News: Mukesh Ambani eyes organic farming

(NDTV 31/03/2006) Jamnagar - Mukesh Ambani may be making quiet plans behind the world's third largest oil refinery in Jamnagar to enter the agricultural sector through organic farming.

Having announced his formal plans to enter the retail sector, one knows Mukesh Ambani now wants to produce his own vegetables.

The Ambanis are already looking for a tag line to sell these products at their own retail chain. They want to bring the prices down of every fruit and vegetable by at least 30-40 per cent.

And organic farms being experimented with at Jamnagar could be the start up points for subsequent mass scale production.

The organic farms are being managed by a small team of agricultural experts at present.

These experts manage to control the climate artificially in the water-starved region of Jamnagar, but there are indications that products from these organic farms will soon hit the markets.

Within the Jamnagar refinery complex is also one of the largest mango orchards of more than one lakh trees spread over 400 acres, where more than 600 tonnes of mangoes are to be produced this year.

And if history is anything to go by, it is clear Mukesh Ambani is all set to make this experiment of organic farms his backbone of producing high quality vegetables on a large scale and selling them very soon through his own retail chains.

Interview: Nimesh Kampani - Chairman JM Morgan Stanley

(Rediff 31/03/2006) Mumbai - It will not be an exaggeration to say that Nimesh Kampani, Chairman, JM Morgan Stanley, knows the Bombay Stock Exchange like the back of his hand. His father Nagindas and uncle Jamnadas Morarjee were names to reckon with at the BSE, but Kampani -- the ace merchant banker -- surprises us saying that he has never speculated in the market. That, however, has not stopped him from carrying forward a rich legacy.

One of the key players in making the BSE the engine of growth for the new Indian economy, Kampani has attained fame over the years for making possible mega acquisitions and mergers. He has come to be known as one of India's foremost votaries of liberalisation.

Kampani was one of the leaders who propelled the stock exchange boom in early 1980s when Reliance Industries founder and visionary Dhirubhai Ambani entered the world of equities.

Those who invest in shares cannot forget how Telco's (now named Tata Motors) public issue changed the world of investment forever. Kampani was the merchant banker for that historic issue.

Nimeshbhai, as he is popularly known, is media-shy and a man of few words. For a change, however, he agrees to a rare and exclusive interview with Managing Editor (National Affairs) Sheela Bhatt over dinner in New Delhi and talks about what can bring about changes in India and about the do's and don'ts of investing in the stock market.

The first of a three-part interview:

Please share with us your early memories of the Bombay Stock Exchange.

During the China War in 1962, the market was practically closed for more than a year and share brokers had no income. Again in 1965 -- I was a student, then -- when war broke out with Pakistan, we had a bad time. It was an awful one for Indian stocks.

I started investing in the market around 1973 to earn a living. I have never speculated in my life.

Everything changed in the stock market after 1980. It started with the government's order to foreign companies -- which fell under the purview of Foreign Exchange Regulation Act -- to dilute their holdings in Indian companies.

The government asked foreign companies to sell their stakes and to bring it down to 40 per cent of the total market share. That led to the public issues of Colgate, Hindustan lever, Nestle and others.

The then industry minister George Fernandes told Coca-Cola to get out of the country. Despite the socialistic pattern of the country, some foreign companies wanted to live in India and hence they brought down their shareholding to 40 per cent.

I remember in the 1970s the biggest public issue my company handled was worth Rs 4.5 crore (Rs 45 million) of Southern PetroChemicals. It was a huge task for us.

Also, during this time, I got to manage the public issue of Lakshmi Niwas Mittal's family. It was worth Rs 40 lakh to Rs 50 lakh (Rs 4 million to Rs 5 million). Their family firm, Andhra Steel Corporation, came out with the issue during the war with Bangladesh in 1971.

I can't forget how we filled in our clients forms in candlelit rooms at Mumbai's Natraj Hotel.

How and when did people's perception of the stock market change?

That started with the Tatas' issue of Telco. In 1980, the Tatas called us and said they wanted to have a public issue worth Rs 50 crore (Rs 500 million). It was a startling proposition. I think the issue was worth little less than Rs 50 crore.

Everyone had doubts about raising such a huge amount from the Indian market. The share was finally oversubscribed by five to six times!

It was the first time company leaders said, 'My God, we do not know how to raise money! Indians do have money.' We held some 48 conferences all over India, including small towns. We went to Dubai and Abu Dhabi and got a whopping $10 million.

I went to the Government of India's Company Affairs department to get permission to raise money abroad. The company thought I was insane. It said I won't even get permission for it. Why would someone pay money with repatriation rights?

I showed the Reserve Bank of India's manual to the sceptics. We talked to the ministry of finance. I sent an application. The ministry asked me, 'How can you raise funds like that from abroad?' I said, 'It is written in your manual. Either change it or give me permission.' It gave me permission, but while handing over the papers, I was told, 'Nimesh, we are watching you! You better bring in the money! Don't run away with the permission!'

We worked very hard. We filed a prospectus in London. I flew to West Asia to meet the Tatas' export executives to know which countries they exported to.

I wanted to know who could invest in the Tatas' public issue. The company said it was exporting to West Asia and Africa. I wasn't sure of getting funds from Africa. Therefore, I concentrated on Indians living in West Asia. We arranged meetings among salaried Indians over there.

In our first meeting, we found people laughing at us. What are repatriation rights, they asked.

Earlier, they had a bitter experience of National Defence Remittances bonds. The Government of India had changed its stance over the same. We told them the Tatas are involved and that JM Finance is the merchant banker who would share criminal liability along with the Tatas. We urged them to read the prospectus.

Gradually, we managed to create trust and got $14 million to $15 million for that issue. I had promised the Tatas we would get $10 million.

Looking back, how do you see the issue?

People have earned like anything from the issue. What we sold for Rs 22.50 per share is now valued at Rs 800. The share of Rs 100 was sold for Rs 225. Later, it was spilt into 10. The company has given bonus and other advantages.

Recently, when I went to Kuwait, some Indians met me and said they are yet to sell Telco shares they bought in 1980. Why would anybody complain if your share of Rs 5 has a market value of Rs 800? I myself haven't sold those shares.

Which are the other factors that lifted the Indian stock market?

In 1980, Indian market capitalisation was merely Rs 5,000 crore (Rs 50 billion). Now, it is approximately Rs 27,00,000 crore (Rs 27 trillion). Just imagine the profit of those people who invested in Indian stocks in 1980. After Telco, I managed the issue of Tata Power shares.

We sold a share for Rs 10 which is now priced at Rs 300, not including bonus shares and other advantages. In 1978, ICICI managed Reliance's first public issue.

They sold Reliance share of Rs 10 which is now selling at Rs 700 and investors have earned out of its bonus shares. Reliance and Tata launched the beginning of a great change. (Dhirubhai) Ambani decided to let shareholders earn money. They wanted to create wealth via the equity market. The money that investors invest should be used in growing your industry.

In 1985, Rajiv Gandhi got a 75 per cent majority in Parliament. It raised people's hopes. We all thought Rajiv will do something, that he will change India.

Somehow, India missed the bus. Rajiv exited and V P Singh came to power. One crisis followed another. Rajiv died amidst economic turmoil. We had to pledge gold and we had foreign exchange to buy oil only for a week.

Then entered P V Narasimha Rao and Finance Minister Dr Manmohan Singh. Dr Singh devalued the rupee to make the market attractive to exporters. He told Indian business houses to increase exports as he felt only then would we have foreign reserves. The trade situation was grim.

In retrospect, I feel Dr Singh then played his cards right. He devalued the rupee from Rs 14 to Rs 18 per dollar. In just two days, he devalued it further to Rs 23 against the dollar and then to Rs 27. Thereafter, the rupee remained stable at Rs 33.

The exporters earned and got us the most desired foreign exchange. For, they were earning Rs 33 instead of Rs 13 for every dollar of exported goods.

Thanks to Dr Singh, Indian exporters, who were exporting goods worth $100 million before liberalisation, started earning Rs 140 crore (Rs 1.4 billion). Now, they are earning Rs 440 crore (Rs 44 billion).

Liberalisation, though it propelled growth, was a very painful process. At that time most people did not understand what it meant.

Indians suffered during the process of consolidation from 1991 to 2004. The survival of the fittest became the norm. Sick units closed down as liberalisation meant competition with the world.

Liberalisation also had an advantage. Children of businessmen, professionals and bureaucrats who were studying in the United States or the United Kingdom, started coming back. We have a large number of executives, who have studied abroad and now work in India. They are world class and think in global terms.

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We suffered like China suffered after 1978. The real growth in that country came around the 1990s. For more than a decade now, they have been growing at 10 per cent. Our real growth started from 2003 to 2004 and I am sure we will not have difficulty in surging ahead, as we are dreaming, for the next eight years or so.

I think we will win the game if our gross domestic product continues to grow at 7.5 to 8 per cent. I don't think ups and downs in the stock market are important, but the market should remain healthy so that Indian companies can raise money to withstand competition.

Take Infosys, for example. The company's chief Narayana Murthy had to borrow his wife's money initially, but today Infosys is a Rs 4,500 crore (Rs 45 billion) company. Indian markets now supports entrepreneurs like him who want to compete in the global market. India has arrived!

News: Nasscom, Dutch agency sign outsourcing pact

(BL 31/03/2006) New Delhi - IT association Nasscom in collaboration with Dutch Centre for the Promotion of Imports from Developing Countries (CBI) on Thursday announced an export development programme, that would enable small and medium enterprises (SMEs) in the European Union to outsource business process outsourcing (BPO) opportunities to India.

"The two organisations will work closely to provide BPO expertise to the European SMEs and help selected Indian IT companies to access the European markets," a Nasscom release said here.

Kiran Karnik, President, Nasscom, said, "We are pleased to announce our collaboration with the CBI to promote business activities between two regions. Through agreements like this, we aim to achieve the success of the IT and BPO sectors to drip down from the major industrial cities to smaller cities that will benefit the industries and economies of Europe and India."

On signing the agreement Ton Lansink, Managing Director, CBI, said "For European buyers, the CBI and Nasscom will be on hand as knowledge centres to help them formulate exactly what their outsourcing demand is and to help them find a perfectly matching partner. Indian entrepreneurs can count on us to provide maximum assistance exporting to Europe. It's a double-edged sword from which all parties will benefit."

The export development programme for the BPO sector was launched last year in India.

News: Prime Property in tie up for Mumbai mall

(BL 31/03/2006) Mumbai - Prime Property Development Corporation Ltd on Friday said that it has signed a development agreement with Plaza Panchshil Properties Pvt Ltd and others, to develop a shopping mall in Mumbai.

The company's share in the project will be 30 per cent and it is expected to be completed in about 18-24 months, in two phases, it informed the Bombay Stock Exchange.

The project will be named 'Prime Down Town Mall,' and will encompass more than 2,50,000 square feet saleable area of commercial shops and showrooms, multiplex screens, food plaza, entertainment-park and games park, among other facilities, it said.

The company said it has fully paid secured loans availed from 'Development Credit Bank Ltd,' it added.

News: Thirty-three Indian companies in Forbes 2000

(PTI 31/03/2006) New York: Oil and Natural Gas Corporation leads the pack of 33 Indian companies, mostly in banking and software sectors, which have found place on Forbes magazine’s coveted list of top 2,000 corporate titans across the world.

HDFC Bank, Industrial Development Bank of India, National Aluminum, Bajaj Auto and UCO Bank joined the list which shows that 17 Indian companies gained in rank but 11, mostly in banking sector, lost ground compared with last year’s list.

ONGC is at 256th position among the 2,000 and is followed by Reliance Industries, State Bank of India, Indian Oil, NTPC, ICICI Bank, Steel Authority of India, Bharat Petroleum, Tata Steel, Tata Consultancy services and ITC to claim the top ten spots for India.

Infosys Technologies, Hindustan Petroleum, HDFC, Tata Motors, Wipro, Punjab National Bank, GAIL, Canara Bank, Bharti Tele Ventures, Larsen and Toubro, Bharat Heavy Electricals Ltd, Oriental Bank of Commerce, Hindalco Industries and Indian Overseas Bank are among others who make the grade.

Citigroup topped the list followed by General Electric, Bank of America, American International Group, HSBC group, ExxonMobil, Royal Dutch/Shell Group, BP, JPMorgan Chase and UBS.

More than 50 companies based in China and Hong Kong and two Pakistani companies, also find place among the 2,000.

The global giants, ranked on a composite score for sales, profits, assets and market value, had a good year. Combined, they show a 10 per cent gain in sales, 32 per cent in profits, 10 per cent in assets and 17 per cent in market capitalisation over last year.

News: Reliance Infocomm slashes ISD rates

(BL 31/03/2006) Mumbai - Anil Ambani-controlled Reliance Infocomm, on Friday slashed international call tariff by 45-69 per cent for calls to various countries including the US, Canada, Middle East, and Europe.

The new rates are spread across all plans and schemes under the pre-paid and post-paid categories, enabling Reliance customers to make the cheapest international calls from India, the company said in a release issued here.

ISD rates for calls to the US, Canada, fixed lines in Europe, Australia, New Zealand and south-east Asia have been reduced to Rs 6 per minute from the present Rs 14.25 under all 'One Nation' plans, it said.

The rates for ISD calls to these countries under all other plans have been brought down to Rs 7.20 per minute from Rs 12.99-14.25 per minute earlier, the release said.

Rates for calls to the Gulf, Middle East and Africa have been brought down to Rs 8 per minute from Rs 17.25 under 'One Nation' plans, it said, adding that rates under other plans have been brought down to Rs 9.99 per minute from Rs 17.25-19.99 per minute earlier, the statement added.

News: GoAir takes tariff war to different plane

(BL 31/03/2006) New Delhi - Taking the tariff war in the Indian aviation sector to a different plane, budget carrier GoAir on Friday announced that it would offer concessions on its tickets to customers, who succeed in getting a ticket from a rival airline that is cheaper than its own on the same sector.

The airline, owned by the Wadia group, would also reimburse the cost of immediate cancellation of its competitor's tickets.

Announcing the competitive move to 'commoditise' air travel, Jeh Wadia, Managing Director, GoAir, said: "If the price paid for the ticket bought on a competing airline is lower than the price paid for the GoAir ticket, then GoAir will adjust double the difference between its fare and the fare of the competing carrier as credit," which can be used to purchase GoAir tickets.

"GoAir will also reimburse the cost of cancellation done immediately of the other airline's ticket as credit, which can be used to purchase GoAir tickets," he said, adding that this "challenge will give the customer value for money which no other airline offers."

He said that the tickets of the airline at present ranged from Rs 999 to Rs 2,999 and announced that the Delhi-Mumbai flight would range between Rs 999 till Rs 4,999 asking the passengers to book early to get the concessional fares.

News: An India full of economic principalities

(DNA 31/03/2006) Harshad Daswani is a happy man. As the business development manager of Fountainhead Exports, making beachwear and swimwear to global retailers like Wal-Mart, his company has already booked a one acre plot at one of the country’s most ambitious special economic zones (SEZ) being built around the Navi Mumbai-Maha Mumbai (NM-MM) stretch on the outskirts of Mumbai city, by Reliance Industries.

This will be Fountainhead’s second manufacturing facility after Surat. “When we commence operations, we can cut costs by 18% and boost sales by 20%,” says Daswani.

Even German auto giant BMW zeroed in on the Mahindra group’s eponymous Mahindra World City, the 3,000 acre SEZ, 45 kms off Chennai. “They chose it because it was the Detroit of India, besides the proximity to a harbour and airport was important,” says Bernhard Steinruecke, the director general of the Indo German Chamber of Commerce.

The company will churn out 1,000 of its 3 and 5 series of cars a year.

Or for that matter, see what’s common between Grasim Industries, Uttam Galva Steel, Prince Plastics, Suzlon Energy India, Fountainhead Exports, Cbay Systems and a host of foreign banks? They have all applied for land at Reliance’s Mumbai SEZ.

“The future is in SEZs,” says a close confidante of Mukesh Ambani associated with the project. That’s why, ever since the government identified SEZs as catalysts of economic growth two years ago — and the more recent moves towards capital account convertibility — both corporates and real estate firms have embarked on SEZ dreams. They all want to provide holistic solutions of industrial, commercial and residential options.

And even as Mahindra was the first to set up an SEZ in Chennai, and has identified similar projects in Jaipur, Maharashtra and the east, the entry of big names like Mukesh Ambani, chairman of the Rs 70,000 crore Reliance Industries, appears to have changed the dynamics of the SEZ scale.

Until now, SEZs, which were earlier designated export-oriented units, stretched across 1,000 to 3,000 acres.

Today, they go beyond 25,000 acres with outlays that are mindboggling. Typically, the acquisition costs in these projects is 10% of the total outlay with a lot of captive infrastructure like power plants thrown in.

And while most of the applications are from IT companies, the developers claim that they will target the manufacturing and services sectors in a big way. To complete the townships, investments from hotels, hospitals and educational institutions, they say, are pouring in.

Today, Reliance is building a 25,000 acre petrochemical SEZ in Jamnagar and has bagged the deal for a similar-sized project in Gurgaon. It just withdrew from another deal in Hyderabad this week, claiming that it already has too much on its plate.

The reported outlay for these projects? Rs 50,000 crore.

But its most ambitious blueprint, which it “wants to showcase”, is the Rs 25,000 crore state-of-the-art project which will sprawl over 35,000 acres to build the twin NM-MM cities.

“Mumbai has a problem of immigration. We are looking at building a landmark city which will help people to migrate,” says a Reliance manager.

So it will have a trans-harbour bridges, broad roads, the basic infrastructure replicating China’s economic experience, particularly in its premier Shenzhen SEZ.

So charged is Ambani about the project, that industry folklore has it that he pipped Tata Group chairman Ratan Tata to buy out NM-MM from the earlier promoter Nikhil Gandhi. Gandhi’s Skil still retains 26% and 10% stakes in the NM-MM zones. He is glad he sold out to Reliance. “They will do in four years what I would have taken 15 years,” he says.

Even real estate companies want to leverage their residential and commercial expertise to SEZs. The New Delhi-based DLF Constructions has already announced plans for its 2,500-acre SEZ in the north.

Surendra Hiranandani, the Mumbai-based real estate developer of the eponymous group says there are plans to enter the 25-acre to 2,500-acre SEZ arena. “The move is of course tax driven,” he says.

“In fact, every corporate with an iota of real estate development expertise wants to set up an SEZ,” says the real estate head of a leading business house.

But not many have announced it, as they call for huge investments. The Godrej group is said to be looking at a smaller export-oriented unit.

A major attraction for the players is the independent status of the SEZs, which affords easier labour laws and special legislations. Says the Ambani confidante: “When the government permits private participation, the Indian industry begins with a clean mandate.”

Arun Nanda, the Mahindra director heading the group’s SEZ projects, says, “For us, it is a great opportunity to create world-class integrated cities and townships.”

In fact, town planning experts say that there are three models in play in the SEZ game. One is to secure licenses for the project and then flip them.

Then there is the investment game, like the Reliance blueprint.The Mahindra model is to develop and move on.

So far, Mahindra’s ventures are with local state governments. “It helps me in land acquisition and in marketing the project. Our model works best as a public-private partnership,” says Nanda.

While its Chennai SEZ is focused on IT and auto industry, Jaipur will be a logistics hub with Maharashtra focusing on electronics, IT hardware, food processing and light electricals.

Already, Infosys Technologies is planning one of the world’s largest software-development centres in Mahindra World city. Two years ago, Mohandas Pai, the chief financial officer of Infosys, claimed that they plan to have at least 25,000 people on campus and claimed that what attracted the company was the infrastructure.

Reliance, which wants to “become the financial hub of India”, will develop clusters of 5,000 acres in its Mumbai SEZs.

The first cluster will include a biotech park, financial services, IT and IT enabled services, apparel, gem and jewellery and a diamond park, besides the regular healthcare, hotels and educational institutions.

Company executives claim that Reliance has already signed 250 memorandums of understanding (MoUs) covering 1,500 acres.

Today, Singapore’s Jurong Town Corporation is the favourite town planners for the SEZ players. First Mahindra tied up and now, Jurong is giving the finishing touches to Reliance’s Mumbai SEZ. Reliance is also one of the three shortlisted to build the trans-harbour bridge along with the Larsen & Toubro consortium.

Adds the Ambani confidante: “We will bring a revolutionary change contributing 2% to the GDP (gross domestic product).”

With almost 75 SEZs sanctioned by the government, it will be a while before India becomes another China.At least the process has begun.

News: Aryan lines up Rs 45 cr for 55 Nike stores

(BS 31/03/2006) New Delhi - Aryan Lifestyle Pvt Ltd, a wholly owned retail subsidiary of real estate developer MGF, is planning to open 55 Nike stores across the country in the next financial year at an investment of Rs 45 crore.

The company has raised Rs 5 crore through 50 per cent equity and 50 per cent through soft loans from the directors of MGF.

“With MGF promoting us, we do not see the need of borrowing from outsiders,” said Deepak Chhabra, chief operating officer, Aryan Lifestyle.

He said MGF would funding the company for the next three years, after which internal funds will start being generated.

Nike India, which entered the country in 2004, has not engaged a master franchisee. Instead, the multinational company opted for direct tie-ups with local partners.

It also tied up with strategic partners, such as Aryan Lifestyle, as national partners. Nike currently has close to 100 single-branded outlets in the country.

In contrast, Reebok India follows the franchisee model and currently has approximately 260 single-branded stores in the country.

The recent Union Cabinet decision to allow 51 per cent foreign direct investment has not impacted Nike India’s strategy.

“While we welcome the move, we prefer our current model. We believe our partners have the financial assets for the required investment,” said Sanjay Mehra, general manager, South Asia.

As of now, Aryan’s Chhabra is planning to open 1,000-4,000 square feet exclusive Nike outlets. However, he is also in touch with “other non-contradictory foreign brands for opening other single-branded stores”. He hinted that one such brand could be a fashion line for casual clothing.

In the next 40 days the company plans to open 12 stores which include three each in Bangalore and Pune, two each in New Delhi and Vadodara, and one each in Dehradun and Ahmedabad.

News: How Pune malls' tricks work

(TNN 31/03/2006) Pune - When college lecturer Sunita Rao decided to go mall shopping last week, she did something unusual. She gathered 15 kg of old clothes, a broken mixer and some other worthless things, boarded a rickshaw and brought her junk to Pune's Big Baazar.

At this "very happening" 40,000 sq. ft hypermarket, Rao exchanged her junk for Rs 3,155 worth of coupons, which she could redeem against purchases, four times their value.

The previous Sunday, Big Bazaar managers were ecstatic when hundreds of shoppers like Rao descended with tonnes of junk and picked up coupons worth over Rs 7 lakh — the highest in a single day among all the 24 other Big Bazaars in the country.

If it's this immensely innovative "junk-forcoupons" exchange mela that's generating footfalls at Big Bazaar, freebie diamonds at Shopper's Stop, iPods, motorcycles, holiday packages and other gifts at Central were among the offers that proved immensely popular with mall shoppers in Pune.

With nearly two dozen superstores, malls and hypermarkets in Pune, international property consultants Knight Frank say that Pune's retail sector is witnessing "tremendous growth", with 20 major projects in the pipeline.

News: Indian job sites in overdrive

(DB 31/03/2006) Chennai - As employees keep switching jobs as fast as companies are able to fill the vacancies, job portals seem to be enjoying a boom, says Venkatchari jagannathan. Domestic job portals are witnessing increased business, thanks to the various surveys predicting a boom in jobs across sectors and non-IT companies embracing online recruitment.

Says N Muralidharan, managing director, JobStreet.com India Pvt Ltd, "We are seeing an increase in the recruitment needs of non-IT companies. There is a 70 per cent month-on- month increase in resumes for non IT sector jobs and 56 per cent growth in the number of job postings on the site by the companies." Jobstreet is listed on the Mesdaq market of Bursa Malaysia.

Adds R Guhan, country manager, Jobsdb.com, "Many companies are switching over to e-recruitment in a big way. Nearly 30 per cent of job postings on our site are by manufacturing companies." Another Chennai-based job site, Clickjobs.com claims 45 per cent non-IT job postings.

The overall recruitment market — including the cost of paper advertisements, consultant fees and others — is around Rs1,300 crore. "The online recruitment industry is around Rs150 crore and is growing by at least 50 per cent. The growth rate will remain the same for the next five years," he adds. However, none of the sites are willing to share their revenue figures.

Not long ago, job portals received the bulk of their business from the IT sector. With increasing employee attrition, soon companies in the fast moving consumer goods (FMCG) sector, telecom, pharma, banking and financial services, too, began moving on to e-recruitments to widen the base of respondents and simultaneously save on costs. And now even manufacturing companies like Flex Industries, LG Electronics, Goldstar Enterprises, Havell's, Ashok Leyland and others have been following suit.

It is a natural transition from traditional recruitment to technology-enabled solutions that simplify the recruitment process since employees have been increasingly frequenting job search sites for newer employment avenues. "We currently offer our website users exhaustive job search options as well as through SMSs on mobiles. Combined with the regular job fairs that these portals organize, there emerges an ideal mix of online and offline options," explains Rajeev Gaur, CEO, TimesJobs.com.

According to Gaur, the idea is to provide 24x7 access to jobs for a job seeker and the reduced recruitment cycle for the employers. For employees on the prowl for new opportunities, job portals are an attractive medium to enable employers to locate them, while for companies, these sites enable them to position themselves as preferred employers.

"Entry level and middle management position are some of the popular vacancies filling the portals, says Guhan." This year he expects banking, financial services and insurance sector, retail, airlines and manufacturing to be the largest employers apart from the IT and ITeS sectors.

But switching over to online recruitment is not like surfing the net. Explains Michael M Bala, business head, ClickJobs, "Online recruitment requires dealing with large volumes of applications, choices are many and so it is critical to have necessary tools to identify the right kind of candidates. Also, a better understanding of what the candidate intends to communicate is needed."

For the employers who opt for online recruitment Muralidharan has a word of advice,. "The top management should be committed to this method of recruitment and ensure dedicated resource to use this medium. Similarly, it should devote enough time and energy to design the advertisement for the advertised positions. In order to derive the full benefit companies should put all its positions online and decide to be committed to long term."

With the market dotted with several players, job sites offering value added solutions have an edge over others. For instance JobStreet offers a software, Impact, which helps in streamlining the entire recruitment process. According to Muralidharan, around 35 Indian corporates are using this software installed in the website of the client as an application software provider (ASP).

On its part, TimesJobs offers a solution called Empower, a holistic tool for sourcing candidates as well as managing applications.

Though their core offering is online, the job portals conduct offline promotions like having strategic tie-up with newspapers, conduct and participate in job fairs.

Says Gaur, "We are the pioneers in organising job fairs, branded as Big Leap Job Fairs, enabling direct interaction between job seekers and employers. Another first has been the initiation of virtual job fairs online, which allow employers the facility of quality talent acquisition from the convenience of their offices besides giving job seekers the opportunity to respond to job openings from several companies from the comfort of their homes." The site spends around Rs20 crore on promotional its campaign.

Interestingly, only Naukri.com spends money on television commercials while others advertise online and in the print media.

These sites do not consider recruitment consultants entering this space as a major threat. Remarks Muralidharan, "The portal business is transaction-based where as a consultancy is relationship-based. Both require different skill sets."

On the other hand, it is the prospect of newspaper groups launching job sites that is is a major threat, since online sites eat in to the ad revenues of newspapers. Except for The Times of India group, no other news organisation has launched a job site. Explains Gaur, "This business is essentially a media business, and therefore it is best done by a media company. Reach is a constraint for most players in the business."

The site leverages The Times group's resources like the print, internet, television, and the radio. Consequently, within just two years of its launch, Timesjobs has emerged as one of the leading jobs portal in the country.

How do corporates measure the effectiveness of job portals?

"A job portal is essentially a medium which helps bring employers and job seekers together. In this respect, the success of any job portal is measured by how effectively it is able to accomplish the task of matchmaking and the satisfaction that it is able to provide its customers," responds Gaur.

The other measures of effectiveness are:

* The number of people recruited through the portal
* Comparing the cost of recruitment on the level of positions
* The number of resumes in the database and
* The number of page views.

The freshness of the resumes is a major advantage that sites have over print publications because of the frequency of daily uploads that is possible.

Gaur claims his portal has a registered a database of 4.2 million job-seekers, with 16,000 new resumes added every day.

On the other hand, JobStreet's Muralidharan claims a monthly page viewership of 85 million and 1.5 million resumes. "We systematically purge our database to keep the resumes current. Every 90 days we encourage people to update and we also run schemes." JobStreet according to him is a value player rather than a volume player. "Our site is used for recruiting middle and senior middle management cadres and in some cases even the top management."

According to Clickjobs' Bala, since the site was launched in August 2005, around 750 candidates who applied through his site have been placed at various levels. "We have about one lakh jobseekers, 1,500 employers and 6,000 requirements on our site."

With phenomenal growth potential, foreign portals like Monster.com are coming to India. Predicting a shake-up in the industry Guhan says, "Only serious players will survive the onslaught."

The other interesting possibility is the emergence of regional language job portals. "The regional-isation of job portals is an interesting possibility, which could perhaps start happening soon," says Gaur.

So far, Jobsdb seems to be taking the initiative by launching a Tamil job portal soon.

"Online recruitment is dependent on computer literacy and internet penetration. Today these portals are known amongst those having email accounts. Further, going by the kind of positions that are recruited online now I don't think there is a need for regional language job portal. However in Malaysia, even drivers are recruited online," says Muralidharan.

Concurring with him Bala says, "It is highly cumbersome for a candidate to post his profile using assisted tools."

Meanwhile, the players are expanding their operations. Says Muralidharan, "In India we are in five cities — Mumbai, Hyderabad, Pune, Bangalore and Chennai. We haven't gone to second tier cities in south and to few first tier cities in the north. We have plans to open offices in Gujarat, Delhi and in the National Capital Region in couple of month's. We will also open offices in Coimbatore and parts of Tamil Nadu, Karnataka and Andhra Pradesh."

Naukri has started a new online venture for the Gulf , Naukri Gulf. The site will assist recruiters and jobseekers in the Middle East region targetting jobs in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, UAE and other countries in the region.

Present in all major Indian cities now, even Timesjobs will soon start operations in the Gulf and the Middle Eastern.

On its part, ClickJobs, which is present in Chennai, Delhi, Mumbai, send this article to a friend Hyderabad and Bangalore will be expanding to Trivandrum, Pune and Kolkata. Incidentally the country's first ISO 9000 certified site is fine-tuning its features in line with the demands of the market.

News: Taiwan says 'go India', firms aren't rushing

(RTR 31/03/2006) Taipei - It may be the world's second most populous country and have an economy growing at 8 per cent a year, but there are plenty of reasons why Taiwan companies are wary about their government's exhortations to invest in India.

Cultural differences, restrictions on foreign investment, poor infrastructure and government inefficiency mean India has a long way to go before it can come close to rivalling China as the favourite place to invest for Taiwan firms.

But ties between Taiwan and China have been tense under the administration of pro-independence Taiwan President Chen Shui-bian, who plans to tighten the rules on major investments in China and make firms jump through more hoops to get approval.

In some ways, India seems like a natural alternative.

News: Bata to increase Indian retail presence

(F2F 31/03/2006) Mumbai - After the market was opened up to foreign single-brand stores by the centre for footwear segment Bata India Ltd, the largest shoe company in India, feels the need to evolve new retail strategy in order to face the competition.

The company plans to be more visible in shopping malls, bring in franchisee model and create shop-in-shop experience in a multi-branded store.

Bata needs to bring in innovation to be ahead in competition, said P M Sinha, Chairman of Bata.

Bata has 1100 stores in India at present with plans to open 40 new stores by 2006.

Of the 10 shops opened by the company during first quarter of 2006, five are in malls.

The strategy to create international feel in its new stores along with modernising of the existing ones seems to have been successful with sales growth of 20 to 40 percent recorded in modernised shops, Sinha explained.

The company is undergoing discussions with mall developers for space in the new malls and is looking at pushing sales through flagship stores.

In 2005, it had restricted sales through wholesale channels sales were restricted in 2005 due to very high outstandings resulting into sales going down by Rs 20 crore.

Strict measures and modern stores helped Bata return to the black after three years.

Sinha said, the turnaround was due to bringing down costs and innovative product mix introduced during the year.

Net sales grew marginally from Rs 694 crore in 2004 to Rs 706.7 crore in 2005. Bata was able to make profit of Rs 12.4 crore against a loss of Rs 6.27 crore in 2004. He is confident that sales growth would be more robust in 2006.

Sinha said that, a 10 percent growth in topline would be achieved with profitability posting a better performance than 2005.

The company offered Voluntary Retirement Scheme (VRS) to about 1,000 people in 2005 reducing staff cost.

Manufacturing of products in 2005 was planned keeping in mind market needs, focusing on women’s shoe segment where Bata was historically weak.

Bata has plans to explore opportunities in institutional space like hospitals, hotels and defence establishments.

News: Trent announces association with DLF

(PTI 31/03/2006) New Delhi - Tata Group retail arm Trent Ltd, and real estate developer DLF Universal Ltd announced on Friday that the former through either one or more of its brands of Westside, Landmark and Star India Bazaar would anchor the next 12 DLF malls across various cities of India.

"Trent through either one or more of its brands of Westside, Landmark and Star India Bazaar has agreed to anchor the next 12 DLF malls across various cities of India with 27 stores totaling to about a million square feet of space," Trent said in a release.

Meanwhile, fashion and lifestyle store Westside has launched its first store at the DLF's Grand Mall in Gurgaon.

With this launch, Westside is now present in 13 cities and has 22 outlets across the country.

News: On auspicious Indian day, a record sale of cars

(KRT 31/03/2006) New Delhi - Thursday was a day of big festivity for the Indian car bazaar. Sales across the country recorded an all-time high -- average daily retail offtake witnessed a 10-fold hike.

The reason: Thursday was the first day of Navratra in North India, Gudi Padwa in western markets and Ugadi in the south.

That's not all. The end of the current fiscal has also seen demand from corporates boosting sales. Add to this the hefty discounts and freebies offered by car-makers and you know why Maruti's sale was up eight times on Thursday and Honda reported an over five-fold growth. Hyundai and General Motors also witnessed a 10-times surge.

"The rare occurrence of three festivals on the same day resulted in a record growth in car sales on a single day. Buyers have been holding back purchases over the past few weeks to take delivery of their cars on Thursday," Honda Siel Cars India marketing head Rajive Saharia told TOI.

"The trend was witnessed across the country and across all product segments. Maruti, on average, sells around 1,700-1,800 nits per day. On Thursday, its sales went up by nearly eight times," said a Maruti dealer.

Honda sold around 1,010 cars on Thursday compared with 100-odd cars on an average day. Even General Motors reported its highest-ever sale on a single day, which would help the firm end the month at a record high, said its spokesperson P Balendran.

News: Puma Sports India expansion plans kick off

(BT 31/03/2006) Mumbai - The sporting goods manufacturer from Germany, Puma plans to introduce larger range of products in the country through its newly-launched subsidiary Puma Sports India Pvt Ltd, Rajiv Mehta, General Manager Puma Sports India said here on March 31.

The GM further clarifies that the company will introduce nearly 250 products in footwear, 200 in apparel and 100 in accessories and the products will be in line with its international range in sports, lifestyle and fashion.

The company plans to open stores in the country with retail and wholesale partners and expects to open the first one in the second quarter of 2006.

Puma has been selling in the country for the past three years through multi-brand retail stores supplied by its franchisee Planet Retail Holdings, known earlier as Planet Sports India Pvt Ltd.

The company further expects the business in the country to account a large part of its $1.05 billion revenue target from the Asia-Pacific region by 2010.

The first three phases involved establishing a strong financial footing, improving brand equity and generating growth.

"We are looking at Bangalore or Chennai as options," Martyn Bowen, Puma's general manager for Eastern Europe, Middle East and Africa further added.

News: Reliance MF plans fund for overseas investors

(ACERC 30/03/2006) Mumbai - Reliance Mutual Fund on March 29 filed prospectus to launch a fund for overseas investors. Christened Reliance Emergent India Fund, the fund will open to investors in the US, the UK and West Asia. Several other domestic fund management companies have been thinking of tapping this market for a while with limited success though.

UTI Mutual Fund and Birla Mutual Fund are the other domestic funds being advisors to off-shore funds although their fund size is not huge compared with their foreign counterparts.

With growing interest in Indian equities, there has been a growing demand for capable fund managers. There is a lot of demand for fund managers with good track record and credibility. Domestic fund managers so far have managed to provide better returns than off-shore fund managers which make a strong case in favour of them.

Reliance Emergent India will have only one investor called Emergent which is a company incorporated in Mauritius in September 2004 with limited liability. This is the route taken by all domestic funds managing off-shore funds.

News: 'Indian economy to grow by 8 pct up to 2008'

(RTR 30/03/2006) New Delhi - India should be able to sustain a GDP growth rate of 8 percent for the next two years but high oil prices remain a concern, a UN report said on Thursday.

The high rate would be supported by expansion of the agricultural sector by 2.5-3.0 percent, 8 percent growth in industry and 8.5 percent in services, said the report by the United Nations' Economic and Social Commission for Asia and the Pacific.

It said India's inflation rate was likely to remain at about 4 percent in this period due to the government's commitment to reform, including strict fiscal prudence.

Industrial and services sectors were expected to sustain the growth momentum, helped by cyclical factors, rising rural incomes and increased public spending on physical and social infrastructure.

But it said that high global oil prices were exerting more inflationary pressure and eroding the country's balance of payments.

"If oil prices rise further by $10 a barrel, GDP growth of a developing country such as India can drop by 0.5 percent, inflation can rise up to 1 percent and current account deficit can widen up to 0.3 percent of GDP," the report added.

Oil prices held above $66 on Thursday after a steeper-than-expected fall in gasoline stocks in the United States ahead of peak summer demand.

Prices have stayed above $60 for more than a month on worries that geopolitical risks in oil exporters such as Nigeria, Iran and Iraq would keep supplies tight.

News: Lufthansa may add new destinations in India

(PTI 30/03/2006) Bangalore - Bullish on the Indian market, which contributed 21 per cent to its Asia Pacific passenger business revenue, Lufthansa, German Airlines, is exploring the possibility of operating to new destinations in the western and eastern region of this country, including Kolkata.

Lufthansa Vice-President, Asia & Pacific, Uwe Mueller, said here the European carrier was evaluating new destinations and a decision is expected within the next four to five weeks.

General Manager Passenger Sales India & Director South Asia, Werner Heesen, said expert teams from Lufthansa were "scanning and screening" the markets, and "airport infrastructure and profitability of the routes are being looked at."

"Kolkata is one of the important candidates," Heesen said. "There are a lot of development taking place in Maharashtra and Gujarat," he added in the context of likely new destinations that Lufthansa may add.

Lufthansa currently operates 42 flights out of India per week; twice daily flights from Delhi to Frankfurt and Munich, and once daily flight to Frankfurt from Mumbai, Chennai, Bangalore, and Hyderabad.

Japan contributed 35 per cent to Lufthansa’s Asia Pacific revenues, followed by India 21 per cent, and China 17 per cent.

He said while Europe continues to be Lufthansa’s "bread and butter" market contributing 38.1 per cent of the revenues, Asia Pacific, now at 17.2 per cent, "is the growth market."

General Manager Passenger Sales Karnataka Region, Deepak Biswas said the carriers business here has not dented after the starting of flights by British Airways and Air France out of here to Europe. The carrier, in fact, was thinking of bringing bigger planes here to address the growing demand.

News: Bajaj Capital plans wider geographical presence

(BL 30/03/2006) Ludhiana - Financial services company Bajaj Capital Limited plans to open 40 new branches in the next fiscal, aiming to add one lakh new retail investors for its investment advisory services.

"We are planning to open 40 more branches, including 2 branches in Punjab, in the next financial year. In addition, we wish to take the total strength of our retail investor base to 8 lakh as against 7 lakh retail investors at present," Anil Chopra, CEO & Director, Bajaj Capital, said here.

The company, promoted by K K Bajaj, at present has 110 branches in 52 cities. Last year, it opened 20 new branches across the country. "We have fixed a target to grow our business size by 50 per cent in the next fiscal," Chopra added.

Bajaj Capital is engaged in the business of merchant banking, resource mobilisation, distribution of financial products, investment advisory service, buying and selling of money market investments and tailor-made financial planning for individuals and corporate clients.

Bajaj Capital also offers need-based investment advice to retail investors, high net-worth investors and institutional investors and serving to 7,00,000 retail investors throughout country including 12,000 NRIs.

News: Foreign fabric cos plan local tie-ups to set up Indian shop

(TNN 30/03/2006) Mumbai - After readymade garments, India is all set to give China a run for its money in its traditional forte, fabrics. A number of foreign fabric manufacturers are entering into partnerships with Indian companies and looking at setting up units here, as they find it more cost-effective to supply garment manufacturers in India than importing the fabrics.

Banswara Syntex, a manufacturer of synthetic yarns, has announced a 50:50 JV with European fabrics-maker, Carreman Michel Thierry, to set up a plant in Rajasthan for weaving and exporting high-value lycra-based designer fabrics. Raymond recently spun off its denim business into a separate 50:50 JV with UCO NV of Belgium, giving the company entry into India.

Tessitura Monti India, a subsidiary of the Italian Gruppo Tessile Monti SPA, which manufactures dyed yarn and fine count premium shirting fabric for Italy, Europe and the US, already has a plant in Kolhapur with processing and finishing facilities. More companies, including Gangotri Textiles, are expected to announce joint ventures.

This year’s Budget has also given a major boost to the fabrics industry by reducing the excise duty on all man-made fibre yarns and filament yarn from 16% to 8% and the import duty on raw materials from 15% to 10%.

According to industry estimates, manufacturing fabric in India offers a margin of at least $1 per metre, compared to Europe. These companies are not looking for volume production in India, as is the case with China. This is an incentive to set up operations in India.

Exports of fabrics, fibres and made-ups have risen progressively from $6,470m in ’02-03 to $8,015m in ’04-05, according to the Federation of All India Textile Manufacturers Association.

According to Premal Udani, president, Clothing Manufacturers Association of India (CMAI), that is co-organising the upcoming the Intex Fabrics and Accessories Show, “India can become the gateway to international companies for the high-potential South Asian markets including India, Pakistan, Sri Lanka, Bangladesh, Mauritius and Nepal.”

The production of fabrics in India is expected to go up to 47,000m square metres in ’05-06 from 44,991m square metres in ’04-05. India’s imports of fabrics, fibres and made-ups are not likely to increase drastically.

News: East Caribbean for Economic Union

(PL 29/03/2006) Basseterre - Organization of Eastern Caribbean States leaders (OECS) are clinching a declaration to set an Economic Union Treaty and strengthen sub-regional integration.

They have agreed on the need to have a body that protects their interests and takes into account the existing differences among them and other CARICOM partners.

The document, to be signed June 21 in Basseterre on the occasion of the 25th anniversary of the OECS, must be ratified by all member states before the Economic Union takes effect.

The OECS´s unification is fundamental for the bloc´s entry into the Caribbean Single Market June 30.

As part of the 25th anniversary celebrations, the OECS flag will be raised for the first time at the Eastern Caribbean Central Bank headquarters.

This will be site for meetings among executives of the body and international development agencies from June 18.

News: Trinidad central bank moves to fight inflation

(CNN 29/03/2006) Port of Spain - The Central Bank of Trinidad and Tobago has decided to increase the 'Repo' rate by 25 basis points from 6.5 percent to 6.75 percent with effect from Tuesday March 28, 2006.

An official statement from the Central Bank says this decision comes against the background of what is being termed by financial and economic experts as "persistent inflationary pressures," the continued sharp growth in private sector credit and the narrowing of the differential between TT and US dollar, along with short-term interest rates as US rates continue their upward climb.

The bank says the latest available data on prices released by the Trinidad Central Statistical Office indicate that headline inflation measured 6.5 percent year-on-year to February 2006, down from 7.04 per cent in January, but still outside of the Bank's target range of 4–5 per cent. It says core inflation held steady at 2.5 per cent.

In an effort to deal with the inflationary trend the bank says it has intensified its efforts at absorbing liquidity, through the use of longer term debt instruments. It adds that the bank will continue to keep monetary conditions under close review. The next 'Repo' rate announcement is scheduled for April 28, 2006.

News: Staatsolie starts production at new oil field

(CNN 29/03/2006) Paramaribo - Staatsolie, Suriname’s state oil company, has launched production at a second onshore oil field in Suriname.

At the opening ceremony, the new Operations Minister of Natural Resources, Gregory Rusland, announced the oil company and the government will aim for higher oil production to meet the growing needs of the developing country.

In order for the company to continue expanding production, Minister Rusland urged management to increase research and development activities.

Officials estimate that the new Calcutta production field holds 23 million barrels of crude oil. According to Calcutta’s field chief, Patrick Brunings, peak production of 5.000 barrels a day will occur over a continuous development period of 20 years.

Already 12 wells have been drilled in the field and this number is expected to increase to 160 over the next two years. As explorations continue, there are indications that the field may hold more crude oil than the original estimate of 23 million barrels.

The Calcutta field is located in a swamp area and Staatsolie officials publicized that minimal damage will be caused to the environment. The drilling installations are small structures in the swamp, which has no roads. All transportation to the wells and throughout the area requires boats, air boats or other marine vehicles.

Since 1983, most of Staatsolie’s oil has been produced at the Tambaredjo field. This month, the company reported 2005 record sales of US $201.3 million, which reflects a 51.5 percent increase compared to 2004. Staatsolie also reported 2005 pretax profits of US $105.2 million compared to US $59.7 million during 2004.

Higher crude oil prices in 2005 contributed to the landmark results and production increased more than six-fold, to 4.38 million barrels.

Staatsolie recently began investigating potential offshore locations on the Surinamese coast. Hoping these efforts reveal commercial findings, Occidental Petroleum Corporation of the US and Spanish Repsol/YPF have already signed production sharing agreements with Staatsolie.

News: Thomas Cook India plans overseas buyouts

(RTR 29/03/2006) Mumbai - Travel and foreign exchange firm, Thomas Cook India Ltd., plans to buy three overseas companies next financial year, Chairman, Udayan Bose, said on Tuesday.

"The acquisitions will be within the areas we are in," Bose told reporters before the start of its annual general meeting said, without offering further details.

“Dubai Financial LLC, a subsidiary of Dubai Investment Group, acquired 60 per cent in Thomas Cook India in December. Dubai Financial then acquired a further 8 per cent through an open offer made to the shareholders,” Bose said.

Europe's Thomas Cook is jointly owned by airline Deutsche Lufthansa and German retailer KarstadtQuelle.

News: Sanyo to increase presence in India

(BL 29/03/2006) Mumbai - Japanese consumer electronics major, Sanyo Electric Company Ltd, announced plans to increase its presence in India.

The company, which has already launched its consumer products in the Indian market last year, plans to bring in its commercial and industrial equipment business to the country.

"We have big plans for India and after building a firm foundation using our initial investment we hope to make it a pillar of our growth in the future," Toshimasa Iue, President, Sanyo, said.

Iue has selected India as his very first overseas destination since taking over the reigns of the company last year. "I have been closely watching the immense growth opportunities India offers.

"We have big plans for India and after building a firm foundation using our initial investment we hope to make it a pillar of our growth in the future,'' he said.

Iue met the Prime Minister Dr Manmohan Singh. He also had a meeting with Ajit G. Nambiar, Chairman and Managing Director, BPL Ltd.

The company sees overwhelming potential for its environment and energy-related products in India.

Investment

Goldman Sachs along with two other investment banks have invested $3 billion in Sanyo. Of this $73 million will be invested in Sanyo BPL Private Ltd, the joint venture between Sanyo and BPL.

Another $ 27 million has been set aside for working capital requirements for use over the next 12 months.

The company has set a turnover target of Rs 2,000 crore to be achieved in the next three years.

In the future, Sanyo is eyeing a 50 per cent share in the global hybrid electric vehicle battery market.

Power solutions

Sanyo has identified power solutions — HEV batteries, rechargeable batteries and solar modules — commercial and HVAC-R equipment — industrial air-conditioners, showcases and biomedical equipment - and personal mobile devices as its core businesses.

Sanyo plans to introduce these technologies through its subsidiaries — Sanyo India Private Ltd and Sanyo BPL Private Ltd.

News: Fidelity launches India Special Situations Fund

(BL 29/03/2006) Mumbai - Fidelity Fund Management today launched the Fidelity India Special Situations Fund. This open-ended equity fund would invest in Indian companies that are in special situations. The fund house has termed special situations as companies that are in turnarounds, those with under appreciated growth, with new products or new business streams.

These situations present an investment opportunity to a fund manager who can foresee and interpret the implications of the opportunity early enough, according to fund house officials. Fidelity has similar funds in other parts of the world, including Japan and the UK, said Ashu Suyash, its Country Head.

The minimum application amount is Rs 5,000. The fund charges an entry load of 2.25 per cent for purchases less than Rs 5 crore and an exit load of 1 per cent for redemptions within the six months. The NFO remains open till April 26.

News: 'It is India's time in the limelight'

(BL 29/03/2006) Mumbai - The Sensex at 11,079 is just a short distance away from the Dow Jones Industrial Average. Is this just a numerical landmark, given that the Dow's market cap is 27 times that of the Sensex? Are we comparing apples to oranges?

Dalal Street wizard Rakesh Jhunjhunwala says history is finally shifting from the Western markets to the emerging ones.

On the other hand, the BSE member, Ramesh Damani explains, "Are we comparing apples and oranges, perhaps in a sense, yes?

Excerpts from an interview given to CNBC-TV18

Are there any points of comparison or are they just two different things and cannot be compared at all?

Jhunjhunwala: I don't think we are looking at two different things, which cannot be compared, but we are looking at the cusp of history shifting from the western world to the emerging markets.

My view is that economic growth is going to be far greater and there is going to be a shift to the emerging markets, with India being one of the largest ones.

One must not forget that the Dow was 100 in 1900 and today it is 12,000 and the base of the Sensex is 100 in 1979. Therefore, if we compare the rise from 1900 to 2006 and compare the rise from 1979 to 2006, the Sensex has given a far greater result, rather than the Dow.

The growth of Sensex has been stunning and in case of the Dow, not so much. Does that really point to a shift in the economic balance?

Damani: Are we comparing apples and oranges, perhaps in a sense, yes? The Dow is a price-weighted index. There is a 100 rule among Dow company stocks. When the stock goes to a 100, you split the stock and bring it back to 50. So the absolute price of the stock is more important. Whereas, with the Sensex, it is a free float market cap weighted index. So in that sense they are different.

One must remember that we were denominated by a weaker currency for most of the time. So the returns in terms of dollar and in terms of gold would be substantially less because Indian rupee has been consistently weak between 1979 and 2000.

Jhunjhunwala: Even if one takes into account the inflation and weak rupee, then I think the return of the Dow and Sensex could be quite equivalent.

Is it a concern that Sensex P/E is at 18.9 and Dow P/E is 18.5?

Jhunjhunwala: Well but the growth rates are different and may be interest rates in America are still lower than in India. But growth rates in India are much higher than in America. One must also not forget that there is vast domestic underexposure to equity in India.

Is that a valid point that the American market has almost 70 million investors, India just a fraction of that?

Damani: Of course, it is a great point but my sense is rather than going into Sensex stocks, they might go into IPOs, which now has a strong pipeline.

The Dow Jones had been at 10000-11000 for almost five years? Any worry that the Sensex could go the same way?

Damani: It is a well-known axiom when you follow indices, for example, the DJ hit 1,000 for the first time in 1968, it didn't cross that level again until 1982. Then when it broke out of that range, it went to 10,000, the next 10 years or so. Similarly, our Index in 1992, we made a top of 4,500 but we didn't cross that top decisively until 2003. So once we have broken out, it tends to be a huge move.

News: Big Bazaar bags more customers with exchange offer

(BL 29/03/2006) Bangalore - Spring-cleaning is something most people put off, if they can. But novelty and innovation in retailing has changed this humdrum task into yet another exciting shopping experience for consumers across the country. Big Bazaar's `The Great Exchange Offer' has mobilised more than two lakh families to actually carry the junk of the house and offload it at the nearest Big Bazaar.

Sanjeev Agrawal, President, Marketing, Pantaloon Retail, talks about the excitement it has created among housewives, "We at Big Bazaar had found that the housewife is really excited if she is able to dispose the `kachra' of her house at a value price. Thus to add excitement to our customers who are mainly housewives, we hit upon this idea where the exchange value is higher by 4 to 8 times than that of the road side kabari wala."

Other than regular throw-aways such as clothes and newspapers, people across the country have been dumping old TV sets, furniture, used mattresses and vehicle tyres at exchange counters at the retail store.

Retail analysts say that generally February and March are dull months for consumer buying in the country and therefore this kind of a promotion campaign is needed to boost sales during the period. Though exact sales figures for the two months were not available, Agrawal pointed said that the same store year-on-year growth registered by their value retail business in the month is approximately 30 per cent. "Shopping in terms of buying season and spending is very different in the months of January, February and March," he says and therefore a comparison with the previous month would be inaccurate.

Pantaloon currently has 24 Big Bazaar hypermarkets across the country and revenues from value retailing in February '06 stood at Rs 91.49 crore.

News: Planet Retail plans 10 Debenhams stores

(BL 29/03/2006) New Delhi - Planet Retail Holdings Pvt Ltd has said it plans to set up ten `Debenhams' stores across major cities in India by 2010, envisaging an overall investment of $30-50 million.

Planet Retail Holdings, which is the master franchisee for a host of international brands including Marks and Spencer, Guess, Women's Secret, Debenhams, and Body Shop, said the first Body Shop store would come up in India during May this year, in Delhi and Mumbai.

"The first Debenhams store will come up in Gurgaon, followed by a second store in Delhi. By 2010, Debenhams stores will come up in locations such as Delhi, Mumbai, Bangalore, Kolkata, Chennai, Hyderabad and Ludhiana," said Arun Bhardwaj, Managing Director of Planet Retail Holdings.

The investment for each Debenhams store is pegged at $3-5 million, taking the overall investments to $30-50 million.

Debenhams, a department store chain with over 50 exclusive designers and its own brands and labels, has a retail market share of about 20 per cent in the UK and Ireland. Debenhams also has franchise stores in Bahrain, Cyprus, Czech Republic, Denmark, Dubai, Iceland, Kuwait, Indonesia, Malaysia, Qatar, Saudi Arabia, Sharjah and Sweden.

"Planet Retail Holdings has 55 stores for various brands and we plan to increase it to 250 stores by 2008," he said adding that the company plans to set up as many as 40 Body Shop stores by 2010.

The Rs 140 crore project is expected to be completed by June 2008.

News: Escort India to foray into Bangladesh

(PTI 29/03/2006) New Delhi - Escort India Limited is set to make foray into Bangladesh to manufacture tractors through a joint venture with the Nitol-Niloy group.

The project, to be set up in Kishoregunj district of Bangladesh, is expected to go into production by this year-end with 1,000 tractors, which is half of the estimated demand in the neighbouring country, Nitol-Niloy Group Chairman Mohd Abdul Matlub Ahmed said.

Escorts and the Bangladeshi group had signed a Memorandum of Understanding here during Prime Minister Khaleda Zia's visit to India a little over a week ago and the two companies are to sign a formal agreement on the joint venture in May, Ahmed said.

He said Nitol-Niloy group would be the major partner in the joint venture which is the Bangladeshi company's fourth with an Indian company. The group had earlier tied up with the Tatas in automobile sector, the Birlas for Grasim cement and Blowplast.

According to Ahmed, an attractive export market for the tractors exists in Myanmar and northeastern states and plans are afoot to export 3,000 tractors to Myanmar.

Each tractor will be priced at $ six thousand, he said.

Ahmed said his company would also go for manufacture of agriculture implements.

He said given the narrow manufacturing base of Bangladesh, the country needed such joint venture projects.

News: British Airways to expand India operations

(ACERC 29/03/2006) London - As foreign carriers like Malaysia Airlines close shop in Kolkata, British Airways plans to woo passengers by providing three weekly flights to Heathrow London from Kolkata and a soon to be introduced online boarding pass facility. This was announced at a press meet by company delegates.

The airline has plans of operating five flights a week from Chennai and six flights a week from Bangalore from May 4, 2006. Double-daily flights would be introduced on the Delhi-London route from April 8, 2006, said Charles Carneiro, Marketing Manager, South Asia. The total number of flights operating from five cities in India would also be increased to 42 from April this year.

The flights from Kolkata had good passenger volumes. However, flights from Bangalore always ran to full capacity. 80 per cent of the business class passengers from Bangalore were repeat flyers.

News: Intel launches PCs for rural India

(PTI 29/03/2006) New Delhi - World's largest chipmaker Intel on Wednesday launched a personal computer platform that was conceived and largely designed in India to suit the rural environment.

The PC, conceived by the Platform Definition Centre set up in India in June last year, is one of the many platforms for specific uses that the group is working on.

"The group is working on more affordable solutions and PC platforms for specific uses like in area of education. A series of new platforms are coming up," Amar Babu, Managing Director (Sales and Marketing) for South Asia said.

Apart from India, Intel had set up platform definition group in Sao Paulo in Brazil, Cairo and Shanghai, William M Siu, Vice President and General Manager (Channel Platforms Group) at Intel said.

The sturdy PC launched today can work in temperatures of up to 50 deg. celsius and can even run on a battery that can be charged by pedalling (as in a bicycle dynamo) and other means.

The battery works as a back up in areas where power supply is erratic. The PC can also operate in high dust environment and in surroundings, where there are lot of insects.

Intel has positioned the personal computer as a community PC that can be used in citizen service centres and other applications like education, Babu said.

The government has set a target of setting up 1,00,000 citizen service centres all over the country.

He said the platform has been provided to computer manufacturers like HCL and Wipro, who were expected to roll them out in a few weeks.

The PCs will be priced between Rs 20,000 and Rs 30,000, Babu said.

News: AIG to set up real estate development firm

(ACERC 29/03/2006) Mumbai - American Insurance Group (AIG), the world's largest insurer by market value, plans to set up a real estate development company and a consumer finance arm this year.

The group, which has been selling insurance in India since 2000, recently set up the country's first mutual fund with 100 per cent foreign investment. AIG India said that a JV for commercial real estate development will be floated this year.

Last week, the government cleared AIG Capital Corp's Rs 225-crore proposal to peddle consumer finance and asset management services. AIG Global Real Estate comprises a group of international companies within AIG Global Investment Group that invests in and manages real estate for clients and group companies around the world.

On December 31 last year, AIG Global Real Estate was managing assets over $10 billion. AIG Global Real Estate's property portfolio includes over 53m square feet of retail, residential, industrial, office and hospitality properties owned, managed, or being developed in more than 50 countries.

AIG Real Estate has offices in Atlanta, Dublin, Hong Kong, London, Los Angeles, Mexico City, San Francisco, Seoul, Singapore, and Tokyo. In consumer finance, AIG is looking to emulate Citifinance, which funds purchases of consumer durables, cars and home loans. In the US, AIG provides consumer loans through American General Finance.

News: Planet Retail Holdings to set up 500 stores by 2010

(TNN 29/03/2006) New Delhi - Planet Retail Holdings, master franchisee for several premium lifestyle brands in India such as Debenhams, Marks&Spencer, Guess, Next, Women’s Secret and The Body Shop, plans to set up around 500 stores by 2010, that is expected to generate sales turnover of around Rs 1,000 crore.

This includes opening 10 Debenhams departmental stores, 40 Marks&Spencer and Body Shop outlets, around 20 exclusive stores of Next and Women’s Secret, apart from around 100 Planet Sports stores, across all major metros in the country. This is estimated to require investments to the tune of another Rs 200 crore, majority of which will be met through internal accruals.

Planet Retail, a venture in which the Pantaloon group has 49% stake with the majority held by an NRI investor, currently has around 55 stores which generate around Rs 100 crore in sales. Plans are to have at least 250 stores in place by 2008 which would generate revenues to the tune of Rs 500 crore with an investment of around Rs 120 crore.

According to Arun Bhardwaj, managing director, Planet Retail Holding, the first two Debenhams departmental stores, a leading brand from UK, will come up in Gurgaon and Delhi in 2006.

This will be followed up with presence in Mumbai, Bangalore, Kolkata, Chennai, Ludhiana and Hyderabad. Debenhams has recently signed up as anchor store in MBD Neopolis, a premium mall in Ludhiana that will house a multiplex and five-star hotel, set to open in ’08.

“Punjab has a strong association with UK and we want to built on that,” Mr Bharadwaj added. Each Debenhams departmental store would require an investment to the tune of around $5million and should be in a position to pay for themselves over a three year time-frame.

Of the health and beauty segment brands under its portfolio, the first Body Shop store will open in Delhi in May this year followed by one in Mumbai. The company currently has 30 Planet Sports stores, nine Marks&Spencers outlets and 11 Guess stores under its portfolio.

News: Tupperware India plans to enter beauty care

(BL 28/03/2006) New Delhi - Direct marketing company Tupperware India Private Ltd has finalised plans to set foot, in a big way, into the beauty and personal care and home care product segments. The company will also enter the clothing and nutritional product segments simultaneously.

In August 2005, the parent company, Tupperware Corporation, had entered into an agreement with Sara Lee for buying its direct marketing business for $557 million in cash. Sara Lee operated in the beauty and personal care business. This acquisition has given the company the advantage of Sara Lee's existing market with established products.

Earlier this month, the Foreign Investment Promotion Board (FIPB) permitted Tupperware to expand its product range.

The company sells its storage and serving products for the kitchen and home through the Tupperware brand and beauty and personal care products through its Avroy Shlain, BeautiControl, Fuller, NaturCare, Nutrimetics, Nuvo, and Swissgarde brands.

The company will fund its expansion from profits from its Indian operations alone and it does not plan to bring in fresh investments from its parent company for this purpose, sources said.

Till now, the company had restricted its activities to food containers, toys, cookware and kitchen aids. With the introduction of its new products, the company would pose severe competition to other direct marketing companies such as Amway, Avon, Herbalife, Hindustan Lever, Modicare, Oriflame, Quantum and Sunrider.

According to the company's plans, it would enter into joint venture agreements with third party manufacturers for beauty and personal care products, home care items, clothing and nutritional food supplements as it had done in the case of its existing products such as plastic containers, cooking and kitchenware.

Tupperware India will operate with small-scale manufacturers for sourcing SSI reserved items as per FIPB specifications and will sell its products through the commonly practiced network marketing system.

Tupperware India is a wholly owned subsidiary of Tupperware Asia Pacific and started operations in 1996.

News: RBI eases overseas investment norms

(BL 28/03/2006) Mumbai - Indian corporates will now find it much more easier to provide guarantee for their overseas investment or to disinvest from their foreign venture. The Reserve Bank of India today issued a notification liberalising the procedure for overseas investment.

As per the new norms, corporates can offer any form of guarantee for their overseas investment under the automatic route, provided all financial commitments are within 200 per cent of their net worth and the guarantee amount is specified upfront.

Accordingly, companies can offer corporate, personal, primary or collateral guarantees. Guarantees by wholly-owned subsidiaries (WOS), sister concerns, joint ventures (JVs) or associates of a company will also be permitted. At present, only the promoter company is permitted to offer guarantees on behalf of its wholly-owned subsidiaries or joint ventures under the automatic route. Personal, collateral and third party guarantees require prior approval of the RBI on a case-by-case basis.

Guarantees issued by banks in India in favour of subsidiaries or joint ventures abroad will be outside this ceiling and subject to prudential norms issued by the RBI.

The RBI has also permitted Indian companies to disinvest without its approval where the JV or WOS are listed on the overseas stock exchange, the Indian promoter company is listed in India and has a net worth of not less than Rs 100 crore, the Indian promoter is an unlisted company and the investment in overseas venture does not exceed $10 million.

In order to allow recognised exporters with a proven track record and a consistently high export performance to enjoy the benefits of globalisation and liberalisation, the RBI has allowed proprietary and unregistered partnership firms to set up a JV or WOS outside India. Until now, only registered firms were allowed to invest in or set up JVs abroad.

News: Deutsche Bank to move jobs to India

(PTI 28/03/2006) London - Deutsche Bank, one of the leading international financial service providers, plans to move almost half of its back-office jobs to India by the end of next year, according to a media report.

The bank's plan to move the jobs in its sales and trading operations is part of its reorganisation efforts that has already helped boost revenues by about 1.3 billion pounds, the Financial Times reported.

Deutsche Bank intends to triple its global markets staff offshore to nearly 2,000. The bank is also looking to increase offshore research staff from 350 to 500, more than half the present global total of 900, it said.

The move comes as other big investment banks are also rushing to take advantage of the low cost of highly educated staff in India.

JPMorgan Chase hopes to hire 4,500 graduates in India in the next two years with the aim of transferring 30 per cent of back-office jobs at its investment bank offshore by the end of next year.

These moves highlight the shift in the use of offshore facilities from traditional areas such as information technology support and call centers to more high-value tasks.

About 15 per cent of operational staff in Deutsche's markets business are offshore and the bank plans to lift this to 40 to 50 per cent by the end of next year.

News: Cairn to invest $760 m in India

(ACERC 28/03/2006) Mumbai - Britain's Cairn Energy will invest $760 million in two years for oil exploration and production activities in India. The company has also allotted $560 million for its Rajasthan operations.

The risk capital of $200 million will also be invested in the various oil and gas assets across the country.

Couple of weeks ago, Cairn had announced that it was considering a part float for funding its exploration and production activities in India. This public issue is expected to hit the capital market by 2008, before its main Mangala field in Rajasthan begins production.

Sources said the amount to be raised would be determined by the then prevailing market conditions.

News: Genius to open 40 Indian retail outlets

(BL 28/03/2006) New Delhi - Consumer electronics and IT products major Genius announced on Tuesday that it would open 40 retail outlets across the country by this year-end and said it targeted a revenue of $3.5 million in 2006.

"We will have 20 outlets in cities such as Delhi, Mumbai, Chennai, Kolkata and Bangalore by June 2006 and the remaining 20 showrooms would be opened in Tier-II cities such as Ahmedabad, Chandigarh, Cochin, Hyderabad, Jaipur and Pune," Sales Specialist As ian Sales Division of Genius Boris Chang told reporters here today.

The Taiwan-based company, which has four manufacturing units in China, also introduced waterproof, anti-bacteria keyboard.

''Through our innovative products both in entry and middle level segment, we aim to capture 15 per cent market share by this year end, which could be around 3.5 million dollars,'' Country Manager Sales Division Genius Sandeep Ramani said.

The company aims at about Rs 15 crore sales by this year-end through the outlets, he said, adding: "We are not going for exclusive outlets. We are in talks with retail stores in the country and will display our products through their outlets."

On adding headcount, he said: "We will invest in headcount, who will work in sync with the distributors to increase the brand awareness and generate leads."

News: Universal Empire plans Rs 1,750 cr investments

(UNI 28/03/2006) Kochi - Kerala-based Universal Empire Group has said it plans investments worth Rs 1,750 crore in various infrastructure projects, including an airline in the North-East and a mega tourism project in Kerala, in the next five years.

Addressing a press conference here last night, Universal CMD K Balachandran Nair and International Affairs Director, P V Vivekanand, said the group was at present running medical and dental colleges, a 700-bed hospital in Nepal, the Tripura Medical College in Agartala and the Thamath Institute of Management and Technology at Alappuzha, Kerala.

It was now planning to make a major foray into the infrastructure sector with an airline service, a knowledge hub and global university, a mega tourism project, a hydro-electric project, medical colleges and healthcare facilities.

The Group's 'Surya Air' would be the first dedicated airline service for the North-East. The Rs 150 crore project was expected to take off by October this year.

To be started in collaboration with Buddha Air of Nepal, 'Surya Air' will, in the first phase, operate five 19-seater fixed wing pressurised Beechcraft aircraft, manufactured by Raytheon of US, to connect major cities and towns in the North-East and eastern India.

In the subsequent phases, services would be extended to the western and southern parts of the country, he said.

On its home turf, Kerala, the Kochi-based Group planned to put up a mega tourism project at a cost of Rs 300 crore in Alappuzha district.

It will include an eco-resort, a convention centre, a golf course, an art, culture and heritage zone and other tourist attractions such as a 'dolphanium' and an 'ice city', Vivekanand said.

For the knowledge hub and global university, meant primarily to cater to non-resident Indians and 'people of Indian origin,' the group was holding talks with the Goa Government.

A 700-acre site, close to capital Panaji and NH 17, had been identified. The National Capital Region (NCR) Delhi was also under consideration for the project entailing an investment of Rs 1,000 crore.

It was intended as a knowledge cluster in which various universities, R&D set-ups of companies, townships housing students, faculty and companies would be present.

The group was also planning to invest Rs 300 crore to set up medical colleges and healthcare facilities in states lacking these services on a public-private partnership model.

It had also carried out initial discussions with the Arunachal Pradesh Government to set up a hydro-electric project.

To a question, Nair said the group with an asset base of Rs 150 crore will mobilise money from overseas for the investments.

News: Debenhams 'anchor' store at MBD Neopolis

(TNN 28/03/2006) New Delhi - Debenhams, UK's popular departmental store, will be the 'anchor' store at 'MBD Neopolis', the MBD Group's mall project in Ludhiana.

"The UK group, Debenhams will be launched with an average store size of 25,000 square feet with MBD Neopolis in Ludhiana and will have major international brands including luxury, premium and speciality brands," said, MBD Group managing director and chairman Ashok Kumar Malhotra.

Keeping in with their commitment to bring some of the best national and international high-end retail brands in Ludhiana, he said, "by this tie-up, we will seek make MBD Neopolis the most preferred destination amongst the elite and affluent of Punjab."

He said the other retail brands signed up by the group include home solutions by Pantaloons, Marks and Spencer, Guess, Next, Women's secret, Archies and many others. The group is also planning to bring MBD Neopolis to Jalandhar, Patiala and Amritsar.

Planet Retail Holdings Ltd managing director Arun Bhardwaj said, "MBD Neopolis scores very high on the parameters which an international department store such as Debenhams looks for. We will together provide the consumers of Punjab some of the best labels of the UK."

News: State seeks to fly over delays in Mumbai mega projects

(DNA 28/03/2006) Mumbai - The state government’s tardiness in implementing mega transport projects in the city is creating a need to look at flyovers as a quick-fix solution, the controversial Peddar Road project being a prime example.

With the mega projects running up to 15 years behind schedule — thanks to poor planning and execution — the state has had to resort to the flyover as an immediate solution to the massive traffic congestion in the area.

Consider this: the Mumbai Metro, planned way back in the late 1970s, was only initiated in 2002. Even now, issues like gauge size (standard or broad) and rehabilitation are stalling the process.

Similarly, the passenger water transit system between Nariman Point and Borivli remains a non-starter since July 2003, when financial bids were submitted for a hovercraft service. The Maharashtra State Road Development Corporation took an entire year to issue a letter of intent to Mumbai-based Satyagiri Shipping, which won the contract. Parts of the project still await environmental clearance.

“Ideally, the project should have started by now,” said Satyagiri director Dinesh Joshi. “Also, we need single window clearance for the multiple clearances needed.”

The Worli-Bandra sea link has already missed its 2004 deadline, pushing its cost up from Rs420 crore to Rs1070 crore. The Western Island Freeway is also delayed, with doubts as to how the state will raise the Rs3,600 crore required. Technical consultants for the Mumbai Trans Harbour Link, connecting the city to Navi Mumbai, have only just been appointed.

The project, estimated to cost Rs4000 crore, was conceived in the 1970s.

“There is no will or vision in the leadership to implement these projects,” says BJP leader Nitin Gadkari. “Frankly, no one really cares for the ordinary commuter.”

But Gadkari favours persuading singer Lata Mangeshkar not to protest against the Peddar Road flyover.

“I am sure if its advantages of low pollution and ease in traffic movement are explained to her, she would agree,” he says.

State Public Works Minister Anil Deshmukh may call on Mangeshkar on Tuesday to hear her arguments against the flyover and present the government’s view.

News: Mumbai hovercraft project stuck in babudom

(DNA 28/03/2006) Mumbai - The delay in the Passenger Water Transport project for western suburbs is a classic example of the way the Maharashtra government is hampering mega transportation projects.

The Rs1,400-crore, eco-friendly project, part of the Mumbai redevelopment plan, has been locked in bureaucratic wrangles and delays since the financial bids were opened in December 2003. The delay and lack of initiative means commuters will have to wait for another three years to whiz across the sea from Borivali to Nariman Point in just 50 minutes in air-conditioned hovercrafts.

Ministry of Environment and Forests (MoEF) has allowed passenger water terminals at Bandra, Juhu, Versova and Borivali, while those at Nariman Point and Marve are awaiting nod for want of more geo-technical investigation and sub-soil exploration.

A consortium, led by Mumbai-based Satyagiri Shipping Co Ltd, which won the contract, is now in the final stages of getting the project financing report prepared by a leading international consultant. Indian financial and infrastructure institutions are evaluating the project.

The consortium, comprising KJMC Financial Services, Gammon India, Videocon International, Hiranandani Group, along with ABS Hovercraft Ltd (UK) and Hoverline AB (Sweden), is planning to bring high-speed hovercraft and catamarans with capacities to carry 60 to 300 people. It is planned to operate hovercrafts every 15 minutes during peak hours.

The project will be implemented on a ‘Built-Operate-Transfer’ (BoT) basis, with a 30-year lease. Initial estimates show that the services would carry one lakh people daily for a Rs130 one-way fare (from Borivali to Nariman Point) and would be operational 300 days a year.

“We are expecting the ‘letter of award’ from the state government by April 2006. We will be finalising criteria for shareholding and technical evaluation shortly,” said Dinesh Joshi, director, Satyagiri.

However, the feasibility of this project lies on the concession agreement between Satyagiri and the Maharashtra government. The former wants the project to made part of the Inland Water Transport (IWT) policy to get subsidies on fuel and reduction in import duties. “We need subsidies so that the fares can be made affordable The passenger terminals must have cafeterias and other entertainment avenues for revenues,” explained Joshi.

It looks like the city’s wait for a sea ride to work will continue for some more time.

News: Goldman MD sets up consumer-focused Indian private equity fund

(FA 27/03/2006) Mumbai - Ex-Goldman Sachs MD, Sameer Sain, moves to India to set up a financial services company with a consumer centric edge. Ex-Goldman Sachs MD, Sameer Sain, was formerly co-head of wealth management for Europe, Middle East and Africa at the US firm, as well as head of the special investments group in London. He recently moved to Mumbai as CEO of Future Capital Holdings (FCH), the financial services arm of Pantaloon Retail.

What attracted you to the Pantaloon Retail group?
After 11 years with Goldman Sachs at various international offices, I had a strong personal desire to return to India. I also wanted to do something entrepreneurial and build a business in the financial services area. I’ve known Kishore Biyani, (promoter of India’s largest retailing chain Pantaloon Retail) for 20 years. We discussed his vision for the country and travelled across India together. The country is changing dramatically. Kishore wanted to build a finance-led business leveraging his success in retail and his pulse on the Indian consumer. I share this vision and passion.

What's the ownership structure of FCH?
FCH is majority-owned by the Pantaloon Group. Other partners include myself and Alok Oberoi, an ex-Goldman Sachs partner, who's currently running ACP Partners in London. There's also a couple of other investors. I can't share financial data with you at this juncture, but we intend to strongly capitalize FCH and scale its various businesses.

What type of investors are you in dialogue with?
Investors who can enhance our value proposition, as well as provide capital. This might comprise an international consumer company, or a retail-oriented family who can provide insight and possibly international distribution capabilities for our portfolio of Indian companies.

What kinds of businesses will FCH invest in?
FCH is a holding company and so far we have three business lines up and running.

In the real estate sector we have two funds. The first is called Kshitij and we raised $80 million for it in 2005. It's now fully deployed. We also have a second fund called Horizon ($300 million), which we're planning to close this month.

In the private equity division we have Indivision India Partners Fund. We're currently raising money for this fund and targetting $350 million.

Then there's the asset management division. We're in discussion with a management team and plan to get this division going shortly.

In addition to these three areas, we're also finalizing our strategy before launching a significant credit business (microfinance, mortgage, auto, credit cards) within our retail formats.

What's FCH’s role?
While each business will run independently, FCH will provide shared resources - developing strategy, establishing JVs/strategic relationships, fund raising, investor relations, business synergy, business operations and financial structuring. Our intention is that each individual business should focus on the deployment of its capital, leaving FCH too look after everything else.

What's the strategy for real estate?
We're developing a retail-led project with some mixed use (commercial, residential and hotel). When legislation permits, we want to launch a REIT around the $500 million mark in partnership with a global investor. We've also mapped 50 Indian towns with a population of more than one million people living within an 8km radius. We want to create malls in the centre of town that are leisure-cum-shopping destinations. A store from the Pantaloon stable could be an anchor tenant and that should ensure a strong footfall for other tenantts.

