Godrej Industries to buy Godrej Foods’ manufacturing activities
Mumbai--In a major restructuring effort, Godrej Industries is planning to take over the ailing Godrej Foods,’ manufacturing business.
Hence, a meeting of the board of directors of Godrej Industries is being held on Saturday, to consider a proposal to restructure Godrej Foods by demerging its manufacturing business into Godrej Industries, the company said in a notice to the Bombay Stock Exchange (BSE).
The move, if cleared by the board, will restrict Godrej Foods’ activities to just marketing and distribution of its products with manufacturing activities being shifted to Godrej Industries.
Recently, Godrej Industries acquired the brand rights of Godrej Foods’ brands.
Godrej Foods reported a net loss of Rs 8.7 crore for the fourth quarter ended March 31, 2001, on sales of Rs 31.55 crore. The company manufactures and markets fruit drinks brand Jumpin, and edible oils like Godrej Sunflower, Cooklite, among others.
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Cadbury; acquisitions on the anvil
Mumbai-- Cadbury India managing director Mathew Jonathan Cadbury, son of former Cadbury chairman Adrian Cadbury (of corporate governance fame) sports a famous surname, but wears it lightly.

However he doesn’t take the goals he’s set for the company lightly— an average annual growth rate of 20 per cent, almost double the 10-12 per cent rate of recent years.

To do so, the Rs 571.14 crore (in December 2000) Cadbury India plans to launch a series of new products— and may just hit the acquisitions trail.

Cadbury acknowledges that the company is looking at acquiring brands or companies in the sugar confectionery industry and would also foray into snack foods but doesn’t go into details.

Cadbury India’s chocolate-based drink Bournvita is a market leader in its category, but has been taking a beating from SmithKline Beecham Consumer Healthcare’s Horlicks, especially in South India, though in north and west India Bournvita is still ahead.

Still, malted food drinks, which contributed 32 per cent to Cadbury India’s turnover in 1994 accounted for only 24 per cent of sales in 2000.

Chocolates currently contribute 64 per cent to turnover, but Cadbury thinks that this could fall to under 50 per cent in five years as the company moves in a big way into snacks.

He concludes that though Indian operations contribute two percent of the turnover of Cadbury Schweppes, it figures high in the priority list in terms of opportunities.
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Amul to be numero uno in ice cream
Anand—Gujarat Cooperative Milk Marketing Federation (GCMMF), India’s largest milk products maker aims to become the country’s top ice cream manufacturer, and will sell over 24 million litres of ice cream by April 2002 said GCMMF’s managing director B M Vyas.
GCMMF sells its ice cream under the Amul brand and commands about 35 per cent of the market despite not being present in key areas like Delhi where its sister concern, Mother Dairy, is present.
Vyas said GCMMF, which entered the lucrative ice cream only four years ago, was expanding capacities of its ice cream manufacturing plants at 25 locations around the country.
HLL, the current market leader, sells around 24 million litres of ice cream under its umbrella brand Kwality Walls.
It clocked turnover of Rs 2,258 crore for the year ended March 2001 from sales of various dairy products such as butter, cheese, ice cream and chocolates.
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ICI India to focus on core businesses
Kokata—In an attempt to align itself with ICI Plc’s core product portfolio world-wide, ICI India is planning to do away with non-core businesses in this country.
At the moment a portfolio rationalisation effort for its pharma and rubber chemical divisions is underway and the company is negotiating with four to five companies for a strategic partnership for its pharma business.
At the same time recasting of the company’s rubber chemicals division at Rishra, West Bengal is on which includes cutting the workforce here. About 250 employees have opted for a voluntary retirement scheme at this division. The exercise is expected to be complete in the next few months.
Daljit Singh, director, ICI India said once the unit becomes more lean and efficient the company will go in for a valuation of the unit and only then would look for divesting its stake in this business. This could be a joint venture or some kind of a strategic alliance, Singh added.
The division’s product portfolio includes a wide range of anti-oxidants, anti-ozonants and accelerators used by the rubber
industry.
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Tata Coffee acquires 34 percent in Barista for Rs 26 cr
Mumbai—Tata Coffee, a subsidiary of Tata Tea has announced an all-cash deal of Rs 26 crore for a 34.3 per cent equity stake in Barista Coffee Company. Tata Coffee has paid a premium of Rs 40 on the Rs 10 paid-up share.
The company had a paid-up equity capital of Rs 10 crore prior to the acquisition. This has now increased to Rs 15 crore following the issuance of fresh shares to Tata Coffee. The enterprise value of the company is in the region of Rs 80 crore.
Besides the Tatas, employees at Barista hold a stake of 8 per cent and the balance stake is held by the promoter, Turner Morrison, which is the largest stake holder.
Barista clocked revenues of Rs 3 crore in fiscal 2000-01, during which it made losses and Ravi Deol managing director, Barista Coffe Company said Barista would make operating profits on revenues of Rs 32 crore in fiscal 2001-02.
Barista is the largest and the only leading coffee retailer in the country with 38 expresso bars across India. The strategic transaction between Barista Coffee and Tata Coffee was structured by Rabo India Finance.
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Indian Airlines declared sick
New Delhi—Finally Indian Airlines (IA) has become a BIFR (Board for Industrial & Financial Reconstruction) company.

