Nestle chief Paul Bulcke wants to see its hugely popular Maggi brand of instant noodles back on the Indian market as soon as possible after it was banned over a health scare. India's food safety regulator on June 5 banned the product after tests that it said showed the noodles contained excessive levels of lead. "The only thing that interests me is to have the product back as soon as possible and that things are cleared up," he said while visiting the Milan expo. "We are doing all we can to make contact with Indian authorities at the earliest," he said, adding: "The product is safe." Asked about the possible impact of the ban on jobs in India, he said production would resume "if we can resolve this fast." Nestle has been battling its worst-ever branding crisis in India since a regulator in the northern state of Uttar Pradesh found monosodium glutamate (MSG) and excess lead in a sample of its noodles. On Monday, the Swiss food giant said that the ban had led to 3.2 billion rupees (44.5 million euros, $50.5 million) worth of goods being withdrawn. A Nestle spokesman said it was the biggest ever withdrawal of a product by the company. The world's biggest food company is challenging the June 5 order from the government's food safety regulator and is in the process of destroying more than 27,000 tonnes of Maggi noodles after halting production. The company had already announced it was pulling the product from sale when the Food Safety and Standards Authority of India imposed a ban following similar moves by some state governments. Nestle does not give a breakdown of sales per brand but Jon Cox, an analyst at Kepler Cheuvreux, put it at around three billion Swiss francs (2.8 billion euros) a year. The safety scare is a huge blow to the company, which has been selling its Maggi products for more than three decades in India, and has 80 per cent of the country's instant noodle market. Nestle's Indian unit has said it would take a hit of more than 3.2 billion rupees ($45 million) from the continuing withdrawal and destruction of its Maggi instant noodles. The company on Friday challenged those findings in court but has to continue with the withdrawal until a verdict is reached. Nestle India said the estimated sales value of the stock in the market was worth around 2.1 billion rupees. It also has Maggi noodles and related products in its factories and distribution centres worth 1.1 billion rupees. (Agencies)
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Offices of the Chettinad group were raided by Income Tax officials on Wednesday (10 June) morning, adding a fresh twist to a family feud in one of southern India's oldest and influential business families. A top Income Tax official said that raids were carried out in 37 places of the Chettinad Group in Tamil Nadu, two places in Andhra Pradesh and a few places in Mumbai. The Chettinad Group, started in 1902, was nurtured by Muthiah Chettiar initially and then his sons M.A.M. Muthiah and M.A.M. Ramaswamy. M.A.M. Muthiah had no children and died in 1970. In 1984, M.A.M. Ramaswamy inherited the group after his father's death. Following are the 10 top developments in Chettinad Group family feud 1) On Tuesday, industrialist M.A.M. Ramaswamy disowned his adopted son M.A.M.R. Muthiah in the latest episode of Chennai's Chettinad feud that unfolded in a dining room where the Duke of Edinburgh was once hosted. Ramaswamy, who lost control of the Rs 10,000-crore turnover Chettinad group to his adopted son but is said to have personal assets worth over Rs 1,200 crore, added that "he (Muthiah) should not perform any rituals after my death" and refused to give him any share of his property. 2) The family feud in the Chettinad group, which deals in cements, hospitality and education among others, came to the fore recently after Ramaswamy was not elected as a director in the Chettinad Cement Corporation, the group's flagship, last year. On May 23 this year, 14 alleged aides of an assistant of Ramaswamy were arrested for locking a room belonging to Muthiah. 3) Ramaswamy has accused Muthiah and his wife Geetha of violating various provisions of the Companies Act. "Chettinad Cements alone owes hundreds of crores as sales tax arrears to the state government," he said. 4) Ramaswamy, who owns 22 per cent of the Chettinad Group, shares lineage with former finance minister P. Chidambaram and is a former Rajya Sabha member. Ramaswamy had last month accused Muthiah, formerly Ayyappan, of trying to usurp the Chettinad house, located on a 10-acre plot along the Adyar river. The 84-year-old industrialist has spurned recent attempts by Muthiah for a rapprochement, saying "he has no bonafide intention or sincerity". 5) Ramaswamy’s cousin, A.C Muthiah, head of the M.A. Chidambaram Group that owns Southern Petrochemical Industries Ltd (SPIC), said Muthiah has effectively and cleverly taken control of the Chettinad Group. 