|B U S I N E S S||
Monday, September 14, 1998
Sukhbir targets Rs 22,000
Dalmia seeks claim
CMs meet tomorrow
upbeat over Trais new tariff
EU to discuss anti-dumping duty
Sukhbir targets Rs 22,000 crore
NEW DELHI, Sept 13 The Union Minister of State for Industry, Mr Sukhbir Singh Badal, is seeking to create a record of sorts by getting investments totalling Rs 22,000 crore for his home state, Punjab.
A massive thrust in agro industry and food processing, creation of a software park in Mohali, luring big industrial houses to set up units and have tie-ups with the ITIs in the State is the new mantra of the young Minister to stir up economic activity and industrialisation in Punjab.
His penchant with the development of Punjab even while attending to the national issue of divestment in Public Sector Enterprises and the reorganisation of their administrative machinery as a Central Minister has already started showing results.
Big industry names like ICI, Hindustan Petroleum Corporation Ltd, Hyundai, Bharat Heavy Electricals Ltd, Gujarat Ambuja, Mahindra and Mahindra and Apollo Group have already indicated their desire to set up shop in Punjab.
The development strategy, according to Mr Badal, involves a shift in the pattern of agriculture in the State. Punjab, which accounts for only 1.5 per cent of Indias land under agriculture, produces 70 per cent of the total wheat in the country and 60 per cent of rice. Mr Badal would like the farmers in the state to shift to production of fruits and vegetables which has got a good export potential.
He feels that Punjab with its excellent irrigation system, soil and agro-climatic conditions and hard working farmers is predestined and suited for growing most of the horticultural crops.
Broccoli, Cauliflower, Baby-corn, Okra, Capsicum, Pearl Onions, Gherkins, Snow Peas, French Beans, Spinach and Lettuce are some of the products which have been identified for exports in either fresh, frozen or in bottled form.
On its part, the state government is encouraging creation of an adequate infrastructure for export of processed foods including setting up of cold stores. The Government is encouraging and actively promoting the processing facilities like packaging, canning and bottling, freezing and dehydration to attain value-addition for the States produce.
Apart from having the advantage of being closer to Delhi and Jaipur, which are big markets for fresh vegetables and fruits, export of vegetables by air to Europe through dedicated chartered flights from Amritsar is also being explored. Mr Badal feels the first flight could become a possibility by the end of next year.
Information dissemination is another area where the Government is focussing. Prices of various markets in the country for horticultural produce would be made available to the farmers to help them choose the right selling point. Likewise the export prices of the various markets would also be published and made available on fax and phone.
The Punjab Government has already created a corpus fund of Rs 25 crore which it would contribute as equity to create infrastructure like cold stores and processing facilities.
Availability of adequate power for industrialisation of the state is also being ensured. According to Mr Badal, the State would soon have surplus in power generation. While the total requirement of power in the state is estimated to be around 4000 mw, Punjab produces 3100 mw of power. However, in the proposed projects, the Thein Dam unit would generate 600 mw, the Lehra Mohabbat unit at Bhatinda 500 mw, Goindwal Sahib project 500 mw and the by-product of the proposed Bhatinda oil refinery 1100 mw. This totals up to a production of 5800 mw which would enable Punjab to supply surplus power to other States connected with the Northern power grid.
Though Punjab does not have too many natural resources, it has decided to harness water flowing in its canals. Companies in the private sector are being encouraged to set up mini hydel projects of 5 mw to 6 mw capacity near the numerous canals in the State.. The potential of mini hydel projects is estimated at around 300 mw.
Mr Sukhbir Badal, would also be making available from the Centre Rs 600 crore for roads, Rs 200 crore for irrigation and canals and Rs 500 crore from HUDCO for better housing facilities.
Mr Badal, who in his earlier interview with The Tribune had said that he wants to make Bathinda into another Ludhiana, is now speaking of making Mohali into another Bangalore or Hyderabad. An ambitious software park is being planned at Mohali which Mr Badal feels would make Punjab the software capital of India.
A boost to technical education facilities in the state that would empower youths of Punjab to get employed is another area of focus for Mr Badal.
He has talked to BHEL to set up an Industrial Welding Training Centre at Moga costing around Rs 8 crore. The Centre would generate jobs for 50 persons directly and enable training of 500 persons annually.
