Monday, January 11, 1999
today's calendar
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B U S I N E S S | Monday, January 11, 1999 |
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Petroleum tax code soon
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‘Divest stake in
Maruti’ Pre-Budget
discussions begin today |
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Petroleum
tax code soon NEW DELHI, Jan 10 — A new petroleum tax code is being proposed for the petroleum sector as part of the new exploration licensing policy (NELP) and it will be distinct from other industries, the Minister of Sate for Petroleum, Mr Santosh Kumar Gangwar, said here today. Under the new policy open acreage bidding system will be followed “with level playing-field conditions for all participants”, Mr Gangwar said while speaking at a special session at an international conference on petroleum — Petrotech 99 — here. The national oil companies will also be required to bid for blocks either individually or in partnership, on the same terms and conditions as the private parties.” The system is being streamlined in order to reduce time between an indication of interest and award of contract”, the minister said. Central Vigilance Commissioner N. Vittal emphasised that indigenous petroleum technologies should be patented and said a separate fund be created for protection of India’s intellectual property rights (IPRs). Addressing the ongoing Petrotech-99 conference here, he said, knowledge management and entrepreneurial motivation would decide the future of the country’s petroleum industry, which is undergoing major structural changes now. “India’s oil and
gas industry should become a learning organisation, as
the global petroleum industry is moving away from
managerial capitalism to intellectual capitalism,”
Vittal said. |
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NEW DELHI, Jan 10 (UNI) — The government should rush in to divest its 50 per cent share in Maruti Udyog Limited as it will get a better price now than sometime later down the road, according to economy observers. Talking to UNI, Prof Suresh Tendulkar of Delhi School of Economics said there should be no further delay in divesting from the car venture, where the government had no business to enter the first place. MUL is unlikely to keep up its profit-earning capacity with several competitors entering the market. Dr Charan Wadhwa at the Centre for Policy Research said that it should “move quickly and adopt radical measures” to achieve the divestment target set in the 1998-99 Budget at Rs 5,000 crore. The economists were reacting to the reported move of the government to sell off its stake in the 50:50 venture with Suzuki Motors Limited to public sector financial institutions like LIC, GIC, UTI and IDBI and get out of the business of making cars. The privatisation of MUL will mark as a departure from the hitherto “confused and confusing signals” on PSU disinvestment, said Dr Gulshan Sachdeva of CPR. On the MUL workers demand
to maintain the status quo in the country’s largest
car manufacturing company, the economists said the
workers were trying to combine the benefits of the
private and public sectors, “Why should they be more
privileged than other PSU workers,” they asked. |
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NEW DELHI, Jan 10 (PTI) — Persisting with its declining trend, the annual rate of inflation fell to 5.34 per cent for the week ended December 26 as pressure on food prices continued to ease. Inflation, based on the wholesale price index (WPI), fell by 0.87 percentage points to 5.34 per cent (provisional) from 6.21 per cent (p) in the previous week. However, it was still
higher compared to 5.02 per cent during the corresponding
week last year. Inflation has fallen by more than 3.5 per
cent since November first week when it touched a
three-year high of 8.85 per cent. |
Pre-Budget discussions begin today NEW DELHI, Jan 10 (PTI) — Finance Minister Yashwant Sinha begins pre-Budget discussions tomorrow with a promise to “demystify” the making of the Budget and put in place second generation reforms, including those on indirect taxes. Sinha, who has already advocated more transparency in Budget-making, will hold meetings with nine groups from Monday to Friday to elicit suggestions for the next year’s budgetary and fiscal policies to improve performance of agriculture, industry and infrastructure. The Finance Minister, for
the first time, will have pre-Budget discussions with
selected editors, financial and economic journalists to
get their opinion about the Budget process and various
proposals. |
Where is