6) Ramaswamy and his wife Sigappi did not have any children and adopted Ayyappan, son of R.M. Sekkappa Chettiar, and re-named him M.A.M.R Muthiah in 1996. Ramaswamy went against the custom of the Nattukottai Nagarthar community and adopted an outsider (most adopt a close relative). Most of the Chettiar community avoided attending the ceremonial rites related to the adoption to show their displeasure. Ramaswamy's cousin A.C. Muthiah said that Ayyappan's adoption was not valid according to the Nagarathar (a mercantile community that follows Shaivism) tradition as he belonged to a different temple. 7) According to media reports, Muthiah clarified that he had tried to patch up with his father many times but was not being allowed to. Muthiah, a shrewd businessman, has given a corporate identity to the various companies under the Chettinad Group after becoming the MD of the group's flagship company, Chettinad Cement, in 1999. Under Muthiah's leadership, the group has grown from an annual turnover of Rs 600 crore to Rs 4,000 crore. The group's interests include manufacturing cement and silica, constructions, transport, power, coal terminal services, healthcare, plantations and textile. 8) The family also used to head the country's first private university - Annamalai University, founded by Ramaswamy's grandfather Annamalai Chettiar - before it was taken over by the Tamil Nadu government last year following allegations of large-scale mismanagement and corruption. 9) In August 2014, Ramaswamy was removed as director in any of the group's companies. He tried to scuttle an AGM resolution to this effect, by allegedly bribing the then registrar of companies, only to see the attempt backfire as the CBI arrested the officer and named Ramaswamy as the second accused. The case is being investigated. 10) Ramaswamy's family has extensive land holdings in private capacity and in some cases through trusts. The Chettinad Palace, with the palace buildings alone located on a two-acre plot, is estimated to be worth Rs 1,800 crore to Rs 2,000 crore.
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Singapore-based air carrier Tiger Airways today said that its Chennai-Singapore flight was delayed by 24 hours "due to an issue with hydraulic system" and it has landed safely. The aircraft, which was scheduled to leave here at 10.45 PM on Saturday, left for Singapore on Sunday at 10.45 PM, an airline spokesperson said. "Tigerair flight TR2639 scheduled to depart from Chennai to Singapore on Saturday evening was delayed due to an issue with the hydraulic system which has since been rectified," the spokesperson said. "The aircraft departed Chennai last evening and landed safely in Singapore at 1.58 AM local time," he said. A total of 158 passengers and crew were scheduled to be on the flight, he said. "Safety is of utmost priority to Tigerair and we will spare no effort to ensure the well-being of our passengers," he added. Chennai Airport sources said passengers were accommodated in various hotels by the airline till the issue was addressed. (PTI)
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s the telecom sector is stepping up with the launch of 4G technology, India’s largest telecom service provider Bharti Airtel still holds its market leader status in terms of consumer base and in broadband services. A report by Credit Suisse says Bharti Airtel which has already launched 4G services in various circles, is best positioned to respond to the upcoming launch of services by Reliance Jio Infocomm. "Bharti clearly has the lead among incumbent operators on 4G deployments, and is probably best positioned to respond to the upcoming RJio launch," the report said. Bharti Airtel soft-launched 4G/LTE services in Mumbai and a few other cities recently. This comes more than three years after its 4G launch in Bangalore in 2012. The report, however, said given the scale of investments, network capacity size and differentiating investments (spectrum/fibre backhaul, etc.) made, it believes even Bharti's numbers could come under pressure in the next couple of years. The year was quite eventful for the country’s biggest telecom service provider Bharti Airtel. In the spectrum auctions conducted in March, the company successfully renewed 900 MHz spectrum in six circles. The company also won additional 900 MHz spectrum in key leadership circles, added to its existing 1800 MHz and 2100 MHz spectrum in 7 circles, and won 2100 MHz spectrum for 3G services in 6 new circles. This will enable the Company to provide world class voice and data services to its customers across 2G, 3G and 4G technologies. In the recent spectrum auction conducted by DoT spectrum worth Rs 109,875 crore was bought by seven telecom operators, with Airtel alone acquiring