India Business Journal November 2014

 

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CONTENTS YOUR GATEWAY TO INDIA INC. NOVEMBER 2014, Rs 35 EDITOR AMIT BRAHMABHATT ASSISTANT EDITOR SHRIVATSA JOSHI ADVERTISING MANAGER WILLIAM RUMAO GRAPHIC DESIGNER RENUKA SAWANT ADVISORY PANEL SHASHIKANT PATEL JITENDRA SANGHVI REGISTERED OFFICE 102, RAJASTHAN TECHNICAL CENTRE, PATANWALA ESTATE, GHATKOPAR (W), MUMBAI 400 086. INDIA PHONE: 6703 0250/6703 0251 FAX: +91 22 6703 0251 EMAIL: mail@ibj.in BUREAU CHIEFS AHMEDABAD: B D RAWAL CHENNAI: G JACINTH DELHI: RANJANA ARORA HYDERABAD: B SATYAM KOLKATA: DIPANKAR SEN COVER STORY GOOD DAYS AHEAD Promising macroeconomic numbers and the Modi government's reforms spree raise hopes of an economic revival. News Round-Up A brief on news, tie-ups, appointments and awards 24 Policy ..........30 Hawkish View: Despite a dip in inflation, an IMF paper urges the RBI to maintain a tight monetary stance for a prolonged period. Legal Affairs ..........32 Miles To Go: A year after its enactment, the new companies law is yet to be fully operational as stakeholders disagree on its various provisions. Telecom ..........34 Reviving Fortune: TRAI's detailed pre-consultation paper on VNOs could be the beginning of a game-changer for the troubled telecom sector. Straight Talk ..........36 "We Are Mulling Buying Some Lloyd's Syndicates": Ashok Kumar Roy, CMD, GIC Re Internet ..........38 Net Gains: India's internet revolution, spurred by affordable tablets and smartphones, is adding new chapters to the ICT story. Global Wrap-Up ..........40 A quick round-up of news and current affairs across the world Readers' Lounge ..........42 Catch up with new book launches - The Power Of Impact Investing - Business Battles - Rokda ...........6 Consumer Durables ..........12 High Hopes: After a dismal last year, consumer durable companies are betting on positive sentiments to drive sales in the ongoing festive season. Focus ..........14 A Rich Harvest: The Kerala government is triggering an agrarian revolution by scaling up farm productivity and boosting food processing industry. Corporate Report ..........16 Sunny Days: Technology, scale and efficiency brighten the prospects of Waaree Energies in the high-potential solar energy sector. Automobile ..........18 Mixed Signals: Two top European car-makers spell out contrasting India plans even as the domestic automobile sector shifts gears and enters the fast-growth lane. Face To Face ..........20 "Govt Is Ready To e-Auction Coal Blocks": Piyush Goyal, Minister of State for Power, Coal and Renewable Energy International Business ....22 Getting A Foothold : Indian exporters explore opportunities in Russia as it is locked in a sanctions war with the US and the EU. 3 NOVEMBER 2014 Printed and published by Amit Brahmabhatt for Issues Analysis and Research Pvt Ltd and published from 102, Rajasthan Technical Centre, Patanwala Estate, Ghatkopar (W), Mumbai 400 086 and printed at Graphtone (India) Pvt. Ltd., A1/319, Shah & Nahar Indl. Estate, Lower Parel, Mumbai 400 013 Processed at Graphtone (India) Editor: Amit Brahmabhatt Volume X, No 5 Issue date November 1-30, 2014 Released on November 1, 2014 EDITORIAL ASSOCIATE Press Trust of India MARKETING ASSOCIATE Milage ads & events SUBSCRIPTION RATES India Rs 420/- for 1 year (12 issues) Overseas Rs 1,860/- or US$32 for 1 year (12 issues) Add Rs 50/- for outstation cheques www.indiabusinessjournalonline.com Events Calendar ..........44 An update on national and international exhibitions Star Talk ..........46 Forecast by Bejan Daruwalla Knowledge Zone ..........48 - Jean Tirole, French Economist - Game Theory - Spiritual Corner: Worries Viewpoint The black money trail ..........50 INDIA BUSINESS JOURNAL

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NEWS ROUND-UP MISCELLANEOUS Bullion body re-enters retail trade The India Bullion and Jewellery Association (IBJA) has launched a retail venture with gold bars and silver coins in Mumbai. To start with, the bullions will be available between one gram and one kilogram at the IBJA's office in Zaveri Bazaar in Mumbai. Plans are on to rope in retailers and launch online sales in the near future. Gold coins and bars will have IBJA's hallmarking with assurance of finest purity and be priced at market rates. The Bombay Bullion Association, which was rechristened recently as IBJA to include jewellers, had discontinued selling gold after the economic liberalisation. learning Asian Language, the report adds. It also notes that some fast-growing Asian countries are starting to reclaim workers they had lost. Animal-tested cosmetics import banned India recently banned import of animal-tested cosmetics. The move follows India's earlier decision to ban testing of animals for cosmetics within the country. This makes India the first cruelty-free cosmetics zone in South Asia and an example for other nations to follow. Pro-life groups across the world have long campaigned to end the practice of testing cosmetics on animals. Often called the ugly secrets behind the beauty industry, campaigners have revealed how tests on animals like rabbits are done, injuring and maiming them. Several large companies have MP gets Rs 6.85-l cr investment intentions Madhya Pradesh Chief Minister Shivraj Singh Chouhan has revealed that various industry leaders expressed their intention to invest about Rs 6,85,000 crore in the State in the recently concluded threeday Global Investors' Summit in Indore. Most of the investments announced in the summit are in power, coal, food processing and information technology sectors. The government had decided earlier that it would not sign any MoUs with the investors. It is planning to contact all the investors within a month