The Asian private equity space is very crowded. How can you differentiate yourselves?
Kishore Biyani made a success of Pantaloon Retail because he understood retail markets and the consumer psyche. We'll use this platform to differentiate Indivision. The strategy is consumer-centric and will leverage the strong distribution capabilities of Pantaloon, as well as the mentoring ability of our team. We've also hired world-class private equity investing talent and developed strong research capabilities.

Will your private equity investments have a sectoral bias?
We expect a large proportion of investments to be in the fast moving consumer goods (FMCG) sector - media, retail, logistics, entertainment and financial services.

What's the management structure for Indivision?
Within Indivision, Sanjiv Gupta and I are joint MDs. Prior to joining Indivision, Sanjiv was CEO of Coca Cola in India and South Asia. He's also worked with Unilever’s Indian subsidiary, Hindustan Lever and in the media space. Sanjiv has an exceptional network and deep understanding of companies in the consumer space, which we aim to invest in.

What's your strategy for investee companies in the FMCG and consumer space?
Internally we call the strategy ‘mentor capital’, as opposed to traditional venture capital. Rather than being passive investors we target companies where we can add value with hands-on mentoring.

We'll provide inputs on marketing (including branding, distribution, supply chain, logistics) organisation development as well as capital structure. Combined with our nationwide reach, this will place our companies on a strong growth trajectory. Indivision has already made its first investment in a branded food-product company, Capital Foods. We've doubled its revenues in just six months.

Over the next two years, we believe we can grown revenues another two to three times by leveraging our relationships via joint ventures, intelligent investing in capacity and developing complementary product lines. For a small food company to get the focused attention of someone with Sanjiv’s caliber and the full distribution strength of the Pantaloon Group is quite rare and therefore very impactful.

What's the strategy for private equity investments in the financial services space?
Given that less than 50% of Indians have a bank account, we see great synergies between retail finance and shopping at a Pantaloon “Big Bazaar” store. In addition, our access to almost 25% of all modern retail space in India provides with a point of sale for financial producs. This is an area where I will focus given my own background.

To your mind, what is the critical success factor for FCH?
Two simple things: vision and talent. Kishore had the vision to do something that changed the way people think about consumption in India. FCH has the same vision with a financial edge. The other key to success will come from our ability to attract and retain talent.

Our strategy is quite simple. We want to empower talent we hire to act like owners rather than employees. We want to give them the width and space to operate and the right financial incentives. We are rolling out a unique programme, LTWC (Long Term Wealth Creation) – a variation of certain Western compensation models, tailored for India.

News: Wal-Mart takes its China lessons to India

(RTR 27/03/2006) Shenzhen - When Wal-Mart Stores Inc. opened its first store in Shenzhen a decade ago, the local newspaper headline proclaimed, "The Wolf is Coming."

The world's biggest retailer has not exactly devoured China's retail sector since then, opening just 56 stores, but it has learned a few lessons that may prove useful for its next major project -- India.

"China and India really represent the future of Wal-Mart," Joe Hatfield, chief executive officer for Wal-Mart Asia, told Reuters in Shenzhen, the retailer's China headquarters.

Foreign retailers are not permitted to directly invest in India's retail sector, but they have been lobbying hard for a change to those rules.

Analysts say that will likely happen within a year or two.

Wal-Mart's opponents in India fear the "wolf" would demolish competitors and drive up unemployment in a country already struggling to feed and house its one billion citizens.

But Wal-Mart believes India, like China before it, will embrace Western retailers. The key is to show an understanding of local tastes, whether that means stocking popular spices, the right baked goods, or just the top-selling brand of soap.

Easier said than done.

In China, Wal-Mart tried to sell paint, something that works well in the United States. But customers weren't used to buying paint and food from the same place, and Wal-Mart eventually stopped carrying it.

Analysts and economists in India say the retail sector and its supply chain are in dire need of modernisation. India's farm goods typically pass through six or seven intermediaries before reaching consumers, and some 40 percent of produce spoils along the way.

'STEAL SHAMELESSLY'

Wall Street is eager for signs Wal-Mart is making progress in China and India at a time when growth at home is sluggish.

The United States accounts for about 80 percent of Wal-Mart's annual sales, which topped $312 billion in the latest fiscal year, but rival Target Corp. has posted faster sales growth in recent quarters.

Investors have noticed. Target's shares are up more than 6 percent over the past year, and trade at 17.2 times analysts' profit forecasts for the current year, according to Reuters Estimates. Wal-Mart's stock has fallen about 5 percent in that time, and is valued at 16.5 times earnings.

Wal-Mart has already taken steps to prepare for India. The retailer has applied to open a liaison office in Bangalore to study the market, and recently hired a head of Asian strategy who will oversee expansion in India, among other things.

Wal-Mart Vice Chairman Mike Duke met Indian officials earlier in March, marking the retailer's second round of high-level talks in less than a year.

Hatfield himself may be one of the best resources. He opened Wal-Mart's China operations in 1994, so he is well aware of the potential pitfalls in a developing economy.

His best advice? "Steal shamelessly," Hatfield said, quoting from Wal-Mart founder Sam Walton, who routinely visited competitors' stores to get new ideas.

He spent his first months in China walking around and talking to shopkeepers about which items sold well.

In China, Wal-Mart got off to a slow start, and trails rivals such as France's Carrefour, which did a better job of adapting stores to meet local tastes.

Hatfield says it is unlikely he will be in charge of Wal-Mart's India business, because a major China expansion will keep him busy. But he has some ideas about how a Wal-Mart store in India should look.

For starters, it should have an expansive spice section, where employees can custom grind orders while shoppers wait. It would also boast a large bakery section.

In India, as in China, few households have ovens, so baked goods must be purchased.

Stores would probably be smaller than they are in China -- no more than 140,000 square feet, instead of the 200,000 square-foot supercenters in China and the United States.

WHERE TO GO?

Figuring out what to put on the shelves is one thing -- the bigger task will be figuring out where to put the stores.

Analysts in India say it will be tough for Wal-Mart to get into the mega-cities such as New Delhi or Mumbai, where real estate is pricey and large parcels of land are hard to come by.

Severe traffic congestion will also be a problem. How many shoppers will be willing to brave hours in a car just to visit a Wal-Mart store, particularly when a multitude of small, corner shops offer convenience and service?

Millions of those small stores currently account for some 97 percent of India's retail market. Most of them accept telephone orders and will deliver to homes.

Raman Mangalorkar, a principal with consulting firm A.T. Kearney in Mumbai, said small, corner shops will survive because of the convenience factor, but some will need to change their merchandise offerings to compete.

"They'll have to evolve, just like they've done in China," he said. "They will cater to needs that are not being served by the Wal-Marts and Carrefours."

Mangalorkar, whose firm ranks India number one on its annual list of the top markets for international retail expansion, said he would advise foreign retailers to focus on the second-tier cities such as Lucknow.

Hatfield said Wal-Mart was interested in cities both large and small. He said his strategy would be to make a big splash early on, opening 12 to 18 stores in the first 18 months, to show consumers that Wal-Mart was committed to India.

News: India's corporate tax collections rise 19 pct

(RTR 27/03/2006) New Delhi - India's corporate tax receipts between April and March 22, 2005/06 amounted to 897 billion rupees ($20.10 billion), up 19 percent from the same period a year ago, a senior finance ministry official said on Monday.

News: India, Korea begin talks on economic pact

(BL 27/03/2006) New Delhi - India and Korea have commenced negotiations towards a Comprehensive Economic Partnership Agreement (CEPA), with the India-Korea Joint Task Force (JTF) holding its first meeting over the last two days in the Capital.

An official release said that the JTF discussed the modalities of the negotiations and that seven working groups have been constituted to carry out the negotiations in specific areas. These areas are — trade in goods; trade in services; investments; other rules and economic cooperation; general provision and dispute settlement mechanism; rules of origin and Customs administration and procedures.

This meeting was co-chaired by the Commerce Secretary, S.N. Menon, and the Korean Deputy Minister for Trade, Kim Joong Keun. The next meeting of the JTF would be held in May in Seoul.

News: India, GCC to accelerate finalisation of FTA

(PTI 27/03/2006) Dubai - Entering a new era of partnership, India and the six Gulf Cooperation Council (GCC) countries have decided to accelerate finalisation of the free trade area agreement and enforce the framework agreement for economic cooperation, which includes joint ventures in the sectors of energy, communications and petrochemicals.

Both sides have agreed to enforce the GCC-India Framework Agreement for Economic Co-operation, and expedite the finalisation of the free trade area agreement, which includes other economical sectors, Mohsin bin Khamis al Balushi, advisor at the Ministry of Commerce and Industry, Oman, said.

The FTA is expected to be ready by 2007, he said. The bilateral relationship between the GCC and India has entered into a new era of partnership this year, a declaration issued after the conclusion of the two-day India-GCC Business Summit in Omani capital, Muscat, said.

Minister of Commerce and Industry Kamal Nath and commerce ministers from the six GCC countries, Saudi Arabia, the UAE, Oman, Qatar, Bahrain and Kuwait attended the summit.

News: Liberty Shoes plans expansion

(BL 27/03/2006) Karnal - Liberty Shoes Ltd will set up three new manufacturing units to double its production capacity to one lakh pairs of footwear per day in next three years and would invest Rs 160 crore for the expansion plans.

"We are coming up with three plants in 2006-07. We are increasing our capacity from 50,000 pairs per day to 75,000 pairs within the year and to one lakh pairs in three years," Liberty Shoes CEO Adesh Gupta told reporters here.

While one unit would be at Roorkee in Uttaranchal, two units would be located at Ponta Sahib in Himachal Pradesh.

The company would invest Rs 50 crore for the Roorkee plant for manufacturing leather footwear and Rs 30 crore for the two units at Ponta Sahib for non-leather shoes, he added.

Besides, the company would invest another Rs 80 crore by 2008 for further expansion, he said adding the funds would be sourced through internal accruals and bank loans in 1:1 ratio.

When asked about the export strategy, he said the company was looking to increase its presence in the US through its tie up with Wal-Mart, the world's largest retailer, and termed it as one of the reason for ramping up the capacity.

"We had tied up with Wal-Mart a year ago and our footwears are on display on trial basis in 35 of their stores," Gupta said, adding that the company would be supplying more to the retail giant from next financial year.

News: Sharp India to trade in electronics

(RTR 27/03/2006) Mumbai - Indian consumer electronics goods maker, Sharp India Ltd said on Monday that it has received the Foreign Investment Promotion Board's approval to trade in electronic goods.

Shares in Sharp India were 1.1 per cent lower at Rs 17.55 in a firm Mumbai market.

News: Shell disowns oil drums as Trinidad's panmen gather for soccer World Cup

(Bloomberg 27/03/2006) Paris - Royal Dutch Shell Plc has one word to offer on the subject of its musical oil barrels. "What?" says Shell spokeswoman Alexandra Wright in London. The World Cup is about to change Shell's tune.

"Oil drum music is infectious," says Sepp Blatter, the president of FIFA, soccer's global governing body and organizer of the 2006 World Cup in Germany in June.

Blatter envisions the rum poured and a conga line ensuing around the 10,000 steel-drum "panmen" expected to follow the Trinidad and Tobago "Soca Warriors" soccer team.

"Over a billion people will see this on television," Blatter says. "Fantastic for Trinidad and the World Cup. The audience will go wild."

And therein lies the corporate dilemma of Gerard Mitchell, country head of Shell Trinidad Ltd. More than a few thousand of those World Cup drummers will probably be beating Shell oil barrels.

"It's officially against corporate policy for us to hand out oil barrels," the 37-year-old Mitchell frets. "We really don't know what to do about all this."

For many of the world's estimated 35,000 panmen, the sweetest-sounding music comes from the 55-gallon, 20-gauge red steel oil barrels made in Shell's lubricant mixing plant on Barracones Bay in Trinidad.

A few miles up the road in Port of Spain, beneath the shade of the big breadfruit tree at 147 Tragarete Road, a Shell executive in 1946 made history's first steel drum from an empty barrel of tractor lubricant bearing the company's distinctive clamshell insignia.

Stradivari Reputation

According to American jazz musician Andy Narrell, Shell oil-barrel pans made between 1946 and 1967 are as renowned and desirable as the Cremonese violins of Antonio Stradivari, Nicolo Amati and Giuseppe Guarneri.

Even the barrels made today are in high demand among pan players. "We kind of have a reputation," Mitchell says.

Adds William Rosales, Shell Trinidad's 36-year-old engineer charged with overseeing the manufacture of more than 42,000 Shell oil barrels annually: "Let me state for the record that our used drums are disposed of properly and that Shell health and safety regulations prevent the use of empty drums for anything but Shell oil products."

That wasn't always the case. Sixty years ago, Shell bankrolled the invention of the modern pan drum, the only new acoustic instrument to hit the music scene since Adolph Sax came up with the saxophone in 1841.

'Mr. Alexis'

Shell's archivists in London and The Hague have no record of the pan or its inventor, Ellie Mannette. Shell executives in Trinidad suspect the company's documentation for both was lost when the government nationalized the oil industry in 1974, and Shell's presence was reduced from 4,000 employees to its current 55-member operation.

Old-timers on the island say Shell got into the music business in 1951, when a Shell Caribbean managing director they remember as "Mr. Alexis" put Mannette on the payroll with an annual salary of $2,000 to stop him and his pals -- Birdie, Puddin' and Cobo Jack -- from stealing the company's empty and toxic oil drums.

Mannette remained with Shell until 1967, as a sales manager, steel-drum maker and leader of pan band the Shell Invaders. "They called me Cairo," says Mannette, now 80 and the artist-in-residence and a professor of music at West Virginia University in Morgantown.

"We were teenage gang members, all viewed as social outcasts until Shell took an interest in us and our music. They gave us barrels and money and made the music happen."

The Barracuda

Mannette named the world's first 55-gallon Shell drum "the barracuda." It was last seen in August 1946, stuck in the high branches of the breadfruit tree.

"The big kids beat me up and stole barracuda because it made a better sound than their drums," Mannette says. "They threw it up in that tree and I wasn't going up there for it."

By the early 1960s, Jeff Chandler, Shell Trinidad's British managing director, and fellow Englishman Michael Smallbone were spending their off hours as managers for the Shell Invaders. The group even played at New York's Madison Square Garden.

"They carried the beer and made sure it was cold," recalls 70-year-old George Martin, Shell's Caribbean public relations director from 1966 to 1996. "Chandler and Smallbone loved hanging out at the Shell pan yard. They arranged scholarships and helped all the musicians study abroad."

Bonfire Treatment

One of the early Shell Invaders, Malcolm Weekes, received an annual $2,000 scholarship to attend Howard University in Washington, where he played the double alto (two drums with 16 notes on each pan) for the school's Trinidad Steel Band and graduated with a degree in chemical engineering.

Now retired after a career as a chemist at Bechtel Group Inc., Weekes remembers when he and Mannette forged pans out of toxic barrels. "We built bonfires to burn out all the crap stuck inside the drums," Weekes, 65, says.

"It was dangerous work. We all inhaled the fumes. But what the barrel had contained also helped define the sound of the drum."

Mannette now builds about 100 pans annually from the unsoiled barrels that roll off the line at North Coast Container Corp. in Cleveland.

"Weird thing is, nobody's really sure why a 55-gallon oil drum can be crafted into a musical instrument or why my early Shells have a distinctive sound," Mannette says. "I once made a drum out of a Shell barrel that had stored perfume. Now that was really exceptional."

It's the Solvent

Back in the lab at Shell Trinidad, chemist Saira Joseph says the sound is in the solvent. "A lighter oil would lend itself to higher notes and a heavier oil to lower notes," Joseph explains.

"The gauge of the steel is the most critical factor. Shell stayed with the heavier 20-gauge, while the other oil companies mostly went to 15- and 18-gauge steel."

Panman Chanler Bailey, who spent six years at Mannette's side studying steel-drum construction, says the oil companies no longer know how to make an oil barrel. "There's a lot of junk Japanese-made barrels out there," Bailey says. "They don't hold the sound and the drumheads crack on impact."

Modern pan makers, called blenders or tuners, rigorously follow Mannette's system in constructing any of the nine drums that make up the pan family.

The barrels are first sliced according to register, from soprano to bass. Then, using a selection of rubber and metal mallets, blenders stretch the thickness of the metal top to create a concave drumhead to produce anywhere from three to 30 notes.

Before Mannette's first nine-note barracuda, steel music makers could play only three notes on hubcaps and cookie-tin tops configured with convex drumheads. They went clunk.

The Fine-Tuning

In Trinidad, a blended barrel costs about $600. And should the oil drums tumble from the Shell factory -- which they officially don't -- add perhaps a few hundred dollars to the sticker price.

Majudell Raham is a 37-year-old master oil-barrel maker at the Shell plant. With a sheet of rolled Columbian steel in his gloved hands, Raham heaves the metal into the "drum rounder," the first of the assembler's four-step process.

From there, the tubular sheet goes aboard the "beader flanger" to create the two rims that give an oil drum its industrial musculature and musical resonance.

For panmen, what Raham does next is akin to the difference between a fiddle and a Stradivari, and his choice is clear. Raham can let a computer regulate the flow of the chalky substance that locks in the barrel lids, or he can tweak the stream to his taste.

The Logo Goes

"I don't play any musical instruments," Raham says, fine- tuning the surge of sealant. "The barrel seam must fold together. For the sound, I think the solid seam is everything."

To ensure the finished product meets Shell's environmental standards, Raham checks for leaks and ruptures in the metal.

Back along the banks of the Monongalia River, in the workshop of Mannette Steel Drums Ltd., a set of the maestro's chrome-plated pans can fetch more than $10,000.

The result can be heard accompanying the tunes of Harry Belafonte, Alison Krauss, Jimmy Buffett, and the National Symphony Orchestra at the John F. Kennedy Center for the Performing Arts in Washington.

"It's a lot different from the days when I'd go out every morning on my green bicycle to scout empty oil drums," Mannette says, pushing a finger through his crop of curly gray hair.

"My gang, the Oval Boys, would go back at night to steal them. We took everything, including garbage cans, but those Shell barrels were gold."

Vintage Mannette

During his early years in Trinidad, Mannette estimates he tuned 512 Shell oil pans.

"The sound is completely different," says Narrell, who counts a set of early 1960 Mannette pans among his collection. "You'll occasionally spot a vintage Mannette, but the drums are so old that it's hard to find one with the original Shell logo."

Mannette says part of his deal with Mr. Alexis was a promise that the Shell Invaders would always play with the Shell logo on their drums.

"Can't do that anymore," Mitchell explains. "Corporate policy prohibits us from putting the logo on our barrels. We don't know where it might show up."

The Shell Invaders no longer exist. Once first among the 150 bands and 3,000 drummers who practice in the pan yards along Tragarete Road in Port of Spain, Shell disbanded the group in 1974.

They reappeared a few years ago as the BWIA Invaders, named for their new underwriter, British West Indian Airways Ltd.

Preferring the Clam

Along the musical thoroughfare, the hippest band these days is the Excellent Stores Silver Stars, named after a supermarket chain.

On a recent evening, a few BP Renegades were spotted playing alongside Tony's Ice Cold Coconut Truck in the center of town. They wouldn't say where their barrels came from.

Weekes, the retired Shell Invader, says he knows. "Cairo and I would blend the competition's pans on Shell barrels and then they'd paint BP, Texaco stars and Mobil flying horses over the Shell clam," Weekes says.

"The panmen still prefer the Shell barrel," adds 71-year- old Miky Galera, Shell Trinidad's aviation fuel manager during the 1960s.

Suppressing a grin, Rosales, Shell's barrel superintendent, says, "I know we make the best musical oil drums in the world."

News: BSNL wants to defer IPO by a year

(PTI 26/03/2006) New Delhi - State-run BSNL has sought minimum time of one year before any decision on offloading a small stake of the Government in the PSU could be considered.

The PSU's response comes in the wake of Ministry of Finance asking BSNL for its view on listing the company by selling some Government shares to the public. The PSU after consulting its advisor ICICI Securities said the IPO should be delayed by one year to ensure conformity of its accounts with the listing requirements.

The IPO route was one of the options that were to be considered for disinvestment. However the PSU has stated that if the Government wants, it can go ahead with disinvestment but only the government could take a decision in that matter.

For that, the company would have to come clean on the accounts and also a whole lot of disclosure norms have to be cleared before going in for a sale of shares.

BSNL also said in its response that it does not need to raise any fresh capital.

BSNL officials clarified that these were just BSNL's response to queries posed to them, and any final call on the mode of disinvestment have to be made by the Government.

Three months ago sources had said that the government had written to BSNL along with a few other companies seeking the right time and procedure to seek an IPO if required by BSNL.

Telecom secretary J S Sarma recently had said "there is no decision to disinvest in BSNL partially or otherwise.”
BSNL which so far have been valued by various estimates at about $25 billion and a 5-10 per cent stake sale could fetch the Government up to Rs 10,000-12,000 crore.

News: Reliance retail gets 'A' team in place

(DNA 26/03/2006) Mumbai - The outlines of Mukesh Ambani’s proposed retail empire are now visible. The generals are in place, and the fact that so many of them were recruited from the competition has left the latter bruised and bloodied even before the first shot has been fired.

Rival retailers now face the daunting task of matching Ambani’s bottomless war-chest, as he continues raiding them for managers at various levels, making them offers they just can’t refuse.

The company seems to have arrived at an operating structure where the retail division’s chief executives will head vertical functions, and report to Mukesh’s right-hand man Manoj Modi.

Raghu Pillai, an experienced hand, who kicked off retail ventures like Food World, Music World and Health & Glow for the RPG group over the last decade, will spearhead front-end operations at the Reliance stores.

Pillai was enticed away from Kishore Biyani’s Pantaloon Retail. Lending his expertise to the lifestyle division will be Bijou Kurien, the erstwhile marketing head of Titan watches.

Commodity procurement, setting up a supply chain and ensuring quality control are some of the critical functions in a retail outfit. For these, once again, Ambani has laid his hands on men with experience and dipped into the multinational talent pool.

D Saravanan was the big daddy of supply chain and quality control at burger king McDonald’s. With an agriculture degree, Saravanan is said to have been responsible for working on the right grade of potato for French fries at the double arches. He will head those same functions at Reliance retail. He will also be responsible for the linkages of backward integration.

Sanjeev Asthana, who was the business head for grain at Cargill India, will cater to grains and oilseeds in the venture.

While the consumer electronics vertical will be headed by Rajeev Karwal, ex-Onida, LG and Electrolux, the apparel and clothing vertical will be overseen by Sriram Srinivasan of Indus League.

The food and grocery beachhead will be headed by former Hindustan Lever (HLL) man Gunender Kapur. Kapur was earlier seconded to Modern Foods, HLL’s first public sector acquisition, and was later shifted to Unilever Nigeria.

Since Reliance wants to enter into every big and small retail format, including malls, Suresh Singaravelu, the former chief executive of Prestige Constructions and Forum, the south Indian mall venture of the Prestige group, will push the same here. He is responsible for the setting up and development of malls.

The company will also have a state-level CEO, who will be the owner of the geography and the store formats therein. These include hypermarkets, supermarkets, convenience stores and malls. The heads of the business verticals will drive profits at their respective product groups, whereas the geography owner will be accountable for individual store and geographical performance.

News: Indo-Pak trade talks begin tomorrow

(PTI 26/03/2006) Islamabad - Pakistan's stance on granting India the most favoured nation (MFN) status in the light of SAARC countries ratifying a regional free trade area is among issues expected to be taken up during bilateral talks on economic cooperation from Monday.

Indian Commerce Secretary S.M. Menon and his Pakistani counterpart Arif Ali Shah, who head the Joint Working Group (JWG) set up two years ago, would meet here on March 27 and 28 to hold the third round of talks on economic cooperation listed under the Composite Dialogue process.

Though officials of both sides maintain that the parleys would cover bilateral trade, the talks are taking place in the backdrop of SAARC Secretariat's announcement this week that South Asia Free Trade Area (SAFTA) has finally been ratified by all SAARC countries, which is expected to have a big impact on the Indo-Pak trade.

The issue of Pakistan granting India the MFN status as a reciprocal gesture in the light of ratification of SAFTA was also expected to figure in the talks.

India has already sought clarification from Pakistan over reports that Islamabad would continue to trade with India with the negative list of products despite SAFTA ratification.

The JWG met few times in the past, but made very little progress in the face of Pakistan's reluctance to publicly open up its markets for Indian products and investment linking it to "tangible progress" on political issues like Kashmir.

Pakistan has complained of high Indian tariff regime and demanded a level-playing field for its products in the Indian market.

Pakistan cabinet ratified SAFTA last month amid reports that Commerce Ministry headed by Humayun Akhtar Khan recommended strongly against it on the ground that it would end up opening Pakistan's markets to India in a big way under the regional multilateral arrangement.

News: Salvatore Ferragamo to open 10 stores in India

(PTI 26/03/2006) Mumbai - Italian luxury brand Salvatore Ferragamo plans to open ten stores in five years in India after opening its first store in New Delhi recently.

Speaking on the sidelines of launch of their store in New Delhi, Salvatore Ferragamo, vice president Fulvia Visconti Ferragamo, said, "We plan to open our second store at Delhi in a year and a total of ten stores would be opened in the next five years." Fulvia, however, refused to give details of the exact investments company plans to makes in India.

The new stores would come up at major metros, including Bangalore and more stores in Delhi and Mumbai, she said. Salvatore Ferragamo has opened the store in association with SSIPL Luxury Fashion Private Limited, their franchisee in India.

The collection at the stores includes shoes, silk and leather accessories, eyewear and ready-to-wear lines that are exclusively by Salvatore Ferragamo.

The Salvatore Ferragamo Group closed the financial year 2005 with sales worth 575 million euro.

News: India may soon be Gulf's top trading partner

(IANS 26/03/2006) Muscat - With India and the six Gulf Cooperation Council (GCC) countries expected to sign a Free Trade Agreement (FTA) soon, bilateral trade could surge to record levels enabling India emerge as the largest trading partner of the Gulf states.

Commerce and Industry Minister Kamal Nath said the two sides have agreed to expand the scope of the agreement to include services and investments, thus making it a Comprehensive Economic 000peration Agreement instead of just a FTA.

“We (India and GCC), at a meeting in Riyadh last week, decided to work to finalise the FTA by early 2007,” Kamal Nath said while speaking at the opening session of the two-day Second lndia-GCC Industrial Conference which opened in Muscat Saturday.

At present, the Gulf is the second largest destination for India’s exports after the US. “Indian businessmen and entrepreneurs have already put India on the global map,” he said.

“We can look forward to a proactive engagement between our trade and investment promotion institutions as well as the private sectors on both sides.”

The current value of bilateral trade, excluding oil, between GCC countries and India is around $17 bn and is expected to reach $25 bn by 2010.

In 2004-05, India’s export to the GCC was $10 bn and imports from these countries, minus oil, stood at $7 bn.
According to Kamal Nath, there is a convergence of interests between India and the GCC states in the present global environment.

His Omanese counterpart Maqbool Bin Ah Sultan said the current economic scene in the GCC states and India was conducive to strategic economic cooperation.

“India is a promising market for energy. The opportunities will continue to exist for exporting greater quantities of Gulf oil and gas to India,” he said.

Countries like India, Kamal Nath, said are seen emerging as champions of trade and economic liberalisation. For the Gulf, India is the most attractive natural partner, he said.

“The indication is that the US may lose out to India as the largest trading partner of the Gulf in future, if India explores the scope of expanding its ties with the GCC. India has all the rootstocks to enhance the bilateral trade with the Arab region,” a leading Indian entrepreneur from Hyderabad said.

Kamal Nath also said that India could emerge as the largest trading partner of the Gulf in two years. In the recent past, several Indian financial institutions have established operations in the region, which include State Bank of India, ICICI Bank and UTI Bank.

Over 500 delegates, besides the ministers of commerce and industry from the other five GCC countries and India are attending the conference.

Bahrain’s Commerce Minister Hassan Fakhro said the overall economic cooperation between the GCC and India was endorsed through a GCC-lndia Framework Agreement at the first conference, held in Mumbai in 2004.
“Our GCC region has a long history of trade with India and today, the GCC is the second largest export market for India and in turn India is the largest export market for the GCC,” he said.

“In the case of Bahrain, India represents around five percent of our non-oil exports, and in 2005 we imported over four percent of our total non-oil requirements from India.”

News: Easier norms for metro airports revamp likely

(BL 26/03/2006) New Delhi - For the proposed modernisation of Chennai and Kolkata airports, the Government is planning to drop the restricting clause, as was the case of Delhi and Mumbai, that a company could take up only one airport for development.

Consequently, it may allow interested parties, including those already participating in the development of Delhi, Mumbai, Bangalore and Hyderabad airports, to bid for Chennai and Kolkata airports too.

"We will soon invite bids for modernising the two airports. Whichever party is successful will be awarded the contract. While deciding on the joint venture partners for modernising Delhi and Mumbai airports, we had to put restriction on each airport being taken by a different private sector party as it could have led to a monopoly situation. However, in the remaining airports coming up in the six metro cities, one private sector party will be allowed to develop more than one airport if they are successful in winning the bid," a senior Government official said.

The Government has selected a consortium led by the GMR group for developing Delhi airport, while a consortium led by the GVK group is to modernise the airport in Mumbai. Similarly, a consortium led by Siemens has already started work on the new greenfield airport in Bangalore. The restructuring process for the Kolkata and Chennai airports will start soon after the assembly elections in the two states are completed, said officials. The Tamil Nadu Government recently agreed to provide several thousands of acres of land free of encumbrances for the airport project to start.

The Centre's intention to proceed with the modernisation of the airports was spelt out in the Economic Survey 2005-06 that states an in-principle decision has been taken to modernise Chennai airport through the joint venture route.

News: Anil Ambani quits as Rajya Sabha MP

(BL 26/03/2006) Mumbai - Anil Ambani, Chairman of the Reliance ADA Group of companies, has resigned as Member of Parliament from the Rajya Sabha on Saturday.

Ambani was elected to the Upper House from Uttar Pradesh in June 2004.

Prior to that, in October 2003, Ambani had joined the Uttar Pradesh Development Council, an advisory role which he still continues to perform. A press release issued here today by Reliance ADA said, "There has been no suggestion that there is any issue in his continuing to be a member of the UPDC after being elected to the Rajya Sabha."

Ambani has been quoted in the release as saying, "It is my firm view that, in public life, one must uphold the highest standards of transparency, propriety and ethics and avoid any possibility of controversy, however remote or unlikely. Keeping this in mind, I have decided to tender my resignation from the Rajya Sabha with immediate effect."

It may be recalled that when the fight between the Ambani brothers broke out in 2004-end, sources in the Mukesh Ambani camp had cited among other reasons, Anil Ambani becoming an advisor on the Board of UPDC.

News: 'Bangladesh can consider FTA with India'

(BL 26/03/2006) New Delhi - Bangladesh will look into the possibility of a free trade agreement (FTA) with India provided the business communities of the two countries come out with an agreed list of items for inclusion, according to the Finance and Planning Minister of that country, Saifur Rahman.

Speaking at a meeting in the Capital, he said: "We may not be able to go the full length with such an agreement right away, but we can still make a beginning."

Scope for pact

He added that there was scope for an agreement for freer trade between India and Bangladesh. The meeting was jointly organised by Indian and Bangladesh industry chambers FICCI and FBCCI.

Rahman emphasised the need for mutual recognition of standards, testing, and certification. He also welcomed technical assistance from India to upgrade testing facilities in his country.

Rahman also said that there is a need for better sharing of information between the Customs points of the two countries in order to facilitate bilateral trade.

11-point agenda

At the meeting, FICCI Past President Y.K. Modi suggested an 11-point agenda that would help achieve the target of doubling bilateral trade flows by 2010 and also would give an impetus to the Indian investments in Bangladesh.

The agenda focuses on issues such as reduction of tariff on both sides to increase market access, implementation of inland waterways agreement, and facilitation of movement of business teams for long duration.

News: 'Single Asian currency decades away'

(PTI 26/03/2006) Manila - Single Asian currency along the lines of Euro is still a far cry as Asian countries would have to first establish a common market and improve regional infrastructure, said, Asian Development Bank.

Haruhiko Kuroda, president, said," Before we can realistically envisage any single currency, we have to have a single market as the European experience shows," He said, “if we have to do so regional governments and regional institutions must make their best effort.”

"Although I am in favour of a single currency in Asia it is a very remote possibility," Kuroda said.

Even in Europe where economies are much similar with each other and have very strong social and political unity, even there establishment of Euro took three decades after a common currency was started, he pointed out.

Currently in the world there are about 150 central banks and currencies, but this will be reduced substantially in years to come as economies are fast integrating.

"I am quite sure that in 100 years there will be much fewer currencies and central banks in the world," Kuroda who is also a former Japanese vice minister of finance, said.

He said this will happen because economies are becoming more and more interdependent and particularly financial flows are speeding up and the amount of financial transactions is really amazing.

News: ‘India can sustain high growth for two decades’

(PTI 26/03/2006) Manila - Indian economy has the potential to sustain high growth rate for the next 10-20 years and can even further accelerate it provided economic reforms continued and infrastructure further improved, Asian Development Bank President Haruhiko Kuroda has said.

"Indian economy has the potential to sustain growth for the next 10-20 years," Kuroda said, adding that India will be able to attain 7-8 per cent growth this fiscal.

"It is possible for the economy to grow by 9-10 per cent but at least two conditions have to be met, economic reforms must be continued and infrastructure must be further improved," Kuroda said.

As Indian economy has been growing fast, infrastructure like roads, seaports, airports, power, communication network has to be really sufficient.

Lots of economic infrastructure needs to be upgraded, expanded and improved and also economic reform must be continued and accelerated, Kuroda said.

Applauding the government for moves on deregulation and privatisation, ADB said further economic reforms will be good for India if the economy has to grow by 9-10 per cent.

The Manila-based multilateral development financial institution also emphasised that growth must be inclusive and equitable for poverty reduction.

"Growth is necessary but not sufficient for poverty reduction. Inclusive growth, further investment in social sector and improved governance are the three elements absolutely necessary for sustained poverty reduction," Kuroda said.

He said ADB is helping developing countries including India to achieve these objectives.

News: Daimler unfazed by BMW’s India plan

(TT 25/03/2006) Chennai - Welcoming competition in the premium car segment, DaimlerChrysler today said BMW’s plan to set up an assembly plant in India would not pose any threat to the German auto maker.

Unveiling the latest edition of the Mercedes S-Class and the M-Class at the Brand Showcase event here, Daimler’s India CEO Wilfried Aulbur said “competition will only help the automobile market to grow.”

The new offerings from the Daimler stable are a mastery of technology, providing greater safety and comfort to its users, Aulbur said.

The M-Class sports a price tag of Rs 56 lakh, while the price for the S-Class ranges from Rs 75 lakh to Rs 1.25 crore.

Brand Showcase is featuring the complete range of Mercedes-Benz cars in India — the debutante S-Class, the E-Class, the C-Class, as well as the completely-built imported range like the SLK-Class, the CLS-Class and the M-Class.

Also featuring at the show is the stately Maybach.

The south is becoming a fast growing market for Mercedes-Benz cars, with strong sales being reported from cities like Bangalore and Hyderabad, Aulbur said.

The ultimate car from the Daimler stable — the Maybach —- is a “statement of perfection in automobile engineering” and is the only customised car being sold now, he said.

Each Maybach costs a whopping Rs 5.25 crore and only two cars have been sold so far in India to two top industrialists. Daimler is also seeing an increase in demand from non-metro cities such as Kochi, Coimbatore and Madurai, Aulbur added.

While DaimlerChrysler India has an assembly plant in Pune, there is no plan to build another, Aulbur said.

According to Daimler officials, the age profile of the Merc customer is changing with young entrepreneurs, IT professionals and successful businessmen getting attracted to the brand.

News: Get a slice of Chinese tourism cake

(TTG 25/03/2006) Port of Spain - Tourism representatives from almost 40 countries around the world, including a few Caribbean countries, will be in Beijing, the capital of the Peoples Republic of China, from April 3 to 5.

They will be attending the Beijing International Travel and Tourism Market to seek a slice of what is predicted to become the fourth most important outbound travel market.

The accounting firm of PricewaterhouseCoopers (PwC) in a recent report says the Chinese economy will double in size between last year and 2050, outstripping all developed nations.

PwC is basing its analysis on forecasts for economic growth on the basis of purchasing power parity (PPP)—a figure which defines the size of an economy by adjusting for local costs.

On this basis, PwC says that while China’s economy is currently 18 per cent the size of the USA’s in dollar terms, it is 76 per cent as big on a PPP basis.

By 2020, China will have a middle class of 200 million versus 186 million in the US.

Several Caribbean countries have a head start over other countries. Antigua and Barbuda, the Bahamas, Barbados, Dominica, Jamaica, and St Lucia have already been given “approved travel destination” status by the Chinese government.

But they are competing with over 100 other countries that have signed approved destination status (ADS) with China, 76 of which can already receive tourist groups. Among the destinations investing heavily in the Chinese marketplace are: Australia, Thailand, Korea, Japan, Singapore, France, Italy, Germany and Switzerland.

Last year, when the Beijing Market was held for the first time, 120 exhibitors from 31 countries attended. European tour operators and hotel groups flocked to the Chinese capital to try to establish partnerships with Chinese outbound tour operators.

Tourism markets in Europe and North America are usually like a cattle show with little serious business being done in relation to the money spent by exhibitors. Tens of thousands of people pass through simply to pick up costly brochures.

But some 80 per cent of the European tour operators and hoteliers who attended the Beijing Market in 2005 reported that the quality of the visitors “met or surpassed their expectations.”

The Europeans have booked even more space at this year’s Beijing Market and new countries such as Poland have entered the race to attract the Chinese tourist. Britain, France and Germany are already forceful players.

Canada, too, is becoming aggressive in the Chinese market.

Ottawa Tourism has launched an official Chinese Web site that is tailored to the travelling needs of Chinese visitors.

The site contains information on Ottawa’s major seasonal attractions to coincide with the Chinese tourists’ travel pattern of three “golden weeks” in February, May and October.

The CEO of Ottawa Tourism declares: “As China’s economy continues to grow, its outbound tourism will also continue to increase. China is now one of the most important markets in Asia for Canada, just behind Japan and Korea.”

According to the Canadian Tourism Commission, 117,490 tourists from China visited Canada in 2005. The commission estimates that when approved destination status with China is fully implemented the increase will be around 25 per cent a year.

Airports are not to be outdone in the quest for Chinese business.

For example, with Heathrow, London’s biggest airport, providing only limited capacity to Chinese carriers, the managing director of Stansted Airport outside of London, has been talking to the Chinese about providing facilities.

Presently, two Chinese airlines operate services to Heathrow—Air China and China Eastern—and Stansted is keen to fill the void by promoting itself to the Chinese as a hub for access to a large number of European destinations.

In January this year China opened its first air route to South America, from Beijing to Sao Paulo in Brazil.

So much work will have to be done if the Caribbean is to compete effectively with other countries and regions that are actively pursuing the Chinese market.

Cuba has started the ball rolling with the announcement that it will open a representative office in Beijing to provide better services to Chinese travellers.

Caribbean hotels and tourist offices also require a strong and vibrant presence in Beijing. It would be both cost effective and beneficial if the Caribbean Hotels Association and the Caribbean Tourism Organisation were to open a joint office in Beijing to promote the Caribbean.

But beyond promotion the Caribbean will need airlift from China to the region. There is need, therefore, for strategic alliances to be established now between hotels in the region, tour operators in China and airlines that can pick-up Chinese tourists in the United Kingdom and Canada to bring them on to the Caribbean.

It may very well be that if the Caribbean can generate enough demand amongst the Chinese, the flights from Beijing to Sao Paulo in Brazil can move on to Caribbean destinations as well.

The Chinese tourists—like the Japanese and other Asian travellers—are more interested in culture, ecology, history and scenery than they are in simply sitting on beaches. In this connection countries, such as Guyana with its vast interior and wild life, have an equal chance to share in the Chinese cake.

The Beijing Tourism Market presents a real opportunity for Caribbean hotels, airports and ground tour operators to set-up deals with Chinese tour groups and travel agents.

If they can get the commitment for sufficient numbers, they will be able to interest the airlines in bringing the Chinese tourists from Europe, North America and Brazil into the region.

The Caribbean should be at the Beijing Market in full force.

News: CSME presents new opportunities

(TTG 25/03/2006) Port of Spain - Inquiring minds in T&T want to know: how will the new Caricom Caribbean Single Market Economy (CSME) agreement, recently signed in Jamaica, affect small business owners in this country?

Dr Eric Williams must be smiling in his grave because his dream has finally come to past. Remember, he was the one who originally proposed the same idea that inspired the formation of Caricom, his name for it was “Caribbean Federation.”

But now that the ink has dried on Caricom’s latest agreement the real concern for each country is exactly how this new initiative would affect its citizenry and their commercial markets.

Undoubtedly, this is a boon for the corporate giants in the Caribbean as they can easily expand there operations without feeling the pains of expansion. But what happens to the small- and medium-sized businesses? How would CSME impact on them?

There is a growing cadre of small/medium businesses that are operating in saturated markets in T&T.

CSME has suddenly open doors to new opportunities in the form of additional markets. But be forewarned that before jumping into this market the business must conduct some sort of self assessment or audited to determine if such a move is not only feasible but profitable.

There is another cadre of business owners in T&T who will ignore the potential this new initiative represents. Some, even if they are aware of the benefits, do not have the resources to expand their operations in T&T or anywhere else. These are the businesses that will be most adversely affected by CSME.

Their competition will start coming from countries like Jamaica, Guyana, Belize and all the other small Caribbean islands whose economy is not as robust as T&T. CSME gives them the right to compete like locals.

For readers who are unfamiliar with the CSME agreement, basically it legalises the “free movement” of qualified citizens within Caribbean member states.

Currently members states include: T&T, Jamaica, Barbados, Guyana, Belize and Suriname.

Within 30 days of the signing on March 31, the following countries are expected to sign a letter of intent to become a member state in CSME: Antigua, Barbuda, Dominica, Grenada, St Kitts and Nevis, St Lucia, St Vincent and the Grenadines.

Free movement is an important pillar of CSME where qualified nationals travel with ID cards between member states.

To phase in the free movement of Caribbean citizenry, the member states have agreed that “qualified citizens” must fall under the criteria of university graduate, artistes, musicians, sports and media personnel, self-employed people and any support staff associated with a Caricom company.

According a document distributed by the Ministry of Labour, “CSME is intended to assist member states of Caricom to achieve their national objectives, such as full employment of all factors of production, improved standards of living and work, sustained economic development and expansion of trade and effective economic relations with other countries.”

Based on the content of the CSME agreement, and the inevitability that there will be losers and winners in this new trade initiative, the point of this article is to highlight the actions that should be taken by small- and medium-sized businesses in T&T specifically and the other member states as a whole.

The question is: as an owner of a local small/medium company with maximised resources, how does a small business capitalise on this new initiative?

Many of them are too under capitalised, in survival mode and, in all honesty, will become spectators of this new initiative.

There are still others who, because of the particular stage of their business, are just not able to take advantage of the CSME. It does not matter how you categorise your business right now, every business owner operating in T&T must understand the benefits of this new initiative.

But before you categorise your business, answer this simple question honestly: is my business operating at full capacity now? That is not an easy question to answer if you do not have the metrics to determine what is full capacity. And if you don’t have the numbers to tell you where you are, you are most likely not operating at full capacity.

Granted most local small businesses do not have any idea of what share of the market they control, however any business can quickly use simple indicators to determine their capacity for expansion, for example:

For retail sales:

How fast do you turn over your inventory?

Can the business afford to double its inventory and overhead cost?

Is your gross monthly sales, over the last six months, going up, down or at a steady pace?

For services

Do you have the manpower to expand your services locally?

Is there a possibility of opening another branch of your business?

In T&T?

Is the service available in the market you intend to enter?

How is your service different to what currently exist in the market?

When you have determined that CSME is a possibility for your company, your next step is to determine which country/market you would like to approach.

T&T residents will have to go to the Ministry of Foreign Affairs for an application. There is no application fee. The documents necessary for a university graduate to qualify includes:

Certification of a university degree

Birth certificate

Marriage certificate, where applicable

Police certificate of character

Passport

Three passport-sized photos.

In cases where the person is an artiste, a musician, a media worker or a sportsperson the completed application form must be accompanied with items two to six above in addition to:

A letter from the respective ministry which states that the applicant was registered in the particular field—art, sports, media or music.

Copies of relevant qualification or certification in the respective field.

Letter from the previous employers.

It takes up to six weeks for the application form to be processed and the skill certificate to be issued.

Caricom’s newest brain child, CSME, is actually the first initiative that will directly affect the rank and file nationals of the member states. But its value must be recognised.

Whether we know it or not, this is the first step towards the building of a regional economy that goes beyond the level of government co-operation.

When we face the fact that there will be a significant percentage of the local businesses who will not benefit from CSME that has to be seen in the perspective that there will always be individuals, businesses or events that will always leave some of the population out.

The good thing about taking that perspective is that it can become a goal for many of the businesses who cannot use it right now.

Many a naysayer will count the reasons why this new initiative will not work. The response to most of their comments should be, that’s why it’s an initiative. It is always easy to postulate reasons to negate any idea without suggesting a suitable alternative. The point is that it’s a lot smarter to have a tool in a box and not need it than not to have it at all.

Business owners and wage earners who can see the advantage of using this initiative should jump on it with both feet.

The people of T&T should be proud that Caricom and this new CSME agreement was actually pioneered by a son of our small republic. That pride should be translated into a determination to make the CSME the glue that unites the entire Caribbean community.

The tools for the success of this initiative is now in the hands of citizens in the respective countries. They must understand what they have and taking advantage of all the rights and privileges afforded in this document.

To determine your business marketing readiness take a free complete marketing self-diagnostic assessment test.

This assessment is in the form of a questionnaire made up of 87 thought-provoking questions that will change the way you look at your business. The test is entitled: How Do You And Your Business Stack Up For CSME.

Go to www.TrinidadAndTobagoBusiness.com

By Tony Puckerin - the managing director of Caribbean Guerilla Marketing Concept, a marketing consulting company.

News: Shell readies $250-mn Hazira expansion plan

(BS 25/03/2006) Mumbai - The LNG consortium is expanding its capacity to 5 MT from the current 2.5 MT.

Shell India has drawn up plans to expand Hazira terminal and port with an investment of over $250 million (over Rs 1,100 crore).

Ahead of the proposed expansion, the company is likely to sell part of its stake to some of the majors in the sector. Shell holds 74 per cent stake while French oil major Total SA holds the remaining stake in the terminal.

Marc den Hartog, director, Shell India, confirmed that talks were on with both Indian and foreign companies for the expansion project. However, he declined to divulge the details of the stake sale plan.

Marc told Business Standard, “Two consortiums are controlling the Hazira Shell project. In that, Hazira port consortium has the potential to grow. Now the port is handling only LNG cargoes. We are planning to expand it to a container cargo handling terminal of world scale with an investment of $250 million. Now the depth of the port is 12 metre and it should be deepened to 60 metre to handle container ships. The entire expansion is likely to be over in three years.”

Port consortium is planning to build a new container terminal also. The LNG terminal consortium is expanding its capacity to 5 million tonne (MT) from the current 2.5 MT. French oil major Total SA is a partner in these consortiums.

Marc clarified that Shell did not have any plans to go for a public float.

“Major companies in the sector are ready to collaborate with us and there is no need to go to the public,” he pointed out.

He also denied that Hazira terminal was facing shortage of natural gas for imports. “We are sourcing gas from Oman, Australia, Malaysia, Brunei, Qatar and Egypt. These are all short term contracts. If any problem suddenly occurs in one of these countries, we will source gas from the other,” he said.

National Thermal Power Corporation and Maharashtra State Electricity Board are likely to enter into an agreement with Shell for LNG supplies. Marc said that talks are going on and a decision is expected soon.

The company is in talks with Torrent Power Generation Ltd and fertiliser majors Kribhco and Rashtreeya Chemicals and Fertilisers for selling gas.

News: UTI MF ties up with SBI

(UNI 25/03/2006) New Delhi - Looking to tap State Bank of India's (SBI) huge network and customer base, UTI Mutual Fund (UTI MF) today announced a strategic tie-up with the bank for distribution of UTI MF schemes.

Under the agreement, SBI will offer the entire bouquet of UTI MF's schemes across the bank's selected branches.

UTI AMC Chairman and Managing Director U K Sinha said, “the tie-up with State Bank of India, who are also our sponsors, will give easy access to customers to invest in the various schemes of UTI MF. State Bank of India has a dominant presence across the country and is also present in various parts of the world. This tie-up will be mutually rewarding”.

The tie up with UTI Mutual Fund will be a first for SBI in vending a third party's mutual fund products. Initially SBI has identified 48 centres across the country wherefrom UTI MF products will be sold.

News: Max Retail launches store in India

(UNI 25/03/2006) Indore - Max Retail of the Landmark Group (Dubai), retail player in the Middle East, launched its first store in the country here today as part of its plan to open 10 stores investing a total of Rs 30 crore this year.

Talking to mediapersons here, Max Retail Stores President Vasantha Kumar said besides one store each in Mumbai, New Delhi, Hyderabad and Lucknow, 5 more stores would be opened in this financial year with an investment of Rs 30 crore. The company has plans of opening 50 stores in the next 5 years.

Vasantha Kumar said that with an objective to offer contemporary fashion at affordable prices, Max will create a new segment of value retail in the country.

Of the Rs 85,000 crore apparel segment in India, nearly Rs 40,000 crore constitutes the mid-segment. Max aims to cater to this segment, which is estimated to grow at 14 per cent over the next three years, a company release said.

Artikel: Wat zijn termijncontracten en futures?

(DWT 25/03/2006) Paramaribo - De financiële wereld biedt talloze mogelijkheden buiten de traditionele spaarrekeningen om een vermogen op te bouwen. In deze rubriek zal meer inzicht gegeven worden over de mogelijkheden, struikelblokken en aandachtspunten bij het opbouwen van uw vermogen en fiscale aspecten waarmee men geconfronteerd kan worden.

Wat zijn termijncontracten en futures?

Termijncontracten bepalen dat de leverancier op een overeengekomen tijdstip de afgesproken hoeveelheid van een welomschreven soort goederen levert aan de afnemer. Die betaalt daarvoor dan een afgesproken prijs, ongeacht de marktprijs die op het tijdstip van de levering (of van de betaling) zou gelden voor de goederen.

Termijncontracten bieden de leveranciers en klanten de mogelijkheid om prijsrisico's te ontlopen door het vastleggen van de ver- of aankoopprijs. Daalt de marktprijs tussen contract en levering, dan heeft de leverancier een voordeel, want hij krijgt toch de afgesproken prijs. Stijgt de marktprijs echter, dan is het voordeel voor de klant.

De markt werkt met verschillende soorten termijncontracten die wel een aantal kenmerken gemeen hebben: het gaat steeds om een overeenkomst tussen twee partijen - de koper en de verkoper - om op een vastgestelde dag in de toekomst iets te leveren tegen een afgesproken prijs. De onderliggende waarde kan variëren van grondstoffen als ruwe olie, goud en graan, tot effecten en andere financiële instrumenten. Uiteindelijk kunnen echter alle goederen via futures worden verhandeld.

Een futuresmarkt is een termijnmarkt, maar dan een met speciale kenmerken. In het Engels maakt men het onderscheid tussen 'forward contracts' en 'futures contracts'. Forward contracts zijn de traditionele termijncontracten; contracten op maat, die meestal niet op de beurs worden verhandeld. Futures contracts zijn gestandaardiseerde termijncontracten. Alleen hun prijs is onderhandelbaar; voor het overige liggen al hun kenmerken vast. Deze worden meestal op de beurs verhandeld.

De meest verhandelde futures zijn de financiële die betrekking hebben op rentetarieven, wisselkoersen, indexen op aandelenkorven, obligaties, enz. Bij aankoop van een futurecontract op de langetermijnrente neemt u eigenlijk een positie in op de obligatiemarkt: u koopt als het ware op termijn een obligatie tegen de huidige rente.

Bij dergelijke contracten is er vaak zelfs geen levering van de onderliggende waarde voorzien: op de eindvervaldag is er slechts een geldelijke verrekening van de openstaande positie.

Eigenlijk kan men op alle denkbare dingen futurecontracten afsluiten. Maar om een succesvolle markt te organiseren, moet wel aan een aantal voorwaarden voldaan zijn. Het verhandelde goed moet van een kwaliteit zijn die voor de marktparticipanten als een referentiekwaliteit kan gelden. Alleen dan kan het contract gebruikt worden als surrogaat voor goederen of producten die eventueel niet helemaal identiek zijn, maar waarvan de marktprijzen in voldoende mate gelijklopend ontwikkelen met de prijs van de onderliggende waarde. Er moet ook voldoende behoefte zijn aan het contract, want anders zullen het handelsvolume en de liquiditeit van de markt onvoldoende zijn. Belangrijk is ook dat het aanhouden van (grote) voorraden van de onderliggende waarde heel normaal moet zijn.

© Drs. Benjamin R.H. Bremmer, InCar Trust (bremmer@incartrust.com)
InCar Trust is het aanspreekpunt voor Sares Invest in Suriname en het Caribische gebied

News: Banking Act changes may take a while

(BS 25/03/2006) New Delhi - Government to table fresh Bill. It could be a while before amendments to the Banking Regulations Act become effective. The government will take a fresh Banking Regulation (Amendment) Bill to Parliament after including changes to the earlier Bill based on recommendations of the standing committee on finance.

This will bring the banking regulation law in line with RBI's guidelines on ownership in banks. While private sector banks will enjoy proportionate voting rights, the government will also have proportionate voting rights in public sector banks once the Bill is passed.

This will be significant when the government decides to offload stake in a public sector bank, because the buyer will also enjoy proportionate voting rights.

The RBI's circular on a cap on stake holding has been in place since 2004.

“There is no time limit for reducing the equity holding and the RBI can allow higher holdings in cases it feels that the stakes are justified. Therefore we could continue to see many banks having stakes of over 5 or 10 per cent,” a private-sector bank executive said. Banks like ING Vysya, Kotak Bank, Yes Bank, HDFC Bank, among others, continue to have promoter ownership well above 10 per cent.

The Banking Regulations (Amendment) Bill approved by the Cabinet proposes to do away with a cap on voting and instead provide a 5 per cent cap on shareholding for a single entity in a bank except when approved by the RBI.

The amendment is an important step to do away with control on voting rights and instead regulate the ownership through level of equity holding.

The committee, which submitted its report in December 2005, while endorsing the move to remove the cap on voting rights, had suggested that sufficient safeguards be put in place to ensure that the ownership levels are regulated.

News: VIP to add 40 retail outlets

(BL 25/03/2006) New Delhi - Luggage manufacturer VIP Industries is planning to increase its retail presence across the country. The company would add another 40 to 50 exclusive outlets.

"We plan to open another 40 outlets next fiscal with an investment of Rs 4 crore," said V.S. Mani, Chief Financial Officer, Blow Plast Ltd (the marketing arm of VIP Industries).

At present, the company has 88 retail stores, which Mani added would cross 100 by the end of this fiscal.

Post-expansion, VIP would increase its total retail area to one lakh sq. ft from 75,000 sq. ft by March 2007. Mani said, "the retail business accounts for 12.5 per cent of total business and is expected to grow to 25 per cent in the next three years."

New plant

The company, whose new plant in Uttaranchal would be operational by April 2006, is looking at a manufacturing capacity of two million units per annum.

"The new plant, set up with a capital expenditure of Rs 20 crore, would be operational by April 2006," Mani said.

Unauthorised logo use

In an attempt to put an end to the unauthorised use of its trademark logo, VIP recently filed a suit against two Delhi-based retailers for using its trademark on their signboards.

"Lots of retailers use our logo without actually realising that they are committing a civil crime,'' said the Company Secretary, VIP Industries Ltd, Rajesh Doshi. "The company reserves the right to institute proceedings to enforce its valuable Intellectual Property Rights," he added.

Revenue loss

When asked about the revenue loss to the company due to such practices, Mani said, "It is not possible to gauge the actual loss in terms of rupees... Nevertheless, it could add about 15 per cent more in the turnover if we could put an end to this. We expect to grow about 15 per cent this year and this campaign should be of significant help," he said.

News: 'India to tap education market'

(TNN 24/03/2006) New Delhi - Harvard University’s outgoing president Lawrence H Summers said that India needed to realise its potential as magnet for global students. While US universities attracted some 565,000 international students last year, India managed to attract less than 8,000 foreign students.

Professor Summers said that of the 191,000 US students, only 1,157 came to India. “There is enough economic potential and opportunities in India. But India has to do a lot to improve its higher education.”The former US treasury secretary said that it was flexibility, capacity to respond to changing conditions and brutal competition for students, faculty and funds that allowed for a better higher-education system.

Pointing to economic benefits of encouraging foreign students, he said: “Some may argue that there is not enough for Indian students, so why get international students, while others may say that India should try to retain its students from going abroad.” But I would say there is a simple economic counter to this. Attracting tuition in dollars and euros will provide a reliable stream of revenue for Indian universities, which will enable them expand facilities to reach larger number of domestic students.”

Professor Lawrence H Summers was addressing Ficci summit on private participation in higher education. Echoing Planning Commission deputy chairman M S Ahluwalia, Summers said India should move ahead of the traditional debate on the importance of primary or higher education.

News: GM to invest Rs 100 cr in Gujarat facility

CHENNAI: Automobiles major General Motors will invest Rs 100 crore in its manufacturing facility at Halol in Gujarat, for penetrating into the Indian small car segment, company's Vice President P Balendran said on Friday.

Talking to reporters on the sidelines of the official launch of Chevrolet Aveo, a small car, he said the company would be rolling out two other new cars to cater to small car segments in the next six months.

The new cars, which would be rolling out of the factory have been named Aveo-U-VA and Optra SRV.

In a bid to reach out to more customers, the company would expand its dealership network from the present 77 to 110 besides two new parts distribution centres, one each at Maharashtra and Delhi, to supplement the two existing centres in Gujarat and Tamil Nadu, he said.

The company would expand its car manufacturing capacity from the present 65,000 a year to 86,000, he said.

General Motors has invested Rs 1,380 crore in the country so far, he said.

News: North India's top 10 value creators

(TNN 24/03/2006) New Delhi - Today, business in North India is flourishing thanks to its Top 10 entrepreneurs. Just over a decade ago, when these players started off — in FMCG, telecom, pharma or auto — success was a term often linked to the South and West. That, well, is a thing of the past. Today, best practices and better topline have made them the benchmark against the best of the world. ET chronicles the Great North Ride.

The resurgence of North Indian business is now an established fact. Take any financial parameter—profitability , growth, return on shareholder funds, market capitalization -- the performance of North Indian companies is at par with, if not better than, their counterparts in other parts of the country. ET has for long reported and recognised this revival.

To celebrate the men who have made this possible, we have compiled an exclusive list of 10 entrepreneurs based in North India who have created maximum value for their shareholders. They have been selected and ranked on the basis of market capitalisation of their companies on the Bombay Stock Exchange as of March 2, 2006. As the purpose of this exercise is to applaud domestic private enterprise, government owned companies and MNCs have not been considered while compiling the list.

Our selection does not constitute the club of the 10 richest men in the region. Instead, it forms the league of entrepreneurs whose companies have been valued the most by stock markets. While these men belong to a host of diverse sectors ranging from telecom to IT to pharma to chemicals to two-wheelers to FMCG, there are several similarities between them. First, all of them are leading companies that have come into prominence in the last 10 to 15 years. None of them belong to the traditional families that dominated North Indian business 25 to 30 years back.

Moreover, many—Sunil Mittal, Shiv Nadar, B M Munjal, Jaiprakash Gaur, Deepak Puriare first generation businessmen who have built successful companies from scratch. A striking feature of most leading entrepreneurs and business families of the North is that having created success, having established their core businesses , they are doing what is in the DNA of all entrepreneurs: entering new areas and creating new businesses.

The Singhs of Ranbaxy have become a key player in the healthcare arena through Fortis, a company promoted by them. They have now chalked up aggressive growth plans in the financial services business. Sunil Mittal’s Bharti group, which had remained focused on telecom over the last decade has now entered the agri business, announced plans to enter insurance and financial services, and is also looking at the food retail business.

The Hero group, which had for long concentrated on the automotive business, has entered the IT, ITeS, training and engineering design businesses and is also looking at other new opportunities. Even the supposedly conservative Burmans of Dabur have entered the insurance sector, picked up equity in Lord Krishna Bank, and in a move that surprised most acquired more than 11% holding in Punjab Tractors.

Of course, in today’s competitive global business environment, there is no guarantee that these industrialists will continue to succeed in the long run, or that they will even make it to our list next year. Ranbaxy continues to find the going tough in the competitive US market . Back home, Bharti has an aggressive Reliance Communication Ventures snapping at its heels. Hero Honda faces competition from Bajaj Auto. Time will tell whether their leaders as well as the other leaders in this list go the way of the traditional North Indian business families, or whether they are made of sterner stuff. Watch this space!

News: LogicaCMG India plans to hire 1,000

(TNN 24/03/2006) New Delhi - Software services firm LogicaCMG plans to add 1,000 people in India by this year end to service its global business divisions. This will increase LogicaCMG’s workforce in India to over 3,000.

LogicaCMG is doing many works from India. Our expansion plan is based on the requirements of our global affiliates. Based on their projections, the headcount in India should be close to 3,000 by the end of current year, Rahul Patwardhan , CEO of LogicaCMG India told ET.

To accommodate new recruits, the Indian arm of the Anglo-Dutch IT major plans to expand its GSD centre in Bangalore. The company refused to divulge investment details. Orders are flowing in from the UK, Netherlands and Asia Pacific, he added.

LogicaCMG services almost all geographies, including Germany and Australia. The GSD is LogicaCMG’s fifth largest facility. It is the fastest growing unit of the company.

About 1,500 employees of LogicaCMG in India are into applications management, BPO services and infrastructure management, while 350 are into product engineering for telecom and finance sector. We are implementing the phase II of our infrastructure expansion programme in Bangalore with a capacity for 850 people . It should be ready by September , Mr Patwardhan said.

We are are evaluating other cities too for expansion, he said, refusing to divulge details. LogicaCMG has been focused on the finance and telecom sectors in India. Its clients include RBI, IndusInd Bank and UTI Bank. LogicaCMG’s New Delhi division supports its telecom customers , including BSNL, Bharti, MTNL and Spice. We were focused only on financial services and telecoms earlier.

However , we are now servicing all market sectors of LogicaCMG like transport, energy and utilities, and government, Mr Patwardhan said. In the BPO segment, LogicaCMG offers services in HR outsourcing , payroll, finance and accounting and some middle office functions such as claims processing.

We are not planning to increase call centre type of work, he added.

News: Indian shares at new closing high, Karachi surges

(RTR 24/03/2006) Mumbai - Indian shares rose 1 percent to a record closing high on Friday, with foreign portfolio investors driving diversified ITC Ltd. and metals maker Hindalco Industries to all-time peaks.

ITC, in which British American Tobacco Plc owns 31.7 percent, ended 4.1 percent higher at 185.40 rupees, off the day's peak of 186.50.

"ITC is one company which has the size to deliver and benefit from the enormous potential from the agro-commodities businesses. Funds are fast realising that," Deven Choksey, managing director at KR Choksey Shares & Securities, said.

"If somebody believes in India's long-term growth potential, they will remain invested in such a stock for years to come."

ITC's surge helped the benchmark 30-share BSE index end at 10,950.30 points, a new closing high. Losers edged out winners 1,261 to 1,241 in volume of 278 million shares.

The index gained 0.8 percent on the week.

The 50-issue NSE index gained 1.01 percent to 3,279.80.

Hindalco, India's top copper and aluminium maker, hit a new peak of 171.10 rupees before ending at 169.80 rupees, up 5.7 percent after a source told Reuters in Sydney Birla Copper, a Hindalco subsidiary which ownes mines in Australia, planned to raise A$293 million ($207 million) through an initial public offering.

A top company official also told Reuters in Mumbai that Hindalco expected to post a rise in January-March profit, boosted by higher aluminium prices and a better performance from its copper division.

In Sri Lanka, the Colombo All-Share ended 0.15 percent higher at 2,232.98 points and in Pakistan, the Karachi 100 index climbed 1.61 percent to 11,459.58.

STOCKS THAT MOVED

* Banking software firm i-flex solutions ltd. climbed 6.5 percent to 1,380.85 rupees, after 3.5 percent of the company's equity was sold in a bulk deal at 1,390 rupees.

* Jet Airways Ltd. gained 0.8 percent to 948.20 rupees after it agreed on Thursday to extend its agreement to buy Air Sahara by 90 days.

* Tube Investments of India Ltd. jumped more than 5 percent to 623.80 rupees after its board approved on Thursday to split each of its shares into five and set a special interim dividend of 17.50 rupees per share.

* State-run oil refiner Hindustan Petroleum Corp. Ltd. added 1.32 percent to 331.05 rupees after it said it would build its refinery in Bhatinda despite oil giant BP Plc's decision to pull out from the project.

* Steel Authority of India Ltd. climbed 10.7 percent to 80.85 rupees, Tata Steel Ltd. added 1.7 percent to 493.30 rupees, Essar Steel Ltd. gained 5.7 percent to 41.85 rupees and JSW Steel Ltd. firmed 3.6 percent to 264.80 rupees on expectations of a 7-10 percent rise in steel prices from April 1.

* Nahar Exports Ltd. climbed 14.1 percent to 78.70 rupees on news that its board would meet on March 30 to consider a 2-for-1 stock split and to transfer its textile business to Nahar Spinning Mills Ltd., which jumped nearly 20 percent to 238.10 rupees.

TOP 3 BY VOLUME

* Steel Authority of India saw trade of nearly 27 million shares.

* Reliance Natural Resources Ltd. slipped 4.6 percent on trade of 26.8 million shares.

* Prism Cement Ltd. jumped 16.6 percent with 7.4 million shares changing hands.

News: Mahindra Gesco, Maharashtra to build SEZ in Pune

(RTR 24/03/2006) Mumbai - Mahindra Gesco Developers Ltd. signed a preliminary agreement on Friday with Maharashtra to jointly build a special economic zone.

The two partners will invest 11 billion rupees in the first year to set up the 3,000 acre project in the district of Pune, Arun Nanda, president of infrastructure development at Mahindra group, told a news conference.

"The project is primarily to attract foreign investments as it will be an export oriented unit," Nanda said.

The zone will aim to attract investment of $2 billion, mainly from electronics and electronic hardware companies, Mahindra Gesco, which built similar zones in Chennai and Jaipur, said in a statement.

Nieuws: Telegraaf laat advertentie-opmaak doen in India

(ANP/AFX 24/03/2006) Amsterdam - De advertentiepagina’s van de regionale HDC-kranten van de Telegraaf Media Groep (TMG) worden vanaf september opgemaakt in India.

Dochterbedrijf HDC Media, uitgever van onder meer het Haarlems Dagblad en de Gooi- en Eemlander, richt hiervoor een gezamenlijk bedrijf op met het Indiase Nintec en het Nederlandse reclamebureau Luminus.

Dat zei een woordvoerder van de uitgever vrijdag. De nieuwe gezamenlijke onderneming biedt de opmaakdiensten ook aan andere (Europese) uitgevers aan. TMG is vooralsnog niet van plan redactionele pagina’s elders te laten opmaken of andere activiteiten uit te besteden naar India. Wegener kondigde eerder aan de productie van zijn advertentiepagina’s uit te besteden, maar dit werk blijft wel in Nederland.

News: India's retailers change fast as Wal-Mart waits

(RTR 24/03/2006) New Delhi - In the New Delhi suburb Gurgaon, shiny new shopping malls line the main street, housing Western brands ranging from apparel retailer Benetton Group to restaurant chain Ruby Tuesday.

In Mumbai, an electronics store draws crowds of customers by listing discounted prices on flat-panel televisions and refrigerators -- a major shift for shoppers accustomed to haggling with small, independent shopkeepers.

India's fast-growing, young, urban middle class is driving a retailing revolution, bringing Western-style formats including hypermarkets, department stores, specialty chains and even dollar stores. As many as 250 malls are expected to open in India over the next two years, up from around 60 now.

But the next phase is still to come as global giants such as Wal-Mart Stores Inc. wait anxiously for India's government to ease restrictions on foreign investment.

"India is becoming a consumer economy," Mike Duke, Wal-Mart's vice chairman and head of international operations, told Reuters in a recent interview in New Delhi.

Duke was the second high-level Wal-Mart executive to meet government officials here in the past year, as the world's biggest retailer tries to convince India to open up its retail market to outsiders.

Wal-Mart and other retailers see huge opportunity in the country of one billion people, with a middle class estimated at nearly 60 million people, and another 220 million who have significant buying power.

"The average (Indian) consumer today is richer, younger and more aspirational in his/her needs than ever before," consultants KPMG wrote in a report for the Federation of Indian Chambers of Commerce and Industry, which is actively pushing for India to relax rules on foreign direct investment.

Analysts say it is only a matter of time, perhaps a year or two, before retail sector investment rules are eased.

India recently allowed retailers that sell a single brand -- Nokia, for example -- to own a majority stake in stores. Nokia, Benetton and others are already here through franchise deals.

Opponents say big foreign players will drive local firms out of business and destroy jobs, replacing quaint corner shops with characterless superstores.

But many analysts argue that modernising retailing will add good jobs with opportunity for advancement, particularly for Indians who don't have the education to find high-paying work in hot sectors such as information technology.

CORNER SHOPS TO HYPERMARKETS

Small, corner shops dominate the retail sector, accounting for some 97 percent of trade, but chain stores are popping up as retailers scramble to expand before Wal-Mart and others arrive.

Analysts say most consumers aren't worried about foreign investment, and appear more than ready to embrace Western-style retailing.

A recent clearance sale at India's biggest retailer, Pantaloon Retail (India) Ltd., drew such large crowds that police were called in to control traffic jams and the store was forced to close early.

At Pantaloon's Big Bazaar chain, which sells food and general merchandise, similar to a Wal-Mart, shoppers sometimes wait for over an hour to get through checkout lines.

"Indian consumers are a smart lot and they will choose between good versus bad, not necessarily foreign versus domestic," said Asitava Sen, principal consultant with PricewaterhouseCoopers in New Delhi.

A study by his firm found modern trade in India would create jobs, increase efficiency in agriculture and boost exports.

MALL BOOM OR BUST?

There are signs that trouble is brewing, however.

In Gurgaon's malls, retail analysts say foot traffic has declined, suggesting the novelty is wearing off. A KPMG survey found most retailers think India is heading toward mall overcapacity.

Part of the problem is planning. In Gurgaon, analysts say some malls will likely fail because too many are too close together, selling too much of the same merchandise.

Newer malls are being built near public transportation -- a key issue in India's major cities where trucks, buses, taxis, cars, pedestrians, pushcarts and cows vie for space.

Developers are also paying more attention to demographics, choosing tenants that fit local income levels and tastes.

All this brings a smile to the face of Wal-Mart's Duke, who sees the rapid changes as a sign that Indian consumers are ready for more retailing options -- including Wal-Mart stores.

"It's already happening in India," he said. "That's what is encouraging. It's not waiting for Wal-Mart."

News: ADF Foods to acquire two American brands

(BL 24/03/2006) Mumbai - ADF Foods Limited has decided to acquire two brands, Camel and Aeroplane, from American Dry Fruit Stores.

At the meeting held yesterday, the board gave its nod to the acquisition and also approved a proposal for setting up a unit in the special economic zone at Surat in Gujarat, the company informed the Bombay Stock Exchange.

The unit would cater to the export market and manufacture frozen food, chutneys and pickles.

News: BP pulls out of HPCL refinery JV

(RTR 24/03/2006) London/New Delhi - Oil giant BP Plc. will not proceed with plans agreed five months ago to form a joint venture to build a $3 billion refinery with Hindustan Petroleum Corporation Ltd. (HPCL), a BP official said.

"We do not intend to take the letter of intent we signed with HPCL forward into the joint venture stage," a BP official told Reuters late on Thursday.

BP had signed a letter of intent in October to form a 50-50 joint venture with the state-run company, with plans to build a 180,000 barrel-per-day (bpd) refinery in northern Bhatinda and to create a network of service stations.

HCPL Chairman M.B. Lal said in November that it could agree a second similar deal with Total BP officials had said Total was in talks over joining the same project.

HPCL officials could not be reached for comment. The company is planning to hold a news conference to discuss the issue at 2:30 p.m. local time (0900 GMT).

Oil majors have been eager to gain access to India's guarded downstream and retail oil sector -- the third-biggest in Asia -- as well as its upstream, where a series of oil and natural gas discoveries has revived exploration interest.

State refiners are also keen for foreign investment to help finance big expansion plans, part of India's vision of becoming a key fuel exporter by the end of the decade.

Royal Dutch Shell and flagship state-owned producer Oil and Natural Gas Corp. formed a strategic partnership in January to search for reserves in India and abroad, with the possibility of refining and coal-to-gas investments as well.

Oil majors and top producers have also been scrambling to break into China's retail market, three times the size of India's and growing many times faster.

But unlike China, whose industrial economy is fuelling strong demand growth, India's thirst for fuel barely rose last year due to the dominance of the services sector in Asia's third-largest economy and more consumers seeking alternative fuels such as natural gas.

The BP official did not give further details on why it was withdrawing from the venture, but Indian refiners have long complained about New Delhi's reluctance to raise regulated transport and cooking fuel prices in line with international costs.

Indian fuel prices rose about 15 per cent last year while U.S. benchmark crude oil prices soared about 40 per cent. The government disappointed refiners last month when it failed to raise prices in its 2006/2007 Budget.

For the nine months ending December 2005, the state-owned refiners posted a combined net loss of $2.2 billion -- despite global refining margins that are in the midst of their biggest boom in a decade.

Big oil companies have also proven more reluctant than Indian refiners or big OPEC producers to invest in new refining facilities, fearing that the current upcycle may crash when a slug of new capacity comes online at the end of the decade.

News: Dabur open to retail foray

(TT 24/03/2006) New Delhi - Dabur is planning expansion with a possible foray into retail. It is also considering setting up a manufacturing facility in Pakistan.

A ‘vision statement’ charting the Rs 1,500-crore food and personal care company’s diversification and expansion plans will be unveiled next Wednesday.

At present, the top honchos are giving the final touches to the vision statement in Dubai.

The statement will also reveal plans for a major rejig in its international operations, which include dividing the business into two hubs in Dubai and India, sources said.

While Dubai will look after operations in Pakistan, West Asia and Africa, its Indian counterpart will cater to South Asia, the UK and the US, sources said.

The spokesperson for Dabur confirmed that a major announcement was scheduled for next week.

“An announcement on a vision statement is expected to be made next week,” said the spokesperson. He, however, declined to elaborate on the proposals.

The board has proposed to raise the company’s authorised share capital to Rs 125 crore from Rs 50 crore.

“The current capital base was not commensurate with the revenue which topped Rs 1,500 crore last year,” sources said.

The authorised share capital is being increased primarily to fund the increase in the paid-up capital on account of a bonus issue and to meet future requirements. The company, which is debt free, last went public 11 years ago.

Meanwhile, Sunil Mittal-promoted Bharti Enterprises is in advanced stages of discussions with the UK-based Tesco for a foray in the country's organised retail trade. Mittal plans to enter the food processing industry and retail trade would be the next logical step to generate higher revenues.

A senior company official told The Telegraph, “Bharti has an existing interest in the horticulture sector and is exploring the opportunity in food retail. For now, we are evaluating options. This is at an early stage and it would be premature to comment.”

Sources said talks with Tesco have been going on for about six months now on a possible foray into the retail segment by the company. Bharti is likely to set up a separate subsidiary for the proposed retail business.

The horticulture business — Field Fresh Foods — is a joint venture with the Rotchshilds of the UK. It will set up its own facilities in Punjab equipped with greenhouses and cold storage.

Field Fresh Foods would eventually act as the back-end centre of the retail business of Bharti, sources said. The Punjab government has already allotted land to the company for the horticulture venture and would start contract farming with local farmers in the state.

The Punjab government is keen to diversify its agriculture, which is currently stuck in the wheat-paddy cycle. This has lowered the water table and reduced soil fertility.

News: Two Anil firms chart merger schedule

(TT 24/03/2006) Mumbai - The Reliance Anil Dhirubhai Ambani Group today announced the time schedule to implement the proposed merger of Reliance Energy Ventures Ltd (REVL) with Reliance Energy Ltd and Reliance Capital Ventures Ltd (RCAPVL) with Reliance Capital Ltd (RCL).

According to the schedule, allotment and listing of shares of the respective resulting companies (after the scheme) formed by the merger of both REVL with REL and RCAPVL with RCL will be done from the week beginning July 17.

