Ice-Cream maker Vadilal Industries Expansion-Cum-Modernisation Plan

With its Rs 80-crore expansion-cum-modernisation plans completed, Vadilal Industries Ltd, India's second largest ice-cream maker after Amul, is all set to increase its production capacity from the existing 2.25 lakh litres per day to 3.25 lakh litres at its two manufacturing plants in Gujarat and Uttar Pradesh, from Friday.

The Rs 40-crore expansion at each of the plants — Pundhra in Gandhinagar district and Bareilly in Uttar Pradesh — has been carried out with internal accruals and borrowings, Mr Rajesh Gandhi and Mr Devanshu Gandhi, both Managing Directors, told presspersons here today.

The 80-year-old company has also set up India's fastest cone-making machine with a capacity of 18,000 cones an hour, as against 6,000 in the case of the existing machines. Since 60 per cent of sales come from cups, cones and candies, Vadilal plans to increase its share in the organised market from the current 20 per cent to 24 per cent by focusing on these as also small-value packs which are new growth drivers. Its candy-making capacity, 15 lakh pieces per day, is the largest in India.

With a view to achieving a growth of 40 per cent, as against the industry's growth 15 per cent, Vadilal is increasing its ad-spend by 40 per cent, with a focus on electronic media.

While the Chinese ice cream market size is around Rs 20,000 crore per annum, India's is only Rs 2,500 crore, of which the organised sector market is estimated at Rs 1,500 crore. Problems such as weak cold chains, logistics and reach to the rural areas are hampering the growth of this industry, they added.

Currently, Vadilal has 150-plus flavours, sold in a variety of more than 250 packs and forms.

The range includes cones, candies, bars, ice-lollies, small and big cups, family packs and economy packs.

The BSE-listed company, whose turnover in 2010-11 was around Rs 270 crore with a PAT of Rs 10 crore, is increasing the network of retailers from the current 50,000 to 70,000 across India. Currently, it procures 70,000 litres of milk per day and is planning for backward integration to increase it in the near future.

“The company's national ice-cream market share would have been even higher but for the fact that it does not operate in major consuming regions such as Maharashtra and the four southern states as these are covered by another faction of the Vadilal family,” the Gandhis said.

 

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Solvay acquires Rhodia SA

Belgian chemicals and plastics company Solvay SA has announced plans to acquire specialty chemical producer Rhodia SA in a deal valuing the French company at 3.4 billion euros ($4.8 billion).

Brussels-based Solvay is offering 31.60 euros for each Rhodia share in cash as part of a friendly deal. The new group will have sales of 12 billion euros.

“We have a shared vision in that we want to create a new group to achieve our goal of sustainable growth and development in chemistry”, Christian Jourquin, CEO of Solvay, said in a statement. “We see the possibility of doubling our [recurring earnings before interest and taxes, depreciation and amortization] to almost 2 billion euros and creating a major global chemicals platform under the banner of Solvay.”

The acquisition will be earnings accretive from 2011, with annual cost synergies of 250 million euros expected within three years, which will be achieved through the reduction of external costs and “without major downsizing plans.”

The aim of the deal is to create a global chemical company with an enlarged business portfolio. Solvay is a leader in high performance specialty polymers, soda ash and hydrogen peroxide, while Rhodia is strong on specialty materials (silica and rare earths), products for consumer markets and engineering plastics based on nylon 6/6.

Solvay says the group will also concentrate on growth in emerging markets, which already generate 40 percent of sales for the combined group.

Jean-Pierre Clamadieu, chairman and CEO of Lyon, France-based Rhodia, will take on the role of deputy CEO once the offer is closed. He is also expected to succeed Solvay’s current CEO Christian Jourquin when he retires.

The deal is conditional upon approval from EU and US anti-trust authorities.

During the recession, Solvay announced major reorganisation plans, including the sale of its pharmaceuticals business to focus on chemicals and plastics. Last year it reorganized further, reducing annual costs by 65 million euros and making 800 redundancies.

France-based Rhodia has 14,000 employees worldwide and generated sales of 5.23 billion euros in 2010. Solvay had sales of 7.1 billion euros last year.

In related news, Solvay has also announced to plants to unite Solvay Advanced Polymers, Solvay Padanaplast, Solvay Solexis and SolVin PVDC as a single business unit: Solvay Specialty Polymers.

