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Thursday,
September 6, 2001, Chandigarh, India  
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IMF cuts India’s growth forecast
‘Bathinda refinery a priority project’
Compaq deal to benefit competitors
Compaq — the story of a dream
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NIIT inks pact with Microsoft Philippines ABCL to
offer public issue Overstaffing bane of Nathpa Jhakri
Wipro gets nPower project
Car trips risky
for newborns
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IMF cuts India’s growth forecast Washington, September 5 That forecast, being prepared for publication in the IMF’s World Economic Outlook later this month, has been shaved back from a 2.8 per cent growth rate staff economists had expected just last month. Growth in India is seen lower, at 4.5 per cent and 5.7 per cent for 2001 and 2002, down from an April estimate of 5.6 per cent and 6.1 per cent respectively. The report sees 2002 global growth of 3.6 per cent, down from the 3.9 per cent the lender forecast in April. These lower global forecasts come as the IMF has cut its estimate for growth in the 12-nation euro zone to 1.9 per cent this year and 2.3 per cent next year. In August, IMF economists had expected slightly better growth of 2 per cent this year and 2.5 per cent next, well below the 2.4 per cent and 2.8 per cent the WEO forecast in April. The report leaves forecasts for US growth unchanged at 1.5 per cent for 2001 and 2.5 per cent for 2002. Details of the draft report obtained by Reuters last week revealed Japan is seen in recession this year, with a contraction of 0.2 per cent compared to the April forecast of 0.6 percent growth. Japan’s prospects for 2002 have also been downgraded to growth of 0.5 per cent compared to an earlier prediction of 1.5 per cent. The source said that while the latest global projection was “not that bad,” it remains, “highly uncertain and there are a lot of risks accumulating on the downside.” The latest data, updated by the IMF economists last Friday and distributed to the IMF’s board, showed that within Europe, Germany’s forecast took the largest knock. German economic growth is now expected at 0.9 per cent and 1.9 per cent for 2001 and 2002, respectively. Those figures are below the August estimates of 1.2 per cent and 2.1 per cent for 2001 and 2002, and well below April’s 1.9 per cent and 2.6 per cent forecasts for each year. Growth in Britain is now seen at 2 per cent for 2001 and 2.4 per cent for 2002, down from August’s preliminary forecast of 2.1 per cent and 2.6 per cent and well below April’s 2.6 per cent and 2.8 per cent projections. Italy’s forecast for 2001 remains 2 per cent but 2002 growth is now seen lower at 2.3 per cent, weaker than August’s 2002 forecast of 2.5 per cent. In April, the IMF saw Italian growth of 2.per cent and 2.5 per cent for 2001 and 2002. And while almost the entire world is having their growth forecasts cut, China is swimming against the tide. The IMF has upped its 2001 forecast for that nation to 7.5 per cent from an earlier estimate of 7per cent. The IMF’s forecast for Chinese growth for next remains unchanged at 7.1 per cent.
