Rupee Trades Higher At 66.96 Against Us Dollar

The Indian rupee on Monday was trading little changed against the US dollar, as traders turned cautious ahead of the US Federal Reserve meeting.

At 2pm, the home currency was trading at 66.96 per dollar, up 0.04% from its previous close of 66.99. The rupee opened at 66.95 per dollar and touched a high and a low of 66.86 and 66.95, respectively.

India’s benchmark Sensex index rose 0.11% or 32.50 points to 28,631.53. So far this year, it has gained 9%.

Most Asian currencies advanced and regional equities rallied for the second day amid improving risk sentiment with the Fed expected to stand pat this week. The Fed meeting will start on Tuesday and end on Wednesday. The Bank of Japan meeting will be held on 21 September.

Taiwan dollar was up 0.73%, Japanese yen 0.49%, South Korean won 0.33%, Singapore dollar 0.29%, Thai baht 0.2% and China renminbi 0.08%. However, China offshore spot was down 0.23%, Malaysian ringgit 0.23% and Philippines peso 0.08%.

The 10-year bond yield stood at 6.867% compared to its Friday’s close of 6.868%. Bond yields and prices move in opposite directions.

The rupee is down 1.17% till date this year, while foreign institutional investors have bought $6.29 billion in equity and sold $666.10 million in debt markets.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 95.881, down 0.24% from its previous close of 96.108.

 

 

Sources:livemint.com

Sudarshan Chemicals Plans Rs 1000 Cr Investment In Five Years

 Pune based pigment and agro chemical maker Sudarshan Chemicals is planning to invest Rs 1000 crore over the next five years. The company is aspiring to become the fourth largest company in the world.  Its products primarily serve the coatings, plastics, inks and cosmetics markets.  It is one of the leading manufacturers of color & effect pigments in India.

"We have signed a memorandum of understanding (MoU) with Maharashtra government of Rs 1,000 crore of investment in the next five years. The first stage of the investment has already kicked off and we are already seeing very good utilisation of those capacities," said Rajesh Rathi, deputy managing director, Sudarshan Chemicals.

Sudarshan Chemicals is eying international markets to gain fourth largest position. The global market of pigment manufacturing is of $5.5 billion. It has a dominant 35 per cent domestic market share and are seeing the opportunities towards high margin pigment products with sharpening focus in Europe and North America.

The company would desire to become fourth largest global player in the next three years.  To achieve this, it has started globalising its business from the last two-three years. Its changing the product portfolio to high performance pigments and which go into coatings and also effect pigments which go into cosmetics. Most of these products have a much better margin than the traditional pigments especially in the international markets.

"We are already a dominant player in India and the Middle East market, but we want to majorly increase our market share in international markets because that is where 90 per cent or more of the market is. Our aim is to gain 10 per cent market share in the international markets" adds Rathi.  

This year, the company is planning to introduce new products in the market. It aims at 15 to 20 per cent  increase in sales with these products in the next two years. In the last seven years, Sudarshan Chemicals has introduced more than 100 products.  It has two manufacturing plants in Maharashtra, one is in Roha and other is located at Mahad.

The other three global players in the market are German giant BASF,  Switzerland's Clariant and Japan's DIC Corporation. Domestically, it competes with Pidilite Industries.  

Sudarshan Chemical's FY16 revenue growth 15.7 per cent to Rs 1,409 crore from Rs 1,218 crore in FY16. Its EBIDTA rose 29.5 percent (YoY) to Rs 167 crore in FY17. For FY17, the company is betting on uptick in approvals for its operations in Europe, Asia and North America to clock a higher growth than FY16. Sudarshan Chemical, which has a capacity utilisation iof 80-90 percent tops the Indian pigment manufacturing market with a share of 35 per cent.

Speaking about the expansion plans Rathi said that the company has required infrastructure and already expanded for the utilities and boilers.

"Our exports today would be about 60 percent would be exports and 50 percent would be India market. In near future, we see the export percentage to go much higher up, not that our focus from the India market is going to go away, but 95 percent of the market is out of India," he said.

Plus, it has planned and executing several strategic initiatives within the company to grow the margins and especially a lot of focus on the return on capital employed and the earnings before interest, taxes, depreciation and amortisation (EBITDA) margins.