A proposal is under consideration of BHEL to take over one of the ten existing ITIs in the State. Mr Badal has also convinced the Korean company, Hyundai, to get associated with another ITI. Punjabs Secretary for Technical Education is pursuing industrial houses to adopt the remaining ITIs in the state.
An Urea plant of Punjab State Industrial Development Corporation is also coming up at Sangrur. Though away from the sea coast, the PSIDC is tapping the Bathinda-Kandla pipeline for availability of fuel.
The Hindustan Insecticides Ltd (HIL) is also setting up a project at Faridkot and the Punjab Government has already made available 20 acres for the purpose.
LANDAUs, a leading cheese manufacturer in the USA, is proposing to set up a cheese manufacturing plant in collaboration with PSIDC. The project, estimated to cost Rs 30 crore, would be commissioned within a year.
Dalmia seeks claim for property in Pak
NEW DELHI, Sept 13 (PTI) A company owned by Dalmia, which had its office in Lahore before partition has succeeded in getting show cause notice issued to the Centre from the Delhi High Court on a writ petition seeking compensation under rehabilitation agreement between India and Pakistan for financial commitments made by each other.
Notice, returnable by December 14, was issued by Justice Anil Dev Singh this week on a plea by South Asia Industries Private Limited (SAIPL) seeking adequate compensation for its assets worth Rs 2.35 crore acquired by the Pakistani Government in 1942.
SAIPL Counsel Malavika Rajkotia informed the court that Pakistani authorities, which had paid Rs 1 crore as part payment in 1946, had refused to pay the balance amount of Rs 1.35 crore after partition maintaining that the money could only be paid to the Custodian of Evacuee Property in Pakistan.
SAIPL, which was an electric supply company in Pakistan, had shifted its office to Rohtak in Haryana in July 1947 and was declared as evacuee company by the Pakistani authorities, Rajkotia told the court.
According to the international norms and understanding between India and Pakistan, the amount in respect of evacuee property was to be settled by both the countries with mutual agreement and the affected companies were to be paid adequate compensations accordingly, she said.
SAIPL said the Indian
Government failed to evolve a policy on claim of
compensations by the evacuee companies even after 50
years of Independence and accused it of putting the
matter to back burner after it remained on the agenda for
talks with Pakistan at various fora including the
Indo-Pak joint commission for several years.
Nafed to procure mustard
NEW DELHI, Sept 13 (PTI) The government has entrusted the job of procuring mustard and rapeseed during ensuing rabi season to the National Agricultural Marketing Federation (Nafed) fearing that farmers might face marketing difficulties in the wake of widespread dropsy epidemic in Northern India.
The Agriculture Ministry has also asked the state governments to ensure that the area coverage under rapeseed/mustard is not allowed to suffer as the epidemic has created uncertainties about the future prospects, pricing and marketing of this oilseed crop, the Ministry sources said.
In a letter sent to the state governments, Additional Secretary of the Agriculture Ministry, J.N.L. Srivastava, has written that the remunerative minimum support price (MSP) for rabi oilseeds crops including rapeseed and mustard would be announced soon and Nafed will ensure marketing of the product at the support price.
The note said that enough
quantity of certified mustard seed, free from the seeds
of Argemone and any other contamination, was
available with the National Seeds Corporation (NSC) and
Central State Farms Corporation (CSFC).
FM, CMs meet tomorrow
NEW DELHI, Sept 13 (PTI) The working of the non-banking finance companies in various states and the progress in the introduction of value added tax (VAT) would be among the main topics of discussions during the one-day meeting between Union Finance Minister Yashwant Sinha and state Chief Ministers being held here tomorrow, according to officials.
Mr Sinha will hear the
views of the Chief Ministers on the role of state
governments in regulating non-banking finance companies
(NBFCs) and is expected to put forward concrete
suggestions on regulations of these institutions during
MTNL upbeat over Trais new tariff
NEW DELHI, Sept 13 (PTI) State-owned Mahanagar Telephone Nigam Ltd (MTNL) is upbeat over the new tariff structure recommended by Telecom Regulatory Authority of India (Trai) saying reduction in long distance call charges would give a boost to its business.
