S Kalyana Ramanathan / London June 28, 2010
S Kalyana Ramanathan / London June 28, 2010
Company names Karl-Ulrich Köhler as his successor.
Tata Steel Europe’s high profile and controversial MD and CEO, Kirby Adams, will step down from his position from October 1, handing over the reins to Chief Operating Officer Karl-Ulrich Köhler, who came on board in February 2010.
A press statement issued by Corus (Tata Steel Europe) said, “Adams has decided to step down from his executive roles and return to Australia, having successfully initiated a restructuring of the company and restored profitability. He will remain available to Tata Steel in an advisory capacity.”
The company in its statement, however, has not said why the 54-year-old MD and CEO has quit, when the fate of the Teesside Cast Products (TCP) plant is not clear. According to unconfirmed reports so far, Corus is in talks with Thai steel maker SSI for a possible sale of TCP. A Corus spokesperson said Adams’ exit was due to “personal reasons” and he was leaving a profitable company, which was loss-making when he took over the reins.
TCP was mothballed in February this year and its impending closure (if it does not find a buyer) would result in a job loss of over 1,700 at its north east plant. Tata Group has in the past come under severe criticism by unions and local political leaders for not conducting the negotiations with buyers in a more transparent manner. Neither Tata Steel nor Corus have officially confirmed any negotiations with Thai steel maker SSI.
Ratan Tata, chairman of Tata Steel, said: “In his time as chief executive of Tata Steel Europe, Kirby has effected a major turnaround of the business and he leaves the company very well placed for the future. We thank him for his contribution and look forward to making further progress under Karl’s leadership.”
In January this year, Tata Motors-owned Jaguar Land Rover, too, had announced the resignation of 49-year-old CEO David Smith. As in the case of Adams, neither was Smith's sudden departure explained clearly by the Tata Group.
Adams, who was picked by Tata Group Chairman Ratan Tata to head the steel maker’s European operations in 2008, is not new to controversy. Earlier this year, he skipped a meeting with the parliamentary committee in the UK set up to look into the mothballing of TCP to attend a board meeting of Tata Steel in India. Later, in an interview to Sunday Times newspaper, Adams had said he had to “choose between the committee and a board meeting”, making his position clear that his first loyalty was to his employer. Sources in the steel industry later clarified that right through the investigation by the government committee, Adams was never invited to the hearing and a notice seeking his attendance was issued only towards the end and with just a day's time to confirm his participation. He later answered the questions raised by the committee in writing.
Prior to joining Tata Steel Europe in February 2009, he was with BlueScope Steel and was the founding managing director of BHP Steel in Australia. With an experience of over three decades in the steel business, Adams started his career in Armco Inc as the head of strategy in 1979. Adams hold citizenship in Australia and the US.
Adams' successor Köhler's experience in the steel business, too, spans three decades. Prior to joining Tata Steel Europe, Köhler worked in companies that today comprise ThyssenKrupp Steel, where he was most recently chairman of the executive board and a member of the executive board of the parent company, ThyssenKrupp AG. Until October 2009, he was the president of Eurofer, the European steelmaking federation. Köhler is already a board member of Tata Steel Europe and he would join the board of the parent company, Tata Steel Ltd, later this year, a company statement said.
Köhler said: “We are becoming a much more internationally competitive business and by living the ‘Customer First’ philosophy, we are able to offer more innovative and differentiated products and services. I believe that thanks to these changes, the company has an exciting future.”
Sunday, June 27, 2010
S Kalyana Ramanathan / London June 28, 2010
S Kalyana Ramanathan / London June 28, 2010
The role of independent directors (IDs) on the board of Indian companies will be clarified in the new Companies Bill and their responsibilities will be made finite in terms of what they are answerable for, said Union Corporate Affairs Minister Salman Khurshid.
Post ‘Satyamgate’, IDs across various companies have been frightened to continue in their roles. Companies have witnessed several resignations by IDs due to lack of legal clarity on their role in the event of a scandal for which they could not be directly responsible.
While IDs would be subject to the general laws of the land, their role in the company would be more clearly defined. The new Companies Act would specifically say what they need to look out for as a member of the board. These directors, however, would still be subject to overriding principles that “ignorance of law cannot be a excuse for violating the law”.
However, more stringent conditions for qualifying as an ID is not likely to be brought into the new bill. Khurshid said there was already a big shortage of IDs for companies in India.
