Tuesday, April 30, 2013

DSK Hyosung plans 125cc/150cc motorcycles from proposed Maharashtra plant

BT Online Bureau Chennai Last Updated: April 25, 2013 | 00:00 IST

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DSK Hyosung plans 125cc/150cc motorcycles

DSK Motowheels is planning to invest around Rs 300-Rs 350 crore to set up a plant in Maharashtra to assemble and manufacture Korean bikes Hyosung. The company would initially manufacture 125cc-150cc engine capacity motorcycles at the proposed plant.

The compnay said on Wednesday that it plans to manufacture motorcycles equipped with smaller capacity engines under the brand "DSK Hyosung" 'from the stable of the South Korean-firm S and T group, over the next two to three years in India.

Pune-based DSK Motowheels is part of the Rs 5,000-crore diversified business conglomerate DSK Group.

DSK Motowheels currently has a Completely Knock Down (CKD) facility assembling motorcycles ranging between 250cc to 650cc engine capacities at Wai near Pune. The plant has a capacity of producing 250 motorcycles per month, DSK Motowheels Managing Director Shirish Kulkarni said.

"We are planning to invest around Rs 300-Rs 350 crore for setting up our second plant in Maharashtra. Mostly we will be finalising the 100 acre land in Maharashtra itself. It will be highly automated plant with a paint shop. Probably the construction should commence in six to eight months from now," said.

Noting that the company besides serving the domestic market, would also consider exporting the motorcycles from the facility, he said, the company would initially manufacture 125cc-150cc engine capacity motorcycles at the proposed plant.

"Initially, it will be an assembly plant. Hyosung world over has motorcycles with engine capacity ranging between 125cc to 700cc. We will start with 125 cc and 150cc engines.

In three to four years (from now), it will be a fully operational plant... We will manufacture premium motorcycles also...," he said.

The company since June 2012 has sold 1,200 units and Kulkarni expects to sell about 2,000 units by end of 2013.

Stating that the company now has 25 retail outlets in the country, Kulkarni said the plan was to add another 10 outlets with a focus in tier-II locations, by December 2013.

He said though the industry grew by 25 per cent year-on- year, the company registered a 60 per cent growth last year.

DSK Hyosung currently retails motorcycles with base model 250cc GT250R priced at Rs 2.80 lakh (ex-showroom Delhi) and Rs 5.89 lakh (ex-showroom Delhi) for top model ST7 700cc Cruiser bike, he said.
PINTU KUMAR OJHA
P.G.D.M2nd

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Perth Mint works through weekend as gold demand surges on price

Bullion falls 14% in the two days to 15 April, the most since 1983, spurring buyers to increase physical holdings

Gold for immediate delivery traded at $1,473.05 an ounce at 08:01 am in Singapore after losing 0.2%. Photo: Tomohiro Ohsumi/Bloomberg News

Melbourne: Australia’s Perth Mint, which refines nearly all of the nation’s bullion, said that demand has jumped to the highest level in five years after prices plunged, with the factory kept open through the weekend to meet orders.

There’s been strong interest, including from the US, with buyers speculating that the metal will rebound from the decline, Ron Currie, sales and marketing director, said in a phone interview from Perth.

Bullion fell 14% in the two days to 15 April, the most since 1983, spurring buyers to increase physical holdings. Billionaire John Paulson, the biggest investor in the largest exchange-traded product backed by bullion, reiterated his bullish view on prices. Coin sales by the US Mint are set for the highest month since December 2009, while premiums to secure supplies in India rose to five times the level before the slump.

PREETI CHAUHAN

PGDM 2sem

HUL shares zoom 20% on open offer by Unilever

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Shares of HUL shot up by 20% to touch a one-year high, after the FMCG major's parent company Unilever announced to raise stake in it to 75%

86.45(17.38%)

Vol: 19185493 shares traded

Prices | Financials | Company Info | Reports

MUMBAI: Shares of Hindustan Unilever BSE 17.28 % today shot up by 20 per cent to touch a one-year high level, after the FMCG major's parent company Unilever BSE 17.28 % Plc announced it will spend $5.4 billion to raise stake in it to 75 per cent.

Following the news, shares of the company opened higher and further jumped 19.97 per cent to Rs 597 - its 52-week high on the BSE.

At the NSE, the scrip skyrocketed by 20 per cent to a 52-week high of Rs 597.

The stock was the top gainer among the blue-chips on both Sensex and Nifty during morning trade.

The market capitalisation of the company soared by Rs 17,296 crore to Rs 1,24,900 crore.

Unilever will pay Rs 600 a share in an open offer to raise its stake in Hindustan Unilever to 75 per cent from the current 52.48 per cent, the company said in a filing to the stock exchanges.

The price is 21 per cent higher than the stock's closing price of Rs 497.35 yesterday.

The world's second-largest consumer goods company "is making a voluntary open offer to acquire 487,004,772 shares representing 22.52 per cent of the total Voting Share Capital from the public shareholders of Hindustan Unilever Ltd", it said.
IFAT PERWEEN
PGDM

Labour's golden policy key? Build, build and build more

We've seen intellectual Ed. But if Miliband wants to win in 2015, he needs one idea that has our inner optimist jumping for joy

'Building is not just good policy, but the best symbol for optimism.'

