Renault to buy out 20 per cent in International Tractors
New Delhi: The French heavy engineering major, Renault, is all set to make a major entry into the country through a purchase of a 20 per cent stake in International Tractors Limited (ITL) for an estimated consideration of Rs 44 crore.

ITL is a new entrant in the Indian tractors market that has a demand potential of approximately three lakh tractors. While the market is currently dominated by the mid-range tractors, of 30-35 HP, with intensive agriculture requiring a deeper tilling of the soil, there is a demand for higher HP tractors. ITL manufactures the Sonalika brand tractors in the country and enjoys a large market in northern and central Indian region covering states like Punjab, Haryana and Uttar Pradesh.

With the entry of Renault in the highly competitive market, the tractor industry is all set to see a royal battle between the foreign majors like Ford New Holland, John Deere and domestic heavyweights like Mahindras, Punjab Tractors and Escorts.

ITL will now manufacture Renault tractors with capacities between 55 and 85 HP at its Hoshiarpur plant and market them in India and neighbouring countries along with its own tractors. Back to News Review index page 

Lafarge in the fast lane, now eyes Madras Cements
New Delhi: With the ongoing battle to gain capacity and market share in the consolidating cement market, the major players, including foreign companies, are moving fast to get a bigger share of the pie. The $11 billion French global giant, Lafarge, which has been furiously scouting around for take over targets, is reportedly in discussions with Chennai-based Ramco Group for buying out Madras Cements.

According to reports appearing in a leading paper, the companies have almost arrived at an agreement and an announcement was expected in a few days, and Lafarge has reportedly offered a price of Rs 1,500 crore for a complete takeover of the 3.5-million ton Madras Cements.

The proposed takeover by Lafarge would give the multinational a strategic control over the cement industry in the eastern and southern coasts, having already bought over the cement divisions of Tisco and Raymond for Rs 550 crore and Rs 785 crore, respectively. Madras Cements has four cement units in south India with three of them in Tamil Nadu while the fourth plant is in Andhra Pradesh.
Back to News Review index page 

Broadcast Worldwide plans Gujarat channel
Ahmedabad: After a successful launch of its Bengali channel, Broadcast Worldwide, floated by former Doordarshan and Star TV boss, Mr. Rathikant Basu, has decided to launch a Gujarati channel. The channel is targetted at the large Gujarati NRI population in the UK and the US which, according to Mr. Basu, is a huge untapped market in terms of viewership and revenue.

Tara Gujarati, for which the company has completed extensive market research, would be launched as a pay channel in the UK which is the next market BW would be expanding into after India. As for India, Tara Gujarati will be free-to-view for a while with the final aim being to make it a pay channel.

BW also plans to extend their Tara brand to the net and explore the possibility of revenue through e-commerce.
Back to News Review index page 

Enron moots direct sale to MSEB
Dabhol: US energy giant, Enron, which operates in Maharashtra through its subsidiary, Dabhol Power Company (DPC) has completed one year of full operations and soon looking to getting its second phase on stream by end 2001. DPC has been selling power to MSEB for the past one year and the current tariff for the power is around Rs 4.10 per unit.

The company is also aiming to be the first independent power project to directly merchandise power, and has initiated talks with the Maharashtra State Electricity Board to go in for direct sales of surplus power from its Dabhol power plant, in this regard. It is not clear whether its proposal to do so will be cleared by the government.

It has done this since the company has some surplus power at its disposal which has been created due to the introduction of new technology. The company has set up a new chilling process in power generation -- a systems procedure by which the water is circulated in a loop to get higher power efficiency – as a result of which it has got surplus power.

To enable the company do this, the existing laws governing electricity will have to be amended. As of now, in most of the cases, IPPs have been allowed to sell power to only the SEBs who in turn sell it to consumers.

