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Rupee dip: Imported booze prices shoot up 30%

BANGALORE/MUMBAI: Connoisseurs of international wines and spirits will have to shell out 30% more for their favorite beverage, courtesy the falling rupee. The rupee has been on a free fall against most foreign currencies.

India imports a significant chunk of its favourite drinks labels from Europe, followed by countries like US, Latin America, South Africa, Australia and New Zealand.

But with the rupee hitting new lows every other day, pressure has been mounting on importers to raise prices of liquor brands. Usually, inventory lasts from a few weeks to a few months and the impact of the rupee isn’t felt immediately.

The impact is felt when fresh orders are placed, said industry players. Moreover, firms can’t easily raise liquor prices as in the case of consumer electronics or FMCG sector. Importers have to register the new retail price of the foreign liquor brand with the excise department first, they added.

For our new consignment of wines from Chile and New Zealand, we had little option but to raise prices of Vina Caliterra Colchagua Valley and Sileni Estate Hawke’s Bay by 38% because of the weak rupee,” said Abimalek M David, VP, sales and operations, at Finewinesnmore, a boutique wine seller of 21 international labels. A 750 ml bottle of Chilean or New Zealand wine is being sold at Rs 1,800 against the earlier price of Rs 1,300.

Every Re 1 increase in the import price hurts companies by Rs 2.5. Worse still, since in many states price revisions happen only once a year, the company will have to absorb the price hike until the next revision cycle. Hence, margins are going to be under severe pressure, said an industry observer. Consumption of foreign labels has been on a rise with more young professionals and entrepreneurs with high disposable incomes spurring the growth.

Manoj Venkatswamy, MD, Drops Total Spirits, a leading liquor retailer in Bangalore, said, “Importers have already sent revised rate cards to the excise department. The new card will see MRPs going up by 25-30 %.” About 40% of the retailer’s sales come from imported alcoholic beverages.”

‘Rajasthan textiles sector may attract Rs 10,000 crore investments’

JAIPUR: Rajasthan’s textiles industry is expected to attract huge fresh investments worth Rs 10,000 crore in the next seven years as the state government has formulated a new policy and provided a special package for the sector, employing over 1.61 lakh people.

“The new textiles policy announced recently by the state government will prove to be a boon for the industry and is likely to attract fresh investments to the tune of Rs 10,000 crore,” Rajasthan Industries Minister Rajendra Pareek said today after inaugurating the fair titled ‘VASTRA-2013’ here.

The Rajasthan Cabinet had decided to provide a special customised package for the development of the textiles industry. The package for the sector will be applicable to new enterprises, already established entities making investment for modernisation, expansion and persification and sick units.

“Few years back, the textiles industry in Rajasthan was languishing and that is when, under the guidance and vision of our Chief Minister Ashok Gehlot, the state machinery went into mission mode. Today, because of innovative schemes, textiles-friendly policies and infusion of new technologies, the industry has been resurrected and is headed for an upsurge,” he added.

The policy will remain valid till 2020 and the salient features of this package include interest subsidy for establishing new enterprises as well as persification and modernisation of existing units and reimbursement of 60 per cent of Value Added Tax paid under Rajasthan VAT.

The four-day long exhibition, which is being jointly organised by Rajasthan State Industrial Development and Investment Corporation (Riico) and Federation of Indian Chambers of Commerce and Industry (Ficci), aims to provide a platform to participants for forming new business relations, exports, partnerships worldwide and locations for setting up businesses in India.

The fair would contribute further in projecting India particularly Rajasthan as a prominent sourcing hub and investment destination.

This year, 202 exhibitors have showcased their products including apparel, made-ups, home textiles, fashion accessories, carpets, rugs and bags. 421 buyers from 66 countries and 43 Indian buying houses are expected to visit the fair.

Besides participation from traditional export markets like the US and western Europe, this year there is also an increase in participation from new markets such as Latin America, Africa, China, Australia and eastern Europe.

‘Vastra’ has a special significance for Rajasthan as the state government has recently announced a separate policy for the sector titled the ‘Special Customised Package for Textiles Sector Enterprises – 2013’.

Textiles is among the prominent sectors in Rajasthan.

Textiles export at $28.4 billion in April-February, below FY’13 target

NEW DELHI: India’s textiles exports were $ 28.4 billion during the April-February period, way below the target for 2012-13 fiscal that ended on March 31.

The government had set a target of $ 39.6 billion for the entire fiscal.

“The textiles exports increased from $ 22.4 billion during 2009-10 to $ 27.7 billion in 2010-11 and these exports were $ 33.31 billion in 2011-12. Export performance for the April-February 2012-13 stands at $ 28.4 billion,” Textiles Minister Anand Sharma said in a written reply to the Lok Sabha.

