New coastal norms could find houses, businesses at sea Be it housing or building a factory on the shore, tighter coastal norms could be on the way. The ministry of environment and forests has prepared a draft notification that draws new hazard lines on the seaward side of which only a few entities will be allowed to set up shop on shore. The entities listed in the draft notification include only those that require regular access to the shore such as ports, harbours and fishing jetties.
“However, this holds only for coastal zones that will be declared by the ministry as not being eco-sensitive,” said a government official. In eco-sensitive zones, no development will be allowed. Such zones include mangroves, coral reefs, turtle resting grounds and those harbouring coastal wildlife among others. The draft notification is a revised version of the coastal regulatory zone (CRZ) regulation of 1991.
Under the 1991 notification, which is the basis for policy, a CRZ clearance is required for development on the seaward side of the hazard line (i.e., between the hazard line and the sea) that is constant at 500 metres throughout the country. A hazard line is marked from the high tide line. The ministry has now proposed to do away with such CRZ clearances by imposing a ban on entities that don’t require constant access to the shore from setting up base. Other environmental clearances in line with the Environment Protection Act will, however, still be required.
The draft notification also calls for drawing different hazard lines using scientific findings for different regions based on ecological sensitivities, and safety zones for hazards such as cyclones. That is, it could be 200 metres in one zone or 800 metres in another depending on the ecology and geology of the zone, such as the extent to which the sea level can rise in a particular area.
While the scientific basis of the methodology for making new hazard lines has been mentioned in the notification, the mathematical formulae for the methodology will be formulated by institutions notified by the ministry such as Survey of India, Dehradun, and the Department of Earth Sciences, Thiruvanathapuram.
The draft notification has incorporated the recommendations of an expert committee, headed by MS Swaminathan. The committee that was constituted on July 19, 2004, was meant to carry out a comprehensive review of the 1991 notification
Thursday, May24, 2007
Source: Economic Times
Govt to promote houses for urban poor
After devising several housing schemes for rural masses, the government plans to go flat out in promoting low-cost housing for the urban poor. It is in the process of formulating an interest subsidy scheme for them.
The ministry of housing and urban poverty alleviation, which is framing guidelines for the subsidy programme, is learnt to be in favour of engaging commercial banks and specialised housing finance companies (HFCs) in this endeavour. At present, the government engages the Housing & Urban Development Corporation (HUDCO) only to disburse soft home loans to the poorer section.
The housing and urban poverty alleviation minister (independent charge) Kumari Selja will meet banks and HFCs in Mumbai in the first week of June to sensitise them on this issue of low-cost dwelling units for economically weaker section in the urban areas.
The ministry of housing and urban poverty alleviation is also weighing an option to allow private builders to develop more floor space out of a particular plot on which the building is being constructed. This measure is aimed at improving builders’ profitability. The ministry, in turn, is planning to ask builders to cross subsidise and build low-cost dwelling units.
According to preliminary discussions, builders in Mumbai or in Bangalore may be allowed to develop total floor space which is two-and-a-half times the plot, instead of 1.5 times now. The ratio, commonly known as floor space index (FSI), is pegged at 1.5 in most states for commercial real estates and 1 for residential areas. An FSI of 1.5 indicates that the total floor area of a building is one-and-a-half time of the plot.
“A higher FSI will enable builders to improve their profitability. The ministry is, in turn, planning to ask developers’ to build low-cost houses for the poor. This is one of our suggestions to the ministry,” said DHFL Vysya Housing Finance managing director R Nambirajan.
In the proposed National Urban Housing and Habitat Policy (2007), the government included a provision to earmark at all levels, including the new housing colonies, a portion of land at affordable rates for housing for the economically weaker section (EWS) and low income group (LIG). This could be 10-15% land area to accommodate 20-25% dwelling units for EWS and LIG.
“The government is exploring ways to provide shelters to the low income group. It has convened a meeting in Mumbai to discuss this issues with banks and HFCs,” GIC Housing Finance managing director AK Guha said.
Meanwhile, the government has reclassified the income limits for various economic groups to avail loans from Hudco. Accordingly, EWS is classified as those who earn up to Rs 3,300 per month while LIGs are those who earn anything in the range of Rs 3,301 to Rs 7,300 per month.
