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| Monday, February 05, 2007 |
| Tata Group not entering airline business |
Ratan Tata, chief of the Tata Group, has indicated that the Group does not intend to enter the airline business for the time being.
This is significant since it virtually rules out the chances of the Tatas taking over SpiceJet, a low-cost airline, in which the Group picked up 6% stake recently.
"I am still very keen on aviation, but aviation as a sector. I have been keen on airlines also, but today, I am also one of the people who say that we do not want to be in the airline business at this time," Ratan Tata said in a television interview.
Ratan Tata's remark indicates a major change in his thinking since the time the Group unsuccessfully bid for Air-India in collaboration with Singapore Airlines.
The Tata Group had also tried launching a domestic airline in joint venture with Singapore Airlines, but this attempt too did not succeed.
Since the Tatas had owned Air-India before its nationalisation, the Tata Group was always considered to be interested in the business.
The talk of the Tatas entering the airline business had become louder recently since SpiceJet had offered the Tata Group representation on the low-cost carrier's board of directors. Industry sources said the Tatas have not accepted the offer. The Group does not plan to pick up more stake in the airline, according to them.
Through two investment arms, the Ewart Investments and the Tata Investment Corporation, the Tata Group had invested Rs 780 million in SpiceJet to pick up 6% stake. The Group has been maintaining that it was a financial investment and that it does not plan to take up management of the low-cost airline.
Ratan Tata's view that the Group should not enter the airline business possibly highlights the risks associated with the airline sector that has seen increasing competition and mounting losses of late. Almost all major carriers are in the red on account of high fuel prices and mounting salaries of pilots, engineers and other skilled professionals.
A number of players in the airline segment such as SpiceJet are coping with competition by infusing funds through private placements. Texas Pacific was to pick up stake in SpiceJet, but it did not do so. Similar was the case with Temasek.
In view of the increasing losses, airlines have now formed a federation to fight their case for lower taxes and better infrastructure.
However, overcapacity would be an issue since most airlines have placed huge orders for planes to be delivered over the next three to five years.
Despite the strong growth in traffic, large capacity induction is expected to mount pressure on bottomline of airline companies.Labels: Business |
posted by a correspondent @ 9:56 PM   |
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| Sunday, February 04, 2007 |
| Coping with business travel burnout |
In the absence of adequate psychological and emotional support, travel by high-flying executives for long periods could burn them out.
Unlike in the case of traditional expatriates who would relocate for a number of years, these days some professionals are expected to leave home for a few days, weeks or even months.
While counsellors, recruiters and career coaches agree that these long-period travels can certainly boost a professional's résumé, the travels do take their toll.
Considering the increasingly mobile and global nature of today's work force, companies will do well to take measures to help their employees deal with the hazards and strains that go with having to traverse time zones constantly, strained personal and family relations, and having to work thousands of kilometres away from colleagues.
Michael Leiter, a psychology professor at Acadia University in Wolfville, Nova Scotia, says travel can be a major work perk. "It can really be a high point, if it is packaged right."
But, without the proper support, long travels can quickly lead to burnout.
Professor Leiter says there are three classic signs: chronic exhaustion; feeling cynical, distant and uncaring about work; and feeling ineffective.
It is likely that workers who feel exhausted have not completed their recovery cycle. Which means they have not had the chance to exercise, spend time with their children or do their crossword puzzle.
"Being away so much, you get out of your daily groove and out of personal relationships, as well as from the flow of things at the office," Leiter says. "Something fundamental like not getting enough sleep plus the change in time zones can lower your energy dimension."
There are things that companies can do to support their globe-trotting workers, according to Leiter - like structuring work schedules to make sure people recover from their trips and provide employees with energy-friendly infrastructure such as a high-quality hotel with a comfortable bed, a gymnasium and good food.
Employers will do well to communicate often with their employees on the move through e-mail, conference calls or video-conferencing. They can also cultivate an organisational culture that is inclusive, as opposed to the cut-throat, Leiter says.
Intense bouts of travelling also can have a physical impact on the people. Spending two to three hours at the hotel each night hunched over a laptop can lead to repetitive strain injury since tables and chairs in hotels are not designed for that kind of work.
Derrick Neufeld, an associate professor at the University of Western Ontario's Ivey School of Business, says people who jump between cities usually struggle to form and maintain deep relationships. "How many times have I been on a flight, sitting beside a businessperson who is very successful, but on his or her their third marriage," says Neufeld.Labels: Business |
| posted by a correspondent @ 7:19 AM |
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| Singapore surpasses tourism targets |
Exceeding target, the tourism sector in Singapore generated an estimated S$12.4 billion in tourism receipts (TR) in 2006.
