23 April 2011;business-standard.com:Jyoti Mukul & Sudheer Pal Singh:New Delhi: The Central Electricity Authority (CEA) has suggested that Coal India Ltd (CIL) be made the nodal agency for pooling of coal prices besides being made the canalising agency for import of coal. The proposal, though has found few takers in the coal ministry. Coal is currently freely imported into the country by power projects mainly through an intermediary trading company which also arranges for transportation. “It will be simpler (for introduction of pool pricing mechanism) if all imports to meet the shortfall in the availability of domestic coal be made by domestic public sector company like CIL,” CEA said in its recommendations on the pooling mechanism for domestic and imported coal. A senior CIL executive told Business Standard that the company does not want to import coal for other companies, a condition which has also been imposed by the New Coal Distribution Policy. “According to the policy, CIL and Singareni are required to meet the country’s coal demand even through imports. We did not want this but it was thrust on us. It is a policy in which one company is asked to meet the country’s entire coal demand even if it has to be met through imports,” he said. Questioning the feasibility of pooling coal prices, coal minister Sriprakash Jaiswal told Business Standard that pooling was feasible only if one company imports coal. “Pooling is a proposal but no decision has been taken so far on this. Import of coal is under open general licence (OGL). As of now, there is no use talking about pooling because CIL is not the only one importing,” he said. The Union minister said private companies could go ahead and import coal at any cost. It has also proposed a pooled price formula based on the average price of imported coal, after transportation and insurance charges, and the coal produced by CIL and Singareni Collieries Company Ltd (SCCL). While drawing up the formula, the technical regulator for the power sector also said captive coal should be kept out of the mechanism for arriving at the pooled price. Around 87 coal blocks have been allocated to independent power producers and states for captive coal mining in power sector. It is difficult to price this coal since there was no bidding for distribution of the mining rights. Besides, as CEA pointed out, the pooling of captive coal will create problems for these projects since they have power purchase agreements signed with utilities through bidding on tariffs arrived on the basis of captive coal blocks. NTPC Ltd, the biggest coal consumer in the country with an annual requirement of more than 150 million tonnes, is also not keen on the pooling proposal. The average cost of NTPC coal will go up since around 85-90 per cent of its consumption is met through domestic coal. “We are already pooling coal at our power plants so at the company level our cost is pooled,” said a senior NTPC executive.
23 April 2011;Sharmistha Mukherjee:New Delhi: With oil prices on a rise, Maruti Suzuki, Hyundai Motor and General Motors are increasingly looking at alternative fuel variants of vehicles to drive sales. All three companies have three to five models across the compact car and sedan segments propelled by CNG and LPG fuels. They see, on an average, 10 per cent of sales from the variants. The companies are betting on an increasing procurement of such vehicles with the CNG and LPG dispensing network spreading beyond markets in Delhi, Mumbai and Gujarat. The country’s largest car manufacturer, Maruti Suzuki India Ltd (MSIL), which introduced CNG-driven variants of its Alto, WagonR and Estilo small cars, the multi-utility Eeco and the SX4 sedan in these areas last August, recently started sales in Andhra Pradesh. Shashank Srivastav, chief general manager (marketing), MSIL, informed: “The CNG dispensing network currently covers not more than 28 per cent of the overall vehicles’ market in the country. The operating cost of a CNG-propelled car is a third of that of a petrol car. There is demand in the market. If adequate infrastructure is put in place, sales will shoot up substantially.” The company sees eight to 16 per cent of total sales in Delhi, Mumbai and Gujarat from CNG variants. “In the models where we have introduced CNG, contribution to total volumes is