Showing posts with label IIPM NEW DELHI. Show all posts
Showing posts with label IIPM NEW DELHI. Show all posts

Tuesday, September 04, 2012

It pays at times to stay married!

Speculations abound on the probability of the Hero Honda JV heading for a sudden break up. B&E’s Pawan Chabra does a speed-check on the repercussions of such an event for both players

August 26, 2010. Venue: Taj Palace Hotel, New Delhi. SIAM’s 50th annual convention was in its last session before the day was called off. The theme of the session was crystal ball gazing for the Indian automotive industry, and the panel had eminent names of the industry like Anand Mahindra, Vice Chairman & MD, Mahindra & Mahindra, Abhay Firodia, Chairman, Force Motors, Ravi Kant, Vice Chairman, Tata Motors and Venu Srinivasan, CMD, TVS Motors. As the session was in its question and answer round, Madhur Bajaj, Vice Chairman, Bajaj Auto pointed out that it is somehow difficult to predict the future; as an example, Madhur forwarded the example that in the early 1980s, no one could have predicted that scooters will be replaced by motorcycles. Before Madhur could complete his statement, Abhay Firodia gesticulated towards the much respected Brijmohan Lall Munjal, Chairman, Hero Honda Motors (sitting next to Madhur Bajaj on the same table), giving a repartee, “He predicted it!” The statement consolidated the emotion of the event – that not only had the Munjals forecasted correctly the change, they had also acted on the same in a brilliant manner, by forging one of the most successful JVs in Indian corporate history with Honda Motor Corporation in 1984.

It was at a period when the country saw many JVs and alliances happening in the domestic circuit – be it Kinetic joining hands with Honda or TVS and Suzuki getting into an alliance. But the fact is that most of these alliances ended sour – including all those mentioned above; all except the Hero Honda JV.

But apparently, corporate history is set to be re-written. The technological agreement between Honda and the Hero group was due to expire in 2014, but reports are now filtering out that Honda is attempting to move away from the relationship by attempting to sell their stake in the JV, The day these yet unconfirmed reports hit the stock bourses, Hero Honda saw its share price falling by over 6%. But that’s clearly not the worrying part for the Hero group. It’s quite evident that the parting of ways could inflict much more damage to the Hero group; which will be left lagging on the technology front.

In reality, even till last month, there was no such talk, report or discussion about any future breakup. When B&E met Anil Dua, Senior VP – Marketing & Sales, Hero Honda, in August 2010, he had enthusiastically commented, “Honda has had the most profitable JV with the Hero Group in India and as the companies have been launching right products at the right time, the strategy has paid off very well.” On the contrary, sources in the industry are of a view that the main issue of dispute between the two giants is on royalty payments. In case such a breakup does occur, the option of getting a new technology partner, developing its own R&D or continuing with Honda’s support are the most probable choices for the Hero group. For the uninitiated, the Hero Group owns a majority stake in the JV (see chart) and with Honda moving out, it would not only take a huge pile of cash reserves from Hero (to acquire the stake, if it wants to stop others from buying into the company) but the company could also take a temporary blow on volumes (due to supply issues). The market leader is already facing supply constraints and has seen its market share fall from over 50% since time immemorial to 44% in September 2010; and competitors like Bajaj Auto & TVS Motors have been quick to build on the opportunity.



 
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Monday, September 03, 2012

US: Pranab is still the External Affairs minister

Secretary of State Hillary Clinton’s State Department considers Pranab Mukherjee to be India’s foreign minister! More similar gaffes inside...

Truth is stranger than fiction, but fiction does appear to have an irresistible appeal for two of the world’s largest administrative agencies, the US State Department and CIA. The official web portals and communiqués of the US State Department and CIA are splattered with notable misinformation and errors that would be necessarily considered highly affronting at a diplomatic level.

