Enron lines up data centres to knit broadband netw
Gautam’s coronation at Raymonds likely today
Air-India exitpackage ready
ICICI set to offload 20% in infotech arm
Import norms for raw materials relaxed
Panel seeks freeze on grain floor price
Tata Tea brews new Tetley range
Govt spins new designs for khadi
LML graduates to mobikes
Foreign Exchange, Bullion, Stock Indices

Mumbai, Sept 5: 
Enron India, the global energy giant with a major presence in the power sector, has lined up a high-stakes broadband foray as part of which it will set up a string of data centres and build an infotech network that links silicon hubs across the country.

To flag off its local initiative in the broadband sector, the US energy major plans to initially set up a data centre in the financial capital at an investment of Rs 100 crore. Once complete, the network will cover cities like Bangalore, Hyderabad and New Delhi, company sources told The Telegraph. The venture will under the control of Enron India, headed by Sanjay Bhatnagar.

Sources said setting up data centres will save local dotcom companies precious foreign exchange. “Earlier, their data used to be saved and, therefore, accessed from servers based abroad. Enron plans to grab a slice of business which now goes to US companies that provide these services. “It will save time and foreign exchange for local dotcom outfits,” they said.

Enron has already leased 70,000 square feet of prime commercial property at Lower Parel, once a bustling settlement of cheek-by-jowl textile mills, but now gradually turning into the hottest address for ambitious new-economy upstarts.

The annual lease rent to be paid by the company would be a staggering Rs 6.72 crore, the sources said.

The company has also leased close to 90,000 square feet of Wockhardt’s swank office space in the Bandra-Kurla office complex, in the north-western suburbs of the city.

The heavy investments in property — much of it to acquire space for a string of new businesses — has stirred the city’s real estate mart.

In its global scheme of operations, Enron has transformed itself from being a traditional ‘brick-and-mortar’ company to a fleet-footed player trying to carve a niche in the infotech sector.

In the US, the company has already set up a network called Enron Intelligent Network. This is a new-world network, which is built from the ground by using state-of-the-art optical technology to meet growing business requirements.

To implement its new plans, the company has formed strategic alliances globally with Cisco Systems, Ciena Corporation and Sun Microsystems all leaders in network technology.

By offering virtually unlimited bandwidth and built-in intelligence, the Enron Intelligent Network bridges the gap between very expensive dedicated (virtual private) networks and public network.

The network provides bandwidth for transporting data, most of it for the media, at a high-speed data.    

Sept 5: 
The son is set to rise at Raymond. Vijaypat Singhania, chairman of Raymond Ltd, is likely to hand over the reins of the family-owned company to son Gautam Singhania at a board meeting tomorrow.

Sources said the company’s board is likely to be reshuffled with the senior Singhania being designated chairman emeritus. Gautam Singhania, who is presently managing director, is believed to be taking charge as the chairman-cum-managing director.

Among other board level changes possible, V.K. Bhartia, the vice-president of the textiles division, is expected to take over as its president. Former Videocon chief, Nabi Gupta, is likely to take charge as the new president of the company.

The institutional nominees, which include representatives from financial institutions such as UTI and ICICI would continue as before on the board.    

Mumbai, Sept 5: 
Air-India has presented before the department of public enterprises a voluntary retirement scheme (VRS) to cut 1,000 jobs, including 500 in the officer cadre.

According to sources, the department will consider the proposal in all its dimensions because its decision on Air-India could form a precedent in the case of other state-owned companies which are loss-making and considered over-staffed.

The country’s national carrier says its VR scheme, to be financed from internal resources, has been cleared by the civil aviation ministry. A Cabinet approval is now required, but it is expected to be a mere formality.

Air-India managing director Mark Prem Mascarenhas said the scheme was cleared by the board, but the department of public enterprises must approve it before it is implemented.

Those who opt for the scheme will get two-and-half months salary in lieu of every completed year in service. Employees who are more than 40 years old or, have completed at least 10 years in service, would be eligible for the package.

The airline says the VRS will cost Rs 55 crore. Employees who sign up for the scheme will get a maximum of Rs 10 lakh, but they will be entitled to benefits like medical facilities after they complete the notional 20 years of service. “Ours is a very attractive scheme,” he said.

Cynics dismiss the VRS as an effort to attract suitors, but Mascarenhas said the airline has been on a flab-cutting drive since 1997-98.

According to Mascarenhas, the airline can reduce its employee strength by 6,500 if it is allowed to outsource non-core activities, such as road transport. If it can do so, it could bring the employee-aircraft ratio to 450 from 680 at present. The industry average is 350 employees per aircraft.

Dry lease

General Electric Capital & Allied Services (GECAS) and Singapore Airlines have been shortlisted by Air-India for dry leasing of A310 aircraft. “The board had approved a proposal to re-tender bids and the latest round has two firms running for the deal,” Mascarenhas said. The management decided to dry-lease aircraft as an interim measure to meet the shortage of planes.    

