Highweight on Aam Adami

LPG costlier by Rs 50 per cylinder, diesel prices up by Rs 3

   Biting the bullet, government on Friday hiked the price of diesel by Rs 3 a litre, kerosene Rs 2 a litre and cooking gas by a steep Rs 50 a cylinder to raise Rs 21,000 crores, and slashed customs and excise duties on petroleum products, sacrificing Rs 49,000 crore a year.

The hike in prices will be effective from midnight on Friday night.

New Game Plan for to Reduce Input Cost

FMCG companies are tightening their purse strings by controlling advertising spends and other marketing expenses to maintain their margins, as high raw material prices continue to pose serious challenge, according to analysts.

Experts said these companies were likely to be cautious on their advertising expenses if they had to remain profitable despite high input costs. “Most of the FMCG companies are focusing on volume growth without hurting their operating margins. While they are resorting to price increases, they also have to reduce their operating cost, including their ad spend, staff cost and other expenses, to maintain their margins,” India Infoline Research Analyst Vanmala Nagwekar said.

 Two of the biggest spenders on advertising, Hindustan Uniliver (HUL) and Procter & Gamble (P&G) marginally reduced their advertising and promotional expenses in the fourth quarter last financial year. In the last quarter of 2010-11, HUL’s advertising and promotional expenses were down marginally to Rs 623.29 crore, from Rs 626.52 crore in the period a year ago.

Similarly, P&G reduced its ad spend to Rs 37.96 crore, from Rs 44.13 crore in the corresponding period last financial year.

 In an investor conference recently, Dabur Ltd Chief Executive Officer Sunil Duggal had said the company would not obviously go overboard in terms of advertising and promotion as long as inflation remained the way it was. 

New whitening form Nivea.

Nivea India has launched Whitening, a deodorant for women. It claims to repair underarm skin and make it fairer and even-toned. It contains liquorice extracts and witch hazel. It is available in an aerosol spray pack for Rs 179 and 50 ml roll-on for Rs 165.

HAPPY MOTHER'S DAY ...

      God could not be everywhere and therefore he made mother's- HAPPY MOTHER'S DAY."MOTHER'S LOVE"

Happy Companies & Happy Work !!

 FMCG major Hindustan Unilever, telecom player Bharti Airtel and state-owned NTPC were adjudged among the best employers in India by leading global human resources management company Aon Hewitt. 

Aon Hewit in its seventh 'Best Employer in India Study 2011', done in partnership with magazine Outlook Business, has listed the country's 25 companies that provide the best working environment for employees. 

Hindustan Unilever is put on top of the list as the best employer, followed by Aditya Birla Group, LG Electronics India , Godrej Consumer Products , Bharti Airtel, NTPC, Becton Dickinson India, Aircel, Wipro and Marriott Hotels India. 

"Best Employers in India represent organisations that have done an outstanding job of aligning people strategy with articulated business strategy. The Best have been able to offer a compelling career proposition to their employees in a high performing work environment that differentiates needs, expectations and drivers of different employee segments," Aon Hewitt India Project Director Rakesh Malik said. 

Wipro Worry About Rising Input cost ..!!

        Wipro's consumer products division will increase prices of its soap brands such as Santoor and Chandrika for the second time this calendar year due to high palm oil prices, a top executive said. 

     The company will increase soap prices by around 5%, Wipro Consumer Care and Lighting President Vineet Agrawal said. He said he did not expect Wipro consumers to opt for cheaper brands after the price increase. Wipro Consumer's sales rose 19% in the quarter ended March despite a 5% increase in soap prices during January-February . 

    Sharp increases in key ingredients such as palm oil and crude oil hit personal care product makers in recent months. "Palm oil prices are still at an all-time high... but I am not expecting a further hike in prices unless crude goes awry," Agrawal said.There was a 10-15% correction in prices in mid-March.

Gilleette, half shave out it's profit !!

   Gillette India net profit down 51.45% at Rs 20.73 crore

Personal care products maker Gillette India Ltd (GIL) posted 51.45 per cent dip in net profit for the third quarter ended March 31 at Rs 20.73 crore on the back of high advertising spends.
In the same period last year, the company's net profit was Rs 42.70 crore, Gillette said in a filing to the Bombay Stock Exchange .


GIL's net sales for the three month period under review, however, grew 18.61 per cent at Rs 263.11 crore compared to Rs 221.81 crore during the quarter ended March 31, 2010.


"There has been a substantial increase in advertising and sales promotion expenses," the filing said.


GIL spent Rs 72.68 crore on advertising and sales promotion during the three months ended March 31, 2011, compared to Rs 42.16 crore in the same period last year.

