Mahindra Fin Net Rises 31% to . 105 crore

MUMBAI Mahindra Finance posted a 31% rise in profit at . 105 crore in the first quarter of this fiscal year compared with . 80crore in the yearago period. Total income increased 42% at . 585 crore during the quarter against . 413 crore in the corresponding period last year.

Siemens Profit Flat at . 155 crore

MUMBAI Siemens reported a net profit of . 155 crore for the quarter ended June, almost flat from a year ago as high raw material cost dented the engineering solutions provider’s profitability. Its revenues rose 24% year-on-year to . 2,779 crore, driven by growth in three of its key businesses— industrial products and services, energy and healthcare business.

SBI Commercial's Buyout by Parent is Effective July 29

KOLKATA The government said the acquisition of State Bank of India Commercial and International Bank by its parent SBI is effective July 29. Accordingly, all branches of the subsidiary has started functioning as SBI branches and its customers and depositors will be able to operate their accounts as customers of SBI.

MediaTek Buys 10% in Spice Digital for $20 m

NEW DELHI Taiwan’s MediaTek, maker of chips used in mobile phones, picked up a 10% stake in Indian value-added services player Spice Digital for $20 million, valuing the company at $200 million, or . 883 crore. MediaTek chairman Ming-Kai Tsai said, “Through this investment in Spice Digital, we are hoping to capitalise on its market potential and reinforce its strong operator relationship and leading position in India, Southeast Asia, Africa and the Middle East.”

Hero Honda Motors is Hero MotoCorp Now

MUMBAI Hero Honda Motors on Friday changed its name to Hero MotoCorp following the company's split from Japan's Honda Motors last year. “The new name is the first step in the rebranding exercise that commenced earlier this year. As a next step, Hero MotoCorp will unveil its new global brand identity in London on August 9,” the company said in a statement.

Maruti Net Rises 18% to 549 cr

Other income, rise in sales help auto co post better-than-expected results in June quarter

Maruti Suzuki, which sells approximately half the cars on Indian roads, posted a better-than-expected 18% increase in profit in the June quarter, boosted by other income and rise in sales. Maruti, where 54.2% is held by Japan’s Suzuki Motor, suffered production losses worth . 483 crore during the quarter as a 13-day old strike by employees crimped production at its Manesar facility.
Automobile sales in India have slowed down as rising interest rates and higher fuel prices have curtailed demand. Driven by rising disposable incomes, auto sales posted a record high of 30% in the financial year 2011. Analysts have forecast a modest 10-12% growth during the current financial year.
The RBI has increased interest rates 11 times in the past 15 months. The central bank raised raised rates by 50 basis point on Tuesday, which could lead to a to a further decline in demand for cars, a majority of which are financed through auto loans. Car makers have been offering discounts for petrol cars and resorting to competitive pricing for diesel cars to prop up sales in a slowing economy.
“Maruti will have to sustain its volume growth by offering discounts for petrol cars in the coming quarters,” said Deepak Jain, analyst at Mumbai-based brokerage firm Sharekhan. Maruti is confident of beating the slowdown through measures like discount offers and launch of new products. “There is definitely a slowdown. But demand will pick up during the festive season,” said Ajay Seth, CFO, Maruti. The New Delhi-based company posted a net profit of . 549.2 crore during the quarter. The company’s net sales rose by 3.3% to . 8,319 crore during the first quarter. Maruti reported other income of . 180 crore for the June quarter. Return on investments accounted for major portion of the other income. Maruti scrip was up 0.8% in a Mumbai market that down 1.6%.
“Rising yen is a worrying sign for Maruti. The company has hedged yen imports for the first quarter and partly for the second quarter. With Maruti not hedging for yen imports in the third quarter, it will find the going tough since the Japanese currency is appreciating against the dollar. For Maruti, total yen outgo is 21% of total sales and this is quite significant,” Mr Jain said.
Though higher commodity prices and foreign exchange volatility put pressure on margins during the quarter, this situation is likely to change in the ensuing quarters. “Feedstock prices will ease in the third quarter. This will partly offset the negative impact caused by the rising yen,” Mr Jain added. Maruti spent . 6,502 crore on raw materials in the first quarter, up from . 6,080 crore in the year-ago period.

Cox & Kings in Talks to Acquire UK Travel Firm

Cox & Kings is in talks to acquire UK travel firm Holidaybreak, which provides residential outdoor education and adventure trips for school children. Based on Monday’s closing, the Northwichbased company is valued at 225.24 million pounds, according to news agencies.
Cox & Kings’ shares closed at Rs 197.65, down 1.20% on Tuesday on BSE after the Mumbai-based travel company that went public in 2009 confirmed to BSE that it was in talks with Holidaybreak for a possible deal. “In line with the company’s growth strategy and expansion, we are in talks with Holidaybreak, which may or may not lead to an offer for shares,” it said.
    A top executive of another travel company who did not wish to be quoted said that if the deal goes through the acquisition could help Cox & Kings to direct outbound traffic that is interested in specialist holiday packages like camping and adventure tourism to the UK and Europe. “Students and educational leisure travel segments are growing fast in the country and the company could introduce these concepts in India,” he added.
Holidaybreak shares were up 12% at 412 pence, making it the second biggest gainer on the London Stock Exchange on Tuesday.
Last week, Cox & Kings had invested an undisclosed amount in the US travel management company RADIUS, through its Singapore subsidiary. In December 2009, the company had acquired two travel brands MyPlanet Australia and Bentours International from First Choice Holdings Australia. In 2008, the company had acquired Tempo Holidays for $25 million. The travel firm, which had listed itself on the BSE in 2009, had raised money from the market to fund acquisitions and expansion of its businesses.

HPCL to Raise $300 m to Fund Expansion

Co’s conducting road shows for the capital-raising exercise

SHUCHI SRIVASTAVA MUMBAI

    Hindustan Petroleum Corporation (HPCL) is planning to raise $300 million in the second half of the current fiscal and has appointed Bank of Tokyo-Mitsubishi, State Bank of India and Sumitomo Mitsui Banking as advisors. “We are currently conducting road shows and this capital raising exercise of $300 million with a greenshoe option is to primarily fund expansion activities at our existing refineries and our new refinery projects,” said B Mukherjee, director, finance, HPCL.
HPCL is planning to build a new 9-15 MTPA greenfield refinery project at Ratnagiri, Maharashtra. “We have identified 3,000 acres in the Lote-Parshuram industrial area in Chiplun, Konkan district in Ratnagiri and are yet to begin work as we are waiting for the state government to grant us clearances for land allocation,” K Murali, director, refineries, HPCL, had earlier told ET.
The company is also in the process of reviving its $10 billion refinerycum-petrochemical project at Visakhapatnam, and is in talks with various firms, such as Mittal Energy, to enter into a joint venture partnership. Separately, Mukherjee said that HPCL has received its share of the additional cash compensation promised by the government for losses incurred on selling subsidised fuel in third and fourth quarters. “We have received our share of Rs 4,500 crore in three tranches this month,” he said.
In May, the government had agreed to provide . 20,000 crore as compensation for revenue losses suffered by state-run oil marketing companies for selling diesel, domestic LPG and kerosene below market rates. On the refinery end, HPCL is currently battling a crude supply crisis as its oil supplies from Iran have been disrupted because Tehran is insisting on resolving a seven-month old payment row.
“We have not got our regular allocation from Iran for the month of August because of the payment issue and we have contracted an extra cargo from Saudi Arabia,” said Murali.
“We do not foresee a major disruption as we have signed term contracts for crude oil supply with Iraq, Kuwait and Abu Dhabi,” he said. HPCL has a term deal with National Iranian Oil Company to annually buy 70,000 barrel per day (bpd) of oil. Iran is India’s second-biggest oil supplier after Saudi Arabia. India imports around 4 lakh bpd, or 12%, of its daily requirement from Iran.
High Ambitions
• HPCL is planning to build a new 9-15 MTPA greenfield refinery project at Ratnagiri

• It is also in the process of reviving its $10 billion refinery-cum-petrochemical project at Visakhapatnam

• HPCL has received its share of the cash compensation promised by the government for losses incurred on selling subsidised fuel in Q3 and Q4

Cognizant to Buy CoreLogic’s India Arm

The $50-m deal to help IT firm expand its mortgage services portfolio

OUR BUREAU CHENNAI

Nasdaq-listed IT firm Cognizant is acquiring CoreLogic Global Services (CoreLogic India), the India-based captive operations of CoreLogic, for $50 million to expand its mortgage services portfolio. The deal also includes adjustments for working capital and other charges or credits which will be determined at the time of closing which is expected in August. This is the fourth captive unit that Cognizant is buying out.
As part of the transaction, CoreLogic and Cognizant will enter into a services agreement with a minimum revenue commitment of $324 million, plus applicable inflation adjustments, over five years with renewal and extension rights, under which Cognizant will provide a range of services to CoreLogic globally. Together, the companies will provide end-to-end solutions across the mortgage value chain, from loan origination, escrow, title and closing services through secondary markets, loan administration, loan default management and analytics.
    IT analysts say the acquisition will give Cognizant a greater presence in the analytics space, an area with high growth prospects.“Around 42% of our revenues come from financial services and this would be an added capability for us. This acquisition also strengthens Cognizant’s BPO and analytics capabilities and provides end-to-end expertise in the mortgage industry,” R Chandrasekaran, president and MD, Global Delivery, Cognizant told ET.
He said Cognizant will also look at more areas to increase non-linear revenues. After the deal is closed, CoreLogic India’s 4,000 associates (2,000 in Bangalore, 1,200 in Hyderabad and 800 in Mangalore) will become employees of Cognizant. “There are no overlapping functions. So, the employees will not have any issues during transit,” he said. Headquartered in Santa Ana, California, CoreLogic has more than 10,000 employees globally with 2010 revenues of $1.6 billion. Its customers are mainly in the US mortgage and real estate markets.

