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insert into SearchTable values (115546,116292,'',' NICHE  COMPANIES Emu farming, snake venom, egg powder…  these aren’t mainstream businesses, yet  they work. 12 unique stories  SPECIAL ISSUE  HOT SEAT  PAWAN  GOENKA  Sandip Taware’s  emu farm brought  in Rs 35 lakh of  revenues last year  www. outlookbusiness. com  August 9, 2008 FOR D ECISION M AKERS Rs 15');


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insert into SearchTable values (115551,116297,'',' INSIDE  COVER STORY  August 9, 2008 volume 3 > issue 16  4 Outlook Business > August 9, 2008  DIFFERENT STROKES  46 Expat Services  Global Adjustments is helping expats in  six cities fi nd their feet in India by taking  care of all their needs, from relocation  and housing to basic utilities and  cultural sensitisation  48 Emu Farming  A farm in Maharashtra is rearing emus  and selling them for a tidy profi t,  thanks to the Antipodean bird slowly  making its way into urban India’s kitchens  and menus  50 Parking Solutions  CPS, a Bangalore- based company, sees  a huge business opportunity in an urban  headache— parking. A look at the  company’s innovative parking management  solutions  52 Telecom Technology  Acme Tele Power has quietly built a  business for itself by providing infrastructure  solutions like surge protectors  and electronic power interfaces to wireless  telecom companies  28  34 Egg Alternatives  For those averse to cracking eggs, SKM  Egg Product makes a variety of powders  from eggs that serve as substitutes  36 Snake Venom  It’s dangerous work, but the huge demand  for snake venom, which is used to  develop vaccines, has made snake catching  a lucrative business for NK Singh  40 Media Planning  Tapping into a huge need in the broadcast  and entertainment sector, Media  E2E is providing broadcasters and media  planners a one- stop data solution,  among others, to develop strategies  44 Edible Cutlery  Don’t like doing the dishes? Want to save  on water bills? Well, thanks to BK Environmental  Innovations, you can do just  that— the company makes cutlery that  you can use and then eat  Every day, in every way, some companies and individuals are choosing  to take the road less taken, the path not beaten, and carving a niche for  themselves. We look at 12 such businesses  JAGADEESH NV  R A CHANDROO  PRIYAM DHAR');


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insert into SearchTable values (115553,116299,'',' INSIDE  6 Outlook Business > August 9, 2008  COVER DESIGN: SUMEET GUPTA  COVER PHOTOGRAPH: SOUMIK KAR  LIFE  86 Hey!  Shailendra Singh, Joint Managing  Director of Percept, on how sport has  inspired him to live life kingsize  REGULARS  10 LETTERS  11 MATTER OF FACT  The market may be going through a  bearish phase, but the bulls will return  80 DATA PAGES  88 ADI SAYS  90 REWIND  96 DIVERSIONS  98 DIARY  76 Realignments  It’s a diffi cult time to be a UV manufacturer,  as high oil prices have hit the  entire industry, says Pawan Goenka ,  President, Automotive Sector, M& M  HOT SEAT  TAKE ONE  70 Building A Niche  Niche businesses exist on the fringes,  where it’s diffi cult to gauge what will  be. So, what does it take to convert an  idea into reality? Sashi Chimala  72 Financing A Niche  It is not the ‘ exotic’ nature of the venture  that comes under scrutiny, but the  feasibility of investing in a hitherto untried  model. Kanwaljit Singh  74 Marketing A Niche  Marketing a niche brand is a labour of  love. Niche brands emanate from small  gaps in the market, at times even nongaps.  Harish Bijoor  INSIGHT  business. The fi rm, the only maker of  treatment equipment in India, has eliminated  the need for manual intervention  64 Placement People  Avtar Career Creators has given the careers  of women who have taken a break  from work a new lease of life, and in the  bargain, done well for itself  66 Watersports  Starting out with just Rs 20,000, Punebased  Sunny Watersports has grown  into a Rs 3 crore company by building  kayaks, canoes and rowboats  56 Organic Cotton  Tamil Nadu- based Appachi Cotton has  gone beyond being an ordinary textiles  company by tapping into a growing demand  for organic cotton  60 Sewage Treatment  Thanks to Kam Avida Enviro- Engineers,  sewage treatment is no longer a dirty  12 Warning Signs  The lack of fi scal prudence could see  India downgraded. And, that will hit India  Inc’s ability to borrow externally  14 Downward Spiral  Fannie Mae and Freddie Mac, the biggest  mortgage backers in the US, are in  trouble. The housing crisis may deepen  and last longer than expected  15 Blame Game  The steel industry and the government  have been blaming each other for the  unprecedented spike in steel prices.  But the real issues remain unresolved  16 U- Turn  In the fi rst quarter, two- wheeler companies  revved up production at a faster  pace than sales. Is this foresight or  foolhardiness on their part?  R A CHANDROO  84 Spirits  A beer afi cionado recreates the journey  of the legendary India Pale Ale');


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insert into SearchTable values (115557,116303,'',' MAIL  < What A Man!  CEOs like Rohit Kapoor are a rarity today  ( Whole In One Man) . His success as  the helmsman of EXL Services says a lot  about his leadership skills. Kapoor has  shown us all how discipline and planning  can script success. Way to go!  RC Bhatt  Rourkela  < Judge Not  There were many things I agreed with in  the story on Shanghai ( The Wannabe)  and a few I disagreed with. The writer has  done a good job of highlighting the city’s  many failings. However, I do not believe  our cities have anything to crow about  either. I believe Indian cities need to come  up to some sort of minimum standards,  before we can judge their counterparts.  If not, our own cities will be judged and  found wanting.  Anita Amraopurkar  Pune  < The Flip Side  Your story on nuclear energy ( Time To  Split More Atoms) was thought provoking.  I have some dissensions, though.  True, India faces an energy crunch. But,  this doesn’t mean that the country should  rush to embrace nuclear energy. The  Three Mile Island disaster in the US and  the Chernobyl disaster have shown us  how dangerous this technology can be. To  quote the article: “ We must learn to differentiate  rhetoric from reality.”  Siddharth Thapa  email  < Divorce Ahead  The Congress may have saved its bacon  by somehow enlisting the support of the  Samajwadi Party ( A Marriage Of Convenience ).  But, as the article points out,  it will have to pay a heavy price. Before  long, the government will fi nd it impossible  to acquiesce to the demands made  my Amar Singh and company. And that’s  when this marriage will end in divorce.  The BJP will no doubt get custody of the  baby— the nuclear deal.  Himanshu Upadhyay  Delhi  < Too Optimistic  The changing power dynamics in the ITES  sector— the shift to Europe, in particular—  will surely be a blow for the US market  ( Battleground Europe, July 12 ). But  I must say that in spite of your optimism,  how India’s IT sector fares in this changing  scenario remains to be seen.  Anil Nair  Chennai  < No Laughing Matter  I think Mr Adi is taking the issue of spam  mail ( A Fool And His Money... ) too lightly.  His own article says that many people  have either been kidnapped or murdered  by these scamsters. Death, regardless of  the cause, is not something to be made  light of. I also felt the article was racist,  although in a veiled manner. Kindly advise  him to desist from adopting such a tone.  Govardhan Thackeray  Nagpur  < The Other Side  I enjoyed reading the piece on Bill Gates  ( He’s Clicked Shut Down...). Mr Karnik  has opened my eyes to many sides of Mr  Gates I did not know existed. I used to  think he was just a greedy billionaire.  Sayantanee Ghosh  Chennai  www. outlookbusiness. com  Editor- in- Chief: Vinod Mehta  Publisher: Maheshwer Peri  Editor: Sonal Sachdev  Executive Editor: M Anand  Deputy Editor: Ashish Gupta  FEATURES  Associate Editors: Nandita Datta, Snigdha Sengupta  Senior Assistant Editor: Sudipto Dey  Assistant Editors: Anurag Prasad,  Sebastian PT, Supriya Kurane  Senior Special Correspondent: Dhruv Rathi  Special Correspondents: Ajita Shashidhar,  Kunal N Talgeri, Sriram Srinivasan  Principal Correspondent: Sharada Balasubramanian  Senior Correspondent: Himar Arjun Singh  Correspondent: Rajiv Bhuva  COPY DESK  Associate Editor: Avinash Singh  Associate Copy Editor: Allan Lasrado  Senior Sub- Editors: Irene O’Brien, Navan Ignatius,  Jinoy Jose P  ART  Deputy Art Director: Anshul Sharma  Chief Designer: Sumeet Gupta  Senior Designer: Manish Marwah  Designer: Sanjit Kumar  Illustrator: Arindam Chakraborty  Graphics: Kishore Das  PHOTO  Photo Editor: Vivan Mehra  Senior Photographers: Bhupinder Singh, R A Chandroo  Saptarshi Biswas, Soumik Kar  Photographers: Nilotpal Baruah, Priyam Dhar,  Srikanth Kolari, Vishal Koul  SPECIAL PROJECTS Editor: Naren Karunakaran  ONLINE Editor: Vijay Srinivas  BUSINESS OFFICE  President: Indranil Roy  ADVERTISEMENT  National Manager: Pankaj Jayaswal  Assistant General Manager: Moushumi Banerjee Ghosh,  Kabir Khattar  Regional Managers: Amit Vaz, Sushil Menon  Manager: Praveen Kumar  CIRCULATION  Vice President: Niraj Rawlley  National Heads: Himanshu Pandey ( Business  Development), Alex Joseph ( Retail)  Regional Managers: Anand Shirali ( West),  Arokia Raj ( South), Yogesh Mohan ( North)  Senior Manager: B S Johar  Managers: Basab Ghosh ( East), Mukesh Lakhanpal,  Ramesh, Vinod Joshi  Deputy Manager: Shekhar Suvarna  MARKETING  Head: Roopam Singh  PRODUCTION & SYSTEMS  General Manager: Anup Dwivedi  Assistant General Manager: Rakesh Mishra  Managers: Deshraj Jaswal, Shekhar Pandey, Sanjay Narang  ACCOUNTS  Managers: Chetan Budhiraja, Kuldeep Kothari  ADMINISTRATION  Senior Manager: Rajendra Kurup  Manager: DR Wadhwa  Associate Manager: Bobby Mathews  HEAD OFFICE  AB- 10, Safdarjung Enclave, New Delhi 110 029  Tel: ( 011) 26191421 Fax: ( 011) 43552287  Customer Care: ( 011) 26191091  Other Offi ces: Mumbai: ( 022) 30612222,  Fax: ( 022) 30612233 Kolkata: ( 033) 40085012  Chennai: ( 044) 28582250, 28582251,  Telefax: 28582250 Bangalore: ( 080) 25582806/ 7,  Fax: ( 080) 25582810 Hyde rabad: ( 040) 23375776,  Fax: ( 040) 23375676  Printed and published by Maheshwer Peri on behalf of  Outlook Publishing ( India) Pvt. Ltd. Editor: Sonal Sachdev.  Printed at Infomedia India Limited, A Wing, Ruby House,  J. K. Sawant Marg, Dadar ( West), Mumbai 400028, and  published from AB- 10 Safdarjung Enclave, New Delhi 110029  TALK BACK  Email olb@ outlookindia. com  Mail Editor, Outlook Business,  Nafed House [ 8th fl oor],  Ashram Chowk, New Delhi 110 014,  NCR, INDIA  10 Outlook Business > August 9, 2008  Our cities need sustainable and  eco- friendly traffi c systems, not roads  that invite congestion and chaos. Your  story has done an excellent job of highlighting  this. The government must play  a pivotal role in introducing sustainable  transport in our cities.  Genevieve Mascarenhas | Mumbai');


