 The Business World Magazine has been a part of my studies as a commerce student. This habit was inculcated into my daily curriculum by my father. Almost three years down the line I still depend on the same magazine for my dose of information on the know - hows of the business fraternity. The recent edition of the magazine (dated July 15-21, 2008) has once again lived up to my expectations, providing beautiful cover stories and other features which were quite thought provoking.
The cover story “The Price of Growth” serves an eye opener and depicts how India has ceased to be a lucrative business destination unlike the recent past. It also throws light on the fact that India now falls into the high cost economy, thus resulting in industrial and services migration. In this regard an incident has been narrated where a successful entrepreneur from the US is trying to start up a venture. However, unlike popular belief, he now finds the expenses way too much to bear and says that if costs scale, he might just have to recalculate his plans. This looks like an alarming situation for the country. From past histories of the world economy such as US, the inventors of semiconductors losing their industries to Taiwan for being a high cost economy, India definitely has lessons to learn. Why just industries? I think each and every common Indian today would relate to the present costlier 'avtaar' of the country. According to me it is difficult to maintain a life style here, but it is much more difficult to do business. Is it the price of growth that everyone is paying in the country? This is the question which may plague the general public, industrialists and economists alike for days to come in the future.
What impresses a reader like me about the Business World is their ability to club inter related stories together within one magazine. The next story that pulled my attention was the “The High Cost Of The High Life.” While on one hand it portrays a blooming India with rising per capita income, it also points out the Indian mentality to show off wealth. This urge to show off often leads an average Indian to even buy over priced products, thus resulting in inflated prices of goods in India as compared to other developed nations like the US. Somewhere deep inside, I feel that it is this attitude of consumers that has made our country a so called a high cost economy and the market is playing on this Indian mindset. However, what we must understand is that, such an attitude would serve as a derogative towards the real growth of the country. The only curbing measure can come from the government in the form of luxury goods taxation.
Finally, I would like to sum up with an international event of utmost importance. This is an event which would hold significance in years to come in the future. Yes...You people got me right. I would now be talking about the new US-France relationship which might just get stronger, based on France's return to the NATO (North Atlantic Treaty Organization). Recently President Nicholas Sarcozy announced sweeping reorganization of the French Military. The new plan reverses decades of French security policy, primarily focused on a Cold War-style invasion scenario. The new emphasis highlights counter terrorism and intelligence. The step is likely to bring Paris closer to Washington, which signals a beginning of a new era in US and French relationship. France till now was the only country to echo it’s thought against US monopoly and dominance. Now, with the change in the government and its stance, the international arena and the world political field has become a ground without opposition for US. This is a very alarming situation, which needs everyone’s attention.
Overall, the magazine provided a good overview of the current global as well as national political and economic scenario and I think it’s a must read.
 The recent Business Today magazine's issue dated July 13, 2008 was very informative. I thoroughly enjoyed reading the variety of topics covered in the issue, right from thetop 10 MBA school rating, which would provide the budding managers of tomorrow to make a conscious approach for higher education, to the interesting story about some of the world's finest restaurants which was nothing less than sheer gastronomical delight for a foodie like me. The eye opening story about the growing discontent amongst the Karnataka's farmers for lack of support from the Government in receiving fertilizers,made me ponder upon the real condition of Indian farmer. This issue covers a wide variety of articles which were up to the standard maintained by business today in business news coverage.
I was really impressed with the coverage of the top MBA colleges and the issues related them in the magazine. They have provided an in-depth description about the top ten B-schools and the special courses that each of them is renowned for. This will provide a lot of insight for the MBA aspirants, who would be able to choose the course according to their interests. Along with this, it was quite interesting to read about the dominance of IIM-A as the top-ranker in the MBA market being challenged by other B-schools.
The article about finest restaurants in the world caught my fancy most. The description of different location worldwide of different eateries, their ambiance, the delicacies they offer and the average price of having a meal there, was really a wonderful information for a foodie like me..
