14-point agenda to reverse slowdown
Pant warns against slippage
Tatas tighten grip over Tetley
Dr Reddy’s Q1 revenues up 25%
GE Ship plans to raise Rs 95 crore
Rs 85-cr Shree Cement bonds for power plant
Caltiger services in US
DCM Shriram move to save energy cost

 
 
14-POINT AGENDA TO REVERSE SLOWDOWN 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, Sept. 1: 
Prime Minister Atal Bihari Vajpayee today unveiled a 14-point reform agenda to reverse the economic slowdown and asked states and to take tough measures, even if they are unpopular, to achieve an 8 per cent growth in the Tenth Plan.

Admitting that growth has slowed, Vajpayee said agricultural production, industrial production and exports have come down besides poor credit offtake, with investments drying up.

Addressing the National Development Council meeting here today, Vajpayee said there was “no quick solution” to the economic problems presently faced by the country.

“We must have the courage and the will to accept this challenge; we cannot afford to be complacent. Nor can we afford to make promises that we know we cannot fulfil without taking correct decisions, be they for the moment unpopular,” said Vajpayee.

“The people expect us to act — expect me to act and they expect you (chief ministers) to act. They expect us to take such necessary decisions that will infuse confidence and impart a new momentum to the economy,” he added.

The Prime Minister asked the states to improve their finances, bring about reforms in the power, labour and financial sectors and engineer a recovery in the agricultural, industrial and services sectors. Unproductive and unnecessary expenditure will have to be drastically pruned, he said.

However, all the economic reforms to be undertaken during the Tenth Plan need to have a “strong pro-poor focus and make elimination of poverty the central objective of development,” Vajpayee said.

Highlighting the importance of “good governance,” Vajpayee told the NDC that there must be a reorientation of executive accountability towards results by laying stress on the implementation and making the Tenth Plan a “people’s Plan”.

Expressing his concern over the fall in revenue generation by both the Centre and state governments, Vajpayee suggested a series of measures to be taken on a priority basis.

He also emphasised the need to reduce untargeted non-merit subsidies.

Vajpayee stressed that the downsizing of the government has to be undertaken at the earliest.

He also asked the state governments to hasten labour reforms to attract new investments in various sectors.

The Prime Minister urged the state governments to lay special emphasis on implementing pro-poor projects.

The government will launch the Saampoorna Rozgar Yojana within this month to provide assured employment to the rural poor for building durable assets, Vajpayee said. He also sought the co-operation of state governments to implement this scheme.

Commenting on the power sector, Vajpayee said he was prepared to convene an all-party meeting to build the necessary political consensus so that the reforms are not derailed in states due to “compulsions of competitive politics.”

Expressing concern over the health of the banking and financial system, Vajpayee said, “It is a matter of worry. Many economies have got into serious trouble because of the bad debts that led to the failure of their banks and financial institutions. We have enough warning signals and much sobering experience to go by.”

   

 
 
PANT WARNS AGAINST SLIPPAGE 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, Sept 1: 
The Planning Commission today warned the state governments that any slippage in resource mobilisation to achieve the proposed eight per cent growth target during the Tenth Plan will have serious consequences for the economy.

Addressing the 49th National Development Council meeting here today, deputy chairman of the Planning Commission K.C.Pant sought the states’ help to contain the Rs 90,000-crore revenue deficit and cautioned that the consequences of inaction are too serious to contemplate.

“Not only will growth falter and unemployment rise, but it could also threaten the cohesiveness of our social fabric,” Pant said. He pointed out that “we are now borrowing more and more just to meet our current expenditure on salaries, interests and subsidies. We see that there has been a 200-fold increase in the pension bill of just 15 major states.

It has gone up from around Rs 100 crore to nearly Rs 19,000 crore in the last 25 years.”

He emphasised the importance of disinvestment to fund the Tenth Plan.

   

 
 
TATAS TIGHTEN GRIP OVER TETLEY 
 
 
BY SUTANUKA GHOSAL
 
Calcutta, Sept. 1: 
The Tata Group has invested £ 30 million in Tata Tea (GB) Ltd (TTGBL), the special purpose vehicle created for acquiring a controlling stake in the Tetley Group.

Out of this £ 30 million, Tata Tea has brought in £ 10 million, by subscribing to a 7 per cent subordinated fully convertible bonds issued by TTGBL.

At present Tata Tea holds an 85.7 per cent stake in TTGBL and the rest 14.3 per cent is held by Tata Tea Inc.

