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India seeks alliance with Malaysia
IOC nod to share swap ratio
Sara Lee targets elite segment
Infrastructure growth rate slips
Reliance ‘monopoly’ hits garment sector
Textile units upgrade to compete globally
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Hiked charges draw flak from HP units
$ 400-m ADB loan for power sector
PC sales zoom
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India seeks alliance with Malaysia
New Delhi, December 22 After meeting the visiting Malaysian Prime Minister Abdullah Ahmad Badwai, Petroleum Minister Mani Shankar Aiyar told the reporters that he had suggested that Indian and Malaysian companies could bid together in the field of hydrocarbon in third countries. India has also sought partnership with Malaysia in bidding for the Sakhlain-3 oil and gas fields in Russia while seeking to get on board in an oil block in Sudan. Mr Aiyar sought joint operator-ship of oil blocks 5A and 5B in Sudan where ONGC Videsh Ltd and Petronas are partners and wanted the Indian company to be accommodated on Malaysian-company controlled Block 8 in the same country. “There are indications that Block 12 in Sudan may be given to us. If a package of understanding is developed, we would like Petronas to join us in Block 12,” Mr Aiyar said. In Iran, Mr Aiyar offered the Malaysian company to partner with IOC for developing one of the phases of the gigantic South Pars gas field and producing LNG for export from it. IOC has already signed an MoU with Petropars of Iran for the project. He wanted Petronas to partner IOC in building an LNG import facility at Ennore. “Petronas and IOC were jointly exploring putting up a LNG terminal at Kakinada in Andhra Pradesh. But discovery of huge gas reserves off the Andhra coast had made the terminal unviable. Now we want Petronas to come on board in Ennore project,” he added.
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IOC nod to share swap ratio
The Board of Directors of IndianOil Corporation (IOC) today approved share swap ratio for merging its subsidiary IBP Co Ltd with itself, an amalgamation that will help it save about Rs 450 million per annum in overhead expenses.
“Our Board of Directors has approved a swap ratio of 125:100, that is 125 equity shares of IOC would be offered for every 100 equity shares of IBP,” IOC chairman M.S. Ramachandran told reporters here. The merger, which will increase IOC market share to 61 per cent, would now need a formal government approval and the entire process was likely to be completed by March 2005, he said. Government shareholding in IOC will fall by 1.91 per cent to 80.12 per cent as a result of fresh equity shares of IOC being offered to IBP shareholders. IOC will retain the IBP brand post merger. ”IBP is likely to function as a division of IOC. IBP petrol pumps network would continue to be expanded along with our own network,” Mr Ramachandran said. He defended the swap ratio, which was not received well at the stock markets leading to fall in IOC and IBP stocks, saying: “It is a very fair arrangement to my mind. We took into account six months average to decide the ratio. On current prices the swap should have been 111:100 but our ratio has been generous towards IBP shareholders.”
— TNS
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Sara Lee targets elite segment
Chandigarh, December 22 Sara Lee Apparel is one of the largest apparel companies in the world with annual sales of $ 6.8 billion in 2003. Hanes is a global apparel mega brand, which billed annual sales of $ 2.2 billion last year. Talking to The Tribune, Mr Shekhar Tewari, General Manager, Marketing and Sales, Sara Lee Apparel, India, agreed to the fact that they are a late entrant in this already ‘saturated’ market in India but added that they would be targeting the premium category specifically since this segment is growing at the rate of 20 per cent. “In India, it is a Rs 750-crore market and out of this, the elite segment’s share is Rs 120 crore. The growth in this segment is enormous. Nearly 20 per cent or so and this is what we intend to tap,” he says while adding that 18 to 35 age group would be under focus. He says that Sara Lee has grown through acquisitions, mergers and joint ventures and won’t mind a tie-up for the apparel segment in near future. He, however, is quick to point out that there are no tie-up plans as of now. In India, Sara Lee, a Fortune 500 global consumer product firm, has a tie up with Godrej in the household product segment. Sara Lee Corporation’s annual sales in 2003 was $ 18.3 billion. Globally, the company is into branded apparel, food and beverages, and household products. He says that Punjab and Gujarat (read North and West) are lucrative markets for apparels and they are evaluating the market for getting into the informal (casual wear) segment as well. “We are already into kids’ casual wear in India and plan men’s casual wear by next year,” he says. The company plans a promotional strategy through electronic media, specifically sports, news and prime soap-opera channels.
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Infrastructure growth rate slips
New Delhi, December 22 According to data released by the Ministry of Statistics and Programme Implementation, the growth has declined mainly due to the slowdown in growth of petroleum refinery, electricity generation and production of finished steel, though during April-November period, the growth in the core sectors — crude petroleum, petroleum refined products, coal, electricity, cement and finished steel was higher at 5.8 per cent as against 5.4 per cent in the corresponding period in 2003-04. Petroleum refinery products suffered a major setback and its growth dipped to 0.9 per cent in November this fiscal from an impressive performance of 20 per cent in the same month last year. Its growth in the April-November period was 6.3 per cent against 6.9 per cent in the same period last year.