The figure surpasses the target of S$12 billion and posts a double-digit growth of 14.5% over 2005. This is a record in terms of tourist receipts.
Singapore also set a new high of 9.7 million visitor arrivals in 2006, exceeding its target of 9.4 million visitor arrivals and registering an increase of 9% over 2005.
Total visitor days grew by 9.0% to reach 32.9 million days in 2006.
The breakup of tourist arrivals in Singapore is: Indonesia - 1,921,000 visitors, China - 1,037,000, Australia - 692,000, India - 659,000, and Malaysia - 634,000. These five countries accounted for over 50% of total visitor arrivals in Singapore in 2006.
Asia - with 7.1 million visitors - continues to be an important source market for Singapore, contributing to 72.9% of the total visitor arrivals and marking an increase of 9.2% over 2005.
Singapore's hospitality industry also fared well in 2006. Latest figures show that the average occupancy rate for the hotel sector reached 85% from January to December 2006 - a growth of 1.4 percentage point over the same period in 2005. The average room rate for 2006 was estimated to reach S$164 - a rise of 19.6% over 2005.
Hotel room revenues achieved a double-digit growth of 21.2% to reach S$1.5 billion in this period.
In 2006, Singapore launched two marketing and advertising campaigns: (1) Singapore, Where Great Things Happen - aimed at business travel and meetings, incentive travel, conventions and exhibitions, and (2) Uniquely Singapore, Beyond Words - targeting leisure and meeting, incentive travel, exhibitions and conventions events.
With the two integrated resorts - Marina Bay Sands and Resorts World at Sentosa - getting completed in 2009 and 2010, respectively, Singapore can look certainly forward to even more regional and global interest in the coming years.
In addition, the Singapore Flyer, Singapore's iconic 165-metre observation wheel, is due to take tourism to greater heights at the start of 2008.Labels: Business |
| posted by a correspondent @ 6:53 AM |
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| Thursday, February 01, 2007 |
| Moment of pride as Tata finally bags Corus |
Corus has been won, finally, by India's own Tatas. The Tata group has sealed the deal to have complete control over Anglo-Dutch steelmaker Corus by pushing behind Brazilian giant Companhia Siderurgica Nacional (CSN).
Wednesday's drama ended with the Tatas winning with a bid of 608p a share in cash, against CSN's bid of 603p a share. The Tata bid valued Corus at about £6.7bn including debt, said reports.
The deal has made Tata the word's fifth biggest steelmaker. Chairman Ratan Tata, expressing satisfaction, said that the deal would be the first step in showing that Indian industry can in fact step outside the shores of India in an international market place and in fact acquit itself as a global player, said a report.
With the steel industry on a consolidating mode across the globe, steel manufacturers have been under tremendous pressure to grow. Mittal's Acelor acquisition had given this an added impetus.
With the deal sealed, Tata swung back to real business. The group has forecast cost savings of $ 350m a year through the combination of the Asian and European groups. It also said that procurement and marketing could be areas where savings could be made, and shipping of low-cost steel from India for finishing at Corus' plants in the UK.
The new entity is seen as a strong and robust platform that could help stakeholders. It may be recalled that at the time of its near-collapse four years ago, Corus shares were trading at less than 10p, but a boom in global steel prices and a restructuring had led to a dramatic recovery later on.
Meanwhile analysts are busy questioning the amount Tata had to pay. Saying that Corus was an expensive buy at 515 p a share, a 450 p was where a stand-alone fair value was. More than the money, it was pride at play as far as the Tata-CSN was concerned.Labels: Business |
| posted by a correspondent @ 9:46 PM |
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| Wednesday, January 31, 2007 |
| Air India's aircraft shopping plans move ahead |
National carrier Air India’s plans to buy Boeing aircraft has received another boost with a team from the company all set to fly to Washington to formalise the documentation for availing itself of a $6-billion loan from the US Exim Bank.
A report said that the delegation will work on preparing all operative documents for Air India and Air India Express including the master lease agreement that would see the aircraft being leased to a Special Purpose Vehicle from which they would join the respective airlines.
The report added that the loan constitutes about 85 per cent of the cost of the aircraft with the airline tying up the rest of finances from commercial banks. The formalisation of the documentation would help Air India get the first tranche of $1.4 billion loan for acquiring 17 aircraft including 10 Boeing 737-800 and seven Boeing 777 air.
It may be recalled that in year 2005, the airline board approved a proposal to acquire 68 Boeing aircraft including 27 Boeing 787, 8 B 777-200 Long Range and 15 B777-300 extended range aircraft and 18 Boeing 737-800 aircraft for its arm Air India Express.
