‘We are looking at categories where we can make a difference’

Vinita Bali, Britannia Industries Ltd’s Managing Director, is on a whirlwind trip to Chennai. She’s in the city to participate in the Foodpro as well as launch Britannia’s new milk drink for children, ActiMind. Bali is gung-ho on the growth of the dairy business and says Actimind is the first in a pipeline of products planned in dairy. Post launch, Bali, a former worldwide marketing director of the Coca-Cola Co, who joined Britannia a little over four years ago, spoke to Brand Line on a variety of issues: the company’s strategy for biscuits to maintain its one-third share of the organised biscuits market, consumer trends and insights driving the company, spiralling commodity prices and its small pack strategy. Excerpts:

You’ve just launched a new brand, ActiMind, a milk drink for kids. Does this new product launch signal that you’re getting aggressive in the milk market?

Dairy is a business that in the last three years has doubled for us. We are looking at a 20-22 per cent growth; it’s tracking to be a Rs 200-crore-plus business. So far, dairy was dominated by our presence in cheese, where we have a 47 per cent share of the market. We made a lot of innovations — we brought in cheese spreads and flavoured cheese cubes apart from low-fat cheese. What we have done with this portfolio is to look at how to differentiate or add more value.

You had a presence in the liquid milk market as well earlier?

We as a company are in the business of brands. We buy a lot of wheat but don’t sell wheat flour, we sell biscuits. We don’t want to be in the business of selling just liquid milk, which is something the company had done earlier, because there is no value addition. There is nothing that we bring to milk that anybody else can’t. So, when we looked at value-added products, we brought in branded dahi. I would say there’s a time in the evolution of categories when consumers make the switch from having to make it at home to going out and buying it. The analogy I would use is that 15-20 years ago, people wouldn’t want to pay for water but today we buy branded water! Consumers today are saying they don’t need to do all that their mothers or grandmothers did at home.

Four-and-a-half years ago when I joined Britannia we made it clear that we were in the business of creating brands that offer an attractive value proposition to the consumer. So we are not about selling a commodity.

As we build our portfolio, we are looking at different categories where we can make a difference. If you look at cheese, for instance, we have low-fat cheese under the Slimz range which has 33 per cent less fat. We are creating this whole proposition called Slimz which takes into account the fact that eating healthy is about eating less fat. In biscuits, for example, we have added micro-nutrients and today, 50 per cent of everything we sell in bakery is fortified.

Is ActiMind the first of many such products in the pipeline for you?

We are looking at several products; this is the first to come to market. The quantity of essential nutrition in macro nutrients is not enough, so nutrient fortification is what a lot of developing economies have done to improve the overall wholesomeness and value of food. We developed ActiMind keeping in mind micro nutrients that are known to improve mental agility. For example, Vitamin B is essential for the brain to utilise the energy of glucose. Vegetarian food has very little choline and iodine. So, the need for micro nutrients is higher in a country like ours. We wanted ActiMind to be literally a one shot drink. The other big advantage is that it has no preservatives, it has a shelf life of six months, and is an ambient beverage so it could be put in kids’ lunch boxes (though it tastes better when cold – but that is a personal preference).

What is the kind of business opportunity you are looking at for this?

It’s a new market we are pioneering. I don’t know the size of the market, it’s not milk but in consumption terms, will compete with milk, it’s not juice but will compete with juice, it’s not a malted food drink, but it could compete with them. It’s a completely new concept, nothing like it exists in the market. We’re calling it a milk-based health drink. To describe it … how do you describe a Coke, it’s unique to itself and it’s a beverage. I would call this a health beverage. The investment has been significant … in crores (of rupees).

Do you see the contribution of non-biscuit brands increasing share?

Of course, that business is growing even faster than biscuits. Four years ago, the non-biscuit portfolio was hardly Rs 250 crore. Today, non-biscuit portfolio is Rs 600-plus crore.

You’ve also squeezed out a huge amount of costs from the system?

In the last four years, we’ve taken Rs 180 crore out of the system. There’s been a lot of wastage reduction, a new manufacturing footprint … there’s not one magic elixir, but a whole host of things that we did. On the revenue side, all the new packs we have launched have different margins by channel and geography. We therefore manage a portfolio that includes a diversity of brands, packs, channels and geographies. We don’t make the same money on our brands everywhere.

What about the competition that is hurtling at you from all sides, not just the biscuit brands?

Just like we are encroaching on their territories they are encroaching on ours. That categories are morphing is not a new phenomenon at all. As consumers move from fried to healthy products, biscuits present a good option as they are more healthy, are baked and not fried. Also, on the other hand, the fact that we have removed trans fats works in our favour. We have created a Rs 300-crore opportunity in personal consumption packs by converting those to an impulse purchase format.

What about Britannia’s Daily Bread business, it’s still making losses?

We have consolidated the business in Bangalore and it’s breaking even. We will go slow and steady in growing the business. We have about eight company-owned outlets, 3-4 franchises and we are also present in some modern trade outlets. In Hyderabad, we are working on a franchisee option.

You have withstood cost pressures and maintained your margins. How?

To put it differently, in a very tough environment, we have maintained operating margins and generated Rs 250 crore of operating cash flow in the first half. On the flip side, I wish we didn’t have to deal with the spiralling cost of commodities. Take sugar, last year it was about Rs 14.50 per kg, now it is Rs 32 per kg.

You are importing raw sugar yourselves now?

The government allowed imports only six weeks ago, so we are importing now. There is no sugar available. India produces 21-22 million tonnes of sugar; this year (expected) 16 million tonnes and we have eaten into our opening stock. The government realised that the only way to restore sanity was to allow import of sugar.

What’s new in your core business of biscuits?

The focus that we brought to what I would call the functional aspects of our business: removing what’s not good for you and adding what is! And, we have not done that on the basis of some regulation, we decided that we were going to remove trans fats and ours are the only biscuits that have no trans fats; we removed 10,000 tonnes of trans fats; we have also fortified our brands with micro-nutrients — iron in the case of Tiger. We are also looking at new opportunities. If you look at Nutri Choice 5 Grain, it has complex carbs such as oats and ragi, a dash of honey as well. We just launched a cracker with ajwain and jeera, which is good for digestion.

The other thing in biscuits is that we are looking at consumption opportunities out of home. We asked ourselves the question: if I am a teenager would I eat something that my mother buys as a grocery item … what would we have to do if we wanted to make biscuits an impulse purchase, like chocolate … and that insight led us to some very interesting things. We launched the four-biscuit pack of Bourbon, for Rs 5; it looks like chocolate, has a chocolatey taste as that’s what Bourbon is all about, and that’s what we call a personal consumption pack, which you can carry along with you. That’s tracking to be a Rs 250-300 crore opportunity for us.

‘Easy to be a good agency, harder to be a great one'

Chris Thomas, Chairman & CEO, BBDO Asia

Chris Thomas, Chairman & CEO, BBDO Asia, was in Mumbai recently to share the findings of a global study carried out by BBDO and its digital arm, Proximity, in 15 markets across the world to assess global attitudes to the recession and the recovery of the global economy. According to him, Indians have coped better with the economic challenges posed by the recession compared with the rest of the world . “This offers opportunities for brands to engage in a more meaningful way and also highlights the increasing importance of community, causes and word of mouth, which are particularly relevant in the Indian market.''

On his third visit to India, Thomas outlined through the global study on ‘what goes up and goes down' the prevailing economic scenario. In a freewheeling interview with BrandLine, apart from discussing the global study he also speaks on what BBDO India has been doing in India since it set up shop in the midst of the recession and what lies ahead for the youngest Omnicom agency in the country.

It has been 22 months since BBDO India came into existence. Considering the agency went through the pangs of the recession, how difficult was it to set up the Indian operations and bag clients?

Some of the best agencies in the world have been set up in the grip of recession. We didn't plan for it - but it hasn't slowed our commitment or progress. When clients are trying to do more for less then creativity is at a premium. And that is always BBDO's focus.

Has global alignment of clients helped the Indian agency gain accounts in the Indian market? What about Pepsi and its brands like 7 Up and Nimbooz? Is it part of a global realignment or are they India-specific businesses?

Global relationships help open doors. But if you can't deliver great work and the resources required the doors slam shut. The ideas that we have developed for 7 Up - Mood Ko Do Lemon Ka Lift - and Nimbooz - Ekdum Asli Indian - are uniquely Indian ideas. The benefit of the network is cross-pollination of ideas on the brand across the world.

