CESC may reduce power tariff
Kolkata: Following the conclusion of its debt restructuring scheme and the launching of a VRS, CESC Ltd is now working on its 2004-05 tariff revision proposal which aims at an approximate 40 paise decrease in tariff through cost reduction. Company sources said that CESC was aiming at bringing down tariff to about Rs 3.75 per unit against the current rate of Rs 4.15 per unit. The utility is planning to submit its 2004-05 tariff revision petition to the West Bengal Electricity Regulatory Commission shortly. The last date is December 31.

"The debt restructuring is expected to impact tariff in a significant way as would the reduction in employment costs," sources said. There have been about 500 applications for the VRS, which is open till November 30. Tariff is proposed to be reduced by 15 paise on account of reduced interest and financing cost, while a 10 paise reduction would be on account of personnel cost. A five paise reduction would be on account of reduction in transmission and distribution loss and another 10 paise through improved generation and reduced imports.

While interest and finance costs account for less than 25 per cent of CESC's cost of production, power costs including power purchase have close to 50 per cent share. CESC, which caters to the city and its suburbs has a generation capacity of about 1,065 MW, is forced to import power from the West Bengal State Electricity Board during the evening peak hours. Sources said that these cost reductions were being considered absolutely essential for CESC's survival in the post Electricity Act 2003, regime. While at least one industrial customer has already expressed his intention to move out of CESC's fold, several jute companies have shown keenness on following suit, sending the hitherto monopoly supplier into a tizzy.
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Apollo's low-cost treatment draws patients from West
Chennai: Low cost of treatment for a standard that matches that of the West has drawn a group of patients from developed countries to Apollo Hospitals. Two British nationals and a Canadian undergoing treatment at Apollo, Chennai, were introduced to the media on Thursday by the hospital authorities to showcase the hospital's calibre.

On the occasion, Apollo's chairman, Dr Prathap C. Reddy, said the hospital's cost worked out to 10 per cent of the cost in the West. For example, Apollo carries out a liver transplant for about $ 40,000, as against about $ 400,000 in the US. An Apollo press release said that currently over 80,000 foreign nationals and non-resident Indians visit India every year to get medical treatment. The number is growing at 30 per cent annually.

Dr Reddy added that Apollo's success rate with surgeries was on par with the same in developed countries. Poor airline links between most Indian cities and the world is an obstacle faced by the Indian health care industry in attracting more "medical tourists," felt Dr Reddy. Apollo is in touch with the Civil Aviation Ministry to improve air connectivity of cities such as Chennai and Hyderabad to improve the environment for medical tourists.
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Orient Fans sourcing materials from China, HK
Kolkata: Orient Fans, belonging to C.K. Birla's Orient Paper & Industries Ltd, is outsourcing materials from Hong Kong and China to produce a range of high-end electrical fans for the domestic market. According to C.L. Mohta, president of Orient Fans, the company is buying some items from the foreign players. Everything else is being developed by the company. Orient Fans, whose annual turnover is around Rs 200 crore, contributes approximately a third to the company's total earnings. The other activities of Orient Paper & Industries are cement and paper.

Mohta ruled out a demerger of the fans business from the parent company. Instead, he said the fan business would register a decent growth in the coming years. Orient Fans has manufacturing bases in Kolkata and Delhi. On Thursday, the company launched two high-end products, namely Lincoln and Alexandria and the price ranges between Rs 3,800 and Rs 4,500.
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Skoda lines up new models for India
New Delhi: The Czech-based carmaker Skoda Auto will launch new models and upgrades in India in the coming years as it targets to more than quadruple its annual sales to 20,000 units by 2008, a top company official said. The models that Skoda, part of the Volkswagen Group, is planning to roll out in India include luxury sedans Superb and Laurin & Klement as well as Fabia, a premium hatchback, according to Mr Imran Hassen, Managing Director of Skoda Auto India. Talking to media persons here on Wednesday after unveiling the Superb, Hassen said a new variant of the "successful" Octavia - a diesel automatic - would also be launched in 2004.