This infusion of funds enables the company to replace some of the short-term high-cost debt taken at the time of acquisition. As a consequence of this infusion, the company has obtained a full waiver of interest on a £ 20 million vendor loan note, which amounts to £ 3.33 million. This was included in the interest charges of £ 26.12 million for the year 2000-01. “Fresh investments in TTGBL shows our continued confidence in the acquisition of Tetley after reviewing the performance during the first year,” a senior official of Tata Tea said.

Apart from investing in TTGBL, the company has invested another Rs 3.10 crore for acquiring 21,74575 shares of Unit 64.

Tata Tea’s total production during last the financial year at 58.89 million kgs was marginally lower than the previous year’s figure of 61.92 million kg. The company’s south Indian tea production went down by 8 per cent. The overall volumes of the packet tea division improved marginally compared with the preceding year and the performance was better than the packet tea industry. Aggressive merchandising and brand building efforts prevented erosion of volumes during the last financial year.

The gross turnover of the instant tea division of the company declined by 6 per cent during the year since the relatively mild summer in USA affected offtakes of instant tea by Tata Tea Inc. The company has also decided to produce customer-specific benchmark quality tea both at its south Indian and north Indian tea estates.

Meanhwile, Tata Tea has decided to shut down a division which had so far been acting as agent for Lloyds of UK and other foreign insurance companies, carrying out surveys and loss assessment on their behalf.

The company had inherited the division when it acquired the business of James Finlay & Co.

   

 
 
DR REDDY’S Q1 REVENUES UP 25% 
 
 
FROM OUR SPECIAL CORRESPONDENT
 
Hyderabad, Sept. 1: 
Dr. Reddy’s Laboratories has posted a 25 per cent increase in revenues in the first quarter of the 2001-02 fiscal.

Announcing its financial results for the first quarter today, it said net revenues were up by 25 per cent at Rs 299.5 crore compared with Rs 240.6 crore in the previous corresponding period, as per the US GAAP.

According to a company release, sales outside India stood at Rs 161 crore, registering a growth rate of 54 per cent with sales of generic drugs at Rs 31.9 crore, a 54 per cent growth.

For the 2001 fiscal, Dr Reddy’s net revenue stood at Rs 1097.5 crore, up 37.6 per cent, and sales outside India were at Rs 538.3 crore, contributing 49 per cent of the total.

Novartis dividend

Novartis India Ltd’s board today recommended a 150 per cent dividend, amounting to Rs 7.50 per share, and announced the merged results for fiscal 2000-01, after the Bombay high court approved the amalgamation of Ciba CKD Biochem Ltd (CCBL) with the company, adds PTI.

Net profit stood at Rs 42 crore after providing for depreciation of Rs 10 crore and tax of Rs 19 crore, Novartis India said in a release here.

Sales during this period were Rs 438 crore reporting a decline of 1.8 per cent over the previous comparable period, it said.

Profits have been impacted by the decline in sales, additional costs arising from higher customs levies, costs associated with setting up of the consumer health business, closure of Ciba Vision operations and the amalgamation of CCBL.

Results for the year under review exclude the agri-business comprising the crop protection and seeds businesses, which were demerged effective April 1, 2000, and now form part of Syngenta India Ltd, it added.

   

 
 
GE SHIP PLANS TO RAISE RS 95 CRORE 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, Sept. 1: 
The board of directors of Great Eastern Shipping is planning to raise Rs 95 crore through cumulative non-convertible preference shares.

The proposal will be discussed at a board meeting to be held on September 4.

The company, however, did not divulge to whom the preference shares will be issued.

It may be recalled that earlier this year, the Sheths had come out with a second buy-back offer where they placed a maximum price of Rs 42 per share.

The consideration for the whole process was put up to Rs 100 crore.

   

 
 
RS 85-CR SHREE CEMENT BONDS FOR POWER PLANT 
 
 
BY A STAFF REPORTER
 
Calcutta, Sept. 1: 
Shree Cement Ltd (SCL) is setting up a captive power plant at its production unit in Rajasthan. The investment in the project is estimated at around Rs 120 crore.

Out of this, Rs 85 crore will be raised by privately placing non-convertible debentures. The debentures will have a seven-year tenure.

Addressing a press conference here today, H.M. Bangur, joint managing director of the company, said the remaining cost will be met from internal accruals.

SCL has appointed CARE for credit rating, based on which the coupon rate will be fixed. However, the company is hopeful of raising the fund at a 12.5 per cent rate.

The Pune-based Thermax Ltd has been given the job to set up the power plant.

