Reliance restructures textile business
Ahmedabad: Normally restructuring exercises are carried out by companies that are going through a bad patch. Here is a company, that has broken all records for performance, which has gone into restructuring one of its main businesses.

Reliance Industries Limited, the country’s largest private sector company, has instituted a restructuring plan for its textile business in order to enhance the company’s overall competitiveness and focus on superior quality.

As part of this plan, the company will introduce a VRS for its 3,000 employees at a cost of Rs 80 crore. According to the company, the VRS package being offered to the 20 per cent of the total workforce at RIL’s textile unit in Ahmedabad, contributes less than one per cent to the group’s total revenues.

The plan also envisages the relocation of yarn unit and phasing out of women’s wear being manufactured at the unit at Naroda.

RIL would now focus on its high value-added product ranges of men’s wear and home textiles. Besides phasing out the women’s wear business the company would also relocate polyester filament yarn processing business around Silvassa.
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Sony sets up Internet bank
Tokyo: Leading Japanese consumer electronics company, Sony Corporation, formally set up an Internet bank and will become the first lender in Japan to be set up by a non-financial company. The company expects the bank to get all the approvals to commence business in a month.

While the bank initially plans to offer services, including yen deposit accounts and investment trusts, it hoped to add, within the first year, foreign currency accounts, a credit card business and housing loans.

The bank has a capital of 37.5 billion yen ($297.6 million), with Sony owning 80 per cent by Sony and the balance being shared by Sakura Bank (16 per cent) and US investment bank JP Morgan.

The bank, which will start with 80 employees, aims to have 400,000 accounts worth 600 billion yen within three years, rising to 600,000 worth one trillion yen in five years.
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Pepsi Indian operations yet to break even
New Delhi: Despite its overwhelming market share in the country’s soft drinks market, US cola major, Pepisco Inc., is yet to see any profits from its Rs 2,000-crore investment in the country. According to the company this is because of the huge depreciation provisions it has had to make on its investments in bottling plants and other infrastructure.

The company has however, been able to make cash profits. Pepsi has 43 bottling plants in all, of which, 17 are owned by the company whereas, the remaining 26 are franchisee-owned plants.

But despite this the company has committed an investment of up to Rs 100 crore to set up 12 plants for manufacturing its purified, bottled water brand Aquafina in India, in two phases of six plants each.
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Toyota India sees huge sales growth
New Delhi: Leading Japanese car maker, Toyota, which entered India in February 2000 with its Qualis brand of multi-utility vehicle, said that it expected the sales of its vehicles to grow nearly 60 per cent in 2001.

Toyota’s Indian operations are in partnership with the Kirloskar group and the Japanese giant holds 88.9 per cent stake in Toyota-Kirloskar Motor, with the Kirloskar Group holding the rest.

The company is targeting 35,000 vehicles for this year against the sales of 21,785 vehicles sold last year.

Toyota had a 20 per cent marketshare in the utility vehicles market, behind Mahindra & Mahindra's 45.9 per cent and Tata Engineering and Locomotive Company's 24.4 per cent.

Toyota plans to invest at least $400 million in India over the next five to 10 years to make three new models, and import at least another three.
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Ponds in revamp exercise
Mumbai: FMCG major Hindustan Lever is putting its Rs. 300-crore brand Ponds through a major revamp exercise, which will see the brand only focus on the talcum powder and skincare categories.

As a result the company will discontinue the deodorant range which contributed to more than 30 per cent of the turnover. Also Ponds kiosks, which were installed at various places across the country with a lot of fanfare and great cost three years ago, have been withdrawn.

The Ponds kiosks were part of the services arm where consumers could interact with skin care experts and get consultancy on various aspects of skin through the kiosks. Each kiosk cost the company about Rs. 1.5 lakh and the company had spent between Rs. 45-60 crore in the process.

This revamp is part of the company’s avowed plan to concentrate its resources on a few brands. These brands would number 30 from the company’s overall brand portfolio of over a 100 brands. The brands have been decided on the basis of absolute size, brand strength and uniqueness, competitive positioning and growth potential.

The idea of focussing the Ponds brand on only two categories within the Ponds segment is to maximise resources.

As part of the rejuvenation of Ponds talc and increasing emphasis on functionalities, the company has launched for the first time a prickly heat powder which according to the officials is `different' from the other products available.
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TCS plans largest ever hiring binge
Mumbai: Despite the slowdown in the US market affecting several IT companies, Tata Consultancy Services is planning to recruit between 4,000-5,000 engineers from campuses during the current year in addition to experienced professionals.

Representing a more than 30 per cent increase in its staff strength in one single year, this recruitment spree will make it the largest ever hiring binge by Asia’s largest software and services company, which currently has over 14,000 employees.

