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| Tuesday, January 16, 2001, Chandigarh, India   
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Transform or perish,
Jalan tells banks W. Hewlett
— a founder of Silicon Valley PFC
underselling Punjab Nitrates? Markfed
targets 35 pc growth in rice sales Vardhman
plan to hold contests in 100 schools Ranbaxy
net drops |
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Indian
wheat for Korea SINGAPORE, Jan 15 — South Korea is receiving feed wheat shipments from India for the first time in more than three years as trade houses, which have signed deals to supply optional origin shipments, are finding Indian offers competitive.
On the market for love
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Transform or perish, Jalan tells banks NEW DELHI, Jan 15 — The Indian banking system will have to undergo a complete transformation if it is to survive in the emerging global competitive scenario. It is true that banks have made rapid strides in reaching out to every nook and corner of the country, but they are conspicuous by their absence abroad. The task for India in the new millennium is to transform the banking system from being a largely domestic one to a truly international one. This advice was given to prominent bank economists by the Governor of the Reserve Bank of India, Dr Bimal Jalan here today. Setting the tone of the three-day Bank Economists Conference, which would discuss banking in the new millennium, Dr Jalan said, “We have very few branches in other parts of the world and even these are mainly confined to India related business”. Dr Jalan pointed out the sources of comparative advantage for nations were no longer endowments of capital, land and labour, nor the advantages of early start or participation in the industrial revolution. The primary sources of comparative advantage of nations today are “skills” and the ability to adapt and change. It was important for the emerging economies like India to base their growth on leadership in new technology, knowledge-based services, and manpower skills. Banking was a service-oriented business requiring high levels of professional and personal skills and national boundaries were no longer very relevant in mobilisation and allocation of capital. “Under the new circumstances, there is no reason why India should not emerge as a major international banking centre, just as it has emerged as an important location in the field of information technology and software”, he added. The Governor said India should continue to strengthen prudential norms and align them with the international best practices. “Strengthening the financial system is no longer a matter of choice: it is an essential prerequisite for long run financial stability and for efficient conduct of monetary policy”, he added, cautioning that if the banking system did not follow best international practices then nobody would do business with them. Laying stress on correcting mismatches between asset and liability and risk management, the RBI Governor said with the growing complexity of operations in financial markets banks would have to rapidly equip themselves with a variety of knowledge-intensive skills and appropriate technology. Coming to the problem of non-performing assets (NPAs), Dr Jalan said their reduction was the most critical condition for bringing about an improvement in the profitability of banks. In fact, it was a precondition for the stability of the financial system. He said NPAs in the Indian banks had an overhang component arising from infirmities in the existing processes of debt recovery, inadequate legal provisions on foreclosure and bankruptcy and difficulties in the execution of court decrees. At the policy level, he said the problems of NPAs should be addressed by strict enforcement of prudential norms and requirements of transparency and by legislation which would make recovery processes smoother and legal action quicker. Lamenting the slow progress of technological change in the banking system, Dr Jalan said “we have to redouble our efforts to equip our financial system with the state-of-the art technological infrastructure if it is to achieve an international stature.” Stressing on the importance of human resource development, Dr Jalan said the public sector’s hierarchical structure, which gives preference to seniority over performance, was not the best environment for attracting the best talent among the young. Since a radical transformation of the existing personnel structure was not possible the banks had to create an environment in which they would be able to expand business largely through redeployment, extensive training and better incentives. Mr
B. D. Narang, Chairman and Managing Director of Oriental Bank of Commerce, organisers of the conference, said the biggest challenge for the domestic banking institutions in their transformation towards global operational environment was accomplishing greater advances in banking research. He said the banking industry should support the growth process by designing innovative products and services that would promote the development of the service sector. |