Enron is already planning a trading arm in India in line with its trading activities in the fields of power, oil and gas worldwide.
Back to News Review index page 

Phillip Morris arm in India for processed food
New Delhi: US-based cigarettes and foods giant, Phillip Morris, has set up a new company in India, KJS India Ltd, to undertake manufacturing of its agro-based processed food, which includes cheese, confectionery and chocolates.

As per the approvals obtained by the company for investment in India, it can carry out activities in the areas of of agro-based food processing including pasta, vegetable puree, paste, sauce, cheese, processed powdered food and beverage products, cereals.

The extensive list also includes yeast-based food supplement, quick-cook foodgrains, salad dressings, mayonnaise and other types of spreads, cream cheese, cottage cheese, rice, confectionery (chocolate and toffees), coffee, diary products including yogurt, sour cream, processed meats, frozen and or ready to eat and dry desserts, snack foods pizza, condiments, and other food-based grocery products.
Back to News Review index page 

Dr. Reddy's and Cheminor to merge
Hyderabad: The boards of directors of Dr. Reddy's Laboratories Ltd (DRL) and Cheminor Drugs Ltd (CDL) on Wednesday approved the proposed merger of the two companies thus paving the way to make DRL the third largest pharmaceutical player in the country. The swap ratio has been set at nine shares of Rs. 10 each of Dr. Reddy's for 25 shares of Rs. 10 each of Cheminor Drugs. PricewaterhouseCoopers Securities (PwC) has evaluated the businesses and recommended the swap ratio.

With both companies belonging to the same group, group chairman, Dr. K. Anji Reddy said that the merger gives will ensure that the companies, which so far enjoyed leadership for basic research also has the size to compete in the pharma market.

DRL is a research based pharmaceutical company with revenues of Rs. 493 crores for the year ended March 31, 2000. Last year, it acquired American Remedies Ltd, a Chennai-based company which reported sales of Rs. 94.3 crores during last fiscal year.

CDL, engaged in the business of bulk actives and intermediates development, posted a turnover of Rs. 215.4 crores during the last fiscal year. It has strategic alliances with Schein Pharmaceuticals Inc, Par Pharmaceuticals and Leiner Pharma for marketing of its products in the US market. The company markets its products in Europe through product specific alliances.
Back to News Review index page 

ACC to exit Bridgestone venture, Floatglass
Mumbai: Cement major ACC has decided to exit from two of its earlier investment decisions -- tye company ACC-Bridgestone and Floatglass India. The company’s board yesterday also decided to put two wholly-owned subsidiaries, ACC Machinery Co and ACC Nihon Castings, on the block to plough back money into the ailing cement business. ACC has a 19.8 per cent stake in ACC-Bridgestone and 13 per cent in Floatglass India.

The Tata group, which also has a holding in these companies, is learnt to be evaluating its position in both Floatglass and ACC-Bridgestone. According to company sources, the group was "certain" to pull out of Floatglass.

The divestments will complete a total withdrawal of ACC from the Tata fold once the process is through.
Back to News Review index page 

VSNL may lose monopoly on ISD earlier than scheduled
New Delhi: If the recommendation of the core group of secretaries on disinvestment is accepted, then the monopoly of the state-owned Videsh Sanchar Nigam Ltd over international long-distance telephone service may end by 2002 against the earlier 2004 deadline. The core group has also recommended further disinvestment of the government equity in the long-distance carrier.

According to the core group, in face of the stiff competition to MTNL from the private sector, any delay in the induction of strategic partner would adversely affect the realisation from the disinvestment of the government equity in the company.

The department of telecom services (DTS), which is the service providing arm of the communications ministry, has opposed to the proposal of doing away with the monopoly of the VSNL before 2004, as this would result in a loss of revenue for the department.

Further, the department believes that it would be unfair and against the interest of the investor to consider the monopoly issue of the VSNL over international long distance telephony by 2002 against 2004 assured earlier.
Back to News Review index page 

Marico to exit branded atta business
Mumbai: Marico Industries, which decided to extend its flagship brand, Saffola, to other products, has decided to exit the branded atta business and has pulled out the fledgling Saffola Atta brand from the market. The move follows a tepid response to the product after its soft launch last year.