For Hudco’s loan scheme, people earning between Rs 7,301 and Rs 14,500 per month are classified as middle income group and people with monthly income of Rs 14,501 and above are in the high income group
Friday, May 25, 2007 Source: Economic Times
Cabinet clears social security cover for unorganised sector workers
The Cabinet on Thursday approved the introduction of a Bill for extending social security cover to the workers in the unorganised sector which employs around 37 crore people.
Briefing reporters after the Cabinet meeting here on Thursday, the Minister for Information and Broadcasting, Mr P.R. Dasmunsi, said that legislation to provide social security to workers in the unorganised sector would be introduced on the first day of the Monsoon session of Parliament.
"Besides providing for number of welfare schemes for these workers who constitute over 90 per cent of the 40 crore work force, the legislation would also enable setting up of a National Advisory Board to design, from time to time, suitable schemes for different sections of these workers," he said.
"It is revolutionary scheme, a key programme of the National Common Minimum Programme aimed at taking care of the most vulnerable sections of the unorganised sector workers," Mr Dasmunsi said.
Notifying schemes
The central Government would notify scheme or schemes for one or more sections of unorganised workers based on the recommendations of the National Advisory Board, he said.
The schemes will have provisions for life and disability cover, health benefits, old age protection and such other benefit that will be decided by the Central Government.
Apart from designing model schemes for workers in the unorganised sector, the board will also monitor the implementation of all notified welfare schemes.
Advisory panel
The Bill will also have provision for setting up State-level advisory boards. The board would prescribe the procedures for registration of unorganised sector workers and the minimum age for registration would be 18 years.
Thursday, May 24, 2007 Source: HinduBusiness Line
India: Continued policy reforms essential for sustained economic growth Continued policy reforms and institutional development are a sine qua non for sustained economic growth in India. In his opening statement on behalf of India, at the World Trade Organisation (WTO)’s Trade Policy Review for India, to be held in Genera from 23-25 May, 2007, Shri G.K. Pillai, Commerce Secretary, said: “We are of the view that continued and sustained growth of the Indian economy is not only good for India but also for the rest of the world."
We also believe that in a more integrated global economy, it is necessary that other less developed countries also grow significantly so that they are able to get the benefits of globalization. The Government of India is acutely aware that there is no inevitability of high growth and that sustained rapid growth cannot be taken for granted.
For sustained economic growth, there is need for continual reform as well as a matrix of institutions and public policies tailored to the new needs of the economy. As brought out in the trade policy report, a slew of policy reforms have indeed been implemented over the last decade.
"There have been changes of Government over the last fifteen years, however, the momentum of economic reforms has not abated.In a vibrant and complex democracy such as India, the reform process can and will have some fits and starts but the overall direction of the Indian economic reforms has always been positive."
Referring to non-tariff barriers to imports from developing countries, the statement said that non-tariff barriers in the form of restrictive regulations were impediments that significantly affected not only exports but also the capacity to trade and as a result, even after more than two decades of rapid trade growth, the pattern of trade remained highly skewed in favour of the developed world.
“High-income countries representing 15% of the world’s population still account for two-thirds of world exports. The share of world exports of Sub-Saharan Africa, with 689 million people, is less than one-half of that of Belgium, with 10 million people”, the statement added.
“We have a historic opportunity to partially correct this imbalance in the current Doha Development Round. India is extremely concerned at the slow pace of negotiations. While the suspended talks have resumed, the political will on the part of developed countries is still not evident."
Unless the development dimension of the Doha Round is met and the developing countries prosper, global trade will always be at risk. The rapid economic growth of developing countries is a must for a truly global trade order to flourish.
"India stands committed to meet its obligations under the mandate of the July Framework and the Hong Kong Ministerial Declaration. Developed countries must recognize that our destinies are intertwined”, the statement said.
Thursday, May 24, 2007 Source: Fibre2fashion
Charities too may ride bull as Montek moots tax sop for share donations
Voluntary organisations (VOs) may be allowed to take donations in the form of shares and stock options. The government is also considering to extend tax exemptions for the same.
“Stocks and shares have become a significant form of wealth in the country today. In order to encourage transfer of shares and stock options to voluntary organisations, the government will consider suitable tax rebates for this form of donation,” Planning Commission deputy chairman Montek Singh Ahluwalia said unveiling the National Policy on Voluntary Sector.