The general election is two years and a few days away. By then the political landscape may feel like another country. However well Labour does in Thursday's elections, mid-term results in mainly Tory shires tell us relatively little. One thing is certain: 2015 will be the greatest clash between optimism and pessimism in living memory. Labour needs to persuade the country that politics can and will change lives, hopes and national fate. Despite their own disruptive radicalism, the Tories will claim to be the steady-as-you-go option: change is danger.
This week's YouGov poll for the Resolution Foundation showed the current mood finely balanced. By a majority of over 7:1 voters will make financial prudence and deficit reduction top priority. But the same numbers say they only trust a party that prioritises growth. When offered both options, going for growth (hope) comes out 11% higher than cutting the deficit (fear). YouGov's Peter Kellner adds this useful observation: "Politicians looking for a lead from the public will look in vain." Good to hear a pollster remind them to lead.
These are odd times: many in both main parties seem despondent, finding good reasons why they can't, won't and don't deserve to win in 2015. Scratchy with irritable dissatisfactions, both sides fear the anti-politics sentiment out there. Labour sees fatalism as the enemy – a nihilism that says politics changes nothing. The Tories fear the Ukip dustbin of discontent, hoovering up migration, Europe, HS2, gay marriage and wind turbines, while promising outrageous tax cuts. While the Lib Dems hope only to survive, both Labour and Tories approach the ballot box gingerly this week in something of a confidence wobble. Come 2015 someone has to win, so who's in the worst state?
With right and left upper-cuts from Tony Blair and Len McCluskey, the two Eds may feel a dizzy loss of bearings. They are bombarded from within and without for failing to produce a red-box-ready complete economic policy. They would be crazy to do so, as some Tories concede privately while publicly goading them into the folly of tax and spend commitments now for faraway 2015.
But a financial lacuna can leave Labour floundering, as Ed Miliband did on the World at One on Monday. Asked where he would get £12bn to cut VAT for a year, his answer was growth – which it might indeed produce, though hardly enough to send £12bn flowing into the Treasury in a year. But the b-word – borrowing – is forbidden until the whole manifesto is set out. This was a brutal reminder of the relentless roasting Labour faces in struggling to win trust for economic competence. George Osborne does well with his mantra mocking Keynesianism: "They would borrow less by borrowing more!"
By 2015 with growth at some 2%, the Tory message of fear will be: "Don't let Labour wreck it again." In June, Osborne's comprehensive spending review is designed to force Labour into premature budget promises. Watch the explosion of bogus indignation when Labour refuses that elephant trap. Besides, taking over in May 2015 means inheriting a budget already set, allowing only minor adjustments until the following April. Labour does need some totemic cuts: Miliband didn't altogether rule out a wise one – winter fuel payments for better-off pensioners. But even that honest and widely supported cut would be stormy. So can a message of hope and optimism overcome all that? Labour has plenty to worry about.
Until they peer into the Tory tent, where things look worse. For the win they crave, Tories need to be 10% ahead on the day: just to stay in the coalition they loathe they need to do far better. But living standards will fall below 2008 levels, with wages depressed, prices high and unemployment much worse than when David Cameron took over . And the national debt is ballooning on his watch.
Dicing with death, Philip Hammond may get his way, cutting health and education to fund defence – not popular. The NHS could be a rumbling ferment of bad news. Universal credit will be in deep trouble. Benefit cuts will bring tales of real suffering from the disabled, with evictions due to housing benefit "reform" causing higher costs. This week the Economist calls Duncan Smith's skiver figures "raw sewage" and describes his calculations – that 1 million could work but don't; 8,000 have been pushed into work by the benefit cap; and 878,000 have dropped off benefits for fear of health checks – as "extreme sleight of hand". You can't lie to all the people all the time.
And never underestimate Cameron and Osborne's ideological temptation to do the wrong thing, or propensity to blunder. In this living standards election most people's answer to Reagan's famous question – "Are you better off than four years ago?" – will still be no. Why? Because restored growth will be more unfairly shared than for decades.
Labour has published six bills it would pass now, a reminder that it has more policies than it gets credit for: a real jobs guarantee for the unemployed, 50p top tax, a mansion tax, 10p tax rate, controlling fuel and rail costs, long tenancies, rooting out rogue landlords, an industrial bank. The intellectual underpinning has been laid on wages and wealth distribution.
But if Miliband needs a golden policy key, housebuilding looks set to be it. Build a million homes to cut housing benefit waste, employ hundreds of thousands, create apprenticeships, breathe life into the real economy, stop house price bubbles, replace those right-to-buy social homes. Building is not just good policy, but the best symbol for optimism. Bookies don't like to lose: a Labour majority is their strong favourite, so Labour should cheer up.

VIKAS KUMAR GUPTA
PGDM 2ND SEM

Vodafone, RIL in consortium to build undersea cable

MUMBAI (Reuters) - A group of telecommunications carriers including Vodafone Group Plc (VOD.L) and Reliance Industries(RELI.NS) have joined forces to build an undersea cable system across the Indian Ocean to connect Southeast Asia with the Middle East.

The 8,000-kilometre Bay of Bengal Gateway cable will link Malaysia and Singapore to the Middle East and will have connections to India and Sri Lanka, Reliance said on Tuesday.
The cable system is expected to carry commercial traffic by the end of 2014, it said. Other members of the consortium are Telekom Malaysia Bhd (TLMM.KL), Omantel (OTL.OM), Etisalat (ETEL.AD) and Dialog Axiata (DIAL.CM).
The new cable system is significant for energy-focused Reliance, controlled by India's richest man, Mukesh Ambani, as it readies the launch of fourth-generation (4G) telecom services in the world's second-biggest telecommunications market and is looking for international bandwidth.
The move also illustrates how Indian carriers are investing to build wireless data networks in a market where more than 80 percent of the carriers' revenue is still from voice calls. Data services are growing much faster in India where just a tenth of 1.2 billion people use the Internet.
Carriers in India spent a combined $20 billion to buy 3G and 4G airwaves in a 2010 auction.
Reliance, the only company in India to have nationwide permits for 4G services that enable high-speed wireless Internet, is widely expected to launch the services later this year and is sewing up deals with rival carriers.

