5 billion seems generous and means Microsoft has a high wall to climb to prove to investors that Skype is a necessary linchpin for the company's online and mobile strategy," he added.

10/5/2011

NEW DELHI: Singing a different tune than its foreign partners, Bajaj Auto today said it will launch a fourwheeler commercial vehicle in mid-2012 from the ultra-low cost car (ULC) platform, which was originally planned to roll out a car with Franco-Japanese alliance Renault-Nissan.

"By the middle of next year, we will bring a four-wheeler from the ULC platform. For us, this will be a commercial vehicle and it will be a goods carrier," Bajaj Auto Chairman Rahul Bajaj told PTI. In the smaller goods carrier space, other homegrown auto majors like Tata Motors and Mahindra & Mahindra are doing very well and the company is looking at that space, he added. "We are a two-wheeler and three-wheeler maker and we are moving up toward the four-wheeler segment. With the help of our expertise and frugal engineering and Renault-Nissan's technological expertise, we will launch the vehicle," he said. Bajaj also said the foreign partner will "market it (the product from ULC platform) as a car, but not a lowcost car", and it will be sold at a "mutually agreed price". "The platform is same and it will be for four-wheelers. For them (Renault-Nissan), it is a car, while for us it is a commercial vehicle," he said, declining to comment on whether the two products will be launched simultaneously or not. Bajaj did not clarify further whether there will be a single product or two different vehicles hitting the roads. However, differing strongly, Renault said the company has not seen the final product and will not settle down with a vehicle having any shortcomings of a car. "We are very clear that Renault would only be comfortable with a product that fulfills all the requirements of a car. Nothing short of that will pass our stringent requirements," a Renault spokesperson said. Renault will be in a position to take a final call only after an exhaustive review of the final product that Bajaj will show, the official said. "Till then, it would only be speculation and that is something we would not like to do," he added. When contacted, a Nissan spokeswoman declined to comment. The partners had joined hands in 2008 to make a small car with a price tag of USD 2,500. The ULC was first scheduled to hit the roads in India in 2011, but was delayed due to differences between the partners on pricing and design. While Renault-Nissan wanted to price the car at around USD 2,500, Bajaj insisted on lowering overall cost of ownership. In 2010, Renault-Nissan announced the signing of a Memorandum of Understanding with Bajaj Auto to take forward their ULC car project.

NEW DELHI: Chipmaker Intel's venture capital arm Intel Capital Friday announced an investment of $18 million in five Indian companies as part of its ongoing commitment to support technology in India.

The company signed two new agreements to invest in Policybazaar.com, an online insurance-comparison site, and Sudhir Srivastava Robotics Surgery Center (SSARSC), which provides advanced robotic surgery procedures in the country. It also signed an agreement to make three follow-on investments in online travel company yatra.com, cross-platform mobile solutions provider July Systems, and WSO2 a mobile media company. "Technology has been key to India's unprecedented development over the last few years, and our investments in these companies is proof of our ongoing commitment to nurture technology innovation in India," said Arvind Sodhani, president of Intel Capital and executive vice-president of Intel. "Our support for these companies will give them access to global resources, knowledge and expertise to assist with their own growth and success," he added. The company however did not disclose individual details of the investments done. Funding for the investments comes from the $250 million Intel Capital India Technology Fund established in December 2005. This fund invests in Indian technology companies to stimulate local technology innovation and the continued growth of India's information technology industry. While PolicyBazaar will use this fund for building brand awareness and further enhancing its technology platform, SSARSC will use the funding to launch 8-10 centres throughout India and to advance the use of robotic platforms for tele-training, tele-mentoring and tele-surgery.

13/5/2011 CHENNAI: With Reliance Industries buying out Bharti Enterprises' 74 percent stakes in two insurance joint ventures -- Bharti Axa Life Insurance and Bharti Axa General Insurance, the question that begs an answer now is how the acquirer would rename the two companies. With the Bharti group exiting the insurance companies, its name normally will not figure after the acquisition is completed. The deal between Bharti and Reliance Industries will not disturb the French group Axa's 26 percent holdings in the two insurance companies. Names of major ventures of the Reliance group always start with the word 'Reliance'. But the Mukesh Ambani-led Reliance Industries will find it difficult to rename the two acquired insurance companies with the word 'Reliance' as a part, industry sources told IANS preferring anonymity. The Anil Dhirubhai Ambani Group (ADAG) led by Anil Ambani, younger brother of Mukesh, already operates life and general insurance companies under the name Reliance Life Insurance Company Ltd and Reliance General Insurance Company Ltd. According to Company Law, similar sounding names will not be permitted for usage. It is more so in the

case of financial services business that deals with long term savings of the people. "The word Reliance has good brand equity in the business field. It will be interesting how Reliance Industries plans to leverage that brand equity. Perhaps RIL Axa could be one way out," sources said. Meanwhile, employees of Bharti's two insurance companies have been intimated about the stake sale. According to industry sources, the insurance regulator has also been intimated about the stake sale.

11/6/2011
NEW DELHI: After a false start, French carmaker Renault is making an ambitious re-entry into India's fast-growing auto market where it plans to introduce a slew of new models and rapidly scale up sales. Marketing itself with billboards announcing "Bonjour India. We are Renault," the company last month launched a luxury sedan in the country called the Fluence and aims to sell four more models by the end of 2012. "We really have just launched the brand (Renault). It didn't exist in India," Renault India managing director Marc Nassif said. "It's a fresh start for us." Last year, Renault abandoned its previous attempt to crack the Indian market -- an unhappy tie-up with India's top sports utility vehicle maker Mahindra and Mahindra that resulted in the Logan, a dated-looking car that never took off. The French manufacturer, battling to overcome an embarrassing bogus industrial espionage case at home, has designated India, Brazil and Russia as its top three strategic markets for international expansion. The partially state-owned group is eyeing a 2.5 percent share of the Indian car market by 2013 and five percent in the longer term. It marks a big goal for Renault, which is doubling capacity to 400,000 units a year at its new $1-billion manufacturing plant in the southern Indian port city of Chennai, as "we have zero sales right now," Nassif said. The Fluence, the first Renault car to be assembled in India, is to be followed by a high-end sports utility vehicle this year, the Koleos, and three cars next year, including a lower-cost hatchback. The carmaker is attacking the market from the top down, launching in the luxury segment even though most domestic car sales are in the small-car segment. Nassif said Renault aims to produce a low-cost car for the Indian market, but a major question mark hangs over a proposed tie-up to produce a car to challenge India's Nano, the world's cheapest auto, made by the Tata group. He said Renault and its Japanese partner Nissan will only move ahead with the project with Bajaj, a motorbike and rickshaw maker, if the quality of the product "matches our DNA."

If the product does not meet Renault's standards, "we will do something different, we will have our opportunities," he said, adding: "It's not a joint venture and we haven't made any investments." Renault is driving into the Indian market, still overwhelmingly dominated by the Japanese-Indian group Maruti Suzuki , after other foreign auto makers such as General Motors and Toyota have established a presence. Despite its latecomer status, Nassif believes there is still big potential for the group. Car sales clocked 30 percent growth last year to hit nearly two million units, buoyed by increasing affluence in an economy growing by around eight percent per year. While Indian car sales are expected to slow slightly this year due to higher financing costs, growth is still expected to be up to 16 percent, according to the Society of Indian Automobile Manufacturers . "When you look at that growth and you have a newcomer entering at this stage, this is still a land of huge opportunity," Nassif said. "India's middle classes total more than 350 million people, all of whom are potential buyers, and their numbers are continuing to grow," he added. "We can take part of the cake." Renault is aiming to move swiftly, opening 40 dealerships by year end, from 14 now in 14 cities, and ramping the number up to 100 in 55 cities by the end of 2012. The group also aims to export components worth 100 million euros ($147 million) in 2012, up from 35 million euros in 2010, following the lead of other global automakers which are making India a production hub, attracted by cheaper labour costs.

