Mayur Suitings stitches plan to buy Indus

RAJASTHAN Spinning & Weaving Mills (RSWM), owner of Mayur Suitings, may buy a controlling stake in Indus Clothing, the erstwhile franchisee of Lee Cooper and the current franchisee of Disney, for around Rs 45-50 crore. Industry analysts see this as the beginning of a series of joint ventures and mergers between fabric makers and brand retailers. Several manufacturers and exporters nurturing retail ambitions are in talks with retailers for similar arrangements. It’s a win-win situation for both parties. While the manufacturer gets a distribution network at one go, the retailer gets a dedicated manufacturing capacity, feel industry sources. For instance, RSWM, the flagship company of the LNJ Bhilwara Group, has been making yarns and fabrics for years. It plans to enter the consumer retail business and the only way it can expedite its new business is by forging alliances with retailers. When contacted, RSWM joint MD Riju Jhunjhunwala declined to comment while the owner of Indus Clothing HP Singh said: “At the moment, there’s no tie-up with RSWM.’’ Asked if there was any possibility of a tie-up in future, he said, “I am not sure.’’ If the RSWM-Indus deal goes through, RSWM would get access to a distribution network which includes standalone shops as well as multi-brand outlets. The duo could introduce other foreign brands in the country as well. At present, Indus Clothing has a licensing agreement with Walt Disney to make and market Disney jeans targeted at the 4-14 age group. It has a similar arrangment with Italy’s Rifle jeans for India. But Indus is best known for its licensing alliance with UK’s Lee Cooper brand (Indus marketed it in India for more than a decade) which later went on to forge a joint venture with the Pantaloon Group after government allowed 51% foreign investment in single brand retail. By entering into a venture with the Rs 953-crore RSWM, Indus would get access to its manufacturing capacity in Gulabpura, Banswara, Mandpam, Rishabhdev and Ringas located in Rajasthan. RSWM’s met profit during FY06 was Rs 27.08 crore.

Courtesy: EconomicTimes

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Pyramid inks JV with realty co

PYRAMID Saimira Theatres (PSTL), the Chennai-based movie theatre chain, has formed a joint venture with Delhi-based real estate firm Baderwals Infraprojects to set up a chain of 200 integrated leisure and shopping destinations with an estimated investment of Rs 12,000 crore. PSTL will hold 49% stake in the newly-formed company called Baderwals Pyramid Development, while Baderwals will hold the remaining equity. According to PSTL managing director PS Saminathan, Baderwals Pyramid, besides being the largest chain of its kind in the country, would also develop an array of single largest chain of multiplexes, budget hotels, hypermarkets and shopping malls. “Out of these 200 destinations, big cities and smaller cities would have 100 each. Approximate construction cost per destination would be Rs 80 crore for big cities and Rs 40 crore for the smaller ones,” said Mr Saminathan. PTSL has recently formed a special purpose vehicle (SPV) with Shriram Mall Infrastructure, a south India-based firm to set up 100 malls-cum-multiplexes. In the SPV, Shriram holds 70% equity while PTSL holds the remaining. PSTL, a worldwide theatre chain company, with presence in all categories of theatres including mall, multiplexes, cineplexes and stand-alone theatres, now comes to India with world-class technology, aiming to revolutionise the theatre experience in the country. Pyramid has lined plans to set up 4,000 multiplexes in the US, another 250 in China and 1,500 in Europe. The Indian entertainment industry has undergone a sea-change in the last few years. The industry is projected to grow at 18% annually and is expected to be around $3.4 billion by 2010. The major driving factor in this growth would be technological advancement in production, exhibition and marketing. PTSL has tied up with Asian Integrated Industries to set up a theatre chain in Malaysia with 150 multiplexes and single screen theatres spread all over Malaysia.

Courtesy: EconomicTimes
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Heritage Foods to open 30 retail stores in Bangalore

Hyderabad-based dairy products firm, Heritage Foods, (Q, N,C,F)* announed plans to set up at least 30 retail stories under the brand - `Fresh@` - by the end of 2007 in Bangalore, a part of it Rs 1.5 billion plan to invest in retail operations in South India, reports Business Standard. On Thursday, the firm announced, opening of retail stores in Indiranagar, Jayanagar and Basaveshwaranagar localities of the city. Nearly 40% of the space dedicated to fresh fruits and vegetables, rest will go towards daily home needs. It is also launching stores in Chennai. The company, intends to have 100 stores equally distributed in Hyderabad, Bangalore and Chennai by the end of 2007, holding considerations expanding to tier two cities.The firm launched free home delivery service through its Heritage milk agents. A dedicated call centre and an e-portal will be launched to bring the convenience of shopping to the customers` doorstep.Heritage Retail, procures vegetables and fruits from farmers in Chittoor district (Andhra Pradesh), Karnataka and Tamil Nadu. Shares of the company ended at Rs 265.70, down by Rs 11.45 or 4.50% at the BSE. Total volume of shares traded was 184.

Courtesy: EconomicTimes
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European retail sales rise in March

EUROPEAN retail sales rose for the first time in three months in March as German consumer spending recovered from a tax increase at the beginning of the year. A gauge of retail sales in the 13-nation euro economy rose to a seasonally adjusted 53.4 after February’s 49.8, a survey of more than 1,000 retail e x e c u t i v e s showed Thursday. A reading above 50 indicates an increase. Faster economic growth has spurred hiring and spending. German unemployment dropped to a six-year low in March, the government said Thursday, and KarstadtQuelle, the country’s largest retailer, reported its first annual profit since 2003. “Thursday’s indicator suggests that the economies of Germany and the euro region will clearly regain strength in the second quarter after a slowdown’’ following the January 1 increase in Germany’s value-added tax, a sales levy, said Joerg Kraemer, chief economist at Commerzbank in Frankfurt. Retail sales “will probably continue to show an expansion.” Germany, Europe’s largest economy, led the increase in retail sales with an index reading of 52.8 after last month’s 45, Thursday’s report showed. German sales plummeted in the first two months of the year after the government raised VAT by three percentage points to 19%. The euro rose to $1.3349 at 1:04 pm in Frankfurt from $1.3322 before the report. European government bonds fell, pushing the yield on the 10-year bund up 3 basis points to 4.06%, as signs of sustained economic growth underpinned the case for higher interest rates. The EC last month raised its 2007 growth forecast for the euro-region economy to 2.4% from 2.1%. The economy expanded 2.6% last year, the most since the start of the decade. In France, the retail sales PMI rose to an eight-month high of 56.8 from 54.7 in February.

Courtesy: EconomicTimes

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March Mania - a unique consumer scheme by Futurebazar

futurebazaar.com, owned and operated by FutureBazaar India Ltd., a subsidiary of India’s largest retail chain, Pantaloon Retail (India) Limited, launched a unique scheme for consumers ‘March Mania Cash Back Week’ from March 23rd – March 31st, whereby all those shopping online on futurebazaar site will get cash back during this entire week. Cash back will be given to customers in the form of futurebazaar gift vouchers (GVs), which will be sent to them by email and will be redeemable on further purchases on futurebazaar site. This offer is valid only for one week. Future Group is positioned to cater to the entire Indian consumption space. It operates through six verticals: FutureRetail (encompassing all lines of retail business), Future Capital (financial products and services), Future Brands (all brands owned or managed by group companies), Future Space (management of retail real estate), Future Logistics (management of supply chain and distribution) and Future Media (development and management of retail media spaces). The group's flagship enterprise, Pantaloon Retail, is India's leading retail company with presence in food, fashion and footwear, home solutions and consumer electronics, books and music, health, wellness and beauty, general merchandise, communication products, E-tailing and leisure and entertainment. The company owns and manages multiple retail formats catering to a wide cross-section of the Indian society. Headquartered in Mumbai, the company operates through 3.5 million square feet of retail space, has over 100 stores across 30 cities in India and employs over 14,000 people. Future Group's vision is to, “deliver Everything, Everywhere, Every time to Every Indian Consumer in the most profitable manner.” One of the core values at Future Group is, ‘Indianess' and its corporate credo is – Rewrite rules, Retain values.