insert into SearchTable values (115558,116304,'',' 11 Outlook Business > August 9, 2008  MATTER OF FACT  BUY WHEN FEAR  rules. Sell on euphoria.  Th at’s what the wise men  tell you. Th e Sage of Omaha,  Warren Buff ett, outclassed  market returns over  42 years— delivering an average  21% annual return—  by swearing not to deviate from the value  investing philosophy. Naturally, the best  opportunities emerge when no one is buying. Yet, few listen.  My friends in the industry have tagged me a bear. Yes, I was  bearish when the Sensex galloped from 16,000 to 21,000. But  I can’t, despite my so- called bearish instincts, help feel bullish  now. Markets ignore all bad news in times of irrational exuberance,  but pick out scraps of negative news, and discount  each one well ahead of events when fear grips.  Endure The Pain...  A case in point of the market beating ground realities is the  utter disregard of the bulls to the peaking out of business optimism  in the second quarter of 2007 calendar, as shown by  Dun & Bradstreet’s Business Optimism Index ( See graphic:  Confi dence Call). Th e correction of expectations has been  swift and savage. In 2008 too, business optimism has dipped  from 153.7 points in the June quarter to 136.5 points in the  September quarter.  Business optimism tends to lead market trends, and is seen  as a good lead indicator of corporate performance.  If that be the case, performance  will suff er in the coming quarters.  Th e signs are there in the early- bird results.  Th e Indian IT troika is not exactly  confi dence personifi ed. Banks are less  upbeat. Automakers have made no bones  about being under a margin squeeze.  Th e mood has changed. Optimism  has turned to gloom, and the market is  factoring this in— as usual, in multiples.  Oil has eased up, but we are still in the  red zone. Commodity consumers are  still contracting supplies at higher prices  than a year go. Infl ation is near 12%, and  it could trend higher. Th e Wholesale  Price Index ( WPI) has been bumping up  by an average of 0.37% week- on- week  for the past 14 weeks, 0.64% for the past  six. Fortunately, most economists expect  a tempering. Due to the high base of this  year, the WPI number should start to look far less daunting  by the fi rst quarter of next year, even more so by June.  If infl ation drops, the credit tightening could cease, even  reverse. Th at could revive sentiment. Markets in their manicdepressive  mood are likely to over- discount negatives in the  short- term, pulling stocks below fair value. Some might look  expensive on the basis of recent quarter PEs and now expected  growth rates, but wait for the tide to turn— business  to look up— and they’ll look cheap again.  For now, though, Freddie Mac and Fannie Mae show the  sub- prime mess is still around to haunt us. Oil remains dear.  Th e world’s largest economy, the US, is experiencing greater  anxiety. And growth in China, the fastest growing major  economy, is slowing. Liquidity is tightening. Back home, the  prospect of early elections is spooking foreign investors.  If they are early, the immediate impact of political realignments  on sentiment might be greater. Polls won’t reverse industrial  performance or lead to a cancellation of off - shoring  contracts, but horses traded today may dictate policy shift s in  the new dispensation. So, tax exemptions may be scrapped.  Licences issued may acquire a new form. Approvals may be  revoked. Th ese unknowns could change the way P& Ls look  post- election. While we parrot the “ reforms are irreversible”  line, the ground realities don’t bear that out. Steel prices could  now be put in a band. Petroleum products are still pumped  out at regulated prices. Cement and steel makers face export  curbs. Exporters may need to pay for windfalls. Th e markets  are already discounting these possibilities.  ... And Count The Gains  Still, I say, look on the brighter side. Th e Nano will still be  sold. Money will still be borrowed. Airports will still be built.  People will still shop. Maybe a little less,  but they will. Besides, for many Indian  companies, growth will not be constrained  by one’s economy. It will come  from a larger bite of the global pie. Even  the economic wheels will turn faster.  Every market cycle must have a peak  and a trough. We are drawing closer to  the latter. Optimism will come back before  the markets truly fi nd their vigour.  Markets will rebound far ahead of improvement  in earnings. Th at may not be  around the corner. We could drift here  for a while. We won’t see the Sensex at  20,000 in a hurry, but will we go much  below 10,000? Th at’s the question to ask.  If you pick well, this ( sub- 13,000) level  is a good one to start drip investing—  putting your money into the market in  small lots. I’d say it’s a good time for a  long bear hug. <  Hug The Bear  The question to ask is will the Sensex go much below 10,000. The answer: it won’t  SONAL SACHDEV  EDITOR  500  400  300  200  100  0  Confidence Call  The business confidence index is a good lead indicator.  In Q2 of 2007, it called a peak 6 months before the  market did.  Values rebased to 100 Income and net profit of BSE Sensex companies  Source: Dun & Bradstreet, CMIE Prowess, www. bseindia. com  2004 2008  Income Net Profit  D& B Composite Optimism Index  BSE Sensex  2005 2006 2007  We are drawing closer to  a trough. Optimism will  come back before the  markets fi nd their vigour');


insert into SearchTable values (115559,116305,'',' TAKE 1  Th e threat of a rating downgrade could hit  an already slowing economy hard. Th e government  needs to act now to prevent this  INDIA’S FISCAL consolidation has been interrupted by a sharp  increase in subsidies, populist spending ahead of elections and an  increase in the public wage bill. If past reductions in government  debt ratios— still well above rating peer group medians— are de-  fi nitively reversed, the sovereign’s local currency would likely be  downgraded from the current stable outlook.  — Fitch Ratings ( July 15, 2008)  India’s credit profi le has worsened in the past 12 months, but  we believe the upside and downside risks to its BBB- rating are  currently balanced. Th is assumes, however, that the reasons for  credit deterioration are temporary. If we conclude that they are  longer lasting, the ratings on India could be lowered again to  speculative grade.  — Standard and Poor’s ( July 10, 2008)  Diff erent global organisations. Similar gloomy outlook. And  veiled threats of a downgrade. Th e Indian growth story is fast  starting to crumble, as more and more bad news piles up. Although  neither Fitch nor Standard and Poor’s are ready to give  any time- table for the downgrades, the threat, they say, is very  real. A steady deterioration in the country’s  fi scal health because of a combination of  adverse national and international factors  is really at the core of such a decision.  Takahira Ogawa, Primary Credit Analyst  at Standard and Poor’s, explains: “ We  had originally estimated the consolidated  general government defi cit ( including state  government defi cits, oil and fertiliser subsidies,  and other off - balance sheet expenses)  at 6.5% of GDP for 2008- 09. However, with  the impact of additional expenditure such as  farmers’ debt relief, higher oil and fertiliser  prices, and the partial implementation of  the Sixth Pay Commission, we now estimate  the defi cit could exceed 9% of GDP.’’  Th e country’s rating will depend on the  Centre’s ability to manage the fi scal challenges  that threaten to undermine public  fi nance gains in the short run, says Ogawa.  Adds James McCormack, Chief Analyst,  India Sovereign Rating, Fitch Ratings: “ We  expect weaker Indian economic growth, a  more uncertain policy outlook and changes  in global investor risk appetite to result in  lower capital infl ows and revenues in FY09.’’ Fitch has already  lowered its outlook on local currency rating to negative.  Incidentally, any downgrade of its sovereign rating— Fitch  has already changed its outlook— will mean that India will  slip from the investment grade to speculative grade. However,  the more important question is what such a downgrade could  mean for an economy battling high infl ation and interest rates,  and worsening fi scal and current account defi cits.  The Ramifi cations  For a country that borrows from the international market, it  could mean higher borrowing costs because the risk of default  is perceived to be much higher. But it is unlikely to hurt India,  says Arun Kaul, Chief General Manager, Punjab National Bank,  because it rarely borrows from abroad. “ Most of its borrowings  are rupee- denominated, and hence there are few issues of defaulting  on payment obligations,’’ he adds.  But for India Inc, the cost of raising funds  from overseas markets may be much higher.  Reason: corporate ratings are rarely higher  than a country’s sovereign rating. And, with  already tightening rules for ECB ( external  commercial borrowings) and the issuance  of FCCBs ( foreign currency convertible  bonds), it can only complicate matters.  A downgrade could also postpone or even  slow the infl ow of both foreign portfolio and  direct investment in the country because of  a higher risk perception. Th ere are many  overseas insurance and pensions funds that  are mandated to invest only in countries that  have minimum ratings. “ Th ose funds can  dry up,’’ explains Ogawa. So, the fl ood that  was seen in early- 2007 will be reversed in  the event of a downgrade, putting further  pressure on both markets and the balanceof-  payments situation.  Fortunately, it’s early days yet. And if the  government can prevent the slide by taking  some hard decisions on fuel and fertilisers,  the situation can still be reversed. <  — Ashish Gupta  FIRST  Rating Watch  Source: Fitch  AAA  AA+  AA  AAA+  A  ABBB+  BBB  BBB Investment  grade  India''s country rating ( BBB-) was on the edge of  ‘ investment grade’. Now, Fitch has put it on watch,  where a slippage could make it below investment grade.  Below investment grade  BB+  BB  BB Junk  grade  B+  B  B Austria,  Canada, Singapore, Slovenia, US  Czech Republic, Kuwait, Saudi Arabia  Abu Dhabi, Chile, Estonia, Korea, Slovakia  Israel, Poland  Bahrain, China, Hungary, Lithunia  Lesotho, Malaysia, Mexico, Namibia, Serbia  Aruba, El Salvador, Russia, Thailand  Croatia, Kazakhstan, Panama, Tunisia  Brazil, Morocco, Peru  Benin, Columbia, India, Guatemala, Mali  Azerbajian, Costa Rica, Egypt, Phillipines  Armenia, Turkey  Georgia, Indonesia, Jamaica, Kenya, Venezuela  Dominican Republic, Mongolia  Argentina, Mozambique, Nigeria, Uganda  Bolivia, Ecuador, Lebanon, Malawi, Moldova  12 Outlook Business > August 9, 2008  ILLSUTRATION BY ARINADAM  Thumbs Down  To Largesse');


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insert into SearchTable values (115561,116307,'',' 14 Outlook Business > August 9, 2008  TAKE 1  EXECUTIVE DIARY >>> WORLD  THE US economy continues to wobble,  with giant mortgage companies and banks  staggering from one crisis to another. US  fi nancial companies have lost more than  $ 1 trillion in value this year.  On July 7, shares of the country’s two  biggest mortgage backers, Fannie Mae  and Freddie Mac, plunged 40% each to  17- year lows, on concerns that the companies  would need to raise more capital  because of higher- than- expected losses—  $ 11 billion since the credit crisis began. As  home prices continue to decline and loan  defaults mount, analysts worry that they  won’t be able to do so.  Th e two entities play a central role in the  mortgage system by buying mortgages from  banks, and pooling them into securities for  sale to investors. Th is ensures banks don’t  have to wait 30 years to get their money,  thereby freeing them to lend more. Th e  two mortgage backers are able to maintain  a steady supply of money at low cost  by linking mortgage lenders with investors.  Th ey guarantee payment to holders  of securities if borrowers default on their  mortgage payments.  Together, Fannie Mae and Freddie Mac  hold about $ 5.2 trillion of the nation’s  $ 12 trillion of mortgages. Meanwhile, there  are reports that the US government will  take over one or both companies if things  get worse. One thing’s sure: their collapse  would put the already- paralysed US housing  market in serious danger.  Bailout In The Works  Trying to stem eroding investor confi dence,  the Federal Reserve and the Treasury Department  announced plans to lend more  money and potentially buy large chunks of  Fannie Mae and Freddie Mac. Fed Chairman  Ben Bernanke has moved to calm  fi nancial markets by raising the possibility  of extending lending facilities to investment  banks and fl agging off a wider role  in banking regulation.  Any intervention is likely to benefi t bondholders  by strengthening the perception of  government backing of the fi rms. But it  doesn’t look good for  shareholders their  only hope is that it’s  just market panic and  that the two companies  are adequately  capitalised. “ Th e government should back  them, as a failure to do so raises the possibility  of an enormous worldwide fi nancial  crisis,” said Allen Franklin, Professor of  Finance at the Wharton School of Business.  Fannie and Freddie may need a government  bailout that could cost far more  than previous rescues, he added.  Meanwhile, the mortgage crisis claimed  its latest victim in IndyMac Bank, one of the  largest mortgage lenders in the US once.  “ Banks are getting hurt on concerns that  there could be more IndyMacs out there.  Investors are waiting for the haemorrhaging  to stop,” says Art Hogan, Chief Market  Strategist, Jeff ries and Company.  Th ere is a growing consensus among investors  that the slump will last longer, and  could be far worse than anticipated. But  falling oil prices and a stronger dollar could  see things improving. Until then, investors  should probably remember that there is  more to the market than mortgages. <  — Sharmistha Chakraborty  in Washington DC  HOUSE OF CARDS  The slump could last  longer, and be worse  than expected  The US and world economies are feeling the pressure from  the near- collapse of America’s biggest mortgage backers  US HOUSING CRISIS  Pointers To Peril  < General Motors plans  to cut costs by $ 10 bn,  suspend its common  stock dividend for the  fi rst time since 1922  and sell up to $ 4 bn in  assets. Effectively, whitecollar  jobs may be cut  by 20%.  < Citigroup has reported  a $ 2.5 bn  Q2 loss due  to investments  related  to sub- prime  mortgages, and falling  credit card and prime  mortgage portfolios. It  will sell its German retail  banking operations to  France’s Credit Mutuel  for $ 7.7 bn  in cash.  < In response  to Viacom’s  lawsuit, a US court has  ordered Google’s video  arm YouTube to hand  over records detailing its  users’ viewing habits.  < The US lags behind  other industrialised nations  in the quality of  its healthcare despite  having the costliest system  in the world,  notes a report by  the NGO Commonwealth  Fund  Foundation.  < Former Samsung  Chairman Lee  Kun- hee has been found  guilty of evading $ 45  mn in tax.  AP');


