Castrol shuts down plant in Karnataka
Bangalore: Castrol India Ltd has closed down its manufacturing facility at Hoskote in Karnataka.
Prior to this the company had shut down closed down its Wadala plant in Mumbai.

The company has been suffering losses for the past couple of years owing to the fact that the lube industry in India has become extremely competitive. Added to this is the fact that in the recent past there has been a sharp increase in input cost, all which has forced Castrol to review its efficiency and cost-effectiveness in all areas of business, including the supply chain.

The review found the 17,000-kl lube blending facility at Hoskote commercially unviable. Besides, increase in transport cost, entry tax on the raw materials used for blending, also made the plant economically unviable.

In a notice to the stock exchange the company said that with the passage of time the plant had become commercially unviable mainly due to its land-locked location, resulting in high cost of transportation of raw materials. Castrol had to transport the main input -- base oil -- from Chennai or Mumbai.

Most of the employees had accepted the VRS offered by the company and those left were re-located to company's other plants, said company officials.
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M&M ties up with Renault
Mumbai: Mahindra &Mahindra (M&M) has announced a tie-up with French automobile major, Renault, for sourcing petrol engines.
However, there would be no equity sharing in the Renault deal according to Mr Alan Durante, executive director, M&M. The Renault engine will be part of M&M's upcoming new range of utility vehicles (UVs), being developed as part of the ongoing Rs 500-crore Nasik-based Project Scorpio, which envisages the design and development of a whole new platform for M&M's vehicles.

Mr Durante said that the company hoped to sell roughly 2,000 such vehicles in the first year, largely for urban clientele.

The Renault engine, seen by M&M as a high-end offering, will not be available in the petrol versions of Bolero and MM540 product categories, which at present use petrol engines supplied by Hindustan Motors.

According to a press release from the company on the Renault tie-up, these petrol engines will be Euro III compliant, upgradable to Euro IV. The 2-litre compact engine has multi-point fuel injection and a high power to weight ratio. The fuel-efficient engine is capable of providing a top-speed of 151 km/hr, the highest on offer from an Indian utility vehicle maker.
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Tata Indica sales rise 44 percent in March
Mumbai: Automobile makers are a happy lot with sales of nearly all registering a sales growth during March 2001. This is especially true of the Indica from Tata Engineering, which closed the month with a 44-per cent rise in sales over February 2001, at 5,255 units.

According to company officials at Tata Engineering, "January sales grew by 32 per cent over December '00 and February '01 sales were 24 per cent above January '01 numbers." In February, the company sold 3,651 units.

However, with the total sales of the Indica's 2000-2001 at 43,823 units, Tata Engineering is said to have missed break-even for its Rs 1,700-crore car project, at the annualised level.

On October 20, 2000, while reporting its results for the quarter ended September 30, 2000, Tata Engineering had announced cash break-even of its car project in the fiscal's first-half. Given that production was at 25,000 units at which that happened, the corresponding annualised figure was estimated as 50,000 units.
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Government rejects Daewoo plea for equity conversion
New Delhi: Daewoo Motors India has again been denied permission to convert its $82m unpaid dues to Daewoo Motors Korea, into equity. The proposal was backed by financial institutions ICICI, IDBI and Exim Bank.

The dues were incurred for the import of completely knocked down kits of the Cielo. This is the second instance at which the government has rejected Daewoo’s plea for conversion of equity.
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Reliance Cuts Polymer prices
Mumbai: Effective from April 1,2001 Reliance Industries Ltd has cut polymer prices.
Polyethylene prices are at Rs 43.80 per kg (Rs 44.30), polypropylene at Rs 39.30 (Rs 40.80) and polyvinyl chloride at Rs 37.80 (Rs 39.80). Purified terephthalic acid will cost Rs 30.25 per kg, lower than Rs 33.25 in March. Prices of Mono ethylene glycol remain at Rs 34.30 per kg.
Prices of polyester products such as polyethylene terephthalate is up to Rs 60 per kg (Rs 58.00) while partially oriented yarn has gone up to Rs 62.50 per kg (Rs 61.50).
Polyester staple fibre and linear alkyl benzene remain at Rs 51.50 per kg and Rs 53.90 per kg respectively.
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Centre to renegotiate counter guarantee with Dabhol Power Company
New Delhi: The Union finance ministry is studying various options under which the counter-guarantee given to Dabhol Power Company (DPC) could be renegotiated.

Government officials said that the finance ministry has sought the cabinet secretariat’s opinion on the possible options outlined by it. It is said that the ministry was in favour of introducing an alternate payment security mechanism in place of the counter-guarantee.

The government has already mooted an alternate payment security mechanism for the mega power projects under which the authorised capital of Power Trading Corporation (PTC) would be hiked to Rs 5,000 crore in the next five years for ensuring that there is no default on the payments due to private players.

PTC’s current authorised capital is about Rs 150 crore while its paid-up capital stands at Rs 24 crore. The proposal to beef up PTC’s financial capability will be taken up by the cabinet soon, sources said.

The MSEB-DPC payment imbroglio took a new turn recently with MSEB seeking adjustment of the "availability penalty" slapped by it on DPC. The law ministry, sources said, informed the ministry of finance that MSEB had a case.

The "availability penalty" is a rebate given by DPC to MSEB if the former did not provide 90 per cent of the committed power, which would be adjusted to the latter's outstanding bills.
MSEB slapped a penalty of Rs 400 crore when DPC did not stick to its commitment on certain days between October 2000 and January 2001. Then MSEB sought adjustment of the penalty amount against the outstanding bills and paid the February bill to DPC "under protest".