hand-knitted warmth? CHANDIGARH: With winter making itself felt, there is a glut of leading brand names in the premium knitwear segment. Perhaps for want of time and the busy regimen, hand-knitted woollens are now passe. Easy availability of superior yarn and sweeping variety of readymade woollens have people preferring them. Besides, higher purchasing power and greater fashion awareness have accelerated the trend. There’s a whole lot of acro-woollens and woollens to choose from and most of the labels are affordable. There’s “Creative Line” (Rs 500 and above), “Madam” (Rs 595-Rs 995) and the latest entrant, “Mostrela” (Rs 595-Rs 1,195), which make knitwear exclusively for women. Priced between Rs 1,100 and Rs 3,400 is “Canterbury” for men. Although it has a segment for women, most styles are for men. Premium brands like “Monte Carlo” (Rs 600-Rs 3,000) and “Casablanca” (Rs 600-Rs 2,000) and others like “Rajah” (Rs 500-Rs 2,500) and “Regency” make knitwear for both men and women. “Waves” (Rs 395-Rs 795) is primarily for kids. “Pringle”, a very up class and high-priced brand, is made from Scottish yarn. The lowest price figure in this category is Rs 2,000 and goes as high as Rs 10,000 for the cashmere variety, which is incidentally the softest and the costliest yarn. However, if the sales figures are anything to go by, there are not very many takers for cashmere. Mr Vipin Kapoor of Kapsons says, “This yarn is popular where winter is harsh and the temperature dips real low. So there is no point stocking it here. The maintenance of pure, soft yarn is not easy as it has to be dry cleaned every time. So also with fancy yarns (more in vogue) that are not as soft and are blended with acrylic. They lose lustre easily,” says Mr Ramesh Kapur of Trend Setters, which stocks the cashmere variety. Magna and micro wool, high-twist yarns, can be hand-washed, he adds. Lambswool, although inferior to cashmere, is a soft, quality yarn and very popular with all age groups. The prices are determined by the yarn. So a blended yarn, say 50 per cent wool and 50 per cent acrylic, would come cheap. As the percentage of wool goes up, so does its price. The latest to have come in the market is velvet knitted with wool (for both men and women) and is reasonably between Rs 995 and Rs1095. Twin sweaters for women (Rs 895 onwards) and in the sporty look, heavy knit cables and zipper knitwear (Rs 895-Rs 1,300) are selling well. Fashion statements aside,
nothing really beats a hand-knitted sweater and the love
woven therein. |
Kothari group forays into greeting cards NEW DELHI, Jan 10 (PTI) — The Rs 500 crore Kothari group is foraying into greeting cards and gifts to take on established players like Archies and Hallmark with the launch of its subsidiary Rotomac greetings and gifts here tomorrow. Rotomac Greeting Cards and Gifts has already set up its dealer network and will be the official licencee of four European greeting card companies — Paperhouse Group, Carte Blanche, Paperlink Ltd and Jooles — who will provide the creative inputs. “We have already set up our distribution network and hope to achieve sales worth Rs 15 crore in the first year of operations,” Rotomac’s General Manager Sales Rajnish Sharma told PTI. Rotomac will begin operations with only greeting cards and add gifts to its portfolio within six months, Sharma said. Rotomac plans to cash in on the Valentine season to make a dent in the market dominated by a few players right now and will go in for massive publicity. The Rs 350 crore greeting card market, both organised and unorganised, has recently seen the entry of players such as Archies and Hallmark. The organised sector
accounts for 60 per cent of this at about Rs 210 crore.
Archies, with a sales turnover of Rs 45 crore enjoys a 22
per cent market share followed by Hallmark at 8 per cent. |
CHINA’S economy has grown by an amazing 7.8 per cent in the midst of Asia’s economic decline, according to figures released in Beijing. The figure comes conveniently close to the official target of an eight per cent increase in GDP for 1998, and was hailed by the Chinese press as a remarkable achievement. Economic observers do not deny that China has done well and that the economy continues to grow. The sound performance will help China to defend its currency against pressures for devaluation. Beijing has repeated its pledge not to devalue the renminbi in 1999. But there is concern about the quality of the investment poured into the economy in the past few months to pump up the figures. There are also doubts about the accuracy of some statistics. Declarations of intent to reform the state sector have become more cautious in recent months as priorities shift towards keeping the economy afloat. Value-added industrial output, which excludes the cost of raw materials, is said to have grown by 8.8 per cent during the year. The statistical bureau insists that - contrary to experts’ suspicions - goods are not simply piling up outside state-owned factories. The figures for industrial stockpiles show no increase over the whole year - even though they had risen by more than nine per cent halfway through 1998. — The Guardian Hong Kong BEIJING (PTI): The high cost of doing business in Hong Kong is driving multinational away, according to the government’s latest survey of regional representation by foreign firms in the territory. The number of regional companies with headquarters in Hong Kong special administrative region fell from 903 in 1997 to 819 on June 1 last year, a drop of 9.3 per cent. Don’t be choosy BEIJING (PTI): Hong Kong’s top official Tung Chee-Hwa has predicted the region’s economic recovery will not take long but advised jobless workers not to be too fussy. They should take jobs even if wages are less and bide their time until a better opportunity, Tung, Chief Executive of the Hong Kong special