Significantly, Air India is purchasing aircraft after a gap of more than 10 years. While the Boeing 737-800 aircraft will be used by Air India Express, the low-cost subsidiary, the other aircraft being purchased will be operated on existing and new routes.Labels: Business |
| posted by a correspondent @ 10:31 AM |
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| Kingfisher Airlines opens City Ticketing Office in Kolkata |
Fastest growing Indian airline Kingfisher Airlines has unveiled its City Ticketing Office at the West Bengal capital of Kolkata. With the opening of this office, Kingfisher guests can now enjoy the convenience of ticketing while ensconced in the lap of luxury, said a report.
The office offers personalized attention, warm and friendly service and fast responses will form the key features of this new initiative, it added.
The airline major can take pride in the fact that it has redefined the experience of flying and has been at the forefront of product and service innovation designed to make flying a delightful experience. The inauguration of a ticketing office at Wallace House in the heart of Kolkata is Kingfisher Airlines' way of making it more convenient for passengers to plan their trips.
The airline at present connects 29 Indian cities and operates 156 flights a day. Kingfisher Airlines currently operates 9 flights out of Kolkata and connects Kolkata with 8 destinations. Being the first and only private airline in India to receive the prestigious, 'Best New Airline of the Year' award in the Asia-Pacific and Middle East region from Centre for Asia Pacific Aviation (CAPA), Kingfisher Airlines has come a long way since its first flight.
It has also been voted as the third Most Successful Brand Launch of the Year 2005, in the annual Brand Derby Survey conducted by India's leading business daily-Business Standard. In another Survey conducted by agencyfaqs.com and Brand Reporter, Kingfisher was voted as the 7th Buzziest Brand of 2005 amongst 2000 leading national and international brands.Labels: Business |
| posted by a correspondent @ 10:24 AM |
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| Incredible India campaign works: foreign tourist arrival in India grow at 13% in 2006 |
In India, 2006 witnessed an ascent in domestic as well as foreign tourism, generally thanks to the economic boom in the country and the availability of better and cheaper travel options coupled with attractive package deals for new destinations.
The star packaging of the country under the ‘Incredible India' campaign attracted millions of foreign tourists - about 4 million of them in 2006.
The ‘Incredible India' campaign was built around the brand proposition of "India as a path to ananda"(wellness, bliss and contentment - in Sanskrit).
When the advertising campaign was launched in 2002, and in the years since, India has hardly been the peaceful haven that the tourism campaign promised, yet it worked wonders.
The campaign used captivating visuals of India, showcasing its exciting diversity in terms of geography, heritage, culture and cuisine. The ‘Incredible India' campaign went beyond ‘marketing' India as the land of the Taj Mahal to showing a country that offers tourists sights ranging from spectacular sunsets to ski slopes and adventure sports to a stress-free lifestyle.
The ‘Incredible India' campaign certainly clicked with foreign tourists - over the past two years, tourist arrivals in India grew at a steady 13% annually. In 2005, India was ranked fifth on the Conde Nast Travelers Readers Travel Awards 2005 list - up from the 11th slot three years earlier.
The increase in arrivals resulted in India's foreign exchange earnings from tourism touching US $5.7 billion in 2005 - a 20.2% rise over 2004.
Till a few years ago, it was the ‘shoestring budget' tourists who mainly visited India. This has changed - foreign tourists in India spent an average of $1,470 per person in 2005, nearly double the global average of $844.
While tourism in the strife-torn parts such as Jammu and Kashmir continued to be hit, the tourism potential of the north-eastern states remained untapped owing to the decades-long insurgency there.
Goa, a favorite with foreign tourists, especially those from Israel, was reportedly on al-Qaeda's hit list during Christmas 2006, which prompted the Israeli Government to issue a travel advisory to its citizens travelling to Goa. Interestingly, Israeli tourists, who also constituted the largest group visiting Kashmir, have often said that they are used to worse violence in their own country and are not scared by the situation in India.
Tourism, India's third largest foreign-exchange earner, is also among the sectors that provides the most employment. The tourism sector in India directly and indirectly employs about 42 million people, which is 8.78% of the total employment in the country.Labels: Business |
| posted by a correspondent @ 9:55 AM |
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| World tourism achieves another record in 2006, says UNWTO's Tourism Barometer |
The year 2006 was a year of yet another record for world tourism, with 842 million arrivals - higher than the expected growth rate of 4.5% - despite adverse factors such as the Israeli-Hizbollah war in Lebanon and the terrorist threats to trans-Atlantic air travel from London.
Latest figures released by the United Nations show that, despite risks facing global tourism 12 months ago - in particular terrorism, health scares due to avian flu and rising oil prices - 2006 was another year of good growth.
