Monday, April 5, 1999
today's calendar
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B U S I N E S S | Monday, April 5, 1999 |
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spotlight today's calendar |
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Pepsico, Colgate to export
wheat Leela
group in trouble |
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English Garden opens Swaraj
for expansion of Caparo-Maruti jv |
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Pepsico,
Colgate to export wheat ABOHAR, April 4 — Pepsico and Colgate are among 10 multi-national companies who have been allowed to export wheat starting next month. These companies will be purchasing wheat through C and F agents, well placed sources said. The grain markets in the State were expected to receive fresh crop by next week, the Punjab Government had not found time to finalise arrangements for the purchase. The RBI was not prepared to finance Food and Supplies Department as a part of its policy. The State Government was likely to assign procurement to Markfed, Punsup, State Warehousing Corporation and Punjab Agro Industries Corporation. The Government had not thought of making space available in the godowns earlier, the employees who had a lean period in January and February were now overburdened to vacate the godowns by sending wheat to Gujarat and Maharashtra almost on alternate day through special goods trains. The Union Government had the stock reports but never bothered to make arrangements for export of wheat throughout the year. Even now wheat was not needed in South belt only because some space was available there in godowns hectic lifting from Punjab to Gujarat, Maharashtra and other States was taken up. The condition of paddy was
said to be worst. It was virtually rotting in open
plinths in the fields, godowns and on roadsides. Failure
to reach an understanding with ricesheller owners had
delayed milling in such a way that extracting rice from
the raw crop stock may be uphill task. Commission agents
said they had not been given green signal by the State
Government to present the cheques issued against purchase
of paddy even in December 1998 because the Punjab
Government was still having no funds. |
World-watch The booming US economy is running out of new workers to suck into the labour market, prompting fears that the longest post-war expansion on record may be coming to an end. Unemployment fell to a 29-year low of 4.2 per cent of the workforce in March, from 4.4 per cent the previous month, according to new figures released by the Bureau of Labour Statistics. “We are certainly at a fully employed labour situation,” said Richard Yamarone, senior economist at Argus Research. “Everyone who wants a job in America has one by now”. — The Guardian WTO wrangling Envoys to the World Trade Organisation (WTO) have agreed to put off efforts to name a new chief for the body until this week after hearing that both top candidates faced stiff resistance. The two leading contenders to replace Director General Renato Ruggiero, who steps down on May 1 after four years, are Thailand’s Deputy Prime Minister Supachai Panitchpakdi and Michael Moore, a former Prime Minister of New Zealand. Tanzania’s Ambassador Ali Mchumo told the WTO’s ruling General Council that “the difficulties faced by both candidates are so serious that neither of them can enjoy consensus.” Decisions in the WTO are taken by consensus rather than voting among the currently 134 member countries — a method its proponents says helps avoid bitterness and maintains cohesion. — Reuters Sabeer Bhatia Hotmail co-founder Sabeer Bhatia, who sold his company to Microsoft 15 months ago, has quit the world’s largest software company to head a possible Internet startup. The Wall Street Journal has reported that Bhatia (30) had “joined the ranks of those who’ve left the software behemoth to work on Internet startups”. Bhatia was the General Manager of strategic development at Microsoft Network (MSN) and had helped the organisation to make deals with Internet companies in the Silicon Valley. Bhatia told the Journal he left Microsoft because he didn’t believe it was fair to be thinking about his next company while working at Microsoft. Also, he wanted a return to “the rush of being part of a startup”, Bhatia added. — IANS EC forecast The European Commission forecast a slowdown in the economic growth in the 11-nation euro currency zone but predicted that the economy will pick up later in the year. The commission, the executive body of the 15-member European Union (EU), scaled back its 1999 growth forecast for euroland to 2.2 per cent from the 2.6 per cent made six months ago. The commission in its