The power plant, when in place, will reduce the company’s energy cost by around 40 per cent with a net saving of about Rs 30 crore.

The cost of power from the captive power plant will be Rs 2.50 per unit against the Rajasthan State Electricity Board’s rate of Rs 4.30 per unit.

The captive unit is expected to be operational by December nxt year.

The company, which registered a turnover of Rs 556.41 crore in the last financial year, is also planning to raise the capacity of cement production from 2 million tonnes to 2.6 million tonnes.

Bangur said the company’s plan is to raise its market share in northern India from the existing 15 per cent. The setting up of the power plant couple with improved performance will increase the competitive edge and will also increase shareholders’ value, he said.

The company, which registered a net profit of Rs 26.11 crore last year, has declared a dividend of Re 1 per share after a gap of four years.

   

 
 
CALTIGER SERVICES IN US 
 
 
BY ALOKANANDA GHOSH
 
Calcutta, Sept. 1: 
Caltiger, the Calcutta-based internet service provider (ISP), is going global.

The ISP has initiated operations in the US and has applied to the US government for a licence to start internet services.

The ISP commenced its operations in Calcutta in 1999, (in fact, the Caltiger brand derives its name from the city) and is now present across 40 locations in the country.

At a time when the US is experiencing a slowdown, especially in information technology and related services, it is significant that Caltiger is planning to explore the market to generate revenue.

Explaining the idea behind starting the US operations, Joe Silva, chairman and chief executive officer of Patriot Automation Projects Limited (PAPL) said: “Almost 75 per cent of the internet traffic is generated in the US. We are already present in 40 locations across India, and it makes business sense to expand and establish a presence in the US.” The Caltiger brand is owned by PAPL.

However, in the US, it will not only function as an ISP, but will also provide other value-added services. “The main idea is to provide value-added services to subscribers both in the US and India to facilitate easy access and communication at cheaper rates,” says Joe Silva.

Caltiger has lined up 20 different value-added services, providing an attractive proposition for the user. Of these, two new services will be introduced every month.

Two services — Calfax and Calvox — have already been launched. Calfax allows the user to send messages, national and international, at local rates. Calvox is a messaging service, which provides the user a single point communication access through any communication device like the telephone, cellphone, fax machine, or PC.

Caltiger, which was the first ISP in the country to offer free internet services, will continue to provide free services in five metros, but the remaining 35 locations will have to pay to access Caltiger. The ISP is also starting CaltigerGold — the paid service — in the five metros.

“When we started, we tried to experiment with new ideas and concepts. Now, we are looking forward to consolidate our position,” Joe Silva said. “The decision has been taken in because the idea of the internet as an advertising medium is yet to catch up. We are unable to generate enough revenue in the smaller towns to keep our services running.”

   

 
 
DCM SHRIRAM MOVE TO SAVE ENERGY COST 
 
 
FROM SHASHWATI GHOSH
 
New Delhi, Sept. 1: 
Ajay Shriram-run DCM Shriram Consolidated Limited has formed a new company DSCL Energy Services (DSCL ESCO) to provide energy cost cutting knowhow.

“The technology has been developed with the in-house knowledge that we have gathered while trying to utilise the limited power we generate for our sugar and cement factories. It helps bring down the energy consumption by almost 30-50 per cent,” Vikram Shriram, joint managing director of DSCL said.

DSCL produces 110 mw of captive power at its plants in Kota, Beruch and Lakhimpur. Shriram said, “Due to our vast portfolio of businesses, we can understand the need of the other business houses too. As the energy configuration of each client differs, the services have to be tailor-made for each customer. The time required can vary from three months to one year depending on the project.”

DSCL ESCO is empanelled with organisations like World Bank, Asian Development Bank, DFID of the UK , ministry of petroleum’s Petroleum Conservation Research Association, Power Finance Corporation Ltd and Tamil Nadu Electricity Board.

The technology portfolio of DSCL ESCO comprises data format, measurement and testing, calculation routine, benchmarking, evaluation software and financial analysis.

”The charges for this service is dependent on the savings the client makes. We charge a portion of the savings that can either be a one-time settlement or spread over a few months. We provide after sales services also,” Shriram said.

The energy conservation efforts have already been tested for clients like Amrit Papers, Delton Cables Ltd, Dhampur Sugar Mills, Hindalco, India International Center, Magnum Power Generation Ltd, and New Delhi Municipal Corporation among others. They are currently providing the service to California-based Southern Engineering Exposure Incorporated.

   
 

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