Monday, February 11, 2013

Its overseas expansion

Satobumi Taguchi, Deputy General Manager (Paper Trade Dept.), Overseas Division, Nippon Paper Group, Japan, talks to B&E’s Gyanendra Kumar Kashyap & Ashutosh Harbola about Nippon’s vision 2015 and its overseas expansion.

B&E: You were mulling to buy an Australian firm. Has the deal been materialised?
(ST):
Australia has a commercial publishing market with sustainable growth and low domestic productiom ratio. We have acquired the firm (Paper Australia from PaperlinX) for $459.98 million. While the completion of the deal provides us an opportunity to expand our business into Australia, we will certainly plan to leverage from the deal to create a global presence.

B&E: You import 9% of soft wood and 60% of hard wood from different countries and a big chunk comes from Australia. Don’t you think Nippon is too much relying on Australia?
(ST):
As far as Nippon is concerned, about 14% of the total supplies were met from our own plant. Furhter, I feel there is no such relation of dependence on any specific country. Buying is a different factor, but due to our presence in different categories like pulp manufacturing, paper mills etc, we have a wider pool to choose from. Australia is a big supplier and we have great relations with that country. Also, the deepening relationship with PaperlinX will contribute to our overseas expansion in the near future.

B&E: The demand of pulp supply is shifting from North America and Europe to Asia. Don’t you think China is coming up as a big competitor?
(ST):
So far as the Asian market is concerned, we export to Singapore and other Asian countries. This is a part of our strategy and precisely a weak-link as far as China is concerned.

B&E: Of late, prices of soft wood and hard wood have risen to $1,000 and $850 per tonne respectively. Don’t you think these high purchasing cost is affecting your profit margins?
(ST):
It’s not the soft wood or hard wood, prices of other raw materials and shipping costs have also risen significantly. Be it fuel or anything. But, what gives us an advantage is that we are not only in papers, but also into manufacturing pulp. That’s why our profit margins are not that affected.

B&E: The paper and pulp industry can get into bio-fuels that could solve a lot of power needs and even economical also. Your comments?
(ST):
I think this is the next big thing a paper and pulp industry should get into. In fact, more and more renewable energy sources can be created and as our responsibility to the nature, we also need to pay attention to that point.

B&E: Have you ever thought on issues like recycling?
(ST):
We are already recycling our paper. we recycle almost 100% of our newspapers and 50% of magazine paper as we understand that these are limited resources which can be conserved by recycling.


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

Thursday, February 7, 2013

BURNING CARS: THE TRUTH

As car manufacturers double up efforts to ensure cars don’t catch fire, it is important for customers also to understand how they might be ‘the’ problem in such incidents. by Pawan Chabra

Many similar Ajays and Pramods in the Indian market have literally put their lives at stake and eventually ended up spending lakhs just for saving a few thousands. According to data provided by Indraprastha Gas Ltd., there are around 170 certified CNG kit suppliers in Delhi alone, but consumers still visit local suppliers and get the uncertified kits fitted. Further, the technology is still crude. Cases of leakages in the CNG pipe or problems in the valve of a vehicle are a daily affair at several CNG stations. “The technology has been just lifted from western countries. It needs some refinement so that it can adapt the Indian climate,” says Ramesh Kumar Gautam, an employee at one of the CNG stations in Delhi.

The story is no different with the LPG-kit fitted car owners. In fact, some car owners use gas cylinders that are meant for household use. “We refrain from selling our alternative fuel empowered cars in regions where the alternative fuel is not available as it encourages unsafe practices,” reasons Mayank Pareek, Managing Executive, Sales & Marketing, Maruti Suzuki. He adds that though Maruti is working on developing CNG and LPG variants of its models, it will only happen once the network for these fuels fully develops in India.

