Mahindra & Mahindra Signs Mou With Government Of Maharashtra To Invest An Additional Rs 1500 Crore I

Mahindra & Mahindra Ltd has announced that the Company on March 31, 2008 signed a Memorandum of Understanding (MoU) with the Government of Maharashtra to further boost their investment at its upcoming Chakan Greenfield project. The Company will invest an additional Rs 1500 crore to the already earmarked Rs 2500 crore. The total sum of Rs 4000 crore will be utilized towards the development and production of all vehicles slated to be rolled out from the proposed Greenfield.

M&Ms Greenfield at Chakan will house the manufacture of medium and heavy commercial vehicles, to be produced by joint venture Company Mahindra International and other products slated to hit both the domestic & global markets at strategic timelines.
A memorandum of understanding to this effect was signed on March 31, 2008 by Mr. V K Jairath, Principal Secretary (Industries), Government of Maharashtra and Dr. Pawan Goenka - President Automotive Sector, M&M in the presence of Mr. Vilasrao Deshmukh, Honourable Chief Minister, Government of Maharashtra, Mr. Keshub Mahindra Mahindra Group Chairman, Minister of Industry, Mr. Ashok Chavan, Mr. Johnny Joseph, Chief Secretary, and other dignitaries.

Mr. Keshub Mahindra, Chairman of the Mahindra Group, said M&Ms new investment at the upcoming Chakan facility, besides contributing to the states economic growth will also produce jobs for the locals in that region. We have always been at the forefront to add value to the Indian automobile industry. This project is in keeping with this tradition of mutual growth.

Dr. Pawan Goenka, President, Automotive Sector - M&M said, We are very pleased to expand our activity in the State of Maharashtra. We had decided to make the state the launch pad for our commercial vehicles. The additional investment plan of Rs 1500 crores, will allow us to create a world class manufacturing facility for 300,000 vehicles. The Chakan Greenfield is a significant step for us to contribute to the Indian automobile industry.

Havells To Invest Rs 400 Cr In Expansion Projects

New Delhi: Electrical goods manufacturer Havells India said it will invest Rs 400 crore for increasing its capacities in the country, besides foraying into a new segment.

The company is entering the new segment of manufacturing electrical-motors and is augmenting its capacities in lighting and cables segment. It has earmarked a budget of around Rs 400 crore for the purpose and has already spent Rs 200 crore in current fiscal, Havells India Ltd Joint Managing Director Anil Gupta told PTI.

Havells is setting up a green-field plant in Rajasthan to manufacture electrical motors ranging from .25 horse power to 500 horse power. The company has already spent Rs 150 crore in the plant and will invest Rs 50 crore more in it, he said.

"Manufacturing Industries located in the region provide us excellent opportunity to sell electrical motors here and it also synergies with our products," he said.

The company has also purchased around 17 acres of land near its facility in Alwar to expand the manufacturing capacity of high tension cables and domestic cables.

Loan Waiver And Agricultural Investment

The Rs 60,000-crore agricultural loan waiver by the Finance Minister has generated widespread debate. The reason goes back to farmers’ debt-related distress and even suicides. If the issue is debt-related distress, one must ask why it is so. There is no guarantee that the farmers will not borrow the ensuing year. More specifically, long-term prospects are sacrificed at the cost of short-term gains.

It is established now that the farmer is generally required to repay his/her debt immediately after the harvest. This means the farmer is trapped in a regressive market mechanism in two ways. First, with no other means of repaying the debt, he/she is forced to sell the produce immediately after the harvest — quite often to the creditor or to his agent — probably at a pre-arranged price or in pre-decided quantities.

Second, the sale of crops immediately after the harvest means that the farmer probably receives less for his/her produce than what he/she could have obtained when the market prices stabilise. As more and more farmer-debtors wish to convert their harvest into cash, crop prices tend to get further depressed.

Act of commerce

While all this is true of farmers, in general, the case of cash-crop farmers deserves special attention. Interestingly, those who go for cash crops such as tobacco, sugarcane or cotton are not typical small farmers. They are the ones with relatively large land holdings and risk appetite, for whom farming is a commercial operation. The anticipated incentives in the output market are the motivating factors for hard work as well as for high input costs. The results are, however, not always as expected.

