Indian wineries are no more looking to exploit Britain’s love affair with Indian cuisine. They are looking to trounce the traditional and renowned wineries with products that can compete with the best Britain has in offer.
Indian wine makers are now demanding their rightful place in a world so far dominated by wineries from France, South Africa, Australia and California.
For the first time in the 30-year history of the London International Wine Fair (LIWF) that ended on Thursday, the British got a taste of the red, white, rosé and sparkling wines from eight of India’s best wine markers under one roof — “Wines of India”.
The mood in pavilion 40D was anything but sober — only partly explained by the tasting sessions. Visitors, experts and amateurs alike, expressed surprise at the distance Indian wine-makers have travelled in terms of quality and taste.
Rajiv Singhal, a consultant with the Indian Grape Processing Board, said there was a buzz around the India pavilion.
“People were curious. There was something about India (and Indian wine).”
Over the last 10 years, wine making in India had become a serious business, he said. The number of licensed wineries in India has shot up from two in 1999 to 69 in 2010. There were more in the pipeline, Singhal said.
Cecilia Oldne, head of international business for Sula Vineyards, said despite being a young wine-making country, the scope for Indian wines in the UK was enormous. Interestingly, UK consumes more South African wines than French wines.
After 1993 (after trade ban were lifted), South Africa has significantly increased wine exports to the UK. India can learn and emulate the South African road to success in selling wine in the UK. Sula has its own ambitious plans — the Mumbai-based wine maker has, in the last three months, exported 1,200 cases (12 bottles per case) to the UK.
Oldne said if it could have kept pace, Sula would have exported more than 5,000 cases to the UK this year — an unprecedented achievement in its decade-old journey of wine making.
The market in India, however, would continue to be Sula’s stronghold for a long time to come. Of the 2,70,000 cases the company produced last year, only 7 per cent were exported. This year, Sula hopes to produce 3,50,000 cases. Sula is probably the most visible Indian wine in the UK. Oldne said clients in the UK included Michelin Star restaurants like Benares in Berkeley Square.
While India is still the biggest market for Indian wines, the sheer size of the UK market is irresistible. Despite being a small wine producing nation, the per capita consumption of wine in the UK is 28 litres a year, about half of what major wine-producing countries like France consume (about 56 litres per capita). The per capita consumption of wine in India is just 10ml, which is less than a shot of tequila.
Abhay Kewadkar, chief winemaker and business head of UB Group’s wine-making division, said the route to success for Indian wines in the UK was to see beyond Indian restaurants. “We want to present a truly international wine. Fine wine with any fine cuisine.”
With just about three years since the spirits and beer major got into wine making, UB is already looking at markets in France, the US, Germany and the UK. From the present level of making one million bottles a year, UB wants to take it up to 12 million bottles (one million cases) in the next three to four years. It had set aside Rs 100-crore investment in this new and exciting business, said Kewadkar. UB sells its wines under the Four Seasons brand.
However, Mercury Winery’s Veral Pancholia said Indian wines must zealously hold on to their “Indianness”. He said that was precisely the reason why he sold his wines under the Aryaa brand name in slender bottles with henna designs on them.
Today, Mercury exports to as many countries as the number of states in India where it sells its wines. Pancholia says 40 per cent of the 2,00,000 cases it produces in a year are exported to countries like Japan, Norway, the UAE, China, Italy and the US. This year he wishes to add UK. “We are not just selling wine. We are selling the experience of Indian wine.”
While many of these wine makers are just starting to taste success in India, Indage has already made some serious inroads into the UK market. With its vineyards near Pune, Indage had been selling wines in the UK for the last 22 years, said
Of the 400 restaurants in the UK where its wines are dispensed, only 30-40 per cent are Indian restaurants. Chougle said the biggest challenge Indian wineries had to fight was the temptation of selling Indian wine with Indian food. He said Indian wine makers had to address the larger food market outside the circle of Indian restaurants.
Renowned wine writer Oz Clarke, after tasting what India had to offer, said he was impressed. But he also cautions that Indian wineries must keep the sweetness and oak finish a notch lower if they hope to succeed in a discerning market like the UK — an advice Indian wineries might as well use if they wish to taste the sweetness of success in the UK.
Saturday, May 22, 2010
Friday, May 21, 2010
The Hinduja Group has acquired KBL epb, the private banking arm of Belgian banking and insurance group KBC, for euro 1.35 billion (Rs 7,918 crore) in an all-cash deal. With this acquisition, the Hinduja brothers plan to grow KBL's private banking business in India, West Asia and the rest of Asia.
KBL epb (European Private Bankers) is one of Europe’s largest onshore private banking groups, with affiliated local banks at 55 locations across 10 European countries, including France, Germany and United Kingdom.
Speaking to Business Standard, Hinduja Group’s 76-year old hairman, Srichand P Hinduja, said KBL’s business model, with its local banks in several European countries, was unique and would augur well for its venture into the Indian banking sector.
Of the several bidders for KBL, only two were left in the final round. Exor, an investment firm controlled by Italy's Agnelli family, lost the final round to the Hindujas.
“We plan to invest further in the business, maintaining each of the subsidiaries, while also providing KBL epb with access to the fast-growing markets of the Middle East, the Indian subcontinent and Asia,” Srichand Hinduja said.
“In this way, we hope to address the private banking needs of clients internationally and facilitate capital flows between fast-growing economies and established Western financial markets.”
At the end of 2009, KBL epb had assets under management worth euro 47 billion, assets under custody worth euro 37 billion and, through a 52.7 per cent stake in EFA (European Fund Administration), assets under administration worth euro 103 billion. The sale of KBL epb was mandated by the European Commission as a restructuring plan for KBC in return for a euro 7-billion state aid.
The closing of the transaction is subject to customary regulatory approvals and is expected to be completed in the third quarter of 2010.