and provide them with an investment manager each for effective follow-up of their investment proposals. to a report by the Boston Consulting Group, total jobs.com and The Network. The US has been ranked on the top, followed by the UK, Canada, Germany and Switzerland. The AsiaPacific region does not generate as much interest as a possible work destination largely because of the perceived difficulty of India 18th most desirable workplace India has been ranked 18th globally on the list of most desirable destinations to work even as 70 to 80 per cent of Indians are willing to work in an overseas location, according APPOINTMENTS Hemant Contractor, a former MD of State Bank of India, has assumed charge as chairman of the Pension Fund Regulatory and Development Authority. The government has granted a three-month extension to Ramesh Abhishek, the chairman of the Forward Markets Commission. Arvind Subramanian, a senior fellow at the Peterson Institute for International Economics, has been appointed as India's new chief economic adviser. Rajiv Mehrishi, the former chief secretary of Rajasthan, has replaced Arvind Mayaram as economic affairs secretary. 4 NOVEMBER 2014 INDIA BUSINESS JOURNAL

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Verbatim... MISCELLANEOUS in the past said that they had stopped testing cosmetics on animals. WTO rules against India's poultry ban A World Trade Organization (WTO) panel has ruled against India's import restrictions on chicken legs and some other farm products from the US. The panel has termed India's import curbs based on fears of low-intensity bird flu affecting public health as not in line with multilateral trade rules. The US had dragged India to the WTO on the issue in 2012, claiming that the restrictions were based on "unscientific" reasons, which the dispute settlement panel has upheld. India will now examine if it can challenge the verdict in the Appellate Body. and increase the push for local manufacturing. It also targets to generate Rs 4,00,000 crore worth of software exports by 2020. The policy, which has been in the works since last November, aims to address the slowdown faced in the IT sector, which, in turn, has impacted job creation over the last few years. The State government is rolling out the red carpet to companies to form public-private partnerships across all industries, from IT to toy manufacturing. “I am neither confirming nor denying (UPA ministers’ names in black money list), I am only smiling.” Arun Jaitley FINANCE MINISTER Centre orders merger of NSEL and FTIL The government has decided to merge National Spot Exchange (NSEL), which is embroiled in over Rs 5,600crore payment crisis, with its parent company Financial Technologies India (FTIL). The draft order, issued by the Ministry of Corporate Affairs under Section 396 of the Companies Act, 2013, comes after more than a year after the payment crisis broke out at online spot exchange in July 2013. This is the first time that a listed entity in the private sector is involved in a Section 396 order of the Central government. The Centre has cited that the merger is aimed at settling the dues of its stakeholders and creditors. "This (government’s handling of black money issue) is a case of putting the mountain before the mole (Sic). It is not a good sign.” Ram Jethmalani SENIOR LAWYER New air pollution index on the cards The Ministry of Environment and Forests has launched a new Air Pollution Index to identify the most polluted regions in the country and raise awareness about health implications. The index has been developed with the help of health and environmental experts from organisations, such as the Centre for Science and Environment and All India Institute of Medical Sciences. It expands the bandwidth of the existing air quality standard to monitor eight particulate matters against the three scrutinised earlier. The index will be coded into six categories and launched in cities with a population of over 10 lakh by midDecember. "Our biggest search competition is Amazon as people who are looking for something to buy online are looking for it on Amazon." Eric Schmidt CHAIRMAN, GOOGLE "It is high time the Insurance Act is amended as a majority of the Sections in the Act are constricting the industry." R Thyagarajan CHAIRMAN SHRIRAM GROUP Government gets tough on NGO payments The Centre has advised all NGOs and associations registered under the Foreign Contribution (Regulation) Act, 2010, to make payments of Rs 20,000 and above only by cheque or demand draft. Cash payments above Rs 20,000 will invite a more intensive scrutiny of records and accounts of associations concerned. "The country can move up from 134th rank in ease of doing business within a month if States put their mind to it." Amitabh Kant SECRETARY, DIPP Karnataka unveils new industrial policy The Karnataka government has come up with a new industrial policy that aims to grow other cities in the State INDIA BUSINESS JOURNAL NOVEMBER 2014 5

