The Silver Boom

The prices of silver rose to a six-year high in the Mumbai bullion market on February 4, 1998, following a worldwide spurt in the prices of the white metal caused by US billionaire Warren Buffett's record purchase of the precious metal. In its buying spree, Buffett's Nebraska-based Berkshire Hathaway purchased over 20 per cent of the world's annual supply of silver. The purchase pushed up the metal's price to $7 an ounce in the London market--a nine-and-a-half-year high. Mumbai matched the upsurge with the price of silver going up from Rs 6,820 a kg on November 7, 1997, to Rs 9,350 a kg on February 8, 1998. Following the purchase, the $10.50-billion Berkshire Hathaway announced that it owned 129.70 million ounces of silver, estimated at around $85 million at New York prices then. While the world mine production of silver was an estimated 500 million ounces in 1997, the total fabrication demand was 825 million ounces that year. Silver imports in India--the largest consumer of the precious metal in the world--have doubled since its imports were liberalised in 1992. But prices are unlikely to remain at the extraordinary levels because of buyer resistance.

HLL

The Rs 7,820-crore consumer products giant, Hindustan Lever Ltd (HLL), announced, on February 12, 1998, that it would buy out the Rs 56.92-crore Lakmé's 50 per cent stake in the Rs 134.08-crore cosmetics major, Lakmé-Lever, the Lakmé brands, and Lakmé's two manufacturing facilities. HLL also said that it would merge the Rs 469-crore Pond's India, the Unilever company, with itself. The twin announcements sent the share prices of HLL and Pond's soaring even as the Lakmé scrip languished on the stockmarkets.

MUL

At its recent discussions with the $13.33-billion Suzuki Motor Corp. (SMC) of Japan, the Government of India indicated that it was willing to withdraw support to R.S.S.L.N. Bhaskarudu, managing director of the Rs 7,904.34-crore Maruti Udyog Ltd (MUL), if the Japanese major furnished evidence that he was incapable of tackling the challenges facing MUL. The government also demurred at SMC's proposals that a separate Rs 1,200-crore joint venture be set up to make gearboxes and that the Japanese company hold a majority stake in it. Meanwhile, to combat competition, MUL has given a new look to its Omni model, and is planning to reduce the price of the Zen model.

Tata-IBM

The Rs 746.87-crore Tata-IBM posted a loss of Rs 57.10 crore for the 18-month period ending June 30, 1997, against a loss of Rs 29.75 crore in the previous year (ending December 31, 1995). Among the reasons cited for the poor performance are technological obsolescence of some of the Tata-IBM products, and investments in infrastructure. Tata-IBM has increased its authorised capital from Rs 65 crore to Rs 125 crore, and its issued share capital from Rs 63.63 crore to Rs 92.19 crore.

Mesco

The Rs 1,000-crore Mesco Group announced plans to shift its business operations from Delhi. The group intends selling its surplus commercial property in Delhi and its tannery in Chennai to tide over the financial crisis facing its companies. The announcement came close on the heels of the sale of Mesco Towers in Badarpur (Haryana).

Birla 3M

The Yashovardhan Birla Group announced its plans to sell part of its 32.7 per cent stake in the Rs 70.73-crore Birla 3M. The $1.53-billion 3M of the US will buy back 25 per cent of the Birla stake at an unspecified price (the scrip was traded at Rs 199 on February 6, 1998, on the Bombay Stock Exchange), raising its stake to 76 per cent in the company.

Mercedes-Benz India

Mercedes-Benz India said it will launch its A-Class small car in the country provided the results of its market survey are favourable. The company, which recently launched three models of its new E-Class saloon, has said it will launch the A-Class car within one-and-a-half years of its decision, post-survey. While the E-Class is manufactured at TELCO's Pimpri (Maharashtra) plant, Mercedes-Benz India's upcoming facility at Chikhli (near Pune)--scheduled to be ready by October, 1998--has been designed to make both the E-Class and the A-Class.

GE Plastics India

GE Plastics India signed an alliance with the Rs 229.18-crore Polychem and the Rs 82.24-crore Rajasthan Polymers and Resins to manufacture GE Plastics' Cycolac brand of acrylonitrile butadiene styrene. While the transnational will also make the plastic, it will supply the technology to the two companies, and market and distribute the product as well.

A.V. Birla Group

The Rs 20,000-crore Aditya Vikram Birla Group formed an election trust to fund political parties in Elections 98. Funded by four group companies--the Rs 3,696.91-crore Grasim, the Rs 1,724.44-crore Indian Rayon, the Rs 1,457.15-crore Hindalco, and the Rs 485.20-crore Indo Gulf Fertilisers--the trust will be headed by former Supreme Court Justice P.N. Bhagwati. It will fund both ruling and opposition parties at the national and state levels. The trustees will decide on distributing the funds in consultation with the advisory board.

Johnson & Johnson

The Rs 424.45-crore Johnson & Johnson's advertising campaign for its Acuvue disposable contact lenses, which claims 95 per cent ultra-violet protection, led the company into a controversy. The ad has been banned in the US by the Food and Drug Administration since the company could not substantiate its claim with medical evidence.

Ispat Group

The Rs 2,004-crore Ispat Group announced its plans to downsize its workforce. The exercise will begin with the Rs 1,427.95-crore flagship Ispat Industries--which eased out 100 employees from its Calcutta headquarters in 1997, and plans to shed another 50--followed by Gontermann Peipers (India). While the group has commissioned McKinsey & Co. to review its activities, it will use the voluntary retirement scheme and transfers. The Ispat Group also plans to shift the headquarters of Ispat Industries to Mumbai from Calcutta.

Dabur India

The Rs 720.94-crore Dabur India has decided on major organisational and strategic changes next fiscal. V.C. Burman, currently a managing director, will become chairman in place of his elder brother A.C. Burman who will continue to be a whole-time director. G.C. Burman, the other managing director, will be the vice-chairman and managing director, and Anand Burman, son of A.C. Burman, now a director in the company, will be elevated to the new post of deputy managing director. Dabur will also appoint a professional CEO who will report to the managing director and the deputy managing director.

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