Cash-flush Hind Lever in brand rejig
Talent search to skip premier B-schools
Akzo to buy Century pie in Centak Chemicals
Jalan sees 6% growth, silent on rate cut
Kesoram takes raider in its stride
Legal shield to fight import tide
NHAI bonds to raise Rs 500cr
ITC is out, now Pepsi pads up for long innings
SWC beer to be cheaper in Andhra
Foreign Exchange, Bullion, Stock Indices

 
 
CASH-FLUSH HIND LEVER IN BRAND REJIG 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, Feb. 15: 
Hindustan Lever (HLL) today unveiled a better-than-expected 22.4 per cent increase in net profit at Rs 1,310 crore on a 4.5 per cent rise in net sales at Rs 10,604 crore last year.

The gains were fuelled by strong fourth-quarter gains, especially in December. Sales in the three months ended December went up 6 per cent at Rs 2,648 crore, pre-tax profit jumped 20.5 per cent at Rs 520 and after-tax was 24.5 per cent higher at Rs 430 crore. The last-quarter numbers helped improve full-year performance, otherwise hit by flagging rural sales.

Investors happy with the annual tally sent the Lever share soaring 5.16 per cent to its intra-day peak before it closed at Rs 218.90, up Rs 11.50 compared with its previous finish. The board recommended a final dividend of Rs 2 on a Re 1 share; the total dividend for the year was Rs 3.50, or 350 per cent of the face value.

Chairman M S Banga said the results were the culmination of a continued focus on product mix, cost optimisation initiatives and supply-chain management. He attributed the modest sales growth to stiffer competition in detergents and tea.

The company provided an indication of its future direction: Banga said there will be fewer brands on the shelf to avoid the confusion generated when there are too many of them. However, that will not stop it from launching new brands.

“First and foremost, we will be focusing all our resources and energy on a basket of 30 key brands. We have already finished taking a fresh look at our portfolio,” he said. The brands have been selected on the basis of their size, strength, competitive positioning and growth potential. Given that they account for 75 per cent of the turnover, Banga said his company will devote a disproportionate share of resources — marketing expenditure and human resources.

The second initiative will aim at making some of these brands ‘move across categories’. For instance, it could be a Fair and Lovely soap, a Lux range of cosmetics or even a Lifebuoy talcum powder.

The key will be to exploit their immense brand power and tap consumer confidence in other categories. They brands could also be enriched with more features and value addition.

Banga said Lever had set up 16 Lakme beauty salons, the initial response to which has been encouraging. “We will doing this with greater speed and more vigour this year. We have also installed tea/coffee vending machines in offices and factories, apart from opening ice-cream parlours.”

Money for these initiatives will come from cost savings. Greater use of infotech will help keep a lid on overhead costs, lead to higher levels of efficiency in operations and boost growth, Banga said.

New growth engines, which includes personal healthcare, have been identified as part of the now-familiar New Millennium Initiative. More important, the company would look at acquisitions if they would help realise growth imperatives.

   

 
 
TALENT SEARCH TO SKIP PREMIER B-SCHOOLS 
 
 
FROM SATISH JOHN
 
Mumbai, Feb. 15: 
It is known as the GE of India, being the most fertile ground for other companies to go CEO-hunting. While Hindustan Lever may be the favourite destination for head hunters, where does the recruiters’ paradise itself go looking for talent?

No, not to the perennial favourites — the Indian Institutes of Management (IIMs) and Indian Institutes of Technology (IITs) — which have globally-renowned management consultancies and foreign banks flocking. The FMCG major has glass slippers of a different size. It is looking for go-getting Cinderellas, even if their alma mater may not have much claim to fame.

Confirming this trend, M K Sharma, vice-chairman of HLL said, “We are an FMCG company with FMCG margins. We cannot afford to compete with global consultancies and foreign banks by matching their offers.”

In fact, the ratio of IIM and IIT recruits by HLL has steadily declined over the years, say HLL officials.

“The McKinseys of the world can offer mind-boggling salaries and we cannot compete with them. In fact, HLL has recently completed a major revision in the salary structure. If we match their offers, we will have to undertake an across the board change in our remuneration package, which is not necessary at this moment of time,” he said.

