Friday, September 29, 2006
Business News Sep 28th,2006
Ban exports of iron-ore, says Paswan
New Delhi Sept. 28: Union minister of steel Ram Vilas Paswan on Thursday strongly demanded a ban on the export of iron-ore. Mr Paswan said that if an immediate ban on iron-ore exports is not possible, the government should gradually take measures to ban it in phased manner. Speaking at an Assocham function, Mr Paswan said iron-ore is a great and precious wealth of the nation and should not be allowed to be exported at economies of scale and it is in view of this that the steel ministry has taken up the matter at the highest political level.
Mr Paswan regretted that fine quality iron-ore was being exported to countries like China which had large iron-ore reserves for itself and the country was keeping them unexplored for meeting its future requirements. India, which is one of the leading steel makers in the world, was depleting its iron ore reserves by massively exporting them, said Mr Paswan.
“I have apprised the ministry of mines and the ministry of commerce of my views on the issue. Nevertheless, I assure this august gathering that the government will take a balanced decision, keeping in view the national interest,” Mr Paswan said.
He said that to achieve the targeted level of 110 MT steel production by 2019-20 as envisaged in the National Steel Policy, India should ensure that sufficient quantity of major raw materials like iron-ore and coal is made available to steel producers. Presently, said Mr Paswan a debate is on about the allocation of captive coal and iron-ore mines to steel producers as also export related issues.
Mahindra to acquire 67.9% of Jeco Holdings
Mumbai, Sep 28: Mahindra and Mahindra Ltd., India’s largest utility vehicle maker, said on Thursday that it’s Mauritius-based subsidiary would acquire 67.9 per cent stake in Jeco Holdings AG, at an enterprise value of approximately euro 140 million euros (Rs 830 crore).
The deal is the largest outbound acquisition in the auto component arena, the company said in a statement. The company will fund the deal via FCCB proceeds. “By buying Jeco, we are putting ourselves in a leadership position in the European forging industry,” said Mr Anand Mahindra, managing director and vice-chairman, M&M. According to Mr Hemant Luthra , president, systems and technologies sector, Jeco is one of the top five forging companies in Germany, with revenues totalling 180 million euros in 2005 and a capacity of 1,00,000 tons per annum.
Scholz AG currently holds a 90 per cent stake in Jeco with the remaining 10 per cent held by the management. Mr Anand Mahindra said the board of Mahindra Automotive Steel Ltd will be reconstituted to accommodate Jeco members and the board component of Jeco and Mahindra will be one-third and two-thirds respectively.
“The total auto component business of the company is about $575 million and our goal is to touch the mark of $ one billion by 2010,” said Mr Luthra. “The forging business in India is growing at a CAGR of 25-30 per cent,” he added. “This transaction will result in our establishing a significant footprint in continental Europe. Moreover we would be uniquely positioned to serve our customers from three locations i.e., UK, Germany and India for their auto component needs, by driving synergies across the locations,” Mr Luthra added.
US slowdown will not hit India: RBI
Mumbai, Sept. 28: Reserve Bank of India Governor Y.V. Reddy on Thursday suggested it was too early to cheer the fall in crude oil prices saying the prices we-re still at “elevated levels.” The comfort, however, is that crude oil prices were falling, rather than rising, he said referring to the fall in crude oil prices to around $60 a barrel from a high of $78.40 a barrel on July 14.
“The fact that even at current levels, oil prices are at elevated levels. So therefore as of now, we have to proceed with our current assumptions, but with a comfort that it is going down rather than going up,” he said. He said the global economy was facing a paradoxical situation where economic growth was slowing down while inflation was firming up.
“There is an interesting combination that at a time when growth expectation is moderating, inflation expectation is hardening and so therefore it is again one of those paradoxes,” he said. “So, it is too early to say whether there are inflation pressures or even inflationary expectations.”
He said the slowdown in the US economy had the potential to slow the global growth. He said inflationary pressures were firming up globally but India, however, will not be impacted much by these paradoxical economic parameters and the county’s economy will show resilience, he said. “Our own assessment is that when something like that happens globally, India cannot remain insulated. But we believe that there are two to three reasons why we will be less affected because of inherent strengths and resilience.” (CMW)
Wipro arm will buy Swedish firm for Rs 142cr
Hyderabad, Sept. 28: Wipro Infrastructure Engineering said on Thursday it had signed an agreement to acquire 100 per cent equity of Hydrauto Group AB for U.S. $ 31 million, in an all cash deal. Wipro Infrastructure Engineering is a provider of precision engineered hydraulic components and solutions in India.
According to a Wipro release, Hydrauto, based in Sweden, is a provider of hydraulic components and solutions in Europe. For the year ended December 31, 2005, its revenues were $ 112 million. It is a profitable entity with positive operating cash-flows.