Last week, we showed how both the State Department and CIA confidently misrepresented India’s map (and showed Kashmir as part of Pakistan) on their websites. We had no idea there was more to come – perhaps even ‘the’ reason for why the Americans seem to be making no headway with India on foreign affairs. The US State Department’s official website mentions that the Minister of External Affairs of India is (still) Pranab Mukherjee! S. M. Krishna, the current Foreign Minister of India since May 2009, has been notably left out of the State Department’s official communiqués. Incidentally, Krishna has also met Barack Obama in various forums, including at New York in September 2009. Not all listed information is wrong, though. Some US government letters are thankfully still reaching the right addresses in India. The Home Minister of India is correctly named as P. Chidambaram; and so are some other Indian politicians.

Mistakes on the CIA and State Department’s websites are not only India-centric but can be found in the case of other countries too. What’s interesting is that, in spite of the official websites of these respective countries portraying genuine information, the US has failed to recognise the same in its own records. First, the comical. In South Korea, three years ago, a series of protests against the CIA finally forced the agency to correct the information about South Korea’s origins (CIA had earlier amusingly stated that “South Korea has been a nation for a millennium;” South Korea, apparently a stickler for dates, protested en masse as this nation has been in existence only since the last 4000 years).


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Friday, August 31, 2012

BUSINESS BEYOND PROFITS!

As the world emerges from global recession, businesses should focus on restoring their profitability. But only short-sighted businesses do so at the expense of the pursuit of a broader purpose, writes Amit Bhatia, scion of the l. N. Mittal group, founder of Mittal Champions Trust and Swordfish Investments

The past few years have seen growth rates drop everywhere – even in emerging economies like India and China. That process has not only affected nations and businesses but also lives of ordinary people. As the focus of governments, businesses and the ordinary man turned to survival, many personal aspirations were put on hold and major infrastructure projects, such as the construction of new roads and hospitals were shelved or not built as quickly as they might otherwise have been.

As the world starts to readjust to the new normal of a period of prolonged economic austerity, it might be tempting for companies to reign in programmes that make no discernable contribution to the bottom line as they come under pressure from investors to increase profitability. But now is exactly the time when companies must stay true to the ambitions they laid out in more prosperous times and remember that, over the long term, companies with a purpose beyond profitability will enjoy the greatest success.

There are many who would argue that by simply producing its product, being profitable and providing jobs, a business is already making a substantial contribution to an economy. But over the years the accepted view has become more sophisticated. Business, it is often argued, is in a unique position to help make a broader contribution. As part of its license to operate, it should act responsibly at all times and seek to actively engage with the communities in which it is present. This, advocates of corporate responsibility claim, will generate long-term and sustainable advantages for the business in terms of growth and profitability.

I agree. Of course profitability is crucial. A business has no future if it cannot be profitable, something that will have severe consequences for all stakeholders. But equally businesses must look beyond profit, and also pay attention to the quality of life, in the broadest sense, of the communities in which they work.

I have actually always been very impressed by the emphasis leading Indian companies place on Corporate Social Responsibility. The winner of the Corporate Responsibility Award at the Financial Times/ArcelorMittal inaugural Boldness in Business Awards in 2008 was Selco, an Indian social enterprise that provides sustainable energy solutions and services to under-served households and businesses.

There are many examples of leading Indian companies who make a healthy profit, but utilise a proportion of this profit to make a meaningful contribution where they believe they can have a positive impact such as education and health.


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Thursday, August 30, 2012

H. W. Park, MD & CEO, Hyundai Motors India talks to B&E on the present challenges

H. W. Park, MD & CEO, Hyundai Motors India talks to B&E on the present challenges – both internal and external – and the plans of his company for both the domestic and export markets

B&E: The company has been experiencing labour issues for the past many years in the Chennai plant. In fact, this very year, there have already been three such incidents reported. What is the current state of affairs at the plant?
HWP: The factory is now in a relatively safer state and we are currently in a review stage with the labour committee at the plant. We will be in a better position to comment about it after the review stage is over.