Tata Tele to Merge CDMA & GSM Ops, Job Cuts Likely

Recast comes 20 days after Bharti announced its revamp plan

CHAITALI CHAKRAVARTY & GAURI DIWEDI
NEW DELHI

    The telecom unit of the Tata Group has decided to combine two businesses that provide mobile services using different technologies, raising fears of job cuts in an industry marked by low tariffs and falling profits. In a circular issued on Sunday, Tata Teleservices (TTSL) announced in what it described as the “unification” of two divisions offering services based on CDMA and GSM, two rival technologies.
“This restructuring may drive efficiencies but could end up making job positions redundant. Our estimate is 15% of the employee strength, which includes employees eased out on the basis of non-performance. CDMA employees will be impacted the most due to this restructuring,” a senior TTSL company official said. He spoke on condition of anonymity because of the sensitivity surrounding job cuts.The restructuring comes 20 days after India’s largest telco by market capitalisation and revenues, Bharti Airtel, announced its biggest streamlining exercise in a decade to cut flab and drive efficiencies. TTSL operates CDMA business under the brand Tata Indicom while offering GSMbased services under the Tata Docomo brand. NTT Docomo, a Japanese telecom company has a 26% stake in TTSL, that has 11,000 employees. The Tata Group has the remaining 74%. Entrepreneur C Sivasankaran is also a minority shareholder. The Tata Teleservices spokesperson declined comment.
The internal communication, sent to all employees on Sunday, talks about a unified structure combining GSM and CDMA that collapses all circles under four regional heads: Vineet Bhatia (west & upper north) Mahesh Thampi (east and UP), Yatish Mehrotra (south) and Ajit Chaturvedi (Delhi and Rajasthan). They will report to Deepak Gulati, president, who is in charge of mobility nationwide. These four regions will have between them 15 mobility business units, carved out by combining circles, roughly equivalent to a state.
The heads of two search firm heads, who track the telecom sector, said at least 8,000 job positions across mobile companies will be culled by the end of the year as more companies streamline operations and cut layers to become agile and respond to market dynamics faster. They spoke on condition of anonymity.
“The telcos are rightsizing the mainstream mobility business due to excessive layers at the top and over staffing at the mid and junior level. Certain clusters such as mobile banking, telecom infrastructure companies, valueadded services and specialised 3G business divisions are hiring,’’ R Suresh, MD, StantonChase said.
The possible job cuts at TTSL and a similar exercise by Bharti Airtel could also provide the trigger for parallel moves by rivals, many of whom are confronting similar issues — a high debt burden, slowing growth and high marketing spends amid cutprice tariffs.
TTSL with close to 93 million subscribers, has the lowest number of active customers among private established operators, according to data from the Telecom Regulatory Authority of India. Less than 50% of the GSM and CDMA divisions are active.
Increasingly, telcos are focusing on cost efficiency since tariffs are the lowest in India. Average revenue per user — a key indicator for operational income — is also among the lowest in the world.
Apart from restructuring, mobile phone companies have also started hiking call rates for the first time in three years. Tata TeleServices, which had unleashed a price war with its per-second billing-based GSM offering about two years ago, recently doubled STD call charges for subscribers who have been with them for a year and raised local and national SMS charges by 67% and 25% respectively. Last week, Bharti Airtel increased call tariffs by 20-50% in some regions, a move that may change market dynamics, as it marks the first hike by an incumbent operator in three years.
Earlier this month, Bharti Airtel undertook a restructuring exercise aimed at cutting costs. The company restructured all businesses into two verticals — one that will sell to individual customers while the other will sell to enterprises and businesses.

Headless Henkel

Three months after it acquired a controlling stake in Chennai-based Henkel India, consumer goods firm Jyothy Labs is yet to find a CEO to head the Henkel–Jyothy combined entity. The firm was hoping to name a top official from Unilever as its chief executive, but talks fizzled out. Resurrecting the combine will be an uphill task, considering the losses on Henkel's books and stiff competition from HUL and P&G. Henkel let go former CEO Jayant Singh in March on differences of opinion with the German parent, poor performance of its brands and piling losses.

McDonald’s Adds Apple Slices in Every Happy Meal

Fast food giant to launch nutrition-focused mobile phone app

AP NEW YORK

McDonald's Corp. is adding apples to all its Happy Meals and launching a nutrition-focused mobile phone app as part of a broader health push. The changes underscore how the US restaurant industry is reacting to the demands of customers and regulators who blame it for health ills ranging from childhood obesity to diabetes.
Among other changes in McDonald's new programme: McDonald's pledged to reduce sugars, saturated fats and calories through ``varied portion sizes, reformulations and innovations'' by 2020. It didn't give details. By 2015, it will reduce sodium by 15%.
McDonald's will introduce a new mobile app focused just on nutrition information.
McDonald's USA president Jan Fields and other executives will go on a ``listening tour'' in August to hear suggestions from parents and nutrition experts. The chain will also launch an forum for parents. McDonald's says the new directives are ``absolutely not'' related to impending regulations that will force the industry to curb the marketing of junk food to children and post nutrition information on menus.
Rather, the changes are a response to what customers were asking for, said Cindy Goody, McDonald's senior director of nutrition.
`We've been in the nutrition game for over 30 years in providing nutrition information to our customers,'' Goody said. The nutrition talk also has helped McDonald's grab business from other fast-food restaurants, even as the recession forced people to cut back on eating out.
McDonald's has worked to paint itself as a healthy, hip place to eat, offering wireless access in restaurants and introducing smoothies and oatmeal, moves that other fastfood companies are now trying to replicate.
For Happy Meals, US customers can already choose between apples or fries. But only about 11% of customers were ordering apples, the restaurant said.

Brands Follow TV Ads With Facebook Apps

CHASING GEN Z

Brands Follow TV Ads With Facebook Apps

KFC, Kurkure, Axe & Philips integrate TV, online strategies to drive sales

NEHA DEWAN NEW DELHI

Youth-centric brands such as KFC, PepsiCo's Kurkure, Philips and HUL's Axe have extended their catchy television commercials into whacky Facebook apps to drive traffic in the virtual world and sales in the real world.
If the Philips app lets users try out all the different looks that John Abraham sports in its television campaign for male grooming products on themselves, Kurkure challenges people to find the right mix for its different variants by trying different ingredients, extending its ‘Ingredients of India’ television campaign. Thousands have signed up for these apps.
“With apps running on a parallel with TV commercials, the recall value for the brand improves drastically as consumers are directly interacting with the product,” says ad filmmaker Prahlad Kakkar. And brands say this media integration strategy has helped increase product recalls and boost sales.
Dhruv Kaul, director, marketing, at fast-food chain KFC, says, “Though it is difficult to measure sales through such apps, it has helped drive further engagement with our target group which is young adults and teenagers.”
In the latest KFC Krushers Kafeccino television commercial, a group of youngsters click the expressions of their friend as soon as she tastes the drink for the first time. Now, Kafeccino’s Facebook ‘Kool Hours’ app allows people to upload their photos and earn points for every picture and caption. As many as 2,500 users uploaded their photographs in seven days.
Around 47% of Indian Facebook users are in the 18-24 age group, according to Socialbakers, a company tracking social media statistics.
This makes the social networking site a prime destination for all youth-centric marketers. “A relevant app helps generate buzz about the product and becomes a popular topic of discussion in one’s peer group. The target group feels that they are ‘with it’,” says marketing expert Harish Bijoor, CEO of Harish Bijoor Consults Inc. “In that sense, it connects with their mindset easily,” he adds. Philips would second that. The number of ‘likes’ on its Facebook page increased over 37,600 in a month since it introduced an app that allows men to try out the different beard styles as shown in its John Abraham-starrer TV ad for men’s grooming kit.
PepsiCo’s Facebook app for its Kurkure snack—based on its ‘Ingredients of India’ TV campaign with catch phrase ‘badal jaa’—also has created a lot of interest with some 20,000 users trying it.

