Australia and India to sign Nuclear Deal today: Australian PM, Tony Abbott

Australia and India are to sign a Nuclear Agreement with each other today. This was announced by The Hon. Tony Abbott MP, Prime Minister of Australia at a Business Lunch organized in his honour by the Confederation of Indian Industry, Associated Chambers of Commerce and Industry of India (ASSOCHAM) and the Federation of Indian Chambers of Commerce and Industry (FICCI) in New Delhi today. The Prime Minister observed that this was an initiative of predecessor, John Howard’s government which was being fructified under the Abbot government. 

The Prime Minister stated that he would work towards stepping up Australian investment in India. He felt that the current level of trade and investment between Australian and Indian companies did not adequately reflect the true potential of the relationship. He stated that bilateral trade between Australia and China was ten times higher than the bilateral trade between Australia and India and promised to take efforts to nurture the relationship with India. 

He was of the view that the early conclusion of the Comprehensive Economic Cooperation Agreement would help give a boost to bilateral economic relations and stated that his government intends to work towards concluding the agreement by the end of 2016. 

The Prime Minister stated that Australia could be a dependable partner in India’s progress especially in terms of Energy Security, Resource Security and Food Security. The Prime Minister also announced the formulation of a new Colombo Plan which would help step up the number of Indian students studying in Australia. 

He also announced that Australia was open for business and had undertaken several steps to make doing business in Australia much more easier such as removing mining taxes and setting up one stop shops for clearing investments. He invited Indian industry to invest in Australia. 

In her address, Ms. Nirmala Sitharaman, Minister of State (Independent Charge) for Commerce and Industry and Minister of State for Finance and Corporate Affairs stressed on the need for Australian companies to step up their investment in India. She observed that between 2000 and 2014, Australian investment in India was about USD 600 million whereas Indian investment in Australia was of the order of USD 11 billion. She felt that with the measures taken by the new government, many new opportunities for investment by Australian companies have opened up and invited Australian companies to invest in India. 

Addressing the session, Mr. Ajay Shriram, President, CII stated that Indian industry looked forward to a comprehensive relationship with Australia in areas such as advanced technology, joint R&D, education and skill development, food processing services, vocational education and energy and environment. 

In his address, Mr Sidharth Birla, President, FICCI stated that the visit of Prime Minister Abbot would help take bilateral relations to a higher trajectory. He felt that some of the areas that the two countries could cooperate on included mineral resources, particularly coal, education and vocational training, nuclear energy, urban development planning as well as assistance with the project to clean the River Ganga. 

In his welcome address, Mr. Rana Kapoor, President, ASSOCHAM stressed on the need to step up bilateral trade and investment between the two countries which he felt was below potential. In his view, some of the areas where the two countries could work together on included cooperation in science and technology, setting up of multi-sector innovation hubs and water management among others.

Product development and innovation are top concerns for the Indian F&B industry, says CII Report

While India has favourable supply side dynamics, thanks to its strong agriculture base, product development and innovation in the sector has taken a back seat due to lack of investments and incentives, finds a CII report on Indian Food & Beverage sector – The new wave prepared in association with Grant Thornton. 

The report released at CII’s Food and Bev Expo & Summit, which aims to examine the growth potential of the food and beverage industry also highlights that rising food prices have been a constraint for the sector and is expected to impact the demand if not controlled soon. 

The report suggests that while some of the Indian players are making use of newer technologies to increase production, meet international quality standards and thereby increase profitability, the adoption has been sporadic since the industry is largely unorganised. While, the market opportunities have been emerging in the recent past, requirement of investments, lack of bank credit facility and long gestation period have been impeding the adoption of newer technologies. 

“The growth of food processing sector would need to be a significant component of the second green revolution, considering its possible role in achieving increased agricultural production by ensuring better remuneration for farmers. The food processing sector makes it possible by not only ensuring better market access to farmers but also by reducing high level of wastages. A developed food processing industry will reduce wastages, ensure value addition, generate additional employment opportunities as well as export earnings and thus lead to better socio-economic condition of millions of farm families”, said Mr. PiruzKhambatta, Chairman, CII National Committee on Food Processing, CII Food and Bev Expo & Summit & CMD, Rasna. 

The report highlights that the organised food sector is expected to increase on the back of favourable demographics (middle class, urbanisation), rising disposable incomes (per capita income, double income groups) and changing lifestyle preferences (convenience necessitated by professional commitments, rising aspirations) and is expected to drive the growth, generally, in food and beverages market and specifically in the organised retail market as the average propensity to consume is expected to increase further. 

“The future of the food & beverages sector looks promising with the growing demand due to change in the consumer’s lifestyle and consumption patterns including food habits. While the Indian agriculture sector is gearing up for supply with support from Government, food processing is expected to play a key role in bridging the gap between the demand and the supply sides and addressing the key concerns of the sector – rising food prices and high levels of food wastage. The industry’s growth is dependent on the ability to organise, invest and innovate to deliver high value products to the consumer”, said Mr.ShanthiVijetha, Director, Grant Thornton India LLP. 

Food processing was earlier limited to food preservation, packaging and transportation, whereas the industry has evolved and widened its scope with emerging new trends in consumer preferences and the advancement in technologies adapted to meet those preferences. 

