Mondelez International To Make Andhra Plant An Export Hub

US-based food, confectionery and beverages giant Mondelez International plans to make its $190 million new plant in Sri City in Andhra Pradesh cater to both domestic and export markets, a senior company official said.

The $30 billion group owns brands like Cadbury Dairy Milk, Cadbury 5 Star, Bournvita, Halls, Oreo, Tiger and Toblerone.

"We are investing in this plant for the future. India is an important market for us. We have invested more than $100 million during the last three years. The investment in this plant is part of our global capacity expansion," Maurizio Brusadelli, president, Asia Pacific, Mondelez International, told reporters here.

The 60,000 tonne per annum (tpa) plant in Chittoor district was inaugurated by Andhra Pradesh Chief Minister N. Chandrababu Naidu on Monday.

Inaugurating the plant, Naidu urged Mondelez India to increase its sourcing of cocoa as the state government will be increasing the crop acreage.

Naidu said the state government wants to increase the cocoa planting area to 75,000 hectares from the current 25,000 hectares.

The chief minister also said that Andhra Pradesh is good in cow milk production and can cater to the demands of the company.

According to Naidu, the government will be developing Sri City, Nellore and Tirupati as a tri-city industrial corridor.

The chief minister urged young workers in Mondelez India to behave responsibly as any labour unrest will drive away international investors.

Naidu said Hero Motors will also set up base in Andhra Pradesh. "The plant will be expanded in three phases in five years.

Meanwhile, Mondelez India Foods Private Ltd. managing director Chandramouli Venkatesan said that at the end of the third phase, the total capacity of the newly inaugurated plant will go up to 250,000 tpa.

By that time it will be a multi-product locality," he said.

Mondelez holds 134 acres in Sri City and has utilized only around 30 percent of the land for building the new facility.

Venkatesan declined to comment on the company's total capacity, including the Sri City facility.

According to Brusadelli, exports will start after the third phase and the production will cater to the domestic market till then.

"Three of our suppliers will set up their facilities near our plant. Their investment will be in addition to ours," Daniel P. Myers, executive vice president, Global Integrated Supply Chain, said.

Mondelez India recently expanded its biscuits portfolio, launching Bournvita biscuits.

Venkatesan said he was hopeful that the brand extension will be successful, though another health drink maker's attempts to extend its brand to biscuits did not succeed greatly.

 

Source :.thehindubusinessline.com

Hong Kong Eyes Consumer Electronic Part Imports From India

Hong Kong, the world's eighth-largest trading economy, sees "a good possibility" of importing consumer electronic components from India and will "encourage" local companies to set up assembly plants there with the aim of bolstering economic and business ties.

Terming the potential entry as "a win-win situation", It has stressed on stepping up the programme of exchange and understanding between the two countries and signing of the Double Taxation Agreement and Investment Protection Treaty for promotion of trade and investments.

However, on the bilateral trade front, Hong Kong expects a growth in exports to India, but sees imports from India to stay flat.

"Yes, there is a good possibility (of imports) of parts and components for making consumer electronics products. Because we are the largest exporter of telephones, mobiles in world. So, we need parts for finished products," Hong Kong Trade Development Council (HKTDC) Deputy Executive Director, Raymond Yip told Indian reporters here.

"Because we also trade in products and we don't buy for our 7.3 million people here. We buy actually for 1.3 billion people in China, we buy for the world. We can buy worth USD 1.4 billion per day for the world."

He further said local companies in Hong Kong can also be encouraged to invest in India by setting up assembly plants to tap the big domestic market there in the wake of rising income of the middle class.

According to HKTDC, Hong Kong does not produce components itself and imports the same from China, the US, Japan, Korea, Taiwan, Malaysia. And this is where India can fit in, Raymond noted.

"India excels in making good quality telecom components because of your domestic research and development and the presence of MNCs... electronics is our biggest industry. Out of USD 462 billion of our exports, half is electronics," Raymond said.

"We could import that from India because you produce some good components because we need components and parts to make products for exports."

Hong Kong's total exports to the world last year stood at USD 462 billion while its imports remained at $518 billion.

On the 'Make In India' initiative, he said: "For us, anything which turns into business opportunities is great and of course, we want to sell more products to India."

He pointed to some constraints though in terms of import regulations, and tariff, adding that it is being liberalised.

HKTDC, established in 1966, is a statutory body dedicated to promoting Hong Kong's trade in goods and services.

Asserting that Hong Kong has "big" appetite for trade, Raymond said the country also buys products, including luxury items such as watches, for 60 million tourists comprising 45 million from China.