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NEWS ROUND-UP FINANCE Wave Group enters housing finance The Delhibased Wave Group recently announced its foray into financial services segment with launch of a housing finance company. The new housing finance venture, New Habitat Housing Finance and Development, has been launched with an initial paidup capital of Rs 12 crore. Over the next three years, the group plans to shore up the capital of the housing finance company to Rs 100 crore, essentially out of its internal accruals. The Wave Group has diversified interests in distilleries and breweries, real estate, sugar, manufacturing, malls and multiplexes. insisting on submission of a proof of current address even when a customer produced a proof of permanent address. The RBI has warned that insistence of proof of local address prevents many prospective customers, especially migrant workers, from opening bank accounts. PFRDA to bring all exempt funds under it The Pension Fund Regulatory and Development Authority (PFRDA) is looking to bring all exempt pension funds, such as superannuation funds run by some companies for their employees, under its ambit. The pension sector regulator has sought details from all trusts that operate such funds. The PFRDA is of the view that there is a grey area in the regulation of superannuation funds. Under the current structure, insurers or fund managers manage the superannuation funds and follow independent rules. The regulator has pointed out that the PFRDA Act applies to any pension scheme that is not regulated by any other enactment. India Inc's credit quality improving The overall credit quality of Indian companies, especially that of companies with lower debt on books, appears to be improving, according to a study by rating agency CRISIL. During the first six months of the current financial year, the ratio of rating upgrades to downgrades was 1.64 with 741 upgrades compared to 451 downgrades. Higher upgrades, which shows improving credit quality, were witnessed in export-linked sectors and non-discretionary consumer segments, such as packaged foods, pharmaceutical, textile and agricultural products. Companies operating in construction, engineering and capital goods and auto ancillary sectors had higher downgrade rates. the preceding four years and sound internal control system with at least two professional directors on the board, were classified as financially sound. the capital market for two years with immediate effect for executing illegal transactions in the past. The SEBI last month concluded that Mr Pendse had executed illegal transactions through Inshallah Investments - in which Niskalp Investment, an arm of Tata Finance, had a vital financial interest - in the scrips of HFCL, Telco, Infosys and SSI. The complaint against Mr Pendse was filed by Tata Finance in October 2002 for violating insider trading regulations. CBS a criterion for financially sound UCBs The RBI has said that full implementation of core banking solution (CBS) will be included as an additional criterion for classifying an urban cooperative bank (UCB) as financially sound and well managed. Until now, UCBs fulfilling criteria, such as capital to risk weighted assets ratio of not less than 10 per cent, gross nonperforming assets of less than 7 per cent, net NPAs of not more than 3 per cent, net profit for at least three out of Ex-Tata Finance MD barred from market Dilip S Pendse, a former managing director of Tata Finance, has been banned from accessing Cignal TTK Health Insurance has entered into a distribution tie-up with Aditya Birla Money Insurance Advisory Services to provide comprehensive health insurance solutions to consumers. Aditya Birla Financial Services Group has inked an agreement with MMI Holdings of South Africa to form a health insurance joint venture. Relief for banks to act on stressed loans The RBI has increased the time limit for banks to come up with a corrective action plan by the Joint Lenders Forum from 30 days to 45 days in case of loans showing incipient stress. Similarly, it has allowed the Independent Evaluation Committee a time limit of 45 days instead of 30 days for evaluation of restructuring package and giving its recommendations for restructuring of accounts with aggregate exposure of Rs 500 crore and above. The central bank has exempted crop loans from reporting to the Central Repository of Information on Large Credits. INDIA BUSINESS JOURNAL APPOINTMENTS The RBI has appointed Michael Patra, K K Vohra and G Mahalingam as new executive directors of the central bank. One address proof is enough: RBI The RBI has asked banks to comply with the one-address-proof norm as it was found that many of them were not following the new rules. Despite its clear instructions on requirement of one proof of address, whether permanent or current, the RBI has noted that some banks were still TIE-UPS Karnataka Bank has signed an MoU with TVS Motor for extending channel finance facility to authorised dealers of the company. 6 NOVEMBER 2014

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NEWS ROUND-UP CORPORATE Sun Pharma bets on in-licensed drugs Sun Pharmaceutical Industries plans to invest more than $280 million (about Rs 1,700 crore) in the experimental psoriasis drug that it inlicensed from US-based Merck Sharp & Dohme (MSD) last month. The country's largest domestic drug-maker by market capitalisation is looking at commercialising the drug globally by 2018. This is part of Sun Pharma's attempt to invest in a basket of promising innovative products in select therapies to grow beyond generics and add new revenue streams. Sun is the first Indian medicine company to adopt the strategy of in-licensing experimental drugs at a latetrial stage for commercialisation. M&S to double outlets in India British retailer Marks & Spencer (M&S) is planning to nearly double the number of retail stores in India from 42 to 80 in two years. The company, which opened its first store in India in 2001, entered into a joint venture with Reliance Retail in 2008. M&S, which sources apparel from over 50 countries, has seen growth across all categories in India. Established in 1884, M&S currently has over 800 stores in the UK and over 460 international outlets across Europe and Asia. Vodafone wins transfer pricing case The Bombay High Court last month ruled that Vodafone was not liable to pay tax of Rs 3,200 crore in a transfer pricing case dating back to 2009-10. The tax authorities had alleged that