Thought of the Day:
“I don't know the key to success, but the key to failure is trying to please everybody"~Bill Cosby
Did you know?
“The dishwasher was invented by Josephine Cochrane— a socialite who was tired of servants breaking her expensive dishes”Following made the Headlines:
India:
- Britannia Dunked in Churn, Bali Goes Abroad: Britannia Industries, the country’s leading biscuit maker, on Monday said Chief Operating Officer Varun Berry will lead its India operations, making him the clear favourite to succeed Vinita Bali, the company’s long-serving managing director, who retires in two years. The 58-year-old Bali, who has been Britannia’s MD since mid-2006, will focus on international operations, business development and the company’s nutrition foundation, said a company statement. A person with direct knowledge of the development said Berry’s enlarged role was part of the Nusli Wadia-owned company’s succession plan. The 50-year-old Berry, who joined Britannia earlier this year, will report to the company’s executive committee that includes Bali. Prior to joining the company, Berry was the CEO of PepsiCo Foods and has worked for over 27 years in various companies, including Unilever.
- This Kapoor Too Stars in a Home Production!: The family of YES Bank CEO and Managing Director Rana Kapoor has bought a residential building — jointly owned by Citibank and GlaxoSmithKline — on tony Altamount Road in Mumbai for 128 crore, and plans to build a home there. The building is next to Mukesh Ambani’s 27-storey Antilla. Khursheedabad Building, the apartment block, was put on the block in March this year. The building, built on a third of an acre plot, stands in the middle of a posh neighbourhood that boasts of homes of some of India’s richest businessmen — Ambani and Kumar Mangalam Birla — as well as of Washington House sold recently by the US Embassy to Lodha Developers. It has six apartments in all, of which the US-based bank owns five while one is owned by the British healthcare firm. At least two persons involved in the deal said the building has been acquired in the name of Kapoor’s wife Bindu and a privately held company. The Kapoors plan to bring down the structure to build their home and a small office for themselves, one of the persons said. “My family has bought (the property), and not me,” said Kapoor in an SMS to ET. A spokesman for Citibank declined to comment while GSK’s spokeswoman could not be reached. The transaction was managed by property advisory firm CBRE, a source said. He said other bidders for the property included Mumbai-based Indiabulls, private equity firm Everstone Capital and the Vandrewala family of Hirco Plc. Delhi-born Kapoor, a career banker, is the founder of YES Bank, India’s fourth-largest private bank, and has been on the lookout for properties in south Mumbai for the last one year. Several Indian businessmen have been buying expensive homes in Delhi and Mumbai over the past few years. Earlier this month, ITC Chairman YC Deveshwar bought a bungalow in Delhi's Shanti Niketan area for 85 crore.
- For Jubilant, Doing a Domino’s With Dunkin’ Donuts Not Easy: Through its 63-year-old history, America’s largest donut and coffee chain Dunkin’ Donuts has allowed a different name for its stores only once — for India. All its stores in the country are branded ‘Dunkin Donuts & More’, because Indian consumers prefer to order coffee along with food. “Compelling research showed that if the India story didn’t have food in it, we wouldn’t be successful,” says Ajay Kaul, CEO of Jubilant FoodWorks, which runs Dunkin’ Donuts in the country. The $6.4-billion US firm has made a number of exceptions only for the Indian market including offering home delivery and launching donuts in gulab jamun and laddoo formats in the festive season, but as it completes one year in the country this month it is clear that Dunkin’ needs to overcome several challenges if it has to replicate the success of Domino’s Pizza, American pizza chain run in India by Jubilant. For one, there is a slowdown in the food retail business in the country with consumers controlling their discretionary spends due to economic slowdown. Another problem it faces is that unlike pizzas, donuts are not familiar to consumers in India. Then there are inflation, comparisons with coffee chain Starbucks and high rentals. Dev Amritesh, COO of Dunkin’ Donuts division at Jubilant, says, “The challenges include finding the right real estate and store-level staff.” Company officials say the business environment is more challenging than what it was for Domino's at least till the slowdown set in over a year ago. Now lower discretionary spends have started impacting food firms. Domino’s same-store sales growth during January-March, for example, slipped to 7.7% from 16.2% a year earlier. Jubilant, however, says it is happy with the way Indian consumers have responded to Dunkin’ so far. “Our learning is that even though the market is down, products with a brand proposition can do well,” Amritesh says, adding that its new Dunkaccino beverage is doing well. He says sales of donuts, sandwiches and beverages are evenly spread in India. CEO Kaul says, “We believe we’ve hit a sweet spot— between quick service and coffee chains.” Kaul, however, agrees that there is pressure from investors. “There’s pressure from street investors. But even they know that Dunkin’ is very small compared to Domino’s,” he says. Dunkin has just 10 outlets in the country against Domino’s 500 plus.