In a joint press statement, KBC and the Hinduja Group said the transaction comprises the sale of KBC’s entire interest in KBL epb and includes all the private banking subsidiaries as well as the custody and life insurance businesses. The KBL epb brand, management team and operations will be maintained in their entirety and KBL epb will continue to be headquartered in Luxembourg.
KBL epb operates a unique private banking business model focused on local client service supported by centralised operations. This model has its global hub based in Luxembourg with control functions such as audit, compliance and risk management of the entire group. The local banks of the KBL count among the most prominent banks in the markets they operate in.
The Hinduja Group said the deal would further strenghten its presence in the banking sector that already has two banks under its belt -- Geneva-based Hinduja Bank Ltd, established in 1978, and IndusInd Bank in India, set up in 1994. IndusInd in India has two million customers, 1,225 outlets and a balance sheet of $8 billion, the group said.
Wednesday, May 19, 2010
A £600-million contract won by Tata Consultancy Services (TCS) from Britain’s Personal Accounts Delivery Authority (Pada) has come under renewed media scrutiny. This was after the new government’s chancellor (finance minister), George Osborne said yesterday all major expenses approved by the former Labour government after January 1 would be reviewed.
No contract was named in this regard. However, speculation began on this one. Some details of the cost cuts the new government proposes would emerge only next week. Osborne and his team are hoping to cut expenses worth £6 billion a year. The new government is to also present an emergency budget on June 22.
In March this year, the UK’s pension manager, Pada, had awarded the £600 million deal to TCS as the only remaining vendor who had bid for this contract, after other bidders withdrew.
Both Pada and TCS refused to comment on the outcome of a possible review. A TCS spokesperson in India said, “We, just like Pada, are also under an obligation to not comment on any speculation.”
Pada released the contract to TCS in two parts — the designing and implementation part. The designing part is to end this October. The 10-year implementation part starts after that, subject to a go-ahead.
“The contract is divided into two stages and runs for 10 years, with possible extensions for up to a further five years. The first stage will run to October 2010, allowing TCS to begin the activity required to set up and administer NEST (National Employment Savings Trust). Prior to the expiry of the first stage, a decision will be made on whether to proceed with the contract for the remainder of the contract term,” Pada had said in March.
“Clearly, whoever approved this contract, had obviously provided for the possibility of a non-Labour government in UK after May 2010 and also expected that the new minister in-charge might want to review it,” said a source here.
Competition forces lower valuation, despite strong results.
Britain's telecom giant, Vodafone Group Plc, has written down the value of its Indian operation by £2.3 billion (Rs 15,156 crore) to an estimated £5.7 billion (Rs 37,530 crore).
The reason given is the intense competition it has faced since it took the acquisition route to enter the world’s fastest-growing mobile telecom market in 2007.
Globally, Vodafone today reported a nearly three-fold growth in net profit at £8.61 billion ($12.4 billion) for 2009-10.
The company today released its annual results for the year ended March 31, 2010, and said, “Although our operational performance in India since acquisition in 2007 has been strong, the award of six new national licences in the market one year after our entry and the resulting intense price competition have led to an impairment charge of £2.3 billion.”
Interestingly, the company’s current valuation of its Indian business at £5.7 billion is the same as the price it had paid in 2007. Apart from a cash consideration of £5.7 billion, Vodafone also took on itself debt worth £1 billion ($2 billion at that time) when it acquired the stake in Hutch Essar.
Strong Indian growth
The lower valuation also comes after a year when its revenues grew by 14.7 per cent in India. The company’s Indian operations attracted 32 million customers in March, making it the second largest mobile telecom company in India.
“In a very competitive pricing environment, we were pleased to have confirmed our number two position in the market. Since Vodafone’s entry into India in 2007, our performance has been strong. We have gained about one percentage point per annum in revenue market share, added 72 million customers, moved the business into operating free cash flow generation and launched Indus Towers, the world’s largest tower company, with more than 1,00,000 towers under management.”
Despite the robust growth in revenues and customer-base, the Ebitda (earnings before interest, taxes, depreciation and amortisation) margin for the Asia Pacific region (of which India is a part) fell by 2.2 per cent, primarily reflecting lower margins in India caused by the competitive pricing environment and operating investment in new circles, the company said.
Vodafone India reported a total revenue of £3.11 billion (Rs 20,500 crore) for 2009-10, against £2.69 billion a year earlier (Rs 17,700 crore), a growth of f around 15 per cent. Ebitda for the year improved to £807 million (Rs 5,315 crore) against £717 million (Rs 4.720 crore) in 2008-09, a growth of 13 per cent. Due to non-cash expenses like depreciation and amortisation, the company reported an adjusted operating loss of £37 million (Rs 244 crore) for its Indian operations. The company had reported an adjusted operating loss of £30 million (Rs 197 crore) a year earlier.
The company’s India operation was the major contributor for its growth in the Asia-Pacific region. While APAC region service revenues grew by around 9.8 per cent, the India operations reported 14.7 per cent growth. The rest of APAC grew by only 2.9 per cent.
The Group also said it had granted put options exercisable between May 8, 2010, and May 8, 2011, to members of the Essar group of companies that, if exercised, would allow the Essar group to sell its 33 per cent shareholding in Vodafone Essar to the Group for $5 billion or to sell up to $5 billion worth of Vodafone Essar shares to the Group at an independently appraised fair market value.
On the government of India’s tax claim of around $2 billion on its acquisition deal (that brought it to India in 2007), the company said it continued to seek resolution. The company had become a majority shareholder in the company through the acquisition of Hutchison Telecommunications International in 2007 for a cash deal of £5.5 billion ($11 billion at that time).
Global group revenue increased by 8.4 per cent to £44.5 billion. Group Ebitda was £14.7 billion, up 1.7 per cent. The Ebitda margin declined in line with expectations, the company said. On a consolidated basis, the group’s net profits more than doubled to £8.62 billion against £3.08 billion in 2008-09.