With the other joint venture with RK Swamy existing, how have you differentiated the two BBDO agencies in the Indian market? Will it get difficult to pitch for new accounts when there already is an RK Swamy BBDO existing?

The Indian market is growing rapidly. Having two flavours of BBDO in India will allow us to grow share. The two agencies are defined by their people, their clients and their work. On occasion we will compete, on occasion we will collaborate.

Being the youngest agency in the Omnicom group, what are the challenges BBDO India has faced in the Indian market so far? With recession retreating and ad spends going up, how is the Indian advertising industry looking up for new agencies like yourself?

The market is dynamic and growing. There are talented people and a belief in creativity. Our task is to make sure we have an unfair share of that talent and that our work is setting the industry agenda. How we engage with consumers is rapidly changing all over the world - and that is just as true here. I believe we need simple, powerful brand building ideas. Then those ideas must become the content engines that drive conversations with and participation from consumers. Our idea for Quaker, to “make India heart-healthy”, is changing the dialogue for the brand. Aviva's “Education is insurance” is an incredibly powerful platform that will touch people not just in advertising but in all kinds of new and innovative ways. Just go this weekend to Ansal Plaza to see Aviva's Great Wall of Education and you will see how. (Just make sure you bring along a book to donate!)

There is a new digital initiative through the launch of Proximity. Could you elaborate on its functioning in the Indian market? What are the kind of existing digital outfits it is expected to compete with?

Digital is like oxygen … it is everywhere. So it is not a separate outfit. Digital expertise is embedded in the agency. Proximity allows us to bring in specialist skills and global tools - particularly in the areas of CRM, ECRM and data analytics. But it will always be a single P&L. We won't create separate silos that we have to then sell to our clients. We will understand our clients' needs and then organise our resources to provide a Total Work solution.

In your presentation during the global study on the effect of the slowdown on consumers across markets, you said 62 per cent of Indians would be willing to buy fewer items of better quality, even if it meant spending more. So are you saying that Indians did not downgrade during the recession?

Relative to other markets the data shows that Indians were less likely to downgrade but to cut out individual items from their budgets. By comparison, in the Chinese markets consumers are more likely to maintain the items that they buy - but just do so at a lower price.

How would BBDO India gain from this research while creating its future advertising campaigns? Can you give some examples?

The presentation illustrates six consumer responses that have emerged over the last 18 months. The brand frameworks are very helpful in our planning processes. One of the most interesting things to emerge is the increasing importance of causes and the community. There has been a marked rise in philanthropy and we are seeing consumers seeking greater meaning in their lives. This is a rapidly emerging opportunity for brands — but it must be central to the brand promise and true of the organisation. The Starbucks campaign in the US that encouraged community service, Versace's link with the One Foundation in China and Aviva's support of education initiatives in India are good examples.

With stalwarts such as Josy Paul and Ajai Jhala leading the Indian operations, how would you be leveraging their experience in making BBDO India a top-league agency, especially with WPP dominating the ad industry in India?

The way we will compete is by worrying about how good we are and not how big we are. Scale is not a competitive advantage — big ideas that builds brands are what clients need. And generally those ideas come from small teams of senior, talented practitioners working in close collaboration with their clients.

What are the total billings and growth projected by BBDO India and the future of the agency in the country?

We don't reveal billings figures but we are happy with progress. However, successful agencies have to have a sense of positive dissatisfaction.

We have to constantly challenge ourselves. It is easy to be a good agency. It is much harder to be a great agency.

Clear sight

Bausch & Lomb has launched PureVision Toric Lenses. These lenses come with patented Advanced Lo-Torque design that claims to provide consistent and sharp vision, even in low light conditions. The silicone hydrogel material reportedly provides up to five times more oxygen to the eye than traditional lenses, enabling the consumers to wear these lenses for extended hours. These lenses are available at all the major optical outlets in the country. A pack of three lenses cost Rs 1,110.

‘India growing into fashion destination’

The International Apparel Federation has said that India could soon evolve beyond being a sourcing hub, into a fashion destination for global retailers.

The association, which has 25 member countries under its aegis, also said smaller and medium retailers globally are looking to forge alliances with their Indian counterparts to develop products for the domestic market.

“Over the last five years, we have seen India grow from a sourcing hub for textiles into a fashion destination. Lots of our members are looking at India as the domestic market here is growing exponentially,” Mr Vassilis Masselos, President, International Apparel Federation, told Business Line

IAF, in association with Clothing Manufacturers Association India, is holding a convention in India to share insights on trade, policy and business for its various stakeholders.

Stating that IAF is looking to fill the gap between the small and medium retailers in expanding its footage in India, he said, “Currently, only large retailers are here (in India). For smaller retailers, sourcing is still a challenge. We are looking to address the gap so that the system is harmonised”.

He also said that the growth in organised retail is a key driver for the growth in the apparel segment. The domestic apparel market stands at $30 billion and is likely to touch $50 billion by 2014.

‘No plans to enter into four-wheeler segment’: Venu Srinivasan

Country's second largest two-wheeler manufacturer TVS Motor Company on Wednesday said the company had “no intention” of entering into the four-wheeler segment.

The company currently operates in moped, motorcycle and in the three wheeler segment. The company has no plans to enter into the four-wheeler category, TVS Motor Company Chairman. Mr Venu Srinivasan said here.

“Absolutely, there is no intention (for us) to enter into the four-wheel segment. We have no plan to make a four-wheeler”, he said.

Mr Venu Srinivasan was here to officially unveil the company's first “clutchless” motorcycle “TVS Jive” and automatic scooterette “TVS Wego”.

Pantaloon’s fund raising could help it cut massive debt

The latest in a series of moves, Pantaloon Retail (PRIL) concluded its qualified institutional placement on Monday, raising Rs 500 crore in the process. This comes after the company raised Rs 276.3 crore through issues to private parties besides the potential Rs 91.50 crore that could come through warrant conversions. Equity raised could trim the company’s massive debt of Rs 2,850 crore taken on for expansion, and help distance PRIL from the problems plaguing smaller retailers such as Vishal Retail. It could also help bring down interest costs. It needs mention that interest costs cut operating margins by half to 5 per cent in FY-09.

Besides retiring debt, funds could also be used for store expansion; PRIL is targeting 25 million sq ft by 2013, from the current figure of about 9.7 million. It hopes to close FY10 with about 12.7 million sq ft.

Besides the QIP, PRIL also has restructuring plans, which may establish its presence as a retail player and help raise funds to support retail activities. Retail formats Big Bazaar, Pantaloon, Central and others, accounting for the bulk of revenues and profits, will be grouped under a single vertical as wholly-owned subsidiaries.

PRIL could find it easier to raise funds for its pure retail businesses, since investor returns will not suffer from losses stemming from unrelated businesses such as Future Media and Future Knowledge. Its value retail business, which includes Big Bazaar and Food Bazaar, contributes about 72 per cent to revenues and has seen robust growth. Value retail will be transferred to wholly-owned subsidiary; the entity could be listed separately besides raising funds raised directly in this subsidiary.

Unrelated businesses such as Future Knowledge Services, Future Learning and Development and so on have been transferred to a promoter group company for Rs 190 crore, further positives for PRIL shareholders. These entities were a drag on profits, with PRIL ending FY09 with an adjusted consolidated net profit of Rs 15 crore against the Rs 143 crore standalone figures.

Financial services interests Future Capital and insurance businesses will together form a vertical. PRIL may reduce holding in Future Capital, and create a new entity with the insurance business and thus unlock value in the financial services division. However, PRIL is not yet clear on how its shareholders will be compensated for the transfers and dilution of stakes in the financial services entities, potential transfers in the retail entities.

Netting the tourists

By banking on a marketing strategythat relies on information technologyand the Internet, Kerala Tourism canhope to remain ahead of the pack inthe global travel trade.

Kerala's success in carving out a niche in the highly competitive global travel and tourism industry is by now the stuff of business school lectures.

The key element in its triumph has been sustained and consistent marketing and, more importantly, the ability to innovate its travel offerings by plugging into contemporary trends.

Last week saw another of these initiatives - the launch of `login.kerala', a new move to lure visitors to the State through information technology (IT), specifically by way of the Internet. The new digital move involves creating a cluster of user-friendly interfaces, databases and payment gateways which would transform the Kerala Tourism Web site from an information- led one to a transactionbased one.