spring economic forecasts\ released in Brussels has
attributed the fall in the projected growth of the GDP to
the “impact of recession” in Asia, Latin
America and Russia. — PTI |
Leela group
in trouble NEW DELHI, April 4 — Leela Hotel seems to be in trouble again — this time from a company engaged in building materials — for failing to clear the legitimate dues amounting to Rs 21.22 lakh in spite of several reminders issued by the company. According to Mr Vijay Vashishta, Managing Director of Reliance Building Systems Private Limited, Leela Hotels Ltd, instead of clearing the dues, has resorted to “unbusiness-like practice” by reducing the dues from Rs 21.22 lakh to Rs 14.62 lakh. The Hotel has been served legal notice under Section 438 of the Companies Act. According to Mr Vashishta, Reliance Building Systems was awarded a contract by Leela Hotels Ltd for the construction of Wings ‘A’ and ‘B’ at the HUDCO Place, Andrews Ganj, in South Delhi, against which running bills were issued from time to time totalling Rs 36.72 lakh. The work was executed in 1997 and Leela Hotels paid ad hoc payment of Rs 15.50 lakh upto June 1997. When Mr Vashishta demanded the balance money, instead of paying the amount, the Hotel reduced the bill to Rs 14.62 lakh. However, Mr Vashishta alleges, the Hotel has been unable to pay even the reduced amount of Rs 14.62 lakh which “is an accepted liability and acknowledged debt in writing which remains unpaid till date and is an undisputed liability of Leela”. The Leela Group has been allegedly been diverting funds and the company is cash-strapped and has defaulted in repayment of various loans. So much so that the Municipal Corporation of Delhi has attached bank accounts of Leela Hotels with Global Trust Bank, Connaught Place, and HDFC Bank, New Delhi, to recover the corporation tax of Rs 5.66 crore from them due to which building plans for constructing the five-star hotel at HUDCO Place have been stalled. The hotel is facing
various investigations of their parent companies —
Hotel Leela Ventures Ltd and Leela Scottish Lace Ltd. So
much so that there were summons from the Enforcement
Directorate for FERA violations. |
English
Garden opens CHANDIGARH, April 4 — The Rs 50 crore turnover Dhawan group is in the process of commissioning a mega complex, Gourmet Park, in Sector 17 here by July this year. The complex will include Royal Afghan, the frontier cuisine restaurant; Chinese Garden, the Chinese cuisine restaurant, and Mr Burger, a fast food joint. Mehfil Hospitality belonging to the Dhawan group has opened a restaurant pub called English Garden. The pub is designed to
create atmosphere of a typical British garden with wooden
furniture, Victorian lamps and paintings. With a seating
capacity of 150, the pub has a discotheque also. Former
Union Minister Harmohan Dhawan told TNS that the
group’s Engineering Division has been certified for
ISO 9002 by Underwriters Laboratories Inc, USA. |
Swaraj for expansion of Caparo-Maruti jv NEW DELHI, April 4 (PTI) — The Caparo group of Britain has approached automobile leader Maruti Udyog (MUL) for increasing investment by about Rs 40 crore in their joint venture Caparo-Maruti for production of sheet metal components as part of its ongoing expansion programme. “We want to put another line of production at our joint venture to cater to Maruti’s expansion programme and we are discussing it with MUL,” Caparo group Chairman Swaraj Paul told PTI. Paul, a noted NRI based in London, said during his recent visit to India that the expansion at an investment of Rs 30 crore to Rs 40 crore could be executed in six months after the approval by the joint venture partners. When contacted Mr A.R. Halasyam, Finance Director of MUL, which owns 20 per cent equity in the joint venture, said: “We will consider it only after we get a formal proposal.” Caparo owns 60 per cent equity while the remaining 20 per cent is controlled by Machino Plastics of the Jindals. Maruti is expanding its capacity by 1 lakh vehicles annually at its Gurgaon plant to reach a total capacity of 4.5 lakh and has set a target of selling 3.75 lakh vehicles during the current financial year. Caparo Maruti, with its
present investment of Rs 55 crore, caters to 15 per cent
requirement of MUL, while two other joint ventures, Jay
Bharat Maruti Ltd and Mark Auto Ltd supply the remaining
sheet metal components.