Elder Pharma to Ramp Up Sales Force by 1,000 in Two Years

NEW DELHI Elder Pharmaceuticals plans to increase its sales and marketing force by 1,000 in the next two years, as it plans to launch 35 new products and expand in rural markets. “With a major thrust on rural markets and plans to launch 35 more products (owned and in-licensed) in the next two years across India, we plan to increase our sales and marketing force headcount by about 1,000,” Elder Pharma director Alok Saxena said. The drug firm employs about 3,500 people in India of which nearly 3,000 are in marketing and sales.

BPL to Revamp Product Portfolio to Increase Turnover to . 1,000 cr

NEW DELHI One of the leading consumer electronics brands of yesteryear's, BPL is gearing up for a major revamp of its product portfolio as it looks to more than treble its turnover to . 1,000 crore in the next three years. The company, which is now also present in power products, said it will be kicking off the revamp initiative in this segment. “We are restructuring our entire portfolio. A lot of work is being done on how to innovate our products and studying consumer insights to connect back to the consumers,” BPL Techno Vision CFO Vijaya Kumar said.

Toyota Plans to Produce Etios in Brazil by Late 2012

NEW DELHI Japanese auto major Toyota Motor plans to start producing its sedan Etios, which has been developed specifically for the Indian market, in Brazil by late 2012. In a filing to the US Securities Exchange Commission, Toyota Motor said the Brazil plant will have an annual production capacity of 70,000 units. —PTI

Discount Magic: Honda Jazz Inventory Gone in 3 Days

NEW DELHI Honda's gamble to offer 1.75 lakh rebate on its premium hatchback Jazz has paid off with entire inventory at its factory and dealers being wiped off in just three days of the offer, reports Chanchal Pal Chauhan. The company, which launched the offer on July 11, sold over 850 Jazz till last Wednesday night, which is more than the 643 Jazz sold between April and June this year. The companyhas reportedly stopped production of Jazz at its Greater Noida factory and the price waive strategy has paved the way for its face lifted version of the car to hit the market soon.

TRIBUTE TO TENDULKAR: COKE TO ROLL OUT 6.5 MILLION ‘SACHIN’ CANS

‘Little’ Cans of Joy

In a first in India, Coca-Cola will put Master Blaster Sachin Tendulkar on its cans to celebrate the Little Master’s 100th century expected in the current England tour

RATNA BHUSHAN NEW DELHI

    The world’s largest beverages brand plans a grand tribute to Sachin Tendulkar who is one century short of becoming the first batsman to score 100 international centuries: launch some 6.5 million special Coca-Cola cans with pictures of the master batsman. The move will help the cola giant make the most out of its Rs 12-15-crore endorsement deal with Tendulkar signed early this year, and make up for not leveraging the association during the Cricket World Cup that India won.
Coca-Cola is printing the cricketing legend’s pictures along with statistics of his select 10 centuries on about 6.5 million cans of brand Coke to celebrate Tendulkar’s hundredth international century which everyone expects in England, where India will play four tests and five one-day internationals starting July 21.
The cans will be rolled out in the market starting next fortnight.
This is the first time a celebrity or a brand ambassador will figure on packs of any Coke beverage in India.
“We are making an exception for one of India's great legends,” says Coca-Cola India VP (Marketing) Anupama Ahluwalia.
In some European markets, Coca-Cola has, in the past, printed pictures of celebrities on its beverage packs.
Tendulkar has handpicked nine of the 10 centuries that Coca-Cola cans will spot.
The tenth will be his hundredth century. Coca-Cola will release about eight lakh cans with the details of Tendulkar’s 100th century whenever it comes.
A mass media campaign is set to coincide with the cans rollout, created by ad agency McCann Erickson.
Industry experts say the idea is big and has scale, but its strategic implementation would be a key for its success.
“A Sachin campaign could be a sure-shot winner, but how well the marketer leverages the campaign, makes a consumer connect, and takes it forward is the key,” says Mahesh Chauhan, co-founder of advertising and marketing firm Salt Brand Solutions.
“But they (Coca-Cola) are probably a bit late in leveraging their association with Sachin, considering they signed him early in the year, though it must be part a planned strategy,” he added, referring to the missed opportunity during India’s successful world cup campaign.
Sachin, who is known to charge about a million dollars per year per deal, endorses close to 13-14 brands including sports footwear and apparel maker Adidas, luxury Swiss watch maker Audemars Piguet, insurance services firm Aviva Life Insurance, bank Royal Bank of Scotland (RBS) and appliances major Toshiba.
These brands too are looking to leverage their association with the cricketer once he cracks his 100th century.
“We are, of course, working on plans, in anticipation of Sachin’s 100th ton. But we can’t talk about them now,” says Adidas AGM-—Brand Communication and Sports Marketing Damyant Singh.
Though firms do leverage associations with celebrities through packaging, this is the first time it is being done on a mass scale.
PepsiCo, for example, had rolled out PET bottles with blue packaging with Indian team skipper MS Dhoni’s body during the World Cup.

Seven new BlackBerries to be unveiled soon

Toronto, July 13 (IANS) Warding off investors' anger at their annual meeting at Waterloo near here Tuesday, BlackBerry co-CEOs announced that seven new smart phones running a new operating system will hit the market soon.

Declining market share, shrinking revenue, profit warnings and delays in replacing the aging handsets have triggered investor anger at the two co-CEOs Jim Balsillie and Mike Lazaridis who control management as well as board at the BlackBerry maker Research In Motion (RIM).

Calls for making board independent of management have grown shriller as RIM stock has sunk more than 50 percent this year - hovering at about $27 now.

Admitting that RIM faced 'some challenges,' the co-CEOs managed to control investor anger Tuesday, with Lazaridis announcing that seven new BlackBerry smart phones running a new operating system will be unveiled in the coming months.

The release of the seven smart phones, including the new BlackBerry Bold, will again catapult the wireless giant into the lead role, he said.

'It (the new Bold) may have delayed us, but we are going to come out ahead,'' said Lazaridis who started RIM in the 1980s. Warming the hearts of investors, Jim Balsillie added, 'Mike and I, along with the executive team, are closely managing this transition and have positioned the company for continued future success.''

The new line-up of BlackBerry smart phones will be run by RIM's powerful new operating system used in its PlayBook tablet.

Responding to the prevailing rumours of RIM's takeover by Apple or Microsoft, Balsillie said a rights plan would be put in place in the 'blink of an eye'' if a hostile takeover bid was mounted against the company.

Assuring investors, he said, 'If there is anything that will make you sleep better at night that I can do, I will do it.' There have been rumours that cash-rich Apple or Microsoft could buy out RIM whose net worth is now just $14 billion.

BlackBerry has sunk from top to the third place in the US smart phone since October under onslaught from Apple's iPhone and Google Android devices.

(Gurmukh Singh can be contacted at gurmukh.s@ians.in)

Bajaj Auto Net Up 21% on Record Sales

Two-wheeler and commercial vehicle major Bajaj Auto on Thursday reported a 21% rise in its net profit at . 711 crore for the quarter ended June 30 with sales during the period increasing 18% to 1,092,815 vehicles.
Motorcycle sales grew 16% to 963,051 units, while the company sold 30% more commercial vehicles at 129,764 units, according to a regulatory statement filed by the company. The quarter witnessed its highest ever sales volume for both motorcycles and commercial vehicles, said the company.
Raw-material costs increased 24% to . 3,180 crore in the quarter and were equivalent to 72.6% of operating income, compared with 71.2% a year earlier, Bajaj said.
“Higher raw material costs impacted profitability,” said Umesh Karne, a Mumbai-based analyst with Brics Securities. “Bajaj Auto's sales will continue as demand remains strong, both in the export markets as well as the domestic market,” he added.
Among its flagship motorcycle brands, the company sold 135,000 Discover units on an average each month of the quarter, while 75,000 Pulsar motorcycles were sold every month. Exports too continued to rise with total overseas sales rising 32% to 427,364 units. Motorcycle exports went up 30% in the quarter under review to 339,876 vehicles, while three-wheeled vehicle exports grew 42% to 87,488 units. The company's margins were under pressure during the quarter because of an increase in cost of raw materials and components.
Expenses on material as a percentage to operating income rose from 71.2% in the quarter ended June 2011 to 72.6% in the first quarter of the current financial year. “Despite these inflationary pressures, higher volumes and focus on high end motorcycles enabled the company to declare for Q1, an operating margin of 19.1% — the best in the industry,” said the company.