Last week it signed a deal to lease undersea cable capacity from Bharti Airtel(BRTI.NS) on the Chennai to Singapore route.

Earlier this month, Reliance Industries said it will lease inter-city optic fibre capacity from Reliance Communications (RLCM.NS), owned by Mukesh's younger brother Anil
JEEUTIKA SINHA
PGDM 2nd sem

Apparel exports down 5.75% in 2012-13: AEPC

The US and Europe together account for over 65% of the country's garment exports

Press Trust of India | New Delhi April 30, 2013 Last Updated at 15:43 IST

India's apparel exports declined by 5.76% to $12.92 billion in 2012-13 due to the demand slowdown in major markets of the US and Europe.

In 2011-12, the sector's export stood at $13.71 billion.

"Exports have declined to the country's major destinations - the Europe and the US," Apparel Export Promotion Council Chairman (AEPC) A Sakthivel said in a statement.

He said India's export to the EU region during January-February, 2013 period declined by 6.5% to $1.1 billion.

Similarly, the country's exports to the US dipped by 7.2% to $571 million during the first two months of 2013 calender year.

The US and Europe together account for over 65% of the country's garment exports.

To boost exports, Sakthivel demanded a cut in customs duty on synthetic fabric and adequate availability of credit at affordable rates to the industry.

"On account of the spiralling cotton yarn prices, the Chairman also proposed the banning cotton exports or allowing garments exporters to import duty free yarn and fabrics," AEPC said

Md. Shane Haider

pgdm 2nd sem

T-shirt tax campaign launched for Bangladesh factory victims

Shoppers urged to pay voluntary donation representing fairer factory wages towards ActionAid charity helping victims' families

Demonstrators outside Primark in Oxford Street, London call for the company to take responsibility for the Bangladesh factory collapse. A different campaign has launched for a voluntary T-shirt tax for victims. Photograph: Oli Scarff/Getty Images

A new campaign has been launched to raise money for the Bangladesh factory collapse victims by urging shoppers to pay a voluntary "T-shirt tax". The cash is going to the charity ActionAid which will distribute it to the families of victims killed in the disaster, as well as to workers who survived.
Victoria Butler-Cole, a 36-year-old barrister from Kent who came up with the idea, said: "It seems to me we have a moral duty to help. Everyone has something in their wardrobe from Bangladesh. This isn't just the fault of companies who supply cheap clothes."
Butler-Cole said shoppers should consider donating the difference between what they paid for a T-shirt – and what it would cost if it had been produced by workers treated property. For example, if a T-shirt produced in Bangladesh cost £3, a £3 donation would be fair, she said.
On Saturday demonstrators gathered outside cut-price retailer Primark's flagship store in Oxford Street. A petition has been launched calling for Primark and other brands, including Matalan and Mango, which used businesses based inside the Dhaka building, to compensate the families of workers killed or injured.
Butler-Cole acknowledged struggling families wouldn't be able to pay a T-shirt tax, and often relied on cut-price clothes. But she said others should consider it. The tax was better than a high-street boycott, which could lead to Bangladeshi workers losing their livelihoods, she added.
Butler-Cole's sister Imogen, who lived in Bangladesh, has launched a Facebook page and Twitter campaign with the hashtag #TShirtTax.
Currently ActionAid Bangladesh has 200 volunteers helping with the rescue operation and providing food, water and emergency equipment.

VIKAS KUMAR GUPTA
PGDM 2ND SEM

Volkswagen Polo petrol variant launched, priced at Rs. 7.99 lakh

Volkswagen today launched a petrol variant of its popular hatchback Polo.

The 1.2-litre new Polo is priced at Rs. 7.99 lakh (ex-showroom Delhi), said Arvind Saxena, managing director for passenger cars, Volkswagen Group Sales India after the launch in Mumbai.
The company has not offered the price range for the Mumbai market.
"Fuel efficiency has become vital for every customer looking at purchasing a new car and the Polo GT TSI is an answer to this demand offering maximum power and minimum consumption," Saxena said, adding that the TSI is a pioneering technology of petrol engines by Volkswagen.
Volkswagen, the largest European car maker, sells the Polo, Vento, Jetta, Passat and the Touareg in the domestic market.

mukesh kumar
pgdm
032

Honda's discount offers on Brio, Jazz under CBEC scanner, asked to pay Rs 164 crore more as excise duty

Honda Motor Company's endeavour to garner market share in India by offering discounts on models such as the Brio and Jazz has run afoul of tax authorities.

NEW DELHI: Honda Motor Company's endeavour to garner market share in India by offering discounts on models such as the Brio and Jazz has run afoul of tax authorities. The Central Board of Excise & Customs(CBEC) has served a show-cause notice on the Japanese auto major demanding that it pay Rs 164 crore more as excise duty, on the grounds that the levy should have been paid on the cost of production of the cars, and not on their discounted sales price.

This follows the Supreme Court judgement in the Fiat case last year, where the apex court ruled that if a company sells products at a loss for a long period because of commercial considerations or under competitive pressures, then price is not the sole consideration and excise duty should be paid on manufacturing cost plus a 'reasonable' profit margin. Excise duty is an inland tax on the sale of goods produced domestically. It is paid by the manufacturer, but often passed on to the customer.

