Siemens fuels local green interest with Adani tie-up
22 Oct 2010;business-standard.com:P B Jayakumar:Mumbai: With India emerging as a big market not only for conventional but renewable power, too, global energy major Siemens plans to make the country a major hub for its ‘green energy’ business. It has tied up with the Adani group for a foray into solar power, besides firming plans to put up a wind energy turbine plant in Baroda, targeted at other emerging markets. Siemens Ltd, the flagship listed company of Siemens AG in India, plans to invest €70 million (Rs 430 crore) in the first phase for the Baroda project, to set up a 250 Mw manufacturing capacity. The Indian facility will act as a hub for energy-efficient automation and building solutions, a major business for Siemens, also Europe’s largest engineering company. It is in the process of acquiring land for the unit, which will sell medium to low-end wind turbines globally, mainly to emerging markets like India. The plant is expected to take off by 2012. “We will ramp up the capacity in the second phase to about 500 Mw, depending on the demand in emerging markets,” Siemens Ltd’s managing director, Armin Bruck, told Business Standard. Late entrant India’s wind energy market is dominated by Pune-based Suzlon Energy, which controls 45 per cent of the market, followed by Enercon of Germany with 20 per cent market share and Vestas of Denmark with 12 per cent. Siemens, which has been present in wind energy since 1980 and has about 8,000 turbines installed in different parts of the world, mainly in Europe and the US, had missed this boat in India. With an installed capacity of 11,807 Mw as on March 31, India is the fifth-largest wind power generator in the world, but the capacity addition in the sector is expected to get slower. Any new company will also need to focus on the export market. In contrast, solar power is expected to be the next big thing in the domestic renewable energy sector, with the government aiming to preside over an addition of 20,000 Mw capacity by 2022. For the $5-billion Adani group, which has business interests in diverse fields such as energy, trading, ports, infrastructure and logistics, a tie-up with Siemens can help in accessing latest technology in the solar energy sector. The Adanis plan to set up a 100 Mw solar power plant at Surendranagar in Gujarat, through its subsidiary company, Adani Renewable Energy. Its flagship power company, Adani Power, has operational capacities of close to 1,000 Mw and is developing coal-based projects of about 16,000 Mw. “We have signed a memorandum of understanding with the Adani group for solar power and is working out possible areas of cooperation in future,” said Bruck. He said it was too early to reveal investment plans and other aspects of the collaboration. Products and solutions for solar thermal power plants are parts of Siemens’ environmental portfolio. In 2008-09, revenue from this portfolio totalled about €23 billion, making Siemens the world’s largest supplier of eco-friendly technologies. It supplies 70 per cent of a solar power plant, including turnkey solutions for large-scale photo voltaic units and tailor-made products for concentrating solar power (CSP) plants, including solar fields, power blocks, and critical solar power plant components. Siemens’ global energy sector has some 85,000 employees worldwide and in 2008-09, had generated external revenue of €25.4 billion and profit of €3.3 billion. Medium-term plans Siemens will invest more than Rs 1,600 crore in India over the next three years and a major part of this will be invested to set footprints in the renewable energy market and to expand presence in value priced products, Peter Loescher, president and CEO of Siemens AG had said in February. Bruck said Siemens would not follow the strategy of developing wind energy farms in India by acquiring land and attracting investors for investment, a strategy adopted by its competitors here “Land is a sensitive issue in India and we will come up with a suitable alternate model of business in India,” he said.
22 Oct 2010;business-standard.com:Mumbai: Interlink Petroleum Limited (IPL), a company listed on the Bombay Stock Exchange, has made an oil discovery in its recently-drilled Baola-8 well. The well, which was spudded on the 28th of August 2010, is located in IPL’s small onshore Baola block, approximately 40 kilometres from the city of Ahmedabad, in Gujarat, India. Baola-8 well was drilled to a depth of 1,009 meters and encountered the target Middle Eocene Oolite reservoir section of the Kalol Formation from 904.5 m to 928 m. Further reservoir evaluation and a more extensive production testing program over the reservoir section of Baola-8 is expected in the near future to reassess these zones and to revisit other potential hydrocarbon bearing zones of interest.