Tuesday, May 18, 2010
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S Kalyana Ramanathan / London May 18, 2010
S Kalyana Ramanathan / London May 18, 2010
The times, they are a-changin’... From a painful 2008-09, when global car sales plummeted, the signs of recovery in 2010 have never been clearer. Tata Motors-owned Jaguar Land Rover (JLR) is set to wrap up the £600-million ($850 million) three-year Chinese deal it had bagged in February 2009, one year ahead of schedule.
A JLR spokesperson told Business Standard the company was confident of completing delivery of the 13,000-car deal by the end of 2010 itself, as against the schedule of 2011-end.
In February 2009, when luxury and premium car maker JLR was under stress with sales numbers sinking, it got its first big break with the order from a Chinese delegation that visited the UK at the start of 2009. The order was for 10,000 Land Rovers and 3,000 Jaguars. The status of the delivery breakup for these two parts of the deal is not known, though.
The Chinese order was a major morale booster for JLR-owner, Tata Motors. The order by value is a little over half the price Tata Motors paid (£1.15 billion) for the two iconic name plates in 2008. The massive order is from an importer based in Shenzen, in South China's Guangdong province.
It is not clear at this stage if this impressive delivery performance will have any major impact on other difficult decisions the company has been forced to take recently. In April 2009, JLR had asserted it had no plans to reconsider an earlier decision to close one of its plants in the UK — a decision that expected to enable production rationalisation. An announcement on this, as scheduled originally, will be made by the middle of 2010. In September 2009, the company had announced it would be forced to close one of its three midland plants as a cost-cutting measure. The company as a whole employs around 14,000 people and the three assembly plants employ 9,000 workers — 5,000 in Solihull, 2,000 in Castle Bromwich and 1,800 at Halewood. Castle Bromwich makes some Jaguar models, Solihull makes the Land Rover Defender and Discovery, the Range Rover Sport and Range Rover, and Halewood makes the Jaguar X-Type and Land Rover Freelander models.
Apart from the new cost-cutting measures, the company has also revamped its top management. It has brought in Carl Peter Forster, former head of General Motors Europe and Ralf Speth from BMW to lead the turnaround. The start of 2010 also saw the exit of the then CEO, David Smith, who had spent 18 months to revamp the company’s operations.
Since the start of 2010, JLR has reported impressive improvement in sales. JLR’s global sales in April 2010 were 17,909, higher by 61 per cent. Jaguar sales for the month were 3,559, almost the same as last year in spite of the withdrawal of X-Type. The Jaguar XF sales were up 23 per cent, while Land Rover sales were 14,350, higher by 89 per cent. In March 2010, JLR sold 23,538 vehicles, higher by 43 per cent. Jaguar sales for the month were 4,642, higher by eight per cent, while Land Rover sales were 18,896, higher by 55 per cent. However, cumulative sales of JLR for the financial year are 193,982 units, lower by 11 per cent. Cumulative sales of Jaguar are 47,418, lower by 24 per cent, while cumulative sales of Land Rover are 146,564, lower by six per cent.
S Kalyana Ramanathan / London May 18, 2010
S Kalyana Ramanathan / London May 18, 2010
The UK’s new Tory Chancellor, George Osborne, has said the first emergency budget will be unveiled on June 22 and a new independent Office for Budget Responsibility (OBR) has been formed that will make forecasts of growth and borrowings by the government.
The Emergency Budget would be released exactly 42 days from the date of formation of the new government. Prime Minister David Cameron had earlier promised to present the Budget within 50 days of the formation of the new government.
Addressing the media here on Sunday, Osborne said that with the OBR in place, the UK would for the first time have a “truly independent assessment of the state of the nation’s finances”. Noted British economist Alan Budd would head the OBR. He was the founding member of Bank of England’s Monetary Policy Committee formed in 1997 by the then Labour government.
“We need to fix the budget to fit the figures, not fix the figures to fit the budget. To do this, I am today establishing a new independent Office for Budget Responsibility. For the first time we will have a truly independent assessment of the state of the nation’s finances. So they can get to work immediately, the OBR will initially operate on a non-statutory basis, just as the Monetary Policy Committee operated before it was enshrined in legislation,” said Osborne. At 38, he is the youngest chancellor of the exchequer (finance minister) in the UK in the last 120 years.
Summarising the new government’s plans to get to work on war-footing, Osborne said, in a space of one week since the Cameron-led coalition government was formed, it has already changed the way budgets are made, has created a new independent office to monitor government spending, set in motion the creation of the first independently audited national balance sheet and plans to cut £6 billion worth of wasteful spending without affecting frontline services. The government also announced that it would re-examine all spending approvals made since January 1 by the previous Labour government.
“If we don’t get on top of our debt, every family in Britain will be poorer and the dreams of millions of young people will be dashed. Mortgages will be higher, businesses will go bust and debt interest will become one of the largest items of government spending. We urgently need to restore confidence in our economy. And we need the determination to act quickly in the short-term in order to establish credibility for the longer term,” said Osborne.
The government’s chief secretary would meet the Cabinet colleagues this week to agree on £6 billion of cuts in this year’s spending. “This is to make an immediate start on tackling the UK’s unprecedented £163 billion deficit, boost credibility and help keep interest rates lower for longer,” HM Treasury said today.
As part of cutting government spending, the new Conservative-Lib Dem government last week agreed to cut ministers’ pay by 5 per cent and freeze it over the next five years of the government. Ministers’ pay would also not get any raise to reflect inflation as well.
Yesterday, Cameron announced that bonuses for senior civil servants and NHS managers would be cut by two thirds. This intends to save around £15 million. The new government is also expected to raise value added tax to 20 per cent from the present 17.5 per cent.
On May 11, the new coalition government formed by Conservatives and Liberal Democrats was put in place, ending a 13-year Labour-led government headed by Gordon Brown.