insert into SearchTable values (115562,116308,'',' TAKE 1  EXECUTIVE DIARY >>> INDIA  IT WAS hardly the occasion where one expected  to openly witness the simmering differences  between the private sector and the  government. But the Indian Steel Conclave  2008, hosted by the Federation of Indian  Chambers of Commerce and Industry in  Delhi on July 16, saw sparks fl y.  Irked by the constant carping— especially  by end- user industries and a government  fi ghting infl ation— that it was the greed of  steel companies that was responsible for the  steep increase in steel prices, B Muthuraman,  Managing Director, Tata Steel, fi red  the fi rst salvo: “ In the last few months, while  the steel industry was playing a positive  role, no positive response came from steel  consuming countries or the government.’’  To buttress his argument, he said even today,  domestic steel prices were Rs 10,000-  15,000 per tonne lower than global rates,  adding that Indian fi rms had promised to  freeze prices for three months from May. He  blamed the rise in steel prices on high input  costs, with coke prices quadrupling, scrap  going up 2.5 times, and iron ore and ocean  freight more than doubling last year. And, he  concluded, unless end- user  industries that had raised  their prices in a ratio disproportionate  to steel prices  also chipped in, infl ation  could not be contained.  Th e Centre, Muthuraman  said, could do its  bit by cutting excise duty  rates since high steel prices  have already doubled  its revenues in the past two years. He also  charged the Centre with favouring foreign  players by allowing them to export steel at  much higher prices to meet unmet demand,  while keeping domestic prices low.  The Core Of The Coil  But the real issue of raising steel production—  by 500 mt per capita in the next 30 to  40 years— was lost in the debate. Th e issues  of land acquisition, raw material supplies,  port and railway infrastructure were also ignored.  If that doesn’t happen, India’s growth  could be hurt, Muthuraman warned.  However, RS Pandey, Secretary, Ministry  of Steel, said it was not fair for Indian steel  companies to benchmark their prices to  global ones, as about 44% of the iron ore  need was made available by the government  through captive mines. “ For those who  sourced from captive mines, iron ore costs  were just 5% of the total cost of production,’’  adds Pandey. He says that because of the  government’s decision to lower excise duty  from 16% to 14%, and cut import duties  on coke, zinc, and ferro alloys, companies  were saving some Rs 2,000 per tonne. So,  they had little to complain.  Minister of Steel, Chemicals and Mines,  Ram Vilas Paswan, heated the debate further  by alleging that big steel majors ( he  mentioned Tatas and Mittals) were deliberately  keeping prices high by not raising  production to the maximum. “ How can  companies register higher profi ts when  input prices have gone up?’’ he asked, adding  that EBIDTA margins  for most fi rms were above  20% even in June this year.  He said the private sector  needed to make moderate  profi ts and keep a certain  percentage of profi ts for  corporate social responsibility.  Th e problem of land  acquisition stemmed from  the fact that most companies  left tribals and farmers high and dry  once they got the land. “ So get back their  confi dence,’’ he added. Clearly, the battle  lines have been drawn. <  — Ashish Gupta  While steel manufacturers and the Centre play the blame  game on prices, a slew of pressing issues remain unresolved  STEEL PRICES Beyond The Din  Outlook Business > August 9, 2008 15  The Steel Ministry  feels it is not fair  for Indian steel  companies to  benchmark their  prices to global ones  SHAKY: All smiles at fi rst, Paswan and  Muthuraman later traded charges  < Anil Ambani’s Reliance  Communications  and MTN have called off  merger talks, a day after  brother Mukesh’s Reliance  Industries initiated  arbitration against RCom  over the fi rst right of refusal  for its shares.  < The government will  release annual wholesale  price infl ation data  every Thursday at 5: 30  pm, instead of Friday,  to check leakage of the  sensitive data before its  offi cial release.  < Ending 17 years of  unregulated growth, the  government will make  it mandatory for cable  operators to get a fi veyear  licence by paying  an entry fee. There are  60,000 operators servicing  about 80 mn homes.  < HDFC has said it  might raise lending rates  further if the RBI hikes  key policy rates in the  forthcoming monetary  policy review on July 29.  < SpiceJet has accepted  US- based fi rm WL Ross’  offer to infuse $ 80 mn  in tranches in the cashstrapped  airline.  FICCI');


insert into SearchTable values (115563,116309,'',' 16 Outlook Business > August 9, 2008  TAKE 1  You’ve caused us substantial harm  AAA Communications, the Anil Ambani company that  holds 63% in RCom, to RIL >>>  You took my  MTN away  THE OTHER HEADLINE >>>  AFTER TWO successive poor years, twowheeler  manufacturers are sensing a Uturn  in fortunes. Th eir numbers for the  fi rst quarter of 2008- 09 and their plans  certainly suggest so. In Q1 ( April to June),  production of two- wheelers increased by  9.9% over the corresponding period of the  last fi scal. Although sales grew at a comparatively  slower rate of 7%, that too on a  smaller base, the indicator is that OEMs  are eyeing a comeback. Th eir saviour: soaring  fuel prices.  In these infl ationary times, the greater fuel  effi ciency and lower running costs of twowheelers  make a greater impression on the  Indian commuter’s mind. Says HS Goindi,  Head of Sales, Services &  Marketing, TVS Motor:  “ Operating costs of a twowheeler  are lower. If fuel  prices increase further,  two- wheeler sales will  defi nitely exceed the expected  10% increase.”  In Q1, Hero Honda  has shown the highest  increase in motorcycle  sales, of 11.6%. By comparison,  growth has been  pedestrian at Bajaj, while  TVS saw a decline. Still, all  three companies are revving  up production.  At the beginning of the  fi scal, Bajaj Auto Managing Director Rajiv  Bajaj reiterated the value of focusing  on the above- 125 cc category for better  profi tability. Th is segment is not as pricesensitive  as the sub- 125 cc category, and its  buyers are better placed to  cope with tight fi nancing  conditions it also grew a  robust 16% in FY2008.  Bajaj has four motorcycle  launches planned in  this category. “ We will  step up production in the  second half of this year,”  says Amit Nandi, General  Manager for Marketing,  Bajaj Auto.  Meanwhile, TVS Motor  has increased production  of mopeds marginally, by  5% to 102,000 units, while  maintaining scooters output  at 50,000 units. “ With the bikes, our  portfolio is now complete. We have a distribution  network. All put together, it should  help us,” says Goindi. For the next fi scal,  TVS has outsourced production of around  100,000 motorcycles to Kolkata- based Mahabharat  Motors Manufacturing. By doing  so, it will be ready for an uptrend in  demand without having to invest in additional  capacity to that extent.  Th ese manufacturing plans are a far cry  from last year, when production fell 5%, the  motorcycles segment 9%. In this backdrop,  the Q1 numbers are heartening. Still, inventories  ( unsold units) will pose a worry.  It is something Bajaj Auto is steering clear  of. “ For us, production will always follow  sales,” says Nandi. Motorcycle inventories  have hit 240,000 units this fi scal, compared  to 160,000 units in the fi rst quarter of FY08.  Th e rise in production on the back of negative  growth last fi scal is a gamble, but it may  pay off if fuel prices stay high. <  — Kunal N Talgeri  With fuel prices rising, twowheeler  manufacturers are  ready to stage a comeback in  the domestic market  ROLL OUT: In Q1, the motorcycle output  of two- wheeler companies rose 10- 17%  Change in Q1 of 2008- 09 over Q1 of 2007- 08 Figures  for companies are for motorcycles  Bajaj Auto  Hero Honda Motors  TVS Motor Company  TOTAL Motorcycles  TOTAL Two- wheelers  2.3  11.6  - 1.4  8.0  7.2  Sales  10.7  11.2  16.8  12.4  9.9  Production  On The Road Again  Inventory addition ( production minus sales) in the first  quarter Source: SIAM  2006- 07  2007- 08  2008- 09  153,730  165,828  228,637  Readying For The Pick Up?  Motorcycles  155,541  159,419  240,124  2- wheelers  SAPTARSHI BISWAS  TWO- WHEELERS  The Gamble For  Recovery');


insert into SearchTable values (115564,116310,'','');


insert into SearchTable values (115565,116311,'',' Outlook Business > August 9, 2008  TAKE 1  PHARMA  Courting  Trouble  Again  A US drug regulator case  against Ranbaxy resurfaces  to haunt the company. And  any resolution could take a  long time coming  THE US FDA- Ranbaxy issue just got murkier.  What seemed to be a dispute between  the parties concerned ( the case apparently  dates back to 2006) now involves the Department  of Justice ( DoJ) and the US Congress.  “ With so many parties involved now,  I don’t see any early resolution— the case  seems headed for a long- drawn battle,” says  Ranjit Kapadia, Head ( Research) PCG, at  brokerage fi rm Prabhudas Lilladher.  Th ere are four allegations levelled against  Ranbaxy: using unapproved API ( the key  ingredient in a drug), blending unapproved  API with an approved material, manufacturing  the API in an unapproved facility,  and manipulating bio- equivalence data  and stability data to support its generic  drug applications. If any of these are proved  and the company is found  guilty, both the FDA and  the court will together decide  on the necessary action.  Kapadia says this may  involve revoking the plant  licence, a penalty, or even  total suspension of exports  from India. At $ 390 million,  Ranbaxy’s US sales  accounted for 24% of its  total revenues in fi scal 2007, and an adverse  decision is sure to hit it hard.  Ranbaxy, however, refutes any wrongdoing,  saying it’s business as usual in the  US. Th e company, in a statement issued on  July 14, states: “ We strongly deny the allegations  contained in the motion fi led ( but  not granted) by DoJ, seeking certain documents.  No legal proceedings in the sense  of a prosecution have been initiated. Th e  company continues to cooperate with DoJ,  and has agreed to produce the documents  sought by the motion.” Th e documents in  question relate to an audit report prepared  by Parexel Consulting for Ranbaxy following  FDA concerns regarding the Ponta Sahib  manufacturing facility in 2006. Pharma  analysts say Ranbaxy had made several  improvements based on Parexel’s report.  But DOJ claims it has been selective in  sharing Parexel’s reports— by only sharing  parts that suit the company’s interests. Th e  company has denied this charge.  Dark Cloud  Some pharma analysts feel Ranbaxy is  on a weak footing. “ Unless the FDA had  defi nite evidence, it would not have taken  legal recourse— always the last option in  any dispute,” says an equity  analyst. Although it’s unlikely  that retail chains in  the US will stop stocking  Ranbaxy’s products, industry  insiders say some consumers  may look at these  products suspiciously.  “ Until the case is resolved,  the comfort factor will be  missing. But will this impact  Ranbaxy in the short- term? It’s premature  to take a call on this,” says another  analyst. Marketmen also rubbish recent  claims by the company that an MNC and  a large Indian fi rm are behind the whole  issue. Th ey say the dispute has been on for  a long time, so making such accusations  now seems somewhat strange. Ranbaxy  has so far not furnished any proof in support  of its claim. <  — Nandita Datta  If found guilty,  Ranbaxy may have  to stop exports from  the plant or pay up  worst- case scenario,  stop exports to the US  Exorcising The  Evil Ring  18  If a new proposal before TRAI  has its way, all pesky telemarketing  calls will vanish soon  TELECOM  THE TELECOM Regulatory Authority  of India ( TRAI) is considering a new  suggestion on how to end pesky calls  and text messages phone users have  to endure. This proposal entails having  a database of people who are willing  to receive marketing calls. The current  method assumes that the majority of  users are comfortable with unsolicited  commercial calls ( UCC), and only those  with numbers on the National Do Not  Call ( NDNC) list are averse to getting  such calls.  If approved, the idea would  turn the NDNC system on  its head, and assume that  no user wants to receive  UCCs other than those on  the ‘ positive list’ of people  willing to receive them.  This would virtually put  an end to telemarketing,  as there would be few  numbers that marketers  can call.  Although this plan  favours consumers  immensely, it would  decrease operator  revenues signifi cantly.  This loss of revenue  has been one of  the major considerations  preventing harsh punitive action  against violators. And that’s why some  operators have been shying away from  tackling unregistered telemarketers.  Interestingly, telecom subscribers who  wanted to get on the NDNC list found  the process cumbersome and tailored  to delay resolution of complaints. The  penalty for violators is paltry, as compared  to that imposed in countries like  the US. Last year alone, a Federal Trade  Commission report says, 22 violations of  the DNC registry drew penalties of about  $ 17.1 million. Though there are no precedents  for the latest idea, it could well  be one of the many fi rsts for the Indian  telecom sector. <  — Anurag Prasad');


insert into SearchTable values (115566,116312,'','');