21 Oct 2010;business-standard.com:Chennai: Ashok Leyland, the commercial vehicle major, reported 89 per cent growth in net profit to Rs 167 crore during the second quarter of this financial year, as compared to Rs 88.6 crore, during the same period last year. Revenue rose by 72 per cent to Rs 2,714 crore from Rs 1,577.3 crore for the same quarter last year. This increase in both profits and revenue rode on a record sale of 45,989 vehicles for the first half of 2010-11. Dheeraj Hinduja, son of Gopichand Hinduja, was appointed as the new chairman of the country’s leading commercial vehicle major Ashok Leyland. He will replace 80-year old current Chairman R J Shahaney, who has been with the company for more than two decades. The company board today met in Chennai and elected him as the chairman. R J Shahaney has resigned as director and chairman of the board, according to company’s announcement to the Bombay Stock Exchange. Dheeraj, 39, has been with the company as co-chairman for more than 18 months and was involved in purchasing overseas companies for technology and products. He has been a director at the company since 1996.
22 Oct 2010;business-standard.com:Tokyo: Toyota Motor Corp’s new Etios compact will be half the price of its cheapest model in India, as the automaker seeks to win share from Maruti Suzuki India Ltd. The new car, also to be sold in China and Brazil, will be priced in the range of market leader Maruti’s Swift compact (Rs 405,300), Hiroshi Nakagawa, managing director of Toyota’s India unit, said in an interview in Bangalore. Maruti’s Alto (Rs 229,000) is the country’s best-selling car, accounting for 13 per cent of Indian auto sales. “It has been a challenge to build quality at a lower price,” Nakagawa said. “The Indian car market is one of the toughest markets in the world. Customers and car owners are very cost-conscious.” The Etios highlights Toyota’s struggle to balance sales in low-cost car segments in emerging markets without risking its reputation for quality. The automaker is lowering costs for its new model by increasing the amount of parts purchased in India, with initially 70 per cent locally sourced. Engine and transmission production will also start in the nation in 2012. “Bringing procurement cost to a very competitive level is a do or die challenge for our procurement and production teams,” Executive Vice President Yukitoshi Funo said in an interview on October 4. ‘Premium over competitors’ The compact arrives as Nissan Motor Co plans to sell a $3,000 car in India in 2012 supplied by Bajaj Auto Ltd, the country’s second-largest motorcycle maker. Tata Motor Ltd’s Nano, the world’s cheapest car, is priced at Rs 131,331. The Etios may also be more expensive than similarly equipped models, such as Hyundai Motor Co’s i10 compact, the nation’s second best selling model, which sells from Rs 365,559 in Mumbai. “We can charge a premium over competitors because of the trust in the brand that Indians have in us,” said Sandeep Singh, deputy managing director of Toyota Kirloskar Motor Ltd, said in a separate interview last week. Shares in the Toyota City, Japan-based car maker rose 0.4 per cent in Tokyo trading to 2,900 yen. The stock has fallen 25 per cent in 2010. ‘Intense pressure’ “Maruti will come under intense pressure from newer rivals like Ford, Volkswagen, Nissan and especially Toyota, which plans to launch its Etios model,” Darius Lam, an analyst at J D Power and Associates, wrote in a report yesterday. In India, annual sales of the Alto and the i10 both exceeded deliveries of all Toyota models combined in 2009. Toyota aims to grab 10 per cent of the market in five to seven years after selling an expected 70,000 units this year through September. Maruti, the market leader, delivered 884,400 units during the same period. The Innova minivan is currently Toyota’s cheapest model in India, starting at Rs 8,26,433 in Mumbai. The Etios will be offered in sedan and hatchback versions. Like the Innova and Swift models, airbags and anti-lock brakes will not be standard features on the base model of the Etios, Singh said. By law, seat belts are the only mandatory safety feature in cars sold in India, according to Deepesh Rathore, managing director for India at IHS Automotive.