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W. Hewlett — a founder of Silicon Valley ONE of the founders of California’s Silicon Valley, William Hewlett, has died aged 87. Bill Hewlett and David Packard started Hewlett-Packard in a garage in Palo Alto, close to Stanford University, in 1939. The order of their names was decided on the toss of a coin. Their success in building one of America’s 50 biggest corporations inspired later generations of entrepreneurs, and in 1989, the garage was made a state historic landmark. HP bought the house and garage for $1.7m last year, and used it in its “Invent” marketing campaign. HP also pioneered “the HP way” of “management by objectives”. The concentration on personal responsibility and flexible working practices became a distinctive feature of Silicon Valley life. When he retired in 1987, Hewlett said: “I guess that’s what I’m most proud of — the fact that we really created a way to work with employees, let them share in the profits and still keep control of it.’’ The profit-sharing schemes and company picnics may, however, have been less important than the close ties HP maintained with Stanford University and their mentor there, Fred Terman. HP set up a co-operative programme that enabled employees to do advanced degrees at Stanford while on full pay, and this helped them recruit bright young graduates. When the university created the Stanford Industrial Park in the early 1950s, on 579 acres (235ha) next to the campus, HP was the second company to move in. The Stanford experiment helped generate the Silicon Valley phenomenon, and HP was just the first corporate giant spawned by the university. When HP’s success made them hugely wealthy, Hewlett and Packard led the way in charitable giving. With his first wife, Hewlett set up the William and Flora Hewlett Foundation in 1966 “to promote the well-being of mankind’’. It now has US dollars 2bn in assets. Hewlett was born in Ann Arbor, Michigan, but grew up in California. He wanted to go to Stanford because it was where his father had taught medicine, before dying when Bill was 12. He often said that if his father had not died he would have studied medicine, and joked that he chose electronics because he liked electric trains. Either way, it was at Stanford that he met Packard, and HP’s first product — a cheap audio oscillator to test sound equipment — was based on research Hewlett had done at Stanford. An early customer was Bud Hawkins, the chief sound engineer from Walt Disney Studios, who was developing sound equipment for Fantasia, Disney’s animated feature. “In the beginning, we did anything to bring in a nickel,” Hewlett recalled in 1987. “We had a bowling-lane foul-line indicator. We had a thing that would make a urinal flush automatically as soon as a guy came in front of it. We had a shock machine to make people lose weight.’’ Later efforts included the first non-invasive foetal heart monitor for use during labour, and an ultrasound cardiac monitor fast enough to produce real-time moving images of a heart beating. Hewlett continued at HP for most of his life, becoming president (1964-77) and chief executive officer (1969-78). He retired in 1987, when he was named director emeritus. David Packard continued as Chairman of the board of directors until 1993, and died in March 1996. Hewlett and Packard not only worked together, they also played together. They took up cattle ranching in 1952. The friends had ranches in California and Idaho. Packard said: “By running the ranches together, as well as the company, Bill and I developed a unique understanding of each other. This harmony has served us well every single day in running HP.” Hewlett is survived by his second wife, Rosemary, five children from his first marriage, and five stepchildren. |
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PFC underselling Punjab Nitrates? CHANDIGARH, Jan 15 — It is yet another case of bureaucratic negligence resulting in loss of potential earnings to the government exchequer. The Punjab Financial Corporation (PFC) recently in an auction of industrial units, had agreed to sell the assets of Punjab Nitrates Limited (PNL) for Rs 100 lakh to a private party, which is much below the assessed value of the unit (Rs 155.98 lakh). Interestingly, in November 1999 the corporation had received an offer where another private party had agreed to pay OTS amount of Rs 271.02 lakh. The PNL was promoted by the Punjab State Industrial Development Corporation (PSIDC) in the joint sector in association with Mr B.K. Gupta and his associates for the manufacture of ammonium nitrate (granules) at Ghollu Majra village near Dera Bassi with a total cost of Rs 204 lakh to be financed by way of equity capital of Rs 54 lakh to be shared equally by the private promoter and the PSIDC and the remaining by way of term loans from the PSIDC (Rs 90 lakh) and the PFC (Rs 60 lakh). The unit which commenced production in 1989 reportedly, ran into trouble in 1993 and owing to default in payment of dues was taken over by the PFC in September 1995. Reportedly, while the conflicts between the private promoter on the one hand and the PSIDC and the PFC on the other hand are still going on the property of the PNL was advertised eight times since then. However, due to the offers being less than the assessed value the same could not materialise into a sale. Recently, after an auction in December 2000, the PFC agreed to sell the assets of the company at a price of Rs 1 crore. However, the corporation had earlier received an offer of more than Rs 2 crore from another private party, namely Goldy Sales Corporation, which was not accepted. It is learnt from sources that the Additional Managing Director of the PSIDC, in a letter to the MD of the FCI expressed discontent over the same, stating that “the corporation should give one last chance to Goldy Sales Corporation to agree to the OTS amount of Rs 271.02 lakh and in case it fails to do so the corporation should re-advertise for a new collaborator as per the policy prevalent in the PSIDC”. In reply to the same, the MD of the PFC had stated that “keeping in view the past experience I am of the considered opinion that we may not get an amount more than Rs 1 crore”. He also mentioned that the offers to the previous auctions had been far less than the assessed value. The MD further wrote,