The policy suggests continuing fiscal concessions for VOs. “The government will also simplify and streamline the system for granting tax exemption status to charitable projects under the Income Tax Act” it says.
Elaborating on the policy, Mr Ahluwalia said it had suggested tightening of administrative and penal provisions to discourage misuse of tax concessions by VOs. “The government will consider tightening administrative and penal procedure to ensure these incentives are not misused by paper charities for private financial gains,” the policy says. The policy also seeks to ensure proper accountability and monitoring of public funds distributed to the VOs.
On monitoring and registration of VOs, Mr Ahluwalia said that the government is in favour of issue being addressed by the voluntary sector through suitable self-regulation. The government would encourage evolution of a national-level self regulatory agency for voluntary sector, he said.
He ruled out government accreditation for VOs. He said that the government would encourage voluntary sector to develop alternative accreditation methodologies to facilitate funding and make the process more transparent.
The policy has proposed simplification of existing provisions of Foreign Exchange Contribution (Regulation) Act (FCRA). “The government will review the FCRA and simplify its provisions that apply to voluntary organisations, from time to time, in consultation with the joint consultative group to be set up by the concerned ministry,” it said.
Mr Ahluwalia said that the policy would act as a model for states and the Centre would encourage state governments to review their laws and rules in accordance with the National Policy.
Re rise hurts textile exports to US in Jan-March Even as textile and apparel exports to the US increased 7.49% in volume during January-March 2007 against the year-ago period, it declined 0.43% in value terms, pointing to the declining unit value realisation.
It is for the first time in several decades that textile export to the US has shown negative growth in value terms, caused mainly by the hardening rupee. China, however, has shown impressive growth in both volume (24.86%) and value (46.47%) in the same period.
The disparity between value and volume growth in exports from India is also substantial on an annual basis. In the year ended March, India witnessed a growth of over 12% in volume but less than 4% in value terms. The apparel segment registered a decline of 2.1%, while non-apparel textile grew by 3%.
China, the largest textile exporter to the US with a market share of 31% in value terms, however, saw a reverse trend. It grew 31% in value and 15.5% in volume in the year ended March 2007. India has had an impressive growth of 27% during 2005 and 8.98% in 2006 in value terms.
Much of the blame for the slowdown rests on the hardening rupee, which has appreciated 4.45% against the dollar during April 2006-April 2007. The Chinese yuan also appreciated 3.5% during the period. The currencies of other major exporters — Pakistan (1.3%), Sri Lanka (5.5%) and Indonesia (2.3%) — depreciated during this period.
All three countries witnessed better growth in value terms compared to their volume growth. Pakistan grew 6.54% in value terms, whereas its volume growth was only 0.57%. Sri Lanka, which witnessed a negative growth of 3.1% in volume terms, grew 1.68% in value terms.
Indonesia’s export volume grew 13.9% compared to 25.77% in value terms. In order to mitigate the impact of currency appreciation on exporters, industry body Confederation of Indian Textile Industry has sought government intervention. Its secretary general DK Nair said exporters are forced to underprice a product to compete with those whose currencies have depreciated.
Moreover, exporters are facing a rise in the cost of production due to continuing high level of inflation, says Mr Nair. The National Manufacturing Competitiveness Council has also taken up this issue with the government
Wednesday, May 23, 2007 Source: Economic Times
Automobile Sector
Durable Sector
Roca to invest 100 m euros in India Spain's Parryware Roca, a global leader in sanitary ware space, today announced plans to invest 100 million euros in India in the next two years for scaling up operations.
"The company plans to invest this money on three fronts -- advertising, scaling up plant capabilities and acquisitions," Emilio Salazar, Deputy Managing Director of Parryware Roca Pvt Ltd, a joint venture between Roca and India's EID Parry said.
"We are currently scaling up the operations and capabilities of the plants owned by our joint venture partner, EDI Parry. We are also looking at acquisitions in the sanitary ware and tap segments," he told reporters at the launch of the joint venture's first showroom in the city.
The 50:50 joint venture was formed in April 2006 and the brand was formally launched in India in March 2007.