It was a necessary thing to happen, for the first time in India cost-based tariff will be introduced and that too with a lot of flexibility, MTNL Chairman and Managing Director, S. Rajagopalan said.
Long distance callers can generate tremendous amount of business for MTNL, which is fully equipped to handle increased traffic, consequent to reduction in charges, he said.
On whether increase in rental and local call charges would affect MTNLs revenue, Rajagopalan said Trai has recommended a cap of Rs 620 as bi-monthly rent meaning that it may or may not fix the rent at Rs 620.
He said the best thing in the new tariff proposals was the cap for the purpose of fixing rent or call charges, which provides ample flexibility to the service provider to offer services at market competitive rates.
Trai in a consultation
paper on telecom pricing released last week, had proposed
to hike the rental upto a massive 140 per cent along with
increasing the local call charges and slashing the number
of free calls.
India, EU to discuss anti-dumping duty
NEW DELHI, Sept 13 (PTI) India and the European Union (EU) will hold consultations at the World Trade Organisation (WTO) in Geneva on September 17 and 18 over the controversial anti-dumping duty imposed by the European Commission (EC) on import of unbleached cotton grey fabrics (UCF) from India.
The consultations are being held after India moved the WTO against an EC decision to impose definitive anti-dumping duty on UCF imports from New Delhi and four other countries, including Pakistan and China, in July.
Commerce Ministry sources said India would point out various errors committed by the EC in arriving at a decision that UCF was being dumped into European countries.
Methods of calculation, investigation process and sampling were all faulty, the sources contended.
India moved the WTO against the duties after bilateral talks with the EU on the issue failed to yield results.
The EC recommended on July 28 to make definitive from October 10 the provisional anti-dumping duty imposed on UCF imports from India, Pakistan, China, Indonesia and Egypt. Turkey has, however, been let off after provisional duties were imposed on imports from Ankara.
EC reimposed an average 15 per cent provisional anti-dumping duty on the UCF imports from India in April.
Indias decision to drag EU to the WTO followed ECs decision to make the provisional anti-dumping duty definitive from October 1.
As per WTO procedure, the WTO director general is requested to use his office to conciliate and mediate between two warring parties if bilateral efforts fail.
If consultations do not produce any results within 60 days, India can request WTOs dispute settlement body (DSB) to establish a panel to examine its complaint. The panel is expected to give its recommendations in six to nine months once it is set up.
The first anti-dumping proceeding against UCF imports was dropped in February, 1996, after the complaining party, Eurocotton, withdrew its complaint.
The second proceeding was terminated in May after the EU failed to ratify the definitive duty slapped in March 1997.
TOKYO (AFP): Japanese newspapers has urged politicians to speed up financial reforms with one warning that the economy faces an unprecedented emergency.
The recession has deepened further, the Nihon Keizai Shimbun said in an editorial following the announcement that the economy shrank for a record third straight quarter.
The continued contraction does not merely show that the economy is in extremely severe or stagnant situation. It shows we are in an unprecedented emergency the business daily said.
The ministers told a joint news conference that the twin moves would facilitate and enhance trade and free flow of goods within the Association of Southeast Asian Nations (Asean) region.
Our objective is to have a freer movement (of commercial vehicles and goods) across borders not just on a bilateral basis but also on a multilateral basis, Singapores Communications Minister Mah Bow Tan said.
The two sides agreed on a 1998 Gross National Product (GNP) growth target of 1.5 per cent, from the governments original target of 2 to 3 per cent, Governor of Central Bank of the Philippines, Singson told reporters.
Gross Domestic Product (GDP), which excludes the foreign exchange remittances of Filipino overseas workers, was set at 1 per cent from 2 to 2.4 per cent.
This was evident by the surging interest in the stock market and the stabilisation of the Ringgit, Mahathir said while defending the measures aimed at defending the currency against speculative attacks.
With such positive developments in the market, the measures are not bad at all, Mahathir said in response to a question on exchange controls at the bi-annual conference of the Commonwealth Association for Public Administration in Kuala Lumpur on Tuesday.
Asian countries have no currency of their own sufficiently hard enough to compete with the US dollar or the prospective Euro, he pointed out.