This will not only re-establish Kerala's premier position in the tourism world but will also revitalise the online presence of the State's tourism and travel-related products, so that it can stand out in the clutter of hospitality products on the Internet.

`CRUCIAL STEP'

At the launch of login.kerala, the State Minister for Home and Tourism Kodiyeri Balakrishnan said that the new digital initiative was a crucial step in marketing Kerala's tourism sector, which had been able to withstand the general recessionary trends in the sector brought on by the global economic and financial crisis.

A year ago, Kerala Tourism entered into an agreement with Google to start its own branded channel on You- Tube, the popular video sharing Web site (www.youtube.com/keralatourism. org).

And recently, Kerala Tourism organised the Travel Video Festival on YouTube. Video films depicting the lifestyle, culture, heritage or any other aspect of Kerala were invited for the Festival's award. The branded channel also features promotional movies and documentaries produced by Kerala Tourism.

All these moves are bound to attract the "alert independent traveller" who these days increasingly relies on the Internet to source information and opinions on "real, green, responsible" destinations. This is a far cry from the past days of the more common conventional `sun, sand and surf traveller'.

Today's alert independent traveller moves around for experience and has a mind of her own. For such a person, Kerala offers a smorgasbord of authentic social, cultural and political experiences, not to mention the geographical wonders of a land characterised by lush greenery, undulating hills, quiet beaches and the unique backwaters.

Even when the State is lashed by torrential rains, as now during the southwest monsoon, Kerala has much to offer the inquisitive traveller via "monsoon tourism." The natural synergy between the monsoon and ayurveda, for instance, has managed to stretch the traditional tourism season in Kerala, so much so that today the State's hoteliers can boast that there is no off-season in Kerala, just a peak season and the green season

Shoppers don’t stop here anymore

Mumbai, Nov. 21 The shops on Colaba Causeway in South Mumbai are bustling with foreigners, seemingly indifferent to the gun-totting cops, barricades and armoured police vehicles that now punctuate the lanes following the 26/11 attacks.

But shop-owners at the Trident, Oberoi and Taj Mahal Palace, the hotels at the heart of the hostage situation during the attacks, have a different story to tell.

Merchants operating boutiques at these five-star hotels complain of non-existent shoppers and falling revenues. A fashion boutique owner at the Trident lamented: “From 200 footfalls a day it is now virtually none.” They attribute the steep fall in shoppers to the drop in guests at the attacked hotels. Security concerns and massive renovations at the Oberoi and the Taj have also led to a decline in the total number of guests staying at the hotels, they say.

Business has come down 50-60 per cent, according to a fashion boutique employee at the Trident. “Our customers are a mix of hotel residents and outsiders. While hotel occupancy has come down post the attacks, outsiders are deterred by the tight security,” she added.

Hotel Trident and Oberoi have around 200 shops between them. While Trident has 30 shops on the ground floor which are linked to the main lobby, there are 15 shops in the mezzanine area and around 80 shops on the second floor of the hotel.

Besides these, Hotel Oberoi, which has a separate main entrance and is connected to the Trident through a passageway, has around 80 shops. Though all the Trident rooms were opened soon after the attacks, hotel rooms in the Oberoi wing are yet to be opened as renovation is going on. This has also reduced clientele.

“Most of our customers were the airline staff living in the hotel. After the incident, many shifted to the Renaissance in Powai. This has impacted our business severely”, said a shop owner at the Trident selling precious gems, gold and silver jewellery, paintings and pashmina.

Last year, a few of the airline crew were at the hotel when the gunmen had attacked. Post-26/11, employees of several airlines have shifted out of the hotel, the shop-keeper said. “The airline crew loved shopping in the hotel shops as well as in the by lanes of Colaba”, the owner reminisces.

It is a similar story at the Taj as well. With the renovation work going on in the Heritage wing, the hotel occupancy is less. As a result, business has come down 30-40 per cent, the manager of a designer store said. “Most of our clients are business delegates and post the attack, their number has fallen”, he added.

After the event, the Trident and the Taj stepped-up security significantly. With X-ray scanners, barricades and a pat-down search for every guest entering the hotel, shop-keepers feel that window shoppers and occasional buyers no longer feel like dropping by their shops to check ‘what is new.’

The hotels are responsible for the security of shops in their premises and only require that the owners be responsible for the background check of the employees they hire. “We carry out detailed background checks of our employees and then apply for IDs (identity cards) from the hotel,” a shop-owner said.

The only silver lining for a few boutiques at these hotels is the loyalty of some customers who continue to place orders on the phone. “They call us and place their order. We then go and deliver it to them,” said a jewellery shop-owner.

Ministry wants to bring warehouses under FMC

The Union Ministry of Consumer Affairs has proposed to the prime minister that the Forward Markets Commission, the regulator for commodity futures, also be the regulator for all warehouses.

The move, it says, will synchronise activities related to commodities trade taking place on nationwide electronic platforms. It is a sequel to the finance ministry’s earlier proposal to place commodity futures regulations under the Securities and Exchange Board of India, the regulator of the financial markets.
The consumer affairs ministry opposed it. Warehousing regulations are its charge and it is also the parent ministry for the FMC .
Commodity futures and capital market regulations, protested the consumer ministry, are quite different, as the interests of their stakeholders are not the same. Traders and players on commodity futures exchanges use warehouse facilities to comply with norms and quality standards laid out by the FMC. A Warehousing Development & Regulation Act was passed last year and it said a separate regulator should be appointed for this segment. The government is yet to decide who should do this job.
However, Abhijit Sen, member, Planning Commission, and chairman of a committee set up to discuss the implications of commodity futures on inflation, said the Warehouse Act provides for a separate regulator and to now put it under FMC requires an amendment. But, added: “Both the activities are related and should come under a single ministry.”
The ministry feels keeping both under the same regulator will ensure proper and coordinated development and regulation of the sector.
The Warehousing Act is aimed at creating scientific grading, handling and storage of commodities and creating electronic negotiable warehouse receipts. Such receipts can be used for delivery on the exchanges falling under FMC and national spot exchanges, which ministry also wants regulated by the FMC.
FMC has so far accredited 69 warehousing agencies, having a total capacity of 1.41 million tonnes spread over 14 states. Thus, it has experience of handling scientific storage warehouses and negotiability of warehouse receipts.
Since FMC is already doing this, a separate regulator for warehouses will create dual regulations and possible regulatory conflicts, is the ministry’s argument. National spot exchanges set up by commodity futures exchanges should be brought under the FMC, it adds, as these spot exchanges would also be giving delivery through the negotiable warehouse receipt system.

Tata DoCoMo to bill roaming calls too by the second

New Delhi, Nov. 21 It’s the death of roaming charges. In yet another game-changing move, Tata DoCoMo is extending to roaming services seconds-based billing that it offers for local calls. Subscribers on Tata DoCoMo’s network moving from one circle to another will soon pay only one paise a second. Incoming calls while roaming will also be charged at the same rate.

Uniform offer

All the other operators currently charge roaming services on a per-minute basis. While these rates are higher than the tariff for local calls, they also vary depending on whether one is calling a subscriber within the same operator’s or on another’s network. The offer from Tata DoCoMo will be uniform irrespective of the location or destination of the call.

Countering Airtel

The company is expected to make an announcement on the new roaming tariff in the next few days, according to sources in the industry. When contacted, a Tata Teleservices spokesperson declined to comment.

The move is aimed at countering Bharti Airtel’s Friday decision to reduce roaming tariffs by 60 per cent. Airtel launched a Turbo plan for roaming facilities charging 60 paise a minute for all incoming calls and between 60 paise and 80 paise a minute for outgoing calls. However, Airtel has made it available only on a single plan for which users will have to pay an upfront fee of Rs 98.

The Tata DoCoMo offer will be available without any upfront cost to the user and will be applicable across all its tariff plans. On the downside, Tata GSM service is available only across 15 circles since the company is yet to roll out in other areas. Tata DoCoMo is expected to complete its roll out in 19 circles by the year-end. Airtel offer on the other hand is available across all the circles in the country.

Taking initiative

Tata DoCoMo was the first to introduce seconds-based billing on local calls. The move ensured that the company got the highest number of new users in the last 3 months. The initiative on the roaming front is expected to trigger the next wave of tariff battle in the mobile segment.