"As per the JV agreement, there would be a progressive implementation of the technology developed by Roca at the production centres of Parryware Roca as well as at the new factory in Perundari, Tamil Nadu," he said.
Parryware, currently has four manufacturing units. The facilities are being enhanced with a view to commence production shortly, he said.
"We hope to commence production of the Roca products by the end of this year," Salazar said, adding the products manufactured in India would be of the same standard and quality produced globally.
Roca products, at present, are being imported and are available in 10 showrooms across the country. Opening up of the first showroom in Bangalore, would help the company in distribution of the products in the southern region.
Plans are also afoot to scale up the showrooms to 50 by the end of this fiscal. Some of the outlets would be stand-alone stores, Emelio said.
Roca also plans to leverage the customer care network of its joint venture partner to deliver after-sales service.
Parrwyare Roca had tied up with some leading builders in the country to sell its products. The company is also targeting the hospitality industry.
"We have received some very good orders," said Parryware Roca General Manager (Sales) S Srinivas.
Roca, which has 90 years of experience in the sanitary ware sector, currently has around 54 factories in all, including 32 in Europe, 11 in the US and 10 in Asia.
To a query on whether the Roca products would appeal to the Indian sensibilities, Srinivas said the company has a team of 100 designers, drawn from across the world, who create innovative line of products. The designers network with the global community and work on the feedback received
Friday, May 25, 2007 Source: Economic times
Margins of durables cos to shrink further: ICRA Profit margins of consumer durables manufacturers are likely to decline further due to increased competition, price erosion and diminishing brand power, according to an ICRA report.
Sounding a note of caution, specially to domestic players such as Videocon and BPL, the report revealed that operating costs for companies were likely to go up as better technological features get incorporated in models and more aggressive efforts were made to communicate competencies in the market.
"For domestic players, the pressure on margins is likely to be higher as they would either have to explore fresh technologies or invest considerably in product research. In either case, the costs would go up and the benefits would accrue only after a lag," it said.
On the other hand, multinationals like Samsung, LG, Philips, which have set up manufacturing units in India are better placed.
"The multinational players would be able to source the latest technology from parents, and at a reasonable consideration," it said.
The ICRA report also said there was a limited but growing threat of imports to the domestic players.
"Declining duty protection in terms of lower rates of customs duty have resulted in increased imports of many higher end consumer durables, such as side-by-side refrigerators, flat panel display TVs like plasma, LCD and projection TV, the manufacture of which is not viable, given the domestic demand," it said
Tuesday, May 22, 2007 Source: PTI via Economic Times
Food Sector
Temptation may buy HLL marine products biz Mumbai-based Temptation Foods (TFL), a frozen food marketer, is understood to be inking a deal with HLL to acquire its marine product business division for around Rs 100-120 crore. The deal would also include transfer of the people managing the marine business in HLL to TFL. HLL’s marine division exports products like crabsticks, shrimps and fish fillets among others. The company had earlier short-listed four bidders for the sale.
When contacted, an HLL spokesperson said, “As a policy, we do not comment on market speculation. We have no comments to offer.” While the deal has already been sealed, TFL is believed to be raising fresh funds either through a qualified institutional placement or by any other equity-related instrument.
While reports of HLL looking to sell its marine product business have been in the air for quite some time now. Apart from TFL, it is believed that a private equity player was also in the fray for acquiring the business that generated a turnover of nearly Rs 250 crore for the FMCG behemoth.
HLL got into several non-core businesses at a time when the Indian government encouraged private sector participation to push the sectors and forex earnings. One of the biggest seafood exporter, HLL earlier operated mainly as a merchant exporter in the seafood market and scaled up as an active value-add player after it took over the seafood processing plants of the Kochi-based Amalgam group.
However, with growing competition, the business was seen as non-core and the FMCG company sold its seafood processing plant in Andhra Pradesh and shut down its operations in Gujarat. Marine exports from India stand at $2.5 billion and the government expects to double it in the coming years. The organised processed foods segment currently amounts to around $3.5 billion and it has been growing at the rate of over 10% per annum.
TFL is looking at aggressively pushing the products in the domestic market where the business margins are quite high. An email query sent to TFL remained unanswered. TFL currently offers frozen products like peas, drumsticks, chillies, capsicum and beans among other vegetables. The firm also deals in frozen fruits like apple, guava, pineapple, mango and strawberry. On BSE, the stock of TFL gained 3% on Wednesday to end the day at Rs 115. The stock has gained more than 12% in the last one week.
