Showing posts with label India. Show all posts
Showing posts with label India. Show all posts

Monday, September 10, 2012

They call it Philanthropy, I call it Business Sense!

Post-liberalisation, India has not only witnessed tremendous economic growth, but has also experienced something which was more of a distant dream pre-liberalisation. With stock markets surging northwards, India Inc. has been all set to storm the lists that feature the “-est” of the world, both in terms of scale and scope. Not only did the Indian economy, within a span of less than two decades, touch the trillion dollar mark, but at the same time, India Inc. also booked their slots in the Fortune 500 and Forbes lists with unprecedented frequency. However, such entries did not change the attitude of these Indian corporations towards social cause. Unlike the West (and even China, Hong Kong and other Asian countries), Indian billionaires largely kept themselves away from the whole idea of philanthropy. This is quite evident from the fact that in spite of the surging number of billionaires, the fate of our workforces has not changed much. Else, how can one justify India’s Gini coefficient (an economic indicator that indicates the income inequality of the nation) of 36.8, which is even worse than Pakistan and Bangladesh.

The Asia-Pacific Wealth Report developed by Capgemini and Merrill Lynch Wealth Management reveals that in 2008, India had 84,000 HNWIs (High Net Worth Individuals) with a combined net worth of a staggering $310 billion (equates to approximately Rs.14,000 billion) with each HNWI on an average maintaining a balance of Rs.166 million – or more than $3.6 million. In 2009, the number of HNWIs grew and crossed the mark of a hundred thousand; and today, the same is estimated to be around 127,000. For the uninitiated, HNWIs are those who have assets of $1 million or more, excluding primary residence, collectibles, consumables, and consumer durables. To top this up, Forbes’ magazine lists around 69 Indians as billionaires, with the net worth of 100 wealthiest Indians being estimated at $300 billion as of 2009.

Now, to get a better perspective of the huge disparity, one just needs to compare this prosperity at the top of the pyramid with the misery at the bottom. The average Indian currently earns $1030 annually (the latest per capita figure). If one were to assume that everyone in India is caught in a time warp wherein the current billionaires’ wealth does not grow beyond the current levels, and at the same time those at the bottom do not spend a single penny for the next many years, then it would take more than 970 years for the average per capita earning Indian to even catch up with the current billionaires! With such high income disparities, if the top 100 HNWIs decide to donate merely 1 per cent of their total wealth, they could add around $3 billion every year to the economy, which could then fund a huge amount for basic developmental initiatives, which the average Indian is devoid of.

Again, to get a perspective of what this money can do, it is significant to understand how much does the government earmark for social imperatives. With the government planning to spend $6.72 billion in education and $4.83 billion on health & family welfare this budget, such a donation as mentioned above would go a long way in comfortably enhancing the allocation towards these social imperatives. Thus, a single year of donation can double and in some cases even triple the flow of funds, depending on the sector! If not for anything else, this $3 billion, which is a mere one year’s donation for India’s richest, can take care of the sanitation problems of 700 million Indians for good! And all this without causing much dent to the personal wealth of these top 100 wealthiest Indians. And mind you, here we are just referring to one year of donation; imagine the magic it could create if this trend of donations could continue for perpetuity. Also, here we are referring to just the top 100 of India’s wealthiest; imagine the social revolution that could be brought about if all 127,000 HNWIs donated 1% of their wealth every year for social development!


Source : IIPM Editorial, 2012.
For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face
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Friday, July 27, 2012

“We’re Good at Cost Optimisation & Growth’’

Akhilesh Joshi, COO, HZL, talks to Virat Bahri on The Company’s Expansions & The Market for zinc, Lead & Silver

B&E: What have been the highlights of this year’s performance for Hindustan Zinc Ltd. (HZL)? How have the expansions undertaken over the year helped the company?
AJ: We ended the year with the highest ever PAT of Rs.49 billion. We commissioned our 210,000 state-of-the-art zinc smelter and 160 MW thermal power plant at Dariba in Rajasthan. Our metal production capacity today stands at about one million tonnes and we are proud to position Hindustan Zinc as the world’s largest integrated producer of zinc. Out thermal power production capacity has also increased to 475 MW. The year saw a record production in zinc-lead mined metal and refined zinc and silver. We also expanded in our mining capacities to 9.75 million tonnes, with Rampura Agucha, which is the world largest zinc producing mine, producing about 6.15 million tonne ore per annum. We are quite keen to close the year with 500 tonnes of silver production and be counted amongst the top global silver producers. HZL governs more than 80% of the growing zinc market in India. The prices are all LME governed and what we are good at is maintaining the momentum in terms of cost optimization and volume growth.

B&E: To what extent has operational efficiency and speed contributed to your positive results?
What are your plans with respect to expansion in exploration in India and overseas?
AJ: If you see our growth plan since Sterlite Industries took over HZL in 2002, we have grown five fold in our production levels. We successfully executed three phases of expansions, which include setting up smelting complexes at Chanderiya and Dariba, mine expansions at Rampura Agucha and Sindesar Khurd and setting up power plants to be power independent at all locations. We have also carried out de-bottlenecking at our smelters located at Chanderiya, Debari and Vizag to increase production volumes. Hindustan Zinc has always had a strong focus on exploration. We believe that we must replace every tonne of ore mined with equal reserves and resources. Today, we are proud to have 313 million tonnes of reserves and resources. As for our overseas expansions, Vedanta group has recently acquired Anglo Zinc assets at Ireland, South Africa and Namibia. The production capacities of these mines are about 400,000 tonnes. We are quite open and keep looking for good assets.

B&E: How do you view the respective potentials of silver, zinc and lead in the Indian market?
AJ: Our silver segment is poised to almost treble from current levels driven by volume ramp up at Sindesar Khurd Mine and improvement in recovery at our other mines & smelters. We are aiming to exit FY 2012 with 500 tonnes of silver production capacity, at which we should be amongst one of the leading silver producers globally. As for zinc, we recently expanded through commissioning of 210,000 tonnes capacity zinc smelter at Dariba which has increased our zinc production capacity to about 880,000 tonnes. We are quite bullish on the lead demand in future, considering the growth of the consumption markets and segments. The growth in recycle market facilitates the balance in demand/supply of lead, as the demand for lead can’t be matched entirely by the limited primary deposits around the world. HZL current lead production capacity is 85,000 tonnes and this year we are commissioning another 100,000 tonnes capacity lead plant at Dariba to take the capacity to 185,000 tonnes. This should suffice a large deficit in the market. But in the current scenario, the deficit has lead to domination of secondary or recycle market.

B&E: What are the price trends that you are seeing in these commodities? Is there any risk of a downturn in the business cycle for any of these commodities, according to you?
AJ: A slight fluctuation in LME prices is a common phenomenon but overall LME is strong. Developed economies have seen stupendous growth in the last few years and we expect the momentum to continue. European nations too have recovered and are showing tremendous potential for growth. Seeing the past and present trend, developing economies like China and India have always been leading the growth and all these factors are expected to generate a strong demand for the metal. With increase in demand, zinc surplus is also expected to come down significantly.

B&E: Input prices have affected commodity businesses globally. To what extent are they affecting your financial performance?
AJ: There is always a challenge to address issue of input prices and they do have their negative impact on the COP. So far we have been partly able to address this issue effectively through our operational efficiency.



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