Monday, September 10, 2012

Manas Kumar Nag, CGM-Small and Medium Enterprises, State Bank of India

State Bank of India (SBI), being the largest lender in India, has the benefit of a wide and deep presence in the Indian market. This also reflects in its performance with respect to extending credit towards MSMEs over the years. SBI has in fact emerged as one of the biggest contributors to meeting their financial needs in a profitable way. Manas Kumar Nag, CGM-SME, SBI talks to Bhuvnesh Talwar and shares the dynamics of the company’s SME business in further detail:

B&E: What are the major challenges faced by you in the SME space?
MN: SME borrowers require continuous support. In case of a downturn, they are more likely to be affected as was evident for textile manufacturers last year. Therefore, we need to be constantly alert to their needs and nurture them. Further, MSMEs belong to the unorganized sector and may not be in a position to provide the required financial documents. They also require technical inputs to upgrade their machinery and due to lack of this expertise, our MSMEs are often unable to successfully compete in the export market.
 
B&E: How much of your revenue and market share comes from SMEs?
MN: Our credit exposure to SMEs amounts to around 19.73% of the overall credit exposure of the Bank for the last fiscal year.

B&E: Any new strategies or schemes for SMEs announced or in the pipeline?
MN: Recently, we have launched a bouquet of power products for different ranges of current accounts, which will be very useful for SMEs. We are also moving onto electronic platform funding for dealers as well as vendors. We have announced very competitive interest rates in various products viz. car loans, food processing units et al.

What proportion of your credit goes under the CGMSE guarantee and how has your performance been?
MN: In terms of numbers and total amount of loans sanctioned under CGTMSE, our bank is presently at No. 1 with 22.56% by account and 20.80% by value of loans covered.

What are your major criteria to reject loans to start-ups and SMEs?
MN: We do not have specific criteria. We have an assessment system based on credit rating/credit scoring models and a defined hurdle rate, below which we don’t normally extend finance.


Source : IIPM Editorial, 2012.
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posted by Editorial at 4:03 PM

Monday, August 20, 2012

INDIAN GENERIC PHARMA COMPANIES: OPPORTUNITIES

While drug makers around the world are lamenting the death of their patent rights on many blockbusters, there is a certain tribe smiling about it – the Indian generic tribe

So how can Indian pharmacos leverage the opportunity ahead? Says Atul Sobti, CEO, Ranbaxy to B&E, “The opportunity is huge but a lot depends on how you exploit it. Recently we launched an authorised generic of Ocycodone ER tablets (pain reliever), which has been a huge success. Similarly the opportunity that we get through Daichi in Japan’s Generic market is also huge.” Experts like Sanjay K. Singh, Associate Director, KPMG comment to B&E that it has to be a three-pronged move ahead: First, in the coming five years, Indian companies can launch bio-equivalent generic products upon expiry of patents and take Paragraph IV filings route to challenge existing patents or file non-infringing products to launch generics with 180 days exclusivity. Second, as products go off-patent, MNCs look at cheaper manufactuirng options and will look to enter into manufacturing & supply arrangements with Indian companies. Third, emerging markets continue to grow at 10%+ growth rates and are branded generic markets. Indian pharma can further strengthen its presence in these markets.

There are over 100 USFDA approved drug-manufacturing units in India that represent the swarm willing to strip all opportunities to the bone, and this is just a modest expression of what the Indian players have in mind. Indian drugmakers have captured $23.6 billion of the $110 billion value of drugs that went-off patent since 2005, and if history is some proof, then of the $200 billion worth drugs that will lost patent rights by 2014 (as forecasted by Datamonitor), Indian drug manufacturers would atleast be looking at a windfall of $34.32 billion over the next six years, making it the world’s third-largest by value, at $63.42 billion and the highest by volumes by 2016 after US and Japan. Says Adige of Ranbaxy, “The Indian pharmaceutical market will continue to observe double digit growth in the coming years. With increasing incidence of lifestyle diseases, rising disposable incomes, a growing middle class, greater penetration of health insurance and expanding medical infrastructure, India’s consumption of pharmaceutical products will go up.” Indian companies should therefore look to increase their manufacturing capacity in order to meet the likely increase in demand. Indian companies could also look at potential acquisitions that could enhance their capacity as well as reach. But that’s a simplistic view, given cash flows.

