Thursday, March 28, 2013

“Germany and France are Adamant and Strong Enough to defend The Euro”

In 2010, Indo-German trade volume crossed The €15 billion mark; a rise of 17.1% y-o-y. Both have set a Bilateral Trade target of €20 billion by 2012. In This Exclusive Interview with B&E, Michael Pfeiffer, Chief Executive, German Chamber of Trade & Invest talks at length on The Opportunities ahead.

B&E: What is the core proposition that you have come here with regarding East Germany and India?
Michael Pfeiffer (MP): Eastern Germany has become one of the popular business locations in Europe, and Europe is a fabulous market for Indian products. At least 50 % of Indian investments in Germany are in the fields of IT and high tech. We want to speak to Indian companies if they want to get access to the European market, and East Germany is a good location in that respect. With the new airports, it’s now one hour closer to India than before. Secondly, our infrastructure provides for easy access to both West European as well as fast growing East European markets.

B&E: How do you see Indo-German trade, which got a big momentum post-liberalisation, going forward?
MP: If you look at the last 10 years, you would notice that Indo-German trade has really become stronger. It has grown from €4.5 billion in 2000 to €13 billion in 2009. For this year, we expect Indian exports to Germany amounting to €6 billion, and German exports to India being €9 billion. So, except for 2009, where we had the global recession, there’s been a strong rise in Indo-German bilateral trade. The same is true for Indian investment in Germany.

B&E: Earlier, there used to be more exports from India than imports from Germany. Now, it’s almost equal. Wouldn’t that create an issue?
MP: Both India’s exports and imports from Germany are rising. It is not so important to have a real balance of trade between the two countries. It’s important for trade balance in general, but your imports & exports are quite balanced. If you look at the structure of exports from Germany to India, it’s mostly machinery. Machinery is needed in India to develop its industries and be more competitive. So, both countries have learnt in the past few years about how to cooperate better.

B&E: Since 2007, you began talks on FTA. Also, during the G20 summit, Indian finance officials met their German counterparts and assured that it will be a reality by this year. How do you foresee this?
MP: If it happens, it will mean there’s less problems with taxes, or no taxes at all. And trade will come up considerably. We will have bilateral trade up to €20 billion by next year, if it happens.

B&E: Do you feel that the trade agreement will be a holistic one, covering a comprehensive number of services?
MP: It will be. Parties want a really good deal for their business communities. The difficult thing is: In Germany, we have a structure with a large number of SMEs. For them, bilateral agreements are difficult to administer, that’s why we preferred multilateral agreements. But for a different market like India, which is fast growing as well, it is a good goal to have.

B&E: What are the key areas where the two nations can work in a better way?
MP: If you look at the past, India’s expertise in textiles were number one, followed by chemicals and electronics. But presently, it’s mostly the IT companies that are setting up the business in Europe including Germany. This shows that Indian companies nurture the goal of becoming high tech partners of the world. That’s also the goal of the German companies investing here – to become partners of technology.


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

For More IIPM Info, Visit below mentioned IIPM articles

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Monday, March 25, 2013

Perfect Technology, Flawed Destiny

The Launch of MNP has seen Significant churn by users of CDMA towards GSM. Is this indeed The Death Knell for a Technology that’s already falling out of Favour in India?

CDMA (Code Division Multiple Access) technology has been at loggerheads with the far more widespread GSM (Global System for Mobile Communications) technology since quite a long time. The irony is that basic technological common sense has always favoured CDMA, since it can handle many more calls per MHz. and has a better data transfer rate. However, GSM has been able to cover around 75% of the world’s cellular phones; partly because it is supported by a global entity, the GSM Association. On the other hand, CDMA is promoted by American firm Qualcomm and has not gone much further beyond North America.

In India, however, CDMA came with a lot of hope, albeit for a different set of reasons, as RCOM used it to disrupt the entire pricing structure in the industry. The technology brought down tariff rates to a few paise per minute from a few rupees. Players like RCOM and Tata Teleservices have offered handsets at incredibly low prices, thus connecting the common man with the telecom revolution. Lately, it has also transformed the way we surf internet on the move. CDMA has a peak download speed of 2MB/s compared to 384 kbps for GSM.