According to the group, while hearing at the high court on the petition to approve the schemes will start from the week beginning June 5, the filing of the court order with the Registrar of Companies is likely to be implemented by the week beginning June 12. This will be followed by the record date in the week beginning July 10.

Bombay High Court has directed the group to convene a meeting of shareholders of both RCAPVL and REVL on April 26 to approve the respective scheme of amalgamations. It added that the meeting of shareholders of RCL has been convened by the high court of Gujarat on April 25.

The scheme of amalgamation between these companies envisages a share swap ratio of five equity shares of RCL for 100 shares of RCAPVL. Similarly, the exchange ratio of 7.5 equity shares of REL for every 100 shares of REVL was fixed early in February. The Anil Ambani group has explained that the main rationale of the merger move is to eliminate dual listing of companies in the same businesses and also abolish potential holding company discount.

According to the settlement between the Ambani brothers, four entities were demerged from Reliance Industries Limited based on telecommunications, coal-based energy, financial services and gas-based energy businesses. Among them, REVL is the holding company for RIL shareholding in REL and RCAPVL is the holding company for its shareholding in RCL. The other two include Reliance Natural Resources Ltd and Reliance Communication Ventures Ltd.

News: India gives Japan, China a tough fight

(TT 24/03/2006) Calcutta - India is poised to become the largest investor from Asia in the UK overtaking Japan and China and one of the top four investors globally.

A Commonwealth Business Council study will list all British companies in India and the Indian ones operating in the UK, said Mark Dolan, director of UK’s Inward Investment Group in India.

“The study, which is due in April 2006, will provide a detailed analysis of the current investment scenario in both the countries. We will then have a clear idea about investments from India in the UK and vice versa,” Dolan said.

Currently, India is the eighth largest investor globally in the UK and the third from Asia after Japan and China. About 60 per cent of the Indian investment in Europe go to the UK.

Global investments in the UK for the first three quarters of this fiscal comprised 37 per cent in IT (business process outsourcing and software development), 16 per cent in financial services, 13 per cent in pharmaceuticals and healthcare and 5 per cent in auto components.

The UK trade and investment business awards 2006 have also been launched to strengthen trade relations.

The awards will be given to knowledge-based companies from India and the UK in categories like investor of the year, business partnership of the year, innovation and entrepreneurship.

To encourage small and medium enterprises (SMEs), a special award has been instituted for start-up success stories of SMEs in the UK or India, Dolan said.

The awards are for firms of Indian and British origin excelling in knowledge-based industries, including information and communications technology, software, business process outsourcing, pharmaceuticals, biotechnology, healthcare, automotive and engineering services.

News: Biyani buys Crossroads

(TT 23/03/2006) Mumbai - Mumbai’s oldest mall might have a new owner soon.

According to sources, the Kishore Biyani-led Pantaloon Group has picked up a controlling stake in the Crossroads mall at a deal estimated at around Rs 200 crore.

Biyani is the lead buyer in a consortium that could consist of foreign buyers also, sources said.

Biyani, however, said, “We are not confirming it (the deal).”

The 1.5 lakh-sq-feet Crossroads mall at Tardeo in Central Mumbai could be a strategic buy for the Pantaloon group since it has a real estate venture fund called Kshitij Venture Capital.

The mall was facing problems after several retail outlets were opened at Phoenix Mills nearby.

There had been an upward pressure on the rentals while the footfalls had not gone up commensurately.

To maintain the profitability of a mall, rentals should not cross 12 per cent of the gross revenue.

If the common area maintenance is high and footfalls low, the above balance cannot be maintained.

Rajeev Piramal, vice-chairman of Morarjee Realties, which owns the mall, however, said, “We are exploring options and no decision has been taken as yet.”

Biyani could be looking at converting Crossroads into a boutique mall dedicated to electronic or consumer durables.

The Investment Advisory, which is a wholly-owned subsidiary of the Pantaloon Group, recently floated two retail real estate venture funds, Kshitij and Horizon International Fund.

The funds are planning to invest in malls across the country.

Pantaloon plans to set up 51 malls by 2008

The realty division of the Piramal group came to Urvi Piramal, Rajeev’s mother, after an amicable division among family members. Urvi also received Morarjee Gokuldas Mills.

At present, the real estate is managed by Rajeev, who belongs to the second generation of Piramals.

News: Private equity players board India Inc

(ET 23/03/2006) New Delhi - A new breed of members is becoming a fixture on the boards of Indian companies. More than 150 domestic companies have private equity investment bankers on their boards, and their tribe is growing rapidly.

It is estimated that more than 500 deals have take place in the five-year period between ’00 and ’05, in which a sum of between $6bn and $7bn has been invested in Indian companies. Experts believe a majority of these companies have private equity members on board.

Every private equity firm now has fund managers sitting on multiple boards. For example, Temasek has its investment managers on at least 5-7 boards, for instance, ICICI OneSource, Matrix, Welspun and Shringar Cinemas.Private equity folks sitting on boards say they are not just taking care of their investments, but are fully involved in all major board functions.

“The private equity board members are on the boards not necessarily to protect their own interests, but to represent the long-term interests of all shareholders. We get involved in long-term strategy formulation, M&A/growth issues, and offer inputs on their capital market approach.

Ideally, we are insiders who are trusted by the majority owner, external shareholders and the professional managers. It’s a commitment that requires a lot of time and something we take very seriously,” says Manish Kejriwal, MD, Temasek.

Another active private equity firm, ChrysCapital, has 7 members of its team on various boards. In fact, senior MD Ashish Dhawan sits on 5 boards, including that of Suzlon, MphasiS, Yes Bank, Simplex and GlobalVantage. Another ChrysCapital MD, Brahmal Vasudevan, sits on the boards of four companies.

“I believe that private equity folks tend to be more active than others as there is an economic ownership, and we have a stronger incentive to do so,” says Mr Dhawan.US-based private equity major General Atlantic’s MD Abhay Havaldar sits on the boards of Jubilant Organosys and Geometric Software, while his colleague Mark F Dzialga sits on the Genpact board.

It’s the same story in most firms, says Bain, a global management consulting firm. Most of the private equity fund managers have held senior positions in top-notch companies, investment banks or consulting firms, and often have global exposure.

There was a time when lawyers, CAs, ex-CEOs and bureaucrats filled the ranks of board members, but new categories of people like private equity managers and management professors are making their presence felt too.

News: Norwegian funds set eyes on India

(TV18 23/03/2006) Mumbai - After Japanese and Korean funds, it's the turn of Norwegian funds to train sights on India. The world's second largest fund, the USD250 billion Norwegian Petroleum Insurance Fund invests nearly 5% or USD12.5 billion in emerging markets.

Governor of the Central Bank of Norway who heads the fund, told CNBC-TV18 that they are stepping up their India exposure.

He also said that the fund will focus on sectors that are likely to gain from growing household sectors.

News: Global F&B majors waiting to bite into India

(TV18 23/03/2006) Mumbai - The way to an Indian consumer's wallet is through the stomach, that's what international food and beverage companies believe. Several food and beverage retailers are waiting to tickle the Indian palate with a plateful of goodies.

Burger King, the second largest burger chain in the world, with 11,000 restaurants in more than 65 countries, is apparently looking for partners in India. Like its competitor, McDonalds, it wants to enter India through a joint venture or master franchisee.

After Dominos and Pizza Hut, one will soon be able to bite into pizza from Papa John's. The American company will share a slice of its profits with master franchisee, Pidilite Industries. American beverage chain Barney's Tea and Coffee has joined hands with Victoria Impex to set up shop here and Canadian chain Saint Cinnamon Bakery has HK Multiplex with it as its Indian master franchisee.

The Indian fast-food industry is growing at about 40% a year and is expected to generate sales of more than Rs 4,000 crore this year. That means more goodies on the table. Bon appetite!

News: The India versus China race

(TV18 23/03/2006) Mumbai - Tarun Khanna, a professor at Harvard Business School, made news three years ago when he co-authored a paper arguing that the Indian economy could overtake China, thanks to a more helpful domestic environment. Today, China still holds a 10 to 1 advantage over India in foreign direct investment, but Khanna says that's unlikely to hold India back.

He says, "First a lot of money is going to India in alternative ways such as portfolio and capital remittances. Second, the FDI in China is substituting to some extent for domestic entrepreneurship, and to the extent that we have much more domestic entrepreneurship- indigenous private sector domestic entrepreneurship -in India, it makes it less of an issue. That said, it would be great if we could double or triple the amount of FDI going into India, I don't have any issues with that."

At the recent India Conference at Harvard Business School, speakers like Desh Deshpande, a Boston-based entrepreneur with operations in India as well as China, said both countries offered different advantages to investors.

Chairman at Sycamore & Tejas Networks, Desh Deshpande said, "China does well in manufacturing, they already have the infrastructure there. India has sort of started off with the service sector, but over the course of time they will pick up manufacturing. Tejas develops a lot of their products in India but these are a little bit higher end, they don't need that much of infrastructure. But over the course of time I think China will pick up service sector and India will pick up manufacturing. So it's not India or China, it's India and China."

This is one debate that's sure to keep economic experts engaged for many years. India versus China, that's a race that increasingly interests many in America. Experts believe that India has the legs to stay in the race and catch up with China.

News: Heritage Foods' retail foray

(BL 23/03/2006) Hyderabad - Hyderabad-based Heritage Foods India Ltd may choose Bangalore as a launch pad to foray into the retail sector. Industry sources said Heritage Foods will open its first retail store in August.

The company had announced its intention to enter processed the food products retail business in early February; it is planning a retail chain across the country.

The Rs 270-crore company, which has tied up with farmers (contract farming) for sourcing its dairy products, will use the same network to source agri-products for the retail stores.

On Realty hunt

Heritage Foods is said to be on a realty hunt in Bangalore, with each store occupying an area of around 4,000 sq ft. Agri-based products will occupy 40 per cent of the store shelves while FMCGs will take up the rest, sources said.

The company may also supply "fruits and vegetables to bigger retail players that are planning an entry in the sector," according to sources.

Hi-tech cold chain

Heritage Foods is reportedly in the process of establishing a hi-tech cold chain and "will use highly sophisticated software to merchandise perishable products." Company sources, however, said the retail foray is being planned in Andhra Pradesh, Karnataka and Tamil Nadu, but "nothing has been finalised."

In February, the company had appointed KSA Technopak (India) Pvt Ltd as consultants for the venture and is expecting a detailed report from KSA "sometime during April."

Mr Lokesh N, son of the former Andhra Pradesh Chief Minister, Mr Chandrababu Naidu, will head the retail venture, sources said.

The company has earlier said the estimated investment would be around Rs 200 crore for the project, though this would "mostly be towards working capital."

News: DSK Developers poised for major growth

(TV18 23/03/2006) Mumbai - D.S. Kulkarni Developers Ltd. (DSKDL), one of India’s premier housing construction companies, is poised for major growth. The Company is currently developing and executing projects in prestigious locations in Mumbai and Pune with over 39 lac sq.ft. under construction. Projects worth Rs. 555 crore are under various stages of development and execution and targeted to be handed over by FY09.

DSKDL has a string of prestigious projects under implementation including DSK Vishwa, a mega township spread over 110 acres at Pune, designed by world-renowned architect Padmashree Balkrishna Doshi. This is one of the largest home project in Asia and has redefined quality standards in the industry by setting a fine example of how eco-friendly construction should be conceived and developed. This model eco-friendly township features rain water harvesting, water and sewage treatment plants, vermiculture composting and biogas energy production; and has facilities like school, hospital, amphitheatre multiplex, healthcare, shopping centre, post office, bank, temple, marriage hall, etc.

DSKDL has successfully completed many projects in Mumbai and Pune and have over 15000 satisfied customers nationally and globally. The Company has been ranked as the 2nd fastest growing construction company by NICMAR and Construction World in 2004. For effective marketing of its projects the Company has representatives in USA, UK, Dubai, Bahrain, Kuwait and Kenya.

DSKDL is might be the only construction company having an ISO 9001-2000,14001 & OHSAS-18001 certification and has received many accolades in the past for ‘best housing complex’, ‘best concrete structure’, ‘best concrete technology’, etc and membership of the World Economic Forum as the global growth company. It’s Chairman, Mr. D.S. Kulkarni has been bestowed with many national and international accolades.

DSKDL is well known for its ethical business practices and has set its sight on becoming one of the top five real estate developers in the country within the next five years. Its strong bonding with the customer and its history of always adhering to the ‘date of possession’ has earned it enormous goodwill and reputation resulting in huge customer demand for all its projects, e.g. When DSK Vishwa was launched, 1000 flats got sold in just 10 days. Till date 2200 apartments have already been handed over to the customers. The township has planned for over 10000 units ranging from 1/2/3 bhk apartments, row houses, bungalow plots, villas, shops and IT Park, which will be developed in a phased manner.

The other businesses that the DSK Group is associated with include dealership of Toyota, Software Training & Development, Education, Hospitality and Engineering.

Financial results for the quarter ended 31st December 2005:

Riding the boom in the real estate and construction business, D.S. Kulkarni Developers Ltd. has posted impressive results for the quarter ended 31st December, 2005.

Total Income plus increase in stock-in-trade for the quarter aggregated Rs.2086.80 lacs (Rs.1894.18 lacs) while Net Profit for the quarter rose sharply by 784% to Rs.460.65 lacs (Rs.52.09 lacs). For the nine months period ended 31st December, 2005, Total Income plus stock-in-trade stood at Rs.6646.65 lacs (Rs.3632.91 lacs) and Net Profit rose sharply to Rs.1189.87 lacs (Rs.127.98 lacs).

The Total Land and development rights acquired during the nine months period ended 31st December, 2005 also showed a sharp increase of 183% and stood at Rs.2901.51 lacs (Rs.1021.95 lacs).

Interview: Spencer White, Chief Equity Strategist - Merrill Lynch

(TV18 23/03/2006) Mumbai - 'India at 30% premium to rest of Asia'

Spencer White, Chief Equity Strategist-Asia Pacific at Merrill Lynch is not as bearish on India as Morgan Stanley. White says that India is at a 30% premium to the rest of Asia.

Further, White believes that the Sensex will struggle over 1-2 quarters and earnings momentum will slow down.

Excerpts from CNBC - TV18’s exclusive interview with Spencer White:

Q: What is your view on India now at these levels?

A: We have been watching with great interest to see whether the Sensex was going to pass the level of KSE 100 of Pakistan, but it looks like for the time being it is not going to happen. But as far as the index is concerned, we are not as bearish as Morgan Stanley. But I think there is certainly call for caution at the levels that we are at. We are very comfortable with the growth story in India. India had almost 2 billion dollars of foreign portfolio inflows in the last month. I think a lot of that was BRICs fund.

Now the index is trading at a 30% premium to the rest of Asia. Only Japan is more expensive than India now. So my sense is that Sensex is going to struggle over the next 1- 2 quarters to really make any positive headway from here. Because it is not cheap, a lot of future growth has been forecast and earning momentum will slow.

It is very hard from my perspective for institutional clients around the world to find any incremental buyers at these sort of levels. If the markets were to come back, there are buyers who were underweight. So I don’t think there is significant downside but from these levels, I think we are going to have pull backs.

Q: What would be a tactical view in India? On one hand you are cautious about valuations and on the other hand, you have weight against liquidity, which continues to come in? We have also been talking to people who have been raising fresh money for India like Petro dollars, which could come in the next 2 – 3 months.

A: That is also right and it is impossible to gauge either the magnitude or the timing of that capital. I think it is very right to highlight the petro dollars and there continues to be a recycling of that capital through markets in Asia. India is a pretty obvious choice but ultimately it is not valuation insensitive.

I really struggle to believe that the market will make significant progress from here. If there is any sort of stumble either with rates increasing more than people expect, or we begin to see pricing pressure come through, the margins as we see some earnings misses coming through, then at these sort of levels, the market and companies are going to be vulnerable.

Q: Where is the space you would go and book your profits first and foremost?

A: To be honest just the market as a whole looks pretty pricey. Some of the banks and consumer durables are expensive. It is very stock specific. As I look at it I can still find some banks, which are interesting, some of the software companies, the capital goods, sort of infrastructure space because there is so much growth. So you would basically be balancing valuations versus the price performance over the last six months. The entire Index is up about 16-17% year to date. So the momentum will have to pull back.

Q: Third Fed meeting coming up on the March 28. Is that the most important catalyst for markets like India as well and what do you expect them to do?

A: It is very important. Obviously there is an intense focus on what happens after that. Is that going to be the last hike, and if it is and the Fed goes on hold what happens next? Is it on hold with a prelude to an eventual cut. By the year end, Merrill Lynch's view is that there will always be a pause and potentially rates actually could go higher.

News: Caribbean governments defend integration

(PL 23/03/2006) Nassau - CARICOM foreign ministers informed the US government about the progress made in realigning the local economies through the Caribbean Single Market and Economy.

After meeting with Secretary of State Condoleezza Rice, Bahamas Foreign Minister Fred Mitchell told media about the group's integration initiatives.

The CSME, following its January approval, will be the CARICOM device to boost the movement of products, services and employment while handling development programs for the least developed members.

CSME will enter in effect in 2008 as an effective response to globalization and the loss of preferential treatment for its goods and services.

The group will also urge for cooperation with Haiti, whose readmission to the bloc was confirmed after Rene Preval's win in the February elections.

Rice did not mention any new project on security and disaster management, despite regional concern, and admitted her failure to find support for the US anti-Iran drive.

Also on the agenda were the high rates of violence, crime and emigration.

News: 'High risk of fraud in Indian financial sector'

(RTR 23/03/2006) New Delhi - Banking, insurance, mutual funds, asset management companies and BPOs are most vulnerable to fraud in India, a survey said on Thursday.

"Twenty-three percent of the respondents believe them (these sectors) to be the most vulnerable to malfeasance," the survey, conducted by KPMG, a global network of firms providing audit, tax and advisory services, said.

"The survey also brought forth the increasing occurrence of frauds and its many forms within the IT world, specifically in the BPO (business process outsourcing) sector," it added.

Called "India Fraud Survey 2006", the report said 36 percent of the respondents felt "employees posed the maximum threat to an organisation in the BPO sector".

India has become a flourishing hub of outsourcing with many western firms moving some of their work to India to save costs.

But cases of alleged fraud have also surfaced.

Last year 16 people were arrested in a probe into fraudulent transfer of more than $400,000 from Citibank customer accounts in the United States to bogus accounts in India.

Investigators said employees of a BPO persuaded customers to disclose information that would make their accounts accessible.

"Over the last few years frauds within the BPO sector have not only increased in occurrence but also managed to change its forms," Deepankar Sanwalka, executive director of KPMG India, said at a news conference.

"The developments of new threats has been faster than what the BPO world could ever imagine...," he added.

The survey results are based on responses from 200 companies, a majority of which have a turnover of between 5 and 10 billion rupees ($112-224 million), company officials said.

According to 2003 official Indian government figures, seven economic crimes are committed in India every hour.

News: Wal-Mart may debut with Sam's Club

(DNA 23/03/2006) New Delhi - The world’s biggest retailer, Wal-Mart, is shuffling in. And its first foot in the door, perhaps, would come as a relief to the Pantaloons, Spencer’s and other chains - including the would-be Reliance Retail.

Sources said the giant is bracing for a launch of its cash & carry wholesale format called ‘Sam’s Club’ in India, along with a local partner.

A development that perhaps unnerves another chain - the German Metro AG - more than anybody else. Metro has already set up a successful beachhead in Bangalore two years back.

While foreign direct investment (FDI) guidelines do not permit investment by multi-brand global retailers in India, 100% FDI is permitted in cash & carry wholesale trading under the automatic route.

Sam’s Club, which was launched in China in 2003, is a members-only warehouse.

It operates by selling high volumes of merchandise for very low profit margins to its members.

A Wal-Mart Inc spokesperson told DNA Money, “As part of the market research we are doing we are talking to a lot of people in India, including those who might be considered local partners.

We have not made such plans (about bringing Sam’s Club to India). At this point we are evaluating a wide variety of possibilities and have made no decisions about any particular formats.”

With large Indian corporate houses such as Mukesh Ambani’s Reliance Industries and the Bharti Group readying plans to make their retail foray, Wal-Mart may find it tough to cater to the complex Indian market alone.

In fact, industry sources point out that Wal-Mart is interested in partnering with Bharti for making its debut but the latter turned down the proposal.

When asked for comments, a Bharti spokesperson said “Bharti has an existing interest in the horticulture arena and is exploring the opportunity in food retail. For now, we are evaluating options. This is at an early stage and it would be premature to comment on any speculation.”

Wal-Mart, however, is going ahead with its sourcing plans for the country.

The Wal-Mart spokesperson said “We will purchase around $630 million worth of goods directly from India this year - mostly apparel, home furnishings, textiles, shoes and jewelry. This is about 40% more than 2005. In addition, we purchase another $1.2 billion worth of goods from suppliers who source from India. We anticipate similar growth in the next year or two.”

News: Intel to 'unwire' Pune

(BL 23/03/2006) Pune - Country's first Wi-Fi enabled city in a year.

Pune is going to be the country’s first Wi-Fi enabled information technology city. And helping it in the task will be the Indian arm of Intel, the world’s largest chipmaker.

Termed “Unwiring Pune”, the project will offer citizens access to Internet from anywhere in the city through a wireless device.

WiMAX and Wi-Fi technologies will provide wireless connectivity to access the Internet using a laptop computer or a PDA or a similar hand-held device.

Announcing this here today, Pune Municipal Commissioner Nitin Kareer said the project, expected to be commissioned in a year’s time, would offer Wi-Fi connectivity to approximately a 400 sq km area, including Pune city, Pimpri-Chinchwad and information technology pockets such as Hinjewadi. The initial investment in the project was estimated at Rs 7 crore, he said.

Kareer said available data showed that Pune had the largest Internet-user base in the country, and connectivity indoors as well as on the roads was equally important for the city’s tech-savvy population.

Explaining the pricing, Kareer said, “The payment mechanism will be something similar to the recharge cards used by mobile phone service providers.”

The Vice-President of Intel Software and Solutions Group, Rick Echevarria, said the company had successfully commissioned wireless connectivity projects in many cities of the world, including Portland in the US and some cities in Germany.

To a query, he said Intel would prescribe the most stringent standards for data security clubbed with access codes.

He also hinted that Intel might also come into the project as a vendor of services through the company’s appropriate subsidiary at a later stage.

Intel’s mandate includes creating a scalable, high-performance technical architecture and detailed design that will fulfil PMC’s requirements.

Intel will also provide information and training to PMC functionaries in wireless technology. Intel will develop the complete road map to make Pune wire-free by setting out specifications and identifying the vendors.

“The selection of the vendors will be through a transparent bidding process,” Kareer said.

The project was an extension of the efforts undertaken by the city corporation “to create facilities for the economic development of the city”, Kareer said, adding that the project might envisage participation of telecom operators in terms of using their towers for installing the Wi-Fi and WiMax capabilities.

Nieuws: Suriname verdient goed aan bezoek cruiseschip

(DWT 23/03/2006) Paramaribo - Suriname moet een pier of cruiseship terminal bouwen, zodat passagiersschepen die in het Caribisch Gebied rondvaren, ook ons land kunnen aandoen.

Het bezoek van het cruiseschip Minerva II heeft bewezen dat wij een toeristische attractie zijn en economische voordelen hieruit kunnen halen, zegt Henri Ori, voorzitter van de Stichting Toerisme Suriname (STS). Volgens hem heeft Suriname aan het bezoek van het schip bijkans 100.000 US dollar verdiend. “Het leek dinsdag even op een invasie van blanken in de stad toen je opeens die 560 passagiers in Paramaribo Centrum zag wandelen”, vertaalt hij deze opleving in de toerismesector.

Samen met de Mets, die de hoofdorganisator was van de komst van het passagierschip, zal de STS de komende periode een destination promotion in het Caribisch Gebied voeren. “We moeten proberen zulke schepen vier tot vijf keren in de maand hier te krijgen”, zegt Ori.

Volgens hem waren de passagiers en de bemanning zeer tevreden over de behandeling die ze van de Surinaamse instanties en organisaties hebben gekregen. “MAS heeft de zaak goed begeleid. De bussen waren goed ingezet, het eten was lekker en ze hebben kennis kunnen nemen van onze culturele en historische waarden.”

Het spin-off effect van dit bezoek was duidelijk waar te nemen. Staatsolie, de Surinaamse Waterleiding Maatschappij, transportbedrijven en eethuizen hebben goede zaken gedaan. Aan ‘immigration fee’ alleen is 5 US dollar per passagier betaald. Opvallend was dat in de avonduren veel nieuwsgierigen aan de Waterkant en de Anton Dragtenweg postvatten om het cruiseschip te zien vertrekken. “Alle lichten waren aan en dat ding leek wel groter dan het Academisch Ziekenhuis”, zegt Ori lachend.-.

News: Detroit to Delhi, in reverse gear

(TNN 23/03/2006) Mumbai - After the wave of Indian software professionals swept back to the country from the Silicon Valley, it is now the turn of Indian automotive engineers in Detroit to take the return flight.

Engineers are flying home to chase growth opportunities in what is emerging as one of the fastest-growing automotive markets of the world.

The research and development departments of many Indian companies like Mahindra & Mahindra, Tata Motors and Ashok Leyland are headed by engineers with stints at General Motors and Ford overseas.

Mahindra & Mahindra’s automotive sector president, Pawan Goenka, who was instrumental in developing M&M’s best-seller Scorpio, spent 15 years at General Motors in Michigan. His return coincided with the torrid pace of growth in the Indian automotive industry.

“Abroad, Indian engineers like us are one among hundreds of others. But here, we head prestigious projects that give us a sense of pride and the feeling of giving something back to our country,” says Mr Goenka.

His colleague at GM, V Sumantran, was till recently with Tata Motors, where he was steering its ambitious Rs 1-lakh car project.

Arun Jaura, who joined as vice-president-R&D, M&M, was with the Ford Motor company in the US, heading the vehicle engineering department.

Aravind Bharadwaj, head of advanced engineering at Ashok Leyland, has worked with Delphi and GM in the US for over a decade.

He is virtually on a recruitment spree, hiring US-based engineers. Having brought in four to five of his Indian colleagues, he is trying to rope in more.

Mr Bharadwaj has recruited professionals from Ford Motor and Dana Corp. They are now heading the testing group and advanced vehicle engineering systems at Ashok Leyland.

Apart from the motivation of being near home, the huge pay packets at Indian automotive companies are also a big draw for engineers.

According to Mr Bharadwaj, the importance given by Indian companies to R&D is increasing and so is the remuneration being offered to match their skill sets.

News: Indian spending on outsourced IT services to double

(BL 23/03/2006) New Delhi - With increase in IT adoption in telecom and banking sectors, and the projected IT uptake in airlines, insurance and manufacturing industries, the domestic spending on outsourced IT services is expected to more than double to over Rs 23,800 crore in 2009 from Rs 10,300 crore in 2004.

"The liberalisation of Indian economic policy, de-regulation of key sectors and progressive moves towards further integrating India with the global economy have been key drivers of increased IT adoption in the country. This is best reflected in the fact that most indigenous players in telecom and banking, two key sectors with significant multinational corporation (MNC) participation, have upgraded their levels of IT adoption to offer best-in-class services comparable to those offered by the global competition. These two sectors together account for approximately 35-40 per cent of the domestic spend on IT services," said Nasscom-IDC study on the domestic services (IT and ITES) market opportunity.

The survey also predicted that the domestic ITES-BPO market is likely to cross Rs 6,600 crore in 2006-07 from about Rs 3,800 crore in the 2005-06.

Commenting on the findings of the study on the domestic IT services market, Kiran Karnik, President, Nasscom, said "Increasing use of IT within the country will help to enhance the competitiveness of the Indian economy and of the companies and sectors that use IT. We believe high maturity IT user segments like Banking, Insurance, Telecom, Automobile will increase spending on IT services to integrate businesses with IT."

The study found that though IT services form 27 per cent of the total domestic IT spending, its share was significantly higher in segments such as banking financial services and insurance (BFSI), telecom, automotive and manufacturing. In terms of split by industry vertical spending, BFSI, manufacturing and communications accounted for 77 per cent of the overall spend on IT services in 2004.

On the one hand, the mature user segments are increasing spending on IT services by moving towards holistic IT services contracts, while on the other hand, emerging segments such as healthcare, the Government and small & medium businesses are also deploying IT services as a means of productivity enhancement, competitive advantage and value addition.

From the user - side perspective, the survey revealed that price, quality of service and lack of people with suitable skill sets were the top three concerns.

On the domestic market, it said, "The ITES-BPO space has been associated only with export, but there is huge opportunity waiting to be tapped as globalisation demands higher efficiencies and competitiveness from Indian businesses. Unlike the IT services exports market where price arbitrage plays an important role, the domestic market will be driven more by access to specialist skills and helping businesses to free up their scarce resources for focusing on core business areas."

News: Arab investors may turn to Indian stocks

(BL 23/03/2006) Mumbai: After the US, European and Japanese investors, it is now the turn of oil-rich Arab investors to create a stir in the domestic stock markets.

With stock markets in Dubai, Qatar, Bahrain and Saudi Arabia turning bearish early this month, bullish Indian markets meant that the time was `ideal` for these rich investors to take a call on the India-story, say experts.

Leading foreign funds have initiated talks to float India-specific funds in the Gulf region that adheres to Islamic or Sharia'h Law, they said.

Already, the Bahrain-based TAIB Bank manages two funds - Everest Fund (minimum subscription of $10,000) and another Mauritius-registered fund - worth a total of Rs 1,000 crore investments in the Indian bourses. "These are open-ended funds; we can raise more through these two funds," said an official.

Now, 'India Profit Sharing Fund', another open-ended Sharia'h compliant fund with an exclusive focus on India is on. The fund, which will be managed by a domestic fund house, is targeted at the oil-rich HNIs in West Asia. This fund is also expected to be a success, courtesy the great Indian growth story doing the rounds across the globe, said an official with the fund. The minimum subscription amount for this fund is $200,000.

As Islamic law stipulates, the fund will not invest in companies that sell pork, tobacco or alcohol, or in casinos and most media and entertainment businesses.

To tap the huge liquidity in the West Asian region, Mumbai-based Sabre Capital on Tuesday announced the setting up of a $250-million fund in partnership with Dubai-based Abraaj Capital for private equity investments in India. Similarly, during 2005-end, Al-Madina, a Shariah-compliant investment firm backed by Gulf Bank, raised $171 million for investments in the Indian stock markets. "We have just scratched the surface," points out Naresh Kothari, Head, Institutional Equities, Edelweiss Securities.

According to him, the Gulf-based investors, sceptical of Indian equities post the stock market crash of the mid-90s, have started to test the Indian markets again. "Till now, we were seeing NRI money from the Gulf. Now, we will see the real Arab money coming in."

Earlier this month, the West Asian stock markets were down - Dubai (35 per cent from February), Qatar (28 per cent), Bahrain (12 per cent) and Saudi Arabia (15 per cent), forcing the Arab investors to look at performing emerging markets, including India.

News: ABN Amro seeks to expand Indian pvt banking

(BL 23/03/2006) New Delhi - The private banking division of ABN Amro Bank in India is hoping to see a major growth in business in the coming years. The division is hoping to more than double its client assets in the medium term from $800 million now.

"We handle assets of around $800 million in India. It is possible to grow to $2-3 billion in the next couple of years," Joster Avest, Executive Vice-President (Private Clients), ABN Amro Private Banking, told Business Line.

Avest heads the worldwide private banking initiative of the bank.

Prospects bright

According to him, the prospects of private banking in India are bright in view of the growing number of high net worth individuals (HNIs).

"The Indian economy is creating more and more wealthy people, many of whom are our potential clients."

He also said that the bank's private banking section provides a complete range of advisory services to HNIs to help them in financial planning.

"We assess the risk profile of our clients and the investment horizon they are looking for, on the basis of which we create a financial plan for them," he said.

The advisory services include guiding clients on taxation and legal issues.

Avest said that ABN Amro's private banking division handles assets worth $60 billion worldwide.

Most of his clients are drawn from existing corporate or retail banking relationships. However, there are others who come through referrals made by existing clients, he added.

HNI customers

Sutapa Banerjee, Senior Vice-President and Head (Private Banking India), said that the bank was looking to offer its private banking services from more cities in view of spread of HNIs across the country.

"HNIs are quickly spreading out to more and more cities. In the next 4-5 years, we want to offer the private banking services from 8-10 cities."

ABN Amro currently offers private banking services in India from its offices in New Delhi, Mumbai, Bangalore, and Chennai. Its private banking services in India commenced in 2002. According to Banerjee, the private banking services are being offered to around 600 groups, which include families, owner-promoters, and trusts.

The number of individual accounts within the 600 groups add up to 2,500.

News: UK insurance cos eye Indian pension space

(TV18 22/03/2006) Mumbai - British insurance companies like Sun Alliance, Aviva and Prudential, who have joint venture partners in India, are upbeat about the government's intention to raise the FDI limit in insurance to 49%. As tariff's are decontrolled starting January 2007, they can bring in new products along with the additional capital.

But, what they are now eyeing is a share of the pension pie, they hope the PFRDA bill, which the government hopes to introduce in the monsoon session of Parliament, will make the envrionment a lot friendlier.

Stephen Haddrill, DG, Association Of British Insurers says, "What we need is a stable regulatory regime and a single regulatory regime. To have a pensions regulator and an insurance regulator at the same time, there's a problem there.

In the UK, insurance companies pay more pensions than the government does. That's the situation they want to see in India. Life insurance companies being allowed to act as pension fund managers offering bundled insurance and pension products. 89% of the Indian workforce is not covered by any pension scheme and it's a huge market waiting to be tapped.

"People are talking about a limit of six players in the market. There's a real appetite in the industry to serve the market. So, why limit it at that number? You're actually cutting off opportunities," reacts Haddrill.

They also want tax incentives to encourage long term savings and a higher fees for intermediaries offering advice-based products. The total central and state pension liability is over Rs 64,000 crore. Couple this with a huge uncovered market and you realise just why foreign players want faster liberalisation.

News: India not overvalued, says KPMG

(TV18 22/03/2006) Mumbai - 2005 was a good year for mergers and acquisitions and this trend is likely to continue. With private equity houses flush with funds and corporates increasingly focussing on consolidation, India will be a sought after destination.

Oliver Tant of KPMG says, "The Indian economy is increasingly moving to take center stage in world economic matters and M&A activity in India has been 50% higher in 2005. I see that level increasing in the next 12 months".

In 2005, India recorded 343 mergers and acquisitions worth USD 18.2 billlion. Of this, USD 16.2 billion was through acquisitions, and the balance via private equity investment. The first two months of 2006, have seen M&A deals worth USD 3.5 billion and 32 private equity deals worth over USD 400 million. And this will only increase as private equity investors don't think the Indian market is overvalued.

"I get the sense that the Indian market will be an increased area of focus going forward. I don't think most private equity think the market is overvalued. I think they still have an enormous degree of interest because they see opportunity," says Tant.

Internationally, energy, natural resources and particularly infrastructure in BRICs economies are likely to see global money flowing in. In India, it is the fast growing service sector- particularly financial services, which will see the most activity. There will be a demand for people, who can provide transaction services, commercial market assessment and benchmarking, post integration.

News: EU boss livid at India

(RTR 22/03/2006) Brussels - Europe's trade chief insisted on Tuesday it was time for big developing countries such as Brazil and India to make concessions to unlock global trade talks that are just over a month from a deadline.

A meeting of trade powers in London earlier in March failed to produce a significant advance in the talks and big moves were now needed as the World Trade Organisation's Doha round neared its end, Peter Mandelson said.

"There is a limited number of cards left on the table -- and they are the big ones," Mandelson, European Union trade commissioner, said in a speech at the European Parliament in Brussels.

"They cannot be played in isolation. The lesson of the London meeting is that the time of incremental steps, small moves and small concessions, is over."

WTO members are trying to meet their April 30 deadline for agreement on agriculture and industrial goods, two key components of the so-called Doha round that has been under negotiation for more than four years.

Mandelson has so far resisted calls from agricultural exporting countries such as Brazil and the United States to go further with opening Europe's farm markets.

He is also under pressure from EU members including France to go no further with his offers to cut farm import tariffs.

But Mandelson reiterated he could offer greater access to the EU farm market if Brazil and India agreed to real cuts to their tariffs on imports of industrial goods -- such as cars and chemicals -- of which Europe wants to sell more.

Brazil had given "an important, albeit so far unfulfilled, signal" by showing it recognised the need for everyone to secure real tariff cuts in their key areas of interest, he said.

Brazilian officials said recently the EU and the United States needed to make the next moves required to break the deadlock by going further with their respective agriculture offers.

The WTO's Doha round was launched in 2001 with the aim of boosting the global economy and lifting millions out of poverty. It must be wrapped up in all its details by early next year.

Several deadlines for the round have already been missed. But negotiators say it risks collapse if a deal is not reached soon because U.S. President George W. Bush loses "fast-track" powers to approve trade deals in mid-2007.

News: Metro power for India

(PTI 22/03/2006) New Delhi - The metro rail is set to become a reality for the residents of Mumbai, Hyderabad, Kochi and Bangalore, with construction on the modern transport system in these cities set to start in 2006-07.

"Delhi metro has completed survey in these cities and construction will start in the coming financial year," said Delhi Metro Rail Corporation (DMRC) managing director E Sreedharan.

The DMRC chief, who was making a presentation of Delhi's experience with metro rail at the conference on alternative technologies in public transport, said there was an urgent need for a national policy on metro and its funding, with the transport system set to go to more cities in India.

Meanwhile, on the performance of Delhi metro, he said the rail system in the capital that was earning operational profits and would be able to not only meet its expenditure but also pay back its loans.

News: A dry Delhi by 2015!

(PTI 22/03/2006) New Delhi - With the water table in the national capital depleting rapidly, ground water supplies in Delhi are likely to run dry in next nine years, a report published in a recent bulletin of Harvard Business School said.

"With their huge populations, China and India are especially susceptible to these water stresses. Ground water supplies in Delhi are expected to run dry by 2015," the report on the global water crisis said.

The demand for water to sustain and feed the world's people is projected to double by 2025, it said.

Another report by the Centre for Science and Environment said things would have been better if ground water had not been over exploited. The national capital has been witnessing a huge gap between demand and supply of water, it said adding the city, with over 15 million population, requires about 3,324 million litres per day (mld) water but gets only 2,034 mld.

The report blamed the widening gap in large-scale extraction of the natural resource, which has also led to depletion of water levels. A comparison of water levels from 1962 to 1977, 1977 to 1983 and 1983 to 1995 presents a clear picture of depletion of ground water level in different parts of the city.

In 1977, the water table was by and large within six metres in most parts of Delhi with deepest being 23 metres in Mehrauli block near Qutab Minar.

The water table declined to 10 metres by 1983 and in 1995 it was in the range of 10 to 20 metres, the deepest being 35 metres at Gadaipur in Chattarpur basin of Mehrauli block, said a CSE report on rain water harvesting.

News: US Frantic to Save Face at CARICOM

(PL 22/03/2006) Nassau - US Secretary of States Condoleezza Rice is attending the CARICOM meeting of Foreign Ministers and will meet the Bahamas Prime Minister Perry Christie.

Thomas Shannon, US Undersecretary of State for the Western Hemisphere, called this first meeting between a US official and the CARICOM an effort to restore bilateral economic and diplomatic ties.

Rice´s pell-mell agenda includes exploring ways for the US to boost regional democracy, improving economies, reinforcing security and looking for ways to cope with the frequent natural disasters that hit the area.

The Bush underling will also try to somehow smooth over frictions with Caribbean leaders that consider the US a partner in the Feb 2004 coup against Haiti´s ex President Jean-Bertrand Aristide.

After the Feb 2006 general elections, the CARICOM decided to reinstate Haiti whose delegation to the July Summit will be led by Rene Preval, to take office in April.

News: Dubai Ports eyes India expansion

(RTR 22/03/2006) Dubai/Mumbai - Dubai Ports World is pressing ahead with expansion plans in India and is confident of winning over local critics of a deal that has put 40 percent of the country's container traffic in the Gulf Arab company's hands.

A senior Dubai Ports official said Indian criticism of its takeover of British ports operator P&O had been muted by comparison with the political firestorm that forced the company to relinquish six major ports in the United States last month.

The Indian controversy has stemmed mainly from objections that officials in one state were not informed of the $6.8 billion takeover that took the number of Indian terminals under Dubai Ports management to five.

All those terminals are on India's western coast and Ganesh Raj, senior vice president of Dubai Ports World, told Reuters in this week that the company wanted a presence in eastern India.

"We are looking at the best options available to us," Raj, who heads United Arab Emirates-based company's operations in east Africa and west Asia, said in an interview.

He said there was little opportunity for port acquisitions in eastern India, but Dubai Ports would push into rail operations and special economic zones (SEZs) to ride the boom in one of the world's fastest growing major economies.

Raj sees the company's contract to develop the Kulpi economic zone in West Bengal as the next phase of the expansion plan. "We are looking specifically at fast tracking the SEZ project in Kulpi," he said.

KEY OPPORTUNITY

Dubai Ports has long viewed Asia's third largest economy as a key opportunity, given its rapid economic expansion and growing demand for infrastructure investment.

Estimates of the amount of money needed to bring Indian ports, roads and airports to levels comparable with other Asian nations range from $150 billion to $200 billion.

India's 12 major ports are crucial to the infrastructure development drive, handling about 75 percent of all shipping volumes. Container traffic makes up a relatively small proportion of the total but is growing by 15 percent a year.

Raj estimates that terminals managed by Dubai Ports World and P&O now handle about 2.2 million twenty-foot equivalent units (TEUs), about 40 percent of India's total container traffic.

The takeover has prompted some criticism from the media and unions that Dubai Ports was acquiring too large a share of India's ports industry. Raj said those fears were unfounded.

"We cannot leverage (our presence in) one port against another. The nature of the business in India means that it is impossible to do that. Shipping (and ports) companies cannot influence trade patterns in India," he said.

"We are subject to the same regulatory requirements. We cannot charge excessively high prices. In fact we can only cut prices and that is good for the trade."

More serious are objections from officials in Gujarat that they were not informed about Dubai Ports' plans to take control of the P&O-operated terminal at Mundra port.

"We wrote a letter to P&O that unless you have Gujarat government's concurrence you can't change the operation of this terminal," an official at the Gujarat Maritime Services Board said.

"They did not inform us of anything officially (about the takeover)," the official said on condition of anonymity.

Raj was confident that Dubai Ports had met all the regulatory requirements in India and said he wanted to address any concerns raised by local officials.

"I would like to meet the officials and provide the required explanation," he said.

News: Reliance goes employee shopping

(TV18 22/03/2006) New Delhi - Reliance Retail is on the prowl and suddenly attrition levels have risen in the retail industry and so have salaries, even of mid-level executives.

With Reliance's entry, the game's got more exciting. Reliance Retail's recruitment drive has led to a major people movement in the sector.

Pantaloon is estimated to be seeing the highest attrition rate of between 35 and 40 per cent, and Piramyd's about 20 per cent, followed by Lifestyle and Shopper's Stop.

Reliance Retail has been responsible for a large chunk of those percentages. Reliance Retail has gone on a shopping spree, picking up about a thousand mid-level retail professionals like store operators and merchandisers.

The company has been offering hard-to-resist packages with hikes that stretch between 25 and 60 per cent over existing salaries and perquisites. Pantaloon is already feeling the heat.

Big Bazaar's category heads like Hans Udeshi for general merchandise and Prabal Ghosh for shoes are some who have joined Reliance Retail.

But sources say companies like Pantaloon and Shopper's Stop are trying to plug the outflow with better salaries and benefits. The top-rung at Reliance Retail is a gallery of high-profile prize catches with annual salaries of more than Rs 2 crore.

Some of the big names are Raghu Pillai from Pantaloon, Rajeev Karwal, ex-MD of Electrolux and Bijou Kurien from Titan.

More names will be added to this list of 15 to 20 people, who will head various categories like apparel, consumer durables and FMCG, under Reliance's mega retail venture that plans a rollout of hypermarkets and supermarkets before the end of this year.

Sensing all this buzz from a distance is Bharat Rathod, a kirana owner for 12 years. Studies suggest that traditional retailers like him will continue to grow at between 5-6 per cent, while modern trade formats grow at between 25 and 30 per cent. But an unconvinced Rathod wants to join Reliance Retail.

He says, "If the big companies offer us a job that requires experience and pays, we will want to close our retail outlet and work there."

Reliance and others might look at tapping local retailers as the manpower crunch worsens. But others feel kiranawalas lack the skill sets for modern retail trade. Even so, Reliance Retail, which is out to change the face of retail in India, might find a way around that too.

News: Retail sees a sea change in POP displays

(BS 22/03/2006) Mumbai - Earlier, there were posters and danglers to attract shoppers in a supermarket. Today, with formats as varied as hypermarkets, discount stores and convenience stores dotting the Indian shopping landscape, marketers are going for innovation in their point of purchase (POP) displays.

General Mills, for its newly-launched biscuits and cream snack, Dip Trix, has opted for a multi-prong strategy for the POP display which ranges from specially designed foot dispensers to gravity dispensers to maximize visibility on the shelves.

Sujay Nanavati of Yellow Resources, who has done POP display units for brands like Parle and Doy Soaps other than General Mills said, “Today what is important is consumer interactivity.”

This becomes even more critical in the modern retail formats where there are a number of brands and products vying for the consumers attention.

Gayatri Yadav, marketing manager, General Mills said that they are looking at having about five-six point of interaction in all the modern format outlets to increase the visibility of the product as opposed to a traditional kirana store where a single point of contact is generally sufficient.

Innovation is clearly the key to attracting attention here, with Doy Care using a set of footprints pasted on the shop floor leading up to the rack where the soap is kept.

Proctor & Gamble, which set up a special display unit when it launched its new shampoo, feels that it is important for the POP display material to be focussed towards the shopper to drive brand recall.

“Good displays and shopper relevant messages can lead to significant increase in overall offtake,” said a P&G spokesperson.

This gains greater significance in either low involvement or impulse purchase categories where it then becomes the single biggest decision making factor for the consumer.

Yadav said,” In an impulse category, it is imperative for your brand to stand out in the clutter that you see in the traditional Indian retail market.”

Other common tools used lately include customised shelves and standalone display units which stock all the company’s brands.

News: Reliance Retail goes employee shopping

(TV18 22/03/2006) New Delhi - Reliance Retail is on the prowl and suddenly attrition levels have risen in the retail industry and so have salaries, even of mid-level executives.

With Reliance's entry, the game's got more exciting. Reliance Retail's recruitment drive has led to a major people movement in the sector.

Pantaloon is estimated to be seeing the highest attrition rate of between 35 and 40 per cent, and Piramyd's about 20 per cent, followed by Lifestyle and Shopper's Stop.

Reliance Retail has been responsible for a large chunk of those percentages. Reliance Retail has gone on a shopping spree, picking up about a thousand mid-level retail professionals like store operators and merchandisers.

The company has been offering hard-to-resist packages with hikes that stretch between 25 and 60 per cent over existing salaries and perquisites. Pantaloon is already feeling the heat.

Big Bazaar's category heads like Hans Udeshi for general merchandise and Prabal Ghosh for shoes are some who have joined Reliance Retail.

But sources say companies like Pantaloon and Shopper's Stop are trying to plug the outflow with better salaries and benefits. The top-rung at Reliance Retail is a gallery of high-profile prize catches with annual salaries of more than Rs 2 crore.

Some of the big names are Raghu Pillai from Pantaloon, Rajeev Karwal, ex-MD of Electrolux and Bijou Kurien from Titan.

More names will be added to this list of 15 to 20 people, who will head various categories like apparel, consumer durables and FMCG, under Reliance's mega retail venture that plans a rollout of hypermarkets and supermarkets before the end of this year.

Sensing all this buzz from a distance is Bharat Rathod, a kirana owner for 12 years. Studies suggest that traditional retailers like him will continue to grow at between 5-6 per cent, while modern trade formats grow at between 25 and 30 per cent. But an unconvinced Rathod wants to join Reliance Retail.

He says, "If the big companies offer us a job that requires experience and pays, we will want to close our retail outlet and work there."

Reliance and others might look at tapping local retailers as the manpower crunch worsens. But others feel kiranawalas lack the skill sets for modern retail trade. Even so, Reliance Retail, which is out to change the face of retail in India, might find a way around that too.

Nieuws: IMF voorspelt gunstige tijden voor Suriname

(DBS 22/03/2006) Paramaribo - Op de laatst gehouden vergadering van het IMF in Washington werd door de leden van de Raad van Bestuur de Surinaamse autoriteiten geprezen voor hun succesvol macro-economisch beleid van de afgelopen jaren.

Ze waren het erover eens dat de korte termijn vooruitzichten voor Suriname er gunstig uitzien. Suriname zou op de middellange termijn voordeel trekken uit het doorvoeren van betere fiscale en monetaire beleidsmaatregelen. Reeds zijn er belangrijke stappen gezet om het fiscaal aamwerk te verstevigen.

De recente wijzigingen van de lokale brandstofbelasting en het systeem van prijsbijstelling zal de kwetsbaarheid van belastinginkomsten t.o.v. fluctuaties van de olieprijzen op de wereldmarkt verminderen.

De leden van de Raad van Bestuur adviseerden om het raamwerk m.b.t. het monetair beleid en het wisselkoersregime te versterken. Doordat er een grotere flexibiliteit t.a.v. de wisselkoers is ontstaan, zullen de autoriteiten de marktvastgestelde commerciële koers als de officiële wisselkoers moeten aannemen.

Ook werd er tegelijkertijd geadviseerd om het vermogen van de bank inzake risicobeoordeling te vergroten. De leden van de Raad riepen op tot implementatie van effectievere anti - witwas controles. Opgemerkt werd dat de al lang bestaande achterstanden van Suriname aan bilaterale crediteuren de kredietwaardigheid van het land ondermijnen en zijn toegang tot kredietdekking voor de export verhinderen.

Naar voren werd gebracht dat structurele hervorming de sleutel zou zijn om de niet-mijnbouwsector in staat te stellen duurzame werkgelegenheid en inkomstengroei te genereren. De autoriteiten werden aangespoord om de voorziening en de nauwkeurigheid van statistieken te verbeteren, vooral voor wat betreft de nationale verslaggeving en de handelsgegevens.

News: GM to withdraw Opel from Indian markets

(PTI 22/03/2006) Kolkata - General Motors India has decided to withdraw the premium Opel brand from the market and focus instead, on marketing the Chevrolet brand.

Launching the Chevrolet Aveo sedan here on Wednesday, Vice President of GM India, Ankush Arora said the company had already stopped production of Opel Corsa.

He said GM India would focus more on the Chevrolet brand in India as it was doing well after the launch of Optra sedan and Tavera multi-utility vehicle (MUV).

Mr Arora said Aveo had been placed in the C segment that included Hyundai Accent, Ford Fiesta, and Honda City and would be sold at the rate of 20,000 units per year.

The car has been designed at four centres of the company -- in South Korea, Russelhiem, Michigan and China.

News: Ansal eyes $2.3 bln Delhi township project

(RTR 22/03/2006) New Delhi - Ansal Properties and Infrastructure Ltd. said on Wednesday it expected to get approval to build a 100-billion-rupee ($2.3 billion) township near New Delhi.

The company also announced a joint venture with Malaysian property and healthcare company Faber Group Berhad to provide healthcare support and facilty management at medical institutions in India.

Chief Executive Anil Kumar told reporters Ansal's order book stood at more than 150 billion rupees, with 75-80 percent of that for integrated townships, or residential colonies, in second-tier cities.

Ansal plans to raise funds for future land acquisition by September via a public share issue or private equity, he added.

Ansal shares rose 4.7 percent to 688.80 rupees in a weaker market.

Ansal, with a market captalisation of 12 billion rupees, has developed about 25 million sq ft of residential and commercial property. It is the flagship company of Ansal Properties Group, set up in 1967.

Faber Star Facilities Management Pvt. Ltd., jointly set up by the Ansal and Faber, will offer clinical wastage management and bio-medical engineering management as part of its services.

"This is our first joint venture in India and the potential for the market is great," Noorizah Haji Abdul Hamid, managing director at Faber, told Reuters.

"The returns can be immediate and I expect to make profit within two years. Our investment is not substantial as there is not much capital expenditure."

The groups said in a joint statement Faber would hold 51 percent of the venture, which will begin operations in May and aim for turnover of 1 billion rupees within three to five years.

Hamid said it would target private sector hospitals.

News: Viacom eyes film co-production in India

(RTR 22/03/2006) Mumbai - Cable network and movie studio owner Viacom Inc. is keen to tap India's digital media business and explore co-producing films to address its large base of young people, its chief executive said on Wednesday.

Viacom, which owns MTV and the Nickelodeon channels, is aggressively expanding its presence in fast-growing markets like India and China, and tapping emerging segments like social networking on the Internet to retain its cool cachet.

"When the world sees India, they see its fast-growing economy, its large middle class, its smart and well-educated young people, and its big movie and television audience," said Tom Freston at an entertainment conclave.

"Anyone would consider it a promised land," said Freston, who lived in India for several years in the '70's, when he set up an apparel export business here and in Kabul for western buyers.

India's filmed entertainment business, valued at about 68 billion rupees ($1.5 billion) in 2005, is forecast to more than double to 153 billion rupees by 2010, according to estimates by consultancy PricewaterhouseCoopers.

Its home video market, estimated at 4 billion rupees in 2005, is forecast to more than quintuple to 21 billion by 2010.

Emerging segments like mobile gaming and Internet advertising based on entertainment are forecast to grow by eight times to more than 10 billion rupees ($225 million) by 2010.

"We don't just want to distribute movies here: We're looking at co-producing films here with Indian partners," said Freston, who claimed Hindi films of the '70's made "a huge impact" on him.

"We're also keen to explore the home video market: 80 percent of film revenues in India comes from ticket sales, whereas 60 percent of revenues in the West comes from home video," he said.

India, home to the world's most prolific film industry and the world's third-largest cable television market, is set to become Asia's leading cable market by 2010. Viacom launched MTV Desi in the United States last summer with south Asian content.

But Hollywood studios have largely stuck to distributing films or dubbing them in regional languages for wider viewership. Sony Pictures, owned by Sony Corp., last year signed its first local co-production deal for a Hindi film.

MTV began airing in India in the early '90's, but the channel only became popular a few years later after it localised its content and hired local executives and veejays who, like most young urban Indians, spoke a mix of Hindi and English.

"We didn't get it right the first time," admitted Freston. "It turns out that young Indians didn't want to listen to Pearl Jam and Run DMC all the time."

Nieuws: Fractievoorzitters op werkbezoek in India

CALCUTTA - PvdA-leider Bos dacht dat hij een redelijk beeld had van India. Maar na een intensieve studiereis van enkele dagen weet hij inmiddels dat hij zijn kennis overschat had. „Het gevoel van urgentie dat je hier krijgt, haal je niet uit boekjes”, zei Bos woensdag in de Indiase stad Calcutta. „Het is net als bij terrorisme: je kunt er jaren over debatteren maar als Theo van Gogh vermoord wordt, begrijp je het pas echt.”

Bos en zijn collega-fractieleiders Verhagen (CDA), Van Beek (VVD), Halsema (GroenLinks), Van der Laan (D66) en Rouvoet (ChristenUnie) reizen sinds zaterdag onder leiding van Tweede Kamervoorzitter Weisglas door India. Hun bezoek staat vooral in het teken van de razendsnelle economische opleving van het land.

Woensdag probeerden ze ook een indruk te krijgen van het andere India, dat waar circa een derde van de een miljard inwoners in bittere armoede leeft. Ze bezochten een opvangtehuis van moeder Theresa die ruim vijftig jaar geleden in Calcutta met haar werk begon.

Alle fractievoorzitters toonden zich diep geroerd door de liefdevolle manier waarop de kinderen die anders in de sloppenwijken nauwelijks kans zouden hebben te overleven in het tehuis worden verzorgd. Maar ze beseffen ook dat deze kinderen juist geluk hebben gehad. „Dit is een exceptioneel voorbeeld van waar het goed gaat”, aldus Halsema. „Zeker 60 procent van de kinderen zou het zonder de zusters niet hebben gered.”

Contrast

Het contrast kon niet groter zijn met het volgende bezoek dat de fractievoorzitters aflegden. Het betrof een ultramodern privéziekenhuis waar patiënten uit Australië, Europa en de Verenigde Staten naartoe komen omdat in hun eigen land de tarieven 300 procent hoger zijn en ze daar jaren op de wachtlijst zouden moeten. Voor de modale inwoners van India is een dergelijke behandeling in een ziekenhuis niet weggelegd. 80 procent van de bevolking is onverzekerd en kan alleen terecht in de veel goedkopere overheidsziekenhuizen.

De fractieleiders zijn na vier dagen rondreizen door India er nog niet uit welke lessen ze uit hun verblijf moeten trekken, maar voor Bos staat wel vast dat Nederland niet moet proberen op loonkosten te concurreren. Ook verder wordt het moeilijk de opmars van het land bij te benen, want de Indiase arbeidskrachten zijn niet alleen veel goedkoper dan die in het Westen maar ze zijn ook steeds beter opgeleid.

CDA-fractieleider Verhagen voelt zich met zijn neus op de feiten gedrukt. „Het Westen kan niet langer vanzelfsprekend van het eigen voordeel uitgaan.”

News: 'Export for 2005-06 to hit $100 bn'

(ET 22/03/2006) New Delhi - Commerce minister Kamal Nath said on Wednesday the country's exports may touch $100 billion in the current financial year that ends on March 31.

"Our exports have been growing at 26 per cent per annum for past two years and will most likely touch $100 billion this year," Nath said.

News: 'Insurance FDI cap hike vital for growth'

(BL 22/03/2006) New Delhi - The Association of British Insurers (ABI) has said that the Indian Government's proposal to hike the insurance foreign direct investment (FDI) cap from 26 per cent to 49 per cent is vital for the growth of the Indian insurance industry.

"Insurance is a capital intensive industry. Raising the FDI cap from 26 per cent to 49 per cent is vital for existing joint venture companies to raise more capital," Stephen Haddrill, Director General, ABI, said at a press meet here today.

Incidentally, Haddrill's visit to India comes soon after the Finance Minister, P Chidambaram, had announced in the Union Budget 2006-07 that the Government would introduce a Bill in Parliament to amend various insurance laws. Subsequently, Haddrill added that there was need for tax incentives for the pension market.

'Huge incentive'

Earlier, speaking on the occasion, the Lord Mayor of the City of London, David Brewer, said that raising the cap would be a `huge incentive' for attracting greater foreign investments in the sector.

"In our meetings with Indian officials, we have been made to understand that the proposed hike is more of a commitment from the Indian Government. We are told that the amendments to the insurance laws should be through by the winter session of Parliament," the Lord Mayor said.

On the issue of the proposed shift-over to the EET (exempt-exempt-taxable) regime, Sikha Sharma, Managing Director and Chief Executive Officers, ICICI Prudential Life Insurance, said the proposed move would be a dampener for long-term savings. "EET would be a dampener for long-term savings," Sharma said.

Joydeep Mukherji, Finance Director and Chief Investment Officer, Aviva Life Insurance agreed with Sharma.

Anthony Jacob, Managing Director, Royal Sundaram Alliance Insurance, said the proposed dismantling of non-life tariff by the IRDA beginning January 1, 2007, would be beneficial for the consumers of insurance products.

News: 'Indian budget to help sustain GDP growth'

(BL 22/03/2006) New Delhi - In its post-Budget memorandum, industry chamber FICCI said the economy's impressive growth would be sustained with the Budget proposals, which have emphasised stability in fiscal management.

However, the chamber has noted that though exports growth of merchandise products has decelerated, the numbers remain close to 20 per cent. Services sector exports are expected to maintain the trend growth and the sharp pick up in oil and non-oil exports is expected to push up the current account deficit to three per cent of the GDP. But the high non-debt creating inflows would provide enough comfort to ensure stability at the external front.

The chamber has also called the growth in agriculture at 2.3 per cent as "lacklustre." A sustained increase in agriculture production at the rate of 4 per cent would be required for a further acceleration in growth of GDP, it said. Share of agriculture in GDP has come down to 19.7 per cent in 2005-06 and its contribution to overall growth is only 5.8 per cent.

In case of manufactured goods, the increase in prices in January 2006 was only 2.8 per cent, just around half the 5.8 per cent increase in January 2005. Overall increase in manufactured good prices in April-January 2005-06 was down to 3.5 per cent from the 6.6 per cent increase in April-January 2004-05.

The Budget estimates reveal that both gross and net market borrowings of the Central Government will grow at a substantially slower pace in 2006-07 as compared to the previous year, said the chamber. The Budget estimates the revenue from disinvestments to go up by 63 per cent to Rs 3,846 crore in 2006-07. Receipts from disinvestments have slowed down by 46.7 per cent in 2005-06, said the chamber.

News: McDonald's announces burgers on bicycles

(BL 22/03/2006) New Delhi - McDonald's India (North) has announced a new delivery system - `McDelivery on Bicycles', an initiative restricted to the area of Chandni Chowk in the Capital.

McDonald's has deployed five bicycles, to be ridden by a team of delivery squad members of the company.

According to Vikram Bakshi, Managing Director, McDonald's India (Northern Region), said, "In our constant endeavour to offer convenience, we took this initiative as a challenge to overcome the accessibility factor. McDelivery on Bicycles is another interesting innovation, which is primarily driven by customer needs and aspirations. We are sure our customers will welcome this initiative and we are confident of making it a success."

News: India, SA to sign shipping deal

(PTI 22/03/2006) New Delhi - India and South Africa will sign a maritime agreement to step up trading ties and to float joint ventures in the area of ship building and transportation.

The agreement would be signed between India's Ministry of Shipping, Road Transport and Highways and the South African government. Shipping minister T R Baalu will lead a high level delegation to South Africa to sign the agreement.

The bilateral Maritime Shipping Agreement aims at increasing maritime ties between India and South Africa and promoting contacts between shipping firms of the two countries.

A Maritime Liaison Committee would be set up under the agreement for promoting merchant shipping, according to an official release.

The agreement also facilitates establishing joint ventures in the field of maritime transportation, ship building and repairs, apart from allowing exchange of information for smooth flow of commercial goods.

Assistance to vessels in distress while at sea also forms an integral part of the agreement. Baalu would also visit the major ports of South Africa such as Cape Town and Durban during his visit, the release added.

News: Tatas upbeat about Bangladesh

(Sify 22/03/2006) New Delhi - Tata group hopes to resolve the issue of natural gas prices for its proposed $2.5 billion investment in Bangladesh shortly, a top company official told Reuters on Wednesday.

"I expect the gas pricing issue to be resolved soon," B. Muthuraman, Managing Director of Tata Steel Ltd. told Reuters on the sidelines of an industry conference to be addressed by Bangladesh Prime Minister, Begum Khaleda Zia.

News: BVI government presses ahead with diversification

(CNN 21/03/2006) Road Town, BVI - The Government of the British Virgin islands is continuing in its drive to diversify the local economy to ensure the Territory’s long-term economic viability.

Chief Minister Dr Orlando Smith gave this assurance at a community meeting in the capital Road Town over the weekend.

The Chief Minister pointed out that the Territory remains a strong performer in the financial services industry, saying this is because Government is ensuring that the industry is well-regulated, promoted globally, and new products are developed.

Dr. Smith said, despite the bright outlook, the Territory should not rely entirely on financial services alone for its economic security. He said this is one reason why the Government has been promoting investment in the Territory’s tourism industry.

The Chief Minister said, apart from having new hotels, there is need to upgrade the existing hotels, inns, and villas. He said the small inns and villas, which are mainly locally owned, make up about 30 percent of the Territory’s tourism accommodation.

Last year Government approved an expansion of the Hotel Aid programme which would enable villas with as few as three bedrooms to benefit from aid, thereby encouraging investment in this important sector.

The Chief Minister said agriculture could become the third economic pillar for the BVI economy. He said agriculture has a place in the economic development of every country, including the BVI.

The ongoing community meetings are intended to give the Chief Minister and his team of ministers an opportunity to inform each community about Government’s plans. At the same time, they provide a forum through which the community can raise concerns and ask questions about Government initiatives.

News: U.S., Caribbean to discuss democracy & trade

(USINFO 21/03/2006) Washington - The United States shares a tradition of democracy and respect for human rights with the nations of the Caribbean Community and Common Market (CARICOM), and will discuss these issues as well as trade cooperation and security and law enforcement at the CARICOM meeting of government ministers March 21-22 in the Bahamas, says the U.S. State Department.

In a series of March 21 fact sheets entitled “The United States at the CARICOM Ministerial,” the U.S. State Department outlined the themes to be discussed at the meeting by U.S. Secretary of State Condoleezza Rice and her Caribbean counterparts.

The fact sheet on democracy and human rights notes that the United States reinforces democratic values in the Caribbean through programs on democracy, conflict resolution and humanitarian assistance. These U.S. efforts include supporting elections, strengthening civil society, improving judicial systems and utilizing cultural exchange programs. Building on a common tradition of democracy and respect for human rights, the United States and CARICOM nations will coordinate closely on issues in these areas, including the political transition in Haiti, the fact sheet states.

On security and law enforcement, the United States and its CARICOM partners will discuss cooperation on migration, illegal drug trafficking and money laundering.

“The Caribbean is the third border of the United States,” the fact sheet says. “As neighbors, the United States and CARICOM countries work together to stem the flow of illegal drugs and to promote security in the Western Hemisphere.”

As part of this effort, the United States will provide almost $10 million to the region during 2006 to address issues such as narcotics and small arms trafficking, money laundering and illegal immigration.

Within this context, the Third Border Initiative will strengthen the ability of Caribbean institutions to address social and economic problems, combat transnational crime and enhance regional security, the fact sheet adds. The United States also will fund the development of a Regional Information and Intelligence Sharing System.

Trade cooperation is another important issue that American officials will emphasize at the CARICOM meeting.

“We are working with our Caribbean partners to strengthen the region's economies and competitiveness in the global marketplace,” the State Department fact sheet says.

Currently, the Caribbean Basin Initiative (CBI) provides the 24 beneficiary countries with duty-free access to the U.S. market for most goods. In addition to the CBI, which will continue until 2008 or until another free-trade agreement enters into force, the United States also will explore with CARICOM nations how to deepen public-private partnerships aimed at improving the region’s trade capacity, investment climate and competitiveness, the State Department said.

News: Barclays invests $220 mn in India

(BS 21/03/2006) London - Barclays PLC, the UK-based financial services provider, has infused $150 million in its investment banking business in India and another $70 million to ramp up its domestic commercial and corporate banking activities. The total investment in its Indian operations now stands at $300 million.

As part of its growth strategy, the bank has already approached the Reserve Bank of India (RBI) to increase its footprint within India, by adding more branches. However, Barclays is not considering an immediate foray in retail banking in India.

Apart from catering to multi-national and larger corporates, the bank now wants to tap small and medium enterprises (SMEs) in India.

For this purpose, the bank is launching services on the lines of supply chain financing, structured trade finance, risk management and corporate liquidity management. For large corporates, Barclays would look at launching assets financing and leasing services.

The bank’s international, retail and commercial banking operations’ chief executive and board member, David Roberts said Barclays now aims to achieve a 50:50 ratio between its domestic and international business activities, which now has a lion’s share in its India-based business.

The current ratio of UK-based businesses to international businesses stands at 40:60. India alone contributes approximately 25 per cent of the bank’s Asia Pacific business.

News: China's largest bank plans India foray

(BS 21/03/2006) Mumbai - Another Chinese bank, UBC, is also eyeing India.

After almost two years since Overseas Chinese Banking Corporation exited India, the biggest Chinese bank—Industrial and Commercial Bank of China (ICBC)—has evinced interest in setting up operations in India.

ICBC executives recently had talks with officials of the Reserve Bank of India, the banking regulator. The development assumes significance as both India and China have begun talks to increase bilateral trade.

Singapore-based United Bank of China has also applied for making a foray into India. UBC is one of the banks enlisted under the bilateral trade agreement with Singapore to get a preferential treatment while setting up its operations In India. It has approached the RBI for getting clearances to first set up a representative office.

ICBC is the largest state-owned bank in China and leads in corporate banking. It has recently concluded the world’s largest initial public offer of around $10 billion. It was the last of the government-owned banks to go public after a partial disinvestment of Bank of China and China Construction Bank last year.

ICBC controls a fifth of China’s $4.6 trillion of banking assets and has a customer base of more than 100 million at 21,223 nationwide outlets. The bank sold a combined 10 per cent stake to Goldman Sachs Group Inc, Allianz AG and American Express Co for $3.78 billion.

ICBC was set up in 1984 by the Chinese government to offer deposit and lending services to state-owned companies. The bank’s non-performing loan ratio fell from a high of 25.46 per cent in 2000 to 2.49 per cent at the end of last year.

In a press statement globally, it had mentioned that its earnings would amount to at least 100 billion yuan (US$12.43 billion) in operating profits during the current financial year, up from 90.2 billion yuan (US$11.21 billion) in 2005. It has offered 283.2 billion yuan (US$35.19 billion) of syndicated loans last year.

Overseas Chinese Banking Corporation closed its operations in India in 2004-05. Incidentally, it is also one of the Singapore-based Chinese banks designated to get preferential treatment by the Indian government under a bilateral Comprehensive Economic Cooperation Agreement. But until now, it has showed no intentions of returning to the Indian market.

News: India to attract $855m telecom manufacturing FDI

(Sify 21/03/2006) New Delhi - India, one of the fastest growing countries in telecom manufacturing in the world, will attract another $ 855 million as foreign investment over the next two years, while rolling out 125 million handsets each year, according to a leading global electronics company.

The rising demand for telecommunications, especially in mobile telecommunications, has attracted close to $ 800 million in foreign investment into India in 2005 and the sector is expected to attract close to $ 855 million in the next two years.

More importantly, it likely to have a springboard effect providing a boost to industries along the supply chain -- including the semi conductor industry, electronics industry, ancillaries and components -- leading to the development of a feasible electronic manufacturing eco system.

The large telecom equipment manufacturers will bring in their component supplier to complete this manufacturing ecosystem, according to a white paper brought out by one of world's leading Electronics Manufacturing Services (EMS) company and also the first global major to establish a telecom equipment manufacturing facility in India in April 2005.

According to Elcoteq, the consumer electronics and telecommunications sector will be the major growth sectors having a production base of $ 11 billion and can increase by 75 per cent in the next four years with just one telecommunications supply chain partner network.

The paper highlights that currently around 80 per cent of the total telecom equipment demand is met through imports. Given the government's vision and the current growth trends -- of achieving approximately 250 million lines in the next three years with a teledensity of 22 per cent -- this would translate to equipment requirement between $ 28 billion and $ 34 billion.

''Local manufacturing is expected to help India cut the $ 165 million it spends each month to import telephones and provide opportunities for the revival of domestic and global companies setting up units in India.'' During 2004, India purchased 25 million mobile handsets, which is expected to go up to 65 million in 2006 and 100 million by 2010.

''With the aggressive manufacturing plans of global companies in India, over 125 million handsets are expected to be rolled out of Indian factories each year -- opening up huge opportunities for exports,'' the paper said.

News: Jet introduces 2nd daily flight to London

(Sify 21/03/2006) Bangalore - Jet Airways, today announced the introduction of a second daily flight on Mumbai-London-Mumbai sectors, starting July 10.

It will operate these flights with the Airbus 340-300E aircraft, a Jet Airways release said.

The return fare in economy class will be in the range of Rs 20,000 to Rs 70,855.The premiere class fare will be from Rs 1,24,000 to Rs 1,70,000. The fares are exclusive of taxes.

Jet Airways A340-300 enhanced aircraft, can carry 269 passengers in a two-class configuration. Premiere class with 38 seats offers luxurious six-abreast seating, ensuring passengers of either an aisle or window seat.

In addition, the A340-300 enhanced aircraft benefits from an engine which delivers improved fuel efficiency and sets satisfactory future noise and emission standards, the Release said.

The gourmet in-flight food service on the flights is a combination of transnational delicacies carefully selected to match passengers’ tastes.

There are a host of entertainment options offered especially on this flight with Sky Screen, the non-stop in-flight entertainment programme, which offers a wide selection of Hollywood and Bollywood movies, music videos, short programmes, eight audio channels and single and multi-player interactive games.

News: Scotch makers fuming as India keeps tariffs

(BD 21/03/2006) Edinburgh - The Scotch Whisky Association says it will ask the EU to make an official complaint at the WTO if India does not lift excessive duty tax on imported spirit drinks.

The association (SWA) said it was disappointed that the Indian government's new budget had not made any progress in reforming what the SWA called a “discriminatory fiscal regime” against imported spirits.

The association said the overall duty burden faced by Scotch Whisky ranged from 212 per cent to 525 per cent.

The European Commission has been investigating India's import regime for EU spirits and wines since September last year.

Peter Wilkinson, SWA international affairs director, said he hoped for a negotiated solution, but “if this does not prove possible, we will have to weigh our options and may be obliged to press the EU to take these issues to World Trade Organisation dispute settlement.

“Domestic interests appear to have outweighed international commitments and, as a result, market access continues to be unfairly restricted by a protectionist tariff and tax system. Indian consumers are being denied the opportunity to buy international spirits brands at an affordable price.”

The high tariffs on spirits imports have forced many consumers onto the grey market, said David Williamson, SWA spokesperson, to BeverageDaily.com.

He said the trade barriers increased the incentive for fraudsters on the spirits market. “India makes 55m cases of whisky every year and half of that is counterfeit.”

The SWA, said Williamson, wanted India to halve its basic customs duty for spirits, to 75 per cent, and replace additional tax on spirits with a levy to encourage “more affordable retail prices and more choice for consumers”.

Emerging markets, particularly those in Asia, increased their importance for Scotch Whisky makers in the first half of last year. The area drove exports past the £1bn barrier for the first time since 1997.

Exports to India rose 19 per cent to a value of £7m, despite the high import tariffs, although the SWA estimated Scotch made up less than one per cent of India's spirits market.

It was China that led the charge with 124 per cent growth. The growing craze for drinking Scotch Whisky with green tea leaves, mojito style, meant Scotch exports to China hit £22m in the first half of last year.

Promising Asian performances helped to offset declines in Europe, the SWA said.

News: Bajaj Allianz all set to tap rural markets

(ID 21/03/2006) Mumbai - Private sector life insurance company Bajaj Allianz would be expanding its network to tap the rural areas, according to company Chief Executive Officer (CEO) and country manager, Sam Ghosh here today.

"The company has set a target of increasing its business in the vast rural market from current 18 per cent to 22 per cent in the fiscal 06-07," Ghosh told reporters, after inaugurating the second branch of the insurance major in the city.

The company would have over one lakh insurance agents in the country and is planning to set up nearly 1000 branch offices from the existing 550 to expand its presence in major towns and cities of the country, Ghosh said.

News: Bangladesh 'seriously' studying Tata's investment plans

(ID 21/03/2006) New Delhi - Bangladesh today said it was "seriously studying" Tata group's investment plans in the steel, power and fertilizer sectors as it was significant for Indo-Bangla trade relations.

"It is a significant initiative by an Indian company. We are seriously studying the proposal," Bangladesh Finance and Planning Minister Saifur Rehman, said at a FICCI business meeting.

News: Wal-Mart Funds Research to Address India FDI Entry

(ET 21/03/2006) Mumbai - Foreign direct investment (FDI) is unlikely to be allowed in retail trading untill a political consensus is evolved on the issue.

With the dust yet to settle from the decision to allow FDI in branded retail, the larger issue of opening up retail to foreign investment would not be taken up till the elections in West Bengal, Tamil Nadu, Kerala and Assam are over.

An indication to this effect has been communicated to a visiting Wal-Mart team informally. The official version, of course, is that FDI in retail is under consideration. Wal-Mart is the largest retailer in the world, with a turnover that beats every other multinational corporation.

During formal interactions, the visiting Wal-Mart team was told that FDI in retail is being considered though no decision has been taken. Informally, however, the officials have hinted that the political climate is not favorable at this juncture.

The US-based company is still hopeful and the high-powered team led by Wal-Mart International's chief Michael Duke made optimistic inquiries about the status of FDI in retail, officials said.

The team also discussed various aspects related to enhanced sourcing of Indian goods, they added. The team met officials of various departments including the ministry of textiles.

Last year, John Menzer, CEO of Wal-Mart International (he has swapped roles with Duke since then) did hectic lobbying with the Manmohan Singh government to open up FDI in retail.

The pressure has yielded partial results with the government allowing FDI in branded retail. Since the window allows only single-brands to be sold in such retail outlets, companies like Wal-Mart do not benefit.

"We are patient and persistent. We are hopeful that the Indian government would allow FDI in food and grocery retailing soon," Duke told ET in a free-wheeling chat. "We will meet senior government officials to put our point across," he added.

Duke did not think that Wal-Mart is set to lose the first mover advantage, thanks to the reliance's ambitious retail plans. "We are not perturbed by them. The Indian consumer is significantly underserved and there's room for many players," he said.

