Tata Coffee picks up stake in Barista
New Delhi—Tata Coffee, a Tata group company, has picked up a 32.5 per cent equity stake in Barista Coffee.
Sources said the all-cash deal was transacted by Rabo India Finance --which earlier helped conclude the Tatas' overseas acquisition of Tetley Tea. This alliance is a logical and strategic fit for both the companies, integrating the entire coffee chain from the back-end through to the front-end.
The alliance gives the Tatas access to the front-end market through Barista's rapidly expanding consumer base, while Barista gets an access to the Tatas' roasteries and plantations, as well as a large play in domestic and international markets.
This also opens up other institutional segments for Barista like hotels, airport lounges and inflight services.
Retail sources point out that the sheer size and integration of the alliance now makes Starbucks', which is Barista’s big competitor in other countries, entry into the Indian market more difficult.
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LIC to pull back Modi Rubber shares
Mumbai—FIs have forced LIC to move court for withdrawing the shares that were tendered against the open offer from the Modi Rubber management.
LIC earlier put its 12 per cent stake in Modi Rubber on the block much to the shock of other financial institutions. Sources say that it’s unlikely that the move did not have the consent of the LIC top management.
LIC and UTI have a large shareholding in MRL.
LIC could participate in the open offer only after the sudden exit of PS Subramanyam as UTI chairman Subramanyam was in favour of dislodging the Modis from the MRL management. Expectedly there was some confusion after his dramatic exit, said a source.
LIC now has to move fast in withdrawing the shares since the open offer closes on Monday at 3 pm.
Modi Rubber promoter B K Modi also participated in the meeting to suggest various options, possibly aimed at avoiding a legal recourse by LIC. But suspicions are that Modi may not take interest in buying the stakes of other FIs once the open offer is through.
Under the circumstances, FIs think that once the open offer is over, Modis, with over 51 per cent, will have no compulsion to buy the holdings of the other FIs.
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Star hikes ad rates by 60 percent
New Delhi—It was bound to happen sooner than later. Armed with a bag full of extremely successful serials, which are consistently recording high TRP ratings, the K brigade--Kyunki Saas Bhi Kabhi Bahu Thi, Kahani Ghar Ghar Ki and Kaun Banega Crorepati-- has helped Star reach the zenith of its success so far in India. Following this Star TV has hiked ad rates on its premium channel, Star Plus, by a phenomenal 60 per cent for fiscal July 2001-June 2002.
The average spot rate for prime time programmes (7-11 pm) has gone up from 5 lakh / 30 seconds to Rs 8 lakh / 30 seconds. In order to shore up revenues of sister channels, which have been caught staggering, Star is giving special rates of Rs 9,60,000/30 seconds to those opting for the entire network (all seven channels).
Also it has made sure that spots on bestsellers KSBKT, KGGK, KBC, Jr KBC, and Khul Ja Sim Sim which is yet to hit the tube, are rotated equally. Meaning that a media planner buying 1,000 seconds on this particular slot will now have to evenly distribute the spots across all the programmes, and cannot select one of his choice.
Media buyers say this would actually increase the cost per rating point. Previous to this newly structured rate card, advertisers could focus ads on any one programme, that gave him maximum reach and ignore others in the same bracket.
There is no respite for those opting for other Star channels either. If a media planner were to single out Star Movies to reach a particular target audience at prime time, he would have to dish out Rs 71,000 / 30 seconds compared to the Rs 45,000/30 paid earlier.
For Channel V, the rate is Rs 16,000/30 seconds instead of Rs 9,000 earlier. The rate hike is in the same region for other star channels.

