Kazakhstan explores trade scope

Calcutta: The ambassador of Kazakhstan, Doulat Kuanyshev, today met Bengal industry minister Partha Chatterjee to explore prospects of co-operation in tea, tourism and mining.

“Kazakhstan is the second largest importer of tea. We take more Assam tea than Darjeeling. We should promote business ties with Bengal. I have invited the minister to take a delegation to Kazakhstan,” Kuanyshev said later at a session organised by the MCC Chamber of Commerce & Industry here today.

He said the consumption of premium tea was becoming a trend in his country. “There is enough scope to qualitatively improve the tea market. We import about $41 million worth of Indian tea.”

Kazakhstan is India’s largest trading partner among the central Asian republics. Bilateral trade has grown to $306.30 million in 2010-11 from $171.48 million in 2006-07.

During the period, India’s exports to the country grew to $167.88 million from $83.18 million, while imports rose to $138.42 million from $88.30 million.

Major export items were tea, pharmaceuticals, medical equipment, machinery, tobacco and consumer items.

Coal India net soars

Calcutta: Coal India (CIL) has posted a 54 per cent year-on-year growth in net profit at Rs 4,037.76 crore for the quarter ended December 31, 2011 on the back of better price realisation and a hefty interest income from fixed deposits worth more than Rs 55,000 crore.

Coal offtake from various subsidiaries during the reporting quarter was a tad lower at 110.27 million tonnes (mt) compared with 110.42mt in the previous corresponding quarter.

A better price realisation in the third quarter of the current financial year helped net sales to grow 21 per cent year-on-year at Rs 15,349.28 crore.

The PSU had also increased prices of some coal grades from February last year.

Production and offtake of raw coal in the October-December quarter were higher at 114.62mt (80.32mt) and 110.27mt (93.73mt), respectively, compared with the July-September quarter of the current financial year.

However, production of raw coal in the first nine months of the current financial year declined marginally to 291.24mt from 299.45mt in the same period a year ago, though offtake remained almost flat at 310.25mt (310.37mt) during the period.

Given the trend, CIL is unlikely to surpass last year’s production of 431.32mt by a big margin.

CIL’s other income, that includes interest income from cash reserves of Rs 55,000 crore in bank fixed deposits, grew 48.39 per cent to Rs 1,855.87 crore in the quarter ended December from the previous corresponding quarter following a steep increase in interest rates last calendar year.

Amway mulls first facility

Calcutta: Amway India will set up its first manufacturing facility in the country at an investment of Rs 300 crore.

The plant is expected to be commissioned in 2014 and will mainly manufacture beauty and nutrition products.

“We are considering different locations for the plant and have received several proposals. Board approvals have been received. But things have not been finalised yet,” managing director and chief executive officer William S. Pinckney said.

“We have about seven third-party contract manufacturing partners. India can become the sixth largest Amway market in the world by this year,” he said.

Amway India’s turnover stood at Rs 2,130 crore in 2011 and is expected to cross the Rs 2,500-crore mark this year.

The contribution of the eastern region is likely to go up to Rs 450 crore this year from about Rs 385 crore in 2011.

‘Europe’s auto hub’ keen to invest in state

KOLKATA: Bavaria, the German state commonly called Europe’s automobile hub, is keen to invest in Bengal’s automobile sector.

This has assumed significance after the exit of Tata Motors from Bengal in October 2008. A 27-member Bavarian parliamentary delegation met chief minister Mamata Banerjee and commerce and industries minister Partha Chatterjee on Wednesday. They had an hour’s meeting with Chatterjee along with industry secretary Basudeb Banerjee and WBIDC MD Nandini Chakraborty.

The commerce and industries minister said the German state has expressed interest to invest in Bengal. Incidentally, Bavaria is the headquarters of automobile-makers BMW, Volkswagen and Audi. Other big companies like Siemens, Allianz, Munich Re, Continental, Adidas, Puma are based in Bavaria as well.

“They want to know what kind of investment Bavaria can make. We know that it is strong in automobiles, auto ancillaries and industrial clusters. We have sought their help in developing an auto industry here,” he said.

Chatterjee said a Bavarian delegation has invited him to visit the German state. “If we get a formal invitation, we shall consider it. They can help us make logistic hubs along with auto-related industries,” he added.

Chatterjee pointed out that a Bavarian delegation has expressed interest in investing in biotech and solar energy, too. “We told them that Bengal has cheap and skilled manpower which they could utilize,” he added.

WBIDC managing director Nandini Chakraborty later added that key members of the delegation have assured that they would talk to industries in Bavaria for investment in Bengal. “In fact, the Bavarian delegation was keen to discuss about industry and sought appointments for it,” she added.

