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Ranbaxy's D.S. Brar: A favourable verdict |
Ranbaxy
may be pumping big money into researching and developing new molecules,
but you have to wonder how large the budget of the legal department
would be.
After all, last fortnight, for the third time
in about a year, the group got into a legal tangle with a global
pharma major. Ranbaxy Pharmaceuticals Inc, the wholly-owned US subsidiary
of Ranbaxy Laboratories, was dragged to court by Pfizer for infringing
on its patent for an anti-fungal drug, Diflucan.
A $1-billion drug, Diflucan is patented by Pfizer
till January 2004. Pfizer wants to extend the patent validity for
another on grounds of paediatric usage.
The reaction of Ranbaxy officials to being
sued is one of nonchalance, to put it mildy. "It's a normal
development," shrugs a company spokesperson. ''So many cases
against Ranbaxy only go on to prove that we are a strong global
player.''
Multinational drug majors have no recourse
save the legal one when companies like Ranbaxy launch cheaper generic
variants of their blockbusters when the latter's patents expire.
Asking for an extension of the patent's validity
is accepted legal procedure in the drug industry. That could explain
the matter-of-fact way in which Ranbaxy has reacted to the suit.
It also reflects the fact that Ranbaxy has
had little problems in getting the verdicts in their favour: most
past suits have worked to its advantage.
In May 2001, a judge threw out GlaxoSmithKline's
appeal, disallowing Ranbaxy from introducing low-cost versions of
the $2 billion-a-year antibiotic, Augmentin.
And, in February this year, Ranbaxy cocked
another snook at GlaxoSmithKline by getting the US FDA's approval
for Cefuroxime Axetil. More power to the Indian multinational!
-Swati Prasad
PUMA
Predator-II
Puma re-enters India, and this time round it's
come in with much more than footwear.
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Puma on the prowl: Hardselling the lifestyle
brand |
Puma
is on the prowl, yet again. The Euro 1 billion-plus footwear and
lifestyle major is back in India after an unsuccessful run from
1991-94 when Puma was being sold by Corona Shoes. It is a different
tale now, if Shriti Malhotra, Brand Manager, Puma, is to be believed.
"Puma has now entered India as a brand, whereas earlier it
was just here for the price-advantage." Puma plans to align
its business in India on the global model where the brand has been
repositioned from a plain-vanilla sportswear entity to a sports
lifestyle brand.
The shift may take a while in India as Puma
is primarily perceived to be a sports footwear company, but the
current licensee, Planet Sports, is hopeful of changing that. "We'll
be able to achieve the global ratio of being a 50 per cent sports
entity and a 50 per cent lifestyle brand by 2003," emphasises
Malhotra.
Puma plans to infuse Rs 9 crore ($2 million)
in the brand in the next three years, with 60 per cent of the funds
going into product development and the rest into retail and promotion.
Initially, the licensee plans to import from abroad "owing
to the high-end brand image". Sourcing from bases in Vietnam,
Indonesia and Malaysia has been sorted out to get a lower freight
advantage.
Says Pradeep S. Shekhawat, Vice President (Licensing,
Business, & Marketing), Planet Sports, "For the first two
years, we will import the entire footwear range. Ninety per cent
of the apparel range will be locally manufactured."
However, Planet Sports is also considering
manufacturing Puma shoes in India from 2003, when it will have the
option of roping in contract manufacturers. By all indications,
Puma isn't backtracking this time round.
-Moinak Mitra
FIRST MOBILE
Dial FMI for Service
An international mobile phone distributor
sets up shop amidst a sea of grey.
The
next time you pick up a mobile phone from the grey market, spare
a moment to think about what you would do if it stopped ringing
(or singing, in case you bought that particular brand). The well-heeled
will, of course, duly dump it and revisit the grey market, but not
everybody can afford to change cell phones the way they change partners.
That's where First Mobile India (FMI) comes in. The Indian subsidiary
of the Hong Kong-based HK $53.3-billion (Rs 2,61,170 crore) First
Mobile Group (FMG) (it sold 4.3 million units last year) is targeting
sales of 1 lakh units in India this year, which translates into
a turnover of Rs 50 crore.
First Mobile's USP is that it's not just another
distributor (worldwide, it sells models of brands like Samsung,
Alcatel, Philips, and Siemens, as well as not-so-well-known names
like Kyocera, Sendo, Sagem, and Sendo). "We are the only ones
to have state-of-the-art service centres providing after-sales service
for multiple brands,'' claims Sanjoy Roy, MD, FMI, who sees 5-8
per cent of his revenues coming from after-sales service.
Gross margins in the distribution business
aren't too high, hovering in the 3-5 per cent region. That's why
FMI has to up sales quickly. The company is gunning for a 10 per
cent share of the organised market in 15 months.
It's the service carrot that could help FMI
hit those figures. As of today, FMI has three service centres in
Mumbai, Delhi, and Chennai. Of course, FMI will need to set up many
more such centres if has to be noticed in the market, 85 per cent
of which is grey.
-Brian Carvalho
BHARAT
ELECTRONICS
BEL Tolls For Punters
Bharat Electronics is India's only defence equipment
manufacturer that's listed on the stock exchanges. Still wondering
why investors are lapping it up?