Sunday, May 16, 2010
S Kalyana Ramanathan / London May 17, 2010
S Kalyana Ramanathan / London May 17, 2010
Ash from a volcano in southern Iceland is back over the UK airspace, disrupting flights from nearly a dozen airports in the country. However the main airports in London — Heathrow, Gatwick and London City Airports — are functioning normally as of now.
In the mainland, East Midlands, Manchester, Liverpool, Doncaster, Humberside and Carlisle airports have been hit by the Civil Aviation Authority’s no-fly zone. Airports in Northern Ireland, Prestwick near Glasgow, some on Scottish islands and the Isle of Man are also affected, according to initial reports.
Between April 15 and 23, air passengers across Europe were affected by the ash plumes from Eyjafjallajokull in southern Iceland. Three weeks after the ash subsided, they are back now. From Saturday evening, aviation authorities in the UK started issuing warning about the ash clouds from Iceland moving towards the UK. The only sliver lining to this problem now is that the southern part of the country’s airspace remains unaffected, thus allowing flights from London airports to function normally.
It was estimated that the airline industry in Europe lost $1.7-2 billion during the week-long ban on flight movement declared by European navigation authorities in April.
UK’s navigation service provider NATS, in its latest notice, said: “The CAA’s no-fly zone required by the high density volcanic ash cloud will not affect London airports for the period 1300-1900 (local time) today. The no-fly zone for this period has moved east to a line stretching from Prestwick on the west coast to Humberside on the east coast and south to a line just north of Birmingham.
Airports which fall within the no-fly zone include all those in Northern Ireland, Ronaldsway, Prestwick, Carlisle, Manchester, Liverpool, Doncaster, Humberside and East Midlands and some Scottish island airports including Campbeltown, Islay and Barra.
Saturday, May 15, 2010
It was hardly a summer evening — cold, grey and depressing. But, an appropriate setting for the outgoing Prime Minister of Britain. On that evening of May 11, Gordon Brown, with his wife, Sarah, and two sons John and James, were getting ready to depart 10, Downing Street. It is very unlikely either Brown or his wife will ever step into the highest executive office in the UK again.
Brown wore the look of a defeated warrior. Even for a couple entrenched in the British tradition of not displaying their emotions in public, it was a hard battle holding back their tears. The husband and wife just about managed to veil their true feeling with a gentle smile. Before the final departure, Brown had delivered his last speech outside this office, on his way to meet the Queen and give his resignation. He used all the strength gathered from 27 years in cut-throat politics, gracefully accepted his defeat and said his last good-bye.
Even his most ruthless critics in the media watched him quietly and later admitted it was a truly touching moment. The fact that his toughest critics shared and empathised that brief moment of grief with him spoke volumes about the legacy Brown was leaving behind.
Speaking of legacy, the first thought that comes to a Brown-basher’s mind is the gaping hole in the country’s finances left behind for the new Conservative-Liberal Democrat government to deal with. The public sector showed a deficit on the current budget of £14.8 billion in March 2010, compared with a deficit of £12 billion in March 2009. Brown was the prime minister in the last 32 months of the 13-year Labour rule in Britain. He came and left as “Gordon the unelected”, after he took charge from predecessor Tony Blair in June 2007.
With his failings, Brown got one thing right. In his closing remark at the third and last televised debate of the leaders on BBC, he said, “I know that if things stay as they are, perhaps in eight days’ time, David Cameron, perhaps supported by Nick Clegg, would be in office.” The prognosis was wrong only on the timing. It took 12 more days for the Brown-Labour era to end.
Brown’s political nemesis came with two heads. One of LibDem leader Nick Clegg and another one of Sky News and The Sun newspaper’s owner, Rupert Murdoch.
Just six months before the May 2010 election, The Sun, the country’s leading tabloid, announced it would not support Labour any more. Its front page on September 30 screamed, ‘Labour’s lost it’. Despite the shrugs from Brown and his Labour colleagues, this must have come as a massive blow. The Sun had supported Labour in the 1997, 2001 and 2005 election. A persistent campaign ensued. The day after Brown’s infamous ‘bigot’ gaffe, The Sun had the shortest and most damning title — ‘Brown Toast’. If the papers had a one-a-day chance to ram Brown’s campaign, Murdoch’s news channel, Sky News, did so 24x7. Sky’s political editor, Adam Boulton, led this campaign from the front. Despite some last-minute hiccups when it was not clear which side Clegg would slant his support, the Murdoch-backed Boulton team came on top. Mission accomplished.
It would be difficult to answer why Murdoch and his media empire had abandoned Labour in the 2010 election after 13 years of generous support. After all, The Sun had claimed it was the force behind Blair’s 1997 victory. The only man who can answer this question with certainty, Murdoch, is never going to answer it. Brown’s defeat was best summarised by Brown’s former spin doctor, Alastair Campbell, when he said Brown’s defeat was one led by the media. This was true. As the election date neared, there was not a single paper or TV channel in country that even remotely supported Brown or
Labour. The best Brown and his team could expect was some sense of neutrality, that the BBC provided.
While Murdoch and his team played their part in Brown’s downfall, the real and final blow to his political career came from a completely unexpected person, Clegg, LibDem party leader. In his election campaign, he had in no ambiguous terms that he would not talk to Labour for a possible post-election coalition if Brown was its leader. Hence after the electorate returned a hung Parliament on May 6, Clegg walked over to the Tory party to start negotiations. As the talks slowly and painfully progressed, Brown and his team watched, hoping Clegg would change his mind. This did not happen. Under severe pressure, on May 10, Brown stepped down as leader of Labour, thus effectively ending any chance of becoming the next PM should the Lib-Lab coalition click. For a brief six hours the following day, it seemed like a “rainbow coalition’ of Lib-Lab with other smaller parties was taking shape.
