The Tribune, Chandigarh, India

	RIL sets out new agenda for growth To supply gas to ADAG; Plans mega power foray Shiv Kumar Tribune News Service Mumbai, June 18 The 36th annual general meeting of Reliance Industries Ltd held today in the backdrop of the Ambani brothers smoking the peace pipe turned into a damp squib as Anil Ambani belied investors’ expectations and stayed away. Anil and his older brother Mukesh, who is chairman of RIL, are reported to have improved ties by taking a holiday together with their respective families last week. However, there was no sign of the improved bonhomie at the AGM with Mukesh himself informing shareholders of the truce arrived between the two brothers and the opportunities it opened up for RIL in the power and telecom sectors. At the end of the meeting, Mukesh thanked his mother, wife and various associates but made no mention of his younger brother clearly indicating the ground that needed to be covered by the Ambani siblings. Expressing disappointment at the proceedings, the markets pulled down the stocks of companies headed by both brothers. RIL, itself fell more than 1.38 per cent after showing impressive gains at the start of the AGM. Addressing the shareholders of the company, Mukesh Ambani said RIL would supply gas to his younger brother’s companies as and when they were ready to receive it. He also reiterated that gas supply would be determined by the government. "It has always been our position that we are, and continue to be, governed by the provisions of the Production Sharing Contract in all respects of the petroleum operations carried out by us. We have also been fully conscious that the Government of India has more than a significant say in these operations," he said. Expressing his satisfaction at the agreement reached with his brother, Mukesh said RIL could now enter the power business other than non-captive gas-based power plants until 2022. "This paves the way for Reliance to participate in the whole value chain of the power business, spanning generation, transmission and distribution,” he said. Ambani added that RIL was working towards entering clean coal-based power generation projects, hydel projects and also in nuclear power. Apart from the power sector, RIL was looking towards opportunities in the telecom sector as well. Regarding broadband, Ambani said, India has less than 1 per cent market penetration, compared to the developed nations which have over 60 per cent market penetration. "In this respect, we are faced with a much larger opportunity in broadband today than we were in 2001,” Ambani said. Outlining RIL’s plans, Ambani said the company would be building its wireless digital distribution platform using the “asset light, but partnership-heavy approach". The project will be kicked off with the establishment of a Wireless Innovation Centre in Mumbai, Ambani said. In telecom sector, RIL plans to offer fourth generation wireless infocomm services across the nation using the 20 MHz, contiguous, pan-India spectrum it got with acquisition of 95 per cent stake in Infotel Broadband. RIL, which stands to benefit from huge cash flows in the coming years from the sale of gas from the Krishna-Godavari fields, is planning to enhance investment in its traditional areas of competence, Ambani said. "In the next five years, our total investment in all the new polyester and petrochemical manufacturing facilities will be the largest investment in this sector to be made anywhere in the world at any given point of time,” Ambani said. He added that RIL would emerge as the most profitable petrochemical producer in the world. Regarding the group’s entry into the retail business, Ambani said RIL's retail business had grown to become of the largest pan-India retailers. The group’s retail business had revenues in excess of Rs 4,500 crore, and it currently operates nearly 1,150 stores, in 86 cities across 14 states, he said. Ambani said the group is targeting the retail business to grow 10-fold in the next five years.
	Exports jump 35 pc in May New Delhi, June 18 Exports grew for the seventh straight month, rising by 35.1 per cent to $16.1 billion in May, but exporters may take a hit due to the sharp decline of the euro. Commerce Secretary Rahul Khullar today said export numbers this fiscal look good because they were at the bottom (low base) last year. "Don't get carried away by these numbers. These are essentially being driven by the base effect. In May 2008, exports were in the range of $18.5 billion. We are still below that number," Khullar said. Battling recession in the Western markets, which account for the bulk of shipments from the country, exports had dropped to $12 billion in May 2009. However, a sharp erosion in the euro because of the the still lingering debt crisis in the Eurozone economies has reduced the margins of exporters. Since December 2009, the euro has depreciated about 18 per cent against the rupee. "Exchange rate depreciation of the euro is making European goods more competitive, and Indian goods more expensive. That's how depreciation works," Khullar said adding if exporters' margins are small they cannot continue in the business. Federation of Indian Export Organisations president A Sakthivel agreed with Khullar."We must watch the developments in Europe cautiously as the Greek crisis may spread to other countries," Sakthivel said. Of $176.50 billion exports last fiscal, Europe accounted for 23 per cent. For the April-May period, exports grew by 35.7 per cent to $33 billion against the the year-ago period. Labour-intensive sectors like engineering, gems and jewellery, leather and man-made fibres have registered healthy growth rates, Khullar said. — PTI
	Maruti to launch CNG WagonR New Delhi, June 18 Maruti Suzuki India plans to introduce a CNG variant of its recently upgraded WagonR hatchback within the next three months, which could be about Rs 70,000 costlier than the existing version. "Maruti Suzuki is working on at least five models across different segments to launch the CNG variants, which will come as dual mode with petrol, and these will be launched during the next quarter," a source said. The move is a part of the company's plans to expand its portfolio of eco-friendly vehicles, which could see other models such as Alto, Eeco, Estilo and SX4 also powered by CNG fuel, industry sources said. — PTI
