Monday, May 3, 1999
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B U S I N E S S | Monday, May 3, 1999 |
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Stop registration of
cars, Delhi Govt tells Maruti
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Punjab project for
Mozambique
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PSU divestment likely to
suffer KEC profit up 26 per cent
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Stop registration of cars, Delhi Govt tells Maruti NEW DELHI, May 2 (PTI) — The Delhi Government has withdrawn the exclusive facility granted to Maruti dealers to register new vehicles with immediate effect following the Supreme Court’s order banning all non-commercial vehicles not complying with Euro-II emission norms in the national capital region (NCR). In a letter sent to MUL, the Transport Department of the Delhi Government has asked it to stop the registration process immediately, official sources told PTI. MUL is surprised by the State Government’s move as according to the Supreme Court’s directive, a cap of registering only 1,500 private non-commercial vehicles per month conforming to Euro-I norms will come into effect only from June 1 this year. The authority of registering new Maruti vehicles was given by the State Government to Maruti dealers keeping in view the large sales volume of the company — MUL sells over 7,000 vehicles every month in the Delhi region. MUL is planning to file a petition in the Supreme Court next week pleading for re-scheduling of the time-table and seeking more time for conforming to Euro-I emission norms. Maruti will seek more time to meet the stringent emission norms on the ground that actual production of the multi-point fuel injection system would require more time. MUL has tied up with Denso of Japan to produce the MPFI system which is an essential part of the engine to reduce emission of hazardous molecules. Most of the car manufacturers such as Hyundai, Daewoo, General Motors and Honda Siel use this system in their engines and are already meeting Euro-I emission norms. Immediately, Maruti has no other option than importing the kits but placing bulk orders and getting the delivery would entail at least six months time, company sources said. Import of these kits
will be a costly affair for the company as it will
involve an additional investment of about Rs 20,000 per
vehicle. |
Punjab
project for Mozambique NEW DELHI, May 2 — A state-of-the-art commercial farming project is likely to be set up in Mozambique by the Punjab Government. A Memorandum of Understanding (MoU) in this regard is expected to be signed between India and Mozambique in a few months, the Indian High Commissioner to Mozambique, Dr Jaspal Singh told the TNS. The project involves identifying commercially viable crops for farmers of Mozambique. The cost of investment would be borne entirely by the Punjab Government while about 3,000 to 4,000 hectares would be provided free of cost by Mozambique authorities for the purpose. “The Punjab Government has a list of private investors who are interested in investing in agriculture and has the requisite expertise in handling projects of such nature. The government will select a few from this list of potential investors”, he said. The Government of Mozambique will provide the necessary facilities for exporting the produce to neighbour countries like South Africa, Zambia, Zimbabwe etc. The Punjab Government will have the discretion in selecting the crops. “I have suggested rajma, citrus, sugarcane, rice and maize as potential crops”, he further said. Dr Jaspal Singh, who has held the current assignment since little over a year now, said another agreement between the two countries was also likely to be signed in agricultural research and cooperation. “This agreement was likely to be signed in August when the President of Mozambique is scheduled to visit India”, he said. The two countries had recently signed a Joint Commission agreement with focus on economic, scientific, cultural and technical matters. The Indian community in Mozambique numbers around 20,000. A majority of the persons of Indian origin are engaged in wholesale and retail trade and originally hail form Gujarat, Goa, Daman and Diu. They along with other Asian communities control around 40 per cent of the Mozambican retail trade. “Another potential
area for Indian businessmen is the wood business. I am
promoting people to come to this sector”, he said.
