Infosys’ ADS amongst 50 FDI proposals cleared

NEW DELHI, Jan 27: Indian IT major Infosys Technologies’ proposal to increase its American depository shares from 3.5 per cent to between 6.27 and 7.78 per cent was amongst 50 foreign direct investment proposals worth Rs 2229 crore approved by Government today.

The proposals were cleared by Commerce and Industry Minister Arun Shourie on the basis of recommendations made by Foreign Investment Promotion Board (FIPB), an official release said here.

The proposal of Infosys would involve an FDI investment of between Rs 1430 crore to Rs 2145 crore. The Bangalore based company has interests in business consulting, systems integeration, application, development maintenance, re-engineering and product engineering proposal.

In addition to this, Government also cleared a Rs 25 crore proposal of Singapore Computer Systems Ltd for bringing in 30 per cent FDI in Mumbai based Kshema Technologies Ltd.

Samsung Electronics received clearances for amendment in the existing Foreign Collaboration (FC) approval in their Indian arms.

Samsung Electronics sought amendment in the existing FC approval for permission to open trading on carry and cash basis in its Indian arms — Noida based Samsung India Electronics Ltd and Delhi based Samsung Electronics India Information and Telecommunication Ltd.

Other companies which received similar clearances included US company samsonite corporation for manufacture, marketing and merchandising "hedgren" products in its Mumbai based Indian arm Samsonite India Pvt Ltd; and another US company Estee Lauder for providing logistics and mangerial support services to Indian distributors of Estee Lauder products. (PTI)

Govt to retain veto powers in crucial decisions on HPCL

NEW DELHI, Jan 27: Government will retain veto powers in crucial decisions even after the privatisation of oil refiner Hindustan Petroleum Corporation Ltd (HPCL) through special clauses in the sale agreement.

Though the Government is selling its 34 per cent equity stake along with management control in HPCL, special clauses in the shareholders agreement would give the Government a degree of continued control even after its shareholding falls to 12 per cent, highly placed sources said here.

The special agreement would ensure that the strategic investor consults government in matters like altering memorandum of association, changing share capital, winding up of the company, disposing of existing assets of the company and pursuing a new line of business that may be detrimental to HPCL’s interests.

Besides, the Government can also block special resolutions which it deems not in the interest of public, they said.

The Cabinet Committee on Disinvestment (CCD) yesterday did not accept Petroleum Minister Ram Naik’s contention of retaining minimum 26 per cent stake in HPCL, but decided that enough safeguards would be built in the shareholders agreement to protect Government interests, sources said.

The CCD had also decided to offload 35.2 per cent state holding in Bharat Petroleum Corporation Ltd (BPCL) in domestic and overseas markets through a public offering, thereby bringing down Government holding to 26 per cent - minimum statutory requirement to have a say in all matters requiring special resolutions under the companies act. (PTI)

Drought notwithstanding, industry on its way up

NEW DELHI, Jan 27: Despite reeling under the worst drought in the last 15 years, the Indian Industry continued its northward surge with the first half of the current fiscal registering impressive growth, a clear pointer to the industrial recovery and upbeat business confidence.

Industrial data for the first seven months of this fiscal clearly points to encouraging signals for the economy. An industrial growth of 4.3 per cent in the first quarter followed by a 6.4 per cent growth in the second signals further strengthening of the current industrial recovery, the National Council for Applied Economic Research said in its latest quarterly review (December 2002)

The industrial growth was boosted by strong recovery in infrastructure industries, capital goods and basic goods sector as well as consumer goods.

"Also, retaining of the business confidence index in the latest round of business expectation survey of NCAER at the same level as in June 2002 indicates that the impact of delayed monsoon has failed to significantly dampen the reviving business optimism," it said.

NCAER said even though the manufacturing sector, riding on the impressive gains made by segments like motorcycle, colour television, refrigerator, cement, showed a robust growth of 6.8 per cent in the second quarter of this fiscal, the weak global demand conditions were still a worrying factor.

"However, the recent surge in the sensex and the continued soft interest rate regime should cheer up the Indian industry and help it further consolidate positive outlook," it said.

NCAER said the movement of the index of industrial production for the first seven months of the current fiscal pointed to sustained buoyancy in industrial production.

"The IIP-general has increased by 5.2 per cent, Y-o-Y basis, during the first half of this fiscal, about 3 percentage point higher than the growth recorded during the same period in 2001-02.

"The acceleration in industrial output becomes more noticeable when we consider the quarterly performance of 2002-03 over 2001-02," it said, adding that the rise in each of the six infrastructure sectors in the first half improved in comparison with the corresponding period last year.