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‘Bathinda refinery a priority project’ New Delhi, September 5 The projects identified include IOC’s Rs 10,000 crore Paradip Refinery in Orissa, HPCL’s Rs 10,000 crore Bathinda refinery and BPCL’s Rs 6,000 crore Bina refinery in Madhya Pradesh, Petroleum Minister Ram Naik said. “We have identified four projects as priority investment projects. Expenditure on these projects will push economic activity and create demand in the economy,” the Minister said. Besides, IOC’s Rs 14,000 crore Panipat refinery expansion and petrochemicals complex project would also be taken up on priority basis, he said. “On our part we demanded streamlining of project clearance procedures which the Prime Minister has agreed to,” he said. The priority investment projects were approved at a meeting of key economic ministers yesterday chaired by Prime Minister Atal Behari Vajpayee. Initially the grassroot refinery projects would involve manual unskilled labour for jobs like levelling and civil construction which would spurt employment in rural areas and boost economic development, he said. |
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Compaq deal to benefit competitors New Delhi, September 5 “It is unlikely that HP and Compaq will not complete the deal. However, if they do complete it, the companies, their customers and partners are likely to experience at least two years of major uncertainties across all their business activities. This deal is likely not benefit any of them, including most customers,” Gartner said in its assessment of the acquisition. In India, the two organisations face a number of challenges. Compaq already being the number one vendor in the country with respect to volume, the two companies shipped over 200,000 PCs excluding server shipments, equalling over $ 242 million in revenue last year, Gartner said. This combined figure extends the gap between number one and number two in the Indian market place to double. The technology consultancy group said the challenge is to retain this market share against competitors, taking advantage of customer uncertainties and product
discontinuities. The acquisition could result in further job cuts in the country. Overnight the merged entity offered a further 15,000 job losses globally as part of their cost rationalisation. Prior to the merger announcement, up to 17,500 HP and compaq jobs worldwide were slated to go. Gartner said the cost efficiencies in administration, manufacturing and marketing could lead to even further significant cuts in the medium term worldwide for the new entity. In the Asia Pacific region, this could equate to several thousand job losses in total. Globally, the group said the two companies will likely not live up their past achievements by combining their assets. The deal would mean many overlaps in products, technologies, distributors, services, facilities and jobs. The combined HP/Compaq would face the challenge of creating coherent strategies for four server architecture, seven operating systems, four storage architectures and several service businesses. HP announced an agreement to acquire Compaq for stock worth $ 25 billion. HP will own 64 per cent of the merged entity. The claimed annual cost saving of about $ 2.5 billion by 2004 amounts to only about 3 per cent of the combined cost for the two companies. Stating that was an conservative estimate of cost savings, Gartner said the companies had failed to do a good enough job of presenting the benefits of an acquisition of this scale to justify the deal’s risk. Facing unprecedented uncertainties in the market, the two companies’ management teams have made a defensive move, and in doing so, they have added to these uncertainties. Both companies have struggled to resolve the conflict between direct and indirect sales channels. In PCs, they would face the challenge of maintaining two brands, not to mention two businesses. One would have to go. The printer business, which still accounts for a substantial part of HP’s business, would benefit somewhat. In services, both vendors derive most of their revenues from low growth, hardware support offerings. Faster growing services such as consulting, system integration and outsourcing would still elude them without significant investment both internal and via acquisition. |
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Compaq — the story of a dream Houston, September 5 The announcement that the pioneering computer firm would be taken over by rival Hewlett-Packard Co for $25 billion brings an end to one of the great stories of the computer age. It is the tale of good idea brought to reality by daring entrepreneurship, enhanced by innovation and finally felled by failure to meet the challenge of change. Compaq began as an idea by three former Texas Instruments engineers — Mr Rod Canion, Mr Jim Harris and Mr Bill Murto — to build a portable version of the IBM personal computer. In 1982, they met venture capitalist, Mr Ben Rosen, at the House of Pies restaurant in Houston where they sketched their idea on a paper placemat. Mr Rosen agreed to take a chance and Compaq was born, with Mr Canion as Chief Executive and Mr Rosen as Chairman. Its first product was a suitcase-size portable computer that became an instant favourite among business types. In 1983, Compaq went public and quickly became the youngest publicly owned company to reach the Fortune 500 and $1 billion in revenues. Its shares soared in value, making it a darling on Wall Street. But Mr Canion was ousted in 1991 when he was slow to recognise that computers had gone from being high-priced luxury items to mass-market commodities in an increasingly competitive industry. He was replaced by Mr Eckhard Pfeiffer who cut prices to increase sales volume, which led Compaq to become the world’s number one computer maker. But even as Compaq ascended, the seeds of its destruction were being sown. In Austin, Texas in 1988, Mr Michael Dell went public with Dell Computer Corp, which sold built-to-order computers directly to consumers. The direct sales model provided cost savings and higher margins that Compaq could not match with its more traditional build-and-they-will-come approach and its dependence on profit-cutting middlemen to sell its products. In 1997, Compaq said that it would begin selling directly to consumers, too, but try to keep its middlemen happy by continuing to sell through them. The attempt produced mixed results at best. By April of this year, Compaq said it was selling 43 per cent of its computers directly, up from 20 per cent the year before. But it also had fallen out of first place in worldwide computer sales, losing the title of number one computer maker to Dell. Compaq’s other critical moment came in 1998 when it spent $9.6 billion to buy struggling computer firm, Digital Equipment Co. The merger proved difficult, and its benefit slow to materialise. Mr Michael Dell told reporters a year ago that the deal was “the best thing that ever happened” to his company because it caused the Compaq management to take their eyes off the
ball, which gave Dell a giant market opening. In April 1999, with profits dwindling and Wall Street clamouring for his head, Mr Pfeiffer resigned. Current Compaq Chief Executive, Mr Michael Capellas, was named to replace him nine months later. Eternally upbeat, he predicted to the bitter and that Compaq would not only survive, but prevail in the PC industry. Under his guidance, the company was moving away from dependence on computer sales and in the direction of becoming a “full-service” computer company, not unlike IBM. But after thousands of layoffs this year and with the company’s stock price languishing, an end that had been a long time coming finally arrived with the Hewlett-Packard buyout. At a ceremony in October marking his retirement, Mr Rosen paid what now seems a fitting final tribute to Compaq. “These are great achievements — to create 65,000 jobs, $40 billion in sales and $40 billion in market value, all starting with a sketch and a dream,” he said, choking back tears.