There is also a big scope for cycle business and TVS
Suzuki would be opening a showroom there shortly. |
Cutting diesel sulphur to cost Rs 15,000 crore NEW DELHI, May 2 (PTI) — Reducing sulphur content in diesel, the chief cause of carcinogenic suspended particulate matter (SPM) in vehicular exhaust, from the existing 0.25 per cent to 0.05 per cent will cost the government a whopping Rs 15,000 crore, the government has informed the Supreme Court. Additional Solicitor General Kirit N Raval appearing for the Central Government said 0.25 per cent sulphur content diesel was being supplied to Delhi, three other metros and the Taj Trapezium area while for the rest of the country diesel with 0.5 per cent sulphur content was supplied. Before the court passed the order banning registration of vehicles without Euro-II emission norms in the National Capital Region from April 1, 2000, Raval pointed out that the government had spent Rs 6,000 crore on modification of refineries to bring down sulphur content from 1 per cent to 0.5 and 0.25 per cent. The bench observed that if the government spent the money, it would not only be able to provide better quality diesel to reduce pollution but also the price of diesel might increase to reduce the temptation of consumers to go for diesel driven cars as the existing price of diesel is less than half of petrol. It said apart from this,
the industry should explore possibility of improving the
combustion in engine to match the euro-II emission norms. |
PSU
divestment likely to suffer NEW DELHI, May 2 — The Central Government’s plans to privatise a majority of the public sector units has suffered a jolt in by the calling of a snap poll. Political uncertainty has sent the stock markets in a tailspin and the first casualty of this factor would be the Government’s plans to garner Rs 10,000 crore by selling equity in major PSUs this fiscal. According to stock market analysts, the Government would be losing six precious months of the current financial year to political uncertainty and this would make the task of achieving the Rs 10,000 crore more than difficult. Also, the stock markets would await for the outcome of the poll as any future strategy regarding the PSUs would have to be decided by the next Government. The “caretaker” Government’s tall talk of “it is business as usual” notwithstanding, the analysts say ground realities would not permit sale of such amount of equities in the market. The staunch opposition of the Left to the strategic sale of PSU equities and the reservation of the Congress on the subject would also contribute to the markets’ hesitation in picking up PSU shares. The BJP-led coalition had last year exceeded the targeted sale of Rs 5,000 crore worth of equities in PSUs by permitting major oil companies like the Indian Oil Corporation and ONGC to have strategic cross-holdings amongst each other. The strategy paid off and the Government managed to raise about Rs 7,000 crore as against the targeted Rs 8,000 crore. The divestment agenda for the current year included sale of equity in undertakings like Air India, Indian Airlines, Maruti Udyog Ltd and CMC Ltd. In addition, the strategic sale of equity in Engineers India Ltd and Indian Petrochemicals Corporation Ltd cleared in 1998-99 was expected to be done in the current fiscal. In fact, the Cabinet Committee on Disinvestment had earlier this month decided to step up the pace of divestment this fiscal. Ironically, the committee had cited the delayed start last year as a major factor behind the less than expected performance in 1998-99. This factor would come into play this year too. The Commission had
recommended that where appropriate, PSUs should be
restructured before disinvestment in order to enhance
enterprise and the intrinsic value of shares. |
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MUMBAI, May 2 (PTI) — KEC International Ltd has recorded a net profit of Rs 29.11 crore for the financial year 1998-99, registering a growth of 22 per cent over the previous fiscal. KEC, an RPG group company, reported a 45 per cent increase in turnover at Rs 1,009.8 crore, while the total expenditure amounted to Rs 921.40 crore as against Rs 649.03 crore last year. Exports of $ 200 million accounted for 75 per cent of sales during the year under review, the company said in a statement here today. KEC posted a gross
profit after interest, depreciation and taxation, of Rs
46.85 crore, up by 26 per cent. Profit before taxes
showed a rise of 21 per cent over the previous year at Rs
32.11 crore. |
