Sanghi Industries to double TMT steel capacity

In spite of the rising steel prices, Sanghi Industries Ltd (SIL), a part of the Rs 3,500 crore Sanghi Group, is planning to go in for expansion of its TMT steel plant. The company will expand its TMT steel production from 200 tonnes per day (TPD) to 400 TPD in the next two years.

On the expansion plans, Alok Sanghi, Director, SIL said, “We will be expanding our TMT steel production from present 200 TPD to 400 TPD in the next one and half to two years.” Sanghi, however, refused to divulge further information on the investments into the expansion.

Moreover, SIL is expanding its cement plant with an additional unit of 4.5 million tonnes per annum (MTPA) capacity, along with a 120 Mw captive thermal power plant at Sanghipuram, Kutch.

The company is investing around Rs 1,000 crore for cement plant - II, Rs 250 crore for the power plant and another Rs 250 crore for expansion of ports.

Sanghi said they are setting up port terminals in Navlakhi, Dahej, Mumbai, Mangalore, Karwar, and also in Rasalkhema, Iraq, Oman and Colombo.

“The purpose of setting up terminals in the country is to reduce freight charges,” added Sanghi.

At present, the company owns a cement plant of 4 MTPA capacity as well as a 55 Mw captive thermal power plant. With the expansion, the total cement manufacturing capacity of SIL will be 8.5 MTPA which the company claims is the largest single-stream plant in the world.

Laying the foundation stone of the additional cement plant and thermal power plant, Chief Minister Narendra Modi said, “Sanghi Industries have managed to set up the world’s largest cement manufacturing unit in Gujarat despite the lack of iron ore and other raw materials in the state.”

Modi added that with companies like Sanghi preferring to set up plants in such backward regions like Kutch, there is a potential of another Rs 75,000 crore investment in the region.

Post-expansion, SIL which was ranked 9th in cement production across the country will become the third largest manufacturer of cement in the country. At present, Ambuja-ACC group ranks number one in cement manufacturing.

According to Alok Sanghi, SIL manufactures cement worth Rs 850 crore, of which cement worth Rs 350 crore are exported to West Asia and Africa.

The company is also looking for partners in Europe and South Asia. SIL has a market share of 70-80 per cent in bagged cement’s global market.





Flamingo Pharma enters Uttar Pradesh market

Flamingo Pharmaceuticals Ltd, one of the country’s leading manufacturers/exporters of drug formulations, today announced its entry in the Uttar Pradesh market.

The firm has introduced the antibiotics brands Trixone, Qubid and Flaag in the anti-infective range and Bonforte for patients suffering from osteoporosis in the orthocare range, in the state and is in talks with clients.

Talking to Business Standard, KK Puri, director, Flamingo Pharmaceuticals, said: "In the first phase, we are eyeing the market for anti-infectives, and expect to capture at least a 1 per cent share in the first year. We have received approval to hold clinical trials for our drugs at Aligarh Muslim University and King George Medical University, the results of which will help us to penetrate in the market further."

The annual retail drug market in the state stands at Rs 1,500 crore, of which the share of anti-infectives is Rs 750 crore.

"The domestic pharmaceutical market is estimated to be worth Rs 27,000 crore in India. As one of the largest consumers of pharmaceuticals, Uttar Pradesh is a very important market for Flamingo. We will target both the individual and institutional customers in the state and plan to have more than 100 distributors, 60 medical representatives and 12 managers in Uttar Pradesh in the first phase," Puri said.

Rs 120 crore Flamingo Pharmaceuticals has exported for over 20 years and began domestic operations in India about six months ago.

The company is targeting sales of Rs 500 crore over the next three years. For its Indian domestic market, the company plans to have a field force of 2,500 and more than 1000 distributors. The company also plans to enter chronic therapy areas in near future.

"For the second phase of operations, we plan to step into formulations for chronic therapies, including diabetes and cardio vascular treatments by end of this year," Puri said.





Fortis to develop Rs 700 cr medicity in Lucknow

Fortis Healthcare Holding Ltd today announced a medicity in Lucknow spread across 52 acres in a township being developed by Ansal Properties & Infrastructure.