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Reliance ‘monopoly’ hits garment sector
New Delhi, December 22 The increase in prices has hit thousands of industrial units, including in Ludhiana, Jalandhar, Faridabad, Noida and Gurgaon in North India. The industry has blamed that government was indirectly helping Reliance Group in charging exorbitant prices, much higher than the prevailing international market prices, by providing protection of 20 per cent import duty. Some of the units have began to shift towards cotton as raw material, whose prices have fallen by over 20 per cent this year, touching Rs 50 per kg, in comparison to prices prevailing last year. “The raw material, polyester staple fibre (PSF) used in the textile industry for spinning yarns are ruling between the price of Rs 50-Rs 55 per kg world over. However, the polyster staple fibre to the Indian spinning industry is being given for domestic consumption at a price of Rs 80 per kg including central excise duty,” says Mr V.K. Ladia, Chairman, Indian Cotton Mills’ Federation (ICMF). “It is ironical that domestic cotton producers have been given a protection of 10 per cent import duty, but a giant like Reliance is enjoying protection of 20 per cent causing huge financial losses to the state exchequer and industry,” Mr R.L. Toshiniwal, President of the federation, says. Though Finance Minister P. Chidambaram has indicated to rectify the situation in the coming Budget yet industry experts maintain that it would be too late before government takes necessary steps. “ With the dismantling of quota regime on January 1, 2005, garment manufacturers will compete with each other to grab a share of the market. Whoever gets first orders will be able to maintain the pace causing immense losses to the country,” says Mr Ramesh Kumar Jain, CMD of the Pashupati Spinning & Weaving Mills Ltd.
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Textile units upgrade to compete globally
Ludhiana, December 22 “While initially there was a general reluctance towards acceptance of innovative ideas and latest trends, particularly when it came to using machinery, the scenario has witnessed a tremendous change in a short span of merely two years,” said Mr A.K. Agnihotri, task force leader, Project Uptech, State Bank of India, adding, “earlier they were content even with outdated machines, whether they offered poor quality or low productivity, but now they are gearing up to meet challenges they would be thrown open to with the textile quota regime coming to an end.” An in-depth analysis of the hosiery industry as a part of Project Uptech by the State Bank of India pointed towards major challenges — the need to upgrade technology, boost investment level and improve product quality, to the Indian textile sector stating that traditional management approach had led to a host of inefficiencies. This segment will face stiff competition from cheaper Chinese, Bangladeshi, Pakistani and Sri Lankan goods in the post-quota regime, the bank stated.
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Hiked charges draw flak from HP units
Solan, December 22 The factory registration rates which are directly proportional to the number of power units consumed by each unit and the number of workers employed annually have been abruptly hiked. The entrepreneurs, who had barely recovered from the multi-fold hike in the consent fee for establishing and infrastructural charges for power connections have now been left high and dry. They contend that it is unfair to hike all these charges soon after investors made a beeline to the state after announcement of the central industrial package. With the inclusion of new categories these rates had no longer remained competitive and have even surpassed the adjoining states of Punjab and Haryana. The rates of factory registration had been revised for various categories utilising various amounts of power units.
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Magma encashes vehicle finance boom
Chandigarh, December 22 “Almost 85 per cent of the vehicles today are financed,” informs Mr Sanjay Chamria, MD, Magma Leasing Limited, in an exclusive interview to The Tribune. Allaying fears of companies cheating investors, he says that Magma does not accept fixed deposits. It is leveraged on the concept of low margin and high volume with thousands of people wanting to drive cars down the smooth road and trucks serving their business interests. Focusing on semi-urban and rural financing and riding on the booming economy, Magma is set to achieve its target of doing Rs 1,352 crore worth of business this fiscal, nearly 50 per cent hike from last year’s Rs 867 crore. An RBI-registered non-banking finance company (NBFC) with 56 branches in 13 states, it has reported a compound annual growth of 79 per cent as compared to the industry average of 25 per cent. “Expansion in the region after taking over Consortium Finance Ltd in 2000 has been a major reason for our growth exceeding the targets,” says Mr Chamria, who is in the city in connection with the opening of its office in Shimla. They have branches in Ambala, Patiala , Ludhiana , Jalandhar, Bathinda, Moga and Mandi. The implementation of an HR, IT and business process re-engineering exercise helped strengthen the company further. Towards this end, Mr Chamria says, they have linked all branches to the headquarters in Kolkata with virtual private network (VPN). Being online has reduced the turnaround time. Speedy service by trained manpower means happier customers. Also, their tie-up with insurance firms provides an added benefit to the consumer under one roof. “We have an 8 per cent market share in the Punjab region in the truck finance area,” he says, adding that they have a deep distribution network with over 100 staffers fanned out in Punjab servicing a growing number of customers.
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$ 400-m ADB loan for power sector
Singapore, December 22 The project will strengthen and expand the capacity of the national transmission grid, comprising 765-kilovolt (kV) and 400 kV transmission lines as well as substations operated by Power Grid Corporation of India Limited (Powergrid). Powergrid will fund $ 168 million of the total project cost of $ 568 million. Powergrid’s National Transmission Development Plan entails an investment programme of about $ 12.6 billion up to year 2012.
— UNI
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PC sales zoom
New Delhi, December 22 The buoyancy in consumption is expected to continue in the second half with the industry body Mait (Manufacturer’s Association of IT) projecting sales of 22.80 lakh units of desktop personal computers.
— PTI
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