However, media planners say the new rate card is not sustainable and media buyers will negotiate their own special deals with Star.
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Gas supply to Essar blocked by GSPC-Niko
Ahmedabad—Essar’s troubles never seem to get over. After trying to get its project for Vadinar refinery back on rails, its premier projects Essar Steel and Essar Power are now in trouble with Gujarat State Petroleum Corporation-Niko consortium deciding to stop supply of gas to Essar Power and Essar Steel units at Hazira.
The reason being non-payment of dues.
GSPC sources say that Essar group in February 2000 entered into a 5-year contract with GSPC-Niko for supplying 2.5 lakh cubic meters of gas per day at $3.45 per MCF. Thus the Essar units at Hazira were being supplied gas by the GSPC-Niko combine. However, Essar had not made payment for two payment cycles, starting June 16, amounting to dues of about Rs 25 crore.
Though the contract was for 2.5 lakh cubic meters of gas per day, Essar units were being supplied up to 10-13 lakh cubic meters of gas till recently.
According to the contract, Essar too could draw more than allotted gas at higher rate. It was offered a rate of $3.75 per MCF for additional gas above 2.75 cubic meters per day requirement.
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Polaris to launch insurance products
New Delhi—Polaris Software, the Chennai-based software company, is getting into insurance, and is planning to relaunch its retail software product, which failed to take off in the international market when launched the first time round.
Polaris chairman Arun Jain said that the company’s future growth strategy would be based on product development for the four segments, which the company has identified and hopes to generate about 40-50 per cent of future revenue from this business.
Jain added Polaris was bullish on the BankWare suite of products and hopes to generate at least Rs 75 crore from the products in the next three years.
Polaris has also been on a recruitment spree and has currently inducted 119 B-school graduates into the company, Arun Jain added.
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GM, Fiat to work together to cut costs
Mumbai—General Motors India, is exploring ways to work closely with Fiat India "on the cost front."
General Motors, the world’s largest car maker, has strategic stakes (20 per cent) in the Italian car giant Fiat and Japanese small car maker Suzuki Corporation.
According to Aditya Vij, managing director General Motors India, the company would work on synergies with Fiat India and "discuss ways to reduce costs, although we haven’t yet started streamlining the procurement process.
However, he stressed that General Motors and Fiat would continue to remain totally independent in India.
GM has drawn up an aggressive strategy to drive up volumes with its new stationwagon, Opel Swing.
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Glaxo scales down Worli operations
Mumbai— As a step towards winding up operations at its Worli site in Mumbai, Glaxo India recently started scaled down manufacturing at this site.
In the last couple of months, the company has outsourced a clutch of brands to third party manufacturers, which include vitamin C brand Celin, anti-asthmatic BronkoPlus and BronkoPlus Forte and anti-fungal Grisovin FP. As a result, about 70 people out of 550 in the unit who were manufacturing these brands have no work.
The company has also sent about 15 employees back to its Thane facility from where they had been seconded to Worli.
The Worli unit still makes Betnesol oral drops, Flixonase nasal spray and Calpol paediatric drops.
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WISL sales up 125 percent
Panaji—Western India Shipyard has reported a sales turnover of Rs 48.46 crore for the year ending March 31 which represents a growth of 125 per cent over the corresponding previous year (Rs 21.63 crore).
WISL has submitted a proposal to the Union minister for shipping and Mormugao Port Trust for a review of its lease agreement.
The shipyard is currently under a FIs-sponsored rehabilitation programme.
Said WISL vice-president R S Singh, "the rehabilitation programme comprising payment and interest rate rescheduling, conversion of loans with equity and zero coupons fully convertible bonds, along with Customs and excise duty exemption is expected to help lower the costs," he added.
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MRTPC discard expert findings on 'new Pepsodent'
New Delhi—The Monopolies and Restrictive Trade Practices Commission has rejected the findings of an expert panel appointed by it to probe Hindustan Lever's claim of 102 per cent anti-bacterial superiority of its 'New Pepsodent' toothpaste over 'Colgate dental cream.

After Colgate Palmolive moved the MRTPC on HLL’s claim that Pepsodent toothpaste had 102 percent anti-bacterial superiority over other brands in the market, the MRTPC appointed an expert panel to probe the case.

