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SPEL Semiconductors - More Tax Sops Likely For Semiconductor Units

In an attempt to encourage large investments in semiconductors, the government is planning to offer higher tax benefits to ventures that involve higher value-addition or are the first off the block. The idea was that tax benefits should be linked to value addition, investments and employment generated by such activity, a government official said. For instance, tax benefits for a wafer-testing or an assembly testing facility will be lower than the benefits for a semi-conductor facility since investment and employment in the latter are higher.

The proposed policy for the manufacture of semi-conductors and information technology products is expected to be announced in three weeks. Another option being examined is to provide tax breaks to a pioneering unit. “There is a view that the first unit to be set up should be given the most benefits. Once a big unit is set up, several other firms will automatically come on account of backward linkages and spill-over effects,” the official said.

The finance ministry is examining a policy paper prepared by the department of information technology, and will soon take a final view regarding the nature of the tax breaks. Officials said the policy paper listed tax incentives for infrastructure, exemptions from tax for profits earned, and interest subsidy. Finance Minister P Chidambaram had, in the Budget, announced that companies setting up such facilities would be allowed to raise resources from existing vehicles of viability gap funding and from India Infrastructure Finance Company Ltd (IIFCL) for a three-year period.

Agro Tech Foods - Focusing On Food Service Sector

Agro Tech Foods Limited (ATFL), a subsidiary of global food major ConAgra, is currently focusing on food service sector in India. Following in the footsteps of its parent company, the Rs 1,260-crore ATFL, with a dominant market position in the edible oils and branded food sector in the country, has set up a separate business division for food service operations. Incidentally, ConAgra Foods Inc of USA grosses an annual turnover of $3.9 billion from food service operations.

According to ATFL vice-president (commodity sourcing and exports) Madhusudhan Manvi, Lamb Weston, another ConAgra company, will be assisting ATFL in food service operations. Lamb Weston, one of the world’s leading processors and suppliers of frozen potato products with a turnover of $1.5 billion, has already started test marketing of its products in India. ATFL is sourcing frozen potato products from Lamb Weston and is involved in its institutional sales across India to leading hotel chains, quick service restaurants, airways etc. Manvi told Business Standard that the booming IT and ITeS sector, and the growing hospitality and tourism industry in the country had driven ATFL to enter the food service sector. “In three years’ time, we are expecting to do a business of about Rs 50 crore in this segment,” he said, adding that the organised food service market in India was estimated to be around Rs 500 crore.

ATFL, which launched frozen green peas in the Indian market a fortnight ago, will be coming out with a range of tomato products in a month’s span. The tomato products would be marketed under the ‘Healthy World’ brand. In the past few years, ATFL has launched a host of packaged food products under the parent ConAgra’s well-known brand Act II (popcorn) and Healthy World. The company’s branded foods segment is also undertaking several new initiatives in the area of ready-to-eat snack foods and vending of popcorn. “We are focusing on the value-added segment, which would be profitable and sustainable in the long run,” Manvi said.

Shasun - To Invest Fresh $35 mn In Rhodia UK

Shasun Chemicals and Drugs, the leading bulk drugs and contract manufacturing company, which acquired the pharmaceutical custom synthesis business of Rhodia Pharma in UK in January this year, would invest a fresh $30-35 million in the UK company over the next two years. The new investment is to tap the research and production capabilities of the company and also take up its pipeline products to final stage as anticipated in the acquisition deal, said S Vimal Kumar, joint managing director, Shasun.

The Rhodia acquisition, which was completed last week, was done through Shasun’s UK-based wholly-owned subsidiary Shasun Pharma Solutions. The deal was funded through internal accruals and debts. The transaction includes all of Rhodia’s development and custom manufacturing services catering to innovator and emerging pharmaceutical clients in US, Europe and Asia. Rhodia posted $60 million revenues in the year ended December 31, 2005 and employs 349 people. The deal also includes acquisition of Rhodia’s UK manufacturing sites at Dudley in Northumberland, England and Annan in Scotland and also the current management team Rhodia and the existing employees. With the addition of Rhodia’s business, exclusively into the contract research and manufacturing service (CRAMS) area, Shasun is expecting turnover to the tune of Rs 750-800 crore in the fiscal 2007-08.

The company executives also said that it is open for few more acquisitions in Europe to enhance its presence in the CRAMS business. Shasun is also currently setting up another manufacturing facility at Visakhapatanam at an investment of about Rs 45 crore. This facility would also cater to the client-based API manufacturing business.

Zicom - Surveillance System For Mumbai

Next time you think of jumping the signal, think again. Your friendly neighbourhood traffic cop sitting at a distant control room may be watching you through a remotely managed video surveillance system. City-based electronic security systems manufacturer Zicom Electronic Security Systems has bagged an order for setting up Mumbai traffic surveillance system.

In its first phase this state-of-the-art surveillance system will include implementation of a remotely managed video surveillance at 100 identified locations (traffic intersections/junctions, critical locations) in Mumbai for aiding visual surveillance and incident detection and alarm system for selected location to facilitate better management of traffic control, law & order, special events like public gatherings, crime control & disaster response etc. The system will collect real time pictures from cameras and transmit them over leased lines with the help of fiber optical technology to the central control room and mobile vans where they will be digitally recorded, and displayed for immediate response.

According to Manohar Bidaye, chairman, Zicom, this is an important breakthrough for the company as with infrastructure in metros is developing fast, digital remote surveillance is fast becoming and absolute must for better civic life. When contacted S C Mathur, joint commissioner of police (traffic) said, the system costed Rs 7.5 crore and hoped to have it up and running in three months. With this Mumbai would become the first city in India to have a surveillance system on this large a scale. He further said, "This will reduce our response time in the eventuality of traffic jam or accident but with effective use of the system we expect that, we will be able to avert the possibility of traffic jam itself".