Monday, February 11, 2013

Sanjiv Batra

Chairman, MMTC with jayant mundhra on past, present and future of the company...

One of the mini ratna public sector enterprise Minerals and Metals Trading Corporation of India (MMTC) is not only one of the leading bullion traders in the country, but also recognised as an assaying and hallmarking centre for gold jewellery by the Bureau of Indian Standards. Also, a co-promoter of two of India’s brand new exchanges — Indian Commodity Exchange Limited and United Stock Exchange Limited — MMTC has a track record of uninterrupted profit and dividend payment for the past 40 years. In a bid to woo retail customers of gold and bullions in the country, the comapny has recently tied up with Gitanjali Jewellers for the ‘Festival of Gold’ a jewellery exhibition to showcase quality jewellery. In an exclusive interaction with B&E, Sanjiv Batra, CMD, MMTC, talks about the present trend in the Indian gold market and how the comapny is planning to leverage it. Excerpts:-

B&E: How has been the journey of MMTC since its inception? Are you planning to move ahead?
SB: The company was incorporated in 1963 to regulate the international trade of minerals and metals. From a turnover of Rs. 67.79 crore in the first full year of operations (1964-65), we have grown by leaps and bounds to a turnover of over Rs. 45,000 crore (for financial year 2009-10). At present, we are trying to bring in more machinery to India to produce as many as 356 tonnes of gold and 144 tonnes of silver per year. The journey has been an encouraging one, and indeed we are learning everyday.

B&E: The recent economic turmoil has impacted almost all companies across the globe. How did you manage to sheild yourselves?
SB: Let me tell you about a survey that we did in 2006 in connection with the acceptance of the gold that we were producing. After surveying our distributors, we found that as many as 90% gold sales was heading south. But post-2007, when the economic turmoil hit the market, things started changing in our favour. The economy might have gone down, but the demand and price of gold remained strong throughout the period. Moreover, the upheaveal in the country’s share market encouraged investors further to go for gold as a safe bet. And such a trend in demand was unseeen till last year. However, till March this year, we witnessed 240 million tonne of gold. This trend helped us to grow strong even during the slowdown.

B&E: Does price play a significant role when it comes to gold in a market like India? How are you using the potential of the market?
SB: Gold is always considered as an asset and it is the surging demand that encourages its growth. Besides India, the trend is similar in other countries too. It was only during 1999-2003, when gold prices were unstable. For the past seven years, the prices have gone more on the positive side. Interestingly, this has happened despite many crises happening on the way.

India has always seen a strong demand for gold. If you look at the figures, this year we had to import more gold so as to meet the domestic demand. This clearly indicates that despite trading at a high price level, the passion for acquiring the yellow metal has not received a dent in India. While the gold production in the world is receding, India is showing a complete different scenario. Since our market is internal-driven one, if the Indian consumers are happy then it’s really good for us.


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

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Thursday, February 7, 2013

So what do we do about burning cars?

As car manufacturers double up efforts to ensure cars don’t catch fire, it is important for customers also to understand how they might be ‘the’ problem in such incidents. by Pawan Chabra

The email came directly from Nikkei in Japan to us some time ago. The question was quite straightforward: “Have you heard about the Nano units catching fire? Do you think you can get inputs for us?” For once, despite our immodestly sensationalist bent, we were given to defend the various incidents that were being alluded to by the Japanese media giant. Without doubt, a photograph (like the one yours truly has provided above) of a car burning brighter that Roosevelt’s July 4 celebrations, especially of a model that has been at the top-of-the-charts for the most part of last year, is enough to let the Marxian spin doctors weave their immediate socialist hypothesis of why they always knew that small and cheap cars like the Nano would have lesser quality parts, with almost all the commentaries ending with, “Didn’t we tell you?” We’d say, pretty wrong!

Firstly, the facts. Yes, Nanos have caught fire – and those cases are well documented; one suspects more so because of the hype with which this small a-promise-is-a-promise-car was launched. How many new car brands have been launched with this kind of rabid coverage? Ashok Raghunath Vichare, the buyer of the first Nano, is a mini-celebrity in his own way, after having received his from the Chairman of Tata Sons and Tata Motors, Ratan Tata, under massive media coverage. Almost the same coverage was provided to the episode involving a Nano that took place on March 21, 2010 at Mumbai’s Eastern Express Highway. Just 45 minutes had passed after an insurance agent Satish Sawant had collected his brand new Nano from a showroom in Prabhadevi, when the car – while he was driving it home – burst into flames. A similar incident involving a Nano happened in Vadodara (Gujarat) on April 7, 2010 – and there, all the Gueveras jumped out of their graves demanding immediate justice.