On whether the government has explored new markets for exports in view of the recent slowdown in the US and the European nations, he said: “Yes, government has explored new markets for textiles exports in Japan, Australia, Israel, Latin America, Africa, South East Asia and Middle-East nations.”

India’s share in global textiles exports was 3.87 per cent in 2009, 3.98 per cent in 2010 and 4.10 per cent in 2011, he said.

Further, Sharma said, the steps taken by the government to boost textile exports include extending 2 per cent interest subvention scheme on handicrafts, handlooms, carpets and garments up to March 2014, additional duty credit of two per cent of freight on board value on export of certain knitwear apparel for 2013-14.

Textile exports can reach $50 bn by 2014-15: Minister

MUMBAI: Textile exports are expected to reach USD 50 billion by 2014-15 on the back of new markets, Union Minister of Textiles K S Rao said today.

“We have set a target of total exports at USD 50 billion (through the year) by FY2015, as we are not only planning to further strengthen the existing markets in the US and European Union but also exploring new opportunities in Latin America, Australia and Japan,” Rao said here.

The total exports stood at USD 31.7 billion in 2012-13. To further boost the industry, the Ministry will talk to Reserve Bank and Finance Ministry to declare textile a priority sector, he said, adding that being a priority sector the textile industry would be able to get funds immediately when required.

“The sector lacks skilled workers. The ministry will help the industry to train people from below poverty line category. We will support the industry in getting skilled workers. The input cost will go down with rise in number of skilled workers in the industry,” he added.

The textile industry employs 80 million people directly and indirectly.

The ministry wants the industry to tap solar power to solve the problem of power shortages, he said.

“Under the government’s renewable energy scheme, the textile sector will also get subsidy on equipment to tap solar power,” Rao further said.

According to the Cotton Advisory Board, the cotton imports are likely to be 2 million bales due to the rupee depreciation this year.

“Earlier we had set a target of 2.5 million bales for this year. However, due to the rupee depreciation we expect it to be around 2 million bales,” a CAB official present at the event said.

Last year, India had imported 1.2 million bales.

Apparel export target of $17 billion likely to be met: Export promotion body

NEW DELHI: The garment industry is expected to achieve the $17 billion target for the current fiscal as the outbound shipments have already touched the about $5 billion level in the first four months of 2013-14, the Apparel Export Promotion Council (AEPC) today said.

This growth can be attributed to the recovery in USA economy, which is India’s second largest export destination, besides emerging markets like Latin America and Africa.

“For the current fiscal, the government has fixed $17 billion target for garment exports. If the same growth momentum continues and our major recommendations are met by the government, we may be quite close to the target,” AEPC Chairman A Sakthivel said while addressing the 34th Annual General Meeting (AGM) of the council here.

The council had also organised a discussion on enhancing apparel exports which was held under the Chairmanship of Cabinet Secretary Ajit Seth in May and had suggested various proposals during the meeting.

These proposals which include import of synthetic fabrics at a lower duty of 5 per cent in the entire 12th Five-Year Plan from the existing 21 per cent and a separate chapter for getting export credit at fixed 7.5 per cent as done in the past.

However, Sakthivel said the European market has still not recovered. The US and Europe together account for about 66 per cent of the country’s total apparel shipments.

Against the back drop of exports in 2012-13, apparel exports have picked up really fast in the first four months of 2013-14. During April-July 2013-14, exports have increased by 13 per cent year-on-year to about $5 billion, he added.

Further, AEPC said that though there has been a decline in the share of traditional market in India’s total apparel exports to world in 2012-13, the share of non-traditional markets in the last fiscal has increased to 34 per cent from 30 per cent.

In 2012-13, apparel exports declined by 6 per cent to $12.92 billion.

Talking about the Driving Industry Towards Sustainable Human Capital Advancement (DISHA), Sakthivel said: “AEPC’s flagship programme ‘DISHA’ has now completed one year of implementation. With over 15 cluster awareness programmes, the programme today has over 328 enrollments.”

Also, 150 factories have already gone through a holistic capacity building in the area of 11 code principles of the programme, thus, completing the DISHA facilitation process and external assessment, he said.

“The programme has been received with great enthusiasm by the United States Trade Representative (USTR) and US Deptartment of Labour. The Indian apparel industry has implemented an industry-wide measure for facilitating and preparing Indian apparel manufacturers toward becoming more socially and environmentally responsible,” Sakthivel said.

Besides, AEPC would set up sector skill council for apparel, made-ups, home furnishing, including handloom.