Carmakers have resorted to price cuts and discounts to entice customers and increase market share amid tough conditions. Car sales grew just 2.2% in 2011-12 and declined for the first time in a decade in 2012-13 as customers put off purchases in a slowing economy.

It's been a difficult few years for Honda in India because of the shift in demand from petrol to diesel cars as well as the disruption in supply of critical parts due to the 2011 tsunami in Japan, which delayed the launch of Brio and reduced the availability of Jazz. For a long time, Honda did not have a diesel car in its stable, though it has bridged the gap with the recent introduction of Amaze.

The company's market share in the country slipped to 2.07% in 2011-12 from 4.05% in 2007-08.

Honda was able to regain lost ground last year and ended 2012-13 with a 2.73% market share on the back of brisk sales of Brio. While its financial results for 2012-13 are not known yet, Honda's India unit registered a loss of Rs 604.50 crore as revenues dipped 8.5% from the year ago.

In 2011, Honda had, for some time, offered discounts of Rs 1.60-1.75 lakh on the Jazz in a bid to woo customers. Later, it cut prices of other models such as the Brio, which accounted for 43% of its total sales in 2012-13. These discounts have now caught the eye of excise authorities.

A Honda spokeswoman said the company was working closely with industry bodies that were liaising with the authorities concerned on the tax issue. "As you know, this is an industry issue," she said.

Carmakers have lobbied hard with the finance ministry to not raise duty demands on companies that have cut prices. The CII had, during its post-budget interaction, asked Finance Minister P Chidambaram to take into consideration the reasons for manufacturers selling goods at less than the cost of production. The excise department has set up a panel to look into the implications of the Fiat judgement. The panel has not submitted its recommendations yet.

The Honda excise notice is the latest in a growing list of tax demands that have been slapped by the government on multinationals in recent times. The government has issued notices to Shell and Vodafone for allegedly undervaluing shares while transferring them to associate companies. Nokia and Cadbury, meanwhile, have been charged with evading taxes. A tax demand has also been issued to Microsoft.

ALOK KUMAR
PGDM II SEM

Honda's discount offers on Brio, Jazz under CBEC scanner, asked to pay Rs 164 crore more as excise duty

Amul hikes milk price by Rs 2/litre in Delhi-NCR from tomorrow

Milk will be costlier in Delhi- NCR market with leading supplier Amul deciding to increase the rates by Rs 2 per litre effective from tomorrow.

NEW DELHI: Milk will be costlier in Delhi- NCR market with leading supplier Amul deciding to increase the rates by Rs 2 per litre effective from tomorrow.

"We have decided to raise the milk price in Delhi-NCR region by Rs 2 per litre. The prices have been hiked after 13 months as input cost have increased," R S Sodhi, the Managing Director of Gujarat Cooperative Milk Marketing Federation (GCMMF), which sells milk under Amul brand, told PTI.

Sodhi said the prices of full cream milk will now go up to Rs 42 per litre from the current Rs 40 per litre, while that of toned milk to Rs 32 per litre from Rs 30 per litre and double-toned milk to Rs 28 from Rs 26 per litre.

"Our purchase price for milk procured from farmers have increased along with normal inflation in other input cost such as transportation," Sodhi explained.

Amul is a leading milk supplier to the national capital region with sales of 2.3 million litre of packaged milk per day. Mother Dairy sells more than 3 million litre per day in Delhi-NCR including packaged and loose (token) milk through vending machine.

Asked about other markets, Sodhi said the prices in Mumbai have already been increased a week-ago.

GCMMF posted a turnover of Rs 11,668 crore in 2011-12 fiscal, which was 20 per cent higher than Rs 9,775 crore in the previous fiscal.

GCMMF, which is based at Anand in Gujarat, processed 14.5 million litres of milk per day in 2011-12 and has planned to increase the processing capacity to 18 million litres a day by 2018 to meet future demands.

Avinash kumar
PGDM 2nd sem.

Unilever to raise stake in Hindustan Unilever in $5.4 billion offer

Unilever to raise stake in HUL in $5.4 billion offer

Unilever will buy the shares for Rs 600 each, 20.6% premium to the Monday's closing price, the manager to the offer HSBC Sec informed the stock exchanges.

MUMBAI: Anglo-Dutch consumer goods giant Unilever Plc will pay as much as $5.4 billion to raise its stake in its Indian unit, Hindustan Unilever, to up to 75 per cent in a bet on fast-growing spending power in Asia's third-largest economy.

Unilever said it would acquire up to 487 million shares, or 22.52 per cent of the equity, of Hindustan Unilever BSE 17.28 % in an open offer for Rs 600 a share, 20.6 percent premium to Monday's closing price.

The bid sent shares in Hindustan Unilever, largest consumer goods maker, surging 20 per cent to an all-time high on Tuesday morning.

"This represents a further step in Unilever's strategy to invest in emerging markets and offers a liquidity opportunity at what we believe to be an attractive premium for existing shareholders," Unilever's chief executive, Paul Polman, said in a statement.

Indian law requires a minimum public shareholding of 25 percent for a publicly listed company.

The offer, payable in cash, is expected to begin in June 2013 and at $5.4 billion would be the largest equity offer ever in India.

HSBC is the manager to the offer. "It makes a lot of sense to increase stake if the company is serious about staying here for long term," said G. Chokkalingam, chief investment officer of Centrum Wealth Managers, which bought a small stake in Hindustan Unilever after the company reported results on Monday.