As it turned out, this was just a smoke-screen. It was a Tory-Lib that made it to the finishing line. At 59, and after nearly three decades in politics, Brown went home to his constituency as a common man, holding no office in the government or his party. In his own words, he said he was going back to doing his most favourite job in the world — being a husband and a father of his two children.
Tata Steel-owned Corus will have a special visitor calling on them the coming Wednesday, May 19. Prince Charles, heir to the British throne, will visit the troubled Corus Teesside Cast Products (TCP) plant in Redcar and meet representatives from there.
The prince’s plans to visit TCP was announced as a diary entry in his website. The object of the visit and what he hoped to achieve was unclear. Corus executives could not be reached to clarify the purpose of the visit. The royal family has no role in the running of the government or its various departments.
The prince, however, does take an active interest in various issues that concern the British people and is believed to be in the habit of writing to various government departments. This correspondence is not shared with the public.
Prince Charles is also known for this active interest concerning environmental issues. During his visit to India in March 2006, he launched the Bhumi Vardaan Foundation in Punjab, to promote sustainable agriculture and help ensure a viable way of life on the land. His visit to TCP might just be a courtesy visit to get an idea of the issues faced by the local community in Teesside.
Ever since TCP was mothballed in February, around 1,700 jobs have been put at risk, with another 3,000-odd jobs that indirectly depend on TCP likely to be affected, too. After a consortium of buyers prematurely terminated a 10-year contract in April 2009, Corus said it had no option. The last few months also saw Corus attempting to find a suitable buyer for the plant. Corus recently appointed Citibank to help find a buyer for the plant. The company has admitted that it is in talks with more than one party.
Most recently the plant was visited by a team from Bangkok-based Sahaviriya Steel Industries. The outcome of this visit has not been revealed.
Friday, May 14, 2010
S Kalyana Ramanathan / London May 15, 2010
S Kalyana Ramanathan / London May 15, 2010
Sometimes old ideas could be the answer for new challenges. Tata Motors-owned luxury car marker Jaguar Land Rover has been reminded of this the hard way. The company is planning a 2WD (two-wheel drive) version of its new compact Range Rover car, that will go on sale from next year.
The new model would be cheaper than its four-wheel drive peers, offer better fuel-efficiency and lower carbon emissions. A company spokesperson said that the company used to make a 2WD Land Rover right back at the start, in 1948.
Land Rover Managing Director Phil Popham said: “This is good news for the company and for our customers. We are adding to the range and expanding our customer base. We will continue to make the ‘World’s Finest All-Terrain Vehicles’ for those customers who require 4WD but will offer an alternative to those that don’t. 2WD is also an important way to deliver improved vehicle efficiency.” The new model will come in a 4WD version as well. The company has not decided on the price options for the new models.
The company spokesperson further said that against the present 42 miles per gallon fuel efficiency, the new 2WD version is expected to offer 50 miles a gallon. The vehicle will also emit less than 130g/km of carbon dioxide, making it the lightest,
most fuel-efficient Range Rover ever.
As part of the introduction of 2WD, Land Rover will be focusing on three main areas of technology to reduce the weight of these vehicles, reduce parasitic losses and increase power train efficiency. The use of hybrid technology is also part of the significant developments for the larger vehicles in the range, with a view to launching the first diesel hybrid by 2013.
By the end of 2010, Land Rover will be testing the first diesel hybrid prototype, named the 'Range-e', being developed using a Range Rover Sport platform. Tests of this vehicle will use the existing 3.0 litre TDV6 diesel engine, featuring a ZF 8-speed automatic transmission.
The positive sales trend continues for Land Rover globally, with sales up 29.7 per cent for April, with 14,263 vehicles sold and up 35.2 per cent in the year to date. Land Rover UK has seen its eighth consecutive month of improvement, up 54 per
cent for April with 2,675 units and 61 per cent year to date, ahead of the rest of the sector.
Popham added: "The investment in and the success of the latest 2010 model range, including comprehensive exterior, interior, power train and technology improvements, are integral to driving this momentum. Demand is, in fact, so strong that we have just announced 275 new jobs at the Company’s manufacturing plant in Solihull.”
Thursday, May 13, 2010
Retail giant Future Group's CEO Kishore Biyani said more focus should be given to get Indian consumers to spend more. It would be a faster route to overall prosperity than to first develop infrastructure.
His remark at a conference organised by India Business Forum at London Business School — "Spending is the way for India to prosper, not infrastructure", as he put it — sparked a heated debate which didn’t lead to any consensus. Biyani later admitted (after the meet) that his statement was more rhetorical, but then reiterated that India could spend its way to prosperity.
His statement was a reaction to a statement by another panelist who was critical about the regulatory issues in the retail sector in India. Satyen Patel, former Nike Southeast CEO, suggested that if India opened its retail sector to foreign players like Walmart and Tesco, it would lead to more investments flowing into logistical infrastructure in the country and thus could be a possible driver for growth and overall prosperity.
Asked for a reaction to Biyani's statement, retail sector expert and chairman of Technopak Advisors, Arvind Singhal (who was not present), said: “I am not sure what Mr Biyani said or in what context. I can only comment that if there is any single deficiency that can put a major speed-breaker to India’s growth, it will be infrastructure. Further, in infrastructure, we must consider both physical infrastructure as well as social. Physical is what we normally talk about (quality roads, steady and price-competitive power supply availability, especially for manufacturing industry, efficient public transport). The social infrastructure includes affordable, accessible (and accountable) healthcare, education, clean drinking water, and basic sanitation. Sadly, we talk even lesser about the enormous deficiency in this social infrastructure."
Adding: "The way I would state is that if India reallocates larger quantum of its public money to bridge the current and actually increasing gap in such infrastructure, it will be a more prosperous nation in the future. Conversely, India cannot dream to be a prosperous country if it does not spend much more on infrastructure."
Patel also contested Biyani’s statistics on his group’s growth. He questioned if Future Group would be as successful if foreign competition were given a level playing field in India. The government regulations in India do not allow multi-brand retail chains from foreign companies to operate in the country.
