Andhranews

New Delhi, Sept. 7: Suzuki Motor Corp. and Nissan Motor Co. will jointly invest $1.5 billion in India for an export-oriented car plant at Manesar, according to the joint secretary, ministry of heavy industries and public enterprises. Mr Surajit Mitra, who was at the annual convention of the Society of Indian Automobile Manufacturers, said that capacity of the plant at Manesar would be 3,50,000 cars per year and will be essentially for exports.

Suzuki and Maruti in a separate press conference on Thursday said that they will take the total investment in the country to Rs 9,000 crores. They said they would start contract manufacturing for Nissan from 2008-09. “Around 90 per cent of the new investments would be met through internal accruals while we may have to take loans for the remaining portion,” Suzuki chief Osamu Suzuki said. Suzuki has a majority stake in Maruti Udyog Ltd (MUL).

Elaborating on the plans, Mr Suzuki said that Maruti’s new car plant at Manesar, which is expected to begin production soon, will manufacture 1,00,000 units of Maruti’s Swift brand as well as 2,00,000 units of a new small car, that the company is developing in collaboration with Nissan. He said, “Out of the production of the new small car, we will export 1,00,000 units ourselves while 50,000 would be exported by Nissan. The remaining 50,000 units will be sold in the domestic market by us.”

He said that the plant will see overall investments of Rs 2,500 crores. Suzuki also said that Maruti-Suzuki was increasing investments in its “diesel engine manufacturing plant” at Manesar to Rs 2,500 crores. Suzuki has a 70 per cent stake in this plant. Suzuki said that Rs 4,000 crores was being put in Maruti’s existing manufacturing location at Gurgaon for “upgradation of the existing facilities”.

Hyderabad, Sept. 7: If all goes according to plan, Dell, Inc., the largest computer manufacturer in the world, will be announcing the location of its manufacturing unit in India in the next few weeks. Several states, including Andhra Pradesh, have pitched the Texas, US-based firm to locate its first manufacturing unit in South Asia in their states. The issue of the production unit has been hanging since Mr Kevin B. Rollins, CEO of Dell, said during his visit to India in January, “We would like the facility to come up sooner than later, though no time-frame has been set... but we are talking with [state] governments and partners.”

“We are looking for a suitable site to set up a manufacturing base,” Mr Rollins had said. According to Mr Jaideep A. Pradhan, site director of Dell International Services, Dell’s BPO arm in India, the company expects to take a decision in the next four weeks. “India is a growing market for our computers, especially in the enterprise segment, with a growth rate of about 60 per cent,” Mr Pradhan told this newspaper on Thursday.

Dell, which reported a revenue of $14.1 billion for the second quarter of fiscal year 2007 and a global share of 19.3 per cent, has manufacturing units in the US, Ireland, China and Malaysia. Mr Pradhan, however, declined to speculate where the Indian unit would be set up, adding, “Several states have offered tax breaks. Logistics and tax breaks are the two areas which Dell will consider for the location.” State government officials had made a presentation to Mr Rollins during his visit to Hyderabad to open the 3.5 lakh sq. feet DIS centre.

Mr Pradhan said the Hyderabad centre of DIS, set up three years ago, has 4,000 workers, handling technical support, customer care and sales in English-speaking countries in Europe, West Asia and Asia (EMEA) region. “We expect to increase the headcount to 4,200 by the end of 2006. The centre handles sales in the United Kingdom and Ireland and Canada, technical support in the EMEA and collections in Australia and New Zealand,” he said. “Hyderabad is an important part of Dell because it handles a crucial market, EMEA, for the company. We are now in the process of consolidating the processes of DIS in India, where we have centres in Bangalore, Mohali and Gurgaon, apart from Hyderabad,” Mr Pradhan said.

New Delhi, Sept. 7: Andhra Pradesh and Maharashtra lead the race in setting up the maximum number of Special Economic Zones, but the country’s biggest SEZs are coming up in Haryana. The Board of Approval in the commerce ministry has so far given final clearances to 150 SEZs and in-principle nod to another 117 zones across the country.

While 27 SEZs have been given the final nod in Andhra Pradesh, Maharashtra is a close second with 26, followed by 20 in Tamil Nadu, 19 in Karnataka, 13 in Gujarat and 8 in Haryana, according to data compiled by the ministry. States in the northern, eastern and north-eastern region are lagging far behind. In fact, there is no zone proposed in the seven north-eastern States. Other States that draw a blank in the list include Orissa, Himachal Pradesh, Chhattisgarh, Sikkim and Bihar.

