Andhranews

Hyderabad, Aug. 3: General Motors will be setting up its second car manufacturing unit in Maharashtra, investing $300 million. The world’s largest car maker has its first plant in Halol in Gujarat. “We have picked Talegaon (near Pune) as the location to set up our second unit in the country,” General Motors India president and managing director Mr Rajeev Chaba told this newspaper early on Thursday morning, before signing the agreement to set up the new plant with Maharashtra secretary (industries) V.K. Jairath.

With GM deciding to set up the unit in Maharashtra, Andhra Pradesh lost out on another big ticket investment in the automobile sector. The new plant would have an annual production capacity of 1,40,000 units. According to industry sources, GM will be manufacturing its small car “Spark” by 2007. With the Spark, GM would get an entry into the volume-heavy small-car market and help it get a targeted 10 per cent market share by 2010. The GM manufacturing facility at Talegaon will more than double GM’s annual manufacturing capacity in India to in excess of 220,000 vehicles.

The company chose Talegaon after actively considering Tada in Andhra Pradesh and another site near Chennai in Tamil Nadu. In fact, senior GM India executives had inspected the Tada site on a couple of occasions earlier this year. But sources say the absence of an auto component cluster in Tada worked against it and GM India decided to look at other locations. Pune is one of the major automobile clusters in the country which boasts of auto giants such as Tata Motors, Mercedes-Benz, Kinetic Engineering, Bajaj Auto and auto component major Bharat Forge.

“The absence of an established auto component cluster is a major concern in Andhra Pradesh for automobile companies,” an auto expert said on condition of anonymity. This has been an issue in the case of BMW which picked Chennai for its plant and Volkswagen, for reasons best known to the officials of the state government, is more keen on investing in Punjab.

With three major auto components ignoring Andhra Pradesh at the fag end of discussions, the state still awaits its first auto project, if the Mahindras’ project in Zaheerabad is discounted. However, Honda Siel Cars India, a Honda Motor Company JV, is also looking at setting up a second plant in South India. Hyundai Motor India MD Mr H.S. Lheem had also said Andhra Pradesh was the second preferred destination after Tamil Nadu, when the company decides for expansion in India.

New Delhi, Aug. 3: India’s leading private sector telecom service provider has invested $100 million to develop a “Service Delivery Platform” (SDP) with IBM.
Giving the details of the investment, Bharti Airtel president Manoj Kholi said that with SDP, Airtel has integrated all of its content and applications services under one platform. With this, the company claims that consumers would get the benefit of a complete service experience through service personalisation, single access point, single sign-on to its mobile, landline as well as broadband.

With the integration of mobile and broadband, the consumer could play a game on his mobile and would be able to continue it from the same point he left on his personal computer. Mobile users would also be able to access data, videos, music at a faster rate and the quality of the all this would be much better than what they are getting now.

With SDP, quantity of the data send would be much more. Airtel would be approaching a number of companies so that they could provide different content to its customers on SDP. “SDP would act like a big store where companies can come and put their shops,” said Mr Kholi. SDP will enhance the spectrum of content, application and services and integrate them across all of its services lines and present a consistent presentation of services.

Hyderabad, Aug. 3: Tier-one Indian IT service providers have continued to thrive while major global service providers are continuing to lose ground, especially in the application services market, according to a new report by Forrester Research, an independent technology and market research firm. In the report, titled “IT Services: Paradigm Shift Drives Continued Indian Provider Success”, Forrester Research V-P Stephanie Moore says, that Indian firms will continue to grow, not just because they are a lower-cost option, but because they have caused a “fundamental” and “structural” change in the service provider-client relationship.

“Offshore providers have taught clients to expect transparency, efficiency, and accountability in service delivery. With a few exceptions, onshore service pr-oviders are struggling to adapt to this dynamic. Des-pite the talk that Indian vendors would be supplanted by global majors, tier one Indian vendors continue to take business from legacy service providers, and to dem-onstrate tremendous po-wer in creating value,” she says.

Mr Sudin Apte, country head, India, Forrester Research, says, “Top Indian vendors are working successfully towards penetrating the global market for high-end services, and their approaches include, building domain competency, consultancy practices and customer-specific solutions.” “Indian firms challenged by linear revenue growth linked with the labour growth, are trying to break direct connection between the two.”

Hyderabad, Aug. 3: Two venture capital companies — Helion Venture Partners and Matrix Partners India — on Wednesday said they have launched and completed two India-focused funds. While Helion said its $140 million multi-stage, India-focused venture fund will provide capital and mentoring to “technology-powered” businesses in India, Matrix Partners India said it has closed a $150-million, mult-sector, multi-stage fund.

The Matrix fund will be focused on early to growth stage businesses in Internet, mobile, financial services, media and entertainment and travel. According to Helion, the funds’ investors are global institutions including Ivy League endowment funds and Internet entrepreneurs. “With a sustained CAGR of over six per cent, India is clearly one of the most dynamic and fast-growing economies in the world.

The fund sees clear long-term potential in innovative companies in both the outsourcing segment and increasingly, the domestic market,” said Mr Sanjeev Agarwal, managing director of Helion. “Technology-powered sectors, like outsourcing, Internet, mobile services and IP based products, are growing at five times the rate of the Indian GDP,” Helion said. “Matrix Partners is the first venture capital firm to establish a fund in India,” said Mr Paul Ferri, founding partner of Matrix Partners US.

“We believe that the founding team has the competency to recognise and support potential market leading companies in the consume services sector,” said Mr Avnish Bajaj, founding managing director of Matrix Partners India. The venture capital firm is co-founded by Mr Bajaj and Mr Rishi Navani along with Matrix Partners US.