However, this great technology appears to be dying a slow death in India, due to lack of spectrum. The shift made by major CDMA players including Tata Teleservices and Reliance to the GSM platform has also cost the technology dear. RCOM and TTSL, after getting 3G spectrum, are focusing more on the GSM business, as the chances of increasing data revenue on the network are high. The third major player MTS is currently looking for M&A partners in India.

The allowance of Mobile Number Portability (MNP) has also hit CDMA technology hard. The first 10 days of port in and port out, after the implementation of MNP on January 20, 2011, suggested that a large number of subscribers are moving out of the CDMA platform and opting for GSM. Data available till January 31 suggests that more than 50,000 subscribers opted out of CDMA, wherein only 2,000 people chose to give up GSM in favour of better voice & data services. “A large number of people are porting just for the experience for now. In the long term, MNP would not make much of a difference, as the handsets and tariff rates of CDMA technology are cheaper then GSM,” says S. C. Khanna, General Secretary, AUSPI (association of CDMA players) to B&E. Hemant Joshi, Partner, Deloitte, Haskins & Sells, supports, “Since the future is in data services and CDMA banks on having good quality data services on their network, it is likely that subscribers will stabilise after the initial churn (of CDMA users post MNP), which could be due to several reasons,” said.

However, the fact is that the trend of preferring GSM is not new over the past few years. As per TRAI data, GSM subscribers for September 2010 numbered 578.49 million (84.12% market share) compared to 109.22 million (15.88% market share) for CDMA. This is in fact a morose scenario for CDMA, since it commanded a share of 26.35% in September 2007. Interestingly, out of six players in CDMA, four have around 12% market share and continue to see a fall in their subscriber base. A major chunk of market share in this space is commanded by RCOM & TTSL.


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

For More IIPM Info, Visit below mentioned IIPM articles


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The Uprising in Arab League

Colonial Exploitation, Chronic Under-Development and Kleptocracy are few words which explains The Surge in The Uprising and Eventual change in Power Equations in few members of The Arab League: Egypt, Jordan, Tunisia and Yemen. B&E analyses The Economic Dynamics of The Unrest against The Brutal and Corrupt Police state

Economy Key to Protests

2011 has set the stage rolling for a revolutionary change in parts of the Arab League. Cutting across the borders, the broad contours for the uprise however remains the same. If it was the dramatic increase in cost of living coupled with acquisition of corruption among the ruling elite that rocked the streets of Tunis and Cairo’s Tahrir Square; it was the failure of President Ali Abdullah Saleh to revive the economy of Yemen that initiated protests seeking his resignation. As far as Jordan is concerned, the pivotal reasons were unemployment, rising prices and the right to elect the prime minister. Given its revenue from Suez Canal, oil exports and tourism the Egyptian economy is comparatively better than its counterparts but ironically 20% of its population live below the poverty line.

Unemployment - The Catalyst

The Arab Economic Summit aptly summed up the reason for the Tunisian uprising, which finally culminated in Zine El Abidine stepping down and fleeing his own country after 23 years of misrule. It cited the long standing economic woes ranging from poverty, unemployment and recession as the main reasons, which fuelled unprecedented anger and frustration among citizens. Estimates from the Cairo-based Arab Labour Organisation suggests that the number of unemployed people in the region has exceeded 20 million and given the end of the second oil boom (between 2002 and 2008) and the lack of socio-economic developments the number could increase to 100 million by 2020. Also, the per capita income of the region has come down to $5,159 from $6,002.


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

For More IIPM Info, Visit below mentioned IIPM articles

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Monday, March 18, 2013

“We Drive Cost Control, The rest is Market Trends”

HZL COO Akhilesh Joshi in an Exclusive Interaction with Virat Bahri of B&E
 
Hindustan Zinc was taken over by Vedanta way back in 2002. Since then, Vedanta has successively ramped up on both production quantity and quality. COO Akhilesh Joshi has been with the company for 34 years and experienced the evolution of the company before and after the Vedanta acquisition. In this exclusive interaction, Joshi talks about how he sees demand shaping up for zin, lead and silver globally and how HZL is looking to leverage it, particularly with a greater thrust on exploration

B&E: Since the acquisition of HZL by Vedanta, what have been the overall guiding philosophy and strategic thrust for the company? What changes were made in the operating structure and/or management?
AJ: I am from the public sector only and I have been with Hindustan Zinc for the past 34 years. It was the vision of our Chairman (Anil Aggarwal) post acquisition, that we should use our assets well and grow our production capacity to provide value to the investors and the stakeholders. Besides increase in volume, better efficiencies have also contributed to this growth. Major changes made post acquisition were faster decision making, and changes in the delegation of power. Empowering employees and speeding up processes were the major drivers. There were no management changes, only changes were the workers we employed.