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THERE was a time — not long ago — when the Indian Air Force was considered safe in the skies. Judging from recent incidents and mishaps, it is not so now. An age-old fleet of Soviet Union (Russian) version, indifferent maintenance of aircraft and deteriorating standards in the pilot community are some of the reasons for rise in errors and lapses. Regardless of the Budget constrains, the Air Force as also two national carriers, Air India and the Indian Airlines, should not only phase out ‘worn out’ fleet but also maintain standards to the international level. If effective measures are taken in these areas, the chances of human factor to air accidents will also show improvement because ‘men and machine’ will then function more cohesively then has been the case at present. The aviation science, like medical science, is highly complex. Numerous changes keep taking place. It is essential that aviation should be entrusted to men of merit and competence both in the Air Force and civil. Continued laxity can prove suicidal. Administration and commercial areas are important but more important is monitoring and maintenance of fleet. With a view to reducing human errors it is essential that all pilots should be subjected to the extensive use of simulator training. Most of the Air Force and airlines in affluent countries have made it mandatory for pilots to undergo training on “zero hour simulators” or highly sophisticated computerised training which, according to experts, is so realistic that even an experienced pilot is much wiser after this mock-up exercise. The simulator training achieves two important objectives. It improves pilot’s competence and saves crores of rupees otherwise spent on fuel. The simulator training helps a pilot to face abnormal situation, like engine fire, rapid decompression, flight control jamming, that help him in changing weather conditions. While cockpit crew gains technical knowhow, the cabin crew gets intimate knowledge about human psychology. This is vital while dealing with passengers on board the flight, which has run into trouble. An experienced hostess can provide the needed comfort to passengers passing through anxious moments as also helps them in evacuating them in double quick time in emergent situations. Both the Indian Airlines and Air India have simulator training bases at Hyderabad and Mumbai. Air Force has its own base. What is essential is that all commanders, no matter how experienced they are, should undergo ‘mock-up’ exercises. Of late, there have been complaints that our medial check-ups which are mandatory for pilots, are not as rigorous as they ought to be. Pilots, who should be grounded for lack in physical fitness, are allowed to fly. Change of name Soon “Sahar” International airport will become ‘Chhatrapathi’ airport in Mumbai. There is no dispute over ‘Chhatrapathi’s contribution in this country. But no one is there who has contributed more to Indian aviation then JRD Tata. Himself a superb pilot, he provided glamour and dignity to commercial airline industry, particularly Air India. During his tenure, Air India was genuinely ‘Maharaja’. Will heaven fall if Sahar airport renames JRD Tata airport? A huge profit Pakistan’s aviation is newer never than India’s. The Pakistan International Airlines is also newer than carrier’s functioning in this country. Yet PIA has shown a huge profit of Rs 2 billion for the financial year ending December 31, 1998. This profit has been shown despite the competitive environment and expenses made in fleet replacement. PIA operates on domestic
routes as also on international sectors. Why can’t
our two national carriers take a leaf out of the book of
the PIA? Just as Pakistan is superior to India in three
disciplines — squash, cricket and hockey — that
it specialises in playing internationally, PIA has better
image worldwide than Indian carriers. |