Khurshid, who was in London on his way from Ireland to Delhi, said the parliamentary report on the new Companies Bill was expected to be ready by the monsoon session. He was hoping to table the bill in the Lok Sabha by the winter session. The bill should be passed as a law no later than Budget 2011 (February), Khurshid said. The minister said this at an informal gathering of Indian journalists in London on Saturday.
Khurshid was in Ireland to represent the Indian government at the 25th anniversary of the 1985 bombing of Air India’s flight, Emperor Kanishka, that killed 329 people. The flight crashed into the Atlantic Ocean over Irish airspace when it was blown up by suspected Sikh terrorists. Khurshid said he was not meeting any members of the new Conservative-LibDem government in the UK.
Irish offer for AI
Tuesday, June 22, 2010
S Kalyana Ramanathan / London June 23, 2010
S Kalyana Ramanathan / London June 23, 2010
The first budget of the Conservative-Lib Dem government has promised to cut the structural budget deficit to zero in the next six years.
Chancellor George Osborne, in his budget speech before the House of Commons today, said, “The formal mandate we set is that the structural current deficit should be in balance in the final year of the five-year forecast period, which is 2015-16 in this budget.”
“Some have suggested that there is a choice between dealing with our debts and going for growth. That is a false choice,” Osborne added.
Quoting the growth rate forecast by the Office for Budget Responsibility after taking into account the measures in the new budget, Osborne said the UK economy is estimated to grow by 1.2 per cent this year and 2.3 per cent next year. He further predicted that the UK economy will grow by 2.8 per cent in 2012 followed by 2.9 per cent in 2013 and by 2.7 per cent in both 2014 and in 2015.
Consumer price inflation is expected to reach 2.7 per cent by the end of the year before returning to target in the medium term. He also confirmed that the inflation target remains at 2 per cent as measured by the Consumer Prices Index. The unemployment rate by the
Office for Budget Responsibility is expected to peak this year at 8.1 per cent and then fall for each of the next four years, to reach 6.1 per cent in 2015.
If Osborne’s prediction on the budget deficit succeeds by 2016, he would have achieved it five years before the previous Labour government’s estimated target.
According to the latest budget, total borrowing is expected to fall to 2.1 per cent of GDP by 2015, and reach 1.1 per cent by 2016. Current borrowing stands at £155 billion or around 11 per cent of the GDP. UK’s current debt, which is estimated at 62 per cent of GDP, is expected to peak at 70 per cent in 2013-14, before falling to 67 per cent by 2015-16.
“This emergency Budget deals decisively with our country’s record debts. It pays for the past. And it plans for the future. It supports a strong enterprise-led recovery. It rewards work. And it protects the most vulnerable in our society. Yes it is tough; but it is also fair,” Osborne said at the start of his maiden budget speech.
However, the increase in value added tax from 17.5 per cent to 20 per cent in January 2011 was a damper. The British Retail Consortium, the lobby for the retail industry said, “The Chancellor is right to use public spending cuts as the main means for addressing the deficit but the VAT increase is disappointing.”
Starting from January 2011, UK will also impose a new bank levy and in full year of implementation the government hopes to raise £2 billion additional revenue through this new levy.
S Kalyana Ramanathan / New Delhi June 19, 2010
S Kalyana Ramanathan / New Delhi June 19, 2010
This is the 124th edition of The Championships, as they are called. S Kalyana Ramanathan spends a day at London SW19 this week and finds that technology and romance coexist at this famous address
The 41m x 22m patch of perennial ryegrass glows in the midst of empty stands that can accommodate 15,000 spectators. The new £80 million retrac-table roof has been drawn back to let in the warmth of an English June morning, and there is a promise of something momentous, yet indefinable, in the air. I’m standing on the Centre Court at Wimbledon, which is silent and deserted except for a solitary guard. Somehow, it isn’t hard to believe that a few days from now it will be transformed into an arena like none other.
Outside, young volunteers in green overalls, armed with tiny chisels, are cleaning the crevices between flagstones on the pavements and driveways across 13.5 acres on the Church Road site. The ground staff run their mowers over the 17 Championship courts, manicuring the grass to a precise 8mm height. Gardeners trim and arrange the green Boston Ivy creepers and the carefully coordinated and planted white and purple flowers. On July 3 and 4, tennis fans in over 400 million homes across 180-odd countries will raise a toast to the new champions. But few would realise that what they witnessed during those two weeks was the crescendo to a symphony orchestrated by 120 full-time staff at the All England Lawn Tennis Club (AELTC), with the help of over 6,000 volunteers, including 260 ball boys and girls selected from local schools.