The Superb, which will be pitted against cars such as Mercedes C class, Toyota Camry and Opel Vectra, will hit the roads in March 2004. Hassen declined to indicate the price of the car, saying that since the car will be imported as a completely built unit (CBU), Skoda will wait for the 2004-05 Union Budget to decide the price. "If the Budget announces any duty reduction, we can price the car accordingly," he said. Currently, a car imported as CBU attracts duties of 104 per cent. Various models of the Superb are priced between £14,000 and £25,000 in the UK. The Superb will first come with a petrol engine and the diesel version will follow three months later. The petrol version is powered by a 2.8-litre engine that delivers 140 bhp at 6,000 rpm. Some of the features that the car offers include an adjustable steering wheel, illuminated front and rear leg room, mechanical rear window sunshade, electronically regulated air-conditioning and rain sensor.

Along with the Superb, the Laurin & Klement, which is the top-of-the-line version of the Octavia, will also come to India. The Fabia is slated to debut by the end of 2004 or early 2005, Mr Hassen said. He claimed that the 1.4-litre version of the Fabia will return 26 km per litre, making it one of the most fuel-efficient cars in the country. Hassen said Skoda has so far sold 9,000 Octavias in India, of which the diesel version accounted for 80 per cent. "In this year we have sold 4,000 cars till October. Our target is to sell 20,000 cars per year by 2008," he said. In 2004, Skoda hopes to sell 8,000 cars as the number of dealers would go up to 40 from the present 26. The company is ready with a new plant in Aurangabad, close to its existing facility, from where production will start from January 2004. "The first car will roll out from this new plant in February," Hassen said, adding that the plant will give the option for Skoda to start a second shift to double the output. Currently, the company assembles 25 cars a day.
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Elder Pharma to step up production, exports
Mumbai: Elder Pharmaceuticals has planned a slew of investments to step up production and increase exports. The company aims to achieve a turnover of Rs 400 crore by 2005-06. It commenced operations of its new manufacturing facility at Patalganga in Maharashtra on Friday. The new production plant with a capacity of 48 m.t. per annum would primarily be utilised for bulk drugs manufacture for both the Indian and global markets. It has invested Rs 22 crore in this facility.

"We have funded the plant through internal accruals and are looking at installing Food and Drug Administration (FDA)-compliant production units at Uttaranchal and Himachal Pradesh with a proposed investment of Rs 40 crore to Rs 45 crore. Even though we would not be exploring the US market, FDA compliance will certainly help us penetrate international markets," said J. Saxena, managing director, Elder Pharmaceuticals, at the inauguration of the new facility.These investments would help the company to step up its exports and obtain more business from European companies, he said. The company is already in advanced talks with two Italian and two European companies for outsourcing of bulk drug manufacturing.

This year, Elder Pharma expects to record Rs 35 crore in exports and has projected Rs 80 crore - Rs 85 crore for the next fiscal year. The company is looking at the Latin American and European Union market as primary export bases. New products in the nutraceuticals and skincare segments are also on the cards. The company has already entered into a tie up with Blistex Inc to manufacture lip care products and market them in India, added Saxena.
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NFCL sells more, but earns less
Hyderabad: Nagarjuna Fertilizers and Chemicals Ltd (NFCL) had sold seven lakh tonnes of urea during this year's kharif season, one lakh tonnes more than usual sales, but income is less than that of last year. The company incurred a loss of Rs 6.95 crore during the first half of the current fiscal against a profit of Rs 13.85 crore in the corresponding previous period. This year's good monsoons boosted the urea sales. However, replacement of the retention pricing scheme with group concession scheme (GCS) by the government from April 1, 2003 caused depletion of revenues. Despite registering an increase in sales by over Rs 100 crore from Rs 443.73 crore in the first half of last year to Rs 543.97 crore in the same period this year, the company could not post profits. NFCL sources told that on account of GCS, the company got about Rs 700 less per tonne of urea than last year, which translated into a loss of Rs 49 crore on the sale of seven lakh tonnes under the new pricing policy.