insert into SearchTable values (115567,116313,'',' 20 Outlook Business > August 9, 2008  TAKE 1  MANY WOULD recall Rajeev Bakshi as  the more- than- usual public face of Pepsi  India in mid- 2006, when the cola giant  ( and archrival Coca- Cola India) faced allegations  of pesticide adulteration. As Pepsi  India Chairman at the time, Bakshi reached  the public via a TV ad to vouch for the  safety of his company’s product. Today,  as Joint Managing Director of Mumbaibased  private equity fi rm ICICI Venture  Funds, Bakshi plays the role of a behindthe-  scenes strategist— a role the understated  consumer industry veteran prefers to his  earlier public persona.  Th is March, when Bakshi  joined ICICI Venture, the  country’s largest homegrown  PE fi rm, it signalled an important  shift in its business dynamics.  Over the next three years,  ICICI Venture aims to grow  from $ 2.5 billion funds under  management to $ 10 billion.  Th is will set the base for it to  reposition itself as a full- fl edged alternative  assets investor. Bakshi’s job is to build  capabilities to manage that growth. “ Th e  maturity of a team managing a Rs 1,000  crore company is very diff erent from one  managing a Rs 300 crore company. As we  grow, our deals will become bigger, as also  the size of companies we invest in. General  fi nancial skills are not enough, you need  operations skills too. Th at’s where people  like me come in,” said Bakshi in an interview  to Outlook Business last month.  Taking It Up  As second- in- command to MD and CEO  Renuka Ramnath, most of the fi rm’s PE  investment team reports to him. He also  focuses on the real estate investment practice,  a new business area for the fi rm. Th is  practice is currently raising a $ 1.1 billion  fund, among the largest raised in India so  far. Th at apart, Bakshi is also guiding ICICI  Venture’s international foray. He mentors a  three- member team that is being incubated  and will eventually become its engine for  overseas investments.  With the huge fund- raising  exercise underway, ICICI Venture  will have greater currency  to do buyouts. Bakshi expects  deal sizes to get bigger due to  spin- outs and carve- outs ( subcategories  in buyouts). “ In the  last 6- 7 years, most industrial  houses have gone back to the  conglomerate approach. At  some point, they will want to  realise value from these non- core businesses,”  he says. Buyouts imply taking majority  control, and Bakshi’s operations skills will  be critical to ICICI Venture establishing its  credentials in the segment.  If that looks like too much on his plate,  Bakshi is not complaining. “ I need excitement  and adventure every fi ve years,” he  says. Th ere will be plenty of that, and some  more, at India’s most aggressive and ambitious  PE fi rm. <  — Snigdha Sengupta  Pepsi’s former public face is now a behind- the- scenes strategist  at ICICI Venture. He digs his new persona— and role  PRIME MOVER > RAJEEV BAKSHI  The  Invisible  Power  Bakshi joining  ICICI Venture  has signalled a  key shift in the  fi rm’s business  dynamics  SOUMIK KAR  It’s tough to convince  people in this  materialistic age that  you’d do something  without give and take  — AMAR SINGH  General Secretary, Samajwadi Party ,  calling on the government to impose taxes  on big oil companies  There will be no deal if we  don’t get what we want.  Coalitions like G- 20 or the  Nama- 11 are intact. We have  the option to walk out  — KAMAL NATH  Commerce Minister on India exiting the Doha  Round if its concerns in agriculture are ignored  TOUGH TALK >  If, after seven years, you  can’t complete a trade round,  what does that say for your  prospects of reaching a deal  on climate change?  — PETER MANDELSON  EU Trade Commissioner on talks to liberalise  global trade and climate change issues  ALARM CALL>  Economists are  pessimists: they have  predicted eight of the last  three depressions  — BARRY ASMUS  American business thinker  WORDS WORTH>  POLITRICKS >');


insert into SearchTable values (115568,116314,'','');


insert into SearchTable values (115569,116315,'',' THE PAST week was witness to twists and  turns worthy of a political thriller. While it  made for intriguing viewing, unfortunately,  lost amid the din, mud- slinging, wads of  thousand- rupee notes and conspiracy theories  is the ramifications on governance and  policymaking for this government.  As with all coalitions, the tugs and pressures  will be different now. The Left pulled  the United Progressive Alliance ( UPA) coalition  in one direction. The rag- tag bunch  replacing the Left will have their own agendas,  and the PM will have to show deft  political skills to handle the demands of  its new crucial supporters ( such as the SP  and the JMM), and, in an intriguing subplot,  the conflicting interests of the Ambani  brothers.  Polls First  “ We now have a more confident PM and a  more confident UPA chairperson to implement  the Common Minimum Programme,”  Congress General Secretary Digvijay Singh  said after the July 22 trust vote.  However, bold moves on economic reforms  might stem more from hope than  from realism. The nuclear deal will go  through the various stages of IAEA, NSG,  US Congress approval and Indian Parliament.  However, the immediate priority of  the Congress would be to control inflation  with an eye on the assembly polls, likely  in November, in Rajasthan, Chhattisgarh  and Madhya Pradesh ( all BJP ruled) and  Delhi ( Congress ruled). Although there is  speculation of general elections being held  simultaneously, political pundits say doing  so without reining in inflation could spell  doom for the Congress at the hustings.  On other crucial reforms, Finance Minister  P Chidambaram, even before the trust  vote, prodded the BJP to support key fi-  nancial sector reforms the Left had blocked  in pensions, banking, insurance and disinvestment,  among others. Says VK Malhotra,  BJP’s deputy leader in the Lok Sabha:  “ We will not oppose the financial reforms  that were initiated by the Vajpayee government.  This is also true for disinvestmentsin  some cases.”  However, Jagadish Shettigar, Economic  Advisor to the Vajpayee government,  TAKE 1  The government gets a new  lease of life. But it’s naive to  expect the same for reforms  .. ..  advises reining in the optimism. “ The UPA  government has freed itself of the grip of  the Left parties. But remember, no government  goes for these ‘ so- called good policies  or reforms’ during its last leg. This is  the time to balance economic rationality  with political compulsions.” Even the ND E A  government had to make some rollbacks  such as the fertiliser subsidy rationalisation  during its last leg, says Shettigar.  From the daggers drawn by the Left and  other opposition parties, the next few  months will see the government push populist  measures. The focus, UPA insiders say,  will shift to implementing key programmes  and communicating to the people the incumbent  government’s achievements. That  will likely leave little time for much more  other than inflation fighting and minor  tinkering, say a section of political analysts.  We hope they are wrong. ..  — Sebastian PT  Outlook Business > August 9, 2008  V FOR VOTES: With state polls looming,  the PM’s focus will be to check inflation  AP  POLITICS  From One  Extreme To  Another');


insert into SearchTable values (115570,116316,'','');


insert into SearchTable values (115571,116317,'',' Outlook Business > August 9, 2008  TAKE 1  CHANGING STAKES  Big Deals Two cracker transactions materialised in June: $ 2.4 billion  Daiichi- Ranbaxy and $ 675 million Idea- Spice  Mergers And Acquisitions  Total  2007  Jun  2008  Jan- Jun  2008  Jan- Jun  2007  Total  2007  Deals  Jun  2008  Jan- Jun  2008  Jan- Jun  2007  Value ($ billion)  Acquirer Target Sector Deal  Acquirer Target Sector Deal  Anheuser- Busch Cos  Renold  Link Group  SQS Software Quality Sys.  Secude AG  Aegis Media  LexisNexis Butterworths  Thermo Fisher Scientific  Aran World Inc  Daiichi Sankyo  Sistema JSFC  Expedia Inc  Crown Beers India  LG Balakrishnan & Bros  Intime Spectrum Registry  VeriSoft InfoSystems/ Ser.  Altrion Technologies  Communicate2  Wadhwa Nagpur  Chemito Technologies 12  KitchenWorld India  Ranbaxy Laboratories  Shyam Telelink  TravelGuru. com  Breweries  Engineering  Financial ser.  IT/ ITES  IT/ ITES  IT/ ITES  Media  Others  Others  Pharma  Telecom  Tourism  S ( 50%)  S ( 75%, $ 15.88 mn)  S  S ( 75%, $ 2.63 mn)  A  S  M  A  S ( 49%)  S ( 35%, $ 2.4 bn)  S ( 22.7%)  S ($ 17 mn)  1 Bought from Fedders International 2 Bought from Punj Lloyd 3 Sri Adhikari Brothers'' companies 4 Through arm  Zeppelin Mobile Systems 5 Network services and tower manufacturing businesses 6 Bought from Mcorpglobal  Communications 7 Subsidiary of United Phosphorous 8 Bought from Areva 9 Bought from AIG Highstar Capital II  10 Bought from Eskom Holdings and Transnet 11 Polyester manufacturing facility in North Carolina 12 Analytical  technologies and environment instrumentation divisions A: Acquisition S: Stake purchase M: Merger  Limagrain ( sunflower seeds)  Engines Engineering SpA  Schenk Plastic Solutions  Societe Nouvelle de Main.  Technodyne International  Sadelmi Spa  Franco Tosi Meccanica Spa  Thamina Diamonds Int.  Openbit OY  Indigita  Hofmann Ceramic GmbH  Hofmann OHG  Ocean Bright Corporation  Simayla Pharmaceuticals  Synovics Pharmaceuticals  REpower Systems AG  InterGen NV  Telesuprecon  Neotel  Unifi Kinston 11  A  A  A  A ($ 1.9 mn)  S ( 74%)  S ( 50%, $ 10.95 mn)  S ( 75%, $ 58.4 mn)  S ( 50%)  S ( 85%, $ 15.8 mn)  A  S ( 96%, $ 10.22 mn)  A  S ( 74%)  S ( 70%)  S ( 51%)  S ( 30%, $ 690 mn)  ( 50%, $ 1.1 bn)  S ( 51%)  S ( 30%)  A ($ 12.2 mn)  Agro  Automotive  Automotive  Electricals  Engineering  Engineering  Engineering  Gems  IT/ ITES  IT/ ITES  Manufacturing  Manufacturing  Mining  Pharma  Pharma  Power  Power  Telecom  Telecom  Textiles  Gemini Communication  Voltas 1  Oscar Investments  Gitanjali Gems  Gitanjali Gems  3i Infotech  Spanco Tele., Shyam Tele. 2  ICRA Techno Analytics  Rediff. com India  Titagarh Wagons  HDIL  HDIL  HDIL  Indus Networks  Digicable Network  Exide Industries  Arch Pharmalabs  Welspun Power  Sintex Industries 4  Idea Cellular 6  Veeras Infotek  Universal Comfort Products  ANR Securities  Fantasy Diamond Cuts .  Cria Jewellery  Fineng Solutions .  Spectranet  Axiom Technologies  Vakow. com.  Greysham & Co  Broadcast Initiative 3  Sri Adhikari Bros Media 3  Technocraft Media 3  Monica Broadcasting  CableComm Services  Leadage Alloys India  Benzochem Lifesciences  Vikram Ispat ( Grasim arm)  Digvijay Communication 5  Spice Communications  Electricals  Electricals  Fin. services  Gems  Gems  IT/ ITES  IT/ ITES  IT/ ITES  IT/ ITES  Manufacturing  Media  Media  Media  Media  Media  Metals  Pharma  Steel  Telecom  Telecom  S ( 51%, $ 1.75 mn)  S ( 50%, $ 0.78 mn)  A ($ 0.09 mn)  S  S ( 0.20%)  S ( 51%)  A ($ 31.25 mn)  A  S  S ( 50%, $ 1.88 mn)  S ( 51%)  S ( 51%)  S ( 51%)  S  S ( 51%)  S ( 51%, $ 8.75 mn)  S ( 70%, $ 25 mn)  A ($ 257.5 mn)  A ($ 13.5 mn)  S ( 41%, $ 675 mn)  Cross border ( Inbound): 12 deals, $ 2.44 billion  Cross- border ( Outbound): 19 deals, $ 1.90 billion  Domestic deals: 20 deals, $ 1.01 billion  Advanta India 7  Mahindra & Mahindra  Ashok Minda Group  Crompton Greaves  Punj Lloyd  Gammon India  Gammon India  Shyam Star Gems  Tanla Solutions  Moschip Semiconductor Tech.  IFGL Refractories  IFGL Refractories  Sadbhav Eng. ( through arm)  Cadila Healthcare  Maneesh Pharmaceuticals  Suzlon Energy 8  GMR Infrastructure 9  Sujana Towers  Tata Communications 10  Reliance Ind. ( through arm)  51  265  335  676  5.35  18.54  43.97  51.11  Private Equity  Deals Value  ($ billion)  Phi Advisors  Golboot Holdings 1  India Business Excellence Fund  Axis Private Equity  Goldman Sachs Group  UTI Ventures  Motilal Oswal VC Advisors  Mahindra First Choice  Mahindra and Mahindra  Dixon Technologies India  Corrtech International  Sterling and Wilson  Deepak Cables  Parag Milk Foods  Automotive  Automotive  Electricals  Engineering  Engineering  Engineering  FMCG  10  3.7  NA  NA  NA  NA  NA  Investor Investee Sector Stake  20.0  175.0  10.0  16.8  50.0  20.0  15.0  Axis Private Equity  Kleiner Perkins Caufield… 2  Bennett, Coleman & Co.  Sequoia Capital  Intel Capital  ICICI Venture Funds Mgmt  JP Morgan Global Sp. Opp.  Warburg Pincus  DE Shaw & Co  Acumen Fund  Frontline Strategy''s India Ind.  Lehman Brothers RE Partners  Axis Bank  IDFC Private Equity- II  Kubera Cross- Border Fund  Sequoia Capital India… 5  GIC Special Investments 6  Neesa Leisure  PayMate  Culture Holidays 3  SatNav Technologies  Vriti Infocom  PVR Pictures  PVR Pictures  Laqshya Media  International Amusement  Kerala First Health Ser.  Shriram SEPL Composites  Unitech- Western Expressway  Lavasa Corporation 4  Seaways Shipping  Essel Shyam Comm.  Genesis Colors  Reid & Taylor India  Hospitality  IT/ ITES  IT/ ITES  IT/ ITES  IT/ ITES  Media  Media  Media  Others  Pharma  Plastics  Real estate  Real estate  Shipping  Telecom  Textiles  Textiles  NA  NA  NA  NA  NA  20  20  15  NA  NA  26  50  2.5  22  NA  18- 20  25.4  Investor Investee Sector Stake  18.8  9.6  N. A.  7.0  2.5  15.0  15.0  69.0  157.5  1.1  N. A.  185.0  62.5  30.0  22.0  27.5  225.0  Value  Value  1 Unit of Goldman Sachs Group 2 Mayfield Advisors ( through Mayfield Fund) and Sherpalo Ventures 3 Holding  company of Travelchacha. com 4 Subsidiary of Hindustan Construction Company 5 Mayfield Fund and Silicon Valley  Bank 6 Bought from S Kumars Nationwide Ltd Stake in % Value in $ million  Total  2007  Jun  2008  Jan- Jun  2008  Jan- Jun  2007  1.15  7.54 6.77  19.03  Jun  2008  Jan- Jun  2008  Jan- Jun  2007  Total  2007  24  194 195  405  24  GRAPHICS BY KISHORE DAS  Source: Grant Thornton  Disclaimer: This summary has been prepared from various public sources. The above information is believed to be  correct, but Grant Thornton is not responsible for any errors or decisions made by readers based on this information.');


