Zydus first Indian co to file H1N1 clinical trials

AHMEDABAD: The race among Indian pharma companies engaged in swine flu vaccine development may soon throw up a winner just when the pandemic enters a critical stage with the onset of winter.

Drug Controller General (India) Dr Surindra Singh told ET that the Rs 3,000-crore pharma major Zydus Group has become the first domestic company to file for clinical trial protocol for H1N1 vaccine with the DCGI. With this filing, the Ahmedabad-based major leads other Indian pharma majors including Bharat Biotech, Panacea Biotech and Serum Institute of India, the three entities mandated by the Indian government to develop the vacccine.

Interestingly, another pharma major Cadila Pharmaceuticals which too is developing a swine flu vaccine with US collaboration using an advanced technology belongs to Gujarat, whose chief minister Narendra Modi is still recovering from Swine Flu.

According to DCGI Dr Singh: “Zydus is the first and the only Indian company to file for swine flu vaccine’s trial.” Among the multinationals, GlaxoSmithKline (GSK), Novartis, Baxter International and Sanofi-Aventis had applied for test license to the DCGI for carrying out clinical trials in India for their version of swine flu vaccines. “Although, it’s a long process, amongst the MNCs, GSK is comparatively ahead,” says Mr Singh.

When contacted, Zydus did not confirm the development, but top level sources close to the company said Zydus would be the first Indian company to hit the market with the vaccine. The Gujarat pharma company is learnt to have entered into a collaboration with European biotech company BioCryst Pharmaceuticals for the development of the H1N1 vaccine.

It may be mentioned here that earlier this year, swine flu has been declared as a global pandemic by the World Health Organisation (WHO) which feared around 2 billion population might get affected. In India, the influenza virus has so far claimed 484 lives and affected 14,406 people.

Globally, the H1N1 vaccine market is forecast to grow beyond $7 billion in next two years from $676 million as of now.

The Indian government, earlier this year, mandated three Indian vaccine makers – Serum Institute of India Ltd, Bharat Biotech and Panacea Biotec — to develop swine flu vaccine on a war footing. However, their research is yet to reach any significant stage.

In reply to an earlier ET query, the executive director of Serum Institute of India Dr Suresh Jadhav said: “We are developing two types of vaccine – one is injectable (inactivated) and other is intranasal route (live attenuated). Both these vaccines have nearly completed the optimization process of manufacture and are in pre-clinical studies. Immunogenicity trials are nearly over and both the vaccines will come into toxological studies by 2nd week of November 2009. The vaccine would be be made available to the Indian government by March 2010.”

Interestingly, Gujarat is the only state that has two pharma giants in advanced stages of the vaccine development. Earlier this year, Cadila Pharmaceuticals Ltd, another Ahmedabad-based pharma major, joined hands with with US-based Novavax Inc. to develop and manufacture seasonal as well as swine flu vaccines using the latest technology – Virus Like Particle technology.

Source : Economic   Times.    09/11/09

 

Volkswagen’s beetle to hit Indian roads in December

NEW DELHI: Europe’s largest carmaker Volkswagen will roll out the Beetle, fondly called the people’s car after its maker, on Indian roads by beginning of next month.

A senior company official told media on the sidelines of the India Economic Summit that Volkswagen, which mean People’s car, would import the car from its Mexican plant for sale in Indian markets.

He, however, declined to divulge the possible price of the car.

Beetle is one of the most successful models that the German carmaker has ever produced. The car bucked all trends and has made history, although critics had predicted a complete failure due to its peculiar styling, underpowered motor, rough ride and noisy engine.

Volkswagen, which currently sells luxury sedans Passat and Jetta in Indian market, is planning to launch its small car Polo by early next year.

The group has two facilities in India at Aurangabad and Chakan, which assembles cars of its three brands, Skoda, Audi and Volkswagen.

VW is looking at full-capacity production at this plant by 2012 and in order to strengthen its workforce, it is planning to more than double the India headcount with addition of 1,500 employees at Chakan alone in Maharashtra.

The group had earlier announced a target of 8-10 per cent share of the Indian passenger car market in the next 6 years. It will also consider integrating after-sales service of its three brands in India for better synergy.

It sold about 19,000 units of Skoda, Audi and Volkswagen brands last year in the over 1.5 million-unit Indian passenger vehicle market.

Source : Economic   Times.  09/11/09

RIL closes in on big-bang overseas acquisition

NEW DELHI/MUMBAI: Reliance Industries (RIL), India’s largest private sector company by market capitalisation and sales, is close to announcing a major overseas acquisition.