significant. The WagonR and Eeco CNG variants bring in 10 to 13 per cent to the total sales of these brands. We assume a large portion of this sale is incremental, due to CNG options now offered to customers,” said a senior executive at MSIL. MSIL offers the Maruti Suzuki Omni and WagonR Duo in LPG. While Omni LPG variants contribute eight per cent to total sales for the brand, 18 per cent of WagonR Duo sales come from the LPG variant. Push factors “The price differential between CNG and petrol has increased substantially. Diesel cars come at a premium of Rs 85,000-90,000, while premiums for CNG-run vehicles is almost half at about Rs 45,000. Naturally, there is a preference for CNG,” explained Srivastava. CNG costs Rs 29.30 per kg, as compared to Rs 37.75 per litre of diesel and Rs 58.37 per litre of petrol. Concurred Abdul Majeed, leader, automotive practice, PricewaterhouseCoopers: “There is an increased consciousness today about fuel-efficient and eco-friendly cars. Oil prices will only rise. If infrastructure is put in place, CNG-driven cars would be a viable option.” Though there is no official estimate on the volume of CNG/LPG cars, industry sources indicate eight to 10 per cent of vehicles in the market run on these fuels. A mere two to three per cent of the sales come from factory-fitted CNG/LPG cars. The rest comprise models retro-fitted with CNG/LPG kits. V G Ramakrishnan, senior director, Frost & Sullivan, added a note of caution, “CNG as a fuel is much cheaper than petrol. Availability is an issue; also, the fuel affects slightly the pickup of vehicles. There is a perception in consumers’ mind about the performance of a CNG/LPG vehicle and may be that is why sales have not picked up as expected.” Apart from Maruti, Hyundai Motor offers CNG-LPG variants of small car Santro and the entry level sedan, Accent. Said a company spokesperson, “At present, 14-15 per cent of our sales come from these fuel variants. We sell CNG and LPG-driven cars in 14 cities. There is demand in the market, as the performance of these cars is good. Once the dispensing network expands, sales would go up considerably.” General Motors, which has LPG variants of small cars Beat and Spark and CNG-driven Aveo and Optra, registers 10-12 per cent of sales for the models from these variants.
Reliance's record profit challenges ONGC's top rank
22 April 2011;dailypioneer.com:New Delhi: Billionaire Mukesh Ambani-led Reliance Industries on Thursday came close to challenging PSU giant ONGC's position as the country's most profitable company, with a record net profit of `20,211 crore for the fiscal 2010-11. RIL's consolidated net profit for the fiscal ended March 31, 2011, grew by over 27 per cent to `20,211 crore. The company had recorded profit of `15,898 crore in the previous fiscal 2009-10, making it second most profitable company after ONGC. Oil and Natural Gas Corp (ONGC), the nation's largest oil and gas explorer, had recorded net profit of `16,767.55 crore in 2009-10. The PSU major is yet to announce its figures for the fiscal 2010-11. In the first nine months of 2010-11 fiscal, ONGC has reported a net profit of `16,133.13 crore. Analysts expect that the full-year profits of the two companies could be very close to each other and it would be interesting to see whose figures are higher, although not by any big margin. They said that RIL's figures for the last quarter would have been much higher, but for a decline in the production from its main gas field KG-D6. Commenting on the results, RIL Chairman and MD Mukesh Ambani said: "Reliance had a record year with strong financial and operating performance. Global economic growth, emerging markets demand and tightness in the markets led to recovery in refining margins and record petrochemical earnings." "We are fully geared to participate in India's growth and continued global recovery in the coming years. Our committed investments in core business and new initiatives are expected to result in sustained earnings growth," he added. In the league of five most profitable companies, ONGC and RIL are followed by Indian Oil (`10,220 crore), Bharti Airtel (`9,426 crore) and SBI (`9,166 crore), based on their comparable latest available fiscal year results. In terms of turnover, RIL is ranked second after Indian Oil and is followed by BPCL, HPCL, SBI and ONGC.
