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The
immediate news should make 42-year-old Kishore Chokhani happy. The
managing director of Mumbai-based pharmaceutical trading house Euro
Transcontinental has just bagged a $500,000 (Rs 2.37 crore) order
to supply four tonnes of Roxithromycin, an antibiotic, to China's
Guangdong province, one of the worst affected by the SARS epidemic.
If Chokhani isn't smiling, it is because he has, not too long ago,
lost an order thrice that magnitude. Euro Transcontinental was a
sneeze-and-a-cough away from bagging an order to supply $1.5 million
(Rs 7.1 crore) worth of Cefixime to the same Chinese province. But
Chokani was unwilling to travel to Guangzhou, the capital of the
province, to ink the deal. "It is a major loss because I have worked
on this deal for the past six months; but I am not willing to take
the risk."
India may be SARS-free as the World Health
Organization has so obligingly declared, but its economy is, evidently,
not immune to the fallout from the outbreak. The shipping industry,
for instance, is almost grounded: deliveries to the ports of Singapore
and Hong Kong have all but ceased and apart from hurting India's
bilateral trade with these regions, this has hit India's exports
to the US West Coast and Australia (shipments are routed through
either Singapore or Hong Kong) hard. And the Hong Kong Trade fair,
originally scheduled between April 21 and April 24, has been pushed
back to July. This means a loss of a few thousand crores of rupees
for garment- and gift-products-exporters. The April fair routinely
attracts large buyers from Europe, US, Canada, and Australia who
place their Christmas orders well in advance. July may be too late
for that and it is likely that these buyers have identified other
suppliers. The Delhi-based gift products exporter Globe Enterprises
secures orders accounting for 20 per cent of its revenues at the
fair and its Managing Director, T.R. Kathuria fears that it may
have to forgo that portion this year. "The cancellation of the fair
has meant a major loss," he rues.
India's Health Minister Sushma Swaraj may be taken in by WHO's clean
chit to the country, but some buyers are playing extra safe. Virender
Uppal, the Chairman of the Apparel Council of India estimates that
orders to the scale of Rs 400 crore have been lost primarily due
to the unwillingness of buyers to travel to India. Travel and tourism,
an industry that has become vulnerable to most things-recent examples
being 9-11, the war in Afghanistan, Gulf War II-is, expectedly,
the worst hit. Ankur Bhatia, the Managing Director of Amadeus, a
company that provides the information infrastructure for the travel
industry claims that the volume of inbound and outbound traffic
into and from India has fallen between 25 per cent and 30 per cent
in the months of March and April (as compared to last year). Particularly
hit has been outbound traffic to West Asia and the Far East: volumes
have fallen up to 40 per cent compared to last year.
The gems and jewellery sector, the bellwether
of India's export performance, isn't faring too well either. First,
thanks to Gulf War II, Dubai, an important centre for the sale of
gold jewellery, was out of bounds. Now, courtesy SARS, it is Hong
Kong, another hotspot. That could shave a few percentage points
off the rate of growth of Indian exports, reckons Rafeeque Ahmed,
the president of the Federation of Indian Exports Organisations.
Software continues to be the great white hope:
the far East accounts for a fraction of Indian software exports.
Better still, companies have been able to route their execs to the
US West Coast through Malaysia and Europe, avoiding SARS-scarred
Hong Kong and Singapore. Still, should the epidemic continue to
ravage China for some more time, argue some experts, India's drug,
chemical, dye, and garment exporters-they are in direct competition
with Chinese exporters-could gain. "The mishandling of the
SARS epidemic by the Chinese could well mean greater inflow of Foreign
Direct Investment into India," reasons Surjit S. Bhalla, the
President of Oxus Research. "Global investors dislike misinformation
and could shun China for sometime." We'd love to think so.
-Ashish Gupta
Paired
Success-genes
India's biotech companies discover that they
need to partner to thrive.
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| A biotech hotshop in Hyderabad: Going
solo won't do any more |
Dr
B. Bowonder, the dean of research at Hyderabad's Administrative
Staff College of India, should know a thing or two about India's
fledgling biotech sector. The man has been tracking Indian biotech
companies for years. Now, based on a study of 20 of Indian biotech's
finest, he says partnerships represent the only way ahead for companies.
His reasoning: product development requires substantial funds and
involves a longish gestation; ergo, venture capitalists won't be
too interested in funding biotech firms. Bowonder's theory is backed
by the fact that 12 companies in his sample have identified partnerships
as a sustainable strategy.
