While the phone user base in India hits 102 million, the Essar group finally wakes up to the potential in the sector to line up a $1.5 bn investment in the sector. The delay was also in part because they were busy with restructuring their traditional steel and shipping businesses.
Indian IT Minister Dayanidhi Maran has almost prevailed upon Intel chairman Craig Barrett to invest $400 mn in building an advanced test manufaturing center in India. Chennai, Bangalore and Noida are said to the front-runners for the facility.
Japanese electronics giant NEC has set up a joint venture with HCL Technologies to develop high-end wireless technologies. Infosys and Alstom got into a similar deal too. HCL meanwhile also hopes its JV will help it make inroads into the $1 trillion Japanese IT market to find outsourcing opportunities. Maybe this would help.
Growing in the Skies
Indian airlines are getting more access to the world's airports with air routes to Belgium and Holland liberalized and opened up to private airlines. More airlines are firming up plans to share the pie though with GoAir firming up start-up plans.
While Airbus and Boeing are looking to sell heavier aircraft to India, IndUS Aviation plans to make India a light aircraft component manufacturing and export hub. IndUS recently launched, "India's first ever aircraft showroom" in Bangalore.
Reliance and Orissa
Reliance Energy Ltd wants to build a 12 GW coal-based thermal power plant in Orissa. With the right disclaimers in place, it would be the largest plant of its kind in the world. The Orissa government apparently, is not enthused. The deal is that all the coal-mining that Reliance will require, will harm the environment. The government in return wants a slew of monetary compensations, which could render the project uncompetitive. Given the gaps in their respective abilities to implement projects, it would make more sense for the government to get some sort of commitments from Reliance to clean up the environment they damage. Knowing them Reliance will likely turn that into another business opportunity.
The deal with Posco on the other hand is almost clinched, while Australian mining giant BHP Billiton has started talks on its proposed $1 bn investment on bauxite mining.
The government is planning to merge all PSU steel units into SAIL to create a single 18.5 million tonne entity. Synergies would save marketting expenses. Anything would help when the Chinese challenge rises.
The Munjals of Hero Honda are expanding. They could take stake in Honda subsidiaries in Africa and Latin America to help turn them around.
Saturday, June 11, 2005