The upswing was backed up by one of the longest periods of sustained economic expansion.
UN World Tourism Organisation (UNWTO) Secretary-General Francesco Frangialli said that, three years ago, world tourism, which can play a key role in fighting poverty and become a primary tool for sustainable development, began a historically new phase of growth, as it broke the barrier of 800 million international arrivals. It has grown more than 20% since then.
The rise in international tourist arrivals is projected to be around 4% for 2007, much in tune with the predicted long-term annual growth rate of 4.1% through 2020, according to UNWTO's Tourism Barometer.
Growth is expected to be more solid in 2007 as businesses, consumers, governments and international institutions are now better able to anticipate shocks and respond more effectively to crises.
Africa outpaced all other regions - with almost twice the rate of global growth - registering an 8.1% rise in 2006 after an already strong 2005. Africa's upsurge was led by sub-Saharan Africa (up by 9.4%) and North Africa (up by 5.8%). Major destinations such as South Africa, Kenya and Morocco continued to do well.
Asia and the Pacific (up by 7.6%) was able to retain its exceptional growth level, both on account of the recovery of Thailand and the Maldives from the impact of the 2004 tsunami and outstanding performances from emerging destinations.
International tourist arrivals in South Asia rose by 10% - boosted by India, the destination responsible for half the arrivals to the sub-region.
Europe achieved the target (up by 4%). Germany took advantage of the Football World Cup 2006, while Italy made a strong comeback. Spain's solid results also contributed to the European success.
In the Middle East, international tourist arrivals went up by 4%, after the bumper years of 2004 and 2005. This happened notwithstanding the overall, volatile geopolitical situation, especially the Israel-Lebanon conflict.
Though the 2% overall growth in the Americas might seem disappointing, regional results varied considerably. The United States fared well, but not so Canada and Mexico.
However, results from Central America (up by 6.1%) and South America (up by 7.2%) show how Latin America is consolidating its gains in recent years. Chile, Colombia, Guatemala, Paraguay and Peru achieved double-digit growth.
As a whole, the global economy is expected to keep the growth level of 2006.
However, increasing interest rates in some countries and regions could cut available income. A weaker US dollar might hit foreign travel demand by the Americans. On the contrary, stronger euro could stimulate international travel by the Europeans.Labels: Business |
| posted by a correspondent @ 9:52 AM |
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| Friday, January 19, 2007 |
| Indian - Air India merger - Aviation minister meets staff |
As the merger gets closer, the employees of Air India and Indian, the two state-run airlines have been given a reason on why to say yes to the plan. Staffers from the two companies were today explained why the merger was inevitable from the perspective of savings, estimated at Rs 820 crore.
Civil aviation minister Praful Patel on Thursday assured the employees that the planned merger would neither lead to retrenchment nor any cut in salaries and emoluments. Explaining that a redressal panel comprising representatives of the ministry, two airlines, department of personnel and department of public enterprises would be set up to address the grievances of the employees in a fair and equitable manner, he added that the selection and appointment of personnel in the merged entity would be done in the most transparent manner.
Elaborating on the positive aspects of the merger, Patel told the employees of the two airline firms that it would give the new entity flexibility in financial and capital restructuring through revaluation of assets and cleaning up of financial books. The various unions of Air-India and Indian Airlines formed the audience as Patel tried to brief them about the merger process and the future of both the merged entity and the employees. He assured that the government would strive to resolve all issues regarding the merger of the two firms fully and amicably.
With this most important step too over, the government hopes there will not be tough hurdles as the merger process is set in motion.Labels: Business |
| posted by a correspondent @ 10:31 AM |
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| Thursday, January 18, 2007 |
| Air Deccan sells 3 lakh Rs 7 tickets |
Low-cost carrier Air Deccan has sold 3 lakh tickets at Rs 7 each. The ultra cheap flight tickets were sold in celebration of the Hindu festival of Makar Sankranti and would be available for travel in the months of February and March 2007.
Makar Sankranti marks the onset of summer and is celebrated across India with much gaiety.
The ticket sales had opened on January 14 8 am for travel across all sectors.
"Stimulation of spontaneous and impromptu travel is the basic idea behind releasing tickets at low fares. We want to even out the differences between peak and non-peak travel seasons," Air Deccan managing director G R Gopinath said.
"The travellers should be able to get low fares when they plan to travel and not only in off seasons," he added.
The travellers had to pay taxes over and above the cost of the ticket.
The Indian low-cost carrier is close to break-even, when its results would be announced by the end of this month. The company's board is meeting on January 25 to consider the quarterly results and according to industry analysts the carrier will break-even or makes a "modest profit".