administrative region has said. In a radio interview Tung said: “My own experience shows the most important thing is maintaining confidence and keep strengthening yourself.” Don’t blame this and that because destiny is in your hands. If you manage to find a job, don’t be so mean about wages being lower or the job being inferior. Just hold tight to this opportunity and wait for the right time to come,” he said. Car-makers TOKYO (AFP): As new car sales tumble in Japan the economic slump is making some of the country’s top auto-makers attractive merger targets, say analysts. Shares in Japanese car-makers climbed on the Tokyo stock market after sources close to Ford Motor Co. said the US auto giant will buy up Honda Motor Co Ltd as well as Germany’s Bayerische Motoren Werke (BMW) AG. “For US and European car-makers, Japanese rivals are very attractive merger targets because Japanese markers have the world’s top-level technology and production bases in Japan and the rest of Asia, an analyst at Daiwa Research Institute, Masato Ogasawara has said. Rice market DHAKA (IANS): Bangladesh needs to keep a close watch on the rice market in India to ensure better food security for itself, an international research organisation has said. It should continuously monitor India’s food policy, production forecast and market conditions, the study titled “Supply stocks, trade liberations and cross borders trade” and carried out by the International Food Policy Research Institution has said. The study analysed recent
fluctuations in market prices of rice in Bangladesh
taking into account domestic factors as well as
international trade especially with India. |
GTN Textiles I hold 300 shares of GTN Textiles under folio No. GTN 062134 but the company has remitted me dividend for only 200 shares for the year 1996-97 and 1997-98. Dividend for the balance 100 shares has not been sent to me despite repeated requests and complaints to the SEBI. PINKI MANTRO UTI’s-DIUP-93 Till date I have not received the maturity value of my Unit Trust of India DIUP-93 scheme membership No. 404-94-1510051292 (1500 units) inspite of my repeated requests to the UTI’s office at Dehradun, Delhi and UTI’s Registrar’s to the scheme (M/s M.N. Dastur & Co. New Delhi). P.K. CHOPRA Bindal Agro I have not received the dividend for folio-501259 since 1994 from Bindal Agro Chem Ltd., 25, Rajindra Place, New Delhi. This year the company has announced 40 per cent dividend. BASANT KUMAR Pal Peugeot I am holding debentures of Pal Peugeot with Folio No PPD 003896 and have been writing to Registar, Karvy Consultants with copies to Pal Peugeot about the non-receipt of the interest. Now three instalments of interest are due. Karvy Consultants coined reply is that they have forwarded the case to the company but the Pal Peugeot is mum. NARINDER MOHAN SIDBI I deposited Rs 2500 through demand draft issued by SBOP, Mandi Gobindgarh payable at SBOP, Miller Ganj, Ludhiana vide DD bearing No 561103 dated 28.11.92 in the name of SBOP A/c SIDBI Bonds-92. Under application No. 6536066 on 30.11.92. I have not received SIDBI Bond 92 yet despite reminders. MANJIT SINGH DCM I invested Rs 10,000 jointly with my husband in DCM Limited, New Delhi under NCD series “A” in 1997. They were redeemed after expiry of 17 months and 25 days i.e. on 14.8.1998. The original letter of allotment bearing Folio No 201833 duly discharged and signed was sent to the company on 27.07.1998 for redemption payment. But the company is not paying back the amount despite several reminders. GYAN MADAN |
Q. Kindly comment on the prospects of Punjab Wireless Systems in which I hold shares? — Bishan Bagga, Jalandhar Ans: Punjab Wireless Systems (Punwire) is a key player in the Indian telecommunication sector. The company manufactures, sells and services a variety of telecommunication equipment including wireless products, radio trunking systems, microware network equipments, pagers and telephones. The company has also branched off in operating trunking and paging networks in the country after coming together with Motorola and Telia. Punwire has a licence to operate paging services in 12 states and to operate radio trunking services, a leading supplier of telecom equipment to DoT but now it also supplies them to private basic cellular and VSAT operators. It is also leading in the 2-way radios market and has come together with kenwood of Japan in order to offer the latest and complete range of 2-way radios. Never the less. The company is also a strategic supplier of communication equipment to the Indian defence forces. Overall, the prospects of the company appear encouraging. Q: The share price of Carrier Aircon has been falling sharply. Kindly review the prospects of this company and advise me whether to hold or sell its shares? — Sarah Sanches, Shimla Ans: The Indian subsidiary of the US based Carrier Corpn, Carrier Aircon Ltd (CAL) has established itself as a strong contender in the airconditioner industry. After a stormy beginning the company has steadied itself and is now well placed in the industry. CAL is engaged in the manufacture of window and split ACs. It has a capacity base of 30,00 units per year. It has a manufacturing capacity of 55,000 compressors which caters to both captive