Meanwhile, DPC today invoked the government of Maharashtra counter-guarantee for the January bills of Rs 127 crore, a company spokesman said.

The Maharashtra government seems to have gone one up on Enron in the Dabhol controversy. In a fresh twist to the drama, the Union government has also decided not to honour the counter-guarantee invoked by the Dabhol Power Company for the December 2000, bill of Rs 102 crore.

The government has contended that this bill be adjusted against the claim of Rs 400 crore slapped by the Maharashtra State Electricity Board on DPC.

This opens up the possibility of DPC seeking justice in the London Court of Arbitration, which is permissible under the terms of the power purchase agreement.
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Jindal Group asks FIs to warehouse the stake of Tractabel
Mumbai: The Sajjan Jindal group has proposed to financial institutions to warehouse the 49 percent stake of Belgian power major Tractebel in Jindal Tractebel Power Company. Senior executives Jindal said, "We have proposed to the institutions to warehouse 49 per cent equity till such time as we are in a position to buy out the entire stake."

They added that the Jindals were planning to buy the balance shares at a later stage when Jindal Vijaynagar's fund flow improves. This is the second time that the Jindals have approached the institutions to pick up a stake in Jindal Tractebel.

The group had also tried to bring in a strategic partner to replace Tractebel. Talks had broken down first with PowerGen and then with PSEG and Ogden Energy.

The Jindals now plan to acquire the entire stake but are constrained by their poor financial condition due to the recession in the steel industry and huge cost overrun in Jindal Vijaynagar.
Jindal Tractebel was originally promoted as a 50:50 joint venture, but now the Jindals are planning to buy one per cent more of the equity stake and offer the balance 49 per cent to the institutions for warehousing.
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Genomics Biotech to import DNA sequencing machine
New Delhi: Soon doctors in India will be able to prescribe medicines to patients based on their genetic profile. The Delhi-based Genomics Biotech, a pharma company, is planning to import a DNA sequencing machine that will give a patient's DNA profile in a 'snip card'. Doctors can use these cards to identify drugs most effective on particular people.

Shiv Kumar Gupta, managing director, Genomics Biotech, said: "The cost of DNA sequencing will be around Rs 7,000-8,000 per person. We are planning to import the machine valued at around Rs 1 crore."

He added that the company would be importing genzymes (or genetic enzymes) for specific diseases. It would focus on growth hormones, enzymes for cancer treatment, high blood pressure and arterio sclerosis. It intends to approach the Indian Council for Medical Research for clearance and will initially import and market the enzymes in the country. If the demand is sufficient plans are to go in for contract manufacturing and marketing or manufacturing on a buy back basis.

Currently, the global market for genetic medicines is $ 2.5 billion and is expected to go up to $ 100 billion in the next five years. Sixty per cent of this market is that of human genomics.
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HLL begins to revive Modern Foods
Mumbai: Hindustan Lever Ltd (HLL) today said that it has begun implementing a comprehensive turnaround strategy for the ailing Modern Foods Ltd (MFIL) even as the bread maker has been referred to the Board for Industrial and Financial Reconstruction (BIFR).

According to an HLL spokesperson, "Modern Foods has been referred to BIFR to comply with a mandatory regulation. We have not sought any rehabilitation or relief from BIFR."

While declining to reveal the financial health of Modern Foods, the spokesperson said it was mandatory for companies in India to notify the BIFR as soon as accumulated losses resulted in erosion of more than 50 per cent of the company's peak net worth in the preceding four financial years. And as per an ANZ Investment Bank report of November 2000, it was expected that MFIL's net worth had been eroded by about 33 per cent to Rs 24.19 crore between 1998 and 2000.

Modern Foods has 15 company-owned factories and 30 ancillaries and franchisees; its distribution network covers 100 cities and towns via 400 distributors.
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Cola manufacturers to slash soft drink prices
New Delhi: Both Pepsi and Coca Cola are feeling the heat of summer. With volume sales falling during February-March this year, both companies have resorted to marketing promotions, including price cuts, especially in the non-cola flavoured categories.

The sales figures for February-March are nowhere near the projected 20 per cent growth over March 2000, and perhaps this had led to the industry looking at driving up volumes through price discounts.

Coca-Cola, taking the initiative, has reduced the price of Fanta and Sprite in the 300 ml returnable bottle pack to Rs 8 (from Rs 10) and Pepsi has decreased the price of Mirinda Orange and Lime and 7Up, and even flagship brand Pepsi in certain markets.

In Gujarat and Mumbai 200 ml bottles of Coke and Pepsi are being sold at Rs 5 instead of Rs 7, all 300 ml packs of flavoured brands are sold at Rs 7 instead of Rs 10.

Prices have also been cut by 30 per cent in all the non-cola flavoured brands in Rajasthan, Hyderabad, Bihar, Orissa and Bengal. Colas comprising the bulk of the Rs 6,000 crore annual market have been kept out of these price wars.
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Five steel majors combine forces to push sales
Kolkata: Five big steel companies in India have joined forces to form the Indian Steel Alliance (ISA) for promotion of steel in the domestic market. These are the Steel Authority of India Ltd (SAIL), Tata Iron and Steel Co Ltd (Tata Steel) and steel companies of the Essar, Jindal and Ispat groups.

The organisation would be formed on the lines of The SteelAlliance of the United States and Canada, which has more than 100 companies as members.

Before embarking on promotional activities the ISA will appoint consultants in order to determine the target audience for steel in the country and once that was done the organization would go in for a high decibel campaign with contributions from all steel majors.
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