Vodafone India Services, a group entity, had under-priced shares in a rights issue to its parent company, Vodafone Teleservices (India) Holdings, Mauritius. The court, however, ruled that share premium received on the issue of shares was not taxable. The verdict, which may have implications for a number of cases that have been bundled together, comes as a big relief for the UK-based mobile services provider. plant in Iran. The Iran plant is a part of the Mumbaibased drug company's strategy to boost its presence in the country's fast-growing pharmaceutical market. Cipla, which will own a 75 per cent stake in the plant, being set up in partnership with its local distributor, will invest about Rs 225 crore over three years in machinery and equipment for the facility. The drug-maker, which made headlines in 2001 by making antiretroviral medicines to treat AIDS in Africa for under $1 per day, gets more than half its revenue from markets outside India, including United States and Europe. lakh units by 2018. The new factory - employing 1,800 people initially and taking it up to around 6,500 in five years - will be the first in the Yamaha Motor Group to have a vendor park in its vicinity. The company has a plant each in Surajpur (Uttar Pradesh) and Faridabad (Haryana). M&M to buy 51% in Peugeot Scooters Mahindra Two Wheelers will be acquiring a 51 per cent stake in France-based Peugeot Motocycles to expand its presence across global markets. Mahindra Two Wheelers, an unlisted subsidiary of utility vehicle manufacturer Mahindra & Mahindra (M&M), will be investing about Rs 215 crore in the French company. Peugeot Motocycles, also known as Peugeot Scooters, is a part of the PSA Group Mayank Ashar, a former executive of BP, PetroCanada and Suncore Energy, has taken over as MD and CEO of Cairn India. Nokia to stop production at TN plant Nokia will be suspending handset production at its Sriperumbudur facility from November 1 after termination of services agreement with software major Microsoft. Nearly 1,100 employees at the facility, Nokia's largest, will be affected. The workers' union has termed Nokia's move illegal and plans to take up the issue with the Tamil Nadu (TN) government. Nokia had sold its mobile handset business to Microsoft, but the Sriperumbudur plant was not a part of the deal after the company got embroiled in a tax dispute with the Centre. The Finnish company signed an agreement with Microsoft to address the latter's immediate production needs and operated the plant. AWARDS Zicom Electronic Security Systems has won the Porter Prize in the electrical appliances segment. TIE-UPS Gulf Oil Lubricants, a Hinduja Group company, and Mahindra & Mahindra, the world's biggest tractormaker by volume, have decided to team up for co-branded lubricants. Hyderabad-based Zen Technologies has inked an MoU with Rockwell Colins, an American company specialising in aviation simulation and APPOINTMENTS NIIT has appointed Rahul Patwardhan as CEOdesignate of the company. He will take charge of his responsibility on April 1, 2015. Japanese auto major Nissan has named Arun Malhotra as managing director of its Indian arm, Nissan Motor India. Yamaha plans Jan start for Chennai plant Yamaha's new plant on the outskirts of Chennai will start operation by January next year. To begin with, the Japanese two-wheeler maker will produce scooters at the plant, which will have an initial annual capacity of 4 lakh units. The capacity is expected to increase to 18 Cipla to invest Rs 225 cr in Iran plant Cipla will be setting up a manufacturing 8 NOVEMBER 2014 INDIA BUSINESS JOURNAL

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CORPORATE and makes scooters and mopeds in 50 to 400 cc range. Following the deal, M&M will focus on the European market and India, which accounts for 21 per cent of the global twowheeler market. IndiGo places largest order for 250 planes IndiGo Airlines has signed an MoU with Airbus for purchase of 250 Airbus aircraft, the single largest order ever for narrow-body aircraft. At $102 million (a little over Rs 600 crore) per plane, the contract is worth $25.5 billion (about Rs 1,53,000 crore). Delivery of the aircraft will start in 2018 and will continue until 2026. The low-cost airline has also secured purchase rights for another 100 aircraft. The 250 new aircraft will be used to operate a mix of domestic and international flights. Byke Neelkanth in Manali (Himachal Pradesh) harness the best-in-class technology in tune with global trends to deliver service according to international standards. The Byke Group takes pride in serving exclusive multicuisine vegetarian cuisine enriched with natural and authentic flavours. Surat company's big-bang Diwali bonus Hari Krishna Pride enters North with Dharmashala resort Pride Hotels, one of the fast-growing hotel chains in India, has taken over the management of The Surya McLeod Dharmashala, making its foray into north India. Last month, Surya McLeod Dharmashala Managing Director Paramjeet Bamba entered into a management contract with Pride Hotels Executive Director Arun Nayar, roping in Pride Hotels to manage the 53-room property. The property has been renamed as Pride Surya Mountain Resort, McLeodganj, Dharmashala. Speaking on the occasion, Pride Hotels CEO Satyen Jain said: "We are proud to have been appointed to manage and operate one of the finest resorts in McLeodgang. This elegant hotel will provide deluxe amenities and genuine hospitality to accommodate the needs of both business and leisure travelers." Jhagadia, Gujarat, last month. With an investment of Rs 450 crore, the plant will employ more than 400 people. The company will be sourcing about 80 per cent of its ingredients locally. The nounced a long-term