Even though market sources say that Wal-Mart has put its plans to set up cash-and-carry stores in the backburner, Duke insisted that Wal-Mart is doing research on the Indian market and would come up with the best model for India. The company has posted Lance Rettig to India to do extensive research of the market. The idea is to get the groundwork ready.

Wal-Mart says it has set a target of $630 million worth of sourcing from India in 2006, creating 100,000 jobs in the manufacturing sector. Apart from sourcing, Duke is hopeful of creating several thousands jobs, when FDI opens up in the retail sector.

While the government is also keen to liberalise FDI further, it does not want to stir a hornet nest by opening up the retail sector for foreign investment. In a way, the government is caught in a dilemma.

If the government says that FDI in retail cannot be opened up now, it will send negative signals to foreign investors. If the wish to open up retail for FDI is expressed, then the Left is sure to come out with critical statements.

News: ‘Retail Link’ - an Intl Conference at CII HQ

Confederation of Indian Industry (CII) informs that “Retail Link – An International Conference on Building the Right Environment for Brands & Consumers” on Monday, 20 March 2006 at CII Northern Region Headquarters, Sector 31 – A, Chandigarh, India.

Retail Link has been positioned keeping in view the current reports those are forecasting yet another terrific year for the Indian economy with a GDP growth in excess of 8 percent.

The Indian consumers, unlike their counterparts in developed economies have a bullish spending outlook and the retail sector continues to record strong growth. With growing affluence the demand for lifestyle products and aspirational brands has also grown.

The Indian consumer has a number of choices and is becoming increasingly demanding. The demands are not only for affordable products but also superior value. The value perception is influenced not only by innovations in products but also retail formats.

To realize its full potential, the Indian retail sector requires significant capital, technology and best practices to bridge the existing productivity gap and achieve scale in operations, which are critical to the sector’s success. Against this backdrop, the Retail Link is structured in a way to

- Address the key issues of the retailing sector by providing an interactive platform for sharing of different perspectives and views ranging across architects, financial institutions, retail, entertainment, developers, media and leisure industries as also to discuss the policy issues with key Central / State Government officials.

- Unleash the Retail Market Assessment Study with a focus on this Region

- Develop a proactive platform to meet potential partners and interact with the who’s who of the Indian retail industry

CII with 55 offices in India, 8 overseas in Australia, Austria, China, France, Japan, Singapore, UK, USA and institutional partnerships with 240 counterpart organisations in 101 countries, CII serves as a reference point for Indian industry and the international business community.

News: Wal-Mart, Dell plan to expand in China, India

(CT 21/03/2006) Chicago - Wal-Mart Stores Inc. plans to increase its workforce in China sixfold over the next five years, and Dell Inc. will double the number of its employees in India in the next three years.

Bentonville, Ark.-based Wal-Mart said Monday that it will hire as many as 150,000 more employees in China as it expands its number of stores there.

Wal-Mart has targeted China, which has long been a major supplier of its products, as a key region for its international store growth. It now has 56 stores in China and about 30,000 employees, and it plans to open 20 more stores this year.

Spokesman Bill Wertz said that, with a decade of retailing in China under its belt, the company is ready to aggressively multiply the number of stores.

"We expect to significantly increase the pace of our building there in the future," Wertz said. "We've seen an outstanding acceptance of our stores in China. Everywhere we open new stores, there are huge crowds attending, and everywhere we build, there are more applicants than we can accept."

But hiring in China is a "challenge," Wertz said. "We're not able to draw from a labor pool of experienced supercenter or retail workers. We need to train them ourselves."

Though Wal-Mart has been in China since 1994, its store growth has been hampered by strict laws that were only eased in 2004, when China began letting foreign retailers open stores without a local partner.

Also Monday, Round Rock, Texas-based Dell said it plans to double the number of its employees in India, to 20,000, by 2009.

Although most of the new hiring will be made at the company's call centers, there will also be substantial recruitment at its product testing center and a possible manufacturing plant.

Dell operates four call centers in India, a product testing center for corporate customers and a global software development center. Some 10,000 people are employed at these facilities.

"We will double our staff from the current level over the next three years," Chairman Michael Dell said during a visit to the technology hub in Bangalore. "There's a fantastic opportunity to attract talent [here]. We will ensure a major recruitment push in engineering talents."

Scores of Western companies have been cutting costs by shifting software development, engineering design and routine office functions to countries such as India, where English-speaking workers are plentiful and wages are low.

But in this case, the company says it is not reducing its workforce in the U.S. or elsewhere. Rather, it's a bid to increase its share in India's fast-growing market for computers.

Dell says it accounts for less than 4 percent of the 4 million computers sold annually in India. According to research firm IDC, Dell had an 18 percent global market share last year.

But Dell lags in India largely because of taxes that result in higher prices for Dell products. The Indian government imposes higher import taxes on fully assembled computers than its does on computer parts, and Dell ships complete computer sets to India.

James McGregor, a Beijing-based economic analyst who monitors issues in India and China, said a manufacturing facility in India "will help Dell to be close to its customers not just in India, but South Asia."

News: Sabre Capital Worldwide to have India Investment fund

Singapore's Sabre Capital Worldwide Group today said that it has teamed up with Dubai's private equity firm, Abraaj Capital, to set up a dedicated India Investment fund.

The USD 250-million Sabre Abraaj Private Equity fund will invest in Indian companies with "high growth potential," across several sectors, ranging from life sciences to auto-ancillaries.

News: Punjab set to zoom on mall road

(FE 21/03/2006) Chandigargh/Ludhiana - So much has been written and said about the retail revolution in Punjab that many are now blase about the announcement of new malls. But a look at the numbers that convey the enormous retail development in the region is still astounding.

Consider this: Till last year, Punjab only has two functional malls, covering 270,000 sq feet. Within this year, nine new projects would become operational. This would take the mall space to 31.8 lakh square feet (12 per cent increase with an year).

By the end of 2008, there will another four-fold increase, taking the mall space to 152 lakh square feet. By 2010, Punjab would have over 40 malls. These figures have been provided in a new 172-page report released by Images and the CII.

The epicentre of this revolution would be Ludhiana. A study conducted by Hudema consulting group suggests that Total Retail Potential of Ludhiana would be Rs 5940 crore by 2010 and by 2015 the figures is expected to touch Rs 9152 crore. The revolution would be fuelled by the legendary spending spree that Punjabi families are known for. This can be substantiated by the data in the National Sample Survey Organisation and KSA Technopak.The average monthly consumption expenditure per individual in Punjab’s cities is Rs 1182.90, which is higher than the all-India average of Rs 1149.52.

It appears that the rural Punjabis want to beat the urbanities in their shopping splurges. The average monthly consumption expenditure for rural Punjab is Rs 1022.05. The national average is only Rs 635.72.Cut to the list of the companies that have announced their retail plans for Punjab. It reads like a who’s who of India’s retail business — Piramals, Rahejas, Godrej, ITC, DLF RPG, Aerens, Ansals, THI, Omaxe to name only a few. In fact, not only these, there have been announcements from companies hitherto unknown for their retail ambitions. MBD is one example.

Are we going too far? Is there space for everyone? Vikram Bakshi of McDonalds India, a man with a wealth of experience in the retail industry, says 70% of the start-ups will not go very far, simply because they don’t know how to run a business that requires a lot of expertise and effort. “Only the best will survive,” he adds.

Several experts believe that too many mall openings is akin to the initial years of dotcom boom, where numerous people made their forays, but only those with sound business models and profits survived. Austrian economist Joseph Schumpeter had termed it as Creative destruction, where the foundations of successful businesses are built on the ruins of the unsuccessful ones.

For the moment, though, the existing players concur, that differentiation would be of vital importance. This differentiation can be made possible by three ways- Size, store mix and specialisation. As per Sujith Kumar, CEO of Aerens Group who are setting up one of the largest malls in North (Festival City is Ludhiana), determining store mix would be very important. “You may set up a huge complex in Punjab, but if you don’t get adequate coverage to food, beverage and multiplex, who will come there?” he said.

News: Ambani plans new city opposite Mumbai

(FE 21/03/2006) Mumbai - A few years ago, the world discovered Shanghai. If Mukesh Ambani has his way, five years from now, Mumbaikars will see a new city rising across the Gateway of India.

The yet-unnamed city will be about half the size of Mumbai. It will have broad roads, modern transportation systems, and will be linked to the island of Mumbai by a six-lane , 22-km-long sea bridge. A new international airport is also expected to come up there.

The city will be home to at least a million people, most of them working in hi-tech and service industries such as electronics, contract research, finance, and information technology . Residents will have swank housing, modern hospitals , top-class schools, and large parks—amenities of a modern township.

Ambani’s plan got its first green signal last week when the government cleared the setting up of 140 special economic zones (SEZs), three of them proposed by the Reliance group. The project, spanning 32,000 acres (12,000 hectares), and christened Mumbai Integrated SEZ comprises Navi Mumbai SEZ, Ambani’s joint venture with Cidco, and his own yet-to-be-cleared MahaMumbai SEZ.

The development is expected to begin with Dronagiri, near Jawaharlal Nehru Port, and extend to Ulwe and Kalamboli which will be only half an hour away from Mumbai, once the trans-harbour link between Sewri and Nhava is complete.

The MahaMumbai SEZ plans to emulate the succees of the likes of Shenzhen, near Shanghai and Jebel Ali in Dubai to attract foreign companies to set up their office and manufacturing units in it. The government has already announced long tax holidays to make exporting from an SEZ more attractive. Even before the project has got off the ground, CIDCO has received more than 800 applications from prospective companies.

The industries in the SEZ will also be carefully chosen . They will have to be non-polluting and more importantly , export-oriented .

News: UK's Barclays to invest $70 mn in India

(FE 21/03/2006) Mumbai - Barclays Plc will invest $70 million in India in two years as part of its strategy to boost non-UK revenues, a senior official at the British bank said on Tuesday.

The proposed investment will help Barclays build a corporate banking team in India, whose economy is Asia's third-largest and expanding at about 8 percent a year.

Barclays had already spent $150 million in the past one month to strengthen its Indian investment banking operations.

The British bank has been a dominant player in managing overseas convertible issues from India, and expects offerings by Indian companies to rise as they expand.

"We see strong growth in overseas issuances," Robert Morrice, Chairman and Chief Executive for Asia-Pacific, told a news conference. "We've seen tremendous interest for Indian paper."

India was the biggest issuer of convertible bonds in Asia in 2005 with an aggregate value of $3.5 billion.

Barclays has managed Indian convertible bond issues worth $1.29 billion since January last year.

In February, the British bank had said it aimed to increase the share of its non-UK operations to pre-tax profits to 50 percent in three years, from 40 percent in 2005. Its 2005 pre-tax profit was 5.3 billion pounds ($9.3 billion).

Barclays, which has been awaiting the Indian central bank's approval to open new branches, also sees opportunity in trade finance and funding Indian companies to buy businesses abroad.

"We are going to look at funding overseas acquisitions," Morrice said. "Trade finance, funding large and medium sized companies are also options."

Many Indian companies such as auto parts maker Bharat Forge Ltd. and drug maker Dr. Reddy's Laboratories Ltd. have been buying companies overseas to expand at a fast clip.

Barclays, which has about 40 staff in its investment banking division in India, plans to employ about 150 people in its corporate banking division.

($1=.5691 Pound)

News: Sensational Sensex @11,000!

(FE 21/03/2006) Mumbai - India's benchmark share index crossed 11,000 points for the first time on Tuesday, on the back of robust foreign fund inflows and a move by the government toward greater capital account convertibility.

Analysts say the government's decision would attract more foreign money. It would also give firms greater access to foreign debt markets and cut delays in foreign exchange transactions.

"The market is vibrant ... only money is talking now, news is immaterial," said Mitesh Mehta, vice president of equity sales at LKP Shares, who expects the index to hit 11,500 over the next eight weeks.

Foreign funds have moved nearly $3.4 billion into Indian equities this year.

News: AAI keen to develop minor airports

(Sify 21/03/2006) Chennai - The Airports Authority of India (AAI) is keen on developing smaller airports in Tamil Nadu to ease congestion at Chennai Airport.

Releasing a CII report on `Traffic Assessment for Madurai Airport' at a function here today, Regional Executive Director of Airports Authority of India, K Ramalingam, said the AAI had plans to develop the airports at Pondicherry, Salem, Madurai, Tiruchirappalli, Coimbatore, and Tuticorin.

He said the AAI had invested Rs 9.73 crore in developing Coimbatore as the growth of the airport in terms of passengers and cargo was encouraging. Similarly, the authority had invested Rs 9.14 crore in developing Tiruchirappalli airport.

The runways at the airports were being extended, apart from improving the parking area and construction of a terminal building, Ramalingam said.

Noting that the traffic and cargo traffic in the major airports of Chennai, Coimbatore, Madurai, and Tiruchirapalli was showing a steady increase, Ramalingam said, Chennai and Coimbatore were profit-making airports.

Losses at the Tiruchirappalli and Madurai airports were being reduced and he expected that they could break even anytime.

AAI was taking steps to increase the facilities at Madurai, he said and added that he did not see any difficulty in converting Madurai as an `International Airport' as it already had a good infrastructure.

News: Retail foray - Bharti in talks with Wal-Mart

(Sify 21/03/2006) New Delhi - After setting up a nationwide telecom network, Bharti Enterprises is now scouting for a foreign partner to make a foray into the food retail business segment.

The company is understood to be in talks with a number of global retail majors, including Walmart, Tesco, and Carrefour, and will finalise its plans within a few months.

Confirming the move, Sunil Bharti Mittal, Chairman and Managing Director, said: "The Bharti group is considering an entry into the retail business. The group will decide on the retail venture in a few months."

Industry sources said that talks were on with major retail companies for setting up a supermarket chain in India.

Airport modernisation

Speaking on the sidelines of the inaugural function of Bharti School of Telecom and Management, Mittal also said that Bharti would be keen to participate in the modernisation of Chennai and Kolkata airports.

Bharti had earlier bid for the Delhi airport in association with Singapore's Changi Airport but had to drop out of the race after the foreign partner withdrew its application.

Recent reports in the British media had said that Tesco is in talks with Bharti for a £750-million joint venture to set up a supermarket chain. However, there has been no official confirmation of the same.

Seeking synergy

Analysts said that Bharti's proposed business venture would entail predominantly food retail for which synergies could be generated with Fresh Field, its agri-food business.

In the telecom segment, Mittal said, Bharti Teletech has bid for the 30 per cent stake held by Telecom Consultants India Ltd (TCIL) in Hexacom.

TCIL, a PSU, had invited bids for its stake in Hexacom, which offers cellular service in Rajasthan.

If Bharti's bid comes through, its stake in the cellular company would go up to 95 per cent.

Shyam Telecom, the original promoter of Hexacom, has also bid for the stake.

News: JP Morgan invests in Andhra Cements

(Sify 21/03/2006) Kolkata - Global finance major JP Morgan is investing Rs 73 crore by way of debt and equity in the ailing G P Goenka Group outfit, Andhra Cements Ltd.
The size of the equity has been pegged at Rs 24 crore and it would be invested through one of its Mauritius-based investment companies. JP Morgan is also paying a premium for the equity.

The balance - Rs 49 crore - would be made through a five-year-old debt paper carrying an interest rate of 12 per cent. Sources said that on Monday JP Morgan has applied to the Reserve Bank of India for the necessary clearances under the existing foreign exchange regulations. "The clearance from the apex bank is expected soon, and subsequently, the deal would be completed," sources said.

JP Morgan and Andhra Cement had been negotiating over this arrangement for almost six months. In fact, at an extra-ordinary general meeting (EGM) held on March 18, shareholders of Andhra Cements approved the expansion of the authorised capital to Rs 115 crore from Rs 70 crore.

In mid-February this year, JP Morgan and Andhra Cement signed an informal memorandum of understanding. A broad-based agreement among the two is likely to be signed soon.

Around the same time, AAIFR (Appellate Authority on Industrial & Financial Reconstruction) has also approved JP Morgan's investment proposal. As Andhra Cements is the BIFR (Board for Industrial & Financial Reconstruction) net, this approval was necessary.

Talking to Business Line G.P. Goenka said that an investor - and not another cement producer - is likely to be roped in. It is likely to happen "fairly soon" and may be "within this month-end."

"I will not tell anything more than that because a deal is not complete unit the two parties sign on the dotted lines. Moreover, I would have to inform the stock exchanges before anyone else," Goenka said.

He said that his holding in the company is above 84 per cent and he would not mind hiving a portion of it to an investor.

For the year ended March 31, 2005, Andhra Cements registered a turnover of Rs 155.99 crore and a nominal net profit of Rs 2.41 crore. As on that date its total accumulated losses were Rs 257.87 crore.

Approximately three lakh shares of Andhra Cements were traded at the BSE on Monday. However, the stock hardly moved up. It opened at Rs 36.80, reached a high of Rs 38.60 and finally closed at Rs 36.90.

News: Normal monsoon likely

(BL 21/03/2006) Thiruvananthapuram - The country is likely to have a normal monsoon during the upcoming season, going by the seasonal predictions of the International Research Institute (IRI) for Climate and Society, Columbia University.

India Meteorological Department (IMD) is expected to come out with its annual monsoon forecasts next month. The country had a normal monsoon the last season as well.

La Nina conditions, normally considered supportive of a normal monsoon regime in India, continue to persist in the equatorial Pacific. In its update, the IRI said that sea surface temperatures (SSTs) are approximately one degree C below average across much of the central-eastern equatorial Pacific.

With the persistence of below-average SSTs in the eastern equatorial Pacific, the maintenance of La Nina conditions remains the most likely outcome for the coming three-month (March-May) season.

However, there is some uncertainty surrounding the continuance of these cold SST anomalies. There is now an estimated 53 per cent likelihood for La Nina to persist and a near two per cent probability for the contra-indicated El Nino, leaving 45 per cent probability that neutral conditions will prevail over the period.

PRE-MONSOON RAIN

Meanwhile, pre-monsoon showers seem to be providing a taste of things to come, at least in some parts of the country.

The trend was most pronounced in the meteorological sub-division of Tamil Nadu and Pondicherry, where all except two districts recorded excess rain in the first 15 days of March.

The margin of deviation (in percentage figures) was of the order of +1000 Madurai; +757 in Virudhunagar; +642 in Dharmapuri; +582 in Krishnagiri; +557 in Sivaganga and +566 in Tuticorin.

The district of Chennai, including the city, recorded +384; only Theni (-81 per cent, scanty) and Cuddalore (-27 per cent, deficient) provided notable exceptions. And there is more to come. The National Centre for Medium Range Weather Forecasting (NCMRWF) has predicted that isolated rains and thundershower activity over peninsular India and the North-eastern States may continue over the next three to four days as well.

As for the North and Northwest, a fresh western disturbance is likely to approach Jammu and Kashmir and the adjoining hilly regions by Thursday.

Under its influence, the hilly regions and parts of adjoining plains of Northwest India are likely to receive isolated to scattered rains.

News: Selective shoppers

(FT 21/03/2006) London - American consumers are adopting a pick-and-mix attitude towards supermarkets. Plus: Will Indian retail see a similar trend?

Mildred Sjostrand may be the future of the American food retail business. On a warm evening last week, Venezuela-born Sjostrand and her husband were loading shopping into the back of their car in the palm-tree shaded car park of the Publix Sabor supermarket in Kissimmee, Florida.

The supermarket, which opened last year, targets the region’s Hispanic community with a broad range of fresh and packaged Latino foods. Sjostrand, a local resident, visits the store once or twice a week, particularly to stock up on perishable products.

She does not visit the Publix store for other basic items, such as washing powder and paper towels, though, preferring to drive about seven miles to the Costco warehouse club.

“You get a big quantity and... you get good prices,” she says, adding that she is also a regular visitor to her local Wal-Mart Supercenter.

Sjostrand’s shopping habits reflect how the way Americans shop for groceries has changed over the past 10 years — with a mix of shopping destinations now taking the place of the traditional single weekly trip to the local supermarket.

She is also shopping in a market that serves as a model of how the rise of Wal-Mart in particular has changed the regional market. And the fragmentation that results creates new opportunities — opportunities now being targeted by Tesco, the UK grocer, with its plans to establish a range of “convenience” stores on the US west coast next year.

Wal-Mart has expanded aggressively around Orlando since entering the market 20 years ago. The area has a greater density of Wal-Marts than most areas of the US — with 20 locations in a 22 mile radius of Orlando’s centre.

Wal-Mart now controls 31 per cent of the supermarket sector in the Orlando/Daytona Beach market region where it has 42 stores selling groceries, according to TDLinx, a retail analyst.

But Publix, which is privately held, remains the market leader, with 37 per cent of the market from its 107 stores in the region. Winn-Dixie, the regional chain that was previously Publix’s main competitor, has fared less well. It sought bankruptcy protection last year — citing the Wal-Mart effect — and its 87 stores in the region are struggling with just 14 per cent of the regional market.

Darrell Rigby, head of the retail practice at Bain, the consultants, says Orlando reflects what has happened elsewhere in the US — with Publix managing to hold on to its market by opening more stores and focusing on local market needs.

David Marks of Marketplace Advisers, an Orlando-based retail consultant, points out that Winn-Dixie was dependent on a lower income customer base than Publix, making it particularly vulnerable to Wal-Mart. “It’s really been a two-man race between Publix and Wal-Mart,” says Marks, who shops for groceries at Publix or Wal-Mart.

In addition to its high marks for customer service, Publix is regarded as one of the US supermarket industry’s masters of localisation. Its Sabor store, for instance, includes a small British foods selection, with bottles of HP Sauce, Marmite and Heinz Salad Cream aimed at local British expatriates and visitors to Disney World.

In addition to its new Hispanic format, Publix is also remodelling stores in the prosperous Florida communities of Palm Beach Gardens and Boca Raton to sell natural and organic foods.

Wal-Mart, meanwhile, is piling on the pressure in the Orlando market, one of the fastest growing metropolitan areas in the US.

The retailer has four Neighborhood Markets among its 20 Orlando stores, with two more planned for this year. The Neighborhood Market, with its architectural facade in place of the usual Wal-Mart plain big blue box, is roughly the same size as the adjacent Publix and stocks the same wide range of about 30,000 items.

But in spite of the presence on its shelves of five brands of peanut butter, Wal-Mart argues the format is not trying to be a traditional supermarket but rather a more convenient version of a Supercenter.

Publix, meanwhile, is preparing to build a new store on its adjacent site to replace the ageing unit, which continues to draw customers. The store may have higher prices overall but it has its own butchers and bakery counters, and offers complementary coffee, while its staff continue the chain’s tradition of offering to carry shopping to the customers’ cars — under a strict no tipping policy.

Publix, Winn-Dixie and Wal-Mart all remain committed to the large format stores with extensive ranges that Americans are used to — in spite of the increasing evidence that more customers such as Sjostrund are using the traditional format for “top up” shopping.

“It is still the most common shopping format,” says Bain’s Rigby of the traditional store. “But customers are learning to appreciate a variety of alternatives as well... such as convenience store formats. They are using different stores for different shopping occasions.”

Damodar Mall President, food business division, Pantaloons Retail (India) Unlike the West, Indians are used to high levels of service. We need people to clean our homes and utensils, and to drive our cars. Hence, neighbourhood stores play a crucial role and will remain relevant in the future. The convenience stores, however, will have to increase their range, service levels and displays. As the owners of these outlets are entrepreneurs in their own right, they will learn from the environment.

At the same time, the Indian customer is ready for modern retail formats. Even in Nasik, Nagpur and Bhubaneshwar, the first stores of Food Bazaar are just a year old and we have already signed up for second outlets. The early adopters in new categories are now shopping in modern retail formats — there is a higher likelihood that customers will try out new categories like body washes, fruit juices and international foods in large format stores. Even in case of the older categories like soaps, premium brands like Dove or Pears do significantly better in large format stores because of better display.

We consistently look at appealing to the consumer’s imagination. We offer home delivery up to 15 km in smaller towns and up to 3-5 km in big cities. Customers will continue to evolve and we need to be in line with expectations. If they need international cuisine or partly-prepared meals, we should be ready. We sell fresh paneer, cut vegetables, prepared gravy and even offer grinding facilities for free. Factoring in customer needs is a very important part of our decisions. J H Mehta COO, Spencer’s Indian buyers display a buying behaviour that is similar to the West. But will this behaviour change as the penetration of organised retail increases from its current 1 per cent of the total food and groceries bought? It’s not just restricted to just food and groceries. In India, the distinction is pretty much clear in garments and lifestyle. For instance, Shoppers’ Stop and Akbarallys co-exist with Linking Road and Fashion Street in Mumbai. The distinction is less clear when it comes to food. Typically, consumers adopt one or the other outlet for food. They choose the closer outlet for perishables and direct their monthly shopping to the destination hyper markets. For garments, consumers choose the location and store depending on what they are buying. They may buy shorts and vests from local shops, but for shirts, trousers and women’s wear, the same shoppers prefer going to established outlets. Can this pick-and-mix attitude by buyers have an adverse impact on ticket size and customer loyalty of supermarkets? Yes, it certainly will. That’s why all retailers must be sure about what they are addressing. The danger is when the retailer does not offer a consistent range and price and confuses the consumer. Undoubtedly, shopping will be the sumtotal of shopping from various formats like neighbourhood and hyper destinations, particularly monthly groceries. Our strategy? Spencer’s already has three formats — hyper, super and daily — to cover the positions from destination store formats to neighbourhood convenience stores. Raghu Pillai President and Chief Executive, operations and strategy, Reliance Retail The US is a far more mature retail market than India. Consequently, trends there are not necessarily indicative of how events will unfold elsewhere — especially in nascent markets like ours. Even in the US, though, the trend of smaller supermarkets flourishing alongside large hypermarkets and clubstores is fully dependent on the supermarkets aggressively merchandising to attract a particular ethnic community or more broad-based fad, such as organic or health food, and so on. So, obviously, as stores start differentiating themselves sharply in terms of their value proposition, it is but natural they will attract customer dollars that were previously being spent elsewhere. The fact that customers can — and do — decide on which store to visit and what to buy on each visit, based on the occasion, time of month and other considerations is a well-known fact. This is nothing new. The fact that there is considerable overlap on the assortment between convenience stores, supermarkets and hypermarkets points to this being something retailers have been aware of for sometime now. It is still too early to talk about any distinct phenomenon as far as the Indian shopper is concerned. That said, I must also agree that yes, there is an increasing trend towards newer, more modern shopping formats, particularly in urban India. But it is still a trend and not a dominant form of delivery. Arvind Singhal Chairman, Technopak Advisors A lot has been romanticised in India about the efficiency and cost-effectiveness of the neighbourhood grocer, the pavement- or push cart-based wet “markets” for fresh produce, and the ethnic diversity in the country that intuitively leads to specialisation rather than “mass” category management. However, all objective consumer research and lifestyle trends indicate that in the absence of modern options, while the consumer continues to shop at the so-called neighbourhood speciality stores, he would rather economise both on money and time by shopping at a Big Bazaar or Shoprite or Spencer’s. First, the customer feels empowered when he can walk around well-stocked aisles pushing a shopping cart, and can guiltlessly pick up merchandise and put it back in the shelf if he changes his mind. Second, it is almost certain that hypermarkets (50,000 to 150,000 sqft)/large format supermarkets (5,000-15,000 sqft) will not only offer much wider assortment that can take care of the Indian ethnicity variations far more effectively, but will also provide significantly lower prices (Technopak estimates the typical Indian consumer’s shopping basket for food and grocery will see a price reduction of at least 15 per cent in the next three-four years, thanks to more efficient retail front end) and superior shopping experience. The impact may not be as visible in the metros, but as you move beyond the top 12 to 15 cities, large format hypermarkets will become aspirational and, therefore, a destination for the middle class shopper. R Subramanian Founder and Managing Director, Subhiksha Trading Services The Indian consumer is extremely conscious of value and arbitrage — much more than in any other market. While higher incomes have opened up purse strings, there is a clear focus on what to open it for — customer behaviour in terms of parameters for choosing a shop are widely different, based on purpose (functional vs emotional), frequency (high repeat vs infrequent) and differentiation (quality of product service across vendors). High repeat items are bought closer home with an eye on convenience; similarly, functional and undifferentiated products are bought without too much emphasis on the ambience. For most consumers, grocery shopping — high frequency, low differential, functional — is a chore done near home, while at the other extreme is jewellery (low frequency, high differential, emotional), where distance is not a constraint. Retail formats and offerings will also move the same way — large format retail will focus less and less on food, grocery and daily necessities until such time as the currently dense retail penetration in the neighbourhood comes down. You want to go to a mall to chill and pick up a trinket or two — not to buy toilet cleaner and lug back 45 kg of provisions! The Western style of far-away retailing for these categories will happen, if at all, only when neighbourhood retail disappears — and there’s no sign of that now.

News: US developers to put over $1bn in India this year

(BS 21/03/2006) Mumbai - Funds to come in 3 tranches of $350 mn, $750 mn and $50 mn.

A fresh investment of $1 billion is heading the India way — this time from US developers. The investment expected to come in three tranches of $350 million, $750 million and $50 million — all this year. The first tranche is likely to be closed by April.

Mark J Reidy, a Wasington-based attorney of the US law firm Andrews & Kurth, who is putting the funds together, said large American corporations, construction companies and real estate developers are investing in the fund.

Sources close to the development indicated that a major San Francisco-based developer is coming into the country through the fund with plans for developing tech parks on its own. The parks will be constructed as per US specifications, they said.

The sources added that the fund managers have begun talking to construction majors such as L&T, and the initial round of negotiations with L&T is over.

So far foreign funds have invested in existing projects in the country that are being developed by local developers. It is for the first time that a foreign fund is considering buying land and developing its own parks.

Reidy said given the volume of outsourcing to India, American companies are keen on developing their own properties.

The tech parks are proposed to be set up in the southern cities of Chennai, Hyderabad and Bangalore. As for the northern destinations, the fund managers are looking at Rajasthan and Punjab, besides Gurgaon and Noida in Delhi.

These will include biotech parks, IT parks and research and development (R&D) centres for top US pharma companies.

He, however, declined to name the companies that are looking to set up R&D facilities in India. The fund is also considering commercial properties in Mumbai, Reidy said.

Column: The Wal-Mart debate

(RTR 20/03/2006) Mumbai - Reuters correspondent Emily Kaiser is in Asia, reporting on U.S. retailers operating in the region. Here are her impressions on the prospects for big retailers in India:

Sitting in a Mumbai taxi as the driver angrily honks at an endless stream of trucks, buses, cars, pushcarts, pedestrians and cows, it's hard to imagine how foreign retailers could operate here. Then you hear about customers causing traffic jams as they flock to clearance sales and it becomes obvious why Wal-Mart and others are fighting so hard to open stores in India.

The new shopping malls popping up on the outskirts of Delhi and other major cities sell Benetton clothing, Nike sneakers and Nokia phones. Western music plays over the loudspeakers. It's easy to forget that this is a developing country -- until the power goes out and the escalators stop with a jerk. Customers just walk up and continue their shopping. A few minutes later, the lights come back on.

Analysts in India say foreign retailers will bring much-need investment and expertise to a fast-growing retail segment that needs to solve critical infrastructure problems. In a country where millions go to bed hungry, some 40 percent of farm produce spoils before reaching consumers. That may be the most compelling argument for allowing Wal-Mart to come in. Supply chain is Wal-Mart's greatest strength.

The opposition raises a strong case for keeping Wal-Mart out. Will foreign retailers really be able to create enough jobs to make up for the stores that will inevitably close? An efficient supply chain means cutting out the six or seven intermediaries. What happens to them? And how will the arrival of superstores affect a community built around a central market?

The wild card is exports. In China, for example, Wal-Mart turned local suppliers into global export partners, bringing massive amounts of money and new jobs. They hope to do the same in India. Wal-Mart already exports about $1.8 billion to $2.0 billion a year from India and sees room for growth in key categories such as textiles and jewelry.

The side effect of ramping up exports is criticism back home. Many Americans blame Wal-Mart for widening the trade gap with its $18 billion a year in Chinese imports. Would a "Made in India" label draw any less criticism?

News: Pantaloon buys Crossroads for Rs 400 crore

(BT 20/03/2006) Mumbai - The Ashok Piramal Group’s Crossroads has been purchased by the Pantaloon Group owned Kshitij Real Estate Fund and a foreign private equity fund for around Rs 350-400 crore, Kishore Biyani, Managing Director of Pantaloon Retail said here on March 19.

However Managing Director of Pantaloon Retail refrained from commenting directly on the deal said “What will Pantaloon do with the entire Crossroads mall?”. Crossroads is one of the country’s first shopping malls and city’s major landmark which has been spread over to 1.2 lakh sq ft.

The mall which is positioned as a premier retail chain is likely to be converted into an outlet devoted largely to consumer durables. Further it is not clear if the existing tenants have renegotiated tenancies with the new owners as the new owners may also pay compensation to the tenants to move out, if the profile of the mall changes.

Kshitij Fund has so far invested around Rs 713 crore in retail led projects for the development of around 3m sq ft. As a strategy, the fund’s deployment so far has been in shopping malls in tier-II towns like Ahmedabad, Vadodara, Indore, Kochi and Coimbatore.

During recent times the purchasing power of these towns has been growing rapidly but there are few opportunities for shopping and lifestyle spending.

Further the group plans to spread wide by entering into joint venture with landlords and local developers while retaining management control with a 50-70 per cent holding in the SPV formed for each project.

Sources also added that the group had put all future retail expansions under Crossroads on hold as after the merger of Piramal Holdings with Morarjee Realties, Crossroads had been left out of the group’s retail plans. All future retail forays were to be done only through Pyramid, the retail arm of the Piramal Group.

Crossroads failed to scale up its operations even though it has several retail malls mushroomed in the suburbs and across cities. Further mall didn’t get higher footfalls and volumes, the margins were stagnant.

News: The rise of the Phoenix

(TNN 20/03/2006) Mumbai - The sale of 600 acres of mill land in central Mumbai has sparked off a debate on urban land use patterns and the need to balance private versus public needs.ET invited the pioneers of mill land use to share their experiences about going where nobody had gone before. The development of Phoenix Mills has spurred a virtuous cycle of consumption, manufacturing, employment and income generation. And, this can now be replicated across 600 acres of mill land spread across the city.

THINK of High Street Phoenix and one conjures up images of families spending a day at the various eateries and entertainment zones and indulging in brisk shopping activity at some of the largest shopping destinations in the country, twenty-somethings hanging out at bowling alleys and lounges and both foreign tourists as well as upcountry visitors, marvelling at what has emerged as the symbol of emerging India.

High Street Phoenix is where Mumbai meets. In a city starved of public spaces, it provides an ideal location for extended families, living across the city to get together and spend quality time. And it’s designed to be an inclusive environment where every citizen of Mumbai can relax, celebrate and unwind along with the family, right in the heart of the city. Over 100,000 visitors walk into what is today is the city’s largest entertainment and shopping hub. Mumbaikars love this place, and as every shop-owner here will attest, they vote overwhelmingly with their footfalls.

What the city needs today, are public spaces like Phoenix, that provide a significant boost to the economic activity in the mill land area and can spur consumption and employment. The success of Phoenix can be multiplied many times over in the entire mill land area. What’s required is a willingness on the part of the government, to formulate the right policies, set the right agenda and develop opportunities for a public-private partnership.

The public-private partnership can also be extended to develop the government-owned NTC lands in a far more creative way. Imagine a panda and a kangaroo in the Parel zoo, or a university campus and grounds equivalent to the Stanford University in Sewri, or a life-saving hospital and health care campus in Lower Parel.

These can be in addition to world class shopping malls, residential complexes and commercial complexes that will be built in Mumbai in any case by the private sector. We can have that and much more, only if we set the right agenda, for the redevelopment of the mill lands.

Just a decade ago, one remembers Phoenix Mills as another struggling textile mill. Today, it’s a different story. Even as the rest of the textile mills in Mumbai employ less than 15,000 people, High Street Phoenix alone provides indirect employment to 10,000 people and direct employment to 5,000 people who earn over Rs 250 crore. It’s set to generate annual revenues of around Rs 5,000 crore, setting up a virtuous cycle of consumption, manufacturing, employment and higher disposable income.

The impact of the rise of the Phoenix is not confined to High Street Phoenix. Few would disagree that it has played a major role in the rejuvenation of the entire Lower Parel area. The once defunct industrial area, where people ventured only by accident, has now changed into a hip rendezvous point and has offices of blue-chip companies, advertising agencies, consultants, lawyers and media firms. In a sense, the development and evolution of Phoenix Mills, as the city’s entertainment and shopping hub can probably — and without sounding too immodest — be used as the template for the current effort to plan, reinvent and add infrastructure for the overall development of the city.

In fact, High Street Phoenix has become the model for development of shopping and entertainment hubs across the country. Right from the day we started working on the development of Phoenix Mills, there’s one question we haven’t ever stopped asking: what does the average citizen of Mumbai need, to make a visit to Phoenix, a pleasurable and memorable one? The philosophy at Phoenix Mills is: it’s a place where every one is invited. We wanted to retain the character of Mumbai within Phoenix and it was here that we were able to differentiate from other malls. We did not charge to park cars, we did not remove stray dogs, we did not charge any entry fee; we allowed and welcomed every one.

When we decided to commercially develop Phoenix into an entertainment and shopping centre there was a single-point agenda: it needs to be an inclusive place that will attract a broad cross-section of people. It was a development for the Mumbaikar. We tried to understand what a person from the surrounding areas and the suburbs looks forward to? An entertainment centre like BOCO or a music store like Planet M proved to be popular among the young-at-heart, an amalgamation of restaurants and food stalls catering to every cuisine from vegetarianism to Thai to American fast-food attracted families and a hypermarket like Big Bazaar gave everyone a world-class shopping experience.

But as we inched closer to attracting 200,000 visitors on weekends, we realised the need to develop a support-infrastructure, that would be able to handle large crowds. Over the past two years, we invested in planning and building infrastructure — we roped in traffic consultants and are now building Mumbai’s largest car park that will be able to accommodate 3,000 cars and will be free to all visitors. We are adding power and water infrastructure, service areas, planned movements for visitors.

Organised retail, educational and health services are all part of the urban infrastructure and the need of the hour is to involve people from the sector with developers and government policy makers to design and develop mill lands. Mill lands can cater to different needs — need for public places, educational and health care institutions, entertainment and cultural zones, residential complexes and a private-public partnership can create a win-win proposition that will benefit government and developers alike. And, it’s time we started asking — what does the citizen of Mumbai need to make her life better?

Kishor Biyani is the managing director of Pantaloon Retail and Atul Ruia is director, High Street Phoenix.

News: Indian investment in Guyana likely in wood, mining

(SN 20/03/2006) Georgetown - An Indian manufacturer has committed to assisting Guyana to add value to its wood product and seek Indian investors for the mining sector. President of the Indo-Global Chamber of Commerce, Ajay Singh, who is leading a delegation of Indian manufacturers at the second Festival of India trade show, has met Commissioner of Geology and Mines Robeson Benn, to explore investment opportunities in the sector.

Singh said meetings were also held with Director of the Guyana Office for Investment (Go-Invest) Geoffrey Da Silva. He said he expected a response from these two entities on the issues discussed in the next three months.

In an interview last year, Singh had said that Indian investors would also like to invest in the diamond market, by importing rough diamonds directly from local miners which would bring much better prices to the locals. It was said that India polishes approximately 75% of the world's rough diamonds. There can also be an initiative where Guyanese could be trained to cut and polish diamonds, the chamber president explained.

But Singh says that in addition to this, they have now placed gold mining on the agenda. The Indian manufacturers here will also be meeting members of the business community. Singh again mentioned the intention of the IndoGlobal Chamber to set up a large warehouse in the region to house Indian manufactured products to facilitate the ready access of Indian goods to Latin America and the Caribbean.

"We have to decide where to open it," he said, given the size of the region. Some 5,000 Indian manufacturers will display their products at the warehouse and companies in the region can place their orders for commercial quantities. This initiative could get off the ground in the next one to two years.

Singh had also noted that a local entity and an Indian investor could enter into a joint venture to develop a furniture factory, where Indian craftsmen could visit Guyana to teach the intricacies of wood carving so as to add further value to local wood.

The Chamber had also planned to invite information technology and pharmaceutical companies to the trade fair, but Singh said these companies also had commitments for Europe, Asia and North America.

Nevertheless, he said, next year the chamber will make another effort to get the information technology companies to participate.

Forty Indian companies are at the Festival of India trade fair this year, compared with 27 companies last year. Yesterday, the trade show was expected to close in the city and then move to Berbice.

News: Six wise men to show the way to full convertibility

(TT 20/03/2006) Mumbai - The Reserve Bank of India (RBI) today formed a six-member committee headed by S. S. Tarapore that will prepare a roadmap towards capital account convertibility — the first step towards making the rupee freely convertible.

Besides Tarapore, the committee consists of Surjit S. Bhalla, M.G. Bhide, R.H. Patil, A.V. Rajwade, and Ajit Ranade.

Last Saturday, Prime Minister Manmohan Singh signalled the push towards fuller capital account convertibility at a meeting with the Reserve Bank officials in Mumbai.

The Prime Minister had favoured a full float of the rupee saying India’s position, both internally and externally, had become far more comfortable in the last two decades.

Earlier in the day, finance minister P. Chidambaram said, “The Prime Minister has made a very definitive statement day before yesterday and the RBI and the government will announce the next steps (on capital account convertibility) in a few days from now.”

However, the RBI announced the formation of the committee just a few hours later.

The six-member team has been asked first of all to review the various measures taken till date on capital account liberalisation. It has been asked to examine the implications of fuller capital account convertibility on monetary and exchange rate management, financial markets and the financial system.

It has also been asked to study the implications of dollarisation of domestic assets and liabilities and internationalisation of the Indian rupee.

The committee will suggest a comprehensive medium-term operational framework, with sequencing and timing, for fuller capital account convertibility taking into account the implications of such a move and the progress in revenue and fiscal deficits of both the Centre and the states.

It will also survey the regulatory framework in countries which have advanced towards fuller capital account convertibility. It will suggest appropriate policy measures and prudential safeguards to ensure monetary and financial stability.

The committee will commence its work from May 1 and is expected to submit its report by July 31.

At present, the rupee is convertible on current account, essentially on the trade account. Chidambaram said the finance ministry and the central bank had discussions on capital account convertibility of the rupee. The issue could have been part of the budget for 2006-07. “But it was pulled out of the budget as it could have overshadowed other fiscal policy announcements,” he said.

After India opened its doors to economic reforms in 1991, the rupee has become fully convertible on current account but the Reserve Bank adopted a cautious approach towards a full float of the Indian currency. The central bank has particularly been cautious after the 1997 Southeast Asian currency crisis that led to a flight of capital from those countries.

This is the second time that Tarapore will be heading a committee dealing with the same subject. In 1997, a committee headed by him had recommended a three-year time frame for complete convertibility by 1999-2000 subject to satisfying certain conditions.

These conditions included bringing down gross fiscal deficit to 3.5 per cent of GDP as of 1999-2000, keeping the inflation rate at an average 3 to 5 per cent for the above three-year period. The government was also required to design external sector policies to increase current receipts to GDP ratio and bring down the debt servicing ratio from 25 per cent to 20 per cent.

As the conditions stand now, fiscal deficit is expected to come down to 3.8 per cent of GDP next fiscal, wholesale price-based inflation rate hovers over 4 per cent so far this fiscal, current account deficit is below 3 per cent and foreign debt is around $20 billion lower than the forex reserves.

News: Calcutta's experiential destination

(TT 20/03/2006) Calcutta - Swing retail and themed zones, vertical transportation and retail activators, smart parking, live music and a myriad mosaic of entertainment on the perky plaza…

Calcutta Central, the seamless mall format of the Pantaloon group coming up at the junction of Ballygunge Circular Road and AJC Bose Road, promises to bring to the city a “never-before combo of shop-eat-celebrate” to add to Calcutta’s ever-expanding retail horizon.

“Calcutta will have a new-format Central, different from the Pune, Bangalore and Hyderabad outlets. Designed by the celebrated Rockwell Group of New York, with a seamlessly integrated cineplex, a larger food court and more efficient parking systems, the Central will also have a series of retail activators,” said Kishore Biyani, managing director, Pantaloon Retail (India) Ltd.

The G+5 structure of the Calcutta Central, which can be accessed from both Ballygunge Circular Road and AJC Bose Road, will have a built-up area of 281,700 sq ft, with a 656-ft frontage. The mall with a shop-in-shop concept housing all leading brands under one roof, aims to be an “experiential shopping destination”, with live music and events at the core.

The Rockwell Group’s typical style of articulating a brand through storytelling will be evident in Calcutta Central. “We use architecture as the DNA to grow the brand, delving deep into our scenic design competence, since architecture and movies have a great chemistry,” Mark Patricof, president and CEO of the Rockwell Group told Metro.

The US design house has created such icons like Kodak Theater in LA, Michael Jordan’s flexi-space restaurant in New York’s Grand Central Station and America’s largest retail complex, Meadowlands Xanadu in New Jersey. In Calcutta, it will use elements like ‘swing retail’ to liven up a dead zone through “changeable energisers”.

A Central typically has a mix of retail, foodcourts, restaurants, multiplex and/or hotel rooms. Calcutta Central is among the 51 malls to be set up by Kshitij, the asset-management company backed by Pantaloon Retail (India) Ltd.

The ‘Kshitij Destinations’, involving 14.5 million sq ft of prime retail real estate across 14 states and 29 cities, promises to provide the Indian retailer with “an accelerated pan-India footprint”. “The retail footprint of 51 malls ensures a nationwide presence, in the shortest possible timeframe to any retailer. By tying up with us, retailers get access to the best locations across metros, mini-metros and tier-2 towns,” says Shishir Baijal, CEO, Kshitij.

“Calcutta Central will also raise the bar in terms of quality of merchandising and hence, there’s a long list of retailers keen to be present in Central,” observed Joanna deSouza, business development & head leasing, PFH Investment Advisory Co Ltd, advising Kshitij.

Besides Central, the Pantaloon group is keen to bring to Calcutta its books-music-stationery combo ‘Depot’ to Calcutta, besides the ‘Fashion Station’ format, serving the consumer crusts between Pantaloons and Big Bazaar, according to Biyani. ‘Health Village’, a combination of alternative therapies and wellness packages, is also set to hit town.

‘E-Zone’, an electronics chain, and ‘Collection-I’ stocking home stuff, will soon make a combined entry, while ‘M-Bazaar’ and ‘M-Port’, communications solutions for the masses and the elite, respectively, are also in the pipeline, as the group charts out an aggressive expansion course.

News: Bharti to enter retail business

(TV18 20/03/2006) Mumbai - Bharti Chairman, Sunil Mittal is getting ready to ring in new businesses for his group. After getting into agri exports, Bharti is now looking at the domestic market for its agriculture business. Bharti has initiated discussions with supermarket chains like Tesco, Carrefour and Walmart to start retail operations in the country.

Bharti may soon be selling more than just telephone connections. The Bharti Group is looking at entering the retail business in the country. There have been reports about Bharti talking to retail giant TESCO for Rs 6000 crore venture. Though Bharti Chairman, Sunil Mittal agrees that the group is interested in retail, he says that they are in talks with most global retailers, but have not finalised their partner yet.

"Our interest in food and grocery is there. I have to mention it here. Are we examining some opportunities? Yes we are. But it is at the blueprint stage. We are looking at options," says Mittal.

But that does not mean Bharti is ready to go slow on its telecom business. Bharti now wants to up its stake in Hexacom, the largest mobile operator in Rajasthan. Bharti already has 67.5% stake in it.

Forced to pull out of Delhi and Mumbai airport bidding because of its international partner Changi airports withdrawal, Bharti says that it would be interested in bidding for Chennai and Mumbai airports, whenever the government decides to put them on block.

News: Morgan Stanley goes further underweight on India

(TV18 20/03/2006) Mumbai - Morgan Stanley has gone further underweight on India and according to Asia-Pacific Strategist at Morgan Stanley, Malcolm Wood this is due to Indian valuations, tightening global liquidity, and unsustainable fund inflows into India. He adds that, India should increase FDI, and help could be lent by the privatisation programme.

He further adds that the medium-term story in India is still good and Morgan Stanley concerns are more cyclical in nature. They expect the Fed to raise interest rates this year by another 75 basis points.

Excerpts from CNBC-TV18's exclusive interview with Malcolm Wood:

Q: You remain underweight on India but the market continues to move up, what do you do now?

A: We have gone further underweight over the last week or so. Our reasons for that are; we think Asian markets will do well this year and we are looking for further 10% returns from Asian markets, that will give us 15% for the full year. So we are positive on Asia and when we look at India in that context, then we notice that valuations in India are now at a significant premium to the region and to the US and global markets.

Second, liquidity in India is tightening and we look at rising short-rates in India and a sharp increase in loan to deposit ratio in the banking system and we also see global liquidity conditions tightening, which is not positive for liquidity driven markets like India. We also look at factors like the outlook for equity supply and we see that pipelines are building quite rapidly in India as supply could rise 50% this year to over USD 20 billion.

We will also look at factors like the macro-fundamentals in India, we have noticed that the current account deficit continues to widen and foreign exchange accumulation is slow. Putting all these things together there are reasons for going underweight on India. In short it is valuations at a premium, its liquidity tightening, the deteriorating macro and fund inflow, which we think are unsustainable.

Q: Do you think the balance of power is shifting in terms of liquidity both domestic and global wherein domestic gets a little bit higher now?

A: I think that is a fair risk to our viewpoint. When we look at the international liquidity position we are expecting the Fed to raise rates further by 75 basis points this year and now, even Bank of Japan will end its zero interest rate policy in the fourth quarter of this year. Therefore, from a global perspective liquidity conditions will be normalising or tightening further and when one thinks of that particular picture against what we have seen in terms of risk taking in fund flows into emerging markets, then in the last five months we have had equivalent inflows into emerging markets of the last ten years.

It is quite extraordinary what we are seeing on the international front. So we need to put that in context when we switch gears and look at the domestic positions in India. When one looks at the domestic picture in India, according to our data, the inflows into equity mutual funds in India over the last 12 months are greater than the inflows in the entire history of mutual funds in India. Therefore on both the international and domestic front, we argue that fund flows are at extremely higher levels already and it is difficult to envisage it going another leg higher.

Q: Aside from a call on Asia, what is the call at Morgan on emerging markets now? Have you cut your positions on markets like Brazil, Russia as well or is it an India specific call?

A: No, this is a general call and infact we have been a little slow in cutting India, than our colleagues who have been cutting their views on markets in Latin America. In a global context, our global asset allocation team has just gone back to a neutral on emerging markets in the past month or so after many years of being overweight on emerging markets. Whichever way you look at it, at Morgan Stanley the views have become more circumspect on emerging markets.

Q: Do you think there could be any policy related triggers, which could insulate India from any large exodus of capital, and keep it coming from the newer investors with the ones that have been driving flows for the last 3-6 months?

A: I think the announcements over the weekend are positive and that is good for India over the medium-term. Apart from this point of view it is appropriate to emphasise that the medium term story in India looks very good. So our concerns are more cyclical in nature and more short term in nature rather than structural concerns.

To get back to the reforms that India could do to keep international investors particularly concerned; one would be to accelerate privatisation. When you look at the direct foreign investments in India compared to China, then India should be looking at increasing direct foreign investments significantly and one easy way to do that would be to accelerate its privatisation programme, which has really lagged that of other countries globally.

Q: You have a sell on Hindustan Lever, what makes you skittish about that?

A: I would like to emphasise that I have taken Hindustan Lever out of my model portfolio, our analysts are still quite positive on that stock. My concern is the valuations for some of the consumers and some of the domestic focussed stocks in India. I had mentioned in my earlier comment that India is trading at a premium to the US equity market and on our numbers that premiums to about 10%, but if you then strip out the energy and the material sectors from Indian valuations then we have a multiple of about 21 on this year's earnings, which is about 35% premium to the US.

Some stocks like consumer names, some of the industrial names, capital goods etc have now got extremely high multiples. For the moment don’t quibble with the long term story of fast moving consumer goods to a growing India consumer bias. We think you need to have a valuation discipline as to how much you are willing to buy, for assets that provide those goods. That was the reason why we specifically took out Hindustan Lever from our model portfolio.

News: Mandarin to set up shop in India

(BS 20/03/2006) Mumbai - Mandarin Oriental Hotel Group, the hotel major with properties and assets worth $ 1.2 billion worldwide, has decided to enter India through a wholly owned subsidiary. The group had made an unsuccessful attempt to set up shop in the country six years ago.

Mandarin Oriental Ltd, the Bermuda arm of the global hotel major, which is part of Jardine Matheson Group, sought permission from the Foreign Investment Promotion Board a fortnight ago to set up a company.

According to sources close to the development, the group is committed to making long-term investments in India and can make considerable contribution to the country’s hotel and tourism industries.

The group’s previous attempt to set up operations here did not materialise due to differences with its local partner, Indian Hotels & Health Resorts.

As part of its acquisition of the Rafael group in 2000, Mandarin Oriental inherited a joint venture with Indian Hotels & Health Resorts. Mandarin and Indian Hotels had formed a 70:30 venture called Mandarin Hotels India but the relationship did not flourish and they terminated the agreement in 2001.

The global major planned to operate in management and consultancy services to begin with and would make investments in hotels and other hospitality and tourism ventures in the future, the sources said.

Mandarin Oriental’s parent company Mandarin Oriental International is listed on the stock exchanges of London, Singapore and Bermuda. The group manages 21 luxury hotels, resorts and spas across the globe.

It is developing properties in Prague, China, Mexico, Boston, Macau, Las Vegas, Grand Cayman and Chicago. It operated nearly 8,500 rooms in 15 countries with 14 hotels in Asia, 11 in the US and 4 in Europe.

News: Anheuser-Busch froths up its India plans

(ET 20/03/2006) Bangalore - The world’s largest brewer, Anheuser-Busch (A-B), maker of Budweiser beer, is revisiting the India story after nearly a decade. A-B is engaged in talks with a few mid-sized domestic brewers, including a greenfield project, as it looks to tap the market here finally.

Informed sources said A-B was in formal negotiations with Crown Breweries, which is a greenfield plant coming up near Hyderabad.

The US brewer also had informal parleys with the Vijay Chougule-managed Aurangabad Breweries in Maharashtra and Arlem Breweries in Goa as it looks for a viable entry plank.

Sources added that A-B looked at Mohan Meakin’s plans to divest 51% stake in its beer business, but was unlikely to proceed with an aggressive bid.

According to industry observers, for A-B — which still mops up the bulk of its volume from its home turf, USA — reviving interest is a big boost to the promise of the Indian beer market.

The market is reporting a robust 10%-plus growth, and most global brewers are charting plans to foray into what is perhaps the last potentially big emerging beer market in the world.

Domestic beer sales are expected to cross 100m cases (of 7.8 litre each) in the current financial year, but per capita consumption still remains at 0.7 litre in an economically buoyant market with changing lifestyles.

In the mid-90s, A-B had negotiated for a joint venture with Shaw Wallace & Co in the wake of the nascent economic reforms, which induced the global brewers’ first bout of interest in the Indian market.

However, the erratic market growth and a heavily regulated industry meant most of the biggies, including A-B, pulled back. While the regulatory environment is yet to see any major improvement, the sustained economic buoyancy and consumption growth can no longer be ignored.

It is learnt that A-B will go for a marketing-led play initially as it sews up bottling arrangements with mid-sized brewers. It is not likely to go in for outright acquisitions or set up own greenfield projects in the beginning, even though the Centre has recently allowed FDI in breweries.

However, manufacturing investments leading to minority equity stakes in the bottling tie-ups are not being ruled out. In fact, A-B has followed a creeping acquisition strategy with regard to its brewing partners in China — Harbin and Tsingtao.

A-B’s revived interest in India is interesting, given its well-documented battles across the globe with the most aggressive rival, SABMiller. The latter, which is A-B’s primary rival in the US, already accounts for one-third of the domestic consumption after the complete takeover of Shaw Wallace Breweries last year.

News: 'Bangalore Metro will be cleared soon'

(Sify 20/03/2006) Bangalore - The Union Minister for Urban Development, Jaipal Reddy , today said that the Bangalore Metro project would be taken up as soon as the recommendations by the GoM (Group of Ministers) are approved by the Cabinet.

"It will not be delayed for more than a few weeks," he said as the GoM had already finalised a list of recommendations for the implementation of metro rail projects in the country. Reddy was in the city to inaugurate residential quarters for Central Government employees.

Reddy also said that the Centre would extend financial and logistic support for the implementation of the metro project. Responding to a question on the possible delay in the project implementation if it is not cleared by the Japan Bank of International Co-operation, which has in principle agreed to extend a loan of Rs 1,800 crore, he said, "I don't see any difficulty in getting from the Japanese bank."

Reddy said the Union Government will extend financial and other forms of logistical support to ensure that the "dream of Bangalore Metro comes true".

Reddy said the Union Government was aware that Bangalore's "rather exceptional" growth has put existing infrastructure under strain and added that the Jawaharlal Nehru National Urban Renewal Mission would address infrastructure problems of the city.

He said the Centre is determined to raise Rs 50,000 crore under the mission so that State Governments and urban local bodies can be encouraged to raise a "matching amount".

Nieuws: Dell verdubbelt personeelsbestand India

(WW 20/03/2006) Amsterdam - Dell gaat het aantal personeelsleden in India de komende drie jaar verdubbelen naar twintigduizend.

Dat heeft Dell-oprichter Michael Dell gezegd. De tienduizend werknemers die Dell nu in India in dienst heeft, zijn voornamelijk werkzaam in callcenters. In januari kondigde Dell al aan dat het bedrijf de komende twee jaar vijfduizend extra werknemers in India in dienst zal nemen.

Het aantal Indiase 'engineers' die zich bezighouden met het ontwikkelen en testen van producten, is met driehonderd nog relatief laag. Dell is van plan in de komende twee jaar driehonderd extra engineers in dienst te nemen.

Dell wil zich meer richten op de groeiende Indiase markt. De computerfabrikant verkoopt op dit moment nog maar weinig desktop-computers en notebooks in India. Het bedrijf uit Texas heeft een marktaandeel van 4 procent op de Indiase markt. Wereldwijd is dat 18 procent.

News: Lee Cooper may tie up with Pantaloon

(ET 20/03/2006) Bangalore - In what could be the first instance of FDI in single brand retailing, UK’s Lee Cooper is set to float a joint venture with one of the arms of the Kishore Biyani-led Pantaloon group.

Informed sources said Lee Cooper and a Pantaloon company have reached an understanding to float a 50:50 JV, which will set up exclusive stores retailing the entire product range from footwear to apparel to accessories.

Towards this, Lee Cooper has already issued termination notice to end the existing licensing agreement with Indus Clothing in the domestic market.

Lee Cooper, which started as ‘The great British denim company’ before diversifying into other product categories, operates about 450 stores in 70 countries across the world.

The Centre recently allowed 51% FDI in single brand retailing — branded stores selling products under single name — as part of the gradual opening up of the retail sector to foreign investment.

Following this, global brands like Gap and Banana Republic, which rely heavily on retail as the sole distribution channel, were expected to take advantage of the changed scenario in the near future.

However, there was a different opinion that the government’s move on single brand FDI was a bit inadequate, and it may not prompt the global brands looking at or operating in India, to take the equity route. In this context, Lee Cooper’s move is bound to be significant and could well be the trigger point for FDI.

There is no clarity on which Pantaloon company will forge the JV with Lee Cooper, though the name of Indus-League Clothing — the lifestyle apparel company in which Mr Biyani holds 68% stake — is doing the rounds.

It must be mentioned that Indus-League has already announced plans to bring in a few international brands, either through the licensing or JV route.

News: CEO forum charts Indian reform agenda

(PTI 20/03/2006) New Delhi - The US-India CEO forum has come out with a far-reaching reform agenda, including opening up the retail sector and raising FDI caps in insurance, banking, print media and broadcasting.

In a 26-point agenda to create an enabling environment to attract more foreign investment, the US-India CEO forum wanted specialised courts to enforce intellectual property rights laws.

The report tabled in the Lok Sabha today stressed on power sector reforms to ensure the sanctity of contracts, encourage competition, promote market-driven tariffs and set up a separate regulatory and adjudication authority.

It also suggested relaxation of the US government rules to transfer high technology to India and extension of Comsat rules to India and Isro.

According to the report, the US should allow and accelerate transfer of dual use technology to India and liberalise the US visa regime for service providers in IT and nurses.

The forum, comprising selected CEOs from both countries, was given a mandate to develop a roadmap for increased business partnership and co-operation between the two countries.

The document, tabled by the minister of state in PMO, Prithviraj Chauhan, on behalf of Prime Minister Manmohan Singh, has recommended specific action in 15 business sectors with the potential for significantly increasing trade and investment through policy initiatives.

The forum wanted India to consider reducing restriction on FDI in the retail sector, move ahead on urban land reforms, streamline the regulatory, tax and duty structure, and revamp stamp duty and title registration regimes. It suggested India should consider treating dividends from overseas companies in the hands of Indian residents on a par for tax with domestic dividends to make “outward FDI no less attractive”.

According to the report, tariff and non-tariff barriers should be reduced in all products, agricultural and manufactured, over a specified period of time by both the US and India.

It stressed the need to foster speed, efficiency and transparency in the bidding process for build-operate-transfer contracts in infrastructure in India.

Elaborating on liberalisation of the US visa regime, the forum said wherever the US was facing shortages of trained personnel, visa regime should be eased, including quantitative restriction and yearly quotas of such visas.

News: Digicel to spend $2-b on upgrade, broadband

(JO 19/03/2006) Kingston - Digicel Jamaica has committed to spend $2 billion over the next 12 months to upgrade its local network and improve coverage across Jamaica, while facilitating the scheduled roll out of its wireless broadband solution, WiMAX.

In a press statement last Friday, Digicel Jamaica's CEO, David Hall said that the investment represented the company's commitment to entering the landline voice service and broadband markets.

"The current broadband offerings in Jamaica rely heavily on fixed lines, making it limited in choice for Jamaican consumers and businesses, while internationally, broadband access continues to trend away from fixed line to wireless," said Hall.

"Digicel is committed to extending competition to landline voice service and broadband in our ongoing efforts to offer better communication solutions, which are cutting-edge and at lower costs to our customers, who have not had a choice in the past."

The investment is schedule to start April 1, 2006, and should take 12 months to complete.

Digicel's broadband solution, WiMAX, is a standards-based wireless technology that provides high throughput broadband connections over long distances. WiMAX can be used for a number of applications, including "last mile" broadband connections and high-speed enterprise connectivity for business.

Digicel recently concluded a three-month technology trial in the Cayman Islands.

The company's director of business services, Chris Hayman, said in the press statement that the objective of the company was to "develop a cost-effective wireless broadband solution for voice and data in Jamaica that will drive our competitive advantage, and provide a superior product and customer focused network".

Digicel started providing mobile services in Jamaica in 2001, and estimates its subscriber base at 1.4 million as at December 31, 2005.
Having recently acquired licences to operate in other countries in the region, and acquiring Cingular's Caribbean operations, Digicel will have a presence in 15 Caribbean countries.

These are: Anguilla, Antigua & Barbuda, Aruba, Barbados, Bermuda, Curaçao, The Cayman Islands, Dominica, Grenada, Jamaica, St Kitts & Nevis, St. Lucia, St Vincent and the Grenadines, Trinidad & Tobago and Haiti.

News: Grenada to delay joining Caricom Single Market

(HBN 19/03/2006) UN, New York - Recent hurricanes have blown Grenada off course on its way to the Caribbean Single Market, even though its neighboring Eastern Caribbean countries are expected to join the regional trade bloc this summer. And Prime Minister Keith Mitchell does not know when his hurricane-affected nation will make it into the grouping.

The prime minister told the Amsterdam News recently that Grenada may not be able to join the CSM on time. "The expected date is July... my own bet is that Grenada may not necessarily be ready because with the advent of Hurricanes Ivan (2004) and Emily (2005), Grenada would have been marginalized," he said, explaining that the island's manufacturing, hotel and agricultural sectors have been seriously hurt.

"For us to get in now with competition among the parties ... would make us start on an unleveled playing field which would make it very difficult," said Mitchell, who hinted that the implementation of the Regional Development Fund – to beef up human resource development, technology and cheaper sources of energy – would factor into Grenada’s decision to join.

The CSM, which is expected to provide more and better opportunities to produce and sell goods and services in the region, and to attract investment to it, creates one large market among the participating member states. The current members are Barbados, Belize, Guyana, Jamaica, Suriname and Trinidad and Tobago, while OECS countries Antigua and Barbuda, Dominica, St Kitts and Nevis, St. Lucia and St. Vincent and the Grenadines are expected to come on board during the summer.

The Regional Development Fund was established under the Revised Treaty of Chaguaramas, including the Single Market and Economy, for the purpose of providing financial or technical assistance to disadvantaged countries, regions and sectors. It is expected to be capitalized to the tune of at least US$120 million, US$20 million of which is expected to come from Trinidad and Tobago's Petroleum Stabilization Fund which the twin-island Republic established to assist Caribbean countries counter the economic effects of high energy prices.

"There is no doubt that the (Single Market and Economy) has a lot more advantages than disadvantages," admitted PM Mitchell, who argued the region needs to speak with one voice to the global trade community. “The question is how do we get it going and not have countries totally marginalized in the process ... the issue is not whether we should, it's how we should and when".

Mitchell was in New York for the landmark launch of a US$500-million United Nations fund – with over half that amount already pledged – to jump-start relief operations in future natural and man-made disasters. The fund should save thousands of lives that would otherwise be lost to delay under the current under-funded mechanism.

News: More Indian firms in super growth club

(TT 19/03/2006) Mumbai - For Cassandras who snort at the India growth story, here are a few numbers that will make you sit up — more than a third of India Inc, or almost 34 per cent, have achieved a super growth status in the past year.

Not just that, India and Hong Kong could soon be challenging the US for the top slot in the number of super growth companies in the world.

According to the Super Growth Index 2006, part of international management firm Grand Thornton’s International Business Owners Survey, the US has topped the charts for the second year in a row. But this masks the fact that the number of super growth companies in the US has actually fallen from 48 per cent in 2005 to 39 per cent in 2006.

While Hong Kong saw a steady increase from 12 per cent in 2004 to 28 per cent in 2005 and 34 per cent in 2006, India reported a rise from 21 per cent in 2004 and 2005 to 34 per cent in 2006.

Others who posted a strong performance included Sweden with 31 per cent firms achieving the super growth status and 26 per cent in Ireland. In fact, Sweden climbed to the fourth position after falling to the tenth in 2004. The United Kingdom with 23 per cent and Canada with 23 per cent took the next two super growth rankings.

But what exactly is a super growth company? The report says a company, which has grown considerably compared with average firms measured against key indicators, including turnover and employment, is called a super growth company.

“Also, super growth companies were far less constrained by the ability to finance the expansion of their business. For example, cost of finance was an issue for 50 per cent ordinary companies than super growth companies, as was shortage of working capital (47 per cent) and shortage of long-term finance (58 per cent),” the report said.

The survey has established that super growth companies are 23 per cent far less likely to export than others.

Sustained quarter-on-quarter growth of Indian companies has also boosted their position.

Italy, Russia and Turkey jointly shared the bottom position in the index.

News: Chinese eyeing big investments in India

(ID 19/03/2006) Mumbai - Chinese businesses are eyeing big investments and trade contracts in India in hopes of cashing in on lucrative opportunities in the neighboring country, China's commerce minister said Sunday.

The Chinese interest was evident at a weekend conference in Bombay, which was attended by some 1,000 corporate executives from around the world and a fifth of them came from mainland China and Hong Kong. "We believe the economic potential of India will continue to grow," said Commerce Minister Bo Xilai, who was heading about 200 Chinese delegates to the conference. "That's why Chinese businesses are paying attention." With growth close to 8 percent, India is the world's fastest expanding economy after China.

Bo said many of China's top companies are keen to invest in India, especially in infrastructure projects, where the country needs huge investments in order to sustain the current economic boom. Senior executives from companies such as Shanghai Electric Power Generation Group, information technology company ZTE Corp. and China Corporation Bank were attending the conference hosted by the Asia Society and the Confederation of Indian Industry, India's largest business grouping. "We have a lot to learn from each other," Bo said. "China has a lot to offer in infrastructure development to India and we can learn (from India) about developing software, information technology and how to improve the services sector."

Earlier last week, Xilai held talks with Indian officials in New Delhi and proposed an ambitious to more than treble two-way trade between the giant Asian neighbors to US$50 billion (A40 billion) in five years.

News: Decision to adopt free market rupee puts pressure on China

(ID 19/03/2006) Mumbai - India has finally decided under pressure from Western countries what it should have done long time back – free market currency. The lack of artificial control over currency will force the Indian businesses compete with the rest of the world on fair play ground. This move is putting enormous pressure of Beijing and exposes Chinese real intension of talking and taking advantage free markets in the West and really controlling everything in China with iron fist.

According to media reports, speaking in Mumbai at the weekend, Manmohan Singh, prime minister, said India’s economic position internally and externally had become “far more comfortable” and that he had asked the finance ministry and central bank to draw up a plan for reform.

“Given the changes that have taken place over the past two decades, there is merit in moving towards fuller capital account convertibility within a transparent framework,” he told investors at the Asia Society.

News: Can a bush solve rural energy needs?

(BBC 19/03/2006) Jhansi - An ancient tractor dumps a trailer load of plant material next to a battered looking shed. Surprising as it may seem, this unremarkable event may hold the key to ending chronic power shortages in rural India.

Inside the shed is a noisy, little, green generator that runs on gas produced from rotting biomass. That is where the pile of plant matter dumped by the tractor comes in.

The generator produces 100 kilowatts of electricity, enough to service the modest needs of four or five typical Indian villages.

However in this particular case it drives a mini-industrial complex that currently provides 130 jobs in an area where employment is hard to find.

The location is a rural site about 15km from the city of Jhansi in the central Indian state of Madhya Pradesh.

The initiative is called Desi Power (local power).

It aims to provide a model for generating low-cost electricity from renewable resources that can easily be copied elsewhere in the vast swathes of rural India that have no connection to the mains grid.

"This really is a viable solution for remote India", says Dr Arun Kumar, director of the Development Alternatives NGO, which runs the Jhansi project.

He goes on to explain that the generator runs on methane created from a widely available local plant that previously had no economic value.

'Political will'

The plant is the ipunia bush, which grows in marshy land not suitable for agriculture.

But there is nothing special about ipunia. The generator would work just as well on gas from many other plants.

"There is a huge amount of unused land in remote parts of India, which means biomass is either available or could easily be made available", says Dr Kumar.

He reckons it would take a network of 100,000 or so Jhansi-style biomass generators to really make a dent in India's rural electricity shortages.

"The technology is proven, the main issue is now political will," he insists.

The scale of the problem is not in doubt; a third of India's half million or so villages have no connection to the mains grid. In those that do, the power supply is often erratic and unreliable.

Dr Kumar believes his project holds part of the solution to two distinct problems.

The first is "access" to electricity. It provides a way for people in neglected localities to take matters into their own hands.

"No conceivable extension of the mains grid would be comprehensive enough to bring power to all the far flung parts of India that don't already have it," he says.

But by setting up biomass generators, he believes, people in rural areas could in a sense create their own power from plant material or even waste that is easily to hand.

The second issue is "exclusion". Without electricity, large parts of India have no chance of participating in the economic boom that is bringing prosperity to many people living in cities.

Generating employment

Dr Kumar reckons biomass generators have a practical role to play in tackling the growing inequalities between the urban elites, who have made India a global force in areas like computer software, and India's rural poor.

Many of them do not even have the power needed to turn on a light let alone run a laptop or a factory providing jobs.

But the Jhansi project is not just about electricity. It also has wider development aims.

"There was nothing here, not even a blade of grass, when we set up the project 10 years ago", explains Dr Kumar. The presence of the generator has been a catalyst for all sorts of income generating opportunities in a poor area.

For a start local people make money by collecting ipunia - the biomass used to create electricity - and selling it to the Desi Power project. What for centuries had been regarded locally as a useless weed is now an important source of employment.

In addition to that, power from the generator is used to drive industrial processes. The main one is paper-making.

A ramshackle complex of buildings near the generator houses vats and presses used to convert recycled cotton rags into high quality paper for diaries, greeting cards, art projects and other uses that command a premium price.

An onsite shop sells some of these products to tourists.

Dr Kumar claims that over 10 years the project has created something like 10,000 employment opportunities.

Many of the jobs have gone to tribal people, who are widely seen as the poorest, most vulnerable section of the community in what is generally a deprived area.

'Ultra mega' power projects

Dr Kumar, of course, sees the Jhansi project as providing a widely applicable model for bringing both electricity and economic opportunity to rural areas.

But are India's energy planners listening? Could the concept of Desi Power make a significant impact in this vast nation?

The answer to these questions seems to be... well, maybe... up to a point.

You would not find many in India saying that decentralised provision of power using simple technology is actually a bad thing.

This after all is probably the only country in the world that has an entire government ministry devoted to promoting "non-conventional" energy sources.

But the dominant strand in India's energy thinking is in the opposite direction - that biggest is best rather than small is beautiful.

To cater for an expected sevenfold increase in power consumption over the next 25 years or so, India's policy makers are planning a series of what are described as "ultra mega" power projects.

These are huge new power stations located next to mines and energy ports. The electricity they generate will be taken to where it is needed by a network of as yet largely un-built massive transmission cables.

The nuclear co-operation deal with the United States agreed in President Bush's recent visit to India is another sign of this approach to energy policy.

The focus on building power plants as big as possible and as quickly as possible is hardly surprising.

Demand for electricity is expected to rise faster in India than anywhere else in the world, apart from China in coming decades. Power cuts are already a regular feature of life in many Indian cities.

Sceptics

Dr Kumar of Desi Power does not believe building big power stations is wrong, but he does think it will not be enough.

If the Indian government is serious about its stated aim of bringing electricity to all rural areas that do not have it, he says, then locally based biomass generators have an important part to play.

Desi Power has already made some limited progress. It has established a further 18 rural biomass power projects based on the experience at Jhansi.

Whether these become a credible national model depends partly on the cost of the electricity they produce.

Dr Kumar maintains the cost of power generated at Jhansi is currently about the same as that supplied to rural areas by conventional means.

He accepts that consumers may often perceive biomass power to be more expensive. But he argues that where mains power is available in rural India, it is often highly subsidised.

The big hope for supporters of biomass power is that the economic argument will swing in their favour as a result of rising conventional energy prices.

The price of oil is already above $60 a barrel. Gas prices have also risen sharply.

If traditional fuel prices carry on going up, as many expect, then the case for renewable energy such as power from biomass will become much stronger. The world may be running out of oil and gas, or so the argument goes, but there is no shortage of ipunia bushes.

Biomass power in fact has its critics even among environmentalists. Some argue that growing bio fuels on a large scale in developing nations will use up land that poor people currently rely on to produce food.

Dr Kumar insists this is not an issue for Desi Power in Jhansi as the project is powered by weeds grown on land not suitable for farming.

He claims the same is true for other potential biomass sources in remote parts of India. No doubt this aspect of the debate will continue.

News: Cash-rich India Inc on acquisition trail in Europe

(IANS 19/03/2006) Mumbai - From a land of cheap labour for shipping low-end jobs to corporate predators, India Inc.'s profile has undergone a sea change in Europe - thanks to a string of recent big-ticket acquisitions.

Although India-born Lakshmi Mittal's hostile bid of $22.5 billion for European rival Arcelor continues to hang in balance despite the passage of nearly three months, India Inc is eyeing takeover opportunities in Europe like never before.

It is no coincidence that two of the biggest acquisition deals struck by the Indian companies in the current calendar year were in the European market. A string of other big-ticket takeovers are in the pipeline, said analysts.

The latest to join the list is Indian wind turbine maker Suzlon Energy, which last week bought Belgium-based Hansen Transmissions International for $565 million in an-all cash transaction.

"The acquisition of Hansen gives us technological leadership and will make Suzlon a leading integrated wind turbine manufacturer in the world," said Tulsi Tanti, chairman and managing director of Suzlon Energy.

"The company has an excellent management team and over a period of time we will work with them in developing supply chain synergies, expanding capacity in Belgium and development of additional capacity in new emerging markets in Asia."

Suzlon's acquisition of the world's second largest maker of wind turbine gearboxes made it the second-largest foreign corporate takeover by an Indian company in the current year.

Earlier this year, Indian drug major Dr Reddy's Laboratories surprised the stock market by acquiring German generic drug maker Betapharm for a staggering $570 million to expand presence in the European market.

The deal followed other major acquisitions in the pharmaceutical space last year that includes Matrix Laboratories takeover of Belgium's Docpharma and Wockhardt buying German drug maker Esparma for $11 million.

Bangalore-based contract manufacturing firm Kemwell Private Ltd. said last month it had bought Pfizer's production plant in Uppsala, Sweden for an undisclosed sum. The acquisition is expected to be completed by April.