Tata Motors’ spokesperson Debasis Ray is more forthcoming, when he accepts, “There were three separate incidents in September and October 2009 of smoke coming out – not fire – from behind the steering column and localised meltdown of some plastic parts in three Tata Nanos. Those incidents were traced to a defective combination switch. Supplies of these switches were changed immediately and further issues have been comprehensively addressed since then.” As per him, the two fire incidents that took place have already been investigated by a team of experts, highlighting that the Nano has all the required certification by the Automotive Research Association of India, the designated authority under the Ministry of Heavy Industries, Government of India, for road safety and other parameters.

While it makes sense to criticise any car manufacturer for manufacturing defects, the fact is that many incidents of cars catching fire are not really linked to issues with the manufacturers. Ajay Seth, a Delhi-based businessman, had a near death experience when his Hyundai Accent caught fire due to a leakage in the LPG pipe. However, Seth was unable to claim the damage from the insurer as his car had a retrofitted LPG kit which literally didn’t have any certification. The case was similar with Pramod Sharma, another Delhi-based businessman; who opted to give his car to a neighbourhood service centre instead of an authorised service station. The car caught fire during the servicing process and the dashboard console soon turned to ashes. “Though the owner of the garage didn’t charge for the damage, my car has been continuously troubling me since then. I am planning to sell it rather than continuing to invest in it,” Sharma tells B&E.


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

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Lt Gen Athar Abbas, Director General, ISPR

On army action in FATA
In is one of the unique operations of its kind. The area was out of the control of the civil administration and Tahreek e Taliban had taken over. We started the campaign in 2008 but then the elections came and it was decided that the operation will be withdrawn. We also decided to allow the local laws to operate but the terrorists did not stop at that. When they kept on with their terror means even after we offered tribals their own law to operate, this led to the loss of support for the terrorists. Therefore when we started the operation again, we had the full support of the locals. We took a fight in the region that had the most unfriendly terrains but our army overcame all the obstacles and freed the area. Presently we have freed Swat and the reconstruction work is going on. Then it will be transferred to the civil administration. In FATA, we have sanitized the several agencies and the process of consolidation is going on. The focus is entirely on other areas at the present juncture.

On Human Casualty
It was a very different kind of fight and the casualities, therefore, were bound to be high. At the peak of the operation in 2009, we had an average of ten casualties each day. However, we are happy that the motive of the operation has been achieved. Our efforts have been appreciated by people from all over the world.


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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Wednesday, February 6, 2013

MICROMAX: COMPETITION

It was a rather quick climb up the ladder for Micromax. So far, so good. But even after becoming the third-largest handset vendor in India, it has a steep climb ahead, with threats in the names of both new entrants and seasoned players... Will it win the ‘Silver’ soon?

So what was the secret behind Micromax’s unexpectedly quick growth? According to Vikas Jain, Business Head, Micromax, “One of the prime reason was that we identified the right need gap in the right market, and offered products relevant to those needs.” Unlike most handset makers who tested waters in the metropolitan areas, Micromax deliberately made an attempt to tap the interior parts of the country first. Realising that the limited supply of electricity was proving the biggest roadblock to the growth of wireless telephony in those areas, the company started by offering a handset that guaranteed a 30-day stand-by battery. Furthermore, the company deliberately focussed on the entry to mid-level segment that was growing at a much faster rate, both in terms of first time buyers, as well as in terms of replacements.

But Micromax’s easy-on-the-pocket proposition doesn’t come sans value evolution. To cater to the wants of the customers to carry two handsets (to make most of the existing on-going tariff wars amongst service operators), Micromax started offering Dual SIM phones. As a matter of fact, its existing product line consists of 27 phones, out of which 23 are Dual SIM. The handset maker isn’t alien to cosmopolitanism either. Catering to the touch-screen loving lot, it plans to launch two such devices in the coming quarter, one based on the platform Windows and another on Android. What’s best, the products will be offered in the price range of Rs.6000 – Rs.7000. Another strategy that has helped this company to grow from a mole-hill to a mountain has been efficient supply chain management. When Micromax realised that established handset vendors were giving as low as 1-2% margin to their channel partners, it offered a 5% commission to those willing to stock up its products. It proved a win-win situation.