Massive losses of Rs 177.25 crore (revised estimates) during 2000-01 have completely wiped out the state-owned carrier’s networth, which stood at Rs 142.53 crore at the end of 1999-2000, pushing it into bankruptcy.

Deducting the losses for 2000-01 from the previous year’s net worth yields a negative figure of Rs 34.72 crore.
IA’s operating revenue however registered a six per cent growth to Rs 3,758.50 crore.

The huge loss of Rs 177.25 crore during the last fiscal is attributed to a 50 per cent escalation in fuel costs which shaved off Rs 300 crore from the bottomline.

The airline also faced constraint in increasing its fleet size despite the Kelkar committee recommendations in 1996 of a Rs 375-crore fund infusion for fleet expansion.

The committee was appointed after the airline’s networth had turned negative in 1996 subsequent to which the government infused equity of Rs 50 crore.

The airline’s net worth to be reported in its annual report for the year however, is likely be even lower, say officials in the ministry of civil aviation.

IA board has projected losses to the tune of Rs 251.50 crore for 2001-02. The carrier's networth is expected to get further eroded to (-) Rs 286 crore.

The government can avoid reporting the public sector unit to BIFR by infusing capital into the company.
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KPMG to host computer forensic specialists
Kolkata—KPMG, the global professional services firm, will soon have computer forensic specialists for its Indian operations.
With cyber crimes on the rise here, KPMG will bring in special fraud detection equipment along with high-end software.
At the same time, the firm will also employ new recruits, who would specialise in computer forensics.
Deepankar Sanwalka, executive director (forensic accounting), KPMG, said, the forensic department investigates all types of cyber crimes, like hacking, spamming and unauthorised access. However, for special cases, the firm usually seeks the help of its global forensic specialists.
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Videocon will not sell Samsung venture stake at present
New Delhi--The Videocon group has to put on hold plans to offload its 26 per cent shareholding in Samsung India Electronics Ltd (Samsung India) for at least a year, following failed negotiations with the Korean electronics giant.

The reason is the valuation of the Samsung stake by Videocon. The Korean electronics giant says that the valuation of the 26 per cent stake in the company cannot be Rs 500 crore as arrived at by the Dhoots.

Dhoot does not expect a deal being arrived at in the next one year. On being asked why he proposed to sell off his stake at a time when he may not get a fair price in the current industry scenario, Dhoot says he wanted to initiate talks since these kind of deals take time to materialise.

Samsung executives, however, deny there has been any discussion between the partners. A spokesperson for the Korean firm's Indian subsidiary said she had no comments to offer.

Videocon holds the shares in Samsung India through a group firm called Reasonable Computer Solutions.

Sources said that the existing paid up equity share capital of the joint venture is Rs 60 crore, of which Reasonable has invested Rs 16.2 crore. Dhoot's demand is, therefore, 31 times the par value of the shares.
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Packer, once bitten, twice shy
Mumbai—Kerry Packer may stay away from India for quite some time. This is after taking a total hit of around Rs 1,200 crore ($255 million) in Indian operations so far. Packers’s investments in HFCL alone have depreciated by around Rs 970 crore ($206 million), and losses borne by the joint venture entertainment company HFCL-Nine Broadcasting India have cost him another Rs 120 crore.
Losses on account of a few other smaller JVs with HFCL like Consolidated Futuristic Solutions and Excelnet Commerce are likely to add on a few more crores to the total hit.
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LIC, GIC to conform to Irda norms to bail out UTI
Mumbai--State-owned insurance companies LIC and UTI that have been asked to bail out Unit Trust of India (UTI) will conform their investment decisions in keeping with the norms laid down by the Insurance Regulatory and Development Authority (IRDA), unless there are written instructions from the government insisting otherwise.

As small investors will be allowed to redeem their holding only from August, Life Insurance Corporation of India (LIC) officials pointed out that there was no immediate need of funds at this point of time.