Last month, HLL sold its retail operations Sangam Direct to Wadhawan Food Retail, a part of Delhi-based housing finance company, Dewan Housing Finance Ltd (DHFL). The stock of HLL gained a little over 2% to close at Rs 198.45.
TFL had recently bought a 26% stake in Karen’s Gourmet Kitchen for an undisclosed sum. It had also recently announced its entry into the private label business through the launch of its own brand, Delica. The company has a production capacity of 10,000 tonnes per annum and has posted a topline and bottomline of Rs 38.90 crore and Rs 5.82 crore respectively for the fiscal ended March 2007.
Thursday, May 24, 2007 Source: Economic Times
St vendors moving to brandsville After ice-cream vendors, it is your local street-food and fruits & veggy vendor who is headed towards brandsville. The government and corporates are giving a branded push to the vendor as competition from their organised counterparts heats up. The food processing ministry is working with CII on improving quality of street food.
“We want to ensure India is known for its street food as other countries like Hong Kong,” said food processing secretary PI Suvrathan. After assessing street food vendors on parameters like knowledge about hygiene and food safety and economic status, they would be provided subsidised branded carts and trained in making and serving food hygienically.
Trained vendors would also be provided a health insurance cover. The first phase would cover about 4,300 vendors in nine cities including Delhi, Mumbai, Kolkata and Agra. The plan aims to cover 50,000 street food vendors in 50 cities in the next five years.
Tobacco-to-apparel conglomerate ITC would offer its Choupal Fresh-branded pushcarts to fruit and vegetable vendors to sell fresh produce sourced from its choupal network. In discussions with vendors and vendor associations, the company plans to begin its project in the next two to three months.
“The initiative is aimed at working with vendors who are trying to ward-off competition from organised retail,” says ITC agri-business chief executive S Sivakumar. It would help the company boost sales at its wholesale division. Vendors would be trained in customer service and the carts would come with electronic weighing systems. ITC is in talks with micro-finance institutions to help vendors buy carts.
Spencer’s Retail president Jitu Mehta says “Branding commodities is a different ball-game and more challenging than branding processed products like ice-creams. Even in case of commodities, branding should help differentiate the offering or it becomes mere labelling. While countering organised retailers, the branding would give the vendors the proof of quality.”
Acme Cold Chain Solutions, part of the Acme group, better known for its telecom infrastructure arm, Acme Telepower, would launch a pilot project in Delhi-NCR in June where it will provide refrigerated trolleys, branded All Fresh, to vegetable vendors. After paying Rs 3,000-3,500 as a security deposit to use the trolley, the vendor would buy the fruit and vegetable from Acme and sell it at a price recommended by the company.
Tuesday, May 22, 2007 Source: Economic Times
Liquor Sector
Spirit-smitten US cries on WTO's shoulder The United States filed a complaint Friday at the World Trade Organization against India, saying its duties on alcoholic beverages and other imports violate global trade rules.
The US action followed a similar complaint lodged by the European Union earlier this year at the Geneva-based WTO.
"India is an important export market for US products and the United States and India have successfully worked on a number of important trade issues. However, we believe the layers of customs duties India applies to US products, in particular to wine and distilled spirits, are not in line with its WTO commitments," said US Trade Representative Susan Schwab in a statement
"We are disappointed that WTO consultations failed to resolve our concern with the duties and that we must resort to a WTO panel. The United States will continue to work toward a resolution of this issue with India but we must ensure a level playing field for US products around the world."
US officials said that India, on top of its basic customs tariffs, imposes an additional duty of 20 to 75 percent on the value of imports of beer and wine and from 25 to 150 per cent on imports of distilled spirits. Moreover, India applies an "extra additional duty" on these imports that puts the total duties in a range of 150 to 550 per cent.
US officials said that in the WTO, India committed that its tariffs on beer, wine and spirits would not exceed 150 per cent. The additional duty and extra additional duty also apply to other US exports to India such as dairy products and, in some cases, also result in customs duties that exceed India's WTO-pledged rates.