A question of taste
Apart from a variety of snacks, fruits and the ubiquitous fish and chips, some 207,000 square meals would be served during The Championships. “It’s mostly English food and French cuisine,” says O’Grady, “with some Indian curries and Chinese food.”
Ticket to ride
Wherever your seat is, it will set you back by the same £100 pounds or so. At the south end of Centre Court is the Royal Box, 12 feet above ground level, distinctive by its 74 dark green Lloyd Loom wicker chairs. These are the only seats that are not for sale on Centre Court. They are reserved for members of the royal family and other dignitaries. including well known sportsmen. Sachin Tendulkar and Amitabh Bachchan have been among the many personalities spotted here. The Queen is expected to attend this year’s finals after a gap of nearly 33 years.
...as does money
At the 200-year old local pub Dog & Fox you may not get “place even to stand during that fortnight” says bartender John Tomlin. On main match days, this pub apparently collects as much as it does in one whole week during the rest of the year. Venus Williams, Andy Roddick and local hero Andy Murray have all visited this pub.
The 1,200-year old Anglican church in the vicinity, St Mary’s, gets its biggest collection in the year during The Championships fortnight, says Fiona Grom, parish administrator. Last year, the church allowed fans to park their cars in its grounds and collected a cool £35,000, far more than collections during festive seasons. However there are members-only clubs like the 154-year old Wimbledon Village Club which says the games have little impact on their business. Manager John Taylor says his business comes from the 800-odd members who come there to socialise, read the paper and watch the games on Sky Sports, over a pint.
Walking down the High Street, I see local businesses getting ready for some serious ringing at the cash register from June 21. Fresh coats of paint, refurbishments, special game-time offers. It’s clearly festival time for the 65,000-odd local population.
And on July 5, Wimbledon village will go back to being its sleepy self, stepping almost gladly away from the prying eyes of the world, only to re-emerge in the third week of June 2011 for yet another unmatched fortnight.
Saturday, June 12, 2010
UK’s largest apparel retailer Marks & Spencer (M&S) said its “cotton sustainability project” in Warangal district of Andhra Pradesh (AP) had started bearing fruit. The company is ready to increase the number of farmers under the project from 1,500 to 10,000.
The two-year-old project, rolled out with WWF India as the local partner, has enthused the retailer to consider such projects in other cotton-producing areas in India and other parts of the world.
The core of this project, according to M&S’ sustainable raw material specialist Mark Sumner, is better use of water by farmers in Warangal — an area that depends mostly on rain water for crops. After two years, Sumner said, water use was down 50 per cent, pesticide use fell 80 per cent and synthetic fertiliser use was down 20 per cent. A fully functioning farmers’ cooperative has also been established across 28 villages. Cotton, along with rice and sugar, is among the top three water-intensive crops in India.
M&S’ clothing and homeware business reported a top line of £4.1 billion, or nearly half the group’s turnover of £9.5 billion, in 2009-10. Based on the size of its apparel purchase bill, M&S believes it can assert how inputs for its merchandise are produced. Cotton is among the biggest raw material for M&S products.
“The economic strength of farmers has been increased through the cooperative, with less dependence on chemicals and an increase in farmers’ gross margins. So, the next step is to prove these results can be repeated with other farmers; and also increase the number of farmers we work with. We are also investigating ways we can take lessons from the project and apply it to other areas and other cotton projects,” Sumner said.
At present, 7,000 acres crop is under the project in Warangal. The project is a joint venture with environmental charity WWF, implemented by WWF India. Sumner said the financial commitment to the project could not be revealed, but said the investment M&S was going to make was “significant”.
The project in India is part of a three-year-old exercise, called Plan A. Earlier this week, while reporting the annual progress of its Plan A project, M&S said it achieved a 20 per cent reduction in food packaging, a 19 per cent increase in energy efficiency in stores and use of 417 million fewer carrier bags. Besides, over £50 million profit was invested back in the business. A further £13.2 million was invested in community projects last year, equal to 1.9 per cent of adjusted pre-tax profits.
M&S said over the last three years, 62 of the original 100 commitments had been achieved, 30 were ‘on plan’ to be achieved by 2012 and seven were ‘behind plan’ as a result of unexpected challenges. Plan A was extended in March this year to incorporate 80 new commitments and extensions.