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insert into SearchTable values (115573,116319,'',' 26 Outlook Business > August 9, 2008  TAKE 1  DEEP POCKET GO FIGURE  VENTURE CAPITAL investing in the  US may be headed for a slowdown, but in  India, it may bring glad tidings. At  Proto. in, a recent startup showcase in Delhi  where 16 startups showcased their ideas,  venture capitalists came away impressed  with the range and quality on display.  “ It’s a diffi cult time for startups looking to  raise funds in the US, and some of that may  rub- off in India. But it’s not in evidence yet.  In fact, more startups could get funded than  usual because of better quality companies  entering the market,” said Rahul Khanna,  Director, Clearstone Venture Partners on  the sidelines of the event. A downturn is  also imminent in the Indian market, but  this will mean that companies will try to  build more value into business ideas, leading  to better quality deals, he added.  Internet startups, the Web 2.0 kind, dominated  this edition of Proto as well, but the  other hyped segment, mobile value- added  services ( VAS), was less in evidence. Mobile  VAS was among the highest venture  funded sectors last year, and there seems  to be some cooling off for the moment.  Th e mix of Internet fi rms touched upon  areas such as online shopping, including on  online grocery shopping ( Storrz), a one- toone  bargaining platform ( LootStreet) and a  business- to- business e- recruitment portal  ( Th eHiringTool) among others. A refreshing,  though sole, fi rm in the fi nal line- up  was Ferox Foods, which makes popcorn  and cornfl akes using a healthier substitute  called ‘ makhana’ ( fox nut), from the seeds  of Euryale, a plant grown in Bihar.  Proto. in was set up by a group of entrepreneurs,  technology enthusiasts and  bloggers as an independent platform to  promote startups. It is organised by Chennai-  based Th e Knowledge Foundation.  In just its fourth edition and in less than  two years since its launch in January 2007,  Proto. in has gone national, with the objective  of infusing depth and diversity in the  ideas, quality and range of startups covered.  Th e plan seems to have worked: more than  400 people turned up, among them a delegation  of about 30 venture capitalists and  a large contingent of startups.  Th e Foundation has started broadening  the scope of its activities to startup recruitment  camps— branded Startup Lunch—  held across India. “ For seed investors, it’s a  good place to tap into emerging ideas, even  if most of them don’t get funded. Th ere are  quite a few interesting companies around  this time,” said Anand Lunia, Chief Financial  Offi cer, Seedfund. Keeping with the  national theme, the bi- annual event will  go to Bangalore next, then to Mumbai.  “ Th en, it will go global,” says Vijay Anand,  key architect of the platform. <  — Snigdha Sengupta  3.3 LAKH METRIC TONNES Amount of e- waste  generated by India annually another 50,000 mt is imported,  says a MAIT- GTZ e- waste assessment study  23% Rise in paddy sowing in the ongoing  Kharif season, from 12.1 million hectares last year to  14.9 million hectares so far this year  42 Ranking of the US in life expectancy, according  to the American Human Development Report, despite  having the second- highest per capita income globally  VENTURE CAPITAL  Promising Starts  Hand it to the tighter market: the range and quality of startups  looking for seed funding is getting better  FLASHING: Internet startups, the Web  2.0 kind, were prominent at the event  VIVEK THAKKAR');


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insert into SearchTable values (115575,116321,'',' Outlook Business > August 9, 2008 NICHE OVERVIEW  28');


insert into SearchTable values (115576,116322,'',' Outlook Business > August 9, 2008  CHARTING A  DIFFERENT  COURSE  They’re lateral thinkers, and  their thinking has led them  to set up businesses that are  not quite in the usual mould  those who carve out speciality products or services  for narrow, discrete audiences, and examine  them separately? Are they a breed apart?  In a way, they are. Th e products and services  cache engendered by an eclectic band of niche  businesses are indeed fascinating. Th ough they  may function with certain intrinsic advantages—  little or limited competition, a degree of pricing  fl exibility and reasonably good margins— their  stories, the quirks, the turns, the unique challenges  are compelling.  It can also be argued that niche entrepreneurs,  with their proclivity to push unknown, risky frontiers,  possess more than the usual entrepreneurial  doses of spunk, ingenuity and determination.  Look at the belligerence with which a ragtag  bunch of egg- powder producers took on the  mighty European Union ( EU) bureaucracy, early  this decade, as it attempted to asphyxiate them  by raising numerous non- tariff barriers— from  invoking sanitary and phyto- sanitary ( SPS) norms  to changing adherence goal posts frequently.  And these are not well- endowed large corporations,  but small Indian enterprises, operating  out of small towns. Erode, in Tamil Nadu, for  instance. SKM Egg Product Exports, following  29  ILLUSTRATION BY ARINDAM  Naren Karunakaran T HEY HAVE AN  appetite for risk  and are innovative.  Well, aren’t these  the quintessential  attributes of entrepreneurs  of all hues? Why, then,  single out niche entrepreneurs—');


insert into SearchTable values (115577,116323,'',' Outlook Business > August 9, 2008  European skirmishes, is a battle- scarred but  respected leader. While some niche players,  like Media E2E, Avtar Career Creators,  Global Adjustments and Central Parking  Services, have been quick to tap into welcoming  new opportunities thrown up by  a reforming and growing Indian economy,  others have had to undergo the excruciating  pain of expending years in ‘ concept selling’,  of creating and developing new markets,  before dominating them. Manohar Krishna  of KAM- Avida had to, with his mechanised  sewer cleaning systems.  Th eir appetite for risk is also high. Why  then would BS Bhandarkar of Classicraft  Marine Works in Mumbai try to resurrect  a Chinese junk, one of the most successful  ships in history, for a German client?  Unfortunately, the German company,  which wants to fl oat the 162- foot- long ship  as a luxury cruise vessel for the well- heeled,  has reneged on payments. Consequently,  the shipbuilder, with many innovations  in his boatyard, including fl oating jetties,  is in a tempestuous mood, and reluctant  to speak of his tribulations. He is incurring  a dead expenditure of Rs 1 lakh every  month. But, he hopes to catch the elusive  wind in his sails.  In the same mould is Narayana Peesapaty  in Hyderabad, who rendered his family  homeless recently. Th e money from the sale  of his house, Rs 35 lakh, is being deployed  to launch a range of cutlery— spoons, forks,  and chopsticks. Only they’re not of the  plastic, metal or even wooden variety. Th ey  are, in fact, all edible, so you can have your  fi sh and eat the dish!  Peesapaty is uncomfortable with the marketing  function, and is happiest when racking  his brains over a solution for a technical  challenge. Innovation for the niche tribe,  therefore, is not necessarily a function of  the market it’s in their DNA, they do it  because they have to. Many are serial innovators,  prone to testing and pushing their  skills to breaking point.  Manoj Kumar Upadhyaya who makes  green shelters for telecom towers, found  himself in a situation where innovation was  thrust on him by very demanding clients  aft er his fi rst cracker of a product. Today, he  sits on seven patents, while 14 other patent  applications are pending approval.  Risky Business  Some of the niche operators have seen their  hobbies transiting into the business arena.  Like NK Singh, who operates in Jamshedpur,  and makes a cool Rs 1.2 crore a year by  selling snake venom. His case also brings  to the fore the perilous nature of the path  taken by reluctant businessmen.  Singh operates in a policy grey area, where  rules governing the activity lack clarity. Th e  district administration, wildlife and forest  departments are still grappling with the  business of catching snakes and extracting  venom. In Singh’s case, snakes aren’t kept  captive, as at Deepak Mitra’s snake farm  in Kolkata. Singh has perfected a unique  business model. He releases snakes into the  wild aft er extraction, but knows where to  fi nd them when he wants them.  Not all niche businesses are the results  of serendipity or a ‘ eureka’ moment. Th ere  are numerous instances of entrepreneurs  having to change course and re- chart their  growth strategies by exiting existing business  or sliding into a niche within a sector.  Appachi Cotton in Tamil Nadu has been in  cotton ginning and trading for six decades.  Th e risk associated with cotton is rising by  the day. Appachi is therefore gravitating  towards a niche— the eco- textiles supply  chain— right from growing organic cotton  to organic readymades.  In Maharashtra, Sandip Taware saw his  poultry business being decimated by thin  margins and price fl uctuations. Th e bird- fl u  threat, of course, is perennial. He therefore  took to emu farming. He is not the fi rst  one— farmers in Andhra Pradesh were  the pioneers. But Taware has a gameplan  for the niche— as none of the emu farmers  have reached critical mass in terms of  fl ock size, he is trying to bring them together,  pool resources and set up a meat  processing unit.  Th e niche businesses in this package,  12 in all, are varied, and spread across different  sectors— from technology- driven  enterprises to those fuelled by passion of  the avian or reptilian kind. A niche business  faces unique challenges. A niche may  dry up. A niche may grow, as the market  expands, and as the big boys rush in. Still,  you can draw valuable lessons in entrepreneurship  from our fi ne band of niche  warriors. Happy reading. <  With inputs from Rajiv Bhuva  FALSE START: BS Bhandarkar in his  half- fi nished Chinese junk  30  PRIYAM DHAR');