Mumbai, Sept 5: 
ICICI will offload around 20 per cent of its stake in ICICI Infotech Services in a dilution that will be split evenly between an initial public offering (IPO) and an ‘offer for sale’.

The money raised from the flotation will be used to retire debt raised for acquisitions in the past, and to fund future buyouts. ICICI will, however, continue to hold a majority stake in the software firm even after the stake sale.

In all, the parent will divest around 20 per cent of ICICI Infotech’s equity capital, an official said. A prospectus for the IPO will soon be filed with the Securities and Exchange Board of India (Sebi).

Set up in 1993, ICICI Infotech focuses on software development and web-enabling businesses, IT enabled services and IT infrastructure, communications and related services. Its net worth was Rs 48 crore on June 30, of which Rs 6 crore was in the form of share capital and Rs 42.1 crore in surplus and reserves.

The announcement came as no surprise to industry circles, which had expected the click-n-brick ICICI to blend its information technology initiatives with its old-economy businesses.

K V Kamath, CEO and managing director of ICICI, had indicated in the past that the institution was looking at the possibility of listing ICICI Infotech and ICICI Web Trade — its two new-economy ventures — this year if the market conditions were ripe.

At the same time, ICICI’s e-commerce strategy requires it to invest in dotcom start-ups, technology companies, and explore new opportunities.

However, the group’s positioning will combine the traditional and new-economy sectors. The former, it says, will consist of wholesale banking — corporate finance, project finance, commercial banking and investment banking — and retail banking — accounts, deposits & bonds, credit cards, mortgages and loans. Similarly, the new-economy plans involve forays into internet and technology-intensive businesses.

Earlier, ICICI Infotech had acquired Rohan Software, a software development firm specialising in banking and financial services. It also snapped up Ivory Consulting, a US-based software services provider with annual revenue of $ 10 million and Object Xperts, another American IT firm. The acquisitions were a part of its strategy to break into the major software markets of the world.

The company recently tied up with the Emirates Bank Group to set up Tricolour Infotech, a 50:50 joint venture based in Dubai .    

New Delhi, Sept 5: 

The government today relaxed import norms for raw materials components for cars, plastic and textile products needed for exports.

In a decision which may raise the heckles of steel majors like Steel Authority of India Ltd and Tata Iron and Steel Company, the government has permitted import of HR Steel plates/coils, forgings machined/rough or non alloy/alloy steel bars/rods/billets/blooms and ingots for making vehicle rear axles.

For every 1 kg of rear axle housing assemble exported the government will allow 1.83 kg of HR steel plates, 1.47 kg of forgings or 1.7 kg of non alloy or alloy steel bars/rods etc.

In the textiles category it has permitted import of polyester cotton or blended grey fabrics. For export of articles made of polyester like PET, PET raisin would be allowed to be imported. In case of export of plastic coloured items relevant coloured master batches would be allowed along with the relevant polyester. However, for plastic sharpeners, the government has allowed imports of the relevant polystyrene moulding powder/granules, blades and screws.

For the export of 3-Nitro-4-Hydroxy phenyl arsenic acid, the government will permit the import of para nitro chloro benzene, hydrochloric acid, soda ash, reduction grade iron powder, arsenic trioxide, sodium nitrate, copper sulphate, sulphuric acid, nitric acid, sodium hydroxide flakes and glaxial acetic acid.

In case of export of norandro stenedione or Nordion, the import items included are DHA Acetate, chloroform, cyclo hexane and methanol.

The directorate general of foreign trade (DGFT) has notified input output norms for 26 items. Of these 26 new norms, 20 norms relate to plastic products, two to textile products and one norm to miscellaneous products.    

New Delhi, Sept 5: 
The Expenditure Reforms Commission has sought a freeze on the minimum support price for foodgrain, paid out by the government to farmers. The MSP rate has been a subject of intense political lobbying over the years and has been raised regularly by huge margins by political parties supporting the farm lobby. The ERC has specifically recommended a freeze for the current year and moderating the increases over the next few years.

The commission, headed by former finance secretary K.P.Geethakrishnan, has also pegged the total foodgrain stocks which the Centre should keep as buffer at all times as 4 mt of wheat and 6 mt of rice, instead of the varying level which is the current norm. This is expected to reduce the total food stocks needed by the country as buffer and distribution stock by about 7 mt from a current figure of 24 mt.

The ERC, which was appointed by the central government to suggest ways of cutting down excess expenditure flab, has also suggested letting private firms and state governments entry into procurement, trading and export of foodgrain, on behalf of the Centre for its public distribution system.

This has been a function entrusted to the Food Corporation of India till date. FCI is frequently accused of rampant corruption and inefficiency with high levels of wastage.