MUMBAI: Institutional investors such as mutual funds and insurance companies seem to be have caught a fancy for shares of Reliance Industries as their holding in the company has grown to a record high. In the process, the market value of overall institutional holding in RIL has grown by more than Rs 1,500 crore. Despite a dismal performance of the stock, in comparison to the broader market trends, MFs as also government and private insurers have raised their holding in the company over the past six months. RIL shares have not performed very well in the recent months. The stock has fallen by over 6 per cent over the past one year, as against a gain of nearly 7 per cent in the two benchmark indices Sensex and Nifty. However, the changes in shareholding pattern of RIL indicate that the institutional holding in the company has seen an uptick after RIL announced a partnership with global energy giant BP earlier this year. The combined institutional holding in RIL, comprising of Foreign Institutional Investors (FIIs), insurance

companies and mutual funds, has increased to 23.48 per cent, from about 22.96 per cent at the beginning of this year. Taking into account RIL's current market capitalisation of Rs 3,09,010 crore, the value of institutional holding has grown from about Rs 71,000 crore to more than Rs 72,500 crore. The holdings of domestic mutual funds and insurance companies are at their highest level in the company. While holding of private insurance companies has increased from 3.02 per cent to 3.52 per cent since January, that of government insurance company LIC has risen from 7.81 per cent to 7.92 per cent. MF holdings have also increased from 2.26 per cent to 2.51 per cent, although the cumulative FII holding has marginally fallen from 17.68 per cent to 17.45 per cent. RIL scrip closed 1.1 per cent down at Rs 944 last Friday. It had fallen to as low as Rs 885 -- its lowest in one year -- on February 10 this year, after scaling a 52-week high of Rs 1,187 on November 1, 2010.

NEW DELHI: Global hospitality major Starwood Hotels & Resorts Worldwide on Sunday said it expects India to become its third biggest market by 2015 as the company expands in the country faster than planned. The hospitality chain that had earlier set a target of 100 operational hotels in India by 2015 is also preparing to add another full services luxury brand 'St. Regis' from its international portfolio to its existing seven brands within this year. "We are expecting to cross our target of having 100 hotels operational in India (by 2015). It is difficult to say by how much we will exceed that number, but we are confident seeing the current pace of growth here," Starwood India Managing Director Dilip Puri said. He said for Starwood India is currently at No 4 position after the US, China and Canada. "By 2015, India will be number three market for Starwood globally after the US and China, both in terms of number of properties and revenue generation," Puri said without disclosing the sales numbers. With over 100 hotels expected to be operational by 2015, India will overtake Canada, he added. The company operates in India through management contracts and franchise agreements. Starwood operates 37 hotel properties in India under brands -- W, Le Meridien , Westin , Sheraton , Four Points , The Luxury Collection and Aloft . "At the moment we are holding talks with several developers for St. Regis and by the end of this year an announcement is expected," Puri said, adding that Delhi and Mumbai would be preferred destinations. Starwood had earlier announced that it aims to operate 50 hotels in India by the end of 2012 and 100 hotels by 2015.

NEW DELHI: After mobile phones, the competition is hotting up for "tablets" in India with BlackBerrymaker Research in Motion (RIM) all set to launch its PlayBook in the country later this month to face the likes of Apple's iPad and Samsung's Galaxy Tab . The Canadian firm will launch PlayBook in Indian markets and some other countries this month, sources said. According to the company's website, the PlayBook is scheduled to be launched in 16 countries, including the UK , Netherlands, Hong Kong , Australia, UAE and India. "The price is going to be competitive with the other products and in line with the global pricing as well," they said. The price in India could range between Rs 22,000 and Rs 32,000, depending upon its storage capacity, from 16 GB to 64 GB. Globally, PlayBook is available at USD 499, USD 599 and USD 699 for the 16GB, 32GB and 64GB versions, respectively. Since the launch of Apple's iPad, the tablet market is witnessing huge competition, with new contenders launching their devices. A tablet PC, though smaller in size, has PC-like functionalities. Apple's rival in the computing space, Dell had launched the 'Streak' last year in India, while homegrown telecom handset makers like Spice and Olive have also launched similar devices at much lower price points. The BlackBerry tablet has received a mixed response from the markets where it has been launched. According to reports, unlike rival iPad, which sold like hot cakes on its launch in April last year, the PlayBook just sold 50,000 copies in the first week of its launch on April 19 in the US and Canada . BlackBerry has over one million users in India and RIM would target them.

The PlayBook is a seven-inch tablet that runs on a new operating system built by QNX Software Systems -- a RIM unit that makes software used to run everything from cars to nuclear reactors. On a PlayBook, users can go online only using a Wi-Fi network or by synchronising the device to their BlackBerry smartphones. According to analysts, sales in the tablet PC segment in India are expected to touch one million units over the next 12 months. With 3G (high-speed internet services) being rolled out aggressively, the opportunity has only expanded, they said.

12/6/2011
Bangalore: For many who see Infosys as conservative, this may come as a surprise. The company's new management under K V Kamath and S D Shibulal is planning to set up a separate company focused on

IT

products,

platforms

and

intellectual

property-driven

solutions.

The $6-billion company has so far built its global reputation on providing IT services to international firms. The move to establish this new company represents a focused shift to a higher value business. Products are riskier to do, given that they can fail even after substantial investments . But the payoffs from successful products can be huge, as the likes of Microsoft , IBM and SAP have shown. "We are discussing several options to set up this new company to house innovations ," Subhash Dhar, the head of business innovation at Infosys told TOI. One of these is to make an acquisition of an existing company that is involved in areas where Infosys is looking to innovate . These areas include fast growing practices such as cloud computing, mobility and sustainability. The other option is to create a new company. Employees at Infosys who are already involved on the innovation side, which includes products and platforms, would move to this new firm. Dhar said the new company would provide a start-up kind of environment. Product-driven companies require a culture and DNA that nurtures out-of-the-box thinking, the way start-ups do. This culture is very different from what prevails in large firms, which tend to get tied down by processes and bureaucratic procedures, and in IT servicefocused firms, which does not involve much risk-taking . Siddharth Pai, MD of global sourcing advisory services firm TPI India , said Indian service providers had shown with core banking solutions that they can compete with the best product companies in the world (Infosys has a successful banking product called Finacle, and TCS has a successful one called Bancs). He said it is a natural progression for IT services companies to move to products. "The lines are blurring between product and services players. To remain competitive , it is essential to become a full services provider. It can help win long-term and stickier deals." Pai echoed Dhar's view that the two businesses are fundamentally different, and therefore a separate entity for products and platforms makes sense. Nasscom president Som Mittal said that clients are now demanding high-end solutions such as platforms and products from Indian IT service providers to drive greater value and efficiencies. The Indian IT sector , he said, had moved up the value chain from providing basic application support to become domain experts. Mittal said that from the IT companies' perspective, such initiatives are also driven by the need for them to become more non-linear (do more with fewer employees) and become end-to-end service providers. Dhar said that traditional IT services are getting commoditized , with pricing and margin pressures. "In order to bring in non-linearity and differentiation in a competitive environment, innovative products and platforms become vital." The firm has begun the process of setting up a separate unit. Seven new positions at VP and AVP levels have just been created for products and platforms, four of which will be for innovations coming out of the banking & finance, manufacturing , retail, and energy and utilities segments. The other three will build product engineering , product management and commercialization teams for new innovations. "We have not fully utilized several of our products and IP-led platform solutions. The plan is to monetize some of these opportunities as well as build future products and solutions under this new unit," said Dhar. This includes existing products like mobile application platform Flypp and healthcare product I Transform , as well as solutions built for areas like supply chain visibility. The banking product Finacle however will

not

be

part

of

this

unit

since

it

is

already

well

established.

The products and platforms effort is part of the 'Infosys 3.0' strategy under which it intends to transform from a technology solutions company to a business solutions firm. It recently structured the company under three service lines. The first is transformation , which includes 'Change-the-business' initiatives like package implementation and consulting. The second is business operations, which includes 'run-thebusiness ' initiatives like application development & maintenance, testing and BPO. And the third is innovation, including products and platforms. NEW DELHI: Bajaj Auto is no longer competing with Hero Honda in India; instead it has declared war on Honda and other Japanese motorcycle makers in the sports bike segment. "Pulsar sells five times more than any Japanese sports bike in India," says its latest television advertisement. Call it the new-age Mahabharata, where Krishna-the codename Bajaj employees use for its best-selling model Pulsar-takes on the Japanese in world's second-largest motorcycle market. The country's second largest two-wheeler maker by sales has identified its target and potential serious competitor-Honda-and Bajaj Auto's Marketing GM Milind Bade, is open about it. "Before the potential competitor (Honda) comes and attacks us, we want to be in a strong position to ward off the threat," he says. "We have always been numerically superior to them, but people are not aware about the extent of our leadership. The advertisement points out our domination." Honda plans to drive in a slew of motorcycle models into the country through its wholly owned subsidiary Honda Motorcycle & Scooter India (HMSI) after its separation from Hero Honda six months ago. In its advertisement, Bajaj Auto has shown Japanese people uttering "Hunto", the Japanese word for 'unbelievable', because "Pulsar sells 5 times more than any Japanese sports bike in India." DEFINITELY MALE Hero is no threat to Bajaj, but Honda definitely is. And Bajaj is very clear about it. Auto analysts say it's an aggressive move by Bajaj, which is trying to establish itself as the only globally competitive Indian bike maker by pitching itself against Japanese majors and ignoring local competitors. "The real threat to Bajaj in the Indian as well as global market is not Hero, but Honda. Bajaj has been positioning itself as a global player and by taking on the Japanese brands, it's reinforcing that aspect," Ernst & Young Auto Analyst Rakesh Batra says. Sudhir Kukreja, auto analyst at Dolat Capital, says the new commercial gives Bajaj the first-mover advantage in capturing the minds of the consumers. "After all, buying a bike is all about perceptionaYou may be having a far superior technology or product than your rivals, but it may not translate into sales unless you create a right perception," says Kukreja. While Honda Motors India refused to comment, another Japanese bike maker Yamaha India says its performance and not advertisement that sells a bike.