 

sources:business-standard.com

Pulses Traders Welcome Panel Report

 Pulses traders have appreciated the Subramanian committee’s recommendations on measures needed for long term solutions to the commodity’s inflationary problems.

The committee headed by Chief Economic Adviser Arvind Subramanian recommended immediate increase in the minimum support price (MSP) by at least 20% for major pulses with tur and urad at Rs 60 a kg from Rs 50.50 a kg each and chana at Rs 40 a kg from the existing Rs 35 a kg.


“Wheat output stands at four times that of pulses. This means, if a farmer harvests four tonnes of wheat on a piece of land, he would get only one tonne of pulses. Therefore, MSP for pulses (tur and urad) should be four times that of wheat which currently works out to around three times. Assuming that even 10 per cent farmers are diverting there crop from wheat to pulses, India would have enough pulses,” said Pradeep Jindal, President, Pulses and Beans Importers Association.

India’s pulses consumption is estimated at around 24 million tonnes as against its production at 16.47 million tonnes in 2015-16 and 17.15 million tonnes in 2014-15 because of two years of subsequent droughts. Following a more than 30% increase in acreage on favourable monsoon, India’s pulses output is estimated to breach its previous record of 19.25 million tonnes in 2013-14 to achieve at 22 million tonnes for crop year 2016-17.

Further, the panel recommended that the Centre should encourage states to delist pulses from Agriculture Produce Markets Committee (APMC) Act to allow farmers to sell their produce to consumers directly. The government has already adopted this practice in fruits and vegetables.

“The role of APMC is nothing beyond collecting 5.8 per cent of various taxes just to make pulses costlier,” said S P Goenka, Director, U Goenka Sons, a Mumbai-based pulses importer. “Today, farmers should be allowed to sell their produce to anyone who pay higher prices. If they feel, they can sell their output directly to consumers at the prevailing market price. The system which was set years ago as a vote bank for politicians, still continues. Today, APMC has become irrelevant. So, it should be abolished.”

Pulses traders say that this is the first time ever that the government has received right policy recommendations. Some years ago, when pulses’ export was banned, India used to be a hub for processing of varieties of dals. But when dal prices moved up, then Food Minister Sharad Pawar invoked the ban.

“The ban on pulses exports was just an eye wash. India used to import 3 million tonnes of pulses about a decade ago of which 10 per cent was processed locally for re-export which used to earn forex for India. Now, export of 10 per cent of imported goods makes no difference in its availability for domestic market as dal mills could have imported this exportable quantity extra. The ban on export not only killed our industry but also helped emerged many such processing units in the Middle East and Asian countries. It should be immediately revoked to make a market free from any hurdles,” said a senior industry official.

Similarly, traders termed as wrong the stock limit imposed by the current NDA government to control pulses inflation, and have urged the government to intensify procurement to meet its buffer requirement and purchase more in case of distress sale from farmers.

“By imposing a stock limit, the government restricted stockists to hold limited quantity which means supply is restricted. Instead of taking all corrective measures, why the government has not convened a meeting of farmers to understand the problems faced by them for growing less pulses. The increase in pulses area this year is the result of high prices during the last two years. The government, therefore, needs to take a long term measures to encourage farmers with adequate returns to their produce,” said Jindal.

Apart from urging the government to allow genetically modified seeds in pulses for higher yield, traders called for immediate ban on futures trading due to excessive speculation by certain groups of traders.

 

Sources:.business-standard.com

We've Improved And Expect A Rebound In Demand Over The Coming Years: P K Singh

The steel industry in India, like other countries, has been affected by the global oversupply created by China, which led to cheap imports replacing domestic steel. This impacted the margins of all steel makers. However, the government’s intervention by bringing in protective trade measures of various forms provided some respite.

Since the last quarter of the earlier financial year, we’ve improved and clocked record sales of around 3.8 million tonnes, about 20 per cent up over the same period last year. In the first quarter of FY17, we have posted the highest ever in saleable steel production, with 11 per cent growth and a nine per cent growth in operating earnings. Simultaneously, the government’s plans to invest heavily in infrastructure is expected to boost the demand for domestic steel in coming times.