“Hydraulic components are a global $ 17 billion industry catering to the construction equipment, material handling, farm and industrial segments. Growth in India is being driven by the huge investments in the Infrastructure and industrial segments,” the release said.
Anurag Behar, Managing Director of WIE, said, “This acquisition gives us a unique Asia-Europe footprint, a customer base built over the past few decades and deep complementary engineering skills.”
Patel to lobby for jet fuel price cut
New Delhi, Sept. 28: Worried over the financial health of the civil aviation sector in the country, the civil aviation ministry plans to take up the issue of escalating air turbine fuel (ATF) prices in a big way with the finance and petroleum ministries apart from being more “strict” in allowing new players to enter the aviation sector.
Civil aviation minister Praful Patel held a meeting with top airline executives on Thursday which included Jet Airways chairman Naresh Goyal and Kingfisher Air chief Vijay Mallya. The meeting comes in the wake of severe losses suffered even by successful low cost carriers like Air Deccan.
“We are looking at the financial health of the aviation sector. We don’t want to see players going out of business. We don’t want a repeat of what happened in the early 1990s,” said Mr Patel referring to the collapse of several airlines in the early 1990s due to mounting losses.
Mr Patel said that the oil companies in the country were charging higher prices for ATF than even the international prices. He added that he would also take up the issue of taxation of ATF by the State governments. In another important move, Mr Patel said that his ministry would now be “more careful and strict” about the entry of new players in the sector.
The government wants only serious players to enter the sector. The ministry will ask new applicants to show their business plan, arrangements of infrastructure and whether they have the requisite number of trained personnel before permitting them to fly. Mr Patel also revealed that airlines had expressed a desire to form a common body to discuss various issues facing the aviation sector. SpiceJet director Ajay Singh told reporters after the meeting that he was delighted that the government had committed to lobby on behalf of the airlines for overall cost reduction.
BEL eyes Rs 1,050 cr in revenues, keen on buys
Hyderabad, Sept. 28: With an eye on the new entrants and rural markets to increase its presence, Bajaj Electricals Ltd (BEL) expects to close this fiscal with revenues of Rs 1,050 crore, buoyed by significant demand in high-mast luminous segment and strategic alliances with foreign consumer appliances companies.
Talking to this newspaper here on Thursday, Shekhar Bajaj, chairman and managing director of BEL, said, “Having closed the last fiscal with revenues of Rs 845 crores, we are looking at the Rs 1,050 crore mark by this fiscal-end.” The Bajaj group company, whose businesses cover lighting, luminaries, appliances, fans and engineering and projects expects 25 per cent growth in sales this year with rise in operating profit being “better”.
Admitting that operating in a crowded market is not easy, Mr Bajaj said, “Our operating profit for the first quarter this fiscal grew 40 per cent. Margins remained healthy and were not badly impacted apart from the luminous division.” Further, the company which has manufacturing units in Rajnandgaon has kicked off a Rs 25-30 crore capacity expansion plan for its galvanising unit which will increase its capacity to 50,000 tonnes from the current 30,000 tonnes.
“This would be reflected only in the next fiscal as the expansion process would end after March,” Mr Bajaj said. Apart from organic growth and plans to enter the inverter segment by the end of this year, BEL is also looking at acquisitions and is currently negotiating with 2-3 players. “A timeframe for the acquisitions has not been finalized yet but talks are on with 2-3 small companies that are worth Rs 20-25 crores,” the CMD said.
DSP ML hopes Rs 1,000cr mop up from fund
Hyderabad, Sept. 28: DSP Merrill Lynch Fund Managers, one of the largest mutual fund companies in India, expects to raise Rs 1,000 crore through its Small and Mid Cap Fund, a New Fund Offer. The NFO will be open from September 29 to October 16.
Speaking to reporters here, Anup Maheshwari, senior vice-president of DSP ML said, the new fund is the first open-ended equity growth scheme launched by the company in two years. The previous such scheme was the T.I.G.E.R. Fund, launched in April, 2004.
Mr Maheshwari said the small and mid-cap indices have generally outperformed the large-cap indices in the long term but have underperformed in the recent past. “The Indian capital markets are undergoing a scale shift. The profitability of companies across sectors is increasing due to several factors, including strong industrial growth and economic expansion, rising export revenues, a rapid growth of sunrise industries, and the emergence of new businesses.
Several companies in the small and mid-cap category are yet to benefit from this structural change, and DSP Merrill Lynch Small and Mid Cap Fund will seek to identify and capitalise on such opportunities,” he said. Mr Maheshwari said DSP Merrill Lynch Fund Managers had Rs 11,700 crore of assets under management (AUM) in India, while it had an offshore fund of Rs 8,000 crore.