B&E: The overwhelming growth in the domestic market has brought about problems of production shortages for many companies. Is Hyundai one amongst them as well?
HWP: Not really. The impact has been minimal and the shortage lag only lasts for a day or two at worst. That is manageable.

B&E: So you do agree that there are shortages. Do you believe that the company will be able to recover from the situation of component shortage anytime soon?
HWP: Surely we will be able to do so. But it also depends on the health of the overall auto industry in India. The industry is growing at a fast pace, something which wasn’t initially expected by anyone. Hence, there has been a minor shortage from the component supplier side, but because we are a big player in the Indian automotive industry, we can handle the problem by adjusting our exports and domestic ratio.

B&E: If the company had been in a situation with no production constraint, would you have produced more cars?
HWP: No. As mentioned before, even today, the production constraint problem is very much negligible, as the lag only appears for a day or two.

B&E: There have been reports of Hyundai India manufacturing electric i10 for the parent company. Your comment...
HWP: For the electric i10, we are only providing parts for the chassis and the engine. This is because chassis for the model can not be locally assembled for the product that will be sold in Korea.

B&E: Initially, Hyundai focussed heavily on exports. So are your views changing in favour of the domestic market?
HWP: We at Hyundai enjoy such a liberty. If the demand in the local market is high, we can always adjust it by reducing the export volumes. As the Indian market is getting bigger, we are gearing up to cater to this rising demand of the Indian consumers.



          
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Tuesday, August 21, 2012

The intrigue of the islands

A mysterious and fascinating set of islands lie in the Bay of Bengal, ready to give your most adventurous imagination wings…

The British came here and so did the Japanese, but the mystery of the group of islands that is Andaman and Nicobar islands was never quite unravelled. Even after years of studies and observations, practically little is known of the origin and the people of these islands and this sense of intrigue and the feeling of a mysterious air about the place will overwhelm you if you happen to land on these islands – any of the 572 of them cradled perilously in the Bay of Bengal.

There is a sense of the primordial among the flora, fauna and the indigenous people of the islands – the most fascinating bit about exploring the Andamans. Always inhabited by aboriginal tribes, many of whom still live the lives of hunters and gatherers, the inaccessibility of the islands had made them an object of fascination. The existence of the islands had been known for centuries (they find reference in early historical writings of Roman geographer Ptolemy) but the first attempt at an outside settlement on the islands was by the British in 1789. They had to abandon it seven years later because of the inhospitable locals and the immense logistical challenge of connectivity to the mainland.

Oddly, they returned in 1858, this time establishing a penal settlement – the dreaded and the feared ‘Kaala Paani’ or the Cellular Jail. The jail held mutineers from the First War of Indian Independence, even some criminal tribes and refugees from erstwhile East Pakistan apart from other freedom fighters later on. My visit to the jail was a unique experience because a first-hand experience of the conditions there is enough to make your hair stand on its end. You can go around the courtyard, see the cells and the gallows and also look over the horizon from atop the wings. One bit of trivia I got to know was that the sight of the lighthouse and the island imprinted on our twenty Rupee notes is a view from the top of the wing facing the sea. The prison initially had seven wings, with the watch tower at the centre. Today, only three remain (the rest had been destroyed by the Japanese during World War II), and it has been branded a national monument. The Japanese briefly controlled the islands from 1942-1945, a period in which though innocent blood was shed, there was development of the basic amenities, especially in Port Blair.


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Monday, August 20, 2012

The strange cases of Benjamin Buttons!

