Friday, September 29, 2006

India's Love For Gold

The yellow precious metal gold is an old obsession with Indians. Their womenfolk has an insatiable craze for gold jewellery so much so that 80% of gold consumed in India goes for it. However, the global trend currently is for the fusion jewellery that uses platinum and gold.
Gold is a favourite mode of saving too. However, the return out of saving in gold has not always been attractive as at times investments in real estate and stocks have benefitted investors disproportionately. So whenever the stock-markets become dull, gold hoarding is noticed. Interestingly, gold is also held in very large quantities in many temples which are offered by devotees. Some speculative reports estimate gold reserve in India around 20,000 tonnes.
The consumption of gold in India is the highest in the world at 700 tonnes per annum out of total world annual consumption of 3100 tonnes. The demand is also seasonal reaching the peak when festive seasons like Navratri and Diwali start after monsoon. Again, the marriage season starts coincidentally almost around the same time and goes on till May or June. The gold prices had remained weak during the last month as the prices swung between $576 to $621 an ounce. The corresponding prices in India ruling then was Rs8900($193) per 10 grams. But the ground is getting ready for an upswing in gold prices. Some analysts forecast that the international gold prices may touch $700 per ounce and it will touch Rs10,000($220) per 10 gram.
Watch out for the next gold-rush!

Thursday, September 28, 2006

To Export Or Not To Export Iron Ore

For India racing to become a super economic power, fast expansion of steel manufacturing capacity has become an urgent necessity. The National steel Policy aims at a production capacity of 100 million tonnes by 2019-20 but some estimate it to reach 150 million tonnes the way new steel projects including those of the international giants like Arcelor-Mittal and Posco are springing up. Simple arithmetic puts the iron ore requirement at 240 million tonnes per annum. The estimated iron ore reserve in India is around 13 billion tonnes.
Another study puts only 6.311 billion tonnes are proven reserves and a balance 17.27 billion tonnes are probable and possible reserves. Exports from India have quietly risen to 90 million tonnes per annum. Some are apprehensive that iron ores may not last even for 30 years. One would be inclined to infer from the above that iron ore exports should be stopped. An expert 'Hoda committee' has poured oil over the flames by suggesting that export of iron ores should continue.
There are two schools of thoughts prevailing on the issue.On the face of it, exporting scarce raw materials without value addition does not make much sense. The Steel Ministry supporting the interest of the steel manufacturers wants the exports to be phased out in next 15 years. It has now got a political backing with CM, West Bengal openly criticising the export of iron ore.On the other side of the battle-lines are Mining and Commerce ministry officials. This tug-of-war will finally determine the future of Steel industry in India. Associated Chambers of Commerce and Industry of India (ASSOCHAM) released a paper recently titled "Indian iron ore: Where are we heading".
Anyone willing to hazard a guess?

Wednesday, September 27, 2006

Myths & Facts Surrounding Blogging

One fine morning I decided to take up blogging and within minutes, to my utter surprise, my blog was ready thanks to the user-friendly sites which offer ready-made free services. Having entered the blogosphere without knowing ABC of blogging, I found myself in an unenviable position - fight or flight was my choice. As the fight still continues, I got exposed to some myths that have metamorphosed to facts. I want to share my experience gained so far with you.
Myth #1: Blogging is a favourite past-time among only a limited number of people who are casual and pedestrian in their writing.
Fact: A mind-boggling 50 million Bloggers are at it and every second two new Blogs are born. A good number of Bloggers put heart and soul to their work. Some blog posts are as outstanding as some best sellers.
Myth #2: One has to just spend a few hours in writing and then forget about it.
Fact: Blogging requires meticulous planning, research and a good strategy to stay connected with the blogging community to get feedback and act upon comments. The posts should be regular and preferably at least one post a day.
Myth#3: As long as you think your post is having originality and unique style, the readers will surely lap it up.
Fact: Your posts should appear interesting in a cursory glance. To achieve this, a very catchy title is a must. Darren of Blog-Republic has made several useful suggestions in his Blog. The middle portion is equally important if not more explains lucidly Easton in his Bog Businessblogwire.
Myth#4: You have some creative thoughts and you know how to express them. You do not have to bother anything about technology.
Fact: One must have minimum technical background to make frequent changes and add features to the Blog besides making it stand out visually.
Myth#5: One can make money while blogging.
Fact: There are thousands of sites available to show how money-tree can be made to grow when you are blogging. AdSense, SEOs, pings and sitemeters are only a few tools available to monitor and maximise hits which set in an euphoria. The problem arises when some get carried away by such hits their Blogs generate and start believing that their writings are so popular as can be compared with the works of famous writers like Charles Dickens. If the mind is obsessed with how to get the blessings of Google, then paradoxically thoughts for creative writing will have no place.
How many of the above you accept as facts?

