Daily News Digest- 6th Dec'13

Thought of the Day:

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Following made the Headlines:

India:

• Amul Board Votes Out Chairman: Amul’s high-voltage boardroom battle reached a flashpoint as 15 of the 18 directors voted out Chairman Vipul Chaudhary at a stormy meeting on Thursday, leaving a cloud on the 13,700-crore institution that markets the Amul and Sagar brands of dairy products, reports Our Bureau from New Delhi.

• Market Blooms after Exit Polls See Bumper Harvest for BJP: Indian stocks rose 1.2% on Thursday after a series of exit polls showed that BJP is likely to sweep three out of four major states that went to the polls in the past few weeks, raising expectations of a Narendra Modi led victory in the general elections to be held next year. BJP and its prime ministerial candidate Modi are perceived by many investors as being more business-friendly and reform-oriented than the current Congress-led United Progressive Alliance, and therefore, better equipped to put the economy back on a high growth path. Exit polls have forecast BJP emerging as the leading party in Rajasthan, Madhya Pradesh, Chhattisgarh and Delhi.

• Brand ‘Namo’ All Set to Make Waves in Retail Space Too: An Ahmedabad-based company has filed to trademark Namo, the acronym by which Gujarat chief minister and BJP prime ministerial candidate Narendra Modi is becoming widely known around the country. Take India Beyond Merchandising has filed dozens of applications on various versions of the name in Hindi and English. These include Namo, Namo Lekh, Namo and a sketch of a lion with the tagline — The Lion of India, Namo Mantra — Taking India Beyond and Namo Mantra — The Turning Point. The applications have been filed in various trademark classes including beer mugs, paper towels, lunch boxes, bed linen, dairy products, soft drinks, potato chips and others. Ketan Amichand Vora, one of the two promoters of Take India Beyond Merchandising, said the company has filed for the trademarks in order to leverage brand Namo. In the coming months, the company plans to launch Namo-branded merchandise, toys, colour paints for children, etc, he said. People close to Modi have been planning to start Namo-branded stores nationwide to sell various products including the distinctive kurtas that Modi wears, books, candles, incense sticks and various products as part of the effort to drum up support for the candidate in national elections next year. One person close to the Namo retail push said the group behind Take India Beyond is the same as that’s associated with the retail venture. They said the retail rollout was on hold as Delhi, Rajasthan, Chattisgarh and Madhya Pradesh were in the process of holding state elections. With these having got over, the plan will now proceed, they said. The venture is in talks with malls in cities including Delhi and Ahmedabad for taking on retail space, they said. The applications were filed in September and most of them are currently being processed at the trademark office. However, some applications may be contested by others who have already filed to trademark the name under various categories before the Namo brand became famous in the last year or so. For example, Gun Sagar Jain has been using the Namo brand since 2000 and has also registered it for the distribution and wholesale retailing of hosiery garments. Namo India Developments applied in September 2012 to trademark the name under building construction, repair and installation services. That application has been challenged, according to the website of India’s Controller General of Patents, Designs and Trademarks.

• GoAir Takes Indigo to Court Over Name of Booking Site: India’s biggest airline IndiGo has been thrown a legal challenge by its smallest rival GoAir, which said it is losing online customers to the carrier because of similarity in the first part of their website domain names. IndiGo operated by Interglobe Aviation uses ‘goindigo.in’ as its web address name while Wadiagroup’s GoAir uses ‘goair.in’. “Indigo airline is using ‘goindigo’ as domain name for its ticketselling portal and also promoting it as their own trademark,” said one of people who spoke to ET on condition of anonymity. “This is hurting GoAir’s business interest as the website contains ‘Go’ as one of the key word that they have bought from search engine Google and that’s affecting the company adversely. Wadia Group owned airline’s customers are getting diverted towards Indigo,” he added. “Go had tried to resolve the issue through talks, but Indigo was not very forthcoming to settle the issue hence it was left with no choice but to file the suit against Interglobe Aviation which operates IndiGo,” said the person. Low-fare carriers are the biggest beneficiaries and dependants of online ticket sales, as it is a more cost-effective and faster transaction system for them. Internet search engines such as Google show results on the basis of the order of words or even syllables that are typed into the search bar. The airline has accused IndiGo of “passing off ” and “infringement” of its trademark, as both companies are engaged in the same business. ‘Passing off’ in IPR law means making a false representation that is likely to force a person to believe that the goods or services are those of another.