Although all the articles were good, but one article that made me think and feel heavy on my heart was the article on farmers in Karnataka. The article talks about the growing discontent amongst the farmers in the state, who are suffering from the acute shortage of fertilizers such as DAP, which is to be provided by the government. Due to lack of this fertilizer and copious rainfall in the area, they have not been able to sow any crop on their land. This lead me think about the 70% population of our country who works day and night under the extremely miserable condition to satiate the hunger of our whole population. They have to spent many sleepless night out of hunger, have to depend upon the vagaries of nature, have to wait endlessly for government grants that hardly reaches them and many have to go to the extent of committing suicide to escape the debt trap. In this scenario, how can we call that India is progressing?
All in all, there are a wide variety of issues tactfully covered in the magazine's recent issue, and it would prove to be a good read for all people with different interests.
Over the past few years, the Indian mobile phone segment has witnessed a huge surge in the number of users of Reliance Communications and Bharti Airtel Ltd. This has left behind other telecom players such as Idea Cellular and Spice Communications in the booming Indian telecom market. To keep up with the superior quality services offered by the other telecom giants, Kumar Mangalam Birla's Idea Cellular has made a move to acquire 40.8 per cent stake in the B K Modi-owned Spice Communications for a sum of Rs 2,716 crore. This merger would bolster the merged company's market share and profits, as Spice has a large customer base in states such as Punjab, Haryana and Rajasthan. In fact, Spice is the preferred telecom service provider in the rural areas of these states. On the other hand, the use of Idea Cellular’s services is more prevalent amongst the urban areas.
With this clever move on the part of the two companies, they would surely benefit in having steady clientele in the urban as well as rural India. The merger will mutually benefit both the companies, which is pretty evident from the rise in their equity share prices. For the deal, Spice has been valued at Rs77.3 per share, which is a 40 per cent premium to its prevailing market price, while Idea is valued at Rs156.96 for a premium of 58 per cent on its market price before the deal. With this deal, the company can enjoy a pan-India presence and will help them to facilitate a much improved connectivity as well as offer better quality services in an expanded market.
This will also prove to be very beneficial from the customers' point of view. The merger would pose a challenge to the Bharti Airtel dominance in the Indian wireless telecom segment and would provoke them to offer cheaper and better services to all their customers. So, for end users like us, the whole deal is nothing less than a win-win situation!
First of all, I want to congratulate the 'Business world' magazine for coming up with such an informative edition (25th February 2008). The cover story “The great war” is really informative and reveals the true face of the business tycoons in India who are leaving no stone unturned to reach on the top of the telecom business. Whether it is youthful and thoughtful Kumar Manglam Birla, the business genius Ratan Tata, marathon man Anil Ambani or the telecom giant Sunil Bharti Mittal, everyone is applying every hook or crook to leave their competitors behind. The cover story also exposes the true face of the Indian business scenario where the manipulation game is on all time high. But, from the user point of view this competition is proving quite beneficial. The common populace is getting better service, better coverage area and better tariff rate, owing to this ongoing competition. This rivalry seems more than mere maintaining dominance in the telecom sector. It seems that these business tycoons are trying to prove oneself better than the others.
Even the story “Grey Market Blues” was an eye opener. The current crash of the stock exchange affected not only the giant share traders but even the common populace. The hype created by Reliance Power shares led many people to invest a large sum of money including the unofficial bucket (dabba) shop owners. The crash in the stock market brought a crisis situation to these unofficial bucket shop. This situation in the market is quite alarming as it was nearly the similar situation of the stock market in the USA in 1929 which resulted in the great depression. So even the government should observe the situation quite keenly and develop some mechanism to tackle even the worse situation.
Apart from these stories, the other coverage like “Green credits” which informs about ONGC collaboration with Norway's StatoilHydro on carbon management projects and “Falling Flat” which informs us about the narrowing of the gap between the lowest and the highest interest rates are also interesting as well as informative.
Overall this is a marvelous edition of 'Business world'. The magazine has lived up to the expectation of the avid readers like us who desperately wait for its every issue to be available on the stands. Great going 'Business world'.... continue your endeavor to bring the reality of the Indian business scenario in the same way.
A merger of the world’s largest software company Microsoft Corp. and internet media company Yahoo! Inc could pose a real challenge to search engine giant Google overseas and in new advertisement markets such as mobile Internet, but only if Microsoft treats some of Yahoo’s products as superior and let them survive.