"At present, luckily, we have a buyer with us and in future if we fail to fetch even Rs 1 crore the loss due to distress sale will attract audit objection”. When contacted, Mr Som Prakash, MD, PFC, said “ The present offer which has been accepted is as per the norms “. Regarding the earlier offer by Goldy Sales Corporation, he said, “Though I do not remember the specific case but an offer without an advertisement cannot be considered”. The MD, PSIDC, when contacted said the PSIDC was not responsible for the auction and acceptance of the offer. |
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Markfed targets 35 pc growth in rice sales CHANDIGARH, Jan 15 — After Delhi and Jaipur, Markfed has introduced “Sohana Supreme Basmati Rice” in the local market. Launching the product here today, Mr D.S. Bains, M.D., said Markfed was doing business of Rs 2,000 crore in rice alone. It was targeting a growth of 35 per cent of Basmati and Sohana Supreme in the local market. Sohana Supreme, which is matured at least for 24 months before shelling, is available in pet jars of 2 and 5 kg as well as refill economy packs of 1 kg and 5 kg. Markfed has achieved 30 per cent growth in sales of “heat & eat” products in the overseas markets and is targeting almost the same growth next year, said Mr Bains. Markfed has also started marketing fresh fruits and vegetables. These are hygienically packed in standard packs and are delivered at the doorstep of the customer. Markfed has signed an MoU for this project with a private company which was getting vegetables cultivated under contract farming, whereby farmers were provided all kinds of technical and input support to ensure quality produce. Markfed aims to increase the area under fruits and vegetables which will subsequently find sales in the overseas markets, for which necessary infrastructure would be created after experience of the local marketing arrangements. This will relieve pressure on the cycle of wheat and paddy.
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Vardhman plan to hold contests in 100 schools CHANDIGARH, Jan 15 — Vardhman, a Ludhiana-based knitting yarn manufacturing company will organise “Aao-Bune” knitting contests in 100 schools all over Punjab to promote the traditional skill of hand-knitting. Giving this information in a statement here today, Mr V. K. Goyal, Chief Executive, Vardhman Spinning and General Mills, said the entries collected will be displayed at an exhibition in Ludhiana. The knitting contests will be managed by Zoom Media Vision, a Chandigarh-based sales promotion and event management company. Mr Naresh Goswami, its Director, said more than 21,000 students from 100 schools in 25 towns of Punjab are expected to participate. The contests will be held in four categories comprising classes 6 to 9 students. The first will be an intra-school contest followed by zonal competitions. The winners will be awarded cash prizes.
“We will also hold an exhibition of the patterns made by the children”, added Ms Sobiya Ahmed of the company.
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NEW DELHI, Jan 15 (UNI) — Ranbaxy Laboratories Ltd today announced a drop in profit after tax by 8.1 per cent as the company pumped in more funds into the research and development expenditure and provided for higher depreciation for the year ended December 31,2000. The 12-month results approved by the company shows that the company’s total expenditure went up by 8 per cent while its net profit declined by 8.1 per cent to Rs 180.90 crore from Rs 196.90 crore for the same period last year. Since Ranbaxy provided for higher depreciation of Rs 50.1 crore against Rs 45.9 crore and paid less for interest charges, the profit before interest and depreciation was higher at Rs 324.1 crore against Rs 294.1 crore. The company which recently entered into oral anti-diabetes segment in the domestic market and filed for its BPH molecule in the overseas markets spent Rs 59.4 crore on R and D for the period under review against Rs 47.7 crore in the same period last year.
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Indian wheat for Korea SINGAPORE, Jan 15 (Reuters) — South Korea is receiving feed wheat shipments from India for the first time in more than three years as trade houses, which have signed deals to supply optional origin shipments, are finding Indian offers competitive. South Korea has already signed contracts to import 200,000 tonnes of optional origin wheat in the past few weeks from grain trade houses at prices ranging between $ 114.30 and $ 116.25 a tonne C&F, mostly for arrival in March and April. “The only country which has the cargoes to supply at these prices now is India,” a Singapore grains trader told Reuters. “It is very obvious that grain trade houses will be supplying Indian wheat for feed to South Korea,” he added. Another Singapore grains trader said, “I don’t see any big shipments of feed wheat to South Korea of any origin other than Indian origin.” Most optional origin deals allow buyer and seller to agree on price and shipment period in advance while leaving the source to be finalised during physical delivery. Trade sources say South Korea last imported wheat for feed from India in 1997, when local firms shipped in less than 200,000 tonnes of the grain.
While India has stepped up wheat exports to cut its bulging grain stocks and make way for the new crop in the granaries, the prices offered by the other two possible suppliers — Australia and China — were not very competitive, traders said. |
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