Biggest US Inc team coming to India with Barack Obama

If you are not doing business with India, it seems you are not in business. So, US President Barack Obama will arrive in November with the largest US business delegation to any country — a clear sign that India’s rising economy has never mattered more than now. Obama's "historic" five-day visit will also be his longest official trip abroad. He will have in tow a 215-member team including the who’s who of US business and a large number of small and medium enterprises. Jeff Immelt, CEO of GE; Harold ‘Terry’ McGraw III, chairman and CEO of The McGraw Hill Companies; and Indra Nooyi, CEO of PepsiCo are among those likely to accompany him.

Obama will address corporate leaders from India and the US at a business summit in Mumbai on November 6, to be organised by industry body US India Business Council (USIBC), comprising top-tier US firms investing in India, including PepsiCo and Boeing.

“That the President has agreed to address this summit demonstrates the priority he places on creating jobs for America by cultivating deeper commercial ties with India,” said USIBC president Ron Somers.

Three months ago, UK premier David Cameron had come to India with the biggest business delegation from that country. Not for nothing.

India, with China, led the world economy’s recovery. Its economy is predicted to overtake China’s within years. The International Monetary Fund has forecast an Indian growth rate of 9.4 per cent this year.

Yum Brands expects profit of USD 100 million from India by 2015

Yum Brands Inc, the owner of Pizza Hut, KFC and Taco Bell restaurant chains, aims to earn a profit of $100 million in India by 2015. "Yum India, by far, we see over the next 10 years, being another great opportunity for us," Yum's senior vice president for investor relations, Tim Jerzyk, told reporters at Nantucket, Massachusetts.

He said in his presentation that Yum India expects $100 million in profits by 2015. The company had previously said it hopes to break even by 2011 and be profitable thereafter. It had said last year that it has invested $100 million in restaurant development in India and plans to invest up to $120 million more in the next five years. Yum has over 70 KFCs and 160 Pizza Hut units in India. It recently opened its first Taco Bell outlet in May. The company expects to have a total 1,000 units by 2015. "The early signs for Taco Bell are good. We are very optimistic and excited about the potential for Taco Bell," he added.

Jerzyk said India's trillion dollar economy, its $64 billion eating-out market and a young population provides tremendous opportunity for Yum to expand its footprint in the country, where it faces competition from McDonald's and Dominos Pizza. "Yum is poised to capitalise on these opportunities and build a youthful, aspirational brand to appeal to the young population in India," he said.

Unlike most other food franchise players in India, Yum is not franchising. It is primarily expanding by company owned stores. It has selectively franchised some of its locations to area developers and other Pepsi Bottling Plant franchisees.

Yum is looking to further strengthen its position in India and China, as it expects 60 per cent of its earnings to come from emerging markets by 2015. In 2006, 30 per cent of Yum's profits came from developing markets and the rest from developed markets. This ratio is slated to change and this year the company expects half of its profit to be generated in emerging markets, Jerzyk said.

Yum India flag ship brand Pizza Hut faces aggressive competition from the other fast food franchises like US Pizza and other smaller regional players. One of the other pizza master franchisee, Dominos recently raised about 45 crore . Several other international food franchises have entered India, that include the British Pizza Planet and the US Papa John's. Round Table Pizza is looking for a master franchise partner in India.

India ranks 2nd globally as most confident market: Survey

»	India ranks second worldwide among businessmen on the trade confidence level after the recent global financial crisis, a survey has said.
»	The country, with 133 points, ranks next to United Arab Emirates with 134 points on the global trade confidence level index, according to the survey conducted by Hongkong Shanghai Banking Corporation (HSBC).
»	Vietnam, with 132 points and Brazil with 129, are third and fourth respectively. France, with 95 points, was 17th and last in the index,with a very low confidence level, HSBC India Trade and Supply Chain Head Bhriguraj Singh told reporters here.
»	He said the survey had found that some markets, including Asia Pacific region, Latin America, Canada and Europe were in positive territory after the financial crisis.
»	A total of 5,120 small and medium exporters globally were respondents for the findings and were asked for their outlook for the next six months, he said.
»	He said emerging economies topped the index with 122 points against 106 points for developed markets.
»	Stating that the confidence level among Indian exporters remained upbeat, he said trade confidence in India grew to 133 points from 117 in the second half of 2009, which reeled under the impact of the global financial crisis.
»	Giving statistics, he said exports were around $ 12.4 billion in January 2009, but rose to $ 14.3 billion in January 2010.
»	Similarly, exports in February 2010 also increased to $16.1 billion from $ 11.09 billion in February 2009.
»	Exports in 2008-09 stood at $ 162 billion and marginally increased to $ 164 billion in 2009-10, he said.
»	He said the survey had found that 60 per cent of Indian exporters expect finance from banks to increase in the next six months, while 59 per cent are confident of having access to finance through banks.

Audi bullish on India growth; to launch flagship A8 this year 

Buoyed by high sales growth in the first half of the year, luxary carmaker Audi has drawn up big plans for India. The company sold 1,400 cars in the first six months of 2010 - a sales growth of 71 percent. It is now looking to invest a total of 30 million Euros ( Rs 180 crore ) over the next five years.