Tuesday, September 26, 2006

How To 'Tide' Over Energy Crisis

As the population explodes and economy expands, energy needs are multiplying on the expected lines. The unexpected answer is provided by what is abundantly available in nature - tide and wind. Of course, the conventional fossil fuel is also a gift of nature to mankind. But its excessive use has not only depleted already the reserves but also cause new problems of global warming. The search for alternative fuels has found that tide can be a dependable and clean energy source. Unlike the destructive power of tsunami which unleashes devastation and death all round, tidal waves can be tamed and transformed to useful energy.
As time and tide wait for no one, India is going to set up its first tidal energy plant of 3.5 MW capacity to generate power in Sunderbans, West Bengal at a cost of Rs 40 crores($0.9 million). Sunderbans has otherwise been known so far for the famous Royal Bengal tiger reserve. In the whole world, India will become the fourth nation to produce power from tide after Russia (400 MW), France (240 MW) and Canada (20 MW).
In a report appearing in Economic Times, the combined potential for tidal energy in Sundarbans, Kutch and Gulf of Cambay has been estimated at a whopping 9000 MW by the Ministry of Non-conventional Sources (MNES).The best part of the proposed plant spreading over 120m wide and 8500m long area is that it would not necessitate human migration nor would it cause any environmental harm.
Can anything be better than this?

Monday, September 25, 2006

A Billion Dollar Question

Some awards and rankings are simply awe-inspiring. Take for example - the Nobel prize which is regarded as the highest honour for the most outstanding work in the field of science, economics or peace. Similarly, Oscar awards are considered the most coveted in the world of entertainment. Shouldn't there be, therefore, any ranking for possessing the most-sought-after thing in life i.e. money? Why not, there are such honours the magazine Forbes bestows every year by bringing out a list of wealthiest Americans.
The list of 400 richest Americans has been published by the magazine by following a criterion of including only those with a net worth of minimum of $1 billion or more. For the last 13 years in a row, Microsoft's Bill Gates has been at the top position. The second position has always been taken by Mr Warren Buffett since 1994.The third ranker Sheldon Adelson has catapulted to the position from 15th held last year. His rise has an interesting background. He has made his wealth from casino unlike the likes of Bill Gates besides four others who are technologists and five Walton clans who made their fortune through retail sales. The two Google founders Sergey Brian and Larry Page got 12th and 13th ranking; all cyber citizens and Bloggers blogging round the globe have been directly using their creations.
Mr Adelson, however, is looking for a second property in Macau and a new casino in Singapore. These billionaires, perhaps, send one common message for their success - 'Money is lying all over. You should only know how to pick it up'.Very soon Forbes may decide to publish only names of 'trillionaire-athon' participants as the list of billionaires is becoming too long.
Who all are getting ready to take part?

Friday, September 22, 2006

Posco Bitten By M & A Bug?

Whether it is the survival instinct or the ambition to climb higher, Posco - the South Korean giant and fifth largest steel manufacturer in the world is looking for acquisition opportunities in Asia. The move appears to have been triggered by the threat perception of the company itself becoming target for acquisition by bigger sharks like Arcelor-Mittal Steel which has emerged as the largest manufacturer with a capacity of 110 million tonnes. The corporate battle for merger of Arcelor the second largest steel manufacturer with Mittal Steels which was already in the top position was closely watched that lasted several months and created history of sorts. This classic M&A sent shock waves throughout the steel industry worldwide. Several leading manufacturers in China and even Tatas in India have already changed their holding pattern to pre-empt any hostile take-over bid.
Posco, on the other hand, appears more vulnerable at present as more than 60% of investors of the company are foreigners. Their strategy seems to bring change in ownership pattern by mergers and acquisitions. They are on the lookout for some companies in China and India. Fortunately for Posco, such plans can be translated to reality as they are cash-rich with an estimated $1.57 billion in reserve.They have already made a foray in India with a greenfield project to manufacture 12 million tonnes steel at an investment of $10 billion. As ill luck would have it, the project is hanging in the balance as land acquisition has not proceeded smoothly. The company has, however, embarked upon cross-holding ties with Japan's Nippion Steel Corp so that it does not become an easy prey to hostile take-over bids.
Let's see which way the wind is blowing.

Thursday, September 21, 2006

Economy Riding High, So Also FDIs

Every picture of the Finance Minister of India Mr Chidambaram these days shows him wearing a generous smile. Coming from a person who is in the driving seat of the mammoth economy, it is quite understandable. Shaking off its lack-lustre growth rate of 6% in the last decade and achieving an all-time high of 8.2%, India is now in a position to flex muscles before the champion China who are still unbeatable.India's GDP has touched $750 billion by traditional method of assessment. Using the jargon 'purchasing power parity' (PPP) which finds favour with the economists, India ranks fourth largest in the world as per International Monetary Fund (IMF).
When it comes to attracting FDIs, India's performance has been even better. As against bagging $7.5 billion during the year 2005, the Finance Minister, in an interview with Reuters, sounded confident that it would reach $10 billion during the year 2006. He was candid to say that except four or five specific sectors where FDIs have still got caps, the opportunities and the projects awaiting investors are very high.
He would have scored a perfect ten out of ten but for the deficit going haywire so also the inflation. He expects deficit would be contained at 3% and high deficit as well as inflation would become history in 2008.
By then, hopefully, we may see his pictures with a broader smile.