"Commercials don't sell a product. They just influence buyers' decision. It's the product which has to deliver. We are more interested in knowing if bike lovers are taking our bikes seriously or not," says Yamaha Motor India National Business Head Roy Kurian. He refused to comment on the Bajaj commercial and ruled out any counter-attacking move. "We believe in actions, not reactions. Tit for Tat is not how we work in Yamaha," he says. But Bajaj is aggressive, in action and words. Bajaj Auto feels that HMSI, the country's fourth biggest twowheeler maker, faces a perception problem. Rajiv Bajaj, managing director of Bajaj Auto, was reported saying in April that "there is a growing perception that Honda can make scooters only. Customers go to Honda for scooters and come to us for bikes. The perception is that Honda can't make motorcycles and we should maintain that perception".

Even though HMSI has more motorcycles in its portfolio, around 55% of its sales come from scooters. While the company has a market share of 43% in the automatic scooter segment with its three models, the six motorcycle models that it has account for 45% of its sales. Motorcycles make up over 75% of the Indian two-wheeler market, which comprises about 12 million units per annum. While Hero Honda, Bajaj Auto, TVS and HMSI account for over 93% of the sales in the domestic market, Suzuki Motorcycle, Yamaha India Motor, LML, Mahindra Two Wheelers and Royal Enfield slug it out for the remaining pie. UPGRADING GATHERS STEAM The battle among the top four bike makers has now intensified for cornering a major chunk of the rising number of Indians who are upgrading because of the rising level of income and aspirations. A recent report by JM Financial highlights the trend. "Expect the transition from executive to top premium to gather steam as executive owners upgrade to premium bikes," says the report, pointing out that while volumes of 125cc plus bikes grew 35% in 9MFY11, volumes of bikes up to 125cc grew by 20%. The demand for premium motorcycles have also picked up considerably in the semi-urban and rural markets, thereby making the demand for such bikes more broad-based. And Bajaj stands to gain from this trend. "Pulsar has been the key driver for this segment and it remains the market leader despite a slew of new launches from competition," says the report. Bajaj too wants bikers to upgrade to sports segment. "We want bikers to upgrade to sports segment, but this needs assurance. And the Hunto advertisement not only reassures the bikers but also helps them in making the transition," says Bade of Bajaj Auto. Pulsar and Discover-codenamed Krishna and Rama, respectively, by Bajaj Auto employees-constitute 85% of Bajaj's two-wheeler sales, of which Pulsar's volume share stands at 35%. These two brands were instrumental in turning around the fortunes of the two-wheeler maker when its sales dropped 23% in 2008-09.

MUMBAI: Arrival of big retailers has had an impact on small grocers, but neighbourhood stores are still growing their sales, although at a much lower rate than modern trade, according to data from market research firm The Nielsen Company . Since 2006, when most big retailers either entered the retail space or began expanding their network, sales in local kiranas have grown in the low single digits even less than the GDP growth rate, while modern trade has grown in strong double digits, though at a much lower base. For instance, sales at modern stores grew 34% in 2006 and 29.3% in 2010. Traditional stores could increase sales only 1.5% in 2006, but improved the growth rate to 6.2% last year (see graph). The data comes at a time the government finally moves closer to allowing multinational retailers such as Wal-Mart and Carrefour open shops in the country after several years of debates, protests and lobbying. Critics, including the Left and the BJP, say such a move will impact the livelihood of small shopkeepers and traders, but the thinking in government circles is that this will help check rising food prices by removing several layers of middlemen between farmers and consumers. Organised retail accounts for less than 10% of India's retail market estimated at close to $400 million. The Boston Consulting Group estimates the size of organised retail market at $28 billion and expects it to grow nine times to $260 billion in 10 years. Nielsen says Indians have embraced modern retail. "The Indian Shopper has discovered modern retail and is increasingly shopping there," says Nielsen's Executive Director for Retail and Shopper Practice Dipita Chakraborty. This trend is fueled by the growth in number of modern stores, she adds. The study shows that the frequency of consumers going to large stores has increased. More than 37% consumers visited modern trade stores every month this year, up from 30% last year. Reliance Retail President Bijou Kurien attributes this to more options that big retailers offer to consumers. "In mom-and-pop stores, customer has to be very specific with what they want, but they can get more options in a modern store, and that's where we are gaining," he says.

15/6/2011

How the Big Blue was forced to evolve into a globally integrated enterprise as the communication

evolution sparked a major and rapid shift in global economy. Engineers in Bangalore were doing the same work as their counterparts in Silicon Valley, but at about 20% of the cost. The same was true for other office work, including accounting, customer service and even scientific research. This revolution gave rise to a new force in the world of business. Aggressive Indian companies, including Infosys, TCS, and Wipro offered high quality outsourcing services at lower prices than those offered by IBM and other Western tech companies. Once again, IBM faced serious threat. IBM rapidly began hiring people in low cost countries and now employs more than 100000 people in emerging markets. The initial impulse was to respond to the challenge of the Indian tech services upstarts. "if we didn't shift work to lowercost countries, we wouldn't have been able to compete," said IBM chief financial officer Mark Loughridge. But there was an added bonus: IBM found that by locating its offices in important population centers around the world, it could engage tens of thousands of the best and brightest young minds on the planet. What got the company's attention, specifically, was a brash prediction by Nandan Nikekani, an executive at Infosys, that the Indian tech service companies would have the same crippling effect on the American tech services giants that Japan's auto companies had on Detroit's Big Three automakers. Nilekani's prediction was further impetus for IBM to evolve into a globally integrated enterprise.

NEW DELHI: Canadian firm Research In Motion (RIM) has partnered Ingram Micro to offer BlackBerry mobility solutions to large corporate and small and medium businesses ( SMBs )) in the country. "Given the reach of Ingram, the partnership will help RIM capture a bigger share of the market. The opportunity in India is huge and we are looking at offering value proposition to enterprise customers in India," RIM Enterprise Sales Director (India) Sunil Lalvani said. Under the partnership, Ingram Micro India, through its network of Value Added Resellers (VARs), will distribute full portfolio of BlackBerry enterprise solutions in India, including smartphones, accessories, software and technical support services. The services would include collaboration, email, voice and applications solutions.

"The enterprise offerings include mobile solutions, which will help boost productivity, increase sales performance and improve customer service," he said. Apart from BlackBerry mailing solutions and other services, Ingram will offer also offer its BlackBerry Mobile Voice System (BlackBerry MVS). The service integrates a user's corporate phone system with a BlackBerry smartphone to provide single number reachability and extension dialing as well as corporate phone system features like hold, transfer and ad-hoc conferencing.

"With over 30 years of experience as the leader in IT distribution, we are ideally positioned to build a unique value proposition to resellers and telco operators alike," Ingram Micro Managing Director K Jaishankar said.

CHENNAI: Within a year of its launch in India, Japanese auto maker Nissan has clocked production of one lakh Micra from their manufacturing facility near here. The first hatchback Micra was launched in India last July and about 15,000 units have been sold, while nearly 70,000 units were shipped to overseas markets, a company statement issued here said. "I am very proud of the effort that our Chennai staff, supported by our suppliers, have made to produce 100,000 Micras in such a short period of time. Today's announcement not only reflects Micra's popularity -- both domestically and within export markets -- but also Nissan's long term commitment to India," Nissan Motor India Managing Director and CEO (Chennai plant) Kou Kimura said. Besides Chennai, Micra was also produced at their plants in Thailand, Mexico and China, it said. The company also said it would introduce an all-new global sedan later this year, while next year it would launch a commercial vehicle through its joint venture company Ashok Leyland , the statement added. Nissan along with French auto major Renault has set up their joint venture manufacturing facility at Oragadam near here at an investment of Rs 4,500 crore spread over a period of seven years. The Chennai plant has a capacity of two lakh units which would be ramped upto four lakh units, the statement added. 16/6/2011

Why copy pasting is a brilliant business strategy? Ask Google!

Google makes more money than any other website in the world. But at the heart of the search engine's success is a business model that was copied. The interesting story is recounted by John Mummins and Randy Komisar in their book Getting to Plan B: Breaking Through To a Better Business Model. Google was started by Larry Page and Sergey Brin who were both PhD students at Stanford University. Page and Brin thought their search engine was much better than the ones already in the market. So they put out their semi-finished version to see how well it functions.