Courtesy: EconomicTimes
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Titan enters prescriptive eyewear

EVRYTHING from mobile phones to diets may be getting lighter. But when it comes to spectacle lenses, the Indian market is still skewed towards the good old heavy glass lenses rather than the lighter, sleeker plastic ones. With only a handful of branded players, plastic lenses hold less than 15% of the market, growing at 30-40% annually. India is still way behind other countries in the usage of the more progressive plastic lenses. It is likely that as more players enter this market, this trend could reverse. Joining companies like Essilor and Carl Zeiss, Titan has also now entered the fray. “India is one of the few countries where a majority are still using glass lenses. In most other countries, the shift has already been made to plastic and other lighter lenses like the polycarbonate lenses. Here, the transition has only begun,” says B Jayanth, managing director, Essilor India, leading plastic and progressive lenses manufacturer. Though there is no organised statistical data available on the usage of ophthalmic lenses, an estimated 35-50 million pieces are sold per annum in India. To make the most of this Rs 1,800-crore industry, Titan Industries today launched its prescription eye wear store called Titan Eye+. The company is offering lenses under its own brand name Titan, in the Rs 145-Rs 21,000 range and other reputed brands like Essilor and Nikon in the Rs 350-Rs 15,000 range. Titan is expected to have a range in both plastic and glass lenses. They have a collaboration with Essilor for the manufacture of their plastic lenses and with GKB for the manufacture of their glass lenses. “Today nearly 85% of the consumers in India use glass lenses. While more people are shifting their usage to plastic lenses, it is still not a significant portion. For example, in Europe, the usage of plastic lenses is really high,” said Ronnie Talati, associate vice president and business head, Fastrack and New Brands, Titan Industries. Carl Zeiss, which entered the Indian market in 2005, has both glass and plastic lenses but 90% of their sales currently is plastic lenses, says Manish Soni, general manager, Carl Zeiss India. “The problem in India is that only 30% of those who need primary eye care can actually access it. Carl Zeiss exists in the super-niche segment. But in India, we have positioned ourselves at a more accessible level,” he says.

Courtesy: EconomicTimes

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Business class sits well on airlines

FINDING a seat in the expensive front end of planes is turning out to be tougher than getting much cheaper economy class tickets these days. Airlines, especially those operating on the European and South East Asian routes say business class seats are being snapped up way ahead of flight departures and they have much higher loads here than the economy. The trend has prompted airlines like Lufthansa to rip off economy seats on their flights to increase the size of the high-yield business class. Fares on business class are typically three to four times that of economy tickets. Some airlines like US carrier Delta have done away with the first class to increase the more popular business class. “Indian business travellers are willing to spend much more than before on their international trips. The spend is much higher on the travel as well as the choice of hotels, which is invariably five-star instead of the lodges or three-star accommodation in the past,’’ says Rupen Vikamsey, managing director of the Mumbai-based Orbitz Travel. While the return economy class fares between India and Europe cost between Rs 17,000 to Rs 35,000, the fare for a business class round-trip ticket is in the range or Rs 75,000 to Rs 1.5 lakh, depending on the airline. Business and first class fares also attract a 12.5% service tax, which is not levied on economy class tickets. Yet, most airlines are strengthening their business class products. Singapore Airlines general manager (India) Foo Chai Woo said that seats on business class were full almost through the year.

First class no longer as busy as business class

BUSINESS class is the way to travel these days. Airlines are finding seats in this category being snapped up way ahead of flight departures, and are working to strengthen business class products. Singapore Airlines has recently introduced a new business class product with a 1-2-1 seating layout on its Boeing 777 aircraft. Incidentally, for many airlines, the first class is not as busy as business class. The first class, usually 8 to 16 seats, is often built on acres of prime space in an aircraft. “Very often, the presence of a first class is for the ‘halo effect’ that slots an airline as a premium carrier,” says an airline source. The yields do not justify the amount of real estate used up for first class. Carriers like Singapore Airlines, for instance, do not have a first class on flights operating out of Amritsar, Ahmedabad and Chennai. The space is used to put in more business and economy class seats. Internationally, new standards are set every year with airlines trying to better each other with more space for their premium cabins. A flat bed is now de riguer in most carriers and airlines are moving on to improve their offering with live television and other bells and whistles.

Courtesy: EconomicTimes
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THE iPOD RADIO

LOCAL innovators love popular devices. Tinker with the gadgetry and you could convert a nifty device into a different tool. Take for instance Apple’s iPod. A San Francisco teenager, Kristyn Heath, has invented a gadget that turns iPods into miniature radio stations, broadcasting songs to nearby devices. The system, called NoStringsAttached (NSA), uses FM radio waves to transmit music from a portable music player to any other specially equipped player within 15 feet. The NSA system comprises two identical units. Each one plugs into the standard headphone jack found on most MP3 and CD players. A user selects radio frequencies and then opts to transmit or receive music by flicking a switch. Listeners don’t even need a music player if they just want to tune in to someone else’s music. All they need is a pair of headphones plugged into a NSA unit. The 16-year-old made the gadget so that she could share her favourite songs with her friends. She has already submitted a patent for her idea of broadcasting to small spaces. A NSA kit, which includes two transmitter/receiver units and a set of headphones, costs about $60. Powered by a single AAA battery, each unit can transmit tunes for up to nine hours or act as a receiver for approximately 20 hours. Wireless music sharing among friends could be the next big thing.

Courtesy: EconomicTimes

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Citicorp gets go-ahead for 15% stake in Flemingo Duty Free

THE government has approved Citicorp Venture Capital International’s proposal to pick up 15% stake in Flemingo Duty Free Shops Pvt Ltd (FDSPL) which runs duty-free shops at various airports and seaports. The deal is valued at more than Rs 100 crore. The Foreign Investment Promotion Board (FIPB) cleared Citicorp’s proposal recently and the finance minister has also approved it. The application for the foreign investment was pending with the Board. FDPSL would initially issue convertible preference shares to the Citicorp for about Rs 100 crore, official sources said. These preference shares would be converted into equity at a later date for a premium, Flemingo has told FIPB. The Citicorp’s shareholding in FDSPL would be up to a maximum of 15% of the paid-up equity of the company. Currently, Flemingo International, a company based in British Virgin Islands, holds 51.22% equity stake in FDSPL while various NRIs hold 24.87% stake. After conversion of Citicorp’s preference shares; Flemingo International, NRIs and Citicorp would respectively hold 43.54%, 21.14% and 15% in FDSPL, taking the total FDI to 79.68%. FDSPL had sought FIPB approval to issue 10 lakh convertible preference shares for Rs 1,000 each to the Citicorp. FIPB earlier deferred the FDSPL’s proposal for comments from various ministries including finance. The department of economic affairs (DEA) and the department for industrial promotion & policy (DIPP) had raised no objection. DEA had conveyed no objection to the proposal subject to issue of preference shares being in conformity to SEBI, RBI and other statutory guidelines, the sources said. FIPB has now finally approved Citicorp investment in Flemingo. Flemingo runs dutyfree shops at Delhi and a number of other airports. The company is also planning to set up duty-paid shops in downtown areas to tap potential for top international brands in metro cities.