The commission wants all excess stock over the 10 mt buffer to be liquidated at the earliest. The food and civil supplies ministry has consequently drawn up a series of proposals which will be taken up by the core group of secretaries which include moves to use the excess stock for food for work programmes.    

Calcutta, Sept 5: 
Tata Tea is brewing plans to develop new products under the Tetley brand name for the global market.

R.K. Krishna Kumar, vice-chairman of the company said that management teams from both Tata Tea and Tetley were working together and will shortly come up with new products.

The Tatas plan an aggressive foray into West Asia, Russia and the CIS countries with packet teas under the Tetley brand name. Tetley has a presence in Russia with its tea bags.

The Tatas have already started selling south Indian teas under the Tetley brand name. “We are lifting a substantial amount of our South Indian production and putting it under the Tetley brand name,” Krishna Kumar said.

Addressing shareholders at the 37th annual general meeting, Ratan Tata, chairman of the company said that the acquisition would help Tata Tea in penetrating the world market. Tetley is the second largest brand in the world.

The company acquired Tetley for £ 271 million via a leveraged buyout, through a special purpose vehicle, Tata Tea (GB) Limited. Tata said that the benefits of the Tetley acquisition will not be felt this year. “It will take another three to four years for the benefits of the acquisition to be felt,” he said.

He said that company’s total production in the previous fiscal was 58.4 million kg. “This will increase by another six per cent this year,” he further added.

The packet tea division achieved a spectacular growth of about 51 per cent last year and expects a significant rise in sales this year.

“Our Agni brand has already acquired a four per cent market share,” Krishna Kumar said.

Regarding the consolidation of accounts with Tata Tea, Tata said it would be done sometime in the near future.    

New Delhi, Sept 5: 
Back then it was the symbol of passive resistance, the rallying point against the Raj, epitomised by Gandhi at his wheel. Now, the battle against the Raj a thing of the past, the humdrum khadi has undergone a metamorphosis.

The Union government plans to sell khadi through the Net and is in the process of setting up an exclusive website for it.

The marketing strategy on the site will be fashioned by designers from the National Institute of Design (NID) and National Institute of Fashion Technology (NIFT), who will give the fabric a much needed image makeover.

Minister of state for small scale industries (SSI) Vasundhara Raje Scindia said the government planned a global ad campaign to project khadi as an international product. The government has also drawn up plans to set up khadi shops at all international airports in the country. Scindia said the need of the hour was to modernise khadi and village industries and the government was collaborating with the UNDP in a $ 12 million project for bee-keeping, handmade paper and village industry capacity building.

The national programme for rural industrialisation will see various central organisations and banks collaborating to set up clusters for rural firms. Each organisation will sponsor a cluster providing it with design development, capacity building, technological innovation and consortium marketing.

Some 30 per cent of the national equity fund would be invested in the tiny and khadi sectors, she said.    

Kanpur, Sept 5: 
Scooter maker LML Ltd today signalled its foray into the motorbike segment with the launch of two 100 cc models—Adreno and Energy.

LML managing director Deepak Singhania, said, “With the launch we have moved from a scooter manufacturer to a multi-product two wheeler company. We will launch two more 100 cc bikes by February next year to expand the range.”

The bikes will be available all over the country by early January 2001. The models have been designed in technical collaboration with Daelim Motor of South Korea. Adreno is priced at Rs 45,000 (approximately ex-show room Delhi) while Energy has been priced at Rs 44,000. LML claims that the bikes offer a mileage of 63 km per litre. The bikes are four stroke, with three valve engines. Adreno is fitted with a five speed gear box while Energy with a four speed gear box.

With this launch, LML has moved into the four-stroke from the two stroke segment. The company plans to grab 12-14 per cent market share over the next three years in the motorbike segment.

LML has set a sales target of 30,000 bikes in the financial year 2000-2001.

Singhania added, “We are examining the market to introduce a 125 cc, 150 cc and 175 cc bikes. We are also exploring possibilities for introducing a plastic body gearless scooter, four stroke motorbike of higher displacement as well as four stroke scooters. This would be finalised in the next six to 12 months.”

LML has set aside Rs 100 crore investment during the current fiscal. The company has already invested Rs 40 crore. To fund the investment, LML plans to raise Rs 30 crore from internal accruals, another Rs 25 crore through External Commercial Borrowings and the rest through loans.

The company recorded a negative sales of in the first quarter of this year. It sold 66,972 scooters and scooterete during April-July 2000 as against 96,623 units sold during the same period in 1999.

“We know that our sales have been bad in the first quarter and we do not expect the sales to increase dramatically in the next quarter,” he said.

Infotech hiveoff

LML is scouting for partners for its 100 per cent infotech subsidiary which will be hived off into a separate company. The company will be developing services-based software for the auto industry and other services industry.

Sanjeev Shariya, director LML in-charge of IT said, “We have connected all our dealers through a single network. Next we will network our suppliers. We are scouting for partners which are focused on service and manufacturing industry.”    


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