Corporate Buzz
Job Market

New Delhi

India Inc buoyant on hiring, economic growth:

India Inc is upbeat about the economic growth prospects in the second half of current fiscal and majority of the companies surveyed said they plans to increase their headcount in the next two years. ndian firms are optimistic about economic growth in the second half of current fiscal and plans to recruit people because of its robust performance during the April-September period of 2011. Although, overall, global business confidence index has dropped by 11 points. All top 14 countries showed a decrease in confidence ranging from the US, which is down 29 points, to Australia, 4 points down. The only exceptions are India (up 11 points), Brazil (up 7 points), and Germany (up 4 points).

Six months on from a rosy start to 2011, the global outlook has suffered a clear reverse. However, Indian business sentiment and activity continues to be hugely positive, and businesses are actively investing in their most valuable asset: people power. Overall, 70 per cent of Indian companies surveyed plan to increase the headcount in the next two years in order to fuel growth, compared to global average of 64 per cent. In particular, businesses single out freelance and remote staff as the groups of workers they are most likely to hire. Nevertheless, over half of companies (64 per cent) surveyed globally intend to recruit new staff over the next two years.

Besides, 49 per cent of respondent plan to hire more freelance staff and 40 per cent of firms surveyed will employ more remote workers in 2011-2012 indicating a clear move toward more flexible working practices.
Freelance staff will be particularly sought after in developing economies such as Mexico (76 per cent), Brazil (59 per cent), South Africa (57 per cent) and India (53 per cent) signalling that emerging economies have learnt from mature economies' mistakes in the previous recession and are opting to maintain operations lean and rapidly scalable as they grow.


Consumer Products & Services

New Delhi

LG, Lloyd, MTS, Morphy Richards, Bajaj Electricals and other companies betting on festive cheer to beat slowdown blues:

Auto, telecom and consumer durables companies have raised their advertising and marketing budgets by up to 50% to convince cost-conscious buyers to loosen their purse strings in the upcoming festival season. The September-October period packs in two major festivals and offers firms the biggest opportunity in the year to rev up sales. But this time round, businesses will have to use all sorts of tricks to enthuse buyers hurt by rising cost of food, loans and fuel.

The flurry of activity is centering on advertisement houses, with players such as durables and appliances maker Lloyd, mobile handsets maker Lava Mobiles, mobile service provider MTS India and home appliances brand Morphy Richards keen on using print and television advertisements. MTS India, which plans to roll out Android smartphones this festive season, has increased marketing spend across all channels of communication. The idea is to capture growth in the smart voice and high-speed data segments. This is reflective of the continued economic activity in the country.

Similarly, Bajaj Electricals, which also sells the Morphy Richards brand, has doubled marketing and ad spends to Rs 15 crore for the September-November period from last year. For the first time, the company will advertise its pressure and induction cookers and steam iron range as it expects a pickup in demand after Shradh, a period considered inauspicious for buying. Durables company Lloyd has doubled its marketing spend to Rs 10 crore and booked space in 50 malls in 15 cities to showcase its products. Consumer electronics company Panasonic, which has increased spends by 25% to Rs 100 crore this year, will used the increased amount in promoting cameras, and grooming products such as hair dryers and straightners. However, it will continue to focus on core categories such as televisions and air-conditioners.




New Delhi

Honda Brio launched at a starting price of Rs 3.95 lakh:

Honda has entered the business end of India's car market with the aggressively-priced Brio, sending a message that it has the gumption for a fight in the world's second-fastest-growing car market. With a starting price of Rs 3.95 lakh (ex-showroom Delhi), Brio is Honda's cheapest offering and is being launched in the middle of a trying period for the Japanese carmaker. Honda has been struggling with falling sales, production stoppages caused by a devastating tsunami in Japan in March and the recall earlier this month of more than 70,000 City sedans to replace faulty power window switches.

Honda's forte has been the low-volume premium end of the Indian car market, where it sells the City, Civic and Accord sedans and the CR-V sports utility vehicle. The dominance of City, Honda's mainstay, has been undermined by rivals such as Volkswagen's Vento, forcing Honda to drop prices and raising questions about the company's ability to compete in India without being present in the compact car segment. Moreover, Honda does not sell diesel-powered cars.