The company is confident that the growth rate of 65 per cent it had last year in the US business, will be repeated this year also, notwithstanding the slowdown in the US economy. In fact, two of TCS’ biggest clients, Nortel and Lucent, have been hit hard by the recession and were among the first to announce profit warnings and job cuts in February.

According to TCS officials the slowdown would only affect small- to mid-sized Indian IT firms and large Indian companies, like TCS, would remain largely insulated from the crisis.
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BPL to reorganise its manufacturing facilities
Bangalore: White goods major, BPL, has announced that it will undertake a major reorganisation of its manufacturing facilities with a view to optimise production. The move could also, it is understood, entail a larger share for outsourcing and/or acquiring more facilities.

BPL currently has nine manufacturing units and alliances with Sanyo, Toshiba, France Telecom, Siemens and Media One.

The exercise is part of BPL's plan of having a two-pronged growth strategy by continuing focus on its core businesses of consumer electronics, home appliances and soft energy.

The company’s strategic plan is to tap the potential for brown and white goods in the middle and lower-end of the markets and, in turn, increase the penetration levels to achieve high-volume growth across all segments.
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Thermax may acquire stake in Thai energy firm
Pune: Energy conservation company, Thermax, is said to be in talks with its partner, the Canada-based Energy Performance Services Inc (EPS), to pick up to a 50 per cent equity stake in EPS Thailand, a wholly owned subsidiary of the latter.

The Thailand joint venture plans to tap the south-east Asian region for total energy solutions where the Thailand market itself is estimated at $600 million per annum with energy bills shooting up following the sharp rise in fossil fuel costs, many countries have set up funds to enable enterprises to cut their energy consumption through the use of efficient methods and processes. The Thai government has set up an energy conservation fund of $500 million.
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Godrej Consumer Products may be listed by mid-June
Mumbai: The newly formed company, Godrej Consumer Products, born out of the demerger of the consumer and chemicals businesses of erstwhile Godrej Soaps Limited, might be listed on the stock exchanges by June this year. This was stated by the company secretary of the new company.

The company will have in its portfolio popular brands like Cinthol, FairGlow, All Care, Ezee and Godrej Hair Dye. Godrej Soaps has a 7 per cent market share in the soaps market which is estimated to be around Rs 4,500 crore.
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Third milestone payment for Ranbaxy in July
Mumbai: With the new drug delivery system for ciproflaxacin developed by domestic pharma major, Ranbaxy Laboratories and licensed to German major, Bayer AG , entering the clinical trial stage in the US, the former is likely to get the third milestone payment of $5 million from the latter by July this year.

It is understood that the US Food & Drug Administration (USFDA) has already given an in-principle clearance to the NDDS. The agency has asked for some more data which Ranbaxy hopes to submit in the next few weeks.

Ranbaxy is to get a total license fee of $65 million, of which $55 million was supposed to have been paid between the first half of 2000 and the launch of the product. The milestone payment of $10 million was to have been paid last year. Following the in-principle clearance given by USFDA, Bayer paid $5 million last month. Bayer had paid $10 million to Ranbaxy when the companies signed the agreement in 1999.
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ONGC enters fiscal 2001 without insurance cover
Mumbai: Putting itself in a very dangerous position, the Oil and Natural Gas Corporation (ONGC) has entered the new financial year without an insurance cover for its assets.

The discussions for its insurance program for the current year in the London market was inconclusive as it was not willing to accept the demand of the reinsurers who asked for a 100 per cent hike in insurance premium to $37.5 million. This was in addition to an eight-fold increase in the deductibles to $8 million.

As a result of this, should any calamity befall the public sector oil exploration giant, it will be forced to bear the loss in its own books. Industry sources, however, felt it was a conscious decision on the part of the company and its Indian insurance partner, New India Assurance, not to sign under pressure.

The ONGC board is scheduled to meet during the week to debate on the risk decision taken and identify the new terms to be negotiated by the New India Assurance Company in the London reinsurance market.

Even as the reinsurance market expected ONGC to bite the bullet and pay a higher premium, the sources said it was a deliberate attempt on the part of the company to let the March 31 deadline pass without yielding to the pressure tactics of the London reinsurance market.
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Millenium Alcobev in contract manufacturing JV
Mumbai: UB-group company, Millennium AlcoBev Ltd (MABL), has tied up with two more breweries for contract manufacturing, thus brining its contract capacity to 11 breweries. The company is set to achieve 15 per cent market share by March 2002.

The company has been transformed into an independent business unit with its own distribution network, infrastructure, marketing and sales force and simultaneously consolidating UB Group's leadership position.

The company has a portfolio of nine brands - five brands of the UB group leased to MABL with an option to buy, two brands - Sandpiper and Turbo - acquired from Inertia, Guru of Mohan Goldwater and MABL's own Zingaro.
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