That's a theory that finds easy acceptance
among practitioners. "The biotech space is volatile and it
is not possible for individual players to survive if they do not
leverage the synergistic forces that exist within the industry,"
says K. Varaprasad Reddy, the Managing Director of Shantha Biotechnics,
the first company to launch an indigenous hepatitis vaccine. Shantha
forged an alliance with Bangalore-based Biocon last year to manufacture
and market recombinant human insulin. And over the past year it
has been seeking a strategic partner that can invest money and expertise
in an endeavour to become a significant multi-product company.
Hype and competition are two reasons for the
sector's volatility. Buoyed by the media's representation of biotech
as the next big thing, a flurry of companies entered the business.
Today around half-a-dozen locally made hepatitis vaccines compete
with Shantha's. It isn't that the company hasn't been able to find
partners with money-Reddy claims companies from Korea and Taiwan
are interested. It is just that not too many of these have the requisite
expertise. Biocon does, for instance, and that saved Shantha investments
of some Rs 70 crore that it would have otherwise had to make. Even
pharma major Dr Reddy's is looking to use Bharat Biotech's manufacturing
facilities to make its own hepatitis vaccine, an arrangement that
Executive Vice Chairman & CEO G.V. Prasad prefers to describe
as "more in the nature of contract manufacturing than a partnership".
Whatever the nomenclature, as Bowonder argues, it is only by riding
on each other's shoulders that Indian biotech firms can hope to
thrive.
-E. Kumar Sharma
Celluloid
Siege
A recent suicide reiterates that all's not well
in Tamil filmdom.
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| G. Venkateswaran (L) and a still
from Anjali: Neither had a happy ending |
A
once-prosperous businessman runs into rough weather, creditors make
life miserable, and faced with no other option, the protagonist
takes his own life. That's a script worthy of a Kollywood (the Chennai
film industry) weepy. So, when 56-year-old Tamil film producer G.
Venkateswaran, or GV as he was popularly known, was found hanging
from the ceiling fan of his bungalow in a tony Chennai borough,
it was a cruel case of life imitating art.
In the often-shadowy world of Tamil films,
GV was an exception of sorts, and not just because he was the first
producer to take his company, GV films, public in India, as far
back as 1989. A chain smoker, the man could talk about his glory-days
in the late 1980s-he once paid an income tax of Rs 3.75 crore-and
the not-so-great years that followed with equanimity. He also had
a near-perfect pedigree in Kollywood. His father Ratnam Iyer made
a fortune as a film distributor-producer in the black-and-white
era, and ace director Mani Ratnam is his younger brother. The family
once owned the whole of Venus Colony, a neighbourhood in the heart
of south Chennai. GV, mostly in association with Mani Ratnam produced
and distributed some of Tamil Cinema's biggest hits like Nayakan,
Dalapathi and Anjali.
For a producer of the stature of GV to succumb
to financial pressures indicates that all is not well with the Rs
300-crore Tamil film industry. Plagued by rampant piracy and disproportionately
high star costs, the number of films coming out of Kollywood has
come down significantly over the last five years. And of the 100
movies made in 2002, barely a dozen managed to succeed at the box-o.
"It is very difficult to survive,"
moans Chitra Lakshmanan, Secretary, Tamil Film Producers Council.
"Piracy alone sets the industry back by Rs 100 crore every
year. And even new actors who've had half a hit demand unrealistic
salaries." That forces producers like GV to borrow money at
bleeding interest rates from private lenders. The result is rarely
a happy ending.
-T.R. Vivek
DASH
BOARD
 A
Just when everyone thought the Nandas of Escorts couldn't find anyone
to bankroll their new telecom aspirations (cellular ops in Rajasthan,
Uttar Pradesh East and Himachal Pradesh, courtesy new licences),
Rajan Nanda has roped in International Finance Corporation as an
equity investor and a debt provider. Bravo.
 B
With MIT's own media lab going nowhere it was only a matter of time
before something happened to the Indian version. On a recent visit
to India, founder Nicholas Negroponte met with Telecom and IT Minister
Arun Shourie and decided that MIT Media Lab would no longer be part
of the active management of Media Lab Asia. Gone in 60 seconds,
eh?
NATIONALISM
Five Reasons To Pick India
- Yesterday's superstar
China has been laid low by SARS
- Stability: the current government has been
in office 42 months
- The Indian economy was the second fastest
growing one in the world in 2002
- The cricket team is on a high; and Bollywood
is gaining global recognition
- Its key ministers can and do speak the language
of business, English
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