Renewable Energy Holds Out Hope - Part Two

The worldwide wind turbine capacity has climbed to a whopping 60,000 megawatts during 2005. The industry has developed large and efficient turbines of 4 to 6 MW. The average cost of generation is working to as low as Rs2-3.25 (four cents to seven cents) per kilowatt-hour. The social benefit of pollution control by this source of energy is a bonus for the already competitive cost of power. India has vast stretches of land where optimum wind speed almost throughout the year is available for free. Instead of subsidising coal-based power, the subsidy can be given perhaps more liberally for wind power as that would kill two birds in one shot.
The other renewable energy which could be commercialised on a much higher scale is solar energy. Using solar cells or photovoltaics, global generation was merely 5000 MW during 2005. However, with the breakthrough in technologies of making cheaper photovoltaics, the cost of generation has come down to Rs9-11 per kwh - almost four times the cost of coal-based electricity. With an investment of just $100 (Rs4600), people in Kenya prefer solar power to conventional power. In India, the low cost photovoltaics should be mass-produced so as to reach rural areas and inaccessible terrains easily.Innovative ideas invariably get rejected by traditional thinking.
The bureaucrats, the whole political class and power consultants will have to change their mindset.Are they ready?

Wednesday, September 20, 2006

A Question Mark Over Investments - Fallout Of Political Developments

The military coup in Thailand has put the world on tenterhooks. When it happened last time in 1997, the Asian currency market had sunk into a deep crisis. For such coups, whenever or wherever they take place, political analysts find it wise not to venture any comments on their outcome as chances of being proved wrong are very high.
Be that as it may, Indian companies have lot of business interests in Thailand. Investments have been made in a wide range of products including rayon fibre, drugs & pharmaceuticals and chemicals. The companies having large stakes in Thailand and likely to get affected are Ranbaxy, Baroda Rayon, Aditya Birla group and Ballarpur Industries.
Nearer home, the change of government in Jharkhand has already set the cat among the pigeons by announcing a review and revaluation of Memorandum of Understandings (MOUs) signed by the predecessor. In my post 'Politics And Economics Are Strange Bedfellows', this very forecast had been made which now has turned out to be true. Many investors for steel, power and mining projects are crossing their fingers. Of course, those who know how to run with the hare and hunt with the hound are not unduly worried.
It would always be better for investors to keep a distance from politics. Easier said than done - is it not?

Renewable Energy Holds Out Hope - Part One

India is in a Catch-22 situation as far as its burgeoning power needs are concerned. Already facing power shortage, India is racing against time to install additional power capacity of 60,000 MW during the Eleventh Plan to meet the accentuated appetite of the economy poised for quantum leap to become a super economic power. Most of the sources for additional power are coal-based plants. They spew a staggering 0.25 kilogram of carbon for every kilowatt-hour power generated. The Kyoto Protocol has fixed a ceiling of 450-550 ppm of carbon dioxide in the atmosphere as higher presence would result in further global warming.
The 'carbon credit' introduced as an incentive in emission trading imposes fine on those who fail to meet the condition and reward those who succeed in controlling carbon dioxide emissions. Out of 850 coal-based power projects coming up in USA, India and China, it is feared that very little would be achieved by way of controlling carbon dioxide emissions. If these projects are fined for polluting the atmosphere, the cost of power would willy-nilly go up further from the average rate of Rs2-3 (4 to 7 cents) per KWH.
The crisis may be overcome by shifting focus from the conventional fossil fuels to renewable energy sources. In the recent years, renewable technologies have dramatically improved in performance and affordability in wind turbines and solar cells making them viable alternatives rather than mere R&D showpieces.
Please read Part Two to learn more.

Tuesday, September 19, 2006

A Rain Of FDIs!

That India is emerging as a favourite destination for foreign direct investment (FDI) was never in doubt. But when FDIs worth Rs 990 crores ($220 million) for 18 projects are approved by the Foreign Investment Promotion Board in one go, it becomes music for India. According to a news report appearing in Economic Times, the investments are lined up as follows.
The Japanese giant in chemicals - Mitsubishi Chemicals will be investing Rs 380 crores ($90 million) in West Bengal for manufacture, marketing and distribution of purified terephalic acid (PTA). Two American private companies in partnership with Adventity, BPO will set up a voice-based call centre in Mumbai with an investment of Rs 250 crores ($55 million). For manufacture of Titanium Dioxide, Russia's JSC Technochim will set a JV in Orissa with 55% equity out of Rs 190 crores ($40 million) investment. Other investments will be made by British Gas for setting up wholly-owned subsidiaries in Andhra Pradesh, Karnataka and Tamilnadu.
Heavy rains may still be causing inconvenience to many in some parts in India, but when it comes to FDIs - more the merrier!