McDowell’s No.1 is World’s No. 10

Joins UB’s Bagpiper in the IWSR list of world’s top 10 spirit brands by volume

SARAH JACOB BANGALORE

Indian whisky McDowell’s No 1 has regained its place among world’s 10 biggest global spirits brands by volume in 2010, making it the second Indian brand in the toppers’ list after Bagpiper.
Placed alongside leaders such as South Korean Soju Jinro, Bacardi-Martini’s Bacardi rum and Diageo’s Smirnoff vodka, the whiskies from Vijay Mallya-led United Spirits mopped up volumes mostly through sales in India, according to London-based liquor research firm IWSR.
McDowell’s No. 1 whisky recorded 10.6% year-on-year growth in volume to 15.37 milllion cases in 2010. It was in the top 10 list in 2008, but missed out in 2009.
Bagpiper, meanwhile, moved up two slots to the seventh place at 16.92 million cases of 9 litres each. The numbers include sales to defence canteen services and exports to Gulf markets.
The Indian liquor industry, the third largest in the world after China and Russia, has been under the radar of international firms looking to expand. The Indian spirits market is threatening to unseat Russia in registered tax sales by 2013. About 19 million Indians enter the legal drinking age in the country every year.
The Indian spirits market grew 16% from a year ago to 234.40 million cases in 2010, IWSR data showed. The 2.8 billion global spirits market grew at its fastest pace in a decade at 9.75% during the same period. Nearly half of the top 100 liquor brands in 2010 were from Asia.
“Rising prosperity and more disposable income are the main reasons for the growth rates of so many Asian brands and particularly the marked growth of so many Indian whisky brands and the top brandy and rum brands...Having more cash to spend means the consumer buys better, slightly more expensive local products,” IWSR Chairman Val Smith said.
Twenty Indian liquor brands across the portfolios of Allied Blenders & Distillers (ABD), John Distilleries, Pernod Ricard India, Jagatjit Industries, Mohan Meakin, Radico Khaitan and Tilaknagar Industries showed up in the top 100 list. However, United Spirits ruled the roost with nine of the 20 Indian brands such as Celebration rum, McDowell’s brandy and Old Tavern whisky.
ABD’s Officer’s Choice whisky, which occupied the 11th position, recorded a volume growth of 24.4% to 15.26 million cases in 2010. In May, the company had said it plans to overtake Bagpiper, which grew 3.8% in the same period.
“Indian liquor companies have big volume brands but when it comes to value and profitability they are fairly low. Although companies are launching premium brands, the dynamics of the industry is not going to change dramatically too fast,” said an industry expert.
Top 10 Spirits Brands UB India’s Bagpiper and McDowell's Whisk(e)y at 7th and 10th slot, respectively, in the top global spirits list 1 BRAND (CATEGORY):
Jinro (Shochu/Soju) Owner: Hite Brewery Volume: 67.7 2
Ruang Kao
(Other Spirits) Owner: Thai Beverage Volume: 30.0 3
Smirnoff (Vodka) Owner: Diageo Volume: 24.4 4
Cachaca '51' (Cane) Owner: Muller De Bebidas Volume: 19.5 5
Bacardi (Rum) Owner: Bacardi-Martini Volume: 18.7 6
San Miguel (Gin) Owner: San Miguel Volume: 18.7 7
Bagpiper (Whisk(e)y) Owner: U B India Volume: 16.9 8
Kyongwal (Shochu/Soju) Owner: Kyongwal Volume: 15.7 9
Johnnie Walker
(Scotch Whisky) Owner: Diageo Volume: 15.5 10
McDowell's (Whisk(e)y) Owner: UB India Volume: 15.4 All volumes in millions of 9-litre cases to the nearest 1,000 cases SOURCE: The IWSR

Mudra Bags Nestle India’s Celebration Campaign

NEW DELHI Mudra North & East has pipped Publicis to bag Nestle India’s 100-year celebration campaign, reports Neha Dewan. On an account-acquisition spree, the advertising agency last week added personal skin care products such as Dabur Fem and Dabur Ayurvedic Body Massage Oils on its roster. “It’s been eight wins for us in 100 days, and that’s a great opportunity for us," said Nirmal Pulickal, executive creative director, Mudra North & East. "Advertising has changed a lot in itself. Earlier, it used to tell you how brands could solve your problems. Now it’s more about solving problems and telling you about it, because everyone understands how products work," added Pulickal. The agency will also help Dabur in building the Oxy and the recently acquired 30-Plus brands. Twinings Tea has also signed in Mudra a couple of months back.

THUMBS UP TO MODERN RETAIL

Future Group’s Private Brands Steal The Show

RATNA BHUSHAN NEW DELHI

    Retailers’ own brands are making rapid gains across consumer product segments in the booming modern retail industry, weakening several established brands’ power to negotiate lower trade margins.
Leading the charge is the country’s largest retailer Future Group, whose private brands have been outselling some of the country's best-known brands in select categories across 200-plus Big Bazaar and Food Bazaar outlets.
Private brands already account for close to 7% of modern trade sales in India, compared to 1% in China, according to market researcher Nielsen's latest survey that covers over 50 countries.
“The private label phenomenon has leapfrogged in India compared to other Asian countries for many reasons: the value conscious Indian shopper, their familiarity and comfort with unbranded/ generic products, and the focus on quality of private label products on behalf of the retailers,” says Dipita Chakraborty, executive director for retail and shopper practice at Nielsen.
The development will impact the bargaining power of marketers such as Reckitt Benckiser and Cadbury who have had a face-off with big retailers over margins. “This is worrisome.... Very soon, large retailers will call the shots. It has already started happening,” head of a Delhibased maker of consumer goods said on condition of anonymity.
In Big Bazaar stores, private labels such as Clean Mate and Tasty Treat outsell national brands such as Domex, Pril and Bambino, and own brands lead the sales chart in at least four product segments (see chart).
Future Group had boycotted chocolate maker Cadbury in 2008, and the following year it boycotted cereal maker Kellogg’s brands across its Food Bazaar and Big Bazaar stores, both demanding higher business margins.
It stopped fresh orders from Reckitt Benckiser, maker of Dettol soaps and Harpic toilet cleaner, in February this year after the marketer slashed retailers' margins to 14% from 16% on some of its products to partly offset rising input costs. The issue was resolved two months back with Reckitt products back on Big Bazaar and Food Bazaar shelves.
OTHER RETAILERS STRUGGLE Largely Future Group is fueling growth in private brands, while others have yet to crack the private label space. Reliance Retail and Aditya Birla Retail’s More have said they will slow down and consolidate their portfolios. More has already removed personal care products from its private brands.
Future Group Chairman and MD Kishore Biyani says customer acceptance and repeat purchases are what is driving its private brands. “We are working hard on our private brands,” he says.
Based on information shared by Nielsen, Future Group president of food and FMCG, Devendra Chawla, says that Future group's own brands grew 52% last year while private brands in modern trade grew 19%.
“Unlike in the West, where retailers brands started decades later than national brands, in India, we are participating in new age categories, so we can be significant players in driving consumption,” Chawla says. “Modern trade is a catalyst and incubation ground for categories like corn flakes and hand washes, so we are placing big bets on these brands,” he adds.
Future Group recently extended its Sach brand to hand wash.
Industry experts, meanwhile, point out private brands’ share is miniscule in absolute numbers. “Actually the base of private brands remains small, which is why their growth looks impressive,” says retail industry veteran and consulting firm Wazir Advisors MD Harminder Sahni.
Retailers sell private labels (or store brands) to consumer at prices 10-20% lower than national brands because retailers don’t incur overheads like marketing and advertising costs.
Pricing depends on the category — in some low-involvement categories like toilet cleaners private brands are priced cheaper, but in others like hand washes they are costlier than established ones. In developed markets, there are many examples that reiterate the clout of retailers.

Motherson to Buy 80% in Germany’s Peguform

Deal size pegged at . 2,229 crore, co likely to close the transaction in two-three months

OUR BUREAU NEW DELHI

    Auto parts maker Motherson Sumi Systems (MSSL) on Wednesday said it plans to acquire an 80% stake in Germany's Peguform Group from Cross Industries for an undisclosed amount.
The world’s largest producer of rear view mirrors for passenger cars is expected to close the deal in 2-3 months and will fund it through debt from Indian lenders, said VC Sehgal, vice-chairman, Motherson Group.
Austrian automotive group Cross Industries will continue to hold the balance 20%. Investment bankers peg the valuation for an 80% stake at $500 million (. 2,229 crore). Peguform has posted a turnover of . 8,548 crore for the 2010 calendar year.
Shares of Motherson Sumi fell on concerns regarding valuations and pressure on margins. Motherson Sumi, whose shares rose by more than 7% before the announcement on the Bombay Stock Exchange, reversed gains and were down more than 2% at . 234.25 after 12.15 pm.
“It is excessively overvalued and the entire deal is being funded through debt,” said a Mumbai-based auto analyst. Analysts, however, say that margins will improve in the long term.
“The acquisition is very significant as it would add to the top line. However, there are concerns that the acquisition would impact margins in the near term. Motherson Sumi is known to improve performance of acquired companies, which will help bolster margins,” said Yaresh Kothari, analyst at Mumbai-based broking firm Angel Broking.
The acquisition will help the Delhibased joint venture between Motherson group and Japanese major Sumitomo boost its auto parts business as Peguform sells plastic components for vehicle exteriors, dash boards and bumper systems to European carmakers such as Volkswagen and BMW.
“Peguform complements our polymer product range in India, making us one of the largest players globally,” said Sehgal.
    The acquisition will be made through a special purpose vehicle, in which Motherson Sumi Systems will hold a 51% stake and group firm Samvardhana Motherson Finance will own 49%. PwC was the advisor to the deal.
Motherson plans to start the process of deriving synergies from Peguform shortly and complete the integration once the regulatory approvals are in place. “We will explore synergies with our auto moulding business till the approvals are in place,” said GN Gauba, chief financial officer of MSSL.
VC Sehgal started the company in 1977 and established a joint venture with Japanese major Sumitomo in 1983. The joint venture has now presence in 23 countries with 100 manufacturing facilities.
“With this acquisition, our group aims to reach a turnover of $5 billion in two years,” said Sehgal. MSSL, with a turnover of . 8,176 crore, is the flagship company of the Samvardhana Motherson Group.