Is there a demand pick-up? What are the factors preventing a rebound?

In the April-August period, domestic steel consumption grew only 1.3 per cent. During the same period, there was a fall in the import of finished steel of 30 per cent and exports rose 24 per cent. We had a good monsoon and that will surely translate into a rise of steel consumption in rural markets and, demand-wise, a better second half for domestic steel makers.

The huge infra push from the government in form of smart cities, expansion of road and rail network, favourable policies like Make in India, indigenisation of sectors like defence, heavy engineering, etc. will all require substantial amounts of quality steel as a major input. So, we expect that in the coming years, there will be a spurt in demand and no factor would stop that rebound.

How far have the minimum import price (MIP) and anti-dumping and safeguard duties helped? If MIP had not been implemented, what would have been the price scenario? Should MIP be further extended?

The government extended MIP on August 4 on 66 items for a further two months. Further, in March, it extended the safeguard duty on hot-rolled coil (HRC) imports, placed in September 2015, till March 2018. The Directorate General of Anti-dumping & Allied Duties recommended provisional anti-dumping duty on HRC and cold-rolled flat products, which also have been issued. Imposition of provisional anti-dumping duty on wire rods is also under consideration.

In the face of huge global oversupply, almost every other country has resorted to trade safeguard measures of some degree to shield their domestic steel industry. At such times, these are required to give a level field to your own industry.

What is your capital expenditure and your major projects?

For this financial year, capex is planned at Rs 4,000 crore. We spent a little over 25 per cent of this amount in the first quarter of FY17.

SAIL had undertaken modernisation and expansion of its five integrated steel plants at Bhilai, Bokaro, Rourkela, Durgapur and Burnpur, and the special steel plant at Salem, at an investment of Rs 62,000, to enhance crude steel production capacity from 12.8 million tonnes per annum to 21.4 mtpa. All major facilities under this plan at Rourkela, IISCO (Burnpur), Durgapur, Bokaro and Salem have been completed and are under operation or stabilisation. Many of the major projects at Bhilai has been completed; others are in advance stages of installation.

What is the status on your foreign projects?

The major overseas project is at Mozambique. Our joint venture in coal mines there is a strategic investment, our first footprint outside India to acquire any coal mines. Till date, we have exported around 1.3 mt of coking coal from the mines. The cost of operations at the time of acquisition was quite high but in due course, a number of steps were taken that have resulted in considerable reduction of the coking coal price.

 

Sources :business-standard.com

Tea Board Hopeful Of Doubling Exports To Australia In Five Years

 After his recent visit to Australia with a 15-member delegation of tea exporters, Executive Director of Tea Board C Paulrasu said he is hopeful of doubling the export volumes to that continent.

“Indian tea exports to Australia now stand at 3 million kg. This could double in the next five years,” he said, adding that Australia is looking only for speciality products such as organic tea, value-added teas, flavoured teas and green tea.

The total volume of tea imports into Australia is estimated at 15 million kg. “Indian tea exporters are fully geared to cater the international market,” he added.
Tea exports

Tea export has risen by 10 per cent in 2015 -16 compared to the earlier year to touch 221 million kg.

As per Tea Board figures, the CIS continues to be the largest importer of Indian teas at 60.52 million kg in 2015-16. Other major importers of Indian teas are Iran (20.41 million kg), Pakistan (18.94 m kg), the UK (17.70 m kg) and the UAE (15.01 m kg).

The export volumes to the CIS countries have seen some improvement from 54.26 m kg in 2014-15 to 60.52 m kg in 2015-16, which industry sources say “is consequent to the visit of a tea delegation to Moscow just over a year ago.”
Production

Indian tea production rose in 2015-16 by 36 m kg to 1233 m kg compared to the corresponding 12 months of the previous year. While north Indian production increased by 52 m kg to 1,008 m kg, tea production in the South took a huge hit slipping by 16 m kg to 225 m kg.

At the 34th annual general meeting of the Tea Trade Association of Coimbatore, its Chairman UV Saraf said the situation in the South is worrisome. “We do not expect the crop situation to improve during the later part of this year, until and unless rainfall improves in the tea growing areas.”

 

Sources:.thehindubusinessline.com