Monday, September 18, 2006

Small Cars Make Big News

After Tatas gave a clarion call to set up small car manufacturing plant at Singur, West Bengal other car manufacturers have jumped to the bandwagon. (See the post 'Small Is Beautiful').The front-page story in today's financial newspaper Economic Times titled 'Maruti to try its lakh with 800' makes interesting reading. The intended pun on 'lakh' (which rhymes well with luck) has not been lost. In my previous post 'Is Small Car Project A Big Dream', I had mentioned what was this entire buzz about 'lakh'. Reproduced an extract from the same:"One has to understand the psychology of middle class customers in India to appreciate the compulsion to keep the price below the one lakh barrier. Today every Indian first dreams to become a ‘lakhpati’ (one who is worth more than one lakh or$2200) and then a ‘crorepati’ (one who is worth more than ten million rupees or $220000)". ...
Perhaps seeing the writing on the wall, Maruti the undisputed market leader in auto business in India is sitting up and taking notice. As per the story in Economic Times, Maruti is considering to bring down its price of '800' (the cheapest of all the models) by Rs 50,000 to Rs 60,000 ($1100 to $1350) to Rs 1.3 lakh ($3000). It will still be above the psychological barrier of Rs1 lakh ($2200).
The future battle between Tata's People's car with a tag of $2200 and Maruti's 800 with a tag of $3000 is expected to be fierce but interesting for the customers. Both sides are formidable giants. On the one side is Suzuki the Japanese carmaker which brought revolution to the Indian auto industry. On the other side is Tatas - the homegrown corporate icon having experience and goodwill spread over more than a century.Ultimately, the small car customers will be the real winners.
Is it not?

Well, Here Goes Steel For Rural India!

As it is, India's per capita steel consumtion is quite low; it is only 30 kgs as against the world per capita consumtion of 150 kgs per annum.The urban-rural divide is further hightened by the figures of 77 kgs for the urban customers and a measly 2 kgs for the rural masses. Rural India constitutes 70% of the country and if the domestic consumption has to be raised to the level of 90 million tonnes by 2019-20 as per the National Steel Policy, something drastic has to be done for improving the rural market.
Steel is a commodity not used in the same way as other commodities of daily consumption. Unless steel finds customers in large numbers for house construction, silos for food storage, tanks for water storage, construction of roads & bridges and platforms for shelter during natural disasters and the likes, the higher per capita consumption of steel in rural India will remain ever elusive.Realising the potential for growth in this area, the steel ministry has been urging steel manufacturers to make steel available to the rural customers at their doorsteps.
The manufacturers have reportedly agreed, in a meeting with the steel ministry officials held on 8th September, to supply steel to the rural market. They will take care of the logistics and bear its costs too. This will make steel cheaper for the rural customers by Rs600 to Rs1000 ($18 to $30) per mt. It is anticipated that the rural per capita consumption will double to 4 kgs by the year 2019-20.
So the moment of truth has arrived!
It's time for Bhangra and Dandia. Is it not?

Saturday, September 16, 2006

Politics And Economics Are Strange Bedfellows

Politics and economics are strange bedfellows and things are always better when they do not come too close. A case in point is the gloom and uncertainty that has followed the change of government in the state of Jharkhand after 18 months.
So far, big investors were making beelines to the state for investment in mining, steel and power projects. Jharkhand is one of the mineral-rich states and the investments were expected to provide employment opportunities besides raising the living standards which are one of the lowest in the country. The fiffty odd Memorandum of Understandings (MOUs) have come to a halt till the new government is formed. The first thing which the new government may, going by the precedents, order investigations into the project sanctions and transfer the officials from the key posts held at the pleasure of the previous government. There is bound to be some slowdown of projects and some others may get bogged down.
The same thing had happened when central government formed by coalition was changed with a new formation about two and half years back whose constituents' ideologies are diametrically opposed to the former. See, what has happened to reforms process with the Left parties now calling the shots. So, let us wait and watch what happens to those MOUs.
Heavens forbid that the Memorandum of Undersatandings do not become Moratorium of Understandings!

Steel Price Fluctuations

'What goes up must come down'; it looks the steel prices are following this axiom. Steel prices were stagnating till 2003 and when they started rising again, there appeared to be no end. From April 2005, the prices started nose-diving and production cuts as well as loosing flab of inventory became regular features in the steel industry. Just when the steel manufacturers started enjoying favourable markets during the first half of 2006, the prices are again getting slashed. Behind such abnormal hike was the unsatisfied appetite of China for steel. It had gone on an importing spree and the global prices climbed to record highs as a result.
China is the biggest steel manufacturer and consumer at the same time. As per International Iron and Steel Institute (IISI), the world production during the first seven months of the year 2006 was 697 million tonnes - a growth of 10%. China's production was 235 million tonnes representing a growth of 22% where as India's production was 24 million tonnes and a growth of 10% - same growth as the world figure. China has now managed to overtake the steel exporting countries namely Japan, Russia and European Union in exports in the first six months. The excess production forced China to export steel which in turn weakened the global prices.
Obviously, the trump-card is with China and as a thumb-rule, if it imports - the steel prices go up and vice versa. Let us hope that China plays the trump-card soon. Some analysts have predicted that steel prices will go up within 4 to 8 weeks. The third biggest manufacturer in Europe - Corus has even announced its intention to raise prices from the next quarter. In India, the prices are likely to go up after the end of the monsoon season when demand generally goes up.
Meanwhile, the steel manufacturers are crossing their fingers for price rise.

Friday, September 15, 2006

India Ho! Dell's Next Destination

Dell is the largest global computer manufacturer and has several feathers to its cap. It is a $55 billion company - 28th largest and 8th most admired in USA and has manufacturing units in China, Malaysia and Ireland. The decision of the IT giant to set up a manufacturing unit near Chennai - the sixth so far globally speaking - has been hailed as a sign of India emerging as an IT hub. Though the company has initially announced its plan to invest $60 million, the state officials are confident that the total investment will go up to $300 million (Rs1350 crores) with the company's suppliers chipping in.
The brand image of the company is already very high as reflected in its recent sales growth by 63%. The most successful marketing model of the company lies in its accepting orders through Internet and phone calls only and not relying on retail outlets to woo customers.
The Dell plant will be located in the small town of Sriperumbudur near Chennai where ex-Prime Minister of India - Rajiv Gandhi had laid down his life at the hands of assassins. He had tried his best to make the government and the people IT-savvy but for whom India would not have made rapid strides in having one of the largest pool of professionals in the field.
So is it not the best way to immortalise the great visionary?