M&S is one of the leading retailers in the UK, with over 21 million people visiting its stores every week. It employs over 75,000 people in the UK and abroad, and has over 600 UK stores. Since 2008, M&S has had a joint venture with Reliance Retail, with the Indian partner holding a 49 per cent stake.
Wednesday, June 9, 2010
A little over a month after listing its IPO on the London Stock Exchange (LSE), Essar Energy has joined the elite group of blue-chip companies that are part of the coveted FTSE 100 Index. Essar Energy will be joined by gold producer, African Barrick Gold in this debut entry into the FTSE 100 list.
Barely an hour after the LSE closed for trading today, FTSE Group announced the entry of India's integrated energy company into the primary index. “FTSE Group confirms today that gold producer African Barrick Gold and Essar Energy will be joining the FTSE 100 Index for the first time. In the re-balance, Thomas Cook Group and the London Stock Exchange Group will leave UK’s leading blue-chip Index and join the FTSE 250 Index," it said in a media release.
Essar Energy will only be the second company with Indian promoters to feature on the index. The Anil Agarwal-controlled mining major Vedanta Resources is on the FTSE 100 list since December 2003.
Changes from this review will be implemented at the close of business on Friday, June 18 and will take effect from the start of trading on Monday June 21, FTSE Group said.
The FTSE 100 Index represents the 100 biggest UK blue-chip companies by market capitalisation. The index currently reflects approximately 85 per cent of the UK market, providing a broad and accurate investment tool for pension funds, financial products and investment portfolios in the UK and around the globe.
Entry into the FTSE 100 had been a stated goal for the Indian energy major. The timing of the issue, its listing and free float were all specifically designed to ensure that the company makes a smooth entry into the FTSE 100 list.
At the close of today's trading, Essar Energy stock was priced at 449.50 pence — 2.63 per cent higher than the previous close. The company had raised around $1.95 billion by selling 23 per cent stake to institutional investors. The shares were sold at 420 pence each and went to list on the LSE in the first week of May this year.
The FTSE 100 constituents are reviewed on a quarterly basis. Apart from market capitalisation, aspiring stocks must satisfy several other conditions before they can be admitted into the list.
In yet another bid to manage the raging crisis in the Gulf of Mexico, oil major BP today said it had bought the “oil spill” search string in Google.com. So, the next time when an internet user types “oil spill” in Google.com, the first response in the search results will be a link directing to BP’s micro website that is dedicated to disseminating information on how it is handling the crisis on the ground . Buying of search strings is a product from the search-engine giant and is called Google AdWords.
A BP spokesperson here said this initiative was just to ensure that all stakeholders could easily find what the company was doing to overcome the oil spill crisis and also made it easy for affected parties to place their claims. “It is also for people to sign up as volunteers,” said a company spokesperson.
On April 20, BP’s semi-submersible exploratory offshore rig, Deepwater Horizon, in the Gulf of Mexico exploded and sank two days later, causing 11 deaths and spilling oil across the Louisiana, Mississippi, Alabama, Texas and Florida coasts. From an initial estimate of 1,000 barrels a day, the company later had to accept the US government estimate that it could be losing as much as 5,000 barrels of crude every day.
From an early estimate of $6-million loss a day, today BP’s loss clock is ticking at $22 million a day and overall cost, including cleaning efforts, financial compensation and material loss, is expected to be closer to $800 million, before it sees the end of this crisis.
Last Sunday, BP’s 53-year old CEO Tony Hayward appeared on BBC’s flagship political programme, The Andrew Marr Show, and gave his commitment that his company would ensure it leaves Gulf of Mexico exactly the way it was before the crisis. “We are going to stop the leak. We are going to clean up the oil (spill), we are going to remediate any environmental damage, and we are going to return the Gulf coast to the position it was prior to this event. That’s an absolute commitment and we will be there long after the media is gone, making good on our promises,” said Hayward.
The buying of a two-word search string in Google.com is only a small part of a massive crisis-management effort that BP has rolled out over the past few weeks. Since the first news of the oil spill came out in the third week of April, BP’s communication systems had metamorphosed into what seems like a giant living organism that attempts to address every question shot at it.
Apart from taking some help from Google.com, the BP website has undergone a complete facelift, with links to every possible aspect of the oil spill crisis. Several remotely-operated vehicles are used to provide real-time feed of the oil spill and attempts to cap the spill.
