“First Indian automobile company to join the million club Invests Rs 1,700 Crore in new facility to expand capacity by 2.5 lakh units”

The nation’s number one car manufacturer, Maruti Suzuki India Limited, today joined a select club of global automobile makers, when it became the first automobile company in India to produce one million (10 lakh) cars in a year.
The millionth car manufactured in 2009-10, a glistening red Maruti Suzuki Swift, rolled out from the company’s Manesar plant, in the presence of Mr. Bhupinder Singh Hooda, Chief Minister, Haryana and Mr. Vilasrao Deshmukh, Union Minister of Heavy Industries & Public Enterprises. Amongst the dignitaries who graced the occasion was Mr. Hideaki Domichi, Ambassador of Japan to India. Mr. Osamu Suzuki, Chairman and CEO, Suzuki Motor Corporation, Japan joined the company’s senior management at the occasion. Senior officials of Central and State government and company’s business associates were also present at the ceremony.

Expanding Capacity at Manesar facility

Taking forward its commitment to serve its customers better and faster, the car major also set the foundation stone for capacity expansion at its Manesar plant by 2.5 lakh units annually. This initiative will help the company scale up the Manesar plant’s capacity from 300,000 units per annum to 550,000 units per annum over the next two years.
Maruti Suzuki will invest about Rs 1,700 Crore (ie Rs 17,000 million) for this expansion.
Maruti Suzuki’s present production facilities are located at Gurgaon with a capacity of 7 lakh (0.7 million) units and Manesar with capacity of 3 lakh (0.3 million) units.

On the occasion, Maruti Suzuki Chairman, R C Bhargava said, “The landmark attained by Maruti Suzuki fully establishes the validity of the late Prime Minister Smt. Indira Gandhi’s vision when she decided to create Maruti Udyog. This vision has been fulfilled because of outstanding entrepreneurship of Mr O Suzuki, the excellent cooperation which existed between the Government of India and Suzuki Motor Corporation, and the enormous dedication, hardwork and commitment of all Marut Suzuki employees over the last more than 26 years. The future beckons and Maruti Suzuki will not be found wanting.”

Dedicating the one millionth car to Maruti Suzuki employees, Shinzo Nakanishi, CEO and Managing Director, Maruti Suzuki said, “Maruti Suzuki will continue to address the country’s need for affordable personal transport. India needs affordable commuting solutions across its cities, towns and villages. Team Maruti Suzuki stands resolved with me to meet this need of the customers through exciting, contemporary and yet affordable cars. This belief is the cornerstone of the Maruti Suzuki’s business philosophy and derives inspiration from Suzuki Motor Corporation, Japan, our parent and global leader in compact cars.”

A robust Retail and Service network
Having tremendous faith in the growth potential of the Indian economy, the company continues to expand its network. Today the company has a sales network of 790 outlets covering 549 towns and cities (March 2009, 681 outlets in 454 towns and cities). The company provides service support to customers at 2,886 workshops across 1,379 towns and cities (March 2009, 2,767 workshops in 1,314 towns and cities).

The fiscal so far
Maruti Suzuki sales in 2009-10 (April 2009 to February 2010) is 923,242 units (791,260 in Domestic market and 131,982 in exports). The company clocked its highest ever monthly sales in February 2010 with a total of 96,650 units (a record number of 84,765 units in domestic and 11,885 units for exports)

The well KGV-D3-R1, the third in this block was drilled at a water depth of 1982 m and to a total measured depth of 4113 m. The objective was to explore the Miocene deep water lobe & onlapping wedges play fairway. Three reservoir zones were encountered at Miocene Level having gross thicknesses of 4, 23 and 16 meters. The potential of these were evaluated through a wire-line based technology called Reservoir Characterization Imager (RCI). The discovery namely “Dhirubhai – 44” has been notified to Government of India and Directorate General of Hydrocarbons. The potential
commerciality of the discovery is being ascertained through more data gathering and analysis.

This discovery supplements RIL’s understanding, of the petroleum systems within the block. 3D seismic has been acquired over the entire block area. Besides the above discoveries, several prospects have been mapped at different stratigraphic levels to fulfill the balance minimum work commitment of three wells.

Reliance Industries Limited (RIL) is India’s largest private sector company on all major financial parameters with a turnover of Rs. 1,46,328 crore (US$ 28.85 billion), cash profit of Rs 22,365 crore (US$ 4.41 billion), net profit (excluding exceptional income) of Rs. 15,637 crore (US$ 3.08 billion) and net worth of Rs 126,373 crore (US$ 24.92 billion) as of March 31, 2009.

RIL is the first private sector company from India to feature in the Fortune Global 500 list of ‘World’s Largest Corporations’ and ranks 117th amongst the world’s Top 200 companies in terms of profits. RIL ranks 75th in the Financial Times FT Global 500 list of the world’s largest companies. RIL is rated as the 15th ‘Most Innovative Company’ in the World in a survey conducted by the US financial publication-Business Week in collaboration with the Boston Consulting Group.

News Source: Media release by  Reliance Industries Limited (RIL)

Meeting one of his key election promises, US President Barack Obama recently said he will end the tax incentives to those US companies which created jobs overseas in places like Bangalore. Instead, the incentives would now go to those creating jobs inside the US.

India Inc. however feels this move will hit American companies more than impact on the Indian outsourcing industry.  As per Som Mittal, president of the National Association of Software and Service Companies (Nasscom)  “It’s a more US-US issue rather than one aimed at stopping outsourcing, or off-shoring, or anything to do with India,”

“If you look at Indian companies operating in the US, or elsewhere, they work there and pay taxes there. Hence, it is not about stopping outsourcing, or off-shoring, but just to collect taxes,”

I too believe this things wont affect much to India Inc. however will put more cost pressure on US companies.

Lets look a simple mathematics, as an hypothetical example if a US company has a work equal to say 100 man days outsourcing would still   benefit them despite Tax has been applied.

If you look at the table below its very easy to understand that despite tax is applied US firms will still gain more than 30% profit over USD 4000.

–All the figures such as per hour rate in US, India is based on my personal experience so far in the industry and should not be taken as benchmark.
–US tax on companies is assumed as 33.9 %
–In order to keep example simple, No other cost/overheads are considered except labor cost.

Section: News On Outsourcing

Satyam Computer Services Ltd.’s American depositary receipts fell the most in three months in New York trading after Tech Mahindra Ltd . won the bidding for control of the software exporter. Satyam ADRs declined 14 percent to $2.29 at 1:54 p.m. in New York.
Scam-hit IT major Satyam has informed that its board of directors has selected Venturbay Consultants Pvt. Ltd., a subsidiary controlled by Tech Mahindra Ltd. as the highest bidder to acquire the controlling stake in the company. However, the decision is yet subject to the approval of the Company Law Board (CLB).
Tech Mahindra, which Monday agreed to acquire a controlling stake in Satyam Computer Services, admitted the crisis-ridden IT firm’s liabilities would add to the challenges usually related with an acquisition.

Tech Mahindra, a venture between the BT Group and the conglomerate Mahindra & Mahindra, is poised to become an outsourcing giant after submitting the top bid for Satyam.
Tech Mahindra becomes the 4th largest IT company in India overnight by buying 51% share of Satyam Computer Services. Tech Mahindra Ltd. won the bidding for control of Satyam Computer Services Ltd.