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insert into SearchTable values (115581,116327,'',' Outlook Business > August 9, 2008  NICHE EGG PRODUCTS  There could be  better opportunities  if the world market  is opened up... we’ve  been lobbying for  years to make Russia  open up, but in vain  SKM Shree Shivkumar  CEO, SKM Egg Products  Sriram Srinivasan C ONVENTIONAL WISDOM NEED NOT  always work. At a factory at Cholangapalayam  village, 20 km from Erode, Tamil Nadu, SKM  Egg Products has all its eggs in one basket, in  a manner of speaking. Th e fi rm produces 1.1  million eggs daily at the Erode unit. It doesn’t  stop there— the eggs are then broken. Aft er removing the eggshells,  SKM workers, using machines, ensure that the mixture  is processed and undergoes treatment from  a high- pressure spray before making its way  out as egg powder, ready to be exported  to 24 countries. Customers, a proud CEO  SKM Shree Shivkumar says, include Kraft ,  Heinz and an arm of Unilever. Th e multinationals  use egg powder as an ingredient  in their food products. Shivkumar’s  father SKM Mailenandhan started SKM,  the group that runs SKM Egg Products.  Mailenandhan started his career as a general  store merchant. In time, he became  a poultry feed dealer, and then, a manufacturer  too. His modus operandi was to  not only sell feed to farmers, but also collect  eggs from them for further trade. By  1993, when Shivkumar joined his father’s  business, SKM was making money in the  feed business, but losing it in egg trading.  Th at was despite SKM being a major player,  with daily volumes of 1.5 million eggs.  “ I got involved to set the business right,”  recalls Shivkumar. “ Some improvements  happened, nothing dramatic. Th e fact is, we  were competing with small companies.”  The Shift  Th at was when a new window of opportunity  opened up for SKM. Th e Tamil Nadu  Ru 34');


insert into SearchTable values (115582,116328,'',' Outlook Business > August 9, 2008  Industrial Development Corporation ( Tidco)  sought a co- promoter for a venture that  would export eggs in processed form. SKM  applied, and was chosen. SKM Egg Products  was set up in 1995 in technical collaboration  with Belgium’s Belovo. Tidco took  an 11% stake ( currently 7.6%). Th e plant  at Cholangapalayam was set up in 1997,  with a breaking capacity of 1 million eggs  a day, capable of processing 3,500 tonnes  of egg powder a year. Th is has since been  upgraded to 4,600 tonnes.  Th e egg- powder exports segment is  indeed a niche. Th ree players— SKM,  Venkateshwara Hatcheries and Ovobel—  constitute a market worth about Rs 230  crore. Venkateshwara has a capacity similar  to SKM’s it can process about a million  eggs every day.  Th e ease with which SKM Egg moved  into the processing space couldn’t, however,  be sustained when the business was  up and running. Trouble hit almost immediately.  Th e problem was pesticide residue.  It was an issue that shook the whole Indian  agri- products industry, and SKM took time  to beat the negative perception about the  country’s products. Aft er over three years,  things started looking good.  Shivkumar attributes the turnaround to a  seminar that SKM conducted for potential  suppliers and distributors from across the  globe (“ there were guests from 27 countries”)  in December 1999. “ Seeing is believing,”  says Shivkumar, “ and all of them could  see our processes for themselves.” In 2001,  when SKM Egg broke even, all the highinterest  debt had been done away with.  Th e breakthrough had come from Japanese  customers. It didn’t take long for others  to sign on. About 40% of the company’s  Rs 100 crore revenues ( for the year ended  March 2008) came from Japan, another  40% came from Europe and the rest from  other countries. SKM hasn’t tried the US  market despite it being a big egg- powder  user. Th at’s because, Shivkumar points out,  the cost of hosting full- time US inspectors  at its factory, as also incurring the duties, is  not something SKM is keen on now.  At the other end of the business process  are suppliers. Th ey form the most important  part of the SKM business. Th at’s because one  of the parameters that the company prides  itself on is quality. And, in an egg powder  business, quality hinges mostly on the input  supplier. SKM has tie- ups with farmers  across 16 farms who, together, supply  1.1 million eggs daily. To ensure product  quality, SKM has its own supervisors and  veterinary professionals at the venues.  SKM is now tweaking the model a bit  by investing in its own farm. Th e target is  to produce 600,000 eggs daily. Simultaneously,  the company will set up a feed mill  and also increase its egg- powder processing  capacity to 6,000 tonnes a year. All this  would entail an investment of Rs 58 crore  ( the outlay for this year). About 1.5 million  eggs a day would be needed to make those  6,000 tonnes of egg powder a year. Th at  leaves 200,000 eggs in its bag. And that’s  the starting point for SKM Egg’s debut in  the domestic market.  Branding Eggs  Th e plan is to fl oat branded eggs in India.  Market research done, the idea will enter  its test- marketing phase by October 2008.  It might not be easy for SKM to taste immediate  success in branded eggs, a nascent  market where the likes of Suguna Poultry  already have a presence. But SKM could  take heart from the fact that egg consumption  is oft en propped up by strong economic  growth, and a branded egg typically fetches  at least a 50% premium over a normal one.  Shivkumar says: “ Five years back, the per  capita consumption of eggs in the country  was 38 per year. Now, it’s over 50.” SKM  could also have numerous variants in this  business, including protein- enriched ones.  Of course, a product targeted at the domestic  market has another use: it won’t be hurt  by currency fl uctuations.  Th e plan, then, is to hard- sell branded eggs  in India and consolidate the egg- powder  business overseas. India, Shivkumar says,  isn’t a market for egg powder. Th ere would  be an opportunity only when bakeries gain  in size, or institutional users are mandated  by law to use pasteurised eggs. Increasingly,  SKM is looking to market value- added  products, like mayonnaise mixes, overseas.  Th is strategy is expected to up SKM’s  net margin to 15% ( from 10% currently).  Th e company is targeting revenues of  Rs 300 crore by 2011- 12. One- third of that  could be from branded eggs.  Th ere could be better opportunities if the  world market is opened up, says Shivkumar.  For instance, egg- powder makers have  for years been lobbying with the government  to make Russia open up, but in vain,  he says. Th e threats are from diseases like  bird fl u, which could hit its eggs business.  But, Shivkumar believes SKM’s accent on  quality could help tide over such crises.  For the time being though, SKM is happy  breaking eggs. And lots of them! <  Tamil Nadu- based SKM Egg Products has hit it big  by exporting egg powder to a number of countries. It  now plans to launch more such products  nning On Eggs  Facts And Figures  Business Manufacturing, exporting egg powder  Based Erode, Tamil Nadu  Year of inception 1995  Clients Food companies in Japan, Europe  Big break Being accepted by Japanese  customers at a time when Indian agri- products  were shunned due to the pesticide problem  Revenues About Rs 100 cr ( 2007- 08)  Profi tability indicator Net profi t of Rs 10 cr  Employees 140 regular ( plus 100 contracted)  Plans Triple revenues by 2011- 12, start selling  branded eggs  35  R A CHANDROO');


insert into SearchTable values (115583,116329,'',' Outlook Business > August 9, 2008  NICHE SNAKE VENOM  People run away from snakes, this man and his band of 45 boys  seek them out. They extract the venom for vaccines and serums  Th e reason: Singh has an unusual vocation—  that of a snake catcher.  Unusually- high rainfall and the fl ooding  that followed, and a chlorine leak at the  Tata Steel plant, have smoked out many a  snake this year. And of late, he has been  getting distress calls everyday from people  who have been bitten by snakes. He  has also been receiving many a request  for catching deadly snakes and from antivenom  serum makers. Some doctors are  also seeking his advice on the exact line of  treatment for snake bites.  In fact, so busy has his schedule been that,  on some days, Singh claims to have “ rescued”  over 40 snakes, compared to a normal  day, which results in a catch of about 10  or 15 of these reptiles. Th is year, his prize  catch has been a rare Golden Cobra.  NK Singh is quite an expert at catching  deadly, poisonous snakes— until now he  claims to have caught at least 35,000 Cobras  alone. From Cobras to Kraits to Vipers,  his scooter toolbox is home to many  a deadly species, before they are released  into the forests of Kuchai in Jharkhand’s  West Singhbum district.  Risky Potential  Milking snakes for their venom is profi table  business, considering that initial invest-  Anurag Prasad T HE ONGOING MONSOON  months have been quite a busy period  for 73- year- old Naval Kishore Singh  of Jamshedpur. This former Tata  Steel employee has this year not only  become the most- wanted person locally, but also in  Bihar, Uttar Pradesh, Madhya Pradesh and Orissa.  Thriving On  The Edge  My greatest ambition is  to provide Krait anti- venom  to people as most deaths  happen due to Krait bite  NK Singh  Snake catcher  36  PHOTOGRAPHS BY SANDIPAN CHATTERJEE');


insert into SearchTable values (115584,116330,'',' Best connections  to Europe are  clearly marked  with a cross.  –  CONNECTIONS, SWISS MADE.  –  Daily nonstop service from Delhi and Mumbai to Switzerland and beyond within Europe INR 24,000*.  Enjoy the best connections via Zurich, in the heart of Europe, to 76 destinations worldwide. Zurich Airport, with its perfectly harmonised fl ight  schedules and shortest transit time, is the most convenient hub in Europe. Our crew, which includes Indian fl ight attendants, look forward to  welcoming you on board. For bookings and information visit SWISS. COM, call 1- 800- 220724 / ( 022) 2287 2210 or contact your travel agent.  * Applicable taxes and surcharges extra.  SWISS . COM');


insert into SearchTable values (115585,116331,'',' NICHE SNAKE VENOM  00 Outlook Business > August 9, 2008  ments are negligible. However, it is a dangerous,  specialised and a niche undertaking.  Only a few, like the Irula Cooperative  near Chennai, and Deepak Mitra in Barasat  ( near Kolkata), apart from Singh, sell venom  for research and to pharma companies  for making anti- venom serums.  During the four summer months, between  March and June, Singh, along with  his 45 trusted boys from Orissa, extract  venom and send it to the Christian Medical  College ( CMC) venom research centre  at Vishakapatnam. In return, he is paid for  the milked venom or gets anti- venom serum  vials, which he distributes free of cost.  And, during these four months, his income  from just milking Cobras exceeds Rs 1.2  crore. Th is income, he says, is ploughed  back into the business— for staff maintenance  and support infrastructure like mobile  phones. “ We spend almost Rs 2.5- 3  lakh per month on maintenance. Th is also  includes the cost of delivering serum and  catching snakes. I don’t charge anything  for my services,” Singh says.  Unlike others in the business, Singh does  not have a proper farm or an enclosed area  to keep the snakes. He releases them at a  designated area in the forest. “ We know  where they are and they can be easily caught.  I never allow them to be killed,” he says.  Singh does not even have an offi ce— he  operates out of a tea stall near the District  Commissioner’s offi ce. He has also been  gift ed mobile phones by Tata Steel, Tata  Motors and BSNL. Th ese help in attending  to distress calls faster. His numbers are  plastered on the notice boards of hospitals,  public places, local administration offi ces  and, even, police stations.  Huge Demand  India consumes almost 600,000- 800,000  vials of anti- snake serum every year. Depending  on the nature of snake bite, up to  10 vials are required per patient. Th e demand  for serum goes up during the fl oods  and harvest season— between June and  September. Each vial costs nearly Rs 400,  but the government distributes it free of  cost in its hospitals.  In India, only four types of snakes— Cobra,  Krait, Russel Viper and Sawscale Viper—  are used for venom extraction. Th e  quantity and toxicity level of the venom  varies, so does the price. A single Cobra  or a Viper, depending on their age and  health, can be milked for 100 to 300 milligrams  of venom in one go. Th eir dry venom  can fetch Rs 3,000 to Rs 4,000 per gram.  However, Krait venom commands almost  Rs 20,000— 100 Kraits yield just one gram  of venom, but this is highly toxic.  Yet, snake park owners, like 60- year- old  Deepak Mitra, say income from selling  venom is erratic. “ In some months, the  income is between Rs 80,000 and 1.2 lakh.  But in others, there is no demand at all,”  Mitra, who spends almost Rs 30,000 per  month to maintain his snakes, says.  One reason for the fl uctuation in revenue  is due to its dependence on demand  from research organisations and life- saving  drug- makers. “ Making anti- venom  is a complex process and is viewed as an  unviable activity by many drug makers. It  requires huge space to maintain the horses  that are used to make the vaccines,” Mitra  explains. Venom extraction is itself quite  challenging. It should not be exposed to  air or sunlight during milking and an optimum  temperature has to be maintained  during its transportation.  Singh’s expertise has helped him bag a  deal with Bharat Serum and Vaccine, a biopharmaceutical  company that also manufactures  anti- venom serums. Th e company  has approached Singh for Krait venom.  “ My greatest ambition is to provide Krait  anti- venom, as most deaths happen due to  Krait bite,” he says. In the last 45 days, he  has caught 220 Kraits. Appreciating Singh’s  passion for snake catching, Kallol Poddar  of Bharat Serum says: “ Nothing has been  fi nalised, but the possibilities exist to take  his work further with better facilities.”  What Singh lacks, however, is a license  from the forest department to carry on his  work. Offi cials cite the Wild Life ( Protection)  Act 1972 ( Schedules I and II), which  prohibit the trapping, hunting, catching  and milking of poisonous snakes. Says  Anup KR, Deputy Conservator of Forests,  Jharkhand: “ Catching of scheduled  snakes is illegal and an off ence under the  Wildlife Act. Milking of snakes in any  form is business under the purview of law  and an off ence equal to hunting them.”  Snake farms run by the Irula Cooperative  in Tamil Nadu have a license to milk  snakes ( caught by the Irula tribals) and to  sell their venom.  Clearly, while NK Singh is providing an  essential service, he has no legal cover. Th e  government needs to enable Singh and his  kind to legally practice their trade. Th ere  are some positive signs— the Bihar government  is formulating a policy to allow Musahar  tribals to catch and milk snakes.  In Singh’s case, the local administration  has been looking the other way, as what he  is doing is seen by many as a social service.  “ No one has complained, and I am not  aware of any such activity,” says Ravindra  Agarwal, the District Commissioner of  Jamshedpur, although his offi ce is not far  from Singh’s tea stall. One thing’s for sure:  the countless victims of snake bites won’t  be complaining! <  Facts And Figures  Business Trapping snakes, milking venom  Based Jamshedpur, Jharkhand  Year of inception 1993- 94  Capital invested Negligible  Revenues Rs 1.2 crore a year  Employees 45  Clients Christian Medical College, Bharat Serum  Entry barriers Fear of reptiles  Plans Providing Krait venom  38  MONEY BITES:  A gram of Golden  Cobra venom  fetches Rs 3,000  to 4,000');