Damas allowed 51% in FDSPL venture

THE government has cleared a proposal from Dubai-based Damas for investing 51% in a joint venture with Flemingo International’s Indian arm to set up duty-free jewellery outlets at Indian airports. Damas Jewellery LLC has set up a JV firm with the Flemingo Duty Free Shop Pvt Ltd (FDSPL) to set up duty-free shops at airports for selling jewellery products and luxury watches. The new JV company, which has been registered under the Indian Companies Act, 1956, is called Flemingo Jewellery India Pvt Ltd. The Foreign Investment Proposal Board (FIPB) has cleared the Damas-Flemingo joint ventrue, according to official sources. Damas will be selling its gold jewellery brands like harmony and legacy and its diamond brands at major airports. Damas has already been allowed to set up shops at Chennai, Trivandrum and Jaipur international airports. Operations at these airports are expected to begin within a month. While Damas is holding a 51% equity stake in the JV firm, the remaining stake will be with Flemingo, official sources said. The Damas-Flemingo venture has inked deals with stateowned Airports Authority of India (AAI) to set shops at three airports. The proposed shops shall use the brand name Damas. The JV company is also keen on starting operations at other major airports, government sources said. Being a foreign investor, Damas has sought approval from the FIPB to set up a JV firm. The sources said FIPB’s clearance to Damas allows the company to pick up 51% equity shares of Flemingo Jewellery India. The JV firm will issue 22,95,000 shares at Rs 10 face value to Damas. While Flemingo will look after the day-to-day management, Damas will depute its personnel and specify other requirement to run the business. Damas LLC, established in 1993, is engaged in the business of gold jewellery, diamonds and watches. Damas has operations in six countries, 127 retail locations and it has one manufacturing & selling division. It also jointly controls companies in India, Dubai, Kuwait, Maldives and UAE. Its annual revenue in 2005 was more than Rs 3,200 crore. Damas operates in India through D’damas India which functions in partnership with diamond house Gitanjali Digico Group. D’damas India has granted a no-objection certificate to Damas to enter into a JV with Flemingo, as per the requirements of Press Note 1 (2005).

Courtesy: EconomicTimes
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Car majors ramp up IT, finance ops in India

GLOBAL car manufacturers are ramping up their IT and finance operations in the country to support their global operations. While India has emerged as the low-cost manufacturing base for many car manufacturers, it is also now serving as a significant low-cost centre for their finance, IT and engineering services, sources said. Companies like Ford, Volvo, General Motors among others have outsourced some of their global operations to India. It is no longer surprising, that a global CEO based out of Detroit would have his promotions, salaries and bonuses handled out of India by a Bangalore-based accountant. And it is a trend that is on the rise. Ford India, for instance, is significantly ramping up its finance and IT units in the country. Ford Information Technology services (FITSI) the wholly-owned subsidiary of Ford Motor handles critical IT and engineering services to support Ford operations worldwide. This unit has expanded rapidly with a captive employee base of 150 people and a third party headcount of about 530 people. Also, according to company officials, Ford Business Service Centre (FBSC) that handles the accounting services along with other functions such as banking, reconciliations, taxation, marketing & sales and purchasing support, internal control and audits now gives support to all Ford businesses in Europe, North America, South America, Asia Pacific and Africa. FBSC unit has just crossed the 1,000-employee mark this December. General Motors India has also seen a consistent increase in the outsourcing of finance and IT work into India in the last two years. Volvo India, the Swedish bus manufacturer, is also looking at making India the sourcing hub for its worldwide operations. The company plans to increase its R&D, engineering design activities and IT services sourcing from India. The company plans to increase the headcount at its engineering design office in India. “We currently employ 80 engineers at our engineering design office. We plan to employ another 100 engineers soon,” said Eric Leblanc, managing director, Volvo India. Daimler Chrysler R&D unit in India also handles a significant portion of the its global engineering services. According to industry sources, the growing outsourcing of work in the non-manufacturing sectors for global car manufacturers is on the rise due to the low costs and available pool of talent in the IT and accounting departments that India offers.

Courtesy: EconomicTimes
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FIPB defers decision on Hutch Essar deal, seeks more info

THE Foreign Investment Promotion Board (FIPB) on Thursday deferred clearance for Vodafone’s acquisition of Hutch Essar (HEL) and sought additional information from all stakeholders on the shareholding of the company. “I have sought more comments from the companies,” finance secretary Ashok Jha — who chairs the Board — told reporters after the FIPB meeting. This is the second time FIPB has deferred its decision on Vodafone’s application. The Board had taken up Vodafone’s application last week, but the deliberations were inconclusive as the RBI had not submitted its report on the shareholding pattern and the alleged violation of sectoral FDI cap. Last month, Hong-Kong Hutchison Telecommunications International (HTIL) had sold majority stake in Hutchison Essar (HEL) to Britain’s Vodafone Group Plc for $11.1 billion. The FIPB did not come to a conclusion even after hearing representatives from HTIL, HEL and Vodafone who made presentations to officials, explaining the equity structure of HEL. It seems the Board would wait for reports from various government arms before coming to a conclusion. In a related development, HTIL chief Dennis Liu told reporters in Jakarta that the company was in full compliance with FDI norms of India and it would not take much time for the sale to Vodafone to be concluded. Sources said that the FIPB could not take a call on Vodafone’s application as it was yet to receive conclusive replies from both the finance ministry and the law ministry on the extent of foreign holding in Hutch-Essar. The RBI, in its reply to the finance ministry’s query on this issue, had said that the 12.26% shareholding of HEL MD Asim Ghosh and Max India chairman Analjit Singh in HEL amounted to violations of the Foreign Exchange Management Act and the country’s FDI norms. Following this, the finance ministry has sought the law ministry’s opinion on the stake held by Mr Ghosh’s and Mr Singh. “The FIPB will take up the Vodafone application for consideration only after receiving the law ministry’s opinion, and this was unavailable for Thursday’s meet. Additionally, other agencies such as the enforcement directorate and the department of income tax have also not submitted their reports. It is also believed that the PMO after receiving complaints from many MPs has asked the department of telecom to examine the changes in HEL’s shareholdings over the last 10 years,” a source told ET. Vodafone CEO Arun Sarin on Monday told ET that the company was not concerned over the delay in getting FIPB clearance as the deal was barely a month old. "Maybe, if this question was asked six months from now, I would say that it is disappointing. The FIPB has to be given time, and I am fine with it. At the end of the day, I want FIPB, the finance ministry, the telecommunications ministry, the industry ministry and the Prime Minister to say that you are welcome here (in India). The last thing we want to do is show up one fine day and then people ask, ‘Hey, hang on, which door did you come from, was it the front door, back door or side door,” Mr Sarin had said.

Courtesy: EconomicTimes

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Hasta la Vista baby, say PC makers

AFTER all the hype surrounding its January launch, Microsoft’s new Vista operating system has yet to brighten the outlook for PC makers and could even lead to oversupplies for those who had built up inventory. Top PC makers, such as Dell, Hewlett-Packard and Lenovo may now have to resort to sales of lower-margin computers in emerging markets such as China, Eastern Europe and Latin America for their growth this year. Featuring high-definition video and audio functions and three-dimensional graphics, Vista is being billed as a major upgrade of its predecessor, Windows XP. But the software, which runs on more memory and superior graphic cards, has not taken off as fast as some had hoped, leading to concerns of potential inventory woes for makers of those products, analysts and industry players said. “Vista has had no big help,” said Acer’s president Gianfranco Lanci, adding that PC makers are really not counting on Vista to drive high demands for the industry. Samsung Electronics, the world’s top memory chip maker, also said that demand for DRAM computer memory chips from Vista hasn’t materialised as fast as it had predicted. “We had expected the ‘Vista impact’ on DRAM around April, but now we see it being delayed into the second half,” said Hwang Chang-gyu, semiconductor business president of Samsung Electronics. But many PC vendors were already sceptical on fresh demand from Vista even before the product’s launch in January, better preparing them for a potential disappointment, said JP Morgan analyst Charles Guo. Major PC players like Asustek Computer, also the world’s top motherboard maker, said Vista might have warmed up the market but significant results have not been seen. “We aren’t seeing any effects yet and compatibility issues will take at least six months to resolve,” said an executive at Asustek, who declined to be identified. He added that many corporate customers — who tend to buy in much larger volumes than individual consumers and therefore can make a bigger impact — were staying on the sidelines for now as individuals accounted for new buying. “We’ve carried out numerous surveys recently with IT managers and they’ve all said they are not planning to migrate to Vista, and we are not expecting a major influx anytime soon,” said Bryan Ma, an analyst at IDC, expressing a similar view. Different forms of Microsoft’s various Windows operating systems now run more than 90% of the world’s PCs. Computer makers are now looking to strong buying from emerging markets such as China, Eastern Europe and Latin America to boost business. Dell announced earlier this week a super cheap computer costing as little as 2,599 yuan ($336) specifically for China, now the world’s second largest PC market by unit sales. “Emerging markets are still a key driver for growth in the PC sector. Global PC shipments this year should grow by low double digits, in the 10% range,” said Mr Lanci. The comment by Acer, which is trying to overtake China’s Lenovo as the world’s No 3 PC maker, was in line with the outlook for the broader industry. IDC expects worldwide PC shipments to reach about 253 million units this year, up 11% from 228 million in 2006. That 2007 growth rate is up from the 9.6% posted last year. Vista’s newness aside, analysts also say the right computing platform, which is needed to run the operating system smoothly, is a main factor that will determine whether the software will be accepted in the near term. “Intel’s main Santa Rosa platform needed to support Vista features won’t be launched until May 10, and in the last five to 10 years, the biggest PC driver is still price,” said JP Morgan analyst Alvin Kwock. Microsoft founder Bill Gates said last month that Vista has been well received and that PC vendors have seen a nice lift in their sales. A week before his comments, chief executive Steve Ballmer had said that Vista would only create a ‘small surge’ in PC sales for its fiscal year starting in July, and would not spur a big increase in normal growth rates. “Vista was very popular in the first couple of weeks, but let’s not just focus on that. Dell and Hewlett-Packard don’t even advertise much on PCs with Vista,” said JP Morgan’s Kwock.