Stepping up his pitch further, Raymond said it is number one market in the world for Swiss watches and Japanese food products.

 

Source :economictimes.indiatimes.com

Super Premium Ice-Cream Brands Eye A Big Bite Of The Indian Market

 Selling super premium ice-creams in a price sensitive market has never been easy. Steep import duties at nearly 27 per cent also add to the woes of players such as Haagen Dazs, Movenpick and London Dairy when it comes to deriving healthy margins.

They are now seeking lower price points and SKUs (stock keeping units) to garner volume growth by penetrating the market further through retail stores and cafes.
Affordable packs

For instance, Nestle-owned Movenpick, which has a new distributor for the past three years (Nectar Hospitality), is now bringing in 500 ml packs as 1-litre packs at ?950 were a bit too costly for the Indian market.

Tarun Sikka, Managing Director, Nectar Hospitality, said: “The price points of our 1-litre packs were considered prohibitive and affected the perception of the brand.

“We are now getting seven-eight flavours at the retail level in the 500 ml packs to specifically cater to the Asian market as the per capita consumption of ice-cream is still low in India compared to Europe.”

India continues to be a challenging market for Movenpick, which had exited the country in the past.

“We have had FSSAI issues in the past since there has been lack of clarity, but we have to work in this scenario.

“India is a challenging market but we have plans to expand our retail presence along with our cafes and sell about 1 lakh litres of ice-cream in a year,” added Sikka.

After catering primarily to institutional trade, Movenpick is now taking up its retail presence from 74 to 100 outlets along with nine cafes this year.

Volumes have also been sluggish for the Dubai-based London Dairy for the past two years as it was also facing FSSAI issues over the labelling of some of its flavours.

But this summer London Dairy is hoping to make up for it by introducing its mini ice-cream sticks at ?75 for 60 ml, its lowest SKU, in addition to enhancing its retail presence to 3,000 outlets from 2,000.

Compliance issues

After being present in India for the five years, London Dairy is now seeking to grow at 36 per cent. “Trying to get FSSAI compliance has led to erratic supplies for the past two years. But now we have to fight back by focussing on growth through the mini sticks since we believe in staying invested in India. The super premium segment is growing at 18-20 per cent,” said Shweta Shrivastava, Head - Marketing, London Dairy.
General Mills’ plans

General Mills-owned Haagen Dazs, which is imported directly from Arras in France, is seeking ways to garner additional volumes with more India-specific innovations to help it grow faster in the segment. It already has 19 cafes and reaches out to more than 100 retail outlets.

Salil Murthy, Marketing Director, General Mills, said: “We are seeking volumes for which we are working on product innovations specific to India. Since we started the super premium segment in 2009, we have been experimenting with Indian offerings such as mithai and faluda based ice-creams.”

According to market estimates, about 6 per cent of the ?3,300-crore ice-cream segment is pegged as super premium, which makes it a ?150-crore category.

 

Source :.thehindubusinessline.com

Indian Speciality Chemicals Firms To Benefit From China's Stricter Green Norms

India stands to gain from the strict implementation of environmental norms and safety standards against Chinese firms that has resulted in the closure of several unorganised and small units in that country.
 
Over the past decade, China has seen unrestrained industrial expansion, enabled by the government and by easy financing. This, coupled with lax regulations, contributed to serious environmental violations. To crack down on polluters, the Chinese Ministry of Environmental Protection enforced strict penalties starting January 2015, leading to plant shutdowns and softening of the global leader’s exports.
 
“Under the new policy framework, China is expected to cleanse its environment by shutting down or shifting 1,000 plants to a ‘green belt’. While China saw softer exports in 2015, we expect more of the same in 2016,” said Surya Patra, an analyst with PhillipCapital.
 
As a consequence, import of speciality chemicals from China to India has declined. Besides, Indian manufacturers have started steadily capturing markets in China and in other markets.
 
“There has been a phenomenal change in the structural dynamics of Indian speciality chemicals industry over the past year. Until a year ago, India was not having the extra edge in speciality chemicals compared to China. But now, with more stringent environment control regulations being implemented in China, it no more has the extra edge,” said Ashok G Rajani, chairman and managing director, Seya Industries Ltd, a specialty chemicals manufacturer based in Mumbai.
 
“We have started exporting to China as Chinese manufacturers have lost the price advantages they used to enjoy till a year ago in the world of specialty chemicals market,” he added.
 