The search engine was a huge success as it gave users more relevant results. But even with the huge popularity of the search engine, Page and Brin were not making any money out of the search engine. As more and more people started using Google, Page and Brin had to buy more servers to support the additional web traffic. They had some PhD grants that could fund a portion of the cost. But Google had to start generating money if it was to be a sustainable business. The business model, which led to the success of Google, was copied from a company called Overture, a paid search specialist company, based in South California. As Mummins puts it, "They actually stole from a company called Overture, based in South California." Google wanted to have an objective search engine as well advertisers. "So when somebody is looking for a tennis racket, we will allow sports goods companies to place an ad so that person can see it. Overture's genius was they separated the two. So they kept the objectivity of the search but on the other half of the page they said, here are the paid results. And you, the user, click on our objective links and if you want to click on our paid link, you can do that too," explains Mummins. And every time the user clicked on the paid link, Google would make money from the advertiser. This bid for patent mechanism, which allowed the search engine technology to be combined with text ads and an ad placement mechanism, was pioneered by Overture and they even had a patent on it. The US Patent office had issued Patent 6,269,361 also known as the 361 patent to Overture in July 2001. "Now that is not exactly a rocket science idea. It's just to put objective search on one side of the page and paid search on the other side of the page. And yet that simple idea was stolen from Overture, and they had to pay Overture, they got sued, but they settled," says Mummins. The new darling of the web, Facebook, has also been accused of copying the idea of a social networking site from the twins, Cameron and Tyler Winklevoss. The twins sued Facebook and the last has not been heard on this case. What these examples clearly tell us is that imitation or copy-pasting what others are doing is a prevalent and successful business strategy. Peter Drucker referred to IBM as the world's foremost creative imitator. In fact, as Oded Shenkar writes in his book, Copycats - How Smart Companies Use Imitation to Gain a Strategic Edge, "IBM repeated the feat with a personal computer that took the best of the Apple and Commodore machines, among others, and combined them to create the first commercially viable product, only to lose out to clones led by Compaq and Dell ." Another great example of a company that started a new category but never got around to leading it is White Castle. Walter Anderson, the founder, came up with the concept of a fast food chain way back in 1921, only to see a slew of copy-pasters descend on him, and copy everything from the store design to his operating processes. The first credit card was issued by Diner's Club and not Visa or Master Card which are the most popular now. In India, Hindustan Unilever Ltd in the early 80s was having a tough time fighting Nirma, a low-end detergent.

Instead of diluting the positioning of Surf, their premier detergent, they launched their own "Nirma" and called it Wheel. Over the years Wheel became a bigger brand than Nirma. Other than this, scores of Indian pharma companies survived and thrived by copying drugs produced by multinational companies, when the process patent regime was in place. Captain Gopinath had the vision to start a "low-cost" airline Air Deccan, a model soon to be copied and improved upon by other airlines like Go Air and Indigo . Recently, Apple sued the South Korean company Samsung for copying "the look and feel" of its iPad tablet and iPhone smartphone. One reason why imitators are so successful is because their costs are lower than that of innovators. Bessen J And Maskin E. estimate in their research paper, The Imitation and Diffusion of Industrial Innovations, that overall costs in case of imitators are around 60 to 75 per cent of the costs borne by the innovator. As Shenkar explains in his book, "with the innovator and pioneer paving the way (and paying for it), the imitator enjoys a free ride. It saves not only on research and development but also on marketing, because customers have already been primed to use the novel product or service. The imitator avoids dead ends." So the moral of the story is, if your business model is not working, look around and you might just find something.

MANILA: Nestle, the world's largest food group, expects the upward trend in raw material prices to persist, and its global operations provide a natural hedge against the strength of the Swiss franc, its chief executive said on Saturday. Swiss-based Nestle, which has factories in 81 countries making products such as KitKat chocolates, milk products and pet food, is working to improve efficiencies and reduce costs as the prices of its inputs and packaging rise. "It is clear that the upward trend, in our eyes, is going to be there to stay," chief executive Paul Bulcke told reporters said in Manila , where he was marking the 100th anniversary of Nestle's Philippine unit. "Which is not a bad thing, if you put it in context of the fact that agricultural raw material prices went down for so many years to a level that agriculture was not an interesting activity, or there was no R&D investment, or there was no political impulse." Nestle, which makes Nescafe, Maggi soups and Gerber baby food, has said it expects to meet its goal of 5-6 per cent sales growth in 2011 and higher margins, although higher raw material costs and a strong Swiss franc would dampen first-half results. It had projected rises in input costs to be at the top end of its guidance of 8-10 per cent in 2011, with pricing expected to tick up during the year.

That guidance on input costs remained, even after some moderation in global commodity prices in recent months after a sharp surge earlier in 2011, Bulcke said. "When we speak, we don't speak on the cost-on-the-day cost, we speak on the trend we see," he said, saying Nestle tried to read trends and set prices that could be stable amid market volatility. "We never calculate our cost price on the peaks of every raw material," he said. Nestle, whose shares have fallen 4 per cent this year, expects emerging markets to account for 45 per cent of turnover by 2020, from 35 per cent, or 39 billion Swiss francs ($46 billion) now. "I do see the growth of the emerging markets double, give and take, the growth of the developed markets," Bulcke said. STRONG FRANC The Swiss franc has hit record highs against the dollar and the euro in June, and that will weigh on Nestle's consolidated results, when income from its foreign operations is converted to francs for reporting. Bulcke said the franc did not affect the day-to-day operations of foreign units, which work in local currencies. The company hedged its raw material needs to provide price certainty, but was not going to start hedging the Swiss franc purely for account consolidation," he said. "No, because we have a natural hedge. What you can have is less Swiss francs, but they are Swiss francs so there's more dollar equivalent. "We are growing very, very handsomely, and with less francs at the end of the day. And that is a little bit more the ego stuff -- you say 'all that effort, all that growth, where is it?' Well, it's in the Swiss franc."

NEW DELHI: Hero Honda Motors Ltd, the world's largest two-wheeler company by volume, on Friday got shareholders' approval to change its corporate name to Hero MotoCorp Ltd. The shareholders' approval will now be forwarded to the Registrar of Companies for final changes. Japan's Honda Motor is exiting Hero Honda Motors after a 27-year partnership with the Munjals' Hero Group. The joint venture was India's largest motorcycle manufacturer with more than half the domestic market. The Munjals hold the right to use the Hero Honda name till 2014. The company, which has assigned London-based brand specialist Wolff Olins to developed a new look for it, plans to export to Latin America, Africa, West Asia and Southeast Asia. The Hero Group , for its part, hopes to explore new products and export opportunities now it has been released from a ban on exporting to markets where Honda has a presence The group has set aside .`100

crore for a new brand identity, which includes a new name, logo and positioning. 18/6/2011 The Indian arm of Atlanta-based Coca-Cola Company, the world's largest soft-drink maker, has a problem: of the 15,000 new coolers, or fridges, it supplied to retailers across the country since early 2010, 15 have caught fire. The company is not recalling the whole batch of coolers, retailers, cooler manufacturers and a company executive close to the matter said. Hindustan Coca-Cola Beverages Pvt Ltd, the bottling unit of Coca-Cola India , distributed 15,000 such new coolers last year, all of which were originally designed at Coca-Cola's in-houseAtlanta facility. In India, these coolers are made by the Western Group and Frigoglass India Pvt Ltd. The product is christened Work Horse in Coca-Cola corporate parlance, and it's for use by retailers. Retailers don't pay for the cooler, but only foot the power bill. The problem was first noticed in June 2010. Coolers started catching fire in many locations across the country, said a top official at a cooler manufacturing company, asking not to be named because he is not authorised to speak to the media. Cuddalore, Tamil Nadu-based retailer B Murugan said the cooler placed at his restaurant, Devi Hotel , located some 20 km from Puducherry, caught fire on 8 June at 230 a.m.; when he contacted the company, it agreed to "compensate" him for the loss due to the fire which he said came to `2.5 lakh. "They have given a new cooler of the same type," he told ET on Sunday on the phone. "No details of the compensation are available to me." A Hyderabad-based retailer of Coca-Cola, who also had to face a similar plight with what he calls "Coke's new cooler", refused to comment saying he is fighting a case against the company. "So the matter is sub judice," he said, on condition of anonymity. Globally, soft drink companies offer refrigerators to retailers to showcase their products -in corporate parlance, they are called sales generating assets. Western Group's Kaushik Roy Chaudhury, general manager (West), said "there were some design problems with these coolers". He added: "But in many places where there were fires, stipulated precautionary measures were not taken." He said Coca-Cola, along with the two manufacturers of its new coolers, is spreading awareness about proper steps to be taken while handling such coolers