The expert panel found HLL’s claim justified.

Following this the two-member bench comprising MRTPC members R K Anand and M Mahajan directed the expert panel, to re-examine the case and conduct necessary clinical study and submit its findings within the minimum period.

The members said "the task of the panel appointed by the Commission was to verify the claim independently, ...This, in our view, has not been done and therefore we are unable to accept the report of the panel."
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Deutsche Bank reposes confidence in India; invests Rs 100cr
New Delhi—Deutsche Bank, seems to have laid its bets on India and has pumped 24 million euros (Rs 100.3 crore) into its operations here. The bank’s capital adequacy ratio, as a result, has increased from 10.68 per cent in ‘99-’00 to 12.67 per cent for the year ended March 31, 2001.
The German bank’s business lines in India include global corporate and institutions, global technology and services, private banking and asset management.
The global corporate and institutions function includes the bank’s corporate banking, treasury, investment banking and equities businesses.
In December last year, Deutsche Bank exited the retail banking business by transferring its retail deposit liabilities in India to HSBC.
Deutsche Bank is now focusing more on private banking services and wealth management for high net worth individuals. It will also be active in investment banking in line with the bank’s business focus in the Asian region.
Among the other business plans, Deutsche Bank is also in the process of setting up an asset management company (AMC) and is currently awaiting approval from the Securities & Exchange Board of India.
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Videocon defers cancel non-life insurance plan
Mumbai--The Videocon group has deferred its proposed foray into non-life insurance.

Videocon was earlier in talks with Banque Paribas, Allianz AG and the French major Axa Insurance for a possible alliance.
However, Banque Paribas has tied up with the State Bank of India for life insurance, while Allianz has tied up with Bajaj Auto for life and non-life insurance.

A Venugopal Dhoot, chairman, Videocons said, "We had almost finalised our joint venture with an Australian company, but at present the partner does not want to enter India." He refused to divulge the foreign ally's name.
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Ranbaxy to rejuvenate old product sales
New Delhi--Ranbaxy Laboratories Ltd has set up a task force, Rextar, comprising 225 new field staff to focus on, older (more than ten years old), products in its portfolio according to Ranbaxy president (pharmaceuticals) Brian W. Tempest.
Rextar was constituted after statistics revealed that during the first half of 2001, products that were less than five years old grew at 45 per cent, while products that were between five years and ten years old saw a decrease in sales by 1 per cent. Further products that were more than ten years old saw a decrease in sales by 7 per cent.

Thus, products less than five years old contributed 32.7 per cent to the sales during January-May 2001, five- to ten-year-old products contributed 19.1 per cent and more than 10 years old products, 48.2 per cent.

Ranbaxy has also set up a Cifran Task Force of 50 new representatives to give a boost to Cifran, another product in the company's portfolio, which has been around for a while.
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HLL says Kwality Walls Numero uno brand in Delhi
New Delhi—Hindustan Lever Ltd quoting ORG-MARG sales figures for April, claims that during the past year it has beaten Mother Dairy in terms of value of sales. It says that its market share in Delhi has increased from 44.1 to 48 per cent while that of Mother Dairy has come down from 48 to 42 per cent over the past year.
Mother Dairy on the other hand maintains that it sells more ice-cream than Kwality Walls.
Further HLL says that if pushcart sales were taken into account, its share would be over 50 per cent of the market.
Mother Dairy, however, maintains that it commands 47 per cent volume of the Delhi market. Its claim is that Kwality Walls has priced its ice-cream 11-45 per cent higher than than that of Mother Dairy.
The ice-cream market in Delhi is estimated at around 12-15 million litres per annum, which would translate into a sales figure of Rs 85-105 crore.
Overall the total ice-cream market in India is growing at 2-3 per cent per annum in volume and around 5 per cent in value terms due to upgradation from the unorganised to the organised sector. Delhi accounts for 15-17 per cent of the total ice-cream market.
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Zee Tele to protect the brand "Zee"
New Delhi—Zee Telefilms has approached the World Intellectual Property Rights Organisation to protect its popular mark "Zee." It has complained that the domain name "ZeeTV" registered by an Indian was causing embarrassment to the company as the public believed that the official Web site of Zee Telefilms had been cracked.