Undoubtedly, car manufacturers are doing their bit to control such incidents, but then no one has a control on unsafe practices undertaken by individual consumers. For instance, in western countries, the after-sales market is equally divided between authorised service stations and multi-brand car workshops. But in India, customers prefer to go to the neighbourhood garages rather than visiting an authorised service centre to get their car serviced. Moreover the concept of multi-brand car service shops has still not picked up. “The trend and magnitude of neighbourhood garage shops is almost exclusive to India. Having said that, the trend is changing and consumers prefer authorised showrooms over the neighbourhood garage shops,” Jagdish Khattar, former Maruti head honcho and current MD, Carnation Auto tells B&E.

All this clearly indicates that just as car manufacturers need to be put under the scanner for service defects, there is a need to reinforce safety measures and the government should persuade consumers to follow the same either by incentives or by increasing the cost of non-compliance.


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

Rehman Malik, Interior Minister, Pakistan

On Mumbai attack
We have always condemned such attacks and we condemn it once again. Within hours, our Prime Minster and the President called Delhi and assured full support to India. We ordered an investigation even before India gave its first dossier. Seven accused are under trial currently while more that 16 have been put on the absconding list. However, as an independent judiciary, it has its own ways. But we are positive that the trial will be finished in coming months.

On custody of Ajmal Kasab The process is very simple. When the conspiracy is made somewhere, then the culprit should be tried there too. So, if the trial of Kasab is over, we will like him to be tried here too. We can discuss it later. The only thing is that we want India to talk to us on a common level. Not breathing down our neck. On intricacies of trial
We have not yet been provided with the Kasab’s statement. It is not good for us and it is not good for India. There is constant pressure on us to arrest Hafiz Saeed. But we have not yet received proof. We have just been offered allegations. We arrested him but he was released by the court because we were not provided with the info. There was some information on Lakhvi but we filled the gap. Our intelligence agency managed to track the server to Russia, Kuwait and elsewhere.

On David Headley
No information has been shared with us. Since it is claimed that he hatched the plan here, we need to receive information. We will also love to investigate him. He is subjected to US law and India is yet to receive access. If we have any information we will provide it.

On Hafiz Saeed’s hate speech
We cannot stop anybody from making speeches. If you start putting people behind bars for making hate speech, half of India and half of Pakistan will be behind bars. Under the anti-terror act of Pakistan if anybody instigates terror he can be put behind bars.


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

Wednesday, February 6, 2013

“We should aspire & work for prosperity””

In this exclusive interaction with virat bahri of B&E, Dr. Isher Judge Ahluwalia discusses her views on the potential & challenges of the Indian economy

Dr. Isher Judge Ahluwalia plays a phenomenal number of roles apart from her position as Chairperson, ICRIER, which highlight her remarkable contribution to resolving critical issues of Indian economy & policy. Besides being Member, National Manufacturing Competitiveness Council, Government of India & Chairperson of the High Powered Expert Committee on Urban Infrastructure by the Ministry of Urban Development, she is on the boards of a number of research institutes in India & abroad; and a recipient of the Padma Bhushan in 2009 for her achievements in education & literature. In the second part of this two-part interview series, she elaborates on issues related to poverty alleviation and urbanisation:

B&E: Analysts seem particularly obsessed with GDP growth & Sensex. What other indicators can help ascertain our economic health?
IJA:
These indicators are ultimately only signaling devices. Along with GDP growth, we should be looking at employment growth. Besides, we should look at social indicators like life expectancy, Infant Mortality Rate, Maternal Mortality Rate, literacy & immunisation. These are determined by long term factors. When you look at life expectancy, you look at it every ten years; when you look at production in the economy, there is focus on GDP. So nothing by itself will tell you the total story. But I am not advocating happiness index because I know that it can not be measured. I believe we should place more importance on employment. If we do that, we will understand how regressive our policies have been and how they stand in the way of providing employment. Related to that is education and providing the right skills. We keep talking about the demographic dividend. But it could become a demographic disaster if we don’t endow our youth with the skills that the market needs.