While Coca-Cola initially blamed the two manufacturers for the accidents, they soon realised the problem was with the design and that the fire was caused by a defective part in the cooler, said a person close to matter. He said it was a Coke team from Atlanta which concluded the problem was with the design of Work Horse. While Coca-Cola refused to disclose the total number of coolers it has placed in the Indian market citing competition concerns, a statement from the company said: "We are aware of some isolated incidents of Coca-Cola-branded coolers malfunctioning in different geographies of the country. No injuries have occurred as a result of these incidents." The statement added: "The company accords top priority to safety and quality. A review of the current operating conditions in India prompted our decision to retrofit all affected coolers currently in the India market as well as make certain improvements to all new coolers to be placed in India. To this end, the company and the Coca-Cola system in India have been proactive in retrofitting the in-market coolers and anticipate that this work will be completed in the next few weeks. We are confident that the improvements will take care of any

of the issues experienced by our customers." A senior Coca-Cola executive said, on condition of anonymity, that in 75-80% of the 15,000 coolers, "a part" identified as "fire-causing" had been replaced. "The rest will be covered in a few weeks." The official refused to comment on the recall option. 19/6/2011
NEW DELHI: Bharti Airtel has embarked on a restructuring exercise that will merge three separate businesses, triggering a large-scale job cull for the first time in the services sector since the 2008 economic slowdown. Under this exercise, Bharti Airtel plans to merge its mobile, satellite TV ( DTH )), and fixed-line & broadband telemedia business, which jointly account for about 90% of the company's revenues and the vast majority of its workforce, into a single entity. The merger, ostensibly aimed at cutting costs and boosting efficiency at the country's biggest telecom operator at a time of falling profits, is expected to lead to big job losses, with estimates putting the number at more than 2,000. Bharti's move could provide the trigger for similar action at rivals, many of whom are battling identical issues-debt burden, slowing growth and high marketing spends amid cut-price tariffs. Several Bharti executives and others familiar with the company's plans told ET that managers had been told to cut positions in their teams and that the merger would create large-scale redundancies. "The estimate is that up to 25% of the 11,500 or so positions in the three verticals will be axed. The process has already started," said one company executive who has been asked to bring down the number of his direct reports. Another executive based out of Airtel's Delhi office said "the brunt of the merger will be felt across all levels", noting that each of the three business verticals has separate teams for sales, product, strategy, human resources and finance, all led by separate CEOs. A third employee said: "Employees were being sounded out about the restructuring, which on completion could impact 20-30% of Airtel's 16,830 employees in the country, including in its enterprise business." The enterprise arm is Bharti Airtel's fourth business division, serving corporates and small & medium businesses and also responsible for its undersea cable offerings. Bharti, in its response to specific queries sent by ET, confirmed the restructuring, but said it would have "minimal impact on people". "As and when any change is planned, the same will be done in the interest of all stakeholders and shared in an open and transparent manner." Co unlikely to go for mass sackings

The company said it had pioneered what it called the "strategic outsourcing model", in which key functions such as networks, technology and customer services are managed not by the company, but by specialist vendors. "Such initiatives wherever and whenever appropriate will find favour at Bharti. Scale and agility backed by synergies and business efficiencies have been the hallmark of Bharti Airtel's growth story.

All these are an intrinsic part of our DNA and have always guided our growth strategy over time," it said. While large-scale job cuts were certain, the executives who spoke to ET said the company was unlikely to resort to mass sackings, and a vast majority of affected employees would be offered opportunities to work in the group's other businesses and in its Africa operations.

25/6/2011
MUMBAI: Tech Mahindra has made Nigeria the headquarters for its business process outsourcing (BPO) and plans to scale up its African operations , the company said today. "We are extremely excited to be part of the growing market of Africa. We have already helped our customers in Africa reduce their operating costs and generate new revenue streams. Tech Mahindra has recruited over a thousand local employees in Nigeria and it is our strategy to nurture local talent for effectively executing our BPO operations," Tech Mahindra President (Corporate Affairs & Business Services Groups) Sujit Baksi said. Over a period of two years, we plan to reduce the expat head count considerably and develop the workforce locally to run the operations. Tech Mahindra has now joined the league of Indian IT companies with significant headcount in the region, Baksi said. Over the last two years, Tech Mahindra has partnered with leading telecom operators in Nigeria, like MTN and Multilinks. The company has recently won the prestigious Bharti Airtel Africa deal for setting up Airtel's BPO operations in seven countries. "With its telecom domain expertise and global experience over two decades, Tech Mahindra is committed to offering best in the industry services to telecom operators leading to enhanced experience for the end consumers in Nigeria and the Africa continent as a whole. Tech Mahindra would bring its global experience across developed and emerging markets to offer top levels of service to operators and end consumers in Nigeria," Tech Mahindra Vice-President (Sales & Global Alliances) Krishna Gopal said.

27/6/2011
MUMBAI: State-run ONGC today toppled billionaire Mukesh Ambani-led Reliance Industries as the country's most valued company today, as a regular game of musical chairs for the top slot continued in the stock market. With a market valuation of Rs 2,37,842 crore, slightly higher than RIL's Rs 2,35,571 crore, the PSU energy major reclaimed the top position from the private sector corporate giant after a gap of nearly four and half years. However, ONGC's lead over RIL is barely about 1 per cent (about Rs 2,200 crore) and their performances would be keenly watched when stock market resumes trading next week.

RIL had first toppled ONGC to become the country's most-valued firm way back in late 2006, but the state-run energy giant later reclaimed the top position, albeit only for a few brief period. RIL has managed to stay on the top since February 2007, except for past few days. A situation similar to game of musical chairs is evident in the stock market for past few days when there have been many twists and turns in the top positions of the country's most valued firms. Earlier on August 17, state-run Coal India Ltd (CIL) dethroned RIL as the top-valued firm, ending the private sector energy's giant over four-year reign at the top. Two days later on August 19, RIL briefly slipped to the third position after CIL and ONGC but returned to the second slot at the time of the market closing. However, CIL's top position proved to be short-lived as RIL reclaimed this position within six days on August 23. A day later on August 24, CIL lost further ground and slipped to the third position after RIL and ONGC.

26/8/2011
Scotland: Google Inc will launch its TV service in Europe early next year, Executive Chairman Eric Schmidt said on Friday, despite teething problems that had led some observers to question how committed the company would remain to the project. Google TV, which allows viewers to mix Web and television content on a TV screen via a browser, was launched in the United States in October but received mixed reviews and was swiftly blocked by three of the top U.S. broadcast networks. Large parts of the television industry, like the news and telecoms industries, view Google with suspicion and accuse it of stealing their advertising revenues without contributing to the costs of making programmes. Schmidt sought to allay the fears of Britain's broadcasting elite in a speech to the Edinburgh television festival, the first time a non-TV executive had been invited to give the keynote MacTaggart lecture at Britain's premier industry event. "Some in the US feared we aimed to compete with broadcasters or content creators. Actually our intent is the opposite," he told an audience who quickly warmed to his friendly style and liberal compliments to the quality of British television. "We seek to support the content industry by providing an open platform for the next generation of TV to evolve, the same way Android is an open platform for the next generation of mobile," he said. "We expect Google TV to launch in Europe early next year, and of course the UK will be among the top priorities." Google TV has gained little traction so far in the United States, and its set top box provider Logitech International SA slashed prices to $99 in July from an initial price of $299.

Schmidt also included a warning to British television regulators, who he said were far more stringent than their U.S. counterparts and threatened to throttle the development of British television companies in an increasingly global market. "Stifling the Internet -- whether by filtering or blocking or just plain turning the 'off' switch -- appeals to policy makers the world over," he said. "Instead, policy makers should work with the grain of the Internet rather than against it." OPPORTUNISTIC Google has long held ambitions in the television arena, hoping to extend its online advertising business, which made $28 billion for the company last year, to the big screens that still command the lion's share of global advertising budgets. "If his ambition was to go there and convince the TV people he wasn't a big threat, I don't think he achieved it," said Keith McMahon, an analyst at research firm Telco 2.0/STL Partners. "The message I got was that TV is such a big market that Google can't ignore it. They're never going to give it up." So far, Google has had little success breaking into the TV market, despite its ownership of the world's most popular online video site, YouTube.

Back in 2004, Eric E. Schmidt, then Google's chief executive, proclaimed, "We're not going into the phone business, but we're going to make sure Googleis on those phones." Less than a year later, however, Google did the opposite.