2G order puts users on the blink

KOLKATA: Cell phone users in the city and beyond were clueless and confused about their fate following Thursday’s Supreme Court order cancelling 2G licences in several circles, including Kolkata and West Bengal. Nearly 1 crore subscribers of five telecom operators – MTS, Idea, Uninor, Loop and Videocon – are expected to be affected by the court order.

According to the order, the operators have to wind up operations in 122 circles in which licences have been cancelled. This means their subscribers have to shift to other operators or risk disconnection.

Ashutosh College student Sharmila Roy, who had opted for Uninor because it offered tariff lower than leading players Vodafone, Airtel, Tata Docomo and CellOne, was shocked when she heard the news. “I have to obviously shift to another cellular operator. But I am unlikely to get the attractive plan that Uninor had offered. That means my phone bill will go up. The biggest hassle is documentation for the shift. If the process is not streamlined, it will cause a lot of problems for subscribers,” she said.

Like Roy, scores of cellular subscribers either dialled helplines or visited nearby customer care centres for some clarity on the issue. There are several worried on how and where to apply for switching to another operator; when to do so and how long it will take; nature of the new plan and how much more the bill will be.

It’s not just them who are worried. Subscribers of other operators are also worried that the likes of Vodafone, Airtel, Tata Docomo and Aircel will raise tariff as competition constricts. “There are rumours doing the rounds that call and SMS charges will go up,” Tata Docomo subscriber Suromona Dasgupta said.

While many subscribers had serious concerns, there were several others who were blissfully ignorant of the judgment. St Xavier’s College third-year student Mohammed Samim was shocked to learn that the services would cease in a few months. “I had no idea about any verdict on cellular service. What is 2G anyway? By when do I have to switch a new operator?” he wondered aloud.

Cellular Operators’ Association of India (COAI) director-general Rajan Mathews allayed fears and said there would be no immediate impact given the transition time given by the court. “Companies will come out with statements and policies. A clearer picture should emerge in a couple of weeks,” he said.

In Bengal, Uninor has the biggest subscriber base among the affected operators. Of its 50 lakh users in Bengal, 15 lakh are in Kolkata. Idea has 30 lakh subscribers in the state, of which 11 lakh are in the city.

The Supreme Court order cancelling 122 licenses has also raised deep trust-related issues about stakeholders involved in the troubled telecom brands. According to a study titled ‘The Brand Trust Report (BTR) India Study, 2012′ which compares brand trust on a 61-component matrix and ranks the top 1,000 brands in terms of trust, the verdict would dent of a lot of trust from the brands.

“The telecom growth is nothing short of a revolution. Telecom has left no life untouched. The Supreme Court judgment will definitely impact the consumers, but the bigger and deeper damage has been done to the trust that these brands evoke. The brand trust of the impacted brands is bound to be severely affected,” TRA chief executive officer N Chandramouli said.

Mathews, however, felt that since almost all players had been hit by the court verdict, Indian subscribers will learn to live with them.

Concast funds plan

Calcutta: City-based Concast Group is planning to invest over Rs 2,000 crore to strengthen its steel and cement businesses over the next two to three years.

The company has recently acquired a majority stake in a 0.5-million-tonne-per-annum cement plant in Jamshedpur from the original promoters Swati Group.

It is looking to invest Rs 300 crore to expand the plant’s capacity to 1.2mt by the year-end.

The company plans to set up a 1.2mt cement facility in Arunachal Pradesh at an estimated investment of Rs 800 crore.

Chairman and managing director Sanjay Sureka said the presence of limestone reserves close to the plant in both Jamshedpur and Arunachal Pradesh would benefit the company.

He added that the Arunachal unit was expected to be operational within two years after getting the environmental clearance, which was likely in a month.

The company plans to invest Rs 550 crore to upgrade the capacity of its steel plant in Jharsuguda (Odisha) to 1.4mt from 0.5mt.

It had acquired the plant last year from Bipin Vohra-promoted SPS Group.

Concast has also lined up an investment of Rs 400 crore to set up a pelletisation plant at Bankura.

Meanwhile, the company is looking to diversify into the hospitality sector and has acquired two acres for Rs 96 crore off EM Bypass.

It plans to develop a 150-room hotel and residential complex.

In the infrastructure sector, the company is looking to construct two airports at Dwarka and Ankleshwar in Gujarat. The memorandum of understanding has already been signed.

“All our expansion will be financed through a mix of bank loans and internal accruals roughly in the ratio of 70 to 30,” Sureka said.

The company hopes to increase its turnover to Rs 9,000 crore by the end of this fiscal from about Rs 7,000 crore last fiscal.

“Concast has engaged Bollywood superstar Shahrukh Khan as brand ambassador for its TMT steel bars under a two-year contract.”