• Diesel demand dips for first time in a decade: Diesel demand has declined for the first time in over a decade as monthly price increase and rise in power generation pulled down demand, IndianOil chairman R S Butola said on Thursday. “This year there has been 0.8-1% degrowth,” Butola said at the 3rd World Energy Summit here. Improved power generation reduced use of generator sets, which resulted in lower demand for diesel. “But the bigger reason is the move to deregulate diesel rates through small monthly increases. Small adjustments of 50 paise every month has brought some parity with cost,” Butola said. Diesel rates have risen by a cumulative Rs 6.62 per litre since January, which has also led to a drop in demand for diesel cars. Diesel is India’s most-consumed fuel, accounting for close to 45% of the demand of total petroleum products. Since 2003-2004, the demand for the main transportation fuel had been growing at a healthy rate of 6-8%. Butola said petrol consumption had dropped when the fuel was deregulated in June 2010 but diesel continued to see rise in consumption as it was heavily subsidized, thereby discouraging people to use it optimally. Now petrol is on a par with its cost of production but the current selling price of diesel is still Rs 9.99 a litre less than cost. “We believe that market forces need to be allowed to have proper inter-play (on demand and consumption),” he said. While diesel sales dropped in the first seven months of the fiscal, petrol consumption rose by 10% to 9.1 million tonnes. But, overall fuel demand during the April-October period was largely unchanged at 90.6 million tonnes against 90.2 million tonnes in the same period last year. Besides losing Rs 9.99 a litre on diesel, state-run fuel retailers are losing Rs 36.2 per litre on kerosene sold through ration shops and Rs 542.5 per cylinder of cooking gas. The slowdown in economic growth could also be a factor in dampening demand. Growth slowed to a decade low of 5% in 2012-13 and is expected to be in the same territory in the current fiscal year as well. Industrial growth has also remained sluggish.

• Warburg Pincus and Faering Capital invest Rs 300 crore in Biba Apparels: Private equity firms Warburg Pincus and Faering Capital have invested about Rs 300 crore in Biba Apparels, a firm engaged in women and girls' ethnic wear. "The investment includes a primary fund raise and provides an exit to the existing investor, Future Lifestyle Fashions Ltd. The transaction is the largest private equity investment in the Indian ethnic wear market," Biba said in a statement. On November 12 this year, Future Lifestyle Fashion Ltd (FLFL), part of Kishore Biyani-led Future Group, had divested its minority stakes in Biba Apparels. Commenting on the development, BIBA Managing Director Siddharath Bindra said: "I am very happy to be able to provide a healthy exit to Future Lifestyle Fashions Limited, who has been an excellent partner to the company so far. I am also very excited to now have as partners Warburg Pincus and Faering Capital, as we scale up BIBA to the next level." Warburg Pincus Managing Director and Co-head India Vishal Mahadevia said: "Warburg Pincus' investment in BIBA reflects its recognition of the company's high-quality management team led by Siddharath Bindra. We are excited to partner with BIBA'S management team as they continue to grow the business going forward." BIBA Apparels, which was established in 1986, has over 330 sales points across the country.

International:

• Anti-apartheid icon Nelson Mandela dies at 95: Nelson Mandela, South Africa's first elected black president and a global anti-apartheid icon has died early today aged 95, President Jacob Zuma said. "Fellow South Africans, our beloved...The founding president of our democratic nation, has departed," Zuma said in a nationally televised address. He passed away peacefully at 20:50 (local time), December 5, Zuma said. "He is now resting. He is now at peace...Our nation has lost its greatest son. Our people have lost a father," he said. Mandela will have a state funeral. Zuma ordered all flags in the nation to be flown at half-staff from today through the funeral, the BBC reported. Madiba, as Mandela was fondly known, had been battling health issues in recent months, including a recurring lung infection that led to numerous hospitalisations. Friends and relatives of the ailing statesman had gathered yesterday, at his Johannesburg home where "democratic South Africa's founding father" was said to be on his "deathbed". Daughter Makaziwe Mandela, in an interview to national broadcaster SABC, had said, the 95-year-old world leader continues to fight against the ailments ravaging him. Grandchild, Ndaba Mandela, yesterday had also lamented Mandela's ill state. Mandela was admitted to the Pretoria Heart Clinic in June, where he was treated for a recurring lung infection before he was released to receive home-based care nearly three months later.

• US fast-food workers stage nationwide strike: Fast-food restaurant workers across the US are staging a 24-hour strike in protest against low wages. Walkouts were reported in New York, Chicago, Washington DC, and also Detroit, Michigan; Raleigh, North Carolina; and Pittsburgh, Pennsylvania. Organisers hope workers in as many as 100 cities will participate in what is the latest in a series of such actions. Unions want a $15-an-hour (£9.19) federal minimum wage. The current one, set in 2009, is $7.25 per hour. President Barack Obama, who has backed a Senate measure to increase the minimum to $10.10, specifically mentioned fast-food workers "who work their tails off and are still living at or barely above poverty", in an economic policy speech on Wednesday.