insert into SearchTable values (115586,116332,'','');


insert into SearchTable values (115587,116333,'',' Data Superstore  With media planners having to collate  data from disparate sources, one company  saw an opportunity to be a one- stop shop  crore, and analysts were predicting 19%  annual growth till 2010. Th e entry of new  players in the broadcast space meant spi- spiralling  demand for services such as content  ralling creation, production facilities, studios and  so on. While content creation boutiques  and production companies mushroomed  across the country, 35- year- old media spe- specialist  Atul Phadnis, CEO of media solu- cialist solutions  company Media E2E, decided to do  tions something diff erent.  Crying Need  “ I had always wanted to be in a space where  nobody had been earlier, but obviously, it  had to be a fi eld in which I had expertise,”  says Phadnis. Having been a media planner  for a large part of his career ( he had worked  with Rediff usion, MindShare and Starcom  MediaVest earlier), and having got to know  the industry inside- out during his stint as  Vice- President of TAM Media Research,  Phadnis felt that the biggest shortcoming  in the Indian media industry was the lack  of systems.  When a broadcaster plans its strategy,  it not only has to take note of the average  ratings a show generates, but also how well  it is doing in various regions. It has to look  at whether a particular show receives more  eyeballs in the aft ernoon or at prime time  ( 8- 11 pm), as well as the ratings rival chan- channel  shows are getting. It has to keep in mind  nel factors such as whether demand is greater  for the 8 pm drama, the 9 pm reality show,  or the 10 pm fi lm. Th en, it has to compare  this demand with advertising supply on  competing shows of rival channels. While  planning the ad pricing, the sales person  has to keep in mind facts like the cost per  rating point ( CPRP), which is calculated  on the basis of ratings a show commands  during various parts of the day.  “ If the senior manager of a broadcast com- company  had to plan his programming sched- pany schedule,  he had to collate information from  ule, various sources to put his plan together.  For instance, he had to get the ratings for  his own shows, say from TAM, the per- persecond  revenue these shows commanded  second from a second source, and the TV ratings  and ad pricing of rival channels from a third  source. Th is was extremely time- consum- consuming,”  says Phadnis.  ing,” Almost 65% of the information was appar- apparently  being gathered from external sources,  ently and it took anywhere between two or even  three weeks to collate all the information.  Th e media manager invariably would have  no time to wait for the data to be collated,  and would oft en have to depend on his gut  feel while preparing the plan.  Th is situation made Phadnis think about  putting together a back- end analytics soft -  ware, that could help broadcasters plan  things more effi ciently. Phadnis shared his  business plan with Star TV’s then Head of  Planning and Research ( Asia- Pacifi c), Ju- Julie  Peterson. She also believed that there  lie was a huge opportunity in the business  I’ve always wanted to be  in a space where nobody  had been earlier, but in an area  in which I had expertise  Atul Phadnis, CEO, MediaE2E Media E2E  PRIYAM DHAR 40 Outlook Business > August 9, 2008  NICHE MEDIA- ANALYTICS SOFTWARE  Ajita Shashidhar T HE YEAR 2005  was arguably  one of the best  for the Indian  media and en- entertainment  tertainment  industry. Revenues grew an  impressive 24% to Rs 35,300');


insert into SearchTable values (115588,116334,'','');


insert into SearchTable values (115589,116335,'',' Outlook Business > August 9, 2008  NICHE MEDIA- ANALYTICS SOFTWARE  analytics space, and eventually quit Star  to join him.  Th e company partnered with US- based  pricing analytics technology company, Vistaar,  and decided to name its business intelligence  solution Broadcast Biz- MAPS.  Media E2E has two revenue models for Biz-  MAPS. Th e fi rst one is a one- time buyout  option, with a yearly maintenance contract.  Th e second is an annual licensing deal.  Th e company was also keen to make electronic  programming guides ( EPG) for the  TV distribution platforms. An EPG provides  detailed information on the programming  schedule of a channel, sometimes with  a synopsis of each show. It is a huge business  in the West, with companies such as Gemstar  ( US) having a market cap of $ 600 million.  With DTH and IPTV making inroads  into India, and the government keen to implement  CAS, Phadnis sees a tremendous  opportunity in the EPG business, which is  virtually non- existent in India.  However, putting a soft ware system in  place meant making huge investments, a  lot of R& D and a long gestation period. Th e  company set up R& D centres in Pune, Hyderabad  and Mumbai. “ We studied the businesses  models of start- up successes in the  West, and realised that during the period  of incubation for bigger businesses, most  used consulting to get cash fl ow in.”  Th e company, therefore, started off with  consulting services, roping in clients such  as Geo TV Network of Pakistan, as well as  leading Indian broadcast companies. It also  ventured into branded content valuation,  and did a lot of work for corporates such  as Hindustan Unilever and Marico.  It eventually also managed to rope in angel  investor, Wealth First Advisors, to fund  its business. Says Premal Mehta, Director,  Wealth First Advisors: “ We looked at the  technical background of the promoters and  the passion behind their approach. Th is is  why we invested in the company.” Mehta  is extremely bullish about the TV guide  business, which, he says, is in the process  of a major breakthrough.  Business Intelligence  Media E2E’s Broadcast Biz- MAPS was  launched in April 2006. Th e back- end  soft ware is targeted at broadcasters, and  provides varied pricing analytics across  parameters in a few minutes. “ Framing  of policies is usually dependent on getting  on- demand pricing analysis at granular  levels, average rates, CPRPs ( cost per rating  point) and CPTs ( cost per thousand)  across day- parts, clients, seasons, sectors  and regions. BizMAPs churns out this data  in minutes. It’s like a CEO’s dashboard,”  says Phadnis.  Since launching the soft ware, the company  has roped in Star and Zee Network. And,  luring them into Biz- MAPS was not really  a big issue, claims the Media E2E CEO. In  fact, Paritosh Joshi, President, Star India,  says Biz- MAPS is a marvellous business intelligence  and data- mining tool developed  specifi cally for the media industry.  Essentially, says Joshi, it really is a bunch  of smart macros sitting on top of a lot of  discrete excel workbooks. It can cross- refer,  cross- tabulate, query and run complex  computations on all the underlying workbooks  and then present the output to the  user, again in easy- to- understand excel  workbooks and spreadsheets.  “ An advertising sales executive in any  media business uses cost, revenue and audience  measurement data, and needs to crossrefer  and cross- tabulate them. How much  do I earn by selling 1 GRP on my English  channel? What about my Hindi channel?  Did the carriage fee I paid in market X  for channel Y translate into new distribution  revenue on the channel? Previously,  it was time- consuming to collate all this  data. Now, we do it in minutes, and accurately,”  adds Joshi.  Phadnis is now looking to take Biz- MAPS  to other broadcast networks and is even  considering foreign markets, saying that the  technology is the fi rst of its kind in Asia.  “ Th ere are broadcast analytic soft wares in  the US, but nothing as exhaustive as Biz-  MAPS, which off ers 35 diff erent sources  of information,” he says.  Th ough Phadnis refused to talk fi nancials,  he said private equity fi rms were interested.  And, as Media E2E gets ready to  take Biz- MAPS overseas, it has already  tied up with Reliance ADA’s DTH venture,  Big TV, and also with Bharti to launch its  EPG service, on an annual subscription  revenue model.  “ We will fi rst look at digital platforms,  then print,” says Phadnis. He believes that,  as usual, creating programming guides for  a diverse market like India is more challenging.  Th e company has taken two years  to construct an EPG production engine.  It already has a WAP- enabled TV listing  portal ZipAZap for mobile users.  Th e EPG, Phadnis says, will be quite different  from newspaper listings. “ We will  have a host of value- additions such as a  show synopsis and a host of other interesting  things that I can’t really talk about  now,” says Phadnis. If the analytics soft -  ware is a precedent, the EPG should well  be worth the wait. <  Facts And Figures  Business Analytics software, electronic  programming guides ( EPGs)  Clients Broadcast companies  Based Mumbai  Year of inception 2005  Big break Deal with Star India in 2006 for Biz-  MAPS, and with Reliance and Bharti DTH ventures  for EPG  Advantage First mover in both businesses  Employees 40  Entry barriers Lack of expertise and investment  needed in setting up software support  Plan To take Biz- MAPS to other networks and roll  out EPG in DTH, IPTV and cable platforms  SCREEN GRABS: Broadcasters use the  software to make programming calls  42');


insert into SearchTable values (115590,116336,'','');


insert into SearchTable values (115591,116337,'',' Outlook Business > August 9, 2008 The idea behind the  edible cutlery was to give an  alternative to people who do  not want to use plastics  Narayana Peesapaty  Managing Director, BK Environmental Innovations  Narayana Peesapaty’s edible cutlery may just eat  into traditional plastic cutlery sales if it catches on  Sudipto Dey I T WAS AN IDEA THAT STRUCK NARAYANA  Peesapaty thousands of feet above the ground— on a  fl ight, while he was being served refreshments. What got  this 38- year- old scientist thinking was the plastic cutlery  accompanying that hot meal. In a jiff y, the concept of edible  cutlery— spoons, forks and chopsticks that you don’t  need to throw away aft er use, and are healthy and nutritive enough  to eat— was born. And, even if they had to be disposed, they  Have Your Dish  And Eat It Too  44 would degrade in less than a day. “ Th e idea  was to give an alternative to people who do  not want to use plastics,” says Peesapaty, a  Master in Forestry Management with over  16 years of consulting and research experience  behind him. Th at was 2004.  It took Peesapaty, a former scientist at  ICRISAT in Hyderabad, another two years  to give commercial shape to his idea. Peesapaty  began by checking out the suitability  of various cereal fl ours— wheat, rice and  sorghum ( johar)— as base for his edible  cutlery. He fi nally zeroed in on sorghum  as the base fl our. Vegetable pulp— spinach,  beetroot and carrot— were used to add colour  and nutritive value to the cutlery. Spinach  gave it a green shade, beetroot red and  carrots brought out a yellow tinge.  Th e production line, comprising blenders,  slicers, dyes and an oven, had to be designed  and calibrated to ensure that the spoons  retained their hardness, while not losing  out on their taste and nutritive value.  Peesapaty aims to capture a slice of the  domestic plastic cutlery market, which is  estimated to be worth Rs 250 crore, and  is growing at about 20% annually. He also  aims to corner a part of the global disposable  chopsticks market, which sees sales of  around 24 billion units per annum in Japan  and 35 billion units in China.  In 2006, Peesapaty applied for a process  patent for producing edible cutlery. “ Apart  from the fi rst- mover advantage, the fl our  combination, kneading process and mould  designs are unique, creating substantial  entry barriers for this business,” Peesapaty  claims, even as apron- clad staff ers work on  the production line at his factory in Nacharam  industrial area in Hyderbabad.  VC Pangs  Th e concept, however, did not exactly  excite the venture capitalist community.  “ My funding requirement for commercial  launch of the product and for brand  promotion was around Rs 50 lakh to start  with. But VCs typically like to invest at least  $ 3- 5 million ( Rs 15- 20 crore) in a project,”  says Peesapaty. Banks asked for collateral  for loans, while the VCs wanted to see a  healthy order book.  Next, he knocked on the doors of several  angel investors— those with interests in real  estate, the cement business and non- conventional  electricity— but to no avail. “ 2007  was frustrating as I did not get the right  investors to back me,” Peesapaty recalls.  NICHE EDIBLE CUTLERY  PHOTOGRAPHS BY A PRABHAKAR RAO');