Headquartered in Bollate, Italy, the company’s activities employ more than 2,500 across 26 locations throughout North and South America, Asia and Europe.

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Wilo SE inaugurates hi-tech mfg plant at Kolhapur

Pump and pumping system manufacturer Wilo SE has inaugurated a hi-tech manufacturing plant at Kolhapur.

Built at an investment of Rs 100 crore, the new facility will manufacture standardised water handling pumps and pumping systems.

It will produce the latest range of Wilo products for the domestic market as well as for its subsidiary Mather & Platt Pumps Ltd for the global market. The company expects a turnover of Rs 150 crore a year from the Kolhapur plant, 80 per cent of it coming from domestic sales.

INVESTMENT PLANS

Wilo SE also has plans to infuse more funds in India to expand capacity and upgrade technology, plant and machinery both at Kolhapur and Pune. Dr Jochen Oplender, Chairman Emeritus, said over Rs 200 crore will be invested for the purpose in the next five years.

"We also will create job opportunity for 1,000 skilled and semi-skilled manpower by 2015," he added.

Wilo SE considers the Asian market, especially India as a prominent growth opportunity. It has also set up an R&D centre at Pune, the first such Wilo facility outside of Germany, where 40 engineers are working on new generation product development.

In India, Wilo operates through its subsidiary Mather and Platt Pumps Ltd, which it acquired in 2005.

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Hindustan Copper Plans Expansion

State-run Hindustan Copper plans to invest Rs 3,677 crore to almost quadruple its existing copper ore production capacity to 12.41 million tonnes per annum (mtpa) by 2016-17.

"The company has prepared an ambitious expansion plan to expand the capacity of 3.21 million tonnes to 12.41 million tonnes at an estimated cost of Rs 3,677 crore, which would be funded from internal resources, fresh issue of shares and debt," the Mines Ministry's Outcome Budget for 2011-12 said.

The entire expansion would be completed by 2016-17 and in the meantime, the company would also take up greenfield projects for exploration and ore production, it said.

The company would spend a total of Rs 297 crore next fiscal through internal sources for part-funding the expansion of the Khetri, Kolihan, Banwas and Singhbhum mines and reopening of the Rakha and Kenadadih mines.

The only copper ore producer in India, Hindustan Copper's existing capacity caters to about 3 per cent of the requirement of optimum utilisation of installed capacity for smelting/refining of copper in the country.

"The gap in supply and demand provides a huge opportunity to the company to expand its operations in the mining of copper ore," the note said.

The company plans to invest a total of Rs 174 crore for expansion of the Khetri mines from 0.5 mtpa to 1 mtpa. In the Kolihan mines, it would invest Rs 275 crore for expanding the capacity to 1.5 mtpa from 0.5 mtpa and Rs 91 crore to develop the Banwas mine with a capacity of 0.6 mtpa.

The Surda mine's capacity will be expanded to 0.9 mtpa from 0.42 mtpa at a total cost of Rs 216 crore. Hindustan Copper would also invest Rs 347 crore to reopen the closed Rakha mine and Rs 87 crore for enhancing the capacity of the Kendadih mines to 0.21 mtpa.

The note said that the company has already applied for prospecting leases across the country for greenfield exploration and it proposes to explore and develop these mines through a joint venture with global mining majors.

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Essar Energy to acquire Shell refinery for US $350 million

Essar Energy to acquire Shell refinery for US $350 million

Essar Energy said it expects to sign a deal to acquire Royal Dutch Shell’s Stanlow refinery in northwest England for US $350 million by month-end.

The company, announcing financial results for 2010 full year, in a press statement, said it is “expecting to sign deal to acquire Stanlow, the UK’s second biggest refinery, from Shell over the next 10 days, by March 31. Acquisition price will be US $350 million plus inventory at cost price,” Essar said.

Essar had on February 18 announced acquisition of the Stanlow refinery to make the Ruias-promoted firm the first Indian refiner with “truely global footprint.”

Essar owns a refinery at Vadinar in Gujarat which can process 2,80,000 barrels of crude oil per day.

It also owns a 90,000 bpd unit in Kenya and is expanding Vadinar to 4,00,000 bpd (20 million tons). Stanlow has a nameplate capacity of 2,96,000 bpd but currently operates at 2,20,000 bpd.

Together, it will now have a little less than one per cent of global oil refining capacity of 88 million bpd. Essar will also pay for Stanlow’s crude and oil product inventory, which will be about US $780 million at current rates, the statement said.