During harvest time, the supply of crops often overshadows demand and, thus, prices go down. This is due to the pressure created by both formal and informal lenders for loan repayment, post-harvest. As a consequence, average input costs are sometimes higher, or just marginally lower, than the average revenue, leaving little or no cash surplus for loan servicing.

Small farms

It is hard to generalise a small farm as one with not more than two hectares of land across the whole of India. Physical land under assured irrigation is much more productive than the area with no assured irrigation.

Thus, a small farmer with less land but assured irrigation may be financially better off than another farmer with much larger land holding but no assured irrigation.

Take the case of eastern India and some parts of the south. The basic unit for organising production in the rural areas is either the farm or the village, depending on how rural society is structured.

In this region, agriculture is characterised by small farms in alluvial lowlands; too many people on too little land; production largely for subsistence; and a heavy dependence on cereals and other food staples. Farming with simple handheld tools or ploughs pulled by animals is common. Many farmers are owner-tenants and tenants.

Rice, usually grown under wet conditions, is the staple food crop in these regions. Controlled irrigation facilities are poorly developed, yields are often low, and double-cropping (planting and harvesting two crops in one calendar year) is not universally practised. Although high-yield varieties of wet rice have been introduced since the 1960s, this has not increased production as predicted.

In northern India, irrigation schemes have helped stabilise annual yields and increase overall production, but the average rice yield per hectare in the mid-1990s was only about half that of Japan.

Nevertheless, Asian countries produce about 90 per cent of the world’s rice. China and India alone account for nearly 60 per cent of the world total.

Low productivity and water management

The average rice yield is 2.9 tonnes per hectare in India. In comparison, the average rice yield (in tonnes per hectare) is 6.8 in the Republic of Korea; 6.2 in Japan; 6.3 in China; 4.3 in Indonesia; and 3.8 in DPR Korea.

The key issue is: Why has productivity remained so low in India, particularly in the eastern region, despite availability of modern rice technology? Experts argue that the above differences in yield are a result of poor water management. Irrigation, drainage and flood control investments can alter the water regime and, in the process, the plight of millions of small farmers. Together, they constitute the concept of water management. The high magnitude of poverty in this region is partly explained by poor water management.

Admittedly, achieving food security has been the overriding goal of agricultural policy in India. The introduction and rapid spread of high-yielding rice and wheat varieties in the late 1960s and early 1970s resulted in steady output growth for food grains.

Public investment in irrigation and other rural infrastructure and research, together with improved crop production practices, has helped significantly increase food grains production.

Declining investments

However, the benefits of the Green Revolution are waning now. Public investment in agriculture is declining, and the annual increment to gross capital formation is now lower than in the early 1980s.

This trend is the same across all the States, not just the poorer ones. More interestingly, the increasing shares of total public expenditure on agriculture are allocated to input subsidies (on fertilizers, electricity, irrigation, and credit, for example), rather than to productivity-enhancing investments such as research and public investment in irrigation. The share of input subsidies in public expenditure rose from 44 per cent in the early 1980s to 83 per cent by 1990.

Private investment in agriculture has increased modestly in recent years, but is nowhere near enough to fill the gap caused by the decrease in public spending. Unfortunately, the agricultural loan waiver can hardly be used to create these investments.

NYSE Euronext May Be First To Invest In Idrs

MUMBAI: Indian Depository Receipts, the revised guidelines for which were formulated in mid-2007, have found no takers so far. It may just turn out that NYSE Euronext, the world’s largest exchange group, will be one of the first to make use of this listing window available in India, for overseas companies.

NYSE Euronext chief executive officer Duncan L. Niederauer said he could potentially list the exchange’s stock in other markets where companies listed on his exchange wanted to go.

“It wouldn’t shock me if US or European companies listed on NYSE Euronext have aspirations to list their stock in Asia, one of the hottest markets these days. We, as an exchange, can potentially list our shares in those markets in order to show the way to our companies, but there’s nothing imminent,” said Niederauer.

NYSE Euronext is currently listed on Euronext in Paris and New York Stock Exchange. It in turn has nearly 4,000 companies listed on it, across the six countries in which its family of exchanges is located.