The company is looking to establish 10 large-scale medicities, comprising healthcare facilities as well as medical schools by 2017.

Ansal Properties’ had sold the land to Fortis for an undisclosed amount. Fortis will invest Rs 500-700 crore for setting up the medicity, which will include an 800-bed hospital, a dental college as well as a full fledged medical college offering undergraduate, post graduate and post doctoral courses.

While the realty company will not charge Fortis any license fee for operating in its township, it is looking to unlock value from it.

“We have planned a retirement village in the Lucknow township and the medicity has been a major attraction to the senior citizens. Others who come from outside Lucknow for treatment will be able to find accommodation in the township,” said Pranav Ansal, director, Ansal Properties & Infrastructure.

This is Fortis’ second announcement for a medicity—the first being in Gurgaon. “As far as which will roll out first, I want both the medicities to compete with each other on that front. But it looks as if the Lucknow one will become operational first,” said Shivinder Singh, managing director, Fortis Group.

He added that Fortis was also in talks with the Gujarat government for setting up a project in Ahmedabad. In addition to that, the company is currently planning two medicities in Punjab and one in Jaipur.

“As we are a listed company, it is important to note that the colleges cannot be a part of Fortis Healthcare. Medical Council of India does not permit education for commercial purposes. As of now, it is part of the holding company, let us see if we spin off a new company for these institutes,” said Singh.

Ansal Properties may also partner Fortis for a medicity in its 5,000-acre township in Greater Noida. “We have to reserve 2 per cent, or 100 acres, for healthcare in the township as well as another 2 per cent for education. We might partner Fortis for this,” said Ansal.

Clearly on an expansion drive, Fortis Healthcare is on the verge of signing a joint venture with DLF Ltd for setting up 31 hospitals in the realty company’s 200 acre plus townships at an investment of Rs 6,000 crore.

“We will partner with realty firms when it makes sense and when it will help in our expansion drive,” said Singh.





IOL Chemicals plans expansion

Ludhiana based IOL Chemicals and Pharmaceuticals Limited, will soon be expanding its pharmaceutical division with a capital outlay of Rs 24.11 crore and making it USFDA compliant.

Established in the year 1986, IOL Chemicals and Pharmaceuticals Limited is a manufacturer and supplier of Industrial Chemicals and Bulk Drugs for use in various pharmaceutical applications.

The production capacity of Ibuprofen has already been boosted through the establishment of a new facility in February 2007. It has been designed to conform to USFDA & EU standards and the production capacity of Ibuprofen has increased to 1800 TPA.

Speaking to Business Standard, Varinder Gupta, Chairman cum managing director, IOL Chemicals and Pharmaceuticals Limited said that the company has reported jump of 33 percent in its turnover which increased from Rs 174.48 crores during the year ended March 31, 2006 to Rs 231.71 crores during the year ended March 31, 2007.

``The profit after tax increased from Rs 7.26 crores during the previous year to Rs 7.55 crores during the year under review.’’

The company also has overseas customers, who are spread across countries like Bangladesh, Thailand, UAE, Syria, Singapore, Hong Kong, Pakistan, Egypt and many others.

The company is also supplying to Ranbaxy Labs, CIPLA, Flex Industries, ICI Paints, Asian Paints, Pidilite, Rallis India, Hindustan Polymide, Gujarat Super Phosphate, and Avon Organics Ltd besides many more.




Barings set for fin services splash

Barings Private Equity Partners India (BPEP), managers to a $175 million private equity fund, is set for a financial services splash in the coming months.

The fund manager, which made more than a handful of returns in hawking MphasiS to EDS, is keenly pursuing this sector, which is witnessing a exponential growth in the Indian markets.

Rahul Bhasin, managing partner, BPEP India, said they are keen to either incubate a financial services platform or buy into one.

“Given our lineage of being a financial services firm, we have got expertise in this sector. We also have the bandwidth to put a team in place to tap into this segment,” he added.

The company recently hired a financial services veteran Manish Tayal as partner to focus on this vertical. Tayal has over two decades of experience having worked at Citigroup and Yes Bank in various positions including wealth management. BPEP has a nominal exposure to this sector through an investment in a micro-finance firm.