"In the long term, we expect there will be more incentive for the parent company to share technology to the Indian unit, introduce more brands here and raise market share," he said.

Last November, GlaxoSmithKline Plc offered to buy an additional 31.8 per cent stake in its India consumer products business for about $940 million

ALOK KUMAR

PGDM II SEM

Volkswagen launches Polo petrol variant at Rs 7.99 lakh

BT Online Bureau Mumbai Last Updated: April 30, 2013 | 00:00 IST

Tags: Volkswagen Polo | Volkswagen cars | POlo | POlo price

STORY TOOLS

Volkswagen new Polo GT TSI Photo courtesy: http://www.volkswagen.co.in

Priced at Rs 7.99 lakh (ex-showroom Delhi), Volkswagen on Monday launched a petrol variant of its popular hatchback Polo. The new Polo GT TSI is powered with 1.2-litre, 4 cyclinder TSI engine

The company has not offered the price range for the Mumbai market.

"Fuel efficiency has become vital for every customer looking at purchasing a new car and the Polo GT TSI is an answer to this demand offering maximum power and minimum consumption," said Arvind Saxena, Managing Director for passenger cars, Volkswagen Group Sales India. He added that the TSI is a pioneering technology of petrol engines by Volkswagen.

Volkswagen, the largest European car maker, sells the Polo, Vento, Jetta, Passat and the Touareg in the domestic market.
PINTU KUMAR OJHA
P.G.D.M2nd

Microsoft’s Azure cloud sales top $1 billion annually

Microsoft’s $1 billion sales figure includes Azure, as well as software provided to partners to create related Windows cloud services. Photo: Reuters

Microsoft Corp.’s Windows Azure software and related programs have surpassed $1 billion in annual sales for the first time, a sign of progress in the effort to challenge Amazon.com Inc. in cloud computing.

“The sales milestone for Azure—which stores business information and programs on remote servers and lets customers access them over the Web—was reached in the past 12 months,” said Curt Anderson, finance chief for Microsoft’s server and tools unit.

Microsoft, the largest software maker, is counting on Azure and other Internet-based business programs to bolster growth as a global personal-computer slump erodes demand for Windows software installed on desktop machines. “About 20% of companies tapping the cloud use Azure, compared with 71% usage for Amazon, according to James Staten,” an analyst at Forrester Research Inc. “Within a year, Microsoft can command as much as 35%,” he said.

“I expect them to double annually from here, Staten said of Microsoft’s Azure revenue. Microsoft probably has more net new growth opportunity sitting in front of them than probably anyone in the market.”

Microsoft’s $1 billion sales figure includes Azure, as well as software provided to partners to create related Windows cloud services, Anderson said in an interview. Azure customers use the services to run corporate programs, websites and applications from Microsoft’s data centres, rather than spending on their own servers, storage machines and workers to maintain them.

Amazon’s Beachhead

“Azure subscriptions have risen 48% in the past six months,” said Takeshi Numoto, Microsoft’s vice-president for marketing for the server and tools division. That unit, which encompasses Azure, has posted nine straight quarters of sales growth of at least 10%, he said. Windows sales were $18.4 billion last year, down 5.7% from a peak in 2010.

Gaining ground against Amazon won’t be easy. Microsoft will need to do a better job of convincing existing customers, as well as newer companies seeking to reduce computing costs, why they should opt for Azure, Staten said.

“The majority of people thinking about cloud weren’t thinking of Azure first,” Staten said. “That’s been an uphill climb for them, and even though Microsoft is now matching the prices of Amazon and some of the capabilities, they haven’t really answered the question of ‘Why Azure?’”

Startups, which tend to be early adopters of new technology, may be an especially hard sell, he said.

“They haven’t excited the front-line developers—the ones who made Amazon who they are,” he said. “Those will be hard to influence.”

AMIT KUMAR SINGH

PGDM- 2ND SEM

Monday, April 29, 2013

Air India will expand aggressively this year : Rohit Nandan

Air India and other airlines will have to gear up to meet challenges after Jet-Etihad deal, says Air India CMD

Air India will use two 787s this year as a premium product in the domestic market to ply on metro routes, says chairman and managing director Rohit Nandan.

New Delhi: Air India Ltd will connect Delhi to Rome, Milan, Moscow, Melbourne, Sydney and Birmingham with direct flights in a bid to expand its footprint, one-and-a-half decades after it stopped flying to many of these cities, the airline’s chairman and managing director Rohit Nandan said in an interview.

Air India will deploy its brand new Boeing Dreamliner 787s in these routes as it takes steps to compete with stronger rivals, including the Eithad Airways-Jet Airways combine, which announced a strategic partnership last week. Edited excerpts:

Despite strong opposition from India’s airlines and most large airports, the government has gone ahead and allowed a 400% increase in the number of seats to and from Abu Dhabi, and Abu Dhabi’s Etihad has immediately invested in Jet Airways. How do you respond to this new situation ?

It is a challenge, it is definitely a challenge but Air India is competent to face these challenges. The changes are bound to happen and we are not living in a protectionist environment. It would be unreasonable to have that expectation. Air India and all other airlines will have to gear up.

What do you plan to do to about the impact of this alliance on Air India’s finances as many passengers will now fly to the US and Europe via Abu Dhabi?

We have a different model based on direct flights (Air India operates direct flights to US and Europe). We have now been pursuing it for some time. We dismantled our Frankfurt hub long time back. This new model of direct flights provides a better product to the people. It is a better product and better price that will win.

So does the deal between Etihad and Jet not impact you at all?