In the area of skill development, it has assessed a total number of 5,800 candidates in the 2013-14 (up to 2nd September 2013) under Skill Development Initiative (SDI), scheme of Modular Employable Scheme (MES) of the Director General of Employment & Training (DGE&T).

The candidates assessed the Non-MES scheme are 4,595, while the total number of candidates assessed is 10,395, Sakthivel said.

7 buyouts: Godrej aims at cultural integration

MUMBAI: Seven acquisitions in five years may have seemed like a cakewalk for the Godrej group. However, the tough part of integrating these companies spread across three continents — Asia, Africa and Latin America — on a common cultural platform is what the group has now set off to undertake.

A separate team has been put in place under corporate HR department to develop processes and execute the cultural integration across Godrej’s newly acquired international empire. The team, headed by Shailesh Deshpande, is drawing up a blueprint which will be ready by July this year, according to Sumit Mitra, executive vice president (corporate HR),

Godrej Industries

.

Deshpande has had prior experience in handling international operations since he performed a similar task at Asian Paints. “The biggest challenge for the team would be to ensure a leadership and talent pipeline,” Mitra told TOI. The team would set up an employee database, assist the newly acquired companies to inculcate the Godrej way of working, its values and ethics, in addition to introducing Godrej’s performance-based assessment programme.

After acquiring Keyline Brands of UK in 2005, Godrej Consumer Products (GCPL), the FMCG arm of the Godrej group, acquired Rapidol (Africa) in 2006 and Kinky (South Africa) in 2008. This calendar year, starting with the acquisition of Tura (Nigeria), GCPL then acquired Megasari (Indonesia), Issue Group (Argentina) and Argencos (Argentina).

Recent acquisitions have raised GCPL’s international employee strength four-fold from 400 to 1,600. Its strength in India stands at 2,000. This takes the total strength (international plus domestic) to 3,600. Although, to an outsider , it may have seemed like GCPL went on an indiscriminate buyout spree, the fact is that these acquisitions were made after a thorough HR due diligence process to confirm a cultural fit with the parent company. “There were some acquisitions which were blocked simply because they did not fit in culturally ,” said Mitra, without revealing any names.

Given the large number of international acquisitions, GCPL has introduced a plan of sending new recruits on a two-week stint abroad during the induction period to give them a sense of the cultural differences in other countries. Considering that there are not many brand synergies (acquisitions have been made on product/category synergies) between GCPL’s acquired companies, the only way the group can weave a common thread is through processes like HR, finance and IT.

Godrej Consumer Products acquires Strength of Nature

MUMBAI: Godrej Consumer Products Limited (GCPL) has entered into an agreement to acquire Strength of Nature LLC (SON), a hair care products firm, as part of its wider strategy to boost its international business.

US-based SON has significant presence in Africa and the Caribbean, and is one of the fastest growing companies in the hair care category for women of African descent.

With an annual revenues of $95 million, the company has hair care products such as relaxers, maintenance, styling and shampoos in its portfolio.

“Over the past few years, we have been scaling up our international presence with acquisitions that fit well in our 3 by 3 strategy – a presence in emerging markets in Asia, Africa and Latin America through 3 core categories – hair care, home care and personal care,” said Adi Godrej, Chairman, Godrej Group.

“These strategic acquisitions have strongly aided our growth. Through them, we have extended our core businesses and implicitly broadened presence to a wider canvas.”

Last month, ET had reported that Godrej Group, India’s oldest conglomerate, has created a war chest of Rs 3,000 crore to buy home and personal care companies in Africa, Indonesia and the home turf.

Africa has more than half of the world’s fastest growing economies, a fast growing middle class population and increasing urbanisation. Just Africa accounts for 35% of Godrej Consumer’s international revenues and it now aims to to double their business in Africa in the next four years.

Jewellery exports may grow 15 pc in FY12: GJEPC

NEW DELHI: Gems and jewellery exports are likely to grow by 15 per cent to USD 49.5 billion in the 2011-12 fiscal, driven by increase in prices of gold and diamond.

In the 2010-11 fiscal, the exports stood at USD 43 billion, according to the Gems and Jewellery Export Promotion Council (GJEPC).

“The first eight months have been OK for us and I believe the growth momentum will be maintained in the remaining months of the current fiscal,” GJEPC Chairman Rajiv Jain said here.

During April-November this fiscal, the gems and jewellery exports grew by 15.5 per cent to USD 29.1 billion compared to the same period last year.

India imports gold and rough diamonds in large quantities and re-exports the value-added items like jewellery.