spectrum worth Rs 29,129 crores.Of this, Rs. 17,618 crores has been spent on the renewal of existing spectrum while the balance Rs 11,511 crore has been spent on procuring new spectrum. The company which has its operation in 20 countries continued to invest on up-gradation and expansion of network sites. By the end of the quarter, the company had 146,539 sites in the country. Out of the total number, 33.3 per cent are 3G sites. With 48,825 3G sites, Airtel has the largest 3G network in India. Finances For the year ended March 31, 2015, the consolidated total revenues for Bharti Airtel amounted Rs 92,039 crore, EBITDA at Rs 31,452 crore and Net Income ended at Rs 5,183 crore, up by 86.9 per cent from last year. Mobile Data revenue at Rs 2,324 crore registered a growth of 70.4 per cent Y-o-Y in India, uplifted by increase in usage per customer by 41.2 per cent and Data customer base by 30.3 per cent. Advantage Airtel As the sector is gearing up for the 4G battle Airtel has the advantage of having the largest consumer base. As of now total number of wireless broadband subscription stood 83.68 million. Bharti Airtel (20.58 million) leads in this segment too, followed by Vodafone (19.37 million) and Idea Cellular (14.52 million), Reliance Communications Group (7.83 million) ranks 5th below BSNL (8.92 million).The Company’s 3G services are now available in 9,951 towns and 4G in 17 towns, largest in the country.(Arshad Khan) Its announcement of strategic collaboration with China Mobile under which the two companies will work towards the growth of the LTE ecosystem and evolving mobile technology standards to enable delivery of world-class affordable services to customers.
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Ajay Singh, the man who had co-founded and last year rescued a collapsing Spicejet, is on a roll. He claims to have cleared all debts of the company in just three months since his takeover in December last year. Speaking to BW |Businessworld's Monica Behura, Singh says that the company is undergoing a corporate restructuring. Clearing off debts, a leaner management, expansion of fleets and hiring back people who left during the Maran times is right on his agenda. What brought you back into SpiceJet?It was both an emotional and rational decision but most importantly it was the national perspective that convinced me to join SpiceJet. With fewer players, brands are visible and any airline failure such as a shutdown gives a bad name to country’s aviation industry. Did it make any business sense for you to take on the ailing SpiceJet?Macro economic climate like low oil prices helps growth. With Modi government in power, I was convinced of a higher economic growth trajectory which is bound to have a ripple effect on all sectors including aviation. There is a growth potential to help that one per cent of population that flies in planes and its number is bound to grow. Before joining SpiceJet, were you privy to the book of accounts? How different was it from the time you founded it in terms of financers, reserves, management? It was only in December, after the commencement of dialogue that I looked into the matter. I was given a 30 day interim period and in between that I saw the books. It was a big hit for me. When I left the company in 2011 it was making profit, it had reserves but when I joined back, its balance sheet had accumulated huge losses. Its liability had surpassed its assets and financial condition was not healthy. What led the company to such a financial crisis? What was harming it the most? Deviation from low-cost flights which made the company grow was one of the main reasons. Shift from focuses such as trying to reduce the cost of operation was lost. The moment I stepped in I opened stations which were disproportionate to the number of planes we had, and we also opened low-cost flights with exciting deals. Why do you think the Marans failed and what was the failure cost of the airline? Firstly, I think the airline deviated from its principles of trying to reduce cost on a regular basis. You have to keep knocking down costs which I didn't think was the focus under the Maran leadership. Secondly, in terms of revenue, there was a lot of dilution of revenues by having promotions which were not designed as well as it should have. Thirdly, I think they went more for spread, in terms of opening up of large number of operations as opposed to having higher frequency. Fourthly, the airline was functioning under an absentee leadership because the Marans were not physically present here. I think airline being a very competetive space, you can’t afford a hands off deal. It is a combination of factors that led to the failure. With almost six months in office, how does the balance sheet of Spicejet look like now? Ever since I joined I’ve cleared all the statutory