Lever to crank up personal products
WiLL tender put off, private firms earn reprieve
Govt allows 10 lakh tonne sugar exports
Rupee at record low of 44.74
World Bank loan for telecom
E-business set to drive TCS growth machine
First flush signals record tea output
Foreign Exchange, Bullion, Stock Indices

Mumbai, June 6 
The Rs 10,918 crore Hindustan Lever Limited has set itself a challenging goal: to turn its personal products business into a whopping $ 1 billion dollar (Rs 4,400 crore) business by the year 2001.

The personal products business � one of the top three personal products businesses in the Unilever world � has been growing ahead of the market in the past and has consolidated its position as the No. 1 personal care business in India.

Hindustan Lever has a short, pithy slogan for its personal products business: its called BIM � �to make a Billion in the new Millennium (BIM)� by 2001 which it intends to achieve by going for top-line growth.

The personal products segment is one of the fastest growing segments in the fast moving consumer goods (FMCG) market in the country.

Moreover, personal products is Hindustan Lever�s most value creating business, which scored 15 per cent growth in terms of turnover and its stable of products notched some notable victories against competition.

According to analysts tracking the company, the personal products business contributed roughly Rs 1800 crore to HLL�s top line in 1999.

While admitting that personal products is the fastest growing businesses in the FMCG segment, they are however guarded when asked to comment on the possibility of HLL achieving its goal.

Most acknowledge that the targets are challenging, while some reckon that HLL might just pull it off. It is challenging because of concern regarding slowdown in UVG (Underlying Volume Growth) to 12.9 per cent in 1999 from 33.3 per cent in 1996.

However, sources reveal that out of 180 million households, not more than 25 million had been tapped, many with only one Hind Lever personal product.

The growth in personal products will be fuelled by focus on key brands and accelerated rural and small-town penetration.

The new initiatives will come from focusing on new segments such as youth and the top-end, as well as venturing into new businesses.

Driving the growth in personal products business for HLL will be its speciality businesses in the category.

Lakme is expected to grow to its full potential profitably in the current year while Aviance � its direct selling brand � will see housewives partnering HLL in providing services and innovative products to every urban consumer.

The growth drivers in the personal products business for HLL will come from beauty services through franchised Lakme beauty salons. The branded parlour chain plans to expand its operations through the franchise system.

HLL has also rolled out prestige brands like Calvin Klein and Elizabeth Arden.

The company had earlier projected imports of Unilever products worth Rs 300-400 crore into the high-end cosmetics and personal care segment.

By introducing top-of-the-line products, Hindustan Lever plans to straddle the entire consumer products segment.

Calvin Klein brand includes fragrances priced at Rs 1,600 to Rs 2,300 and are targeted at the top-end customer.

The personal products blueprint for growth will be aided by cost savings such as focusing on managing the supply chain and creating world class manufacturing processes at Indian costs.

Thus, the PP business along with popular foods business will play an important role in making Hindustan Lever a Rs 20,000 crore company by 2004.

By then, HLL will truly be a $ 5 billion company and will be shooting for a place in the Fortune 500.    

New Delhi, June 7 
The Department of Telecommunications (DoT) has deferred its decision to finalise the award of six lakh lines wireless in local loop (WiLL) equipment tender amid allegations that private telecom operators had engineered the move to get more time to expand their networks before competition hots up.

Communications minister Ram Vilas Paswan today said, �We have decided to take up the WiLL tender in October which will be finalised by November. This was to be taken up in July. However, we are unable to process it and it would be delayed.�

The six lakh WiLL line tender of 175 systems of 3000 lines each was scheduled to be opened up on July 26.

Industry sources said, �This is a move designed to give private telecom operators more time to expand their networks particularly in the rural areas which will assure safe returns, leaving DTS to manage the less lucrative areas.�

The delay in award of tender is a setback to the installation of village public telephones, an area that has by and large been ignored by the private operators in violation of the terms of their licences.