Courtesy: EconomicTimes
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Diageo favours buying brands, may bid for Absolute

DIAGEO, the world’s largest liquor maker, would rather buy drink brands than make a “transformational” acquisition, and is considering bidding for Absolut vodka, CEO Paul Walsh said. Walsh wouldn’t rule out buying Remy Cointreau SA, the maker of Mount Gay rum, which is one-tenth of Diageo’s size and whose shares have risen on speculation Diageo may bid. Absolut, made by Vin & Sprit AB, may be sold by Sweden’s government. Buying “quite large brands could be a possibility,” Walsh said in a March 27 interview at the company’s London headquarters. “It’s still an amazingly fragmented industry. It’s hard to conceive any transformational deal.” The company’s last major brand acquisition was in August 2005, when it purchased Bushmills whiskey from Pernod Ricard. Buying Absolut would give Diageo, the London-based owner of Smirnoff, the two top-selling premium vodka labels in the world. The biggest liquor takeover in the past 10 years was Pernod’s $13 billion takeover of Allied Domecq in 2005. A broader range of brands would help Diageo’s push into developing markets. The company increased its profit forecast last month after increasing sales of Johnnie Walker Scotch whisky and Smirnoff in China, Brazil and Mexico, and created an Asia-Pacific unit in January. Walsh said he will look “very closely” at Absolut. Sweden’s government hasn’t yet set a method or timetable for the sale of state assets. Stakes may be sold in initial public offerings, or by direct sales to other companies. A sale of all of Vin & Sprit may fetch 4.6 billion euros ($6 billion) in a sale, according to JPMorgan Chase & Co research, and may trigger further combinations in the industry. Pernod and Bacardi are considering buying the Swedish distiller. Vin & Sprit also makes Plymouth gin and Cruzan rums. When asked if he would consider buying Paris-based Remy, Walsh said he “looks at everything.” The French company’s market value is 2.3 billion euros. Diageo declined to comment on Remy in January, when bid speculation sent Remy’s shares surging. Remy is leaving its Maxxium joint venture in Asia to gain more control over distribution, a step analysts have said may lead Diageo to scrap its own pact with LVMH Moet Hennessy Louis Vuitton SA in the region and make a bid for Remy. “We have a fantastic relationship with Moet Hennessy,” Walsh said. “It’s hard to conceive we would do anything to disrupt that. If you believe something with Remy would disrupt that, you can draw your own conclusions.” Shares of Diageo slipped 1.5 pence, or 0.2%, to 1010.5 pence at 9.30 am in London. Remy shares added 1 cent to 50.90 euros in Paris. “He could have said ‘no, we are not interested in Remy because it would disrupt our relationship with LVMH’, but he didn’t say that — he is leaving the back door open,” said Laetitia Delaye, an analyst at Kepler Equities in Paris. “It could mean he found a way to keep both LVMH and Remy, though I don’t see how that’s possible.” Walsh, 51, took over as chief executive in 2000 from John McGrath after being chief operating officer for eight months. He headed Diageo’s Pillsbury Co baked goods unit for 10 years before that. Pillsbury was sold to General Mills Inc in 2000. Shares of Diageo added 19% last year, the fourth straight annual gain, compared with an 18% gain by Pernod stock. Diageo’s market value is about 27 billion pounds ($53 billion), more than double Pernod’s 16.2 billion euros. Diageo’s most recent purchase was a 43% stake in China’s Sichuan Chengdu Quanxing Co in a bet that rising incomes in the world’s most populous nation will boost demand. China won’t add to Diageo’s earnings for the next couple of years, Walsh said in the interview. The country is likely to have a “meaningful impact” on profit in five years if demand grows at the same pace as this year, he said. Diageo, which doesn’t break out sales by specific country, said first-half revenue excluding acquisitions advanced 16% at its “international” division, which comprises Asia, Africa and Latin America. The company plans a new distillery in Scotland to meet rising demand for Scotch in emerging markets. Like Pernod, the distiller has sought expansion outside Europe as demand for Guinness stout and premixed Smirnoff drinks slows in the region. “Europe is tough, but we do see it getting better,” Walsh said. He expects sales to return to growth in the region. Spirit brands including Johnny Walker and Bushmills Irish whiskey are “poised for growth” as Guinness demand in the British Isles shrinks, he said. Diageo paid 200 million pounds for Bushmills.

Courtesy: EconomicTimes

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Tur prices soar on supply woes

SUPPLY constraints and firm trend in international markets have pushed up prices of tur (pigeon peas) in the domestic market. Prices have jumped by about 20% in the past 15 days. Despite a ban on futures trade in this commodity since mid-January — a move attributed to rein in inflation, the strong fundamentals are back in action. Prices of lemon tur (FAQ) that were at Rs 1,930 per quintal a fortnight ago have soared to Rs 2,300 per quintal. According to market watchers, prices are expected to rise further in the coming days. The firmness in the prices is on account of low estimated domestic production for the Indian crop along with a crop failure in Myanmar, a major producer of tur. As per the average estimates, taking into account estimates by the trade and the government, the country is expected to produce around 22 lakh tonnes of tur this year as against last year’s 25 lakh tonnes. There may be overall shortage in pulses this year with the Economic Survey projecting output at 14.5 million tonnes as against a target of 15.1 million tonnes. When contacted, KC Bhartiya, president of the Pulses Importers Association, agreed that there is a pressure on prices. He said the “government needs to further scale up its efforts to import the commodity”. Mr Bhartiya expects the government to import nearly five lakh tonnes of pulses this year and 25 lakh tonnes by private importers. Meanwhile, the international price of the commodity has also scaled up from $450-$480 per metric tonne a month ago to $550. This has also impacted the prices in the domestic market. A Jalgaon-based trader and miller Satish Mittal said that the domestic price has increased by Rs 200 to Rs 300 per quintal and may further rise due to a severe shortage. “The tur production that was hovering around 25 lakh tonnes is expected to come down to 15 lakh tonnes this year and even the crop production in Myanmar was not good,” he said. Mr Mittal said the production may further dip as farmers are shifting towards growing two crops in a season as against tur which is a nine-month crop.

PRICE WATCH

Despite a ban on futures trade in this commodity since mid-Jan, strong fundamentals are keeping prices firm

Prices of lemon tur, which was quoting at Rs 1,930/quintal 15 days ago, gone up to Rs 2,300/quintal now

Lower domestic production and a crop failure in Mayanmar are also aiding the sentiment

Courtesy: EconomicTimes

For more detal on Retail India visit: http://www.retailindia.tv/

The demand of Watermelon is high across India

THE COUNTDOWN BEGINS: The demand for watermelon is soaring across the country along with every rise in mercury. Here, two vendors in Ahmadabad arrange their produce on Thursday, ahead of this year’s peak season.