Uttar Pradesh hosiery makers adopt online marketing

Toeing the lines of their Tirupur and Surat counterparts, hundreds of small and medium hosiery makers are now trying to build up their online presence to cash in on the improving market situation. Around 30 of them have already registered their products with a leading online textile maketing portal ‘fibre2fashion.com’.

Fibre2fashion marketing executive, Amar Ashish Phanse said the portal had charged Rs 15,000 from each of the new entrants from the state. “Our portal will provide easy access to the consumers around the world, apart from crucial information about the latest design techniques, raw material rates and regular trade fairs in various parts of the country,” he added.

The portal will develop separate websites of these manufacturers and provide their links on its webpage. “We will help in the brand building exercise of these smaller players, while acting as a link between their customers and dealers, apart from providing up-to-date information on the trade, trends and technologies in apparel and textile industries,” said Phanse.

The portal has more than 2.5 crore members (including dealers, registered consumers and brokers) spread in over 200 nations all over the world, who will now have access to the local industrialists. “There is huge demand for our goods and products abroad but due to lack of relevant information on both sides, the immense market potential is largely unexploited,” said UP Hosiery Association (UPHA) president, Manoj Banka.

It will now be easier for the local manufacturers to gain access to overseas markets and analyse the demand structure in various parts of the world and shape heir marketing strategy accordingly.

The portal hosts more than 1,000 wide ranging handicraft and handlooms products with specifications, including origin and place of production, along with high-quality graphical display, with a single window gateway for procurement. “It also provides e-payment facility through major debit/credit card in a secured environment, and offers online tracking of the shipment,” added Phanse.

Vishal Retail’s CDR may take shape in two months

Value retailer Vishal Retail’s proposal for corporate debt restructuring is likely to take a final shape in the next 60 days. The company is planning restructuring debt worth Rs 730 crore.

“We are looking at a loan extension from banks and hope to achieve a conclusion soon,” said Mr Ambeek Khemka, Group Vice-President, Vishal Retail. Earlier this week, the company had met with as many as six banks.

The State Bank of India is one of the main lenders to the retail chain. There about 13 odd banks involved. SBI has about Rs 170 crore of exposure to the company.

The company is also mulling to dilute its stake to tide over the cash crunch.

Bank sources informed that lenders are likely to give a four-year moratorium on the interest payment as well as the principle amount. Vishal Retail had about Rs 100 crore of interest payment annually.

Additionally, the company is looking at shutting down unviable stores and looking to reduce its inventory. Currently, Vishal Retail has 180 retail outlets in 24 cities.

Meanwhile, the board of directors of Vishal Retail has decided to merge a company by the name of Vishal Water World Pvt Ltd with Vishal Retail Ltd in accordance with the Companies Act.

The board also took note and adopted the scheme of merger, valuation report and the fairness opinion on the scheme of merger.

Airlines may get reprieve in expat pilot phase-out

Regulator may extend deadline after industry says it lacks Indian commanders
.The year-old controversy over hiring expatriate pilots is likely to intensify, with the Directorate General of Civil Aviation (DGCA) considering an extension of the deadline for their phase-out.
The airline industry regulator is considering the move in response to requests by airlines that say they lack Indian commanders and senior pilots to replace all the 600 expatriate pilots on their rosters. The phase-out deadline is July 1, 2010.
FOREIGN HANDS(Who has how many)
Air India
153
Jet Airways
200
IndiGo
25
Kingfisher
200
SpiceJet
22
Commanders require about 2,800 hours of flying time as a co-pilot, a process that takes about four years. Airlines contend that the services of at least 25 per cent of the current complement of expat pilots would be required after the July deadline.
"It is not possible to phase out all the expat pilots by the July deadline and we expect that at least 150 of them will be needed still for some period of time," a DGCA official explains.
“We are monitoring how airlines are reducing the number of expat pilots and a decision on an extension could be taken soon,” he adds.
Although an extension will be a reprieve for the airlines — mainly Air India, Jet and Kingfisher — and the expat pilots that face a global slump in demand for their services, local associations have protested strongly.
"This would be a wrong move. We already have a lot of qualified pilots in the country who need to be accommodated in senior positions," says Ravindra Kumar, president of the Indian Commercial Pilots Association, which represents the erstwhile Indian Airlines pilots (Indian Airlines was merged with Air India).
A senior committee member of the executive pilots association of Air India adds, "Co-pilots are not being trained to become commanders so that a shortage is being created. Otherwise we don't need expats even now, forget about July."
Indian pilots are also aggrieved because expats earn salaries that are at least 15 per cent higher, even when the carriers cut salaries and emoluments of local pilots owing to the slowdown.
DGCA's order of June 2008 was taken primarily to create opportunities for Indian pilots, especially at a time when around 3,000 pilots were looking for jobs and the slowdown had forced airlines to retrench hundreds of pilots .
This will not be the first time DGCA has had to postpone a phase-out deadline for expat pilots. The regulator extended the deadline in 2008 for hiring only Indians as co-pilots by two years after the airlines said fresh pilots could not start flying immediately and they would need training, which could take a few months.
State-owned Air India has 153 expat pilots and has said it will promote 50 co-pilots with sufficient hours as commanders, which leaves a deficit of over 100 pilots.
Jet Airways and Kingfisher have around 200 expats each and they are also trying various ways to phase out the expats. SpiceJet and IndiGo, the two low-cost carriers, have very few expats and say they are working to meet the DGCA directive.

Big back in fashion for retailers

Small is no longer beautiful for retailers. With customers returning to the shops, almost all retailers are now focusing on large format stores (15,000 to 20,000 sq ft or above) that allow them to sell a larger number of items and trigger higher consumer spending compared to the smaller, convenience formats where it’s becoming increasingly difficult to make money.
.RPG Group’s Spencer’s, which has 220 convenience stores, plans to set up 25 to 30 larger stores by March 2010. Aditya Birla Retail is adding six to seven hyper markets. Shoppers Stop is also expanding through Hypercity after closing its catalogue stores Argos.
Reliance Retail, which has a large number of convenience stores, is not adding new stores. Barring the odd new entrant like Bharti Easyday, retailers say none of them are adding smaller stores any more and those who are left with a large pool of smaller stores are trying best to see how they can reduce their losses and run these profitably.
Bangalore-based Max Hypermarkets, a relatively new entrant in the retail business, has three outlets and is planning to add three more, all large-format stores.
‘‘We don’t do convenience stores. Smaller stores have their own set of challenges, you have to compete with the Kirana or neighbourhood store. In a larger store, you can offer more to the customer and increase share of wallet,’’ says Vinay Singh, managing director, Max Hypermarkets.
Future Group Chairman Kishore Biyani, who always believed in larger formats, says a larger store allows a retailer higher throughput and to sell value-added products and services (like processed foods and new product categories) rather than just basic commodities (food and grocery) that one ends up selling in smaller, convenience stores.
‘‘Retailers are focusing on larger formats because they have better cost structures, productivity and efficiency. In a large format, you can sell 7,000 to 8,000 SKUs (stock keeping units) or items against 700 to 1,000 SKUs in a neighbourhood store,’’ says Biyani who has stayed away so far from setting up small stores.
Anand Raghuraman, partner and director, Boston Consulting Group, says in smaller stores, retailers can sell fast moving consumer goods (FMCG) and fresh produce that offer low margins compared to, say, categories like apparel, where margins can be as high as 30 per cent.
Smaller stores also end up competing directly with the neighbourhood that operate on much lower cost structures, have established relationships with customers, and offer a range of services like credit and home delivery. Hypermarkets can have a wider assortment, offer better prices and pull in customers.
Besides, as an industry expert says, rents are too high, margins too low and there are not enough footfalls. “The problem is we have a huge installed base of smaller stores and cannot close them overnight,’’ he says.
Servicing smaller outlets can also be a logistical challenge. ‘‘Back-end operations need to be more responsive for smaller formats if you have many stores. The ability to feed a store is a Herculean task, given traffic restrictions in many Indian cities,’’ says the sales head with an FMCG major. Hypermarkets, by contrast, have more depth as a format. Since they have central warehouses, they offer double protection for carrying inventory.
But most crucially, “Customers are walking into modern trade for assortments. They are constantly exploring, seeking new stuff. That’s what modern trade is all about. It also helps you increase the ticket-size,’’ adds a senior executive with an FMCG company.
Interestingly, even as Indian retailers go for larger formats, global retailers are getting into neighbourhood formats. WalMart is setting up 60 neighbourhood stores in Brazil, while Carrefour’s first neighbourhood store in Paris is doing roaring business.
Biyani says it depends on a market’s stage of evolution. Experts say if a retailer has a robust supply chain built on the hyper format, smaller stores can ride on it.