It is a vital missing element in India because of the large difference in price between petrol and the subsidised diesel. A little more than 2.5 million cars were sold in India in the 12 months to March 2011. Honda sold a little less than 60,000 cars. With help from Brio, Honda expects to sell at least 10,000 cars every month, eventually helping it to utilise its idle manufacturing plant in Rajasthan. For the compact car, the aim is to sell 50,000 units annually.

Honda has been unable to fully use its Greater Noida plant which can make 1.2 lakh cars a year, leading to high overhead costs and inventories. Sales fell 13.4% to 19,433 units in the April-August period. But the recent price 66,000 for the City and 1.6 lakh for the Jazz premium compact-have provided a boost: sales rose to 6,900 units in August from 2,000 in April. To keep costs low, Honda has kept a high proportion of local content in the Brio-it is 80% now and should rise to 90% in the coming months.


Job Market

New Delhi

General Electric bets on India; to hire 6,000 more:

The $150-billion global major General Electric (GE) is betting on India for exponential growth and plans to hire about 6,000 more people over the next five years. They see robust demand for their infrastructure products and financial services in the Indian market.

As they expect their business to grow by 20-30 percent annually, they plan to hire about 6,000 more people to ramp up their headcount in India to 20,000 by 2015. Announcing selection of Pune in Maharashtra for setting up its first integrated manufacturing facility in India with an upfront investment of $200 million (nearly Rs.1,000 crore), the company would focus on increasing localisation to roll out customised products for the infrastructure sector.

GE has been present in India since 1902 when it had set up the country's first hydro power plant in Karnataka. Since then it expanded its footprint by setting up technology centres in Bangalore and Hyderabad, employing about 14,000 people. Combining its engineering and technical talent at the Jack F. Welch Technology Centre in Bangalore and a similar centre in Hyderabad, the US conglomerate plans to increase its revenues and market share substantially in the coming years. The Pune facility will allow them to localise and customise their products in diverse sectors. The great technical footprint in Bangalore will help them to penetrate deeper into the Indian market.


Energy & Power

New Delhi

Expats power up foreign firms' Indian projects making it tough for BHEL and Larsen & Toubro:

Young engineers from China, Korea, Russia and the US are swarming power projects in the country, earning big bucks for themselves and helping foreign companies challenge Bhel and Larsen & Toubro in one of the world's biggest markets for power equipment. HM Chris, a Korean electrical engineer in his early forties, has happily braved harsh conditions in a remote power project site at Chhattisgarh for the past five years. Working in Sipat, a far-flung village, he is helping South Korea's Doosan make a mark in the country, and helping his own savings swell handsomely in days of global economic uncertainty.

Last week, the Korean company grabbed a lucrative NTPC tender, bidding well below Bhel whose equipment generates power to light three out of every four bulbs in India. Chris is one of 40 Korean and Russian employees at a project of NTPC. Vadim Khciuhrhko, who works for Russia's Power Machines, is also roughing it out in rural surroundings, 100 km away from the nearest town, and reaping rich dividends.

Expat engineers have been flown in to help engineer, design and construct projects such as refineries, but in the power sector, it is a recent phenomenon and unlike other sectors, engineers are being stationed permanently. These engineers also help plug the gap in local availability of specialised talent, and are rewarded handsomely even though the equipment supplied by their companies may be cheaper than what Bhel provides. Indian companies have already ordered equipment worth $50 billion from China to build 80,000 mw. The opportunities are enormous as the country aims to add 1 lakh megawatts in next five years. India's move to coal-saving "supercritical" technology has opened doors for Chinese, Korean and Russian companies.

Major private power producers including Adani Power, Tata Power, Reliance Power, Lanco Infratech, GMR Energy and GVK Energy have placed orders with foreign companies. Indian collaborations with Mitsubishi Heavy Industries, General Electric, Hitachi, Alstom, Ansaldo and Babcock & Wilcox have also proved to a boon for foreign engineers. Indian companies are also sourcing auxiliary equipment like cooling towers and switchyards from overseas. Domestic power equipment manufacturers including Bhel and L&T have touted their own equipment as better suited to local conditions and easier to maintain as its engineers are readily available. But foreign rivals have responded by stationing their own engineers on Indian soil, denting the selling proposition of local firms. Indian companies have also been demanding a level playing field against competitors in China, Korea and other countries that offer tax incentives.