Courtesy: EconomicTimes
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China’s young & trendy add a dash of gold

MURPHY Ma should be a gold miner’s dream — she’s young, trendy and has enough income to spend a few thousand yuan a year on jewellery. But this Chinese fashionista, like many others in their 20s and 30s, prefers white metal jewellery to gold — something promoters of the yellow metal are keen to change. As China’s economy booms, sales of gold sales have taken off. Rural women and workers in the cities have bought thicker, larger yellow gold earrings, and gold shop windows glitter with Buddha statues, Olympic memorabilia and cute pigs in solid gold. But it’s been a harder battle to reach young professionals like Ma, who prefer the cool glamour of platinum and a touch of individuality. “Before I thought gold was pretty pokey, something for grannies to wear. But now there’s K-gold and it’s becoming a little younger,” she said at a gold promotion soiree in a chic Beijing art warehouse on Wednesday, referring to a brand of gold aimed at the young and fashionable. In the drive to reach young Chinese, gold promoters have to combat a cultural preference for gold as a means to hoard wealth for hard times. China was one of the few countries in the world last year where gold demand was barely dented by a 25-year peak in prices. Gold jewellery demand fell by only 1% in 2006, compared with a 16% fall world-wide. Gold is often sold by weight in China’s department stores, and can be sold back for a small fee if prices rise or if the buyer needs some cash. The purity demanded by consumers who plan to re-sell the metal means pieces are often too soft to retain an intricate design. The focus on weight also means jewellers’ margins are too thin to justify spending on raftsmanship. But marketers have been making inroads with K-gold, which has a lower purity to support better designs and fatter margins for jewellers. K-gold accounted for 18% of jewellery sales in greater China in 2006, up from 15% in 2005. “K-gold has grown phenomenally, from 4 tonnes in 2004 to 44 tonnes in 2006,” said Thero Setiloane, executive director of marketing for AngloGold Ashanti, the world’s third-largest gold miner. One of the few miners to actively promote gold jewellery, AngloGold Ashanti has picked China as a focus area along with India, the Middle East, South Africa, and Brazil. Designers are also getting into the act, with glossy jewellery magazines and fashion shows. Designers like Zou Ningxin are trying to craft a look that will appeal to modern Chinese.

Courtesy: EconomicTimes

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Govt rules out ban on private traders in wheat market

THE government has denied imposing any restrictions on private traders for buying wheat from farmers, but said it will monitor the stock positions of these companies to check hoarding. “The government has not put restrictions on any company, including MNCs, to buy wheat from anywhere in the country. The farmers are free to sell wheat to whosoever they like,” food and agriculture minister Sharad Pawar told reporters here on Thursday. The minister dismissed suggestions that private companies were being restricted to enable staterun Food Corporation of India (FCI) meet its procurement target of 151 lakh tonnes for this year. Private traders should, however, need to furnish details about their stock position if they purchase more than 50,000 tonnes of wheat in a year, Mr Pawar said. “The nodal procurement agency, FCI, does not hide its stock position and a similar policy should be followed by the private traders,” he said, adding FCI had a system of disclosing its stock position on the website. According to industry officials, the government had urged upon the private traders not to enter the wheat market for a few weeks till its procurement gains momentum. “As agriculture minister, I want farmer to get better price. Simultaneously, there should be no hoarding and consumers should not be exploited,” the agriculture minister said.

Courtesy: EconomicTimes
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Edible oil prices hit upper curcuit

Edible oil prices continued to rule firm on the local oils and oilseeds market on Thursday. Groundnut oil rose by Rs 5 to Rs 645 per 10 kg, while refined plamolein inched up by a rupee to Rs 444. Among industrial section, castor oil commercial improved up by Rs 5 to Rs 454, while castorseeds bold rose by Rs 25 to Rs 2,120. Linseed oil also moved up by Rs 5 to Rs 465.

Courtesy: EconomicTimes
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Sugar prices show a mixed trend

Vashi wholesale sugar market recorded alternate bouts of buying and selling pattern on Thursday. Prices of medium sugar edged up on renewed enquiries from retailers, while small sugar prices eased back slightly. Medium sugar (M-30) rose by Rs 5 to Rs 1,510/1,555 per quintal. Small sugar (S-30), on the other hand, lost Rs 10 per quintal to Rs 1,490/1,515.

Courtesy: EconomicTimes
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Copper stays firm despite growth pangs

Copper prices on the London Metal Exchange traded sideways on global growth worries and tin extended the previous session’s losses ahead of the second quarter, analysts said on Thursday. Copper for delivery in three months was up $44.5 at $6,699.5/6,700 a tonne in the second official open outcry session. On Wednesday it closed at $6,655. Tin was down 3.3% at $13,350/13,400 from $13,800 on Wednesday, when it dropped over 5% on profit-taking on long positions built up in recent months. Falling nickel stocks underpinned prices, down by 204 tonnes to 5,292, with just 3,270 available to the market — less than one day of global consumption. Three-month nickel gained 1% to $43,845/43,850 in thin volumes against Wednesday’s $43,400. Lead stood at $1,904.5/1,905, up $4.5, aluminium was up $5.5 at $2,755.5 and zinc was flat at $3,200.

Courtesy: EconomicTimes
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Blackstone plans counter-bid for drugs retailer Alliance Boots

Private equity firm Blackstone Group is planning a possible counter-bid for British drugs retailer and distributor Alliance Boots, the Daily Telegraph reported on Thursday, citing sources familiar with the matter. Such a move would frustrate bid efforts by Stefano Pessina, deputy chairman of Alliance Boots, the newspaper said. Pessina, backed by buyout firm Kohlberg Kravis Roberts, was expected to propose a new offer for the firm within weeks, it added. The Times, however, quoted sources close to Pessina as saying he would not be rush-ing back with a new offer for Alliance Boots and was waiting for some encouragement. The company, created from the merger of health and beauty retailer Boots and drugs wholesaler Alliance Unichem last year, rejected a £9.7 billion ($19.06 billion) bid proposal earlier this month from Pessina and KKR.

Courtesy: EconomicTimes
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Sail Salem plant launches Odyssey dinner set

SAIL's Salem Steel plant has launched Odyssey, a newly de-signed fortypiece stainless steel dinner set, made out of stainless steel. The 12-kg collection of kitchenware is designed for a family of six.

Courtesy: EconomicTimes
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Finnair to fly to Mumbai, increase frequency to Delhi

As part of its expansion plans in India, Finnish carrier Finnair is all set to add Mumbai as the second destination and increase frequency to New Delhi to every day of the week. Finnair, which currently operates three flights from here, will begin its daily flights from mid May. From Mumbai, it will operate five times a week .

Courtesy: EconomicTimes
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Doordarshan to launch two channels in Britain

After years of uncertainty, Doordarshan will begin broadcasting two free-to-air channels here with the idea of bringing ‘the essence of India to Great Britain’ from April 16. According to the Rayat Group, the private company in charge of the channels’ distribution here, the two channels, DD India and DD News, will start broadcasting 24 hours a day from April 16. The content will be mostly in Hindi. The launch of the channels is expected to provide a base for further expansion into Europe.

Courtesy: EconomicTimes
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Gitanjali to invest Rs 100 cr in luxury retail space

Gitanjali Group will invest Rs 100 crore over the next 2-3 years to set up luxury malls and stores across the country, besides tying up with international brands to facilitate their entry in the Indian luxury market. The group’s foray in the luxury retail market would be through ‘Luxury Malls’ and ‘Luxury Connexions’, which would act as consultants to global brands on how to enter the domestic market. The first store would open in Hyderabad, followed by Mumbai, Bangalore, Delhi, Kolkata, Ludhiana, Chandigarh and Chennai.

Courtesy: EconomicTimes
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Chanel plans to expand presence in India

Bullish on India, luxury goods major Chanel will expand its presence in the country through shop-inshops, while hoping to grow its business 50% annually. The luxury brand has been in the country for the past two years and offers its complete range of products like watches, fragrances, beauty, eye care and fashion accessories.

Courtesy: EconomicTimes
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GM launches Chevrolet Optra Platinum for Rs 8.24 lakh

General Motors India has launched the Chevrolet Optra Platinum, a special edition of its premium mid-size sedan. Kitted out with a range of exterior and interior features it will be available in two new colours — icy blue and shimmering black. Among other features, Optra Platinum sports a platinum badge on the trunk lid, a chrome kit for the front lower bumper, outer rear view mirror and taillamps, a sporty gear knob and a 1 DIN MP3 music system and a rear spoiler. A total of 250 units of the Platinum will be available at a price of Rs 8.24 lakh ex-showroom Delhi. GM is offering a 3-year/100,000-km warranty on the new variant.