Analysts said the string of acquisitions in the European market in recent months were helped by spiralling Indian industrial earnings on the back of a booming economy and a blistering stock market rally.

"For the Indian corporate houses, the world has truly become their playing field. Acquisition has become the key business strategy for expansion in the overseas market," said DH Pai Panandiker of think tank RPG Foundation.

"Europe is a big market for a vast spectrum of industrial sectors. The companies that want to have a global footprint will not like to ignore such a huge market at any cost," Panandiker said.

Even as Mittal Steel's takeover bid remains at an initial stage, a host of Indian firms have quietly risen from the shadow in recent months and taken over European companies representing areas like drugs, energy and chemicals.

While the economy is poised to expand by 8.1 percent in the year ending March 31 making it one of the fastest growing economies in the world, the benchmark share market index has risen over 15 percent in the current year so far.

Foreign institutional funds, which provide crucial support to long-term rally in the Indian capital market, pumped in a record $10.7 billion in the market in 2005 and have already bought shares worth over $3.37 billion this year.

"The biggest change that has happened to the Indian corporate sector is the mindset change," said N Srinivasan, director general of the premier lobby group Confederation of Indian Industry (CII).

"Indian companies are now acquiring firms of global scale to get proximity to the market they are targeting. There is an appetite to become global player by adding capacity, getting new technology and proximity," Srinivasan said.

And fuelled by this passion of establishing a global footprint, India's once-insular corporate firms went on an overseas shopping spree in 2005 like never before.

The past calendar year saw Indian companies striking as many as 100 acquisition deals in the overseas market by spending a total of whopping Rs 106.70 billion ($2.37 billion).

This compares with 60 acquisition deals worth Rs 76.50 billion ($1.7 billion) in 2004, according to India Advisory Partners, a London-based database firm on mergers and acquisitions.

News: 'Prepare road map for full rupee float'

(Sify 19/03/2006) Mumbai - The Government feels the time is now ripe for moving towards making the Indian rupee fully convertible.

The Prime Minister, Dr Manmohan Singh, today asked the Finance Minister and the Reserve Bank of India to prepare a road map for moving towards capital account convertibility.

"Given the changes that have taken place over the last two decades, there is merit in moving towards fuller capital account convertibility within a transparent frame-work," the Prime Minister said.

Dr Singh was addressing a gathering at the Reserve Bank of India today after releasing the third volume of the central bank's history.

The full convertibility of the Indian currency means that the rupee would be made freely exchangeable into other currencies and vice versa.

This would also mean that international investors can buy and sell Indian assets at will.

"The issue was first examined by the Tarapore Committee. Much water was flown down the Ganga since then. Our own position, internally and externally, has become far more comfortable" the Prime Minister said. Ever since India's foreign exchange reserves crossed the $50-billion mark, the issue of full capital convertibility has been keenly debated.

India's forex kitty has been steadily growing during the past few years; it stood at $143.92 billion for the week ended March 10, 2006. The Indian rupee has been ruling below Rs 45 a dollar for the last six months.

According to RBI's latest report on Currency and Finance, released by the Finance Minister, P. Chidambaram, today at the same venue, the monthly average Real Effective Exchange Rate of rupee appreciated by 0.5 per cent and the Net Effective Exchange Rate has appreciated by 0.6 per cent, in the financial year.

Bankers, corporates welcome move

Bankers and corporates welcomed the Prime Minister's move towards the full float of the rupee.

Cherian Verghese, Chairman, Union Bank India, said it is the right time to go in for full convertibility as the economy is doing well and the country's forex reserves are at a comfortable position. It would attract much more capital to the country, he said.

Anil Singhvi, Managing Director, Gujarat Ambuja Cement Company, said the move is in the right direction.

But the road map for the capital account convertibility should be transparent and, given the current environment, convertibility can be achieved in the next two-three years.

The Tarapore Committee had suggested a road map for full convertibility in 1997. However, the Asian currency crisis had put the issue on the back-burner.

Mumbai as financial hub

"Mumbai, with all its inherent advantages in terms of human capital and commercial acumen, can be positioned as a viable Regional Financial Centre," said the Prime Minister.

Full capital account convertibility will facilitate the transformation of Mumbai into not only a regional but also a global finance centre, Dr Singh said.

"There are multiple options that are possible for such a centre, including as an SEZ (special economic zone), and I am confident that we can make steady but firm progress in that direction.

"The State Government will have to ensure an appropriate enabling environment, in particular the physical infrastructure."

News: Reliance to focus on marketing products

(Sify 19/03/2006) Jamnagar - The 33-million-tonne Reliance Industries Ltd refinery here will focus on marketing through its 5,800 proposed retail outlets following commissioning of the Reliance Petroleum Ltd (RPL) refinery (also in Jamnagar).

RPL is scheduled to commission a 27-million-tonne refinery in 2008. Following commissioning of this project, the group will have a refining capacity of 60 million tonnes.

Group's strategy

As part of its strategy, the group is going to reduce its sales of petroleum products through oil PSUs. RIL is a major supplier of LPG and kerosene to oil PSUs. It may be mentioned that the company's supply contract with oil PSUs is due for renewal shortly.

Reliance currently exports roughly 45 per cent of the petroleum products produced by its existing refinery at Jamnagar. Bulk of exports constitutes diesel, gasoline and other high end products.

As RPL will be capable of handling heavier and sour crudes than the RIL refinery, and 75 per cent of its products will constitute petrol, diesel, ATF and alkalytes, the company is poised to generate wider refining margins.

Also, being located in an SEZ promoted by the group, RPL will enjoy sizeable fiscal benefits making it even more competitive in the global market.

According to sources, RIL is currently setting up three retail outlets a day. Already, 1,000 outlets have been set up, the target for the network being more than 2,000 this year. Unlike the oil PSUs, which follow a product exchange policy in regions where they do not have their own refineries, RIL markets its own products through its outlets across the country.

"Reliance is already a marginal supplier to oil PSUs and things are moving to a point where we will not have adequate supplies to lend them in the future," sources said.

News: 'Speed up work on Mumbai Metro'

(Sify 19/03/2006) Mumbai - The Prime Minister, Dr Manmohan Singh, on Saturday promised the people of Mumbai that his Government is committed to seeing that the city got world-class public transport system.

Calling upon the Maharashtra Government to speed up work on the Mumbai Metro, Dr Singh said the city could not continue to depend on a public transport that it has inherited from the distant past.

Dr Singh was speaking after launching a group personal accident cover `Mahasuraksha Yojna' for over 2.25 lakh drivers of CNG-fuelled autorickshaws and taxicabs in Mumbai by Mahanagar Gas Ltd (MGL), a joint venture between GAIL, British Gas and the Maharashtra Government.

The social security net provided by the insurance cover of Rs 1 lakh for loss of life and a 70 per cent saving on fuel cost is expected to make more taxis and autorickshaws convert to CNG.

At present Mumbai conserves about 3 lakh litres of petrol and 65,000 litres of diesel each day on account of CNG use and reduction in vehicular emission of 600 tonnes a day. MGL is also planning to bring the city under piped gas cover by 2008.

In line with the effort to clean up Mumbai, an initiative to convert about 3,500 BEST buses to CNG was under way, with World Bank support, said M.S. Srinivasan, Secretary, Petroleum and Natural Gas.

Earlier, Murli Deora, Union Minister of Petroleum and Natural Gas, in a brief chat with the media, said he had called a meeting of the oil PSU heads on Sunday. "I want to address the issue of fuel adulteration with the oil company heads."

K.V. Kamath, Managing Director of ICICI Bank, said the social insurance model was scalable across other sectors so that it covered farmers, textile workers and so on. ICICI Lombard is the lead insurer for Mahasuraksha Yojna.

News: At a mall near you

(TNN 19/03/2006) Mumbai - A series of swanky malls and multiplexes are coming up in the city in the next couple of years -- 40 to be precise.

According to industry stalwarts, demand for quality retail space has been escalated by the advent of international brands in India.

“The arrival of the global brands has intensified the need for quality retail space. This has given a further fillip to the mall mania ,” says developer Nandu Belani, adding, “Malls ensure larger footfalls for the retailers and this justifies the high establishment cost.”

Interestingly, most of these malls are not targeting the well-heeled alone.

There are malls which target the middle and lowincome brackets as well with attractive deals and competitive pricing. The concept of ‘locality malls’ has now grabbed the imagination of the real estate developers.

“Instead of shopping in bits and parts for items of daily need from local stores, one chooses to shop in comfort of an air-conditioned environment. Moreover the malls offer the privilege of finding practically everything under one roof,” says Pradip Chopra, member of governing body of CREDAI.

‘Speciality malls’ , like wedding malls, jewellry malls, women centric malls, gift malls, office equipment malls, have added a new dimension to the mall culture. These, according to developers, make shopping all the interesting and help tap a focused target audience.

One seldom has to worry about parking space when shopping at a mall. Also some of the malls offer ‘play zones’ for kids while the parents do the shopping . These serve as value additions for the shoppers.

According to developer Rahul Saraf, “Malls have become the prime drivers of the retail revolution in the country. Large shopping malls are the new mantra for the real estate fraternity. No wonder they are busy creating malls at a frenzied pace.

Presently, malls that are are operational in the country occupy approximately 6 million sq ft of retail space. It is estimated that by end of 2006 over 200 new malls will be made ready, adding another 35 to 40 million sq ft of area.”

More and more developers are taking to building malls because of good returns on their investments.

“Mall spaces are sold at much higher price compared to houses,” points out Pradip Chopra. “With an expected growth rate of almost 25 to 30 per cent per annum, organised retailing is poised to grow to Rs 1, 00,000 crore by 2010. Opening up of the retail sector to FDI will only give further impetus to the projected growth,” sums up Saraf.

News: India, Russia sign seven accords

(PTI 18/03/2006) New Delhi - India and Russia signed seven agreements to bolster cooperation in space, banking and other sectors.

Under one such agreement, the EXIM bank has agreed to open a 100 million dollar line of credit with Russian Vneshtorg Bank, the largest such credit line extended so far by it.

A pact to this effect was signed by the two banks during the visit of Russian Prime Minister Mikhail Fradkov.

The Indian Space Research Organisation(ISRO) signed an accord with Federal Space Agency (ROSCOSMOS) for launching of Russian navigation satellites GLONASS-M by a variant of Indian Geo-synchronous Satellite Launch Vehicle (GSLV).

This is a follow-up agreement to the umbrella GLONASS agreement signed in December, 2004.

Another agreement was reached between ISRO and ROSCOSMOS on joint development of GLONASS navigation satellites GLONASS-K. This is also a follow-up agreement to the earlier accord. Indian and Russian space agencies would cooperate in developing GLONASS-K satellite with technoloogical inputs from either side.

Indian Oil Corporation and Russian joint stock company Stroytransgaz signed a Memorandum of Understanding for pursuing petro-infrastructure projects worldwide jointly through a consortium.

The other pacts on cooperation were between ICICI Bank and Vnesheconom Bank, CII and the Russian Union of Industries and Enterprises and between FICCI and the Indo-Russian Business Council.

News: India aims to buy 1 mn bpd Russian crude

(RTR 18/03/2006) New Delhi - India aims to buy at least 1 million barrels per day (bpd) of Russian crude oil within five years, Prime Manmohan Singh said on Friday.

India imports about 2 million bpd of crude oil, mainly from the Middle East and Nigeria and occasionally buys very small volumes from Russia.

"Russia is also our strategic partner in the energy sector," Singh said during talks with Russian Prime Minister Mikhail Fradkov in New Delhi, according to a government statement.

"Our objective is to lift at least 1 million barrels per day from Russia in the next five years as the necessary infrastructure is built at both ends," Singh said.

He also said India was keen to buy Liquefied Natural Gas (LNG) from Russia and join hands with Moscow in the pipelines sector.

Separately, Indian Oil Corp. said it had signed a memorandum of understanding with Russia's Stroytransgaz to team up on pipeline projects.

In November, Russia's oil minister said in New Delhi that the country's leading gas firm, Gazprom, was keen to join a proposed $7-billion pipeline linking Iran, Pakistan and India.

Singh said he would welcome Russian involvement in construction of the pipeline.

He added that gas pipelines were vital to provide energy supplies to power-hungry India and its booming economy.

"It is in that context that we have welcomed the proposal to have a pipeline which brings together Iran, Pakistan and India," Singh told reporters.

News: The retail party has just begun

(Tribune 18/03/2006) Mumbai - There is not a patch of grey in the horizon and tomorrow may be even better," is what trade pundits predict for the Indian retail industry. With both real income and spending intent going up through the roof, there seems to be nothing that can spoil the party.

Consumer niches have begun propelling the market and the concept of ‘value for money’ is picking up. As consumers move from the ‘feel-good’ to the ‘feel-great’ zone, those turning to the retail industry know the bounty that awaits them. No wonder then that not only conglomerates such as Tatas, Birlas, Rahejas and ITC have initiated investment in retailing but also oil companies like HPCL (Speed Mart), IOCL (Convenio) and BPCL (In and Out) are diversifying from fuel retailing to grocery and convenience stores. What’s more, even venture capitalists like ICICI and IL&FS are increasingly investing in retail businesses.

Today, India may be called a nation of shopkeepers as it has more outlets than any other country in the world. However, the retail industry is still in its nascent stage here as organised retailing accounts for less than two per cent of the total pie.

Besides, we have the lowest retail space per capita in the world (two feet per person) and against about $2,500 retail business in the US for a population of only 263 million, the industry accounts for only $200 billion for over a billion people we have.

Organised retailing in India began in the South mainly due to availability of land and low real estate prices, Chennai followed by Bangalore and Hyderabad being the trendsetters in this realm. Later, the recession in Mumbai and Delhi saw this concept take root in these cities. As of now, the retail industry in India is evolving into an exciting and competitive segment with both the private sector and global players vying for their share in the world’s second largest consumer market. So not only big cities but also smaller metros and even large towns are witnessing a construction boom with shopping malls and large retail stores taking on ambitious projects.

The increasing income and assertiveness of the Indian consumer and growing supply base (both in the domestic market and from outside due to cheaper imports post-liberalisation resulting from fall in customs duty, shift from quota to tariff-based system and easing of entry restrictions for multinationals) are not the only compelling factors. Technology is perhaps the most dynamic change agent in the retailing industry. Computerisation of operations, including inventory management, billing and payments and database management, use of bar coding, point-of-sale terminals, MIS (management information systems), electronic article surveillance systems like close circuit televisions and interactive applications like CD-ROMS to virtual reality have all made retailing an appealing proposition.

Besides, the tech-savvy customers find it a lot easier to indulge in shopping delights using credit, debit or smart cards. Toll-free numbers, tele-shopping and online shopping are other ways the retail industry is trying to add to its fortunes and woo customers.

Add to this, the explosion of the electronic media in the last decade. Today, there are more cable connections than telephones in Indian homes! This media bombardment has exposed the Indian consumer to products and lifestyles of more affluent countries and raised their expectations in terms of choice, value, convenience and ambience. Besides, the behaviour of the consumer, too, has undergone a drastic change and a greater number of working women, nuclear families (children accompanying parents to malls) and hectic lifestyles have all necessitated the need for bringing products under one roof.

Tapping rural sector

The rural market is no longer a non-player in the retail game. It is now accounting for over one-third of the market for most durable and non-durable products. Even manufacturers are developing new products with the rural consumer in mind besides using village-oriented marketing strategies for brand promotions. Whether it is Rani Mukherjee promoting the chocolate Munch or master batsmen Sachin wowing village lads with a soft drink, both ad makers as well as top company honchos know where to put their money and how. The rural market is no longer of hypothetical empirical value but is well researched and reached by most companies looking to tap India’s vast and abundant bounty.

As of now, India can be said to be in a stage when retailers control the market, being the closest link to the consumers in the supply chain. They are now providing good ambience, merchandising and extra services to emerge as power retailers.

Most of the small kiryana stores in your neighbourhood must have gone for a makeover and are quick to offer you home delivery, cleaned and packed dals and spices and other small services. The ones in prime locations with greater space offer good display, imported goodies at reasonable rates, separate counters for top cosmetics’ brands and a magazine section besides stacking your weekly dose of veggies, bakery items and poultry. The list does not end here.

Also in the offing are holiday packages and other exciting prizes, more so when the festive season is on. Now that the retailer is the king, even consumer goods’ giants like Hindustan Lever Limited are going for a makeover and realigning its distribution channels.

The HLL, for example, is now targeting different consumer segments, namely mass, upper middle class and premium class through mohalla shops, big traditional retailers and modern retailers having self-service stores, respectively. While the last is called modern trade, it is trying to rope in traditional kiryana stores into the mainstream by certifying them as Super Value Stores (SVSs). These SVSs display the company’s products prominently and offer better deals conceptualised by the company. The company, in turn, gets better merchandising of its products to cash in on the retail boom. Thus, while manufacturing giants are wooing retailers, other big players are into opening retail chains and malls.

However, what is the most heartening factor for the whole retail scene in India is the changing face of the Indian consumer. There is a sudden whoosh in disposable incomes of households with hikes in pay reaching the skies.

Also, with competitive pricing and easier availability of finance at lucrative interest rates, the gain is trickling down to the consumer, who is now exerting his right to expect value for money.

Besides, there is a rise in new consumers, those hailing from the so-called Class B of the socio-economic milieu. The walk-ins at restaurants, cafes, bars, malls and multiplexes are up. Therefore, what we have is a win-win situation for all.

While the discounts, price wars and great offers and variety have made the "very-aware" consumers happy, wider reach through the media, better merchandising, rising consumerism and greater number of consumers with larger moneybags is good news for the retailers and manufacturers. So none seems to be complaining and the party is not only on but also rocking.

While the Super Bazaar experiment flopped, Pantaloon’s Big Bazaar and many others are doing brisk business. The reason why Super Bazaar went into losses was also inefficiency resulting from government’s handling of the same.

Present players

India’s largest organised retail chain – Batas – has a turnover of $140 million, while a single store of a retail chain like Wal Mart in the West turns in $180 million. This explains two things – we have miles to go and the unexploited potential of retail trade in the country which houses world’s second largest population.

Super Bazaar was government’s initiative into modern retailing way back in the 1960s. Started during inflationary times, it introduced the concept of self-help, controlled rates and open layout to the Indian consumer.

Vasanth, RPG’s Food World, Viveks, Nilgiris and Subsiksha in the South were pioneers, followed by real estate owners like Rahejas (who started Shoppers’ Stop) and brands like Zodiac, Park Avenue, Titan, Tanishq, Raymonds and Bombay Dyeing that have their exclusive retail stores.

These first-generation retailers then expanded to multiple locations, mainly metros and big cities. Now, pure retailers like Lifestyle, Ebony, Westside and Fun Republic are providing almost everything under one roof.

They house eating joints like McDonald’s and Pizza Hut, apparel stores like Pantaloon, Provogue and Shoppers’ Stop besides other brands offering niche lifestyle products such as sports accessories (Nike, Adidas), designer watches (Swatch) and entertainment (multiplexes, play galleries).

India can be said to have entered the second phase of retail growth when there is high-speed growth.

There are retail chains like Tata’s Westside, Pantaloon’s Big Bazaar and Rahejas’ Shoppers’ Stop, to name a few, along with global players such as McDonald’s and Benetton, trying to tap country’s vast potential.

Bringing all these under one roof are mega malls such as Lifestyle, Fun Republic and Big Bazaar. Now, top names in international malls such as Marks and Spencer and Mango are also eying the Indian market. It is only later that the retailing scene will move to the other phases when the fruits of rapid growth will result in economies of scale and greater efficiency leading finally to consolidation through mergers and acquisitions. Thus, retailing in India has a very long haul ahead.

Regional surge

Punjab mainly has Fast Moving Consumer Goods’ (FMCG) stores as modern retailers besides big kiryana stores and mohalla shops. Unlike Haryana’s Gurgaon, which is the most successful example of mall culture in India, Punjab has still to come of age in the retailing scene. While in an upcoming metro like Chandigarh, there are modern retailers like Peshawaris, JDs and Empire Stores, the Haryana General Store, a large traditional retailer, is still recording highest business in grocery and FMCG trade.

Thus, it is the masses, which still decide the turnover and not the classes. But, the scene is fast changing. Gradually, even the middle class is taking to the mall culture if the sudden surge in mega mall projects is any indication. As of now, the retailing scene looks buoyant and will continue to be fuelled by consumer expectations. Though there are concerns that cloud the otherwise clear horizon, there is nothing, feel trade pundits, that can spoil the party.

News: Raheja set to enter big-time retailing

(TNN 18/03/2006) Mumbai - A giant new structure, coming up cheek by jowl with the Inorbit Mall in Malad, has caught the attention of every resident in the locality. Some reckon it is retail giant Wal-Mart, which is setting up shop in Mumbai. Others insist it is a new age bank. But the intrigue may not last long.

In about six to eight weeks time, Hyper City, K Raheja's foray into big-box retailing, will open its doors. Spread over nearly 1,00,000 sq ft, the hypermarket is expected to stock virtually the entire gamut of merchandise, from apparel to food, from grocery to consumer electronics at a sizeable discount.

Said BS Nagesh, V-C, Hyper City India Retail Pvt Ltd, a company fully owned by the promoters of the K Raheja group, "The complete technology, property and the team is now in place." Shopper's Stop, a department store chain floated by the K Raheja group, has an option to buy 51% stake in this new venture in 2008.

Hyper City will be the fourth major hypermarket to be launched in the country, after Pantaloons' Big Bazaar, Trent's Star India Bazaar, and RPG Retail's Spencer hypermarket. Reliance Retail's much-awaited debut in the middle of this year is also expected to see the launch of a new hypermarket format.

A mega retailing complex like Hyper City, next to Inorbit, Mumbai's largest mall, will focus the spotlight on Malad, which is fast emerging as Mumbai's answer to Gurgaon.

Action is hotting up in the western suburbs, starting from Lokhandwala to Borivili, with nearly 20 new malls in various stages of completion. Of these, four new malls are coming up in a 10 km stretch in and around Inorbit.

Apart from Nagesh, the new Raheja venture consists of chief operating officer Andrew Livermore, a retail professional from South Africa, with specific expertise in sourcing and merchandising.

Hyper City has already lined up plans to hit Ahmedabad, in the 5 lakh sq ft Iscon Mega Mall on Sarkhej in Gandhinagar, which is slated for completion in June this year.

News: PM - "Economy is 'comfortable'"

(RTR 18/03/2006) Mumbai - Prime Minister said on Saturday the country's economic position internally and externally had become "far more comfortable" and it was worth looking into greater capital account convertibility.

In a speech at the central bank in the country's financial hub Mumbai, Prime Minister Manmohan Singh said he would ask the finance minister and central bank to come out with a roadmap to greater convertibility "based on current realities".

The Indian rupee is only partially convertible and India has in the past set out benchmarks for full capital account convertibility, including levels of fiscal deficit and foreign exchange reserves, inflation and non-performing assets of banks.

"Given the changes that have taken place over the last two decades, there is merit in moving towards fuller capital account convertibility within a transparent framework," Singh said.

India's external debt was $124.3 billion at the end of September 2005, up $2.2 billion from the end of June due to higher borrowings by Indian corporates abroad.

Its foreign exchange reserves are nearly $144 billion, exceeding external debt by about $20 billion and enough to cover around 13 months of imports.

The federal fiscal deficit is expected to be 4.1 per cent of Gross Domestic product at the end of this financial year on March 31, lower than a targeted 4.3 per cent, although the combined federal and states' deficit is much higher at about 7.7 per cent. Inflation is currently running at about 4 per cent.

RESILIENCE

The central bank said in a report released on Saturday there had been "a perceptible improvement in external debt indicators over the years, reflecting the growing sustainability of external debt of India".

In its Report on Currency and Finance for 2004/05, the central bank said software exports have remained strong despite concerns about protectionist measures from the countries which import them. Also, expatriate Indians continue to send money home at a robust pace, making India one of the world's leading recipients of remittances.

The resilience of the external sector during the current fiscal year was reflected in the fact that a record level of the current account deficit was financed through normal capital flows, it said.

The Prime Minister's economic advisory council has said it expects the current account deficit for this financial year to be 2.9 per cent of GDP, compared with a deficit of 0.9 percent last year.

INFLOWS SEEN STEADY

The central bank also said it expected foreign fund inflows to the booming stock market to remain steady in the near term amid growing investor confidence in Asia's third-largest economy.

India's main share index has gained nearly 16 per cent so far this year, lifted by net foreign portfolio investment of more than $3.2 billion. It rose 42 per cent in 2005 as foreign institutional investors (FII) moved in a record $10.7 billion.

"A series of India-centric funds being floated overseas reflect that the FII inflows are likely to remain robust in the near term," it said.

The inflows have helped the rupee rise 1.4 per cent against the dollar since the start of 2006 and analysts say if India continues its drive to lower its fiscal deficit, its sound balance of payments position could lead to a ratings upgrade which would attract more investment.

International rating agencies Fitch Ratings and Standard & Poor's rate India one notch below investment grade while Moody's Investor Services gives its foreign currency rating an investment grade.

News: MNC food giants vie for desi pie

(FE 18/03/2006) Mumbai - Indians may be going global but their taste buds are not. As Indian consumers continue to prefer localised flavours, large food retail giants such as McDonald's India, Dominos Pizza India and Yum! Restaurants International are putting in extra efforts in localising international flavours and creating a youthful ambience within their restaurants to woo Indian consumers.

The Rs 600 crore fast-food retailing which is already growing at the rate of 20% per annum, is beginning to see some frenetic activity.

News: India is Wal-Mart's fastest growing mart

(RTR 18/03/2006) New Delhi - Wal-Mart Stores Inc., the world's top retailer, sees sourcing from India growing rapidly, but says this growth could accelerate further if foreign firms were allowed to set up retail chains in the nascent market.

"India is already our fastest growing market for direct importing, or exporting to other countries," Mike Duke, Vice Chairman and Head of Wal-Mart International, told Reuters on Friday.

"The growth of the market here is already very significant. With retail stores here, it will grow even faster, and we've seen it (happening) in other markets."

The Bentonville, Arkansas-based group plans to buy $630 million worth of apparel, home furnishings, textiles, shoes and jewellery directly from Indian factories in 2006, up 40 per cent from last year.

"The growth that we look at in the next couple of years is 35 per cent," S. Ramesh, general manager for global procurement, said.

Wal-Mart also buys products worth $1.2 billion indirectly from the country.

At the moment India, Asia's third-largest economy, does not allow retailers like Wal-Mart to set up retail chains across the country, but it has approved foreign firms selling single brands to invest up to 51 per cent in their marketing infrastructure.

They are also allowed to set up wholesale operations or enter the country through joint ventures.

Homegrown players like Pantaloon Retail are against further liberalisation, and want the government to allow them to add muscle before foreign competition is let in.

POLITICAL OPPOSITION

Also there are many in the political class who oppose the entry of retail chains such as Tesco Plc and Carrefour on the grounds that they may drive small mom-and-pop shops out of business and lead to widespread job losses.

But Duke, who is meeting Indian government officials to try to gain access to one of the world's fastest growing economies, said the entry of foreign retail chains would further improve prospects of small businesses.

"I wouldn't say that I will ever see any small shops -- that particular business dying out -- there is so much room for all formats," he said.

"Operators like this will still be here and if anything they will be able to buy the product at lower cost and still be profitable and offer the consumer a better price."

Analysts say the key trends driving retail growth in India are changing lifestyle aspirations, growing disposable incomes and the rise of the middle class, estimated to be around 300 million people.

The retail market in India is around $210 billion and it is likely to grow 7 per cent a year till 2010. But organised retail is a miniscule 3 per cent here compared with 17 per cent in China.

But as the mall culture takes root in the economy, this segment is forecast to grow at 25-30 per cent a year over the next four years.

Duke said he was hopeful that changing buying patterns of consumers would result in a further dilution of laws.

"What is encouraging is the tone of discussion as well the steps already taken. I think reasonable people of any party look at it and realise the consumer speaks the loudest," he said.

"The person who votes in the democracy is the most powerful, and that is the consumer. To me what is encouraging is ... that India is becoming a consumer economy and it's the consumer that ends up voting."

Column: Why Mumbai should get a 'greener' look

(Sify 18/03/2006) Mumbai - People with vested interests often talk of attracting foreign investment, but more often then not, they stand completely exposed. One can understand their ignorance and hatred for serious literature, but they could at least take a lesson from a recent article in Newsweek magazine.

The main focus of the article was Singapore becoming more environment friendly and attracting huge foreign investment. Even a dictatorial regime in Singapore understands the importance of greenery, but our dear 'friend' George Bush does not realise this.

The glee with which the upper class greeted the Supreme Court judgement of March 7 in the textile mill land case shows that it has no understanding of urban development issues and not even foreign direct investment about which it talks so much.

More construction on mill lands will further Mumbai's image as a concrete jungle. It is this very negative image that Singapore has consciously avoided. Neighbouring Hong Kong has suffered precisely because it has become a concrete jungle and disregarded environmental concerns. Hong Kong is now regretting that it has built an office complex on the waterfront ignoring the great potential of the place.

The selfish section of architects, builders, bureaucrats and politicians choose to turn the other way round. We should be thankful for the personal initiative taken by Indira Gandhi many years ago in preserving the Borivli National Park. Else, this greedy lot would have turned that area into a concrete jungle, too.

Many years ago, Singapore brought rare plant species from as far away as Africa and the Caribbean and planted them on Singapore soil. Many other steps were taken. They have found that a green, soothing environment is the best advertisement for attracting foreign investment.

The lesson to learn is improving the environment helps improve the economy. In contrast, Hong Kong has failed miserably on the environment front and its chief executive Donald Tsang is facing a backlash from people due to the overgrowth of the city.

In Seoul, Lee Myuna Bak has rehabilitated an ancient stream, buried for decades under the road and it has now become a great tourist attraction. Seoul has also dismantled, yes dismantled, a huge flyover running through the central part of the city. All these environment-friendly steps have made the mayor so popular that he is now in the running for the post of the president of the country.

The question is when our leaders of business, architects, politicians and bureaucrats visit foreign countries, do they not observe the wide-open spaces, the green environment? A very large number of people with tonnes of hidden wealth are now flying abroad regularly as part of conspicuous consumption.

Many of them do not have the faintest idea of the great history, architecture and environment of these countries. Tour operators know this and literally take these parasites for a ride. I know of a fortnight long tour of Europe in which barely half a day was spent in London and Paris and lots of time in casinos.

These worthies are actually contributing to the worst pollution of the environment because aviation emissions are the major contributors to global warming. Environmentalists are, therefore, demanding a reduction in international flights. We will not stop flying unless the government closes the runways, points out the outspoken author George Monbiot.

Even authors of the excellent international tourist guide Lonely Planet now realise that they are unwittingly contributing to global warming by popularising international travel. So they have begun a campaign against needless aeroplane flights. In the context of Singapore's developing an excellent, environment-friendly water front, we can see how dangerous, ludicrous and dishonest is the determined bid by our authorities to convert the Mumbai port trust land into a concrete jungle for the benefit of the builder lobby and international property grabbers.

Unfortunately, a good section of the media is siding with vested interests instead of the interests of the city and the common people. An editorial in the Indian Express on the mill lands judgement on March 8 is a case in point. After unabashedly pandering to market forces, it says, "Of course, Mumbai must have more parks. But urban development cannot be an activist's walk on the park."

Even this last sentence is quite dishonest because common people now do not have space to walk even in parks in the regime of privatisation and stiff entry fees. Even the most public spaces are now rendered out of bounds for the common people. That is the great achievement of selfish and arrogant elements.

The sad thing is that the media is being betrayed from within by unscrupulous journalists pandering to vested interests and from outside, by politicians and the corporate sector.

An article with the headline The end of news? appeared in a recent issue of the New York Review of Books. It exposed the unscrupulous role played by the Bush administration in campaigning against mainstream media, which is critical of his policies.

The Bush administration is pursuing its undemocratic policy, though the media is less critical on issues today than it was in the past. In the 70s for example, The Washington Post refused to buckle under intense White House pressure during the Watergate scandal and the New York Times did not shrink from publishing the Pentagon Papers.

Yet, the freedom of the media is now under attack from government-backed agencies as never before, points out Michael Massing. So the rousing, in fact, servile coverage of his visit by the Indian media, must have pleased Bush.

Obviously, his media management machine must have encountered people who were more than willing to serve the imperial agenda for considerations, which common people very well understand though they may not be talking about it.

The pity is that these elements have obviously no self-respect because in the mainstream media in America itself, Bush has become an extremely detestable figure. So the attempts of our yes-men to please him can only evoke the utmost pity and ridicule. Besides, Bush who was so patronising even to Prime Minister Manmohan Singh would have little respect for these yes-men.

Arundhati Roy has tremendous credibility and reach in the western media and she writes so brilliantly, it is obviously too much for vested interests to digest. There is an interesting play Pratibimb by the noted playwright Mahesh Elkunchwar. In it, the main character looks into the mirror but finds that it does not reflect his face. It is full of symbolism.

Similarly, one could say that our vested interests dare not see the brute image of their own in the mirror and anyone who reflects such a reality in the mirror of literature is intolerable to this class.

It is because the exploiting classes are so afraid of the power of literature that they have always wanted literature to divorce itself from reality. And there is no shortage of writers and critics whom this class can buy to propagate the art for art's sake theory.

A few honest writers may have believed in this theory for genuine reasons. But it would be foolish to forget that the Americans have over decades poured enormous amount of money in different parts of the world to silence writers to run institutes with set anti-people agendas. This is very well documented.

Right from ancient Greeks to Shakespeare, Dickens and our own Mahashweta Devi and Tendulkar, writers have always felt concerned about injustice and have always dealt with political issues.

Even a look at the winners of the Nobel prize for literature in the last few years would show that many of them are very committed politically. That should make things a little more clear for the petty minds targeting Arundhati Roy.

By Vidyadhar Date |

News: McDonald's to enhance presence in South India

(HBL 18/03/2006) Mumbai - To enhance its presence in the southern markets, Mc Donald's has decided to increase the number of outlets in the region. Having opened its second outlet in Bangalore, the fast food chain intends to add another 6-7 outlets in south India.

Mr Amit Jatia, joint venture partner and MD Mc Donald's (Western Region), told Business Line, "We are now seriously looking at the southern markets and expect to grow exponentially in this region.'' It has earmarked an investment of Rs 3 crore per outlet with the additional cost of property, Mr Jatia said. Expecting to grow at 50 per cent this year from its core business of restaurants, the restaurant chain has also been spreading to other services such as home deliveries and setting up cold kiosks for selling its ice creams.

Focus on healthy lifestyle

It is also advising its consumers with a philosophy based on leading a healthy lifestyle. `What I eat, What I do' is the message the restaurant chain wants to convey to its consumers.

Besides, it has also been tweaking its menu to have offerings to suit the health-conscious consumers. "Our deserts have fat content which is less than 3 per cent while the calorie count of our ice creams is at 90,''says Mr Jatia.

Meanwhile, McDonald's has decided to focus on the affordability platform to draw in more customers.

Having introduced its happy price menu with products ranging at Rs 20 in the past, the fast food chain continues to focus its communication on the affordability aspect.

Marking an ad budget of Rs 20 crore last year, Mc Donald's intends carrying forward its message of product and pricing in its future campaigns.

News: Raheja's retail foray Hyper City to open soon

(F2F 18/03/2006) Mumbai - K Raheja is to cash on the retail roar in Mumbai as the local media confirms that Hyper City will open in about six to eight weeks.

Spread over about 1, 00,000 square feet, the hypermarket will put almost every thing from apparel to food, grocery to consumer electronics at a fat discount, said B S Nagesh, VC, Hyper City India Retail Pvt Ltd.

Hyper City is set to be the fourth successor of Pantaloons' Big Bazaar, Trent's Star India Bazaar, and RPG Retail's Spencer hypermarket in the country.

Next to Inorbit, Mumbai's largest mall, Hyper City will focus on Malad to compete with North based Gurgaon.

News: Indian carmakers driving out imported cars

(TV18 18/03/2006) Mumbai - It's a matter of head over heart. Indian carmakers find that high-end imported cars might have boosted their image but they find few takers. So now, they are driving them out of their showrooms.

One of the reasons for putting the brakes on certain imported models is the cost involved in building the business. Manufacturers say that whether they sell 10 or 100 imported cars a month, they still have to spend a few crore of rupees on exclusive after-sales infrastructure. That investment makes sense only in the light of large volumes.

Consider the Hyundai Terracan. This model drove into India in August 2003 but it has sold only 790 units. Hyundai has now stopped taking orders for it.

President of Hyundai Motor India, BVR Subbu says, "Are we going to focus on bread and butter lines where we have established manufacturing capabilities or we focus our business on 2-3 models, which look good on paper, have all the glamour but don't really add to bottom line or topline?"

Other firms like General Motors and Ford have followed a similar strategy. The Rs 16 lakh Ford Mondeo, launched in December 2002, is off the market since January this year. GM's Opel Vectra, launched in January 2003, reached the end of the road after selling 532 units in two years. Chevy Forester, launched in March 2003, sold 346 units until it was stopped last year. High import duties of about 106% further discourage demand.

MD & President of GM India, Rajeev Chaba says, "When CBU started 3-4 years ago we thought it will grow. Some manufacturers do it for reasons other than volumes. In GM India we definitely want to focus on CKD operations."

Besides Toyota and Honda other big carmakers have put the CBU business on the back seat. They find the road to success lies in homemade vehicles.

News: Ambani bros working together again!

(ET 18/03/2006) CHENNAI - The Ambani brothers might have spent a major part of the last few months dividing the Reliance pie. However, a property deal in Chennai, which also turns out to be the biggest in the city so far, has now brought the warring brothers together.

A 42-acre premium plot, located between the city’s busy Koyambedu junction and Anna Nagar, has been bought by Bangalore-based developer Ozone and HDFC, along with the investment arms of Mukesh and Anil Ambani camps, for over Rs 300 crore. The land was primarily owned by Krishna Tiles.

Ozone is the lead developer, while HDFC is a major investor. The investment arms of the Ambani camps have picked up “small stakes” in the project.“Both the camps are well aware of the presence of the other camp. All necessary agreements have been signed and the property got registered last week,” sources privy to the deal told ET.

“It will be an integrated project, which will offer a mix of residential, retail and IT space. It will be complete with malls and multiplexes,” they added.The deal has turned out to be the biggest for Chennai, which over the past one year saw a slew of big-ticket transactions.

The Delhi-based DLF Builders kicked off the process, when it acquired the 43-acre Sivaji Gardens on Mount Poonamalle Road for Rs 145 crore. Mumbai’s Hiranandani soon followed by grabbing a 100-acre land on Chennai’s IT corridor from a media house for a little over Rs 100 crore.

Strengthening its aggressive posture further, DLF picked up the Mico property at Egmore for close to Rs 190 crore. In another deal, Shriram Properties emerged as the highest bidder for the 57.8-acre Standard Motors property at Perungalathur, south Chennai, offering Rs 154.1 crore.

News: Blow Plast's retail initiatives

(TH 18/03/2006) CHENNAI - Blow Plast, the marketing arm of VIP Industries, a leading luggage manufacturer, is planning to add 42 exclusive showrooms across the country by the end of the current financial year.

In Tamil Nadu, the company will add three showrooms, taking the total to seven exclusive showrooms, according to Parag Dani, Head (Retail).

Addressing presspersons here on Thursday, Mr. Parag Dani said the company will increase its retail presence and in terms of space the total retail area will increase to 8,000 sq.ft by March 2007 from 3,100 sq.ft. at present.

At the national level, Blow Plast is looking at nearly trebling retail space to 1.22 lakh sq.ft. This will be done through 85 standalone brand stores and 41 franchisee stores, he said.

Blow Plast has a 65 per cent share in the organised market for luggage in India with its mainstay brand VIP commanding 97 per cent `awareness' among consumers, Mr. Parag Dani said.

News: Raheja set to enter big-time retailing

(TNN 18/03/2006) MUMBAI - A giant new structure, coming up cheek by jowl with the Inorbit Mall in Malad, has caught the attention of every resident in the locality. Some reckon it is retail giant Wal-Mart, which is setting up shop in Mumbai. Others insist it is a new age bank. But the intrigue may not last long.

In about six to eight weeks time, Hyper City, K Raheja's foray into big-box retailing, will open its doors. Spread over nearly 1,00,000 sq ft, the hypermarket is expected to stock virtually the entire gamut of merchandise, from apparel to food, from grocery to consumer electronics at a sizeable discount.

Said BS Nagesh, V-C, Hyper City India Retail Pvt Ltd, a company fully owned by the promoters of the K Raheja group, "The complete technology, property and the team is now in place." Shopper's Stop, a department store chain floated by the K Raheja group, has an option to buy 51% stake in this new venture in 2008.

Hyper City will be the fourth major hypermarket to be launched in the country, after Pantaloons' Big Bazaar, Trent's Star India Bazaar, and RPG Retail's Spencer hypermarket. Reliance Retail's much-awaited debut in the middle of this year is also expected to see the launch of a new hypermarket format.

A mega retailing complex like Hyper City, next to Inorbit, Mumbai's largest mall, will focus the spotlight on Malad, which is fast emerging as Mumbai's answer to Gurgaon.

Action is hotting up in the western suburbs, starting from Lokhandwala to Borivili, with nearly 20 new malls in various stages of completion. Of these, four new malls are coming up in a 10 km stretch in and around Inorbit.

Apart from Nagesh, the new Raheja venture consists of chief operating officer Andrew Livermore, a retail professional from South Africa, with specific expertise in sourcing and merchandising.

Hyper City has already lined up plans to hit Ahmedabad, in the 5 lakh sq ft Iscon Mega Mall on Sarkhej in Gandhinagar, which is slated for completion in June this year.

News: OptiMix fund of funds

(EM 18/03/2006) Mumbai - OptiMix, a division of ING Investment Management (India), has launched its maiden fund of funds: OptiMix Income Growth Multi-Manager Fund of Funds Scheme. The NFO, which is currently open, will close on April 7. The entry load, both during and after the NFO, is 1 per cent; there is no exit load.

The minimum investment in the fund is Rs 5,000. It has two plans:

15% Equity Plan. About 85 per cent of the assets will be invested in debt, liquid and money market funds and money market securities; the balance of about 15 per cent in equity funds.

30% Equity Plan. About 70 per cent of the corpus will be invested in debt, liquid, and money market funds and money market securities; the balance of about 30 per cent in equity funds.

ABN AMRO-Barista card

ABN AMRO Bank, in partnership with Barista Coffee Company, has launched ABN AMRO Barista Credit Card. A cardholder will earn 15 reward points for every Rs 100 spent at any Barista outlet, which they can use to get discounts on purchases at the coffee chain. The card can also be used in other MasterCard establishments, where a user will get two reward points for every Rs 100 spent. Further, this card offers discounts on books, music, watches and perfumes through tie-ups with renowned retail brands.

News: Walmart sees sourcing from India grow rapidly

(RTR 18/03/2006) Mumbai - Walmart, the world's top retailer sees sourcing from India grow rapidly, but says this growth could accelerate further if foreign firms were allowed to set up retail chains in the nascent market.

Mike Duke, Vice-Chairman of Walmart told Reuters, "India is already our fastest growing market for direct importing, or exporting to other countries,"

Walmart plans to buy USD 630 million worth of leather, apparel, home furnishing and jewellery from India.

The Bentonville, Arkansas-based group plans to buy USD630 million worth of apparel, home furnishings, textiles, shoes and jewellery directly from indian factories in 2006, up 40% from last year.

It plans to increase procurement from India at 35% over the next few years. Walmart also buys products worth USD1.2 billion indirectly from the country.

News: Harvard Biz School to open R&D center in India

(TV18 18/03/2006) Mumbai - On March 24, Harvard Business School will formally open its fifth research center outside its Boston campus, and this one will be in Mumbai. The school's other research centres are in Buenos Aires, Tokyo, Paris, Hong Kong and in California's Silicon Valley. Harvard realised it could no longer ignore India.

Professor at Harvard Business School, Kash Rangan says, "For a while we thought we could cover Asia through the Hong Kong Centre but then we quickly came to the realization that India's got this beautiful juxtaposition of government, business and civil society, all happening simultaneously, which rarely happens because Governments lead and then the businesses follow, or civil society is weak or the Government suppresses civil society in many economies. But here there's this beautiful juxtaposition. So we jumped into setting up a center in India, in which we saw some new opportunities coming up".

Professors at Harvard Business School say the new center will greatly help their growing research in India.

"The intent of the research center is to help connect Harvard Business School faculty with interesting issues and opportunities, business people and other people in India, to facilitate knowledge generation, knowledge creation and dissemination," adds Tarun Khanna, Professor, Harvard Business School.

Work has already been going on at the research center; now it will be officially inaugurated on March 24. As Harvard Business School sets up a research center in India, it indicates that leading American universities are not just looking for students from the country but also knowledge.

Interview: Pierre Lavaud - President Jetfin

(TV18 18/03/2006) Mumbai - President at Jetfin, Pierre Lavaud is positive about hedge fund industry's growth in India. He informs that currently, there are around 20-40 hedge funds dedicated to Indian markets.

Lavaud discusses the present hedge funds scenario in India as well as its future.

Excerpts from CNBC-TV18's exclusive interview with Pierre Lavaud:

Q: Could you give us the names and number of hedge funds operating in India today? And from which geographies they are from?

A: There are a few hedge funds operating in India and it is a new trend. There are around 20-40 companies, which are Indian hedge funds, dedicated to Indian markets. We have more companies with larger mandate, who invest in emerging markets and have exposure in India.

One among them is Kotak, which is one of the well-known Indian company running an Indian hedge fund and there are a few US companies like Avenue Capital, who are running several billions and they too, are involved with India at this stage.

Q: What sizes do these funds usually work at?

A: The size is still small, but it is growing fast. The average size is estimated to be around USD 20-30 million. Probably, the largest fund has around about USD 200-400 million today, but the capacity is relatively small because the managers tend to short and shortening liquidity is not that great at this stage in India. But things are improving and liquidity is increasing very rapidly and in total, we can estimate hedge funds have more than USD 2 billion in India.

Q: Is this when you include funds like BRICs fund, which also have an India focus?

A: No, if one could thinks on a broader scale, we could have several billions run by those themes/firms in India. I am talking about real dedicated Indian funds. You may have more and more funds that make India a specialisation, but I am talking about hedge funds, which really concentrate on the Indian market and invest only in India. Those funds are probably running around USD 1-2 billion.

My view is that they are the future of industries in India because they are focused and they know what they are doing and usually they operate from Mumbai or atleast they have an advisor in Mumbai. You can see this trend in Latin America or in Asia, where the best fund managers are local. So it is an industry, which I think is going to be even more visible in the country.

Q: What do these funds typically do? Are they involved largely in trading in futures and options? Do they do arbitrage between cash and futures for a fixed return every month? What kind of activities do you see them doing because they would typically not be long on only funds like most of the other foreign institutional investors in India are?

A: That is another region, where there is a bulk of improvement, possibly in India because at the moment, hedge funds present in India are only present on the equity market for legal reasons. If you take the example of United States, hedge funds are present everywhere. They are present in commodities, fixed income markets, derivatives market, real estate and India equity. This is very different at the present stage in India. At present, 90% of hedge funds operate only in equity markets. Having said that, what they do in the equity market is a bit different from the mutual funds as typically, they short and that is the big difference when compared with mutual funds. They short the index or they short the equity futures and as a consequence, their return profile and volatility profile is slightly different from the long only funds.

The key of what they are doing is that they have a possibility that when market goes down or when there is a downturn in the market globally, they have a possibility to make profits or atleast to compensate the losses, which they should position and that is something which a mutual fund is typically not able to do because in his mandate, the manager has no right to short anything. That is the big difference between hedge funds and mutual funds clearly.

Q: Any ball park idea of which could be the top five hedge funds active in India right now?

A: Kotak is clearly one of them. United Overseas Bank is important, Monsoon is interesting, Venus Capital was also a nice, Tricolor is in Mumbai and has good premises, good potential. These are all interesting names.

News: India to see $500 mn IFC investment in 2006

(BS 18/03/2006) New Delhi - International Finance Corporation plans to invest $500 million in 2006 in the Indian private sector and is currently talking to second tier banks about investments.

IFC’s incremental investment in 2006 is almost half the institution’s current outstanding India portfolio of $ 1.2 billion. In the current portfolio, about $1 billion was in the form of loans, said Anil Sinha, general manager, SEDF (a facility managed by IFC), today on the sidelines of a workshop organised by the Competition Commission of India.

Sinha said IFC was open to investing in the second tier banks with whom it was in talks through either equity or loans. IFC was willing to offer banks a choice between dollar denominated loans and rupee loans. It was also offering technical assistance to banks, added Sinha.

The institution had earlier invested in financial sector companies such as HDFC Bank, IL & FS and IDFC.

IFC’s investment strategy in India will focus on manufacturing sector, infrastructure, and financial intermediaries. It is also looking at growing its advisory services in India.

Sinha said an area that interested IFC was designing solutions to improve investment climate in different states.

IFC also concentrates on providing assistance to small and medium enterprises in North East India. The South Asia Enterprise Development Facility (SEDF) is a multi-donor facility managed by IFC, which concentrates on the needs of small and medium enterprises in Bangladesh, Bhutan, Nepal and North East India.

India is IFC’s third largest country of operations. Recently, IFC announced an investment of $ 15.2 million in two subsidiaries of India Hydropower Development Company through a debt financing deal. Last year, IFC invested in equity of Apollo Hospitals, a company listed on the stock exchanges.

News: 'Move towards full Re convertibility'

(PTI 18/03/2006) New Delhi - Favouring a move towards fuller capital account convertibility in the context of changes in the last two decades, Prime Minister Manmohan Singh today asked the finance ministry and the Reserve Bank of India (RBI) to work out a roadmap to attract greater foreign investment.

"Our position, internally and externally, has become far more comfortable. I will request the finance minister and the Reserve Bank to revisit the subject (of capital account convertibility) and come out with a roadmap based on current realities," Singh said while releasing the third volume of the history of RBI today.

Elaborating on the need to move towards capital account convertibility within a transparent framework, Singh said progress in this regard would facilitate the transformation of Mumbai into not only a regional but a global financial centre.

He said there were multiple options possible for such a centre, including a special economic zone, and added: "I am confident that we can make steady but firm progress in that direction." He also wanted the state government to provide an enabling environment, particularly adequate infrastructure.

After the liberalisation process started in 1991, the rupee has become fully convertible on the current account, mainly for trade purposes. The movement on convertibility of rupee for capital purpose has been slow as the RBI adopted a cautious approach, especially after the 1997 East Asian currency crisis that led to flight of capital in those countries.

News: Govt clears Rs 100,000 cr investment in SEZs

(BS 18/03/2006) New Delhi - Zones to come up on 40,000 hectares; 500,000 jobs to be created.

The government today cleared Rs 1 trillion (Rs 100,000 crore) of investment in special economic zones, the largest clearance of India Inc’s growth plans in a single day. The investments will convert over 40,000 hectares of the country’s land mass into SEZs and create jobs for over 500,000 people.

The Board of Approval, comprising officials from various ministries, cleared 148 of 166 proposals, including those of Reliance Infrastructure Ltd, Biocon, Satyam Computers and DLF Universal.

The proposals cleared contained 75 that had already received approval in principle. The board, which met for the first time after the notification of the SEZ rules in February, also set in motion a system of single-window clearance for setting up these SEZs. Notifications for all proposals approved will be issued next week.

At least 18 proposals pertaining to three states — West Bengal, Kerala and Tamil Nadu — were deferred because of state elections. The board also asked all the information technology SEZs to operationalise their zones within three years in order to enjoy income tax benefits.

Proposals for setting up two power SEZs by Maharashtra Industrial Development Corporation (MIDC) at Chandrapur district were deferred. One proposal is for a 1,000 Mw SEZ spread over 1,100 hectares and another for a 150-Mw SEZ spread over 103 hectares. According to the proposal, MIDC will sell power to other SEZs.

Reliance Infrastructure Ltd will be setting up a petrochemical SEZ at Jamnagar spread over 450 acres with an investment of over Rs 20,000 crore. Gujarat Industrial Development Corporation’s multi-product SEZ over 4,370 acres, with an estimated investment of over Rs 4,000 crore, was also approved.

Two proposals of the Adani group — the Mundra SEZ of Gujarat Adani Port Ltd spread over 5,000 acres and Adani Chemicals’ SEZ, also in Gujarat, spread over 7,000 acres with an estimated investment of over Rs 12,000 crore — were also cleared.

Biocon’s proposal for a bio-technology SEZ in Bangalore spread over 90 acres with an investment of around Rs 200 crore also got the nod.

Among the IT sector proposals, three by Satyam Computers Services Ltd for SEZs in Thotlakonda in Visakhapatnam, Bahadurpalli in Hyderabad and one in Hyderabad city, were cleared.

A decision on Reliance Industries’ Navi Mumbai SEZ proposal pertaining to acquisition of additional 850 hectares of land was deferred till the next meeting because of CIDCO still being in possession of the land.

Some of the cases which received approvals in principle included two proposals by DLF Universal for SEZs spread over 1,000 hectares in Punjab and 8,000 hectares in Haryana. Two proposals by Jubilant Organosys Ltd for SEZs in Gujarat and Mysore were also cleared.

News: Reliance Retail’s top rung to get shares in co

(ET 18/03/2006) BANGALORE - It’s not just a massive Rs 100-crore executive hunt. Mukesh Ambani could be doling out the biggest incentive of all — Reliance shares — to retain talent in his mega-retail rollout.

Informed sources said Reliance Industries (RIL) was exploring a formalised share option scheme as it forays into competitive sunrise sectors like retailing, where people-retention remains a key challenge. For starters, India’s largest private conglomerate is looking at allotting shares to Reliance Retail’s top rung as a value-creation incentive for the future.

Till now, RIL has had a quasi-formal share allotment process to some of its long-serving top brass, and the latest step towards a formalised share option scheme for the management of the new retail subsidiary is bound to be significant, given the blue-chip tag to any Reliance share. “Share allotment to employees has been happening in RIL, but there could be a formalised approach in future,” said sources.


It is learnt that the move on shares is part of brainstorming happening inside RIL on the need for an HR revamp as it has a few emerging businesses on board, and retail could well be the trigger point.There is no clarity on whether Reliance Retail’s top rung will be entitled to share in the company, which is likely to be spun off at a later date, or in the parent RIL.

Even though company law is silent on the issue of a subsidiary’s employees holding shares in the parent, in this case it could well be in the retailing venture itself, since the objective is also “performance-linked value creation”.

The domestic retail sector is revving up rather nicely, with Reliance taking the first big move by roping in notable names for its operations divided into various verticals.

It is reported that RIL’s employee emolument war chest in the retail rollout could be as high as Rs 100 crore. However, the anticipated freeing of shackles on FDI is expected to bring the global biggies — Wal-Mart, Carrefour and Tesco — to Indian shores soon. This could unleash a sapping battle for a skilled talent pool in the sector, sources added.

News: RPG retail arm may hit market

(Sify 18/03/2006) Kolkata - Great Wholesale Club Ltd, a little known RPG outfit that owns the Spencer's brand and runs the retail business, is likely to go in for a public issue next year after a rechristening exercise.

According to Sumantra Banerjee, President & Chief Executive of RPG Enterprises, the retail business of the group is all set to witness major activities in the next 12 months.

From the existing level of 2 lakh sq.ft. of retailing space the group is adding another 8 lakh sq.ft. and it would be spread all across India. The corporate headquarters of RPG Retail is also being shifted from Chennai to Kolkata. The process would start from April 1.

"We are galloping at a rapid pace. The size of our locked up properties, which is now 20 lakh square feet would jump to 40 lakh square feet by the end of the next fiscal," Banerjee told Business Line.

Regarding investments, he said, all properties are on rent. According to him, the group would be spending approximately Rs 200 crore on the retail business. He said it would be funded through internal accruals, debt and a public issue. However, he was not sure of the size of the equity offering, as it would solely depend on the need of the liquidity.

The name of the holding company, Great Wholesale Club Ltd, would be changed too. "That name does not mean anything. Whenever we go public we would have to make that necessary change," he said.

For the year ended March 31, 2006, RPG Retail would be registering a turnover of Rs 450 crore. However, it would not breakeven. According to Banerjee, this is not a deterrent for an IPO.

"The total business might not be recording profits but all our stores are making money. Our earnings will increase with the opening of the new shops but the overhead expenses remain constant. So, profits would start coming in," he said.

He went on to clarify that at present RPG Retail is recording a turnover of Rs 30-35 crore a month.

It is expected to increase to Rs 80-90 crore a month by December 2007.

News: RIL plans mega foray into farm sector

(Sify 18/03/2006) Jamnagar - Reliance Industries is in the process of taking on lease thousands of acres of land across the country to use latest technologies and procedures to increase agriculture productivity.

The company's plans for a mega foray into the farm sector fits in well with its huge retail ambitions, and will be a backward integration for its distribution chain.

Reliance Industries has already done the preliminary work at its Jamnagar refinery and wants to replicate it elsewhere. The company had already held talks with many state governments on leasing of land and had positive offers from many of them.

The company essentially wants to do a Wal-Mart in India, and completely integrate supply with delivery. The idea was to try this out first as an experiment and later scale it up when the opportunity comes.

The opportunity, according to Reliance Industries mandarins, has finally come, with the company getting ready to open as many as 800 retail outlets across the country. Since food will account for around 40 per cent of the company's retail operations, it can sell fruits and vegetables grown on its own land through the outlets.

Going by the initial results of the company's infusion of "scientific technology" into farming at its Jamnagar premises, the results have been encouraging. The company has more than a lakh of mango trees in its mango orchard here, the largest in Asia. While the normal density of this crop in our country is around 40 trees per acre, it is no less than 333 here. Soon, the company will increase it to 1,332 per acre.

News: Reliance hungry to diversify

(TT 18/03/2006) Jamnagar - In a major diversification move, Reliance Industries Limited (RIL) is planning a foray into the processed food sector.

The company has quietly made a beginning at Jamnagar through a little known company Jamnagar Farms Private Ltd (JFPL). This group company of RIL has planted commercial crop on 1000 acres.

Company sources said agri-processing would fit in well with its proposed foray into retail business.

“We are firming up a strategy to enter the retail sector. Within the next six months, we will take the proposal to the board,” a company executive said. It has earmarked a $750-million kitty for the retail push.

Born out of the necessity to create a green belt around the 33-million-tonne refinery here, the company has carved out a part of it to grow mango, cashew and grape among others.

Last year, the company had produced 300 tonnes of mango and made pulp out of 100 tonnes. “We employed contract manufacturing to process the mangoes and the produce was exported,” a Reliance official said.

While export will remain a focus area for the company, the produce from Jamnagar and other places would also find place in the retail outlets that the petrochemical major plans to set up across the country.

In the next three years, the company is hoping to produce 3500 tonnes of mango out of Jamnagar only. Spread over 450 acres having over 1 lakh trees, Jamnagar is already one of the largest mango plantations on a single location in the country. It is growing different varieties of mango with an eye on both domestic and international markets.

“We are in talks with state governments of Andhra Pradesh, Maharashtra and Karnataka for agri-business,” an official confirmed.

The Jamnagar experience — where it has already invested Rs 10 crore — will come in handy for the company to replicate it in other states.

It is employing all the latest technologies — using treated waste water and drip irrigation system — to grow mango in what used to be an arid land here. The rate of return from this business is likely to be 30 per cent on an annualised basis.

The research and development team is now looking at growing mango varieties that would bear fruit round the year.

Apart from mango, 29 other horticultural items have already been identified. In the long run, the biggest cash crop for JFPL would be teak wood, company officials said.

News: Digicel eyes 'seamless' pan-Caribbean service

(SN 17/03/2006) Georgetown - As Guyana awaits an update on President Bharrat Jagdeo's February 22 announcement that the government intends to grant Digicel, the region's fastest growing wireless telecommunications operator, a licence to operate in Guyana, the company has moved to further expand its operations in the Caribbean, announcing last week that it is moving to acquire Bouygues Telecom Caraibe, the wholly owned subsidiary of Bouygues Telecom with assets in Martinique, Guadeloupe and French Guiana.

A Digicel official was quoted in a March 8 Market Wire press release originating in Kingston, Jamaica as saying that the company will be offering a portfolio of innovative products to local customers and visitors throughout the French West Indian territories "pending all the appropriate and necessary approvals."

Digicel which says it seeks to "roll-out a seamless pan-Caribbean service was launched in 2001 and has operations in fifteen Caribbean countries including Anguilla, Antigua and Barbuda, Aruba, Barbados, Bermuda, Curacao, the Cayman Island, Dominica, Haiti, Jamaica, St Kitts & Nevis, St. Lucia, St Vincent and the Grenadines, Grenada and Trinidad and Tobago.

Little was known about Digicel outside the local telecommunications sector prior to President Jagdeo's announcement that the company will be granted a licence to operate here. The disclosure that the regional telecommunications giant has been cleared to operate in Guyana came as part of an angry tirade by the President against GT&T in which he accused the ATN subsidiary of failing to provide a proper telephone service in Guyana. The President who has vowed to put an end to the GT&T monopoly as a service provider for land telephone services has called on the local private sector to join the government in the call for an end to the local monopoly.

So strident was the President's outburst against GT&T that the Company's Chief Executive Officer, Major General (retd) Joe Singh and his top executives summoned a press conference to respond to the President's outburst. The press conference was screened in its entirety on local television channels as a paid advertisement. While GT&T has sought to play down what has become a public confrontation with the government the President's remarks coupled with an equally strident response to the GT&T press conference by presidential spokesman Robert Persaud leaves little doubt that the government is fiercely committed to breaking the ATN subsidiary's monopoly in the local telecommunications industry.

Since late last year GT&T has had to face widespread public criticism over a continuing decline in the quality of its cellular phone service. While the company has not denied that it has faced difficulties with its GSM cellular phone service it has clearly gone on the defensive over the matter. The Company is now confronted with a demand by the Public Utilities Commission that it cease to add to its existing 100,000 GSM subscribers until it solves the problem. Industry sources believe that the Company's cellular service woes have strengthened the hand of the government in its call for competition in the industry.

In the face of official criticism of its performance and its current cellular service woes GT&T has found itself drawn into a vigorous advertising "war" with Cel*Star, its competitor in the local cellular phone market. Cel*Star, it appears, has set its sights on wooing GT&T's 120,000 subscribers to the older TDMA system to its own GSM service. While Cel*Star says that the TDMA service is long outdated and should not be offered to customers GT&T says that it intends to retain the service until at least 2008.

While there has been no further word on the Digicel issue since the President's announcement three weeks ago Stabroek Business has learnt from sources close to GT&T and Cel*Star, the country's second cellular phone service provider, that Digicel has been in communication with both companies, a development that has led to speculation that Digicel may be interested in securing the assets of at least one of the two existing service providers.

Sources close to the telecommunications industry say that the small size of the local market may not allow for three service providers to operate profitably.

Since its establishment four years ago Digicel has successfully taken on Cable and Wireless among other incumbents and its move to establish a foothold in the French-speaking Caribbean will challenge the incumbent Orange Caraiba and only, a recent entrant in the French West Indian market. The move by Digicel to take control of the French West Indian market also follows its acquisition of the assets of another service provider, Cingulair, in Bermuda.

Nieuws: Indiaas bedrijf koopt transmissiebouwer Hansen

(ANP-AFX 17/03/2006) AMSTERDAM - De Belgische fabrikant van industriële versnellingsbakken, Hansen Transmissions, wordt voor 465 miljoen euro overgenomen door het Indiase Suzlon Energy. Dat heeft Suzlon vrijdag bekendgemaakt. Het is een van de grootste buitenlandse overnames door een Indiaas bedrijf tot nu toe.

Suzlon is de op vijf na grootste fabrikant van windturbines ter wereld, met activiteiten in Australië, China, Europa Zuid-Korea en de Verenigde Staten. Suzlon liet weten vooral in de technologische kennis van Hansen geïnteresseerd te zijn. Hansen is de op een na belangrijkste producent van transmissiesystemen voor windturbines, na het Deense Vesta. Hansen is eigendom van de investeringsmaatschappij Allianz Capital Partners.

De overname van Hansen is de op een na grootste buitenlandse overname door een Indiaas bedrijf tot nu toe, na de acquisitie van het Duitse farmaciebedrijf Betapharm door Dr. Reddy’s Laboratories voor 480 miljoen euro afgelopen maand.

Column: We all need Indian lessons

(TV 17/03/2006) London - George Bush has anointed India as his most favoured nation. He has even ignored the fact that they have nuclear bombs and are taking American jobs.

In the 21st century, every sixth human being will be Indian. India is very close to becoming the second largest consumer market in the world, with a buying middle class numbering over half a billion. The Indian economy is already the fourth largest in terms of purchasing power. It is in the top ten in overall GDP. The world’s largest democracy is a nuclear power.

COMMON

Yet at least 200 million Indians remain desperately poor, illiteracy rates are high, communal violence is widespread and corruption is endemic. Brides are still tortured and burnt for dowries, female infanticide is common and the caste system has lost little of its power and none of its brutality.

So with all these contradictions, why is India flavour of the month for the White House? For me its because the Hindu religion has given India a unifying framework but also a great deal of freedom – something, at least superficially, close to Americans’ hearts. What other religion around the world throws in a guide book about really interesting sexual positions?

What Hinduism has given to Indians is a wonderful contradiction, the ability to belong and not to belong to the world. I always felt that much of the spirituality that the Beatles got into in the 60s was just a bit of Indian myth-making. They are a pragmatic people.

I remember a trip I took to the source of the holy river Ganga – there was a group of men looking deeply and spiritually into the water – then suddenly like birds they would dive in. This was no ritual, they were simply going after the coins on the riverbed.

Unlike Christianity or Islam, there is no notion of ultimate sin in Hinduism. What I love is how they are able to harness their Gods and make use of them for their own ends.

Indians have never been, and will never be, ‘other-worldly’. They hanker for the material goods that this world has to offer, and look up to the wealthy and more powerful.

Hindusim has some wonderful psychological props to give those of us born out of the madness of colonialism. The British, and before them the Moghuls and the Turks, must have wondered why it was so easy to rule a people with such a strong history.

STRATEGY

The answer is that the Indians were just playing them. Hindu culture is no easy ride for would-be colonialists. It regarded all foreigners as ‘mleccha’, unclean.

The practical Indian mind would collude with the more stronger power. They wouldn’t try and fight it out when the odds were against them, the best strategy was to absorb the enemy.

Those Indian elites who compromised with the British knew that soon their time would come.

No one can accuse Indians of crass consumerism like America, where religion is just a comfort zone for hating ‘other’ people. Indians have managed to survive endless invaders by their ability to compromise and adapt while their Hindu culture and civilisation remained intact.

I have visited India several times and I found their caste system baffling. They associate dark skin with the negative, and no black southern Indian girl will ever win Miss India.

That said, most of the caste hierarchy is based on status and family What is even more interesting is that many Indians in Britain also have African roots. My neighbour had to admit that he had never visited India and was, in all intense and purposes, a son of Kenya.

Bush can see a spirit in Indians that he can’t argue with; he is the world emperor who wants India. The Indians appear to have laid down in acquiescence: America is now another opportunity, just like the British had been.

In the same week that George Bush was blessing India, Chris Patten, the chancellor of Oxford University, was also in India busy recruiting students. Indian students have been going to American and Australian campuses and not to Oxbridge.

They have shown that ‘talented people’ can be a bigger asset than oil in world trade. There are lessons here for Africa and the Caribbean when comes to modernising their education systems.

For those of us brought up on Christianity and Islam, we may need to be less reliant on fatalism and like our Hindu neighbours, start bribing the Gods to work in our favour.

BY Tony Sewell

News: 'Small businesses T&T getting bigger'

(TE 17/03/2006) Port of Spain - There are between 20,000 and 30,000 small and medium sized enterprises (SMEs) in Trinidad & Tobago. So said Permanent Secretary in the Ministry of Trade, Edwina Leacock, as she quoted data estimates yesterday.

She further explained however that those figures "are underestimated" since they do not include establishments which function in the informal economy, including food preparation and preservation, street and market vending, specialty services and suppliers.

Leacock spoke at the Chamber of Industry and Commerce's NOVA Committee conference titled "Supporting the Growth of SMEs in Developing Economies", at the Crowne Plaza, Port of Spain.

Providing additional statistics, Central Bank Governor Ewart Williams during his presentation said: "While comprehensive data are not available to allow a precise estimate of the impact of the new SME expansion thrust, the evidence is that there has clearly been strong growth in the SME sector over the last few years.

"The NEDCO programme has built a client base of 5,600 businesses and has advanced close to $100 million in loans to various sectors including light manufacturing, services and food and agro-processing- since 2002, some 4,600 persons have also benefitted from the training and mentorship programmes."

While Williams, like Leacock and other presenters during the first session of the conference all highlighted that access to finance is the major challenge faced by SMEs because they're perceived to carry higher risks, Williams said SME development is one mechanism which could lend to a country's sustainable growth prospects. "There is no reason why the Caribbean SMEs cannot capture a share of the outsourcing market that is now dominated by countries such as India.

"To take this leap forward, the focus must be on innovation and increasing productivity and competitiveness-the strategy may need strengthened financial support and perhaps more trade and export market facilitation.

"In Singapore for instance, a new SME loan programme has been introduced to help Singaporean firms penetrate global markets-as a start a similar scheme could be devised under the recently launched Caribbean Single Market programme to enable Caribbean SMEs to develop the potential and capacity to export," Williams said.

He also demonstrated the importance of a culture shift which has aided the nurturing of the entrepreneurial spirit.

"The importance of an entrepreneurial culture for SME development is a subtle but no less a real precondition...my generation grew up in a culture in which you studied hard to get a job, to work for a large firm or the Government. At that time, business acumen was considered hereditary and involvement in small business was not generally encouraged.

"It is now acknowledged that the culture most conducive to SME development is one in which business studies are an integral part of the school curriculum," the Governor stressed.

News: Canada, France Congratulate CARICOM On Single Market

(JIS 17/03/2006) Georgetown - The Governments of Canada and France have expressed goodwill to the Heads of Government and people of the Caribbean following the formal launch of the Caribbean Community (CARICOM) Single Market (CSM) on 30 January in Kingtson, Jamaica.

Canada, in its congratulatory letter to CARICOM Secretary-General, H.E. Mr. Edwin Carrington through its High Commission in Georgetown, Guyana, expressed "sincerest congratulations to Member States of the Caribbean Community" for what was deemed "a significant achievement and an historical milestone on the path to Caribbean integration."

France in its letter to the CARICOM Secretary-General said it considered the CARICOM Single Market and Economy (CSME) "a significant advancement for regional integration of Caribbean countries."

France said it "noted with interest the announced establishment of the regional Development Fund," and expressed assurances of that country's ongoing support of the regional integration process.

On 1 January, the CARICOM Single Market was launched following which the formal signing ceremony took place on 30 January in Kingston, Jamaica. The first Member States to implement the Single Market were Barbados, Belize, Guyana, Jamaica, Suriname and Trinidad and Tobago. Six Other Member States, Antigua and Barbuda, Dominica, Grenada, St Kitts and Nevis, Saint Lucia, and St Vincent and the Grenadines have signed a Declaration of Intent to join the Single Market by the end of June 2006.

With respect to the three other Member States, The Bahamas is not yet a part of the Single Market arrangement while Montserrat, a British Dependency, awaits the necessary instrument of entrustment from the United Kingdom government in order to participate. Haiti has not completed its accession to the Revised Treaty of Chaguaramas and is therefore not a participant in the Single Market.
Attached are the full texts of the congratulatory messages from Canada and France respectively

Message from H.E. Bruno Picard Plenipotentiary Representative to CARICOM from Canada

On the occasion of the formal launching of the CARICOM Single Market (CSM), I take this opportunity to express, on behalf of the Government of Canada, our sincere congratulations to the Member States of the Caribbean Community (CARICOM) for this significant achievement.

The event marks an historical milestone on the path to Caribbean integration. Undoubtedly, in the context of globalization, the entry into force of the CSM should stimulate growth in the Region and contribute to greater economic and social development for Caribbean states.

Canada has been a longstanding supporter of economic integration and sustainable development for the Caribbean. We have demonstrated this commitment in various ways, including through support provided by CIDA for programmes and projects that are directly related to the establishment of the CSME.

I commend you and your colleagues for the hard work that has been done to make the CSM a reality.

Message from France

France joins fully with the European Union in its congratulations on the entry into force of the CSME, delivered by its Ambassador in Jamaica locally representing the Austrian presidency, on the occasion of the Inaugural Ceremony of 30 January last in Kingston.

Within the framework of the bilateral relations that it has established with CARICOM and in view of the agreements to be entered into between the EU and CARICOM, France, like the European Union as a whole, considers that the CSME represents a significant advancement for regional integration of Caribbean countries.

Similarly, France formally notes with interest the announced establishment of the CARICOM Development Fund.

News: UN raises growth forecast for Latin America

(Xinhuanet 17/03/2006) Santiago - The United Nations Economic Commission for Latin America and the Caribbean said on Friday it had raised the 2006 growth forecast for the region to 4.3 percent,from an earlier prediction of 4.1 percent.

Lower interest rates in some of the region's main economies, including Mexico and Brazil, had created a more optimistic scenario, Jose Luis Machinea, head of the UN commission, told reporters.

Mexico and Argentina, in particular, would grow more than the commission's forecast published in December, he said.

Meanwhile, Chile was also likely to put up a good performance and achieve an economic growth of 6 percent, up from the previously estimated 5.5 percent, said Machinea.

In 2005, the economy in the region as a whole grew by 4.3 percent, and many countries surpassed earlier estimates and paved the way for better performance this year, he added.

News: Wal-Mart International CEO upbeat on India

(RTR 17/03/2006) New Delhi - A top Wal-Mart Stores Inc. executive said on Friday he was encouraged by talks with unnamed "very senior" Indian government officials here as the world's biggest retailer lobbies to gain access to one of the world's fastest-growing economies.

Mike Duke, Wal-Mart's vice chairman and head of international operations, told Reuters that the retailer would help modernize India's inefficient supply chain and provide quality jobs if it were permitted to open stores here.

These were the second such high-level talks here in less than a year. John Menzer, who now runs Wal-Mart's U.S. business, visited in May 2005.

"We continue to be encouraged by the steps that have been taken by the government but also anticipate, and want to encourage, additional steps," Duke said in an interview with Reuters.

India does not allow foreign retailers such as Wal-Mart to directly invest in the retail market, although analysts widely expect restrictions to be eased within the next two years.

The country recently relaxed rules for stores that sell a single brand, such as Nokia or Nike, allowing them to take up to a 51 percent stake in retail businesses in India. Many of them already sell goods here through franchisees.

Asia's third-largest economy has a population of more than one billion, so its appeal for multinational retailers is obvious. With a large and rapidly growing middle class estimated at about 56 million people, it has a further 220 million or so "aspirers" earning $2,000 to $4,400 a year who can afford a motor bike, refrigerator and television.

Organized retail chains control perhaps 3 percent of the market, so analysts see monumental room for chain store growth. Duke said India was among the retailer's top priorities for international growth.

The United States accounted for roughly 80 percent of Wal-Mart's $312 billion in sales in the last fiscal year, but slowing growth at home has made international expansion more attractive.

COMMUNISM VS CAPITALISM

Cracking the Indian market won't be easy for foreign players. Wal-Mart and other global retailers face stiff opposition from the coalition government's communist allies, who considers Wal-Mart the poster child for the perils of unchecked capitalism.

Many local retailers also oppose relaxing restrictions for fear that global titans will drive local mom-and-pop stores out of business, and topple fledgling retail chains that are only now building up sizable positions in a fragmented market.

But Duke, who once ran Wal-Mart's widely respected logistics business, said the retailer would bring much-needed expertise to modernize the supply chain, adding jobs and lowering prices. The stores themselves would provide jobs and opportunity for promotion to management positions, he said.

"Reasonable people of any party look at it and realize that the consumer speaks loudest," he said. "India is becoming a consumer economy. It is the consumer that ends up voting."

Many of the objections raised here mirror complaints leveled against Wal-Mart back home, where critics contend that the retailer bankrupts competitors and pays poverty-level wages and stingy benefits that force employees to rely on public aid for health care.

"There is a lot of noise that filters around but I think in the long run, the consumer ends up knowing what the real truth is," Duke said. "The facts overcome the noise. We would treat our associates with respect, we will provide tremendous opportunity for them."

Most of India's retail trade now flows through millions of small corner shops. Duke said he visited some of those stores -- called kiranas -- and was convinced that they can survive

because of the convenience and service they offer.

They may even benefit from lower prices if Wal-Mart is successful in improving supply chain efficiency. Indeed, that may be Wal-Mart's most compelling argument.