DCM Fin I purchased 10 No debentures of Rs 1,000 each from DCM Financial Services on 29.11.96 vide regd. Folio No 301376. The said NCDs matured on 31.5.98. The original debenture certificates stand surrendered. I have not received the payment till date, despite repeated requests. Lalita Paplani II I deposited Rs 16,000 with DCM Financial Services Ltd for one year vide FDR No 46373 on 8.11.96 which matured on 8.11.97 Duely discharged FDR was sent well in time. Part payment of Rs 5000 was received during May 1998. Balance payment of Rs 11,000 plus interest has not been received till date, despite repeated reminders. Anupama Janapriya Fin Despite many reminders to Janapriya Finance Indl Investment (India) Ltd, Regd office 113Park Street Calcutta. I have not received the maturity claim for Rs 8,000 which was due since 1989 onwards for certificate No 03/08518 till date. Bijla Sood Altos India I sent 100 Nos. shares (7 certificates) having Nos 234402 to 05 & 155537 to 39 Folio No 004342 for consolidation to Altos India Ltd, B- 312, Okhla Industrial Area-I, New Delhi on 14.4.98. A year has passed, I have not received the certificate after consolidation. Neelam Jain US-64 I have not received Rs 2,000 withheld wrongly by UTI for US-64 certificates 400980011025275 case No. 4000104129894371. Sanjeev Garg |
Any stick is good enough to hit two national carriers, Air India (AI) and Indian Airlines (IA). Whatever scheme — however legitimate — they initiate to increase their sales and also serve the public, they are criticised. Now they have been taken to task for offering concessions to passengers travelling under the leave travel concession (LTC) scheme. What is wrong in providing this facility to woo passengers who get stranded during summer (holiday) months because of grossly inadequate availability of seats in trains? How can there be public interest litigation (PIL) for providing this concession to passengers to travel home or go for educational trips? How are some passengers more important than others, as stated by one national newspaper? Air India flights on domestic sectors — which are limited to a few sectors — are generally during night when Indian Airlines flights are not in operation,. AI is in no way competing with IA. Air India’s operations on domestic routes are negligible while Indian Airlines operates flights on almost all routes within the country. The facility offered by these two carriers is for summer months only when employees working in government and public private undertakings are granted leave to avail LTC. This is in no way an unethical or illegal practice. What is unethical is to offer under-the-table discount. There are carriers which are doing this on both international and domestic sectors. They are the culprits who should be hauled up instead of raising finger at these two national carriers. A Titanic in skies If and when flown in the skies, Airbus Industries’ latest monster— the $10 billion 650-passenger Airbus 3XX—is expected to be “big, bold and beautiful”. It will have many novel features, including a ‘gym’. There will be a shopping complex also on the upper deck of the aircraft.Will there be a night club also? Nobody seems to know this as 600 employees are busy working on a veritable ship. A proposal for the mammoth ‘ski-liner’ was initiated more than a decade ago by two world’s leading manufacturers — Airbus Industrie and Boeing — When the demand for seats in aircraft intensified. The experts were divided on the viability of such a ‘monster’ in skies. After protracted deliberations and surveying of market, Airbus Industrie seems to be going ahead to make the proposal into into a reality. Boeing appears to have reservations, except to enlarge its “Jumbo” from 420 seats to about 500 seats. If the aircraft comes to India, will the Indian airports be able to handle it? Are Indian runways long and strong enough for such a heavy aircraft? Will Indian carriers be able to buy this costly aircraft when they have no money to buy even small aircraft? There are several other questions that arise which can only be answered by technical experts. A detailed and in-depth survey shows that airlines, small and big, have been guilty of indifference to passengers since travelling has become totally impersonal. Gone are the days when staff cared for passengers. Reports reveal that cabin crew and even commanders are now more concerned about carrying left-over articles like whisky, perfume and even toilet articles in their hefty bags than caring for passengers. Shocking Ms Hema Kumar was an affable and friendly public relations officer of Air India in Delhi when Capt Jimmy Martin, ex-Navy officer, was public relations chief of the airline in Mumbai. If Capt Martin was articulate and good judge of men and matters, Ms Kumar, as she was known among journalists in the capital, was friendly and helpful. Ms Hema Kumar’s murder, master-minded by alleged domestic servants, has sent shock waves. Public relations is a part of the media. She is the fourth person to have been murdered in the capital. Previous three murdered persons are Bhatnagar, Irfan and Anil Rattan. An award Air India’s public relations (PR) director Jitendra Bharagave has been conferred the PR Man award of the year by the Public Relations Society of India in Chandigarh recently. The award, sponsored by