- Toyota Recalls Around 1,000 Corolla Altis Cars in India: Japanese car major Toyota is recalling about 1,000 units of the diesel variant of its sedan Corolla Altis in India, manufactured between August 3, 2012 and February 14 this year, due to a faulty driveshaft. The company’s Indian arm, Toyota Kirloskar Motor (TKM), said in a statement on its website that it has initiated a recall campaign this month for Toyota Corolla Altis Diesel. “The campaign is for Corolla Altis Diesel manufactured between August 3, 2012 and February 14, 2013,” it said. When contacted, a TKM spokesperson said the recall would “affect around 1,000 units” of the model sold in India. “A potential aberration on the left or right side of the driveshaft has been observed in a few cases. We have decided to proactively inspect and repair/replace the drive shafts,” the company said, adding, it was a precautionary measure. It further said the rectification might take about two hours. Last week, Toyota’s compatriot Nissan had announced it would recall 22,188 units of its small car Micra and sedan Sunny in India due to a faulty braking system, as part of a global exercise to rectify the problem. The company's wholly-owned subsidiary Nissan Motor India will recall the vehicles, which were produced between June 2012 and March 2013. Earlier in April, Toyota had recalled a select lot of its premium sedan Corolla sold in India, affected by its global recall of 17.3 lakh vehicles to rectify defective airbags.
- Mistry Focuses on Cost Cuts as Frugal Era Begins at Tatas: As Ratan Tata strode the halls of the Geneva Motor Show in March, joking with journalists and chatting with auto industry leaders, his successor at the helm of India’s biggest business group stood silently on the sidelines. Shunning the spotlight since taking charge of the $100-billion Tata Group in December, 44-year-old Cyrus Mistry has focused on belt-tightening at a conglomerate left bloated by explosive growth under his predecessor. “Ratan was much more ... strategic, more over-arching. Mistry’s much more focused. The CFOs as well as the business heads are going to find it a much more rigorous exercise,” a director who sits on multiple Tata company boards told Reuters. In early February, at his first Tata Chemicals board meeting as group chairman, Mistry sat quietly as directors debated efforts to find synergies between interests dotted around the globe, from Wyoming to Gabon. Bringing the discussion to a halt, Mistry politely but firmly outlined that further consolidation was the only way forward. “He summed up the decision: ‘This is what we are doing’,” a person present at the meeting told Reuters. “It’s quite clear he believes in the process of consolidation.” The last decade of Ratan Tata’s tenure saw revenue grow ten-fold to $100 billion in the year ended March 2012, fuelled by acquisitions including an ill-timed $13-billion deal for Anglo-Dutch steelmaker Corus and a more successful $2.3-billion purchase of luxury car brands Jaguar and Land Rover. The group spent billions more on overseas assets like engineering firms, luxury hotels and coffee brands. Tata Chemicals alone bought, invested in or merged with eight companies between 2004 and 2011. Mistry’s job is to consolidate, three directors said, an effort focused on getting more from existing businesses, as opposed to shedding assets. “A very good numbers man, very hard-nosed in the way he approaches things, which is what is probably sorely required now,” the first director said. In his first five months on the job, Mistry has ordered his CEOs to tighten spending, and replaced oversight structures to give him greater influence over the running of the more than 100 group companies.