It seems with the Yen in difficulties and the Yuan or any other Asian currency not strong enough, the US dollar and the prospective Euro are going to be the major reserve and key currencies, Brahmanand said.
The money base for the
world economy will be the aggregate of reserves of these
two currencies with different countries and their joint
rate of growth will determine the growth of world money
supply, he said.
The more often a politician is implicated or imprisoned in India, the more powerful he emerges, it is said.
This exactly is the scenario of the countrys aviation where people charged with FERA violation and shady past are dictating men of merit.
A person was arrested for FERA violations not long ago. But he enjoyed a strong political backing. Not only he was released and charges against him were quashed but also he went from strength to strength despite frequent changes of governments. Such is his clout that he has successfully manipulated the blocking of the Tata Airlines entry in the domestic sector. It is said that the entry of Tatas would have affected private operators more than the national carrier.
It is the countrys loss as unscrupulous operators thrive in such scenario.
It is wrong to say that Ratan Tata chose to withdraw his proposal in a haste. He came to the conclusion that it was pointless to continue to wait at the corridors when the powers that-be were looking at the project with a closed mind.
Civil Aviation Minister Ananth Kumar has gone on record saying that his counter is always open for Tatas.To say is one thing and to act is another.
When the Tata-Singapore Airlines proposal was first made, the then Minister for Civil Aviation C.M. Ibrahim had gone on record saying only Over his dead body. Seeing ministers mood, the proposal was amended and SIA was dropped from the project.
The Tatas kept making changes, as suggested by the Civil Aviation Ministry and the Directorate-General of Civil Aviation (DGCA). When everything seemed settled after an inordinate delay, the proposal was again tossed back for examination for yet another expert committee.
We dont mind if our proposal is rejected outright, said a Tata official, adding: but we certainly cannot be made to wait for attendance at this or that office.
Singapore Airline introduced new service features on September 11 in all three classes on 747s and A-340s and Jubilee 777s.
The Airline Manager for northern India, Leng Lim said considerable improvement, particularly in economy class, had been made to provide additional comforts to public.
Our existing product continues to be the best in the industry, said Lim, adding: It is an appropriate time to bring about refreshing changes so that we continue to be the best.
Entitled to welcome to new travel experience, the Airline has introduced new in-flight cuisine.
Q: I had invested in the shares of Rain Calcining at the time of its public issue. Could you comment on its prospects and advise me whether it would be worthwhile to pick up some more shares of this company?
Shyam Panjwani, Chandigarh
Ans: Rain Calcining is an emerging player in the aluminium industry. The Company is promoted by US based group of NRIs along with US-based Houston Industries Energy Inc, IMCOR and Industrial Finance Corporation. The company is the first of its kind in the private sector, not only in India but also in Asia, having an installed capacity of 3 lakh tpa of calcined petroleum coke (CPC), which is a crucial raw material for the production of primary aluminium. The project is expected to become fully commercially operative soon, but a major cause for concern is the fact that the main raw material, green tetroleum coke (GPC) would have to be imported, which may in result have a negative impact on the companys financial performance. Though its prospects seem quite satisfactory, one could wait a while and review its actual performance before investing in the shares of this company.
Q: I am considering investing in the shares of India Cements. Please let me know of your opinion too.
Talwinder Bhinder, Ludhiana
Ans: India Cements is a leading company in the cement industry. The company is based in South India with its largest market share being in Kerala and Tamil Nadu. The company enjoys a market share of 26 per cent and 19 per cent in Kerala and Tamil Nadu respectively. On the financial front, the companys performance has been satisfactory despite the slow down in the cement segment. During the year that ended in March 1998, the company posted sales and net-profits of Rs 905.83 crores and Rs 56.33 crore respectively thus yielding an EPS of Rs 8.8. India Cements has been expanding its own capacities and is also acquiring other units. The company has acquired the entire share capital of Visaka Cements which has a capacity of nine lakh tonnes per annum, and it also took over CCIs Yerraguntla plant which has a capacity of four lakh tonne per annum. Recently, it has also taken over Rassi Cement and all these acquisitions will increase its capacity to 4.80 million tonne. Overall, the prospects of the company seem encouraging, and it could fare even better provided the market conditions improve. Yet, an immediate investment in the shares of this company cannot be recommended at this stage.