While drug makers around the world are lamenting the death of their patent rights on many blockbusters, there is a certain tribe smiling about it – the Indian generic tribe

A year back, when John Lechleiter took charge as the CEO of the $21.8 billion-a-year earning US pharma giant Eli Lilly, he decided to send his top executives a gift. It was a digital clock, which counted backwards, second by second. The clock was programmed to stop ticking precisely 48,384,000 seconds later. The deadline – October 23, 2011, the day when Eli Lilly’s top-selling (which raked-in $4.9 billion in 2009) schizophrenia pill Zyprexa would go off-patent, setting-off the alarm for generic drug companies to work double-time. This is however, not the only heartache in store for Lechleiter. Besides two more blockbusters losing their exclusivity rights by 2016 (its second-best selling Cymbalta expires 2013 and its third-best Alimta in 2016 – two drugs that make for another $4.8 billion-a-year), two of its most promising compounds failed the final clinical trials last year. Result: Lilly’s stock could not withstand the shock that the company had no new compound ready to hit the global market, while standing to lose close to $10 billion (of its $21.8 billion revenues FY2009) by 2016. It became the worst performer amongst the eleven S&P pharma stocks, and fell by 11% in just the year 2009. This is however just the beginning of the landslide for Eli Lilly, and much remains to be seen. As for the clock, it has started ticking backwards, and it’s the generic challengers that are waiting for the time, to make most of the misery of the once-proud patent holders, Lilly being just an instance.

When shareholders don’t like you, they let you go sans remorse. Much as this sounds a “generic” take on shareholder activism, it is true. Jean-Paul Garnier was voted out despite trying hard for seven-and-a-half years to revive the GlaxoSmithKline stock. Busy ensuring delivery of drugs at cost and selling 90% of its vaccines at not-for-profit prices in developing economies, it lost focus on new drug discovery. During his tenure, the GSK stock had fallen by 41%. He got the boot in May 2008. His successor Andrew Witty hasn’t made amends yet. Since February 2009, the company has enforced price cuts on its patented versions, in more than 50 countries, while winning just one patent (on a vaccine for H1N1 influenza). Witty is dreading the day when the second-highest selling drug in history, the $7.8 billion-a-year earning Advair, expires on April 1, 2011. Pfizer, the biggest pharma giant is no exception. CEO Henry McKinnell was booed-out in June 2006, following a stagnant stock price. His successor Jeff Kindler hasn’t been an exception. Under him, Pfizer’s stock has touched the sub-$18 level for the second time in over a decade and its bottomlines for 2009 have shown a drop of 57% as compared to pre-Kindler days. Worse, despite losing patents on 14 big drugs by 2014 (representing 70% of its annual revenue for 2009), its new launches have simply been shadows. Of the biggest setbacks will be the losses of Lipitor’s patent (the largest-selling drug ever) in 2011, and that of Viagra in 2012 and Celebrex in 2013 – add the losses from these two, and you would have Pfizer’s revenues being reduced by an alarming $13.74 billion (as per Evaluate Pharma, loss of revenues, post-patent expiry, is estimated at 85%). “Pfizer has a number of downward revenue revisions. You have to believe board members are scratching their heads,” says David S. Moskowitz, Analyst at Friedman, Billings, Ramsey Group Inc. The company has 148 compounds in the early developmental stages, but hopes of producing another blockbuster drug remains a fantasy.

Time is running out fast for these Benjamin Buttons of the pharma world, and of the lot most hated by them, the Indians are definitely on top of the list! But the volume-playing generic players in the country won’t mind it. The potential that lies in wait to be tapped by the Indian players can be imagined by the fact that despite being the third largest player in terms of volumes in the world, the Indian pharma market is still 14th in terms of value ($21.04 billion, as per Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers). A market which was written-off about half-a-decade back, when the world was heaving forward at a great rate of knots to catch the patent blockbusters bus, is now chugging ahead faster than imagined before. While the domestic market alone is expected to grow at a CAGR of 12-15%, as opposed to a global average of 4-7% during 2008-2013 (according to an October 2009 report released by research firm IMS Health), Indian pharma companies are finding the proposition of lapping up the opportunities granted by the patent expiries simply irresistible. Over the next two years, more than 26 bestsellers, with an annual value of $70 billion (Rs.3.1 trillion) are going off-patent, representing 240% of the current Indian pharma space. This justifies well why despite struggling to win approvals for generic versions from the USFDA, Indian drugmakers are filing for generic licences at a brisk pace. Indian companies have filed for approvals to market 11 of 15 drugs that go off-patent by 2010 and 22 of the 26 that expire by 2012. “These developments present large opportunities to the Indian pharma companies and with their low-cost manufacturing capabilities India is well-positioned to tap the opportunities,” says Animesh Kumar, Principal Consultant, Datamonitor Healthcare to B&E.