Paswan today said all villages would be provided with telephones by 2002 and that all villages in southern states would be covered by 2001. He said all secondary switching areas (SSAs), which constitute the basic field level executive unit of the DTS, will be linked to internet nodes by August 15.

He said all block headquarters will have the internet facility. About 1.10 lakh faulty VPTs working on multi access radio relay (MARR) system will be replaced in a phased manner by 2002.

Paswan said about 63,000 route kilometres of optical fibre systems has been spread out against the target of 60,000 route kms and about 19,000 route kms of microwave systems against the target of 15,000 rkms.

He said the government would soon take decision on allowing private operators to offer national long distance telephone services.

�The recommendation made by TRAI on opening up national long distance telephony have been received and will be taken up at the meeting of the Telecom Commission to be held early next week,� said DoT secretary Shyamal Ghosh.

Ghosh also said the issue of disinvestment in MTNL and VSNL will be taken up at the next meeting of the cabinet committee on disinvestment to be held on June 23.    

New Delhi, June 7 
In order to liquidate the huge sugar stocks, the government today decided to allow private sugar mills to export up to 10 lakh tonnes of sugar and levy exemption on the exported quantity.

Announcing this decision, minister for consumer affairs and public distribution Shanta Kumar said that the decision of exemption from levy obligation was expected to make sugar manufactured in India competitive in the global market.

The country has more than adquate sugar in its warehouses, he said. �Our stocks, as of today, is estimated at 242 lakh tonnes as against the consumption requirement of 151 lakh tonnes.

With sugar mills exempted from the mandatory levy obligation of 30 per cent on the quantity exported �there are chances of Indian sugar finding buyers in countries where production shortfalls have been reported,� he said.

International prices of different grades of sugar ruled between $ 190.50 to $ 216.50 a tonne, while the sugar Ready-m variety is sold in the domestic market at Rs 15,025-15,065 (about $ 337) a tonne.

The government is also open to the idea of reviewing the 10 lakh export ceiling. He said this ceiling could be revised at a later stage after taking into account the demand and supply situation prevalent in the market.

This year the surplus has led the government to permit exports. Last year, however, the country did not have sufficient sugar stocks and the government had resorted to imports of sugar from Pakistan, even at the height of the Kargil war.    

Mumbai, June 7 
A battered rupee, teetering on the edges for days, today plumbed a new low of 44.73/74 against the dollar amid concerns that it could trip below the 45-mark soon if the Reserve Bank of India (RBI) and State Bank do not rescue it.

At its lowest close ever, the currency was only a whisker away from its all-time intra-day low of 44.75/77, a trough it hit on May 25.

Analysts say the rupee is drifting in uncharted waters, and its future course will almost entirely be decided by the central bank and SBI. �How the rupee will behave will depend totally on the RBI and SBI. All the same, the underlying feeling is bearish,� a senior dealer with a foreign bank said.

The currency opened steady at around 44.6650/67, and was traded in a narrow range for much of the early session. The sentiment weakened further when State Bank entered the market � not to sell as it usually does in times like this � but to purchase dollars on behalf an oil company.

�The rupee was trading in a narrow range and most of the market participants thought that it would stay at these levels through the day. However, the entry of SBI upset the calculations,� said N Subramanian, senior analyst at Mecklai Finance.

As other public sector and foreign banks joined SBI in the rush for dollars, the rupee�s decline was accentuated by the fact that the supply of greenbacks in the market was just too insufficient to satiate the massive appetite.

The rupee depreciated through the day and hit its intra-day low of 44.74 late in the afternoon.

Some dealers say a few quotes were available even at 44.75. At this point, the supply of dollars improved a little, propping it up from its trough to 44.71.

However, the recovery could not be sustained with buying enquiries sending the rupee tumbling once again to 44.73/74.

At the close, the currency had lost six paise over its overnight finish of 44.6700/6750.    

New Delhi, June 7 
The World Bank today approved a $ 62 million loan to assist India�s telecom reform process and to modernise the department of telecommunications (DoT).

The bank in a statement said that the total cost for reforms in the telecom sector is estimated to be $ 72 million.