The BP spokesperson was unable to provide more details on how it was using its online communication team to quell the negative publicity the company has been subject to for the last several weeks. A Google spokesperson in the UK said:
“Google AdWords allows companies, political candidates and advocacy groups to get their message in front of consumers who are searching for relevant information.”
However, buying of the search string in Google.com will have limited advantages. One, the first link the search offers will be BP-sponsored, but it will also say it is a sponsored-link, equivalent of an online advertisement. Apart from this link, the rest of the links that follow would be exactly as they are had BP not bought this search string. This means the information access to third parties outside the company or US government will be unfiltered and untampered.
The new Conservative-Lib Dem coalition government has advanced its plans to introduce mandatory “English language test” for aspiring non-European migrants by nearly a year. The government plans to start the screening process by Autumn or around September this year.
UK Home Secretary Theresa May said, “I believe being able to speak English should be a pre-requisite for anyone who wants to settle here. The new English requirement for spouses will help promote integration, remove cultural barriers and protect public services.”
Compulsory English language tests would be introduced for migrants applying to come to the UK to join their partner or marry, the government said today. From Autumn 2010, all non-European migrants will have to demonstrate a basic command of English that allows them to cope with everyday life, before they are granted a visa. The rules will apply to spouses, civil partnerships, unmarried couples, same sex partners and fiancés, and will be compulsory for people applying from within the UK and from overseas.
The introduction of the language test for aspiring migrants was an idea mooted by the previous Labour government.
“It is a privilege to come to the UK and that is why I am committed to raising the bar for migrants and ensuring that those who benefit from being in Britain contribute to our society. This is only the first step. We are reviewing English language requirements across the visa system to tighten the rules further in the future. Today’s announcement is one of a wide range of measures the new government is taking to ensure that immigration is properly controlled for the benefit of the UK, alongside a limit on work visas and an effective system for regulating the students who come here,” the home secretary said.
Anyone wishing to come to the UK as a spouse will have to demonstrate basic English at A1 level, the same level required for skilled workers admitted under the Skilled Tier of the Points Based System. A spouse coming from outside Europe will need to provide evidence to the UK Border Agency with their visa application that they have passed an English language test with one of the UK Border Agency’s approved test providers.
Under the current rules, spousal visa applicants already have to meet a range of criteria before being allowed to enter the
UK. Applicants must show their marriage or partnership is genuine and that they can support themselves financially.
“Whether you are married in the UK or overseas, the non-UK partner must apply for a two-year settlement visa to come and live in the UK as a spouse. At the end of the two years, they can apply to the UK Border Agency for indefinite leave to remain,” a Home Office media release said.
Spouses applying for indefinite leave to remain after completing their two-year period of temporary residence will still need to fulfill the Knowledge of Life and Language in the UK Test.
Monday, June 7, 2010
If it gets on the FTSE 100, it will be only the second company there with an Indian promoter.
In about 72 hours, the Ruia family-promoted Essar Energy would know if it had made it to the coveted FTSE 100 index, a month after listing its Initial Public Offer on the London Stock Exchange (LSE).
The FTSE 100 is a market-capitalisation weighted index representing the performance of the 100 largest UK-domiciled blue chip companies. The index represents approximately 88 per cent of the UK’s market capitalisation and is considered the basis for investment products such as funds, derivatives and exchange-traded funds.
Essar Energy’s market capitalisation at the close of trading on Friday on the LSE was £5,533.64 million, making it the 52nd most valuable company there. It also placed the company in the middle of the 102 stocks listed on the FTSE 100 index.
On Friday, Essar Energy’s closing price was 435 pence a stock or 1.16 per cent more than the previous close. At 420 pence a share, Essar had raised around $1.95 billion from its LSE IPO in the first week of May.
Market capitalisation, however, is not the sole criterion for making it to the FTSE 100. Apart from the 19-day trading rule prior to being considered for the list, a test Essar Energy has passed, the stock must have a gross market capitalisation above the 90th ranked company in the index at the time of review. The 90th company in the list as of Friday’s market cap was travel and leisure company Whitebread, at £2447.62 million. Based on this condition alone, Essar Energy has made its way past the 90th ranked company.
A FTSE 100 aspirant stock will also have to pass certain liquidity conditions. Market sources here said that with a 23 per cent free float, Essar Energy is most likely to pass this test as well.