	RCom may hive off DTH biz Tribune News Service New Delhi, June 18 Reliance Communications (RCom) is apparently on way to restructure its various interests and may sell its tower business to elder brother Mukesh Ambani’s Reliance Industries Ltd (RIL). It may also separate the direct-to-home (DTH) and Internet protocol TV (IPTV) businesses. According to reports while RCom was said to be in advanced talks with Reliance Industries to sell its optic cables and telecom tower businesses in a bid to back Mukesh’s foray into the telecom sector, it may hive off DTH and IPTV businesses into a separate company titled Reliance Digital Works. Reports said RCom had decided to offload its stake in its tower company, Reliance Infratel, by again creating a new separate entity. It is looking to use the proceeds from the sale of tower business to clear debts. RCom was earlier in talks with other suitors to sell its tower business, but with Mukesh’s foray into the telecom sector with the buyout of Infotel, Anil’s first choice would be RIL to sell the tower business. RIL has already announced plans to usher in the next level of growth through broadband and would be in immediate need for 15,000 towers for its broadband venture. On the other hand, RCom has more than 50,000 telecom towers in its portfolio and around 190,000 km of fibre optic cable distributed across 44 cities in the country. Twice earlier, Reliance Infratel had tried to launch an IPO to raise funds, but adverse market conditions had forced it to call off the plan. Reports also said that as part of the restructuring, RCom has plans to bring multi-system operators (MSOs) and foreign investors into Reliance Digital Works for funding its expansion plans. Currently, the group operates the DTH business under the brand name Reliance Big TV, which is a subsidiary of Reliance Communications. It has about 2.3 million subscribers. Reliance Digital Works is expected to offer a 25 per cent stake to overseas investors and 10 per cent stake to multi-system cable operators (MSOs), reports said. Earlier this month, RCom had taken permission from its board to sell as much as 26 per cent to investors at a premium to its stock price.
	Curbs on cotton exports to go from October New Delhi, June 18 Deviating from the stand of the Textile Ministry, Commerce Secretary Rahul Khullar today said restrictions on cotton exports will be removed from October. "From October 1, we shall go to the policy of unrestricted exports," Khullar told reporters here. He said "by and large" the Commerce Ministry tries to have a regime where exports are unrestricted. "You do not tax exports, you do not restrict them in any way...I would have a rather an open system where nobody has to come and ask my permission or anybody else's permission for export or import," Khullar said. The government, on May 21, imposed restrictions on exports of cotton due to domestic supply side constraints and about 20 per cent increase in prices. Though there is no blanket ban on export of the natural fibre, the shipments have virtually halted as the government has stopped their registration, which was a pre-requisite. Textiles Minister Dayanidhi Maran had said earlier this month that cotton exports should be calibrated in the interest of the domestic industry. "We need some kind of calibration in exports (cotton)," Maran had said. The cotton season runs from October to September. Khullar said his ministry was also not in favour of export duties. Largely on the recommendations of the Textile Ministry, the government had also imposed an export duty of Rs 2,500 per tonne on cotton. According to the Cotton Association of India (CAI), production of the natural fibre is estimated at 305.5 lakh bales in 2009-10 crop year. Total cotton supply is estimated at 387 lakh bales in 2009-10, while the domestic consumption has been retained at 250 lakh bales, thus leaving a surplus of 137 lakh bales. — PTI
	US award for Infosys BPO New Delhi, June 18 Bangalore-based Infosys BPO has picked up this year's North American Shared Services Excellence Award for best new outsourced services, for handling advertising production work of its client McClatchy's newspapers that include Kansas City Star. The award was jointly awarded to Infosys BPO and McClatchy, which also publishes Miami Herald. The advertising outsourcing deal was signed in 2008. "This is a significant honour, given that the awards are open to end-users as well as captives and outsourced shared services organisations from all countries," Infosys BPO's COO Ritesh Idnani said. — PTI
	‘Free Trade Agreements to hit SMEs’ Manav Mander Tribune News Service Ludhiana, June 18 India is signing large number of Free Trade Agreements (FTAs) and the country intends to achieve 70 per cent of India's foreign trade through FTAs from the present 10 per cent. But, the FTA spree of the government is posing a serious problem for the small and medium enterprises (SMEs). At present, India is negotiating FTA with 20 countries. It has already concluded around 10 FTAs. With the ongoing slump in Europe and America, economists say it is not worthwhile to give access of our large market to other countries through FTA. "The business transaction cost in India is much higher compared to other countries. The raw material cost is also higher due to cartelisation. The cost of capital is too high compared to other countries with whom FTAs are being conceived. Banks charge much higher interest rates and burden the borrower with extra processing charges," said PD Sharma, president, Apex Chamber of Commerce and Industry. "The input cost in India is higher as compared to other countries. Our finished goods sold there cannot result in profit to the entrepreneurs, particularly the MSMEs, as they have limited resources. In China, even steel is cheaper while in India the prices of steel is sky rocketing.” “We, especially MSMEs, cannot take advantage of these free trade agreements. Foreign countries can also give incentives to attract buyers but the Indian sellers cannot do so as the input cost is very high," said Joginder Kumar of the Federation of Tiny and Small Industries of India. Since January 2010, India has entered into FTA with ASEAN, which is a block of 10 South-East Asian nations. After signing FTA with ASEAN, bilateral agreements were confirmed with three countries and agreements with Vietnam and Myanmar have also been signed. Simultaneously, China also entered into similar agreement with the ASEAN. "The pattern of business with the ASEAN is widely different for India and China. China has been dealing with the ASEAN for the past five years and the trade between the two has been almost on nil import duty whereas India has to deal afresh," added Sharma.