Thursday, September 14, 2006

India Beats China At Cellular Industry

India has had to play second fiddle to China in economic growth, reforms et all. The reason is not far to seek; China had a head start of embracing liberalisation fifteen years back. Nevertheless, India is trying to break the order. During August 2006, India marched past China in adding cellular subscribers. While India added 5. 9 million new connections, China could do only 5.1 million numbers. According to The Cellular Operating Association, the global mobile industry is growing at 40 million subscribers per month of which 41% is accounted by Asia- Pacific and the combined share of India and China is 25%.
The future growth is simply mind-boggling. The population of mobile subscribers will reach 3 billion by the year 2007. In other words, every second person on this earth will have a mobile phone. Out of 500 million new connections expected by 2007, the lion's share will go to India with 80 million subscribers.
Cellular phones are becoming raging favourites everywhere. Is it because
1. It is fast, easy mode of communication.
2. It is convenient to use.
3. It is a status symbol.
4. It is the answer to the latest insuppressable common desire to stay connected all the time.
5. The users are becoming more and more garrulous.
Any other reason you can add to explain the phenomenal growth in mobile industry?

Wednesday, September 13, 2006

Industry's Seductive Vital Statistics

Aaron Levenstein had said "Statistics are like a bikini - what they reveal is suggestive, but what they conceal is vital". One can as well say the same when he goes through the latest data of monthly Index of Industrial Production (IPP) released by the Ministry of Statistics and Programme Implementation.Let us have a quick glance at those seductive figures.
The industrial production grew at 12.4% during July, 2006 over July, 2005. The figure for April-July, 2006 is 10.6% higher than the April-July, 2005 figure. All the three sectors - Mining, Manufacturing and Electricity have clocked growth of 6.0%, 13.9%, and 8.6% respectively which collectively lifted the industrial growth to 10.6%. The consumer non-durables and durables have both recorded 18% growth. The capital goods sector which holds the benchmark for industrial growth is on a high growth track of 15.4%. In the industrial group wool, silk, man-made fibre textiles (25%), paper, basic chemicals and transport(22.4%) have individually attained double digit growth. The only industrial group which recorded negative growth was Leather and Leather & Fur products (-7.2%) and Jute and other vegetable Fibre Textiles (-5.1%).
No wonder, all roads seem to lead to India for the present. Among others, USA and Japan are giving finishing touches to their FIIs.
What then others are waiting for?

Tuesday, September 12, 2006

Say It With Flowers

Modern society is not content merely with 'Rose smells sweet - call it by any name!'. It wants roses and other flowers to have unique design, petal size, pleasing colours and longer shelf-life as well as nice fragrance. Yes, it is possible to achieve all this by influencing nature using genetics. Before raising your eyebrows in disbelief, please note that the famous rocket scientist turned President of India told this while inaugurating the second International Flora Expo-2006.He urged the research institutes to develop roses that are beautiful, fragrant and long lasting and also to develop indigenous variant of pesticides and fungicides either independently or in collaboration with foreign institutes/ industries. He further emphasized that the research community should bring out value-added products for the export market. Presently, the flower exports from India face competition from Kenya, Uganda, Zimbabwe and Zambia.
The agriculture minister observed that the agro-climatic diversity of India gives the capability to cultivate large number of flowers including temperate flowers that can be grown in the high altitude states of Sikkim, Himachal Pradesh and Uttaranchal.
The President's vision includes an export target of $1 billion by the year 2010 besides meeting the ever-increasing domestic demand. He is famous for his iron-will. He had once in his early career carried some rocket assembly on his bicycle for launch at Thumba Rocket Launching Centre when he found no other transport available.
When he has the will, surely there has got to be some way.

Monday, September 11, 2006

Blog's Editorial

Every newspaper has an editorial content which is the exclusive prerogative of the editor. The other contents are contributed by various journalists working for the newspaper. Of course, the editor uses his scissors to clip the wings of those who fail to toe the line. He also knows which side of the toast is buttered and bends over backwards to please his boss - the newspaper baron. The barons, again, have their own axes to grind in the political, business and social arenas.
Blogging, by contrast, is a completely different cup of tea. The blogger finds himself in the changing roles of a journalist, an editor and even a media baron if he rises to the top of the blogophere. So when he posts stories, it is the hidden journalist and the editor within him who owns up full responsibility. He cannot shift blame to the journalist or the editor or to the media baron if anything goes wrong. The buck really stops there.
Some bloggers fail to visualise the consequences of not having any firm opinion on a topic. The first victim of such a lackadaisical approach is the credibility of the blogger. Suppose a blogger writes critically about George Bush's Middle East policy. He may succeed in building up a niche readership over time. But if he alternately goes on to support his policies, his readers will desert him permanently and this happens when one tries to be too clever by half. He will soon be condemned to oblivion as a turncoat. Of course, many blogs have teams of authors and what has been said in previous paragraph may not hold good for them. Those blogs function in similar style as newspapers.
Be that as it may, it reminds me of a very old advertising jingle 'Take a stand, be a man'. Will you?