Reuters |
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NIIT inks pact with Microsoft Philippines New Delhi, September 5 “Under the agreement, NIIT would become the premier education and training partner of Microsoft in Philippines,” a company statement said here. The MoU was signed by Mr B. G. Purushotham, Vice-President (education and training), NIIT and Mr Richard Francis, Managing Director of Microsoft Philippines. Commenting on the MoU, Mr Purushotham said: “Through this partnership we will further build on the decade-long association with Microsoft to contribute significantly to the IT skills development in Philippines, as we have in other countries in the Asia Pacific.” Under this MoU, NIIT would introduce IT education and training in Philippines through its latest industry
relevant curriculum and world class infrastructure. NIIT education centres in Philippines would offer training in Microsoft certifications, such as SQL Server, Microsoft Office 2000, Visual Basic and C++, it said, adding that NIIT would also offer a range of Microsoft technologies, including Microsoft certified
professionals (MCP), Microsoft certified solution developer (MCSD) and Microsoft office use specialist.
PTI |
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ABCL
to offer public issue
New Delhi, September 5 Bachchan has disclosed this in a letter to tehelka.com CEO Tarun Tejpal in which he intimated his decision to step down from the Board of Directors of the news portal. “You are perhaps aware that AB Corp is desperately trying to get back on its feet. We are now steadily on our way to recovery. The next step in our scheme is an IPO,” the letter, which was released by Tehelka to press today, said. Bachchan told Tejpal that those managing the public issue has opined that former’s being on the Board of Tehelka was creating conflict of interest, Tehelka also being a media company, and they would obviously want that no such occurrence takes place which would jeopardise the public issue of AB Corp.
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Overstaffing bane of Nathpa Jhakri Shimla, September 5 The project is likely to be completed within two years and thereafter only 900 employees will be required for its operation and maintenance. The strength of staff deployed in the project at present is more than 1,800, including 526 direct recruits and 1,300 employees on secondment from the board. Initially, 2,800 employees, including 1000 daily wagers, were taken by the corporation on ‘as is where is basis’. The strength came down as most of the daily wagers were regularised by the board and repatriated. In fact, the corporation had been already overstaffed as the management had awarded all works on contract to private companies and it did not require such a huge manpower for supervision. There had been virtually no work for the 200-odd heavy-duty drivers,
beldars, masons and carpenters taken from the board. Officers of the corporation point out that the requirement of manpower will come down further as the project enters the completion phase. Since the 500-odd permanent staff of the corporation will have to be retained after the commissioning of the project, there was scope for absorbing only 400 employees of the board. As such 700 employees will have to be sent back to the board. The board employees to be absorbed will also be selected on the basis of requirement. The situation could have been saved had the state government taken an early decision on the 400 MW Rampur project downstream the Nathpa Jhakri project. The government had expressed its desire to assign the project to it but no decision was taken. The surplus staff would have been easily accommodated in the
Rampur, project. The plain-speaking done by Mr Yogendra Prasad, Chairman-cum-Managing Director of the corporation, regarding the huge time and cost overruns and the indication given by him regarding repatriation of surplus staff will put tremendous pressure on the fund-starved state government to assign Rampur project to the corporation. |
Wipro gets nPower project Bangalore, September 5 This came close on the heels of the successful completion of projects with Farmers Insurance, USA, and Enron, India, on CRM initiatives. Wipro, which had been implementing CRM solutions such as Siebel and Clarify during the past two years, was now poised to reach out to the wealth of customer insight among the global 2000 companies. It had more than 100 consultants, who had insight into customer intelligence through their expertise in visioning, implementing and sustaining CRM projects.