In April, the WTO agreed to take up the European Union's complaint on Indian import duties on wines and spirits. The United States, Chile, Australia and Japan will participate in that dispute as third parties.
The European Union argued that combined duties and taxes range from 252 to 550 percent on spirits imported into one of the world's fastest-growing markets, and from 177 to 264 percent on wine imported into India.
Indian Commerce Minister Kamal Nath in March acknowledged that tariffs were high but said that his country remained committed to resolving the issue through negotiations.
The Press Trust of India has reported that the Indian government expects to pass legislation cutting the high drinks duties.
Both the US and Europe see India as a key growth market for the sector because of its surging economy. US officials say that in cases where wine and distilled spirits may enter India under special duty-free rules, such as for airport duty-free shops and for luxury hotels, US exports to India have grown by 350 percent and 200 percent, respectively, between 2000 and 2005.
But overall exports to India are low, and US officials say the tariffs are the main cause.
The United States is the world's sixth-largest exporter of wine and third-largest exporter of spirits, selling more than 600 million dollars annually around the world.
The EU began probing India duties on European wine and spirits in September 2005 after receiving complaints from EU producers, for whom India represents a potentially huge market.
In 2004, the then 25-nation EU's spirits exports to India amounted to only 23.3 million euros (30.9 million dollars) while wine exports the same year were worth around four million euros, according to the EU's Eurostat data agency. Those figures are a drop in the bucket compared with the five billion euros in spirits the EU exports annually to other countries and annual wine exports worth 4.5 billion euros.
Saturday, May 26,2007 Source: Economic Times
Malts waltz through B'lore's liquor guzzling crowd After-hours at the country’s quintessential beer capital is not just about guzzling the world’s most popular alcoholic beverage. Of late, Bangalore’s liquor-downing crowd has developed a taste to what many refer to as the highest benchmark in scotch whiskey appreciation —single malts.
Bangalore is a major market for 10, 15 and 18-year-old single malt scotch whiskeys on par with Mumbai and Delhi, thanks to the city’s cosmopolitan culture, says industry analysts. The market is growing very fast, though it has a very small base for single malts in Bangalore, as is the case elsewhere, and are available at select outlets.
Single malt whiskyes, considered as ‘image products’, have emerged to be the talk of the town. For instance, Glenmorangie, UK’s top brand and among the leading five in the world, launched in India about year ago, has made inroads into Bangalore market.
“Glenmorangie has made significant progress in Bangalore in the last six months. The whiskey’s USP is that it is available in 7 variants distributed in 10, 15, and 18-year-old varieties, apart from offering whiskey finished in Sherry, Port wine and Burgundy casks,” says Ashwin Deo, MD, Moet Hennessy.
Also, in a marked shift, the target audience for whiskeys today are young people because drinking a single malt is more of a style statement. “Most of us want to try something aspirational. A few year’s ago it was any blended scotch whiskey.
Today, it has to be a single malt,” says Ashish Misra, VP-marketing, Mason & Summers Alcobev, Bangalore, whose brand Glen Drummond, is another strong contender in the single malt segment. Countrywide, the market for single malts is very small— under 20,000 cases annually—with the overall whiskey market estimated at around 69 million cases.
But, everyone is talking about malts and the segment, according to industry analysts, is growing over 100% year-on-year. And, the industry hopes this talk will convert to volumes over the next two years as it has happened in the case of wines. Also, the dilution of the price barrier to entry will also provide opportunities for more broad based trial of single malt brands in India.
Thursday, May 24, 2007 Source: Economic Times
Toast to liquor majors; that's the spirit Indians are on a high, literally. The country will witness unprecedented alcohol consumption surpassing juices, colas, energy drinks and other ready-to-drink beverages by a mile. Growing affluence and declining growth of carbonated beverages will boost liquor consumption by 2025.
Despite being highly regulated now, the alcohol market with limited distribution and communication is expected to zoom past non-alcoholic beverages, largely piggybacking on premium offerings.
Going by consulting firm McKinsey’s latest study on the Indian consumer market, the report suggests while total beverage consumption will grow at 9% over the next 20 years, non-alcoholic beverages will see a spurt of 8.8% against 9.6% growth in the alcoholic beverage market, which may experience a further significant boost’,15-20%, if it’s deregulated.