Coal price revision to hike power cost

KOLKATA: Power utilities in the state anticipate the cost of electricity generation to shoot up at least by 20 paisa per unit, thanks to the coal price revision announced by Coal India Ltd (CIL) on Wednesday. State utilities said the impact would be as much as 20 to 40 paisa per unit. Even as the intensity of the blow is expected to be half of what was apprehended when CIL made the first price revision on January 1, utilities have to wait till when the Calcutta High Court hears out petition by the state government and its utilities against CIL prices.

West Bengal State Electricity Distribution Co Ltd (WBSEDCL) is already under financial constraint and has not been able to apply for a tariff revision even after revision of coal prices before the recent one. CESC consumers, however, will feel the pinch as the utility goes in for an interim hike sometime after the pending tariff revision.

Of 17 categories of coal computed under the gross calorific value (GCV) against the earlier seven bands when coal was sold on the basis of useful heat value (UHV), price has been hiked between Rs 30/tonne and Rs 1,630/tonne. But with power utilities primarily using coal of calorific value 4,000-6,000 kcal/kg, the additional payout will be between Rs 70/tonne and Rs 1,750/tonne. But if power utilities manage to avoid the fifth grade of coal with calorific value 5,800-6,100 kcal/kg, the price hike will be contained between Rs 70/tonne and Rs 570/tonne.

While GCV that measures the amount of heat liberated by carbon and hydrogen in the coal when it is heated, is an internationally accepted pricing mechanism, due to the high ash content in Indian coal, the UHV mechanism was followed that took into account the heat trapped in ash. Typically in Indian coal, GCV is 25% higher than UHV.

“Among the category of coal we use, we expect the average price hike of Rs 400/tonne. That translates to around 20 paise hike in per unit generation cost,” a CESC official said. The private utility that supplies power to Kolkata and adjoining areas purchases 35 lakh tonne of coal from CIL, is also worried about 3-4% wastage as they will have to shell out anything between Rs 360/tonne and Rs 500/tonne for extremely low-grade coal (calorific value 2,200-3,200 kcal/kg) that were considered stone till December 31, 2011.

WBSEDCL, however, fears a bigger hit as it buys bulk of its 20 lakh tonne coal requirement from CIL. “We purchase around 16 lakh tonne coal from the company. Around 80% of the purchase is in the bandwidth of 4,000-4,500 kcal/kg and 20% from 5,000-6,000 kcal/kg,” an official said.

What power utilities are miffed over is that CIL will have the ultimate say in the quality of coal supply. “Even if we want to use more coal of higher calorific value, CIL cannot supply it. So we will be using the same coal but paying more,” an official explained.

The worst affected will be power units in the east as CIL will levy 6% extra on coal from Eastern Coalfields Ltd (ECL) as it is a sick subsidiary and listed with the Board for Industrial & Financial Restructuring (BIFR). ECL supplies coal to both CESC and WBPDCL. Power from Bharat Coking Coal Ltd and Mahanadi Coalfields Ltd also supplies coal to power plants in the state.

Relief means little for better varieties

Calcutta: Good quality coal will continue to cost more even after Coal India’s price rollback today.

Under the directive of the Planning Commission and the coal ministry, Coal India changed the pricing mechanism to the internationally accepted gross calorific value method from the useful heat value method, a system that existed only in India since 1979.

The revised coal prices based on GCV may not fetch additional revenue for Coal India, but will increase the coal cost for some consumers, including ailing power producer West Bengal Power Development Corporation Limited (WBPDCL).

This is because the seven grades of coal under the UHV system have been reclassified into 17 bands under GCV with a narrower range of 300 kilocalories against 600 kilocalories earlier.

Coal having UHV of 6,200 kcal per kg or more was classified as grade A and priced at Rs 4,100 per tonne earlier. A useful heat value of 6,200 kcal is equivalent to 6,454 kcal in terms of GCV.

According to the January 1 notification, coal having a gross calorific value of 6,454 kcal will cost Rs 4,460 per tonne. After today’s revision, the same coal will cost Rs 4,420 per tonne, which is still higher than the Rs 4,100 per tonne under the UHV system.

Similarly, coal having UHV between 4,940 and 5,600 kcal/kg under grade C was priced between Rs 1,410 and Rs 1,860 per tonne depending on the coalfield origin.

Under GCV, the grade C equivalent is 5,597 kcal per kg and 6,049 kcal per kg. In the new pricing mechanism, this kilocalorie bandwidth has been subdivided into two classes — 5,500-5,800 kcal and 5,800-6,100 kcal. The coal with GCV between 5,800 kcal per kg and 6,100 kcal per kg will cost Rs 2,800 per tonne (against Rs 1,860 per tonne) and coal with GCV between 5500 kcal per kg and 5800 kcal per kg will cost Rs 1,450 per tonne after today’s revision.

