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Rising oil prices revive hope for ethanol-mixing project
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Corporate
results
6.5 pc growth projected
Foreign banks can pick stake in private ones
Bank account
Minister rues lopsided bank loan regime
Graphic: Freight traffic
on railways during April-September 2004
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Rising oil prices revive hope for
New Delhi, October 29 Despite the announcement of the previous government to make it mandatory for the oil marketing companies to mix 10 per cent ethanol in petrol in a phased manner, the project has so far failed to pick up due to the high ethanol prices and limited supply. The project was virtually put off last year, as the oil marketing companies were not enthused to buy ethanol from sugar mills at a higher price than the international crude oil prices. But now with the rise in the international crude oil prices, they are considering it more economical to push the ethanol-mixing project. Sources in the industry said the Agriculture Ministry had also pressed upon the government to push the project to provide a relief to the sugar industry that is just coming out of a critical phase after over three years. At present, the oil companies are supplying 5 per cent ethanol mixed petrol in some states, including Punjab, Haryana and Chandigarh. In Brazil, a major user of ethanol as an alternative fuel, the sale of flex-fuel vehicles has gone up after rise in oil prices. Brazil blends its gasoline with 25 per cent ethanol but also sells pure ethanol, known locally as alcohol, at gas stations. In the international market as well, say industry experts, the ethanol prices are cheaper by up to 40 per cent in comparison to petrol. Launched in Brazil in March 2003, flex-fuel cars had already grabbed 30 percent of new car sales by September and are expected to take half the market next year. Most major car manufacturers in Brazil already produce, or are planning to introduce, flex-fuel cars of various designs, with at least one analyst predicting that in three years flex-fuel cars would make up 100 per cent of new car sales. Sources in the Petroleum Ministry said, “Though the government is in favour of pushing the mixing of ethanol to cut down the oil import bill, it is worried whether the sugarcane industry lobby would keep a tap on the ethanol prices.” Since the sugar industry is supplying molasses, basic raw material of ethanol to the wine manufacturing industry, the oil companies are worried how they could meet the ethanol demand in the long term. With the fall in sugar production this year, they said, the sugar mills may not be able to meet the required supply at the reasonable price. On the other hand, the farmers’ representatives, including the Bharti Kisan Union, have pressed upon the government to push the ethanol-mixing project, as it would also raise the income level in the rural sector. They argued that even a marginal rise in ethanol prices would encourage millers to produce more of the fuel and less sugar. The R&D experts of the Oil companies are also of the view that government should take a firm stand to promote the use of ethanol that is a relatively clean fuel in comparison to diesel and petrol. They lamented the unlike in the Brazil and some other countries, the auto manufacturers have so far failed to come up with flex-fuel versions that could use alternative fuels.
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Oil prices set to increase tomorrow
New Delhi, October 29 The Left today said it was not averse to a hike in petrol and diesel prices which have been necessitated due to the surge in crude oil prices, but suggested the government should try to cushion the impact on the common man. “We understand the government is under a tremendous pressure. Now, with crude prices touching nearly $55 a barrel, the government has a valid case to hike the prices,” CPM leader Sitaram Yechury told reporters. He said the government should take the brunt of the burden and not let it fall on the people as it has done so far by reducing duties.
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Indian steel tycoon is UK’s richest man
He
was named after the Hindu deity of fortune and prosperity and born in a desert village, which had no electricity. As a young man he worked 18-hour days in Kolkata to keep the family business ticking over while completing his studies.
