A poor performance by mining, manufacturing and electricity sectors resulted in a dismal industrial production growth of 3 per cent during March 2008, as against 14.8 per cent in the same month of the previous year. Data released by Central Statistical Organization revealed that the production in manufacturing sector, which has an 80 per cent share in the Index of Industrial Production, grew by 2.9 per cent as against a robust 16 per cent in the same month of the previous year.
In the month under consideration, electricity production grew by 3.7 per cent as against 7.9 per cent in March 2007. Mining production growth also slumped to 3.8 per cent in March 2008 as against 8 per cent in the corresponding month of the previous year. Consumer durables production in March dipped by 2.1 per cent as against a growth of 3.8 per cent in March 2007. Capital goods production in March grew by 8.6 per cent as against 18.1 per cent in the same month of the previous year.
There is a silver lining, though. Part of the drop appears to be because of the base effect of the industrial growth in March 2007, the base for calculating growth in March 2008, which was unusually high. If we look at the numbers month-on-month (M-o-M) and look at March over February, we will notice a 23-point increase in the general index, which will translate to a growth of nearly 8.5%. Basically, in March 2007, growth had been 37 points over a base of 250, so that was a huge increase.
Thus considering the base effect and the M-o-M figures, there is really no signs of slowing down yet. The higher sequential growth (March over February), which had turned negative in February 2008, does underscore the point. However IIP figures for the coming months would be keenly watched to see whether there are actual signs of slowing down on account of prevailing higher interest rates and rising input costs.
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Ratan Jindal-led Jindal Stainless has entered into an agreement with Indonesian mining and metals firm PT Antam to form a $700-million joint venture to develop a nickel smelting and stainless steel facility in North Konawe, Southeast Sulawesi (Indonesia). While PT Antam will have a 55% stake in the JV, Jindal Stainless will hold the balance 45%.
The new venture would entail an investment of $700 million (Rs 2,900 crore approx), of which 30% would be raised through equity and the balance would be in the form of debt. The new plant will have a capacity of close to 20,000 tonne per annum (tpa) of contained nickel in the form of ferro-nickel and 2.5 lakh tpa of stainless steel. The facility will also have its own coal-based captive power plant and water-treatment plant, besides residential facilities for its employees.
While the construction work would begin from early next year, the plant would be commissioned by mid-2011. Under the terms of the agreement, while PT Antam will share its expertise in mining and nickel processing, Jindal Stainless will provide expertise in stainless steel processing and marketing. With Jindal Stainless already having a stainless steel plant in Indonesia, the new venture would strengthen its presence in the global stainless steel industry.
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Ranbaxy Laboratories has signed a strategic product development agreement with German pharma major Merck for drug discovery and clinical development collaboration in the anti-infectives field. As per the deal, the two partners will work together to develop clinically validated anti-bacterial and anti-fungal drug candidates. The agreement is in line with Ranbaxy’s recent overtures for collaborative research in various segments with other pharma companies both in India and abroad.
Under the terms of the agreement, Ranbaxy will receive an undisclosed upfront payment, in addition to potential payments totalling more than $100 million associated with the achievement of various research, development and regulatory approval milestones for each target included in the collaboration. This apart, Ranbaxy will also be eligible to receive significant royalties on worldwide net sales of any products commercialised under the agreement.
Ranbaxy will carry out drug discovery and clinical development through Phase II of clinical trials. Merck will then develop and commercialise the drug candidates. The collaboration, beginning this year, will have an initial term of five years and can be extended mutually. This deal could be similar in nature to Ranbaxy’s existing relationship with GlaxoSmithKline. The two had struck an alliance in 2003 under which Ranbaxy conducted the optimisation chemistry required to progress drug leads to the stage of candidate selection.
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