As Steven Levy described in his book "In the Plex," Google soon acquired Android, the mobile phone operating system, and began building a phone business that it has since developed into a juggernaut. Even after Google acquired Android in 2005, it continued to play down plans to enter the phone business for several more years. It wasn't until the summer of 2008 that Steven P. Jobs at Appleactually took notice and went to Google's headquarters to inspect one of its prototype handsets. Google's diversionary tactics made sense: By 2006, Schmidt was an Apple board member and Google was considered an important partner to Apple. But when Jobs finally saw Google's phone he was "furious" and "concluded he was a victim of deceit," according to Levy's account. (Schmidt has said he never misguided Jobs.) That history may be instructive to consider when judging Google's $12.5 billion deal for Motorola Mobility, which makes Android phone handsets and TV set-top boxes. Google is actively positioning the deal not as a means to buy its way into the handset market, but as an opportunity to buy Motorola's portfolio of patents some 17,000 of them. During the company's conference call with analysts and the media, Google executives peppered the call with talk about the enormous value of Motorola's patents (it mentioned this 24 times); yet they talked about its handset business almost as an afterthought.

Google's focus on the patents rather than the handset business makes almost too much sense: Google's Android operating system has long been "open" and is used by a large ecosystem of handset makers including Samsung and HTC. These companies have invested billions of dollars in its Android-based operations and helped make Android more popular than Apple's mobile operating system. Those handset makers will now have to compete against Google. "Google can't admit in public that what they intend to do is eventually make Android proprietary," said Tavis McCourt, an analyst at Morgan Keegan Equity Research. Despite Google's protestations, McCourt says he believes that in two to three years - after Motorola increases its distribution channels in Europe, where it is weak compared to Samsung and others - Google will seek to start closing Android's platform or begin building special features on its own phones that are not available to its "partners." And even though Google could keep Android as an "open" platform, a special phone with bells and whistles could still infuriate its current manufacturing partners. For consumers, however, a proprietary phone would finally make Google's Android system vertically integrated, creating an end-to-end system that may allow it to better compete against the iPhone, which has long been heralded because Apple has been able to control all aspects of the phone, from software to hardware.

FARIDABAD: General Motors said on Tuesday it plans to source about 95 percent of its components from local manufacturers for its newer models. "The percentage of locally sourced parts and components in new vehicles can be as high as 95 percent," Ashwani Muppasani, vice president, global purchasing and supply chain, General Motors India said at a Federation of Indian Micro and Small and Medium Enterprises (FISME) event here. According to Muppasani, the company expects the small and medium enterprises (SMEs) suppliers to adhere to the strict global quality and be certified for technical specification (TS certified) which is meant for engineering industries. The company plans to double its current production capacity from 150,000 units to 300,000 units by 2014 and envisages a big role for small and medium enterprises. Meanwhile, the SMEs industry raised concerns on the rising number of auto component imports. "While there is a positive medium-to-long term outlook for demand in the Indian auto sector, there are concerns about rising imports of auto parts and components," a FISME research brief said. Data furnished by the Automotive Component Manufacturers Association of India ( ACMA) showed that auto component imports grew by 8.5 percent at $30.2 billion in 2010-11. FISME secretary general Anil Bhardwaj said that the impact of the India-ASEAN free trade agreement

also needs to be monitored. Depending on whom you ask or what you read, China has between 100 and 250 carmakers. Joint ventures with the global biggies dominate the top 10, think General Motors (GM), Volkswagen (VW), Toyota, Ford, Nissan, Hyundai, and a rash of domestic players makes up the rest of the pack. The sheer number of players may not come as a surprise considering China is the largest car market in the world, in 2010, 13.8 million units were sold.

In In

Pic: Pic: All

Nissan new

'SUNNY' Audi

sedan A6

The Indian car market is roughly a seventh of the Chinese one, and at last count, there were a little over 20 major players, mostly multinational, in the race with close to 40 brands. The difference: the top three are not global leaders by any yardstick. There's no Toyota, GM, VW, the global one-two-three, at the top of the India grid. Rather, there's Maruti, the affiliate of world No 9 Suzuki at pole position, followed by Hyundai Motors (No 8 globally) and home-grown manufacturerTata Motors in third spot. What's more, the top three rather remarkably control almost 70% of the Indian car market, with the Detroit giants GM and Ford (globally No 2 and No 4, respectively) relegated to 6th and 7th position, Toyotaat No 5 and VW at No 8. Much of this, of course, has to do with Suzuki's early entry into India, via a joint venture with the government in the early 1980s when the competition at that time was sparse and outdated. Ford, GM, Toyota and Honda began Indian operations over a decade ago but have met with limited success thanks largely to their top-down approach of first launching cars at the higher end of the market where margins are fatter but volumes slim. A situation in which global leaders are also-rans with market shares in single digits is unimaginable in most other parts of the world. But that situation may not hold for too long back home. For, even though growth in car sales fell by 15% in July to touch a two-year low, global auto majors are convinced about prospects in the long haul. Abdul Majeed, auto practice leader at PricewaterhouseCoopers (PwC) expects the Indian car market to more than double to five million from 2.2 million units in five years. ON THE GROWTH PATH

In contrast, growth in developed markets is subdued. In the Eurozone, growth in car sales is expected to decline by 2-4 % in 2011. The saviour for global Big Auto, as in the case in many other industrial categories, is of course the much-touted cluster of developing economies. The July skid notwithstanding, car sales are still expected to grow by 10-12 % in India in 2011.

KOLKATA: Godrej Consumer Products will take its brands Good Knight, Hit, Renew and Godrej Expertabroad and possibly enter beauty products, shampoos and food segments as it targets more than Rs 30,000-crore turnover by 2020, a top official said. "We are drawing the roadmap to take our own

brands to overseas markets by end of the year," Godrej Group Chief Strategy Officer Vivek Gambhir said. "We want to take our insecticide brands like Good Knight and Hit to the African and Latin American markets, and hair colour brands like Renew and Godrej Expert to Asian markets like Indonesia," he said. Godrej Consumer wants to accelerate its pace of growth to 25% a year from 18% to become a Rs 30,000-crore entity by 2020, Gambhir said. He said the group plans to evaluate its 3X3 strategy-which is about expanding in three continents (Asia, Africa and Latin America) through three categories (home care, personal wash and hair care)-to accelerate growth. "We would look at ways to expand personal wash into personal care without diluting margins as profit margins are comparatively lower in this category and subject to commodity price swings," Gambhir said. "We would evaluate a possible entry into foods which too can become a big driver." He said the company localises the formulation of its brands for international foray . For instance, it recently rolled out the Renew brand on trial in South Africa where the product has been customized for Caucasian hair. Godrej Consumer is already a market leader in hair care in South Africa, Kenya, Ghana, Argentina and Uruguay, thanks to an international acquisition spree over the last couple of years. It has bought South African firms Darling Group Holdings , Rapidol and Kinky Group, African medicated brand Tura, Indonesia's Megasari Group and Argentina's hair colour companies Issue Group and Argencos. Gambhir said Godrej Consumer will look at possibilities of brand extension for popular brands like Cinthol, Godrej Expert, Good Knight, Hit and Protekt in its product expansion process. He said the company will be cautious in expansion. "We will not get seduced for growth and will take calibrated steps."

KOLKATA: Tata Global Beverages (formerly known as Tata Tea) on Tueday said it will consider entering the nourishing food segment as part of its plan to become an overall health and wellness company. "There will come a time when there will also be a possible entry into nourishing foods and nourishments of all sorts," Tata Global Beverages (TGBL) Chairman Ratan Tata said at the company's annual general meeting. He said the company is going through a transformation to become a truly global beverages and food company rather be known to customers as "sugar and sweetness alone". "This company is going through a transformation which is to become a truly a global beverages and food company; not to fall into the category of being not good for you, but in fact, everything based on health and nutrition and wellness," he said. He, however, did not divulge the time line and the kind of products the company aims to launch in the food segment. "What has happened over the period of time is that your company has moved majorly to branded tea products and exited plantations in favour of its employees," Tata said.

"It (the firm) has moved on, looking at the future to be the creator and marketer of beverages and foods: ready to drink teas, ready to drink beverages or focus on providing health and wellness rather than mere sweetness and in taste," he added. Last year, the company formed a joint venture firm with Pepsico -- NourishCo Beverages -- to produce non- carbonated ready to drink beverages. Besides, the Tata group has signed a Memorandum of Understanding (MoU) with Starbucks to supply tea and coffee to the US-based coffee chain. It is also looking for opportunities to open Starbucks retail outlets in India. The company has recently acquired 31 per cent stake in US-based Rising Beverages, which is known for vitamin water based products. It had also signed a MoU with Kerala Ayurveda to form a joint venture for product development. "The company has introduced several new products under a specific brand that is going to achieve a name. So basically, when one looks ahead, the company is focused on growing in different geographies, in new countries all over the world," Tata said. TGBL has recently introduced 8 O' Clock Coffee in Europe. Tata Tea is also being launched in Germany.