Sunday, September 10, 2006

Watching The Time Industry Grow

In India, fifty years back, watches were timekeepers, status symbols and preservers of memories. Only the educated, the elitist and the affluent generally flaunted their watches - mostly smuggled from Switzerland. It remained more or less a male domain. The social practice was for the in-laws to gift a watch to their sons-in-laws irrespective of whether the wedding was of a rich-man or poor-man.
Today, from kids to the elderly, businessmen to common men, farmers to fashion designers - all put on watches and the gender divide has disappeared so much so that the feminine trend is to have watches matching every occasion and every sartorial style.During the era of nationalisation and public sector companies, HMT(Hindustan Machine Tools Limited) became a household name for watches. The company got technical know-how from Citizen Watch Company of Japan.They lost the dominant position when private sector companies made foray into the watch industry.
Watches made by Titan Industries are now hot favourites among customers irrespective of age, sex and profession. Their current production capacity is 10 million pieces per annum. They have exploited to the hilt the innate desire of customers to get more value out of products. Watches need not merely show the time; it better be a jewellery that can also give the time.The company has gradually penetrated the niche market of making jewellery. Last year, the jewellery segment contributed 53% and the watch segment 44% of the turnover of Rs1500 crores($330 million). It plans to attain a turnover of $1 billion by the year 2010.
Which industry it represents - watch or jewellery or both?

Saturday, September 09, 2006

Small Is Beautiful

Some say small is beautiful. Talking about small cars, nothing can be more correct. Small cars are cheap, generally consume less fuel than big cars, go well with the lifestyle of middleclass people and are easily manoeuverable in Indian cities having narrow roads. The limousines and big cars are beyond the reach of Indian customers and those are better seen in films, TV shows as well as glossy magazines rather than owned.
Tatas - the oldest corporate house in India knows the mind of Indians. They have already embarked on a small car project to be located in Singur, West Bengal. Initially it would produce 2,00,000 cars but by the year 2012, the capacity will go up to 5,00,000 cars.
The Japanese and South Korean auto giants having joint ventures in India have realised, albeit, belatedly that small cars are the In-Thing in India.Toyota Kirloskar will bring out a small car within next 2-3 years which will expand their capacity to 2,50,000 cars and a market share of 10%. Its plant location has not yet been finalised. Not to miss the boat (or car?), Hyandai will bring a compact car by the year 2008 for both domestic as well as export markets. Honda Siel is also planning to invest $200 million in a new plant with a capacity of 1,00,000 cars for the Indian market. The location is yet to be fianalised.Suzuki is holding talks with its alliance partner Nissan for another small car plant which may require investment of Rs2,500 crores ($550 million). It will have export thrust. If Nissan's plant comes up, the total exports from Suzuki-Maruti and Nissan plants will cross 4,00,000 cars. The diesel versions may also get a further boost because of frequent fuel price hikes.When it happens, small car exports from India will turn the table on foreign big car makers.
Take a big bet on the 'small'.

Friday, September 08, 2006

Chiria Mines - The Heart-Throb Of Steel Moguls

Till recently, not much was known about Chiria mines. But when the famous cast their eyes on anything, it becomes the cynosure of all. This is precisely what has happened to Chiria mines which is hogging publicity for long.Indian Iron Steel Company - the second steel plant in existence (other than Tata Steel) prior to India gaining independence in 1947 was a British blue chip company listed in London exchange. It became sick despite several efforts to revive it in 1970s. It had a mining lease for Chiria mines which reportedly expired in 1979. After it was made a wholly-owned subsidiary of SAIL in 1979, the company turned corners during 2005. Along with IISCO, Chiria mines also came under SAIL.
What is so special about Chiria mines? It has a deposit of 1.4 billion tonnes of iron ore of superior quality. So in a competitive world of new steel projects coming literally by dozens, if one has Chiria mines the battle is half won. SAIL is therefore keen to retain its hold over it. After all, it has ambitious plans to expand capacity to 22 million tonnes and is aiming higher to reach 40 million tonnes. The ubiquitous Mittal Steel has also jumped into the arena with their project to manufacture 12 million tonnes in the state of Jharkhand and wants 600 million tonnes out of the Chiria mines.
The Jharkhand government which awards the mining rights cannot throw away so easily SAIL - a central government undertaking. The matter is subjudice and any out of court settlement has been made difficult by the political twist to the problem. The state government is ruled by a coalition of parties which are opposed to the central coalition.Can you guess which suitor will get Chiria mines?

