Yet another company defaults on FRN – Arvind Mills
Ahmedabad: In what is clearly like to hit the credibility of Indian corporates in the global financial markets, Arvind Mills, became the third company, after Essar Steel and Spic, to default on interest payments on its $125-million floating rate notes. The $125-million FRN issue was led by Union Bank of Switzerland with 14 more banks participating.

For Arvind, once a most sought after blue chip company, this default comes close on the heels of the default on domestic debt. Earlier this year, the company had defaulted on its $75-million external commercial borrowing.

To add insult to injury, the country’s leading credit rating agency, Crisil, downgraded some of its domestic debt papers to D (default grade) from C (substantial risk). The ratings were assigned to the Rs 72.72-crore regular income debenture and to a Rs 25.36-crore cumulative interest debentures. However, the company still continues to service its retail debt investors.

Arvind Mills’ chief financial officer, Mr. Jayesh Shah, said the company was working out a total debt restructuring package with its banks, pending which all interest payouts had been put on hold.

The company, which has a debt exposure of about Rs 2,600 crore on its books, is writing to institutions for restructuring of their debt.
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Cipla and Ranbaxy expand marketing deal
Mumbai: Two pharma majors, Cipla and Ranbaxy, have expanded an already existing marketing partnership to include the marketing of anti-depressant venlafaxine being manufactured by Cipla. The pact between the two companies already covers cardiovascular product carvedilol, cholesterol drug atorvastatin and anti-infective cefpodoxime.

Under the deal, Ranbaxy and Cipla market the same products under their own brand names with a view to increasing the size of the market for the molecules involved. The deal envisages that, for each of the four products under the agreement, one company will manufacture the product and the other will source the product from the manufacturing company.

According to industry experts, the anti-depressant market is a tough one in India, and the marketing partnership will help both companies make inroads into it more easily.
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Nirma launches supermarket chain
Ahmedabad: True to its style, domestic FMCG major, Nirma, has entered the retail business in a very quiet way. It has launched Radhe Supermarket, in the most unpretentious downmarket residential areas of Ahmedabad.

Mr. Hiren Patel, head of Nirma consumer care, and the prime mover behind the initiative, prefers to downplay the first store as an experiment. If it is so, it is indeed an unique experiment. While most other grocery supermarkets are located so as to target the upmarket consumer, Nirma is clearly viewing the mass market.

With 6,000 square feet of shopping area, Radhe may not be the biggest store in Ahmedabad, but it is certainly by far the biggest in the labour area of Bapunagar, on the Eastern fringe of the city.

Given the fact that it does its market surveys and research over an extended period, it may be sometime before the company opens up its second store. But once that happens, who knows, Indian retailing may change for ever.
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Wockhardt ties up with domestic research institutes for new molecules
Mumbai: According to Mr. Noel DeSouza, director for research and development at pharma major, Wockhardt Limited, has initiated talks with almost all Indian research institutes for possible tie up for conducting basic research for the development of new molecules and the company will invest in research substantially. These institutes include the Central Drug Research Institute (CDRI), the Indian Institute of Chemical Technology (IICT) and the Department of Biotechnology (DBT)..

Wockhardt has identified biotechnology and genomics as the thrust areas in the coming years and has plans to foray into these segments in a big way.

The company has recently filed over 20 world as well as US patents for products and technologies involving novel drug delivery systems (NDDs) and new chemical entities (NCE).
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Asian Paints does well in Sri Lanka
Mumbai: One year after taking over Sri Lanka’s second largest paint company and renaming it as Asian Paints Lanka Limited, the company is doing well above the management’s expectations.

It is now set to unleash Gattu, the popular logo of Asian Paints, on the Sri Lankan market, alongwith its other brands like Colour World. The Sri Lankan company is said to be controlling a 12 per cent share of the paints market and the company has expanded its operations in the new market through its own depots at Colombo, Galle, Kandy, Kurunegala and Ampara.

The company has also revamped its distribution network to bring in efficiencies for quicker response time to market. The company said that it has detailed a new marketing strategy and plans to take the brand to Sri Lanka. It also plans to introduce a wide range of products for various segments of the market. The company intends to create new segments just as it has done in India.
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Hindustan Motors to implement three pronged plan
New Delhi: In a bid to revive the dropping profits of the company, Hindustan Motors will implement a three-pronged strategy centred around increase in sales of its new "user-friendly" Ambassador model, increase in localisation of the upmarket Mitsubishi Lancer model and cutting of costs at all the three plants.

The company, which suffered huge losses in the last financial year, has decided to implement an independent turnaround strategy for each of its three manufacturing facilities at Uttarpara, Pithampur and Chennai.

The corner stone for this strategy is the new "user friendly" Ambassador model, which has seen some major irritants removed from it, based on market feedback.

The company is also planning to rev up the localisation efforts in the Lancer model. If localisation requires heavy investments, then toolings can be sourced from countries such as Taiwan and Malaysia. The company is planning to increase localisation to 70 per cent by March 2001 from the existing 56 per cent. With an increase in the localisation level, the costs are expected to come down and would improve profitability.
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Chrysler initiates wide-ranging review
London: German-US automotive giant, DaimlerChrysler, has initiated a wide-ranging strategic review of product development, component sharing and manufacturing flexibility at Chrysler, its US subsidiary.

To be conducted under the direct supervision of Mr. Jim Holden, Chrysler president, the review is expected to lead to Mercedes-Benz engines being fitted to Chrysler cars for the first time and lead to more component sharing between the two companies.

The review will also seek to go beyond the Chrysler's current $2 billion cost-cutting programme and build on restructuring measures announced last month in light of a possible third quarter loss. The review will also examine initiatives to increase Chrysler's competitive advantage.

It is understood that diesel engines from Mercedes-Benz will be fitted in vehicles for Chrysler's Jeep brand and its best-selling PT Cruiser, which is likely to be assembled at Graz, Austria.

Also as part of the review, DaimlerChrysler will explore joint development of future products between Chrysler and the group's new Asian alliance partners - Mitsubishi Motors of Japan and Hyundai Motor of South Korea.
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