An estimated 40 percent of India's farm produce spoils before reaching consumers -- an alarming statistic in a country where millions go hungry. Farm goods typically pass through six or seven intermediaries before reaching stores. Cold storage is scarce and expensive.

Duke said Wal-Mart would work directly with farmers and logistics suppliers to help develop a cold supply network that could get produce to stores faster, and with more money staying in farmers' hands.

"That's not an overnight fix, but we will certainly, over time, have dramatic impact on that," he said. "We can dramatically benefit the consumer, the farmer, the government, the country, the community."

For now, Wal-Mart has applied to open a liaison office in Bangalore so that it can study consumer habits here, and Duke said he was hopeful that the application would be approved "very soon."

Factbox: India's retail sector set to grow rapidly

(RTR 17/03/2006) NEW DELHI - The following are some of the characteristics of India's retail industry.

They have been culled from various reports by consulting firms such as PricewaterhouseCoopers, A.T. Kearney and lobby group Confederation of Indian Industry.

-- India does not allow foreign retailers to set up wholly-owned retail chains in the country.

-- They can enter into wholesale trade and foreign chains selling single brands can also own up to 51 percent of their marketing networks.

-- Even though retail chains are not present in India, the country is a huge sourcing base for giants like Wal-Mart Stores Inc. who buy textiles, jewelry and home furnishings.

-- Organized retail is currently 3 percent of total retail trade worth $210 billion. It is forecast to hit 9-10 percent by 2010.

-- Some 97 percent of the trade is through 12 million mom-and-pop shops spread across Asia's third-largest economy.

-- More than 65 percent of total retail trade comprises of food and grocery items.

-- The retail industry employs 21 million people, 7 percent of total workforce. It is the largest employer after the agriculture sector.

-- Per capita income in billion-plus India has grown an average 6 percent a year for the past five years, roughly in line with GDP expansion over the past decade. The services sector contributes to nearly half of the $700 billion economy.

-- A young population, half are under the age of 25, coupled with rising salaries are fuelling demand for lifestyle products.

-- The middle class, numbering 300 million, is the target audience for most global consumer durable firms, including retailers.

-- India ranks fourth based on purchasing power parity behind the United States, China and Japan.

-- Discretionary spending has risen by 16 percent in the upper and middle income strata.

-- India is the world's second-largest producer of fruits and vegetables.

-- India has a skeletal cold storage network leading to huge wastages across the supply chain. Estimates vary between 24 percent to 40 percent.

-- Rates for cold storage are also higher -- at 10 to 18 rupees/cubic feet each month compared with the equivalent of 2 rupees/cubic feet per month in the United States.

News: Indian Inflation rate falls to 4.02%

(Sify 17/03/2006) New Delhi - Inflation fell to 4.02 per cent during the week ended March 4 from 4.29 per cent in the preceding week, mainly due to decline in prices of chicken, eggs and some other essential food items and vegetables.

Inflation fell by 0.27 per cent to 4.02 per cent despite increase in industrial fuel prices while manufactured items prices remained firm, but wholesale price rise was lower than 5.46 per cent a year ago, according to data released by government today.

Chicken and egg prices fell sharply as people are dreading to have it on their plate due to bird flu scare.

Also the week saw fall in prices of fruits, vegetables, fish-inland, soyabean, bran, gur, atta, butter, textiles, resins and zinc.

However, prices rose for moong, arhar, fodder, furnace oil, sooji, maida, rice bran oil, imported edible oil, groundnut oil, newsprint, steel sheets, other iron steel and batteries.

Wholesale Prices Index (WPI) declined by 0.1 per cent to 196.8 points and it was 189.2 points in the year ago period.

Government revised downward the final inflation figure to 3.86 per cent from provisional 4.24 per cent for the week ended January 7 while WPI stood corrected at 196.2 points as against provisional 196.9 points.

The wholesale price rise is in line with government’s estimate of 5-5.5 per cent inflation this fiscal.

During the week, world oil prices steadied to $ 63.4 a barrel due to concerns over the potential for fresh disruption to supply in Nigeria and a heightened sensitivity to Iran’s nuclear ambitions.

Back home, the government is yet to take a decision on passing fully the price rise in India’s basket of crude oil imported from foreign markets to consumers.

News: Indian insurance sector may get new entrants

(Sify 17/03/2006) Mumbai - Fitch Ratings says in a special report published that several new players are expected to enter India's rapidly growing insurance market in the next one to three years, especially if the foreign direct investment (‘FDI’) limit is raised. Most private insurance companies are joint ventures between Indian and foreign partners; foreign partners' share is currently capped at 26 per cent.

The report notes that India's insurance industry has undergone major structural changes in recent times and now accounts for 10 per cent-15 per cent of India's total financial sector assets. Despite the strong growth and improving penetration levels, the Indian market is still quite small and holds the potential to expand further.

Total gross premiums amounted to $21.2 billion in FY05, split roughly 60:40 between life and non-life businesses respectively. Total (life and non-life) premiums were equivalent to 3.17 per cent of GDP in 2004 as compared to 8.27 per cent in the US, 7.89 per cent in Europe (western, central and eastern) and 7.4 per cent in Asia as a whole. This potential for growth is likely to attract more players.

At present, there are 13 private insurers in the life sector and 8 in the non-life sector. "Private insurers are rapidly gaining market share at the expense of the public sector and will continue to be aggressive in their attempt to capture an ever larger share of an expanding market," says Purvi Harlalka, analyst at Fitch India. "Private insurers are able to do this because they offer greater choice in terms of products and services and also make a concerted effort to increase consumer awareness about the benefits and importance of insurance via vigorous marketing."

Additionally private insurers have also focused on developing alternative distribution channels - among them corporate brokers, bancassurance, the internet and corporate agents. These have provided additional ways of getting products and services to customers, and now account for 25 per cent-30 per cent of private sector sales.

The agency also notes that the expected increase in the FDI to 49 per cent from the current 26 per cent level will allow a fresh infusion of capital into the insurance sector, given the business' strong capital needs.

Fitch has recently introduced National Insurer Financial Strength (‘IFS’) ratings in India. The national rating scale provides a relative measure of the rated entity's capacity to meet senior policyholder and contract obligations on a timely basis as compared with other rated entities in the country.

News: Bengal vodka sales bubble over

(TT 17/03/2006) Calcutta - Vodka distillers are raising a toast to Bengal.

The state has now about 10 per cent share of the national vodka market along with a compounded annual growth rate of 54 per cent in the last three years.

Even in eastern India, tipplers are swearing by the vodka: around 20 per cent of the spirit’s sales are from this region compared with the regional share of whisky which is about 10-12 per cent and growing at a rate of 9-10 per cent.

Vodka sales in India have increased to 16.94 lakh cases in 2004-05 from 7.92 lakh cases in 2002-03. In Bengal, sales touched 1.69 lakh cases in 2004-05, with the growth rate forecast for 2005-06 being 54 per cent.

Strong growth prospects have enticed liquor giant Radico Khaitan to foray into the vodka market under the Magic Moments brand. Priced at Rs 260 for a 750 ml bottle, Radico expects to have a market share of 10-15 per cent within the year in this price segment.

“We have studied the white spirits market extensively. While gin is experiencing a downturn, vodka — like in other parts of the world — is seeing jump in sales in the country and especially in states like Bengal by leaps and bounds,” said R. Vaziraney, president sales and marketing, Radico Khaitan Limited. The company has invested Rs 85 crore to set up a grain distillery at Rampur in Uttar Pradesh with an annual capacity of 27 million litres.

Diageo India too is pleased as Punch with vodka sales in Bengal, where the white spirit fares well across all price segments.

The company counts the state as one of the top five markets in India in terms of sales for its premium brand Smirnoff, according to Santosh Kanekar, director — marketing, Diageo India.

He said surveys in the state indicate that vodka is the preferred spirit among the new drinkers whose numbers swell by as much as 25 million a year.

Kanekar attributed the sales spurt to a stable licence regime in the state and to the drinking habits of its youth, who are ever willing to try out new spirits.

Radico will launch Magic Moments first in the city and then in Mumbai. The company has 28 bottling tie-ups in the city. Both Radico and Diageo plan innovative marketing strategies to attract the younger urban customers.

Radico clocked a turnover of Rs 995 crore in the last fiscal and expects 22 per cent to 25 per cent year-on-year growth over the next two fiscals.

Column: Another reminder for opening FDI in retail

(FE 17/03/2006) Mumbai - All the common-sense warnings on who primarily benefits by refusing to open the retail sector to foreign direct investment are coming true. Any sensible government should have got suspicious when prosperous domestic business and the Left alike demanded restricting sector entry in the name of protecting the small man. Now come reports of Sunil Mittal’s Bharti group planning to enter the food retail sector with an initial investment of Rs 6,000 crore, possibly with Britain’s Tesco taking a minority stake. It was so clear from the start that the people to benefit most by keeping FDI out, apart from the inefficient retailer, would be organised domestic business. Shoppers’ Stop and Pantaloon are expanding with speed, Mukesh Ambani is putting together a reported Rs 20,000 crore for a retail foray, Godrej and Bombay Dyeing are getting into investing in malls. This is so similar to the old licence raj’s walls protecting domestic industry’s market and profits from external competition.

Owing to a fragmented retail set-up, India’s brand manufacturers have had only limited pressure to be efficient. Organised retailers force manufacturers to look at every single process to see whether it adds value or not. The biggest gainer from the absence of this is the inefficient manufacturer. Companies in advanced countries are constantly scouring the world for cheaper and higher-quality products. We are talking of hooking our manufacturing and agriculture to consumers through the globe. All our supply chains will, in such a scenario, get upgraded on a scale we haven’t seen, slashing costs and consumer prices, hugely expanding productive capacity and creating millions of new jobs. The system needed to manage such a chain has been on for decades in the US and Europe. By keeping FDI strictly limited, we stunt our economy in the same way the permit-licence raj did for so long. Big domestic companies take the first-mover advantage and can keep it, with the protected market.

We had earlier suggested Icrier’s study on the subject, commissioned two years before by the Union consumer affairs ministry, could be a basis for change. It had called for a 49% cap on FDI to be raised within five years to 100%. This could be supplemented with a ‘negative list’ of items, where the door would stay shut in the medium future. With related changes—infrastructure reforms, credit access changes, legalising contract farming, revamping the quality standards machinery, etc. If only reformers could get their act together.

News: Pantaloon seen buying Crossroads

(ET 17/03/2006) MUMBAI: Crossroads, one of India’s first shopping malls and a major Mumbai landmark, may soon see a change of ownership. The Ashok Piramal Group is believed to have sold Crossroads to the Pantaloon Group-owned Kshitij Real Estate Fund (KVC Fund) and a foreign private equity fund for around Rs 350-400 crore. Informed sources said that under the terms of a deal finalised last week, the entire mall space of around 1.2 lakh sq ft have been sold.

When contacted, Kishore Biyani, managing director of Pantaloon Retail, refrained from commenting directly on the deal. “What will Pantaloon do with the entire Crossroads mall?” he asked. Rajeev Piramal, vice-chairman of Morarjee Realities, which owns the mall, was not available for comments. There is speculation that the mall, which is positioned as a premier retail chain, is likely to be converted into an outlet devoted largely to consumer durables. It’s not clear if the existing tenants have renegotiated tenancies with the new owners. The new owners may also pay compensation to the tenants to move out, if the profile of the mall changes.

Kshitij Fund has so far deployed around Rs 713 crore in retail-led projects for the development of around 3m sq ft. As a strategy, the fund’s deployment so far has been in shopping malls in tier-II towns like Ahmedabad, Vadodara, Indore, Kochi and Coimbatore. The purchasing power of these towns have been growing rapidly in recent times, but there are few opportunities for shopping and lifestyle spending.

The fund’s strategy is to spread wide by entering into JVs with landlords and local developers, while retaining management control with a 50-70% holding in the SPV formed for each project.

ET had reported on February 6 this year that the Ashok Piramal group, headed by Urvi Piramal, was exploring various options to revamp its operations, which could either see a large fund acquiring the entire real estate property near Haji Ali in central Mumbai, or the roping in of a financial partner. The group had also put all future retail expansions under Crossroads on hold. Following the merger of Piramal Holdings with Morarjee Realties, Crossroads had been left out of the group’s retail plans. All future retail forays were to be done only through Pyramid, the retail arm of the Piramal Group.

While several retail malls mushroomed in the suburbs and across cities, Crossroads failed to scale up its operations. Since the mall didn’t get higher footfalls and volumes, the margins were stagnant. In the retail business, the location matters a lot, analysts said. The Crossroads mall at Haji Ali houses various premium and branded retail outlets.

News: ING hot on pension, retail banking and life insurance

(BS 17/03/2006) Mumbai - Dutch financial institution, ING group, has identified post-retirement financial planning, retail banking and life insurance as its three key growth areas in India.

ING group chairman, Michel Tilmant, said the changing demographics provides a tremendous opportunity for financial solutions providers to tap the growing middle-class and also capitalise on emerging affluence, which gives rise for focused financial planning.

During his meeting with the top brass of Indian banking arm, ING Vysya Bank, Tilmant asked the the local management to submit a growth strategy plan in three months.

The management of ING Vysya Bank has been asked to be “ambitious in its ambitious” and draw up a growth strategy that corresponds to ING’s “ambition in this country”, Tilmant said.

“We have been too modest in India. One of the purpose of my visit is to revitalise the team here,” the ING Group chief said, while declining to spell out any future growth targets.

ING group is also betting big on the internet as a banking channel. Towards this, ING Vysya recently rolled out 12 automated branches in Bangalore, in a bid to expand its direct banking operations.

The ING group, through its banking, life insurance and asset management businesses, employs over 7,200 people in India and operated under the ING Vysya brand.

The group has launched its life insurance platform in 70 cities in India and hired over 11,000 agents in 2005. In addition to this, ING is also focussed on the fast-growing small and medium enterprises (SMEs) in India.

Tilmant emphasised on the alternative channels of investment sought by most global investors, mainly private equity, real estate and the bond markets. The group currently has 670 million euros of assets under management.

News: ING Group drafting new biz plan for India

(Sify 17/03/2006) Mumbai - ING Group in India would be preparing a long-term business plan that could fetch the Dutch financial service group 100 million euros in annual profits.

Michel Tilmant, Chairman of ING Group, today said that he had asked the Indian team to come out with a business strategy for the country.

However, he said, "the € 100 million is not a magical figure for me." What is important for ING is long-term business development. "We want to revitalise the Indian operations."

When asked about plans for fresh capital infusion, he said, "ING has long-term commitments in India and capital is not the only issue." Management and talent are equally important.

Tilmant, who is on a visit to India, said he did not want to put any specific figure on capital investments or income, or profit at the moment. It is for the Indian team to first work out the plans. "I have asked the Indian team to come out with its proposal in the next few months" he said.

Currently, profits from Indian operations, which consist of banking, asset management and insurance, account for a very small percentage of the group's total earnings.

He said the group would review the product offerings in the Indian market. "Along with products, we will invest in branch network to ensure efficient delivery". When asked about outsourcing of jobs to India, he said "being efficient means sometimes we have to cut cost.

However, as employers, we have social responsibility. But we do not rule out outsourcing specific projects, even to India, but it is not an operating rule".

He said the group was keen on exploring the opportunities in the fast growing Asian markets, including India.

ING operates in 60 countries and employs 110,000 employees.

News: India Is 'Land of Opportunity' Minus the Land

(Bloomberg 16/03/2006) Mumbai - George W. Bush got it wrong this month when -- perhaps feeling a bit flush with the success of his maiden trip to New Delhi -- he urged Americans to view India as a land of opportunity.

If U.S. investors want to make money in India, they should tweak their president's counsel a little and see India as one big opportunity -- minus the land.

A growing shortage of good-quality urban real estate in India is beginning to act as a dampener on many businesses that might otherwise have strong prospects.

Take organized retailing, which is set to triple in size to $23 billion by 2010, according to KPMG International.

Wal-Mart Stores Inc., which is anxiously waiting for India to allow global retailers to set up shop, will need anywhere from 100,000 square feet (9,290 square meters) to 200,000 square feet for each of its bigger stores. So would Carrefour SA.

Where will they find that kind of space in Mumbai, New Delhi or Bangalore? Not in the main shopping areas.

"Supply of vacant space of the desired size in prime locations is extremely limited,'' economist Amitendu Palit said in a recent study on the challenges that global retailers can expect in India. "While New Delhi and Mumbai are expected to acquire additional retail space of around 30 to 40 million square feet over the next few years through new retail formats, the bulk of this is to be located in satellite or suburban areas.''

Zoning Blues

The Indian property market is extremely fragmented, thanks to zoning laws that specify land use based on pre-World War II British notions of what cities should look like.

A legal "conversion'' -- using a vacant factory or farm for, say, retail or housing -- is so difficult and time-consuming that many individuals and businesses cut corners, and bribery is rampant. It's only when the judiciary insists on a faithful enforcement of the zoning norms that one gets to understand just how oppressive the laws really are.

That's what happened last month when the Delhi High Court ordered municipal authorities to demolish more than 18,000 unauthorized structures. As part of the drive, two shopping malls on the southern fringes of the city were bulldozed. Overnight, the flourishing businesses of some of the city's best-known fashion designers were grounded because they were operating from a zone reserved for "villagers.''

If business is unwelcome on the outskirts of the city, the center is out of bounds, too.

A dearth of designated hotel land in central business districts is already showing up in an acute shortage of rooms. Average rates have shot up to about $160 a night in New Delhi and $242 in Bangalore. With such high room charges, India will struggle to build a tourism industry.

Acrophobia

The other obstacle is that Indian planners dislike tall buildings, and this has very little to do with aesthetics.

The logic goes something like this: The taller the building, the more people who will be working or living in it. That means the authorities will have to provide wider roads to avoid traffic snarls. They will also have to supply piped water at a higher pressure to satisfy the occupants on top floors.

The municipality will have to collect garbage every day from taller buildings, whereas it can leave smaller heaps of refuse to rot for a few days in suburbs scattered over a larger area.

Since both the revenue and the technical capabilities of Indian municipalities are limited, town planners impose a very stringent limit on the floor-space index, which is computed by dividing a building's total floor area by the size of the land occupied.

This is essentially a limit on a building's height. In most Asian cities, floor-space index readings range from 5 to 15. In India, it is 1.6.

City Must Shrink

The floor-space index "should be raised significantly in central business districts to create affordable office space and make these areas accessible to small and mid-sized businesses,'' N.R. Narayana Murthy, the chairman of Bangalore-based Infosys Technologies Ltd., said in a speech last month.

A recent experiment by the Mumbai authorities to provide decent housing to the 600,000 residents of Dharavi, Asia's largest shantytown, has evinced strong investor interest because there's talk of allowing a floor-space index level of as high as 4, Daily News and Analysis reported Jan. 30.

The floor-area restrictions push people away from the city center. In 2003, Alain Bertaud, a World Bank consultant on urban planning who is based in New Jersey, and economist Jan Brueckner at the University of California at Irvine estimated that if there were no such limits in Bangalore, India's Silicon Valley, the city would shrink and commuters would save money.

Rent Control

A large chunk of India's prime real estate is being held to ransom by existing tenants who are using archaic rent-control laws to pay rates that were fixed 60 years ago.

In Mumbai, real estate supply is constrained by the Maharashtra state government's Urban Land Ceiling Act more than six years after the federal government repealed the draconian statute and advised states to do the same.

Almost five years ago, McKinsey & Co. warned that India was losing as much as 1.3 percentage points of economic growth because of distortions in the land market. Since then, the size of the economic opportunity knocking on India's doors has increased, and so has the pressure on urban real estate.

Land is getting scarce in the land of opportunity.

News: Essar lines up telecom retail chain plan

(FE 16/03/2006) Mumbai - The Essar Group is planning to set up a multi-branded telecom retail chain with an investment of Rs 1,500 crore in the next five years. The initial plan is to invest Rs 500 crore for the first phase spread over a year, and another Rs 1,000 crore over the next four years.

The communication hub would offer convergence of all telecom products and services such as mobile-based gaming and entertainment, repairs and refurbishment with a pan-India footprint of close to 2,000 outlets in the next five years, according to sources.

Speaking to FE, an Essar spokesperson said, “As a company, we continue to look at growth opportunities and cannot comment on any specific plans.” Sources also said the group is on the lookout for an internationally-renowned partner to collaborate with for its retail venture. KSA Technopak is said to be preparing a feasibility study.

News: "Big Bang" in India for first time home buyers

(FR 16/03/2006) London - The first time you buy a home, it is very common to put down a down payment towards the home price, and then borrow money from a lender to cover the rest of the price. You then make payments with either a fixed or adjustable rate mortgage, based on a predetermined interest rate and terms. This transaction with you and the lender is called a mortgage. And if it is the only mortgage on a property, it is called a first mortgage.

In the case of this first mortgage, you most likely have a larger amount of debt than the amount of home equity, unless of course you borrow less than you put down, then you would have a greater amount of home equity than debt. Every time you make a payment to the lender, your debt decreases and the property's home equity increases. This occurs until the life of the loan has been fulfilled, and the mortgage is paid in full. At this point, the property is free and clear, and you own the property out right.

Anytime during the life of the first mortgage, home owners may choose to borrow against the home equity built in the home and take out a second mortgage. A second mortgage is a mortgage on a property which has already been pledged as collateral for an earlier mortgage.

The process of a second mortgage is much like the process of taking out the first. However, because you are borrowing against the equity already built up in the home, the second mortgage carries rights which are subordinate to those of the first. This means that the second mortgage is second to make a claim and the second to collect if the first mortgage is in default. For this reason, interest rates are often higher for a second mortgage than a first mortgage.

When considering a second mortgage, it is important to outweigh the costs against the benefits. You should shop for credit terms that best meet your borrowing needs without posing undue financial risk. After all, with the responsibilities of a second mortgage, a home owner is more likely to default and possibly lose his or her home. Be sure that you shopped your second mortgage just as diligently as you did the first, comparing annual percentage rates, points, fees and prepayment penalties. All these terms can make a huge difference in the amount of money you will be paying in turn for borrowing against your home equity.

As in the situation of the first mortgage, a second mortgage generally increases your debt and decreases your home equity. The opposite, however, is that of a reverse mortgage.

In a reverse mortgage, a homeowner borrows against the equity in his/her home and receives cash from the lender without having to sell the home or make monthly payments. This cash can be given to the homeowner as a monthly cash advance, in a single lump sum, as a credit account that allows you to decide when and how much of your cash is paid to you, or as a combination of these payments. The homeowner does not have to make any payments as long as he or she lives at the residence. If the homeowner should move, sell the property, or die, then the loan would have to be paid off.

In order to qualify for a reverse mortgage, you must be at least 62 years of age and own a home. This option for a reverse mortgage is perfect for older homeowners who are equity rich, and cash poor. In the case of a reverse mortgage, your debt increases and your home equity decreases.

Depending on what stage of the homeowners experience you are in, it is important to always know your options as a homeowner. With the option to borrow against your equity, you can have cash to improve your home, make improvements to increase the overall value of your home, or live comfortably when there is not any liquid cash readily available to you, but you have equity in your home.

Being a homeowner can be rewarding in many ways, and being able to utilize the money in your home is one of them. Always research terms and conditions of any mortgage, and always borrow from a qualified, trusted source.

News: India & China strenghten trade ties

(TV18 16/03/2006) New Delhi - China could soon overtake the United States as India's biggest trade partner. The two countries today agreed to work on a regional trade agreement and an investment protection agreement.

Commerce Minister, Kamal Nath says that trade between the two countries, which is likely to be in excess of USD15 billion this year, will touch USD20 billion next year.

He also says that the focus is now on expanding the trade basket.

He says, "We are looking at engineering goods between both our countries as well as agricultural products. The whole objective is not that volumes should increase, the items in the trade basket should increase."

News: FMCG firms battle to attract consumers

(TV18 16/03/2006) Mumbai - Pepsi's juice brand, Tropicana, gets 20% of its sales in modern retail stores. When placed on racks of hypermarkets and supermarkets, Saffola's market share in the edible oil category almost doubles. According to a CII study, fast moving consumer goods are moving faster in the non-kirana stores with numbers growing well above 15%.

One would usually end up buying daily bread from a kirana store pretty much sticking to just what one requires. However, offers like 'Buy 1 get 1 free', Rs 24 off and freebies encourage one to loosen purse strings and this is what modern retailers are using to bargain with FMCG brands for better margins.

Experts say that this is just the beginning of a tussle between FMCG companies and modern trade retailers. Besides with higher margins, retailers are demanding discounts and asking for frequent promotions. In return, FMCG guys get good visibilty on shop shelves and focussed point of purchase promotions leading to higher sales.

Though the higher margins and promotions spends means 3-5% jump in selling costs than at a kirana store, companies like HLL think it's well worth it.

Executive Director-Sales & Customer Development, Sanjay Dube says, "We may be giving higher margins but we get back something more than general trade in terms of our expectations."

Separate sales teams at FMCG majors like HLL & Marico are now supplying directly to big retailers to cut distribution costs. Others are pushing top-end products through specific promotions at these outlets, to catch the urban customer who comes visiting.

There is also a battle brewing because modern retailers are putting up their own private labels to compete with big FMCG brands. While the traditional retail set-up will continue to be the mainstay for FMCG companies, modern trade is expected to grow 10% of the total Indian retail market by 2010.

With the entry of big players like Reliance and Walmart, it's clear that retailers will be flexing more bargaining muscle.

News: LatAm-Carib Keep Talking with EU

(PL 16/03/2006) Caracas - Latin American and Caribbean delegates agreed to continue exchanging experience regarding the current negotiations with the European Union, announced the Latin American Economic System (LAES) Wednesday.

The institution's webpage contains a summary of the regional meeting dealing with "Economic relations between the European Union and the Latin America and the Caribbean" in the two-day private sessions in Caracas.

According to the source, the work sessions identified the essential elements characterizing regional countries´ economic relations with the European Union, particularly trade exchange, foreign investment, and cooperation.

The LAES-organized meeting was held prior to the bi-regional Fourth Summit of Heads of States and Governments that will take place in Vienna, Austria in May.

The proposals were focused on citizen rapprochement, creation of dialogue, social policies and infrastructure, identification of public assets, strengthening educational spaces and conversations dealing with migration and remittances.

LAES is a regional intergovernmental institution of 26 Latin American and Caribbean countries headquartered in Caracas, Venezuela.

It was founded October 17, 1975 in Panama to promote cooperation and integration, as well as consultation and coordination of economic positions and strategies in dealing with other countries, groups of nations, forums and international entities.

News: India hopes job logic will coax left on retail

(RTR 16/03/2006) New Delhi - Nandan Piramal is a harried man. As vice-chairman of a leading Indian retailer, he can't find the technology to ensure farm products stay fresh on their way from the fields to his stores.

Food retailers in India are mainly family-run businesses too small to have created much of a market for a home-grown refrigerated transport industry.

Piramal, of Piramyd Retail Ltd., says one solution would be to tap into foreign expertise. Yet, there's a hitch -- foreign investment in Indian retail is heavily restricted.

"We don't consider foreign direct investment as too much of a threat," he said. "I think it will add to the pie instead of eating into the pie."

Piramal's situation is one reason the ruling Congress-led coalition wants to open retailing to foreign investors. It has so far shied away due to opposition from its communist allies, avoiding the issue in last month's annual budget, but analysts say it will tackle the issue once state elections in May have run their course.

A small step was taken in January -- allowing single-brand foreign firms to own 51 percent of retail joint ventures. Until then, these brands depended on franchisees to sell their wares in Asia's third-largest economy. But multiple-brand firms such as Wal-Mart Stores Inc. and Carrefour are still barred.

JOBS GALORE

Developing the $8.5 billion retail sector carries huge opportunities and huge risks. Economists say it has a clear link to overall economic growth and thousands, if not millions, of jobs stand to be created to make up for those lost through competition.

The government expects foreign investment in retail to make India the factory to the world and push growth beyond its current annual rate of 8 percent.

Analysts said chains like Wal-Mart and Carrefour will tap local vendors once they set up shop, to ensure better margins in a high volume market with a population of more than a billion. This may also prompt them to export to their stores abroad.

"The global retailers taken together buy about $60 billion of goods each year from China for exports," said Alok Ray, economics professor at Indian Institute of Management Calcutta.

"Contrast this with India, where less than $1 billion of exports are accounted for by global retailers."

India is on a drive to boost exports, which form just 10 percent of the $700-billion economy. They are a key growth driver in years when domestic demand, driven by rural consumption and dependent on capricious monsoon rains, is sluggish.

POLITICAL QUAGMIRE

But there are roadblocks to opening a part of the economy in which tiny shops and bazaar stalls have 97 percent of the market and which the government's communist allies, facing elections in their stronghold states in April and May, want protected for ideological reasons.

The ruling Congress party and the communists are locked in an electoral battle in two of the five states due for polls and Congress does not want to open retailing beforehand and hand the left a stick with which to beat it.

"Opening the single-brand retail was the pebble and the rock will follow," said Mahesh Rangarajan, political commentator and analyst. "The budget was a quiet one and the government took care it offended no one. Particularly with the elections, they would not be wanting to raise the left's hackles too much."

Analysts say the communists oppose the move on the basis that foreign investment is not good for the country's development rather than because it might threaten jobs, as labor unions have little influence among retail employees.

So the government hopes they will come around on the potential for new jobs and higher rates of growth.

Consultancy firm KSA Technopak expects retailing to employ 2.5 million people in the next five years as it expands into a $45 billion industry. Another 2-3 million people would be indirectly employed in manufacturing, packaging and transport.

The government could copy China and first partially open the sector, giving local players time to gather strength before removing all the caps, analysts say.

In fact, the government does plan to cap foreign money at 26 or 51 percent, to ensure foreign firms have a local partner.

This may also silence local retailers who say they are not yet strong enough to face the might of foreign giants.

"Being closer to the consumer, small retailers can reinvent themselves and stock products which have high frequency like fruits, eggs and milk and also cater to the top-up needs of personal care," said Purnendu Kumar, Principal Consultant with KSA Technopak.

Small retailers say they will also retain some advantages.

"The foreigners will have shops in big malls and not many of my customers have cars to load all their groceries," Mussaddi Lal said at his shop in a residential area of New Delhi. "Moreover, we deliver at home for free."

Column: Sanjeev Nayyar - The path to 10 per cent

(BS 16/03/2006) New Delhi - To achieve a 10 per cent growth, India needs to think out-of-the-box.

A GDP growth rate of 8 per cent has led to euphoria all around. The question, however, is, can we sustain it? More importantly, India must think big and target to consistently grow at 10 per cent. Will the existing policies deliver? India needs to think out-of-the-box, realise that strategy and implementation are equally important and change its mindset.

What must be done? Focus on urban or rural markets, globalise or be inward looking, build rockets or provide free power, run a national employment scheme or support entrepreneurs, are some of the conflicting approaches that need to be resolved. Our policies should reflect a combination of approaches to create wealth across all sections of society. Some innovative ideas:

Special economic zones for education (SEZE): India sent about 76,000 students to the US in 2002-03. If each parent remitted an average of Rs 15 lakh a year, India’s contribution to the US economy was about $2.6 billion. Most students go abroad because the demand for quality education exceeds supply. Further, seat availability is reduced by reservations. Conversely, college managements complain they are not allowed to fix fees that reflect actual costs and are subject to excessive government control.

These centres of excellence would be governed by the Central government and administered by a regulator. There would be no restrictions on fees/ salary for the faculty or tie-ups/equity investment by foreign universities. Admission would be on merit only.

These SEZE’s should be able to not only retain at least 40 per cent of the students in India but attract foreign students, too. At 2002-03 levels, it implies a fall in remittances of about $1 billion.

Empowering rural India: The Gujarat government has introduced a unique scheme called Jyotir Gram Yojna. Due to inadequate power generation and excessive consumption by the agricultural sector, load shedding was unavoidable. With an investment of Rs 1,300-1,500 crore, the government decided to provide single/three-phase electricity connections to domestic and cottage industry consumers in all villages with a population more than 3,000. This way, line one is for agricultural and line two for domestic use. Homes are assured power for about 20 hours a day and the farmer gets a minimum of eight hours. So far, about 14,000 villages have been covered.

Near-uninterrupted power at home has given an impetus to diamond polishing and cottage industries. At a cost of between Rs 6,000-10,000, villagers have started Ghanti — a diamond-polishing unit. Average monthly income is between Rs 3,000- Rs 4,500. Earlier, villagers went to cities for work but reverse migration has started now. Home industry allows homemakers to work in their spare time, which results in empowerment of women. Deurbanisation reduces the need for men to go to sex workers, which decreases the possibility HIV/AIDS.

Health care cities: According to a McKinsey Quarterly article, “Employee benefits now represent the third-largest expense after the cost of goods sold and non-manufacturing payroll and health insurance is the fastest growing component. Total US health insurance cost in 2003 was $389 billion”.

India could help reduce costs by setting up health care cities. These will have hospitals and hotels. Facilities would be world-class but at a lower price. Hospitals could be funded by private equity funds, hospitals and have back-to-back tie-ups with Western insurance companies. Hospitals must be run on corporate lines and pay income tax at 20 per cent (no exemptions).

Rural malls: Traditional thinkers are happy to see Indians work globally. However, if India seeks to grow at 10 per cent, it must seek to capture a higher per cent of value addition within the country itself.

Rural India needs huge malls that are a one-stop shop for farmers needs? They must have a:

• Technical cell that advises farmers on crop related issues;
• Bank that provides credit;
• Insurance company that insures produce;
• Mandi that buys produce at market-related prices;
• Food-processing unit;
• Hospital that provides basic medical facilities for human beings and cattle;
• Consumer store;
• Entertainment complex that organises melas, bullock cart races and rewards outstanding performance by farmers.

The malls must be promoted by the private sector.

Indus economic free trade zone (IEFTZ): After 1947, the Sindhi community is hurt because unlike others, they do not have a state to call their own. We also know that the Sindhi community is successful globally. Is there a way by which India could satisfy their need for a state and attract capital?

We could start the IEFTZ in Kutch. Why Kutch? Three reasons. One, Indus area and the Kutch are geographically close to each other. Two, there is similarity between Sindhi and Kutchi languages. Three, Kutch needs lots of investment, which NRI Sindhis can provide. There was once a proposal to create a state of Sindh in Kutch.

Carving out a separate state of Gujarat is a non-starter. Instead, IEFTZ could have a clearly demarcated area. Broad contours of the scheme are: All Indians could invest here but preference would be given to the Sindhi community. They would be allowed special facilities for preservation of Sindhi culture. The IEFTZ could be a joint venture between the government and the Sindhi community.

If the average Sindhi believes there is money to be made coupled with making a contribution to preservation of Sindhi culture, I am sure the IEFTZ idea would fly.

India needs many more ideas to achieve its potential.

Sanjeev Nayyar
Surya Consulting
347, Tardeo A/C Market,
Mumbai 400 034.

News: 'China to be India's largest trade partner'

(ID 16/03/2006) New Delhi - China will overtake the US as India's largest trading partner in a year if the present trend of over 30 per cent annual growth in bilateral trade continues, Commerce Minister Kamal Nath said in New Delhi on Thursday.

The annual bilateral trade, currently estimated to be around $18 billion, is expected to reach $20 billion by 2007, one year ahead of target, said Kamal Nath, addressing the India-China Joint Business Forum, organised here by the Confederation of Indian Industry (CII). "If the present annual growth of over 30 per cent, which in the last five years has even crossed 60 per cent, continues, China may be our largest trading partner in one year overtaking the US, with which our trade is around $21 billion," said Kamal Nath.

Echoing similar sentiments, China's Commerce Minister Bo Xilai said: "If the present trend of trade flow is maintained by 2010, the bilateral trade could reach $50 billion." "There is a huge demand in the Chinese market. Last year, there was 95 per cent increase in input (raw materials) from India," said the Chinese minister, who is leading a large delegation comprising 40 officials and 42 business representatives to attend the India-China Joint Economic Group meeting being held after six years.

News: China criticizes India on trade

(ID 16/03/2006) New Delhi - A spokesman for the Chinese Ministry of Commerce criticized India on March 16 for a series of trade barriers including Indian anti-dumping duties against Chinese goods and India's failure to grant China "market economy" status. The comments came just as Chinese Commerce Minister Bo Xilai visited his Indian counterpart in New Delhi.

News: Islamic finance - an emerging financial market

(TTG 16/03/2006) Port of Spain - Over the past decade, the growth of the global Islamic finance industry has been impressive. At an estimated growth rate of 15 per cent per annum, the industry currently owns assets of between US$200 billion and US$300 billion, which represent a small but growing share of the global banking industry.

Islamic finance involves the provision of financial products and services that comply with Islamic laws, which are collectively referred to as shariah. The underlying premise of this rapidly growing financial system is the absolute prohibition of payment or receipt of any predetermined, guaranteed interest or riba. Instead, the system is based in a profit and loss structure rather than a lender borrower arrangement.

With a profit and loss structure, a financial institution enters into a joint venture with a client in order to provide capital. The risk associated with the joint venture entitles the financial institution to profit from the transaction. In this way, principles of Islamic doctrine regarding risk sharing, individual’s rights and duties, property rights and the sanctity of contracts are observed. Only those business activities that do not violate the rules of shariah qualify for investment. For example any investment in businesses dealing with alcohol, gaming or pork products would be prohibited.

The system of Islamic finance is not limited to banking but extends to capital formation, capital markets and all types of financial intermediation. In practice, this form of finance is offered through two channels: specialised Islamic banks and Islamic windows. Specialised Islamic banks are commercial and investment banks structured wholly on Islamic principles, dealing only in Islamic instruments. However, Islamic windows are unique facilities designed and offered by traditional banks to provide services to Muslims who wish to engage in Islamic banking.

Products and services

The dominant instruments of Islamic finance include mark-up financing (murabaha), profit-sharing (mudaraba), leasing (ijara) and partnership or equity participation (musharaka). The mudaraba and musharaka modes are the main conduits for investment. The former has a maturity structure that ranges from short to medium term and is more suitable for trade activity, while the latter has been used for financing fixed assets and working capital of medium to long-term duration.

In practice, however, Islamic banks tend to prefer less risky modes such as the “mark-up” device (murabaha). In a murabaha transaction, the bank finances the purchase of a good or asset by buying it on behalf of its client and adding a mark-up before reselling it to the client on a cost-plus basis, to be paid in monthly installments after a period of time.

Islamic banks also frequently practice leasing or ijara. With this mode of financing the banks would buy the equipment or machinery and lease it out to their clients who may opt to buy the items at some time in the future. At the deposit end, Islamic banks normally operate three broad categories of account, mainly current, savings and investment accounts.

The current account, as in the case of conventional banks, gives no return to the depositors. It is essentially a safe keeping arrangement between the depositors and the bank which allows the depositors to withdraw their money at any time and permits the bank to use the depositors’ money. The savings account is also operated on a safe keeping basis, but the bank may at its absolute discretion pay the depositor a positive return periodically, depending on its own profitability.

Current global trends

Apart from countries such as Iran, Pakistan, Egypt and Malaysia that are predominantly Muslim states, Islamic finance is becoming a growing phenomenon in the US and Europe. The burgeoning of Islamic finance in the latter regions is partly due to immigration, and Islam being one of the fastest growing religions in the world. In the US, using religious affiliation as a gauge for estimating demand, experts identify three levels of observance in the muslim community.

The first level represents the most observant—those who do not use conventional financing. This group represents the core market for Islamic financing arrangements. The second (one-third of muslims) consists of those who currently use conventional financing, but might switch to Islamic financing if it became more widely available. The final one-third consists of those who currently use conventional financing and may continue to do so even if religiously compliant alternatives were readily available.

A global market for Islamic bonds (sukuks), which was only in its infancy a few years ago, has grown to the value of almost US$8 billion today. According to survey released by the Islamic Finance Information Service, the Islamic bond market has more than tripled from US$1.9 billion in 2003 to US$6.7 billion in 2004.

One of the significant catalysts driving the Islamic bond market is the surplus earned from record high oil prices. Issues by both sovereigns and corporates have already reached US$1.08 billion at the end of the first quarter of 2005. t is estimated that the shariah-compliant market, including sales of Islamic bonds and other financial instruments could provide interest-free returns between US$1.3 billion and US$1.8 billion for 2005.

Challenges

The key challenge facing the future growth of Islamic finance is the structuring of products that not only conform to Islamic doctrine but also traditional banking regulations. The key issue for regulators is understanding the risks associated with Islamic banking products.

Another significant issue is the lack of a secondary market for Islamic products, which often places liquidity constraints on the providers. This latter issue is being addressed through the securitisation of assets, particularly real estate, leasing and trade receivable owing to the collateralised nature of their cash flows.

A third important issue is the need for sound accounting procedures and standards for information disclosure, monitoring and to build investor confidence. Finally, given the differences in interpretation of Islamic principles by different schools of thought, providers of Islamic finance have to form their own religious boards—“shariah advisers”—for guidance, and consult them to seek approval for each new instrument and investment. This problem may result in the same instrument not being acceptable in all countries or even by all Islamic groups within a country.

Outlook

Islamic financial products are fast becoming the darlings of the global banking industry, attracting Muslims and non-Muslims due to risk sharing, ethical provisions and no-interest policies. Even if one does not subscribe to the Islamic injunction against the institution of interest, one may find in Islamic banking some innovative ideas that could add value to the existing financial network and by extension one’s portfolio.

The main selling point of Islamic banking at least in theory is, unlike conventional banking, Islamic banking is concerned about the viability of a project as opposed to the size of collateral. It is especially in this sense that Islamic banks play a catalyst role in stimulating economic development.

Using the very rough gauge for projecting demand outlined above and estimates from the local Central Statistical Office, the potential core demand for Islamic finance in the local economy is approximately 0.2 per cent of the population or roughly 25,000 clients.

Institutions offering Islamic finance locally include Clico Investment Bank Ltd (CIB) through its Islamic Banking Service (IBS) and the Muslim Credit Union. Further growth of Islamic finance in the local market is anticipated as more Muslims and non-Muslims are attracted to this alternative financing and investment vehicle.

Interview: Brooks Entwistle - CEO Goldman Sachs India

(TV18 16/03/2006) Mumbai - CEO of Goldman Sachs-India, Brooks Entwistle says that they are planning to invest upto USD1 billion in India.

He says they want to bring Goldman Sachs to India across all their divisions and have presence and a comprehensive range of services for their clients in India.

He says that they have identified people from Goldman Sachs to run their India businesses. The company will also be entering private equity and real estate businesses.

Excerpts from CNBC-TV18’s exclusive interview with Brooks Entwistle:

Q: Now that you are out of the JV with Kotak Mahindra atleast from an equity sense, what are your specific plans in India?

A: We are going to bring Goldman Sachs to India across all our divisions and operate it for the presence and give a comprehensive range of services to our clients in India.

Q: Would that include setting up a separate stock brokerage and a separate mutual fund or asset management company?

A: We are applying and we plan to apply for all the appropriate licenses for our businesses. However this will be comprehensive across investment banking, brokerage, asset management and importantly our principle businesses. We hope to over the course of our first phase, to invest USD1 billion in India across our principle asset management and fund-to-fund businesses.

Q: To do this you have got the required 'no-objection' certificate from erstwhile joint venture partner Kotak?

A: We had a terrific decade long relationship with Uday Kotak and his team and we look forward to our friendship moving ahead, and we do have the consent to move forward. We will co-operate on clients and what is important is that clients always come first and that is why we are here in India and we want to be here for our global and Indian clients.

Q: Was there any sort of non-compete clause as well that you have signed with Kotak as you parted ways?

A: We are not going to comment on the specifics like documents and the transactions. But I believe the co-operation will be appropriate going forward. We are looking forward to that but most importantly we are looking forward to building our business here on the ground and bringing Goldman Sachs to India and delivering India to Goldman Sachs, which works around the globe.

Q: In order to build that business, did you look at the option of perhaps increasing your stake in the JV you have with Kotak and garnering a bigger share there, and hence moving into India in a bigger way?

A: We looked at all options and we believe that this is the best opportunity for us to build our own brands and control our own destiny and more importantly to build our businesses across each of them, in the way we would like to.

News: Decks cleared for 74% FDI in private banks

(BS 16/03/2006) Mumbai - Panel also clears RBI's proposal to reduce its stake in SBI to 51%.

In a move that clears the decks for 74 per cent foreign direct investment in weak private banks, the Parliamentary Standing Committee on Finance has approved the necessary amendment to the Banking Regulation Act.

B C Khanduri, chairman of the committee, said the 74 per cent FDI limit has been approved along with a proportionate hike in voting rights. At present, the voting rights is capped at 10 per cent irrespective of the FDI limit, now at 49 per cent.

The Reserve Bank of India had submitted the draft proposals in February 2005 for the committee’s approval.

In addition to this, the committee has also approved reduction of the RBI’s stake in State Bank of India to 51 per cent from the current level of 59.73 per cent.

This comes as a shot in the arm for SBI, which proposes a second public issue. It will be also raising around Rs 3,000-4,000 crore from the debt market. These funds will be used for overseas expansion and funding of domestic assets. At present, foreign institutional investors and public hold 20 per cent each in the bank.

SBI has also approached the Union government for a stock split in its three associate banks and doing away with the cap on individual shareholding limits in these banks.

Currently, individual shareholders are not allowed to hold more than 200 shares in SBI’s three associate banks, which are listed. Foreign direct investment in banking, on the other hand, has been a bone of contention between the government and the RBI.

Initially, the RBI had preferred hiking the FDI to 74 per cent in banking without proportionate hike in voting rights. Later it had agreed for increase in voting rights to 15 in an incremental manner.

However, in the draft guidelines, the RBI had recommended hiking the FDI to 74 per cent in weak private sector banks till 2009. After 2009, the foreign banks will be allowed to pick up 74 per cent in other banks as well.

The committee has also approved the proposal to allow the RBI to supersede the board of co-operative banks following financial irregularities.

However, it has categorically pointed out that the administrator of the bank will have to be a professional in law, finance , banking or accountancy, and not a bureaucrat.

News: Swiss fund in pact with ADB, India bank

(RTR 16/03/2006) Mumbai - Swiss Investment Fund For Emerging Markets has teamed up with Asian Development Bank and an Indian state-owned bank to launch a new private equity fund next month, Managing Director Claude Barras said on Thursday.

The BTS Private Equity Fund, in which the Swiss fund has invested about $12.5 million, would typically invest $3-5 million in each Indian company in its portfolio, Barras said.

"There are a few investors in the BTS Fund along with the Indian bank, whose name cannot be disclosed now," he said.

The Swiss fund, which entered India about eight months ago, hopes to have cumulatively invested $50 million by the end of March, he said.

That includes $10 million already invested in Infrastructure Development and Finance Corporation Ltd and $21 million in Swiss Tech Venture Capital Fund, he said.

"Our target is to scale it up to $75 million by December," he said.

In India, the company was keen to invest in manufacturing, health care, information technology and life sciences, he said.

The Swiss Fund, which has a global portfolio of $200 million, was looking to exit some of its investments in India, he said, but did not give further details.

News: India among the top in 'super-growth' firms

(IANS 16/03/2006) SINGAPORE - India has the second highest proportion of "super-growth" firms after the US, a survey said Wednesday. India, Hong Kong and Malaysia have the highest proportion of companies listed as "super-growth" firms in Asia.

Grant Thornton International (GTI) defined "super-growth" as having expanded at well above the average global rate of mid-sized companies in compiling its index.

Although the US has the largest proportion of firms with 39 percent, "the real story is the continuing rise of Indian and Hong Kong companies", said Kon Yin Tong, managing partner at the Singapore-based member of GTI.

India and Hong Kong shared second place in the index, each with 34 percent, while Malaysia was tied with Australia in the seventh spot, at 22 per cent. India's figure jumped from 21 per cent in 2005, while Hong Kong's rose from 28 per cent last year.

GTI attributed India's soaring proportion of "super growth" companies to expansion in exports of software services and business process outsourcing. "Businesses in Hong Kong are benefiting from the rapid pace of development in mainland China," GTI said.

China, included in the index for the first time, emerged ninth with 14 percent of companies qualifying as "super growth". Singapore and Taiwan each had 10 percent of their firms in the category, followed by Thailand with nine percent.

The survey covered owners of medium-sized businesses from 30 countries.

News: FICCI seeks fiscal incentives for retail sector

(Sify 16/03/2006) New Delhi - Industry chamber FICCI has sought fiscal incentives for the retail sector under the Export Promotion Capital Goods Scheme (EPCG scheme) in its submission to the Board of Trade meeting held on Tuesday at the Ministry of Commerce and Industry.

This fiscal incentive is in addition to changes in a number of export promotion schemes sought by FICCI in its submission to the Board for the forthcoming Foreign Trade Policy.

FICCI has said that the organised retail sector has huge employment potential and further incentives are required from the Government in order to encourage exports and investment in this sector. In the current policy for the retail sector, only import of capital goods are allowed under EPCG scheme and a lot of other equipment required in the retail supply chain pertaining to material handling, and warehousing and distribution facilities are not entitled to fiscal incentives under EPCG.

FICCI said that in order to bring this sector up to international standards, equipment allowed to be imported under EPCG scheme for the hotel and tourism industry should also be allowed for retail sector.

News: Goldman Sachs sets up investment bank in India

(Sify 16/03/2006) Mumbai - Goldman Sachs said on Thursday that it would set up a wholly owned investment banking and securities firm in India, after it exited two local joint ventures with Kotak Mahindra Bank Ltd.

Goldman Sachs -- which sold 25 per cent stake in both merchant bank Kotak Mahindra Capital Co Ltd, and Kotak Securities Ltd, for $74 million to its partner -- said its India strategy would include principal investing and asset management.

"The Indian market represents tremendous growth and opportunity," Brooks Entwistle, Chief Executive of Goldman Sachs (India) LLC, said in a statement.

"Now, more than ever, there is a compelling case for us to build an onshore presence which is fully integrated with our global businesses."

Nieuws: Inschrijving telecomsector heropend

(DWT 16/03/2006) Paramaribo - Uiterlijk in juli krijgt president Ronald Venetiaan opnieuw namen van aanvragers van een telecomvergunning ter goedkeuring voorgelegd. Het inschrijvingsproces is ondertussen heropend. Nieuwe belangstellenden hadden tot 10 maart de gelegenheid een verzoekschrift in te dienen bij het ministerie van Transport, Communicatie en Toerisme (TCT). Alle aanvragers worden in de gelegenheid gesteld om tot en met 18 april hun bedrijfsplannen op basis van de gestelde criteria in te dienen bij TCT. Zij moeten ook een bedrag van 5000 US dollar betalen. Wie in aanmerking komt voor een concessie, dient een bedrag van tussen de 4 en 5 miljoen US dollar op te hoesten, samen met een bankgarantie van 1 miljoen US dollar. Tijdens een persconferentie dinsdag, zei TCT-minister Alice Amafo, dat Suriname “aan de vooravond staat van de liberalisatie van de telecomsector” en dat er nog plaats is voor “twee andere spelers” naast Telesur.

Voormalig TCT-minister Guno Castelen had eind 2004 al advies uitgebracht aan het staatshoofd, die de namen van begunstigden in januari 2005 zou bekendmaken. Dat is nooit gebeurd. Zowel onderdirecteur Communicatie Thea Smith als waarnemend-TCT-directeur Thelma Douglas-Pinas stellen desgevraagd, dat op basis van gewijzigde beleidsinzichten het proces opnieuw wordt gestart. De eerste keer hadden ongeveer dertig geïnteresseerden verzoeken ingediend.

De criteria,waaraan aanvragers moeten voldoen zijn aangepast, zeggen de hoge TCT-functionarissen. Volgens Douglas-Pinas was het nodig, dat oude aanvragers hun bedrijfsplannen ook actualiseerden, omdat in de achterliggende periode zaken kunnen zijn veranderd.

Dinsdagavond is voor concessieaanvragers een informatiebijeenkomst gehouden. Smith zegt desgevraagd, dat er zowel voor aanbieders van een vast netwerk met gereguleerde en niet-gereguleerde diensten plaats is als voor providers van mobiele netwerken met gereguleerde en niet-gereguleerde diensten. Tot de belangrijkste voorwaarden behoort dat aanvragers uiterlijk één jaar na verkrijging van een vergunning de dienstverlening moeten zijn begonnen. Voorts zal het bedrijfsplan een periode van minimaal vijf jaar moeten beslaan en moet worden aangetoond, dat de aanvrager financieel en technisch in staat is de dienstverlening te garanderen.-.

News: Pantaloon to focus on designwear

(PTI 16/03/2006) Mumbai - To focus on "reasonably priced designwear", Pantaloon Retail India Ltd has tied up with fashion designers and will showcase their new line at the forthcoming Miss India beauty pageant.

"The company wishes to extend the designer collection as fresh fashion to customers at a reasonable price," Company President Marketing Sanjeev Agrawal told reporters in Mumbai.

He was speaking at the launch of the second collection line created by designer Rocky S, which will be showcased during the Finals of Miss India 2006 contest.

Earlier, the company had launched the collection by designer Anita Dongre.

Both collections will be available on all 18 stores and three central malls of the company across the country from March 19 onwards, he said.

Company Head-Category Management Bina Mirchandani said that Pantaloon plans to add more designers to produce clothing lines "after a successful launch" of these two collections.

"After successfully launching the collections by Anita Dongre and Rocky S we may think of adding more designers," she said.

Pantaloon has also created a whole range of accessories to go with these collections.

Interview: Kushal Pal Singh - CEO DFL Group

(Forbes 16/03/2006) New Delhi - K.P. Singh's family holdings took off when he became GE's pioneering landlord in India and other multinational tenants followed.

Jack Welch wasn’t the first tough character that Kushal Pal Singh ran into. Upset at the rigors of the Indian Military Academy, an 18-year-old Singh plotted his escape to London, where he’d previously dabbled in aeronautical studies before returning home to an army commission. His plan leaked and he was summoned. The colonel in charge, rather than reprimand him, said he was willing to let Singh leave. “But remember that once you go, you will be forever known as the coward who ran away,” he added shrewdly. “If you don’t mind that label--go, by all means. Otherwise, reconsider it.” Singh stuck it out.

“If the colonel hadn’t played his cards so well, I would be repairing airplanes in some corner of England!” smiles Singh, now 74, recalling the first of many “accidents” that have shaped a remarkable fortune on the subcontinent. Today he presides over closely held DLF group, India’s largest real estate developer with an estimated land bank of 3,000 acres in prime city locations. Singh, who owns 99.5% of parent DLF Universal with his family, is worth, by our reckoning, at least $5 billion.

His showpiece: a busy, 10-mile-wide township called DLF City in Gurgaon, situated south of Delhi, in the neighboring state of Haryana. Some just refer to it as the “new city” or Delhi’s tech city.

It is a sight to behold. A barren expanse of farmland has been transformed into a sprawl of office and residential towers, interspersed with bright, busy malls, monuments to the country’s newfound consumerism. DLF City boasts restaurants, hospitals, schools, hotels and an 18-hole Arnold Palmer signature golf course, which is Singh’s big passion. Gurgaon is no longer the back of beyond but a suburb much sought after by those who cannot afford Delhi’s prices or would rather live closer to where they work.

Among the first to settle in a decade ago was General Electric (nyse: GE - news - people ), as the industrial giant opened up India for outsourcing.

By laying a modern foundation in a country whose physical plants usually lag its intellectual assets, Singh put Gurgaon on the map as a destination for global companies. They have flocked there to situate their Indian headquarters or back offices. If Bangalore is India’s software services capital, Gurgaon is the call center hub. The state contributed 10% to the country’s $17.7 billion in annual export revenues from software services and back-office work last year.

Other developers have rushed to cash in on Gurgaon’s boom, but none match DLF in size or the goodwill it enjoys as the first-comer. “It is one of the strongest real estate brands in the country. Gurgaon is DLF and vice versa,” says Akshaya Kumar, chief executive of property consultants Colliers International (India). DLF has completed projects covering 35 million square feet mainly along the Delhi-Gurgaon belt. Now, with his son, Rajiv, at the day-to-day helm of the company, Singh aims for DLF to go national.

It’s getting there: DLF has 100 million square feet under development in residential, commercial and retail projects all over the country. Last year it made a splashy debut in Mumbai when it paid $160 million in a public auction for 17 acres, site of a former state-owned textile mill that is in the heart of the city. DLF’s newly forged partnership with U.K. construction giant Laing O’Rourke will develop this into a mall-cum-entertainment complex that Singh claims will be “futuristic.”

The timing couldn’t be better. India’s red-hot real estate market is appreciating 20% annually, fueled mainly by the outsourcing boom and a resurgence in manufacturing, says Colliers’ Kumar. As technology firms expand, they require both office space and homes for their engineers. The federal government has opened real estate to foreigners for projects exceeding 25 acres. There’s plenty of untapped financing potential. India’s mortgage-to-GDP ratio is a mere 3%, compared with 50% in the U.S. and 20% in Southeast Asia. Merrill Lynch (nyse: MER - news - people ) estimates that the real estate sector, $12 billion currently, could grow to $50 billion by 2010.

Yet Singh’s ambition faces obstacles internal and external. Reflecting Indian tradition, his generation within DFL’s operations remains tied to its Delhi origins, requiring an infusion of younger thinking with a national orientation.

And the real estate market takeoff can obscure what is still a thicket of arcane regulations on development. The Urban Land Ceiling & Regulation Act of 1976, with its complex rules governing ownership and development of property, remains in force in some states (in Maharashtra it prevents billionaire Adi Godrej from fully developing his family estate), although it was repealed federally in 1999. Land acquisition still isn’t for the impatient or fainthearted.

That would partly explain why foreign companies are not rushing to enter on their own but rather are looking for Indian partners who know their way around.

Singh is master of this game. The army left him with a military bearing that, together with an impeccable dress sense, sets him off from the developer crowd. He has connections and will use them. Pursuing his plan for Gurgaon entailed navigating infamous bureaucracies and braving political fire.

Pramod Bhasin, president and chief executive of leading outsourcing firm Genpact, calls DLF Corporate Park, the first office tower Singh built in Gurgaon, “the birthplace of India’s business-process outsourcing industry.” Bhasin used to head GE Capital International Services, the outsourcing pioneer. (GE sold 60% of the firm to private equity investors in 2004, after which it was renamed Genpact.)

As Bhasin tells it, GE was brave to open its pilot back office at DLF Corporate Park in 1997. Transport wasn’t available and there were no restaurants in the area. GE had to bus employees to work and provide catering services. Despite these odds, Bhasin never regretted moving. “We got the kind of space, both in size and quality, that just wasn’t available in the center of Delhi. DLF really understands what companies like ours need. They are quick, and they deliver on their word,” says Bhasin.

Once GE took the plunge, DLF landed other big-name corporate tenants, including Nestlé (other-otc: NSRGF.PK - news - people ), PepsiCo (nyse: PEP - news - people ), British Airways (nyse: BAB - news - people ), American Express (nyse: AXP - news - people ), IBM and Ericsson (nasdaq: ERICY - news - people ). At a time when the industry practice was to sell and not lease, DLF offered long-term leases, which suited companies that didn’t want to load assets on their books. DLF benefited from the steady rentals during a market downturn when property sales stagnated. Singh’s refusal to cut quality corners ensured that DLF could get premium prices for its properties. Leading Mumbai architect Hafeez Contractor, who has designed several signature buildings for the group, including DLF Center, the corporate headquarters in downtown Delhi, maintains that “DLF always aims for the very best from day one.”

Singh’s introduction to GE’s legendary CEO Welch came in 1989, when the company was still scoping out India. Singh set up a meeting with then prime minister Rajiv Gandhi. Welch’s book Jack: Straight from the Gut recalls that Singh also led him to Azim Premji as GE was looking for a partner for its medical systems business. Today Premji, by virtue of his building software power Wipro (nyse: WIT - news - people ), is one of Asia’s richest men.

In an interview Welch recalls, “K.P. was the igniter of the flame for GE coming to India. He was the perfect ambassador because he opened our eyes to a great country, and we fell in love with it.”

Welch says he offered Singh no management tips in return. But Singh says that observing Welch’s toughness with GE’s managers in close quarters provided a model for running DLF: Think big and be a sector leader.

These goals were a far sight off when K.P. Singh, seven years after an arranged marriage, left a prestigious army posting in the Deccan Horse cavalry regiment to join his father-in-law’s land business in 1961. Chaudhary Raghvendra Singh was a civil servant with a keen nose for business. Upon independence from Britain the country was to be divided to create Pakistan, a Muslim nation. Chaudhary Raghvendra figured this would lead to mass migration, which would, in turn, create a need for mass housing. His prescience made him launch Delhi Land & Finance in 1946, a year ahead of Indian independence.

Although he lacked capital, Singh went on a land-buying binge. Tapping into old family connections, he convinced farmers to sell their land to him on credit. They would be paid the principal plus interest once the land had been carved into plots and sold. This formula worked so well that he eventually developed 21 residential and commercial “colonies” all over Delhi, including South Extension, Hauz Khas and Greater Kailash, which today are prized properties. The good times ended in 1957, when land development in Delhi was nationalized. DLF’s future was bleak.

The patriarch scrambled to enter the car battery and electrical motors field, assigning K.P. Singh to make it work. Young Singh found a mentor in George Hoddy, founder of Universal Electric in Michigan, a joint-venture partner. Hoddy, who turned 100 last year, recalls, “K.P. wasn’t afraid to work hard. He followed directions very carefully and mastered manufacturing.” But the diversification strategy came a cropper in the Indian market.

Regrouping again, Singh and his father-in-law recommitted themselves to real estate, vowing to break the state’s stranglehold by all lawful means.

Over 15 years Singh assembled the Gurgaon holdings, starting with 40 acres that his father-in-law still held. The surrounding families had an average landholding of 4 to 5 acres, with half a dozen relatives sharing the title. To win their trust, he attended weddings, mediated family disputes, helped out during illnesses. “I became part of each family, almost like an elder brother,” he recalls. Singh lobbied hard to get the farmland reclassified as “nonagricultural” and managed to obtain licenses for developing it. When they were later canceled as political winds shifted, DLF faced lawsuits from buyers.

In 1981 Singh caught one of those lucky breaks in his life. As he tells it, he had a chance encounter with Rajiv Gandhi (whose mother, Indira, was still prime minister) when Gandhi’s car overheated and he stopped for water at a village well in Gurgaon. Singh happened to be sitting nearby. Young Gandhi leaned on the troublesome local authorities for years, into his own term as premier, and DLF was able to get its foothold.

Singh’s leap of faith in Gurgaon paid off in spades. The average cost of the 3,000 acres that DLF initially amassed in Gurgaon was $2,000 an acre--a tiny fraction of today’s market value.

“Gurgaon was deserted when K.P. first took me there to see it 25 years ago. But he had the gumption to go relentlessly after it,” says Deepak Parekh, chairman of home mortgage company HDFC, which started lending to DLF early in its expansion drive.

DLF now enjoys good enough credit for loans to be approved informally over the phone.

Along the way Singh insisted his buyers also be on the up-and-up. Real estate in India is full of off-the-books transactions, the better for tax dodges and to avoid once-prohibitive mortgage terms. Also, builders flout codes and often see their handiwork ripped down.

Singh insists that DLF’s dealings remain aboveboard. “This business is surrounded by cash transactions. But we are transparent and take only check payments. If we accepted cash, our sales would double,” he maintains.

The legitimacy of his success notwithstanding, Singh avoids the spotlight. He agreed to give FORBES Asia an interview only after months of pursuit. Son, Rajiv, 46, an MIT-trained engineer, and daughter Pia, 35, a Wharton B.S. who also is in the business, running the retailing side, similarly duck public attention.

While father is happy to spend time golfing with their mother, Rajiv and Pia are aiming even higher than he did. Cashing in on India’s mall boom, DLF is planning a massive retail rollout: Over the next five years 100 malls will be built in 60 cities, including a 4-million-square-foot Mall of India, the country’s biggest, in Gurgaon. Malls have become cool places for families to hang out at, so on any given day they are teeming with window-shoppers. “Our challenge is to get them to open their purses,” says Pia.

The Singhs are willing to pay the top price at any land auction and team up with local developers in cities where DLF is a newcomer. Rajiv estimates that these expansion plans, which include building hotels, middle-income homes and special economic zones, will translate into investments of at least $10 billion.

To finance their ambitions the Singhs are going beyond their bankers, talking to private equity investors and considering a future listing. They’ve retained McKinsey & Co. to advise on executing strategy and converting DLF to professional management.

“We have never done things in a small way. We will continue to be the influencing player and disrupt existing cozy arrangements,” vows Rajiv.

Like father, like son.

News: Bharti in Rs 6000 cr retail splash

(BS 15/03/2006) Mumbai - Tesco may pick 49% in venture; Sunil Mittal firm says talks at preliminary stage.

The Bharti group is all set to make a big splash in the booming retail sector. The Sunil Mittal-controlled group, which runs the country’s largest private telecom firm Bharti Tele-Ventures, is believed to have initiated talks for a joint venture with Tesco, the world’s largest grocery retailer and a Fortune 500 company, to enter the food retail segment.

A source close to the development said Bharti had set up an internal team to finalise the rollout, which would see an initial investment of around Rs 6,000 crore. It added Bharti would enter food retail with the conventional model of setting up a chain of supermarkets, hypermarkets and convenience stores.

A Bharti spokesperson said, “The company has interest in the horticulture arena and is exploring opportunity in food retail. For now, we are evaluating various options.”

He also added since the initiatives were at an early stage it would be premature to comment now.

In an e-mail to Business Standard, a spokesperson for Tesco said: “The company doesn’t comment on speculation.”

With the Centre permitting foreign direct investment in retail, the £34 billion Tesco might pick up as much as 49 per cent in the joint venture. With over 2,000 stores worldwide, the principal activity of Tesco is food retailing.

Industry sources said the proposed move gelled well with Bharti’s planned entry into the agri-commodities and insurance businesses. It had announced plans to set up a life insurance venture in association with AXA Asia Pacific Holdings in August last year.

The Bharti AXA Life Insurance, a 74:26 joint venture between the Indian and the French groups, committed investment of Rs 500 crore over three years.

Prior to that, it had tied up with the EL Rothschild group-owned ELRO Holdings India to export fresh agriculture products to Europe and the US. It had made abortive attempts to participate in the modernisation of the Delhi and Mumbai airports.

If the move fructifies, Bharti would be the latest to enter the Rs 35,000 crore domestic retail market after the Mukesh Ambani-controlled Reliance Industries’ announcement to foray into the sector. Industry watchers found a similarity between the plans of Reliance and Bharti.

“Both have the experience of handling consumer-centric businesses such as telecom and both have huge cash flows, which could be ploughed into the retail space. Also, they will run agri ventures simultaneously,” said a Mumbai-based retail analyst.

The scope of organised retail is huge as it commands a meagre 3.5 per cent share of the total retail market. The sector is expected to grow at 26 per cent CAGR over the next few years. It is the second largest employer in the country after agriculture. Food and grocery is the least penetrated so far with maximum opportunity for growth.

Tesco had told Business Standard a couple of months ago that it had sourced goods worth pound 65 million from India last year and planned to enhance it to pound 95 million this year. Tesco’s sourcing from India was focused on apparel with 90 per cent of total sourcing.

News: Reliance eying B'lore for retail biz

(ET 15/03/2006) BANGALORE - Reliance Retail is likely to locate its apparel business in Bangalore. The move is driven by the advantages the city enjoys on account of the skilled human resources and the large manufacturing base offering better sourcing opportunities, said informed sources. This could be one of the rare instances of Reliance taking its corporate management functions outside Mumbai.

Mukesh Ambani’s mega retail rollout — in a hypermarket-led format — is expected towards the end of ’06, and the private label apparel business is likely to account for as much as 20-25% of the turnover, reportedly estimated at Rs 90,000 crore in the next 4-5 years. This probably would make Reliance Retail the biggest apparel player in Asia, added sources.

It is learnt that Reliance has been scouting for a large corporate real estate space in the city to house its apparel retailing division. It has also initiated talks with potential sourcing partners in and around Bangalore.

The city is already home to most of the branded apparel players and garment exporters in the country. Besides, the potential MNC retail rivals like Wal-Mart and Tesco have located their sourcing function, where apparel accounts for a sizable chunk, in Bangalore. More recently, Wal-Mart announced plans to set up retail business development office in the city.

Reliance Retail’s apparel plans would give the domestic private label business a big fillip.

Currently, the private label apparel business is estimated at Rs 1,000 crore annually, and growing at 20-30% on a like-to-like basis. However, the growth in retailing could see this business doubling on an annualised basis, added sources.

Reliance Retail’s apparel strategy could see it effecting outright takeover or making investments in brands, which would fit into the private label mould. There could also be exclusive distribution arrangements like the one between Big Bazaar and Arvind for Ruf ‘n Tuf Jeans.

Similarly, on the manufacturing front, Reliance could look at large dedicated suppliers on a contract basis, or it could even mull investments into some such vendors, said sources.

News: PwC study may be underestimating India’s potential

(DNA 15/03/2006) NEW DELHI - How accurate is the methodology used by the PricewaterhouseCoopers macroeconomics division to project growth in various countries over the next 45 years? Though Indian economists broadly agree with the statement that India will grow faster than China, they’re not very comfortable with many of the assumptions made in the study and feel India’s growth potential has, if anything, been underestimated.

The main objection seems to be the low investment rate assumed in the study - 22% between 2005 and 2010 and 20% from 2010 to 2050. This, says Bibek Debroy, secretary general of the Punjab, Haryana & Delhi Chamber of Commerce & Industry, does not take into account recent trends. “The starting assumption itself is not right,” says Siddharth Ray, economic advisor to the Tata Group. Agrees Pronab Sen, adviser, Planning Commission, “this an excessively pessimistic prognosis.” For the investment rate to average 20% for close to 40 years, he argues, it will have to peak to 35% by 2015 and then fall very sharply in the last 15 years to below 15%. While that is happening in the United States, he doesn’t see it happening in India.

Debroy points to similar underestimations on the demographic dividend and productivity growth, with incremental capital/output ratios having dropped because of competition and efficiency, and the rapidly increasing share of services in gross domestic product (GDP).

There’s also the issue of whether the relative size of economies should be compared on the basis of GDP at market exchange rates (MER) or purchasing power parities (PPP). Debroy agrees with the report’s assumption that in some cases, the MER may be a better indicator. Going by this, India will be the third largest economy in the world in the next few years in terms of PPP, overtaking Japan, he notes, while it will have to wait till 2025 to overtake Japan in MER terms.

DH Pai Panandiker, president of RPG Foundation, however, feels PPP might be a better measure. “PPP is more reflective of what is happening in the economy. The exchange rate depends on trade and foreign investment.” Ray agrees.

Ray also has problems with the study’s measure of human capital, which is linked to the number of years of schooling.

Debroy, however, feels on both MER and PPP basis, India’s growth has been underestimated. Measured in domestic currency, India is on a trend rate of real GDP growth of 8%, and this can be increased to 10%, if reforms are continued, he argues.

News: Mammoth has momentum, dragon drives

(DNA 15/03/2006) NEW DELHI - Sometime within the next decade, and maybe even within the next seven years, India will overtake China as the fastest growing major economy in the world.

It all began with Goldman Sachs’ BRICs study in 2003, but two other independent studies have now raised this prognosis to the level of high probability - unless we manage to mess things up.

Last week, PricewaterhouseCoopers (PwC) said in a study (The World in 2050) that India has the potential to be the fastest growing large economy between 2005 and 2050. India could overtake the Chinese growth engine as early as 2013, if not earlier. The PwC report, authored by John Hawksworth, head of macroeconomics, bases its projections on favourable demographics. By 2050, India will be the only emerging market economy where the share of the 15-59 age group in the total population will not decline.

The Goldman BRICs report had earlier also pitched 2013 as the year when Indian growth rates would overtake China’s; in 2012 the growth rates would be the same, it said. By 2050, it had projected, Chinese growth rates would be half India’s.

Back home, exactly a year back, Arvind Virmani, currently advisor in the Planning Commission, had said as much in a paper, “A Tripolar Century: USA, China and India”. The crossover point, Virmani showed, would come some time around 2015.

So, what makes the unwieldy elephant sprint more rapidly than the nimbler dragon? Well, for one, it’s starting out from a lower base, so growth rates are bound to be higher. But like the tortoise and the hare, it’s also about strategy.

While the PwC study focuses largely on India’s demographic dividend, other India-watchers have been arguing that India has perhaps placed its bets on the right development model, while China could have erred in relying almost entirely on a foreign direct investment (FDI)-led export-oriented model.

If Morgan Stanley’s chief economist Stephen Roach waxed eloquent last year on India’s “increasingly powerful internal consumption dynamic”, Harvard Business School’s Tarun Khanna and Massachusetts Institute of Technology’s Yasheng Huang had, in 2003, focused on India’s strong entrepreneurial culture and its more efficient financial sector, apart from its stronger institutions, for India’s ability to sprint ahead.

However, Indian economists caution against too much being made of the advantages being totted up in India’s account.

Virmani himself argues that India will run faster only because China will slow down. This will happen because China’s export growth will decelerate as its share in the world’s goods exports rises to United States levels. The socialist planning system, touted as China’s strength, is also a source of weakness, he argues, as it distorts factor markets and the price of various inputs. While this pulls in FDI, job losses in the OECD countries and China’s entry into the World Trade Organisation will force a closer scrutiny of these practices. Besides, income inequality and uneven access to social services have also sharpened, which could disrupt growth.

The Tata group’s economic advisor Siddharth Ray wonders if China’s state-controlled systems and state-directed investment can survive in a more globalised world. Indian growth, he points out, has come in a market-oriented economy and despite several problems. “We have got accustomed to the hurdle race. The Chinese have been sprinting the 100-metre dash on plain ground. How they cope when they face the first few hurdles needs to be seen.”

That shouldn’t be cause for complacency, warns Basant Pradhan, chief economist at the National Council of Applied Economic Research (NCAER), since India’s much-touted advantages will help it catch up with China only in the long term and definitely not in the medium term. “Our advantages are not going to last forever,” he argues, “so the question to ask is how long they will last.”

Domestic consumption in China is growing, he points out, even as within India the share of exports in gross domestic product (GDP) is growing. India will have to increasingly focus on exports to take care of its growing trade deficit ($37.5 billion in April-February, 2005-06).

China, for its part, is increasingly leveraging the size of its domestic market to woo FDI. Indeed, the PwC study itself points out that accessing new customers is the key driver for companies moving into the emerging markets.

The Chinese, agrees Pronab Sen, principal advisor in the Planning Commission, are aware they are more vulnerable to an East Asian type of crisis and are trying to manage the transition from FDI- and export-led growth to domestic demand-led growth, says Sen. For starters, they are reforming their internal trade sector, which is far more distorted than India’s. “They are doing more dramatic course corrections.”

And while it is true that India has a stronger entrepreneurial class than China’s, that edge may not last long. “China is bubbling with entrepreneurship,” says an economist with a leading private bank, a point Pradhan corroborates. If entrepreneurship in China isn’t as well developed as India’s it is only because of 30 years of Communist rule. Developing entrepreneurial talent will require two generations, says Sen, and he’s sure that the children of the post-1979 (when economic reforms began) generation in China will drive private entrepreneurship by the middle of the next decade.

And as for the celebrated demographic dividend, it could well become a burden if adequate attention isn’t paid to health, education and skill development. The PwC study shows that India tops among the other BRIC nations in terms of companies accessing a highly skilled talent pool.

What India needs to do, therefore, is to nurture and promote its advantages, with the same focus with which China is trying to overcome its weaknesses, even in areas like education, whether it is in English, engineering, science or management.

And there is, of course, its single minded focus on building infrastructure far ahead of demand. Infrastructure, currently, is the most biting constraint in India that could spoil the whole growth story.

And while there is a lot of talk about focusing on health and education, there’s a general feeling that not enough is happening on the ground.

Perhaps policymakers should heed Pradhan’s words: “China is doing more to catch up with India in services than India is doing to catch up with China in manufacturing.”

News: Reliance may make B’lore apparel hub

(TNN 15/03/2006) Bangalore - Reliance Retail is likely to locate its apparel business in Bangalore. The move is driven by the advantages the city enjoys on account of the skilled human resources and the large manufacturing base offering better sourcing opportunities, said informed sources.

This could be one of the rare instances of Reliance taking its corporate management functions outside Mumbai.

Mukesh Ambani’s mega retail roll out — in a hypermarket-led format — is expected to hit the market towards the end of 2006, and the private label apparel business is likely to account for 20-25per cent of the turnover reportedly estimated at Rs 90,000 crore in the next 4-5 years.

This probably would make Reliance Retail the biggest apparel player in the Asian context, added sources.

It is learnt that Reliance has been scouting for a large corporate real estate space in the city to house its apparel retailing division. It has also initiated talks with potential sourcing partners in and around Bangalore.

The city is already home to most of the branded apparel play and garment exporters in the country. Besides, the potential MNC retail rivals like Wal-Mart and Tesco have located their sourcing function, where apparel accounts for a sizeable chunk, in Bangalore.