a Rajasthan Patrika, was presented to Mr Bhargava by the
Governor of Himachal Pradesh, Ms Rama Devi. Mr Bhargava,
with 25 years experience in PR, has been with Air India
for the past 10 years. |
Q: Is Novartis a good medium to long term investment bet at the current price level ? — Amarinder Bhatti, Ludhiana Ans: Novartis India Ltd (NIL) is a prominent player in the Indian pharmaceuticals industry. The company is the fourth largest player in this segment in Europe and seventh largest player in the world. Novartis is also involved in the agricultural segment. On the financial front, the company’s financial performance has been good. During the year that ended in March 1998, the company posted sales and net-profits of Rs. 663 crore and Rs 37.02 crore respectively. The company is part of the 31.2 billion Swiss Franc giant, the Novartis group, which was formed subsequent to a world wide merger and a complicated business restructuring of the two entities, Sandoz and Hindustan Ciba Geigy. This company has planned a number of OTC launches during this year and later. It is likely that these launches will enhance its business. Lately, it has launched three products in the pharma segment, which has been readily accepted in the market. Thus, the overall prospects of the company seem very encouraging and a long term investment in its shares could be considered. Company has expanded its Ranitidine capacity from 240 tpa to 360 tpa while its Ibuprofen capacity is over 3000 tpa, though the company is not fully utilising it’s Ibuprofen capacity, it plans to increase the production to 2800 tpa in the current year out of which 1500 tpa could be exported, whereby it gets better margin. The outlook for the company may improve as Naproxen is expected to yield an additional turnover of Rs. 10 crore and its technology transfer agreement with Chiotech. UK also augurs well for the future. Q: Please review the advisability of an investment in the shares of Bata India ? — Avtaar Mehta, Chandigarh. Ans: A subsidiary of the Canadian multinational by the same name, Bata India is the largest footwear manufacturer in the country. The company enjoys a dominant market share of 24 per cent in the leather footwear segment and 52 per cent in the non-leather footwear segment along with a strong brand equity in the market. On the financial front, the company’s performance has been slowly but steadily improving. The company has a well established and a wide distribution network all over India with around 1000 retail shops. The parent company of Bata India is planning to hike it’s investment in Indian operations, and the company itself plans to manufacture its own polythene soles to meet its in-house demand. Overall, the company’s prospects seem encouraging, although it would be prudent to note that the company recently faced labour problems. Q: Do you recommend an investment in the shares of Swaraj Engines? — Rajinder Sethi, Ambala Ans: A Punjab Tractors group company, Swaraj Engines is engaged in the manufacture of diesel engines of 15 HP to 80 HP. The total installed capacity of the company’s plant in Ropar is 16,000 units per annum and with growing demand for diesel engines, the company plans to increase its capacity by 42,000 units by the end of the financial year 1998-99. Set up in collaboration with the Punjab Government, Swaraj Engines facilities are dedicated to Punjab Tractors Ltd. (PTL) and Swaraj Mazda — both group companies. All engines are supplied to PTL and job work done on connecting rods is done for Swaraj Mazda. The capacity of Swaraj Engines for manufacturing tractor engines is lower than that of PTL and resultantly, the latter enjoys assured sales. The job work done for Swaraj Mazda is dependent upon the sales growth of LCVs. However, the income from job work is low in proportion to the overall turnover of the company. The company is also creating capacities for some more hi-tech components like crank case, gear casing etc, which are till now being outsourced. While the entire expansion programme is scheduled to be completed by March 99, some additional capacities have been made available during the financial year 1997-98 itself. With the actual capacity expansion having been spread over 3 years, a substantial portion of the funds needed are being met through internal accruals and some borrowings. With the capacity for assembling engines rising to 42,000 in the current fiscal, the sales for 1998-99 are expected to double as demand would continue to outstrip supply. Overall thus, the prospects of this company seem to be bright. Q: Please comment on the prospects of Asea Brown Boveri ? — Sarabjit Singh, Patiala Ans: Asea Brown Boveri (ABB) is a 51 per cent subsidiary of the US $ 35 billion Swedish-Swiss electrical equipment major Asea Brown Boveri. The slowdown in the power sector and also core sectors of the economy like steel, cement, chemicals, etc. affected ABB’s two business segments viz. power generation and industrial & building