L&T bags Rs 582-cr Vizag industrial water project
Hyderabad: In a series of decisions, the Andhra Pradesh government has cleared a proposal for devolution of powers to the local bodies, a package that will be able to leverage and harness the potential of the textile and garment industry, award of Vizag water project to L&T, and Government guarantee for power evacuation from four power plants, and expansion of the Rayalaseema thermal power plant.

Briefing newspersons, the state information minister, S. Chandramohan Reddy, after the Cabinet meeting held here on Saturday, said that the state cabinet has agreed in principle for devolution of powers to the local bodies, details of which will be released shortly and has awarded the Vizag water project to L&T.

The Cabinet has decided to award the Rs 582-crore Vizag Industrial Water Supply Project to L&T, which will be taken up in a build, own, operate and transfer mode. While RINL would contribute Rs 240 crore, Vizag Municipality (Rs 60 crore), NTPC (Rs 50 crore), Hudco (Rs 13.8 crore), among others. L&T, which bagged the project, will have 51 per cent equity, APIIC (23 per cent) and Vizag Municipality (7.5 per cent) among others.

In a special thrust to leverage the potential of the garment sector, the State Government has drawn plans to invest Rs 354 crore, which will help the State garner exports of about Rs 9,600 crore by the year 2010. This will see strategic tie-ups with companies such as Walmart and JC Penny to market the produce. An Rs 123-crore garment city will be located at Gundlapochampally, while three apparel parks are planned at Visakhapatnam, Warangal and Kuppam. Three more centres - Tirupati, Visakhapatnam and Warangal will see the establishment of NIFT centres.

In a boost to the medical and health sector, the State Government has decided to grant permission to locate two more medical colleges, one each at Patancheru and Suryapet and two more dental colleges at Warangal and Bhongir. Alongside this, the State Cabinet has decided to consider the application of medical and dental colleges at Adilabad, Srikakulam, Cuddapah and Kurnool.

The government has also decided to request the Centre to provide a grant of Rs 100 crore to convert the Nizams Institute of Medical Sciences, a super speciality hospital, into a national centre of excellence. To compliment the multi-modal suburban transport system, the State Cabinet has considered the proposal to develop an Rs 4,206 crore metro rail project, the details of which are being worked out.

Other decisions include, an ordinance to hike the corpus of the Andhra Pradesh Water Resources Development Corporation from Rs 1,000 crore to Rs 2,000 crore, and Government guarantee to Andhra Pradesh Water Resources Corporation to raise Rs 1,000 crore. The Government has agreed to provide government guarantee of Rs 272 crore for loan to be raised from the Power Finance Corporation to part fund the Rayalaseema Thermal Power Stage II.
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KPFC to pay 30 pc dividend
Thiruvananthapuram: Kerala Power Finance Corporation (KPFC), jointly promoted by the State Government and the State Electricity Board, has paid dividend amounting to Rs 34.76 lakh, which is 30 per cent of the allocable surplus, for 2002-03. Out of the total dividend, the Government received Rs 20.65 lakh and the State Electricity Board Rs 14.11 lakh, according to a statement from KPFC.

The company had paid dividends of Rs 30.43 lakh in 2000-01 and Rs 34.31 lakh in the following year. It has so far sanctioned loans amounting to Rs 1,088.50 crore and disbursed Rs 962.77 crore, says the statement.
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IOC, Hyundai in pact for service facilities
Mumbai: Indian Oil Corporation has signed an agreement with Hyundai Motors for setting up Hyundai service back-up facilities at select IOC petrol pumps across the country. According to the memorandum of understanding signed here on November 7, Hyundai Authorised Service Centres at the IOC outlets will offer car owners repairs, maintenance and servicing. Also, Hyundai Service Contact Points will be set up at places where full-fledged service centres are not available to provide basic service through certified technicians.