According to information available, the foray into financial services sector in India is backed by the fact that this sector attracted about $3.3 billion across 58 investments in the past 18 months ended June 2007.

According to Venture Intelligence, a research service focussed on private equity and venture capital activity, BFSI has replaced healthcare and lifesciences as the third most attractive industry for PE investment, followed by IT and ITES and manufacturing.

While banks, retail brokerages, NBFCs were among the favourite sectors within BFSI, stock exchanges (both the BSE and NSE) as well as housing finance institution HDFC raised large amounts of capital.

Some of the recent deals include Citi's investment in Anand Rathi and BNP Paribas in Geojit. Many global majors like Nomura and Macquaire are understood to be exploring active options in India.

In addition to the financial services focus, BPEP India is understood to be mulling over options to raise its third fund.

“We are yet to take a fix on what the fund size will be. Our Limited Partners are pushing us to raise our next fund. The challenging part of this private equity business is in how best we can deliver returns to our investors. For example, on a fund size of $175 million, we are expected to deliver a return of $500 million,” a source in the company detailed.





Leela Group mulls overseas foray

Hotel Leela Venture, which currently owns four five-star properties in the country, is planning to expand abroad in the next 2-3 years.

Speaking to Business Standard, general manager of The Leela Palace Kempinski, Bangalore, Charles de Foucault said the Leela Group was looking to set up five-star hotels in Maldives, Mauritius, Dubai and Abu Dhabi.

The group has also opened offices in London, Dubai and New York to strengthen its international marketing and distribution network in the United Kingdom, West Asia and North America.

“We are still in the preliminary discussions stage. But are looking for partners best suited to our style of management.

Leela would typically like to own and manage properties and not merely manage it for someone else,” Foucault said.

Earlier this year, the Leela Group became a member of the Global Hotel Alliance (GHA), an international alliance of independent luxury hotel brands.

Set up in 2004, the GHA partners hospitality groups like Kempinski, Omni, Pan and Pacific, and comprises 190 luxury hotels and resorts.





Vatika group to develop township in Ambala

Guragon-based Vatika group is planning to develop a 180-acre township called Vatika City Central in Ambala (Haryana) at a cost of Rs 500 crore. This will be the group’s first major township in Ambala.

The township will be divided into group housing, plots, bungalows, commercial and retail space. It will also have facilities like a library, swimming pool, indoor games etc. The project offers 55 per cent area as open spaces in form of theme and landscaped parks.

“The USP of Vatika City Central is that it is located in sector 23, which is the centre of the city and surrounded by premium sectors. After getting approval from the state department, we will start the construction soon,” said Pankaj Pal, president, sales and marketing.

He added that 12 acres was reserved for group housing, which would consist of 650 apartments, accompanied by a separate club house, swimming pool and power back-up facilities. Another 7 acres is for commercial space. The commercial space will include a mall, a market, a budget hotel and space for a hyper market. In the plots segment, 10 per cent will be kept for the economically weaker sections and 10 per cent for the no profit, no loss category.

Apart from this project, the group is developing three more commercial complexes — Vatika Technology Park, Vatika Technopark, Faridabad and Vatika City, Gurgaon. He added that Vatika City was the largest ever group housing project in Gurgaon, with over 1400 apartments spread over 3 million square feet. It will be a combination of low, mid and high-rise apartments.

The group is also developing Vatika Infotech City in Jaipur, an 808 acre integrated township offering a mix of residential, retail development and a 53-acre infotech special economic zone park with a host of world-class faculties and amenities. The IT park was one of the first projects in Rajasthan to get SEZ status.

After the success of its restaurants and business centres, the group is ready to introduce world class luxury with its chain of Westin Hotels, in association with Starwood Hotel and Resorts, the largest upscale hospitality brand in the world. As a part of the agreement, the Vatika group will be setting up Westin hotels in Bangalore, Gurgaon, Sohna and Jaipur.

The group has also ventured into facilities management. Vatika Space Management total management of maintenance, services and operation of real estate to its clients.




Evera launches electric mobike

The seven models will be priced between Rs 18,000 and Rs 48,000.