Marico to invest Rs 37 cr to set up facility in Bangladesh

      Indian personal care products maker Marico today said it will invest up to Rs 37 crore to set up a manufacturing plant in Bangladesh.
"We will be investing 50-60 crore Taka (Rs 30-37 crore) to set up a manufacturing unit here," Marico Ltd Chairman & Managing Director Harsh Mariwala told PTI here.
With this, the total investment of the company in Bangladesh will go up to 100 crore Taka (about Rs 62 crore), he said.
Marico Ltd listed itself in Bangladesh in 2009 and has already invested about 20 crore Taka to acquire two brands and 4 crore Taka to set up a Kaya Skin Care Clinic here. It has one manufacturing plant in the country.

TANG TRYING TO TAG INDIAN MARKET..

Cadbury India, a part of Kraft Foods, today launched its first marketing campaign in India for its global power brand Tang, which is targeted at mothers.  "Findings from our research with mothers and children reveal that a child's day is no different from that of an adult, with the level of activities that they perform. Our campaign focuses on a mother's continuous effort to create a fun and exciting atmosphere to bring out the best in her child," Cadbury India's Director, Powdered Beverages, Gum and Candy, Narayan Sundararaman, said in a press release issued here.  The Tang total video converter (TVC), developed by Bates 141, showcases the innate creativity, talent and enthusiasm in every child, he said. "The launch of this TVC will be supported by a robust marketing campaign, including activations and sampling in urban and semi-urban cities across India. The communications campaign will be also leveraged through digital media," Sundararaman said.

GODREJ NEW TARGET IS MULTINATIONAL COMPANY ACQUISITION!!

Fast moving consumer goods (FMCG) major Godrej Consumer Products Ltd (GCPL) is scouting for further acquisitions in Asia, Africa and South America, said a top company official in Kolkata today. The firm is also planning to introduce some of its acquired overseas brands in India and evaluating a re-entry into air freshners.

“If you ask about our company stand in terms of overseas acquisitions, we are looking at right opportunities in basically three continents — Asia, Africa and South America.

 The categories which we are concentrating are home care, hair care and personal wash,” said Tarun Arora, Executive Vice President (Marketing) of GCPL. The company is also expecting a double-digit growth in its revenue this financial year.

“Moreover, in the domestic market we are looking at more organic growth. Some of our acquired overseas products might be introduced into the Indian market. For example, we might introduce a room refreshner brand Stella of Megasari in India,” he added.

According to reports, the product has 35 per cent marketshare in the $30 million air care category in Indonesia. This will lead to the re-entry of the company into air freshners after it had given the rights of Ambipur brand to Procter & Gamble. Recently, the company had gone for many acquisitions like the Nigerian personal care brand Tura, Indonesia’s household insecticide brand Megasari, and two hair care firms — Issue and Argencos —in Latin America.

 The firm had also bought out its former partner Sara Lee from a joint venture in India. According to sources, overseas operations contribute 35 per cent of the total revenue of GCPL.

“Our growth in India will be based on innovations, relaunching and restaging of our products. Since, soaps, insecticides and hari care constitute 90 per cent of our revenue, our focus will be more on those sectors,” Arora said. Meanwhile, the company has launched a new consumer connect initiative called Godrej Power Play for the Indian Premier League season. 

Relax now, Thanks 2 Kisan

S&P Affirms India's Ratings

Budget impact on FMCG

    Indian FMCG companies have been major beneficiaries of robust consumption demand led by favourable demographics, rising income levels and increased urbanisation. Overall sales growth of the companies has been strong despite continued high food inflation for past several months. The momentum witnessed by the rural economy has also helped to a great extent since rural India forms 40-50% of total FMCG demand. 

However, rising input costs and heightened competition has dented profitability.  Though companies resorted to price hikes, they have been either with a lag or insufficient to cover escalated costs.

While the Union Budget 2011-12 has attempted to pep up demand, it has not addressed concerns of inflation though the Finance Minister expects average inflation to come down in next financial year.

Budget proposals ::  
Proposal: Exemption limit for the general category of individual taxpayers enhanced from Rs 1,60,000 to Rs 1,80,000

Impact: Higher disposable income with consumers

Companies:  Positive for the sector

Proposal: Central excise duty maintained at 10 per cent

  Impact: Amid high inflation levels, not raising excise duty has been welcomed.

Companies: Positive for the sector especially ITC as a single digit excise hike on cigarettes was strongly expected

Proposal: As a step towards roll out of GST, Constitution Amendment Bill to be introduced in this session of Parliament.

Impact: GST on implantation will reduce distribution costs and encourage the organised sector
 

AIRTEL IS ON TOP TOWER AN ACTIVE SUBSCRIBERS LIST

    India’s largest telecom operator, Bharti Airtel, topped the active subscriber base list, with around 91.8 per cent subscribers on its network active.

According to data released by the Telecom Regulatory Authority of India (Trai), only 70.3 per cent of India’s 752 million mobile subscriber base is active, while the rest are not.

On the heels of Bharti is Idea Cellular, which has 90 per cent active subscribers on its network. The country’s second largest telecom operator, Vodafone, however, scored much less with 76 per cent active subscribers.