Big back in fashion for retailers

Small is no longer beautiful for retailers. With customers returning to the shops, almost all retailers are now focusing on large format stores (15,000 to 20,000 sq ft or above) that allow them to sell a larger number of items and trigger higher consumer spending compared to the smaller, convenience formats where it’s becoming increasingly difficult to make money.
.RPG Group’s Spencer’s, which has 220 convenience stores, plans to set up 25 to 30 larger stores by March 2010. Aditya Birla Retail is adding six to seven hyper markets. Shoppers Stop is also expanding through Hypercity after closing its catalogue stores Argos.
Reliance Retail, which has a large number of convenience stores, is not adding new stores. Barring the odd new entrant like Bharti Easyday, retailers say none of them are adding smaller stores any more and those who are left with a large pool of smaller stores are trying best to see how they can reduce their losses and run these profitably.
Bangalore-based Max Hypermarkets, a relatively new entrant in the retail business, has three outlets and is planning to add three more, all large-format stores.
‘‘We don’t do convenience stores. Smaller stores have their own set of challenges, you have to compete with the Kirana or neighbourhood store. In a larger store, you can offer more to the customer and increase share of wallet,’’ says Vinay Singh, managing director, Max Hypermarkets.
Future Group Chairman Kishore Biyani, who always believed in larger formats, says a larger store allows a retailer higher throughput and to sell value-added products and services (like processed foods and new product categories) rather than just basic commodities (food and grocery) that one ends up selling in smaller, convenience stores.
‘‘Retailers are focusing on larger formats because they have better cost structures, productivity and efficiency. In a large format, you can sell 7,000 to 8,000 SKUs (stock keeping units) or items against 700 to 1,000 SKUs in a neighbourhood store,’’ says Biyani who has stayed away so far from setting up small stores.
Anand Raghuraman, partner and director, Boston Consulting Group, says in smaller stores, retailers can sell fast moving consumer goods (FMCG) and fresh produce that offer low margins compared to, say, categories like apparel, where margins can be as high as 30 per cent.
Smaller stores also end up competing directly with the neighbourhood that operate on much lower cost structures, have established relationships with customers, and offer a range of services like credit and home delivery. Hypermarkets can have a wider assortment, offer better prices and pull in customers.
Besides, as an industry expert says, rents are too high, margins too low and there are not enough footfalls. “The problem is we have a huge installed base of smaller stores and cannot close them overnight,’’ he says.
Servicing smaller outlets can also be a logistical challenge. ‘‘Back-end operations need to be more responsive for smaller formats if you have many stores. The ability to feed a store is a Herculean task, given traffic restrictions in many Indian cities,’’ says the sales head with an FMCG major. Hypermarkets, by contrast, have more depth as a format. Since they have central warehouses, they offer double protection for carrying inventory.
But most crucially, “Customers are walking into modern trade for assortments. They are constantly exploring, seeking new stuff. That’s what modern trade is all about. It also helps you increase the ticket-size,’’ adds a senior executive with an FMCG company.
Interestingly, even as Indian retailers go for larger formats, global retailers are getting into neighbourhood formats. WalMart is setting up 60 neighbourhood stores in Brazil, while Carrefour’s first neighbourhood store in Paris is doing roaring business.
Biyani says it depends on a market’s stage of evolution. Experts say if a retailer has a robust supply chain built on the hyper format, smaller stores can ride on it.

'Don't know if Ambanis colluding or clashing'

The Centre on Tuesday asserted full ownership over gas from the KG basin and said as Mukesh Ambani's RIL was only a contractor for exploration, it was barred from having a private agreement with Anil Ambani's RNRL for supply of gas that violated the production sharing contract (PSC).

"We do not know whether the Ambani brothers have colluded or have fallen apart over the issue of supply of gas by RIL to RNRL. How can two private parties decide about allocation of gas, which is a national resource. We are concerned only about the national interest and will take every step to safeguard it," said additional solicitor general Mohan Parasaran.

Arguing before a Bench comprising Chief Justice K G Balakrishnan and Justices B Sudershan Reddy and P Sathasivam, Parasaran did not have an easy time presenting the stand of the ministry of petroleum and natural gas as RNRL's counsel Ram Jethmalani made a constant pincer attack ranging from calling the government to be in collusion with RIL to telling blatant lies before the court.

"The ministry which ran away from a cross examination before the High Court should not be allowed to argue like a party to the RIL-RNRL dispute. If it does, then the ministry should select its star witness for cross-examination," Jethmalani said promising the three judges that they would enjoy it.

But Parasaran stood his ground and said the government had a sovereign interest over national resources and was telling the court about the facts of the case -- "The PSC was signed much before the family agreement and that a private agreement could not override government policy or national interest."

Hyundai to invest Rs800 cr on small car for India

South Korean car-maker Hyundai will invest around Rs800 crore to develop a small car for the Indian market that is likely to be launched in the next two years.

The firm, which has operations in India through a wholly-owned subsidiary, Hyundai Motor India Ltd, will manufacture the car, which will be smaller than the Santro, at its plant here.

“We are developing a small car and approximately Rs800 crore will be invested at the Korean plant for development,” newly appointed managing director and CEO of Hyundai Motor India Ltd (HMIL) Han-Woo Park told reporters.

He declined to give any details, but said: “It will be smaller than the Santro and the price will also be lesser. It will take at least 24 months from now to launch the car in India. Right now, it is in the design stage.”

“Initially it will be targetted at India but gradually it will also be exported,” Han-Woo added.

“It will be manufactured at the Chennai plant once the design gets completed,” he said.

HMIL, which sells popular compact cars like Santro, i10, i20 has made India a small car hub for the Korean firm and has been exporting the cars to overseas markets.

In October, the company sold a total of 51,736 units, an 11% growth compared with same month last year. Its exports, however, dipped by 11.9% to 23,435 units during the month.

Mahindra Satyam joins Symbian Foundation

Mahindra Satyam joins Symbian Foundation
Mahindra Satyam announced today that it has joined the Symbian Foundation, which, together with its ecosystem, is creating an open and complete mobile software platform.
The platform is based on Symbian OS and software assets contributed by Nokia, NTT Docomo and Sony Ericsson, including the S60 and MOAP(S) user interfaces. Portions of the source code are already being moved to open source, under the Eclipse Public License. By mid-2010, this process will be complete, the company stated in a press release.
“The Symbian Foundation welcomes Mahindra Satyam into the community,” said Shaun Puckrin, head of community support for Symbian. “Our services members ensure that companies with great ideas for the Symbian community can reach their full potential - on time and within budget. By understanding and engaging with the Symbian platform, Mahindra Satyam will contribute to a growing, evolving mobile value chain”, he added.
As a member of the Symbian Foundation, Mahindra Satyam gains the immediate right to license the Symbian Foundation platform, royalty free and without source code fees, participate in the governance of the foundation and take part in joint marketing and branding campaigns. The company's scrip on BSE on Monday was trading at Rs 108, down 1.55 per cent over the previous trading day's close of Rs 109.70.

Govt to free tech tie-ups, trademark use

Move aimed at expediting projects undertaken in collaboration with foreign technology providers.

In a move that would help Indian companies access technology and trademarks more freely, the government has decided to free the pricing for import of technology and use of trademark.

The move, approved by the Cabinet two weeks ago, was aimed at expediting projects in collaboration with foreign technology providers, since companies would be able to enter into tie-ups without seeking prior government approval, including those for pricing. They would be able to make the required payments and merely inform the Ministry of Commerce and Industry.

Officials said it was decided in principle that all payments for royalty, lump sum fee for transfer of technology and payments for the use of trademark or brand name would now be on the automatic route.

They added that the project approval board would also be dismantled. Earlier, companies were required to seek PAB approval for fixing the price to be paid for technology, trademark, patents or royalty. “Instead, a reporting mechanism will be worked out in collaboration with the Reserve Bank of India (RBI) and the Ministry of Finance for these companies to report the transaction and maintain a database,” an official said.