Wipo, an apex body of arbitration and mediation for the protection of IPR,
has come to the relief of Zee Telefilms and has restrained Rahul Dholakia from using the domain name "ZeeTV" and any other domain names with the brand name "Zee." It has also transferred the said domain name to Zee Telefilms.
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Amex offers toll-free number
New Delhi--American Express (Amex) has launched a toll-free number for merchants accepting American Express credit cards in 50 cities.

American Express director (establishment services group), India & area countries, Peter Raj Kapoor, said, "the new facility will allow merchants in these cities to get the authorization to carry out a transaction free of cost." Whenever a merchant does a transaction above a certain limit, he needs to take the authorisation of the bank.

At present in about two dozen cities in India, Amex has a local office which gives the authorisation, while in the remaining 225 cities covered by the bank, the merchant is obliged to make a long distance call when he needs to get the authorisation. Now in 50 of these cities, with Amex’s toll-free number merchants need not make those long distance calls on which a merchant would typically spend Rs 30-60 per call.
Now the cost of the communication will be borne by Amex. Kapoor said the bank hopes to extend the service to 75 to 100 cities in the next three to six months.
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HDFC Bank plans capital expenditure of Rs 120 crore
Mumbai--HDFC Bank is planning to invest Rs 120 crore on capital expenditure in the current financial year already having invested Rs 200 crore in capital expenditure since March 31,1998.

The bank plans to invest Rs 63 crore in technology, Rs 23.7 crore to expand the branch network by another 20 branches and extension counters and Rs 33.5 crore to install another 200 ATMs.

As on March 31, 2001, the bank had entered into capital commitments worth Rs 26.92 crore, which it proposes to fund through internal accruals and through the proceedings from the recently launched American depositary shares (ADS) issue.

The bank will use the ADS proceeds for also reducing the use of overnight borrowings as funding source and also for funding the future growth.

The bank, in its prospectus for the ADS issue, has said that its business could suffer if there was a prolonged or significant downturn in the stock market.
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Telco to reduce dependence on sales of commercial vehicles
Mumbai-- Tata Engineering (Telco) is working on a long term strategy to reduce its dependence on sales of commercial vehicles (CV).
The company proposes to achieve this by increasing its revenues from non-cyclical businesses such as engines for industrial and marine applications, the aggregates reconditioning business, spare parts sales and hire purchase activities. The company is also looking at opportunities arising out of the marketing of special and fully built up vehicles, according to the company’s latest annual report.
Telco is also planning to leverage the revenues from its passenger vehicle business, which follows a somewhat different cyclical pattern. The company also plans to shore up its bottomline over the next few years through exports, which would enable it to have a steady stream of export revenue.
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Falling freight rates likely to hit SCI bottomline
Mumbai--Declining freight rates on the European sector in particular is likely to affect the profitability of the Shipping Corporation of India.
The average container freight rates have slumped by over 40 per cent in the first quarter of the current fiscal, to around $600 to $650 per 20-feet container from around $1,350 to $1,400 for 20-feet container on the European sector last year, SCI officials said.
The decline in freight rates is attributed to the introduction of new container liners leading to freight-cuts, the general recession and the repositioning of containers, which is taking its toll, officials said.
The liner division had posted a net profit of Rs 2.5 crore after a gap of five years on a turnover of Rs 795 crore for the year ended March 2001.
The positive results were a result of restructuring, which saw the company dispose of 10 break-bulk vessels, coupled with the planned two-way cargo, enabling reduction in the positioning cost of empty containers.
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