The agreement was signed by T.L. Jain (executive director, IOC) and B.V.R. Subbu (president, Hyundai Motors India Ltd) and N.G. Kannan, director marketing, IOC.
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Corporates bullish on all fronts, says FICCI survey
New Delhi: Going by the latest FICCI survey during the month of October 2003, corporate India is even more optimistic than in the last round of the chamber's Business Confidence Survey. "What was last time an undercurrent has now surfaced as the predominant sentiment," according to the second quarter 2003-04 BCS released by FICCI.

Corporate India is bullish on all fronts especially the country's economic performance, the survey stated. Sentiment of India Inc as measured by the FICCI's business confidence index is up by 6.9 per cent and stands at 76.2. "While the economy wide `feel good' factor is the key, the strengthening industry and firm level performance seen over the last few months have also contributed to this upbeat mood," the survey said.

Almost 90 per cent of the respondents have rated the current overall economic conditions to be moderately to substantially better than in the last six months. Expectations regarding the overall economic condition in the next six months reflect a similar strain of exuberance, with 84 per cent of the participating companies anticipating a moderately to substantially better performance on this front.

Further, the first five months of the current fiscal saw the industry sector grow by 5.6 per cent, the highest for the period for the last three years.

About 73 per cent of the respondents cited the current industrial performance vis-à-vis the last six months to be `moderately to substantially better'. Looking ahead, three-fourths of the participating companies feel their industry's performance would be `moderately to substantially better' in the next six months. The quarterly business confidence survey elicited response from 564 companies. The turnover of the companies who participated in this survey ranged from Rs 1 crore to Rs 10,000 crore.

Sectoral analysis reveals that the performance of the heavy industry has improved notably. "This is an indicator of revival in investment activity and is in consonance with the firm level responses regarding the same," FICCI said. There has been a remarkable improvement in the domestic demand conditions. While 62 per cent of the respondents had complained about weak demand in the FICCI business confidence survey in the second quarter of 2002-03, in the latest survey the corresponding proportion has shrunk to 35 per cent.

Further, almost 80 per cent of the respondents were in favour of more bilateral FTAs similar to the one recently signed with Thailand. Corporates felt that while India should maintain its principled stand in multilateral fora like the WTO, it should also actively pursue bilateral trade agreements with cooperation based on the Ricardian principle of complementarity.

Corporate India has also taken the rising rupee in its stride. As per the survey, it prefers gaining a sustainable competitive edge through improved infrastructure and reduced transaction costs and not RBI intervention.

While 46 per cent feel that the appreciating rupee is having an impact on India's exports, another 39 per cent opined that the rupee's strength couldn't be blamed for the slowdown in India's exports in the current fiscal. Interestingly of the 46 per cent who seemed concerned about the rupee exchange rate movement, about 48 per cent want RBI to intervene and slow down the rupee's upward movement.
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Honda Siel mulls bringing in more CBU models
Pune: Honda Siel Cars India Ltd, which is testing its waters by bringing in the CBU unit - the CR-V, is looking at options to bring in further models into the Indian market. Neeraj Garg, head, marketing, Honda Siel Cars, said ``the volumes would be the criteria and it could be any vehicle on the Honda platform, SUV or MUV.''

He said the vehicle, which was launched in July this year, with the combination of a sedan and a SUV (sports utility vehicle), has order bookings close to 150 and a delivery wait-in period of four weeks. The target for CR-V sales is 1,000 vehicles for the current fiscal. He, however, noted that ``in case the volumes reach around 2,000 vehicles, the company would be looking at manufacturing the CR-V at its Noida plant.''

The car is priced at Rs 14.5 lakh and its competitors include Forester (Rs. 15.5 lakh) and Suzuki Vitara (Rs 16 lakh). Giving details of its other offerings, the City and Accord, he said, the company is targeting sales of 18,500 City (includes both old and new), 2,000 Accord and 1,000 CR-V. The company in the previous fiscal had sold 12,000 City and 1,300 Accord.

The Honda City (old) has already been phased out, though its components and parts would be available with the Honda showrooms for the next 15 years. Asked whether there were plans for increasing its capacity at the Noida plant, he said the installed capacity is 30,000 catered to by two shifts. The aim is to touch 30,000 vehicles by 2005-06.