UNI HCL
call centres HCL Infosystems Ltd, today announced the launch of its call centre services in the country in association with Stratasoft Inc., a provider of advanced call centre solutions. Speaking at the launch of the-call centres, Mr J.V. Ramamurthy, president of the Office Automation Division said HCL has chosen to work with Stratasoft as it was one of the largest providers of advanced call-centre solutions and had an extensive reach in the US market. HCL sources said they plan to set up 30 call centres with over 3,600 agents in the country in the first year to capture significant share of the industry, which is expected to grow to US $ 3.7 billion by the year 2008 as per Nasscom’s estimates. Initially, the call centres would provide outbound telemarketing or telesurvey campaigns to its customers at a fixed contract rate. The service portfolio of the call centres would be soon expanded to provide voice calls and data services such as e-mail response, web chat etc.
UNI i-Flex shares to split The shareholders of i-Flex Solutions Limited, in their recently concluded Annual General Meeting, have approved the sub-division of the company’s present equity shares of Rs 10 into two shares of Rs 5 each. The company’s present authorised shares capital of Rs 50 crore divided into five crore equity shares of Rs 10 each hence stands changed to 10 crore shares of Rs 5 each. The Board of Directors of the company shall declare a record date on which the subdivision of shares will be effective. The shareholders also approved a dividend for the financial year ended March 31, 2001 that was recommended by the Directors at 25 per cent, which is a dividend of Rs 2.50 per equity share of Rs 10.
Business Media HDFC MF to pay 8 pc HDFC Mutual Fund has declared an annualised tax-free dividend of 8 per cent for its liquid fund under its weekly dividend option. The per unit dividend for HDFC Liquid Fund under reinvestment plan is Rs 0.01534 for the week ended September 3, 2001. The record date for the same was September 3, 2001.
UNI RIL reduces prices Reliance Industries Ltd (RIL) has reduced the prices of fibre intermediates for September but left the polyester and polymers segment, except for Polyvinyl Chloride (PVC), untouched. Last month, the fibre intermediates prices had remained
unchanged as compared to the previous month. However, RIL has reduced the same for Purified Terapthalate Acid and Mono Ethelyene Glycol by Rs 2.90 per kg to Rs 28.50 and Rs 0.50 per kg to Rs 30.50 for September, company sources said here today.
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Car trips risky
for newborns Chicago, September 5 The potential breathing problems arise because infants have immature development of reflexes that keep the head upright and their breathing normal. Doctors at Children's Hospital-St. Paul and the University of Minnesota School of Medicine said they issued the precautions after looking at 50 full-term and 50 premature infants. "Data in this study show that term and pre-term infants are equally susceptible to declining baseline oxygen saturation values in car seats," said the study, published in the September issue of "Pediatrics," the journal of the American Academy of Pediatrics.
Reuters
GM to buy 2 Daewoo plants Seoul GM and Daewoo’s main creditor, state-run Korea Development Bank (KDB), declined to comment on the report. “Due to the ongoing status of talks with the Korean side, it would be inappropriate to comment on specific issues,’’ GM spokesman Rob Leggat said.
Reuters
Floriculture parks for HP Solan Mr Bragta, who was speaking at a flowers day function jointly organised by Parmar University of Horticulture, the state Department of Horticulture and the PHDCCI at Mahog, said these parks would serve as live demonstration centres.
OC
PTI ties up with business2media New
Delhi The tie-up, which brings PTI’s India-wide news distribution network with business2media’s Internet-based distribution, will enable any company to communicate news instantly to journalists via the combined network, a business2media.Com news release said here today.
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