The most fundamental condition, however, is that it must have a LSE listing and a company registered in the UK. Essar Energy is already a UK-based company, with the Indian connection strictly restricted to the promoters’ nationality.
The entry of Essar Energy in the FTSE 100 list is also likely to oust at least one other company from the current list. The London Stock Exchange’s own stock, which is also on this list, is a possible candidate that could be ousted on Wednesday. LSE stock with a market cap of £1,691.63 million is the second least valuable company on this list and the least valuable company now is financial services company Schroders Plc (non-voting), with a market cap of £658.81 million.
On Wednesday, it will be known on which stocks the axe falls. Along with Essar Energy, Tanzania-focused gold producer, African Barrick Gold, will also be making a FTSE 100 debut. Hence, at least two stocks are likely to beat a retreat from the FTSE 100 on Wednesday.
The FTSE 100 Index also accounts for 7.97 per cent of the world’s equity market capitalisation. The index, that began ticking in 1984, today has 101 companies and 102 stocks (Royal Dutch Shell has two classes of shares) in it.
Essar Energy’s successful entry into this primary index will make it the second company to go on the FTSE-100 that is backed by an Indian promoter. At present, the only company there which is backed by an Indian promoter is Anil Agarwal’s Vedanta Resources (£5,934.07 million and ranked 47th by market cap).
FTSE is expected to make an announcement of the reconstituted FTSE 100 list on Wednesday after the markets close for trading. The debut stocks on the FTSE 100 list however will appear in the list only after June 18.
S Kalyana Ramanathan / Cologne (germany) June 2, 2010
S Kalyana Ramanathan / Cologne (germany) June 2, 2010
Eyes place in the top 10 tyre makers’ league globally by 2015.
Nearly a year after acquiring Dutch tyre maker Vredestein, India’s Apollo Tyres today consummated the marriage by delivering a selection of its own products in the European market.
With the launch of six of its products in Europe today, Apollo became the first Indian company take this uncharted road into the 300-million unit European tyre market.
Apollo had bought Vredestein from Amtel of Russia for ¤36 million. In 2008, it had withdrawn from Hungary where it was looking at prospects, due to political opposition, and started looking for alternative sites. Its executives said today the abandoning of their plans in Hungary now looked like a blessing in disguise, given that the company had already recovered the money it had paid to buy Vredestein. Post-acquisition, Vredestein Banden BV was rechristened Apollo Vredestein BV.
Along with the Apollo brand’s launch in Europe, the company is also keen to bring the Vredestein brand to India. However, this will have to wait for capacity expansion envisaged for the company in its home ground, Netherlands. This could happen in a year, when the Dutch tyre maker would have expanded its capacity from 5.1 million tyres to six million a year, with an investment of ¤6.6 million.
Apollo Tyres’ current turnover which is around $1.7 billion (by the end of 2009-10), is expected cross $2 billion before the close of the current financial year.
The company made its first mark outside India when it acquired Dunlop in South Africa Rs 290 crore in 2006. Unlike the more recent Dutch acquisition that gave Apollo a pan-European reach and access to a 300-million tyre market, the South African buy is for a more restricted market of about 35 million units a year. The largest constituent of this market, South Africa, is now about 10 million units a year.
The company’s global ambition of achieving a $5 billion top line over the next five years will be achieved by both new projects and acquisition in regions other than where it already has a strong presence. Chairman Onkar Singh Kanwar said the company’s big move could happen in Southeast Asia or Latin America. With concentration of expensive natural rubber in South East Asia, the company has more compelling reason to set a base in the region.
As for China, the company is willing to look at an arrangement with a local source who could be Apollo’s contract manufacturer, Kanwar said.
Despite the global ambitions, the company believes its board can continue to be dominated by Indians. The management committee within the company is however multi-lingual and multi-ethnic, with members from its subsidiaries in Europe and Africa represented in it.
A company headed by a Kolkata-born tech-preneur is developing colour-sensor technology that will significantly enhance airport security.
From 2013, airline passengers in Europe will have Arnab Basu to thank every time airport security runs their hand luggage through an x-ray machine. That is the year Europe has committed to allowing passengers to carry liquids in their hand luggage, banned since 2006. And the task of detecting explosives in the lotions, after-shaves and shampoos is dependent on sensor technology developed by a company co-founded and headed by this tech-preneur born and schooled in Kolkata.