- Jet to Focus on Overseas Routes: Jet Airways, the country’s second largest carrier by market share, has said it will focus on expansion of its more lucrative international operations rather than the slowing domestic market. The airline, which is selling 24% stake to Gulf carrier Etihad, will increase capacity on overseas routes by 10%-12% and develop a hub for flying more travellers towards the east of India, its management said in a conference call with analysts on Monday. “Indian passengers over the next three years will have the choice to fly anywhere in the world, either from the EU or Abu Dhabi,” Raj Sivakumar, Jet's senior vice-president for planning and alliances, said. “We are also looking at leasing narrow-body fleet to expand our eastern connections and develop an eastern hub, but this is not as advanced as the western strategy as of now.” The airline, controlled by businessman Naresh Goyal, on Friday said fourth quarter losses had widened to 495 crore, as increased fares could not offset the carrier’s rising operation costs. In the backdrop of its equity partnership with Etihad, the management announced a two-pronged strategy: increasing flights to Abu Dhabi and beyond, and direct flights to several European destinations. The eastern hub could be in the ASEAN or the SAARC region, it added. Jet also said it plans to pare its debt by about 3,000 crore ($550 million) this fiscal with the help of equity infusion through the Etihad deal and sale and leaseback of aircraft. “The alliance with Etihad Airways will bring immediate revenue growth through joint training programmes and maintenance of aircraft, and also through extended code sharing, creating a combined network of 140 destinations. The strategic investment will deliver wide-ranging revenue growth and cost synergy opportunities for both airlines,” said Sudheer Raghavan, Jet's chief commercial officer. The airline has reduced its debt from over 13,000 crore last fiscal to 11,200 crore this year. Debt reduction will also be done through regular principal repayment through operating cash flows, the airline added.
- Amway top bosses held for ‘fraud’: Amway India chairman and managing director William S Pinckney and directors Sanjay Malhotra and Anshu Budhraja were arrested on Monday and charged with cheating and violation of laws dealing with chit funds. Though the trio had obtained anticipatory bail in one case, they were arrested at the CB-CID office here on the basis of three other complaints filed in Kerala’s Wayanad district. The complainants had alleged that in 2002, Amway India attempted to collect money from them with the intention to deceive them by involving them in a money-chain scheme. Amway said it was cooperating with the authorities.
International:
- China Builds a $5-b City in Belarus: China is building an entire city in the forests near the Belarusian capital Minsk to create a manufacturing springboard between the European Union and Russia. Belarusian President Aleksandr Lukashenko allotted an area 40% larger than Manhattan around Minsk’s international airport for the $5 billion development, which will include enough housing to accommodate 155,000 people, according to Chinese and Belarusian officials. Lukashenko, who’s led Belarus for two decades, is turning to China to help revive a $60 billion economy that’s needed $6.5 billion of bailouts from the IMF and Russia since 2009. The hub will put Chinese exporters within 170 miles of EU members Poland and Lithuania and give them tax-free entry into Russia and Kazakhstan, which share a customs union with Belarus. It will also let them draw from a workforce that’s 99.6% literate and makes $560 a month on average, half the Polish wage. “This is a unique project,” Gong Jianwei, China’s ambassador to Belarus, said on state television on May 17, after the project won regulatory approval. “Nobody will be able to build anything like this industrial park anywhere else in Europe anymore. The infrastructure is so powerful.” The “modern city on the Eurasian continent,” as it’s called in marketing documents, will be built around the M1 highway that links Moscow and Berlin via Belarus and Poland. A speed-rail network will tie the airport to the centre of the city, which will be powered by a $10 billion nuclear plant, Belarus’s first, which Russia agreed to finance and build by 2018. The first stage of the park is scheduled to be completed by 2020, with the second stage taking another 10 years.