Even as the markets
were tanking last month, thanks to the cries of war-or at least
the rattling of the sabres-one stock was calmly more than holding
its own on the stockmarkets. In fact, over the past three months,
Bharat Electronics Ltd (BEL), in which the government controls 76
per cent with the rest being in public hands, has gained close to
50 per cent; since October, the stock has appreciated over three-fold.
SAME'S DIFFERENT TACK
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The year gone by couldn't have been
worse for the tractor industry: it could sell just half of
its 4 million capacity. Italian tractor major Same Deutz-Fahr
thought it a good opportunity to buy out its joint venture
partner Greaves (for roughly $5 million) last month. The No.
4 player in the global tractor market will now pump $20 million
(Rs 98 crore) in the plant at Ranipet to produce 10,000 tractors.
That number may appear small but Same
is targeting the high horse-power (hp) segment-45-50 hp and
upwards, which cost Rs 3 lakh-plus per tractor-of which only
6,000 sold last year.
''We find increasing preference towards
high hp tractors,'' says Kamal Bali, the company's Commercial
Director (Asia).
Bali predicts that the next two years
will be flat in terms of overall tractor sales, but growing
aspirations of farmers (particularly those upgrading or purchasing
their second tractor) will ensure good offtake of high-hp
tractors. Now that's a high-powered furrow.
-Nitya Varadarajan
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There's a reason of course for the Rs 1,940-crore
BEL, which was set up by the government in 1954, becoming the flavour
of the season. It's India's only defence company that's listed on
the exchanges. And with the government indicating its intention
of upping defence expenditure in reaction to border tensions, the
company that designs, develops and manufactures, among other things,
radars and defence communication systems is in clover. "We
have a comfortable order book position of Rs 4,100 crore,"
says a relaxed Dr V.K. Koshy, Chairman & Managing Director,
BEL.
Koshy, however, will soon have to contend with
private competition, what with the government throwing open the
sector to foreign investment, up to 26 per cent. Already companies
like Larsen & Toubro have applied for licences, and are talking
to international players in the US, Sweden and Italy for collaborations.
That's why BEL is attempting to de-risk its
business portfolio. In 2000-01, 78 per cent of its turnover came
from the defence departments. Last year, the figure dropped to 72
per cent. The company has diversified into the telecom/infocom sectors,
and has announced plans to launch hand-held computers, smart cards,
motherboards, solar-powered traffic signals and even a soundwave-based
device to help fishermen detect shoals of fish.
For the moment though, BEL is riding the wave
of being India's only listed defence stock. For investors, if greed
is good, (talk of) war is better.
-Venkatesha Babu
Terms
Of The Trade
Corporate-speak you can't do without this season.
Tear and keep.
BUSINESS PROCESS IMPROVEMENT (BPI)
Enhancing the profitability of
the business by improving operating efficiency on the one hand and
reducing costs on the other.
Sales continue to be hard to come
by and Enronitis has caused analysts and fund managers to take a
magnifying glass to financial statements. Which is why this hoary
technique is back in vogue, albeit under a new name.
FORCE-FIELD ANALYSIS
Procedure for deciding what factors
or forces seem to be contributing to a problem.
Like the few other business tools that
aren't focussed on deriving chaos out of order, but on the reverse,
force-field analysis is a science-heavy method to ascertain whether
there is something like the butterfly effect (you know, one flaps
its wings in one part of the world, and an economy crashes in the
other).
IRM (INFORMATION RISK MANAGEMENT)
Includes services like Software Asset Management and Business
Continuity Management to assist clients across diverse industries
manage their infotech-related business risks.
We've been hearing a lot of this lately. Please see the Managing
section of this magazine for an agonisingly descriptive know-how.
MANAGEMENT BY EXCEPTION
Any exceptional management decision
that cannot be taken at one level and is passed on to the next level.
Bureaucracy, not necessity, is the
mother of invention (of management terms).
MAS (MANAGEMENT ASSURANCE SERVICES)
Includes internal audit, risk
management and corporate governance services to meet current risk
management and internal assurance needs of clients.
Corporates are touchy about all three,
internet audit, risk management, and corporate governance. What
better way to overcome that touchiness than creating a specialisation?
MBO (MANAGEMENT BUY-OUTS)
Existing management of a company
being funded by external investor to acquire the business from the
organisation's promoters.
Why run what you don't own when you
can own what you run. An eternal favourite.
PEOPLE CAPABILITY MATURITY MODEL (PEOPLE
CMM, OR P-CMM)
A framework for successfully addressing
strategic workforce issues.
HR pros have always been a little
offended at their function being labelled touchy-feely. Here's the
antidote.
PURE-PLAY
A company devoted to one line of
business, or, whose stock price is highly correlated with the fortunes
of a specific investing theme or strategy.
As opposed to diversified; an adjective
that can be used indiscriminately.
QUALITY REGISTRAR
Any organisation that issues quality-related
certifications (ISO 9000, ISO 9001, ISO 14000).
The 1990s obsession with quality certifications
is yet to die out in India
STRATEGIC INFLEXION POINT
Major turnaround point in an industry/company/sector,
which may have a positive/negative impact.
If pure-play is salt, this is pepper.
Sprinkle liberally.
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