• Jaguar Land Rover confirms Brazil car factory plans: Jaguar Land Rover has confirmed plans to build a car plant in Brazil capable of producing 24,000 vehicles a year. The UK car company had been in talks about the project with authorities in Rio de Janeiro for months. JLR, the luxury car unit of India's Tata, said that it would invest £240m (750m reais) in the factory, which would begin production in 2016. JLR, which is also building a plant in China, is targeting the new rich in emerging economies. Dr Ralf Speth, chief executive of JLR, said: "Brazil and the surrounding regions are very important. Customers there have an increasing appetite for highly capable premium products." JLR's sales in Brazil for the first ten months of 2013 have increased by more than 40% to 9,549 vehicles. The company's best-selling models in the country are the Range Rover Evoque, Freelander and Discovery Producing cars locally means JLR will avoid Brazil's high import tariffs. Nor does JLR have to form a partnership with a Brazilian company, as it had to in China. As part of its joint venture in China with the Chery Automobile Company, JLR is building a manufacturing plant at Changshu. Tata bought Jaguar and Land Rover in 2008 and has won plaudits for the way it has re-established the two prestige marques. In September, JLR announced plans to create 1,700 jobs at its plant in Solihull in the UK as part of a £1.5bn investment to expand its product range.

• The Clarks Group Names Thomas O'Neill Chairman: Thomas O’Neill has been appointed chairman of The Clarks Group, the British footwear firm said Thursday. His appointment is effective immediately. O’Neill, who is already a non-executive director on the company’s board, succeeds Peter Davies, who the firm said had reached the end of his term in the chairman’s role. O’Neill is a veteran of the retail landscape, having served as ceo of Harry Winston and as president of the Harry Winston Diamond Corp. from 2004 through 2010. He also served as worldwide president for Burberry from 2001 through 2004 and has held senior roles at LVMH Moët Hennessy Louis Vuitton, Marc Jacobs and Tiffany & Co. Melissa Potter, ceo at The Clarks Group, commented: “[O’Neill’s] extensive experience working with global retail brands in the USA, Europe and Asia, combined with his in-depth knowledge of the Clarks business made him a natural choice for the role of chairman.”

• Chanel Acquires Lambskin Tannery: In a move to ensure future supplies of the leather used to make its quilted handbags, Chanel has acquired a 100 percent stake in French tannery Bodin-Joyeux, a specialist in supple lambskin. Financial terms were not disclosed, but Chanel said the tannery would continue to supply its existing customers, said to include such luxury brands as Hermès and Louis Vuitton. Founded in 1860, Bodin-Joyeux today produces about 500,000 skins annually and employs 100 people in Levroux, a town in central France. “We use more than half of what they produce, so it’s an important supplier for us,” Bruno Pavlovsky, Chanel’s president of fashion, explained. “The idea is to ensure the continuity of the company.” He noted it’s the first time Chanel has invested in a supplier so far upstream, speaking to the rarity of the enterprise and the raw material. Chanel acquired Bodin-Joyeux from the Bodin family and said Frédéric Bodin would remain as president of the firm, originally a specialist in parchment and one of the last remaining makers of the stiff, thin skins, which are used primarily in bookmaking. Chanel has purchased what’s known as “plongé” lambskin from the firm for almost three decades to realize its classic quilted flap bags, first designed in 1955 and retailing today for roughly 3,000 euros, or $4,075 at current exchange. Pavlovsky noted it takes three or four lambskins to create a handbag, depending on the size. Bodin-Joyeux controls the entire tanning process, from beam house operations through to dyeing, enabling it to deliver a broad spectrum of colors, he added. Chanel and Karl Lagerfeld are expected to showcase some luxurious quilted bags made with Bodin-Joyeux leathers on Tuesday when it presents its latest metiers d’art collection of luxury ready-to-wear for pre-fall in Dallas. Pavlovsky noted Chanel is keen to ensure savoir-faire and production capacities around its iconic products. Last year, the firm acquired Scottish cashmere expert Barrie knitwear, maker of Chanel’s bicolored cardigans and other sweaters for more than 25 years. The transaction is the latest signal that Europe’s big luxury groups are keen to secure suppliers of the rare raw materials and technical know-how needed to make their high-margin products.