Ideally speaking, which airline would not like to be protected, but that is not how the world is going to function. Our product will be superior to others and that is how we will compete. We are introducing Rome and Milan (Italy), Moscow (Russia), Birmingham (Britain) in the next three-five months, then we are introducing (flights to) Australia.

These flights will be from Delhi or Mumbai?

We will use Delhi as a hub and as and when Mumbai will have capacity—which I am told will be soon—it will be a natural second hub for us. It has always been our hub. That will cater to western and southern India markets.

So Delhi will act as your main hub?

We would not like to have an offshore hub [a reference to Jet’s hub being in Abu Dhabi now]. We would like to have a national hub.

These flights will be all run with your new Dreamliner 787s?

Yes, we plan to do it with 787s.

So, your focus in 2013 is going to be Europe and direct flights?

It’s basically giving value for money to the passengers. We will be doing a lot more. Air India will expand aggressively this year. We are looking at five destinations in five months. Not many airlines try that.

What happens to your domestic market share? Since you are not expanding, your market share which has improved to 20.2% after many years will shrink again, won’t it?

We will use two of our 787s this year as a premium product in the domestic market to ply on metro routes. Earlier, we were flying them on the Chennai, Kolkata, Bangalore route from Delhi, so two of these 787s will continue to cater to the domestic market from now on.

In your meetings with the civil aviation ministry, Air India had categorically said that if the increase in capacity Abu Dhabi was asking for was allowed, it would forced to withdraw its flights from US. Do you plan to do this now?

There is no question of cancelling US flights; if at all we may look at expansion provided there is a market for it. We will look at newer destinations.

But these flights have to feed off and into another airline there, right?

We will definitely have a code share or a seat (sharing) arrangement to go into the interiors with one of the US airlines.

Where do the talks with Star Alliance stand?

That remains, but we have to develop relationships with other powerful airlines. We have already signed (partnerships) with Air Egypt, Air Astana and I think this year we will be able to do more code shares and improve existing ones.

Star also has to see how the Asian network as well as the Indian network fits into its scheme. I am very hopeful. It’s more of a time thing because of the 2011 setback [when Star back-tracked on its commitment about inducting Air India into the alliance] and we are continuously pursuing it but we can’t be sequential (and say we will exclusively focus on it).

Have you talked with the other two major alliances Oneworld and Skyteam?

No, not Skyteam and Oneworld. As of today we are looking at Star Alliance but those (two) options are completely open to us.

Have they approached you?

They haven’t, knowing well that we are in talks with Star Alliance.

Is there a timeframe on how long you plan to pursue Star?

We can’t put a timeframe on that one. Everyone (every member of Star) has a right to say what they feel in that group and even if one member disagrees then it becomes difficult. But we are confident that the environment is now in favour of Air India. It’s better to go softly and cautiously.

How are last fiscal’s numbers looking?

In March, we have done exceptionally well; our loads have been higher than IndiGo. We are neck-to-neck in other parameters. We have a lot of hope now with the 787s being released to fly. In September, we had a lot of positive energy in the company which I think will come back as soon as the 787s start flying. In 2012-13, we were Ebidta (earnings before interest depreciation taxes and amortisation) positive of Rs.19.45 crore compared with a Rs.2,236 crore loss last fiscal. Every parameter is looking better than last year and this is despite of the fact we have had a pilot strike, (unfavourable) dollar rate changes, and grounding and delayed delivery of 787s. We have done better than what we were expecting.

I understand the net loss will be about 30% less than last fiscal?

Yes. It was Rs.7,559 crore last year, this year will have a net loss of Rs.5,198 crore. It would be a reduction of Rs.2,400 crore. The cash losses will reduce from Rs.5,884 crore to Rs.2,585 crore, which is nearly half. Our revenue this year increased by Rs.1,200 crore and yields have increased by 21%. Had the 787s not been grounded the performance would have been even better.

What are the targets for this fiscal? Do you see further improvements on numbers?

Yes. The Ebidta for this fiscal is projected to be Rs.1,040 crore. This should be achievable if the 787s fly.

What support do you want from the government?

We just want the equity that has been promised to us in the turnaround plan. We are meeting and surpassing the parameters that we were supposed to meet under that plan.

priya singh pgdm

Fiat seeks to up market share from 1% on back of new campaign

Fiat Group Motors, now a 100 per cent subsidiary of the Italian SPA post its transition announcement from Tata Motors, has launched a new integrated brand reassurance marketing campaign, designed as a communication tool to tell its consumer database about its new initiatives, dealerships, post sales service and more importantly, deliver the brand experience that was missing with the joint venture with Tata Motors.

This is also an initiative by the brand to make up for lost brand equity and sales due to the split and re-establish itself in the Indian market.

“Go direct to the consumer, do not depend on anyone else to give the customer your brand experience, have a direct contact with the market, and local customisation is imperative, are some of the lessons we learnt from the JV,” said Nagesh A Basavanhalli, President and Managing Director, Fiat – Chrysler India Operations.

“It is a very exciting time to be back in India where the consumer is younger and more ambitious,” added Basavanhalli.

The brand has also re-engineered its approach and consolidated its network relationships, with a three-focussed approach on brand, product and distribution. Fiat India has 51 exclusive points of sales (dealerships) and plans to double its footprint by the end of the financial year.

With the establishment of FGAIPL, an independent dealership network and state-of-the-art workshop dedicated to serving FIAT vehicles in prime locations across major cities in India, Fiat’s wheels are in swift motion to capture significant market share in one of the fastest growing markets in the world.