If all goes according to plan, RIL is looking to do so before its annual general meeting on November 17, a source close to the development said.

The likely target is a part of the assets owned by troubled petrochemical major LyondellBasell, which is undergoing reorganisation under the protection of a US court. “The intent is certainly to make an announcement on the day of the AGM or very close to it but that depends on how the talks progress,” one person familiar with the transaction said.

A team of senior RIL officials is said to have been camping in New York since September, according to a senior banking source. All the people with direct knowledge of the deal who we contacted for this story spoke on condition of anonymity because the transaction had not yet been consummated.

ET spoke to a number of bankers and analysts to ascertain the possible size of the transaction. One banker said the transaction could be in the region of $6 billion and may include both the US and the European assets of LyondellBassell.

Earlier media reports had referred to a deal in the region of $3.35 billion for the company’s US assets. An external spokesperson of RIL, who responded by e-mail to ET’s questions, said the company was evaluating global opportunities. “Reliance Industries is reviewing a number of global opportunities for growth in its core business. The difficult operating environment of the past year has made available several interesting opportunities, where an investment by a strategic operator of industrial assets can add substantial value.“

The review is on and there can be no assurance that any approach will be made with respect to the opportunities under review or that any such approach will result in a transaction.”

The spokesperson said he would not be able to elucidate further.

Jal Irani, head of research at Macquarie Securities, told ET the deal had synergies for RIL. “RIL will enjoy a lot of synergies if it acquires LyondellBasell. It will benefit from state-of-the-art technologies of LyondellBasell. Besides, its marketing and distribution network come in handy. LyondellBasell will provide a ready market for RIL and RIL may turn it around if it is able to source feedstock at a cheaper rate.” He refused to comment on the size of the deal.

The fact that RIL may make a large buy outside India has been in the public domain for some time. In an interview with ET NOW last month, RIL’s chairman Mukesh Ambani had said that an overseas acquisition was one of the options as the company sought new growth opportunities after the completion of the Jamnagar refinery and the start of production of natural gas from the Krishna Godavari basin.

Maurice Bannayan, a senior official in RIL’s refinery business, had been recently quoted in agency reports as saying that RIL was considering overseas acquisitions in the US and Europe.

Mr Bannayan was speaking on the sidelines of a conference in Abu Dhabi. RIL may also be trying to diversify outside India, partly as a reaction to recent events in the country. The company’s top leadership, according to people familiar with their thinking, has become disillusioned by the uncertainty created by the prolonged litigation with Anil Ambani’s Reliance Natural Resources over the price and supply of gas from the KG basin and frequent changes in India’s tax regime.A senior RIL official who spoke to ET this summer expressed frustration and annoyance over the curtailing of tax benefits for pipelines carrying natural gas. An unlisted company which is part of the RIL Group is building a pipeline network to carry natural gas from the KG basin off India’s eastern coast.

 LyondellBasell had posted a loss of $7.3 billion on annual revenues of $50.7 billion. It has $27 billion of assets and $19 billion of debt. On Friday, the RIL scrip closed at Rs 1956, up 0.87%. RIL, the potential acquirer, is smaller. It had a profit after tax of $3 billion on a topline of $29 billion for the year ended March 31, 2009.

The RIL overseas acquisition buzz started getting louder after the company raised Rs 3,188 crore by selling its treasury shares recently. The company had cash reserves of $4 billion or about Rs 18,000 crore as on September 30.

LyondellBassell is the outcome of a number of mergers. Lyondell Chemical Company was earlier listed on the NYSE. It was the third largest chemical company in the US. In December 2007, it was acquired by Basell Polyolefins for $12.7 billion to create LyondellBasell — one of the world’s largest polymer, chemical and fuel companies. RIL has been eyeing the company after it filed for Chapter 11 under the US Bankruptcy Code in January 2009.

In May 2009, LyondellBasell Industries gained an additional owner in German investor Andreas Heeschen, whose firm ProChemie Holding has joined with LyondellBasell owner Access Industries to create ProChemie GmbH, a joint venture in which each side will own 50% equity in LyondellBasell. This deal was structured to give Access Industries flexibility to invest additional funds in LyondellBasell as part of the bankruptcy process, but without triggering unfavourable tax consequences for the company.

In September this year, the company submitted its reorganisation plan and disclosure statement to the US Bankruptcy Court to emerge from Chapter 11. The United States Bankruptcy Court for the Southern District of New York is administering this restructuring and reorganisation process.