Toyota to trim output in India by 70% due to parts shortage
22 April 2011;economictimes.indiatimes.com:NEW DELHI: Japanese car giant Toyota today said it will reduce its production by up to 70 per cent in India between April 25 and June 4 due to supply constraints of components following the devastating earthquake and tsunami. On account of this measure there will be a production loss of about 7,000 units a month, translating into a revenue deficit of Rs 490 crore to its Indian entity -- Toyota Kirloskar Motor. "This production adjustment step is a temporary measure from April 25 to June 4...We will be losing about 7,000 units per month," Toyota Kirloskar Motor (TKM) Deputy Managing Director (Marketing) Sandeep Singh told PTI. Under the plan, production at TKM's two plants in Bangalore will be suspended on Mondays and Fridays during the nearly one-and-half month period. The company will operate about 30 per cent of its normal capacity of 11,000 units a month during this period, he added. TKM currently manufactures models like sedan Etios, multi utility vehicle Innova, premium sedan Corolla Altis and SUV Fortuner in India. On the impact of the temporary production cut on waiting period of vehicles, Singh said: "We are having waiting periods for all our models and it ranges from one month to three months. After this production cut, it will increase by an another month." At present, the waiting periods for Etios and Innova are two to three months each, while that of Fortuner and Corolla Altis are three months and one month respectively, he added. When asked about income loss, TKM Deputy Managing Director (Commercial) Shekar Viswanathan said: "Because of the production drop, the revenue loss will be on an average Rs 7,00,000 per vehicle." On that basis, the overall production loss of 7,000 units per month translates to about Rs 490 crore. Viswanathan, however, declined to comment on when the company expects the situation to become normal, and said TKM has not laid off any worker due to this step at its plants. "The company primarily imports engine and transmissions from Japan and other region. But, even if we import some components from other countries, it is somehow linked with Japan," Viswanathan said. In a statement, the TKM said there will be no impact on its service and spare parts supply operations. "It is important to note that this is a necessary response to a short-term supply issue and we intend to restore the normal operations as soon as possible," TKM Managing Director Hiroshi Nakagawa said.
Nano overseas production site to be finalised soon
21 April 2011;business-standard.com:New Delhi: Tata Motors is "at a very high stage" in finalising a production site for its small car Nano at an overseas location, which could be either in Latin America, South East Asia or Africa. A senior Tata group official said that the automobile major was exploring various options at different places and looking at uninterrupted supply chain for the components. "The work is at a very high stage," Tata Industries Managing Director Kishor Chaukar told PTI when asked about a time-line to produce Nano in any of the overseas locations. Tata Industries is one of the investment arms of the Tata Group. He said Tata Motors is looking at various regions such as Latin America, South East Asia and Africa. "They are looking at any of these possibilities." While declining to specify details, Chaukar said: "They (Tata Motors) are looking at the best options in terms of country locations or a geographic location." Apart from considering land building facilities availability, Tata Motors will look at supply chain availability and at the accessibilities of markets, he added. "...Most importantly they will also be looking at the supply chain. Because component usage in a single automobile runs into thousands and if you go in a large production, supply of these components of desired quality has to be highly reliable," Chaukar said. Nano, touted as the world's cheapest car, is now produced only at Sanand in Gujarat for the Indian market. In 2009, Tata Motors unveiled the European version of Nano -- Nano Europa -- at the 79th Geneva Motor Show. The company was expected to launch the car in Europe by 2011. The version in Europe is said to have airbags, central locking and would be Euro V emission norms compliant. Although Tata Motors did not reveal any price tag for the Nano Europa, British media had predicted a price of over $6,000. The Indian edition of the car hit the roads in 2009 for about $2,500. Tata Sons Chairman Ratan Tata had said that the European version of the Nano would come with airbags and other high-end features, "but it will still be a low-cost car".
21 April 2011;deccanherald.com:New York: On the first anniversary of the Gulf of Mexico oil spill, BP Plc sued Transocean, seeking at least $40 billion in damages and other costs from the owner of the Deepwater Horizon rig. London-based BP also sued Cameron International Corp for negligence, saying a blowout preventer made by Cameron failed to avert the catastrophe. Both complaints were filed Wednesday in federal court in New Orleans. Eleven people died when the Deepwater Horizon rig exploded. About 4.9 million barrels, or more than 200 million gallons, of oil later flowed out of a subsurface BP well. BP has incurred tens of billions of dollars of liabilities from the disaster. BP accused Transocean of negligence, saying it caused the drilling rig to be "unseaworthy." "The simple fact is that on April 20, 2010, every single safety system and device and well control procedure on the Deepwater Horizon failed, resulting in the casualty," BP said. Transocean called the lawsuit a "desperate bid" by BP to renege on a contract to assume full responsibility for pollution and environmental costs. "This suit is specious and unconscionable," it said in a statement. In a separate lawsuit, BP asked U.S. District Judge Carl Barbier, who oversees national litigation over the spill, to order Houston-based Cameron to reimburse it for "all or a part" of its damages. "The blowout preventer failed to work and perform the function it was designed and manufactured to perform -- i.e., to secure the well," BP said. "The blowout preventer was flawed in design, and alternative designs existed that did not have these flaws." BP said it took a $40.9 billion pre-tax charge in 2010 related to the spill, and by year end had incurred $17.7 billion of costs.
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