Hyderabad, Aug. 3: 24/7 Customer, a business processing outsourcing firm, will be expanding its operations in Hyderabad to 1,500 people by March 2007, even as the six-year-old company is planning to set up its own campus here, the company’s founders said on Thursday.

Speaking to this newspaper, P.V. Kannan, founder and chief executive officer of 24/7 Customer and S. Nagarajan, founder and chief operating officer said that the BPO business being offshored to India “continues to be strong”, and the company was expecting to maintain its 70 per cent growth rate this year as well. “We currently have 7,000 employees working at our centres in Bangalore, where we also have our own campus, Hyderabad and Chennai. We expect to fill the 1,500 seats in Hyderabad by March, 2007,” Mr Kannan said.

Asked whether the BPO business was scalable, Mr Kannan said, “The BPO business is in the same situation that the IT services industry was several years ago, when people would dismiss claims that the industry could be scaled up. But today, India has software and service companies with over 50,000 employees.”
“The BPO segment, too, is scalable, but we need to put the education and training infrastructure in place to create employable people. Currently, only about 10 of 100 graduates being interviewed for jobs in the BPO sector are found to be employable,” he said.

According to Mr Nagarajan, the company had initiated a programme called “Train the Teachers”, with the governments and colleges in the four southern states. “We have designed the curriculum which can be imparted to college students by the teachers trained by us,” he said.

Hyderabad, Aug. 3: India faces the prospect of losing out to China in pharmaceutical manufacturing unless India speeds up its innovation game, according to a new study by Bain & Company, a consulting firm.

“Nearly 90 per ent of pharmaceutical executives consider a better choice than India for low-cost drug manufacturing. Only 17 per cent of the survey’s respondents cite innovation as a key asset of Indian drug makers,” the study says.

It said that Bain’s sampling of 179 international executives with headquarters in North America, Europe, Asia and India also expressed concerns about intellectual property protection (56 per cent), parallel trade or grey market imports (52 per cent) and regulatory uncertainty (46 per cent) affecting the Indian industry.

“The Indian pharmaceutical industry now stands at the crossroads. It India is looking to be the home of quality generic drugs, it needs to step up its innovation game,” said Ashish Singh, managing director of Bain & Company India, and leader of the consulting firm’s Indian pharma survey.

“If Indian pharma is effective in shoring up its operating and cost structure, promoting innovation and gaining more regulatory credibility, the challenges both from mature markets and from developing countries like China should substantially lessen,” Mr Singh added.

Bain said Indian companies should strive for low-cost leadership in their core generic businesses through a “focus on operating efficiency, and begin to invest in innovation”. It said the Indian government should create the “right investment climate for both MNCs and Indian companies by addressing key concerns over IP protection, parallel trade and regulatory uncertainty”.

New Delhi, Aug. 3: Domestic pharmaceutical major Ranbaxy Laboratories Limited on Thursday announced that a ruling in its favour from a US appeal court, seeking to invalidate Pfizer’s patent on cholesterol lowering drug Atorvastatin, will let it launch the generic version of the drug in March 2010, fifteen months ahead of time. One of the largest-selling drugs in the world, it is marketed by Pfizer under the brand Lipitor. Annual sales of the drug in the US are $8.5 billion.

Speaking to this newspaper, a spokesperson from RLL said that in case the ruling did not go in Ranbaxy’s favour, then it would have to launch the drug in the US market only in June 2011, upon the expiry of Pfizer’s patent. In a statement here on Friday, Ranbaxy has said that the US court of appeals for the Federal Circuit ruled in favour of Ranbaxy’s patent 995, while the other patent
893 went in Pfizer’s favour.

The court’s ruling reverses an earlier order by a district court, which favoured Pfizer for both the patents. In its statement, Ranbaxy said that CAFC sided with Ranbaxy by invalidating one of Pfizer’s atorvastatin patents, US Patent No. 5,273,995 (‘995) and overturning the Delaware district court judgement in that regard. However, it affirmed the portion of the judgement, which held that Ranbaxy’s product infringes Pfizer’s US Patent No. 4,681,893 (‘893). The ruling followed a hearing in the US CAFC, which took place on May 4, 2006. Ranbaxy is now evaluating its option with respect to the 893 patent.

Ranbaxy’s senior V-P, Global IP, Mr Jay R. Deshmukh said, “We are pleased by the court’s decision on the 995 patent and are evaluating our options with respect to the 893 patent.” Stating that it could bring the launch date forward to March 2010 from June 2011, Ranbaxy said that there would be a 180-day exclusivity in the US.

New Delhi, Aug. 3: India has been earning a lot of foreign money through its BPOs and call-centres but according to a study by Nasscom, India has a potential to earn $50 billion only through offshore engineering services by 2020.

Releasing the report prepared by Nasscom in association with Booz Allen Hamilton, Nasscom president Kiran Karnik said, “The total offshore engineering spend is expected to grow to $150-$225 billion by the year 2020 and India with its talent pool and existing experience in engineering service, is well suited to realise 25 per cent of this opportunity.” However, Mr Karnik cautioned that to achieve this, India must ensure that required steps are taken by the stakeholders to address possible roadblocks especially those concerning the workforce.

Mr Karnik also emphasised on the need to build a strong “Engineered in India” brand name to attract more companies towards India. A key consideration for India in its bid to become the dominant player in offshored engineering services is competition from other low-cost countries. Within the developing world, a number of countries are likely to participate in the growth of offshored engineering services. But according to the study, when it comes to high-end complex tasks, India and China will bring home most of the contracts.