As part of the Chapter 11 process, LyondellBasell obtained approximately $8 billion in debtor-in-possession (DIP) financing to fund continuing operations. The DIP financing includes two credit agreements: a $6.5-billion term loan (comprising $3.25 billion in new loans and a $3.25 billion roll-up of existing loans) and a $1.62 billion asset-based lending facility, according to media reports.

Bank of America-Merrill Lynch, Royal Bank of Scotland and Citigroup are among the lenders to the company, which obtained debtor-in-possession financing of $8.1 billion in February this year.

LyondellBasell is learnt to be offering a partial exit to these bank lenders by offering equity through a rights issue. Bank of America-Merrill and Citigroup are believed to be involved in the deal with RIL as investment bankers.

According to earlier reports the lenders may get into a pre-offer arrangement, under which RIL will pick up some of the forfeited rights and directly pay the lenders for the stake, entailing a minimum payment of $3.35 billion or Rs 15,000 crore.

The primary products of LyondellBasell are polymers (polyethylene, polypropylene), chemicals (styrene, ethylene) and fuel (two oil refineries — one in Houston, one in France). The Houston refinery processes heavy crude (mostly from Venezuela) and has a capacity of 13.5 million tons/year. The other refinery in France, which was purchased from Shell in 2008, has a capacity of 5 million tonnes.

The US arm of the company had filed for bankruptcy protection on January 6, 2009.On September 15, LyondellBasell announced it will shut its 185,000 tonne a year low density polyethylene plant (LDPE) in the UK.

Source : Economic    Times.  09/11/09

Birla proves a point with Novelis turnaround story

MUMBAI: Aditya Birla group chairman Kumar Mangalam Birla had more than one reason to smile when Novelis, a Canadian firm he bought in 2007 for $6 million, staged a turnaround in the September quarter to post a net profit of $195 million (about Rs 915 crore). The feat by the Atlanta-based firm must have been a personal victory for Mr Birla, who faced criticism from several quarters for backing the deal that was considered expensive. Shares of Hindalco — Novelis was acquired by the Birla flagship — had fallen by 14% on February 12, 2007, the day the deal was announced.

As the turnaround was achieved on the back of strong sales in Asia and South America, the company’s earnings, that will be boosted by tough cost-cutting measures and the closure of loss-making supply contracts, can only improve with the US economy riding out of recession with a 3.5% growth in gross domestic product.

“When you look at the situation and see the EBITDA (operating profit), you know that the performance will only get better and it’s not a flash-in-the pan,” Novelis vice-chairman Debu Bhattacharya told ET. In the September quarter, the EBITDA went up to $200 million from $124 million in the previous quarter and $89 million last year.

Back in 2007, when the group was trying to close the deal, the viability of acquiring a downstream company at a time when the whole world was going upstream was questioned. In the metals sector, downstream implies value-added, high-tech products, while upstream means mining. The company was bought at the peak of a commodities boom when prices of metals, such as copper and aluminium, were ruling at record high levels, almost double the prices seen in the year before. That was the time when the world’s largest metals firms, such as BHP Biliton, Rio Tinto, Xstrata and Vedanta, were on an acquisition spree.

“It was felt that acquiring a company (Novelis) that had about $3.5 billion in debt and had also got locked into a supply contract, was commercially unviable as it would have nullified any metal price upside,” said a senior executive of the group.

Novelis had a can price sealing contract with Pepsi and Coke that restricted the company from selling can stock metal used in beverage cans at a price not higher than the corresponding price on the London Metal Exchange. So, when the price of aluminium surged by more than 60% in the subsequent period, Novelis was buying at a higher price and selling its products to Pepsi and Coke at a lower price. The can contracts will expire on December 31, 2009.

Mr Birla also faced opposition from some senior executives within the group who wanted the greenfield projects to be given priority. Subsequently, the group did both — acquired Novelis, and also went ahead with the greenfield projects in Orissa, Jharkhand and Madhya Pradesh. “But no one anticipated the slowdown that gripped the world and then, access to credit was restricted,” the executive said. Also, in 2008, Hindalco took a $982 million foreign currency loan at Libor plus 315 basis points to pay back a $3.03-billion bridge loan it had taken a year back at Libor plus 80 basis points to fund the deal.