Prices of the yellow metal, diamonds and coloured stones have increased between 12-13 per cent in the last eight months of this fiscal, Jain said.

The value of exports is showing an increase despite sluggish demand in the western markets, largely because of rise in raw-material cost.

Maintaining that there is not much growth in demand for jewellery exports, Jain said, “But exports are growing in terms of value. These export figures are reflective of an increase in gold and diamond prices.”

The UAE is the major market accounting for 43 per cent of the country’s total gems and jewellery exports, followed by Hong Kong 30 per cent and the US 17 per cent.

Exporters are also trying to tap new markets in countries like Latin America, Russia and Africa, Jain said.

Rocket’s GFG raises $33 million amid Jabong sale talks

(This story originally appeared in on Jul 23, 2016)

BENGALURU: Global Fashion Group (GFG), which houses six international fashion e-tailers including India’s Jabong, has raised an additional $33 million, topping up its April round this year when it raised nearly $331 million at a sharp 68% drop in valuation to $1.1 billion.

Existing investors Kinnevik, Rocket Internet and Rocket Internet Capital Partners have participated in this round, the company said in astatement.

The development comes at a time when GFG is actively talking to suitors to sell Jabong. It has held talks with multiple online and offline retailers here, such as Aditya Birla Group, Flipkart, Snapdeal and Future Group, among others.As a possible sale is on the cards, Jabong CEO Sanjeev Mohanty is believed to be on his way out to join Levi’s as its managing director.

According to Kinnevik, it has infused $178 million in the round and holds 35% stake while Rocket Internet has pumped in $75 million and holds 20% stake in GFG.

Oliver Samwer, CEO of Rocket Internet, said, “The recent funding round provides GFG with the necessary capital. We are looking forward to continuing to work with the GFG team as well as Kinnevik and the other GFG shareholders.” Started in 2014, GFG has five regional online fashion businesses apart from Jabong -Dafiti in Latin America, Lamoda in Russia and CIS, Namshi in the Middle East, The Iconic in Australia and Zalora in South-East Asia.

Rocket Internet, known for a copycat model, has been struggling with many of its startups being unprofitable.

Havells to dilute majority stake in Sylvania to focus on domestic market

NEW DELHI:

Havells

India, a maker of lighting and electrical products, may pest its majority stake in European lighting systems and fixtures company Sylvania, which it acquired in 2007 and became a global player, two people familiar with the negotiations told ET.

The £443-million company, now known as Havells Sylvania, is among the top four lighting brands in Europe and Latin America. Concord, Lumiance and Sylvania are some of its leading brands.

“The company is in negotiations with some of the leading global players in the lighting space and private equity firms. It is expected to complete the deal shortly, may be by this month end,” one of the personssaid. Havells wants to increase focus on the Indian market.

A strategic player is the frontrunner for the stake, the other person said. The name of the potential buyer is not known.

“The equity value of the deal would be more than what Havells paid as equity to take over one of the leading electrical brands in Europe,” he said, adding that Sylvania’s equity value would be a little over Rs 1,000 crore. A Havells spokesperson did not reply to queries seeking comment.

“The deal would be structured in two phases. In the first phase, Havells would pest its majority stake with management control to the strategic investors. It will sell the residual stake in 3-5 years, depending on multiple factors,” the person said.

Havells, which posted net revenue of Rs 8,570 crore in FY15, acquired Sylvania for an enter-prise value of £227 million, including debt, in 2007 and had invested £80 million as equity.

Over the past seven years, it put in an additional £60 million, taking its total equity investment in Sylvania to £140 million or about Rs 1,000 crore.

“The move is part of Havells India’s plan to increase its focus in the domestic market,” the person said.

“Globally, technologies in the lighting space are changing very fast toward LED light. To compete in this changing technological environment, Havells will have to increase its focus in the European market, which is almost saturated,” the person said. LED is 40% of lighting fixtures in the European business, Havells said in a presentation to investors in November.

Europe is stable, yet challenging, and Latin America offers growth, according to the presentation on Havells’ website.

“With huge demand in India, Havells’ new mantra will be to focus on the domestic market and in case there are new opportunities, they may re-enter the overseas market again,” the second person said.

Havells India shares slipped 1% to close at Rs 292.25 on the BSE, giving the company a market capitalisation of Rs 18,254 crore. The benchmark BSE Sensex declined 0.86%.

Havells India reported a net profit of Rs 385 crore on net revenue of Rs 8,569.4 crore in FY15 against a net profit of Rs 446.3 crore on a turnover of Rs 8,185.8 crore in the previous year. Sylvania reported a turnover of £443 million in FY15 against £440 million in previous year.