21 Oct 2010;business-standard.com:Shine Jacob:Kolkata: While Reliance Industries Ltd (RIL) has bought interests in three shale gas assets in the United States, government-owned Oil and Natural Gas Corporation’s (ONGC) began drilling at its maiden shale gas well at Ichhapur in West Bengal’s Burdwan district last month. Shale gas is natural gas, primarily methane, trapped in the earth’s most common sedimentary rock shale, which has low permeability. Shales have large organic matter, from which oil and gas can be extracted by destructive distillation. ONGC's preliminary estimate for Damodar and Cambay basins indicate that shale gas resources here may be 35 and 90 trillion cubic feet, respectively. “If reports from Ichapur meet our expectation, India will possibly be on the road to produce more shale gas than the US. Moreover, states like West Bengal, Gujarat, Assam and Jharkhand have the capability to make this a reality,” said P K Bhowmick, head of the Keshava Deva Malaviya Institute of Petroleum Exploration in Dehradun. He was involved with ONGC’s research activities. Six major shale areas in the US have proven reserves of about 240 tcf. Shale gas production in the US has led to a substantial reduction in natural gas demand, with International Energy Agency’s Annual Energy Outlook-2010 expecting that shale gas will contribute 34 per cent of total gas production in the US in 2035, up from 17 per cent at present. Eastern hope As the central government is gearing up for the first-ever auction of shale gas areas in 2011, experts consider West Bengal and Jharkhand will contribute substantially in fulfilling the country's shale dreams. “There are a number of shale formations in the 26 sedimentary basins of India, the cumulative thickness of which are comparable or more than best global shale plays. As shale gas exploration is a recent phenomenin in the Indian hydrocarbon sector, a comprehensive resource estimate of these assets is not yet available,” said an ONGC spokesperson. The findings of the project will be finalised after ONGC completes drilling till 1,200 metres in another 208 days. So far, the company has drilled up to 170 metres. Regarding the prospects of eastern India, the ONGC spokesperson said West Bengal and Jharkhand comprised a small part of the total sedimentary fill available. However, given the fact that shale gas exploration has been initiated from this part of the country, the two states are expected to provide a major impetus to the effort once the pilot is successful. “As the government has recently initiated an exercise to evaluate, identify and offer shale gas acreages and may launch the Shale Gas Policy of India in 2011, much will depend on acreages and opportunities opened up in these states,” said the spokesperson. Still nascent Basic shale gas-specific data are also being generated in other basins like Cambay, KG and Cauvery. “It needs to be borne in mind that although India has large shale volumes in its sedimentary basins, we are at a nascent stage of shale gas exploration compared to the US,” the spokesperson added. A top official from the Directorate General of Hydrocarbons (DGH) said it was too early to comment. “The oil PSU had requested the petroleum ministry to carry out this research, with the shale gas auction expected to take place next year. We have to wait and watch for the final report,” said S C Sharma, a chief geologist at the DGH. Adding: “The scene will soon change, as the US, too, is interested in India’s shale assets,” he added. ONGC plans to drill three more wells in Damodar Valley by March 2012. Private sector giants such as Reliance Industries are also bullish on this gas source. RIL has completed three shale gas deals in the US since April. Reports suggest it is in talks with Chesapeake Energy for the Eagle Ford shale in South Texas. Oil India Ltd has also announced a plan to look for shale gas assets abroad.
Munjals working on new branding strategy for Hero Honda
21 Oct 2010;economictimes.indiatimes.com:Sushmita Mohapatra & Nikita Rana: MUMBAI: With the imminent exit of Honda from its 26-year old joint venture with the Hero group, the Munjals are now working on a new branding strategy for Hero Honda Motors -- India's largest motorcycle maker. The company has initiated talks with its brand managers on the new look of the brand which will drop "Honda" from all its advertising campaign. Sources say that the focus is likely to be move from mother brand 'Hero Honda' to individual product names such as Splendor, Passion, CBZ and Hunk. The company is currently in discussions with brand experts and market research agencies studying the changes that need to introduced, primarily on whether individual models like Splendor and Passion need be leveraged with the Hero tag. This new logo, sources say, will be accompanied by technological innovations that should put at rest skepticism about Hero’s research and development. Hero Group’s technology tie-up with Honda is expected to end by 2014. Most Industry experts are certain that Hero will do well without Honda and can easily bank on the equity that it has built up over the last few decades. "Of course, re-branding has its own challenges, so it would be great if Hero can quickly roll out the new brand strategy and products, so that this discussion on the brand name doesn’t last for long and the conversation shifts back to the product," says Shripad Nadkarni, Founder-Director, MarketGate Consulting. However, he believes that in a high involvement segment like motorcycles, buyers are known to research products well before the purchase and solely seek value, something that Hero has delivered on for years. Honda on the other hand has existed as an individual brand in the Indian market and has failed to make a dent in it. But not everyone is as hopeful that the company will be able to ride out the absence of the Honda tag. Nabankur Gupta, Founder, Nobby Brand Architects says, "Hero without Honda would honestly look a little naked. The conjunctive branding is too strong for Hero to be able to manage alone at least at the moment. I don't think what worked for Bajaj will work for them because Bajaj always stood for itself. It was always "Hamara Bajaj" and not "Hamara Bajaj Kawasaki". Hero will have to reiterate the fact that they are the largest manufacturers of motorcycles in the country." Also he adds that Hero's branding in India is currently associated with Hero Cycles and that could turn out to be down market for bike users. Meanwhile, Hero Honda spokesperson said that the story was speculative.
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