Analysts back the Canadian firm to do well in the coming quarters. “Operational improvements are driving significantly improved profitability in Novelis,” said Promeet Ghosh of DSP Merrill Lynch. Other analysts back this view as the turnaround was achieved at a time when markets haven’t been robust and recovery was just beginning. “This clearly signals that the company has staged a turnaround and the momentum is likely to sustain over the next few quarters,” said a Mumbai-based analyst, adding, “However, the next quarter could see strain on the profitability due to the winter season where the demand for aluminium cans typically fall.” The feat by Novelis is commendable considering cross-border acquisitions by Indian companies have run into hurdles, mainly due to issues relating to integration and developing synergies. Most of their issues on synergy between the Indian company and the foreign company have been market related.  

Source : Economic   Times.   09/11/09

Indians account for close to 20% of all realty sales in Manhattan

NEW DELHI: They say the present is so powerful in New York that the past is often lost. Owning a slice of that present comes a tad cheaper these days, thanks to a general slowdown in the US realty market. Sure enough, money bags back home are taking note.

Indians now account for close to 20% of all realty sales in Manhattan, and 30% of all enquiries made, says Raphael De Niro, MD of New York’s biggest property broking firm Prudential Douglas Elliman. “India and China are now replacing the buyers from Eastern Europe,” he says.

Prices of residential apartments in Manhattan have slipped 20-25% off their peak in end-2007. Mr De Niro says he is currently negotiating with several Indian buyers who are public figures in India. Sales pitch for a typical Manhattan condo begins at Rs 3 crore-Rs 4 crore, less than what a South Mumbai apartment or a Mehrauli farm house comes for. Average price per square feet for a Manhattan East side condo is $1,249 while that for a South Central Mumbai apartment is $1,319.

“New York is now becoming what London was about 15 years ago,” says Jaswant Lalwani, VP and associate broker at real estate firm Corcoran Group. He says the new enquiries for Manhattan condos mostly come from businessmen from the small and med-size segment, since most of the top league entrepreneurs already own property in New York. A few Bollywood stars too are latching on to the opportunity, two people in the sector told ET on condition of anonymity.

Mr De Niro, a former actor and son of Hollywood star Robert De Niro, however, wouldn’t confirm any of the names that he is dealing with. According to realty firm Brown Harris Stevens, a luxury condo in Manhattan can be bought for $1.65-3.93 million, while a similar apartment in Mumbai will cost $3.3 million-$6 million. “Add to that the fact that the rupee has strengthened against the dollar, and you could have a killer on hand,” says a Delhi-based rice trader who claims to be negotiating a deal.

A study on high net worth individuals (HNIs) by Bank of America Merrill Lynch and Capgemini last month said India’s HNI population shrank 31.6% to 84,000 and its combined wealth declined 29% to $310 billion. However, the study said the numbers could bounce back this year with the stock market gaining strength since Indian millionaires park almost a third of their wealth in equities. Mr De Niro says that Indians prefer high-end Central Park condominiums. “Apart from Indians, there are a number of Chinese and other Asians too who are transacting for these properties,” he adds.

Mr Lalwani says that that even if the property market falls by a further few percentage points in the near future, keeping a 5-10 years investment horizon could only mean gains. “Legally, any Indian filing tax returns can remit up to $200,000 every year out of his post tax income. A buyer in the US market usually pays 15-20% of the cost of the property upfront and the rest is mortgaged,” says Prashant Kaura, director at GenReal.

Mr Lalwani says he has got 20 serious enquiries from India over the past 3 months of which 10 have been converted. “The remaining buyers are in varying degrees of decision making. Indians are looking for value, location and resale potential. There are a lot many more enquiries but many of them are just doing homework,” he says.

According to a Q3 2009 Manhattan Market Overview by Mr De Niro’s Prudential Douglas Elliman, in the condo market, all price indicators showed double digit decline when compared with the previous year quarter. The median sales price of a Manhattan condo was $1,015,124, down 16.8% from $1,220,000 in the same quarter last year, but was up 1.6% from the last quarter price of $999,000.

This shows that property prices have bottomed out that explains the sharp rise in sales in the last one quarter. While the number of listings of condos in Manhattan slipped a modest 0.6% to 4,549 units from previous year quarter total of 4,575 units, it saw a sharp drop of 8.6% from last quarter’s total of 4,979 units.

Source : Economic   Times.  09/11/09

TCS, Infosys, WNS redraw strategy with exposure to pound, euro & peso

MUMBAI: As it exporters look to expand beyond US markets, their currency management is getting more complex and challenging. Until a few quarters ago, most of them focused only on hedging the rupee against the dollar. But with the recent volatility of the pound, euro and other currencies against the dollar, coupled with their growing exposure of the companies to these currencies, they now need to hedge against these inflows as well.