partnership to supply critical, high-integrity, forged and machined components for commercial aircraft applications to Safran's global affiliates. Webtec Corporation has formed a joint venture with Texmaco Rail & Engineering to manufacture safety and control equipment, such as draft gear and bogie-mounted braking. GVK Biosciences and Takeda Pharmaceutical Company have joined hands to recycle shelved or failed drugs and find possible new indications. plant is Abbott's third manufacturing site in India, the other two being in Baddi and Goa. The Jhagadia plant will manufacture high-quality nutritional products for India. In 2012, Abbott had opened a nutrition research and development centre in Bangalore to accelerate development and delivery of nutritional products. Exports, a Surat-based diamond company with an annual turnover of Rs 5,000 crore and a workforce of about 6,000, recently shot to fame with unique Diwali gifts for its employees. The company gifted its employees 491 Fiat Punto cars, 200 two-bedroom houses and jewellery ahead of the festival of lights. The incentives, adding to Rs 50 crore, were meant for employees who contributed significantly to the growth of the company over the past five years, added Hari Krishna Exports Chairman and Managing Director Savji Dholakia. Abbott to open Rs 450-cr plant in Gujarat Multinational healthcare company Abbott's new greenfield plant to produce nutritional products went on stream in training products, to build on-air and ground solutions for the Indian military forces. Reliance Brands has tied up with New York-based Authentic Brands Group to bring lifestyle brand Juicy Couture to India next year. Drug-maker Cipla has announced a collaboration with Israel's Teva Pharmaceuticals for sale and distribution of the latter's drugs in South Africa. Global aerospace defence and security leader Safran and Pune-based high technology components company Bharat Forge have an- Kalyan Jewellers gets Warburg funding Keralabased Kalyan Jewellers has raised Rs 1,200 crore from US private equity major Warburg Pincus, in return for a minority stake. The deal, which is the largest private equity investment in the country's jewellery manufacturing and distribution industry, values Kalyan Jewellers at about Rs 12,000 crore. The investment has been made by an affiliate of Warburg Pincus. Kalyan Jewellers, a Thrissur-based jewellery manufacturer and retailer will use the proceeds for expansion, opening 28 outlets in the next six months. Kalyan Jewellers has 61 retail outlets, of which six are at foreign locations. NOVEMBER 2014 The Byke Hotels makes rapid strides With four luxurious and plush properties across serene hill stations and popular holiday destinations of the country, the Byke Hotels and resorts is fast emerging as a serious player in the domestic hospitality sector. The Byke Heritage, Matheran, (Maharashtra); The Byke Old Anchor, near the Cavelossim beach in South Goa; The Byke Hidden Paradise near the Ashwem beach in North Goa; and The INDIA BUSINESS JOURNAL 9

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NEWS ROUND-UP PUBLIC SECTOR PSB chief selection process cancelled The government has scrapped the ongoing selection process for chiefs of public sector banks (PSBs). The move is likely to delay appointments of heads of eight State-run banks. The decision comes after a committee, comprising the expenditure secretary, RBI governor and school education secretary, set up to look into the process, found irregularities in the followed procedure. As a result of the decision, a fresh process will begin to appoint eight chairmen and managing directors and 14 executive directors in PSBs, including Bank of Baroda, Canara Bank, Indian Overseas Bank, Oriental Bank of Commerce, Syndicate Bank and United Bank of India. Air India to get Rs 3,000 cr more Air India will get around Rs 3,000 crore more from the government towards capital infusion in the latter part of the financial year. The ailing national carrier is expected to make operational profits from the next financial year, according to a top official of the Ministry of Civil Aviation. Air India has drawn up a turnaround plan based on a little over Rs 6,000-crore capital infusion by the government. The airline has already received a little over Rs 3,000 crore. Another round of infusion of Rs 3,000 crore by the end of the financial year is expected to put Air India back on the road to profit. an option to pick up a stake of up to 25 per cent in the proposed joint venture company. SCI currently operates four LNG ships through joint venture companies with Japanese partners, among others, in which the Indian PSU holds 26 per cent stake. Both the companies see the proposed joint venture as a business Coalfields, has taken over as the chairman of Western Coalfields. The term of Air India Chairman and Managing Director Rohit Nandan has been extended until August 21, 2015, or until the appointment of the new chief regular incumbent, whichever is earlier. opportunity for them. 2017. This will help the government's disinvestment programme as well as ensure more PSU shares for retail investors. At present, public sector companies are required to maintain 10 per cent minimum public shareholding while listed private sector entities are required to have 25 per cent public shareholding. However, in June, the SEBI decided to have a uniform norm for all companies listed on stock exchanges. SAIL to fire up IISCO furnace by Jan SAIL has set a December deadline for lighting up a blast furnace of its 2.7-mt IISCO Steel Plant in West Bengal. The Rs 17,000-crore plant, which is replacing the 100-year-old steel making facility, is already delayed by three years due to land-related problems. The facility