Microsoft has made an aggressive bid to acquire Yahoo! for $44.6 billion, or $31 per share. If it becomes a reality, the new company would be the second largest player after Google in internet search and get nearly 600 million unique visitors monthly, from around the world under one roof.
The success of a merger, experts said, would however depend on how Microsoft treats some of the products under Yahoo. Microsoft has to admit that some of Yahoo’s products like its search engine are superior to that of Microsoft and let them survive post-merger.
From the market point of view, the merger company would compete with Google. Yahoo is strong in Asia, while Microsoft's web sites are popular in Latin America and Europe. The combined companies will be efficient and more competitive in offering their products.
At present, Google is the leader in online advertising. According to estimates by US strategy consulting firm Market space Advisory, Google has a share of 42 per cent of online advertising business, while Yahoo, Microsoft and Time Warner's AOL combined have about the same percentage of the market share.
The combination of Microsoft and Yahoo could also reshape the entire cyber landscape for millions of web users. It is matter of discussion as to whether the two companies would join their online portals or if they rethink about the desktop computer to integrate web content more directly. The changes could be huge, but probably not in the short term.
Microsoft officials have not indicated what exactly they would do with Yahoo's products if its bid is accepted. In his letter to the Yahoo board, Microsoft Chief Executive Office Steve Ballmer only said the merger company would have the potential to create ''a more efficient company with synergies in four areas: scale economics driven by audience critical mass and increased value for advertisers; combined engineering talent to accelerate innovation; operational efficiencies through elimination of redundant cost; and the ability to innovate in emerging user experiences such as video and mobile.''
However, analysts say post-merger the combined companies will preserve many of their separate services such as instant-messaging and e-mail programs.
In recent times, there has been a definite shift from the use of conventional fossil fuels to new and renewable energy sources that are cleaner, safer and inexhaustible. As the cost of oil soars, it becomes imperative to diversify energy sources and explore alternative ways to meet the country’s energy needs and sustain economic growth.
Bio-diesel is am alternative fuel, having diesel-like properties, synthesized by a simple chemical reaction of alcohols and vegetable oils. It is commonly made from edible oils like soya bean, rapeseed and palm oil in the world. However, in India, non-edible oil seeds of Jatropha and Karanjia are the raw material of choice.
Successful Tests
Indian Railways completed a successful trial run on the diesel locomotives using bio-diesel, hauling the Shatabdi Express between New Delhi and Amritsar. Following this, the Railways has started to use the oil from the Jatropha plant, blended with diesel in various ratios, to power its diesel locomotives in select routes of Southern Railways.
This was followed by another success story when Daimler Chrysler AG completed a 5000 kilometer trial run of a C- class Mercedes Benz sedan, powered by Jatropha bio-diesel. The trial run showed that the bio-diesel did not require any engine modification and can smoothly power any vehicle.
The Jatropha Plant
Jatropha oil is produced from the seeds of Jatropha Curcas, a plant that can grow in wastelands across India. The plant can grow on poor de-graded soils and is able to ensure reasonable production of seeds with very little water or other inputs. Plants start yielding seeds in 2-5 years, depending on rainfall and soil conditions. Once grown, the plant has a useful life span of over 30 years. The seed kernels contain about 60 percent oil that can be converted into bio-diesel by the process of transesterification.
The Future
Jatropha cultivation and subsequent production of bio-fuel is a crucial part of India’s plans to attain energy sustainability. Jatropha cultivation is also being considered as a good business opportunity. Large tracts of waste land have been selected for jatropha cultivation and it will also provide much-needed employment to the rural areas. The National and State Governments are actively promoting jatropha cultivation and agencies such as the State bank of India are providing financial assistance to the cultivation projects.
Thus the jatropha bio-diesel could well become the fuel of the future.
Global pharmaceutical company Zydus Cadila and US-based Prolong Pharmaceuticals Inc have entered into an agreement to develop a next-generation therapeutic protein 'PEG-EPO' to treat severe anemia.
Severe anemia is a condition where the hemoglobin level or number of circulating red blood cells is significantly reduced. This is common in chronic renal failure, some chronic inflammatory diseases, heart failure, cancer patients undergoing chemotherapy, surgical settings and critically ill patients.