In terms of in-principle approval, Andhra Pradesh is at the top with 23 zones proposed. Maharashtra has 19 SEZs with in-principle nod, followed by 15 in Karnataka, 9 in UP and 7 each in Gujarat, Punjab and TN. However, in terms of area, Haryana has the country’s biggest zones. Gujarat is also getting a large number of bigger-sized multi-product zones. RIL’s 10,000 hectare SEZ at Jhajjar in the northern State, which has received approval, is so far the country’s biggest zone proposed.

Hyderabad, Sept. 7: As aviation companies bring in another round of fuel surcharge hike this week, the big question that bothers the traveller who has now become used to low-cost flying, is, how long would cheap fares last?
Some experts say two years while others like Capt. G.R. Gopinath, promoter of Air Deccan, India’s first low-cost airline, feel it would remain forever. If Capt. Gopinath’s optimism is excluded, the ground realities seem different.

“What we are seeing now is profitless growth for airlines who are resorting to loss leadership pricing. Airlines are stretching themselves too far to gain market share even as they bleed,” says Mr Kapil Kaul, CEO (India and West Asia) of the Centre for Aviation in Asia and Pacific (CAPA). This is because as more players firm up plans to join the battle in the skies, the kind of volumes generated is not profitable. “Airlines resort to pricing that is below their cost structure, as a result of which their cost of operations goes on increasing,” says the CAPA executive.

Yet Mr Kaul, maintaining a bullish outlook for the sector, believes that by 2010 the next easyJets and Ryanairs would emerge from the Indian skies. The key for airlines to achieve that would be to emerge unscathed out of the next two “turbulent and very tough” years with a mix of strong management, strong war-chest and backing of sound investors. Not surprisingly, SpiceJet has raised $80 million recently and others are exploring various options of raising money.

Mr Kaul says, “There will be room for two full-service carriers having international and domestic network and 2-3 low-cost carriers each with a fleet of 70-75 aircraft. Moreover, 3-4 niche regional airlines would also emerge.”

Interestingly, according to a CAPA research, LCCs (low-cost carriers), which now have 31 per cent market share, could see their share rise to 70 per cent. The growth of such airlines can be sustained because, according to Mr Kaul, “LCCs are generating good capital interest since the design of the market is attractive.”
Further, in an offshoot of the passenger segment boom, cargo airlines, MROs and flying schools are bound to grow because they offer reliable revenue streams. “The cargo segment is the key now for Indian aviation. It has to target the market share of cargo hubs like Hong Kong and Singapore,” Dinesh Keskar, senior vice-president (sales, commercial planes) of Boeing told this newspaper.

However, apart from soaring ATF prices, experts point out to a few air-pockets for the industry. “The level of preparedness of the some of the players is low.
What is important for airlines is to set rational and realistic targets and they should not enter the segment only for strategic reasons,” Mr Kaul cautions, adding that organisational capability also holds the key for survival.

Mumbai, Sept. 7: The Investors’ Grievances Forum president Kirit Somaiya has accused Sicom of being hand in glove with the Makharia group, allegedly one of the big defaulters of the United Western Bank or UWB. Dr Somaiya alleged that since 2000, they have defaulted for a sum of Rs 56.54 crores of which Rs 45 crores was through a textile company and the rest from the stock broking firm. Dr Somaiya said that after the rights issue in April, the Makharias hold 12 per cent stake in the bank. They also have two of their nominees on the bank.

Dr Somaiya on Thursday demanded that all the details of the Makharias and other defaulters should be made public. He said the RBI should “keep in mind that if the restructuring proposal is not worked out properly, there will be a heavy run on the bank immediately after the moratorium is lifted. No small depositor can continue with the bank with a management which is pressurised and compromised with wilful defaulters.”

Dr Somaiya said that Sicom has a 9 per cent shareholding in UWB but it did nothing to save the bank. Sources in the know say that the Makharias got their nominees on the bank after several years only through a former chief secretary of the government of Maharashtra. Sicom is a fiefdom of politicians of Western Maharashtra through the bureaucrats. The present chairman is Mr Prem Kumar who was a former chief secretary and the managing director was finance secretary under the present finance minister Jayant Patil.