A power producer consuming C-grade coal with higher UHV in the band will now have to pay more than before.

“We generally use grade B and grade C coal — grade B from Eastern Coalfields Ltd and grade C from Mahanadi Coalfields Ltd. However, in percentage terms grade C is used more,” said a senior official of WBPDCL.

“I have not yet gone through the revised coal prices, so I cannot tell you the exact impact on us,” he said.

Lower grades such as D, E and F were subdivided into three classes each under the GCV pricing system. Thus, power producers who have been using higher UHV coal in these respective coal grades will see their prices going up.

Rashtriya Ispat selloff gathers momentum

Calcutta: The government has appointed merchant bankers to divest its 10 per cent stake in Rashtriya Ispat Nigam Ltd, chairman and managing director A.P. Choudhary said.

He, however, added that the divestment through initial public offering would happen only in the next fiscal.

The government is planning to sell 48,89,846 shares of RINL — a wholly owned government enterprise — having a face value of Rs 1,000 each.

In the request for proposals (RFP) from merchant bankers, the government said RINL’s capital base was very high compared with the size of the company and hence it had undertaken the capital restructuring exercise.

RINL’s paid-up capital as of March 31, 2011 stood at Rs 7,827.32 crore, of which equity capital comprised Rs 4,889.85 crore (4,88,98,462 shares having face value of Rs 1,000 each) and preference capital, Rs 2,937.47 crore.

The shares will be split before the IPO. The stock-split coupled with capital restructuring may change the number of shares on offer in the IPO.

The government had initiated the stake sale process in June.

Meanwhile, RINL’s total production capacity is likely to increase to 6.3 million tonnes of liquid steel at the end of this fiscal. “We have completed the first phase of our expansion plan,” Choudhary said.

Jalpaiguri plant

The Rs 350-crore rail axle plant being set up at New Jalpaiguri by RINL will go on stream by 2014, Choudhary said. “We have already appointed Mecon as the consultant for the project and ordering for the plant will start in another six months.”

In January 2011, Indian Railways had signed a memorandum of understanding with RINL to manufacture forged axles for BOX N wagons to meet the growing requirement of the railways.

Following this, Indian Railways have leased 47 acres to RINL for 30 years to set up the facility, called Uttarbanga RINL Rail Karkhana at New Jalpaiguri. It is the second largest rail axle plant in the country after the Rail Wagon Factory in Bangalore.

Recall hope for MAMC staff

Calcutta: Former employees of Durgapur-based Mining & Allied Machinery Corporation (MAMC), which has been shut down for more than two decades, may hope to join the company again with the new owners planning to start production this year.

“We are going to hire all former employees of MAMC, who are still below 65 years of age,” said V.R.S. Natarajan, chairman and managing director of BEML Ltd.

BEML, in a consortium with PSUs Coal India Ltd (CIL) and DVC, had acquired the movable assets of MAMC for Rs 100 crore in June 2010.

When MAMC was wound up in 2001, all its employees had to leave the company through a golden handshake scheme.

“I had discussions with the chairmen of DVC and CIL and have asked them to give MAMC a minimum initial order of Rs 1,000 crore so that the company can be run profitably,” Natarajan said on the sidelines of the ongoing Fourth Asian Mining Congress.

“CIL and DVC are expected to revert back shortly after getting an approval from their respective board of directors,” the BEML chairman added.

With a 48 per cent shareholding, BEML will have management control of MAMC, while DVC and CIL will have a 26 per cent stake each.

However, the shareholders’ agreement is yet to be signed.

“We hope the shareholders’ agreement will be signed before March 31 this year,” Natarajan said.

The consortium has got the 195-acre plot on which the MAMC plant is located on a lease for 90 years. “MAMC’s total land in Durgapur is spread over 400 acres, including staff and officers’ quarters, a hospital, a research and a training institute and so on.

“We have asked the state government to give us 100 acres out of this 400 acres for employee and officers’ quarters. We hope that we shall get this before March-end,” Natarajan said.

Meanwhile, if MAMC gets the orders from DVC and CIL, it shall announce the date of production after March.

MAMC will start with manufacturing spare parts of underground mining machines.

“Even BEML will shift some of its spare parts manufacturing to MAMC plant,” Natarajan said, adding that manufacturing of mining equipment from this plant would take another two to three years.

The Durgapur plant was set up in 1965 with Soviet co-operation to make equipment for various mining industries. The company had diversified into the manufacture, erection and commissioning of bulk material handling plants and coal washeries.

It slipped into the red and was referred to the BIFR in 1992. In 2010, the consortium took over the company by winning an auction with a Rs 100-crore bid