According to industry sources, this opportunity has come India’s way after many decades as the cost of production of India’s specialty chemicals works out to 10-15% lower than that in China after investment in environmental protection.
 
Sensing the chance, other specialty chemicals manufacturers are looking to invest large sums to increase production. Aarti Industries, for example, plans to invest about Rs 300 crore over the next two year, after having already invested Rs 738 crore in the four years ending 2014. Seya, too, is planning to invest about Rs 600-700 crore over the next two years.
 
The $25-billion Indian specialty chemicals sector is growing at 12% annually despite economic slowdown in global markets. The sector is now expected to be worth $33.2 billion by 2019. Specialty chemicals find applications across various industries and their growth is driven by exports as well as domestic consumption.
 
Traditionally, low-cost labour and raw material availability have been key factors for Indian companies. However, factors such as product innovation, branding and distribution are becoming increasingly important.
 
“The specialty chemicals market is witnessing tightening import norms in developed nations due to environmental concerns. This is making it difficult for smaller players to stay cost competitive and compliant. The world is also seeing a shift in production from the west to Asia. Multinational companies are focusing on Asia thanks to lower cost of production, availability of low-cost skilled manpower and increasingly stringent environmental regulations in their home markets,” HDFC Securities said in a recent report.
 
Over the past five years, the Indian specialty chemicals market saw faster growth (13% annual average) against global growth of around 7%, with the momentum supported more by rising domestic demand than exports.
 
“We expect India to emerge as a strategic alternate source for manufacturing of speciality chemicals for multi-national companies,” said Patra. “The emerging trade gap due to softening Chinese exports offers huge opportunities for Indian chemical players, particularly for manufacturers of polymers, dyes & pigments, textile chemicals, and agro chemicals.”

 

Source :.business-standard.com

Coal Mine Auctions Unlikely In First Quarter Of This Fiscal

The Coal Ministry is not likely to auction mines in the first quarter of the current fiscal and the strategy for the remaining quarters will depend on demand.

The Ministry’s decision is largely due to the outcome of the fourth round of auctions which had to be cancelled in December last, due to low bidding interests. There were almost no takers for the fuel in the fourth round as there was more supply than the demand, besides a fall in global prices.

Nine mines with 1.167 billion tonnes of reserves were on offer in the fourth round.

Coal Secretary Anil Swarup told BusinessLine: “Today the situation has reversed — it is now a demand side problem rather than a supply side one.”Increased domestic availability has also helped cut the country’s import bill by ?28,000 crore through a 15 per cent reduction in volumes. Coal India’s additional output in the last two financial years is about 73.98 million tonnes.

Last fiscal, Coal India produced 42.28 million tonnes more, hitting an output of 536.51 million tonnes. In addition, Singareni Collieries Company Ltd’s production of 61 million tonnes in 2015-16 fiscal meant that public sector coal production was nearly 600 million tonnes.

“It is the same people who are now helping in producing more. The output has gone up because of faster land acquisition, forest clearances, and increased rake availability from the Indian Railways,” said Swarup.

Following the Supreme Court’s September 2014 directive to de-allocate 204 coal mines, the government has been conducting fresh auctions and allocation to public sector — both central and state — entities for these areas.

Out of 55 mines that were auctioned and allocated last year in three rounds, so far 10 mines are operational and have produced anywhere between 10 and 11 million tonnes. In all, 28 mines were auctioned to the private sector and 27 mines allocated to central and state PSUs. There are still 149 mines that can be auctioned to the private sector or allocated to state and central public sector units.  
Thermal coal imports

Piyush Goyal, Minister of State (Independent Charge) for Power, Coal and New & Renewable Energy, is confident that India can soon completely stop thermal coal imports.

However, with some coastal power plants requiring coal of a higher gross calorific value (GCV) than what is currently available locally, the country would still keep importing some amounts. GCV is the amount of heat produced from burning a specified quantity of fuel. Typically, GCV is measured in kilo calorie per kilogram.

“Our objective is to see that such coal (in context of quality) as is available in India is not imported,” said Swarup adding that in the foreseeable future, apart from some coastal plants, thermal coal imports will not be required.
Coal price

India’s falling imports have left their mark on benchmark coal prices in the region which have touched multi-year lows in recent weeks. But, despite the weak prices of imported coal, Swarup remains confident that domestically produced fuel will remain more competitive.

“Even now, coal prices in the region are 30-40 per cent higher than domestic coal. This is when prices are at multi-year lows. I cannot comment whether global prices will drop further but at these levels, domestic coal is much cheaper,” he said.

 

Source :thehindubusinessline.com