More recently, Wal-Mart announced plans to set up retail business development office in the city.

Reliance Retail’s apparel plans would give the domestic private label business a big fillip. Currently, the private label apparel business is estimated at Rs 1,000 crore annually, and growing at 20-30per cent on a like-to-like basis.

However, the growth in retailing could see this business doubling on an annualised basis, added sources.

Reliance Retail’s apparel strategy could see it effecting outright takeover or making investments in brands, which would fit into the private label mould. There could also be exclusive distribution arrangements as in the case between Big Bazaar and Arvind for Ruf ‘n Tuf Jeans.

Similarly, on the manufacturing front, Reliance could look at large dedicated suppliers on a contract basis, or it could even mull investments into some such vendors, said sources.

News: China's rapid rise may hurt Caribbean

(BBC 15/03/2006) London - A UK based economist has warned that the Chinese economic expansion will impact negatively on the Caribbean and other developing countries.

Dr Linda Yueh of the London School of Economics and Oxford University was speaking at a forum on globalisation and China organized by the Caribbean Development Bank in Barbados.

The growth in the Chinese economy has been phenomenal, measuring an annual average of 9 per cent over the last three years.

Dr Yueh said while the experience is that neighbouring countries are benefiting from China's growth - supplying its economy with services - other developing countries will come under pressure to compete.

This view is supported by economist at the Barbados Central Bank, Dr Deny Lewis-Bynoe who said:"the opportunities that have opened up in China are in a very real way impacting on the amount of foreign direct investment that we are able to attract."

Dr Yueh said "China is one challenge on top of a number of challenges" that developing countries are faced with, and its economic power will make it harder for small states to compete in the global market.

However, she said there are some things the region can do to lessen the fallout from China's rapid growth, such as targeting tourists from the new Chinese middle class which numbers some 400 million.

China's problems

The picture is not all doom and gloom for the Caribbean. Dr Yueh said China itself has its own challenges as the State sponsored growth and expansion has benefited mainly the urban communities and left hundreds of millions in poverty in the rural areas.

The economist said this is leading to the drift of the rural population away from agriculture. She added that there is no social safety net for people who do not make it in China's economic boom. She said China will also have to tackle other issues such as environmental problems and political transformation as it becomes fully part of the WTO and global community.

News: 'Deepen Economic Integration within the Americas'

(JIS 15/03/2006) Washington - Prime Minister, P.J. Patterson, has called on governments throughout the Americas to deepen the economic integration process and forge hemispheric, regional and sub-regional linkages that would enable small states, in particular, to withstand challenges in an increasingly globalized international economic environment.

The Prime Minister's statement came as he addressed a special protocolary session of the Permanent Council of the Organization of American States (OAS) in Washington, DC on Thursday (March 9), which was convened by the Secretary General of the OAS, Jose Miguel Insulza, in recognition of Mr. Patterson's decades of service within CARICOM, as well as his broad contribution on the hemispheric political stage.

In a wide-ranging address, which touched on several key themes, Prime Minister Patterson observed that the process of integration remained a fundamental necessity, given that despite the potential benefits of globalisation, "we have to acknowledge that the long-term survival of many of our countries continues to require adjustment to the new realities of an international environment, which has become increasingly hostile and unpredictable."

He noted that, "notwithstanding improvements in global economic prospects and the potential benefits to be derived therefrom, we have to admit that inequities still remain, putting a number of countries at economic risk, including those in Latin America and the Caribbean."

Mr. Patterson also expressed disappointment with the failure of the Summit of the Americas process to achieve consensus on the Free Trade Area of the Americas (FTAA), which should have been instituted at the beginning of 2005. Agreement on methods and modalities to dismantle tariffs in the negotiations on market access and agriculture, as well as defining the future framework for trade in services, have been key issues, which have bedeviled the negotiations.

"We formally launched the FTAA negotiations, fully cognizant of the contribution that economic integration and trade liberalization in the Americas could make to create jobs, fight poverty and strengthen democratic governance in our Hemisphere," the Prime Minister said.

"It is with disappointment that on the eve of my departure from office as Prime Minister of Jamaica and Chairman of the Prime Ministerial Sub-Committee on External Negotiations of CARICOM, the FTAA is faltering on the rock of political will," he lamented.

Reiterating his longstanding position that small countries should receive equitable treatment in the trade negotiations process, Mr. Patterson used the opportunity to highlight the need for "urgent and genuine engagement" of Haiti in the aftermath of its recent presidential elections, which resulted in the restoration of democratic rule to that country.

The Prime Minister insisted that, "every effort must be made to bring Haiti into full participation in the various trade negotiations in the hemisphere and (in) the World Trade Organization (WTO). In this case, there can be no question about the need for special and differential treatment and technical assistance" as Haiti dealt with its chronic and significant development challenges.

Subsequent to his address, a reception was hosted in the Prime Minister's honour by the Assistant Secretary General of the OAS, Ambassador Albert Ramdin, which was also attended by members of the United States House of Representatives, including Congresswoman Diane Watson of California and Congresswoman Sheila Jackson Lee of Texas.

News: India: Retail magnet?

(CNN 15/03/2006) New York - Indian workers have been getting U.S. jobs. Now U.S. retailers want to get their money.

"Because of India's status as a good IT hub for outsourcing by U.S. companies, young Indians between 20 to 24 years old, who ordinarily wouldn't be able to find work easily, are finding jobs with call centers straight out of college. This is a consumer base that typically lives at home, with the family. Now they have disposable income that's totally discretionary and about 20 to 30 percent higher than prevailing wages," said Manisha Juneja, analyst with Indian retail consultancy KPA-Techpak.

"What are they spending it on? Food, books, music, cell phones and brand-name clothes. Who's taking note of this? Companies like Tommy Hilfiger," Juneja said.

India's $200 billion retail market is still small compared to other growing overseas markets. But it is expected to boom in the next few years.

"India appears to be taking off, having become the location of choice for many outsourced processes that involve knowledge of English and /or skills with information technology," according to a 2004 market study by consulting firm Deloitte Research.

"Although this nation of one billion people has a per capita income only half that of China, it's estimated that there are roughly 150 million middle class consumers. For retailers, these facts present a great opportunity," the report said.

And that growth is tempting U.S. retailers, despite serious trade barriers, to test the waters. Some are setting up shop there in a limited way. Others, notably retailing behemoth Wal-Mart, are establishing sourcing centers and cautiously learning about the local market first.

"Sportswear companies Nike and Reebok. Hugo Boss opened two stores last year," said Michael Fernandes, retail consultant with McKinsey & Co. in New Delhi. Separately, U.K.-based department store Marks and Spencer, clothing retailer Benetton, and more recently Spanish clothing chain Mango have also broken ground in India.

"Two interesting things are happening. The growth of western-style malls is changing the way urban consumers shop," said Fernandes. "Secondly, we're seeing many more big box, value-based formats setting up shop. The size of these stores is about 50,000 square feet, a departure from the smaller mom & pop-type store that dominates the local retail landscape," he said.

Apparel retailer Tommy Hilfiger is reportedly the latest entrant into India. According to trade publication Women's Wear Daily, the company is expected to open at least six free-standing Tommy Hilfiger stores in major cities, carrying men's and junior sportswear and jeanswear. Tommy Hilfiger did not return calls for comment.
Wal-Mart interested, but cautious

Wal-Mart CEO Lee Scott, in a speech to the National Retail Federation's annual convention this past January, said his company is eyeing India as well...especially in light of indications that the Indian government may be gearing up to relax excessive regulations that have hampered retail growth in the past.

''I think we will see global retailers moving to India over the next few years to take advantage of what is happening there,'' Scott said.

Current norms regulating foreign direct investment don't allow global retailers to invest directly in India. So the way global retailers enter the market is either through joint ventures, as Hilfiger did, or through franchisee operations or cash-and-carry formats.

"The next stage of economic reforms would be to allow a 100 percent equity-owned policy," said Dr. Amit Mitra, secretary general of the Federation of Indian Chambers of Commerce & Industry (FICCI). Mitra wouldn't specify the time frame but indicated that a policy change might take effect as early as this summer.

According to Bill Wertz, Wal-Mart's director of International marketing affairs, Wal-Mart currently is trying to expand its supplier sourcing in India.

"We are interested in importing more from India. Opening stores there is more complicated, primarily because of the regulation issues," said Wertz. "Down the road we may be interested in building stores there. The most encouraging factor for us is the size of the market."

McKinsey's Michael Fernandes thinks the market size could grow to over $500 billion in the next 5 to 6 years. Nevertheless, he agreed that India has a long way to go to catch up with the popularity of its Asian rivals China, Malaysia and Thailand.

"India is among the top 15 global retail markets but it's also perhaps among the least actively competed for with global retailers," said Fernandes. "Gaining entry is the first hurdle, attractive real estate in big cities is hard to find, and its a logistically fragmented country with a complicated tax structure. But transformation is happening and it's possible to overcome some of these issues."

But the time frame is not immediate.

"Besides the political issues, retailers interested in India have to understand the cultural differences and sensitivities," said Conference Board economist Delos Smith. "Ultimately India's still a very complicated world for Western companies to understand."

News: Hefty rise in assets under Indian mutual funds

(TT 15/03/2006) Mumbai - The domestic mutual fund industry is finally coming of age.

Buoyed by the booming stock market, retail investors’ interest and a slew of new fund offerings, the assets under management (AUM) of the mutual funds swelled by 4.56 per cent in February.

The combined AUM of all the 28 mutual fund houses at the end of the reporting month stood at Rs 2,17,472 crore, a rise of Rs 9,490 crore, according to the figures released by the Association of Mutual Funds of India (Amfi).

The new fund offerings, which closed during the month, have mobilised over Rs 2,500 crore.

Some of the new issues were Kotak Lifestyle fund, which closed on February 22, Prudential ICICI Fusion Fund closed on February 27 and Standard Chartered Imperial Equity Fund that closed on February 21. Two tax savings funds, which also closed during the month, were Tata Tax Advantage Fund-1 and Deutsche Tax Saving Fund.

However, eight asset management companies reported a decline in total assets during the month, including large fund houses like Prudential ICICI, Franklin Templeton and Birla Sun Life Mutual Fund and others were Benchmark, ING Vysya, JM Financial, Sahara and Sundaram Mutual Fund.

According to the Amfi figures, HSBC mutual fund gained the most in terms of AUM, which went up by 44 per cent, or Rs 2,772 crore, to Rs 9,060 crore during the month.

In January, the AUM of mutual funds grew 4.39 per cent at Rs 2,07,982 crore.

Some big-ticket mutual fund plans that closed in January were SBI Bluechip Fund with Rs 2,850 crore, UTI Leadership Equity Fund with Rs 2,080 crore, HSBC Advantage India Fund with Rs 1,659 crore and HDFC Long Term Equity Fund with Rs 1,450 crore. While 62 mutual fund plans, including 15 equity schemes, closed in the last two months, several issues are still open. Expected big issues, including Reliance Equity Fund and UTI Contra Fund, are scheduled to close during the month.

News: Anil readies his war chest

(BS 15/03/2006) Mumbai - Anil Ambani is building a war chest for his group's energy-based resources undertaking, Reliance Natural Resources Ltd, and the operating company of his telecom business, Reliance Communication Ventures Ltd.

Reliance Natural Resources has convened a board meeting tomorrow aimed at raising capital through allotment of preferential shares, while the Reliance Communication board will decide on an issue of foreign currency convertible bonds (FCCBs) next Tuesday.

Sources close to the developments said, going by the instances of Reliance Capital and Reliance Energy, Reliance Natural Resources might place preferential shares to the promoters.

The funds will be utilised to strengthen the capital base of the company which has an equity share capital of Rs 611.56 crore. Its equity capital comprises 122.3 crore shares of Rs 5 each. The promoters have a 40.54 per cent stake.

Reliance Communication informed the stock exchanges that the FCCBs would be issued at a premium to the ruling market price. The company’s stock today closed at Rs 316.80 on the BSE, 0.41 per cent lower than yesterday's close of Rs 318.10.

The issued share capital of Reliance Communication will be Rs 1,022 crore, post the reorganisation of the telecom business of the group. With this, promoters’ holding will go up to 63 per cent from the present 40.54 per cent.

Industry sources said the proposed move of Reliance Communication to issue FCCBs meant that the group would take some time to launch the company's initial public offer.

They added that the proceeds of FCCBs would be utilised to fund Reliance Communication’s expansion plans. This includes strengthening its presence in the country and adding on subscribers for its CDMA and GSM operations. The company's telecom business has a total of 18.3 million subscribers.

Reliance-Anil Dhirubhai Ambani Group Chairman Anil Ambani had recently announced that Reliance Communication would invest Rs 15,000 crore in three years. The investment was to be funded through a mix of debt and internal accruals.

“Reliance Communication Ventures Ltd will require Rs 2,500 crore a year for its wireless operations, Rs 1,500 crore for broadband operations, Rs 1,000 crore for global operations and Rs 500 crore for common servicing assets,” Ambani had said.

The Rs 5,000-crore capex will be used for expanding its CDMA business network to over 4,500 towns from the present 2,000 towns (which will be completed in months). It will also be used for expanding its GSM operations, and for roping in both enterprise and retail customers for its broadband business.

The company, which had recently acquired insurance firm AMP Sanmar for around Rs 100 crore, had also earmarked a capex of Rs 1,000 crore for the next “two to three years” in the insurance business.

This will be the second instance of the group raising funds. Immediately after the June 2005 settlement with his elder brother Mukesh, Anil Ambani announced an infusion of Rs 3,000 crore in his group companies.

The group's financial services company, Reliance Capital, received Rs 2,000 crore, while the power outfit, Reliance Energy, got Rs 1,000 crore.

News: Bharti may tie up with Tesco

(ET 15/03/2006) NEW DELHI - The Bharti Group has quietly begun groundwork to get into food retail with the world’s second largest retailer Tesco. Market sources say the two are close to inking a deal and added that in all probability Tesco would first help Bharti set up the supply chain crucial for a retail model like supermarkets. Foreign investment in pure food and grocery retailing is still not allowed and Tesco cannot scout for opportunities in the front-end at the moment.

When asked about the prospective tie-up with Tesco, the Bharti spokesperson said, “Bharti has an existing interest in the horticulture arena and is exploring the opportunity in food retail. For now, we are evaluating options. This is at an early stage and it would be premature to comment on any speculation.”

Sources, however, said Bharti could use the Tesco brand for its food retail venture under a licensing arrangement but more importantly, it is the know-how, infrastructure and supply chain management that Bharti is looking at learning from Tesco. In any case, it would take Bharti another 12 months to put its first supermarket in place.

Interestingly, Bharti already has a joint venture — FieldFresh Foods Pvt Ltd — with EL Rothschild Group, which has a substantial equity in Tesco. The company exports fresh farm products to markets in Europe and USA, UK, South East Asia and West Asia.

FieldFresh Foods was set up with an initial investment of $50 million (Rs 250 crore), with both BEL and Rothschild-owned ELRo Holdings contributing $10 million of equity. The company exports fresh fruits and vegetables to markets in the European Union, the United Kingdom, South East Asia and West Asia.

If sources are to be believed, the recruitment process has begun and the industry may witness another set of high-level movements once hiring gains momentum.

Interview: Nikhil Vora - SSKI

(TV18 14/03/2006) Mumbai - Nikhil Vora of SSKI throws more light on the retail sector and lists his favourites. Vora is positive on Pantaloon, Provogue, Shopper's Stop and Nilkamal Plastics.

Excerpts from CNBC-TV18's exclusive interview with Nikhil Vora:

Q: How have you gone about valuing retail and what looks like a more prospective buy in that space?

A: I think it is a tough situation to value business, which is in the nascent stage. That means that valuations do run slightly ahead of the curve for the fair value of the businesses. We have tried to look at it slightly differently. The fact that the entire retail space in India is around USD 7 billion right now, if one looks at the growth track, which we think retailing will do in the next four to five years, it should be close to around USD 35 billion. Pantaloon is likely to remain the largest player and could have around 10- 15% of the market share.

If one looks at that sort of market share, the valuation of a billion dollar may not really appear too steep in that regard. If one see what happened to retailers globally, be it WalMart in US, or even some of the Chinese retailers who have been in the market , they had those periods of slightly abnormal values, which have prevailed for slightly longer time. So I wouldn’t really like to play a strong value game here. It will suffice to look at business merits and look at the growth trajectory, which I think can be abnormal in the next 3 – 4 years.

Q: Which of the listed companies seem to be best positioned?

A: There are three things to look at. I think the speed of execution is one, I would look at the business model and operational efficiencies of these players. Between the players which are there, I would say Pantaloon is the best player. I like Provogue but it has not come to the size, which one would like to look at. I think Provogue will be a dark horse in retailing.

I would also put Nilkamal Plastics, it is a small company but it has the right model to capture the growing consumerisation. These are the three companies, which we are strongly positive on. I also like Shopper's Stop but the business model has to move towards value retailing if it has to make any significant dent in the overall retail space.

Q: Tell us little bit about Nilkamal Plastics and why do you like that stock?

A: It is a small company but managed by people who have a very strong business direction. They have been very credible in their own business in the Plastic processing space, which is furniture.

I think the difference in a historical model and a model of tomorrow is that they are getting into home furnishing, retailing. They have just set up four shops for retailing outlets in the country, which I think will be scaled up to around 30 in the next two years. A model like home furnishing can be a big success. The company right now runs a business, which is close to around Rs 400 crore in terms of the topline. I think retailing itself can generate close to around Rs 200 crore in the next two years. That valuation is not really getting captured in the business today.

I think these people understand the business model much better than most of the retailers in the country today.

Q: You have a price target of Rs 950 for Titan, put that business into perspective and where do you see the growth coming in and by what quantum?

A: Titan is a strange case of business, which we think will do very well. Valuations are slightly stretched, doesn’t leave too much room for an investor apart from 10 – 15% gain from the current level. What we are looking in Titan is trying to equate it to something like Pantaloon and we believe Titan will make more money than Pantaloon in the next year. Valuation of Titan is still lower than Pantaloon.

It is model, which is slightly difficult to replicate than the Pantaloon model. But on a model to model basis, longer term sustainability, I think Pantaloon will score pretty high.

Q: You spoke about USD 7 billion business of retailing going up to USD 35 billion, which implies probably a 40% growth over the next five years. Do you see most of the retailers actually growing at that kind of an average growth rate or higher YoY?

A: What is interesting to look at is what growth they have achieved in the last 6-7 years and what growth they will achieve in the next 2-3 years. The fact that Pantaloon in the last four years is less than 2 million square feet under retail will be possibly close to 10 million square feet in the next five years.

Shopper's Stop which was less than a million square feet in the last six years is now going to be 3 million in the next three years. The growth going forward will be far much stronger than the growth that we have seen. Between the players to choose for in terms of growth rate, I feel that everyone is going to grow at similar pace.

The trouble obviously is that some of them are very small players so the growth rate might look slightly more abnormal. If I have to look at companies and look at longer term buys in those, we are still skeptical on Piramyd, we are not really bullish on Trent, they are the guys who are relatively slow in that space and not been able to catch up opportunities. But we are pretty positive on Pantaloon, Provogue, Shopper's Stop and Nilkamal.

Q: A word on the media space, what have you made of TV Today’s plans of launching a city channel in Delhi called Delhi Aaj Tak. Do you think it is an extension which makes sense or will it make money more importantly?

A: We have been very skeptical of TV Today’s business model. Skepticism has been pretty well documented. It has got a very limited space to grow and unlike stronger niche channels like your own channel or even New Delhi Television Ltd for that matter, which has a strong franchise and distribution which they can capture on, we think TV Today will possibly struggle on that count.

I am still not able to satisfy myself that they are doing a lot of right things. Whatever they are doing is incremental baby steps, not really building up a model from where they have a strong franchise and taking that forward. I don’t think these fringe incremental steps will really make a big difference to their entire portfolio or their entire bottomline.

Q: Dabur on the Nifty. How do valuations look on Dabur?

A: We have been bullish on Dabur for quite some time but valuations are getting into the fair price zone. We have tried to value Dabur on the basis of cash on book and how they can really leverage that cash for future acquisitions and also for Dabur Foods. We think that is an interesting business opportunity. I think at around Rs 125- 130 levels, Dabur is getting into the fair price zone. I don’t think there is too much of steam left. Till that point, I think it is pretty good.

News: CIBC buys leading bank in Caribbean

(CP 14/03/2006) TORONTO - The Canadian Imperial Bank of Commerce has tentatively agreed to buy a majority stake in FirstCaribbean International Bank for nearly $1.26 billion.

CIBC said yesterday it has signed a non-binding letter of intent with Barclays Bank PLC to acquire the British bank's 43.7% stake in FirstCaribbean.

After the deal, CIBC would own 87.4% of FirstCaribbean, the largest regionally traded bank in the English-speaking Caribbean.

CIBC will have the option of paying for the transaction with cash, CIBC common shares or a combination of cash and shares.

CIBC has a long-standing presence in the Caribbean, where it opened its first branch in 1920 and acquired its current stake in FirstCaribbean when its Caribbean operations were merged with those of Barclays to form FirstCaribbean in 2002.

The bank would also join Scotiabank among the major Canadian financial companies with a big presence in the Caribbean.

Scotiabank has more than 200 branches in such places as Antigua, Jamaica and Trinidad and Tobago.

The expansion comes in the wake of CIBC's withdrawal from much of its U.S. operations in recent years.

News: TNT to invest 100 mn euros in India

(PTI 14/03/2006) New Delhi - Dutch Logistics network company TNT would invest over 100 million euros (about Rs 531 crore) in infrastructure, trucks, information technology and manpower in India in the next five years as it feels infrastructure sector in the country would swell two-folds by 2014.

"As India's market is among the fastest growing markets in the world, there lies a huge opportunity for a logistics company like us. We are committed to investments worth 100 million euros in India in next five years," TNT CEO Peter Bakker said addressing a CII organised conference 'Global Focus on developing Logistics Networks in Asia.

The company is looking at strengthening its network within the country and increase the headcount from current 1,000 to 2,000 by this year end.

Infrastructural sector in India would double itself by 2014.

"India and China are the drivers of global economic growth and the markets here would grow by 6,000 per cent and 4,000 per cent respectively in next 50 years, while the US market would grow by 350 per cent in the same period," he said.

Bekker expressed confidence that with the opening of foreign investment in infrastructure sector, logististics cost that currently stand at 13 per cent of country's GDP would come down. Developed countries spend about 9 per cent of their GDP on logistic costs.

There is a need to move to "just in time" from "just in case" in delivery business and things are moving in the right direction with foreign players coming in the sector, Director Genrra CII N Srinivasan said.

TNT is looking at improving service networks and smoothening connectivity from entry point of the country to other destinations within the country, Bekker said.

"We recently bought two 747 boeing to facilitate deliveries from Europe to China and might do a similar thing for India depending on the market," he said.

Bekker feels there lies a great opportunity once the road network in India is fully developed.

He, however, said the company at this point in time is looking at organic growth only. But might weigh other options in the times to come.

"Road network in this part of the world is not as developed as they have in the West. Roads contribute to about 80 per cent of the transport in developed countries... Things in India have improved after the work on Golden Quadrilateral started but there is still a long way to go," he added.

News: Govt to modernise airports

(PTI 14/03/2006) New Delhi - Apart from Delhi and Mumbai, the Government is contemplating to modernise other metro airports and 35 non-metro airports in the country, Rajya Sabha was informed on Tuesday.

The work on non-metro airports is proposed to be taken up and completed by 2010-11 at an estimated expenditure of Rs 4,662 crore, Minister of state for Civil Aviation Praful Patel said in a written reply.

To another question, he said the airports at Amritsar, Nagpur, Srinagar, Jaipur and Kozhikode have been declared as international airports in the last three years.

He said the Government has taken fresh initiatives to open up more airports in various cities.

Apart from the proposals for development of Greenfield airports at Hassan, Gulbarga and Gangtok, Airports Authority of India has taken initiatives during the last one year for operationalisation of the airports at Cooch Behar, Pantnagar, Akola, Gondia, Surat and Mysore on the demand of airlines.

On the development of aviation sector in Uttaranchal, Patel said, while AAI owns Dehradun and Pantnagar airports, which are being upgraded. Besides, Pawan Hans Helicopters Ltd also plans to diversify/connect to important tourist places in the state such as Ghangharia, Hemkunt Sahib etc.

The state government had also requested AAI to examine suitability for upgrading of airports developed by them at Pithoragarh and Gauchar, but they were not found suitable for operation of 20/50-seater class of aircraft due to their location and surroundings, he said.

News: Salaries up 16 pc in IT services last year

(HB 14/03/2006) The IT services sector witnessed an average salary increase of 16 per cent and the BPO sector 16-18 per cent in 2005, although the salary rise was less dramatic at the entry level, according to a Nasscom-Hewitt Total Rewards Study.

"The salary increases were not very high across all levels. The salary increase at the entry level was five per cent in the case of BPOs and 12 per cent for IT services. This implies that there is not much of a skill shortage at the entry level, although availability of skilled and experienced managerial talent remains an issue," said Mr Sunil Mehta, Vice-President of Nasscom. Continuing with the trend of last year, IT professionals working in Bangalore and NCR bettered the national average.

"Bangalore and NCR are among the highest on the location index with each reporting a 4-6 percentage point increment over the national average, followed by Hyderabad. " the study said.

Pressure on talent and profitability increased in 2005 and companies looked at ways to establish competitive advantage.

During the year, IT organisations revealed a similar cash orientation as last year with the average cash-to-benefits ratio across levels being 78:22. Organisations in the IT services sector are increasingly designing compensation structures that are tax-friendly and allow employees to exercise their choice of benefits through a single flexible allowance.

"Although the average fixed pay to variable pay ratio continues to be 91:09 across levels in 2005, the variable pay as a percentage of total cost to company across levels has seen a rise in 2005, wherein more and more organisations across the comparator sample are directly linking the employees' compensation to his/her performance," the report said.

Of the 91 IT organisations approached, 27 per cent reported a formal differentiation based on hot skill sets, while 41 per cent said that they clearly did not differentiate between skills in specific job families. The rest maintained that they had no formal policy for differentiation, but differentiated compensation basis criticality of resource requirement.

Within the ITES/BPO space, the average salary increase in the sector across levels was in the range of 16-18 per cent. "ITES organisations in 2005 revealed a similar cash orientation as last year with the average cash-to-benefits ratio across levels being 76: 24."

Here too, NCR and Bangalore figured on the top of the location index, with both reporting a 3-6 percentage point increment over the national average, followed by Hyderabad.

News: ABN AMRO launches Future Leaders Fund

(Sify 14/03/2006) Mumbai - ABN AMRO Mutual Fund is targeting assets under management of over $1 billion by the end of 2006, according to Nikhil Johri, Executive Director, ABN AMRO Asset Management Ltd.

The asset management company is also expected to launch its portfolio management service shortly; its application is pending with the Securities and Exchange Board of India.

Johri was speaking at the launch of the ABN AMRO Future Leaders Fund - an equity fund that will invest in small and mid-cap companies.

The ABN AMRO Future Leaders fund will emphasise on companies that appear to offer opportunities for long-term growth and will be inclined towards companies that are driven by a dynamic style of management and entrepreneurial flair, according to a company press release.

The new fund offer remains open till April 7.

The scheme charges no entry load for investments during the new fund offer.

The minimum investment to the fund is Rs 5000 under both growth and dividend options.

Column: Retail growth, a boon to job market

(ET 13/03/2006) Imagine the positive impact on the job market when Wal-Mart Stores, the world’s largest retailer with a $285.2-bn turnover (larger than some countries’ GDP), opens its stores in India. In fact, a little known point is that even presently, retail is the second-largest employer in India after agriculture, but is highly fragmented and largely disorganised.

When we talk of retail, it almost always conjures up an image of our local kirana shops that form the bulk of the ubiquitous retailers in the country. Names like Westside or Shoppers Stop are still more of an exception.

How big is the industry?

Some studies have indicated that presently, the Indian retail business employs nearly 21m people, which is around 7% of total employment. Although the country has about 12m retail outlets, the largest number in the world, the share of organised retailing is merely 2%. Compare this with the US (80%), West European countries (70%) and Brazil (40%). This only indicates the huge scope for the growth of the organised sector in India.

Studies also indicate that organised retail in India will grow from 2% of the total retail industry to a significant 20% by the end of the decade. Once foreign direct investment (FDI) in retail is permitted by the Indian government, large employment opportunities are expected in organised retail. As is obvious, organised, large-scale retailing would also create indirect or support jobs in areas such as interior infrastructure, security and information technology.

Globally, organised retailing means more than selling products over the counter. The skills required in a winning large-scale retail business are complex front-office and back-office functions that offer plenty of scope for growth to a professional seeking a career in retailing.

Who can get into retailing?

An MBA in marketing is best suited to understand, establish and operate a large-scale retailing business. However in India, even a qualified MBA is only just learning about the concept of retail management by being on-the-job. For a graduate seeking a successful career in Retailing, it may be a good idea to join a long-duration course in retail management from any of the specialist institutions that train you in carrying out this function. For an MBA, these courses could be a further super-specialisation. It may also be a good idea to check out the depth of curriculum and expertise offered by the institution before enrolling.

What does retailing comprise of?

Organised retailing is not just about stocking and selling, it is more about smart management of the supply chain (back-end vendor relationships), quality customer service, slick visual merchandising, timely promotional campaigns and robust customer relationship management (loyalty programmes).

The core job functions can be broadly classified as retail marketing and merchandising management, customer service and operations. Apart from this, conventional back-office staff functions like accounting and human resources are additional inclusions.

Like any organisation, there are hierarchies and clear growth paths in all these job functions. Typically you start at the bottom as a shop-floor sales person, buyer or assistant merchandiser before moving up as floor manager, store manager, merchandising head or operations head.

Retail marketing and merchandising management

These are the people who are responsible for your getting pulled to a product lying mutely on the shelf as you enter a store. Retail merchandisers select, purchase, promote and sell products for a retail store, department, division or chain.

They study trends, visit manufacturers, designers and merchandise markets, and make forecasts based on the information they collect. They work with a team of buyers and managers to decide the most effective way to sell their products.

A very special sub-function includes visual merchandising that focuses on advising advertising and display departments on the best ways to position and place merchandise in the store. In addition to this, the function may also be responsible for organising and co-ordinating promotional activities. Merchandisers may also specialise in specific lines of products like furniture or clothing.

A trade marketing manager or retail services manager looks after the retail trade. Typically, they appoint distributors and dealers; and appoint franchisees for expansion of company outlets. They take care of all marketing services such as events, promotion, point of sales etc.

Operations

How would a retail outlet survive if its most-selling items ran out of stock while nobody inside in the organisation was aware of this big gap? This is where operations people step in. The function is famously called supply chain management (SCM).

In a large scale retailing business, this function is completely IT driven and includes areas like vendor management, warehouse management and inventory management. This is a loaded back-office operations role which is an absolute must for gaining and maintaining a competitive edge.

Most retail businesses deploy extensive SCM software systems available from large vendors like TCS.

Marketing and customer support service

There is a strong likelihood that those of us residing in metros have been offered a privilege card while making major purchases at large retailing houses like Lifestyle’s Inner Circle card or Westside’s Club West card. Also, chances are that those of us who hold such a privilege card have received a special first-day, first-hour invitation to the launch of the store’s season sale. Technically speaking, this is termed as a loyalty programme and aims at encouraging a customer to make repeat purchases, while rewarding her with redeemable points. This is much like the frequent flyer schemes offered by nearly all airlines.

Again, this is mainly an IT driven back-office function integrated with front-end sales counter point-of-sale software and involves a dedicated marketing support team. This function is mainly driven by CRM software and includes retailer-customer interaction, including sales force automation, opportunity management, customer support, and a full spectrum of customer analysis.

As we can clearly see, apart from conventional job functions, organised retailing offers both the aspiring youngster or experienced marketer, a depth in career path and some exciting job functions to choose from.

BY ARCHANA RAHEJA, Head, Academics, Indian Retail School, New Delhi

News: Alcoa plans Trinidad smelter

(PBT 13/03/2006) Pittsburg - Alcoa Inc. wants to build a $1.5 billion aluminum smelter in Trinidad, the company said Monday.

The Pittsburgh-based aluminum giant (NYSE:AA) said it has filed an application with the government of Trinidad and Tobago for environmental clearance.

The plant would be located in the Cap-de-Ville area of southwestern Trinidad, and would employ 750 to 800 people when completed.

Alcoa would own 100 percent of the plant.

The planned environmental impact assessment is a study that identifies the environmental and social conditions currently existing and then determines likely effects of the project on those conditions and what must be done to mitigate any negative effects.

"We are committed to a full and open environmental impact assessment process to ensure all citizens of Trinidad and Tobago have the opportunity to participate and be heard," said Randy Overbey, Alcoa's president of primary metals development.

News: Insurance honeypot will draw more bees

(DNA 13/03/2006) MUMBAI - India’s rapidly growing insurance market will see several new players in the next one to three years, especially if foreign direct investment (FDI) limit is raised, according to a Fitch Ratings report.

Most private insurance companies are joint ventures between Indian and foreign partners; foreign partners’ share is currently capped at 26%. The report said India’s insurance industry has undergone major structural changes in recent times and now accounts for 10%-15% of India’s total financial sector assets.

Despite the strong growth and improving penetration levels, the Indian market is still quite small and holds the potential to expand further.

Total gross premiums amounted to Rs 95,140 crore in FY05, split roughly 60:40 between life and non-life businesses, respectively.

Total (life and non-life) premiums were equivalent to 3.17% of GDP in 2004 as compared with 8.27% in the US, 7.89% in Europe (western, central and eastern) and 7.4% in Asia as a whole. This potential for growth is likely to attract more players. At present, there are 13 private insurers in the life sector and 8 in the non-life sector.

“Private insurers are rapidly gaining market share at the expense of the public sector and will continue to be aggressive in their attempt to capture an ever larger share of an expanding market,” says Purvi Harlalka, analyst at Fitch India. “Private insurers are able to do this because they offer greater choice in terms of products and services and also make a concerted effort to increase consumer awareness about importance of insurance via vigorous marketing.”

Additionally private insurers have also focused on developing alternative distribution channels - among them corporate brokers, bancassurance, the internet and corporate agents. These have provided additional ways of getting products and services to customers, and now account for 25%-30% of private sector sales. The agency also notes that the expected increase in the FDI to 49% from the current 26% level will allow a fresh infusion of capital into the sector.

News: Don't ignore Asia

(IIN 13/03/2006) London - Asia’s rising global significance is too important to ignore says Fidelity International.

Significant market advances have already been made in Asia, John Lo, portfolio manager of Fidelity Asian Values Investment Trust, believes there are still an overwhelming number of untapped investment opportunities to be found.

“The global prominence of India and China continue to attract worldwide attention, but in an environment where recent performance has been generated by local rather than global factors, a top down view may obscure opportunities offered by individual markets, such as Singapore, Thailand, Korea and Taiwan,” says Lo.

Lo argues that Asia has 54 per cent of the world’s population but only 14 per cent of the global GDP, highlighting the potential for growth. The regional crisis in the late 1990s led to more disciplined capital expenditure, increased focus on profitability and significantly improved balance sheets. Moreover, in Asia the ratio of external debt to GDP is at a twenty year low.

He says that consumerism is taking hold as the demographics change, fuelled by births after 1980. Rising per capita income, a reduction in household savings, increased spending levels and evolving consumer tastes are driving the growth of modern retailing across Asia. Urbanisation and lower tariff barriers within Asia are creating new ‘semi-local’ markets.

Lo points out that the Asian market is relatively uncorrelated with other major markets and as there is low correlation between markets within Asia Pacific itself, it provides diversification as part of a global portfolio.

And that China is an emerging player to global powerhouse. It continues to demonstrate increasing significance as Asia Pacific’s powerhouse and is therefore too important to ignore believes Lo.

Stephen Westwood, head of investment trusts, Fidelity International, comments: "Asia is too significant to ignore and should be considered as an integral part of a core diversified portfolio. The region is a rich tapestry of unique and lowly-correlated countries offering substantial scope for investment diversification. Structural changes in Asia are creating a wealth of opportunities across various sectors. An investment trust such as Fidelity Asian Values offers investors the opportunity to benefit from Asia as it continues to develop."

John Lo continues: "Equity valuations remain attractive despite a marked increase in equity prices across the region and traditional valuation measures remain undemanding by historical standards and less stretched than those in other regions.

"At a macro level, data releases continue to be robust. Asia continues to benefit from a unique mix of emerging markets with rapid growth potential and developed nations that have historically demonstrated the ability to generate much higher levels of economic expansion than that associated with the western world.

"Companies in Asia remain focused on improving corporate governance and delivering shareholder value. Across the region there has been a marked shift away from grand scale expansion plans in favour of a concentrated focus on the core fundamentals such as cost control, profitability and return on capital. This should enable the region to continue to secure strong foreign capital inflows going forward, as investors become increasingly reassured that the lessons of overcapacity and value-destroying acquisitions, which formerly dogged the region, have been learnt.

"In particular, South East Asia offers an increasingly diverse pool of investment opportunities but continues to benefit from a low-cost labour force and relentless opportunities for external trade, which has helped support strong market performance over the last 12 months."

News: City malls switch to power save mode

(EI 13/03/2006) Mumbai - With the Maharashtra Electricity Regulatory Commission (MERC) sounding serious about its decision to penalise power consumers not cutting down their power consumption by 20 per cent, malls in Mumbai have decided to regulate electricity usage on their premises.

‘‘Malls, like other commercial buildings, fall under high-end users. If they reduce consumption, it makes a huge difference to the power scenario in the city,’’ said MERC Chairman Pramod Deo. He said people using more than 300 units of electricity and not saving it would be penalised.

Use of efficient air-conditioners (ACs), reduction in late night operating hours and switching off lights during the day are some of the measures being adopted by the malls to save electricity.

‘‘We planned a schedule to reduce power consumption as soon as the MERC issued its orders,’’ said said T Anupam, head of Inorbit Mall at Malad.

The mall, spread over 5 lakh square feet, consumes 25,000 units of electricity per month, excluding the same amount used by the 84 shops on its premises.

Stating that it’s their duty to help improve the power scenario, Anupam said: ‘‘Besides using better ACs, we have started shutting off lights in areas which are not in use, plus keeping escalators and some lifts closed when not required.’’

Big Bazaar and Pantaloon outlets are also following a similar pattern with emphasis on reducing AC usage because it accounts for maximum consumption. ‘‘Even as we have instructed our outlets to reduce consumption by 20 per cent, we still maintain the best customer service,’’ said Kishor Biyani, incharge of these outlets.

Mega stores like Pyramid at Crossroads, Haji Ali have also worked out a plan to reduce consumption during the day by partially using the lights and ACs.

‘‘But, our stores will be fully lighted during evenings and weekends,’’ said Pyramid Chief Operating Officer (COO) Bipin Gurnani.

It remains to be seen if the MERC order can prevent load shedding during the peak season—it has predicted a power shortage of 250 MW for April, May and June in the city.

But mall owners are not worried about the possibility of load shedding. ‘‘Everyone has power back-up in diesel generator sets. Although it costs Rs 15 against Rs 6 per unit, which is almost double, we have no other option,’’ said Biyani.

But their optimism is based on the crisis situation continuing for only two months. ‘‘Otherwise we will have to adopt a long-term strategy,’’ Gurnani said.

The shoppers are also happy about initiative of the malls to reduce power consumption. Sripad Mahale, who shops regularly at Inorbit, said: ‘‘It is the social responsibility of the malls to help the state tide over power crisis. Our shopping experience will not be hampered if the malls minimise the use of ACs and lifts.’’

News: Global investors descend on India

(Sify 13/03/2006) Mumbai - It's India everywhere for global investors. A clutch of MNC investment banks led by Citigroup, Morgan Stanley, Merrill Lynch, and Deutsche Bank are hard-selling the India story to their global clients like never before, thanks to the over 50 per cent a year returns from the equity markets in the last few years.

Recent weeks have seen over 500 clients of these MNC banks, including pension fund, hedge fund, and mutual fund managers from across the globe, descend on India to attend `investor conferences' held in different cities.

These conferences are designed in such a way that their global FII clients get opportunities for one-to-one meets with top managements of Indian companies, industry officials said.

The clients will also get a "feel" of the companies they are investing or have invested in.

In some cases, FII clients visit the manufacturing facilities of the Indian companies as well. The objective is to make it easier for clients to take the investment decisions.

Citigroup held its first India Investor Conference in the country early this week, where over 70 Indian corporates including large cap companies and many mid-cap companies made presentations to institutional investors; Deutsche Bank went a step further by taking their top investors to the facilities of blue-chip Indian companies, including Maruti Udyog and Bharat Forge.

Over 150 top institutional investors of Citigroup from the US, Europe, the Asia-Pacific region, and Japan attended the three-day conference held in Mumbai and Delhi.

"The markets may be at frothy levels, but it is easier to sell the equity at these levels. See the returns the Indian markets have given in the last couple of years," said an official in a local brokerage firm. "The Indian companies are now more researched than ever before."

Merrill Lynch held its investor conference in Jaipur in February, which was attended by over 150 FII clients from all over the world.

"The mood is bullish," said Andrew Holland, Executive Vice-President (Research) of DSP Merrill Lynch.

"The objective of the investor conference is to help our clients get the flavour of what's happening in the country. We try and showcase the country and the companies to our clients."

Interview: Ajay Banga - Citigroup Global Consumer Group

(HT 13/03/2006) New Delhi - The economic growth is the way of life in India, feels Ajay Banga, chairman and chief executive officer of Citigroup’s Global Consumer Group International businesses. The continuity in the Indian economic policy despite changes in the government has increased the global confidence index towards India, he told Arun Kumar in an interview.

Much has been done and a lot more needs to be done, particularly in the manufacturing sector that will generate fresh employment and attract foreign capital. Banga’s responsibilities include all credit card, retail banking and consumer finance operations in Asia, Japan, Europe/Middle East/Africa, Latin America, and Mexico. Excerpts:

Where does India fit in Citibank’s global perspective in terms of importance?

India is among the top five markets for the US. It is one of the most prospective markets in terms of growth. Let me give you an overview of some assessment done by us. We believe that nearly 750 million people will be added to the middle class category worldover in the next five years. Out of this, we strongly believe that 25 per cent will be from India. This shows about the potential of Indian market. The other important markets are China, Brazil, Poland, Turkey, Korea and Russia.

Given the current restrictions in terms of opening of new branches, what is your plan for growth?

Yes, there are certain restrictions which prohibit natural growth. But if that is the law of the land, there is nothing wrong. There are other areas like credit card business, corporate banking, investment banking and personal wealth management. Yes, retail banking is an important component in the overall banking, but we have very good stream of income from other areas. And, we will continue to strengthen in these areas. As and when the government allows us to grow organically or inorganically, we would like to grow aggressively. The regulatory environment has undergone a massive change over the past five years and it is becoming much more conducive now than before. Having said that, I believe that there is lot more that needs to be done.

Has the makeover of India perception in the last couple of years made some impact on your bank’s decision towards India?

Certainly, it does. We have invested between $300 to $400 million in India by way of profit plough-back and incremental investments. Going forwards, I strongly feel that this number will go up substantially as and when opportunities arise. The changing perception and huge economic growth made by India is part of boardroom discussion for most of the multinational companies. Since growth in India is demand driven, it is certainly more sustainable. There is consensus on the fact that Indian companies are becoming globally competitive and offer good opportunities.

Between India and China, which is more important for Citibank?

We don’t take decision like which is important. In this case, we believe that both are important countries in term of growth. However, having said this, since we are present in India for over 100 years, the amount of investment is much more than China. In India, Citibank has investment of $1.5 billion and has asset base of $10 billion. India has different position in Citi’s world views. Let me give you another data, over 300 employees from Citibank India are now working in Citibank global operations.

We have an employees base of 16,000. We have witnessed huge flow of funds from foreign institutional investors in the last couple of years, while the FDI flow is comparatively low. What is your reaction to this trend?

I believe the current ratio has to change in future. The fact that India provides one of the most developed markets in term of technologies, or rule of the law allow FIIs to invest in India. At the same time, Indian entrepreneurship has created robust companies which are competitive in the global market. Therefore, foreign companies have not been able to invest directly. Going forward, I believe India needs to strengthen manufacturing sector which will create employment and attract lot of FDI.

News: The rich begin to invest more in private equity

(DNA 12/03/2006) MUMBAI - After art, real estate and commodities, the latest asset class that private bankers and wealth managers are promoting for their high net worth individual (HNIs) clients is private equity.

No authentic figures are available on the number of individuals taking up private equity stakes in companies and the proportion of their wealth that goes into this alternative asset class, but wealth managers assert that the trend is definitely picking up.

“We believe that clients should have more flexibility and go beyond offerings comprising equity, mutual funds, debt and real estate. Alternative investments including investments in private equity allow high net worth individuals (HNIs) to broad-base their portfolios. Though at a nascent stage, private equity as an asset class in India is definitely on the rise on account of the maturing financial sophistication of HNIs,” says Sandeep Sharma, head of private banking at SG Private Banking India.

Secondary research in developed markets suggests that a growing number of HNIs accept the fact that investments in fundamentally strong businesses could be a much more dependable wealth management strategy than the usual avenues. “Investing in private equity focuses on this philosophy,” Sharma says.

In fact, according to information sourced from the World Wealth Report of 2005, brought out by Capgemini and Merrill Lynch, the United States Private Equity Index, with returns of 23.5%, outperformed other major market indices in 2004.

“HNIs take private equity stakes in companies either through venture capital funds that are promoted by various institutions or in an individual capacity,” adds Sharad Sharma, head of private banking (India) at BNP Paribas.

For instance, Kotak Mahindra Bank’s wealth management division has directed some of its HNI clients to the Kotak Venture Capital Fund, which closed with $160 million of committed capital. According to Nitin Deshmukh, head of private equity at Kotak Mahindra Bank, 30% of this money has been raised from HNIs. Adds Kotak’s Prakash Dalal, senior vice-president (products and marketing): “High net worth individuals are definitely taking private equity in companies. A wealth management institution not having its own venture capital fund (VCF) would direct its clients to take a stake in third-party promoted funds.”

SG Private Banking India, meanwhile, thinks of itself as an investment bank for clients. “Our team has a robust network with fundamentally strong companies and we are constantly evaluating firms. Armed with expertise in stock picking, when we meet our clients whose risk return portfolio seems synergistic, we recommend that the client consider private equity,” says Sharma.

News: India Opens Sectors of the Economy to FDI

(EUNN 12/03/2006) London - Last month the Indian cabinet approved the opening of sectors of the economy to foreign investment, but not without objections. There are approximately 40 million people and 11 million outlets in India's retail sector. Many of these are marginal businesses - small shops and stalls, street vendors and hawkers - which will be hurt by competition from large retail outlets and chains.

The government decision on January 24 allows up to 51 percent foreign direct investment (FDI) in "single brand" retail stores. Nike, Nokia or Levi can establish stores, but multi-brand retailers such as Wal-Mart and Carrefour are excluded, for now.

The Congress-led government also opened up diamond mining, the development of new airports, the laying of natural gas pipelines, cash-and-carry wholesale trading and export trading to foreign investors.

Companies investing in these industries no longer need to seek approval from the Foreign Investment Promotion Board and all FDI limits have been removed.

The government has also approved the removal of restrictions in aspects of the petroleum, power trading, coal, rubber and coffee sectors.

The latest measures are part of a programme of privatisation, deregulation and restructuring that began in 1991. Over the last decade and a half, successive governments have opened up transportation, telecommunication, food processing, electrical equipment, software, hotel and tourism, financial services, non-financial services, metals and other industries to foreign investment.

Commerce and Industry Minister Kamal Nath announced the changes before flying to the World Economic Forum conference in Davos in late January where Indian business and government officials touted for increased foreign investment.

Nath told the leaders of the world's richest corporations that India was seeking to increase its FDI to $US10 billion by 2006-2007, up from the $6.5 billion invested in 2005.

India's team at Davos, which featured Nath as well as the Finance Minister, the Chief Ministers of Delhi, Kerala and Rajasthan and representatives of Indian the business, ran a high-profile campaign to promote the benefits of investing in India. The Confederation of Indian Industry spent $4 million on an "India Everywhere" campaign at Davos.

Delegates arriving at Zurich airport were greeted with a billboard announcing India as the "world's fastest growing free-market democracy."

The slogan "15 years, six governments, five prime ministers, one direction" underscored the commitment of all parliamentary parties in India to the free market agenda.

Although the Indian government hails foreign investment as an economic boon, the growth has largely benefited the wealthy to the detriment of large sections of workers, small business and farmers. The opening up of the Indian economy and deregulation has resulted in substantial public sector job cuts, the destruction of industries, land seizures and cuts to food and fuel subsidies.

Nath tried to play down the effects of the latest changes on the poor, claiming that the opening of the retail sector was "limited" and would leave existing small retailers unaffected. But any change is going to have a negative impact on an economic sector that employs seven per cent of the workforce or about 40 million people and supports as many as 200 million people.

Partly due to poor infrastructure, India's retail economy is backward by world standards. Approximately 98 per cent of those employed in retail are in what is categorised as the unorganised sector—businesses that are small, unlicensed and do not pay tax.

The sector is far less developed than in most major countries in Asia. China's organised retail sector is 20 per cent of the total, while the proportion is 50 per cent in Malaysia and 40 per cent in Thailand.

Retail activities such as door-to-door selling, street carts and market stalls, act as a last resort for the unemployed, given the lack of jobs in manufacturing and agriculture. Many in the retail trade are living below the poverty line. A report published in December 2004 by the Centre for Policy Alternatives (CPAS) entitled "FDI in India's Retail Sector: "More Bad than Good" stated that retailing is "probably the primary form of disguised unemployment/ underemployment in the country."

The report continued: "Given the already over-crowded agricultural sector, and the stagnating manufacturing sector, and the hard nature and relatively low wages of jobs in both, many million Indians are virtually forced into the services sector. Here, given the lack of opportunities, it is almost a natural decision for an individual to set up a small shop or store, depending on his or her means or capital. And thus a retailer is born, seemingly out of circumstance rather than choice."

Commenting on the likely impact of foreign competition, the CPAS report stated: "India has 35 towns each with a population over one million. If Wal-Mart were to open an average Wal-Mart store in each of these cities and they reached the average Wal-Mart performance per store—we are looking at a turnover of over Rs80,330 million [$1.82 billion] with only 10,195 employees. Extrapolating this with the average trend in India, it would mean displacing about 432,000 persons."

The report added that if large retailers were to obtain 20 per cent of the retail trade "this would mean a turnover of 800 billion rupees [$18 billion] on today's basis. This would mean an employment of just 43,540 persons displacing nearly eight million persons employed in the unorganised retail sector."

Unlike export-orientated investors, foreign retailers such as Wal-Mart, Carrefour SA of France and Metro AG of Germany, which have been lobbying the government to open up the sector, will seek to dominate the domestic Indian market. Their success as well as those of Indian retail chains will be at the expense of small traders.

Large retailers also threaten the livelihoods of small farmers and manufacturers. Through their buying power they can force down prices. In addition, retail chains will often want to deal with bigger and more efficient suppliers rather than small producers.

A 2004 paper by Andrew Shepard, an economist with the UN Food and Agriculture Organisation, confirmed that large supermarkets often push small farmers out of business.

"Farmers experience many problems in supplying supermarkets in Asia and in some cases this has already been reflected in the fairly rapid declines in the numbers involved as companies tend to de-list suppliers who do not come up to expectations in terms of volume, quality and delivery," he stated.

The paper cited, among other examples, the development of the Giant retail chain in Malaysia which slashed the number of vegetable suppliers from 200 in 2001 to just 30 in 2003.

The Indian decision to open up the retail trade has provoked opposition. Following the announcement, the Hindu supremacist Bharatiya Janata Party (BJP) passed a resolution opposing foreign involvement.

The BJP's president in Delhi, Harsh Vardhan, complained the measure would cause major job losses. However, BJP-led governments played a major role in opening up the economy when in power from 1998 to 2004.

The Communist Party of India-Marxist (CPI-M) and the Communist Party of India (CPI) complained that they had not been consulted over the measures.

CPI secretary, D. Raja, declared: "We have been opposing it."

The four Left Front parties—the CPI-M, CPI, the Revolutionary Socialist Party and All-India Forward Bloc—met privately on January 27 and, according to the Times of India, decided to activate retail trade merchants' organisations to protest against the decision. There was no hint, however, that the Left Front would withdraw its support for the UPA government.

Moreover, in the Indian state of West Bengal, the CPI-M led government is a vigorous advocate of free market policies, including in the retail sector. Last October West Bengal Chief Minister Buddhadeb Bhattacharjee held talks with Wal-Mart representatives about the company's proposal to take over all the fresh food markets in and around Calcutta.

Speaking to the Indian Chamber of Commerce in October, Bhattacharjee said he had accepted a proposal by the German company Metro to provide wholesale supplies to hotels in West Bengal. He also spoke favourably about a proposal from an Indonesian company to build a three-storey shopping mall in Calcutta that would stock foreign goods.

News: ICT a pillar for economic development

(KT 12/03/2006) DOHA — The role of information and communications technology (ICT) in development has been stressed by speaker after speaker at the World Telecommunications Development conference in Doha. Uganda's Minister of Works, Housing and Communications outlined the ICT reforms undertaken by his country with the approval of a National ICT policy and development of a model Universal Access policy on the one hand, and a major expansion of the ICT infrastructure and implementation of a comprehensive human resource development in the ICT sector on the other.

But he also said that his country, like the 21 other countries of the Eastern and Southern African region, are still facing infrastructure challenges because of their inability to be connected to a submarine cable. At the regional level, Uganda spearheaded the formation of one of Africa's most recent regional regulatory associations, the Association of Regulators of Information and Communications for Eastern and Southern Africa (ARICEA).

For the Doha Declaration and Action plan, to be released by the meeting today, its final day, he said Uganda sees the need to focus on strategies to: assist and guide countries in need of enabling environments; provide guidance and facilitation for the development of infrastructure in member countries; and facilitate a mechanism that will enable countries to transition seamlessly from current technologies to Next Generation Networks (NGN).

Interestingly, work on upgrading ICT in Iran has also included an increase in the percentage of women with university degrees working in the sector; their representation has grown from 15 per cent in 1993 to 65 per cent by the end of 2005, with the average growth rate of 14.7 per cent according to Iran's Deputy Minister for International Affairs, Research and Training at the Ministry of Communication and Information Technology, Dr. Kamal Mohamedpour.

Explaining Iran's progress in the field of ICT, he said: "We live a fast moving world, whose dynamism is accelerated by the introduction of new telecommunication services and facilities. This fascinating and breath-taking progress has also brought with itself a widening gap between those who have and those who do not have. We are of the view that the primary mission of the ITU-D is to assist the developing world in bridging this gap, also known as the digital divide. This bridging would have direct impact not only on the well being of humankind, but will also contribute to the world peace and stability on a much broader scale. It will bring nations together, remove misunderstandings, and create an atmosphere of cooperation and togetherness. It is on this plateau that the Islamic Republic of Iran, in the spirit of justice and kindness has contributed to the development of communication services and infrastructure to other friendly countries in our region. We have done this in spite of the fact that we are also a developing country, and have a enormous needs ourselves."

Bridging the digital divide between rich and poor nations, the developed and developing world is of prime importance; the effective and correct provision and use of telecommunications has a basic role in the economic development of nations and can be a major contributor to the development of world peace and security according to Qatar's Prime Minister, Shaikh Abdullah bin Khalifa Al Thani. "The means of communication and information technology have become a major pillar for economic and social development in all societies. They have opened a wide scope for consolidating the principles of communication and dialogue and bring closer points of view between people. However, we would like to draw attention of this conference to the crises and negative effects that have been revealed in the last few years and what might result out of the misuse of technology and the means of communications.

This requires attaching great importance to establishing the legal and regulatory environment and the technical methods that would secure the optimum use of the resources of knowledge. We do believe in the necessity to enhance joint action between governments, international and regional organisations, the private sector, the civil society organisations and other concerned bodies to realise the goals of this conference, on top of which is the Doha Declaration and World Action Plan for the next four years. I am sure that with your joint efforts, this conference will agree on a list of priorities and the proper solutions in support of the projects that can eliminate the technological and knowledge gap [between the developed and developing world] and effectively implement the results and recommendations of the world summit of information society. "

Some 600 delegates from around the world have gathered in Qatar for the meeting. International Telecommunications Union (ITU) Deputy Secretary General, Roberto Blois, says that a clear roadmap has already been created to breach the existing digital divide in the world and, together with the advances made in the telecommunications sector over the past decade now need to be translated into action. The World summit on the Information Society, (WSIS) meeting in Tunis last November, set a goal for all villages, schools, libraries and local bodies should be connected to Information and communications Technologies (ICT) by 2015. That, pointed out Blois, needs the development of low-cost technologies and the wider, cheaper provision of broadband.

Qatar is moving to provide internet connections and networking facilities that will allow schools and universities in eight countries of the Middle East and Asia to connect to their counterparts in Qatar within the next two years. Technological access is important for all communities across the globe if they are to be economically competitive in today's changing world, according to the Emir's daughter, Shaikha Al Mayassa bint Hamad Al Thani, the founder of the Reach Out to Asia (ROTA) charity. Addressing a panel session WTDC, she spoke of Asia's potential and the importance of education and technological connectivity in its development.

ROTA, Shaikha Al Mayassa noted, is a determined initiative, established under the aegis of the Qatar Foundation for Education, Science and Communications Technology, with the aim of relieving poverty in Asia, improving health care and developing economies particularly through the development of educational opportunities. ROTA, and the Qatar Foundation, she said, are determined to help the global community reach the Education for All Millennium Development Goal goal, with particular emphasis on primary and secondary education. "We firmly believe that access to education is critical to sustainable development and in promoting the participation of citizens in their immediate communities and in the world," she said.

'Connect ROTA', Shaikha Al Mayassa said, is a Qatari initiative to create a regional knowledge network between schools and universities in the Middle East and Asia. "Such a network will improve access to knowledge-sharing, networking and the application of ICTs to enhance educational quality and research competence." she said. Rota's target for 2008 is to connect remote schools/universities in eight Asian countries to schools and universities in Qatar, using affordable: wireless broadband networks. The countries involved are: Iraq, India, Pakistan, Afghanistan, Bangladesh, Cambodia, Nepal and Indonesia.

Malta was one of the first countries to digitalise its telecommunications network, in the early nineties, and the Maltese Minister for Competitiveness and Communications, Censu Galea, stressed the importance of ICT in development, while representatives from Suriname pointed to the fact that while ICT development would provide remote communities with access to information and lead to the development of knowledge and skills which in turn would have a multiplier effect for the improvement of standards of living, there is a major challenge in even providing basic telephone services to remote areas. However, Alice Amafao, Minister of Transport, Communications and Tourism, says the country recognises the importance of telecommunications as a catalyst for social and economic development, and has begun to restructure its telecommunications sector and hopes to draw on support from the ITU's Telecommunications Development Bureau.

Marc Furrer, from Switzerland, echoed Suriname's concerns: "the digital divide is no longer an abstract concept. It is real and we have to make all efforts to bridge it. In many countries of the North we enjoy an 'embarrassment of richness' with regard to ICT services and bandwidth, while in many countries of the South there are still not enough basic services such as simple access to a telephone." Such countries, he added, must be helped to improve their regulatory systems and concepts such as universal service obligation must be implemented. "We have to find new ways to solve problems like internet interconnection costs, where developing countries pay for the internet used mainly by developed countries. And we also have to find ways for developing countries to benefit from new technologies like VoIP."

The International Telecommunication Union (ITU) signed two agreements on the sidelines of the WTDC in Doha. An agreement with Alcatel seeks to support telecommunications students in developing countries. Alcatel will train 30 students from developing countries each year at its training centre in France and will provide sponsorship of $20,000 this year for higher studies of ITU-selected students, with a cap of $10,000 per student. Cisco, meanwhile, signed an agreement with the ITU to set up Internet training centres in developing countries and to offer information technology scholarships to one hundred women. Cisco currently runs 60 internet training centres in 49 countries, including Kenya, Uganda, Indonesia, Zambia, Romania, Mauritania, Ruwanda, India, China and Tanzania.

News: ABN Amro invests 120 m euro in India

(Sify 12/03/2006) New Delhi - Netherland-based ABN Amro Bank NV has infused 120 million euro in its Indian operations and got RBI approval to open 4 branches in small cities this year.

The foreign bank will also start retail brokerage services in India by June, ABN Amro Bank Executive Vice President and Country Representative Romesh Sobti said.

ABN, which has assets worth 856 billion euro spread over 60 countries, aims at sustaining 25 per cent growth in its Indian operations this fiscal as also next fiscal.

To sustain the growth momentum in India, Sobti said: "The parent bank has infused 120 million euro this year in Tier-II capital. Our capital adequacy ratio will go up from 10 to 11 per cent by March end."

The Dutch bank intends to grow organically in the country as RBI does not permit foreign banks to buy more than 5 per cent stake annually in a domestic bank till 2009.
"We will wait. We will grow organically," Sobti said when asked if the foreign bank has plans to acquire a private bank to grow faster.

He said the bank plans to open more branches, ATMs, introduce more products and improve services.

"We have got four new licences from RBI for opening branches. We will open branches in four new cities -- Kolhapur, Salem, Udaipur and Ahmedabad," he said, adding ABN will be in 21 major cities and have 28 branches by 2006 end.

ABN recently tied up with coffee retail chain Barista for a co-branded card. The bank is planning to come up with more retail products, ABN Amro Bank's head of consumer banking (India), Nitin Chopra, said but declined to divulge details.

News: Now, Anil richer than Mukesh

(HT 12/03/2006) Mumbai - The big bang merger and consolidation of Anil Ambani's telecom companies has made him richer than brother Mukesh.

The merger, announced on Sunday, raises Anil's stake in Reliance Communication Ventures Ltd (RCoVL) to 63 per cent. This stake, at Friday's price of the share at Rs 301, comes to Rs 38,430 crore, which is more than Mukesh's net worth of Rs 37,825 crore ($8.5 billion) as per the Forbes list.

Add to that, Anil's holding in Reliance Capital, Reliance Energy and Reliance Natural Resources, and he emerges with a conservatively estimated net worth of Rs 45,000 crore ($10 billion).

In its listing released last week, Forbes pegged Anil's net worth at just over Rs 25,000 crore. However, that seems to have been before the RCoVL listing. Now, Anil is third in the list of richest Indians, behind NRI steel magnate Laxmi Mittal ($23.5 billion) and Wipro's Azim Premji ($13.3 billion).

Sunday's board meeting approved the merger of Reliance Infocomm into RCoVL. Through a share swap, Reliance Telecom and Reliance Communication Infrastructure will become 100 per cent subsidiaries of RCoVL soon. Also, Flag Telecom, a 100 per cent subsidiary of Infocomm, will now be a 100 per cent subsidiary of RCoVL.

In a statement, Anil said this move was a "milestone in our endeavour to create the most valuable India-based global communications services company."

News: CARICOM defends integration

(PL 11/03/2006) Kingstown - The Caribbean Single Market and Economy is the timely response to globalization, well-known for the loss of preferential treatment to regional products and services, declared a St. Vincent and the Grenadines minister Friday.

Philmore Isaacs, minister of agriculture for St. Vincent and the Grenadines, made the statement regarding the goal of Caribbean officials on a European visit to negotiate for better sugar prices.

CARICOM and CSME are very positive about dealing with the challenges ahead.

The CSME plans to boost economic integration through the free trade of merchandise, services and capital within CARICOM and to protect consumers.

CSME Agricultural Diversification Program Manager Ashley Caine said agriculture is basic to achieve food security and national development.

A meeting in Brussels this weekend will conclude the mission´s European trip that included the UK, Germany, Austria and Finland.

Mission leader, St. Kitts and Nevis PM Denzil Douglas, said the tour is motivated by the four-year enforcement of the unilateral EU decision to cut sugar prices by 36 percent.

News: Siemens Venture Capital set to make India debut

(BS 10/03/2006) Bangalore/Chennai - Siemens Venture Capital (SVC), the 700 million Euro corporate venture funding organisation from the Siemens AG stable, is understood to be set to debut in India. This is in line with other globally-reputed names deciding to invest in Indian companies, according to informed industry sources who declined to be named.

A spokesperson for Siemens India while not confirming this, said, “To date, SVC has invested in start-up companies and venture capital funds mainly in the US, Europe and Israel. SVC is located in Germany, in the US and is active through Siemens’ regional units in Israel and China. As part of its ongoing activities, SVC is continuously evaluating opportunities across the globe, including attractive emerging markets like India.”

An industry analyst anticipating the development said, “Close to $2.2 billion was invested as venture capital and private equity in India in 2005 and this is expected to turn into a gallop in 2006. In addition to this, investments in Indian companies are paying off healthily and it will not be a surprise if more and more funds come calling on India.”

SVC identifies and funds investments in emerging and innovative technologies that will enhance the core business scope of Siemens, particularly in information and communications, automation and control, medical solutions, automotive technology and transportation systems, power and lighting.

Siemens has so far invested in over 100 companies and 30 venture capital funds through its four funds --Communication Funds, Medical Solutions Funds, Corporate Funds besides the Fund-of-Funds, which invests indirectly through other VC funds.

It is also learnt that Siemens might look at setting up a direct Indian presence with a focused India fund, though this was not confirmed by the company. According to SVC, it is interested in funding companies at the initial stages and its investment will range between 0.5 million euros and 5 million euros.

News: India hot destination for small UK cos

(PTI 11/03/2006) Mumbai - With bilateral trade between India and UK all set to touch USD 10 billion in this fiscal, India is turning into a hot destination for small and mid-size UK companies.

A trade mission of 21 companies is already here while another one will be here in the next week.

"In the coming week, Lord Mayor of City of London will come here with a 20-member delegation to meet corporates and government officials," British Deputy High Commissioner Vicki Treadell told PTI.

Treadell, however, mentioned that there is need on the part of the Indian government to further open up sectors like retail, financial and legal services.

Companies providing services in retail sector are already eyeing the boom in the sector that may see opening of about 300 malls in the near future, she said.

"We are here to provide retailers expertise in different areas. We have a large database of people who are ready to extend their services in retail sector," recruitment consultants Gilder-Harrison Executive Search MD Liz Gilder said.

The company will be hosting a series of seminars for the corporates and retailers on how they can benefit from their company.

Agri sector companies in the UK, who are ready with their plans, are looking at the sops Indian government has extended to the sector.

"We are working at energy saving technology and devices that can help farmers cut down its cost. Company is in search of a right partner in the area," Trantor Vehicles Ltd CEO and Co-Founder Graham Edwards said.

The companies in entertainment industry too are fascinated by the impact of Bollywood in the UK and are wooing Indian producers to shoot at UK locations.

One of the British entertainment companies has plans to set up office at Mumbai for collaboration in fusion music and film production areas.

Artikel: Wat zijn warrants?

(DWT 11/03/2006) Paramaribo - Dit instrument lijkt op het eerste gezicht erg op de converteerbare obligatie. Ook de warrant geeft immers het recht om in de toekomst een onderliggende waarde te kopen tegen een vooraf vastgestelde prijs. En ook hier is de periode waarin dat kan gebeuren contractueel vastgelegd. Maar er zijn ook duidelijke verschillen.

Er bestaan twee soorten warrants. Gedekte warrants geven recht op de aankoop van aandelen die reeds bestaan. Ongedekte warrants geven recht op de aankoop van aandelen die nog niet bestaan. Bij een ongedekte warrant zal de emitterende onderneming aandelen moeten creëren op het ogenblik dat de warranthouder zijn recht uitoefent. Hij zal dus zijn kapitaal moeten verhogen. Ongedekte warrants worden meestal door de onderneming in kwestie uitgegeven. Gedekte warrants worden meestal uitgegeven door een gespecialiseerde financiële instelling.

De uitoefenperiode is de termijn waarin de warranthouder zijn recht kan doen gelden. Deze periode verschilt van warrant tot warrant, maar ligt gemiddeld tussen drie en vijf jaar. Zolang ze niet uitgeoefend zijn, geven warrants in de meeste gevallen geen recht op een dividend. Dat is logisch: de warranthouder bezit de aandelen nog niet en participeert niet in het kapitaal van de vennootschap.

De warrant lijkt in vele opzichten op een optie. Een optie is namelijk ook een recht om een onderliggende waarde te kopen tegen een vooraf bepaalde prijs binnen een vooraf bepaalde periode. Toch bestaat er een aantal duidelijke verschillen tussen een optie en een warrant. De tegenpartij van de warranthouder is altijd de emitterende vennootschap; de tegenpartij van een optiehouder is een andere belegger.

Voorts is de uitgever van een warrant ofwel een onderneming die via de warrants later nieuwe aandelen wil creëren, ofwel een gespecialiseerde instelling. De uitgever van een optie is de georganiseerde markt waarop de opties worden verhandeld. De uitoefening van opties leidt daarom nooit tot de creatie van aandelen, de uitoefening van ongedekte warrants wél.

Warrants hebben meestal een langere uitoefenperiode dan opties. En de handel in warrants vindt gewoon plaats op de aandelenbeurs, terwijl de georganiseerde markt voor opties een specifiek beurssegment of een specifieke beurs is.

Wie belegt in warrants moet met een aantal specifieke kenmerken rekening houden. Warrants zijn allereerst speculatief en wisselvallig van karakter. Dat heeft natuurlijk voor een groot stuk te maken met de beperkte uitoefenperiode. Indien de onderliggende waarde gedurende die periode ongunstig blijft ontwikkelen, zullen de warrants uiteindelijk waardeloos worden. Er hoeven zich dus geen grote rampen voor te doen opdat de warranthouder zijn volledige inzet verliest. Bovendien fluctueert de koers van een warrant veel wilder dan de koers van een aandeel. Kortom, warrants houden grote risico’s in.

© Drs. Benjamin R.H. Bremmer, InCar Trust (bremmer@incartrust.com)
InCar Trust is het aanspreekpunt voor Sares Invest in Suriname en het Caribische gebied

News: India can grow by 10% - ADB

(HT 10/03/2006) New Delhi - Warning that poor infrastructure came in the way of high growth, Asian Development Bank on Friday said economic reforms needed to be pushed further, especially in the power sector.

"Eight per cent growth is sustainable in the coming five years or more if infrastructure is improved and economic reforms are continued," ADB president Haruhiko Kuroda told reporters at a press meet in New Delhi.

"The rate of growth can even be accelerated to 9-10 per cent," he further said.

He praised the budget for steps to contain fiscal and revenue deficits and said: "Prudent fiscal management is of basic requirement for further high growth."

On the Government's massive investment plan in social sector, he said it is appropriate to achieve growth with equity.

With growth in economy, poverty is reducing but still there is a sizeable population living below poverty line, he said, adding that growth must be inclusive.

ADB support to infrastructure sector will improve in the coming years focussing on power, transport and water projects.

Pointing to huge investment required in infrastructure sector, he said though small, ADB will step up financial assistance to 2 or 2.5 or even $3 billion a year.

ADB's assistance to India will be about $2.25 billion in 2005-06, which will go up to $2.45 billion next fiscal and further to $2.65 billion in 2007-08.

News: ‘Indian markets will outperform for next 10 yrs’

(SIFY 11/03/2006) Mumbai - According to investment guru Marc Faber all asset classes have entered a correction mode. As interest rates, he says, are rising and bonds markets are experiencing weakness in the US, people are beginning to reassess the risk profile they want to take.

Looking ahead, he says, following this correction the money will come back mostly into emerging economies. About Indian economy, he opines that it can grow at 8-10 per cent in the next 5-10 years. As per him, emerging markets, including India, would outperform for next 10 years.

Excerpts from CNBC-TV18's exclusive interview with Marc Faber:

What is your sense of what has been happening in the emerging markets for the last few days because some market watchers feel that the risk appetite is waning just a little bit?

In general, I think all asset classes have entered a correction time. We have a bull market in real estate, bonds, stocks, and commodities since October 2002. As interest rates are rising and bonds markets are experiencing weakness in the US, people are beginning to reassess a little bit of the risk profile they want to take. We have a lot of profit, especially out of emerging markets; so some selling is now coming in.

Do you see this correction deepening as more such churning happens from asset allocators and what could be the key for this? Could it be the US bond yields or something else?

It is always difficult to know what the catalyst will be. I expect the next 6-months to be a difficult period in asset markets including stocks markets. So my view would be to stay out of markets. We will have to see within three to six months whether it was a correction within a rising trend or something more serious.

Which one would be the hardest hit in the asset class?

I think everything will go down. But it is difficult to tell what will go down the most. The fundamentals in the emerging economies are the best we have seen in the 50 years.

The emerging economies have current and trade account surpluses, whereas the US has large trade and current account deficit. The emerging markets: the Eastern Europeans, the Russia especially Latin America, Middle East including India had superb performances over the last three years.

So I think some profit taking could knock these markets more than the US stock market

Would it stop at profit taking or are you expecting turnaround not just in the money that is invested but in future money that might be waiting on the sidelines to get into emerging markets like India?

I think there might be some reluctance to buy in the emerging markets right now. India has become an asset class.

There are endowment and pension funds, insurance companies, and well-to-do people that will say that they want to have some money in India. That money will stay and buy more as the market comes down.

At the same time in all asset markets, whether it is gold or silver or sugar you have momentum players. When these momentum players see the markets wobble or down, they will sell these markets so that they can have big impact on pricing.

Where will the tide of money turn to? Will it go back to developed markets like Europe and America or into markets, which haven't performed up until now like Japan?

After the correction that I am expecting the money will come back mostly into emerging economies.

I think for the next 5-10 years the emerging stock markets, including India will outperform the US.

If I were not a market timer then I would rather have all my money in India. The economic prospects in India are potentially very good. Indian economy has potential for substantial growth.

But immediately from low level it may drain liquidity from the financial markets into the real economy.

News: 'India to be made global manufacturing hub'

(SIFY 10/03/2006) New Delhi - Replicating the revolution in auto industry, Government today said it would make India a global manufacturing hub in other sectors like textiles, leather, petroleum, food processing and handicrafts.

"We will become a global manufacturing hub for small cars in the next 3-5 years," Finance Minister P Chidambaram said adding "we would emulate this success story in other sectors to become top global three manufacturing centres."

Winding up the discussion in the Lok Sabha on the general budget, Chidambaram said one talks of industrial and french revolutions but the auto revolution that is unfolding in the country has gone unnoticed for many.

"If every second toy and third shoe in the world are made in China, why can’t we emulate these examples," he said asking people to throw away "ideological and political blinkers" while promising all help in this endeavour.

Asserting that Growth alone was the best antidote to poverty, Chidambaram said the Government has been able to allocate more resources for its flagship programmes and infrastructure due to over Rs 50,000 crore additional revenue mobilisation annually without coercive tax measures. | Go to Sify Business Home page |

Never in the past, the State Governments were flush with cash, he said appealing to them to spend various social sector programmes to boost the high growth momentum.

Identifying power sector as a major impediment to industrial development, Chidambaram said contracts will be awarded by this year end for the five ultra mega power projects for 4000 mw each with total investment of about Rs 90,000 crore to make up for the "lost ground" in the last few years.

Chidambaram promised there would be no cut in food and fertiliser subsidies, particularly in those, which are truly meant for the poor. The PDS system will continue.

Regarding fertiliser subsidy, he said there was a proposal to change the system. But the present system to subsidise fertiliser companies will continue until new system is evolved.

He said there were some arrears claimed by fertilizer companies and due to good revenue position this year the government would clear them by March 31.

Chidambaram said Government proposed to give new impetus to agriculture sector without which the 8-10 per cent growth could not be sustained.

He said services sector was clocking high growth autonomous of government intervention and he proposed to keep it that way.

Elaborating on the improved revenue generation, Chidambaram said in the first two years of UPA Government it has recorded over 20 per cent growth. In 2006-07, it is projected to grow over 20 per cent.

The 20 per cent growth has been achieved because of near eight per cent GDP growth which meant an additional revenue of Rs 50,000 crore in 2005-06. In the next financial year, the Government proposed to mop up additional Rs 54,000 crore without any new taxes.

This had enabled the Government to substantially step up allocation for its eight flagship schemes for rural and infrastructure development, the minister said.

Chidambaram said the states were not far behind in improved financial situation and quoted statistics to say that Rs 73,000 crore was devolved in 2004-05, Rs 96,000 crore in 2005-06 and in 2006-07 it was likely to be Rs 1,13,448 crore.

As against mere Rs 90,000 crore increase in devolution of central resources to states in six years of NDA rule, the UPA Government has devolved an additional Rs 97,000 crore in just two years.

Concerned over the indebtedness of farmers which had led to some suicides, Chidambaram said that this was for the first time the Government was crediting into their bank accounts two per cent of interest paid by them on crop loans in the current year.

This is expected to cost the exchequer Rs 1700 crore, the minister said adding the government would be giving crop loans for the forthcoming Kharif and rabi seasons at a subsidised seven per cent interest.