It is said that the politicians would like to keep the bank under their control as they know that if an independent bank takes it over they will send recovery notices to the defaulters as was done in the case of the GTB. Meanwhile, Sicom and the state government have got an assurance from the HDFC which will infuse Rs 70 crores to revive the UWB. Balaji Industries which had bid for taking over the bank’s management and failed, staked its claim again. Mr Vijay Kalantri of Balaji has written to the RBI staking his claim as he says he has the support of shareholders who have mopped up 15 per cent of the equity of the bank.

Hyderabad, Sept. 7: The Indian economy is expected to grow robustly, led by the services sector and an industrial expansion that continues to gather momentum, according to the Asian Development Bank. The ADB’s “Outlook 2006 Update” forecasts the economy will grow 7.8 per cent in fiscal year 2006, which ends on March 31, 2007.

The forecast represents a slight upward revision from 7.6 per cent anticipated in April. Growth of 7.8 per cent is also expected in FY2007. “We are witnessing a steadily-accelerating industrial expansion. Growth in manufacturing and in capital goods production has been robust, driving the economy forward,” said Mr Ifzal Ali, ADB chief economist. “While the service sector is growing sharply, the rapid expansion in manufacturing and manufactured exports is a welcome sign of a more diversified growth path.” In India, the update highlights four stories that drive the forecasts: new industrial figures that further confirm India’s accelerating industrial sector; an expanding gap between international oil costs and domestic fuel prices; challenging fiscal indicators; and inflationary pressures that are building even as interest rates rise.

“Recent industrial results build on three years of acceleration and confirm that on the strength of India’s growing role in the international industrial supply chain and expanding domestic demand, the economy is shifting from a services-led model to a more balanced, services-and industry-led growth trajectory,” the Oulook Update says.

Hyderabad, Sept. 7: Sales of personal computers and laptops together crossed 12 lakh units in the first quarter of 2006-07, according to MAIT, the apex body representing the hardware, training and R&D services sectors of the IT industry in the country. In its Quarterly Industry Performance Review, Mait said sales of notebooks, servers and peripherals witnessed robust growth. With strong macroeconomic conditions and upbeat market sentiment, sales in third quarter are expected to be buoyant. Desktop sales in FY 2006-07 are expected to cross 5.6 million units.

“IT consumption in the country continued to be dominated by industry verticals and corporate sectors such as telecom, banking and financial services, manufacturing and IT-enabled services. The consumption in these segments were largely driven by investments in software, solutions and other enterprise products. Apart from these traditional sectors, high consumption was also witnessed in SMEs, education, retail and other computer centric small enterprises,” Mait said.

In addition, the trend of increased PC purchase in households, smaller towns and cities as witnessed over the last few quarters, continued to be steadfast. Aggressive pricing by the PC vendors has also helped improve the PC penetration.
MAIT’s Industry Performance Review — ITOPs — conducted by market research firm IMRB (Indian Market Research Bureau) says the desktop market grossed 10.2 lakh lakh units, a growth of nine per cent year-on-year. However, this is 22 per cent lower than the sales in the fourth quarter of 2005-06. Notebook sales crossed 1.8 lakh units, recording a 125 per cent y-o-y growth and 18 per cent sequential growth.

Chennai, Sept. 7: The minister of foreign trade of the Netherlands, C.E.G. Karien van Gennip, on Thursday said Indian knowledge workers were welcome in her country and visa processing rules for them have been relaxed to attract them to her country. Ms Karien van Gennip said the Dutch embassy had issued 160 visas to Indian knowledge workers in the last quarter, after relaxing the visa processing.
She said there was huge scope to consolidate and strengthen economic relations between the two countries. Presently, the volume of trade between the two countries is euro 2.3 billion.

She said the delegation with her was discussing with Indian industry chambers how the mutual investment can be increased in both countries. The minister suggested that the Dutch companies could help Indian firms in building infrastructure, environmental technology and alternative energy sectors.
Similarly, she invited the Indian firms to set up shop, especially in the IT processing sector, in the Netherlands.

“India is one of the three priority countries of the Dutch Trade Board, a public-private partnership body set up to promote trade in the Netherlands. With an investment of $244 million, the Netherlands emerged as the largest recipient of overseas Indian investment in the first six months of 2006,” she said. The Dutch minister was in Chennai to promote bilateral economic relation between Indian and the Netherlands with Indian companies. She is accompanied by a business delegation, consisting of 30 Dutch companies from the sectors of information technology, agro-industry, biotechnology, healthcare and banking. The minister is also scheduled to deliver an address on “Capturing the European IT Market — The Netherlands: India’s Gateway to Europe”.