The department of policy and promotion and RBI would soon issue the required orders.

At present, in case of technology transfer for an identified project, the automatic route can be used for payment of a lump-sum fee of $2 million or a royalty of 5 per cent of domestic sales and 8 per cent of exports for certain commodities. With no technology transfer involved, royalty up to 2 per cent for exports and one per cent for domestic sales is under automatic route.

The officials, however, said the freedom in pricing would be for sectors where foreign direct investment was allowed and there was no breach of the sectoral limits

Indian team got good info on Headley from US: PC

New Delhi: The Indian team of intelligence officials which went to the US in connection with probe into LeT operative David Coleman Headley's terror designs has come back with "good information", Union Home Minister P Chidambaram said on Saturday.

He, however, refused to share details, saying investigations were still underway."The team had a good visit. They have come back with good information," Chidambaram told reporters here when asked about the trip that officials from Intelligence Bureau and RAW undertook to the US last week to obtain details of the terror plan of Headley.

Asked whether Headley was linked to the Mumbai attacks, the Home Minister snapped, saying "This is not a cricket match which gives a ball-by-ball description. Investigation is on and once the investigating agency completes investigations, we will share whatever has to be shared."

Headley, 49-year-old Pakistan-born US citizen, was arrested in Chicago last month by the FBI which said he was part of an LeT plan to carry out terror attacks in India.

Oil min to ensure 5% ethanol blending by OMCs

The government today asked the petroleum ministry to ensure that oil companies compulsorily sold petrol mixed with 5 per cent ethanol.

The government had in November 2006 mandated that ethanol should be blended in a 5 per cent proportion with petrol to be sold throughout India, except in areas like North-Eastern states and Jammu and Kashmir.

Subsequently, it stipulated that the amount of ethanol in petrol may be optionally ramped up to 10 per cent from October 2007 and made compulsory with effect from October 2008.

But oil marketing companies (OMCs) — Indian Oil, Bharat Petroleum and Hindustan Petroleum — could not even implement the 5 per cent blend due to shortage of ethanol.

The Cabinet Committee on Economic Affairs (CCEA) today made it mandatory for OMCs to sell 5 per cent blended petrol.

“CCEA reiterated an earlier decision that there shall be a mandatory blending of 5 per cent of ethanol. It has instructed the petroleum ministry to ensure that all OMCs implement the decision,” Home Minister P Chidambaram told reporters here after a CCEA meeting.

He said, in order to ensure that there was no supply dislocation of ethanol, a small group of officials representing the Ministries of Food, Consumer Affairs, Renewable Energy and Petroleum would be constituted.

Officials said there was a 84 per cent shortfall in procurement of ethanol by OMCs this financial year. Till September, OMCs procured only 4.75 crore litres of ethanol, compared to a prorated tender quantity of 30.25 crore litres.

No procurement has been made so far in West Bengal, Orissa, Chhattisgarh, Tamil Nadu and Madhya Pradesh, whlie other states like Maharashtra have recorded a shortfall of 98 per cent. Procurement has also been extremely low in Uttarakahad, Kerala and Gujarat.

“A group of officers will be constituted to ensure that there is no supply dislocation so that ethanol produced by the sugar industry is easily available to OMCs and the blending programme can go forward without any hitch,” Chidambaram said.

He said the group of officers will monitor demand-supply situation of ethanol and ensure that the environment-friendly programme is implemented in “letter and spirit”.

Chidambaram also dispelled apprehension that there was shortage of ethanol, saying “there is enough ethanol in the country”, adding, there was no reason why temporary dislocation in supply should derail a good programme.

Yahoo!, Cisco eye role in unique ID project

Along with a bouquet of flowers, the global CEO of Yahoo! Inc, Ms Carol Bartz, offered the Prime Minister, Dr Manmohan Singh, whom she met on this morning, help with the Unique Identification (UID) programme being put in place in the country when she met him on Wednesday morning.
“The UID project involves a huge database. We, at Yahoo, have expertise in handling such huge amount of data. We met the Prime Minister today and discussed, among other things, how Yahoo can help the Government in the project,” Ms Bartz said here at an editorial round table with the media.
However, Yahoo also said that it was not looking at the UID project for any commercial interest but to pay back to the nation where it has had a presence for so many years.
On her first visit to India as Yahoo chief — a post she took over in the beginning of the year and one that brings with it industry expectations of a turnaround for the company — Ms Bartz also met Mr Nandan Nilekani, who heads the Unique Identification Authority of India (UIDAI), today.
The UID project, which will provide a Unique Identification Number to the country’s over one billion citizens, is being looked at with great interest by several other multinational IT and Internet players as well. On Wednesday, networking solutions company Cisco Systems was another player to evince interest in the project. The company said it was in discussions for a possible role in the project.
“We are in talks with Mr Nilekani on how to help and the kind of role Cisco can play,” Ms Padmasree Warrior, Chief Technology Officer, Cisco Systems Inc, said on the sidelines of the BangaloreIT.biz conference. When contacted, the UIDAI Chairperson, Mr Nilekani, told Business Line that the discussions with Yahoo revolved around the general Internet economy and the project.
“Yahoo and other Internet companies such as Amazon and Google have built massive Internet applications that have millions of users…That experience is relevant to us. When one looks at a project the scale of UID, it is good to share such experiences.”preliminary stage
But Mr Nilekani pointed out such meetings are still at a preliminary stage. “We need everyone… every technology company… and need to look at their offerings. UID project is large and complex, and we have to have an open mind so that we can choose the best possible solutions,” he said.
Earlier this year, the Microsoft Co-founder, Mr Bill Gates, had stated that his company is interested to partner India in the project. He had also met Mr Nilekani during his visit to the country in July.
Indian IT companies such as TCS, Infosys and Wipro too are hoping that the project would galvanise the domestic software market, which has historically trailed IT exports. This is because the project will require a full technology backbone, massive computing power, database, storage, and biometrics.
Meanwhile, the UIDAI has started working on a draft legislation which will arm it with statutory powers to hand-out a unique identification number to every Indian resident. It has also started dialogues with various state governments on the project strategy. Mr Nilekani has met Government representatives in nearly 10 States and expects to cover all the States by January 2010.
The UIDAI will start issuing the identification numbers in 12-18 months, and expects to cover at least 600 million residents within five and half years. The Authority has made it clear that the identification number will be a proof of identity linked to demographic and biometric information but not confer citizenship.

Luxury brands are back to wooing Indian customer

Niche luxury retailers are putting expansions back on track after a brief hiatus. Despite foreign direct investment restrictions, companies such as Versace, Oakley and Nike Golf are increasing area and product assortments to draw consumer interest in what they consider one of the biggest markets in Asia.
“India is one of the strongest markets in Asia and this is where we are looking to establish our product line. Until now, we were cautious with expansion but now we will be making a lot of noise. The appetite for luxury products is huge. We are exploring means to entrench ourselves here,” Mr Scott Bowers, Senior Vice-President (Global Marketing and Brand Development), Oakley Inc, said. The premium sunglass brand is not restricting itself just to shades but also looking to venture into India with its range of footwear and apparel.
Similarly, Versace is back with a standalone format in the Capital. After eight months of setting foot in India, the company is going ahead with its second outlet with a much larger area and product range.
Blue Clothing Company, which brought Versace to India, said it is also seeking a greater presence for other premium brands such as Corneliani and Cadini, besides high-end jewellery brand Entice, in India soon.
“The purchasing power in India is a major factor while considering expansion. We will keep looking at opportunities in markets where we feel they are growing. The slowdown in our business is a temporary one and we will keep looking at opportunities to grow our business,” Mr Marc Duhm, Wholesale Director, Versace, said.
The second Versace store, which has a size of about 4,000 sq ft, is one of the largest Versace outlets in the world. Versace is also mulling increasing the floor space in its Mumbai store, an exclusively accessories outlet. “We will be adding an apparel line to the Mumbai outlet as well.”
The Blue Clothing Company Executive Director, Mr Abhay Gupta, said consumers are seeking high-end brands and that purchasing power is back with a bang.
“We have had a good response to Versace. Our next venture will be to launch high-end jewellery brands in India. However, easing of FDI norms will help the industry grow,” he said, adding that premium brands enable value addition by helping to improve retailing experience and manpower training.
Industry analysts note that the premium and super premium category has been growing at about 30 per cent per annum in India.