Tata Motors to Start Work on S African Plant Next Week

JOHANNESBURG Indian automotive giant Tata Motors will start construction of a vehicle assembly plant in South Africa next week, giving the country's economy a huge boost, according to a report in 'Business Day' daily here, citing “a well-placed government source”. However, Tata officials are not giving out much information on the plans. “We're not giving out any details now, but it's been the planning for some time now to build an assembly plant in South Africa, “ Tata's spokesman in Dubai Debasis Roy told the daily.

Unlimited storage on Yahoo Mail

Yahoo Mail offers unlimited storage for users. No more worrying about how many heavy attachments have been sent to you. With Yahoo, you can send free text messages to cell phones. Simply enter the phone number or choose a contact from your list and type out the SMS. The recipient can reply to the SMS to send a message back. It offers the option to view mail, SMS or Chats as a conversation for easy reading and reference. You can attach up to 25MB in a mail, however, Yahoo has tied up with Yousendit.com to send files up to 2GB in a mail. Attachments are stored on Yousendit servers and can be downloaded for 30days. You also get 1GB online cloud storage with Yahoo as they have a tie up with ZumoDrive. A quick sign-up is required first time to integrate ZumoDrive with Yahoo Mail. After that, you can upload, download from within the mail window itself. In terms of social networking, there is integrated Facebook chat as well as a tie up with Sobees. Sobees allows access to Facebook, Twitter, Linkedin and Myspace. You can view the feeds from various networks and update status on multiple networks in one go. There are a variety of layout options available as per your choice. Yahoo Mail also has a stationery feature, which allows mails to be created with various custom backgrounds to give it a funkier look. Another tie-up with Fontself allows you to send mail in various fonts. An integrated notepad allows you to save notes to yourself, and sort them into folders for later use.

Bangalore Start-Up To Take on iPad, Launches Tablet

Weighing less than a kg, Magic Tile Marathon runs on Android OS and is priced at 29,990

OUR BUREAU BANGALORE

EAFT Technologies, a start-up based in Bangalore, has launched a tablet device-—Magic Tile Marathon.
Weighing in at less than a kilogram, the device which runs on Google’s Android operating system is priced at Rs 29,990 and will compete in a market dominated by Apple’s iPad.
A tablet is a computing device, which though smaller than a laptop, offers most of the features of a computer. The Marathon which is 3G enabled has coming with features such as USB and HDMI ports, 3G, 16 GB storage and high definition (HD) video playback
The tablet wars in India are heating up with a slew of international companies such as Apple, HTC, Research in Motion, Dell, Acer and Lenovo launching devices here. Last year Olive Telecom launched its Olive Pad, which also runs on Android and has 3G, Wi-Fi and Bluetooth and is priced at a little over Rs 25,000.
Indian mobile handset makers too are set to enter the fray including Lava, Micromax and Zen who expect to capture market share by launching lower priced products.
International Data Corporation (IDC) stated in a report that it expects Apple’s iPad to maintain 70-80% worldwide market share this year. The product engineering company, EAFT, was founded in 2008 by Jitendhar G S and Giri Prathivadi, who were colleagues at Celstream and Hewlett-Packard. The Marathon has been launched with an initial production run of 10,000 tablets. While the product is available in Bangalore, the company is planning to expand distribution to Delhi and Mumbai soon. EAFT is also planning to launch three variants of the Marathon in the next few months.
Nitin Khanapurkar, Executive Director (Advisory Services), KPMG, says price will be the key differentiator. “Samsung’s Galaxy Tab is at a comparable price range to EAFT’s Marathon,” he adds. Industry watchers say big brands will benefit from bigger marketing budgets compared with start-up manufacturers.
Even the lower-end version of the iPad is available at a little over . 29,000. “The tablet is still a lifestyle product. A person willing to pay this price will shell out more for a brand like iPad,” says Khanapurkar.

Power Dressing for Wills Lifestyle

ITC to revamp its product portfolio with more designer wear and international designs

WRITANKAR MUKHERJEE KOLKATA

ITC plans to take its flagship Wills Lifestyle apparel chain upmarket, transforming it into a luxury brand to profit from the upgrading Indian buyer who is willing to pay more.
In a move analysts consider risky, Wills Lifestyle will revamp its product portfolio with more of designer wear and international designs and explore newer retail formats like boutique stores and specialised luxury stores to reach out to luxury buyers. This will increase the average price of products at Wills Lifestyle to around . 3,000 from . 2,500 now. “The premium consumers are upgrading themselves to the luxury segment… A transition to the luxury segment will make our business model future-proof for the next ten years,” says ITC’s Divisional Chief Executive (Lifestyle Retail) Atul Chand.
ITC wants to carve out a niche presence in the increasingly crowded apparel retailing business where margins are under pressure due to competition and increase in commodity prices. Wills Lifestyle has been facing competition from the flurry of international brands entering India like Zara, Promod, Diesel, Tommy Hilfiger and Mango.
Analysts, however, say it will be an uphill task for an Indian apparel brand to position itself in the luxury segment.
“Indian consumers are still little sceptical to accept Indian luxury brands, except may be jewellery,” says consultancy firm Technopak Advisors Chairman Arvind Singhal. “Whichever Indian brand had tried to raise prices has met with a significant challenge in growth, more so in the apparel, accessories and footwear space,” he adds, citing the failure of Titan’s luxury wristwatch and Raymond’s Manzoni range.
Wills Lifestyle plans to launch products on cashmere wool, including Pashmina jackets priced upwards of . 25,000 and international design women wear on premium silk and chiffon starting at around . 6,000.

RMW Ties up With Digital Domain

Anil Ambani-led Reliance MediaWorks (RMW) has partnered with Los Angeles-based Digital Domain Productions to open visual effects and 3D Stereo Production services studios in Mumbai and London, reports Nandini Raghavendra from Mumbai. “The partnership gives us a substantial presence internationally with an established partner and enables us to take on bigger projects,” said Cliff Plumer, CEO of Digital Domain, in an email response to ET. RMW will set up a new studio at its Media BPO in Navi Mumbai and deploy an extra team of up to 650 artists for projects allied with Digital Domain. “This (partnership) has been part of a plan. We had been working on scaling up for a year now, and by 2013 share of services to our topline will increase from 30% to over 50%,” says RMW chief operating officer Anil Arjun.

Woodland to Invest . 100cr to Set up Facility, Open New Stores

NEW DELHI Footwear and apparel brand Woodland today said it will invest over . 100 crore in this fiscal to set up a new manufacturing unit at Greater Noida and open 60 more exclusive stores in the country. “We are commissioning a new unit for denim and woven garments at Greater Noida with an investment of about . 60-70 crore. The production is likely to start in the next 3-4 months,” Woodland Managing Director Harkirat Singh said. He said the company will also set up 60 new exclusive Woodland stores across India, with focus on Tier II and Tier III cities, entailing an investment of upto . 40 crore. Currently, the company operates over 300 exclusive outlets and also sells its products at over 400 multi-brand stores. “Almost 50% of the new stores planned would be large format spread across 10,000-12,000 square feet,” Singh said. Currently, the company owns or operates 10 manufacturing units in North India for outdoor shoes. It outsources production of fashion footwear range to Vietnam and China. For the current financial year, the company expects 30% growth to touch a turnover of . 800 crore. Woodland is betting big on online retail, Singh added. — PTI

New FMCG entrants ready to take on big rivals

 A new breed of FMCG companies in India is aiming to reach the top quickly and challenge the incumbents. While Jyothy Laboratories hopped onto the top-five bandwagon by acquiring Henkel India, Ruchi Soya, with an annual turnover of Rs 18,000 crore, is close to matching the turnover of leading FMCG firm Hindustan Unilever (Rs 19,000 crore). Although Dinesh Shahra-run Ruchi Soya is seen as a commodity company, its growth is driven by brands like Ruchi Gold, Nutrela and Mahakosh. Not content with piggybacking the existing brands, Shahra is planning a foray into other branded commodities such as pulses, rice and salt. Its soap brand ‘Ruchi No.1’ may be a minnow when compared to the offerings from HUL, but with 10-15% yearly growth, Ruchi Soya Industries may just be able to catch up with the FMCG major, sooner or later.