He said the vehicles are also being exported to Nepal, Bangladesh and Sri Lanka. The vehicles exported numbered 70 in total and was targetting sales of 150 for the current fiscal, he added. Mr Garg was in Pune for the launch of the all-new Honda City. The new City is the third model launch by the company during this fiscal. He said since the launch, from October 30, the company has received 2,500 bookings across the country and added that 150 bookings had come in from Pune.
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Tata Coffee defers plans on its Russian instant coffee JV
Mumbai: Tata Coffee Ltd, an wholly-owned subsidiary of Tata Tea Ltd, has deferred its plan for setting up a joint venture (JV) in Russia. The work for setting up an instant coffee facility near Moscow was slated to start by the beginning of 2004.

Tata Coffee Ltd sources said,"The proposed plan for setting up a joint venture in Russia has been put on the back-burner. The Russian partner Grand Trading House is not keen on investing at this point of time. However, Tata Coffee is still pursuing the project."

The initial investment earmarked for the project was around $5 million. As per the memorandum of understanding (MoU), Grand Trading House was supposed to hold 50 per cent while Tata Coffee’s holding was at 35 per cent and the remaining 15 per cent was held by Kolkata-based Beeyu Overseas, the trading partner of Tata Coffee. The due diligence of the project has already been done by Deloitte Haskins & Touche. As per the agreement, Tata Coffee along with its trading partner was supposed to provide its technological expertise as well as supplying key raw material (coffee beans) from India. The Russian partner was to take the responsibility of marketing and distribution of products in Russia and CIS countries.

At present, Tata Coffee exports nearly 80 per cent of its instant coffee to Russia and the CIS countries. The instant coffee division contributes 50 per cent to the turnover of the company. The company firmed up its plan for setting up a plant in Russia since the local authorities increased the import duty for bulk coffee to promote value addition in the country itself.

Tata Coffee, which is betting big on its instant coffee business, has recently acquired Highhill Coffee India Pvt, which owns an instant coffee facility in Tamil Nadu. With this acquisition, Tata Coffee will have three instant coffee facilities.

Tata Coffee, the largest coffee plantation company in Asia, produces around 10,000 metric tonne of coffee per annum. Besides, it has a total capacity of around 5,000 metric tonne per annum of instant coffee produced by the company as well as through contract manufacturing.
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Siemens Lines Up New Export Plans
Mumbai: Siemens, which posted a good financial performance during the fourth quarter and year ended September 2003, now plans to undertake new export projects. Jurgen Schubert, managing director, Siemens, that the German company had been already exporting equipment to countries where the British had developed the rail network. The company also plans to export electric mechanical systems to its parent in Germany (Siemens AG). However, he added that many times the differences in standards in India and other countries hindered exports.

During the year, software development for exports to Siemens AG touched a new-high and the 100 per cent export-oriented design centre was enhanced. In the medium-and-high voltage business, exports were made to Qatar, Iran and Nepal. The industrial solutions and services division made a breakthrough in Chinese market through flat products in electrical and automation solutions.

He lauded the ongoing power sector reforms in India, but added that the plans should materialise on ground. Siemens is already established in the power sector and a better regulatory setup will be an added advantage. At the same time, power losses have to be controlled and grid investment is required to make the distribution system more efficient. With a factory in Nashik, Siemens is a strong player in railway safety systems. Mr Schubert said that his company’s equipments and systems were not involved in any of the accidents that have happened on rails. Answering questions about competition from unorganised sector, he said that once they had faced such a problem in low-volume panels, but are largely unaffected due to the high-end nature of their equipment..

Going forward, Schubert announced that in power generation they would concentrate on automation and service business, while health of power utilities remains an area of concern for power distribution business. In the automation and drives division, it plans to launch new products and develop channel partners. Order booking of Bangalore international airport is also expected to boost the sales of its industrial solutions division.
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