The brand has taken a big bang approach for its comeback of sorts with its ‘Make the move’ campaign. To make its presence felt, it is using IPL as a media vehicle, hoping to grab eyeballs of cricket fans on television. Maxus India is responsible for the media presence of the brand, whereas Ogilvy India has conceptualised and executed the campaign.

“The campaign comes post the Fiat and Tata Joint venture coming to end. It is a brand reassurance campaign to reach out to existing and new consumers to say ‘we have our won exclusive dealerships’. It is a completely 360-degree campaign, present at all consumer touch-points. I would call it a balanced campaign with a strong presence across TV, digital, print, radio and OOH media,” commented Kartik Sharma, Managing Partner, Maxus India.

The genesis of the campaign is based on urging the consumers to make the move, follow their heart and realise their long pending dreams.

“As long as the overall emotional persona resonates with something that the consumer feels strongly about, there is a connect; this is what brands are looking for. We have the heritage and history in the market to make the claim that we have been there through both, the good and the bad times,” observed Tarun Khanna, Marketing Head, Fiat India.

The brand’s existing offerings Linea and Punto contend with Honda, Skoda and Hyundai – all of which have the advantage of a consistent connect with the consumer through new product offerings and brand initiatives.

Television has been allocated around 60 per cent of the spends, the TVC being the face of the campaign, followed by 20 – 25 per cent to print, which supports the TVC and 15 – 20 per cent of the brand’s spends are allocated to the digital medium, which is a growing focus area for the brand. It has also revamped its website to increase consumer engagement and interface.

“In the auto segment, very little stands out today. The category in its entirety reminds me of the suitings category of yore. A category where everyone advertised like everyone else did, till a time when everyone looked like everyone else. In the end, you loved the category advertising, but you forgot which brand did what. Fiat and 'Move on' is reasonably generic in its mindset, tone, tenor and decibel. The campaign helps stay in the category, but does not help it jump out and stand out,” feels Harish Bijoor, Brand Expert and CEO, Harish Bijoor Consults.

The brand has also opened Fiat cafes which it positions as ‘Cafés with cars on the menu’ in collaboration with coffee retail giant, Lavazza, as its retail partner in Pune and Delhi. These cafes aim to showcase the brand’s offerings in an informal atmosphere combined with Lavazza’s offerings of pasta and coffee.

This is, however, not the first time an automobile player has ventured into the gourmet arena to enhance brand experience; BMW conducts similar food and wine tastings and invites the consumer base to experience its latest offering. More recently, Mercedes also conducted similar initiatives.

The brand currently has a market share of 1 per cent and has seen a quadrupling of sales in some pockets of the country. With 51 touch-points of exclusive dealers, 360-degree marketing campaign, focus on service and expansion of exclusive dealer networks in metros followed by tier II and III cities, the brand aims to increase its market share.

The question still remains: Is Fiat India making the right move to reconnect with consumers, catch up with completion in a fiercely competent automobile market in India and repair its brand image? Will this campaign aid the brand in rebuilding its equity after being meted out the step child treatment by Tata Motors? Only time will tell.

ALOK KUMAR

PGDM II SEM

Nokia sees revival with handsets at 97% discount to iPhone

Priced 97% below the latest iPhone, the Nokia 105 features pre-loaded games, a colour screen, a radio and a flashlight

Nokia CEO Stephen Elop pointed to the 105 as a signal that the low-end business can recover after a difficult quarter. Photo: Reuters

Markets shake onslowing China

SponsoredManagers' Index for China in April fell to 50.5 in April from 51.6 in March but was still stronger than February's reading of 50.4, suggesting that the world's second-largest economy still faces formidable global headwinds into the second quarter. A sub-index measuring new export orders fell to 48.6 in April from 50.5 in March, reflecting weaker global demand.

The figures follow an unexpected contraction in export orders in March to Taiwan, one of the region's biggest providers of tech gadgets, signalling that Asia's trade-reliant economies may be losing further momentum.
Exports from South Korea, another big supplier to the global tech industry, fell by 3.1% for the first 20 days of April from a year earlier.
The PMIs for the euro area showed that business activity in Germany shrank for the first time in five months in April, while a broader gauge of the wider 17-nation zone showed the region still mired in recession. A similar survey for US manufacturing is due later in the day and is expected to show that growth in factory activity there slowed slightly this month.
"New export orders contracted after a temporary rebound in March, suggesting external demand for China's exporters remains weak," said HSBC's China chief economist Qu Hongbin. "Beijing is expected to respond strongly to sustain the economic recovery by increasing efforts to boost domestic investment and consumption in the coming months."
Asian stocks reacted with gloom, and crude oil and gold followed suit. Hong Kong shares slid 1.2% and Shanghai tumbled 2.2%. Japan's Nikkei eased 0.2% as investors took profits from Monday's nearly five-year highs.
Brent crude fell below $100 a barrel on Tuesday.
KAUSHAL SINGH
PGDM 2 SEM

Coke and Pepsi change manufacturing process to avoid cancer warning

Coca-Cola and PepsiCo account for nearly 90% of the US fizzy drink market

Coca-Cola and Pepsi are changing how they make an ingredient in their drinks to avoid being legally obliged to put a cancer warning label on the bottle.

The new recipe for caramel colouring in the drinks has less 4-methylimidazole (4-MEI) - a chemical which California has added to its list of carcinogens.
The change to the recipe has already been introduced in California but will be rolled out across the US.
Coca-Cola says there is no health risk to justify the change.
'No risk' Spokeswoman Diana Garza-Ciarlante told the Associated Press news agency they wanted to ensure their products "would not be subject to the requirement of a scientifically unfounded warning".