Dubai's Ultimate Motors to launch Super/Hyper cars in India

Three brands of Super Hyper Cars (SHCs), including the world's fastest car, Ultimate Aero, are all set to storm Indian roads by the end of this year.

Dubai-based Ultimate Motors, one of the leading distibutors of exotic and luxury sports cars in the world, will be launching the three brands of commercial SHCs -- Shelby, Zenvo and Arash, by December. "The demand for luxury cars in India is increasing of late and people are now keen to have customised cars. We are in touch with four leading dealers in India and expect to launch the commercial SHCs by the end of this year," Ultimate Motors' President, Nasser Al-Hai, told PTI here on the sidelines of a luxury lifestyle event here. US-based Shelby SuperCars' Utimate Aero has been recorded as the world's fastest car with a speed of 413 kilometres per hour (257 mph) and produces 1,183 horsepower thus making it the world's most powerful production car. It can reach from 0-to-60 mph in 2.78 seconds. Similarly, Denmark's Zenvo and UK-based Arash are also in the race to introduce their SHCs into the Indian market. Arash has a unique road car aerodynamics whereas the Zenvo comes with full carbon body and steel chassis. All the three SHCs are priced at a range of Rs 2.4-5.4-crore.

What went wrong with Logan

Pricing problems, poor localisation put the Mahindra-Renault sedan in reverse gear.
Pawan Goenka to head M&M's farm equipment sectorFrench car maker Renault SA’s CEO Carlos Ghosn talked about the need for "patience and determination" to bring Logan back on track in India, at the India Economic Summit yesterday.
Going by the sedan’s performance in India so far, Renault and its joint venture partner in India, Mahindra & Mahindra (M&M), would need much more than that. When it was launched in April 2007, the joint venture was targeting sales of 30,000 cars a year, or 2,500 a month. Actual sales have been one-fifth of that, at just under 500 cars a month. In October this year, that number fell to 401, a 68 per cent drop from the figure a year ago.
M&M has already said it does not see volumes of the car going beyond 500 units per month.
The result: the joint venture posted a loss of Rs 490 crore in the year ending March 31, 2009 on sales of Rs 740 crore — something that prompted Ghosn to say at the Tokyo Motor Show last month that the company wouldn’t be surprised if it lost at least one of its three partners in India.
So what went wrong with the car that promised so much? Analysts said the biggest problem was the price point. The petrol range starts at Rs 4.43 lakh going up to Rs 5.32 lakh and the diesel variant (1.5 DLX) is priced at Rs 6.68 lakh (all prices ex-showroom Mumbai).
But that’s not exactly a low-cost entry mid-sized car model as Mahindra Renault, the 51:49 joint venture, had claimed. Stronger competing models in the market with aggressive price tags such as Maruti Swift Dzire and Tata Indigo CS and other models like Ford Ikon and Hyundai Accent that were available in a price bracket close to the Renault model put pressure on demand for Logan.
Logan’s failure to play the pricing game was because the localisation content (the percentage of parts sourced locally) of the car, which is at 50 per cent, is much lower than competition and thereby has pushed up the final cost of the car.
Also, the engines were imported from France, forcing the joint venture to price the sedan higher than the segment leaders — Maruti Suzuki and Tata Motors.
Some experts say Logan has suffered also because of the dual structure excise duty, which is lower for small cars ( up to 4 metres long) at 8 per cent while larger ones such as Logan (4.24 metres long) face a heftier 20 per cent. Competitor Tata Motors has trimmed the length of Indigo to take advantage of the lower excise for small cars, thereby bringing down the cost of the car.
Automobile experts cite other reasons for the poor performance of Logan. "One of the primary reasons the demand of Logan didn't gather pace was its dated looks. Also the car ended up being a tourist taxi in many urban centres, which dented its image. Besides the uncertainty hovering over the future of the joint venture created doubts in buyers’ minds", said a Mumbai-based analyst.
A latest JD Power India Automotive Monthly study says, “Even the festive season was unable to turn the fortunes of Mahindra-Renault Logan, which plunged 71 per cent year-on-year in September. Indications that all is not going well in the partnership was evident from Renault CEO Ghosn’s comments at the Tokyo Motor Show. Earlier plans to bring other Logan derivatives to India may be put on hold indefinitely.”
Ghosn had said at the Tokyo Motor Show that amongst the three separate ventures it has in India — Ashok Leyland, Bajaj Auto and Mahindra & Mahindra — it was keen on continuing with just one of these.
On Sunday, the CEO said in Delhi, “I am not saying all our partnerships are going exactly as we want them to go. We have been questioned by some performances but we are talking to our partners on what's the best way ahead and what we can learn from our mistakes, so we can envision better relationships in the future.”

Lay's goes in for new flavour: Co-creation

Companies will need to interact with their customers so closely that they actually “co-create” value with them on an individual basis.— C K Prahalad in his book The New Age of Innovation, published in 2008
The top brass at Frito-Lay, the foods division of PepsiCo India, is taking the management guru’s advice quite seriously.
Frito-Lay’s new campaign for Lay’s – “Give Us Your Dellicious Flavour” is giving consumers an opportunity to co-create the flavour they like for Lay’s. The winner will receive a mega prize of Rs 50 lakh plus 1 per cent of the sales turnover from the new flavoured snacks, which will be launched by the end of May 2010. Consumers can send in their entries by post, drop boxes, email, website and SMS.
Deepika Warrier, Frito-Lay's executive director, marketing, is excited. “Personally, I am keen to see what interesting and innovative flavour ideas India will give us," she says. The campaign, executed by JWT, is to reap "interactive" benefits as consumers love to own brands.
The commercial begins with Saif getting himself a tattoo on his forearm. When he sees the tattoo, he realises that the artist has tattooed 'kareepatta' (curry leaves) on his arm, which is the former's favourite flavour. He storms out of the place with a pack of Lays, when he sees a man with a red and green tattoo saying 'tomato chutney'. Similarly, a girl with raw mangoes tattooed all over her says 'Kacchi Ambi'. In the end, Saif ask all of them to tell Lay's about their favourite flavour.
Ad gurus are quick to endorse the brand strategy. “Brands of the future will be owned by consumers and not the marketers,” says Ashish Mishra, business head and chief strategist, Water (Mudra’s strategy and design consulting arm).
An increasing number of companies (Frito Lay’s competitors included) are doing precisely that to drive up engagement levels and interactivity with consumers. Frito Lay, for example, had launched a similar campaign last year which asked consumers to vote for the flavour of their choice between the new launches - Spunky Pimento and Balsamic Blast. Titled 'Fight for your flavour', the campaign had Saif Ali Khan and M S Dhoni. Even Kurkure ran a campaign which asked consumers for recipes. The winning entrant’s family was featured on the packets of the snack.
Lay’s is the leader with a market share of around 48 per cent, Bingo has 13 per cent and Parle’s Musst Chips and Musst Stix have a combined 5-7 per cent market share. But the new Frito-Lay campaign comes in the backdrop of a volume war among the three players (Frito-Lay, ITC and Parle). ITC recently added 50 per cent more content to all its Bingo packs without increasing prices. Lay’s followed with 20 per cent extra content and Parle Products with 50 per cent extra on Musst Chips and Stix.
Recently, Parle launched Monaco Smart Chips, which it claims, is the only baked chips and hence being positioned in the healthy category. Parle is eyeing a 25 per cent market share through an aggressive marketing and distribution strategy. Parle has signed Aamir Khan for Smart Chips.ut Frito-Lay is unruffled. It says that it has already taken the “health positioning” into account. "We have been innovating continuously in the health and wellness area under our "snack smart" programme. We’ve ensured that Lay’s offers consumers great tasting chips made from the freshest, best quality natural potatoes, made from best quality seasonings which contain zero MSG, and are cooked in rice bran oil (40 per cent less saturated fat) and contains zero trans fats," says Warrier.
It’s not clear whether Lay’s will also follow Kurkure into the lower price segment. Kurkure is now available also at Rs 3 a pack, while Lay’s is available in Rs 5, 10 and 20 price points.

GM Europe boss Forster may take charge of JLR

The departing boss of General Motors Europe, Carl-Peter Forster, is all set to take charge of Indian conglomerate Tata group-owned Jaguar Land Rover (JLR) in the next few months, a media report has said.