Explaining his company’s outlook in the generics space, Ramesh Adige, President, Ranbaxy tells B&E, “Ranbaxy is today well positioned in the global generics space and is amongst the top 10 generic companies globally offering products in over 125 countries. With over $80 billion of drugs going off patent by 2012, the generics market will continue to provide attractive growth opportunities in future.” Even Uday Baldota, VP – Investor Relations, Sun Pharma tells B&E, “In our view, generic drugs is a significant, growing and profitable opportunity, worldwide. We are working towards getting a meaningful presence in the worldwide generic industry over the longer term.” As per a report by HDFC Securities, 34 Indian players are looking ahead to play this game. While Dr. Reddy’s stands to gain the most, there are others like Ranbaxy and Sun Pharma (despite their troubles with USFDA), which are amongst the top gainers. Even Cipla, which has so far avoided the US market, has filed for permission to market generic/low-cost editions of drugs that make over $45 billion annually! While 10 Indian firms have seeked permission to sell generic versions of the highest-selling Lipitor, in US alone, it is Merck’s Cozaar (anti-diabetic drug) and Astra Zeneca’s Arimidex (anti-cancer), which have received the maximum number of applications from the country.


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Saturday, August 11, 2012

Tale of a tri-city

Chandigarh is fast moving beyond the shadow of its legacy of being a sleepy town to a hot hub of realty opportunities, says nirupama dutt

No longer can Chandigarh be dismissed as a sleepy little town on the Shivalik foothills, which was described by a cynical writer as the abode of green bushes and white beards. Up North, it is the fastest growing city and as predictions go it is going to be India’s richest city in three decades; with Delhi following close on its heels. This is a great change for a city that showed very slow growth in the first fifty years of existence. Even the tiniest piece of land of around 125 square meters is over a couple of crores. Yet it has takers aplenty; including landlords, industrialists, NRIs, doctors, lawyers and bureaucrats.

Its great location in the Shivalik foothills, proximity to Delhi and its growth as an IT city; all work to Chandigarh’s advantage. The Chandigarh Technology Park has attracted many multi-nationals like Infosys, Wipro & Convergys. Quark is also planning to establishing a ‘Quark city’ in Mohali. Earlier, many professionals had to shift to other places in search of high employment. Due to advancements in IT sector, the city has become a virtual magnet for professionals. It has also helped improve the economy and quality of life in the city. Now the city has its share of malls and multiplexes with builders moving in to make the most of the changing mood.

Chandigarh has limited land; so adjoining areas like Mohali, Panchkula, Zirakpur and Kharar are developing very fast. Ritu Singal, MD, Raglan Infrastructure Limited, says: Chandigarh’s periphery is the area of the future as property has now gone out of the reach of common man. So over the next few years, Derabassi, Kharar and Zirakpur would be to Chandigarh what Gurgaon is to Delhi now.”

Besides the big fish, a large number of local builders have made their fortunes in real estate. The builders are now selling the concept of luxurious apartments and penthouses. The rates of property in these areas adjoining Chandigarh are still affordable and thus property developers are making a beeline to make investments there. They are expected to make huge returns on these investments in the near future with the considerable increase in commercial and infrastructure development activities taking place. In main city, owners are converting their spaces into one, two and three bedroom apartments and giving them out on lease or rent. Also, floors are being refurbished into small shops and retail outlets to meet the demand for commercial property. Shravan Gupta, Executive VC and MD, Emaar MGF, says: “Punjab is a progressive state and offers endless opportunities of development aligning with our vision of ‘Creating a new India’.”