India has to find a way to grow with other people's money, like the Chinese, Patel said. "This is not about India versus the West," he asserted.
Biyani reiterated his point from another angle, by saying fruits and vegetables in India were grown closer to places where they were consumed to keep them fresh. He said only 70 per cent of the cold storage facilities in India are actually used, suggesting the need for improving infrastructure in the country on a war-footing might be an exaggerated, Western-influenced notion.
Wednesday, May 12, 2010
After five days of intense negotiations, the Conservatives and the Liberal Democrats finally put in place yesterday a coalition government, the first in the last 70 years, which will consist of at least five ministers from Liberal Democrats, the smaller partner.
Conservative Party leader David Cameron on Tuesday evening formally took charge as the 52nd Prime Minister of the UK with Liberal Democrat leader Nick Clegg as his deputy.
Late Tuesday evening, standing outside 10 Downing Street, Cameron, 43, delivered his first speech as Prime Minister and said: “In terms of the future, our country has a hung parliament where no party has an overall majority and we have some deep and pressing problems — a huge deficit, deep social problems, a political system in need of reform. For those reasons, I aim to form a proper and full coalition between the Conservatives and the Liberal Democrats.”
His speech did not even remotely resemble the rhetoric witnessed in the run-up to the elections, but was one that was sober and in parts even grave.
Despite the intense rivalry with his predecessor, Cameron started his speech by paying rich tribute to Gordon Brown, who had only a few minutes earlier stepped down as Prime Minister. “Compared with a decade ago, this country is more open at home and more compassionate abroad and that is something we should all be grateful for and on behalf of the whole country. I’d like to pay tribute to the outgoing prime minister for his long record of dedicated public service,” Cameron said.
At 43, Cameron is also the youngest prime minister since Robert Banks Jenkinson, the 2nd Earl of Liverpool in 1812. He is six months younger than Tony Blair when he had become the prime minister in 1997.
Until noon on Tuesday, the situation continued to remain precarious, with Liberal Democrats resuming talks with Labour. However, by the same evening, order was restored when Brown tendered his resignation to the Queen, recommending that Cameron be invited to form the new government. With this, the 13-year-old Labour tenure came to an end.
In the new government, the top two cabinet posts will be held by members of the majority partner (Tory) with William Hague as foreign secretary and George Osborne as Chancellor (finance minister). Vince Cable, the Liberal Democrat’s financial wizard, who for sometime was expected to grab the Chancellor’s job, had to content with a position of the man in charge of business and banking, which is a slightly modified version of what his predecessor Peter Mandelson had held. Cable became famous with his book “The Storm” that vividly explains the last economic crisis and often credited with the man who predicted the financial meltdown way back in 2003.
Liam Fox and Andrew Lansley from the Tory side have also managed to grab two other important cabinet positions of defence and health, while Liberal Democrat MP Chris Huhne will be cabinet member in charge of energy and climate change. More announcements on the new cabinet are expected to follow soon.
Probably as a gesture of his confidence that the new coalition government will survive its five-year term, Cameron’s first official announcement was that the next general election would be held on the first Thursday of May 2015. His optimism was, however, played down by several Labour leaders who do not expect the new government to live beyond 18 months. The sceptics in the Labour Party were in fact joined by a handful of MPs from both the Tories and Liberal Democrat as well, who from the beginning had opposed the Tory-Liberal Democrat coalition.
In the coming weeks and months, the two coalition partners will have to iron out their differences on several key issues including government spending, political and electoral reforms and the UK’s policies towards Europe. Cameron and his supporters have been projected as strong Eurosceptics, a position that is unlikely to go down well with their new coalition partners.
Monday, May 10, 2010
BS Reporters / London/Mumbai May 11, 2010
BS Reporters / London/Mumbai May 11, 2010
London-based minerals and metals major Vedanta Resources today announced it would buy UK-based Anglo American Plc’s zinc business for $1.34 billion (Rs 6,011 crore) in an all-cash deal.
The acquisition substantially increases the Anil Agarwal-promoted company’s zinc and lead production capacity to 1,462 ktpa (kilo tonnes per annum) — boosting its production of lead and zinc by 37 per cent.
Vedanta said the group would now have an 11 per cent share of the global zinc market. The deal also increases reserves and resources by 206 million tonnes, increasing Vedanta’s total reserves and resources by 76 per cent.
Today’s acquisition further consolidates the company’s position as the world’s leading zinc producer. The acquisition will be handled by subsidiary Hindustan Zinc Ltd, in which Vedanta holds a majority stake (through Sterlite).
In a statement issued today, Vedanta said Anglo American Zinc’s operations were highly profitable with long-term development potential. For the year ended December 31, 2009, the company generated, on an attributable basis, a gross revenue of $670 million, Ebitda of $213 million, operating profits of $154 million and had gross assets of $845 million.
Chairman Anil Agarwal said: “These high-quality assets complement Vedanta’s existing portfolio, creating the largest zinc and lead producer in the world. We intend to rapidly develop Gamsberg, one of the largest high-quality zinc projects in the world, leveraging our world-class large project development expertise.”
Anglo American said the sale of its zinc business follows its October 2009 announcement of its strategy to focus on commodities where it holds advantaged positions.
Vedanta will buy the Skorpion mine in Namibia, the Lisheen mine in Ireland and a 74 per cent stake in Black Mountain Mining in South Africa, said Anglo American. Completion of the transaction is expected to be in stages and Vedanta has planned to complete the acquisition of all three within the next 12 months.
Anglo American's zinc business produced 3,50,000 tonnes of zinc in 2009.
Of the total consideration, $698 million relates to the Skorpion mine, $308 million relates to the Lisheen mine and $332 million relates to Anglo American's 74 per cent interest in Black Mountain Mining.