NCAER said the manufacturing sector, which contributes majorly to the IIP-G, grew by 5.3 per cent, Y-on-Y basis, during the first half as compared to 2.5 per cent during the same period last year.

"Also, the growth trend in mining — from a decline to positive 6.5 per cent — and electricity was one of the positive gains, though there was a marginal rise in the latter at 3.4 per cent over last half’s 3.2 per cent," the report said.

NCAER said the positive trend continued even in the month of October 2002, with the IIP-General growing by 6.2 per cent, manufacturing sector by 6.4 per cent, mining by 3.8 per cent and electricity by 7.4 per cent.

The report said infrastructure industries also recorded superlative performances, with steel and crude oil clocking positive growth of 9.3 per cent and 5.5 per cent in comparison to negative figures in the first half of last fiscal.

"Coal grew by 5.9 per cent to last fiscal’s first half of 2.1 per cent, cement a massive 9.8 per cent (to 3.4 per cent in H1 2001-2002) and petro products 5.6 per cent (against 4.2 per cent)," the report said.

NCAER said besides the surge in infrastructure, evidence of improvement in industrial activity was also seen in the growth of revenue earning of Railway traffic.

"A growth of seven per cent in the revenue earning of Railway freight traffic during H1: 2002-03 further provides credence to the fact that the industrial recovery is well on its way.

"Although the growth in case of foodgrains traffic has been sharp during the first half of this fiscal due to drought relief measures, the traffic of cement and coal grew at the rate of nearly 5 per cent," it said.

NCAER said in the use-based classification of industrial output, the capital goods sector witnessed remarkable buoyancy.

"The sector posted a double-digit growth for the fifth consecutive month in October 2002. The growth for the H1: 2002-03 is an impressive 8.9 per cent compared to a negative growth of 6.8 per cent in H1: 2001-02."

The report attributed the growth of capital goods primarily to extremely high growth in PVC/PICL, machine tools, diesel engine, hydraulic machine/cylinder, wheels and axles complete set, auto rickshaws, switchgear (circuit breakers) and commercial vehicles.

"However, goods like shipbuilding and repair, broad gauge covered wagons, medical and surgical instrument, cutting tools and industrial machinery registered negative growth. Thus it appears that the buoyancy observed in the capital goods sector is still narrowly based," it added.

The basic goods sector also registered a growth of 5 per cent in October 2002 after witnessing a paltry growth of 1.6 per cent during September 2002. The cumulative growth of this sector during the first half of this fiscal stood at 4.8 per cent, 2.7 percentage point higher than the growth recorded during the same period last fiscal.

The report said though production in intermediate goods sector increased by 4.1 per cent during October 2002, its performance was well below the performance of both basic and capital goods sector in the first half of this fiscal recording a growth of a mere 1.8 per cent.

"This poor performance of the intermediate goods sector is largely an outcome of the negative growth experienced by its major segments such as cotton yarn, PVC pipes and tubes, particle board and plywood commercial, with the exception of filament yarn," it said.

NCAER said the production of consumer goods in H1: 2002-03 increased by 8 per cent as opposed to 5.4 per cent in H1: 2001-02.

However, it added that the strong growth at the aggregate level was not uniform within the sector. The break up of the consumer goods sector into consumer durables and consumer non-durables reveals a sharp distinction in performance, it added.

"While the consumer non-durables notched up an impressive growth of 14 per cent during H1: 2002-03, the consumer durables experienced a negative growth of 6.5 per cent for the same period.

NCAER said the performance of the industry at two digit level of classification revealed that 13 out of 17 industries experienced positive growth in H1: 2002-03 as compared to 12 during the same period in H1: 2001-02.

"Although the bad run experienced by wood and wood products, including furniture and fixtures as also cotton textiles, during the first half of last fiscal continued even in the current fiscal, textile products (including wearing apparel), jute and metal products reversed their performance in H1: 2002-03, registering a growth of 16.2 per cent, 6.1 per cent and 5.3 per cent respectively."

On the prospects, NCAER said, "it has been observed in the past that buoyancy in agricultural sector in the preceding year and improved export performance have a significant bearing on the performance of industrial sector.

"If past is an indicator, then the likely impact of the drop in this year’s kharif production would only be felt in the coming months and quarters," it said.

Also, a sluggish global economic outlook, with slower growth in the next 12 months than previously anticipated, pose added difficulties for the Indian industry, NCAER said, adding that the continued strain on fiscal health of Centre as well as States due to drought relief measures and non-revival of investment activity were a serious threat to the sustained recovery of industrial sector.