debts and every single rupee of bad debt, all employee salaries are up to date and oil companies are paid. The company has turned upside down since its inception in 2005, the company was based on the premise that it will not take credit rather discount from the oil companies, but Maran had sought credit from the PSB’s. Right now we are on a recovery zone and it is always tough to recover after a shutdown. Given your connections , did you receive any government help? Nobody wanted another Kingfisher, nor the government, the stakeholders, investors, or the aviation industry. Kingfisher and Deccan Airlines were irresponsible. They got a lot of money as debt which was much higher than their revenues and ultimately consequences are known by everyone. Air India too incurs losses but it is written off by government expenses. It creates an imbalance, there has to be a coherence of policies and this government is aware of it. Yes, we did the civil aviation ministry for advice and they supported us morally which was important. As for oil companies, we asked for discount which was provided to us. There were certain allegations regarding transparency in the acquisition. How would you justify it? I would like to clear that we acted as per SEBI law who duly protected the small investors with this acquisition just because some people (referring to Subramanium Swamy) are not happy with the law the way it is then the law should be changed. Where have you raised the Rs 550 crore from that you’ve invested till now? What is the investment required for turning around SJ? Where is going to come from? Any more investors coming aboard? This money has come from a mix of investors and banks. We are getting a lot of funding offers from various players like private equity, debt providers, hybrid products and even foreign airlines. We will choose the mode of investment that comes at the lowest cost. If any further dilution of stake is needed, that will be done at better valuation. Our improved performance will reflect in our stock price. We would need another Rs 500 crore for complete revival of the company. What about the Rs 1500 crore that was talked about? Yes, it was because initially we didn’t knew the amount to clear the liability. From some portion of the fund and by the cash flow, liability was paid off. At present our cash flow is strong. From December no flights have been cancelled. Has the operation increased or has it come down? 190 flights per day from December has been increased to 230 today. My first order in business was to bring stability in operation. We have started operating in airports like Jabalpur, Dehradun, Amritsar but our basic remains same, higher frequency in few stations. So now, can it be said that SpiceJet has cleared all its debt and recovered from the financial burden? Yes, we have cleared all the debts by the intrusion of money we brought in and paid some by cash flow. Big vendors such as Lessors t has been paid off fully. Besides cost-cutting what are the business plans for revival – we hear of SpiceJet leading a low-fare war, which gives cash flow, but is debilitating in the long run. Also, major effort for ‘on-time’ and operational efficiency. Anything else? It is completely wrong. Promotional sales are a part and parcel of low cost airlines world over. They enable people, who have never flown before, to take to the skies. However, they should not be indiscriminate and revenue-dilutive. We have achieved high load and yield factor in months of Feb, March and April. We will continue to look at reducing costs ways to increase our revenue through our launch of products like SpiceJet Assurance service among others. What about your contract with bombardier? What are your plans for fleet increase? We are renegotiating our 20-25 contracts with Bombadiers to bring the cost back in line,” asserts Singh who is looking order a large number of aircrafts by October. Reports are that top management body is leaving SpiceJet? What would you like to say in this matter? Yes, the CCO and head of HR have left the company reasons which I cannot disclose. We are having some structural changes at the top level which you will know in near future. Right now our core team consists of very experience people. Given that Vistara and Air Asia have steeped in the market, how you feel things have changed in the last five years? As of now they are small players. There is a scope for growth for everyone. Talking about development of airports by government’s PPP programme, what is your view? Government should invite tender for raising the infrastructure of airports. Company which agrees to the work with minimum amount should be given the charge. Smaller airport development is very necessary for the development of aviation industry. What is the revival scheme based on?Simple, stick to the basics.