Mahanagar Telecom Nigam Limited is at the bottom of the list, with 27 per cent active subscribers in CDMA and 35.6 per cent in GSM. The state-owned telco’s active subscribers are lower than that of new entrants like Videocon, which has clocked 37 per cent, Etisalat with 36 per cent, Uninor with 45 per cent and Sistema Shyam with 49 per cent.

Tata Teleservices clocked 49.7 per cent in GSM and 46.5 per cent in CDMA. Bharat Sanchar Nigam Limited scored better than its PSU counterpart, with 57 per cent active subscribers on its network.

The circle-wise number of subscribers who have active connections are highest in Jammu & Kashmir with 81.8 per cent, followed by Assam with 79 per cent and Maharashtra with 77.7 per cent. Mumbai ranked the lowest with 58 per cent, indicating a lot of inactive subscribers in the city. 

Sunil Bharti Mittal, Bharti Airtel & his view on telecom sector

  Bharti Airtel Chairman and Managing Director Sunil Bharti Mittal, in an interview with Surajeet Das Gupta, speaks on a wide range of subjects on the Indian telecom industry, as well as global trends. Excerpts from an interview at the GSMA conference in Barcelona:

 What do you think is your next big area for acquisition? What about the potential in India? 
We are present in 16 out of 38 African states. So, there is a lot of potential there for growth. India will see consolidation, but it does not make sense for two small operators to merge. It also does not make sense for us to go for it, except for spectrum. However, with an open auction possible, it again makes no sense.

  But will data pick up? Do you think you would be at a disadvantage, since firms like Reliance Industries are already in the LTE space with BWA, while you are still in the 3G space?
Our 3G experience shows that the data space is flying. We have four circles in which we have BWA licences and our networks are LTE ready. So, we will launch some services in the end of this year on dongles. Also, all of us will have roaming networks on LTE with other operators and offer services from 2G to LTE. Customers will be using devices which work on various networks. We also expect more auction of 3G and 2G spectrum in the near future.

Is the stagnant revenue in Indian telecom a concern?
Yes, we are worried. We need to be concerned that in the last eight quarters, there has been no revenue growth but minutes of usage have gone up. Surely, there is need for consolidation. And the regulator is saying that we should pay more for spectrum. This will only add to the pressure.

What about regulatory policies on mergers? 
I think we should have a liberal merger and acquisition policy and the transfer of spectrum should be allowed.

Do you think the earlier trend, in which companies fought to get a telecom licence because it was at a premium, is over? 
I think the trend is present all across the world. I see it in Africa, where no one wants to buy the new operators. I see it in Indonesia, where the last two or three licences are finding it difficult to secure buyers.

What about your African Zain operations? 
We are on track, the rebranding is over. IT infrastructure, network and call centre orders have been placed. Also, as the rollout in India has slowed down, most of the companies here are happy that there is work in Africa for the rollout of the network.

In Zambia, you seem to have got into a problem with shareholders on delisting the company (Zain).
Yes, we have 97.7 per cent stake and we wanted to delist. However, some shareholders have objected. We will reapply for the permission to do so again.

Reverse impact on Indian FMCG firm. from Egypt protest ..

India's trade with Egypt stands disrupted and companies such as Dabur and Marico have suspended their operations in the strife-torn African country.

   Ten Indian firms, including Wipro, Ranbaxy, IFFCO, Dabur and Marico, have their wholly-owned subsidiaries in different parts of Egypt.

Two major FMCG companies - Dabur and Marico-- said they have shut down their plants in Egypt temporally, while Emami is keeping a close watch on the situation. 

Personal Care Adds On Top Gear

Toilet soaps, tooth pastes and fairness creams were the most advertised categories under the personal care sector on TV during January-September 2010, and with 30 per cent share of the total ad pie in this sector, Hindustan Unilever was the top advertiser, followed by Reckitt Benckiser and Colgate Palmolive.

The top 10 advertisers contributed to 86 per cent share of the overall personal care/personal hygiene sector TV ad pie during the period.
According to AdEx Analysis of TAM Media Research, in overall TV advertising, this sector witnessed 48 per cent growth during this period, over the corresponding period last year.


This category was followed by the services (30 per cent growth) and food and beverages (18 per cent) sectors, in that order.
During the period, overall TV ad volumes saw growth of 24 per cent over that in January-September 2009, and Hindustan Unilever was among the top 10 advertisers.
In the services sector advertising, which grew by 30 per cent during the period under consideration, DTH providers occupied the first position, with Tata Sky topping the list. Real estate and Internet services sectors were the second and third biggest advertisers in this sector.


The food and beverages sector also grew by 18 per cent, with aerated soft drinks category accounting for the most, followed by milk beverages and chocolates.


Over 65 per cent of the total ad pie in this segment came from the top 10 advertisers. Coca Cola was the top advertiser in this sector, followed by Cadbury India and PepsiCo.