Taj may end London tie-up with InterContinental

The Taj group, the largest hospitality chain in Asia, is reviewing its three-decade-old alliance with Crowne Plaza, a unit of the InterContinental Hotels group, for its four-star property in London. Located at a stone’s throw distance from Buckingham Palace, the residence of the British monarchy, the Crowne Plaza London-St James is the only Taj property globally that is marketed under another hotel operator’s brand and distribution channel. Now, chances are that Taj would call off this pact. When Taj acquired the 342-key hotel in 1982, marking the Indian firm’s entry into the UK market, it didn’t have a well-established sales and distribution network in the West and so it went with Crowne Plaza. However, having acquired properties in the US, South Africa, Maldives and Australia over the year, Taj has built a strong brand and a robust infrastructure globally, and looks set for a solo journey.

Bajaj to Ride on Rural Demand for Safety Bikes

NEW DELHI With customers in rural India moving beyond frugality and beginning to demand safety and performance oriented bikes, Bajaj Auto Ltd is gearing up to cash in on the new trend with products suited to meet requirements of the hinterlands. The firm that is aiming to sell around three million units in the domestic market this fiscal is witnessing robust demand for more powerful bikes of 125 cc and 150 cc for its Discover model from the rural areas. It will be adding another model, Boxer 150 cc --dubbed as 'Tank on Two Wheels' -- by August this year targeting the rural market. “Our market studies have found that there is a change in the demand from rural customers. They are moving beyond frugal, mileage driven products. They are asking for bikes that provide them safety and performance,” said Bajaj Auto ltd (BAL) President (Motorcycles) S Sridhar. The company caters to the rural market mainly with its Discover range and has been experiencing the change as reflected in the pattern of sales. — PTI

Eureka Forbes to Enter Packaged Water Market

MUMBAI Water purification appliances-maker Eureka Forbes is making a foray into the packaged water segment and will roll out the bottled water product on a pan-India basis by next year, a top company official said. “We are foraying into the extremely competitive packaged drinking water market through the `franchise' route. In our business model, each franchisee will invest Rs 1.5-2 crore in a state-of-the-art purification and bottling set-up,” said Eureka Forbes CEO - Direct Sales and Senior Vice President Marketing, Marzin Shroff. The company will sell the product under the brand name `AquaSure', in 20 litres and one litre bottles, but has not divulged the prices. Eureka Forbes, which started the direct selling concept in India, has a 52% market share in the 1,500 crore water purifier segment, with Aquaguard and AquaSure brands. — PTI

Nokia Still a Hot Brand Among Indians: Survey

NEW DELHI Even as the Finnish handset maker Nokia is facing tough competition, it is still the most trusted and popular brand among Indian customers as it topped 'The Handset Hotlist' for July 2011, according to a survey. As many as 12 handsets of Nokia made it to the list of 25 most exciting mobile phones, that were searched and viewed the most by consumers online, the survey by 'The Mobile Indian' website said. Samsung was second with six of its models, including one CDMA phone, making it to the list. While Micromax and Sony Ericsson stood at the third position with two of their models figuring in the list, a model each from Dell, HTC and iPhone completed the list of 25 most exciting handsets, the survey added. "The Handset Hotlist' will give marketers a monthly insight into changing consumer preferences," The Mobile Indian Director Sreekant Khandekar said. Nokia C5-03, priced at Rs 8,600, was the most searched for and viewed handset, followed by Nokia C6 (Rs 12,200) at the second spot, the survey revealed.— PTI

Two Dozen New Cars to Rev Up Motown This Yr

CHANCHAL PAL CHAUHAN NEW DELHI

Rising fuel prices, spiralling interest rates and negative consumer sentiment over the last few months may have forced carmakers to take their foot off the pedal, but they may be cruising again soon with more than two dozen cars slated to hit the road this festive season starting September-October.
“New cars generate huge excitement and increase sales,” said a senior Maruti executive.
India's largest carmaker, which stopped production of Swift from the end of last month, is gearing up to roll out new Swift next month. Its new wagon RIII, slated for October-November launch, will challenge the domination of Toyota Innova in the multi-utility segment.
Maruti will also bring a shorter and compact version of its hugely popular DZire sedan, which is expected to have a highly competitive price tag due to 12% less duty on smaller cars under four metres of length.
“The launches are part of the broader strategy to get some incremental numbers and increase footfalls in our showrooms,” added the senior Maruti executive.
The company posted a 4% decline in sales in June this year, its first in 30 months, and was also hit by annual maintenance shutdown at Gurgaon and Manesar plants. It also suffered a production loss of 13,200 units due to a 13-day strike at its Manesar facility earlier last month.
In India, most of the cars are launched either at the beginning of the year or during the festive season (starting September). However, slowdown in the market— car sales grew just 6% in the first two months of the current fiscal against 30% in FY’11—has promoted carmakers to advance their launches. The sluggish growth, which raised apprehensions over the original 14-15% growth target in FY’2012, even forced the Society of Indian Automotive Manufacturers’ to revise the target to a modest 8-10%.
The new launches could be another effort by car companies to bolster sales in coming months, say auto analysts. “New cars are the best bet to revive fortunes in the market. Every new car generates excitement leading to incremental sales and better volumes, which is the need of the hour,” partner for automotive practice PwC Abdul Majeed said.
MADE FOR INDIA There has been a greater thrust among carmakers to launch cars especially designed to suit local tastes and conditions. After the stupendous success of Toyota’s Etios,
which was developed specially for India, Honda Brio and Skoda Rapid too have been designed exclusively keeping in mind needs of the domestic market.
“We expect our new sedan (Rapid) to turnaround the market for us. The car will be pegged as first offering from Skoda’s global portfolio for the Indian customer,” a Skoda Auto executive said.
Hyundai’s micro car, which is expected be exclusively developed for India, is one of the most-awaited products and is likely to be priced lower than Santro.
“We are already making great incremental sales with the new Verna sedan and the new cars shall be equally opportune to generate some good volume in the otherwise sluggish market,” Hyundai director (marketing & sales) Arvind Saxena said.

India Core to HP’s Growth Strategy: Vyomesh Joshi

NEW DELHI The world’s largest printer and computer maker firm HP on Thursday outlined its strategy for the Indian printing and publishing market. “My first priority would be to listen to the Indian consumers. Markets such as India and China are very core to HP's growth and strategy. My focus would also be to build a talented employee base here,” said Vyomesh Joshi, executive VP of HP's Imaging and Printing Group, who is on India visit. — Our Bureau

LG Plans . 20-cr Marketing Drive For Microwave Ovens

NEW DELHI Consumer durables LG Electronics India on Thursday said it will spend Rs 20 crore on marketing and advertisement of its microwave oven range this year. LG Electronics India Business Head (Home Appliances) Rajiv Jain said the marketing budget of the category has been increased by 25% over that of last year's as it is scaling up its marketing initiatives this year.— PTI

Future Group to Open 25-30 Big Bazaars in One Yr

 MUMBAI The Kishore Biyanipromoted Future Group, which runs India's largest retail chain in both value and lifestyle formats, on Thursday said it plans to open 25-30 Big Bazaar outlets by June 2012, and will invest . 300-crore for the same. “Our target for this year is 30 stores for Fashion at Big Bazaar and we already have 13 stores,” said Future Value Retail Joint CEO (East & South) Sadashiv Nayak. The Future group owns 152 Big Bazaar stores in the country. — PTI

Japan's Unicharm Enters Indian Sanitary Napkin Mkt

NEW DELHI Japanese FMCG firm Unicharm on Thursday announced its entry into the Indian feminine care market, which is dominated by multinational giants like Procter & Gamble and Johnson & Johnson. The company, which on Thursday launched its global sanitary napkin brand 'Sofy', said it aims to capture around 10% of the market in the next three years. The firm has roped in Bollywood actress Prachi Desai as brand ambassador.—PTI

BMW Sales Hit All-Time High in June

FRANKFURT BMW sold 15.9% more cars in June year-on-year and recorded the highest level of monthly sales ever, boosted by an upswing in demand at home and surging sales in the emerging economies. The carmaker sold 165,855 vehicles in the month, 134,432 of which were of the BMW brand. Year-on-year this represents a 12.3% rise in BMW brand car sales. Group sales in Brazil rose 69% while sales doubled in India and almost tripled in Turkey. "The figures reflect strong global demand," board member Ian Robertson said in a statement, adding however, that due to the model cycle and the year-on-year base effects, he expects growth to slow in the second half of the year.—Reuters

SRK Acquires 26% in KidZania’s Indian Franchise

Comcraft Group has been scouting for a significant minority investor to add value to the project