insert into SearchTable values (115592,116338,'',' Outlook Business > August 9, 2008  When it seemed his dream project was  not getting anywhere, Peesapaty sold his  fl at for Rs 35 lakh in February this year. He  moved to a rented house, forking out Rs  7,000 a month. Th is was not the fi rst time  that he had let ‘ the idea’ change the course  of his life. In 2006, he had resigned from  his ICRISAT position to concentrate on his  ambitious venture. Along with fi nancial  help from some friends and his own resources,  Peesapaty commercially launched  the product in April 2008. Th is means, of  the Rs 50 lakh Peesapaty has invested in  the venture so far, 70% of the funds have  come from his own pocket.  In the past three months, he has targeted  fi ve- star hotels, sweet shops and  organised retailers in the city. Samples  have also been sent to corporate  caterers, schools and  housewives. Consumers  in the US, Canada and  Dubai have lapped up test  samples picked up by some  exporters, Peesapaty says. Some like  Vijay Rama, a sweet- shop owner in  Hyderabad, has turned serving in  edible spoons into a unique selling  proposition. “ Th is has increased my  brand’s equity. Th ere are people who  come from far- away places just to eat  with edible spoons,” he says.  Need To Scale- up  But the frustration arising from his inability  to ramp up operations still saddens Peesapaty.  “ Th e Hyderabad market itself can take  5,000 packets a day,” he says. But, without  sound marketing machinery, that potential  will remain untapped. Peesapaty knows  he still has to travel a long way before the  business can be considered commercially  viable. “ I need to ramp up my production  to 500,000 spoons a day, and invest in marketing  and promotion in export- oriented  markets such as Japan,” he says.  To scale up the business, he has worked  out plans for a franchisee model that will  see him off ering machinery and trained  staff , while the marketing support will be  expected of the local partner. “ I am a technologist,  and I want to focus my attention  on innovations and quality. I wish to entrust  marketing to a partner,” he says.  Talks with a US- based venture capitalist  for fresh infusion of funds are also at an  advanced stage. Suneel Parasnis, Country  Director, New Venture India, a networking  forum which facilitates small and medium  enterprises to connect with investors, feels  some tweaking of the business plan to suit  Indian needs may help. Peesapaty too is  willing to go that extra mile. “ Th ough selling  my house was a big decision, I know that  if the business works, I can aff ord to buy 20  such houses,” says the serial innovator.  Peesapaty is now in the process of developing  an edible plate that can also be  tweaked into a ‘ desi pizza’. No doubt this  is an interesting innovation, but the edible  cutlery concept pioneered by Peesapaty  may have to wait just that little while  longer to catch on. <  Facts And Figures  Business Producing edible cutlery  Based Hyderabad, Andhra Pradesh  Year of inception 2008  Clients Five- star hotels, sweet shops  Entry barriers Applied for process patent  uniqueness of dye and production process  Capital invested Rs 50 lakh  Revenues Rs 5 lakh  Market potential Rs 250 crore ( India)  Employees 20 ( All women, except for two men)  Plans Scale up funding, marketing tie- up  45');


insert into SearchTable values (115593,116339,'',' Outlook Business > August 9, 2008 gave them a guided tour of the city and  patiently answered their questions. More  importantly, Global helped them fi nd an  apartment ( fi ve weeks and 10 houses later),  set up utilities and employ helpers.  Houses And Mindsets  For 47- year- old Ranjini Manian, Chief  Executive Offi cer of Global, this is all in  a day’s work. It’s work that was born out  of an a- ha moment. In 1995, Manian was  shuttling between India and the US, and  she met Joanna Huski, another globetrotter.  Th ey teamed up to help people move  from the US to India, but at a personal  level. Soon, the thought struck Manian:  “ Why not do this as a profession!” And  thus was born Global Adjustments Relocation  Services.  Th e timing couldn’t have been better, as  the economy was opening up. Global’s fi rst  client was Ford, which was setting up a plant  in Chennai Global helped relocate 70 families  to India. Since then, it has provided a  Sharada Balasubramanian C HENNAI IS FAR REMOVED FROM SWEDEN  and Texas. So, when the 50- something Swedish  couple Mollernilsons decided to shift from  developed economy to developing economy in  September 2007, a bit of circumspection and a lot  of questions were in order. Th ere were practical  posers: how does one get a house, does the water fl ow 24 hours  and is it clean, where are the good medical facilities and good  schools? There were cultural conundrums:  is it safe to stay out late, are Indians  helpful?  Some answers came from friends and  colleagues, but it was Global Adjustments  — a Chennai- based company that provides  relocation and realty services, and crosscultural  training, primarily to expats and  NRIs— that did most of the hand- holding.  Ericsson, where Jan- Eric was a senior system  designer, had a tie- up with Global, the  idea being to make it easier for expats to  make the transition.  So, even as they were in Texas, his wife,  Annette, got an email from Global, informing  them about its gamut of services. “ We  also got a book called India Calling , which  gave a lowdown on life in India and do’s  and dont’s,” recalls Annette. A few days  aft er reaching Chennai, a Global staff er  46 Pass When expats come to In Global Adjustments han “ We address  apprehensions: which  school should I put my  kid in, where are the  best medical facilities,  what will my wife do...”  Ranjini Manian  CEO, Global Adjustments  NICHE EXPAT SERVICES');


insert into SearchTable values (115594,116340,'',' Outlook Business > August 9, 2008  47  for example, it conducts Tamil classes in  Chennai and Hindi classes in NCR.  It brings out a monthly magazine called  At A Glance from fi ve cities ( excluding  Kolkata). Th e magazine features India,  other expat experiences and city- specifi c  cultural listings, and is distributed free of  cost and its electronic version is available  on the Global website. Also, says Manian:  “ We have something called a social and  business acceleration programme, where  we help people network, both for business  and socially.”  Going Places  For providing all these, Global bills the  company. Most multinationals, even several  Indian companies, have a special relocation  budget. Th ey don’t mind this spend, as it  helps cut the adjustment time for expats.  Says Balasundaram: “ We assess the client’s  needs, aft er which we put together a package  and quote a fee.” Th e fee is based on  the contours of the package ( for example,  whether it includes cross- cultural training  or not), though it is also fl exible to  an individual’s needs. Says Balasundaram:  “ Packages start from Rs 25,000 and go up  to Rs 7 lakh.”  Balasundaram refused to reveal revenue  or profi t numbers, though she did say that  the company has grown 100% on a yearon-  year basis in the last three years. About  50% of its revenues come from destination  services, 30% from advertising in its publications,  and the rest from cross- cultural  training. Says Balasundaram: “ Th e industry  is fragmented. Th ere are people who off er  relocation services, there are individual  trainers who give cross- cultural training.  We off er it as a package.”  Th e business is light on capital investment.  All it needs is offi ce space, computers  and human resources. Demand for Global’s  services is buoyant— and growing.  According to Balasundaram, there are  about 50,000 expats in the country, and  their numbers are only going to increase.  Obviously, Global wants their custom, not  just in its established lines of businesses,  but also beyond.  Th e company plans to extend itself into  a host of other initiatives including packing  and moving, immigration, taxation,  leisure and travel, and fi nancial advisory  ( for which it has tied up with Citibank).  It is also eyeing tier- II cities.  And if the expat infl ow numbers and the  experience of people like the Mollernilsons  is anything to go by, Global will stay  popular among the expat community for  now at least. <  With inputs from Ashish Gupta  smooth passage to India to a few thousand  expats from 74 countries, including 600  families in 2007- 08. It employs 65 employees  across six cities ( Bangalore, Chennai,  Kolkata, Mumbai, NCR and Pune), half of  whom speak a foreign language, or have  lived or travelled overseas. And its client  list reads like the parts of a premier stock  index: BMW, Dow Chemicals, Ericsson,  Fidelity, IBM India, Intel, Motorola and  Nokia, to name a few.  For about a decade, Global was essentially  a provider of relocation and realty  services. So, it helped expats fi nd houses  on rent and did all the paperwork. Th e  company sometimes even helped them  out with commercial property ( Nokia being  a notable example). It organised utility  services— water, phone, power backups,  broadband, cable— for them. It found them  maids, drivers and helpers, and helped out  with school admissions. Th ey also acted as  enablers, from arranging music lessons to  giving work leads. Says Annette: “ I wanted  to work with NGOs working on social uplift  ment programmes. Global put me on to  some NGOs, and now I am able to make  a diff erence.”  As Global’s engagement with expats grew,  so did its understanding of their needs. Says  Chief Operating Offi cer Rajeshwar Balasundaram:  “ About three to four years ago, keeping  destination services as an anchor, we  diversifi ed into cross- cultural training to  sensitise expats to Indian culture.” Refl ecting  that broader coverage, Global Adjustments  Relocation Services became simply  Global Adjustments. More importantly, it  strengthened its one- stop shop positioning,  and increased its relevance and duration  of engagement with expats to about  six months.  As part of its cross- cultural training, Global  organises orientation tours of the city,  where it takes people around the sights,  the landmarks, the shopping centres and  other places of daily engagement. Says  Balasundaram: “ For expats, the fi rst two  weeks, the fi rst phase of absorbing, are like  a honeymoon period. Th en, the frustration  starts creeping in, which goes on for about  a month- and- a- half. Th is is the time when  they need us the most.”  Global does a lot of things with the basic  idea of integrating foreigners into India. So,  FACTS AND FIGURES  Business Relocation and other services to expats  Based Chennai fi ve other cities  Year of inception 1995  Employees 65  Clients Mostly MNCs ( like BMW, Dow Chemicals,  Ericsson, Fidelity, IBM, Intel, Motorola and Nokia)  Entry barriers Market is fragmented  Big break Relocated 70 families for Ford to India  Plans Packers and movers, immigration,  taxation, leisure and travel, and fi nancial advisory  age To India  dia, the last thing they want is to ‘ deal’ with India.  d- holds them through the transition  R A CHANDROO');


insert into SearchTable values (115595,116341,'',' 00 Outlook Business > June 28, 2008  estimates about 33,000 tonnes of emu meat  is produced in India now, which is a fraction  of the 1.9 million tonnes of chicken meat  produced in the country every year.  From its native habitat Australia to the  shelves of HyperCity, a hypermarket in Malad,  Mumbai, that sells emu meat sourced  from Bhagirathi Hatcheries, it has been a  rather long journey for the fl ightless bird. It  is not a staple in the Indian diet yet. Hyper-  City’s marketing head Ashutosh Chakradeo  says that though most consumers are aware  that emu is healthier than lamb or beef,  many of them don’t know how to cook  it. Th e retail chain has therefore started  giving out recipes with each pack of emu  meat that is sold.  Th e recipes include some exotic Indian  delicacies such as Roganjosh, which is usually  associated with mutton. “ Roganjosh  Snigdha Sengupta L OW ON CHOLESTEROL, HIGH ON PROtein,”  says Sandip Taware, in what sounds like a  well- rehearsed line designed to sell the benefi ts  of consuming emu meat. Taware has had over  40,000 visitors, including tourists, at his fi ve- acre  emu farm at Malegaon in Baramati, Maharashtra,  since he started emu farming in 2000. Since then he has sold  150 tonnes of meat, and is now aiming for 60 tonnes of meat  per year. Taware’s farm, called Bhagirathi  Hatcheries, is one of an estimated 1,000  emu farms— there are about 300 in Maharashtra—  up and running in the country  today. While 1,000 may seem like a big  number, it’s a drop in the ocean in comparison  with the poultry farms that dot the  country. Likewise in production. Taware  This Bird Means Bu A poultry farmer in Baramati has managed to build an  unlikely business around an extraordinary bird  NICHE EMU FARMING');


insert into SearchTable values (115596,116342,'',' with emu meat is as delicious as the lamb  version,” remarks Ulrica, a senior executive  with a PR fi rm, who has switched to  emu meat. Adds Chakradeo: “ With Indians  becoming increasingly health- conscious,  we are seeing the sale of emu meat growing  steadily. Out of 10- 15 stock keeping units  ( SKUs) of red meat sold everyday, at least  two of them are emu meat.” Th e bird’s meat  is considered a healthy substitute for other  red- meat variants such as lamb or beef.  It is supposed to be extremely nutritious,  with fat and cholestrol content being much  lower than in any other red meat.  Expensive Bird  Healthy, yes, but popular? Not yet. Its off -  the- counter price ( in Mumbai) at Rs 300-  700 per kg is a big barrier. “ Emu meat is  the costliest item sold in our non- vegetarian  section,” says Bhalchandra Koli, incharge  of the section at HyperCity. But  for farmers like Taware, it is proving to  be a lucrative alternative to poultry farming.  Returns in poultry farming have diminished  over the years and have been  further compounded by problems such  as the bird- fl u crisis. “ Emus are extremely  resistant to disease and infection. My  medical costs in the last seven years have  been zero,” says Taware.  Like many of his ilk, Taware switched  to emu farming aft er a decade in poultry  farming. In 2000, when he decided to make  the switch, his return per egg at Rs 1.25  was level with his per- egg cost of production.  By this time, emu farming had already  started in Andhra Pradesh, Karnataka and  Tamil Nadu. When Taware started his farm  with 20 birds, which he sourced from a  farm in Andhra Pradesh, he was the fi rst  in Maharashtra. Since then, his fl ock has  grown to 150 birds— 100 females and 50  males— while emu farming has itself spread  to 14 states in the country.  Th e fi rst chicks on Taware’s farm, about  300, were born in December 2003. Most  of the farm’s current income comes from  meat ( each bird yields about 20 kg of meat),  which he sells at the rate of Rs 400 per kg  to a processing company called Baksha &  Co. His cost of production per bird works  out to about Rs 4,000. Revenues for the year  ended March 2008 totalled Rs 30- 35 lakh,  he says, while gross profi t was Rs 10 lakh.  He now wants to expand to 10,000 eggs,  for which he needs to make an investment  of Rs 2 crore. He plans to get into exports  when he hits 150,000 birds.  Golden Eggs  Th e low cost of production and high commercial  value makes emu farming lucrative.  Th e bird can adapt to any climate and  environment. And just about every part of  the bird has fairly high commercial value.  Apart from the meat, its bones, feathers,  body fat, claws, skin and eggshells translate  into valuable commodities.  Emu