The development comes at a time when rival Hindustan Lever has identified branded atta as a key business as part of its new focus on foods. According to the company chairman the low volumes being generated by the brand, made the product unsustainable.

The chairman said that the company will continue to focus on its existing brands, of which, Parachute and Saffola, contribute over 60 per cent to its turnover. The company is said to be beefing up opeartions to increase market share for each of these brands.
Back to News Review index page 

Telco may join ESOP bandwagon
New Delhi: The house of Tatas’ seem to have been caught up with the employee stock option (ESOP) fever. According to a report in the Financial Express, Tata Engineering may well be the first company in the group to offer ESOPs to employees.

It is said that Tata Engineering will be issuing close to 76 lakh fresh equity shares in the scheme.

This works out to about three per cent of the company's equity base of Rs 256 crore. The company’s board of directors have approved the proposal on May 9.

The scheme, based on the Sebi guidelines, once finalised, will be put up before the company's shareholders at the annual general meeting to be held on July 25.

Manufacturing companies like Tata Engineering are slowly joining the ranks of information technology companies and adopting the ESOP route to reward as well as retain human talent.
Back to News Review index page   

M&M and Renault in engine deal
Mumbai: India’s largest utility vehicle manufacturer, Mahindra & Mahindra Ltd (M&M), and French car maker Renault have signed an agreement to explore the possibility of using Renault petrol engines for M&M's planned Scorpio utility vehicle, which is planned for launch in mid-2001.

The company’s managing director Mr. Anand Mahindra, confirmed that M&M was seriously considering the Renault engine for the Scorpio and is in the process of doing a feasibility study on the Scorpio before taking any decision.

Mahindra said that the company wanted to have a strong petrol engine for the Scorpio because of highly competitive market conditions. The company expects to produce 20,000 Scorpio units in the first year of production.
Back to News Review index page 

Hyundai founders lose control of the group
Seoul: The beleaguered South Korean giant, the Hyundai group, finally bowed down to its creditors with the founding family today agreeing to sell $3 billion in assets and hand over day-to-day running of the conglomerate.

The restructuring aims to allay concerns about a cash crunch at Hyundai, but the announcement was overshadowed by an outburst from the eldest son of founder Chung Ju-yung who initially refused to relinquish control of the group’s flagship automaker.

Badly weakened by the financial crisis that swept Asia in 1997-98, Hyundai has been resisting pressure to introduce more managerial transparency as part of a corporate reform drive championed by the government and the IMF.

On Wednesday, Chung, the 84-year-old honorary chairman who built Hyundai out of an auto repair shop he opened in 1940, finally relented and told his two sons that the only option for the group is to relinquish managerial control.

The family will exercise rights and responsibilities as majority shareholders but they will no longer involve themselves in day-to-day management of the group.
Back to News Review index page 

IBM plans for online business exchange
Armonk: The world’s largest computer company, IBM, is said to be spearheading the formation of an online business exchange for computer and electronic parts, after similar moves by rivals. It has, reportedly, already struck agreements with large partners including Nortel Networks and Toshiba of Japan for this purpose.

It is expected that the consortium, to be named e2open.com , could be announced next week.

The partners would handle buying and selling of semiconductors and other electronic parts over an Internet-based network, which would aim to bring down costs and streamline the purchasing process.

The IBM-led venture comes a month after the three biggest consumer personal-computer makers — Compaq Computer, Gateway, and Hewlett-Packard Co — set plans for an online marketplace.

The company is also negotiating with wireless players Nokia of Finland, Telefon AB LM Ericsson of Sweden and Motorola, to join in on the consortium, but those companies have yet to sign on to the marketplace.

IBM plans to build the online marketplace using its own hardware and software as well as products and services from its electronic-commerce partners, Ariba and i2 Technologies Inc.
Back to News Review index page