Kromek, his company based in County Durham in the north-east of England, specialises in making complex semiconductor material used in x-ray scanners to produce digital, colour and three-dimensional images. By changing for good the black-and-white world of x-rays, Kromek’s technology, which is derived from chroma the Greek word for colour, will help airlines and security agencies across the world spot and eliminate potential liquid bomb threats without harassing millions of air passengers.
For the past week, 37-year-old Basu says he has been averaging three hours of sleep a night owing to regular transatlantic flights to conclude a deal with the US defence department. But his career marks a far longer personal journey.
After finishing school at Hindi High School (now Birla High School) and graduating from St Xavier’s College with a BSc in physics, chemistry and math, Basu worked in his father’s metal-processing business in his home town between 1993 and 1996 before he moved to England for higher education.
He admits that he did not see a future so closely associated with global security issues. On the contrary, after his PhD in physics from Durham University, he was well on his way to becoming a banker in the City, London’s globally famous square mile.
In Basu’s case, destiny came bearing the name of Professor Mark Robinson in Durham University, who asked Basu to carve out Durham Scientific Crystals from its academic setting and run it as a commercial spin-off
Colour being the essence of this business, Basu and his team decided to name the new spin-off Kromek. So far, the company has raised £19 million from British and American investors. Basu is confident that this financial year his company will start reporting top-line numbers in “double digit millions” (though he’s not willing to disclose current numbers).
Kromek is a tiny 45 -person outfit but it has 60 families of patents to its name. The bottle scanner is already in use, though Basu will not name the airports concerned for security reasons. The successor to this technology, which will take the company to the next level, is currently being tested in many places.
Security screening is only one of its potential applications; it can also be used in medical imaging, industrial inspection and space exploration.
For less scientifically-inclined minds, Basu describes his company as “an Intel among x-ray machine makers”. Just as the Intel chip defines the computer that houses it, so will Kromek’s technology for the x-ray machines of the future.
He does not, however, see Kromek becoming a manufacturing giant. “It will basically be a technology company and much more solution-focused. We will be IP creators, solution creators and part of a supply chain,” he says.
All of this gives him little time to indulge his fondness for food, music and an occasional round of golf. “Like any other Bengali I love eating and try to keep fit,” he says.
He has given up following cricket since he moved to the UK. Loyal to the region where his new life began a decade-and-a-half back, he is a die-hard supporter of Newcastle United football team.
Currently on a brief stopover in London, he is eager to fly home to his three-and-half year old son and his Belgian wife — whom he met in Kolkata — who is expecting their second child.
Chancellor George Osborne and his colleagues in the Treasury in the new Conservative-Liberal Democrat government in the UK today presented a long laundry list of expenditure cuts totalling £6.25 billion for 2010-11, including a possible £2 billion cuts in “IT, suppliers and property”. Osborne’s plans to cut government spending comes nearly a month ahead of the first emergency budget the new government will present in Westminster on June 22.
Today’s announcement is the first step taken by the new government to tackle an historically high budget deficit faced by the UK. Budget deficit over the next five years is estimated at £156 billion.
The brunt of expenditure cuts will be borne by business (£836 million), communities and local government (£780 million), Department of Transport (£683 million), education (£670 million), Department of Works and Pension (£535 million) and Department of Justice (£325 million).
Explaining the rationale for the massive cuts, Osborne said there was an urgent need for action in dealing with government debt. “We are all in this together,” he said. Chief Secretary to the Treasury David Laws said, “The years of public sector plenty is over.”
The £2 billion spending cuts comes at a time when there is a widespread speculation that £600 million contract awarded to India’s IT company Tata Consultancy Services for delivering IT solutions for the Personal Accounts Delivery Authority may come under review by the new government. TCS had bagged this order in March this year, when the previous Labour government was in power. Today’s announcement, however, did not dwell on any specific contract or vendors.
A Department of Works and Pension spokesperson later clarified that Treasury’s announcement was not about National Employment Savings Trust (NEST), the scheme for which TCS has been mandated to provide the IT solutions. A DWP spokesperson said, “The government is reviewing all recent spending approvals, to ensure that they are consistent with the government’s priorities and good value for money. “The HMT announcement today covers £535m of efficiencies for DWP. It’s not about NEST,” DWT said.
DWP also said that the austerity measures that would affect this department would include £70 million of savings from stopping or delaying some IT projects and reduced spending on IT consultancy and a further £25 million of savings from renegotiating contracts on medical and IT services.