B&E: The acquisition of Anglo Zinc makes you the world’s largest integrated zinc-lead producer. What is the vision for you from here on?
AJ: The target for us now is that we are now going for more and more greenfield exploration. After the Rampura Agucha find, there has been no new find. If any opportunity comes, then we will look into other areas as well.

B&E: Silver is one area where you are looking for significant expansion in capacity to around 500 tonnes by 2013. Are you looking to make it a separate profit centre? Also, what are you planning in the case of exploring the potential for lead, since India faces a huge supply crunch and you are the only prominent domestic producer?
AJ: As far as that (making silver a separate profit centre) is concerned, we wish to do that, but only as and when the appropriate time comes. In the case of lead, we are indeed ramping up production. We are commissioning another smelter of 100000 tonne per annum at Rajpura Dariba, so our capacity will increase to around 1,80000 tonne.


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

For More IIPM Info, Visit below mentioned IIPM articles


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Tuesday, March 12, 2013

Two Hoots for The White Owl?

Will Harry Potter’s Iconic Pet Disappear into The Dark?

Ever since the first of the Harry Potter series by JK Rowling was published in 1997, it achieved a global fan following and gave birth to the Harry Potter cult, and alert filmmakers cashed in on the Potter pandemonium. With the release of Harry Potter and the Deathly Hallows (Part 1), fans are thronging to the theatres. But not many know that in the last couple of years, it’s not the child wizard alone but his pet owl too, which has captured the imagination of millions. A report by the wildlife trade monitoring network, TRAFFIC, launched by the Environment and Forest Minister Jairam Ramesh, called ‘Imperilled Custodians of the Night,’ claims that there is a huge rise in illegal owl trade in India, which has led to a sharp decline in its numbers. Harry Potter’s white pet owl, Hedwig, is being partly held responsible for the fall in owl population as many Harry Potter fans are purchasing owls to keep as pets from illegal animal markets.

Reena Pandey and her 10-year-old daughter, Rishita, are both Harry Potter fans. Some time back Reena was taken by surprise when her daughter demanded a white owl to keep as a pet. “It was a strange wish but I saw no problem in it. People keep various kinds of birds as pets, so I went to a couple of pet shops to ask how I could purchase an owl for my daughter,” said Reena. Failing to receive any information from those pet shops, Reena decided to look up on the net and realised that it was not only her daughter making this strange wish, but many children in India and abroad wish to keep Hedwigs in their home too. The reason why Reena could find none at pet shops is because the Wildlife Protection Act (1972) bans hunting and trade of all Indian owl species.

The craze for keeping pet owls is a recent one, and has had very little to do with the dwindling number of owls. Highlighting the other reasons, TRAFFIC revealed that sacrificing owls on auspicious occasions, especially on Diwali, is a regular practice in India.


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

For More IIPM Info, Visit below mentioned IIPM articles
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Monday, March 11, 2013

Is She Turning it On The Right ‘A’xis?

The Indian Banking Sector is going through a Massive Transformation post Economic Crisis. While some have cut down on Expenses, Some have Halted Expansion. However, Axis Bank is the one which has Hardly Changed its Course as it Apparently kept its basics right. But can this ‘Basics’ Strategy work out for the long run as well?

It was July 2007, when UTI Bank changed its name to Axis Bank, and in the process broke away from a legacy of triumphs as well as tragedies. The bank’s board felt that the existence of several shareholder-unrelated entities using the UTI brand was leading to a brand confusion, which forced them to take this decision.