- Half of EU members 'oppose China solar tariffs': The UK and Germany are among at least 14 European Union members opposed to punitive tariffs on Chinese solar panel imports, according to diplomats. The revelation, made on Monday, shows a split among the EU bloc's 27 members. The European Commission - the EU's executive arm - argues that Chinese firms are unfairly undercutting rivals. It claimed China was pressuring members to oppose the duties, a day after German Chancellor Angela Merkel hinted in favour of a negotiated agreement. France and Italy are among those in favour of the duties while Germany, the UK and the Netherlands are in the opposite camp, according to Reuters, citing diplomats. One source, who asked not to be named, told the AFP agency that 17 member states "have come out in opposition". "In view of this considerable opposition, it is clear that the European Commission must step up efforts to find a negotiated solution," the person said.
- Australia plans to ban live betting odds during sports: Australia has unveiled plans to ban television and radio broadcasts of betting odds during live sports matches in a bid to curb problem gambling. Gambling advertisements will no longer appear during live events and around sporting venues, the government said. Prime Minister Julia Gillard said Australians had become "increasingly frustrated" with the promotions. The broadcasting industry is expected to submit a revised code to Australia's media watchdog reflecting the changes. "From the moment that the players step onto the field, to the moment that they leave the field, there will be no live odds," Ms Gillard told a press conference. "This is good news for families, because families I think have become increasingly frustrated about the penetration of live odds into sporting coverage." Under the new rules, advertisements would only be allowed before or after a game, or during a scheduled break in play, such as quarter-time and half-time.
- Seeking Duty-Free Status for Travel Goods: Coach Inc., Luen Thai USA and other manufacturers of a broad array of briefcases, purses and backpacks in the travel goods category are endorsing new legislation that could potentially provide fresh sourcing opportunities. Many companies in the U.S. travel goods industry are facing rising costs in China, which is the number-one supplier of travel goods to the U.S. market. But companies are somewhat hampered in where they can move production because China is such a dominant player and duties on travel goods imports to the U.S. can be as high as 17.5 percent. In an effort to find more cost-competitive alternatives to China, the industry is hoping to advance legislation that would expand a U.S. trade preference program and allow developing countries to qualify for duty-free benefits on exports of travel goods products. Reps. Ander Crenshaw (R., Fla.) and Adrian Smith (R., Neb.) introduced the GSP Update Act in the House on Wednesday. The bill seeks to expand the U.S. Generalized System of Preferences program to include most travel goods products that were exempted when the program was established in 1974. “Upon passage, travel goods, such as the purses, briefcases and backpacks, could be considered for approval as duty-free products by the U.S. Trade Representative under the [GSP] program,” said Crenshaw. “That’s a win-win for companies like Coach, in Jacksonville, Fla. [where the company has a distribution center], as well as our national security strategy in countries around the globe. The bill would give the travel goods industry viable market alternatives to China, which is not a GSP country.” If the bill is enacted, companies and countries would still have to petition the USTR office to request specific eligible items to be added to GSP. If a product is approved after a U.S. International Trade Commission review, the duty-free benefits would apply to all GSP-eligible countries.
Currency:
· 1 USD= INR 55.5725 (↓)
· 1 EUR= INR 71.7091 (↓)
· 1 GBP= INR 83.8436 (↓)
· 1 AUD= INR 53.4656 (↓)
Glitter Meter: India
Gold (INR/10g) | Silver (INR/kg) | |||
City | Current | Change | Current | Change |
Chennai | 26810.00 | 50 | 43660.00 | 195 |
Mumbai | 26530.00 | 50 | 43660.00 | 195 |
Delhi | 26840.00 | 50 | 43660.00 | 195 |
Kolkata | 26810.00 | 50 | 43660.00 | 195 |
World Indices:
Exchange | Last | Change |
DJIA | 15303.10 | 8.60 |
FTSE 100 | 6654.34 | -42.45 |
CAC 40 | 3995.16 | 38.37 |
DAX | 8383.30 | 77.98 |
Nikkei | 14171.70 | 29.05 |
Hang Seng | 22643.22 | -42.83 |
Sensex | 20030.77 | 326.44 |
NASDAQ | 3459.14 | 0.27 |