Ludhiana is another classic case of the big boom in property and Ashok Malhotra CMD AMGECO (Ashok Malhotra Group of Companies) says: “The boom was due for a long time. In winters, the hosiery market had done great business and the profits were high.” AMGECO has come up with the first IT Park in Ludhiana and is moving onto group housing colonies on the highway.


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Thursday, July 26, 2012

Russians Out! Yankees in! Germans down!

A Comprehensive Journey through The History of The North Atlantic Treaty Organisation (NATO) and Libya will Convincingly Demonstrate that The World has more to fear from NATO than from Colonel Muammar Gaddafi!

Libya, a developing nation in North Africa, which has set an ideal example of development, is witnessing a downfall; economically, politically and socially. This is because ‘rebels’ (with an ever-present tribal mentality to overthrow Gaddafi without realising the severity of the measures they have adopted), who are aided and equipped by NATO forces are destroying Libyan oil fields & buildings, ruining existing infrastructure and killing innocent civilians. A nation built with hard earned wealth (Americans or Europeans didn’t gift Libya the wealth it has earned, in fact they tried everything possible to stop Libya), is now being sent back to the stone age with naive impunity.

In its last 43 years of history under the leadership of dictator Gaddafi whom NATO now wants to remove badly, Libya hasn’t met with such a catastrophe. To a sane observer, it is not difficult to realise that if Gaddafi is bad for Libya, then what NATO strikes are gifting to Libyans in the name of ‘liberation’ is even worse. However, this is not the first time that the world’s most influential collective defence force NATO has endangered world peace. History bears testimony to the blunders that NATO has committed and the wars that it has waged, which are not only unjust but also unpardonable for mankind.

After being formed on April 4, 1949 based on the North Atlantic Treaty with a simple ideology to keep the “Russians out, Americans in and Germans down”, as aptly stated by the first NATO Secretary General Lord Hastings Lionel “Pug” Ismay, NATO basic structural premise was its key fault. Its biggest failure has been in defining its relationship with Russia. The Soviet Union expressed its desire to join NATO in 1954, but the proposal was rejected, suspecting that the Soviets were conspiring to weaken NATO. But surprisingly, in the next year, it accepted West Germany on May 9, 1955 as a member to resist Russian military might. This move not only formally started the Cold War but also resulted in the creation of the Warsaw Pact signed on May 14, 1955 by the Soviet Union, Hungary, Czechoslovakia, Poland, Bulgaria, Romania, Albania, and East Germany – a pact to counter NATO, which apparently hasn’t even matured with age. As recently as in 2007, NATO again slighted Russia with its announcement of plans to install a defence system with interceptor missiles in Poland and Czech Republic to defend the nations against Russia. Yes, one can understand that Putin loves to attack nations faster than talk (Georgia, an iconic case study), but to deliberately go overboard in announcing the missile systems was a critical geopolitical blunder.





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Wednesday, July 18, 2012

Can we Move Out at All?

India’s Traditional Transport Systems Including Road, Rail, Air and Water never got their due Importance from Successive Governments.

The very essence of the phrase ‘national priority’ often gets diluted due to the number of times it is used, reused and misused in our country. It’s almost as if everything is national priority depending on how hyped up it is at a particular point in time. In that context, it is indeed debatable whether reforming and modernising India’s transport systems, including road, rail, air and waterways, were ever ‘national priorities’ in the sense that we expected it to be. On both technological advancement and security, India’s transportation systems seem to have fallen way behind when compared to our economic progress. And the gap is only increasing with time.

Indian Railways, which spawns across the nation connecting almost all cities and towns, is still awaiting modernization and suffers from many shortcomings. During the last 20 years, Indian Railways added merely 1,648 km, which is less than 90 km per year. Given the population size, we have very less rail route length per capita. According to the Centre for Transforming India, when it comes to roadways, New Delhi saw a mere 20% increase in road length and an alarming 132% increase in vehicles, which has led to a congestion cost of Rs.40 billion per year and a loss of 2.5 productive hours every day in Delhi alone. And this is the state of the capital; one can imagine the plight of the rest of India.




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