Even as he began his ascent through the ranks of global industrialists, Lakshmi Mittal will have had the words of his father, Mohan, ringing in his ears: “The day you go high profile is the day you begin to fall.” For the impoverished accountancy student who became a steel magnate of vast wealth, life has been dominated by an unbending work ethic. But it has also been marked by a desire to draw minimal attention if not to his status (he owns one of London’s most expensive houses, complete with a jewel-encrusted swimming pool), then at least to the size of his bank balance. Recently all has changed. An announcement to the Dutch stock exchange of a $17.8 bn (£10.5 billion) merger between Mittal’s steel conglomerate, Ispat, and its rival, International steel Group, made the Indian-born entrepreneur Britain’s richest man. The deal reveals for the first time the true scale of Mr Mittal’s personal wealth, long hidden in the inner workings of a private company,
LNM, used to hold his family’s investments. The man who was last year ranked fifth in the Sunday Times Rich List with an estimated fortune of £3.5 bn, is now known to be worth £12 bn placing him ahead of the Russian oligarch Roman Abramovich (£ 7.5 bn) and the Duke of Westminster (£ 4.9bn). The figure confirms once and for all the shrewd efficiency with which Mr Mittal has accumulated his vast fortune. In so doing, he has found favour and occasionally controversy among British institutions ranging from the Labour Party to the Royal Family. Underneath the business-babbles lies the guiding principle of an entrepreneur who both thinks and operates on a worldwide scale. He is as much at home in Kazakhstan, the maverick former Soviet Republic where he controls not only the steel works but also the trams, as he is in 18/19 Kensington Palace Gardens, the 15-bedroom mansion with underground parking for 20 cars which he bought last year for £57m from the Formula 1 magnate, Bernie Ecclestone. His industrial empire stretches from Indonesia to Poland, via Mexico, the United States, South Africa and Trinidad. But while he has used the peaks and troughs of international trade to maximise profits, this global activity has also caused him grief. Indeed, it was his “citizen of the world” status, which first brought Mr Mittal to public notoriety in spectacular fashion in 2001 when Tony Blair sent a letter to the Romanian government backing his purchase of the country’s ailing state-owned steel company,
Sidex. In the letter, the Prime Minister made an effusive case of LNM, describing it as a “British company.” It was only after the deal was done that it emerged that LNM was ultimately registered in an obscure tax haven in the Dutch Antilles, and thus paid minimal taxes to the British Exchequer. It had only 100 UK-based staff out of a global workforce of 80,000. Despite his British residency, the billionaire himself travels on an Indian passport. He was born in the remote village of Safalpur in the desert state of Rajasthan. The community had no electricity and the family moved to Kolkata in the early 1960s to seek a share of India’s emerging economy. Mohan Mittal took over a small steel factory while his son studied business and accountancy at St Xavier’s College, from 6.30 a.m. to 9.30 a.m. before returning to working a full day in the family business. Along with his father, he founded Ispat — the Sanskrit word for steel — in 1976 and soon branched out to Indonesia, turning around an ailing 65,000-ton mill. His modus operandi has been the same ever since buying ageing, money-losing plants and putting in new technology and target-driven managers. A year after he took over a plant in Trinidad which was losing £ 6 lakh a day, it was making a profit.
— By arrangement with The Independent, London
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Sail profit soars, Tatas gain
New Delhi, October 29 “Our board will consider giving interim dividend soon... Our first quarter was good, second is even better... we may consider dividend at an appropriate time,” Mr V S Jain, Sail Chairman told reporters here. The consolidated profits during the first six months (April-September) this year stood at Rs 2,624.74 crore over Rs 759.85 crore in the same period last year. The highlight of first half is that it has beaten the whole of last year’s profit of Rs 2512.08 crore. “We are comfortable today but certainly not complacent about the company’s future. We have planned a massive expansion plan envisaging an investment of over Rs 25,000 crore,” Mr Jain said adding most of the investments would be funded from the internal accruals. With the steady improvement of performance, Sail reduced its debt by around Rs 1,783 crore during the first six months to bring it down to Rs 6,906 crore as on September 30 compared to Rs 8,609 crore at the end of March this year. Tata Motors
Tata Motors Ltd today reported a 49.6 per cent rise in net profit for the second quarter ended September 30, 2004 at Rs 309.21 crore as against Rs 206.68 crore in the same period of the earlier fiscal. Total revenues during the reporting quarter rose to Rs 4,147.05 crore as compared to Rs 3,177.73 crore in the corresponding period of 2003-04, the company said in a release here today. A provision of Rs 118 crore has been made towards deferred tax, it said. For the six months ending September 30, the net profit stood at Rs 532.57 crore as against Rs 306.99 crore in the same period last fiscal while revenues improved to Rs 7,721.13 crore as compared to Rs 5,680.17 crore in first half of Fy’04.
Tata Steel
Tata Iron & Steel Ltd has posted a 130.61 per cent rise in its second quarter profit at Rs 929.59 crore as against Rs 403.1 crore in July-September 2003. The total income, net of excise, for the reporting quarter rose to Rs 3,795.36 crore from Rs 2,669.34 crore in the second quarter of 2003-04, the Tata group company informed the Bombay Stock Exchange today.