Essar said the phase-I expansion of Vadinar refinery on the west coast will be completed this year at an estimated cost of US $1.85 billion. Following the expansion, the refining capacity will rise to 3,75,000 bpd and lift complexity from 6.1 to 11.8, allowing it to produce Euro V standard petrol and diesel of UK and European quality.

“We also have a further optimisation project underway at the Vadinar refinery costing US $380 million to take capacity to 4,05,000 bpd by September 2012,” the statement said.

In power, Essar said it has US $8.02 billion investment underway. These include 10 power plants under construction totalling 8,070 megawatt of electricity generation capacity. Besides, two other power plants are at a development stage totalling 1,800 Mw at US $1.56 billion. They will move to construction once the company has fuel and funding secured. “By end of 2014, we will have 11,470 Mw operational altogether against just 1600 Mw now,” Essar said.

“We are focused on delivering our growth projects including securing the necessary approvals to move forward with our coal mine developments,” the statement said.

Essar Energy Chief Executive Naresh Nayyar said demand for energy in India is expected to continue to grow sharply. “We remain focused on delivering our key projects, which in 2011 includes the first phase of our Vadinar refinery expansion and another 2,910 Mw of power generation capacity,” he added.

 

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Berkshire Hathaway Buys Lubrizol For $9 Billion In Cash

OMAHA, Nebraska (AP) — Warren Buffett's Berkshire Hathaway Inc. is buying specialty chemicals company Lubrizol Corp. for about $9 billion in cash, making it among Berkshire's biggest acquisitions.

The companies said Monday that the transaction also includes about $700 million in net debt. Berkshire will pay $135 per share, a 28 percent premium to Lubrizol's closing stock price Friday of $105.44.  Buffett said earlier this month he was looking for more big acquisitions to boost Berkshire's earnings power. Last year, Berkshire Hathaway acquired railroad Burlington Northern Santa Fe for more than $26 billion.  "Lubrizol is exactly the sort of company with which we love to partner — the global leader in several market applications run by a talented CEO, James Hambrick," Buffett said in a statement. Lubrizol makes chemicals for pharmaceutical companies, fuel additives for gasoline and diesel and other ingredients for the transportation sector. Last month, it reported that its fourth-quarter profit climbed 17 percent because of a $19 million tax benefit and higher sales. The company's revenue grew 11 percent to $1.32 billion. Berkshire Hathaway, which is based in Omaha, Nebraska, owns roughly 80 subsidiaries, including insurance, clothing, utility, furniture, jewelry and corporate jet firms. It also has major investments in such companies as Coca-Cola Co., Washington Post Co. and Wells Fargo & Co.

Buffett, whose investing decisions are carefully scrutinized by the world of finance, said earlier this month that while he's interested in making acquisitions, it's hard to find big businesses that fit into Berkshire Hathaway well. He also noted that businesses that do appeal to him usually aren't selling at the right price.  Buffett is an adherent of value investing — focusing on finding financially sound companies with underpriced shares. He has simple standards for what he looks for in an investment: easy-to-understand large companies with a strong competitive advantage that generate cash and above-average returns on capital. Berkshire's biggest acquisition before BNSF was the $16 billion stock purchase of reinsurance giant General Re announced in 1998.  Buffett said he tries to close deals quickly partly to avoid the kind of insider trading a former Goldman Sachs board member has been accused of engaging in just before Berkshire invested $5 billion in Goldman in 2008.

Berkshire Hathaway and Lubrizol expect the acquisition to close in the third quarter. After the deal is complete, Lubrizol will become a Berkshire Hathaway subsidiary. It will keep its Wickliffe, Ohio, headquarters and continue to be led by current management. Both companies' boards have unanimously approved the buyout, but it still needs the approval of Lubrizol shareholders.

 

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No Ban on use of chinese equipments for power projects in India

The government today said that at present there is no proposal to ban the use of Chinese equipment in power projects.



"There is no proposal to impose a ban on Chinese equipment in power projects at present," Minister of State for Power K C Venugopal said in a written reply to Lok Sabha.



As informed by the Central Electricity Authority (CEA), no specific issues related to the quality of turbine generators from foreign manufacturers have been brought out by the utilities, Venugopal noted.



There were some failures with boiler and turbine generators supplied by Chinese manufacturers to power plants in West Bengal.



