www.skpcrossborder.com October 2006
Your eye to India-centric and International updates
India Inc - Investment briefs

Rail Europe to set up India arm

Rail Europe is planning a wholly-owned subsidiary in India to promote leisure and the business travel to Europe.

A joint venture between the French and the Swiss national railways, the rail tour operator currently operates in India through a liaison office. Rail Europe is also planning substantial investments in the country to popularise its various travel schemes in India.

The Company will be tying up with leading travel agents, like Travel Corporation of India, Cox & Kings, Thomas Cook, Kuoni, and even smaller players in the segment to sell its tickets.

The Company also intends to establish a B2B website in the country to help create a pool of sub-agents for education and training of travel agents to create awareness and market its products.

It is also looking at forging a partnership with the Indian Railways (IRCTC) to promote its rail passes online. The company is said to have sold about 68,000 Rail Europe tickets and passes in 2005.

Unilever to introduce French cheese to the Indian palate

Unilever will soon be launching Boursin, a flavored, triple-cream cheese product that's one of the most successful cheese brands in the world, with Mumbai-based RR Oomerbhoy (RRO).

RRO currently handles Bertolli olive oil for Unilever and along with Boursin, will be launching Maille premium mustards and vinegars. While Unilever usually markets with HLL, these gourmet products are targeted towards a specific market segment and require specialised attention that a smaller company like RRO can better provide explains Riyad Oomerbhoy, MD, RRO.

The move is in tune with Unilever’s brand philosophy. Loic Rethore, GM (Asia-Pacific), Unilever France, explains “Unilever has two types of brands- big, mass-market brands and local jewels.” The latter are strong local brands (e.g. French Boursin and Maille), often with strong status in consumers minds. Unilever respects this and is content to support despite their relatively small size. Though they may classify as ‘boutique’ brands, in a globalising world, their niche appeal often extends abroad, enhancing their value and making them highly profitable.

With Indian consumers going more upmarket in food consumption for reasons of increased affluence, global exposure and health concerns, RRO has carved out a niche for itself in establishing imported food brands like Barilla pasta and Bertolli olive oil. Going for nascent product categories they spend time in building smaller markets the way the big guys can’t be bothered. For Boursin, RRO is investing in the specialised cold chain that the products must be stored in- chillers that maintain the optimum 2-5 degree C range.
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Chinese to set up steel plant in East India

Sinosteel Corporation, the Chinese government-owned metal and mineral resources company, is looking at setting up a steel plant in eastern India. The 3-5 million tonne per annum capacity plant will mark the first Chinese steel entry into India.

Speaking of their India plans Sinosteel India managing director Wang Hongsen said, “We definitely want to be present in the dynamic Indian steel sector.” The Company has expressed an interest in exploring mining opportunities in Orissa, Jharkhand and West Bengal and is also looking for joint venture partners from the steel and mining industry to assist it in its project. The Company is in talks with Government officials of the various states and hopes to crystalise its India plans by the end of the year.

With a presence in India since 1991, Sinosteel’s Indian subsidiary, was incorporated only last year and is involved in trading in a range of minerals and mineral products.
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Tesco and Bharti to bring a grocery chain to India

Indian telecom giant Bharti is collaborating with British supermarket giant Tesco to bring the first overseas grocery chain to Indian consumers.

While the Indian government has already allowed 51 % foreign direct investment in retail stores that sell only a single brand, global giants are allowed to open stores in India via franchise deals with Indian partners. Bharti is likely to become a franchisee of Tesco, though not much of the deal has been made public.

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India Inc
- Investment briefs
Rail Europe to set up India arm
Unilever to introduce French cheese to the Indian palate
Chinese to set up steel plant in East India
Tesco and Bharti to bring a grocery chain to India
Fosroc Chem to make India export hub
US- based Avenue Capital buys stake in Medicity
EM Capital to raise 3 India funds

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