The transaction is subject to customary regulatory approvals as well as competition clearance in the relevant jurisdictions. In addition, Exxaro Resources Limited, Anglo American's black economic empowerment partner in Black Mountain Mining, holds a 26 per cent interest in the company and has a pre-emptive right to match Vedanta's offer in respect of this asset.
The $1.34 billion consideration agreed with Anglo American is based on effective economic ownership, including profits and cash flows, passing to Vedanta as of 1 January, 2010.
"This agreement represents an important milestone in our strategy to focus on our core commodity businesses and on the delivery of our exciting near-term growth from our $17 billion of approved projects," said Cynthia Carroll, chief executive of Anglo American.
With this acquisition Vedanta will be taking on board 1800 employees from Anglo American's zinc business. Rough estimates indicate that Vedanta would get nearly 4 per cent of Anglo American Plc's revenues but would be burdened with only 1.7 per cent of its workforce. "On enterprise value to Ebitda basis, the acquisition appears at a competitive valuation. However, the success of the acquisition will depend on how effectively they develop the undeveloped mines," said Alok Ranjan, head of portfolio management service, at domestic brokerage Way2Wealth. He was referring to the Gamsberg asset.
Sunday, May 9, 2010
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S Kalyana Ramanathan / London May 10, 2010
S Kalyana Ramanathan / London May 10, 2010
Uncertainty on the formation of Britain’s next government continued even two days after general election results were declared.
As this paper goes to print, senior leaders from the Conservative and Liberal Democrats’ parties are negotiating. If an agreement fructifies, it would put Tory party leader David Cameron in 10, Downing Street — the official residence of the UK’s Prime Minister.
The results declared on May 7 gave the opposition Conservative Party 307 seats, the ruling Labour Party 258 seats and the Liberal Democrats got 57. A clear majority in the House of Commons would need 326 of the total 650. Smaller parties managed to corner 27 seats, with the election in one constituency yet to be held, due to the death of a candidate a day before before the election.
Despite winning the least number of seats among the three major parties, at this stage, the form and shape of the next government depends on a decision from the Liberal Democrats. Party leader Nick Clegg, who won his seat from Sheffield Hallam, is holding the position of a king maker.
PR now a key issue
Under the current system (as in India), voters have to chose one candidate who they wish to be represented by in the House. A change to proportional representation would mean voters can rank their candidates in the order of preference. When votes are counted under this system, the runner up with the least number of votes will be knocked out and his votes distributed among the remaining candidates. This iteration will continue, until one candidate gets 51 per cent of the votes and declared winner.
This electoral system is currently followed in the Council elections in the UK and is, thus, not entirely alien to the country.
As things stand now, all is not over for Labour. As explicitly stated by Labour leader and Prime Minister Gordon Brown after the results were declared, the ruling party is still open to having the Liberal Democrats negotiate with them for a possible “Lib-Lab” coalition. Brown is also open to the idea of electoral reforms demanded by Clegg and his party. This scenario will however emerge only if the negotiations between Liberal Democrats and Tories collapse.
WILL BROWN STEP DOWN?
Saturday, May 8, 2010
Tata Steel can find reason to cheer this weekend from the results of the elections in the United Kingdom; more precisely from the north east corner of the country where Corus has a steel plant.
Sitting Labour MP in Redcar Vera Baird has lost her seat in Westminster to Liberal Democrat rival Ian Swales. The latter won the seat by a massive majority, securing 18,955 votes against Baird’s 13,741 votes. Swales won by an unusual 22 per cent vote swing in favour of the Liberal Democrats.
As the election date of May 6 neared, Baird had almost made the trouble and its resolution at the Corus plant in Redcar her single-point agenda. She provoked the bosses at Corus and Tata Steel with a persistent campaign to find a buyer for the beleaguered Teesside Cast Products plant. The Teesside plant has been in trouble for more than a year now and was mothballed in February 2010, leading to 1,700 job losses in the region that depends on the good fortunes of Corus for work and prosperity.
Baird’s campaign was loud and vociferous. So much so that the usually mellow Tata executives were forced to write to her and ask her to mellow her views. When Baird’s criticism reached its crescendo weeks before the election, Tata Steel Vice-chairman B Muthuraman finally shot a letter asking her to pipe down. In April, Muthuraman asked Baird not to be over-critical about the company’s strategy in dealing with problems in Corus.
He said her continued criticism of Corus was damaging the company’s efforts to find a strategic partner for Teesside.
“Continued criticism of the company and of Corus CEO and MD, Kirby Adams, in particular, was unfair and unwarranted.
Such criticism was unhelpful to the company and its workforce,” he had said.
Baird had been seeking a one-on-one meeting with the bosses at Tata Steel. She was in particular keen to secure this meeting before the election date. Her meeting with Muthuraman was scheduled for April 29, a week ahead of the elections. According to Baird, this was rescheduled to May 20 due to Muthuraman's "flight availability."
With the loss of her seat, it is not clear if she will still meet Muthuraman to discuss the future of Teesside. After losing the election, Baird said: “I am very disappointed but there is still work to be done. I don't think there is anything else I could have done in this campaign. The closure of Corus has had a massive effect on votes."
The big question that might never get answered is if the senior management in Tata Steel in Mumbai had its finger on the pulse of the British election and expected Baird to lose, which could be the reason for pushing a painful meeting to beyond the election date. The bigger question would be if Tata Steel will find a less troublesome and more reasonable negotiator in Baird’s successor.
Harrods, the iconic London store, has been sold by Mohammed Al-Fayed to Qatar’s royal family for pound 1.5 billion. Al-Fayed, 77, had bought Harrods in 1985 for pound 615 million. According to media reports here, he will go into retirement once the sale is completed.
According to The Sunday Times Rich List, Al-Fayed and his family are worth about pound 650 million and share the 94th position with three others in this coveted list of the 1,000 richest people in Britain. Clearly the windfall from this sale should push Al-Fayed and his family further up the list.