is expected to be commissioned in January 2015. A part of the basic oxygen furnace and the casting unit of the plant in Burnpur are almost ready to commence operation. The raw material-handling systems, coke oven battery, sinter plant, wire rod mill and power plant are also ready. SCI, GAIL in talks to buy LNG ships Shipping Corporation of India (SCI) and GAIL India are currently in discussion to forge a tie-up under which GAIL will acquire nine LNG ships, and SCI will run them, according to a senior SCI executive. The country's largest shipping company will have ICVL wraps up Mozambique deal International Coal Ventures (ICVL) recently wrapped up a deal to acquire global mining giant Rio Tinto's coal assets in Mozambique for $50 million (around Rs 300 crore). The deal involves transfer of the Benga coal mine and two other coal deposits in the Tete province of the East African country. This is the first acquisition of assets by ICVL, established in 2009. The acquisition will bring in long-term value and raw material security for Indian steel-makers, particularly in coking coal. SAIL is the biggest stakeholder in ICVL, which has State-run entities, such as CIL, RINL, NMDC and NTPC, as its stakeholders. APPOINTMENTS Om Prakash, a former director of Nagpur-based Western Coalfields, has taken charge as the new chairman and managing director of Bilaspur-based South Eastern Coalfields. K Nag, a former director of Ranchi-based Central Coalfields, has been named as the chairman and managing director of Northern Coalfields. R R Mishra, a former director of Central Corporation Bank's e-Mandate service Corporation Bank has launched the e-Mandate (digital mandate) service to provide a platform for large volume of repetitive payments, according to a bank's release. The e-Mandate service can be used by utility companies for monthly subscriptions and bill payments, by insurance companies for premium payment by policy-holders, by NBFCs and other finance companies for instalment payments and by education institutions for school fee payment. INDIA BUSINESS JOURNAL TIE-UPS Numaligarh Refinery has signed an agreement with Finland-based Chempolis for building a bio-refinery and producing bio-ethanol. 25%public holding must for PSUs too Listed public sector companies will have to comply with the norm of 25 per cent minimum public shareholding by August 21, 10 NOVEMBER 2014

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CONSUMER DURABLES High Hopes After a dismal last year, consumer durable companies are betting on positive sentiments to drive sales in the ongoing festive season. KUMAR RAHUL C onsumer durable manufacturers expect up to 35 per cent growth in the ongoing festive season. Major companies, such as Sony, LG, Panasonic and Whirlpool, are pulling out all the stops as the sector eyes a rebound from a prolonged slump. Consumer durable companies are offering freebies, like hard disk drive, DVD players, carrying case and accessories, to attract buyers. Discounts, cash-back and extended-warranty schemes are also being employed to boost the festive demand. Companies are also adding new products in their line-up and offering an interesting mix of promotional offers on their flagship products. Sony's push Sony, which expects sales of Rs 5,100 crore during the August-November period, has earmarked Rs 250 crore for its marketing budget to push sales. "Coupled with the boost in the customer sentiment, we are expecting to close the festive season with sales of Rs 5,100 crore with growth of 25 per cent over the corresponding period 12 NOVEMBER 2014 last year," discloses Sunil Nayyar, who heads sales at Sony India. "This festive season, we would be aggressively targeting our customers with a thrilling line-up, adding joy to the celebrations," stresses Mr Nayyar. "We are expecting to close the festive season with sales of Rs 5,100 crore with growth of 25 per cent over the corresponding period last year." SUNIL NAYYAR Sony India He also adds that Sony is introducing promotional offers on Bravia TV and Alpha range of cameras and is also offering assured gifts. Sony will be running special campaigns, including ATL and BTL activities, such as print, outdoor, shopfront and events, in order to push sales. "For the festive season this year, we have a dedicated marketing budget of Rs 250 crore, and we are confident that it will help us in achieving a strong response to our festive promotional offers," notes Mr Nayyar. LG's splash South Korean durables-maker LG, which sees a 35 per cent jump in turnover during the festive sales, is spending 50 per cent more than last year for marketing and branding. "We are witnessing a boost in consumers' confidence on the hope of an economic recovery. Consumer sentiment is picking up, and we are very upbeat," notes LG India Vice-President (Sales) Sanjeev Agarwal. LG is also looking at social media and digital platforms as an important mode for its campaign during the festive period. "Digital medium will be an important platform for festive campaigns. We always try our best to engage consumers through innovative digital campaigns," reveals Sanjay Chitkara, LG India's head of corporate marketing. INDIA BUSINESS JOURNAL