“India, China, Japan and some ASEAN countries could be potential markets for our companies, and if our customers want help there, that can steer us as well,” said Niederauer, who visited Malaysia and Singapore before coming to India. This is Niederauer’s first trip to Asia after taking over as CEO of NYSE Euronext in December, following predecessor John A. Thain’s move as chairman and chief executive officer of troubled US investment bank Merrill Lynch.

“I treat this trip as an opportunity to do due diligence of these markets,” said Niederauer, who also has meetings lined up with National Stock Exchange (NSE) and Multi Commodity Exchange of India (MCX), in which NYSE Euronext has a 5% stake each.

“We’re not here to buy up exchanges. We’re here to forge alliances with them. We run a huge technology platform that could help many exchanges in the region (Asia) tide over their capacity issues. And we are open to only partner in technology initially, and maybe later translate that into an investment,” said Niederauer.

On when the NSE listing will take place, Niederauer said, “That’s Ravi’s decision.” Ravi Narain is the chief executive officer of NSE.

“Historically, stock exchanges were considered nationalistic utilities. However, now that their nature has changed to a dynamic industry, where there is rapid consolidation, it’s best to position them differently. It’s necessary that they have a public currency. If Ravi asked me, I would encourage him to list the exchange,” said Niederauer.

Bharat Forge To Open Manufacturing Facility In Baramati

Mumbai: Forged and machined components manufacturer Bharat Forge inked a memorandum of understanding with the Maharashtra Government on March 27 for opening a centre for advanced manufacturing facility at Baramati. The centre, spread over 100 acres, will be opened at an investment of Rs 350 crore. With a forging capacity of 30,000 tpa, the plant will manufacture crankshafts for marine and power, landing gear, engine and structural parts for aircraft and helicopters, connecting rods for locomotives and equaliser bars, spindles and other heavy components for machines used in construction activity. The company had a strong global presence and any automobile would have at least two components made by it. The facility was the first major project outside Pune and the company was positive of strengthening Baramati''s position as a fast growing industrial centre.

NTPC Waived From Equity Cap Guidelines For Bidding

New Delhi: In a move that could give greater operational flexibility for power major NTPC Ltd, the Centre has freed the State-owned utility from the Rs 1,000-crore investment cap in firming up alliances or setting up subsidiaries to bid for power projects. The Cabinet Committee on Economic Affairs on March 27 gave its approval to waive the ceiling for equity investment by NTPC to set up financial joint ventures and wholly-owned subsidiaries in India or abroad for participating in bidding called by state utilities and distribution licensees. The clearance would facilitate participation of NTPC in bidding for the development of power projects initiated by Government utilities and result in greater competition and establishment of more public sector power projects, the spokesperson said after the CCEA meeting

KS Oils Acquired 50,000 Acres Of Palm Plantation In Indonesia

KS Oils Ltd has announced the acquisition of 20,000 hectares (50,000 acres) of Palm plantation in Indonesia. With an investment of Rs 230 crores spread over the next 3 years, the Company is ensuring backward integration to secure raw material supplies and avoid global price volatility. This will help the Company in reducing raw material costs significantly and also signals the Companys strategic intent of being a global player.
K S Oils has acquired a single palm plantation over a vast area spread across 50,000 acres of green land in Indonesia. The Company has set up operations and the plantation will be developed over next 3 years. The investments in the plantation will ensure, that agricultural best practices and environment friendly methods are used in the cultivation; while the focus will be on scientific methods of plantation to increase productivity and yield, due care will be taken to enrich the surrounding eco-system.
Indonesian palm plantations are among the most efficient and productive plantations across the world and hence our decision to invest; with spiraling commodity and raw material prices, owning raw material source is the right strategy to derisk in the long term. We thank our Private Equity partners for providing strategic inputs and deep insights which helped us clinch the deal. This is another important step in our global ambitions.
With current investments in the project pegged at Rs 230 crores over a three year period, the plantation will yield 80,000 Mt annually. This will substantially bring down the raw material costs for K S Oils which is currently importing palm oil to refine and sell along with its main product of mustard oil in Northern and Eastern India. The investment has been routed through the Companys wholly owned subsidiary in Singapore. The plantation yield of 80,000 Mt. represents 2.5% of Indias current palm oil imports, which today stands at 3.6 million tonnes annually.