“However, we will not compromise on quality. We will always hire the best available talent,” Sharma added.

HLL has lined up interviews in the campuses of the Tata Institute of Social Sciences (TISS) and a few other management institutes based in the metropolis.

He said his company is also in the process of hiring a few graduates from Delhi’s St Stephens college, adding that the company has been lucky to bag some outstanding talent from such colleges.

Sharma cited the instance of Shunu Sen who was recruited by HLL from St Stephens and rose from the ranks to ultimately end up as director marketing. Sharma said every year the company inducts about 50 recruits from the campus for filling up vacancies and new requirements.

The company follows a recruitment policy which ensures that one-third of the vacancies are filled up through campus interviews, another one-third through in-house promotions and the remaining one-third through direct recruitments with a few years experience.

   

 
 
AKZO TO BUY CENTURY PIE IN CENTAK CHEMICALS 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, Feb. 15: 
The B K Birla group today decided to sell off the entire stake held by Century Textiles and Century Enka in Centak Chemicals Limited to Dutch major Akzo Nobel Chemicals International at a price of Rs 200 per share.

The price of the deal, which has been sealed for a total consideration of over Rs 34 crore, represents a premium of 72 per cent to Centak share’s closing price of Rs 116.15 on the BSE today.

Akzo’s holding in Centak will go up to 79 per cent from 40 per cent. The Birla group companies held 38.35 per cent each.

Though the sale will result in a change of management, sources close to the company said an open offer to the minority shareholders of Centak was unlikely. They argue that it is merely a transfer of stake between promoters of the same company and, therefore, does not attract the takeover norms framed by the Securities and Exchange Board of India (Sebi).

According to a communication sent to the stock exchanges today, Century Textiles and Industries, one of the promoters of Centak Chemicals, has entered into an agreement with Akzo Nobel Chemicals on February 14. Under the pact, Century Textile’s entire holding of 7,84,000 equity shares will be sold to Akzo Nobel at a price of Rs 200 each.

Century Enka also forged an understanding to offload its entire holding of 9,30,100 equity shares to Akzo, also at a price of Rs 200 per share.

The report sent the Centak Chemicals rising by 8 per cent to its upper-end circuit filter of Rs 116.15. The Century Textiles scrip opened at Rs 59.90, hit an intra-day high of Rs 64.70, but closed a shade lower at Rs 62.55; the Century Enka stock finished higher at Rs 58.90 after opening at Rs 55.50. With the foreign shareholding in Centak expected to increase as a result of the arrangement, analysts say the scrip will be evaluated afresh by operators and traded heavily.

Earlier, Akzo had offered Rs 180 for every share, but a deal could not be sealed because the Birlas thought it was not good enough.

   

 
 
JALAN SEES 6% GROWTH, SILENT ON RATE CUT 
 
 
FROM OUR SPECIAL CORRESPONDENT
 
New Delhi, Feb 15: 
Reserve Bank of Indian governor Bimal Jalan today said he expected the gross domestic product (GDP) growth to remain buoyant at 6 per cent this fiscal with possible acceleration to 7-8 per cent in the medium term, despite the Gujarat earthquake.

He also indicated that financial authorities were debating over the need for a single regulatory authority for the entire financial market.

“I think we are expecting 6 per cent or so GDP growth,” Jalan told newspersons here on the sidelines of a conference organised by the Actuaries Society of India.

He also ruled out any direct impact of possible cuts effected by the Union government in interest on small savings. Jalan, however, refused to speculate on reports of possible cuts in bank rates. “I don’t want to make any comment,” he said when asked whether the central bank would slash rates following rate cuts by the US Fed. The market has been agog with rumours over the last few days that RBI is going to cut the Bank Rate and the cash reserve ratio (CRR).

Speaking at the seminar, Jalan said the RBI was looking forward to the development of a debt market organised on lines similar to the equity market but funded by banks, insurance and pension funds and financial institutions.

He said market regulators for the three areas would be working in tandem as there was increasingly a conjunction of the market and channels for services provided by the three types of financial sector institutions.