At the Durgapur Projects Ltd , one unit of 300 MW was installed by China's Dongfang Electric Corp and was under commercial operation since April 2008.



Venugopal said that DPL had not faced any problem with the operation of the turbine.



He noted that due to some accidental failure of the control system, there was starvation in turbine bearing lubricating oil system on May 30, 2010, which led to some damage of the turbo-generator rotors.



"The damaged portion of the rotors have been repaired and ready for re-commissioning in May 2011," he added.



According to him, two sets of 300 MW units were supplied by Chinese entity DEC were commissioned at Sagardighi Thermal Power Plant of the West Bengal Power Development Corporation in 2008.



"Initially, there was failure of LP Turbine blade of Unit 1. Subsequently, it was replaced and now both the units are running well," Venugopal said.



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Dodsal Group acquired Chennai-based AE&E IDEA (India) Private Limited

UAE-based engineering, procurement and construction company Dodsal Group has acquired Chennai-based AE&E IDEA (India) Private Limited, it was announced here on Tuesday.



The acquisition adds to Dodsal's growing portfolio and improves its project execution capabilities in the engineering, procurement and construction sectors.



In its 27 years, AE&E IDEA (India) Pvt Ltd has established its presence in the power, oil and gas and infrastructure sectors and complements and enhances Dodsal's engineering division's own strengths in the fields of oil and gas, power, pipelines, infrastructure, exploration & mining.



Rajen A Kilachand, the Chairman and President of Dodsal Group, said the acquisition is a strategic fit and further strengthens the company's existing business footprint in the energy, industrial and infrastructure sectors.



"It opens a new window to provide comprehensive solutions and deliver path-breaking technological development in the engineering, procurement and construction space. With huge investments expected in the energy and power sector, we are confident that the synergies with this acquisition will help us to achieve our core mission of serving customers globally," he said.



The enhanced engineering expertise augments the engineering capability within Dodsal's existing business line, providing areas for exploring value engineering options and providing customers more cost-effective EPC business solutions, which sync perfectly with a deeper strategy at Dodsal to execute EPC projects with in-house engineering resources.



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Nuclear Power Corporation of India begins ground work for 6000MW project in West Bengal

Nuclear Power Corporation of India (NPCIL) is slated to complete preliminary ground work for its controversial 6,000 mw power plant in West Bengal by March 2012.



The proposed nuclear power project at Haripur has run into trouble with locals resisting land acquisition. NPCIL, however, has gone ahead and started ground work. Land acquisition for the project is likely to start by 2013.



"Ground work includes collection of oceanography and meteorological data, which is currently in progress. However, we are not carrying out any geo-technical test at present. This can wait for some more time. But by March 2012 all basic information will be with us," NPCIL chairman S K Jain said in Kolkata on Wednesday.



"Following completion of data acquisition, the site will have to be finally cleared by the Atomic Energy Commission board. Following this, NPCIL will start land acquisition. The project will require around 650- 700 hectares for setting up the two reactors of 1,000 mw each in the first phase," Jain said on the sidelines of the conference "Frontiers of Science".



The NPCIL chairman said the company was not facing any difficulty in carrying out data collection work. He said efforts would be made to win over the locals with attractive rehabilitation packages and measures would be taken to ensure there was no environmental damage because of the project.



"The project will not be harmful to the environment or affect fishing activities in the coastal areas of East Midnapore. It will, in fact, be a major boost to the local economy and help maintain ecological balance," Jain said.



Land acquisition for the projec would start by 2013, Jain said. "We need 18 months of activities before the first reactor comes up. Since we plan to begin work during the 12th Plan period in 2013-14, we have not yet come to the land acquisition stage. But we must start acquiring by late 2012 or early 2013 if we have to stick to the schedule. We are confident of being able to go ahead."



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Lanco Infratech receives environmental clearance for 1320MW Thermal Project in Maharashtra

Leading infrastructure group Lanco Infratech today said it has received environmental clearance for its 1,320 Mw coal-based thermal power project in Maharashtra.



The company's subsidiary Lanco Vidarbha Thermal Power has got the approval for the project from Ministry of Environment & Forests.



"(The approval is) for setting up 1,320 (2X660) Mw coal-based super critical thermal power project at village Mandva, in Wardha taluk and district in Maharashtra," Lanco Infratech said in a filing to the Bombay Stock Exchange (BSE).



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