Under GCS, the fertiliser industry is divided based on the vintage and feed stock. The earlier plants have naphtha as feedstock and new generation plants use natural gas as the raw material. The new urea plants using natural gas as raw material have a distinct advantage of energy efficiency and low cost of production. Nevertheless, the NFCL management is of the opinion that the new policy will be beneficial for the company in the long term as it also envisages gradual deregulation, leading to full decontrol by April 2006. With easy access to the Kakinada port, complete deregulation of the industry is expected to open up export opportunities to the company in the event of a surge in the international price of urea. With the North-East monsoons also being normal, NFCL is confident of touching the kharif sales figures even during the rabi season this year. It had already sold two lakh tonnes of urea for the rabi crop.
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SAIL to cut production costs by Rs 500 cr
Kolkata: During the current financial year, 2003-04, Steel Authority of India Ltd (SAIL) has targeted to reduce production cost by approximately Rs 500 crore, according to Dr S.K. Bhattacharya, managing director of Durgapur Steel Plant. He was addressing a press conference to give the details of 41st National Metallurgists Day, to be held in the city on Friday. The meet is being organised by the Indian Institute of Metals and will be inaugurated by the union minister of sState for Steel, B.K. Tripathy. The meet will be followed by a two-day annual technical meet and discussions will revolve around innovations in the steel industry. Dr Bhattacharya felt that every steel producer was focused to meet the requirements of the customers and was trying to reduce production cost. In this context, he said that SAIL would reduce production cost by around Rs 500 crore, of which 50 per cent would come from technological innovations. He said the average industry target for cost reduction is 10 per cent per annum.

When inquired whether it is possible over a long period of time, he said it is to a certain extent. "When we started there was enormous scope of cost reduction but over the years this is shrinking, still we feel that we can reduce production for the next few years," Dr Bhattacharya said. Regarding Durgapur plant, he said, that it registered a net profit of Rs 30 crore in the first half of the current financial year and is expecting an annual turnover of Rs 2,200 crore - Rs 2,300 crore. It would soon install a bloom caster at a cost of Rs 180 crore, already approved by SAIL. Once it is over, a finishing mill would be set up at a cost of Rs 150 crore in the plant, followed by a section mill for Rs 20-30 crore. He felt these innovations would take a year and will be done in phased manner.
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General Motors seeks govt nod to up fee to Isuzu
New Delhi: Citing an increase in the cost in developing the Bharat Stage II engine and transmission of its soon-to-be-launched vehicle, General Motors India Pvt Ltd is seeking permission from the Government to increase the payment of engineering fee to its technical partner, the Japan-based Isuzu Motors Ltd. The vehicle in question is believed to be the Isuzu Tavera. In a letter to the government, General Motors has sought permission to remit payment of Rs 91.5 crore to Isuzu as compared with the earlier decided Rs 65.3 crore in a phased manner. General Motors is set to launch its multi-purpose vehicle Tavera in India early next year, the engine for which is reportedly being sourced from Hindustan Motors. The vehicle is likely to be branded as the Chevrolet Tavera.

General Motors in its letter has also stated that a number of developments have taken place in the regulatory framework in terms of emission norms, safety norms, noise testing, fuel policy, etc. It further stated that General Motors has to carry out a number of engineering changes to meet the new regulatory parameters. The proposal by the company envisages an increase in payment from Rs 13.5 crore to Rs 32.5 crore in 2003 and from Rs 5.6 crore to Rs 29 crore in 2004. General Motors India at present makes the Opel and Chevrolet brand of vehicles. Vehicles in its portfolio include, the Chevrolet Optra, Chevrolet Forester, Opel Corsa, and Opel Corsa Sail among others. Apart from the Tavera, the company is also believed to be working on launching a variant of the erstwhile Daewoo Matiz next year.
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