With a sudden surge in mergers and acquisitions where banks were buying out insurance companies and pension funds were buying up financial institutions, he said a global debate had begun on whether a super-regulator for the entire financial market was needed.

“We have now started a mechanism whereby there is closer coordination between RBI, Sebi and IRDA. Over a period of time, we will see whether we need a single authority,” he said.

While Britain, Sweden and more recently Germany have opted for such a super regulator, Jalan said the United States still has separate regulators.

Speaking of the country’s economic performance, the RBI governor said the country had managed the external sector well and has become resilient with exports growing at over 20 per cent.

The RBI governor said the inflation rate, leaving apart the oil component, was “comfortable” at 4 per cent, while the overall inflation was just over 8 per cent.

IRDA chairman N. Rangachary, who was also present, said there was need to develop the actuarian profession. As India opens up and the companies which have been given permission to start insurance business begin their operations the opportunities in this field will increase manifold, he said.

Rangachary appealed to the actuarians who have left the shores of India for better prospects to come back and serve the country as tremendous opportunities are opening up.

   

 
 
KESORAM TAKES RAIDER IN ITS STRIDE 
 
 
BY A STAFF REPORTER
 
Calcutta, Feb. 15: 
Kesoram Industries today denied having received any communication from the Dubai-based NRI Shiv Kumar on his reported purchase of over 12 per cent stake in the company through market operations.

A senior Kesoram official said the company had taken up the issue with the concerned stock exchanges to ascertain whether they have received any communication in this regard.

“Even the stock exchanges have not received any information about the purchase of such a huge number of shares from the market, which is a punishable offence under the guidelines issued by the Securities and Exchange Board of India (Sebi),” the official said.

The official further pointed out that the company has not taken any step so far against such a raid as “we are not very sure about the authenticity of the matter. Moreover, the Birlas don’t really care since they have a comfortable stake as well as the faith of the financial institutions.”

Sources, however, added that B. K. Birla might seek Sebi’s intervention on the issue. “He will go to the company law board if the situation so demands,” they added.

   

 
 
LEGAL SHIELD TO FIGHT IMPORT TIDE 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, Feb. 15: 
Union commerce Murasoli Maran today said the government would introduce a legislation in the coming budget session of Parliament to protect the industry and agriculture from possible surge in imports after the scrapping of quantitative restrictions (QRS) from April 1.

The minister told a parliamentary consultative committee meeting that he would also hold a meeting of state chief secretaries and other officials concerned soon in order to evolve strategies for the post- quantitative restrictions era.

“A suitable legislation will be brought in the ensuing session of Parliament to safeguard the interests of indigenous sectors, including industry and agriculture, to provide appropriate measures to meet the problems arising out of import surge,” he told the members of the parliamentary committee.

On his meeting with state chief secretaries, Maran said “this interactive process, I firmly believe, will enrich our decision-making process and enable adoption of an effective collective approach to meet the challenges.”

He also said a a nodal officer would be designated in the commerce ministry to facilitate continuous interaction between the states and the Centre on WTO and export-related matters.

The members of Parliament who attended the meeting included included Biplab Dasgupta, Mahesh Chandra Sharma, P.C. Thomas, A.D.K. Jayaseelan, Bali Ram Kashyap, Swadesh Chakraborty, B. Venkateswaralu, Shivaji Kamble, Kirti Azad, and Begum Noor Bano. It was also attended by commerce secretary Prabir Sengupta and other senior government officials. A.K. Kundra, chairman of the Tariff Commission was also present.

Members across party lines expressed concern over the plight of farmers.

   

 
 
NHAI BONDS TO RAISE RS 500CR 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, Feb. 15: 
National Highway Authority of India (NHAI) will tap the market for the second time to raise minimum of Rs 500 crore through a bond issue. This will fund various National highway development projects.

The bonds issue will open tomorrow. These will be issued through private placement on tap basis. Deepak Das Gupta, chairman of NHAI said, “The coupon has been fixed at 9.25 per cent, payable annually with a call and put option after three years.”