New Delhi Sept. 28: Union minister of steel Ram Vilas Paswan on Thursday strongly demanded a ban on the export of iron-ore. Mr Paswan said that if an immediate ban on iron-ore exports is not possible, the government should gradually take measures to ban it in phased manner. Speaking at an Assocham function, Mr Paswan said iron-ore is a great and precious wealth of the nation and should not be allowed to be exported at economies of scale and it is in view of this that the steel ministry has taken up the matter at the highest political level.
Mr Paswan regretted that fine quality iron-ore was being exported to countries like China which had large iron-ore reserves for itself and the country was keeping them unexplored for meeting its future requirements. India, which is one of the leading steel makers in the world, was depleting its iron ore reserves by massively exporting them, said Mr Paswan.
“I have apprised the ministry of mines and the ministry of commerce of my views on the issue. Nevertheless, I assure this august gathering that the government will take a balanced decision, keeping in view the national interest,” Mr Paswan said.
He said that to achieve the targeted level of 110 MT steel production by 2019-20 as envisaged in the National Steel Policy, India should ensure that sufficient quantity of major raw materials like iron-ore and coal is made available to steel producers. Presently, said Mr Paswan a debate is on about the allocation of captive coal and iron-ore mines to steel producers as also export related issues.
Mahindra to acquire 67.9% of Jeco Holdings
Mumbai, Sep 28: Mahindra and Mahindra Ltd., India’s largest utility vehicle maker, said on Thursday that it’s Mauritius-based subsidiary would acquire 67.9 per cent stake in Jeco Holdings AG, at an enterprise value of approximately euro 140 million euros (Rs 830 crore).
The deal is the largest outbound acquisition in the auto component arena, the company said in a statement. The company will fund the deal via FCCB proceeds. “By buying Jeco, we are putting ourselves in a leadership position in the European forging industry,” said Mr Anand Mahindra, managing director and vice-chairman, M&M. According to Mr Hemant Luthra , president, systems and technologies sector, Jeco is one of the top five forging companies in Germany, with revenues totalling 180 million euros in 2005 and a capacity of 1,00,000 tons per annum.
Scholz AG currently holds a 90 per cent stake in Jeco with the remaining 10 per cent held by the management. Mr Anand Mahindra said the board of Mahindra Automotive Steel Ltd will be reconstituted to accommodate Jeco members and the board component of Jeco and Mahindra will be one-third and two-thirds respectively.
“The total auto component business of the company is about $575 million and our goal is to touch the mark of $ one billion by 2010,” said Mr Luthra. “The forging business in India is growing at a CAGR of 25-30 per cent,” he added. “This transaction will result in our establishing a significant footprint in continental Europe. Moreover we would be uniquely positioned to serve our customers from three locations i.e., UK, Germany and India for their auto component needs, by driving synergies across the locations,” Mr Luthra added.
US slowdown will not hit India: RBI
Mumbai, Sept. 28: Reserve Bank of India Governor Y.V. Reddy on Thursday suggested it was too early to cheer the fall in crude oil prices saying the prices we-re still at “elevated levels.” The comfort, however, is that crude oil prices were falling, rather than rising, he said referring to the fall in crude oil prices to around $60 a barrel from a high of $78.40 a barrel on July 14.
“The fact that even at current levels, oil prices are at elevated levels. So therefore as of now, we have to proceed with our current assumptions, but with a comfort that it is going down rather than going up,” he said. He said the global economy was facing a paradoxical situation where economic growth was slowing down while inflation was firming up.
“There is an interesting combination that at a time when growth expectation is moderating, inflation expectation is hardening and so therefore it is again one of those paradoxes,” he said. “So, it is too early to say whether there are inflation pressures or even inflationary expectations.”
He said the slowdown in the US economy had the potential to slow the global growth. He said inflationary pressures were firming up globally but India, however, will not be impacted much by these paradoxical economic parameters and the county’s economy will show resilience, he said. “Our own assessment is that when something like that happens globally, India cannot remain insulated. But we believe that there are two to three reasons why we will be less affected because of inherent strengths and resilience.” (CMW)
Wipro arm will buy Swedish firm for Rs 142cr
Hyderabad, Sept. 28: Wipro Infrastructure Engineering said on Thursday it had signed an agreement to acquire 100 per cent equity of Hydrauto Group AB for U.S. $ 31 million, in an all cash deal. Wipro Infrastructure Engineering is a provider of precision engineered hydraulic components and solutions in India.
According to a Wipro release, Hydrauto, based in Sweden, is a provider of hydraulic components and solutions in Europe. For the year ended December 31, 2005, its revenues were $ 112 million. It is a profitable entity with positive operating cash-flows.