Q: I am considering making a long term investment in the shares of Novartis India. Do you recommend it?
Manoj Bhatia, Chandigarh
Ans: Novartis India Ltd (NIL) is a dominant OTC player in the Indian pharmaceuticals industry. The company is the fourth largest player in this segment in Europe and seventh largest player in the world. Novartis is also involved in the agricultural segment. On the financial front, the companys financial performance has been good. During the year that ended in March 1998, the company posted sales and net-profits of Rs 663 crore and Rs 37.02 crore respectively. The company is part of the 31.2 billion Swiss Franc giant, the Novartis group, which has formed subsequent to a world wide merger and a complicated business restructuring of the two entities, Sandoz and Hindustan Ciba Giegy. The company has planned a number of OTC launches during this year and later. It is likely that these launches will enhance its business. Lately, it has launched three products in the pharma segment, which has been readily accepted in the market. Thus, the overall prospects of the company seem very encouraging and a long term investment in its shares could be considered.
Q: Kindly advise me about the future prospects of Shasun Chemicals and Drugs?
Montu Sharma, Nalagarh
Ans: Based in Madras, Shasun Chemicals and Drugs manufactures Ibuprofen, Ranitidine and other intermediares, amongst which Ibuprofin is a major contributor to its turnover. However, the fall in prices of Ibuprofen in the local market and also of Ranitidine by a sharp 50 per cent may have a negative impact on the performance of the company during the current year. To counter the same, the company is planning to add complementary products like Naproxen and Nizatidine which may also be beneficial in the long term and it also proposes to set up a 60 tpa capacity for the same, while at the same time, trying to fully utilise its Ranitidine capacity. On the financial front, the companys performance has been satisfactory.
During the year that ended in March 1998, the company posted sales and net profits of Rs 156.70 crore and Rs 2.42 crore respectively, thus yielding an EPS of Rs 2.9. The company has expanded its Ranitidine capacity from 240 tpa to 360 tpa while its Ibuprofin capacity is over 300 tpa. Though, the company is not fully utilising its Ibuprofin capacity, it plans to increase the production to 2800 tpa in the current year out of which 1500 tpa could be exported, whereby it gets better margins. The outlook for the company may improve as Naproxen is expected to yield an additional turnover of Rs 10 crores and its technology transfer agreement with Chiotech, UK also augurs well for the future.
Q: Please comment on the prospects of Eid Parry (India)?
Maninder Jaggi, Chandigarh
Ans: Incorporated in 1975, Eid Parry is engaged in segments like fertilisers, sugar, pesticides, urea, seeds, ceramics, plant protection chemicals and sanitaryware etc. The companys performance in recent times has been better in the fertiliser segment as compared to the other segments. This is due to the excellent offtake of Paramfos and Single Super Phosphate during the year 1997-98 and also because the monsoon has been on time. A major problem faced by the company in this area is that it depends heavily on imported ammonia which is a key input for its popular brand Paramfos. To mitigate this problem, the company is setting up an ammonia terminal by which the availability and storage of ammonia will be easy. It will, at the same time improve the volumes of the company.
For its sugar division, the company has very good R&D facilities and spends about Rs 2 crores every year on sugar cane related and allied research. Its sanitaryware segment enjoys a 33 per cent share in the domestic market, but it too has been adversely effected by the slowdown in the construction industry. On the financial front the companys performance has been satisfactory.
year that ended in March 1998, the company posted sales
and net-profits of Rs 903.03 crore and Rs 37.48 crore
respectively. The company has set up two submarine
pipelines and mooring facilities and has set up two new
plants to produce phosphoric acid and sulfuric acid and
has also set up a new plant of sugar in Pudukottai
district. Overall, the prospects of the company seem
NEW DELHI, Sept 13 (PTI) Annual rate of inflation shot up to a 148-week high of 8.78 per cent for the week ended August 29, on sharp increase in prices of edible oils following a ban on use of mustard oil. This is the highest rate of inflation since 8.83 per cent on November 4, 1995. CPI-IW, which measures rise in prices among a basket of items likely to be used by an industrial worker, stood at 12.4 per cent in June as compared to the average inflation of 6.87 per cent based on WPI. The CPI-based inflation breached double digit levels in May this year when it touched 10.5 per cent.
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