   

 
 
ITC IS OUT, NOW PEPSI PADS UP FOR LONG INNINGS 
 
 
FROM RAJA GHOSHAL
 
New Delhi, Feb. 15: 
Tobacco’s loss may turn out to be cola’s gain.

With tobacco having being stumped by a yorker, Pepsi is eyeing the mind space vacated by ITC on the cricket fields.

The cola major is keen to increase its association with the gentleman’s game, which, despite having lost quite some of its pristine charm to match-fixing, has lost none of its popular appeal and therefore remains as lucrative as ever to advertisers.

Though the company maintains “it is still early” to say if it will go all the way to be the official sponsor of the game, Pepsi is known to keep its cricket cards close to its heart.

The company is launching its ‘toss card’ campaign to coincide with the Pepsi series test matches beginning February 27 and the Pepsi Cup one-day matches that will follow.. These ‘toss cards’ are scratch cards promising hundreds of gold coins engraved with mug shots of Saurav Ganguly. Prizes also include hundreds of silver coins and 10,000 team shirts.

Besides, consumers can collect cards with photographs of Indian and Australian cricketers and game trivia, on buying regular bottles of Pepsi.

“Pepsi’s events are aimed to reach out to its target audience, which is the youth,” a Pepsi spokesperson said, adding, “Pepsi plans to organise a lot of big-time music events in the days to come.”

In fact, music happens to be the key to Pepsi’s bonding with the youth.

Said Vibha Rishi, executive director (marketing) Pepsi Foods Ltd, “Music is an integral part of Pepsi’s channel of communication with the youth. It has lined up a number of mega music events.”

Top on its chart of events is the concert of rap star MC Hammer, who is scheduled to perform on February 21 in Bangalore. However, his date with Mumbai on 23rd is likely to be a ticketless event, said the spokesperson.

MTV will telecast the “MC Hammer — King of Rap, India” concert tour at a later date.

Last year Pepsi organised the Pepsi W2K Millennium Concert, which featured shows of Vengaboys and Born Again.

Later in the year it conducted a five-city tour of Lou Bega (of Mambo No5 fame).

   

 
 
SWC BEER TO BE CHEAPER IN ANDHRA 
 
 
FROM G.S. RADHAKRISHNA
 
Hyderabad, Feb. 15: 
Beer giant Shaw Wallace Co plans to market its products in pet bottles in Andhra Pradesh.

The move is expected to make its brands cheaper in the state.

Shaw Wallace, which has a 41 per cent share of the state’s beer market, with a loyal following for its strong beer brands, Haywards-2000 and Haywards-5000, recorded a 27 per cent growth in the sector during 1999-2000 as against the drop shown by other brands.

C. P. Nagpal, CEO, Charminar Breweries, a premier brewery of the Shaw Wallace group, told newsmen today that the group had expansion plans for four more green field projects in the country with an investment of Rs 100 crore, in Kerala, Madhya Pradesh, Goa, Karnataka.

“We already have a license for a 15-lakh case plant in Kerala,” he added. Nagpal said Andhra Pradesh has slapped the highest cess on beer. “The excise duty and sales tax on beer amount to almost double the cost of the product in the state,” he said.

   

 
 
FOREIGN EXCHANGE, BULLION, STOCK INDICES 
 
 
 
 

Foreign Exchange

US $1	Rs. 46.57	HK $1	Rs.  5.90*
UK £1	Rs. 67.72	SW Fr 1	Rs. 27.55*
Euro	Rs. 42.50	Sing $1	Rs. 26.40*
Yen 100	Rs. 40.09	Aus $1	Rs. 24.25*
*SBI TC buying rates; others are forex market closing rates

Bullion

Calcutta				Bombay

Gold Std (10gm)	Rs. 4425	Gold Std (10 gm)4330
Gold 22 carat	Rs. 4180	Gold 22 carat	4005
Silver bar (Kg)	Rs. 7525	Silver (Kg)	7570
Silver portion	Rs. 7625	Silver portion	7575

Stock Indices

Sensex		4437.99		+74.88
BSE-100		2290.24		+38.01
S&P CNX Nifty	1416.70		+23.35
Calcutta	 136.12		+ 2.24
Skindia GDR	 752.04		-12.83
   
 

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