Thursday, September 07, 2006

Maruti On Top Gear

Maruti Udyog Limited - the largest car manufacturer in India which brought a revolution in the auto industry by making since 1983 low-priced and fuel-efficient cars in collaboration with Japan's Suzuki Motors Corp has travelled a long distance. With 11 models and production expected to reach 6,00,000 cars during the year 2006, it has remained a market leader with a market share nearing 50%. Maruti crossed the milestone of making 5 million cars since its inception in April, 2005. India produced 1.406 million cars during 2005.
The Company's vision statement reads as follows:"The Leader in the Indian Automobile Industry, Creating Customer Delight and Shareholders' Wealth;A Pride of India"In keeping with the vision, it is embarking upon a production capacity expansion to one million cars by the year 2010 when the total demand for cars in India is expected to rise to two million. An investment of $1.3 billion is being planned to achieve this. By the same year, it is also targeting to export 1,00,000 small cars to Europe. The company plans to introduce five new models and upgrade its existing plant besides building a new car plant as well as a diesel engine plant so as to attain the target of manufacturing one million cars by 2010.
By contrast, US manufactured 11.524 million cars followed by Japan with 10.06 million cars during the year 2005. It was bound to be so, as there are only three cars for 1000 people in India as against 500 cars for 1000 people in USA. Things may not, however, remain so depressing for India. According to Golden Sachs, India would have the maximum cars in the planet by 2050.
Hold your breath, please!

Wednesday, September 06, 2006

From A Cyber Coolie to Cyber Czar

One field where India's progress has been phenomenal in the less than last two decades is the IT industry. In 1980s and first part of 1990s, India's slow pace of growth had earned a dubious nomenclature 'Hindu growth rate' from some critics. Nobody not even Indians could believe in their wildest dreams that within such a short span of time, it would earn the honour of becoming a global leader in IT sector. Thanks to web 2.0, the whole world knows that India has one of the highest It professionals - its poor resources notwithstanding.
Firstly India enjoys the advantage of having English-speaking skilled workforce. In addition, the wage structure is heavily tilted in its favour. The bureaucratic red-tape which is the bane of slow economic development was circumvented by imaginative private sector torch-bearers like Infosys and Wipro. They spearheaded against heavy odds the penetration to US and other foreign markets. It is true that in the beginning only work requiring low technical skill such as data entry was available to the then IT professionals - an euphemism for cyber coolies going by the nature of work.
But slowly India has consolidated its strength in BPO, KPO and software development work. A news report in Times of India gives a glimpse of the scenario for the IT industry. "While US tech services firms are likely to post an average profit growth of 7% this year, the growth rate is pegged at 22% for their Indian counterparts, Goldman Sachs said in a report. The analysts anticipate an average growth of 30% for large-size Indian IT companies in 2006 and 2007, as against 8% for their US rivals."It has made IT giants like IBM, EDS, ACCENTURE and ORACLE sit up and pull up their socks to face the challenge. Some even want to be partners of Indian IT companies and are planning investments to the tune of $15 billion. So it is music to the ears of Indian citizens that at least in IT world, the cyber coolie is waiting in the wings to become the cyber czar.
Is it not an incredible achievement?

Tuesday, September 05, 2006

India's Short Menu Of Alternative Fuels

Depleting petroleum resources, skyrocketing prices and alarming auto-emitted air pollution have thrown the greatest challenge to man's ingenuity to look for alternative fuels since the 'oil shock' of 1973. Previously the auto makers left no stones unturned for attracting customers for their ever-changing models in size, elegance and comfort. Little attention was paid towards their fuel efficiency so much so that quite a few were just oil-guzzlers. The 'oil-shock' drove home the hard reality that petrol and diesel consumption in cars needs to be curtailed. Success was at hand sooner than expected.
The world found that the future of auto industry need not be fully dependent upon the traditional fuel i.e. petrol and diesel. A few alternative fuels were tested and commercially evaluated. But as price rise of petroleum products got reversed, those fuels were not promoted anymore by any marketing and advertising blitz or incentive packages that could have weaned away customers from the traditional fuels.A brief list of technically feasible and commercially tested alternative fuels is mentioned below.
1. Biofuels: Ethanol in varying levels with petrol or diesel2. Biodiesel:Processed fuel derived from biological sources - can be used in diesel engines.3. Compressed Natural Gas (CNG)4. Hybrid fuels: Using petrol in internal combustion engines and electrically charged batteries as in Toyota Prius.5. Battery-Electric: As in GM EV16. Flexi-fuel or Duel fuel: The vehicle typically alternate between two types of fuels. A common example is a vehicle that can accept petrol with varying levels of ethanol.
In India, alternative fuels with the best techno-economic parameters in Indian conditions should be rigorously put to commercial use as the prohibitive cost of petrol as well as diesel is casting a long shadow on the growth of the auto industry. Bulk of the customers for cars belong to the middle class who can afford prices ranging from $4000 to $8000. For them, petrol selling at $1.1 per litre which can at the most give 18-20 kilometres is pinching their pockets. The most promising alternative fuel is bio-diesel using jatropha, karanj and similar species. The hybrid fuels and flexi-fuels can be run with varying amount of blended ethanol. Locally, the plant cultivation can be promoted provided incentives are made attractive. The auto industry, the government and the political class as a whole have to put their heads together to make this happen. It seems a long way to go.Nevertheless, it should be given a try.
Don't you agree?