With the increase in attractiveness of the food processing industry, there has been significant deal activity in this space with mixed contribution from corporate M&A and private equity investments. While the dairy segment has witnessed primarily PE deals with few M&A, fruits &vegetables as a segment is yet to evolve for food processing industry. This is evident from the deal space where only two PE transactions took place in the last 3 years. 

Commenting on the future of the sector, Mr. Harish HV, Partner, Grant Thornton in India said, “Despite constraints linked to infrastructure, market access and funding, dynamic businesses operating in this sector have made their mark on the global stage. I am confident that the next few years will be the golden years for the food and beverage sector.” 

The report highlights that though food retail constitutes only 15% to 20% of organised retail industry, it constitutes 70% of unorganised retail industry. It will be the organised players who will tap the growth opportunities as they can make investments for backend infrastructure and compliance matters. The report also shows that higher real estate cost, rising input prices and cost of compliance are the stumbling blocks for food retailing industry in India. Amongst the formats of retailing, traditional dominates the most as modern format is yet to increase the coverage, however, online grocery is emerging as is the fastest growing channel among modern retail due to its lower cost and convenience factor. 

According to the report, Quick Services Restaurants (QSR) has emerged as the largest segment in the food services industry as there has been an increase in spending on fast food in Tier 1 and Tier 2 cities in the last few years. It is expected to grow at a CAGR of 25% by 2018 as the segment is largely unorganised and more foreign brands are expected to enter India. Home delivery of food, popularity of global cuisines and localisation of the menu are the emerging trends in the food services industry.

6 Steps to Prevent Indoor Air Pollution

Studies show that many times indoor pollution takes more of a toll on your health than outdoor pollution.  As  we  walk through our  homes, the air turbulence created by our moving bodies stirs up a combination of dust and debris that  can be  very irritating to the lungs. 

Designing a Multichannel Retail Play in an Uncertain Environment

There is much discussion on slowdown in the global economy. Counter to popular perception, economic growth is also faster than ever before. Even after the financial crisis the global GDP grew 4.5 percent from USD 61.3 trillion to 70 trillion between 2008 and 2011. Asia has been driving this growth On a PPP basis Asia will contribute 50% to global GDP in 2050 (vs. only 20% in the year 2000). Asian economies like India, China, Indonesia, Myanmar and Vietnam are driving this growth engine.

India in particular is in a sweet spot. Indian Middle Income and Affluent households will grow from 48 mn in 2010 to 103 mn in 2020. While many think tanks have pegged Indian GDP growth between 5-6% for the next 2-3 years, the untapped potential of this vast consumer base is bound to drive long term growth momentum. According to “The 10 trillion $ prize” a book by The Boston Consulting Group, consumption in India will grow from about 900 mn $ in 2010 to about 3.6 trillion $ in 2020. Hence growth is a macro trend but the near term environment is uncertain with fluctuating inflation and erratic bursts of capital formation. Consumer and investment sentiment has been fluctuating as depicted by the volatile bullion prices and bellwether stock market indices.

At the same time, volatility is as much of an economic reality as long term growth. The inflationary environment continues to be unpredictable. Uncertainty on agricultural output and short term business performance is being reflected in volatile WPI and CPI figures. Global commodity prices including oil and bullion have also been showing high swings.

This tension between near term caution and long term potential is the challenge for Indian FMCG companies. They need to find a balance between pursuing growth and managing costs in an increasingly volatile environment. Retailers are also impacted by this conundrum. Additionally they have the complexity of finding the right mix between multiple channels (digital vs. brick & mortar, small vs. large format) in the backdrop of a nascent and fast growing organized retail environment.

The Indian consumer demands “more, better, now” and is increasingly “trading up”. Adding another dimension to this complexity is the diverse profile of the shoppers across the country. There is a strong need for retailers to provide a seamless, converged consumer experience across channels and leverage a multi channel proposition to drive profitable growth. A seamless consumer experience requires retailers to follow a coordinated approach across formats and functions.

Marketing needs to develop skills on social media, track consumer conversations seamlessly across channels and handle the complexity of maximizing RoMI (Return on Marketing Investment) across multiple consumer touch points. In-store and digital formats need to complement each other such that demand originating on one channel can be served seamlessly on the other.

Companies need to revamp the supply chain to handle higher complexity and merchandising teams need to dynamically optimize pricing and promotions across channels. Robust IT, strong data analytics and an organizational commitment are fundamental to success. But as hard as the journey maybe rewards are ample. Internationally companies that have provided seamless convergence across retail channels have yielded a 3X shareholder return vs. those who haven’t. Indian companies can leapfrog a generation by integrating this concept into their business models from the very beginning.

CII -BCG Report on Winning With Uncertainty will be released at the CII FMCG Summit 2013 on 12 June 2013, Mumbai: This report explores how FMCG companies and retailers can leverage uncertainty to their advantage. Along with global best practices culled out from BCG’s vast international experience, it also showcases the perspective of Indian industry leaders. The report details how FMCG companies must develop flexibility across the value chain while retailers must build agility within their DNA – to win in this uncertain business environment.