4-methylimidazole (4-MEI)

Formed naturally in the heating and browning process
Occurs in caramel colouring as well as some roasted and cooked foods
Can be in some cleaning, photographic and agricultural chemicals, dyes and pharmaceuticals
Exposure can be through consumption or during manufacturing process

Source: California Office of Environmental Health Hazard Assessment

The chemical has been linked to cancer in mice and rats, according to one study, but there is no evidence that it poses a health risk to humans, said the American Beverage Association, which represents the wider industry.

The US Food and Drug Administration (FDA) claims a person would need to drink more than 1,000 cans of Coke or Pepsi a day to take in the same dose of the chemical that was given to the animals in the lab test.
Coca-Cola and PepsiCo account for nearly 90% of the US fizzy drink market, according to one industry tracker, Beverage Digest.
The companies say changing their recipes across the whole of the US, not just in California, makes the drinks more efficient to manufacture.
In a statement Coca-Cola added that the manufacturing process across Europe would not change.
It said that apart from California "not one single regulatory agency around the world considers the exposure of the public to 4-MEI as present in caramels as an issue".
Correction: This story has
IFAT PERWEEN
PGDM 2ND

Tata Steel to shut UK technology centres, job cuts expected

Tata Steel has reportedly warned the British government that it plans to shut down two research and development facilities in the country and shift them overseas, including to India.

In November last year, the company had revealed plans to restructure its British business, which is expected to lead to 12 site closures and 900 job losses.

In a move that will be seen as a major blow to Britain's already struggling industrial base, the steel giant plans to close its technology centres on Teesside, in the north-east of England, and in Rotherham, South Yorkshire, over the next 18 months.

A source told The Sunday Times that Tata Steel may then shift this research to the Netherlands and India, resulting in 300-400 job cuts in the UK.

Tata Steel employs around 19,000 workers in Britain and controls 46 per cent of the domestic market.

Despite the tough environment, it has invested hundreds of millions of pounds in the British operations, including 185 million pounds on a new blast furnace at Port Talbot in south Wales the company's prime asset in the UK.

Its other large plant in Scunthorpe produces flat-steel products, used mainly in the construction and infrastructure markets.

Tata Steel's Europe operations have been hit by a combination of high energy costs, falling demand and plummeting steel prices, which have fallen by 5 per cent in the past month.

Demand has slumped 30 per cent since 2007, largely as a result of China's slowing growth rate putting the brakes on its appetite for the metal.

The European steel operations of Tata, a result of its acquisition of Corus back in 2007 for an estimated 6.7 billion pounds, is believed to be operating with towering debts of 3.4 billion pounds.

Tata has previously dismissed talk of selling some of its British assets but it is believed the company may seek a partner to invest in its Lincolnshire plant.

VIKAS KUMAR GUPTA
PGDM 2ND SEM

Infosys seeks edge over competition with IPsoft tie-up

Infosys' Chandrashekar Kakal (left) with IPsoft's Chetan Dube

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BANGALORE: Infosys has tied-up with New-York based IPsoft in a decisive move that has the potential to drive revenue growth at the Bangalore-based company which is under pressure to demonstrate industry-matching performance.

The partnership with IPsoft, widely regarded as the IT industry's new benchmark in non-linear growth, is not an exclusive one for India's second-largest software exporter. But by virtue of being the first among Indian outsourcing companies to do so, the tieup will give Infosys a head-start on competition in infrastructure management, one of the fastest-growing service lines for the $76 billion (Rs 4.1 lakh crore) IT exports sector.

"We wanted to push the envelope on the automation front and IPsoft has a proven track record in the IT infrastructure maintenance and network management space," said Chandrashekar Kakal, senior vice-president and a member of the Bangalore-based company's executive council who heads business IT Services globally for Infosys. The partnership, which has been in the works for at least six months, will work on a revenue-sharing model.

For Infosys, infrastructure management services accounted for about $530 million, or about 7 per cent of its $7.4 billion sales in the year to March 31. Infosys' exposure to the infrastructure business is less than rivals such as HCL Tech BSE 2.57 %, which gets around $1.26 billion or 28 per cent of its $4.5 billion sales from the service.

IPSoft, founded in 1998 by Chetan Dube, a former New York University mathematics professor, promises 30-40 per cent savings in typical infrastructure management costs. The company's self-learning, self-healing software platform is capable of providing basic infrastructure management support services with limited human intervention.

"Our commitment will be to deliver, in conjunction with Infosys, a certain level of automation and efficiency gains," said Dube, IPsoft's president and chief executive officer. "We will be training around 4,500 of Infosys personnel in Mysore."

Gartner estimates the global IT infrastructure management market to touch around $140 billion by 2015.

Besides the joint go-to-market advantage, the partnership will let Infosys migrate existing clients where IT infrastructure is being managed manually to the autonomous model of IPsoft, thereby being able to significantly reduce the number of engineers deployed to maintain such networks.

Infosys is also betting on extending IPsoft's platform's capability to other service areas to reduce human effort in managing routine and repetitive tasks in areas such as application maintenance and testing as well as business process outsourcing. Towards that end, Infosys and IPsoft is jointly setting up a centre of excellence in Mysore.

"There is a push to move towards a significant level of automation and become less people-dependent. Given that stark reality, it is inevitable that companies will have to move in that direction," said Siddarth Pai, partner and head of the Asia Pacific region at outsourcing advisory ISG. "Service providers with unfettered access to automation tools will be better placed competitively to cater to the emerging demand."

AMIT GUPTA
PGDM 2nd sem