For instance, top exporter Tata Consultancy Services (TCS), now takes dollar-rupee , pounddollar and euro-dollar hedges. Similarly, IT bellwether Infosys Technologies hedges against movement in Australian dollar, pound and euro. Earlier, a firm could assume a near constant rate of pound to dollar and stick to taking only dollar-rupee hedges.

For example, if a firm was expecting to collect £100 million at the end of the quarter, it could take a dollar-rupee hedge for $190 million, assuming a rate of $1.9 for each pound. “But today, if you have only dollar as the coverage point, and cover for $ 190 million, at the end of the quarter you may find that you have only $140 million instead of $190 million,” pointed out TCS CFO, S Mahalingam.

The pound has weakened to an average rate of 1.6 against the dollar in the September 2009 quarter compared to an average rate of 1.9 in the year ago quarter. The pound and the euro are the second and third largest currencies in which a majority of software companies earn their revenue — the largest being the dollar.

“Cross-currencies are reacting to different economic data. You cannot eliminate currency risk,” said V Balakrishnan, CFO, Infosys Technologies. Infosys earns 5% of its revenues in Australian dollars, 7% in euros and 12-13 % in pounds.

And nor are cross-currency risks limited to large firms of the likes of Infosys and TCS. BPO firm WNS, which had revenues of $539.3 million in 2008, intends to start hedging the Philippine peso because its operations in Philippines have swelled to 1,000 employees. About 65% of its revenues are in pounds.

“Every one pence variation in the pound has $1 million impact on revenue,” said Neeraj Bhargava, CEO, WNS. The company took hit on its revenues in the September 2009 quarter because of the weakening pound.

“There are multiple risks. One risk is the currency is which you earn and other is the currency in which you spend. If you have delivery centres in Romania or Poland then your salary costs are in the local currencies of these countries. In some cases, the currency forwards may not even be traded in the home country, and have to be traded in London or Singapore,” said Nandlal Bhatkar, CEO, Pyxis Systems, which provides tools for derivatives risk management.

“The other risk is if expenses are in rupees (INR) and revenue is in pounds (GBP), you still cannot hedge GBP-INR because there is no liquidity for this currency pair in the market. You have to hedge GBD-USD and USD-INR. So you actually have two exposures instead of one, and the movement in one pair can affect the other,” he added.

Many mid-size software firms grappling with these issues are working out different strategies to cope with cross-currency fluctuation. Hexaware

Technologies, one of the few mid-size firms with operations in continental Europe, has taken a euro-rupee hedge for the first time.

“We’ve taken hedges worth £5 million at an average rate of Rs 73.34. We don’t need a very big market because our revenues are small and we didn’t want to get into the additional complexity of taking back-to-back hedges (pound-dollar and dollarrupee ),” said executive chairman, Atul Nishar.

Like many other firms that had long term dollar-rupee hedges, the company had to hedge its euro inflows to cover its dollar forwards.

Hexaware has dollar hedges for the next four quarters — $ 19 million at an average rate of Rs 49.94. Others such as Mastek have also taken dollar-rupee and pound-rupee hedges.

Source : Economic    Times.  09/11/09

 

Directive on PSU listing opens disinvestment tap

New Delhi: Giving its disinvestment programme a big push, the Centre has asked all listed, profitable central public sector enterprises (CPSEs) to meet the mandatory listing norm of at least 10 per cent public ownership.

It has also asked all unlisted CPSEs with positive networth, no accumulated losses and a net profit track record in the three preceding consecutive years to get listed.

Both these decisions are likely to lead to a slew of equity offerings including follow-on public offerings (FPOs). The eligible candidates include behemoths such as NMDC, MMTC, Neyveli Lignite Corporation, Rashtriya Chemicals and Fertilizers, National Fertilizers, Coal India, BSNL and Engineers India.

Timing decision

No time-frame has been specified for the CPSEs to comply with the decisions, but the timing decisions are likely to be governed by market conditions.

The Government has also decided to change the rule on use of disinvestment proceeds by altering the basic scheme underlying the National Investment Fund (NIF) that was launched in 2005. While the disinvestment proceeds would continue to be channelled into the NIF, for the 2009-12 the mop-up would be used as capital expenditure in social sector schemes determined by the Planning Commission and the Department of Expenditure.

Special dispensation

“In view of the tight fiscal situation and the need to fund social sector programmes, a special dispensation is being made for the three-year period 2009-12,” Mr P. Chidambaram, Union Home Minister, told reporters after the Cabinet Committee on Economic Affairs (CCEA) meeting here.