Officials said their roe would be limited to that of purchasing the equity that UTI chooses to sell so that the same is not offloaded in the secondary market. He added that GIC has no intention of saving "someone else (UTI) at its cost.

State insurers do not expect picking up UTI's equity portfolio to have a negative bearing on their performance as the investment decision would first be scrutinised by the investment committee.
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Aptech looks for acquisitions
Mumbai--Software and training firm Aptech is looking at acquisitions in South America and East Europe in a bid to push growth amidst a global IT meltdown according to Aptech's chief executive for training and education Pramod Khera.
He added that Khera said Aptech was in talks with some training firms in these markets but could not say when the deals may be concluded.
Aptech, one of India's largest software education firms, is present in over 42 countries and has over 2,245 education centres. Most of its overseas centres are located in South Asia, China and the Asia-Pacific.
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FMCG ad spend on Star Network rises
New Delhi-Companies like Hindustan Levers Ltd, Emami, Samsung, Asian Paints, Marico Industries and Siyaram are doubling or trebling their ad spend on Star Network this year against last year.

According to industry estimates, HLL has doubled ad spend from Rs 35 crore on Star channels last year. It has bought advertising time on mostly movies.

Marico Industries, which spent about Rs 4 crore on Star Network (mostly on Star Plus) has almost trebled its ad spend on the network.

Even Anchor, manufacturers of electric accessories like switches, and Amul (approximately Rs 4.5 crore last year) have tripled their ad on Star Network.

A big commitment has come from Siyaram Mills, which has struck a deal with Star worth about Rs 3 crore for the launch of its new ad made at an astronomical cost. And this is just for the first three days of the launch of the ad campaign.

Apart from that, the company will spend another Rs 7 crore on the network.

New business acquisitions and big deals include Morepen (coming on to the television screen for advertising for the first time), Colgate, Cadbury, Hero Cycles, Today's Pen and Himalaya Drugs. Himalays Drugs has committed about 90 per cent of its total ad spend to Star Network.
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Zydus Cadila signs deal with Schering
Ahmedabad—Zydus Cadila Healthcare has struck a deal with Germany’s Schering AG, a leading global female healthcare company, to market four of Schering’s products here.
One of the four products is Mirena, a contraceptive inter-uterine device used by more than two million women in Europe alone. Mirena is a small hormonal system fitted into the uterus and releases a minute dose of a progesterone type hormone into the uterus.
Since the hormone is released directly into the uterine cavity, the blood level of the hormone is lower than any other hormonal method of contraception, minimizing side effects.
Mirena is currently available in 48 countries worldwide, and will be launched in the Indian market on July 27. However, top company officials declined to name the other three products to be launched.
Schering holds 4.62 per cent stake in German Remedies, in which Zydus Cadila has acquired a 27.72 per cent stake recently. So for Zydus Cadila, the licensing agreement with Schering could not have happened at a more opportune time.
Besides this Zydus Group has also received perpetual marketing rights for five other products of Schering, which are licensed to German Remedies.
These products are Deriphylin, Paractol, Ildamen, Xipamid and Beta Xipamid. The estimated sale of these products in India is around Rs 42.7 crore.
Schering’s products account for about 30 per cent of German Remedies’ turnover and are very profitable. The company makes drugs for fertility control and hormone therapy for women and men, diagnostics, radio pharmaceuticals, and drugs for dermatology, multiple sclerosis and leukaemia.
In a simultaneous development, Zydus Cadila has also made progress in its talks with Boehringer Ingelheim of Germany, another stakeholder in German Remedies.
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Reliance will buy 5 oil & gas blocks from Tullow Oil
New Delhi—Reliance Industries will acquire five oil and gas blocks from Ireland’s Tullow Oil Plc by the end of current fiscal.
While two of the proposed blocks to be acquired are in Gujarat offshore, one block each exists in Gujarat Kutch basin, Cambay Basin and Krisha Godavari Basin, company sources said.
The acquisition would, however, be subject to government approval.
Tullow had in February signed farm-out agreement with Reliance to sell its stake in the five blocks.
Reliance would acquire 50 per cent stake in block GK-OSJ-1, offshore Gujarat. Post sell-off, Tullow would have a 25 per cent stake while state-owned Oil and Natural Gas Corporation would have 25 per cent stake, sources said.
The company would acquire 40 per cent stake in GK-OS-5, offshore Gujarat block, GK-ON-90/2 block in Gujarat Kutch basin and CB-ON1 in Cambay basin, they said adding that Tullow would have 50 per cent stake in these blocks while US-based Okland Oil Co would have 10 per cent interest.
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