Courtesy: EconomicTimes
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BMW starts plant, rolls out ‘3 Series’ sedan

BMW on Thursday opened its first plant in the country and rolled out the ‘3 Series’ sedan, priced at Rs 26.95 lakh (exshowroom) onwards. The company will also roll out its other luxury sedan ‘5 Series’ by May-June, which is expected to be priced between Rs 37 lakh to Rs 42 lakh across all variants from this greenfield plant located at Chengelpet, 55 km from here. The company has invested euros 20 million in setting up the plant, which has a capacity of 1,700 units per annum on a single shift.

Courtesy: EconomicTimes
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Big Retail Has Started Bleeding Mom-n-Pop Stores

Though currently accounting for just 3-4 % of the Rs 12L crore retail market, big organised retail has already raised the hackles of 12-million plus standalone mom-and-pop stores across the country. Is the threat of the big fish gobbling up the small one real after all ?

Basically, the entry of big players in the retail market is provoking a lot of uncertainty in the retail sector. We’ve been opposing the entry of foreign direct investment (FDI) in the retail sector based on a detailed analysis of the sector in the country. Essentially, only 2%- 3% of the unorganised retail market is organised. The retail sector today is the second highest income generator, after agriculture. The employment in the retail sector is also representing disguised unemployment as well as underemployment because unorganised retail does not entail a high level of investment in our country. Therefore, a lot of people, not only the young but also the old, do run their own retail outfits from a portion of their own or rented residential premises, which have come to be called mom-n-pop shops. A concrete analysis of the unorganised retail sector also reveals that the own account enterprises, both in the urban and rural areas, mainly comprise the retail sector. An extrapolation from the total volume of turnover of the retail trade per such own account enterprises in the retail sector shows that the turnover is far less than the turnover per employee of giant retail multinational chains. The Left parties’ note on the retail sector explaining the reasons for opposition to FDI in retail has brought out this calculation basing itself on the annual per employee turnover of Wal-Mart International. Therefore, the entry of entities like Wal-Mart will have a similar effect in our country as well. Since the space for retail trade is finite, so the per employee turnover of major corporate retail chains cannot but happen without displacing some of these unorganised retail outfits. The other problem is that such big retail players do not only endanger employment in the retail sector alone. Today, the business model of the retail sector involves a complete cycle starting from influencing production to point of sale traversing its journey through procurement, transportation, storage and distribution. The entire chain involves major capital intensive investment with significant control over supply chain management. This, therefore, gives the big retailer a disproportionate leverage vis-à-vis the primary producer both in the agriculture sector as well as in the small and medium enterprises. It is obviously fashionable to shed tears for the ‘bleeding’ small retailer – but the truth lies elsewhere. First, the fact is that small retail has never been in such great health that they have now started bleeding – it has always been a subsistence livelihood for 99.9% of small retail and that has not been because of big retail but because the monopolistic/oligopolistic nature of the FMCG companies who have squeezed them to extreme low margins (in contrast to their own high margins and ROCE and PE’s). Of course, small retail has added to its own problems by not having the scale to harness efficiency or the ability to invest and modernise and provide better value to the consumer. Indian consumers spend more share of their income on food and daily necessities than counterparts elsewhere and while part of this is because of lower incomes, a large part of this stems from the inability of small retail to deliver value to consumers. The reality is that the Indian consumer is paying the price for the inefficiency of the small retailer and for the dominance of the FMCG marketer - and both are interlinked. As larger retailers emerge, two things will change – there will be far greater ability to harness scale efficiencies – be it in buying or store operations or backend logistics or whatever – and also gain bargaining power in dealing with the FMCG companies: both these will ensure that big retail is able to become significantly more efficient than the small retailer. No one needs to be told that cutting 5-6 layers of intermediaries by direct sourcing or putting in IT systems to monitor fresh produce movement across the chain will not cut down costs - and of course the fact of intense competition that the organised retail sector is seeing coming up means that these efficiencies cannot be the profits of the retailer but really the savings of the consumer. The emergence of big retail will really mean sharply lower prices for the billion – blue or red whichever – and the ones to shed tears really if at all would only be the intermediaries who were profiting out of the inefficiencies. After all, we do not stop expansion of mobile phones because the STD/PCO owner will go out of business – and surely there can be no case to hold that whatever little additional pain is caused to small retail is not more than substantially offset by the benefit to the billion consumers. Since the space for retail trade is finite, so the per employee turnover of major corporate retail chains cannot but happen without displacing some of these unorganised retail outfits. Besides, aggressive marketing driven by huge expenditure on advertisements allows the big retailers to draw consumers away from the mom-n-pop shops .Small retail has never been in such great health that they have now started bleeding – it has always been a subsistence livelihood for 99.9% of small retail and that has not been because of big retail but because monopolistic nature of the FMCG companies who have squeezed them to extreme low margins.

Courtesy: EconomicTimes
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Bajaj open to lite car ride with Tatas

Co Also Working On A Concept For Showcasing At 2008 Auto Expo

THE SEARCH for a people’s small car may bring together two of the biggest local players in the Indian auto industry. Bajaj Auto is working on a “nontraditional lite car concept” for which it is open to partnering with Tata Motors which is working on a Rs 1 lakh car. Speaking to ET, Mr Rajiv Bajaj, MD, Bajaj Auto said: “We are newcomers to this game and a traditional car is out of our league. But we are doing something different and if there are synergies with what Tata Motors is doing we would be more than open to talking to them.” ET had reported Bajaj Auto’s foray into light goods and passenger carriers in the issue dated January 29. Bajaj Auto, which is foraying into four-wheelers with a light goods carrier, is also developing a car concept to be showcased at the 2008 Auto Expo. “The concept is a car as in not a onebox passenger carrier but a two-box vehicle like the M800 or Alto,” Mr Bajaj said. “But it is very much a concept unlike the goods carrier which is for commercial production. We are trying an entirely new technology and we are not sure if it will work.” The Bajaj concept car will look and feel like a car but will boast an engine that’s as powerful as the M800 engine but as cheap as an auto rickshaw engine.

Different tech angle

Because the technology is entirely new, Bajaj is not interested in talking to any of the traditional leaders of the compact car market. “Our concept will look and feel entirely like a car but I am approaching it from a technology angle that is totally different and the established players will not be able to help us with that,” he said. But if Tata Motors is interested, “I would be open to teaming up with them... “If we are able to prove a new technology and the Tatas are interested in using that to take their project ahead, I would be open to talk to them.” “If the two companies can compliment each other in creating something as revolutionary as this, why not?” The search for a small car that meets individual mobility needs, is a global phenomenon, he said, with car makers looking at two ends of the spectrum. At one end there will be niche and pricey small cars like the Smart and at other end, affordable small cars like the ones on Indian roads. But to close the cost of ownership gap between a 100 cc motorcycle and the M800, the new range of ‘lite’ cars will have to be substantially lower priced, meet functional needs like design, performance and reliability, meet all regulatory requirements expected of cars (which are non-existing for two and three wheelers) and be profitable as well. Is Bajaj Auto working on something like that? “As far as actual development work goes, we are working on a lite goods carrier which will also meet all the abovementioned requirements,” Mr Bajaj said. “As far as a passenger version goes, we are not in the process of actually developing one but it is a project around which we are currently thinking.” But it can’t be done with traditional technology, he said. “We have some ideas and we are trying to put together a concept vehicle which will also satisfy all the criteria along with the goods carrier.”