Aware of the fact that growth alone was not enough to bring about equity, he said the budget had taken a number of steps to improve rural health, education and sanitation, drinking water, rural roads and other infrastructure.

The outcome budget, which would be tabled in Parliament before March 17 would reflect the achievement of the government, he said.

The government has also initiated a number of steps in the budget to bring more areas under irrigation including improving water bodies to reduce the volatility in the agriculture growth, which is at present highly dependent on monsoon.

News: 10 new Indians join the Forbes club

(ET 11/03/2006) NEW DELHI - Times they are a changing. Twenty years ago the first Forbes list of billionaires had just 140 names. The latest has 793. They’re worth a combined $2.6 trillion, up 18% since last March. Their average net worth stands at $3.3bn.

The bull run in emerging markets has spawned 102 new billionaires. India, where the sensex soared 54% between February ’05 and February ’06, is home to 10 new billionaires , more than any other country except the US. Notable newcomers include Tulsi Tanti of Suzlon (No 562 with $1.4bn), Vijay Mallya, Kushal Pal Singh of DLF ($5bn) and online gaming mogul of PartyGaming, Anurag Dikshit ($3.1bn).

Steel tycoon Lakshmi Mittal remained the richest Indian, though he slipped a notch to Forbes No. 5 with $23.5bn.

Microsoft founder Bill Gates is the world’s richest man for the 12th year running. His net worth increased to $50bn. Warren Buffett, chairman of Berkshire Hathaway, retained the second spot though his fortune fell by $2bn to $42bn.

Azim Premji is the second richest Indian with an estimated net worth of $11bn. Mukesh Ambani, with $7bn, Sunil Mittal ($4.9bn) and Kumar Mangalam Birla ($4.4bn) are among those who find a place among the top 10 richest persons in India.

The global top 10 underwent a major reshuffling with three familiar names dropping out of that select group — German supermarket company owner Karl Albrecht, Oracle Corp’s Lawrence Ellison and Wal-Mart chairman S. Robson Walton.

Mexican telecom mogul Carlos Slim Helu moved up one notch to No. 3 with $30bn. Ikea founder Ingvar Kamprad of Sweden, with $28bn, rose two slots to No. 4.

Microsoft co-founder Paul Allen edged up to sixth place from No. 7, with a net worth of $22bn.

He was followed by France’s Bernard Arnault, chairman and chief executive of LVMH and The Christian Dior Group, with $21.5bn. Arnault was new to the top 10.

Saudi Arabian Prince Alwaleed Bin Talal Alsaud fell to eighth place from No. 5, with $20bn, and Canadian publisher Kenneth Thomson and his family moved into the top 10, ranking No. 9 with $19.6bn.

Hong Kong’s Li Ka-shing was in the tenth slot with a net worth of $18.8bn. Ka-shing is the chairman of Cheung Kong (Holdings) and Hutchison Whampoa.

S Robson Walton, who last year ranked 10th, slipped to 19th spot with $15.8bn. China added eight more billionaires, up from two last year. Its market grew just 3%.

The Forbes list of 40 richest Indians shows that a person had to have a net worth of $590m, up from $305m in the previous year, to make the grade.

Nieuws: Expansiedrift voor noordelijke grens

(DWT 11/03/2006) Paramaribo - Suriname treft voorbereidingen om zijn noordelijke (zee)grens uit te breiden tot een maximum van 150 nautische zeemijlen, vanaf de huidige buitengrens van de economische zone van 200 zeemijlen. Deze grensverlegging is mogelijk op grond van het VN-verdrag over de Rechten van de Zee. Suriname trad in mei 1998 toe tot dit verdrag en heeft tot 2009 de tijd om een claim in te dienen bij de Verenigde Naties. Deze mededeling deed minister Lygia Kraag-Keteldijk gisteren op een persconferentie. Bij de uitvoering van deze plannen wordt wel rekening gehouden met overlappingen, die kunnen plaatsvinden op claims van Guyana, Frankrijk en Barbados. “Het is echter de hoogste tijd, dat we dit proces inzetten”, benadrukt Hans Lim A Po, voorzitter van de Grenscommissie.

Volgens de eerste voorstudies heeft Suriname goede gronden om zijn claim in te dienen bij de volkerenorganisatie. Echter moeten eerst alle data worden geverifieerd, die moeten uitwijzen of de claim legitiem is. Daarvoor zal de komende drie jaren voor 1,5 miljoen US dollar verder onderzoek worden verricht naar onder meer het verloop van Surinames continentaal plateau. Het land krijgt assistentie van Alex Oude Elferink van het Nederlands Instituut voor de Rechten van de Zee. Hij heeft ook zitting in de Surinaamse arbitragecommissie, die Guyana’s claim op Surinaams zeeterritoir bij het Internationaal Tribunaal voor de Rechten van de Zee moet aanvechten. Oude Elferink gelooft dat het proces van Suriname in de loop van 2010 zal zijn afgerond.

Vooral Staatsolie heeft belangstelling in uitbreiding van de zeegrens, vanwege de mogelijke potentiële voorkomens van aardolie en aardgas, zegt oud-directeur Eddy Jharap. Hij maakt ook deel uit van de commissie die de claim moet voorbereiden. Er wordt wel rekening gehouden met mogelijke implicaties, die deze stap zal hebben voor de grensafbakening met Guyana en Frans-Guyana. Op basis van gangbare uitspraken en een hypothese vermoedt Lim A Po dat Suriname uiteindelijk zijn grens met 60 tot 70 zeemijlen kan verleggen.-.

Nieuws: IMF pleit voor stabilisatiefonds

(DWT 11/03/2006) Paramaribo - In een rapport, waarin wat schouderklopjes worden gegeven voor het economisch beleid van de regering, pleit het Internationaal Monetair Fonds (IMF) voor instelling van een stabiliteitsfonds. Dit fonds moet worden gecreëerd door verhoogde royalty’s en belastinginkomsten, die worden verwacht van toekomstige grootschalige investeringen, in een internationaal gediversifieerde portfolio te beleggen.

De Raad van Bestuur van het IMF boog zich op 24 februari over het eerder opgemaakt Article IV Rapport van Suriname. Hij prees het macro-economisch beleid van de afgelopen jaren vooral op het stuk van het begrotings- en monetair beleid. Het fonds zal volgens het IMF ook helpen de druk van wisselkoersen te verminderen en een eerlijke verdeling van de inkomsten uit natuurlijke hulpbronnen mogelijk te maken.

Het dichter bij elkaar komen van de wisselkoersen van de Centrale Bank van Suriname en die van de cambio’s en commerciële banken worden als een belangrijke zaak aangemerkt. Bij de autoriteiten wordt erop aangedrongen de door de markt bepaalde koers als de officiële wisselkoers te hanteren, “waarbij de wisselkoersen worden geünificeerd.”

Het IMF is ingenomen met de stappen die ondertussen zijn gezet om het fiscaal raamwerk te verstevigen en adviseert verdere versterking van het monetair- en wisselkoersbeleid. De recente verhoging van de belasting op olie-importen en de wijze, waarop de brandstofprijs nu wordt bepaald, zijn verwelkomd. Met het nieuwe systeem wordt de kwetsbaarheid van belastinginkomsten door fluctuaties van olieprijzen op de wereldmarkt verminderd.

Het is belangrijk, zegt de IMF-bestuursraad verder, dat de druk op de prijzen en de concurrentiepositie, als gevolg van gestegen olieprijzen, het hoofd wordt geboden. Gewaarschuwd wordt tegen het toekennen van compenserende salarisverhogingen of subsidies, die de overheidsuitgaven kunnen verhogen. De monetaire instelling verwacht, dat het land op de middellange termijn voordeel zal hebben van het doorvoeren van betere begrotings- en monetaire beleidsmaatregelen, waarbij de omvang van het overheidsapparaat wordt ingekrompen en het concurrentievermogen van de niet-mijnbouwsector wordt vergroot.-.

News: Tourism soaring in the Caribbean

(PL 10/03/2006) Bridgetown - The latest figures shows a steady increases in tourist arrivals in the Caribbean: As many as 42 million sunbathers visited the balmy region in 2005, up 3.5 percent from the previous year, according to CTO´s annual report.

Two nations in particular have gone the rest of the pack one better as far as tourism growth is concerned: Cuba, that posted a 7 percent hike, and the Dominican Republic with a whopping 13 percent increment, the Caribbean Tourism Organization highlights.

Europe´s outbound market was the force that drove these spikes. Their presence in international fairs and tradeshows, like Spain´s FITUR, their leaning to traditional markets like Germany, and a fresh investment policy have definitely made their leisure sectors skyrocket.

The region set encouraging numbers, however, despite the dire hurricane season that swept the Caribbean.

Thanks to new policies and strategies implemented by the Dominican administration designed to ramping up tourism, the country has embarked on a building spree that includes vast infrastructure, fancy hotels and other facilities. DR has today the largest number of golf fields in the region: 20.

The same applies for Cuba. The largest Caribbean island has set out to piece together a top-notch offer with the addition of scores of deluxe and exclusive lodgings that lure more and more well-to-do tourists with each passing year.

News: Tourism soaring in the Caribbean

(PL 10/03/2006) Bridgetown - The latest figures shows a steady increases in tourist arrivals in the Caribbean: As many as 42 million sunbathers visited the balmy region in 2005, up 3.5 percent from the previous year, according to CTO´s annual report.

Two nations in particular have gone the rest of the pack one better as far as tourism growth is concerned: Cuba, that posted a 7 percent hike, and the Dominican Republic with a whopping 13 percent increment, the Caribbean Tourism Organization highlights.

Europe´s outbound market was the force that drove these spikes. Their presence in international fairs and tradeshows, like Spain´s FITUR, their leaning to traditional markets like Germany, and a fresh investment policy have definitely made their leisure sectors skyrocket.

The region set encouraging numbers, however, despite the dire hurricane season that swept the Caribbean.

Thanks to new policies and strategies implemented by the Dominican administration designed to ramping up tourism, the country has embarked on a building spree that includes vast infrastructure, fancy hotels and other facilities. DR has today the largest number of golf fields in the region: 20.

The same applies for Cuba. The largest Caribbean island has set out to piece together a top-notch offer with the addition of scores of deluxe and exclusive lodgings that lure more and more well-to-do tourists with each passing year.

News: Independent Financial Centre of the Americas

(PRN 10/03/2006) Santo Domingo - The establishment of the world's first privately operated and independently regulated international financial centre is announced today: The Independent Financial Centre of the Americas. The Centre is being built and operated in the Dominican Republic, the geographical crossroads of the Americas.

The Centre is the result of three years research into other financial centres and extracts best practice from around the world. It benefits from starting with a clean slate -- a new legal framework and an independent regulatory structure will be served by state-of-the-art information architecture. It will operate from a USD 850 million purpose-built business environment on a 17 km. sq. greenfield site, bordering the Caribbean Sea.

The Independent Financial Centre of the Americas will house private and commercial banks and an electronic exchange, called LAIFEX, to clear and settle emerging market debt and other tradable products.

Mr. Gaetan Bucher, President of the Independent Financial Centre of the Americas commented:

"The Independent Financial Centre of the Americas is being purpose built from the ground up: the legislation, regulation, operating systems and physical infrastructure have been meticulously planned and researched. We are applying the best practice of other financial centres, to create a new model for the 21st century, which responds positively to greater regulatory scrutiny and appeals to market participants operating in an increasingly innovative marketplace.

The Government of the Dominican Republic appreciates the benefits our model will generate for the country. It also understands that success is dependent on the dynamism and adaptability of a private enterprise".

Banking

The Centre will support a range of banking services. The Regulatory Authority will grant licenses for other regulated financial services business including investment, commercial and private banking as well as asset management. The IT platform has been designed to underpin all banking transactions to increase the speed and cost efficiency for institutions and their clients.

LAIFEX

The Centre will house a state-of-the-art settlement and clearing centre, called LAIFEX: the Latin American International Financial Exchange. LAIFEX will facilitate primary and secondary debt trading both regionally and globally. It is a private exchange where members can apply for seats. The custom-built IT platform for the Centre could also support a regional stock exchange.

The rationale behind the clearing and settlement centre is the USD 2.94 trillion of Latin American and Caribbean debt traded across the globe in 2004, accounting for 63.2 % of total emerging markets debt traded worldwide that year (source: EMTA survey). Currently, there is no central platform to clear and settle locally denominated trades in Latin American debt.

Regulation

The Centre will embrace "positive" regulation through independence, robustness, responsiveness, efficiency and transparency. An internationally recognised Regulatory Authority is being established to regulate the Centre with complete independence from political and commercial influences, and the Centre itself. A new legal framework is being proposed to the Congress of the Dominican Republic to grant an enabling law which will allow the formation of a new jurisdiction in 2006.

News: Fortis buys Caribbean hedge fund firm

(IPE 10/03/2006) London – Fortis Prime Fund Solutions, the fund-servicing arm of Fortis Merchant Banking, has acquired Hedge Fund Services (HFS) for an undisclosed amount.

HFS, which is the largest fund administrator in the British Virgin Islands, becomes Fortis’ third Caribbean base in the hedge fund services industry, said Merchant Banking chief executive Filip Dierckx.

HFS is headed by director Michael Kane and has an 18-strong professional team. It had some €2bn in assets under administration at end-2005.

“Fortis wants to grow both organically and externally,” a Fortis spokesperson told IPE. “Externally, we make acquisitions depending on opportunities.”

She declined to comment on why HFS agreed to the acquisition deal. HFS could not be reached for comment.

“This transaction will have no material impact on Fortis’ solvency position or net profit per share,” said the spokesperson.

According to Fortis, it is to early to say whether there will be any staff changes or management shake-ups following the acquisition. The spokesperson added that HFS will be fully integrated and Michael Kane “will remain”.

Yesterday Fortis said 2005 net profit rose 45% to €3.5bn.

News: Results Sares Invest - January 2006

(InCar) March 10, 2006 – InCar Trust’s partner for wealth management in Suriname and the Caribbean, Vienna, Zurich and Amsterdam based Sares Invest AG, has presented the results of the various investment strategies for January 2006.

Strategy	2002	2003	2004	2005	2006 YTD	jan-06
LCEF1	29,15%	55,62%	26,79%	44,75%	20,57%	20,57%
LCEF2	20,80%	52,30%	31,20%	68,80%	7,40%	7,40%
DIS	35,23%	39,70%	24,89%	13,52%	4,91%	4,91%
FoCF	12,49%	15,40%	11,68%	9,98%	3,88%	3,88%
LCAF				2,30%	-0,39%	-0,39%
LVS1		9,50%	7,71%	2,72%	1,69%	1,69%
MVS1	7,71%	12,77%	5,27%	11,74%	4,42%	4,42%
LVS2	6,50%	6,90%	4,70%	1,20%	2,50%	2,50%
LVS4	5,60%	14,70%	10,17%	7,06%	1,63%	1,63%
Convertible	23,11%	23,74%	26,55%	18,60%	1,94%	1,94%

Sares Invest

Sares Invest offers transparent and independent global selection of the best performing hedge funds, equity funds and bond funds, based on a system of transparent quantitative and qualitative analysis of thousands of funds in terms of performance and risk. Sares Invest does not offer individual stocks or bonds. Sares Invest aims to build on proven track records of experienced and successful professional money managers.

Sares Invest bases ‘best performing’ on analysis of performance (measured by risk and return) of these funds since inception and past 5,4,3,2 and 1 year(s). Sares Invest identifies the best performing not only based on return but also in terms of risk, via identifying good performing funds that have a low standard deviation. Using the above tough selection criteria only a couple of hundred funds make it to being qualified as ‘best performing’.

A significant proportion of the best performing funds are closed. Sares Invest has access to many open best performing funds (but are able to get in closed funds too) through their Amsterdam, Zurich and Vienna offices (who combined have over €1 billion assets under management). Many of these best performing funds are not offered by or accessible to traditional banks. Sares Invest talks to many of the best performing fund managers directly in order to verify whether their approach for the future will be maintained or changed for the better.

Competitive Conditions
Whereas banks or many other asset managers often charge 1-3% yearly management fee and/or a 20-30% yearly performance fee when offering ‘fund of funds’, Sares Invest simply charges a flat management fee of 0.125% per quarter (which translates into approximately 0.5% per year) and no performance fee.

In addition, whereas a client with a bank often pays somewhere between 0.5 and 5% per transaction, Sares Invest has negotiated transaction costs with several banks down to 0.15-0.20% per transaction. Transparent as Sares Invest is, it passes this saving fully on to their clients, so they enjoy extremely low transaction costs of 0.15-0.20% per transaction. In other words Sares Invest does not make money on transactions. The bank custody fees they have negotiated down for the clients to at maximum a yearly 0.02% to 0.05% of assets under management.

Sares Invest is supervised by AFM (Dutch regulators) and FMA (Austrian regulators)

InCar Trust
Indo-Caribbean Trust Authority N.V. (“InCar Trust”), is a limited liability company formed according to Suriname law in 2003. As a business services provider InCar Trust primarily offers financial services in the broadest sense. Her clients include local institutional and private investors, local and foreign companies and the Suriname government. InCar Trust offers her clients excellent advice and information about international investment opportunities, never losing sight of financial integrity. InCar Trust also facilitates financing and fund management. Creative marketing, extensive financial contacts abroad, fiscal knowledge, and unique knowledge of the Caribbean play an important role in the services offered.

For more information about Sares Invest and the other services that InCar Trust can offer, please contact Mr Satish Singh at +597 420024 or Mr Benjamin Bremmer at bremmer@incargroup.com.

News: Piramals may snap up Italian shirt brand

(TNN 10/03/2006) Bangalore - The Piramals’ search for an European buy could see them snap up a niche formal shirt brand in Italy. Their flagship textile company Morarjee Textiles is seen in advanced talks to acquire Italian brand Mens Club. The deal size is estimated between $4-6m, according to sources.

The brand buy is expected to provide a better marketing platform for its garmenting business in the post-quota era. In the context, a premium niche brand with scaling up possibilities is likely to give its garment operations smoother access to the chain stores channel for apparels in Europe.

In fact, the move by Morarjee comes at a time when many standalone niche apparel brands, which thrive on the chain store route, are up for grabs. It is not yet clear whether Morarjee would effect a complete buyout or pick up a majority stake in the Italian venture. The annual turnover of the targeted buy, Mens Club, is estimated at $12-15m, said sources.

“We have not identified any particular brand at the moment. We are talking to two or three brands in markets like Italy and UK to support our garment operations in Bangalore,” said PK Gothi, MD of Morarjee Textiles. The company’s strategy was not to invest into an established brand, but picking up a target with growth potential as well as appeal.

Morarjee forayed into the garmenting sector by taking 85% stake in Integra Fashion & Apparels almost two years back. Integra’s current turnover is estimated at Rs 20/25 crore, but the Piramals are betting on brisk growth, which could see it topping Rs 50 crore by the end of ’06-07.

It must be mentioned that Indian textile/apparel companies are yet to effect a major brand takeover globally. Last Year, Arvind Mills acquired the rights of a super-premium designer denim brand, Reds, promoted by Italian designer Stephano Turk.

News: 'Real estate prices to stabilise soon'

(PTI 09/03/2006) Mumbai - With the landmark decision by the Supreme Court paving the way for sale of mill lands in Mumbai, Dewan Housing Finance Ltd on Thursday said real estate prices in the city would reach the threshold limit of price stabilisation.

"The land-starved city of Mumbai would reach to the threshold limit of price stabilisation following the order. However, the limit will be defined by market conditions," DHFL Managing Director Kapil Wadhawan told the agency.

The Supreme Court in a judgement on March 7 permitted real estate development in five NTC mill lands here.

Asked whether the increase in available land for development would impact the margins of lending institutions, Wadhawan said they were not facing any pressure.

"Interest rates on housing loans were as high as 15 to 16 per cent even five years back. Now, even after the hike in recent times by major lenders, the rate hovers around 8 to 9.75 per cent," he said, adding financial companies were not facing any pressure on net interest margin.

On DHFL's plans for the current year, he said, the company aimed to disburse Rs 1,100 crore by the end of the current fiscal.

In the first nine months of the current year, the company has disbursed Rs 855 crore, he said. However, he maintained that the company would consider change in the lending rates only after three months. "We have no plans to increase lending rates now. After three months, we would review the market scenario and our cost of funds before taking any decision on rate hike," he added.

News: Mumbai set for real estate boom

(IANS 09/03/2006) Mumbai - Nearly two decades ago, the Jupiter textile mill in central Mumbai was one of the key contributors to the economic vitality of India as it produced quality fabric in large quantities and employed hundreds of people.

Today the sprawling 14-acre mill land looks like a haunted place with plaster peeling off the walls and its unpainted exterior building surface leading to rot and warping at a rapid pace.

It will, however, not be long before the land that once buzzed with industrial activity and produced quantities of yarn and cloth is transformed into a glitzy glass and chrome building churning out IT products and services for global companies.

A real estate boom is set to emerge in India's space-starved financial hub from the vast tracts of unutilised textile mill land with the Supreme Court allowing their sale to private firms for building malls, offices, and residences.

Analysts and construction industry representatives say the move will unlock the potential of unutilised land in prime locations, bringing down the spiralling real estate prices in the city of over 15 million people.

Environmentalists, on the other hand, warn that haphazard and unregulated construction activity will rob the city of its share of open space and put huge pressure on the creaky infrastructure such as power, water and traffic.

"The (Supreme Court) verdict has provided an opportunity for unlocking real estate potential in the heart of Mumbai," said Chanakya Chakravarti, joint managing director of real estate consultancy major Cushman and Wakefield India.

"This is likely to enhance the economic growth of the city, as the demand for various real estate segments is projected to continue to rise in the next couple of years," said.

According to Chakravarti, the ruling is also expected to send positive signals to a large number of foreign investors who are assessing substantial fund deployment opportunities.

"It will not only encourage them to consider further investments in the Indian real estate market but also augur well for their confidence in the dispute resolution mechanism in the country," he added.

The total land area of the defunct mills is around 600 acres, located mostly in posh central Mumbai and carries a very high price tag because of its strategic location.

Most of theses textile mills started shutting down after India's independence due to diminishing profitability in the face of stiff global competition and prolonged labour unrest.

The mill owners saw good opportunity in real estate business but their attempt to transform the mill land into residential and business complexes got embroiled in lengthy legal battles as environmentalists opposed the move.

The Supreme Court verdict has, however, given a go-ahead to companies like Indiabull to purchase the Jupiter mill land for a whopping Rs.2.76 billion for the construction of a state-of-the-art IT park.

"It (court verdict) is a victory to the mill owners and real estate companies but it is an irreversible loss to the city," said Shyam Chainani, a member of the Bombay Environmental Action Group.

"Mumbai will soon turn into a world-class slum with these haphazard construction activity that will put immense pressure on infrastructure. The people have been denied the last opportunity to have some open space," said the activist.

Infrastructure has been one of the main topics of the developmental agenda in the past few years as authorities struggled to reproduce the recent transformation of Shanghai, China's showpiece business city. Environmentalists fear the complex network of houses of former mill workers, markets, and social institutions, which invariably surround the textile mill campuses, will be destroyed as new skyscrapers are constructed there. Real estate developers like Niranjan Hiranandani, however, argue that prices of zooming real estate would stabilise and make houses affordable to millions of middle-class citizens as and when building development takes place. "The expansion of the real estate market will finally start in the city as more land is made available for construction activity. This is a very positive development," said Hiranandani.

Agrees Vijay Vancheswar, vice president of New Delhi-headquartered DLF Universal that has bought Mumbai Textile mill land for Rs 7.02 bn for the construction of a hotel and a shopping mall.

"This (the court verdict) will facilitate the company's planned development, matching international norms while at the same time adhering to all the appropriate legal and social requirements," he said.

News: Biyani's quest

(HB 09/03/2006) Mumbai - Kishore Biyani is a man with a mission. Comparing his achievements in Indian retail to Richard Bach's Jonathan Livingston Seagull, at a recent presentation in a management school, Biyani showed slides of extracts from the book based on the life of the bird which wanted to fly higher and higher, to portray the heights reached by his own retail forays.

The year 2004-05 has been eventful for Pantaloon Retail as it crossed the Rs 1,000-crore target. But there have been other watershed years, such as 1997 when it launched its first departmental store, Pantaloons, in Kolkata and 2002, when it opened its first departmental store, Big Bazaar.

Today, Pantaloon is poised to don a new look with a new corporate identity. From the `Knowledge Group,' it will be now known as the 'Future Group' with a new logo (a human palm print) with the message 'India tomorrow.'

The Rs 1,100-crore retail company has been moving at a scorching pace straddling almost all possible segments in retail (fashion, food, general merchandising, home, leisure, entertainment, finance, beauty, wellness and e-tailing), exploring new areas and formats.

Future competition

Ramping up operations is what the retail major has been doing all this while to ward off imminent competition from global retailers. But the company needs to tread with caution.

"While Biyani has ambition combined with street smartness, his business model could choke if there is inadequate funding. He has to be careful about cash flows," warns Arvind Singhal, Managing Director, KSA Technopak.

Says Ajay Mehra, Chief Operating Officer, Times Retail, "Biyani has spread himself thin across all formats, so his exposure to risks is higher.

"The retail scenario is changing rapidly and benchmarks are getting dynamic in this industry. Customers' demands and expectations are changing dramatically and in this situation he has to have a format which is robust to withstand competition."

Equity research firm First Global in its report on Pantaloon outlines the competitive threats to the company. In its report, it states that Pantaloon does face significant competition. Players such as Trent and Shoppers' Stop also have expert knowledge and financial muscle and have prepared aggressive expansion plans which may lead to cost pressures. Besides, the entry of global retailers into the Indian retail industry also poses a risk but it may be a couple of years before the multinationals step in.

But Biyani is unfazed by the FDI threat. "We will fight them out and beat them," he says.

Beyond lifestyle

Moving down the population pyramid, he now intends tackling the lower socio-economic strata with his micro-financing schemes to help the masses buy from his stores. Claims Biyani, "We are working on a model to service the bottom of the socio-economic pyramid. This would be based on micro-financing whereby we will be giving money to our lower-end consumers to make them spend at our stores."

Believing that consumption is development, Biyani intends spreading his operations to value seekers and to consumers beyond the lifestyle retail chain . According to Biyani, "Retail is about facilitating consumption and consumption equals development." "We believe that in the times to come, Pantaloon will play an active role in the social and economic development of the country. By creating avenues, formats, brands and spaces, we are raising aspirations, inducing consumption, creating public property and generating employment opportunities — all pointers to a strong, buoyant and emerging India."

His Big Bazaar concept of a discount hypermarket store was a milestone for the company, after which it introduced Food Bazaar. As Biyani says, "Big Bazaar changed the contours of the company since it touched the Indian masses." Currently, Big Bazaar occupies 8 lakh sq. ft. of retail space and is present in 13 cities.

While the format was successful in the metros, Pantaloon decided to become bold and took its value and discount model to Tier 2 and Tier 3 cities such as Nasik, Nagpur, Bhubaneshwar, Durgapur (in West Bengal) and Sangli (in Maharashtra).

Currently, half of the Big Bazaar format constitutes apparel retailing and the balance is divided between household goods and food and groceries (extended as Food Bazaar).

The reason food and groceries were included were footfalls. "Once a customer visited Food Bazaar, she was tempted to also have a look at the discounted general merchandise and fashion sections," says Biyani.

News: Pantaloon's new look

(HB 08/03/2006) Mumbai - Despite forays into many formats, Kishore Biyani is not ignoring his flagship store brand. Late last year, he refurbished its image. From being a family-oriented store, Pantaloon stores are being re-launched on the `youth' platform. Pantaloons now carries the `Fresh Fashion' statement across its 12 stores.

Pantaloons has tilted the balance of its merchandise, especially its apparel, in favour of its in-house brands such as UMM, Rig, Lombard, Bare and Denim.

"Today, our in-house labels form nearly 70-75 per cent of our apparel and we want our stores to be differentiated from the rest primarily on this account. We intend changing our fashions every 4-6 weeks," says Sanjeev Agrawal, President (Marketing), Pantaloon Retail.

Straddling both value and lifestyle retailing, Pantaloon Retail has been growing inorganically and organically. Picking up stakes in a host of companies such as Indus League Clothing, Planet Sports, Galaxy Entertainment, Gini & Jony and even forging joint ventures with Liberty Shoes, Pantaloon has been exploring synergistic advantages through such acquisitions. At the same time it has been growing organically through its own format stores such as Fashion Station, Chamosa, aLL, Central Mall and has floated a separate home retail company, Home Solutions. Leveraging its retail expertise for real estate and brand venture capital funding, it has also floated the Kshitij Fund.

Claims Biyani, "We have signed more than 10 million sq. ft. of retail space and the management of the venture capital fund for property will further that space. Between the domestic and international schemes, the venture is likely to develop 30 million sq. ft. and hopefully Pantaloon may get some space there too. We are looking at both inorganic and organic growth." Roping in some industry veterans, Biyani has built a strong management team. It comprises the likes of Sanjeev Gupta (Managing Director of the new venture capital fund) from Coca-Cola, Shishir Baijal (COO, Kshitij Fund) from Inox and Damodar Pal (President, Food Bazaar) from Hindustan Lever.

Competitors of Biyani don't hesitate to compliment the man on his vision and the aggressive speed with which he has emerged as the largest Indian retailer today. "Biyani's resource mobilisation with respect to funding, people and technology has held him in good stead," says Krish Iyer, the former MD and CEO at Pyramid Retail.

Says B.S. Nagesh, Managing Director & CEO, Shoppers' Stop, "His quest for more and his aggression in acquiring more property and businesses has helped." As for Biyani, he continues to believe in what Jonathan Livingston Seagull was trying to do. "There is a Jonathan Livingston Seagull in each of us. The best way to predict the future is to create it," he says.

News: Pantaloon Retail plans restaurant foray

(Sify 08/03/2006) Pune - The country's largest retailer, Pantaloon Retail, is cooking up plans to significantly increase its presence in the rapidly growing domestic food industry.

The group, which owns brands such as Food Bazaar and Big Bazaar, is all set to venture into the restaurant business either independently or through alliances in the near future with plans initially to launch two restaurants in Mumbai and Bangalore this year.

The retailer is also working towards getting closer to the Indian homemaker by offerings in store which will take away the negative labour back home with a range of products in a `live kitchen' format, including home style gravies, dals, cooked rice and even kneaded dough, Damodar Mall, President, Food Bazaar, told Business Line.

Not just metros

"We have significant interest in food which will find - expression through multiple formats including live kitchens which will now be part of every Food Bazaar we set up," Mall said. "Indians not just in metros but in tier-1 and 2 towns too are ready for modern format offerings in food and we want to be the pioneers in this," he said.

Pantaloons food division, meanwhile, is also simultaneously working at other aspects of strengthening its footprint in the segment with Food Bazaar already on a private label programme with in-house brands in everything from tea and salt to ketchup and jams.

The group plans to increase the number of Food Bazaar outlets from the current 40 to 150 by end 2007. "Food Bazaar will be part of every Big Bazaar and Central and in smaller centres we will set up stand-alone outlets,'' he added.

With the domestic retail industry now on a boom and large players such as Reliance and Wal-Mart expected to join the bandwagon, existing retailers are rushing to gather maximum early mover advantage.

Indivision to fund

Indivision, a Pantaloon group venture fund will help the group spot brands with promise in everything from food, footwear to apparel and accessories, according to Mall who said that among other things Indivision will fund and provide market strategy to these brands. Market sources insist that the Pantaloon group is scouting for regional players in the ready-to-eat and ready-to-cook segments of the food business right now.

Kiosk brand

With food on the radar, Pantaloons is also charting out growth maps for its food brands Café Bollywood, which serves Indian street food and Chamosa, its kiosk brand, that sells a combination of Indian chai and samosas at affordable prices. "Chamosa kiosks require very little space and we are right now planning to grow it at the level of one outlet every week," says Mall.

News: CARICOM Single Market needed

(PL 07/03/2006) Havana - The set up of the Caribbean Community Single market has vital importance as a preliminary way to strengthen the regional economic integration plan, said the Saint Vincent and the Granadines Ambassador to Havana, Dexter Rose, on Tuesday.

"This is a unification dream of the region that is almost about to come true, but it is still underway," stressed the diplomat in a statement to Prensa Latina.

"The Caribbean bloc is heading steps towards cooperation and needs to keep united, chiefly in economic and migration issues, to achieve positive results," said Rose.

"It is a shame to see Caribbean countries separated. Each nation should integrate the Great Caribbean, then become provinces of what I would consider as only one country," said the diplomat.

Rose made clarified that there are differences concerning individual economic development and commented on the case of Trinidad and Tobago, Barbados and Jamaica as the most developed countries within the Caribbean Community (CARICOM).

News: Guwahati undergoes a major mall makeover

(DNA 07/03/2006) Guwahati - It won’t be long before Guwahati becomes the Mulund of the Northeast. Just 15 months back, shoppers from the region used to go all the way to Kolkata for a visit to a mall. No longer. Ever since Hub opened in Guwahati in December 2004, followed by Sohum Shoppe and Vishal Mega Mart, Assam’s capital is abuzz on weekends with people from Tripura to Arunachal, and Manipur to Mizoram who come for the unique shopping experience.

“There’s nothing like shopping in a mall. It’s an entertaining experience and a great stress reliever,” says Reena Tamuli, an executive with a multinational company. “Traditional shops here hardly store any varieties. That is why we had to go to Kolkata. But now, the malls have brought all sorts of goods to us,” she adds.

Hub, the first mall to open in the region, has come up on an area of 55,000 sq ft on Guwahati-Shillong (GS) Road. Although it has an average conversion rate of 20 per cent, meaning 20 per cent of the visitors end up buying something, there are sections like Daily Bazaar which have a conversion rate of 65 per cent. “Food outlets, like Sanjeev Kapoor's Yellow Chilies, are the most popular," says Prakash Sanganeria, proprietor, Hub.

Vishal Mega Mart opened six months ago on an area of 55,000 sq ft on Assam-Tripura Road in the heart of the city. Its general manager, Gautam Kumar Medhi, says the mall has been so successful that the proprietors are planning more malls in the city and in other parts of the Northeast. "We have a conversion rate of 80 per cent. That's because of our prime location and the wide range of prices that cater to customers across segments. The garment outlets here are especially popular," informs Medhi.

One reason why the shops in the malls are registering huge sales is because Guwahati is host to a floating population from neighbouring states like Meghalaya, Nagaland and Arunachal Pradesh. "Not only are they rich, but also they like to have the latest goods.

This attitude has kept up sales," says Swastika Jalan, one of the partners in Sohum Shoppe. "In fact, they start enquiring about a product much before it hits the shelves. About half of them are window shoppers, but the other half buys high end products. So the conversion rate is high." Ashish Bhutani, chairman, Guwahati Metropolitan Development Authority, says big mall players like Shoppers Stop know what Guwahati's floating population means in terms of business. "The big mall chains have started sending delegations here to study the business prospects. At least six proposals for malls are pending scrutiny with us. The list includes some very big names."

It is only a matter of time before the big players are seen in the region, says MP Jain, president, Kamrup Chamber of Commerce. “I know for sure that Big Bazaar and Reliance intend to enter the region.” Malls like Donna Plaza and Amaze are nearing completion on GS Road, and a few more will be ready by the end of the year. This is, however, just the beginning.

Column: The dilemma of Caribbean dependence

(AS 07/03/2006) Antigua - Caribbean territories that remain overseas territories of the United Kingdom or departments of France and The Netherlands face a dilemma: how to balance a desire for greater autonomy with the benefits they receive from their non-independent status?

In the case of the French departments, such as Martinique and Guadeloupe, they are treated as part of France and their people benefit from all the social welfare conditions that apply to French citizens, and they are free to move to France. Additionally, their security and defence are the responsibility of the French government.

There have been movements for independence within the French Departments, but in recent years these movements have become muted, particularly as the experience of independence in some neighbouring Caribbean countries has not resulted in the great economic and social advancements that were predicted.

Greater autonomy for the French departments is arguably not an issue at this time.

But, the dilemma is now evident in Bermuda and the British Virgin Islands (BVI)

With regard to the BVI, discussions are taking place between that territory’s local government and the government of the United Kingdom for greater powers to be devolved to the BVI administration.

In Bermuda there is continuing debate over the desire for independence expressed by the government of Premier Alex Scott. Independence is opposed by a significant number of the Bermuda populace who demand a referendum on the issue.

While Bermuda, with a population of 68,000 people, is not geographically a Caribbean country, its proximity to the region and historical administration links it to the area.

The per capita income and quality of life in both the BVI (population: 27,000) and Bermuda is higher than in many independent Caribbean countries, and the citizens of both countries have the right to move to the United Kingdom to live and work.

Both territories enjoy low unemployment and are homes to immigrant labour.

In recent years, the health of the BVI economy, and its tourism sector, has attracted workers from neighbouring islands and Guyana.

But, their non-independent status has saved their budgets significant costs for external affairs, defence and security for which the United Kingdom government has responsibility.

These are significant costs given the area’s vulnerability to drug trafficking, and the myriad organisations to which independent countries have to belong, and in which they have to be represented to safeguard their interests.

Many independent Caribbean countries are finding the costs of security extremely onerous, and, in reality, they could not provide such security as now exists without help from donor countries and agencies.

Further, several Caribbean countries can not afford representation in key international organisations. As a result, many times their interests go unattended, or they have to fight rearguard actions to defend their concerns after decisions have been taken or rules made. The World Trade Organisation (WTO) is one such organisation.

In the case of Bermuda, a break from Britain is regarded by some as harmful to the island. The constitutional tie to Britain, the Head of State being Queen Elizabeth and the Privy Council being the final court of appeal – all are seen as elements of stability that are important to the financial services sector, which accounts for 60 per cent of the island’s gross domestic product (GDP).

Like Bermuda, financial services and tourism are the major contributors to the economy of the BVI.

The government of Chief Minister Dr. Orlando Smith in the BVI is not seeking independence; it wants greater autonomy in keeping with recommendations made by a locally appointed Constitutional Commission.

Dr. Smith has said past economic improvements of the territory have been linked to constitutional advancement, and he clearly believes that if the local government has a freer hand, economic development would take place at a faster rate.

As it is, the BVI enjoys a large measure of internal self-government, but the governor, as the UK representative, has direct responsibility for external affairs, defence and internal security (including the Police), the Public Service and the administration of the courts. The Constitution provides for a ministerial system of government headed by the chief minister.

Specifically, what the BVI government is seeking from Britain is what the chief minister descries as “a better alignment of rights and responsibilities between local government and the UK’s representative (the governor) in the territory”.

This, of course, is the age old problem that every former colony faced, and which, to some degree, pushed them into seeking independence: How to balance the authority of elected local representatives with the powers of the colonial governor?

The price of the protection of the colonial power and its financial responsibility for external affairs, defence and security is the direct involvement in government decision-making by the governor and the offices in the colonial capital from which he takes his guidance.

The desire of a people for self governance and the right to determine their affairs is understandable, but the cost is high and burdensome on national budgets.

And, individual small states in today’s global community are so increasingly marginalized in international relations as to make their political independence almost meaningless except for the votes they cast in international bodies. But, even the issues on which they cast votes, and the organizations in which they cast them, make little difference to their individual capacity to influence global issues.

This is a principal reason underlying the movement of the member countries of the Caribbean Community and Common Market (Caricom) to ceding some of their individual sovereign powers into a single pool.

Both the BVI and Bermuda are confronting the dilemma of dependence, and there is no easy solution to it. How the governments deal with it in ways, which do not overburden their national budgets, and promote their continued economic growth will be a real challenge.

By Sir Ronald Sanders, a former Caribbean diplomat, now a corporate executive who publishes widely on small states in the international community.

News: Reliance May Spend 150 Bln Rupees on Retail Stores

(Bloomberg 07/03/2006) Mumbai - Reliance Industries Ltd., owner of the world’s third-biggest oil refinery, may invest 150 billion rupees ($3.4 billion) over the next year to open shops and supermarkets across India, people familiar with the plan said.

India’s second-biggest company by market value aims to establish a chain of about 1,575 stores between December 2006 and March 2007, the people said, declining to be identified before details are finalized. The plan includes the $750 million in retailing investment outlined by Mumbai-based Reliance on Jan. 23, they said. Spokesman Tushar Pania declined to comment.

The spending suggests Chairman Mukesh Ambani will channel oil earnings into retailing, after an ownership dispute prompted him to hive off telephone, power and financial services units to younger brother Anil. Sales at retail chains in the world’s second-fastest growing major economy may more than triple to $23 billion by 2010, according to KPMG International.

“The kind of money Reliance is pumping in shows its confidence in the retail story in India,” said Viswanathan Vasudevan, who helps manage about $200 million, including Reliance shares, at Aquarius Investment Advisors Pte in Singapore. “They are cash rich.”

Reliance’s petroleum and textiles businesses give it a nationwide reach in a market that is 97 percent controlled by small, family-run shops. A nationwide chain of stores would allow the company to achieve lower supply and management costs, as the government considers opening the country to global retailers such as Wal-Mart Stores Inc. and Tesco Plc.

Rivals

Indian rivals such as Mumbai-based Pantaloon Retail India Ltd. are also expanding. Pantaloon runs 24 hypermarkets called Big Bazaar, 37 food supermarkets called Food Bazaar and 19 apparel stores called Pantaloon. Pantaloon’s Managing Director Kishore Biyani, 44, plans to add four more Big Bazaar stores this month.

Shares of Reliance rose 3.4 rupees, or 0.5 percent, to 735.3 rupees at 10:45 a.m. local time on the Mumbai stock exchange.

Reliance’s retail plans are similar to investments the company has made and risks it has taken in the past. In 1996, Reliance invested $6 billion to build a 27-million-ton-a-year oil refinery at Jamnagar at a time when the complex’s capacity was roughly equal to the difference between the demand for fuel in India and the existing supply.

The company processes 660,000 barrels a day of crude oil at the Jamnagar refinery, located in the western state of Gujarat.

Hiring Plans

Reliance plans to hire as many as 500,000 people for its retail business, the people familiar with the situation said. The company has hired 6,000 managers for the new business, the people said.

The 150 billion rupee investment includes the $750 million announced earlier, the people said. Reliance Industries had about 70.9 billion rupees of cash and short-term investments as of March 31, 2005, according to data compiled by Bloomberg.

Reliance is selecting locations for the stores, setting up agreements with farmers to buy their produce and tying up with manufacturers for merchandise ranging from consumer electronics to apparel.

The company will set up as many as 60 distribution centres across the nation to feed its retail chain, the people said.

Reliance will initially contract trucks and warehouses with cold storage facilities and subsequently build its own, the people said, without providing a schedule.

Shop Formats

The company plans to have different formats of retail stores. In towns and villages it will have so-called hypermarkets, which will be warehouse-style stores spread over 150,000 square feet selling products ranging from consumer electronics and groceries to fresh food and clothes. The company will also open smaller, 75,000 square feet, supermarkets.

Larger metropolises such as the capital New Delhi and Mumbai may have smaller stores depending on the availability of real estate, the people said.

“Investors will be watching out for where they are able to locate their stores and the execution of the project,” said Karthik Ramakrishnan, an analyst at Sunidhi Consultancy Services in Mumbai, who has a “buy” rating on the stock.

Sales of consumer goods, including clothes, mobile phones and computers, have surged in India as incomes have risen and lending rates have fallen to their lowest in more than three decades. India’s economy is expected to expand 8.1 percent in the year ending March 31, the fastest pace in two years and more than the 7.5 percent pace of growth in the previous year.

Revenue

Total organized retailing revenue is expected to grow as much as 30 percent a year, according to the KPMG survey.

About 60 percent of India’s more than 1.1 billion people are younger than 30 years of age and retailers are benefiting from the “spending power associated with this consumer segment,” the KPMG survey said in December.

The nation’s per-capita income in nominal terms is estimated to increase 11 percent to 25,788 rupees in the year ending March 31, compared with a 9.8 percent gain the year earlier. As incomes rise, consumers are buying higher quality products, KPMG said.

Growth in India’s retail business will be driven by food and grocery items, according to the KPMG survey.

Foreign companies are also getting more access. In January, the government eased investment norms in the retail industry and allowed overseas “single-brand” companies such as Nokia Oyj and Ikea.

India allowed companies which sell goods under one brand globally to own as much as 51 percent of the local ventures.

Still, the Communist Party of India (Marxist) and three other communist parties that support the coalition government of Prime Minister Manmohan Singh are opposing overseas companies such Wal-Mart to own retail businesses in the country.

The government has said the further opening of the retail business to overseas investment will take place only after discussions with all stakeholders.

News: Canarc Identifies New Suriname Gold Prospects

(BUSINESS WIRE 07/03/2006) -- Canarc Resource Corp. has identified several new gold prospect areas on its Benzdorp property in Suriname. Benzdorp is one of the largest historic gold districts in Suriname, with past alluvial mine production estimated at over 1 million ounces gold.

In 2005, Canarc completed 33 km of line-cutting and collected 1189 soil samples in the Van Heemstra Kreek area, on the north part of the property. A total of 96 anomalous samples exceeded 0.25 gpt gold, including 10 samples that assayed more than 1.0 gpt gold. Two large new gold prospect areas were outlined, referred to as VHA and VHB.

The VHA target is 650 m long by up to 600 m wide, and is possibly related to two separate quartz-sericite schist and quartz vein exposures, one of which assayed over 3 gpt gold in a grab sample. The VHB target is 400 m long by 200 m wide, with peak values up to 1.7 gpt gold.

Towards the south end of Benzdorp, just north of the Rufin Kreek headwaters, garimpeiro miners have mined a 30 m long by 30 m wide by 15 m deep pit into a broad north-south oriented shear zone hosting a gold bearing stockwork of quartz veinlets. Along Rufin Kreek itself, a several hundred metre square surface area is currently being mined from the alluvial gravels up onto the surrounding hillsides where saprolitic intrusive rocks and quartz veinlets are exposed.

South of Rufin Kreek on the next hill, garimpeiro miners are excavating a pit on the apparent south extension of the mineralized shear zone and using hammer mills to crush the ore for sluicing. Detailed sampling of the mineralized zones at Rufin Kreek is now underway.

These Rufin Kreek mineralized zones lie only 2 km along strike to the north of the Haut Antino high grade gold prospect recently acquired by New Sleeper Gold Corporation. New Sleeper has reported high-grade gold values up to 30 gpt in channel samples at Haut Antino.

Sampling, trenching and drilling by Golden Star Resources also returned multiple high-grade gold intercepts over widths up to 15 km in the mid-1990's, Haut Antino is currently being mined by excavators in an open pit and processed by hammer mills and sluicing.

In addition to completing line-cutting and soil sampling in 2005, Canarc also carried out selective re-logging and re-interpretation of the JQA drill core to better understand the controls on mineralization. In 2003 and 2004, Canarc drilled a new gold porphyry discovery at JQA. At 0.5 to 0.7 gpt average gold grades, the saprolite mineralization (top 40 m to 80m) may be of economic interest.

At the end of the 2005 exploration program, Canarc had reached the US$5 million in exploration expenditures required as part of its option to earn up to an 80% interest in the Benzdorp property. Canarc currently holds a 40% interest and is required to make certain cash payments and complete a feasibility study in order to fully vest its 80% interest.

To date, only 18% of the prospective greenstone belt that extends for over 20 km along the eastern side of the property has been explored by Canarc. Much of the untested area is drained by creeks that have been mined, or are currently being mined for gold by garimperiro miners. The government estimates over 500 miners are currently active in the Benzdorp district.

In the first half of 2006, Canarc plans to complete a further 300 km of line cutting and collect greater than 7000 soil samples over another 30% of the prospective greenstone belt, focusing on the meta-sedimentary rocks that host the Haut Antino and Rufin prospect areas. Many of the creeks being mined for gold have their headwaters in this part of the belt. The Gros Rosebel gold mine owned by Cambior in Suriname is also hosted by a meta-sedimentary rock unit within the greenstone belt.

Canarc has also commenced a 4000 km high-resolution airborne magnetic and radiometric survey over the entire greenstone belt and other prospective portions of the property in order to provide a previously unprecedented degree of geological detail and assist in identifying the structures controlling gold mineralization. Once this next $500,000 phase of exploration is completed, Canarc can better prioritize the gold prospect areas for trenching and drilling.

James Moors, B.Sc., P.Geo, is the Qualified Person who supervised the 2005 surface sampling program on the Benzdorp Property. All samples were obtained by Canarc personnel and flown to Paramaribo, Suriname for assay by The Assay Lab. Gold content was determined by fire assay with an AA finish.

Canarc Resource Corp. is a growth-oriented, gold exploration and mining company listed on the TSX (symbol CCM) and the OTC-BB (symbol CRCUF). The Company's principal assets are its 100% interest in the New Polaris gold deposit, British Columbia and its 80% option on the Benzdorp gold property in Suriname. Major shareholders include Barrick Gold Corp. and Kinross Gold Corp.

News: Tier-II cities are the new money-spinners for retail

(ET 06/03/2006) MUMBAI - The presence of Tier-II cities on the growth map of leading retailers has been on the rise in recent months. While sales are growing by 50-60%, albeit on a lower base, leading retailers say that volumes have been significant enough to encourage them to pan out quickly to other similar markets.

Currently, while the top metros growing at 35-40% are the biggest contributors to total sales, retailers say the format in the smaller cities is more profitable, owing to lower investments in land and manpower. In fact, the entry of several retailers in smaller cities has sent real estate prices zooming. Retailers say consumers in smaller cities are making more aspirational purchases in clothes, jewellery, accessories and footwear, among other things.

“The growth rates in the smaller markets show great promise. But it cannot be this or that. Urban markets continue to be crucial and there’s no question of saturation at all. In terms of sustainability, it is clear that consumers keep coming back, even after the initial novelty wears off. The entry of several retailers, including Indian corporates, means that real capital is coming into the business” said a top official in Big Bazaar.

Harminder P Sahni, chief operating officer of KSA Technopak, said that retailers are trying to tap growth in the smaller markets when the bigger cities are not really saturated. “It’s not unusual for consumers in the smaller markets to get aspirational or seek choices.

Most retailers are trying to pan out faster in the smaller markets, worried that they may miss some great opportunities. While the smaller markets will offer the scale, retailers need to consolidate their presence in one area before moving out into the next,” he said.

When a big retailer opens outlets in a smaller city, that city is immediately on the map for other retailers, said analysts. “These markets are growing faster than the industry on a whole, but this will stabilise over the next seven to ten years,” said a retail analyst.

“Clothing is seeing a 5-10% growth in Tier-II cities, but the base is very small. There is an increase in employment and the number of working women is also going up. As a result, leading retailers are looking at these markets more seriously,” he added.

The driving growth factors are discontinuity in terms of lifestyle, coupled with a growing young population. Personal care, which is growing at 10-15%, is another segment which is gaining popularity in the smaller cities. As a result, grooming has also been seeing steady growth since the past five years.

“Retailers will have to cut prices for there to be an upsurge in the market. There is a lot of buying during end-of-season sales, so consumers do have a price point which they follow, which retailers will have to address,” said an analyst.

Nieuws: Fortis wil bankverzekeren in India

(ANP-AFX 06/03/2006) AMSTERDAM - Fortis probeert een bankverzekeringsbedrijf in India van de grond te krijgen. Daartoe voert het Belgisch-Nederlandse financiële concern exclusieve onderhandelingen met Industrial Bank of India Limited (IDBI). Dat meldde Fortis maandag voorbeurs.

Fortis verwacht in de komende weken met IDBI een samenwerkingsovereenkomst op het gebied van bankverzekeren te kunnen sluiten. De overeenkomst past in de plannen van Fortis om in Azië een positie te verwerven in de bankverzekeringsmarkt.

Fortis geeft geen nadere toelichting. Eerst wil het concern tot een definitieve overeenkomst komen. Eerder doken er al geruchten in de media op over een mogelijke samenwerking van Fortis met IDBI. Fortis probeert al jaren een positie te verwerven op de Indiase verzekeringsmarkt, potentieel een van de grootste ter wereld.

Nieuws: Staatsolie stopt $70 miljoen in productieontwikkeling

(DWT 06/03/2006) Paramaribo - Staatsolie Maatschappij Suriname NV heeft voor dit jaar 70 miljoen US dollar nodig om een olieproductie van 4,44 miljoen vaten per jaar te halen.

Met deze investeringen moeten ook boorprogramma’s voor 147 putten worden afgewerkt. Door exploratie moeten minstens 14 miljoen vaten olie worden toegevoegd aan de huidige bewezen reserves. Dit zijn de plannen die Staatsolie voor 2006 in petto heeft .

Bij de onshore exploratieactiviteiten zal de focus liggen op het Calcutta-, Caledonia-, Tambaredjo West-, Coronie- en Nickeriegebied. Afhankelijk van de beschikbaarheid van financiering, zal worden gestart met de uitbreiding van de raffinaderij. “Dat moet uiteindelijk resulteren in het verwerken van 2,64 miljoen vaten ruwe olie in de raffinaderij tot verschillende producten,” zegt Staatsolie.

De Staatsolie Raffinaderij verwerkte in 2005 al om en bij 2,7 miljoen vaten ruwe olie tot dieselolie, stookolie en asfaltbitumen. In het afgelopen boekjaar zijn ongeveer 4,8 miljoen vaten petroleumproducten verkocht, waarvan 4,2 miljoen vaten uit eigen productie en 0,6 miljoen vaten geïmporteerde olie. De verkopen naar afzetmarkt waren als volgt: 63 procent aan de bauxietindustrie, 17 procent als bunkerbrandstof, inclusief leveringen aan vissersschepen, 16 procent export en 4 procent aan verschillende lokale klanten. Dit jaar moet tenminste één contract worden gesloten voor één van de onshore arealen en zal de promotie van de exploratiemogelijkheden in Suriname verder ter hand worden genomen. Voor drie offshore blokken is begin 2006 al een internationale bidding round gestart. De komende jaren zal het nieuwe Calcutta-olieveld een belangrijke bijdrage leveren aan de productie. In 2005 is de laatste hand gelegd aan de voorbereidingen, zoals de constructie van elektriciteits-, opslag- en laadfaciliteiten, teneinde dit veld in 2006 in productie te brengen. De maatschappij is van plan haar standaarden verder op te krikken door een bedrijfsbrede ISO 9001:2000 certificering.-.

Column: The View From Europe

(SN 05/03/2006) Georgetown - Govts and services industry must pay attention to discussions in Brussels and Geneva.

The fastest growing part of the Caribbean economy is the services sector. It is also one of the few areas in which smallness, fragmentation and all the other characteristics that are said to disadvantage the Caribbean are largely irrelevant. For this reason the sector - if that is not a misnomer for so varied a range of activities - has come to represent a significant part of the region's future.

Despite this, it may be the next in a long line after sugar, bananas and rice, value-added products such as rum and offshore financial centres, to be subject to attack in international trade negotiations.

At its most obvious the services sector is tourism and the myriad ancillary activities that support hotels, airports and cruise ships and provide hundreds of thousands of jobs across the region. But the sector is significantly wider than this.

It includes financial services, shipping and telecommunications and takes in all of the professions from architects through lawyers to dentists and doctors. It embraces those who work in information and communications technology (ICT) and the media. Less obviously it is also the many small and medium-sized enterprises that operate in every Caribbean country from the artists and musicians to the accountants.

What all these activities have in common is that they are indigenous, knowledge based, and require those involved to have had a sound education and ideally creative ability. What makes such industries unique is that to a significant extent they offer the opportunity for economic growth in a manner that enables the Caribbean to become the base for commercial activity that can be sold across the region and ultimately the world.

A 2005 World Bank report points to this. It notes that offshore education, health services and ICT all offer areas of potential growth. It observes that in education, the region's twenty-three offshore and onshore Caribbean medical schools, have responded to a growing and unfulfilled demand for physicians in the United States so that they now account for close to seventy per cent of the international medical graduates entering the US. The report also notes that demographic trends in the US suggest that there is scope for an expansion of cross- border health services in a manner that could create opportunities for Caribbean health services and health-tourism providers. It cites Le Sport in St Lucia and the rehabilitation service offered by Island Dialysis in Barbados as examples.

But much more needs to be done to make the region's services industries competitive.

Central to their development is the effective use of ICT and the creation of a sustainable strong educational infrastructure. This requires a more competitive telecommunications sector that is able to provide high-speed internet services at a reasonable cost for both small and large companies, deliver reliable global connectivity and for governments to regionally harmonise ICT policies.

A vibrant and growing services sector also requires constant enhancement of the skills base in every Caribbean nation.

Services have the unparalleled capacity to create higher-paying employment and to lift the region out of its reliance for jobs on primary agriculture, but this will take time. Services are highly competitive. They pit companies in the Caribbean against others not just in neighbouring islands but against others that might be in Costa Rica or South Africa.

For this reason such industries need time to mature. In certain cases they require degrees of protection - restaurants, small hotels, taxi services for example - secure in the knowledge that they remain locally owned and an authentic part of the regional identity.

Alarmingly this may not be allowed to happen.

There are signs that in trade negotiations on services that Europe may be taking a hard mercantilist approach towards the Caribbean.

Over the last week a number of Caribbean organisations and those close to the negotiations for an Economic Partnership Agreement with Europe have commented privately on this. They make clear that European negotiators, far from seeing services negotiations with the Caribbean as a step towards enhancing regional development, appear to regard their role as to try to force open the Caribbean services market in a manner that advances the interests of EU companies.

While some of the blunt language presently being used may represent a negotiating strategy, there are strong indications that on services the EC will take an offensive line against the Caribbean when it comes to negotiating an EPA. This view is bolstered by the fact that in the tourism sector in particular, large European commercial interests are seeking commercial advantage from the negotiations.

If the EC continues down this route and is not able to accept that services - the one area in which the Caribbean might hope to have long-term competitive advantage - need a more sympathetic approach, then any last vestige of belief in an EPA being a tool for development will be gone.

Small hotels, taxi drivers, restaurateurs to say nothing of the many thousands of individuals just gaining a foothold in the services sector can not be swept away by generic demands for market opening, free movement and the many other negotiating issues that touch on services providers.

A trade negotiation between the Caribbean and Europe is not the same as one between Europe and the United States. EC Trade Commissioner Peter Mandelson has recognised this. He has noted that any EPA will be development oriented and suggested that Europe "is very sensitive to the unique challenges of development in the Caribbean and it is deeply committed to helping the region manage its economic transformation."

For most, the language of trade negotiations on services is impenetrable. For this reason the little understood and frequently arcane discussions on these issues in Brussels and Geneva warrant significantly more attention from the industries concerned and from governments. If the industries that represent a significant part of the future of the Caribbean and their elected representatives do not take careful and early note of what is happening in Brussels, the last remaining source of the region's future wealth may prove illusory.

News: Pantaloon talks e-tailing

(DNA 05/03/2006) MUMBAI - After ruling the Indian retail sector for a while now, Pantaloon Retail managing director Kishore Biyani is all set to make it big in the online retailing segment with the launch of ‘e-tailing’.

Expected to take the online retailing segment by storm, the Indian retail giant is readying himself to launch the company’s maiden e-tailing venture. Currently in the last stages of planning, the promoters are busy finalising the nitty-gritty of this retailing medium.

Speaking exclusively to DNA Money, Biyani confirmed the e-tailing foray saying, “Positioned as one of the largest facilities in India, our online foray will retail products ranging from food, fashion, gifting items, communication range and consumer durables. Offering value to our customers at the lowest possible price, the idea is to replicate the January 26 shopping experience on the web space as well. The e-tailing facility should be operational in another four to six weeks time.”

Exploring all the e-commerce and M-commerce possibilities, Pantaloon has pumped in heavily towards creating this dedicated online shopping address — www.futurebazaar.com. Biyani however, refrained from divulging any investment and other details related to the e-tailing foray.

According to an e-commerce report published in 2005 by the Internet & Online Association of India (IOAI), the country’s online population currently stands at 25 million and is predicted to grow four-fold to 100 million by 2007.

The IOAI estimates that online shopping crossed Rs 430 crore to Rs 570 crore in 2004-05 and the turnover is expected to increase by 300% to Rs 2,300 crore in 2006-07.

IOAI report says almost 29% of online shoppers spend 11-20 hours a week watching television and 25% of them spend 11-20 hours on surfing the Net. The report further states 81% of online shoppers own a credit card and 75% of them own a debit card.

News: Body Shop firms up India foray with Planet Sports

(TNN 04/03/2006) Bangalore - The Indian retail story just got bigger. The Body Shop, the world’s leading high-end personal care retailer, is foraying into the country partnering with Planet Sports. Planet Sports, in which Pantaloon Retail holds 49% stake, will be the master franchisee for The Body Shop in India, said informed sources. Planet Sports already represents The Body Shop in a few south-east Asian markets.

It must be mentioned that Planet Sports has brought other brands like Marks & Spencer, Guess and Debenhams to the country though franchising or licensing arrangements.Sources said The Body Shop was likely to hit the top 5-6 Indian metros in the launch phase. It is likely to tap the high-end malls for locating the stores, but may also look at standalone stores in a few cases.

The Body Shop’s range covers products and accessories for skin and hair care, make-up, well-being, fragrance and home fragrance segments. The Body Shop, founded by the radical activist Anita Roddick in 1976, evolved from one shop at Brighton in UK, with only 25 hand-mixed products, to a network of 1900 stores in about 50 countries.

It is touted as one of the world’s top retail brands with highly visible campaigns against human rights abuses, in favour of animal and environmental protection and in its challenge to the stereotypes of beauty .

Incidentally, The Body Shop, said sources, could have opted for an equity venture under the Centre’s recently unveiled FDI in single-brand retail ventures. But it decided to come in through the franchising route, an arrangement which has facilitated its rapid international expansion in recent times.

Sources said it also indicated that standalone brands still prefer franchising arrangement for their entry strategy before exploring equity options at a later date in their development.

News: Many Caribbean countries' debt burden still too high

(JO 03/03/2006) Kingston - While the Caribbean Single Market and Economy (CSME) takes centre stage across the region, many member countries are encumbered by high debt which impedes economic progress. The year 2005 culminated in only Trinidad and Tobago and Jamaica enjoying a higher credit rating than they did back in 1999.

"And that speaks volumes to the problems of economic performance and high levels of economic risk taken by a number of these countries," said Jwala Rambarran, Chief Economist at Caribbean Money Market Brokers (CMMB).

Ramabarran's comments came at a review of St Vincent and the Grenadines' fiscal budget in that country's capital city, Kingstown.

"We in the Caribbean are becoming higher-risk economies and this shows up tremendously when we look at the Caribbean's public debt profile. At the moment we have seven Caribbean countries that rank among the highest indebted emerging markets in the world.

"The Caribbean is perceived now as being very risky by the international investor community. If you want these guys to invest here it helps to meet some of your financial obligations," Rmabarran added.

Caribbean economies have for the better part of 30 years been characterised by high debt. In the region there are two systems of measuring public debt. The IMF presents data on the total debt of a country, that is central government debt, as well as other public sector debt such as debt incurred by statutory agencies.

The Eastern Caribbean Central Bank prefers to measure only central government debt. Debt figures published by the Central Bank tend to be lower than that of the IMF. Debt figures include both guarantees or contingent liabilities as well as actual borrowed money.

Debt is expressed as a ratio of a country's Gross Domestic Product (GDP). In measuring debt to GDP ratios, a comparison is made between total debt against the GDP of a country. The GDP is the total value of goods produced and services provided in a country in one year. For the year 2004, St. Lucia's GDP stood at EC$2.07 billion.

Assistant Director in the Western Hemisphere Department of the IMF, Ratna Sahay surmised in a paper entitled, "Stabilization, debt and fiscal policy in the Caribbean": 'While Caribbean countries have been largely successful in bringing inflation down to single-digit levels in recent years - regardless of their exchange rate regime - growth has been disappointing and public debt has risen rapidly. By 2003, 14 of 15 Caribbean countries were ranked in the top 30 of the world's highly indebted emerging market countries.'

She added that most of the increase in public debt is accounted for by a deterioration in primary fiscal balances largely due to a sharp increase in expenditures, rather than a fall in revenues.

"With the countries of the region now increasingly facing unsustainable debt positions, innovative ways need to be found to raise economic growth rates and generate fiscal savings in order to reverse the debt build-up," said Sahay.

The European Central Bank (ECB) believes that the Caribbean should adhere to a more rule-based framework for the adoption of fiscal policy decisions as opposed to a discretionary fiscal policy outlook.

Having set rules means establishing at the very least a medium-term target for the government to balance the budget as opposed to an ad hoc approach which sees the decision on the budgetary target made without having to adhere to explicit criteria when determining the size of the budget balance in a particular year or over the medium-term.

"Across the Eastern Caribbean, countries have already realised that they face tremendous fiscal and debt challenges and they have started with considerable delay, to try and address the situation," said Rambarran."

The CMMB chief economist noted that Dominica has been under an International Monetary Fund (IMF) programme for the past four years, while Grenada was "riding out pretty good recovery' after the devastating Hurricane Ivan of September 2004.

Rambarran was of the view that Grenada may also need to join Dominica under an IMF programme.

The ECB is recommending annual fiscal balances to be in surplus or in balance, a limitation of the domestic and foreign debt ratio to 70 per cent of GDP and a reduction of the inflation rate to 3 per cent.

The Monetary Council of the Eastern Caribbean Central Bank has adopted benchmarks limiting budget deficits to 3 per cent of GDP, outstanding public sector debt to no more than 60 per cent of GDP and debt service revenues to no more than 15 per cent of current revenue.

Rambarran pointed out that only three countries across the region had met the European Union criterion of keeping public debt at 70 per cent of Gross Domestic Product (GDP).

According to Sahay of the IMF, GDP growth in the Caribbean region relative to other developing countries during 1980-2003 was low. The average Caribbean small-state GDP grew at 2.5 per cent per annum in that period. Compared to other developing countries, this growth rate was only marginally higher than that of Latin America.

News: Service sector growing fast in Caribbean

(TE 03/03/2006) Port of Spain - The fastest growing part of the Caribbean economy is the services sector. It is also one of the few areas in which smallness, fragmentation and all the other characteristics that are said to disadvantage the Caribbean are largely irrelevant. For this reason the sector – if that is not a misnomer for so varied a range of activities – has come to represent a significant part of the regions future.

Despite this, it may be the next in a long line after sugar, bananas and rice, value added products such as rum and offshore financial centres, to be subject to attack in international trade negotiations.

At its most obvious the services sector is tourism and the myriad ancillary activities that support hotels, airports and cruise ships and provide hundreds of thousands of jobs across the region. But the sector is significantly wider than this.

It includes financial services, shipping and telecommunications and takes in all of the professions from architects through lawyers to dentists and doctors. It embraces those who work in information and communications technology (ICT) and the media. Less obviously it is also the many small and medium sized enterprises that operate in every Caribbean country from the artists and musicians to the accountants.

What all these activities have in common is that they are indigenous, knowledge based, and require those involved to have had a sound education and ideally creative ability. What makes such industries unique is that to a significant extent they offer the opportunity for economic growth in a manner that enables the Caribbean to become the base for commercial activity that can be sold across the region and ultimately the world.

A 2005 World Bank report points to this. It notes that offshore education, health services and ICT all offer areas of potential growth. It observes that in education, the region’s twenty three offshore and onshore Caribbean medical schools, have responded to a growing and unfulfilled demand for physicians in the United States so that they now account for close to seventy percent of the international medical graduates entering the US. The report also notes that demographic trends in the US suggest that there is scope for an expansion of cross- border health services in a manner that could create opportunities for Caribbean health services and health-tourism providers. It cites Le Sport in St. Lucia and the rehabilitation service offered by Island Dialysis in Barbados as examples.

But much more needs to be done to make the regions services industries competitive.

Central to their development is the effective use of ICT and the creation of a sustainable strong educational infrastructure. This requires a more competitive telecommunications sector that is able to provide high-speed internet services at a reasonable cost for both small and large companies, deliver reliable global connectivity and for governments to regionally harmonise ICT policies.

A vibrant and growing services sector also requires constant enhancement of the skills base in every Caribbean nation.

Services have the unparalleled capacity to create higher paying employment and to lift the region out of its reliance for jobs on primary agriculture, but this will take time. Services are highly competitive. They pit companies in the Caribbean against others not jut in neighbouring islands but against others that might be in Costa Rica or South Africa.

For this reason such industries need time to mature. In certain cases they require degrees of protection – restaurants, small hotels, taxi services for example- secure in the knowledge that they remain locally owned and an authentic part of the regional identity.

Alarmingly this may not be allowed to happen.

There are signs that in trade negotiations on services that Europe may be taking a hard mercantilist approach towards the Caribbean.

Over the last week a number of Caribbean organisations and those close to the negotiations for an Economic Partnership Agreement with Europe have commented privately on this. They make clear that European negotiators, far from seeing services negotiations with the Caribbean as a step towards enhancing regional development, appear to regard their role as to try to force open the Caribbean services market in a manner that advances the interests of EU companies.

While some of the blunt language presently being used may represent a negotiating strategy, there are strong indications that on services the EC will take an offensive line against the Caribbean when it comes to negotiating an EPA. This view is bolstered by the fact that in the tourism sector in particular, large European commercial interests are seeking commercial advantage from the negotiations.

If the EC continues down this route and is not able to accept that services - the one area in which the Caribbean might hope to have long-term competitive advantage - need a more sympathetic approach, then any last vestige of belief in an EPA being a tool for development will be gone.

Small hotels, taxi drivers, restaurateurs to say nothing of the many thousands of individuals just gaining a foothold in the services sector can not be swept away by generic demands for market opening, free movement and the many other negotiating issues that touch on services providers.

A trade negotiation between the Caribbean and Europe is not the same as one between Europe and the United States. The EC’s Trade Commissioner, Peter Mandelson has recognised this. He has noted that any EPA will be development oriented and suggested that Europe “is very sensitive to the unique challenges of development in the Caribbean and it is deeply committed to helping the region manage its economic transformation.”

For most, the language of trade negotiations on services is impenetrable. For this reason the little understood and frequently arcane discussions on these issues in Brussels and Geneva warrants significantly more attention from the industries concerned and from Governments. If the industries that represent a significant part of the future of the Caribbean and their elected representatives do not take careful and early note of what is happening in Brussels, the last remaining source of the regions future wealth may prove illusory.

News: Shoppers' stop: One too many

(TNN 02/03/2006) Lucknow - The growth of local markets has the price of commercial property in the respective areas soaring even as Ganj profits dwindle in the bargain.

Small is big and bigger than you can imagine. Which is why markets in relatively smaller pockets of the city are booming big time.

It's not just the mall mania here that has adversely affected business in Hazratganj, if only marginally; with self-sufficient markets coming up in Alambagh, Gomtinagar, Mahanagar and Indiranagar among other localities, all roads no longer seem to be leading to Hazratganj.

Of course, there's no detracting from the glory of Ganjing but what's glory got to do with ground realities? And the ground reality is that because of the popularity of the Alambagh market today, prices of property in the area are almost as high as those in Hazratganj!

While commercial property prices in Hazratganj go up to Rs 15,000 per sq ft, in Alambagh they are touching Rs 10,000 to Rs 12,000 per sq ft on a higher side and Rs 7000 per sq ft according to more conservative estimates.

The development hardly comes as a surprise to Kishinchand Bhambhwani, president of the Hazratganj Traders Association, who avers that problems of traffic congestion and parking in Ganj have reduced the inflow of shoppers from relatively far off areas in the city.

"Which is why the markets that are able to meet their basic requirements are fast developing. However, traders aren't ready to lose out on their consumers; if the consumers can't reach them, they will reach out to the consumers by expanding business in other areas."

Though parking and encroachment problems plague Patrakarpuram, Gomtinagar, as well and have prevented a steep rise in commercial property prices, the area is as much in demand as any other – thanks to the population of Gomtinagar that prefers to shop for at least their essentials in the vicinity.

"It's very convenient for us now that everything is available just a hop away. Instead of heading all the way to Aminabad for cheaper bargains, I prefer shopping from Gomtinagar," avers Jyoti Dewan, a Gomtinagar resident.

While speciality stores continue to hold their own in any part of the city, it's the run-of-the-mill but oh-so-important stuff that's giving these lesser knowns markets their clientele.

That, however, does not mean that branded stores are not eyeing them. With a customer-base already in place, it makes good business sense for big brands to also set shop here.

So when Harsh Rajpal, who owns a shopping plaza in Alambagh, says "There are queries almost everyday from big brand names to make their presence felt in this part of the city," you have to believe it.

For jeweller Arpit Rastogi, who already owns a shop in Aminabad, opening up a branch of his jewellery store in Gole Market, Mahanagar was "Intended to tap the trans-Gomti market. Moreover, we saw potential for growth here, not just our own but also the market's as a whole."

That is exactly why the Bhootnath market in Indirangar has taken off in such a big way. Though there aren't too many branded stores opening up here, keeping in mind the customer profile of the area, property prices in here are escalating and are at an all-time high.

"Why should Indiranagar residents head anywhere else, when all they need is readily available here? Property prices here also at an all-time high - Rs 6,000-10,000 per sq ft approximately," says Vijay Gulati, property dealer.

Now, this is as big as it gets!

News: 'Money laundering might account for 60% Guyana economy'

(SN 02/03/2006) Georgetown - The US State Department's 2006 International Narcotics Control Strategy suggests money laundering might account for as much as 40-60% of Guyana's economy, but says political instability, government inefficiency, and an internal security crisis have significantly impaired measures to combat this problem.

No arrests or prosecutions for money laundering were made last year and the report, released yesterday, concluded that this was a result of "a lack of adequate legislation, regulations, and resources, as well as the apparent lack of political resolve to tackle it as a serious crime." The report noted that investigation and prosecution of these cases appear to be low priority for law enforcement.

The report noted that the Money Laundering Preven-tion Act passed in 2000 is not yet fully in force, due to inadequate implementing regulations, difficulties associated with finding suitable personnel to staff the Financial Intelligence Unit (FIU), and the Bank of Guyana's lack of capacity to fully execute its mandate. Crimes covered by the Money Laundering Prevention Act include narcotics trafficking, illicit trafficking of firearms, extortion, corruption, bribery, fraud, counterfeiting, and forgery. The law also requires that incoming or outgoing funds over US$10,000 be reported. Licensed financial institutions are required to report suspicious transactions, although banks are left to determine thresholds individually according to banking best practices. Financial institutions must keep suspicious activity reports for seven years. The legislation also includes provisions regarding confidentiality in the reporting process, good faith reporting, penalties for destroying records related to an investigation, asset forfeiture, and international cooperation.

The report said government established the FIU within the Ministry of Finance in 2003. A director and a police investigator currently staff it and as of December last year the FIU has conducted preliminary investigations on approximately 36 cases. The Money Laundering Act of 2000 provides for seizure of assets derived from proceeds of crime, including money, investments, and real and personal property, but the guidelines for implementing seizures/forfeitures have not been finalized. The report noted that the FIU has prepared drafts of legislation related to terrorist finance and money laundering. It said this more robust legislation is currently under review and is expected to be presented to parliament early this year. The new legislation is also expected to provide for oversight of export industries, real estate, and alternative remittance systems.

The report also said Guyana should publish regulations to implement its money laundering law and to provide greater autonomy for the FIU by making it an independent unit with its own budget. Guyana should also provide appropriate resources and awareness training to its regulatory, law enforcement and prosecutorial personnel. Guyana should criminalize terrorist financing and adopt measures that would allow it to block terrorist assets.

The report noted that Guyana is a member of the OAS Inter-American Drug Abuse Control Commission (OAS/CICAD) Experts Group to Control Money Laundering. A 2002 CICAD review of Guyana's efforts against money laundering noted numerous deficiencies in implementation, resources, and political will. Guyana is also a member of the Caribbean Financial Action Task Force (CFATF), and recently participated in CFATF's first mutual evaluation process. Guyana is a party to the 1988 UN Drug Convention. Guyana became a party to the UN Convention against Transnational Organized Crime by accession on September 14, 2004. Guyana has not signed the UN International Convention for the Suppression of the Financing of Terrorism.

The report said the Ministry of Foreign Affairs and the Bank of Guyana continue to assist US efforts to combat terrorist financing by working towards coming into compliance with relevant United Nations Security Council Resolutions. In 2001 the Bank of Guyana, the sole financial regulator as designated by the Financial Institutions Act of March 1995, issued orders to all licensed financial institutions expressly instructing the freezing of all financial assets of terrorists, terrorist organizations, individuals, and entities associated with terrorists and their organizations. Guyana has no domestic laws authorizing the freezing of terrorist assets, but it was noted that the government created a special committee on the implementation of Security Council regulations, co-chaired by the Head of the Presidential Secretariat and the Director General of the Ministry of Foreign Affairs. To date the procedures have not been tested, as no terrorist assets have been identified as located in Guyana. The FIU Director also disseminates the names of suspected terrorists and terrorist organizations listed on the UN 1267 Sanctions Committee's consolidated list to relevant financial institutions.