DEEPTHA RAJKUMAR & KAILASH BABAR
MUMBAI

    Bollywood star Shah Rukh Khan has acquired 26% strategic stake in the Indian franchise of KidZania, an international chain of family entertainment centres. The $3.5-billion Comcraft Group, which holds the franchise for KidZania in India, had been scouting for a significant minority investor to add value to the Indian project and decided to bring the Bollywood star on board, said people familiar with the development. “He brings strategic value to the deal in that he is a brand himself,” said an official with knowledge of the deal. The Comcraft Group is owned by NRI Chandaria family with diverse interests in about 40 countries across the globe.
Mexico-based KidZania is an interactive family entertainment centre or indoor park that allows children between 5 and 13 to role-play adult occupations in a miniature city. It has activities designed to mimic real-life and functioning economy. The more than . 100-crore “edutainment centre” project will unveil its first leg in India in 2012 at R City Mall in Mumbai’s Ghatkopar area. The centre will be spread over more than 70,000 square feet. Similar edutainment centres are also likely to be opened later in Delhi and Bangalore.
Attempts to reach Mr Khan’s business manager on her cell phone were unsuccessful while an email query to Punit Krishna of Comcraft Group went unanswered. The investment transaction was advised by Altamount Capital Management, India’s multi-family office. Vvikas Aroraa, director of marketing, sales and leasing with real estate developer Runwal Group, confirmed the opening of KidZania at R City. “We expect KidZania to be a major crowd-puller,” he said. Mr Aroraa, who anticipates more customers from high disposable income category with the opening of KidZania, plans to populate Runwal’s second phase with more international brands. Currently, R City Mall is spread over 7 lakh sqft area and receives an average footfall of 1.7 to 2 million every month. KidZania will be located in the second phase of R City Mall, spread over 5 lakh sqft, which will commence by September. Mr Aroraa expects footfalls to increase to more than 2.5 million post opening of the second phase. The Runwal Group has a lease agreement for up to nine years with KidZania. “The agreement provides us with minimum guaranteed lease, in addition to revenue sharing depending on the earnings milestones achieved by the store,” he said. Mr Aroraa, however, declined to comment on lease rent being paid by KidZania franchisee, Comcraft. Currently, lease rentals at the mall are about . 150-200 per sqft a month.
For KidZania there will be two sources of income: one from ticket sales and two from individual or corporate sponsor stalls or marketing partners who want to put up their brands in the mock-up city (as is the business model globally). For the latter it would mean that they can get their brand, products or services closer to kids and their families. In India, tickets may be priced . 500-700 per child.

Birla Tyres to Get a CEO Under Organisation Rejig

KOLKATA BK Birla group entity Kesoram Industries has started organisational restructuring of its tyres division Birla Tyres, director of the company Manjushree Khaitan said on Tuesday. “We are changing the current structure of Birla Tyres and a CEO will be shortly appointed,” Khaitan told reporters after the company's AGM here. She said the division would go also for a change in the product mix and would manufacture more car radials and two-wheeler tyres.

Maruti Shifts DZire Production to Gurgaon

CHANCHAL PAL CHAUHAN NEW DELHI

    In the first step to de-risk its operations, country’s largest carmaker Maruti Suzuki is shifting the production of its highest-selling DZire sedan to its older Gurgaon facility from its current Manesar plant.
DZire is India’s largest-selling sedan and the fifth-most sold car after hatchbacks like Alto, WagonR, i10 and Swift. The car has been a runaway success since its launch in 2008 with customers waiting almost six months for delivery and now, will roll out from the relatively-safer Gurgaon plant that has escaped any major industrial dispute in the past decade.
Maruti will carry out some layout changes at its Gurgaon plant, where it started production of its cars in India way back in 1983, to start pumping out metal sheets in its press shop, to carve out body shells for DZire where aging but best-selling cars like Alto, WagonR, Estilo, Eeco, Ritz as well as the much older Omni and Gypsy models are also made.
“There are some changes in the production plan that would be carried from next week onwards, where Dzire is being shifted from Manesar to the Gurgaon plant. The Swift will continue to be manufactured at Manesar plant,” a Maruti spokesman said.
The Gurgaon plant manufactured bulk of the 12.73-lakh cars that were produced in the last fiscal, while a little over 3 lakh cars of these were rolled out of the Manesar plant. The change comes after the company faced a major production hassle with the 13-day workers’ strike at Manesar plant in June, which had brought production of its high-selling cars like Swift and DZire to a grinding halt and threw its entire manufacturing cycle into a tailspin. The fallout of the strike has been the pretty serious with Maruti losing out hugely on its in-demand cars that are currently manufactured at its Manesar plant only.
The Gurgaon plant had produced Swift in the past, but few months ago, the company shifted the entire production of the hatchback and its sedan sibling DZire to Manesar. The company had optimised production by rolling out specific cars from its different production lines at Gurgaon and Manesar. Now, as per the new plan, while DZire will be made at Gurgaon only, Swift, which is due for a makeover with some minor changes, will be produced at Manesar only along with other cars like Sx4 and A-Star.

Post Honda Split, Munjals Map Out Strategy to Take Hero Global

Co to focus on exports to Latin America, Africa & South-East Asia, make model changes to suit local needs

LIJEE PHILIP MUMBAI

    Hero Motor has finalised an export strategy focusing on markets such as Latin America, Africa and South- East Asia, taking its first step towards emerging as a global player after the recent split with its 26-year old Japanese partner Honda.
The BM Munjal-controlled company is making changes in its existing products to suit the needs of these fastgrowing overseas markets, apart from identifying home-grown talent to drive export growth. “There is a common thread between the three export markets. These are high volume and commuter-driven markets and it’s a quick-win for us,” said Anil Dua, senior vice-president (marketing and sales) Hero Motor.
Mr Dua, who heads the 12-member panel which finalised the export strategy, is also spearheading an exercise to identify potential partners. “We are visiting interested parties and a decision will be taken soon on whether to look for local assembly or export products from here,” Mr Dua said.
India’s largest two-wheeler company has identified Latin America, Africa and South-East Asia as its bikes fit into the preferences of customers in these markets growing at 10-15% rate. The company may also look at launching three-wheelers in these markets. Nigeria, the largest two-wheeler market in Africa, uses bikes for public transport. While Chinese bike makers sell 30,000 bikes per month in Nigeria, their Indian rival Bajaj Auto has monthly sales of 21,000 bikes. Bajaj, which made an entry into this market six years ago, is developing a low-cost bike to bolster market share. “We are currently looking at the pricing power in each of these markets. Our focus on mileage and quality in the commuter segment will hold an edge over other Chinese products,” said Mr Dua.
The group currently exports to South Asia, Sri Lanka, Bangladesh and Nepal and accounts for only 2% of its total sales. The joint venture with Honda barred it from exporting twowheelers to countries where Honda sells bikes and scooters. Honda is present in markets like Africa and Latin America. The overseas two-wheeler market is about 50 million units against Indian two-wheeler market of 10 million units.
Hero Motor may find the going tough in the near-term, said analysts. “The existing competition from Bajaj Auto, TVS and the erstwhile partner Honda will make it difficult for Hero Honda to make gains from these markets immediately,” said Mahantesh Sabarad, auto analyst at Fortune Financials. India’s largest motorcycle maker has been clocking sales of five lakh units every month since March 2011. “New launches and refreshes of the existing models have helped keep up the momentum,” Mr Dua said.

Boeing to Bring 787 to India for Test Flight Next Week

American aircraft maker Boeing will fly its most anticipated and state-of-the-art airplane, the Boeing 787 Dreamliner, to India next week, aviation industry sources said.
The aircraft, already behind schedule by over three years from its first delivery date, has national carrier Air India as its second delivery customer after Japanese private carrier All Nippon Airways (ANA).
One of the lightest planes to have taken to the skies, the airplane, made of carbon fibre and composite materials, will fly to the Delhi International Airport for two test flights and then to Mumbai on July 16, said a person with direct knowledge of the matter. From Mumbai, the aircraft takes off to its base in Seattle. Boeing flew 787 with its first customer ANA to Tokyo on July 3. The Japanese carrier is also contemplating putting the 787s on Mumbai-Tokyo route. “The 787 Dreamliner will fill in the much-needed gap in the mid-sized aircraft segment for the airlines in India,” said Boeing’s India president Dinesh Keskar, declining to offer a comment on the test flight of the Boeing 787 to India.
Airlines in India have a mix of both narrow body aircraft, Boeing 737 and Airbus A320, which can fly 160-190 passengers, and wide-body, like the A330s and B777s, which have the capacity to fly over 350 passengers. But the Dreamliner offers an option of flying 250 passengers for the long-haul flights with maximum fuel efficiency. “Only the functional reliability test remains to be done,” Mr Keskar said.
Boeing’s Dreamliner programme has been through some rough weather after the strike at its Seattle facility and production delays as it relies heavily on Boeing’s use of assembled parts and reliance on outsourcing from other countries. The first test flight took off in 2009.
Boeing’s India head also said that Air India will get its deliveries for the 787 as announced in the fourth quarter of this year, putting to rest speculation that the American aircraft maker might once again stretch the delivery for the languishing national carrier to early next year. Air India is the first customer in the world which will fit the Boeing 787 with a GE engine. India’s other leading airline Jet Airways has 10 of the Dreamliners on order, but Jet’s deliveries are slated for 2014 now.
“Air India can fly its passengers long-distance to regional routes like Tokyo and Australia with this mid-sized aircraft and this 787 link is crucial to its turnaround plan,” Mr Keskar said. Air India, which is facing a dwindling market share on international
routes (already slipped to the fifth position in the domestic market), with a passenger load factor of mid sixties on these flights, has squarely blamed the slack performance on lack of availability of the right aircraft for flying to sectors like Melbourne in Australia, and others.
Air India has asked for compensation from the US plane maker for this delay. “We cannot disclose the amount that Boeing will give to Air India as compensation,” Mr Keskar said. To meet the gap till the airliner gets the deliveries, the airliner is scouting the market for rival plane maker Airbus’ wide-body aircraft A330.