It really has been a dream run for the young founders of Micromax, but the question remains – will it become the #2 soon? Honestly, for now, that question matters little in an industry where, over the years, the top leaders have been incessantly losing ground to newbies. So, while on one hand, Micromax has to hold fort against competitors, on the other, it has to continue running hard to become the first Indian to win the Silver in this new age telecom marathon!


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, February 5, 2013

STEM CELL BANKING: LIFECELL INTERNATIONAL

Being the pioneer in stem cell banking in India, LifeCell does have a head start. But these are early days in this industry and digging beyond the iceberg’s tip is going to be the real challenge by Virat Bahri

Abhaya was aware that the numbers would be hard to come by initially, but was optimistic that things would look up once the company achieved critical mass, which he defined as 5000 client additions annually. The company added 7500 clients last year; taking its total tally to around 25,000. This is not even the tip of the iceberg, however, considering that India has an annual birth rate of close to 25 million. Abhaya himself admits that a company in China typically adds around 50,000 clients every year with prices at the same level or higher (as India). Consulting firm PwC tells B&E that India’s stem cell market is growing at a rate of 15% per annum and is estimated to hit US$ 540 million by year 2010, while the global stem cell market is expected to touch US $ 20 billion mark.

The umbilical stem cell banking industry stands at a size of around Rs.1 billion in India and is projected to triple in size over the next three years. Nevertheless its growth from a small base and one cannot ignore the fact that scaling up remains a challenge. According to Abhaya, the Indian government can follow the US government with two policy initiatives that can encourage the growth of this industry. The first is the Cord Blood Awareness and Education Act in the US, which makes it mandatory for every practitioner to inform expecting parents about the benefits of cord blood banking. In India, a lot of physicians can’t even explain it properly to patients yet. The second is that the US government has set up a National Stem Cell Bank, which is a repository for human pluripotent stem cell lines listed on the National Institutes of Health (NIH) Stem Cell Registry. Being listed, these lines are available for federally funded research in the US.

PwC projects that there will be around 9.5 million hospitalized cases in India due to cardiac ailments, oncology and diabetes with a estimated ailment market size of Rs.720 billion. Although stem cell banking has been positioned by LifeCell as a lifestyle product, true growth of the industry hinges on the success of stem cell treatment in treating several life threatening ailments.


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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Sunday, February 3, 2013

Missing the Ambani touch?

The venture was flawed from the beginning in more ways than one

The Indian retail sector has grown at a stupendous rate and is touted to touch $450 billion by 2015 (as per McKinsey). At that rate, it is not surprising how major business houses have made inroads into the sector. But the chequered journey of Mukesh Ambani’s Reliance Retail in this sector merits analysis.

It was the winter of 2006 when Ambani announced the arrival of his Rs.250 billion retail gamble – Reliance Fresh convenience stores in India. Reliance Fresh had to face the wrath of all be it middlemen, small retailers or politicians. The company had to shut down shops across the country amidst vehement protests. Gibson Vedamani, ex-CEO, Retailers’ Association of India points, “Reliance Fresh failed because it was too aggressive with its strategies and wanted to capture the entire market without leaving any space for the middlemen and local retailers.” The company planned a number of formats viz. hypermarkets, supermarkets, convenience stores & specialty stores. This attracted unwanted media attention & got them into trouble.

With the looming spectre of economic slowdown, Reliance has had to cut down severely on its expansions. It merged the management of its hypermarkets, supermarkets and convenience stores last year to save on administrative, man-power and operational costs. However, the biggest blow came earlier this year, when Ambani, after deferring the launch of its wholesale market, finally scrapped its cash & carry (C&C) model and showed the door to the entire team of 36 professionals headed by Harsh Bahadur (erstwhile CEO of Metro AG’s C&C business in India).

And now, Reliance Retail is mulling over tying up with an international partner back-end support. Had Mukesh gone in for an international tie-up earlier, this situation would not have risen as outsourcing supply chain management is more cost effective and feasible, especially in India. Then came the news that Reliance is planning to shut down 40 of its non-performing stores and rationalising its total retail space of around 4.2 million sq. feet. Reliance Retail also axed almost 600 support jobs to manage costs.


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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