consumption and small air-conditioner manufacturers. To hedge against the intensifying competition it has been strengthening its market network by increasing its retail outlets and also incepting a showroom. The company is well pitched in the segment and with the backing of a strong parent it is sure to scale higher levels. So, hold on for now. Q: Do you recommend holding on to the shares of Voltas? — Amrinder Singh, Ludhiana Ans: Voltas Ltd., a Tata Group company was once the leader in the window ACs segment. The company has not been able to retain its position since liberalisation and has been steadily losing out on its market share. Voltas has an excellent distribution network with dealers in all major cities. The company had the advantage of being a big player in the consumer products segment. The changing ambience has badly affected the company’s bottomline. To combat this crisis it has decided to restructure its strategies and cut costs. It has decided to reduce expenses, use extensive information technology and improve overall on all parameters. It has also decided to make a foray in the unexploited areas like railway coaches where other players had a niche. Overall, its prospects appear to be looking up and one would do well to hold on to this scrip. Q: Will the prospects of Ranbaxy Laboratories improve or worsen over the next couple of years? — Gurusharan Chadha, Bathinda Ans: With the post GATT era fast approaching, Ranbaxy has employed a strategy in the multinational mould of mergers, acquisitions and alliances. Its future emphasis is on value addition and migrating to more powerful markets. From international marketing of active bulk substances the company intends to graduate to dosage to dosage forms. The emphasis will now be on value-added generics and noval drug delivery systems. The process of internationalisation started with the developing market of Malaysia, Nigeria and Thailand and is now spreading to South Africa, Australia, the US and the UK. It has acquired Ohm labs in the US and Rima Pharma in Ireland to cater to the American and European markets, respectively. The merger with Croslands
heads Ranbaxy’s consolidation programme. It
increased its stake in Vorin Laboratories which
manufactures raw material for Ciprofloxacin and
Norfloxacin. With its efforts abroad on, the results from
these investments will accure only in the long term,
subject to their sustenance. Ranbaxy, which is
consolidating its presence in the Indian market, is
expanding its bulk oral and injectible Cephalosporings,
besides formentation facilities. Combined, these factors
will help it sustain competition in the long run.
Overall, its long term prospects appear to be quite
satisfactory. |
For IA it is an occasion to rejoice because despite bad times, it has beaten its private airlines rivals on various domestic sectors in performance and on board service. In 1994 it was termed as the “least preferred”, it is now the ‘most preferred’. This is not all. Its market share has also been improving. Capitalising on the good work done by his colleague, Mr P.C. Sen, the new Chairman and Managing Director Anil Baijal, is said to be all set to further increase airline’s market share. Mr Baijal’s theme song has been to provide personalised services to passengers on board the aircraft so that they continue to choose IA. His thrust is said to be that “our cabin crew is as good as of Singapore Airlines, and therefore hostesses should display more courtesies to passengers than has been the case at present.” There has been a lot of improvement of late, but sky should be our aim, Mr Baijal is reported to have said. This is, however, easier than done what is important is that the airline should provide better working conditions to the hostesses so that they are able to rise to the occasion. After dismantling joint board, Mr Ananth Kumar’s emphasis has been to improve synergy between the two national carriers. He has gone on record saying that there should be more coordination between the two carriers in respect of schedules, operations, commercial, marketing and planning programmes. Tata-SIA project Mr Ananth Kumar is reported to have said that ‘Air India will have a strategic foreign partner who will participate in its management’. The minister further said: Disinvestment means nothing without the transfer of management. Partnership should not only be in financial field but also in the company’s management”. This is a very disturbing statement. The shelved Tata-SIA project will soon become “alive”. Ratan Tata will have eventually the last laugh. This is the impression one gets from the fact that the authorities are trying to remove the bottlenecks that had stopped the take-off of the international airports project at Devanahalli (Bangalore). The Civil Aviation Minister Ananth Kumar will soon have discussion with Ratan Tata at the behest of the Prime Minister Atal Behari Vajpayee. In a recent statement the Prime Minister said there would be a direct flight from Lucknow to Sharjah and back from February 1. How can it be possible until the airport at Lucknow has been upgraded and customs facilities established? Dr Sen gets pass Air India has presented a
complimentary first class pass for life to Dr Amartya K.