Among the positives, it listed the normal rabi season for agriculture, signs of reduced policy uncertainty with disinvestment in oil PSU’s back on track, a soft interest rate regime, comfortable forex reserves, strong performance of capital goods sector and finally the business optimism seen in the three successive surveys of business expectations of NCAER.(UNI)

Shreya Life Sciences acquires Plethico Pharma’s Ethical Mkting div

MUMBAI, Jan 27: Shreya Life Sciences Limited, the Indian unit of the Rs 2,000 crore Shreya group of companies, today announced that it has acquired the domestic ethical marketing division of Plethico Pharmaceuticals Limited, a Rs 200 crore pharma company based in Indore.

The acquisition, made for a total consideration of Rs 85 crore, would be efective from April 1, 2003, said the group chairman and promoter Aujit Kumar Singh.

With the acquisition of ethical marketing division, Shreya Life Sciences would have an immediate portfolio of 130 products that has a strong presence in anti-bacterial, anti-malarial, anti-tb and cardiovasclar therapeutic treatment.

The acquired firm has a marketing infrastructure with nine sales depots and 1800 stockits and 700 sales personnel located all over India.

Mr Singh, who founded the organisation called Shreya Corporation in 1995 in Moscow, made his maiden entry into India through the acquisition of the pharma division of Rallis India in April 2001 and set up the Indian arm called Shreya Life Sciences Limited.

The company is expected to record a turnover of Rs 125 crore for the current financial year with exports touching a peak of Rs 70 crore.

The Shreya group is also currently engaged in promoting a new company called Shreya Biotech Limited through a joint venture with Scitech of USA and Scigen of Singapore and the project is coming up near Pune.

It also has a similar joint ventutre in Zimbabwe in collbaoration with a local leading pharma company called Caps Holdings.

The group, headquartered in Moscow, has a distribution network in Russia employing over 2,500 people in 34 regional offices and the network enjoys partnerships wth Aventis, Sanofi, Pliva, Pfizer, Ranbaxy, Unique and Dr Reddy’s Lab. (UNI)

Get ready to face stiff competition, Ratan
Tata tells VSNL employees

MUMBAI, Jan 27: The Videsh Sanchar Nigam Limited Chairman Ratan N Tata today asked VSNL employees to gear up to face the economic challenges that had been thrown up due to stiff competition in the telecom industry.

While releasing a book ‘The story of Videsh Sanchar’ written by Mr CNN Nair, a retired executive of VSNL, at a function here, Mr Tata said that global competition was increasing in the telecom sector with the entry of new players and the situation was different now.

Emphasising that VSNL needed to be the number one Indian player in offering international connectivity to the world, he said, "we need to gear up to face these challenges."

Stressing on he fact that a proper historical perspective was necessary for any organisation, he said that the Mr Nair’s book was relevant in the current scenario when the telecom industry in India was undergoing vast and unpremediated changes.

Later, Mr Tata told reporters in an informal interaction, that the rate cut war among mobile operators was "not a healthy sign" for the growth of the telecom industry.

Each player is lowering the tariff to attract more and more customers, he said.

Instead, the VSNL Chairman said that the telecom industry needs to provide good quality and reliable services to its customers.

He declined to answer queries regarding VSNL’s future plans and strategy for growth in the telecom industry. (UNI)

UAE’s Thuraya to launch rural telephone project in India

DUBAI, Jan 27: UAE satellite phone company Thuraya has embarked on a rural fixed telephone project in India, besides its plans to roll out mobile commercial services in the huge Indian market, a top company official has said.

"We are in talks with more than two companies in India to launch a rural telephone project, Gulf News, quoting Thuraya chief executive Yousuf Ali Al Saeed, has said.

He said the company has done its part and it is awaiting a reply from them.

Al Saeed clarified that Thuraya is not in direct talks with the Government, rather with Indian companies.

However, Thuraya has yet to sort out the gateway issue, he added.

The Indian Government is demanding a gateway in its country before Thuraya starts commercial services.

"Such a thing is not commercially viable in the beginning. Thuraya’s approach is to start operations first and see how business grows, till it proves viable. Instead of a radio gateway, we have suggested a switch gateway which is lower in cost," he explained.

Although India liberalised its telecom sector last year, certain conditions did not suit thuraya’s plans. India’s huge market could account for some 30 per cent of Thuraya’s markets in mobile satellite telephony.

Al saeed said as per the business plan, it had achieved the target of 75,000 subscribers by end of 2002. "We will add another 75,000 subscribers this year, although our banks expect us to achieve only 60,000 subscribers," he added.

At present, Thuraya is concentrating on the North and Central African markets and planning to expand coverage more to south of Africa to countries such as Uganda, Kenya, Tanzania, Malawi and others.