Courtesy: EconomicTimes

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Govt may ask Reliance to halve Maha Mumbai SEZ

THE government may ask Reliance Industries to scale down the size of its proposed multi-product Maha Mumbai SEZ from 10,000 hectares to 5,000 to avoid dislodging farmers and villagers unwilling to relocate. The decision is expected to be taken at the next meeting of the empowered group of ministers (eGoM) on SEZs. With rising protests from farmer groups, political parties and small businesses intensifying in the state, the government’s proposal could be seen as an attempt to prevent a repeat of the violence in West Bengal’s Nandigram. “If Reliance scales down its operations by half in Maha Mumbai, the sensitive areas could be excluded from the zone and peace restored,” the official said. The Board of Approval for SEZs, in an earlier meeting in August last year, had observed that land planned for building the Maha Mumbai SEZ was much more than required. With the situation hotting up, the eGoM headed by foreign minister Pranab Mukherjee is expected to ask Reliance to reduce the size of the SEZ, sources said. The date for the eGoM, which will also decide on the future course of the SEZ policy, has not yet been firmed up. It is being widely speculated that the meeting will take place only after the UP assembly elections are over. There seem to be two compelling reasons for the Centre to revisit the issue. The Board of Approvals had earlier washed its hands off the issue. The board categorically stated that it had indicated to the Maharashtra government about the need to review the size of RIL’s SEZ after it received a number of representations. “However, the Maharashtra government has approved acquisition of over 10,000 hectares and that land being a state subject, it is the prerogative of the state government concerned,” the board had noted in its meeting squarely blaming the Congress-led Maharashtra government. Politically, it was suicidal for Congress as it gave an impression that though the board was against RIL’s mega-SEZ, the Vilasrao Deshmukh government had facilitated the project. Ever since the state government began facing flak for its SEZfriendly image, the Congress had, on sensing public mood, dispatched a factfinding committee on Wednesday to meet the SEZ-affected people in Raigad district.

Opposition to co in some places

Another reason, according to highly placed sources, is the opposition to the company in some of the villages. Of the 45 villages from the three talukas of Pen, Uran and Panvel to be acquired, the company was finding it particularly difficult to deal with 20 from Uran taluka. These politically-active villages have been leading the campaign against the SEZ. It was here that the Congress faced humiliating defeat in the recent zilla parishad elections. The volatile political situation and violent protests had forced the company to think of redrawing its SEZ plan. “The company may delete 20 villages from Uran from its SEZ,” a high-level political functionary had recently told ET. Last week, when hundreds of agitators, mostly farmers, blocked roads in Raigad district in protest against the Maha Mumbai SEZ, chief minister Vilasrao Desmukh promised that the government would not interfere in the land acquisition process in Maharashtra. The protesters, however, are continuing to keep up the pressure on the state for withdrawing land acquisition notices issued to people in 45 villages falling in the Maha Mumbai SEZ. Apart from farmers, there are businesses located in the zone, many servicing the JNPT port, who have refused to be relocated. The protesters have planned another march on April 5 in Mumbai. Reliance has received an in-principle approval for the Maha Mumbai SEZ. A formal approval is given by the BoA only when all land-related controversies are put to rest and the developer is in possession of the entire land. Meanwhile, the Reliance group has come up with its own relief and rehabilitation package for those to be displaced by the Maha Mumbai SEZ.

Courtesy: EconomicTimes
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Have your fill & some diamonds too, Spectrum Jewellery Sees Robust Diamond Sales At HPCL Retail Outlets

IF Indian marketers were rushing to petrol pumps to vend pizzas, this is clearly one notch higher. Using petrol pumps to sell a woman’s best friend — diamonds. Bringing in this new revolution is Sangini, a brand popularised earlier by the DTC and under the care of Spectrum Jewellery, a joint venture between Gitanjali group and associates. The petrol pumps are courtesy Hindustan Petroleum. Although India’s jewellery market is estimated to be over $15 billion (Rs 60,000 crore), the organised sector forms a miniscule portion of the same. Speaking to ET, Gitanjali group chairman Mehul Choksi said the group was looking at expanding into 40 places over the next one year. “Our studies indicate that petrol pumps have large number of footfalls on a daily basis. It is but natural that we target these pumps for marketing our products,” he said. As part of the marketing programme, Sangini would provide training to the franchisee (the owner of the petrol pump). Typically, products ranging from a lowly Rs 1,000 to upwards of Rs two lakh would be available at the petrol pumps, Mr Choksi added. HPCL, which has a turnover in excess of Rs 60,000 crore, has a pan-India presence with petrol pumps across the length and breadth of the country. Incidentally, HPCL which is a participant in one of the biggest rewards programme in the country-i mint is betting on pulling in more customers through this association. Already, Spectrum has presence in HPCL pumps in Pune and Kolkata and Bangalore is next in the line. Mr Choksi says that other cities where this model would find favour with include Chennai, Hyderabad and Bhubaneswar. He, however, refused to comment on the monthly sales merely stating that sales were robust.

Courtesy: EconomicTimes

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Kirby eyes retail foray via building arm

Plan Opposed As Some Officials Fear Other Foreign Cos Too May Route Retail Plans Through Indian Subsidiaries

KIRBY, a subsidiary of one of West Asia’s largest business houses Alghanim Industries, plans to enter the Indian retail sector through its existing Indian subsidiary, Kirby Building Systems, a manufacturer of pre-engineered steel buildings. According to sources, the company wants to be a multi-brand consumer durable retailer, an area where FDI is not allowed. Kirby India CEO Srikant Gokhle told ET: “Our retail plans are still very preliminary. We are exploring ways to enter Indian retail in tandem with existing policy regulations.” A source, however, said the company has already made a road map that has been shared with relevant government departments. “The company has also zeroed in on a brand name for its retail venture called Excite,” said the source. Mr Gokhle, however, denied having named its retail venture. Certain sections in the government have reservations about Kirby’s plans as it would set a precedent and encourage many such foreign companies to route their retail plans through Indian subsidiaries. Some policy makers in the UPA government have been sceptical over issues concerning foreign retailers ever since the Congress President Sonia Gandhi wrote to the Prime Minister, asking him to conduct a comprehensive study on the “impact of transnational retailers on local kirana stores.” Following this, the commerce ministry had mandated research firm ICRIER to do the study and recommendations are expected early next month. Of late, consumer durable specialty retailing has evinced interest from some leading corporate houses. Last year, the Tatas floated Croma, their consumer durable retail venture in an agreement with the Australian chain Woolworth. Mukesh Ambani’s Reliance Retail and Kishore Biyani’s Future Group are also aggressively sprucing up their presence on this front. Apart from Kirby, some other international players who are looking at a share of the India consumer durable retail pie include the British chain Best Buy and US’ Radio Shack. To incentivise entry of foreign players in the sector, the commerce ministry had said last November that it was planning to allow 51% FDI in multi-brand consumer durable retail. However, this has not yet fructified as a policy. At present, Kirby’s promoting company, Alghanim Industries, has a presence in the trading and distribution of consumer electronics, food and consumables, automotive vehicles and products, industrial manufacturing, engineering, technology, travel, shipping and transportation services, advertising, insurance and contracting.

VERY EXCITED

West Asian Co has reportedly named it retail venture Excite

Of late, consumer durable specialty retailing has evinced interest from leading corporate houses, including Tatas & Reliance

Many international players, including the British chain Best Buy and US’ Radio Shack, are looking at a share of the Indian consumer durable retail pie

Courtesy: EconomicTimes
For more detail on Retail India visit: http://www.retailindia.tv/

‘Elite’Xbox 360 to hit market by April-end

MICROSOFT said on Tuesday that it will begin selling a new version of its Xbox 360 console that transmits highdefinition video and comes with a larger hard drive in its latest effort to position the video game machine as a digital media hub. Microsoft’s new Xbox 360 Elite, with a 120-gigabyte hard drive and high definition multimedia interface (HDMI) port, will be available on April 29 in the US and Canada for $479.99. The hard drive on the new machine is six times bigger than the current high-end Xbox 360 model, which retails for $399. Microsoft said the Elite hard drive has space to hold a library of arcade games and thousands of songs, as well as high-definition TV shows and movies downloaded from the company’s Xbox Live online service. “Today’s games and entertainment enthusiast has an insatiable appetite for digital high-definition content,” said Peter Moore, corporate vice-president for the interactive entertainment business at Microsoft. Microsoft said that it will sell the Elite alongside existing Xbox 360 systems and it will offer the detachable 120 gigabyte hard drive for $179.99. Microsoft released the Xbox 360 a full year ahead of Sony’s new PlayStation 3 and Nintendo’s Wii, grabbing an early lead in the new, three-way video game console war. The Xbox 360 and PS3 are also battling on the home entertainment front with each shooting to take control of the digital living room. Wedbush Morgan analyst Michael Pachter said Microsoft is making a play for a niche market. “Very few consumers will care,” he said, noting that most gamers can probably get by with a 20-gigabyte hard drive while owners of pricey high-definition televisions are still a small percentage of the overall audience. Sony’s PS3 includes a next-generation, high-definition, Blu-ray DVD player that is slowly gaining popularity with movie buffs. The Xbox 360 Elite, which has a 120 gigabyte hard drive and other features including a high-definition multimedia interface port and a high-definition cable. The new model will be available on April 29 in Canada and the US.