systems. The third segment in which ABB has interests is transmission and distribution, which at present is its real revenue spinner. The industrial and building systems segment, which provides turnkey solutions and services for various industries, has also been adversely affected on account of the economic slowdown. ABB’s management is however a long-term player and not unduly perturbed by any short-term slide in performance. After commissioning its turbine manufacturing facility at Vadodara last year, ABB will also be commissioning its greefield transformer project at Vadodara, thus providing a fillip to its T&D business segment. Software exports have also been identified as a thrust area, for which a software development centre has been established in Bangalore. Another important feature is the strong support ABB enjoys from its parent company. The Indian market is slated to be one of the most strategic for the ABB group, which has already committed investments of US $ 1 bln in India by AD 2000, making the operations in the country the fifth-largest among the group’s operations worldwide. Overall, the prospects of this company appear to be fairly promising. Q: Comment on the prospects of ITC Agro-tech ? — Naresh Maker, Ludhiana Ans: ITC Agro-tech has undergone a three-year restructuring programme, which has led to its recovery. One of the prime causes of the company’s decline in fortunes in the past was its foray into financial services during the first half of this decade. Owing to heavy erosion in the market value of investments and the stuck-up credit recoveries, the company’s mainstream line of business viz. edible oils, took a beating. This resulted in enhanced interest costs. The company brought down
its long term borrowings to Rs. 5.7 crore at the end of
March 98. The entry of new global partners into the
company has also played a r ole in the recovery,
considering that the company was able to mop up Rs 94
crore through preferential equity issues made at a
premium. During the last financial year, it mopped up
round Rs. 41 crore by offloading its financial services
assets and investments. In fact, over the past few years,
as a result of its marketing drive, the company was able
to establish a good brand name for its
‘Sundrop’ sunflower oil. Overall, the prospects
of the company appear to be quite satisfactory. |
Stalemate over next chief of WTO The World Trade Organisation has reached a stalemate over the choice of a new Director-General, raising the possibility of a damaging leadership vacuum. A meeting on Saturday of the WTO’s decision-making General Council broke down in disarray after supporters of former New Zealand Premier Mike Moore clashed repeatedly with backers of Thai Deputy Prime Minister Supachai Panitchpakdi. “The atmosphere is testy, tense and not terribly pleasant,” said WTO spokesman Keith Rockwell. “It is very clear that we don’t have consensus.” Mr Ali Mchumo, the WTO council Chairman, adjourned the meeting until Monday in the hope of finding a solution by then. — AP Pharma dumping India has moved the World Trade Organisation (WTO) against South Africa for imposing anti-dumping duties on pharmaceutical imports like ampicillin and amoxyillin. As per a WTO report, India asked for consultations with South Africa under the dispute settlement mechanism last month. Both the nations will have to come to an agreement within 60 days of consultations, failing which India can ask for setting up a dispute settlement panel of the WTO. India complained that South Africa had imposed definitive anti-dumping duties on imports of ampicillin and amoxyillin of 250 mg capsules exported by Ranbaxy Laboratories. — PTI Auto policy The USA has decided to lodge a complaint with the World Trade Organisation (WTO) against India for its new auto policy which imposes “unnecessary” barriers on Americans wanting to invest in the auto industry in the country. It will request WTO consultations with India regarding measures affecting the automotive sector that the USA considers are inconsistent with the Geneva-based organisation’s agreement on trade related investment measures (TRIMs). The office of the US Trade Representative on Friday released a report identifying unfair foreign practices under the US trade law “Super 301” executive. — UNI Too much Asian Development Bank (ADB) on Sunday defended itself against accusations that it lent too much too cheaply to nations hit by the regional financial crisis. But Bank President Tadao Chino told a news conference that the ADB would be reconsidering its lending policies, including a review of its non-concessional rates of interest. Speaking at the end of
the bank’s annual meeting of the Board Governors in
Manila, Chino defended the ADB’s role in the crisis,
saying the task was too much for the International
Monetary Fund, the primary agency tasked with responding
to such a situation. — Reuters |
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