During the previous quarter, Air Deccan had made losses of over Rs 43-crore.
During the quarter ended December 31, 2006 , the carrier made losses to the tune of Rs 35 crore as services were affected by fog. The quarter was otherwise "gainful" revenues surged due to an increase in passenger traffic and better margins. The airline also posted improvement on all the key performance indicators.
The average yield per passenger was Rs 3,200 in December quarter, up from Rs 2,780 in the July-September 2006 quarter. If the carrier makes average revenue of Rs 3,100 per seat, it would break-even.
Air Deccan is also targeting a fleet of 100 ATRs within a decade of operations, even as it is planning to increase fleet size by adding more aircraft. The airline is buoyant on the back of a resurgent market cap, whittling oil prices and further private institutional financing.
According to the company chief operating officer Warwick Brady Air Deccan would continue augmenting its ATR and jet aircraft fleet with ATRs. The company's total number will touch 100 within 10 years of Air Deccan's operations.
This would help the carrier enhance its hinterland route network and operate services to destinations with narrow runways. This would help the carrier access over 300 airports in the country, like Bellary, Hampi and Allahabad.
Air Deccan had added 10 aircraft to its fleet during the past 18 months and is looking at adding one more plane this year.Labels: Business |
| posted by a correspondent @ 5:29 AM |
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| India's Union Budget 2007-2008: A sneak preview |
DWS does some crystal-gazing to read the mind of finance minister P Chidambaram
At a recent meeting with the finance minister P Chidambaram, captains of Indian industry have sought several tax exemptions and benefits to drive the domestic industry. The meeting last Tuesday was attended among others by Ratan Tata, VN Dhoot, Venu Srinivasan, Sunil Mittal and Malvinder Singh among others.
The leaders are reported to have requested the finance minister to give tax benefits in India's Budget 2007-2008 for Indian companies acquiring foreign companies. Indian corporates acquired foreign companies for a total of nearly $10 billion in 2006. The Indian corporates want total tax on such acquisitions to be brought down from 38% to 25%. The Budget is the perfect platform to make strategic shifts in taxation of this scale.
The industry has also called for correction in the inverted duty structure and a reduction in fringe benefit tax in India. Fringe benefit tax (FBT) imposed two years back has been a permanent source of disaffection between the industry and the Indian government. Last year too, before the Union Budget 2006-2007, India Inc had requested a reduction or removal of FBT, but the finance minister did not pay heed.
Telecom companies want the service tax paid by telecom companies to the Department of Telecommunications to be reduced. Currently, the service tax rate is 12% in India. There have even been ominous indications that the rate may go up in Chidambaram's upcoming Union Budget 2007-2008.
In their pre-budget memoranda, the pharmaceutical companies have requested the government to offer tax benefits on R&D done in India, in the wake of large amounts of R&D work on medical field being outsourced to India.
Finance minister P Chidambaram has repeatedly said that any further tax cuts in the Budget will depend on the level of tax compliance. Yet, the minister has not spelt out at what level of tax compliance the cuts will begin. There has also been no mention on how the ministry plans to check the level of compliance.
Yet again, the Prime Minister last week said that tax exemptions may be on their way out in India. Removal of exemptions will begin with the corporate sector exemptions, and later spread to individual taxpayers as well. The UPA government wants to reduce and eliminate all tax exemptions in an attempt to simplify the tax structure in India.
The following are pointers to some of the sectors which are expected to see significant changes in the Union Budget 2007-2008.
Cars: India's 2007-2008 budget is expected to change the excuse duty structure for cars. In the last budget, finance minister P Chidambaram has reduced the excise duty on small cars from 24 to 16%, while retaining duty on large cars at 24%. This budget, he is expected to reduce small car duty from 16 to 12%, while duty on large cars may be brought down to 16%. The government has been trying to incentivise production of small cars in India with the aim of making the country a hub for small car production in Asia. However, makers of large cars are not amused with the proposal. The industry feels that there is no need to have a differential duty structure for cars, since the prices vary widely anyway, making for two clear markets. Currently, cars under 4000 cm length in India classify as small cars for duty purposes, if they have a petrol engine under 1400 cc or a diesel engine under 1500 cc.
Housing: With the ongoing real estate boom in India, the budget is likely to take some steps to regulate this sector. It is not clear if the proposal to set up the real estate regulator will be announced in the budget. The real estate developers association of India has requested the finance minister in a pre-budget memorandum that first-time buyers of property should be exempted from stamp duty. They have also said that building raw materials should be exempted from excise duty, to bring down the cost of construction. However, rather than appeasing the developers, the government is likely to extract more revenues in this booming sector by imposing additional levies and taxes.