Though the branding legacy was lost, the bank itself found its way quite well, especially after the recent global slowdown that to an extent affected several in the Indian banking fraternity. In fact, the strategic move had a positive impact on Axis Bank, as its net profit tripled in a span of just two years (from Rs.6.6 billion in FY 2007 to Rs.18.16 billion in FY 2009) and by FY 2010 the figure had reached a whopping Rs.25.15 billion.

With total deposits of Rs.1.56 trillion and net advances to the tune of Rs.1.10 trillion as on September 2010, the bank has come a long way from its humble beginnings in 1994 (though the bank was set up in December 1993, it started operations only in April 1994), when its deposits stood at Rs.1.15 billion. The bank has not only outperformed public sector behemoth like State Bank of India (SBI), but has also given tough competition to its counterparts like HDFC Bank when it comes to the growth in advances. While Axis Bank witnessed a 48.72% increase in its advances between FY 2007 and FY 2009, SBI and HDFC Bank reported a growth of 26.81% and 45.13% in their advances during the corresponding period.

The bourses are responding well. The bank’s stock is trading at Rs.1,547.25 (as on November 10, 2010) at Bombay Stock Exchange (BSE) and market capitalisation is worth Rs.633.44 billion (as on November 10, 2010). The financial results have been admittedly overwhelming; the bank has just registered a net profit of Rs.14.77 billion for H1 2010, a massive surge of 35% from Rs.10.94 billion profit reported during the same period last year.


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

For More IIPM Info, Visit below mentioned IIPM articles
at

Wednesday, March 6, 2013

India’s Most Authoritative B-School Survey

Watch out for the B-school special issue of B&E that hits the stands on November 26, 2010. Never before has been witnessed such an innovative & credible B-school ranking process, where the respondents are the people who matter – the top honchos of corporate India



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

For More IIPM Info, Visit below mentioned IIPM articles


at

Sunday, March 3, 2013

Dried concrete jungles

The elixir of all life is fast moving to achieve rare commodity status in urban India with water tables going down due to massive rise in consumption, severe pollution of surface and ground water resources and slow pace of setting up rain water harvesting projects. It is high time a modern consumption based tariff policy and other initiatives are taken by the center to promote effective water management in urban India

Their origins can be traced to the early medieval period post the fall of the Kushan empire and the name’s first ever mention was in the Mahabharata. They were immortalized in Indian history post their 1669 uprising against the Mughals. In 21st century India, their claim to fame on one hand is bolstered by the maximum no. of crorepatis they have produced in a single state in India and the infamous back to the medieval ages “khap panchayats” legitimizing the insanity called honour killing. But for all the fame, the thing for which the Jats of India least get reported is their united stand on issues that concern every citizen. Yet another display of their strength and clout was on display when in the Tonk and Ajmer districts of Rajasthan, large gatherings of Jat farmers staged a two day protest against beginning a massive boring operation to extract the remaining water in the cachement areas of Banas river. The reason? Bisalpur dam, the chief water resource for the cities of Jaipur and Ajmer, has all but dried up with one of the worst ever monsoon delays in decades in the state’s history. The Jats oppose the move on account ofthe cachement area being the only resource for drinking and irrigation. Are these the first signs of the water wars’ prophecy? With urban India sliding into an unprecedented perennial water crisis, it might just come true.

The annual per capita availability of renewable freshwater in India has fallen from 5,277 cubic meters in 1955 to 1730 cubic meters presently. Given the projected increase in population by the year 2025, the per capita availability is likely to drop to below 1,000 cubic meters i.e., to levels of water scarcity. According to a study done in 2008 in 7 of the 15 most populated cities of India including Delhi, Kolkata and Mumbai, average domestic water consumption was 92 litres per capita per day (lcpd), while those in Amsterdam (156 lcpd), Singapore (162 lcpd), Hong Kong (203 lcpd), Sydney (254 lcpd) and Tokyo (268 lcpd) are much higher. With mass immigration making our cities akin to clogged potholes and rampant unplanned industrialization causing billions of tonnes of toxic waste being dumped in our surface and ground water resources, supplying fresh water to residents is a Herculean task. As per the study (see table), on an average, some of the most populated metros receive water once or twice in a whole day for a few hours with the frequency falling to once in 2 days cases in select regions.


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

For More IIPM Info, Visit below mentioned IIPM articles.
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