Audi India’s Half-Yearly Sales up 100%

 MUMBAI German luxury car manufacturer Audi Tuesday reported a 100% increase in its sales for the first half of the calendar year. It has sold 2,802 cars from January to June 2011 as compared to 1,400 units sold in the corresponding period last year. "Given our outstanding performance in the first six months of the year, we will soon surpass our 2010 annual sale of 3,003 cars," said Michael Perschke, head, Audi India. — IANS

HUL to Seek Nod to Demerge FMCG Exports Biz

  NEW DELHI Hindustan Unilever Ltd
    (HUL) on Tuesday said it will seek
    shareholders' approval to transfer certain assets, liabilities and properties of FMCG exports business division of the company to Unilever India Exports. In a filing to BSE, HUL said it has been directed by the Bombay High Court to hold a meeting of its shareholders on July 28, 2011 to consider the scheme of arrangement proposed to be made between HUL and Unilever India Exports. The company's Board of Directors at its meeting held on May 9, 2011 had approved a proposal for demerger of FMCG exports business, including specific exports related manufacturing units of the company, into its wholly-owned subsidiary Unilever India Exports Ltd (UIEL), with effect from April 1, 2011. — PTI

Fortis Health Appoints Aditya Vij as New CEO

Fortis Healthcare (India) has appointed Aditya Vij, group president, defence, at Punj Lloyd, as the new chief executive officer (CEO), effective from July 5.
Prior to joining Punj Lloyd, Vij worked at General Motors for 18 years, across five countries in Europe and Asia. He was the chairman & managing director — GM India and was instrumental in turning around GM India’s business into a profitable entity, Fortis Healthcare (India) said.
Shivinder Singh, MD at Fortis Healthcare (India) said: “We believe that Aditya brings with him a compendium of stellar values and unique capabilities to strengthen Fortis’ footprint to the benefit of our many stakeholders, including customers, employees, investors, government associates and business partners.”

More Pain for RIM as Cos Switch Loyalt

Consumer-market pressures could intrude into RIM’s mainstay corporate market, say analysts

REUTERS NEW YORK

The BlackBerry, once ubiquitous in business, faces deep challenges in that market as more companies allow employees to pick their own smartphones and add third-party security applications.
One of the BlackBerry’s main selling points has been Research in Motion’s top-tier security and management features, which appeal to IT managers eager to control what workers do with corporate information and protect business systems from cyber attacks.
But with companies such as Good Technology and MobileIron offering applications that could untether IT managers from their BlackBerrys, analysts say that consumer-market pressures could intrude into RIM’s mainstay corporate market. Only two of nine major US companies said they exclusively use the BlackBerry, namely Boeing and Exxon Mobil.
The remaining seven — Alcoa, Caterpillar, DuPont, Kraft Foods, PepsiCo, Microsoft and Verizon Communications — support at least one other brand, such as Apple's iPhone or phones that run Google's Android or Microsoft Windows.
“I would say their enterprise base has been besieged really, first by Apple, then by Android,” John Jackson, a mobile device analyst at CCS Insight, said of RIM. “What’s happening in the consumer market is repeating itself in the enterprise market. They’ve been materially hurt in their core enterprise market.”
RIM’s share of the US smartphone market stood at 25% in April, down from 35% in October last year, pushing BlackBerry to third place from first place in the market, according to research firm comScore.
Most of RIM’s problems, analysts say, can be traced to their delay in
    rollout of new phones to compete with the iPhone or Android phones sold by Samsung, HTC and Motorola. Chemical company DuPont, which has 67,000 employees, started to give some workers the option to use the iPhone in the fourth quarter of last year. In a few months, iPhones grew to about a quarter of Dupont’s smartphones, according to Eric Smith, a telecommunications manager at the company. “The technology that people have available in their personal and daily lives, they want to use at work. People had their own iPhones and iPads, and they said, ‘Hey, why can’t we use these for work’?” said Smith.
RIM shares are down 60% from their year high, and dropped sharply in mid-June when it released dismal quarterly results and postponed a new operating system and touchscreen version of the Bold phone aimed at companies.
These delays pile pressure on IT managers to support additional phone platforms, which can be costly — or risk security breaches if they say no and employees use their own phones anyway for company matters. To help IT managers, there is a growing number of third-party security options, such as email encryption and technology, that allow IT managers to remotely control data on personal phones. For example, they can wipe corporate data from lost or virus-infected phones.
As employees get more choices, they take on more responsibility for security, said Bob Tinker, CEO of MobileIron, which raised $20 million in a fourth round of private funding in May. “It’s much more of an adult model, where you’re given the latitude to do what you need to do, but if you cross the boundary, there are consequences,” Tinker said.

Indian Consumption to Grow 14% in Three Years: Study

Global consumer products makers relying on Asia Pacific and Latin America to make up for flat sales in US and Europe

RATNA BHUSHAN NEW DELHI

    Consumer durables, automobiles, food and personal-care products have the maximum growth potential in the country as multinationals shift focus to Asia Pacific and Latin America to drive sales, says a study.
And Indian consumers will maintain their spending spree despite challenges such as rising prices and higher interest rates, according to an Ambit Capital Research report, ‘The Indian Consumer: a robust operator in an uncertain world’. “Despite being impacted by several challenges, we expect India’s consumption growth story to maintain its course of about 14% rise over the next three years, driven by three factors — inclusiveness, mix changes and specific consumption categories,” senior analysts Vijay Chugh, Ashvin Shetty and Shariq Merchant wrote in the report.
“Reasonable valuations will keep acquisition interest by global midcap firms alive,” they added.
The $473-billion processed dairy category could grow at 15% in the next four years, while the $340-billion personal-care products category would grow a tad lower at 14%. Multinationals are aware of the potential in India.
“I am hopeful that McDonald’s India will contribute half a per cent to the global sales in the next fiveseven years,” McDonald’s India (North & East) MD Vikram Bakshi said. India currently accounts for just 0.37% of the US fast food giant’s $24-billion global business. Last week, at the Cannes advertising festival, Unilever CEO Paul Polman was categorical when he said “We have to shift our thinking to New Delhi, not New York.”
Calling Unilever an ‘emerging markets company’, Polman said the “shift of economic power to the East and the South” was forcing the world’s second-largest consumer products firm to make extraordinary changes. He said while about 56% of Unilever’s revenues come from outside North America and Europe, by 2020, Unilever expected this to be 70-75%.
At the same venue, Paul Bulcke, CEO of the world’s largest foods maker Nestle, said that the most important global economic difference over the last few decades was that “emerging markets are emerging”. As sales flatten in mature markets such as the US and Europe, consumer products makers are relying on Asia Pacific and Latin America for growth.
Multinationals are committing resources to India not only for manufacturing but also for innovation. “Both traditional names such as Nestle and contemporary ones like Yum Brands and Google have committed to setting up local innovation centres here,” the report said. And Indian managers are being given positions of power to steer growth in emerging markets. Late last month, Unilever elevated Harish Manwani, currently chairman of its India arm Hindustan Unilever, to become the global giant’s chief operating officer, second only to CEO Paul Polman.
Three months back, British consumer goods giant Reckitt Benckiser named India-born Rakesh Kapoor as its CEO to succeed Bart Becht, who had spent a decade at the firm. Earlier this year, GlaxoSmithKline Consumer Healthcare, maker of Horlicks milk drink and Crocin antipyretic drug, elevated its subsidiaries in India and China to report directly to the company’s global headquarters instead of its international division that excludes the US and Europe.
India and China are now a part of the company’s global consumer healthcare leadership team, with India among the fastest-growing regions of GSK Consumer. “A combination of good GDP growth, India being a nutrition deficient geography and an emerging consumer class are contributing to the growth,” GlaxoSmithKline Consumer Healthcare MD Zubair Ahmed said.