Income tax surcharge: The Union Budget 2007-2008 is likely to remove the 10% surcharge on corporate and personal income tax. The tax surcharge was introduced by the previous Union government of the National Democratic Alliance, and when the UPA came to power, it increased the rate from 7.5% to the current 10%. The industry bodies have been clamoring for the reduction of the tax surcharge. This is likely in the Union Budget. With the tax collections in India growing by leap and bounds, the government is now in a position to reduce or abandon the tax surcharge without making a dent in the revenue inflows. The announcement is likely in the Budget. Reducing or scrapping the surcharge will reduce the burden on taxpayers.
Service Tax: Besides bringing more services into the service tax net, Union Budget 2007-2008 may change service tax rates in India. Currently, those service providers with income up to Rs lakh per annum are exempt from paying service tax. Those with higher revenues have to pay a service tax of 12%. Now, the government is planning to remove the service tax exemption for those below Rs 4 lakh. Instead, a flat levy of 8% will be imposed on all services up to Rs 10 lakh annual income. Also, Those in the higher bracket is likely to pay a higher service tax rate of 14%. Thus, the Budget may bring in a differential regime in service tax. In its budget preparations, the finance ministry has already kicked off an exercise to overhaul the service tax structure in India.
Infrastructure: India's Budget 2007-2008 is expected to ring in new methods for funding infrastructure development. A couple of years back, the Planning Commission had proposed that India's booming foreign exchange reserves could be used to finance development of ports, railways, highways, aviation and electricity sectors. However, after opposition from RBI, the government put the proposal in the backburner. Budget 2006-2007 did not mention anything about the Planning Commission proposal. However, recently, finance minister P Chidambaram revisited the issue, saying that he has asked his officials to prepare a note on the issue. Clearly, the FM has his eyes on refining the proposal and including it in his budget speech. With the increasing demand of funds for infrastructure development, the government has also set up a committee headed by HDFC chairman Deepak Parekh to find ways of raising funds for the sector.
Arts & crafts: Artists, painters, authors and craftsmen may be brought under the service tax net in Union Budget 2007-2008. Currently, they are exempt from service tax in India. With Indian art and literary work gaining importance overseas, the government is determined to bring them under the service tax regime. Artists, sculptors, craftsmen and authors may have to pay service tax of 12.24%. The government is also planning to increase the service tax rate, in lieu of transferring some of the service taxes to states. However, artistes believe that instead of taxing them, the government should support artists and their work.
Naphtha: The naphtha industry hopes that the government will put an end to the differential duty structure on naphtha. In India, the import duty on naphtha is different, depending on the end-use to which naphtha is put. However, the industry feels that through the Budget 2007, the government can remove this diversity, giving a boost to the domestic naphtha cracker industry.
Textile: The textile industry is eagerly waiting for the extension of the TUFS (Technology Upgradation Fund) scheme in India. By now, it is more or less confirmed that the government will announce the continuation of TUFS in the budget 2007-2008. The textiles ministry is in favour of extending TUFS and has already recommended the same to the finance ministry. The government has already made its intention clear about boosting employment-generating sectors. The Textile sector is the largest employment-generating sector in India. So, industry hopes are high that the TUFS will be extended. However, as against the textiles ministry's wish for a five-year extension and its inclusion in the 11th Plan, the Budget may bring in only a one-year extension for TUFS.Labels: Business |
| posted by a correspondent @ 5:26 AM |
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| Wednesday, January 17, 2007 |
| Six Airbus A330-200Fs for Flyington Freighters |
The Deccan Chronicle promoted cargo airline firm Flyington Freighters will pick six A330-200F aircrafts from Airbus Industrie, at an estimated cost of $1.1 billion. According to a report, the initial capital outlay for the freight company estimated at $15 million, will come from the promoters.
Signifcantly, Flyington Freighters has become the first cargo airline to order Airbus Industrie's latest freighter A330-200F. With the agreement signed for airing the aircraft, Flyington Freighters expect the first aircraft to join its fleet in the second half of year 2009. It may be recalled that the air cargo company had initially planned to start its cargo operations by December 2006.
According to the Flyington Freighters top brass, the order was placed with Airbus as it offers significant operational benefits and suits Flyington's business model. The A330-200F is the only mid-size, long-haul all-cargo aircraft capable of carrying 64 metric tonne over 4000 nautical miles. The A330-200F offers 30 per cent more volume than any freighter in its class.
Interestingly, no domestic company is currently involved in international cargo airline services. While Blue Dart Aviation is the only domestic player in cargo airline segment, Courier company First Flight had made its entry into the sector recently with three leased aircraft during year 2006.