EPO, The first generation drug, has proved effective in the treatment of severe anemia. However, new advances through research and development in therapy can improve EPO's therapeutic profile and lower treatment costs.
Zydus and Prolong with their combined strengths would increase productivity in the drug development of this new generation therapeutic protein. Both the firms will utilise Prolong's differentiated PEGylation technology to make PEG-EPO.
The only FDA-approved protein delivery technology, PEGylation transforms proteins into superior drug products, by attaching a polyethylene glycol (PEG) polymer to a therapeutic protein. This process results in an improved product with significantly enhance potency, a reduced dosing frequency and fewer side effects.
This joint effort will help in developing an optimized drug candidate with improved therapeutic properties. Both the companies will also be equitably sharing risk and reward for this collaborative program.
Zydus Cadila will utilize its expertise in carrying out a focused drug development program starting from pre-clinical candidate selection, filing of the investigational new drug, undertaking pre-clinical studies and human clinical trials and marketing it in mutually agreed upon territories globally. The collaborative program will bring an edge to Zydus' global biologics strategy with the introduction of an improved biologic product.
On the tie-up, Dr Abe Abuchowski, president and COO, Prolong, has been quoted as saying, “This collaboration will also enable Prolong to capitalize on the cost-effective drug development capabilities that India offers.”
Zydus Cadila, headquartered at Ahmedabad in the western Indian state of Gujarat, is the fifth largest pharmaceutical company in the country, with US$290m in turnover. It is a significant manufacturer of generic drugs. Zydus Cadila develops and manufactures a large range of pharmaceuticals as well as diagnostics, herbal products, skin care products and other OTC products.
"This agreement marks Zydus's foray into the area of novel improved biologicals. There is a strong unmet medical need in this space, and we are committed to discover, develop and provide better as well as safer alternatives to patients at affordable prices." said Pankaj Patel, chairman and managing director, Zydus Cadila.
Aditya Birla Retail Limited will have 500 outlets across India by March this year with a strong presence in the southern part of the country. The firm has at present 350 supermarkets and it plans to increase to 500 by March 2008, Sumant Sinha, CEO of Aditya Birla Retail Limited, said in a press conference in Bangalore recently.
Aditya Birla Retail is a part of the Aditya Birla Group, a US $24 billion corporation with a market cap of US $31.5 billion and in the league of Fortune 500. The food and grocery retailer is looking at an investment of Rs 8,000-10,000 crore (US $ 2-2.5 billion) in next three to five years with over 1,500 supermarkets and 50-100 hypermarkets all over the country, Sinha said.
A hypermarket would have a floor area of at least 60,000 sqft and the average size of a supermarket would be about 4,000 sq. ft, he said. Aditya Birla Retail also announced the rebranding of Fabmall grocery supermarkets to 'More' after the acquisition of the Trinethra Super Retail which includes retail brands Fabmall, Trinethra and FabCity in January 2007. The firm will have 275 stores across the southern states of Kerala, Karnataka, Tamil Nadu and Andhra Pradesh.
At present, Aditya Birla Retail has 60 stores in Bangalore, eight in Mysore and 10 in Mangalore. It plans to increase it to 100 stores in Karnataka by the end of this financial year, Sinha said adding that integration would bring 68 Fabmall stores in Karnataka under the 'More' banner.All Fabmall stores will be re-branded as 'More' by the end of January. The 'More' stores are supermarkets where consumers can get their everyday needs including a range of products such as vegetables, fresh fruits, personal care, homecare and grocery and dairy products, basic apparels and pharmacy.
Sinha said the organised retail industry in India is “still in a nascent stage” and that the market shares of the new entrants “were not very reliable”. He also said that high real estate prices “was still a cause for worry”. Aditya Birla Group’s foray into the retail sector began in 2006, when it acquired Trinethra, the south-India based chain of stores. Trinethra has over 170 outlets across Andhra Pradesh, Karnataka, Tamil Nadu and Kerala.
The Group operates in 20 countries -- India, Indonesia, Thailand, Laos, Philippines, Egypt, Australia, China, Canada, USA, UK, Germany, Hungary, Brazil, Italy, France, Luxembourg, Switzerland, Malaysia and Korea.
