ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Wipro, Godrej Consumer Products, Usha Martin

WIPRO Acquisitions and Expansion WIPRO is a leading global IT services company providing a comprehensive range of IT services in the areas of hardware and software design to leading companies worldwide and has a presence in the domestic market for consumer products and lighting. Net profit of the company in 2002-03 dropped by 7.3 per cent to Rs 820.5 crore, despite 25 per cent increase in sales. The global economic downturn, particularly in the US, is having a severe impact on revenues. Economic slowdown has forced most of the companies to either reduce or defer their spending on IT. These apart, an expanding workforce along with increasing wages is eroding its cost-competitiveness and making it difficult to sustain its profitability. The company derives 66 per cent of the total revenue from its global IT services and products business, of which 64 per cent arises from the US alone.

Bata India, Wockhardt, Motor Industries Company

BATA INDIA Seeking the Right Fit Bata India, a household name in Indian footwear, is facing difficult market conditions. Once a market leader, it now has stiff competition mainly from the unorganised sector, which enjoys a low cost of production. The latter, unlike Bata, caters to an increasing number of customers demanding trendy footwear. They not only sell at a lower price, but also resist any increase in prices. Besides, cheap imports from neighbouring countries are adding to Bata

Castrol India, Siemens, GlaxoSmithKline Pharmaceuticals

CASTROL INDIA Smooth Ride Ahead Castrol India, the well known lubricants company is going through a tough period. Demand for lubricants is derived from the movement of automobiles which is dependent on the general industrial and economic activity. The demand for lubricants from commercial vehicles, which constitutes the bulk of the total market, has been under pressure over the last few years and 2002 was no different. The market volumes from commercial vehicles have declined due to several reasons: The increase in proportion of new technology vehicles such as euro norm compliant vehicles, which consume less oil; old technology trucks extending oil change periods because of cost pressures; and lower tractor utilisation because of difficult conditions in the agriculture sector. This market trend will continue until such time as there is revival in freight market and agricultural activity. The company, understanding the implications of this scenario, has developed strategies to address these structural changes in the market.

Reliance Industries, Larsen and Toubro, Jindal Iron and Steel

RELIANCE INDUSTRIES Spreading Wide With the merger of Reliance Industries and Reliance Petroleum, the group has emerged as a fully integrated energy company with operations in oil and gas exploration and production, refining and marketing, petrochemicals, power and textiles besides creating the largest private sector company on all financial parameters. The company made a strategic move by acquiring 26 per cent equity stake in Indian Petrochemicals Corporation( IPCL) a leading public sector company. This will help it to attain global leadership in terms of asset base, revenues, profitability, production volumes, market share as both serve the same customer base in domestic as well as export market. While production has increased significantly, steps have been taken to optimise process conditions.

Gujarat Ambuja, Kesoram Industries, Bajaj Tempo

GUJARAT AMBUJA Growth by Consolidation Consolidation in the industry has led to the emergence of a few players in the market. Following the trend, Gujarat Ambuja has built up huge capacities incorporating several measures to maintain market share and remain profitable .With no fresh capacity in the offing in next few years, Gujarat Ambuja is poised to grow. While in the past, the growth in the company has been checked by capacity constraints, at present, production has gone up by 16 per cent to 70.80 lakh tonne from 60.96 lakh tonne in its existing plants. In addition to this, the company appears to be in a comfortable situation with the commissioning of the 2.5 million tonne unit at Chandrapur, Maharashtra. The new facility depends entirely on captive power and will cater to markets in Maharashtra and Andhra Pradesh. Besides, a two million tonne unit has been commissioned at Wadi. In an industry, where volumes and efficiency are key success factors, the company can aim for growth in market share through increase in capacity. This will prove to be an apt strategy to counter the formidable threat posed by the coming together of two major players of cement industry, Larsen and Toubro and Grasim, the Aditya Birla Group company. The approved merger of Gujarat Ambuja Cements with its ailing subsidiary Ambuja Cements Rajasthan, as part of rehabilitation scheme submitted to the Board for Industrial and Financial Reconstruction (BIFR), will strengthen the company

Tata Steel, Thermax, Mahindra and Mahindra

TATA STEEL High Value Initiatives The recovery in global steel prices has had an positive impact on Tata Steel even when there has not been any substantial upturn in domestic steel prices. With regard to the operational efficiency of the company, its cold rolling mill is operating at 100 per cent capacity utilisation which will help it to achieve an increase in production target to cater to increased export demand. The company has hiked the prices of commercial grades of hot roll coils and galvanised steels which will be of value to the company as many business contracts are coming up for renegotiation. Earlier price hikes industry wide could not be utilised by the company because contracts with end-users had been finalised before the metal prices went up.

Indian Hotels, Exide, Godfrey Phillips

INDIAN HOTELS Expanding into Ecotourism Indian Hotels Company, better known as the owners of the Taj group, has shifted its focus from mere physical growth to quality growth in order to survive the industrial downturn. It has now decided to venture into ecotourism and wildlife resorts by signing a memorandum of understanding with CC Africa and the Chaudhary group of Nepal. The venture will be promoted by setting up a separate subsidiary and creating a sub-brand. The group is giving a facelift to its resort properties in leisure destinations across Kerala, Chennai, Goa and Rajasthan at a total cost of Rs 65-80 crore. The strategy is an effort towards gearing the company to focus on premium segment seeking luxury holiday within the country and to that extent reduce its dependence on international group travel or in promoting tourism outside India. The group is also concentrating on premium packages to do away with regular ones which are synonymous with the discount culture. In essence, it could command a premium on room rates rather than opting for discount rates by offering customised service laden with variety of packages. It has acquired two heritage properties in Madhya Pradesh and Rajasthan on leave and licence basis. These will be marketed as leisure heritage properties, targeting both the domestic and international clients. It is also in the process of acquiring management contracts for properties in Thiruvananthapuram, Gwalior and Jaisalmer.

Colgate-Palmolive, Berger Paints, BSES

COLGATE-PALMOLIVE Feeling the Rural Squeeze The overall economic slowdown with the continuing sluggishness in agricultural growth has adversely affected rural demand. This in turn, has had a negative impact on Colgate-Palmolive, which draws most of its earnings from the rural market. The company

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