Perschke, who took over as the head of Audi India's operations on July 1, had earlier worked in India with rival Mercedes Benz between 1997 and 2000. The new chief said he sees strong growth for the Audi brand in the Indian market, especially the SUV segment.

"We plan to invest Euro 30 million (Rs 180 crore) till 2015 for expansion of our production capacity and plan to take our production capacity to 6,000 cars by then," said Perschke while speaking to the media on Wednesday.

The company that assembles its A4 and A6 models in India has also started assembling its sports utility vehicle (SUV) model Q5 here and plans to launch the A8 (priced between Rs 71 lakh and Rs 81 lakh ex-Mumbai) by the end of the year. 

"We will increase our dealer network to 19 by the end of 2011 and will open dealerships in Kolkata, Jaipur, Lucknow and Ludhiana, among other cities."

The company has increased its sales forecast for the year 2010 from 2,300 units to 2,700 units and is eyeing to move up in the rankings from third at present. 

"The overall market growth has been good and is growing. Our SUVs have witnessed very good demand in India and while we plan to increase our worldwide sales from 950,000 units to 1.7 million units over the next 10 years, we expect India to also witness strong growth," said Perschke.  

» U.S. companies expanding business in India: report

American companies are rushing to do business in India despite the gloom in the economy and soaring unemployment in the U.S., says a report here.

WASHINGTON: More and more Fortune 500 companies are expanding their operations in India or farming out work -- outsourcing, in business parlance -- to the world's most populous democracy, says the Honolulu Inquirer, a daily published from Hawaii.

For them, India has a large English speaking, college educated and tech savvy work force, the report says. They are hiring workers by the hundreds, building posh offices and signing new business contracts.

"You are increasing the competitiveness of U.S. companies globally. You are lowering the cost to consumers substantially," Michael Clark, executive director of the U.S.-India Business Council, was quoted as saying.

"You are improving in many cases the quality of service to consumers because you have a highly motivated workforce that has become sort of the world standard."

Those cashing in on doing business in India include reputed computer companies such as Microsoft and Dell; telecommunications companies including IBM Corp.; credit-card companies as American Express; and conglomerates including General Electric, which makes everything from light bulbs to plastics.

A total of 3.3 million U.S. jobs and over $136 billion in wages will be sent overseas in the next 15 years, John McCarthy of Forrester Research, a respected business analysis firm in Cambridge, Massachusetts, said in November.

McCarthy said two-thirds of those jobs and money are bound for India, where the federal and state governments and private high-tech groups have joined hands to market themselves aggressively.

This trend worries unions and other critics, who say U.S. companies should be mindful of what this country of 285 million people needs -- jobs -- and not be fixated just on their bottom lines. The U.S. has 8.6 million jobless people currently.

Companies save hundreds of millions of dollars by paying Indian workers less money than U.S. workers, analysts say.

They are quick to add that the Indians aren't working for slave wages. In fact, those working for or contracting with U.S. firms make much more money than the rest of the country's work force -- one big reason is Indian unions haven't objected to the growing American presence, the report said.

Indians increasingly are processing payments, answering customer calls, handling accounting tasks, developing software, and even managing payrolls for their U.S. clients.

Many U.S. companies have set up sleek new offices in Bangalore in southern India, considered India's Silicon Valley.

A more recent trend is U.S. biotech companies doing cutting-edge research in areas such as genetics and conducting clinical trials there, said Sudhakar Shenoy, a native of India who owns a Northern Virginia high-tech consulting company called Information Management Consultants.

If the U.S. government prevents companies from doing more business in India or any other foreign country, the U.S. economy would suffer, Shenoy warned

Food Retail in India to touch USD 150 bn by 2025: KPMG

Driven by the growth of organised retail coupled with changing consumer habits, food retail sector in India is set to be more than double to USD 150 billion (around Rs 6,70,870 crore) by 2025, according to a report by KPMG. The country's food retail sector, which is currently estimated at USD 70
billion (around Rs 3,13,137 crore) will be more than double in the next fifteen years, the global audit and advisory firm KPMG said.

"Evolution of innovative food processing capacity, emergence of organised retail and change in consumption patterns along with fast changing demographics and habits is fuelling the next growth trajectory for the food industry in India," KPMG said in a statement.

Despite the potential, the sector has not yet seen sufficient investment, specially foreign direct investment (FDI), the report said.

"The food sector, in spite of its large share of GDP and the consumer basket, only received 3.3 per cent out of the gross FDI flows in India between 2000 and 2010," KPMG Executive Director Ramesh Srinivas said.

High growth in food retail is limited by sub-optimal supply chain caused by low investment in the sector, he added.

Some players such as McDonalds, RK Foodland, Jubilant Food Works (Dominos) have, however, invested in back-end processes, optimised supply chain management, according to KPMG.

"There is also considerable investment in the cold chain industry by multinational corporations and private equity firms," Srinivas added.