World’s Cheapest Car ‘NANO’ launched by Tata Motors:
Mr. Ratan Tata, Chairman, Tata Group unveiled the world’s cheapest car ‘Nano’ at the 9th Auto Expo in New Delhi on 10th January 2008. This marks the launch of the eagerly awaited Rs 1 lakh car from Tatas. Announcing the launch of the car, the Chairman said that the 623 cc model has been priced at just Rs 1 lakh. The project for the manufacture of Nano commenced about four years ago. These four years have witnessed a sharp rise in the prices for steel, rubber and other sundry inputs. Despite all these factors, Tata has kept its promise. As Mr. Ratan Tata said at the launch, ‘because promise is a promise.’
The 623-cc Nano is a 33-HP petrol engine car that adheres to Euro 4 emission and safety norms. The car has been especially designed to be ‘a reliable form of transport.’ With a mileage of 20 km/litre, this car is a rear-wheel drive, all-aluminum, with two-cylinders. The people’s car will cost just Rs 1 lakh plus VAT and other transportation costs. The Tttal cost is expected to range between 1.27 lakh and 1.30 lakh.
Taking about how the Nano project was conceived, Mr. Tata referred to the frequent instances of families driving on two-wheelers on busy Indian roads. A common sight is that of a father driving with a young child standing in front of him and his wife seated behind with another child on her lap. He said this often led him to wonder whether a safe, reliable and an affordable form of transport could be provided for such a family. Led by a vision to bring comfort to Indian middle-class families, Mr. Tata envisioned a Nano leap into the future, by bringing forth a people’s car, “for the people, of the people and by the people.”
The Nano will be available in three variants: standard and two deluxe models with AC. While the standard version will be rolled out in September, the diesel variant will soon follow. Nano is a compact, no-frills, family car on similar lines as Tata’s Indica (from the rear) and Daewoo Motors’ Matiz (from the front).
Although the Nano appearance and presentation have been much appreciated, the final verdict with regards to the success of the project rests in the hands of the people. However, one would need to wait for a few more months to know how the world’s smallest car fares with the people.
R.S. Sharma, Chairman and Managing Director of ONGC, has confirmed that ONGC Videsh Limited (OVL) and Ashok Leyland Project Services, a unit of the Hinduja Group, are partnering for jointly developing Iranian oil and gas assets. He was referring to Iran’s giant onshore Azadegan oil field and the South Pars Phase 12 gas field. He said that the representatives of the two companies would meet with Iranian officials on the following day here, to discuss further plans. The tie-up will be in the nature of a joint bid for the two assets, although the equity structure is yet to be finalized.
The Hinduja Group has already signed a Memorandum of Understanding (MoU) with NICO, a subsidiary of the National Iranian Oil Company (NIOC). OVL has a Memorandum of Agreement (MoA) with Petropars for development of Phase 12.
Iran does not give foreign investor companies a stake in its oil and gas assets, but signs buy-back agreements, where the companies hand over operation of fields to NIOC after development. The companies receive a pre-determined rate of payment from oil or gas production for a few years to cover their investment.
ONGC Videsh is the overseas investment arm of the state-run explorer Oil and Natural Gas Corporation. A venture in Iran would be ONGC Videsh’s second entry into the hydrocarbon-rich nation, where it operates the Farsi Block. The huge natural gas reserves, estimated at 10 trillion cubic feet, were confirmed in late 2006. OVL owns 40 percent participating interest in this venture.
Indian and Chinese firms are showing keen interest in developing the oil and gas assets in Iran, considered to possess the second-largest reserves in the world and also less susceptible to western pressure. Iran is the world’s fourth-largest crude oil exporter and Azadegan, located in the south-western province of Khuzestan, was its biggest oil find in 30 years, when it was announced in 1999. It has estimated in-place reserves of 26 billion barrels.
However, any attempt to invest in Iran could also prove controversial, as two sets of UN sanctions have been imposed on Iran so far, because Tehran has refused to stop uranium enrichment, a process that has both military and civilian implications.
Earlier in March, India’s Essar group had been in talks with Iran about developing the Azadegan field. But the group, which has bought a U.S. steel plant, is currently reviewing its legal position on investing in Iran to see if it is violating U.S. sanctions on Tehran, after a U.S. governor challenged Essar’s proposed refinery plans in the Islamic nation.
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