31/8/2011
HONG KONG: Online auction house eBay is on the look-out for investment targets in Japan and China, a report said Thursday, as it seeks to expand in fast-growing Asia. The California-based firm, which has already struck six acquisition deals in the second quarter of this year, forecast Asia to be the company's main engine of growth in the next five years. "We certainly look at acquisitions that support our business," Jay Lee, eBay's managing director for AsiaPacific, told the Wall Street Journal in an interview. Acquisitions in China would provide eBay with a link to the world's biggest online population, with 485 million users. He said eBay -- which allows Internet users to buy and sell a variety of goods and services worldwide through bidding -- is in talks with several potential targets in Asia but refused to give details. "We're always in talks with a lot of people but deals take forever to get done. There isn't a lack of appetite, and we have a strong balance sheet and very strong cash flow," Lee added. The United States and Europe each currently account for around 40 percent of eBay's revenue, while about 20 percent comes from Asia, the firm said in May. Officials for eBay in Hong Kong and Shanghai could not be immediately reached for comment by AFP.

The online auction giant's most-recent acquisition in Asia was of South Korea online marketplace Gmarket in 2009, according to the Wall Street Journal. Among the firm's purchases in the April-June quarter was the $2.4 billion it paid for US firm GSI Commerce, a provider of electronic commerce and interactive marketing services. eBay reported in July that second-quarter revenue climbed 25 percent to $2.8 billion but profit dipped due to the GSI Commerce deal.

Hindustan Unilever Ltd.

BSE

320.90

00.28% 00.90
Vol:83701 shares traded

NSE

320.40

00.12% 00.40
Vol:4291158 shares traded

Prices|Financials|Company Info|Reports Unilever has launched a dedicated corporate-brandedFacebook page to engage directly with consumers of its key brands and get instant feedback on initiatives such as its new Surf TV ad. The Unilever VIP programme, set up for 11 Unilever brands including Walls, PG Tips, Persil and Surf, invites consumers to offer personal opinions on new brand initiatives. Consumers will receive previews of advertising, branding, packaging and promotions. Consumers become VIP members by signing up to the dedicated page. Participants will be rewarded through exclusive access to new products, money-off vouchers and invitations to Unilever VIP events.

Unilever has revealed that the first initiatives consumers will be involved in include seeing a "sneak preview" of Carte D'Or's new packaging, writing reviews for the Domestos new Toilet System range, and giving feedback on the new Surf TV ad. Rachel Bristow, media director at Unilever UK, told Marketing: "We have been working on this initiative for several months. The UK is a pilot country and we wanted to build something scalable, interesting and rewarding for consumers." Bristow said that Unilever is about to go into a phase of driving awareness around the initiative, through emails to its consumer database and adverts on Facebook. She said: "Already 6,000 people have liked the page and just under 90% of those consumers have gone on to be members." "It is difficult to run outbound campaigns that allow consumers to interact with in their own time and in their own way. This is about getting consumer feedback and making them feel important in our decision making." This month, Unilever posted a 4.1% year-on-year increase in first-half revenues to 22.8bn (19.9bn), while revealing it reduced its first half marketing spend by 1.5%.

MUMBAI/TOKYO: Expanding its partnership with Nippon Life, Reliance Capital today signed a deal for exploring stake sale in its mutual fund and other businesses to the Japanese major, to which it has already sold 26 per cent equity in the life insuranceventure. A Memorandum of Understanding (MoU) was signed today in Tokyo between Reliance Capital (R-Cap) Chairman Anil Ambani and Nippon Life President Yoshinobu Tsutsui for strengthening of the business relationship between the two companies. Earlier this year, Nippon Life had signed a definitive agreement for acquiring 26 per cent stake in Reliance Life Insurance for Rs 3,062 crore. The deal is currently awaiting regulatory and other approvals. Today's MoU would entail Nippon Life evaluating various collaboration opportunities, including strategic partnership, across all Reliance Capital-promoted financial businesses, including mutual fund, the company said in a statement. After signing the MoU, Anil Ambani said, "Nippon Life has already agreed to be our partner in the Life Insurance business, and we see great potential to work together across our other financial services businesses." Nippon Life's Yoshinobu Tsutsui said, "We are delighted to have an opportunity to expand our relationship with Reliance, one of the most respected business groups in India." Nippon Life is a 122-year-old Fortune 100 company, ranked as seventh largest life insurer in the world and the single-largest private life insurer in Asia andJapan.

Its deal with Reliance Life pegged the total valuation of the Indian insurer at about Rs 11,500 crore ($ 2.6 bn). In addition to life insurance, R-Cap, the financial services arm of Anil Ambani-led conglomerate Reliance Group, has interest in an array of financial sector businesses. These include mutual funds, general insurance, commercial finance, broking, investment banking, wealth management, distribution of financial products, exchanges, private equity, asset reconstruction, among other financial services. Reliance Capital Asset Management is the country's largest AMC (Asset Management Company) and manages over Rs 1,04,136 crore across mutual funds, pension funds, managed accounts and hedge funds and has over 7 million investors. R-Cap figures among the country's top-four private sector financial services and banking groups, in terms of net worth. Its parent Reliance group is amongst India's leading business houses with presence across a wide array of consumer-facing businesses of financial services, telecom, energy, power, infrastructure and media and entertainment. Osaka-based Nippon Life Insurance, also called Nissay, is Japan's largest private life insurer with revenues of $ 80 bn and profits of over $ 3 bn.

1/9/2011

Filmmakers eye growing TV audience

A few months ago, producer Ritesh Sidhwani, did a three-day road trip from Mumbai to Delhi along with his stars, to promote his last release, Zindagi Na Milege Dobara. While he built the hype around his film, one of the most important things he admits he learnt was how many people wait for a film, even the latest releases, to air on television. "One, we have such a huge country and not everyone is watching films in theatres. Gujarat, which is an important market for theatrical collection, was an eye-opener. We came across a huge section of people who said they cannot, specially as families, afford to visit multiplexes for movies and wait for the same (movie) to air on TV. This is altogether a new audience," says Sidhwani. The direct-to-home (DTH) operators are also contributing to this trend, as they are adding big numbers of people watching movies on TV, he says. According to KPMG, the penetration of TV in India grew from 58% in 2009 to 61% in 2010 at 600 million viewers, a big market indeed. So who is this cine couch potato? Is he/she very different from the cine fan who visits the theatre? Yes, he is. In fact, he has a completely different profile from the one who visits theatres often. The TV audience is a growing one, says Sidhwani. It is the hardcore TV viewers who contribute primarily to the viewership on TV, says Raj Nayak, CEO of Colors. They never actually go to a theatre (or go very rarely). The poor in the lower SECs, females, and people in smaller towns make up the most significant part of

the TV viewing audience. "Viewers perceive entertainment on television as literally 'free of cost', and, hence, the viewership pattern is very different from consuming a movie in the theatre where they have to pay specifically for the tickets," says Nayak. What then drives each audience? The top three drivers that influence the buying of a ticket in a theatre are starcast, music and the genre, while TV, given its wide range, enables each to watch the content of his or her choice. The viewership for movies on TV depends largely on how good the movie is the entire family. Ever wondered which film holds the record for an all-time hit across our TV channels (not counting DD of course)? Chances are that the release of the small caper in 2004 may have skipped the theatre-going audience's attention totally, but Taarzan-The Wonder Car (TTWC) comes up trumps in drawing consistent eyeballs on the idiot box since it first premiered six years ago on Zee. "I have aired it maybe over a 100 times across my network and it has been (geeting good) rating consistently," says Jayantilal Gada, who just renewed the movie's rights for Zee Network for five more years. TRP or Television Rating Point, or TVR - which is Television Ratings - is a gauge or an average of how many people across the country have watched a show or film at the time of it being aired. Seven years ago, when Gada first saw his friend Gordhan Tanwani's thriller (TTWC), he tried to close a pre-release deal for the satellite rights of the film with him for an amount Tanwani thought was far too little for his Rs 15 -crore film. Gada, with his close to two decades of experience knew better and was not about to budge. A week later, the fate of his film was sealed at the box office - it was a flop. Tanwani came to Gada and closed a deal for one-fifth the price he was asking for and signed a five-year deal with Zee network. The film, according to trade sources, lost almost its entire investment. It just about earned one-fifth, or about a crore, of its budget, and that too was also like a bonus, a perfect example of how a film can fare differently on the two mediums. Tanwani's film has become like a case study for those interested in satellite but the most important fact it acknowledges is the difference in the two audiences. The fate of TTWC is, of course, not isolated. Many a film that has come a cropper at the box office has come up trumps on the TV, as revealed by TV ratings (see graphic for some ratings), reiterating the differences in both the audiences. Interestingly, it also works the other way around: films that are certified hits at the box office, like Raajneeti or SRK's Don, may not find an echo with the TV audience. Here, too, there are exceptions like blockbusters 3 Idiots and Dabangg, which are equally well received by the theatre and TV audience. "Anything that falls into the family-viewing category works, humour being the all-time favourite, and horror definitely not being one! Action movies too work because you don't have to sit and watch for three hours at a stretch. You can leave and come back to them, unlike the emotional ones where the story is critical. Films that can keep a child's attention too work very well," says an industry veteran who has been closely associated with the satellite rights business. One star whose films get consistently good rating on TV is Akshay Kumar. Be it Chandni Chowk to China, or Khatta Meetha, or Welcome, or even the latest Tees Maar Khan, his films that failed at the box office get an average rating of 3-4 when they are aired for the first time on TV. Many a time, the ratings are

equally

good

when

the

movies

are

aired

again.