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LG is offering sound bar and DVD player with select high-end televisions and magic-motion remote controller with selected smart TV models. It is launching its first-ever 360-degree brand campaign, highlighting its product portfolio. "The festive season is the most important season for LG. With the objective of maximising customer satisfaction and considering the changing lifestyle and robust economic growth, LG is lining up exciting offers," reveals Mr Agarwal. Panasonic's offers "We believe that the new government has resulted in a higher consumer confidence and stable rupee, which will definitely lead to an upsurge in sales this season," opines Panasonic India Managing Director Manish Sharma. The Japanese consumer durables maker, which expects 25 per cent growth in sales as compared with sales during the same period last year, is spending Rs 85 crore for marketing initiatives and has run special campaign during the festive season on its Viera range of TV, microwaves, refrigerators and washing machines. "Panasonic is making optimum use of all the available mediums to promote the festive offers, and social media is an essential part of it. A significant part of our marketing budget for the festive offer is spent on digital promotion," adds Mr Sharma. Panasonic has unveiled My Celebrations, My Choices campaign during the festival season and is providing special offers. "The campaign has been created keeping in mind the flavour and zest of the Indian festive season. Under this campaign, consumers can avail themselves of special offers on the purchase of Viera range of microwaves, refrigerators and washing machines," adds Mr Sharma. Whirlpool's launches Whirlpool of India Vice-President (Corporate Affairs and Strategy-Asia South) Shantanu Dasgupta is of the opinion that there is optimism in conINDIA BUSINESS JOURNAL "A significant part of our marketing budget for the festive offer is spent on digital promotion." MANISH SHARMA Panasonic India sumer sentiment, but it would not be as good as 2009 and 2010, when industry had posted 30 to 40 per cent growth. "We see a certain sense of optimism in consumer sentiment. The reality, however, is that cost of living has gone up, food inflation is high and interest rates have not come down," he adds. Whirlpool of India expects 20 per cent growth in volumes during the ongoing festive season and would spend Rs 12 crore on media cam- "We see a certain sense of optimism in consumer sentiment." SHANTANU DASGUPTA Whirlpool of India paigns. "We will be launching a television campaign, specially created for the ongoing festive season. We will also support the promotion in print, radio and digital media," reveals Mr Dasgupta, adding that it will target women in the age bracket of 25 to 44. The company is also leveraging the digital platform though its main focus would be on TV and print. "Our new TV campaign will be uploaded on YouTube and Facebook and our promotional details will also be communicated through the social media. However, our main communication medium will be TV and print because of their reach," adds Mr Dasgupta. Whirlpool of India will be introducing a new washing machine and a range of high-end microwave ovens in its Indian product line-up, imported from its European factory. Festive mood After facing one of the worst festive seasons last year, consumer durable companies are bullish on the upcoming festive season and targeting strong, double-digit growth. Industry executives feel that the new government has ushered in a sense of greater stability in consumers. Consumer durable companies are going beyond traditional routes of marketing campaigns by logging on to social media platforms, like Facebook and YouTube, to tap young consumers. Apart from running special campaigns of ATL and BTL activities, such as print, outdoor, shopfront and events, the companies are also targeting the 20 to 40 age bracket through various social media platforms. With extension of Excise Duty sops to consumer durable companies until the end of December, prices of many products have also been largely stable, and companies have not been taking any steep hikes in the recent past. They are now hoping that high footfalls during the festive season translate into tangible revenue. NOVEMBER 2014 13

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FOCUS SHRIVATSA JOSHI T he countdown has begun for one of the biggest agricultural events in Kerala. Kochi, the State's commercial capital, has geared up to host the Global Agro Meet on November 6 and 7. The Oommen Chandy government is giving final touches to ensure that the mega farm show enhances the State's agricultural prospects. The agricultural meet, jointly organised by Kerala State Industrial Development Corporation (KSIDC), the State's Department of Agriculture and the Confederation of Indian Industry (CII), is aimed at taking the farm sector to the next level, aided by technology, and adding value to it by focusing on the food processing sector. The mega show will include conferences and an exhibition on highend farming, state-of-the-art technologies and farming techniques, post-harvest solutions apart from stressing on the immense potential of the State's food processing sector. The mega event will also showcase big opportunities available in the God's Own Country as well as attract the best technologies and practices across the world to Kerala. The event organisers expect participation from delegates of Vietnam, the Philippines, Israel and Sri Lanka, among others. "Value-added agriculture and food processing are the sunrise sectors of Kerala's economy in view of their large potential for economic growth. The Global Agro Meet will combine the advantages of both the sectors and bring all stakeholders on a single platform," notes Kerala's Agriculture and Animal Husbandry Minister K P Mohanan. Blooming farms Kerala is a veritable wonder land, abundant in spices and other cash crops. About 11 of its farm products are registered under the Geographical Indication Registry, endowing the 14 NOVEMBER 2014 A Rich Harvest The Kerala government is triggering an agrarian revolution by scaling up farm productivity and boosting food processing industry. southern State with a rich variety of