Courtesy: EconomicTimes

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PepsiCo takes a liking to nimbu paani, milk drinks

THE good old Nimbu Paani and milk beverages are generating soft murmurs within PepsiCo India. If the new PepsiCo, CEO, Sanjeev Chadha, is to be believed, the cola major could soon hit the retail shelves near you with new localised product offerings. So PepsiCo is keenly looking at the traditional Indian options to expand its product basket in the Indian market. The company has recently activated its Gurgaon-based R&D lab, one of the only two outside of the US, to work over time and lead the Indian subsidiary to such localised products. “We are looking at all the needs that a beverage can fulfill,” Mr Chadha told ET in his first ever interaction with the media since he took over the reins of the company in January this year. “Considering that the non-cola market in India is till under-developed due to lack of choice, we want to step up the process,” he said. That’s the big shift, partly fuelled by market and cultural dynamics. Part of this shift includes the recent setting up of a nutrition advisory board on the lines of the red ribbon board that Pepsico has globally. The cola giant is also aggressively exploring new categories such as functional waters and healthy whites to expand its non CSD beverage portfolio in India. The company is in fact, going back to the drawing board to find that ‘sweet spot’ that combines the fun and ‘good for you’ proposition for the consumers to create a whole new range what is internally being referred to as ‘treat for you’. This is in line with ‘performance with purpose’ strategy laid down by the new Pepsi Worldwide Chairman, Indra Nooyi. The target is to align the company’s cola and non-cola on equal footing. While globally, Pepsi’s cola portfolio contributes 70% of the company’s business, it does 60-65% in India. Pepsi India hopes to expand its non-cola porfolio to bring the ratio to 50:50 in 3-5 years time frame. Elaborating on the company’s expansion plans, Mr Chadha said, “There are three major opportunities which have immense growth prospects in India viz, juice and juice-based drinks, functional water and healthy whites such as soya-milk, that have been recently introduced in countries like China and Vietnam.” Besides, the company plans to strengthen its Mangobased drink brand Slice, and introduce value-added or what it calls ‘advantage’ water under Aquafina. Chadha, through all these efforts expects to double PepsiCo’s business in three years time. He however, emphsised that innovation will not be confined to the non-cola portfolio, but spans CSDs as well. “Similarly, innovation would not be restricted to the beverage category, we are attempting the same across product, packaging and equipment,” added Chadha. For instance, the company wants to introduce its water brand, Aquafina’s in various pack sizes in the retail market. Inorganic growth apart, the company is eyeing acquisition targets across categories after a long hiatus. “Mergers and acquistions would be significant for us going forward. Barring water where we already have a strong brand in Acquafina, we are open to acusitions in any other category,” Chadha said. PepsiCo is currently looking to offer smaller single packs for Acquafina besides looking at flavoured water as a growth opportunity although the low profitabilty in this category would be a challenge, Chadha pointed out.

Courtesy: EconomicTimes
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Shoppers’ Stop to Build-A-Bear in their stores

K RAHEJA Group-promoted retail chain Shoppers’ Stop is launching US-based interactive kids brand, Build-A-Bear in their stores soon through the shop-in-shop format. “We will initially launch the brand through the shop-in-shop format and look at the prospects of standalone stores later,” Shoppers’ Stop CEO Govind Shrikhande said. Shoppers’ Stop will have a three-year non-exclusive agreement with the Murjani Group, which is bringing the brand into India, he added. Founded in 1997, Build-A-Bear is a mall-based retailer that allows children to design their own stuffed animals. The retailer had 271 companyowned retail stores in the US, Canada, the UK, and Ireland as on December 30. Of those stores, 232 are Build-A-Bear Workshop stores located in the US and Canada and 38 are located in the UK and Ireland. Revenues for the company during the 2006 fiscal stood at $437.10 million. It has about 30 styles of stuffed animals, plus clothing and accessories for bears. It also has e-cards and a book club, plus tie-in at Kids Apparel retailer too. The retailer had, in April 2006, acquired The Bear Factory and its UK franchisee, Amsbra. Shoppers’ Stop is also looking at reintroducing some of the foreign brands in the luxury category. “We had brought a luxury brand to India by the name of Eaton, but it failed to succeed as the range was through the import route and the customer in India was not ready for it. However, the customer is now getting ready for it and so we will be bringing in international brands in the segment, including Tommy Hilfiger, Calvin Klein, Espirit and others in the price range of Rs 2,500-3,000 in the next three months,” Mr Shrikhande said.

Courtesy: EconomicTimes
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Choice plans budget hotels in India

IN A bid to ramp up its presence in India, US-based hospitality chain Choice International is set to introduce its budget brand, Sleep Inn, to the country at Tirupati, Hyderabad and Vizag by 2008. Plans are to roll out 20 such Sleep Inn hotels over the next five years, Vilas Pawar, CEO, Choice Hotels India, told ET. “We are looking at large-format roll out of the Sleep Inn brand in the country,” he said. Among others, talks are currently on for alliances with fuel marketing companies and retail outlets for locations along major highways. “Sleep Inn is a highway product that can be located at the outskirts of the city and where mixed land use is allowed,” he added. Hotel room rates in the Sleep Inn brand are likely to start from Rs 1,800-2,000 level, depending on the city. The other budget brands in Choice’s portfolio include Comfort and Quality, with room rates ranging between Rs 2,000 and Rs 4,000. By 2008, the group plans to have Comfort hotels at Delhi, Rajkot, Haldwani and Amritsar, while the Quality brand would have presence in Jaipur, Ludhiana, Chennai, Pune and Hyderabad. Choice Hotels India is part of Choice Hotels International, one of the largest franchisers of budget and mid-market brands, with over 5,000 hotels across the world.

Courtesy: EconomicTimes
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Hospitality sector in India marks Rs 4,500 cr for ramp-up

HOSPITALITY majors are ramping up investments in new projects and expansion, which are expected to be Rs 4,500 crore over the next two years on the back of a massive growth in leisure travel. Indian hotel companies like Indian Hotels (owners of the Taj brand), Leela Venture, EIH (member of the Oberoi group), Kamat Hotels, and Royal Orchid are likely to see room inventory go up by around 6,500 rooms given the burgeoning hospitality sector in the country. Global hospitality majors such as Intercontinental, Starwood, Hilton, Accor, Carlson are all stepping up their global offerings in the Indian market given the upbeat demand. While Leela Ventures is investing around Rs 1,265 crore, Indian Hotels is expected to invest around Rs 1,250 crore. EIH, Kamat and Royal Orchid are likely to pump in Rs 1,150 crore, Rs 365 crore and Rs 500 crore, respectively. A total of 60 new properties across categories are likely to come up in the Indian market, sources said. India is witnessing a spurt in hotel expansion as it is facing a severe shortage of hotel rooms because of increased business activity and leisure travel by the middle class and by international tourists, said Chender Baljee, CMD, Royal Orchid. The demand-supply mismatch is likely to last for another two years. A buoyant economy, growth in aviation and real estate, improved infrastructure and the easing of restrictions on foreign investments is expected to fuel demand across star categories in a majority of markets across India. “Hotels on an expansion phase will be in a better position to absorb the decline in occupancies and rates over the long term, as any additional supply can offset the pressure on room rates,” said Nitesh Shetty, MD, Nitesh Estates.

Courtesy: EconomicTimes
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