Crompton Greaves
Crompton Greaves Ltd today reported a 9.8 per cent rise in net profit for the second quarter ended September 30, 2004 at Rs 24.9 crore as against Rs 22.7 crore in the same period of earlier fiscal. Total income during the reporting quarter rose to Rs 456.6 crore as compared to Rs 416 crore in the corresponding period of earlier fiscal, the company informed the Bombay Stock Exchange (BSE). The Board of Directors have granted in principle approval to suspend operations of its large machines divisions located at
Kanjur, Mumbai and consolidate operations for manufacture of HT Motors of the company’s manufacturing facilities at
Mandideep. — TNS, Agencies
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6.5 pc growth projected
New Delhi, October 29 “In the current year, the economy is expected to grow 6 to 6.5 per cent in 2004-05. It will take the growth in first three years of the plan a little over 6 per cent. For the next two years we are aiming at 7 to 8 per cent growth which is
achievable”, Deputy Chairperson of Planning Commission Montek Singh Ahluwalia said at the annual conference of Confederation of Indian Industry
(CII) here. Even as he said that the Tenth Plan (2002-07) target of 8 per cent is unlikely to met during the plan period, the economy would be in a better position for high growth trajector during the beginning of the 11th plan period. There has been a decline in both private and public investment in agriculture during the last six to seven years and “there was a need for policy changes and more investment in the sector”, the Planning Commission Deputy Chairperson said.
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Foreign banks can pick stake in private ones
Mumbai, October 29 On a visit to Mumbai, the Finance Minister said the government would not relinquish its stake in public-sector banks though they would be allowed to raise money from the markets. The minister was inaugurating the new corporate office of Dena Bank at the Bandra-Kurla complex in Mumbai. Chidambaram said he hoped Indian banks would be on a par with international banks by 2010. The minister said he envisaged Indian banks growing through mergers and acquisitions though the government would not force banks to merge. He also urged the public sector banks to look at private banks if they are suitable candidates. The minister further added that the government was watching the price situation and fiscal and monetary steps were already in place to control inflation. The inflation is around 7.1 per cent and there is no irrational price hike in commodities, Chidambaram told newspersons here.
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OBC posts 32 per cent growth in profit
Mumbai, October 29 Announcing the results, the company said its total income has decreased 10.58 per cent to Rs 918.61 crore in the quarter-ended September 30, 2004 as compared to Rs 1,027.3 crore in the same period last year. IDBI Bank
IDBI Bank Ltd today reported a higher net profit of Rs 37.6 crore for the second quarter ended September 30, 2004, as against Rs 36.19 crore in the same period of earlier fiscal. Total income during the reporting quarter rose to Rs 287.1 crore as compared to Rs 240.16 crore in the same period of earlier fiscal, the company informed the Stock Exchange (BSE).
BoI
Bank of India (BoI) today reported 78.14 per cent drop in net profit for the second quarter ended September 30, 2004 at Rs 49.54 crore as against Rs 226.7 crore in the same period of the previous fiscal. Total income decreased to Rs 1,781.74 crore during the reporting quarter as compared to Rs 1,894.93 crore in the corresponding period of earlier fiscal, the bank informed the Bombay Stock Exchange (BSE) here.
PNB
Punjab National Bank today reported 38 per cent growth in net profit to Rs 412.55 crore in the second quarter of this fiscal. Total income of the bank grew marginally to Rs 2,698.88 crore during July-September this year, PNB said in communiqué to the Bombay Stock Exchange. The net profit and income stood at Rs 299.76 crore and Rs 2,691.88 crore in the second quarter of 2003-04.
— TNS, Agencies
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Minister rues lopsided bank loan regime
Chandigarh, October 29 Addressing the participants of the Management Development Programme for senior bank executives, organised by the Centre for Research in Rural and Industrial Development (Crrid), he said the banks are not increasing their share as they have yet to develop entrepreneurship. Similarly in the field of industry, banks are expected to contribute more towards venture capital loan, Mr Singla said. Executives from the Punjab National Bank, Central Bank of India, Syndicate Bank and Canara Bank attended the programme and raised several issues regarding the recovery of loans from farmers and also suggested enactment of legislation to deal with the situation.
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