Flyington Freighters will have Hyderabad as its cargo operations hub . It plans to operate to China, the Far East, Hong Kong, Japan, Malaysia, Middle East, Los Angeles, New York and Europe.Labels: Business |
| posted by a correspondent @ 10:30 AM |
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| Tuesday, January 16, 2007 |
| 16 Asian countries sign key energy pact |
Leaders attending a summit of the 10-member Association of South-East Asian Nations (ASEAN) have signed an agreement to promote energy security and find alternatives to conventional fuels.
The historic agreement, signed by the leaders of 10 ASEAN members and their counterparts from six Asian economic powerhouses – including India, China, Japan, New Zealand, South Korea and Australia – rounded off a week of deliberations in the Philippine resort of Cebu on issues as diverse as natural disasters, disease and terrorism.
The ASEAN members are the Philippines, Thailand, Myanmar, Indonesia, Malaysia, Singapore, Brunei, Cambodia, Laos and Vietnam.
The ASEAN summit also saw an improvement in relations between rivals China and Japan.
The pan-Asian summit was also marked by an improvement in relations between regional rivals China and Japan. Chinese Prime Minister Wen Jiabao is now scheduled to travel to Japan in April.
Also at the summit, Japan, China and South Korea held their first three-way meeting in two years. Leaders of the three countries presented a united front against North Korea, urging Pyongyang to end its nuclear programme and seek a stronger trading relationship with its neighbours.
The Cebu Declaration on East Asian Energy Security, signed after a three-hour meeting on Monday, lists a series of goals aimed at providing “reliable, adequate and affordable” energy supplies to a large region extending from Australia to India.
The document, however, does not set any targets for capping greenhouse emissions, but will call for additional investment in eco-friendly fuels.
Greenhouse gas emissions from Asian nations are forecast to grow rapidly in the coming years, with one estimate saying they could treble by 2025.
The agreement also lists plans to set up a regional electricity grid and a natural gas pipeline across South-East Asia.
Analysts say the 16 nations that signed the agreement are attempting to lessen their dependence on oil from the Middle East.
“The fact that the leaders of 16 great nations are here is a testament to the desire of the leaders and their people for greater collaboration between the nations,” Philippine’s President Gloria Macapagal Arroyo said in her opening statement.
“I hope we make progress on the issues of energy independence, human rights, economic integration and social justice,” she said.Labels: Business |
| posted by a correspondent @ 12:48 AM |
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| Thursday, January 11, 2007 |
| Vizhinjam project likely to get rolling |
After days of lull, Kerala’s southern harbour is set to see some activity. The Rs 4,360-crore Vizhinjam Container Transhipment Terminal project is getting a new lease of life expected with the government opting to start the cycle afresh by going for a fresh global tender.
Read our earlier story on the Vizhinjam project here
The state government is already in the process of preparing a new set of norms for the tender. This is expected to be submitted to the Centre in the two weeks time, reports from the Kerala capital said.
State government sources revealed that the ministry concerned has decided that the process on the tender would be completed in eight months’ time. It may be recalled that the Rs 4,360-crore Vizhinjam Container Transhipment Terminal project had into rough weather with the Central Government not clearing the project proposal. The reasons stated were security concerns and the presence of Chinese players in the project. Now with new specifications being included in the tender to such an effect that only companies having the Union Government's security clearance could participate in the bidding, the issue seems more like being set aside.
Meanwhile, Kerala hs also announced plans to bring the project under the Viability Gap Funding Scheme of the Centre, thereby making the project draw a Central grant . It has been pointed out that Kerala might be eligible for 20 percent of the total cost of the project as grant. It may be recalled here that the earlier proposal had elaborated on a repayment loan.Labels: Business |
| posted by a correspondent @ 1:52 AM |
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| Thursday, January 04, 2007 |
| PerkinElmer buys DMA from Triton Technology |
PerkinElmer, Inc., a world leader in health sciences and photonics, has announced the acquisition of a line of dynamic mechanical analysis (DMA) products from the UK-based Triton Technology Ltd.
The DMA instrument is used by scientists in the polymers, pharmaceuticals and food industries for diverse applications ranging from simple quality control to advanced research.
“This acquisition gives our customers the best thermal analysis tool that combines ease of use and flexibility with powerful performance,” said Robert F. Friel, president of PerkinElmer Life and Analytical Sciences. “The new DMA 8000 represents the type of novel, next-generation technology we are investing in to continually provide solutions to customers that enable them to advance the pace and precision of their research and testing.”