He clarified that the money garnered so far this fiscal from the stake sale in NHPC and OIL India would not be governed by the new rule. An official statement said that the corpus comprising deposits from April 2009 till March 2012 would be available in full for investment as capital expenditure in specific social sector schemes.

Hitherto, disinvestment proceeds were channelled into NIF and the corpus handed over to fund managers. Only the returns from the corpus were used for social sector spending.

The earlier position will be restored from April 2012.

Source : The Hindu Business Line.  09/11/09

India among top 50 in global competitiveness

New Delhi: India ranks 49 among 133 countries in 2009-10 in the global competitiveness index (GCI) prepared by the World Economic Forum (WEF), an improvement of one position from last year. India’s position is a result of mixed performance across 12 categories covered by the GCI.

India has displayed good performance over the past year in business sophistication, innovation and financial market sophistication. However, areas like infrastructure, primary education, health and the fiscal situation dragged India down. The review also stated that bureaucracy, over-regulation and corruption still affect functioning markets and labour markets in particular. India lags all BRIC nations in the index.

India has suffered in the basic requirements index and ranks 101 in the health and education index. The fiscal deficit situation has dragged India to the 96th position in the macroeconomic stability pillar, while poor infrastructure performance has brought it down to 76th position in the transport and infrastructure index. India has performed well in areas of sound financial system, efficient goods market and innovation sectors and ranks in the range of 16-30 in the respective indices.

A survey by PricewaterhouseCoopers (PwC), which took responses from 300 Indian CEOs, revealed that most expect growth to come from better penetration of existing markets, with 58 per cent citing that as their primary opportunity. Most Indian companies said they would be able to achieve growth organically.

Moreover, 42 per cent said the country’s manufacturing sector is becoming more competitive. As many as 74 per cent believed India to have a strong supply of educated and healthy workers and 56 per cent stated a strong entrepreneurial base existed.

Lack of infrastructure, inflation, red tapism and terrorism were cited as risks in our business competitiveness.

Source : Business Standard.  09/11/09

Indian mutual fund industry touches high of US$ 162.62 billion

New Delhi: The Indian mutual fund industry touched an all time high of US$ 162.62 billion and the industry’s average assets under management (AUM) grew by US$ 4.14 billion, or 2.61 per cent, in October 2009, on the back of increased inflows in fixed income plans. The combined average AUM of the 36 fund houses hit US$ 162.81 billion at the end of October 2009, according to data from the Association of Mutual Funds in India (AMFI).

Reliance MF maintained its position as the country’s largest fund house with its AUM standing US$ 24.9 billion, while the assets of the country’s second-largest fund house, HDFC MF, inched closer to US$ 21.4 billion. Other fund houses that saw their average AUM rising in October 2009 include Canara Robeco MF, Sahara MF and SBI MF.

Taurus MF Managing Director R K Gupta said, “Fund houses have witnessed a decline in assets of their equity portfolio. But inflows into fixed income schemes helped the industry to record a growth in assets.”

Source : IBEF.  09/11/09

 

SEZs post Rs 89,000-cr exports in Apr-Sept

New Delhi: Bucking the trend, exports from the country’s 101 operational special economies zones (SEZ) topped Rs 89,000 crore during the first six months (April-September) of the current financial year, compared to Rs 99,689 crore worth of exports in the entire 2008-09.

Out of the Rs 89,000 crore, around Rs 25,000 crore worth of exports took place from government SEZs, Rs 9,000 crore from state and private SEZs and the remaining approximately Rs 45, 000 crore from SEZs that are set up under the Act.

The total number of employees in various SEZs across the country also grew from 283,425 to 418,129.

“This clearly shows the growth of SEZs in the country and how are they helping in stabilising the country’s exports. SEZs go into long-term contracts unlike DTA (domestic tariff area) exporters where it is followed on the basis of per order,” said DK Mittal, additional secretary, Department of Commerce, after the meeting of the Board of Approval (BoA) here today.

The government is yet to ascertain the sectors that were the main drivers of growth, he said, adding that it was mainly the IT and manufacturing sectors that performed well during the period.

However, Mittal admitted that SEZs had also been affected due to the global slowdown and its exports had taken a hit with a number of developers approaching the ministry with de-notification or withdrawal request.

While no new proposals came on the table, BoA approved the cancellation of 10 SEZs in Maharashtra, Tamil Nadu, Karnataka, Kerala, West Bengal and Punjab.

Source : Business Standard. 09/11/09