Quoting German sources, the Sunday Times said, “Forster was likely to be appointed to a senior role at Tata Motors, owner of Jaguar Land Rover, and would take charge of the group’s British operations.”

Tata Motors bought Jaguar Land Rover, which employs 15,000 people, from Ford for £1.3 billion in June 2008.

The report, citing senior sources in Frankfurt and Detroit, said: “Forster...was sounded out about the job earlier in the year, and is expected to join within a few months.”

Forster was responsible for leading GM Europe through its recent turbulent negotiations with the German government and would-be buyer Magna. Besides, he has had some success in moving the Opel brand upmarket. On November 6, GM Europe, owner of brands like Opel and Vauxhall, had said that Forster was leaving.

Forster, 55, made his name as a fast-rising star at BMW in the 1990s and was head of production at the German car maker during its ownership of MG Rover and Land Rover.

The Tata Group declined to comment, the Sunday Times said.

CERC's green power rate norms hurt Gujarat's solar power plans

The new rate charge norms for ‘green’ energy, announced by the Central Electricity Regulatory Commission (CERC) in September, are likely to delay the Gujarat government’s plans for solar power capacity addition.

The state had launched its Solar Power Policy, aimed at setting up solar power plants of up to 500 Mw capacity. Not a single power purchase agreement (PPA) has been signed so far.

Since January this year, when the state government launched its solar power policy, over 700 Mw of solar power generation capacity has been allocated to 34 national and international project developers in the state. Setting up this capacity for solar power generation by developers would require an estimated investment in excess of Rs 80,000 crore.

“Quite a good number of companies have been assigned capacities by us and they have even identified land for setting up the plants. But we have not been able to sign a single PPA with the developers because of the liberal guidelines announced by the Commission,” said a senior official from Gujarat Urja Vikas Nigam Ltd (GUVNL), the holding company of the state government which carries out sale and purchase of electricity in the state.

The new regulations allow project-specific rates for solar power projects as it is a “comparatively evolving technology”. The normative capital cost for setting up a solar photo voltaic power plant has been set at Rs 17 crore per Mw; for solar thermal projects, it is Rs 13 crore per Mw. The CERC has allowed a relaxation on a project-to-project basis; solar power generators can apply for a higher rate, which if okayed will have to be paid by distributors.

GUVNL, the distributor in this case, doesn’t wish to sign a purchase agreement at any higher rate than the set one at which it buys from other suppliers. The GUVNL executive said these PPAs could have taken shape by now if the Commission had not come up with these “investor-friendly” guidelines. “Though we hoped to sign some PPAs, it would be delayed,” he added.

The regulator had announced the new green energy rate norms, to lay down guidelines for pricing power from non-conventional sources and promote generation of electricity from such sources in the country, as mandated by the National Tariff Policy.

While the commission had held detailed discussions with the stakeholders before finalising the new norms, the official complained that GUVNL’s suggestions were not taken on board. “Our contentions have not been considered favourably,” he said.

Denying allegation of the rate regulations being skewed a senior official from the CERC said, “We have to take a balanced view of the arguments from all the stakeholders.”

Intel in talks with ITI for WiMAX joint venture

Huawei, Samsung, Alcatel-Lucent, Hitachi may also bid.

The world's largest chip maker Intel is preparing to participate in bids recently invited by ailing state-run telecom equipment manufacturer Indian Telecom Industries (ITI) to set up joint ventures based on various technologies including Worldwide Interoperability for Microwave Access (WiMAX), according to sources close to this development.

ITI, according to the bid proposals, intends to be a minority partner in the proposed JVs with a 26 per cent stake. The JV partner should be able to invest at least Rs 60 crore to be able to qualify. Though interested parties have been asked to participate before January 29, 2010, the Department of Telecommunications (DoT) is holding a pre-bid conference in Delhi before selecting them.

Intel, according to the sources, is interested in manufacturing the hardware and consumer premise equipment around WiMAX technology which provides for wireless transmission of data and up to 75 Mb/second.

Asked about the development, an Intel India spokesperson declined to comment. However, a highly-placed source within the company confirmed the company was holding a "series of discussions with the extended ecosystem in terms of driving WiMAX technology".

An Intel delegation recently visited the proposed sites for which ITI announced JVs. ITI has invited bids for JVs on WiMAX technology at Rae Bareli, and Gigabit Passive Optical Network (G-PON), Gigabit Ether Passive Optical Network (GE-PON) and optical transmission equipment at Naini. The company has also sought bids for a JV on IT core systems in Bangalore, where the company employs about 2,200 people.

Other than Intel, other global players including Huawei, Alcatel-Lucent, Samsung and Hitachi have also shown interest in participating in the JV.

While Huawei and Alcatel Lucent are already working with ITI to cater to state-run BSNL, Samsung and Hitachi — which have significant interest in the telecom segment — are basically keen to have a JV in Rae Bareli. It is also understood that a team of representatives from both the companies recently visited ITI's Rae Bareli plants, before participating in the bid proposals.

In June this year, the government had even announced its intention to write off the Rs 2,820-crore accumulated losses by ITI. DoT had earlier proposed to identify new areas of growth including foraying into new technology areas, to get the PSU up and running.

LG forays into education segment with new line of IT solutions

Chennai, Nov. 4 Targeting schools, colleges and other institutions, consumer electronics major LG Electronics India has forayed into ‘education segment’ with a range of products such as network monitors, digital signage and interactive and touch-sensitive white boards (screens).

Mr R. Manikandan, Business Group and Marketing Head, Business Solutions, LG Electronics India, estimates the ‘IT solutions for education’ market at Rs 1,000 crore. He said the company is targeting a fifth of the market in the first year, which could go up to a third of the market by 2011.

Currently, LG Electronics India is present in the IT business solutions vertical with a range of products in areas such as PC virtualisation, image projections, network storage and commercial display solutions. This division contributes Rs 1,100 crore to the company. “With the launch of these new products, we hope to add another Rs 200 crore initially,” said Mr Manikandan.

He said with LG network monitor, one desktop PC can be shared by 10 students at a time. For example, a class of 40 students can do with just four desktop PCs and 40 network monitors. “The education content can be in the form of Powerpoint or movie files that would enable one-to-one teaching process with computer access to every student,” he explains.

The interactive touch-screen board (computer-enabled 60-inch Plasma screen), he said, can play all types of educational content. “The teacher can explain by highlighting, writing or even drawing on the screen itself with a stylus.”

He said the company is in talks with a number of education content providers across the country to develop more products and necessary software for any specific function of these products. For example, the software could facilitate picture-in-picture or a graph with picture, if the content provider deems it necessary.

Expansion of Naini-Saini airport to gather steam

The process of hiring a consultant for the expansion of the Naini-Saini airport in Pithoragarh district of Uttarakhand will gather momentum, with state Chief Minister R P Nishank holding the ‘bhoomi pujan’ two days back.

Sources today said the government was expected to release Rs 5 crore for the project, the deadline for whose completion was now 2011. “We are to get Rs 5 crore shortly and consequently the work will start,” said a state government official.

The government has appointed the Uttarakhand State Infrastructure Development Corporation Limited (USIDCL) as the nodal agency for the expansion work. The USIDCL has already initiated the re-bidding process for hiring a consultant for the modernisation and expansion of the Naini-Saini airport, which would be completed before November 9.

Besides, the expression of interests (EOIs) were also invited for expansion and strengthening of the runway and up-gradation of associated operational infrastructure and terminal facility for nearly 50 passengers is also being constructed.

The government intends to invest Rs 50-60 crore for the up-gradation and modernisation of the airport in picturesque Pithoragarh for promoting tourism.

Significantly, the Naini Saini airport hit a roadblock last year after the government cancelled the tender process for hiring a consultancy firm on technical grounds.

Later, the government decided to hand over the airport development process to the USIDCL, which was set up last year.

The government has so far spent Rs 22-24 crore for acquiring 17.8 hectare of land for the expansion purpose and a total of 85 people were given compensation. “The government has also assured all the affected people a job at the airport,” said Labour Minister Prakash Pant, who is the local MLA from Pithoragarh. Under the modernisation plan, the airport is being upgraded to facilitate the landing of ATR 72 aircraft. The airstrip is expected to be 1,900 meter long and 45 metre wide.Four hangers for the parking of aircraft are also being built at the airport.