Movies make up a major chunk of the Gross Ratings Points, or GRPs, of the General Entertainment Channels (GECs). According to TAM Media Research, the share of Hindi feature films has been around 10.4%, which is pretty high as it translates into more advertisers for the channel and the said programme. With the TV audience growing, all the players involved in the movies business are taking it very seriously and is part of each of their business plans. For filmmakers, this audience means they can sell or pre-sell, which is the latest trend, their films at premium rates, helping them recover a huge part of their cost of production. The DTH players offer these films for `25-60 for 24 hours. This value-added service has many takers, which again means additional revenues for the producer. For the satellite players, the tent pole films (blockbusters, movies with big stars) act as differentiators and help them draw huge eyeballs, and, of course, advertisers. The only business vertical deeply affected by the growing TV audience is the home video segment, which has been losing market share. Some players in the sector have now shifted to digital platforms. But in the movie business, there is no certainty of what will work and what will not. "There are some which become the brahmastra for us. Whenever these films - Nayak or Suryavansham, for instance - are played, they never fail to get us the ratings. But there are no guarantees in this business," says NP Singh, COO of Sony Entertainment.

Hit by input costs, FMCG cos HUL, Procter & Gamble and Dabur hikes prices of consumption items everyday
MUMBAI/NEW DELHI: Consumer product companies in India on an average have increased the price of one daily consumption item every day over the last two months, despite an ever-increasing possibility of a consumer slowdown. Prices of more than 70 stock keeping units-or items with a unique model or packaging size-of more than 15 popular brands across food, personal and household products have gone up in the past two months due to higher commodity costs that have been rising for several months now. This has forced manufacturers including Hindustan Unilever, Procter & Gamble and Dabur to review prices regularly to ensure profitability. "We have been taking calibrated price increases, to partially mitigate the impact of the sharp rise in input costs," Dabur India CFO S Raghunathan said. Hindustan Unilever, the country's largest consumer products company, is reviewing prices every Monday,Hindustan Unilever Chief Finance Officer R Sridhar said recently. "All the teams, including supply chain, marketing, finance and customer development, come together to study the impact of rising costs

and its impact. So it's getting very dynamic," he told the company's first quarter press meet on July 28. HUL increased prices of several pack sizes of its popular laundry and soap brands such as Rin and Pears by 7%. Its arch rival Procter & Gamble, which slashed prices in its laundry brands last year to start a price war, too has increased sticker price of Tide detergent by 5% in the first week of August. The 13,000-crore laundry segment, the biggest in the consumergoods space, is under pressure from rising prices of its key raw material crude oil, which is 15% higher than last year at $85 per barrel. At the same time, the segment is suffering a decline in volume sales. Personal care makers and food companies such as Dabur, Marico Emami and Amul too have increased prices in June and July. Between April and June, Dabur hiked prices for Meswak toothpaste, Vatika and Amla hair oils, Real juice, and Odonil air freshener by close to 4%. Gujarat Cooperative Milk Marketing Federation, makers of Amul, has increased prices of packaged milk, butter and cheese by 4-5% in the past couple of months. "Cost of procurement of milk has gone up so we have to mitigate the impact," the federation's MD RS Sodhi said. Cooperatives such as Amul are coughing up about 20% more for procurement of milk than they were same time last year in the world's largest milk producing country. Others like ITC Foods and Nestle have not increased prices, but have dropped weights of packs. "We have reduced grammage by 4-5% of certain packs in our biscuits and confectionery portfolio," says Chitranjan Dar, divisional chief executive of ITC Foods, which makes Sunfeast pasta and Minto candies. But the cigarettes-to-foods maker says it doesn't plan to take up pricing in the near immediate future. "We are not contemplating a price hike in the short-term; we will take a call to do so only if the commodity situation gets much tougher." Nestle too reduced weight of its noodle brand Maggi by 60 grams while keeping the prices intact. But retailers are trying hard to attract footfalls by clubbing products together for discount offers. "During inflation people like to depend on large value places like Big Bazaar. Also, we have many partners doing large value packs, which value to consumers while increasing category consumption at same time," said Devendra Chawla, Future Group president of food andFMCG. But the question is, how long can consumers absorb increased prices without cutting down on their consumption? Debashish Mukherjee, partner and VP at consulting firm A T Kearney, says consumers will not downtrade just yet. "The trade-offs are delicately balanced right now. With large ticket purchases like homes, cars and high-end electronics on hold because of interest rates going up, households do have surplus cash to

spend on essentials," he says. That could be because, consumer products firms still haven't passed on the entire burden of raw material cost. And numbers bear witness. Data by ET Intelligence Group of the top nine listed consumer products firms shows that while sales has risen by 19% last quarter, margins have shrunk for most companies as compared to last year. In fact, six companies have reported a decline in operating margins while rest have grown by lower single digit.

22 AUG, 2011, 02.30AM IST, SAGAR MALVIYA,ET BUREAU

Hindustan Unilever, Future Group to co-brand bakery products, items to be sold at select Big Bazaar stores

MUMBAI: The country's largest consumer products company Hindustan Unilever (HUL) and biggest retailer Future Group will co-develop and co-brand a line of bakery products that will be sold exclusively atBig Bazaar stores in the first instance of such a partnership in the country. The bakery products will sport both Hindustan Unilever's 'Modern' and Future Group's 'Freshly Baked' brands on their packs and be rolled out in select Big Bazaar shops in Mumbai, an HULspokesperson said. "This is co-branding of Modern Foods products with Future group in Future Retail stores," the person said. Though new in India, the concept is widespread in developed markets. The world's biggest consumer products maker Procter & Gamble has worked with Tesco, the UK's largest grocery store chain, to design Great British Flavours, a line of Pringles sold exclusively at Tesco stores. P&G has had similar tieups with Wal-Mart and Kroger in the US. Experts foresee more such joint marketing initiatives soon, because it's a win-win deal. "For any retailer's private brand, the biggest challenge is not to keep prices low or innovative packaging but to source their products from a quality supplier," says Harminder Sahni, founder of Wazir Advisors, a retail consultancy firm.

"In this case, HUL's strength is its ability to make good bakery products as well as to distribute it nationally while Future Group has the largest network of stores across India. Hence, both are leveraging their corestrength for the product," he adds. For the Rs 20,000-crore Hindustan Unilever, modern trade accounts for more than 10% of its total sales with Future Group being their biggest customer. "We believe that in modern trade, breads from a functional product can be developed as a category of choice as consumers are looking for quality and value additions," says Devendra Chawla, president FMCG and food at Future Group, whose private brands have been outselling some of the country's bestknown brands in select categories across 200-plus Big Bazaar and Food Bazaar outlets. "A lot of discovery will happen, we are working at developing this category for the coming year," he adds. Consumer durable makers such as LG, Videocon, Onida and Samsung too are rolling out exclusive models for big retailers, initiating a strategy to differentiate products sold in large chains from those sold in small shops. But for daily products like soaps and shampoos, companies and retailers in India have had a love-hate relationship historically. For instance, in February this year, Future Group, Bharti Retail and RPG's Spencers among others had stopped fresh orders from Reckitt Benckiser, maker of Dettol soaps and Harpic toilet cleaner, after the marketer slashed retailers' margins to 14% from 16% on some of its products to partly offset rising input costs. Future Group had boycotted chocolate maker Cadbury in 2008, and the following year it boycotted cereal maker Kellogg's brands across its Food Bazaar and Big Bazaar stores, both demanding higher business margins. The new partnership is in line with Hindustan Unilever's strategy to focus on new areas, especially food, to grow in a market of over a billion consumers. It acquired Modern Foods from the government a decade ago in the first public sector undertakings divestment. The 42-year-old bakery brand is the country's largest brand in the bread segment and is a profitable business for Hindustan Unilever since the last three years.

4/9/2011