Harrods is famous for luxury and premium products, and is the favourite shopping destination for the rich and affluent in the British society. For many who cannot afford to shop here, the sight of the dark green shopping bag with Harrods written in gold holds tremendous aspirational value. Harrods shares the same level of tourist interests as the Big Ben, Westminster and Madame Tussauds wax museum. Courtesy shopping at Harrods finds a place in most visitors’ itinerary, even if the value of shopping is modest.
The reason for the sale is not clear yet. The store is spread over 4.5 acres and is estimated to have over one million square feet of selling space in over 330 departments and employs over 5,000 people. The economic downturn until last year hardly dented the fortunes of Harrods. The Knightsbridge store in south-west London reported a record pound 752 million in sales in 2008-09. The net assets of Harrods are worth pound 500 million, according to The Sunday Times Rich List 2010.
The 44 million-odd electorate of the United Kingdom returned an indecisive verdict today in the polls to the 55th Parliament. As predicated by the opinion polls and the exit poll in the first hour after voting came to an end last night, none of the parties got a clear majority.
The Conservative Party, that sits in the opposition bench in Westminster, however came on top with the maximum number of seats and votes in this election — positioning itself as the party that should get the first chance to form the new government.
As this paper goes to print, the Conservative Party had won 304 of the 650 seats in the House of Common, followed by the ruling Labor party with 257 seats and the Liberal Democrats 57 seats. Other smaller parties won 28 seats in all, with results from four more constituencies yet to be declared.
The results of these four seats would make little difference to the fact that Britain faces a hung Parliament. The last time voters in the UK gave such an indecisive verdict was in 1974. Subsequently, when Tory Prime Minister Edward Heath tried to form a minority government it collapsed within days for want of support from other smaller parties at that point in time.
Britain has had five hung parliaments since the beginning of the 20th century.
As the results started pouring in since the early hours of Friday, Liberal Democrats leader was the first to address the media, where he said his party was willing to talk to Conservatives to find common ground and allow the Tories to form the next government.
Prime Minister Gordon Brown accepted this decision by the Lib Dems and said as the Conservatives have garnered maximum number of seats, it was fair on the part of Lib Dems to go to the Tories first. He however asserted that his party door would be kept open, should the liberal democrats fail to come to an agreement with the Conservatives.
Political experts and senior party members from across all parties are not expecting any major decision within the next 24-48 hours, with some even claiming it may take days before a clear picture emerges.
Conservative Party leader David Cameron, who was the last major party leader to address the media today said he will be making a “big, open and comprehensive” offer to the Liberal Democrats and sounded confident of heading for No.10 Downing Street soon.
Thursday, May 6, 2010
S Kalyana Ramanathan / London May 06, 2010
S Kalyana Ramanathan / London May 06, 2010
General European economic pessimism blamed, reassurance on India investment plans
Though the Ruias, promoter family behind oil and power major Essar Energy, might have picked an auspicious Friday (May 7) to list the stock on the London Stock Exchange, the first day of conditional trading on Tuesday proved a dampener.
Poor market conditions battered the stock by a 7.3 per cent discount over the original issue price of 420 pence a share. The discounted pricing continued well into the second day of trading today, with the price hovering around 395p a share.
On the first day of conditional trading on Tuesday, when the stock quote is displayed with the WI (meaning “when issued”) suffix, the price dropped by 7.3 per cent to 389.5p a share, even though the primary market index, FTSE 100, fell by only 2.6 per cent. Less than a week before, Essar Energy successfully completed its Initial Public Offering (IPO) by selling 303 million shares at 420p each to institutional investors, raising close to $1.95 billion in the process
Conditional trading started three days ahead of the official listing in the market on Friday. Conditional trading is a unique
rule for stocks that are to be listed on the LSE and is similar to what is called grey market trading in India.
EURO GLOOM BLAMED
The poor performance of the stock, however, has been attributed to the market condition, triggered by the debt crisis in Greece. The fear that the problem from Athens might spread to other European countries like Spain, Portugal and Ireland dampened overall sentiments, leading to the poor performance of Essar Energy's debut trading.
According to Deepak N Lalwani, Director-India, with London-based stockbroking company Astaire Securities: “Essar Energy was just a victim of market conditions over the sovereign debt crisis in Greece and the fear that it might spread to other European countries.”
The $2-billion issue from Essar Energy did not get off to a great start even before trading started. The stock was originally priced in the range of 450-550 pence a share. But, lukewarm market sentiments pushed the price down to 420p each, to ensure that large institutional buyers would fully subscribe to this mega issue.
The IPO from Essar Energy also took off at a time when smaller issues were getting postponed due to market conditions. UralChem shelved its $642-million London IPO on April 29. Russia’s second-largest maker of nitrogen-based fertiliser said in a statement that its stock “cannot be priced at a level which reflects a fair value of the company” due to “current market conditions”.
INDIA INVESTMENT UNAFFECTED
The pressure to lower the issue price by nearly seven per cent (on a base price of 450p), however, is not expected to affect the company's investment plans in India. Upon completing the issue, vice chairman Prashant Ruia said the company had hoped to raise at least $2 billion from the issue and it nearly did so. The company further has a 10 per cent greenshoe option, which it may exercise 30 days after official listing, if there is a need to bridge the gap in funding.
Essar Energy plans to increase its power generation from 1,220 Mw to 11,470 Mw in two phases, while the oil refinery capacity is to be increased to 7,50,000 barrels a day by 2013, making it India’s largest single location refinery. Essar is also raising money to carry out exploration and production across its global portfolio of oil & gas blocks in Asia, Africa and Australia.
The stock will be listed on the London Stock Exchange, following which it hopes to get on the coveted FTSE 100 list (of the most highly capitalised companies), that will make it the second company backed by an Indian promoter to be on the list. Currently, Anil Agarwal's Vedanta Resources holds this solitary distinction.