Evera Auto (I) Pvt Ltd, a Firozabad-based automobile company, has entered the market with the country’s first electric motorbike, capable of running at high speed and at low cost.

The pre-lauch of the motorbikes was held recently in Agra by Evera Chairman Mukesh Bansal and Managing Director Shailesh Bansal, at which seven different models of the motorbikes were displayed.

Bansal said seven models of electric motorbikes were being manufactured by the company, of which four, including a scooter, priced between Rs 18,000 and Rs 48,000, would be marketed in Uttar Pradesh and Uttaranchal later this month.

He said the electric motorbikes launched by the company were the first of their kind in the country and two bike models were being manufactured solely using indigenously developed technology.

He said the motorbikes could run to a distance of 80 km at 25 kmph for 6-8 hours of charging as they were light-weight, yet sturdy in structure, running on 48 volt batteries and a 250 watt motor. Running these bikes cost less than 7 paise per km he said.

The bike’s maintenance free battery had an operational life of two years and it cost Rs 1,500 to replace. Already approved by ARI Pune, running these bikes would not require registration with the Regional Transport Office, he claimed.

According to Bansal, the company had manufacturing facilities in Firozabad, Noida and Mumbai where these bikes would be manufactured as per demand.

The company expected to sell about 12 thousand motorbikes this fiscal year and soon, they would be launching an economical battery-operated auto-rickshaw that shall be able to go about 70 km. at 25 kmph. before requiring a recharge.

In the future, he said, they had a plan to conceptualize and market an electric car that shall be quite economical than the existing electric car models.





L&T to float five new companies

The move is aimed at ensuring better corporate governance as well as attracting talent.

In a major restructuring exercise, Larsen & Toubro (L&T), the country’s largest engineering conglomerate, is setting up at least five new companies.

Chairman A M Naik told Business Standard the “verticalisation” effort is aimed at ensuring better corporate governance as well as attracting talent to the 70-year-old company.

Each of these companies will have a CEO, a board, and finance and human resource management teams. L&T has also launched a global hunt for CEOs.

These CEOs will be a part of the group corporate management committee but would not get a berth on the L&T board. “We hope that some of the CEOs will eventually get into the main company’s board,” he said.

The companies will operate in L&T’s new business areas of power projects, boilers, turbines, water and shipbuilding. An exercise is on to identify other areas. The new structure will also open up opportunities for L&T insiders to move up the ladder.

“The L&T board has no vacancies now. But the corporatisation of the new businesses will suddenly increase the number of directors we require,” Naik said. L&T has been facing a high attrition rate, forcing the company to go in for extensions to existing employees.

On the rationale for setting up new companies, Naik said L&T has a complex structure having 62 different areas of operation. The move to create operating companies within the overall L&T umbrella is aimed at simplifying the structure.

“No one chairman or CEO can manage the complexities as existing businesses are growing fast and there is a need to get into new ones,” he said, adding that the existing businesses will continue under the main company.

Talking on the new structure, Naik said, “We have just created L&T Power Projects, which is a platform for completing the building blocks. However, it’s not easy to get a person who could create a mini-Bhel out of the power business unless he is given the rank of a CEO.”

The power company, which is a wholly-owned subsidiary, will have two subsidiaries for boilers and turbines. In addition to the power business, L&T will set up L&T Shipbuilding within two weeks. The shipbuilding company will announce the location of its yard in August.

Naik said L&T is also looking at appointing a CEO for L&T Infotech for which a global hunt is on. While the CEOs for shipbuilding and infotech will be outsiders, the head of the turbine business will be an insider. L&T has recently appointed a CEO for its water business.

For L&T Power Projects, it will recruit a chief operating officer (COO) who will work under the existing CEO.

He said the engineering company might spin off some of the “unrelated businesses” if the double dividend tax was scrapped. For that the Companies Act would have to be amended.

“If the laws changed, L&T might spin off some of the businesses. However, L&T’s holding in the spun-off entities would not fall below 60 per cent,” he said.

He further added that L&T would not implement a holding company structure for all its businesses.

Such a structure will loosen ownership and “we may again be subject to corporate raids,” he added, citing examples of previous attempts to take over the company.