B&E: Do you believe in the trickle down effect to bring down poverty?
IJA:
I prefer the inclusive growth approach. In the late 1970s, the debate was about growth vs distribution. It was assumed that because you needed to redistribute, you accept a certain reduction in growth rate. So we instituted policies presumably directed at redistribution but actually created a situation in which virtually no growth took place. By the end of the 1970s we could figure out that the policies made no dent on poverty and that the percentage of people below the official poverty line remained around 50% through the 60s and 70s. Growth was at the infamous Hindu rate of growth of 3.5%. Distribution did not improve very much. In the 1980s we realized that we were wrong not to focus on productivity at all. If you only talk about distribution and curb all channels that generate productivity and growth, there will be no growth and no improvement in standards of living. The VIth Plan placed emphasis on productivity for the first time. In the 80s, we were able, through hesitant experiments here and there with domestic deregulation – making the process of licensing easier, decontrolling the price of cement, simplifying the trade policy regime – in facilitating the market to work. It was still a closed economy framework. We did not open up to foreign trade and investment. We did not reform the public sector. Even so, we were able to raise the GDP growth rate to 5.5% per annum. We were able to reduce the percentage of people below the defined poverty line to 33% by the end of the 1980s. This proves that you need a sustainable higher growth rate to make a dent on poverty.


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

Tuesday, February 5, 2013

A stem cell in need...

Being the pioneer in stem cell banking in India, LifeCell does have a head start. But these are early days in this industry and digging beyond the iceberg’s tip is going to be the real challenge by Virat Bahri

We rightly do not consider their banks or their auto companies as role models, but there are areas where we can learn from the American way of life and from their democracy. The manner in which they debated the morality of the use of human embryos (which would get destroyed in the process) for stem cell research is one instance (although it was amusing to see George Bush oppose the use of taxpayer’s dollars for destroying human embryos while using it in the wars in Iraq and Afghanistan!).

The scenario in India is quite different; where a debate on statehood is still far more likely to grab bigger headlines. Moreover, India is a market where health insurance itself has penetrated just about 3% of the market, so stem cell treatment looks even more distant. As far as morality of using embryos is concerned, we ourselves would sound like hypocrites even raising the issue; considering that around 7,50,000 abortions happen every year in India (UN figures), because they were girls.

Mayur Abhaya, ED, LifeCell International was never doubtful of the potential of this business when the company was set up in India in 2004 in technological collaboration with CRYO-CELL International Inc. The twin challenges that they faced instead were to create awareness in the Indian market and create acceptability in terms of pricing.

With a focus on embryonic stem cell banking, the company’s primary target audience is expectant parents from SEC A+, SEC A and SEC B categories. Initially, the company was constrained by availability of funds and therefore tried to reach out to customers through a B2B strategy (gynaecologists). Slowly, the company is targetting end customers through advertising, events, et al. Besides, the company is trying to improve penetration through EMI schemes et al. Tie ups are being done with players like Club Mahindra, Fitness One and Kaya Skin Clinic. The company has decided to position itself on the lifestyle plank to broaden its appeal.


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

Sunday, February 3, 2013

IT’s dark knight

Raju’s fraud has seriously dented India Inc.’s image

We do want to match America in many aspects, but surely corporate scandals don’t belong to that list. Unfortunately, Ramalinga Raju, Chairman of Satyam brought India to the hall of shame this year itself when he admitted to cooking up account books of the company. He is now in prison for claiming non-existent assets to the tune of a staggering $1.6 billion. As Hitesh Agrawal, Head-Research, Angel Broking, points out, “The biggest dent that this Satyam episode has created is in the ‘trust’ factor of investors towards companies, auditors, reported numbers by companies, et al, which is an element that cannot be written in black and white, but is a practice that has to be diligently followed.” One lesson that we draw from Satyam episode is that formal corporate governance recognition in Indian IT industry in reality relies on ticking check boxes. Tech Mahindra (the IT arm of Anand Mahindra Group) has now picked the fraud stricken IT giant at Rs.28.89 billion. And Raju has lost all that he built in so many years by bowing to selfish personal interests.


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.