He said, "we are also looking at the European part of Russia and in the east, our eyes are on Singapore and the maritime routes." (UNI)

Indian toys export now touch Rs 167 cr

MUMBAI, Jan 27: India has become a major exporter of toys to USA, Europe and the Middle East with exports touching Rs 115 crore ( US dollar 24 million) in 2002.

The Toy Association of India (TAI), a representative body of over 700 Indian toy manufacturers and traders, has estimated that the export figure would rise to Rs 167.55 crore (US dollar 35 million) in the current year following greater acceptance of Indian toys in these markets.

"Aesthetic, ergonomic designs and customer friendly protective packaging of our toys is well received in these three major markets which together account for 50 per cent of the USD 73 billion global trade in toys", according to Vishnu Swarup Agarwal, president of TAI.

Mr Agarwal, however, said that India’s toys export was nowhere near the dominance of the Chinese ones which accounts for a massive US dollar 37 billion of the total global trade.

Mr Agarwal said that the measures initiated by the Sports Goods Export Promotion Council (SGEPC), a quasi Government body, recently yielded results with breakthough in newer markets in the European Union and the Middle East.

He estimated that the Indian toy industry is likely to acquire export orders of over Rs 15 crore through its participation in the toy fairs being held in Britain, New York, Hong Kong and Germany next month.

TAI is also organising an exhibition and buyer-seller meet on March 1 and 2 in Mumbai to provide an opportunity to buyers from the Middle East and neighbouring nations to have a close look at the creative talent of leading Indian toy designers and manufacturers.

Over 2,000 manufacturers and component suppliers are likely to display their products at the exhibition termed ‘Toy Biz-2003.’

Since 1998, heavy import of cheap Chinese toys has caused Indian manufacturers to undertake a massive restructuring process aimed at production cost reduction. Efforts are being made to have toy designs in line with the global trend in association with design houses and the National Institute of Fashion Technology, he said. (UNI)

Iran open to giving equity to Indian firms in oil fields

NEW DELHI, Jan 27: Iran today said it was open to giving equity to Indian companies in its oil fields as the two countries signed a Memorandum of Understanding for boosting bilateral cooperation in hydrocarbon sector.

"The law (of Iran) permits it and we don’t mind to have Indian companies developing oil and gas fields," Iranian Foreign Minister Kamal Kharrazi told reporters after signing the MoU with Petroleum Minister Ram Naik.

"We are the supplier of energy and India is purchaser. Naturally we need each other. How this can be done in terms of lng or piped (natural gas) exports, these are different routes which are being studied," he said.

Naik said Iran has enough oil and gas for export and India is a good market.

"We need it. We had preliminary discussions and it has been decided that in next three months, I will go to Tehran to give concerete shape to the requirements," he said.

While Iran offered to sell LNG to India in exchange of giving equity to Indian companies in its oil fields, New Delhi offered its technological know-how in CNG-based transport system and refinery maintenance.

The MoU seeks to establish a framework for cooperation in specific areas of hydrocarbon sector ranging from exploration and production, supply of hydrocarbons (both oil and gas), services sector and R&D. (UNI)

CMC signs agreement with central bank for automation

MUMBAI, Jan 27: CMC Limited, India’s leading IT company, signed an agreement with Central Bank of India for a multi-crore Total Branch Automation (TBA).

The company said here today in a statement that the TBA order for central bank covers the automation of 300 branches across 36 cities and involves the installation of a range of IT equipment including latest PCs, servers and printers in each of the branches.

This would enable the bank to extend its IT enabled services to a larger base of customers across the country, the company said. (UNI)

Govt will try to avoid oil sector strike: Naik

NEW DELHI, Jan 27: Asserting that petroleum product supply will not be affected in the eventuality of employees of privatisation-bound Hindustan Petroleum Corp Ltd (HPCL) going on strike, Petroleum Minister Ram Naik today said Government will ensure that the strike doesn’t take place.

"We will ensure that the strike call doesn’t materalise. There can be discussions to diffuse the situation," Naik told reporters here.

Earlier, oil sector trade unions had threatened to go on indefinite strike from the day Government notifies a schedule for privatising public sector HPCL and Bharat Petroleum Corporation Ltd (BPCL).

"All employees and officers of all the public sector oil companies will go on indefinite strike the day Government announces a time-table for privatisation of HPCL and BPCL," Ashok Singh, president of Oil Sector Officers Association - a representative body of all trade unions, told PTI from Ahmedabad.

Naik said Government will take all possibile steps to maintain supply of petroleum products in the eventuality of a strike by a section of employees.

Asked if the strike threat could prompt Government to reconsider its decision to privatise HPCL and BPCL, he said "Government has considered all relevant issues and has taken a concious decision." (PTI)

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