“Hydraulic components are a global $ 17 billion industry catering to the construction equipment, material handling, farm and industrial segments. Growth in India is being driven by the huge investments in the Infrastructure and industrial segments,” the release said.
Anurag Behar, Managing Director of WIE, said, “This acquisition gives us a unique Asia-Europe footprint, a customer base built over the past few decades and deep complementary engineering skills.”
Patel to lobby for jet fuel price cut
New Delhi, Sept. 28: Worried over the financial health of the civil aviation sector in the country, the civil aviation ministry plans to take up the issue of escalating air turbine fuel (ATF) prices in a big way with the finance and petroleum ministries apart from being more “strict” in allowing new players to enter the aviation sector.
Civil aviation minister Praful Patel held a meeting with top airline executives on Thursday which included Jet Airways chairman Naresh Goyal and Kingfisher Air chief Vijay Mallya. The meeting comes in the wake of severe losses suffered even by successful low cost carriers like Air Deccan.
“We are looking at the financial health of the aviation sector. We don’t want to see players going out of business. We don’t want a repeat of what happened in the early 1990s,” said Mr Patel referring to the collapse of several airlines in the early 1990s due to mounting losses.
Mr Patel said that the oil companies in the country were charging higher prices for ATF than even the international prices. He added that he would also take up the issue of taxation of ATF by the State governments. In another important move, Mr Patel said that his ministry would now be “more careful and strict” about the entry of new players in the sector.
The government wants only serious players to enter the sector. The ministry will ask new applicants to show their business plan, arrangements of infrastructure and whether they have the requisite number of trained personnel before permitting them to fly. Mr Patel also revealed that airlines had expressed a desire to form a common body to discuss various issues facing the aviation sector. SpiceJet director Ajay Singh told reporters after the meeting that he was delighted that the government had committed to lobby on behalf of the airlines for overall cost reduction.
BEL eyes Rs 1,050 cr in revenues, keen on buys
Hyderabad, Sept. 28: With an eye on the new entrants and rural markets to increase its presence, Bajaj Electricals Ltd (BEL) expects to close this fiscal with revenues of Rs 1,050 crore, buoyed by significant demand in high-mast luminous segment and strategic alliances with foreign consumer appliances companies.
Talking to this newspaper here on Thursday, Shekhar Bajaj, chairman and managing director of BEL, said, “Having closed the last fiscal with revenues of Rs 845 crores, we are looking at the Rs 1,050 crore mark by this fiscal-end.” The Bajaj group company, whose businesses cover lighting, luminaries, appliances, fans and engineering and projects expects 25 per cent growth in sales this year with rise in operating profit being “better”.
Admitting that operating in a crowded market is not easy, Mr Bajaj said, “Our operating profit for the first quarter this fiscal grew 40 per cent. Margins remained healthy and were not badly impacted apart from the luminous division.” Further, the company which has manufacturing units in Rajnandgaon has kicked off a Rs 25-30 crore capacity expansion plan for its galvanising unit which will increase its capacity to 50,000 tonnes from the current 30,000 tonnes.
“This would be reflected only in the next fiscal as the expansion process would end after March,” Mr Bajaj said. Apart from organic growth and plans to enter the inverter segment by the end of this year, BEL is also looking at acquisitions and is currently negotiating with 2-3 players. “A timeframe for the acquisitions has not been finalized yet but talks are on with 2-3 small companies that are worth Rs 20-25 crores,” the CMD said.
DSP ML hopes Rs 1,000cr mop up from fund
Hyderabad, Sept. 28: DSP Merrill Lynch Fund Managers, one of the largest mutual fund companies in India, expects to raise Rs 1,000 crore through its Small and Mid Cap Fund, a New Fund Offer. The NFO will be open from September 29 to October 16.
Speaking to reporters here, Anup Maheshwari, senior vice-president of DSP ML said, the new fund is the first open-ended equity growth scheme launched by the company in two years. The previous such scheme was the T.I.G.E.R. Fund, launched in April, 2004.
Mr Maheshwari said the small and mid-cap indices have generally outperformed the large-cap indices in the long term but have underperformed in the recent past. “The Indian capital markets are undergoing a scale shift. The profitability of companies across sectors is increasing due to several factors, including strong industrial growth and economic expansion, rising export revenues, a rapid growth of sunrise industries, and the emergence of new businesses.
Several companies in the small and mid-cap category are yet to benefit from this structural change, and DSP Merrill Lynch Small and Mid Cap Fund will seek to identify and capitalise on such opportunities,” he said. Mr Maheshwari said DSP Merrill Lynch Fund Managers had Rs 11,700 crore of assets under management (AUM) in India, while it had an offshore fund of Rs 8,000 crore.
