Companies & Sectors
Marico, Dabur suspend operations in Egypt; trade disrupted on fears of looting

International consequences and impact on India will be more severe if situation deteriorates; other companies prefer to wait and watch for the situation to unfold

Marico and Dabur have temporarily shut down their units in Egypt and trade between the two countries has been disrupted following the worsening unrest in the Arab nation, according to companies and trade organisations.

It has been reported that at least two other companies-Asian Paints and Emami-which have operations in Egypt, are keeping a close watch on the situation before taking a decision either way. Wipro, Ranbaxy and IFFCO also have wholly-owned companies in the country.  

Meanwhile, the government has said that it has "not received any information so far" of any disruption of India's shipping movements through the Suez Canal, following the Egyptian crisis.

Analysts suggest that if the situation worsens, not only would the trade of goods and services between the two countries be affected, but the consequent impact on businesses across the world could hurt critical inputs like oil that would also impact India.

"Egypt (and the Middle East and the North African region) is an important market for Marico. In view of the current situation, our factories have been temporarily closed as a safety measure," said a spokesperson for Marico Industries. The region accounts for about 7%-8% of the company's revenues which totalled over Rs2,660 crore in 2009-10.

It is difficult to say how long the unrest will go on-so many companies are waiting and watching for the situation to unfold before taking a decision.

Dabur India chief executive officer Sunil Duggal said that the company has suspended its hair oil production plant in Egypt. "We are watching the developments. If the unrest continues for a longer period of time, there might be some impact," said Mr Duggal. Egypt accounts for about 2.5% of Dabur's consolidated turnover, which was about Rs3,400 crore in 2009-10.

Besides these wholly-owned units in Egypt, Tata Motors, Aptech, Iflex and Essar Global have regional offices in that country, according to information available with the Federation of Indian Chambers of Commerce and Industry (FICCI).

Trade between the two countries has also been disrupted with traders fearing looting and arson.

"At this point of time, there is disruption in both export and import trade dispatches from Egypt and these have been kept on hold," said Ajay Sahai, director-general of the Federation of Indian Exports Organisation (FIEO).

There have been reports of looting and arson, which has been a cause for worry. Exports aggregated $1.4 billion and imports totalled $1.7 billion in the last fiscal. With the pickup in demand, exports were expected to grow by 20%-25% in the current fiscal year.

Oil & gas, coking coal, raw cotton, rock phosphate and marble comprise nearly 95% of India's imports from Egypt. The principal export items are frozen meat, cotton yarn and synthetic yarn, rice, diesel, tobacco, electrical machinery, soybean, chemicals, automobiles and components, sugar, pharmaceuticals and tea.

"It is very unfortunate that that business is affected. The problems will definitely impact our bilateral trade," said ASSOCHAM secretary general, D S Rawat.
Maruti Suzuki, India's number one carmaker, exported around 3,000 cars to Egypt. Indian carmakers exported vehicles worth about $85 million in 2009-10, which is about 5% of the country's total car exports. Bike exports totalled about $4 million and truck exports about $1.4 million in this period.

Shipping channels do not appear to have been affected so far. "We have not received any report from either the Shipping Corporation of India (SCI) or the rest of the maritime industry about any disruption so far," said a senior official in the shipping ministry. But there are fears that the crucial Suez Canal link between the Mediterranean Sea and the Red Sea could be affected.


Re-branding cost, forex loss weigh heavy on Bharti Airtel's Q3 net profit

Although Airtel's net profit fell during the third quarter, its flat ARPM indicates a stable tariff environment in the Indian telecom industry

Bharti Airtel Ltd, India's largest telecommunications company, today reported a 41% dip in third quarter net profit mainly due to re-branding cost, increased net interest cost, forex losses and higher spectrum charges.

For the quarter to end-December, the telecom operator said its net profit fell to Rs1,303.3 crore from Rs2,194.9 crore even as its total revenues increased 51% to Rs15,576 crore.

During the quarter, Bharti Airtel undertook re-branding, which cost it Rs340 crore, while adverse foreign currency fluctuation in Africa and India resulted in an exchange loss of Rs151 crore for the company. The company said its revenues also fell due to a Rs80 crore increase in spectrum charges in India and an increase of Rs471 crore in net interest outgo.

Sunil Bharti Mittal, chairman and managing director, Bharti Airtel, said, "In India we have commenced a new journey with the rollout of 3G services and the pilot launch of airtel money. In Africa, we have been focussed on developing a long-term sustainable business model that will transform the Africa market in terms of network coverage, quality of services and affordability."

Bharti's average revenue per minute (ARPM) declined to 44.2 paisa from 44.4 paisa and minutes of usage (MoU) also declined 1% to 449 minutes on a quarter-on-quarter (q-o-q) basis. The flattish ARPM is certainly positive for the Indian telecom industry and continues to resonate that competitive pressures are peaking. In other words, it also indicates a stable tariff environment.

The company's performance in Africa was also good, with strong subscriber addition and stable average revenues per user (ARPU). During the quarter, Bharti Airtel added two million subscribers, taking its total subscriber numbers in Africa to 42 million. In Africa, the company's ARPU remained flat at $7.3 and MoU increased 7% to 120 minutes.

Airtel has about 200 million mobile subscribers at present-about 152 million of them in India, 42 million across Africa and almost five million in Bangladesh and Sri Lanka. In India, it has 3.3 million telemedia and 4.9 million digital TV customers. During the last quarter, Bharti's share of net additions was 14.2% of all-India wireless subscriber net additions.




6 years ago

hi i want to call india . so can you tell me how can i call unlimited to india tatadocomo

Slim gets fatter

Carlos Slim's Mexican holdings have helped him beat Bill Gates and Warren Buffett on the market for the second straight year. His publicly disclosed holdings surged 37% to $70 billion in 2010.

Read Article...


We are listening!

Solve the equation and enter in the Captcha field.

To continue

Sign Up or Sign In


To continue

Sign Up or Sign In



The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)