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Low-cost carrier SpiceJet Ltd, which came close to collapsing in December after running out of cash to pay its creditors, is looking to raise an additional 3 billion rupees ($47 million) and increase its fleet size to 45-50 aircraft by the end of fiscal 2015, the company said on Thursday. In March, Indian courts had ordered India's aviation regulator to deregister 11 of SpiceJet's Boeing planes following disputes with three lessors. The company's website says the carrier currently has 15 Bombardier and 19 Boeing aircraft in its fleet. Ajay Singh, a co-founder, rescued SpiceJet in December with a $240 million bailout he says has put the airline on the road to recovery. SpiceJet was forced to ground its fleet and cancel hundreds of flights before the rescue deal emerged. The carrier on Wednesday said its bookings surged by 400 per cent on day one of its three-day special promotional fares scheme "Celebration". The airline has offered an all-inclusive ticket at as low as Rs 1,010 on its domestic network to celebrate 10 years of operations. (Agencies)
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The mother of all battles in Indian telecom sector may be fast brewing. The country’s largest private sector company Reliance Industries Ltd (RIL) is giving finishing touches to its pan-India telecom network plans through a dedicated subsidiary: Reliance Jio Infocomm Limited (RJIL). Here is a snapshot of Reliance’s most ambitious project ever in the telecommunications sector: MissionBuilding a countrywide broadband infrastructure to deliver digital content, applications and services through high speed fourth generation (4G) internet connectivity. Key Domains Education, healthcare, security, financial services, government-citizen interfaces and entertainment. Progress So Far Plans to provide seamless 4G services, using LTE technology in 800 MHz, 1800 MHz and 2300 MHz bands through an integrated ecosystem in 20 out of total 22 circles in the country. Significant progress in building its 4G-LTE (Long Term Evolution) business, including physical network infrastructure, systems and processes, sales and distribution network, applications and services and content, among others. It is working with strategic partners who have committed significant resources, knowhow and global talent to support deployment and testing activities currently. underway. Why LTE? LTE, a fourth generation wireless technology that offers higher speed, is likely to alter the contours of the Indian wireless industry and drive the ‘Digital India’ movement. LTE rollouts will not only accelerate data adoption (userbase and usage) in India, but will also cause a dramatic shift for 4G services. RJIL has been actively involved in developing the ecosystem for India’s LTE phones, working with renowned OEMs, Original Design Manufacturers (ODMs) and chipset vendors on end-to-end device design and engineering. RJIL is ensuring the tight integration of these devices with Jio’s network infrastructure, platforms and applications portfolio to ensure seamless experience to customers. Advantage Reliance With more than 961 million mobile users as of February 2015 India has achieved a tele-density of more than 76 per cent. However, the growth in broadband connections has not been commensurate with the enormous growth of India’s telecommunication industry. India has only around 18.7 million broadband connections as of September, 2014, excluding internet access by wireless phone subscribers, which is comparatively lower than other countries. RJIL is the only private player with Broadband Wireless Access (BWA) spectrum in all the 22 telecom circles of India. RJIL’s total equivalent spectrum footprint has increased from 597.6 MHz to 751.1MHz (including uplink and downlink), strengthening its position as the largest holder of liberalized spectrum. Value Addition Reliance subsidiary Independent Media Trust (IMT) acquired controlling stake in Network18 Media & Investments Limited (Network18), including its subsidiary TV18 Broadcast Limited (TV18) to provide a unique amalgamation at the intersect of telecom, web and digital commerce via a suite of premier digital properties through Reliance Jio Infocomm. Fiancials Assets: Rs 82,015.09 CroreLiability: Rs 51,940.92 Crore(Source: 2014-15 Annual Report of Reliance Industries Ltd) (Arshad Khan)
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