Sen. The Prime Minister presented the pass. “I will
now undertake more trips to my country to help my
countrymen”, Dr Sen said while accepting Air
India’s gesture. |
Planners
behind steel units’ plight THE steel industry all over the globe is “under siege”. The USA is the latest to enter. According to the American Iron and Steel Institute, third quarter 1998 imports annualised were 57 per cent higher than in 1997 and 87 per cent higher than in 1984, the peak year in that decade. Price pressure and reduced orders has knocked down steel industry’s profit from $ 30 per mt to about $ 18 per mt which is likely to go down to $ 10 this year. Many companies have gone burst. The Clinton Administration which has been preaching the merits of lower tariffs is even thinking of banning imports for a year. Currency debacle of East Asian countries is one of the main reason of this sorry state. Exports are cheaper from these and other countries. Currency chop in some countries is: CIS (64.33 per cent, South Korea (59.04 per cent) Taiwan (24.80 per cent) India (18.05 per cent). Operating costs of steel has dropped like this; CIS (27.23 per cent), South Korea (31.84 per cent) Taiwan (16.22 per cent); India (9.28 per cent); the USA (5.30 per cent); Japan (14.74 per cent) and Germany (14.08 per cent). Back home our financial institutions and banks have locked over Rs 30,000 crore in the private steel sector. SAIL has a borrowings of over Rs 20,000 crore and is in debt trap. Its debt equity which was below 3:1 about a couple of years ago came down to 4.8:1 at the end of March 1998. According to the internal study of credit Lyonnais, iron and steel accounts for 8 per cent of total loans. Top 200 corporates in vulnerable sectors, including steel, have a potential to default on Rs 10,800 crore of banks and Rs 27,300 crore of loans of FIs. This amount is 3.7 per cent of the total outstanding bank loans and 15.4 per cent of FIs loan. Our planners are fully responsible for this debacle. The demand estimate went awry by more than 10 per cent. Against the projected demand of 24.7 million tonnes for 1997-98 the apparent consumption was less than 22.7 million tonnes. Accordingly 19 new major steel projects with an investment of over Rs 25,000 crores for 13 million tonne capacity were financed. Who should be held responsible for this huge national loss? The plight of smaller steel producing units is miserable. Parliament panel on steel have said that wide disparity in power tariff is one of the main reasons of this worsening situation. In certain states tariff is Rs 2 a unit while in others it is Rs 4.50 a unit. Some states are even giving incentives for night use of power. Banks are harsh on small units of induction furnaces. The Government of India is giving huge aid to bigger players. TISCO has been promised Rs 600 crore from steel development fund (SDF) at 8 per cent interest. Certain states like Uttar Pradesh and Bihar have encourage power thefts to promote the induction furnace industry. Progressive states like Maharashtra is waiving arrears of sick units. It has waived arrears of over Rs 125 crore and has a provision of Rs 390.0 crore. The Punjab Government seems neither progressive nor worried over this situation. When it can extend the facility of free power to the major power consuming sector there is no reason that arrears of sick units should not be waived. Moreover, the PSEB has been charging heavy tariff from the induction furnace industry and this further justifies such waiver. The CII, has given a very
good suggestion for the revival of sick units. The
purchasers of sick units should be given some concession
to run the unit. |
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MOGA, Jan 10 (PTI) — The Punjab Government has decided to institute an annual “Vishwakarma Award” to be given to an industrialist from the state in recognition of his performance in the industrial sector. Union Minister of State
for Industry Sukhbir Singh Badal has said. He made the
announcement in reply to a memorandum submitted to him by
the Ramgarhia Welfare Society at a reception accorded to
him here yesterday. |
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