Monday, September 04, 2006

Blogging At The Crossroads:Food For Thought

Blogging is the priceless gift for netizens of modern society. Like
the advent of printing which triggered spread of literacy and
knowledge, blogging has endowed millions with the power to express
their thoughts in writing without let or hindrance. It essentially
involves (a) expression of thoughts (b) writing. Again, expression of
thoughts has to be preceded by idea or opinion produced by thinking.
So, without thinking, how can blogging be done? Some say in discussion
forums nonchalantly that they blog on anything and everything. Some
others merely copy & paste content with just a customary tinkering
here and there. A few others try to sensationalise titles to draw more
The other pre-requisite for blogging is writing i.e. content. Writing
is an art which should be cultivated with patience at least for the
sake of excelling one's own performance. Like an individual's face or
handwriting, a distinctive style of writing would any time get kudos.
Though such blogs are not easily found, it becomes a matter of
satisfaction to visit them on one's own accord. Darren's Blog-Republic
is an example which comes to my mind.Blogging has now become an art as well as science. To make the blog attractive visually, more attention and efforts have to be directed to
this. There are ready-made formulae for increasing the
much-sought-after 'hits'. So once one starts playing to the gallery
for getting more 'hits', his content and style are ipso facto
relegated to the background. One is caught in a dilemma; how much of
art and how much of science should form the foundation of blogging?
Once 'hits' become an obsession, there will be little time for
expression of original thoughts and writing - the two quintessence of
Freedom always entails responsibility and, therefore, the freedom
blogging allows should not be misused. Just as responsible citizens
all over the world are coming forward to protect environment and to
check population growth for the posterity to lead better life,
bloggers should exercise self-control for preservation and growth of
blogging. Otherwise, one day blogging will kill the goose that lays
golden eggs.
What do you think?

Sunday, September 03, 2006

Bright Future For Agri-Industry

Till recently, India's economy was agri-based. It is justifiably so as nearly 70% is rural India. Manufacturing and lately service sectors have now become significant contributors to the growth. But to move away from the traditional agriculture to other growing sectors would be suicidal. India gained self-sufficiency in food production after the success of its green revolution which changed the face from an impoverished begging bowl to a sleeping giant.
Be that as it may, the potential of exports of agri-products has not been fully exploited. The ambitious target of creating 60 agri-export zones (AEZs) has remained a distant dream. The commerce ministry has earmarked over $2 million for kick starting 10 to 12 AEZs having greater potential. Surprisingly, the private sector has been lukewarm to various incentives offered by the government like subsidies. Perhaps one or two success stories will serve as an impetus as has been seen throughout the history of Indian industries. As always, some wait in the wings for jumping into the bandwagon once any new line of investment claims success demonstrably.
As of now, India's agri-exports have reached $1.1 billion though a target of $2 billion had been fixed. Among the products, gherkin and rose-onion in Karnataka, mango in Chittor district of Andhra Pradesh, grapes, grape wines and mangoes in Maharastra and floriculture in Tamilnadu deserve special mention. The state of West Bengal has succeeded in attracting investment flow in processing of pineapples, mangoes and vegetables. Litchi in Uttaranchal and medicinal plants in Kerala also hold good promise. In the case of medicinal plants, India has undoubtedly an edge. Unfortunately, 65% of $150 million exports are in the form of raw products. Value addition can be achieved by infusion of capital and technologies for further processing.
Any takers?

Friday, September 01, 2006

India's Creditable Feat Of Earning 'Carbon Credits'

As global warming due to greenhouse emissions is becoming a stark reality all over the world, the need for corrective measures like controlling the pollutants is getting more attention from all quarters. The crux of the problem of greenhouse emission is the rise of carbon dioxide levels in the atmosphere and the Kyoto Protocol has been accepted by some 120 countries excluding USA with the aim of reducing the same. In order to make it effective, economic incentives of 'carbon credits' have been introduced. As per Wikipedia, carbon credits are measured in units of certified emission reductions (CERs). Each CER is equivalent to one tonne of carbon dioxide reduction. The idea simply stated of a complex mechanism devised is that companies which pollute more are fined and those which pollute less are rewarded. The reward comes by way of carbon credits which can be sold to offending companies which must buy to balance their pollution limits. So like market for any commodity, buying and selling go on for carbon credits. The greater the demand, the higher becomes the price of carbon credits. Consequently, the companies selling more carbon credits make more money which makes the emission cost reduction cost-effective.Just to have an inkling of the emission trading, one unit of carbon credit is now selling around $15 to $20. Silently and surprisingly, some Indian companies have already tasted success in the field. The well-known tyre cord manufacturing company SRF has already sold over 2.5 million units valued at $40 million and are reported to be holding 16 million units more for sale in future. Reliance and Grasim are on the look out clinching best deals. There are others which are holding their cards to the chest and are waiting in the wings for striking gold. The irony of such trading is that the buyers are industrialised countries in Europe trying to beat the deadline of the year 2008.India's euphoria may be short-lived as large manufacturing activities are being planned to sustain GDP growth rate of 8% per annum or beyond to become a super economic power. Large capacity of coal-based power plants, steel plants, cement plants, textile and fertilizer plants along with a growing population of automobiles without provision for alternative fuels could reverse the trend.If India has to attain rapid economic growth to become a super economic power, it must not curtail its mega projects. The hopes of millions of jobseekers and India's dream will be shattered. However, it may still be possible with the help of pollution control technologies and equipments to go for rapid industrialisation and yet retain the honour earned. For this, India will have to shop around the world.Undoubtedly, it is a Hobson's choice for India. Is it not?