For Indian generic drug companies, the news regarding expiry of patents will prove a double blessing – the first is that the imminent bagful of revenues comes minus any headache (Companies like Sun Pharma openly tell B&E they’re happy to be a generics company). Secondly, it’s also an emotional boost (“especially for countries which have a large base of generic manufacturers. India is one such country,” says Kumar of Datamonitor). But there are considerable cynics too, like US-based pharma analyst John Anthony, who while speaking from Massachusetts tells B&E, “You can’t lead by following a dying strategy: generics are the K-Mart part of the Wall-Mart curve. You don’t lead by following and you must innovate to generate income over the long term.” But that criticism cannot succeed in wishing away the future growth of generics and the subsequent fall in drug prices. The October 2009 report titled, ‘The Effect of Patent Expiration on Drug Prices...’ states, that once generic competitors enter the market, “the prices of formerly patent-protected drugs and the marketing expenditures on their behalf fall by about 60%.”

For the Benjamin Buttons, over the next few years (by the time their drug-discover pipeline gets some life-saving batteries that sets their clocks ticking clockwise), they could take two routes to salvation – either acquire generic players at good prices (an idea mooted to B&E enthusiastically by players like Sunil Bhaskaran, MD, Indus Biotech), or take a lesson or two from the GSKs & the J&Js – that is, investing in low-cost R&D developing the ‘diet & digestive’ clan of pills (that is, the body care variety) and non-expensive “patented” re-packaging of baby products for a start.


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posted by Editorial at 5:36 PM

Thursday, August 09, 2012

Let’s just fly a lot lower

High speed railway systems have the potential to bring about rapid progress in the war against warming

By now, the fact that the Copenhagen meet added 46,200 tonnes of carbon dioxide, most of it from flights, has become a cliché that has overdone itself. But the illogic fails to resolve the paradox that avoiding air travel or going to such meetings is not only impossible, but can even put paid to various developmental measures. But then, what can reduce per capita contribution of carbon and limit its harmful impact on environment?

Many countries are readily investing in environment friendly mode of transport. In this long list of green transport initiatives, countries are going ga-ga over the latest high-speed railway system aka HSR. This craziness makes for good social sense; especially after analysing the recent Eurostar research. The study by Eurostar shows that the train to Paris from London, cuts CO2 emissions per passenger by a jaw dropping 90% when compared to flying on the same route. Going beyond numbers, the environmental benefit due to HSR is more than what any empirical research reveals. As airliners emit their CO2 directly into the upper atmosphere, the impact on environment is much severe.

While the Manchester City Council within UK was an early starter in the HSR revolution – precisely to tap on the increase in efficiency and its environment friendly attributes – most of the developed countries (mostly European) like France, Spain and Germany are already supporting the HSR concept. A few other European countries have also decided to join the HSR network, thus linking the UK and Europe with HSR network in near future.

Reducing the amount of CO2 is just one aspect of HSR as it also comes with added benefits. To a large extent, it solves traffic congestion and air pollution problems. Comprehending this fact, Japan has extended its bullet train network by 76%, thus linking almost all its cities.


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posted by Editorial at 5:49 PM

Thursday, June 21, 2007

Am-BUSH-ed!

Rewind to any big-ticket sporting event of the world and you are sure to find a big brand (usually the unofficial sponsor) burning midnight oil, building its ambush strategy. Here is lowdown on some of the biggest cat-fights.

Atlanta Olympics ‘96 The venue city was thronged by unofficial sponsor Nike with billboards and swoosh banners and a huge Nike centre overlooking the stadium was built. The move triggered world sports organisations to adopt strict anti-ambush strategies.

Winter Olympics, Norway, ‘94 In response In response to TVCs of the official sponsor Visa, which said that AmEx cards were not accepted in the Olympic Village, AmEX counteracted by flaunting a tagline that said that Americans did not need a ‘visa’ to go to Norway.

Cricket World Cup, ‘96 After Coca-Cola grabbed the official sponsorship, Pepsi ran ads that said: ‘Nothing official about it.’

World Cup 2002 Despite Adidas being the official sponsor of the event, rival Nike outfitted some of the top teams in its gear. 2002 Winter Olympics, Salt Lake City A local company, Schirf Brewery took on Anheuser-Busch, the official sponsor by painting its delivery trucks ‘Wasutch Beers. The Unofficial Beer. 2002 Winter Games.’ It was completely legal! One read-through of these hilarious mind games, and you realize that India hasn’t seen anything yet!

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Source : IIPM Editorial, 2006

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posted by Editorial at 3:24 PM