farm produce. The State's agricultural riches is reflected in the fact that 2.6 million hectares of the State's total area of 3.8 million hectares are under various crops, such as coconut, "Value-added agriculture and food processing are the sunrise sectors of Kerala's economy in view of their large potential.” K P MOHANAN AGRICULTURE MINISTER spices, natural rubber, cashew, cocoa, tea, coffee and fruits like banana, jackfruit and pineapple. No wonder, food accounted for about 55 per cent of Kerala's total exports of about Rs 25,750 crore in 201314. On a monthly average, the State exported more than 5,000 tonnes of fruits and vegetables during the previous financial year. Last year, Kerala's farm sector grew by 6.2 per cent, higher than the national average. During the same period, the State accounted for about 20, 18 and 16 per cent of the country's total food, marine and dairy exports respectively. The State has built a formidable global reputation for its natural rubber, which accounts for a whopping 92 per cent of the country's total rubber production. Some of the world's finest rubber products, including the FIFA World Cup football, for instance, are made from using the latex sourced from the State. Kerala, which in Malayalam - the State language of INDIA BUSINESS JOURNAL

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Agro Advantage Kerala 92 Cardamom 76 ........................................................... Cocoa 70 ........................................................... Coconut 42 ........................................................... Pepper 38 ........................................................... Coffee 25 ........................................................... Rubber ........................................................... Kerala's share of India's total production in % Food accounts for about 55 per cent of Kerala's total exports. government is trying to rectify by recharging the farm sector. In the last three years, the government has introduced a number of measures to turn agriculture into a profitable venture. It is closing in on this target through its twin focus of enhancing farm productivity with high-end technologies and adding value to the sector by promoting food processing industry. High-technology farming has been planned meticulously down to the block level. The State government has partnered with farm-centric organisations, such as the MS Swaminathan Foundation, to push modern, mechanised farming. It is encouraging construction of greenhouses and polyhouses, adoption of high-yield seeds and setting up technology incubation centres across the State. One such technology incubation centre is coming up in Kochi, jointly promoted by KSIDC and ICRISAT. "More than 1,000 high-technology greenhouses have been planned in the State to grow high- Kerala - means the land of coconut trees, contributes a huge 42 per cent of the country's total coconut production. Besides, the Nendran variety of bananas, pepper of Malabar, ginger of Alappuzha and bold cardamom of Thalassery have made Kerala the king of spices around the world. There is more to the State than spices of course. The State produces a number of speciality rice varieties like Navara or medicinal rice, scented varieties of Jeerakasala and Gandhakasala, natural organic rice variety of Pokkali. Green revolution With such a vast variety of agricultural produce, Kerala's economy should have been driven by the farm sector. But unfortunately, agriculture makes up just about 10 per cent of Kerala's Gross State Domestic Product. Low productivity and high cost have led to people shunning agriculture over the past few decades. It is this anomaly that the Chandy INDIA BUSINESS JOURNAL "The Global Agro Meet will showcase the wide agricultural varieties of the State. It is also the beginning of a joint effort between Kerala and the world." OOMMEN CHANDY CHIEF MINISTER value crops, of which 80 per cent have already been completed," reveals Mr Mohanan. Plans are also afoot to support farmers and agro-entrepreneurs by creating a platform for effective transfer of technology, market linkages, product sourcing and the like. Besides, the government has unveiled a host of financial and non-financial incentives, like providing free electricity and procurement of farm produce at fair prices, to scale up agricultural production and productivity. Agri malls are coming up in select cities of Kerala to act as a one-stop shop for everything related to agriculture. The government has also started a special drive for vegetable production with emphasis on organic production. Meanwhile, brisk developments are unfolding in the food processing sector to cash in on Kerala's huge farm potential. The government has appointed Kerala Industrial Infrastructure Development Corporation (KINFRA) as the nodal agency for running the Kerala Food Processing Mission, aimed at boosting farm productivity and enhancing farmers' income by pushing food processing industry. KINFRA has set up three food parks in Kozhikode, Ernakulam and Pathanamthitta, a seafood park in Alappauzha district and a spices park near Idukki. A second spices park is coming up near Wayanad and is expected to open shortly. Bio-parks dedicated to rice and coconut are also coming up in Kerala. Kerala has spiced up the world's cuisine since time immemorial. However, for years it has been stuck at exporting its spices and other farm products but not moving up the value chain. The Chandy government is making an earnest attempt to pull Kerala out of this low-value rut and trigger an agrarian revolution. The upcoming Kochi meet could be the beginning of that green revolution. NOVEMBER 2014 15

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