Of this, the World Bank would lend $ 62 million, with the remaining $ 10 million to be provided by the Indian government.

The single-currency loan has a variable spread and rate and comes with a grace period of five years and a maturity period of 20 years.    

Mumbai, June 7 
Tata Consultancy Services (TCS) today said it was waiting for the right time to launch its initial public offering even as it unveiled a growth plan that envisages a turnover of Rs 3,200 crore. Much of these gains are expected to come from e-business, an area that has been identified by the software consultancy major as the engine of future growth.

�Finding the right value of TCS� shares would be important to pursue our growth strategy through acquisitions, to supplement organic growth, and to raise funds. But, we do not find the need in both contexts now,� company CEO S Ramadorai said. Hints that open offer could be made in future assumes significance given that TCS is a closely held company with the bulk of its stake controlled by Tata Sons � the holding company for the Tata group of companies.

Announcing the e-business strategy, Ramadorai said the segment will be a major revenue-spinner for the company in by 2001, and is expected to contribute 25 per cent to the turnover. For the year ended March 2000, it accounted for about 10 per cent of TCS� revenues of Rs 2100 crore. The company�s optimism, say officials, is grounded in heady projections which put the size of the global e-commerce market at $ 3.2 billion in 2003.

The TCS CEO said his company has identified end-to-end e-business solutions for global clients as one of the mainstays. The company intends to deliver a wide array of e-business products. These will cover implementation to maintenance and outsourcing, apart from e-commerce, customer relationship management, supply chain management and knowledge management. �TCS aims to be among the global top 10 consulting firms in the near future,� Ramadorai said.

Officials say one of the areas where the company wants to be a key player is the application service provider segment. TCS is thinking of utilising its 14 development centres across the country as data centres to achieve this purpose.    

Calcutta, June 7 
Tea production in the first four months of this year has grown 30 per cent over the corresponding period of last year.

The increase has been helped by the timely rains much of Assam and West Bengal, raising hopes in the industry that the annual output for 2000 will beat forecasts and peak anew.

The projection for the current year has been pegged at 840 million kgs, up from 805.6 million kgs in the previous year when gardens in most tea-growing regions were suffering near-drought conditions.

According to figures released by the Tea Board of India, the output between January and April 2000 was 143 million kgs as against 110 million kgs in the same period of the previous year.

The largest increase was recorded in April, when the total output was 71 million kgs compared with 48.6 million kgs a year ago. The crop during April, also called first-flush tea, is generally known to be of a better quality and its success gives tea growers plenty of reasons to look forward to a better year.

However, this year�s production pales in comparison with 1998 � considered a benchmark year for the tea industry when the yield was a record 870 million kgs.

The output in the first four months of this year was about 8 million kgs lower than the January-April 1998 production of 151 million kgs.

However, if only the trends in April are taken into account, the current year�s crop is nearly two million kgs higher than 69 million kgs in April 1998.

The north Indian tea growing states contributed more than the south in the increased production during the current year.

The output from Assam increased to 54.5 million kgs during January to April 2000 as against 34.8 million kgs during the same period last year. In West Bengal, it improved to 20.4 million kgs from 15.8 million kgs.

Other states in north India contributed 4.8 lakh kgs in the four months of the current year compared with 3.7 lakh kgs in the same period last year.

South India, on the other hand, produced 8.5 million kgs more tea during January-April 2000.

Tamil Nadu, Kerala and Karnataka together produced 67.4 million kgs as against 59 million kgs in the same period last year.

Tea Board has launched an incentive scheme for the tea companies for acquiring ISO 9000 and Hazard Analysis on Critical Control Point (HACCP), especially applicable to food products.

Bureau of Indian Standards (BIS) has already prepared an in-built module for tea for HACCP, which had become inescapable in the international trade under the World Trade Organisation (WTO) agreement on sanitary and photo-sanitary stipulations.

Under the three-year incentive scheme Tea Board would reimburse up to Rs 50,000 of the costs of implementing the scheme for all sectors of the tea business.    

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