Q: Should I sell or remain invested in the shares of Philips India? — Jawahar Pariani, Solan Ans: Philips India Ltd (PIL) has implemented a proposal to shift the Salt Lake factory near Calcutta to Pune, and to offer selective ‘transfers’ to employees of the Salt Lake factory to Pune, where it will be setting up an integrated ‘sound and vision’ factory. The development laboratory in Salt Lake is also being moved to Pune. PIL’s strategy for its Salt Lake unit is in conformity with Philips’ global policy to stake off loss making businesses. Starting January 1, ‘98, therefore, all Philips businesses worldwide may be sold off wherever the bottom line is red. It is in this scheme of things that the global telecom operations of Philips have been sold to Simoco of UK. Multiple production facilities anywhere are being closed down in favour of a single composite unit. Low-tech activities like ‘bundling’ in case of television manufacture are being hived off to third parties all to shore up the bottom line. The entire range of audio and video production may be centered at the Pimpri factory at Pune where PIL will essentially do the hi-tech PCB fabrication job. The video bundling could be shifted to the Japanese Bay in Noida with, big moulding plants situated there, and at least two big picture tube manufacturers nearby. Mohali, off Chandigarh, is another major bundling centre under consideration. Following the fine-tuning of various operational parameters in the last one year, PIL is all to embark upon a rejuvenated marketing exercise aimed at securing a larger share of the domestic CTV market (Current market share 10-11 per cent). The idea behind the exercise is to ensure that revenue from CTV sales during the calendar year 1998 goes up to touch the Rs 350 crore mark from around Rs 250 crore in 1997. Discount packages have been rationalised sales officers have been deployed for better customer interface and demonstration of products, and the choice of dealers is being given importance. Besides, the supply chain structure has been rationalised. The long term prospects of this company are thus quite promising and hence shareholders could remain invested in this company. Q: How do you expect Duncan Industries to fare during the coming years? — Vidyut Pansari, Nalagarh Ans: A part of the Duncan-Goenka group, Duncan Industries Ltd (DIL) has diversified interests in the tea and fertilisers segment. The former constitutes 20 per cent of the company’s sales while the latter contributes 80 per cent. The company operates 12 tea gardens and markets its products under brand names like Gold Cup, Sargam, Double Diamond, Shakti, Pick Up, Rangeeli, etc. The company’s fertiliser plant functions with a capacity of 675 kilo tonnes of urea. Its fertiliser products are sold under the brand name, Chand Chhap. On the financial front however, the company’s results have been uninspiring. The company is hampered by an increasing debt burden which is proving to be a major cause for concern. The fertiliser division of the company has been hit severely on account of excessive imports. It thus appears that the company will witness a testing period in the coming years. Q: Please advise me whether to hold or sell the shares of Cable Corporation of India? — Neelam Sachdev, Shimla Ans: The largest Indian manufacturer of power cables, Cable Corporation of India Ltd (CCIL) was the first Indian cable company to obtain an ISO 9001 certification. The company commands about one-fifth of the organised power cable market. CCIL offers an entire gamut of products comprising PVC cables for low voltage usage, XLPE cable up to 33 KV elastomeric cables and EHV cables upto 230 KV. The company has a technical tie-up with Mitsubishi, Japan for the manufacture of EHV cables. CCIL’s clients includes major companies such as Reliance Industries, Siemens India, Larsen & Toubro, and various State Electricity Boards (SEBs). The performance of the company on the financial front has been satisfactory over the years. The decline in the company’s margins has been attributed to a marked increase in competition and lower demand for cables owing to which the company has resorted to offering discounts, which in turn have resulted in a fall in realisation levels. However, the future plans of the company include the setting up of a new unit, besides implementing the modernisation of its existing facilities. One could thus hold on to its shares for the time being. Q: Kindly evaluate the long term prospects of Escorts Ltd. — Sunny Bindra, Ambala Ans: Escorts third tractor plant is coming up at Pune and will be operational in the third quarter of ‘99 taking the Escort’s manufacturing capacity to 80,000 tractors. Adjacent to the tractor plant at Pune, a new joint venture with Carraro SPA set Italy for the manufacture of axles and transmissions is being set up, which would support the tractor manufacturing