“We believe that this transaction will allow our DMA technology to flourish in the very capable hands of PerkinElmer, while releasing resources within Triton Technology Ltd. allowing us to bring forward the development of radical new technology for the QA/QC of polymeric materials,” according to Glynn Van-de-Velde, director, Triton Technology Ltd. “Triton Technology will work very closely with PerkinElmer to ensure a smooth transition of the technology to the benefit of both existing and new customers alike,” he said.Labels: Business |
| posted by a correspondent @ 2:12 AM |
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| Tuesday, December 26, 2006 |
| 49% foreign investment in Indian stock exchanges permitted |
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In a pioneering effort, the Union Government has allowed 49 per cent foreign investment in the stock exchanges. The move comes close on the heels of the Securities and Exchange Bureau of India’s (Sebi) move to allow public shareholding in bourses.
According to reports, within the 49 per cent, there is a separate foreign direct investment cap of 26 per cent and a foreign institutional investment ceiling of 23 per cent. The policy for foreign investments will apply to all companies in the securities market, including bourses, depositories and clearing corporations, the reports added.
It is learnt that FDI will be allowed with prior approval of the Foreign Investment Promotion Board (FIPB), while FII will be allowed only through purchases in the secondary market. This apart, foregn institutional investors will not get representation on the boards of the exchanges.
Reports further said that an overall cap of 5 per cent has been imposed on a single foreign investor, including persons acting in concert.
Significantly, the Bombay Stock Exchange has been awaiting guidelines to complete its demutualisation and corporatisation process and announce its plans for a strategic sale of 26 per cent.
It may be recalled that Sebi had earlier notified offers for sale, placement of existing shares held by members and also private placement of fresh shares to increase the public shareholding of stock exchanges. It had said that no entity, either individually or together with persons acting in concert, shall be allowed to acquire or hold more than 1 per cent of the paid-up capital of the exchanges without prior approval of the stock markets regulator.Labels: Business |
| posted by a correspondent @ 2:30 AM |
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| Friday, December 22, 2006 |
| India's Auto sector waits for Union Budget 2007 |
The Union Budget is round the corner. As always, the automobile sector players too are waiting with bated breath to know what the FM’s briefcase has in store for them.
The government is likely to pay heed to the demands of the automobile industry and reduce the excise tax on cars to 16%. This move will bring all automobiles under a uniform excise duty rate, something which the industry had been campaigning for. In the prevous budget the excise tax had been reduced from 24% to 16% only for small cars which measure less than 4 metres in length and with an under-1,200 cc (petrol) engine capacity or 1,500 cc (diesel). The excise cut is going to be a part of the government's long-term strategy to make India one of the largest carmakers in the world (India is currently 11th largest) and attract more foreign investment in the sector. Consumers can expect cars to get cheaper although how much of the savings are passed on to the buyer will depend on the manufacturer.
This excise cut will be a crucial factor for global auto majors like Suzuki, GM, Volkswagen etc who are in the process of setting up or upgrading manufacturing facilities in India to cater to future local demand and the export market. Last year’s Budget had also reduced the duty on raw material, which is now between 5 per cent and 7.5 per cent compared with 10 per cent earlier. The Indian automotive industry is currently worth about $32 billion and is projected to grow to over $145 billion by 2016. It is expected to double its contribution to the GDP from the current 5 per cent to 10 per cent. The industry has so far attracted investments worth over $12 billion, with about $8 billion in the pipeline, according to government estimates.
Ever since the Indian Government reduced excise duty on small cars in the Union Budget 2006, most auto majors have been crying foul. Excise duty on small cars was reduced from 24% to 16% as a part of the broader auto policy and in a bid to make India the small car manufacturing hub of the world. Small cars have been defined by the Government as petrol cars with an engine capacity not exceeding 1,200 cc and not exceeding 4,000 mm in length, and diesel cars of engine capacity not exceeding 1,500 cc and not exceeding 4,000 mm in length.
Maruti seems to be the happiest with the excise cut on small cars since it's the leader in the segment and is planning to launch the New Zen -Estilo (1100 cc petrol) and the diesel Swift (1300cc diesel) both of which will benefit from the lower excise duty. The excise duty cut has already resulted in global auto firms — like Suzuki, Nissan and Hyundai — lining up over $6-billion investment plans to build small car bases in India. And some in the government feel removing this sop now might go against the FDI flow.
However most auto majors including Hyundai, Honda, Toyota and General Motors are piling on the pressure on the Government to cut cuty to 16% for all cars in the upcoming Union Budget 2007. This seems obvious since their priduct portfolio relies majorly on larger cars which are still taxed at 24%. Also it seem right to have a uniform duty structure for all cars and not to disriminate on the lines the Government has drawn.Labels: Auto Industry, Business |
| posted by a correspondent @ 10:39 AM |
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