Well, for one, the liquor majors seem to be in high spirits. “With the opening up of BRIC economies, consumers will go for premium liquor. After 20 years with growing incomes and discretionary spending, there will be a distinct move up the value chain even at the entry level,” said Raju Wazirani, president, sales & marketing, Radico Khaitan.
Carbonated drinks, as a category, is bound to witness a marked drop in demand owing to the general move towards health drinks and controversies (pesticides, et al) surrounding the fizz. “The carbonated category, which accounts for more than 80% of the beverage market today, is on the wane, and colas are also facing de-growth across certain brands,” said Sameer Barde, senior representative, food and beverage, Ficci.
At the moment, the Rs 5,500-crore non-alcoholic beverages industry is heavily skewed in favour of carbonated drinks, accounting for a lion’s share of the pie. But cola majors are already feeling the heat. “Though we don’t operate in the same segment, the point of availability and taxes are limiting the growth of alcoholic beverages and if these are addressed, alcoholic beverages may witness an even higher growth rate than mentioned by Mckinsey,” says Abhiram Seth, executive director, PepsiCo India Holdings.
Juice category driver, Dabur, too echoes similar sentiments. “Health and wellness drinks will continue to witness high growth rates irrespective of the growth in the liquor segment. But the dismal performance of the carbonated segment pulls down the health beverage category as a whole,’’ points out Amit Burman, CEO, Dabur Foods.
Today, exponential growth in the premium liquor segment is pulling the entire category northward. “If you look at the dynamics of the market, which is heavily weighted at the bottom-end, there’s room for 10-12% growth in five years, and this momentum will continue with consumers choosing to go premium, and more and more new drinkers coming to the fold,” explains Santosh Kanekar, director-marketing, Diageo India.
Thursday, May 24, 2007 Source: Economic Times
Oil Sector
Software Sector
India ahead of China's offshore market
China's push to become an alternate off shoring hub for MNCs tackling soaring wages and high attrition rate in India remains a distant dream as its market is developing slower than expected, a study says.
Despite massive government support and huge visibility on the global arena, China's offshore market has not taken off as expected and still has a long way to become a potential alternative to India, technology research firm Forrester said in a report released today.
Multinational firms, considering China as a "quick-fix" solution to deal with rising costs and high attrition in other offshore locations like India, would be sorely disappointed by the country's slowing offshore momentum, the report said.
"When we first looked at China's offshore and IT services global delivery model (GDM) nearly two years ago, the country was widely viewed as the key challenger to India for offshore supremacy. However, the market has not taken off as expected," Forrester's Vice-President John McCarthy said. He said while Japanese firms were more aware about China's potential, those from the US and Europe have been slow to respond. "In fact, China's percentage of GDM resources for top services firm like Accenture has dropped, while India and the Philippines have seen far greater investment," he said.
McCarthy, who had predicted in 2002 that over three million BPO jobs in the US would go offshore, added that firms with large bases in India should consider other geographies when addressing the risk mitigation issue.
Even countries like the Philippines, Mexico and Brazil could prove to be better alternatives than China for diversifying offshore exposure in terms of skills, language and convenience, he added.
Forrester also said like India, China also faces similar problems of attrition, increasing wages and lack of experienced manages and technical leads. In addition, the appreciation of the yuan against the dollar was hurting margins of companies outsourcing their work to China, it said.
"The consensus among interviewees was that China still has not overcome clients' concern about limited English skills, attrition and weak intellectual property protection.
One executive went so far as to say that China had to be 20 per cent cheaper than India to be viable," the study said.
Noting that China's percentage of overall offshore resources has dropped and other countries were growing at a faster pace, Forrester said the country needs to refocus its offshore efforts.
Instead of trying to compete in areas like application development and management, where India dominates, China should encourage local firms to focus on other areas like testing, data management and product development services.
For other countries vying for the lucrative offshoring pie, Forrester suggested economic development agencies in Thailand, Malaysia, Egypt and Morocco that they need to do more than just re-labelling the pool of engineering graduates as being ready to export their services.
"Their education programmes ought to focus on advanced skills like project management and advanced architecture skills, while at the same time, respective governments should invest significant funds to market the country as an alternative to the offshore incumbent - India," McCarthy said.
Friday, May 25, 2007 Source: The Financial Express