programme of Escorts. The company has also launched an upgraded tractor model in the 2240 HP segment and has plans to enter the 60-80 HP segment as well. Escorts believes that entry into this segment would enhance its market share to 24 per cent over the next 4 years. Escorts exported 919 tractors during the financial year 1997-98 and expects to export 3500 tractors during the current year. With the currency depreciating, the company stands register gains. Escorts would complete a total investment of Rs 240 crore in the modernisation and expansion plans of its agri-business, and would also be able to finance its future business expansion without taking recourse to borrowings. The long-term prospects of this company thus seem to be fairly satisfactory. Q: How do you think Mico will fare in the long-term? — Narayanaswamy, Chandigarh Ans: A
member of the global automotive major Bosch group of
Germany Motor Industries Company (Mico) is the
country’s leading auto ancillary manufacturing
company with market dominance in key engine parts of fuel
injection pumps (FIPs), used in diesel engines) and spark
plugs (for petrol engines) with its market share standing
at over 60 per cent and 70 per cent, respectively. Diesel
Injection (DI) equipment, which is its major contributor
to revenue comes in a wide range, catering to engines
ranging from 5-2500 HP. While FIPs find applications in
wide spectrum of automotives, the commercial vehicles
(CVs) sector is the major user of DI equipment. In
recognition of this strength, Mico has become the Bosch
global development centre for a range of multi-cylinder
diesel fuel injection pumps. Mico derives around 60 per
cent sales from the OEM segment and around 40 per cent
from the after sales service market segment. To reduce
the vagaries of the cyclical auto industry. Mico has,
over the years, expanded its product range to include
electric power tools, industrial equipment, packaging
machines, car audio systems, hydraulics, etc., and
leveraging its strong distribution network, it also
distributes Germany’s Aral range of lubricants. The
company has also focused on exports catering to the Bosch
group and Bosch customers. The long term prospects of
this company thus seem satisfactory. |
Morepen Lab I deposited Rs 5000 with Morepen Laboratories Ltd., 22, Kasturba Gandhi Marg, New Delhi in fixed deposit scheme for six months from 1.1.1998 to 1.7.1998. The deposit matured on 1.7.98 but the company made the payment on 15.12.98 after so many requests and reminders. Now I have requested the company several times to give me interest from 1.7.98 to 15.12.98 but till date I have not received that. Satish Kumar Thapar Milk I was allotted 10 Secured Redeemable partly convertible debentures of Rs 200 each (Rs 100 as non-convertible portion) of Thapar Milk Products vide allotment letter No 0051548 dated 23.5.94 with maturity amount of Rs 1600 payable after three years i.e on 23.5.97. I had sent the letter of allotment to the firm on 19.5.97 but I have not received the maturity amount so far. Vimal Arora Amrit Banaspati I deposited Rs 4000 for three years with Amrit Banaspati Company Ltd., G.T Road Ghaziabad on 17.1.96 for which the company issued FDR No 00007 dated 20.1.1996. The FDR matured on 17.1.1999 and sent to the company on 5.1.1999 with the request to send the Draft of the maturity value Rs 6256. The company has not released the amount upto this date, in spite of many reminders. Ram Lubhaya Sharma JCT I deposited Rs 15000 with JCT Limited, New Delhi under FDR No GYA 0028/110571 dated 12/2/98 for one year. The repayment of the deposit had fallen due on 31.01.1999. The FDR in original duly discharged and signed was sent to the company during December 1998. through M/s Click Investment (Pvt) Ltd, New Delhi for repayment. Since then reminders have been sent but no response has been received. Gyan Madan |
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| Inflation falls NEW DELHI, April 4 (PTI) — The annual rate of inflation fell below 5 per cent mark for the first time in five weeks to 4.96 per cent for the week ended march 20. The rate of inflation, based on wholesale price index fell by 0.18 percentage points to 4.96 per cent (provisional) from 5.14 per cent (p) a week ago. The annual rate of inflation had stood at 5.25 per cent a year ago. Punjab Alkalies BHEL unit |
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