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Work begins on Kitex cluster in Telangana

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Kitex Group on Saturday began work on its integrated fibre-to-apparel manufacturing cluster in Kakatiya Mega Textile Park (KMTP), Warangal. Kitex, which is the second largest manufacturer of infant wear in the world, is setting up this cluster with a capacity of 7 lakh garments per day at an investment of Rs 1,600 crore. The cluster, expected to be spread over 200 acres, will employ more than 15,000 people directly, over 80 per cent of which will be women employees. The entire investment will be operational by June 2023 with the first unit going live by the end of 2022. Minister for industries, K.T. Rama Rao, and Minister for Panchayat Raj and Rural Development, Errabelli Dayakar Rao, laid the foundation stone for the project. The ministers also inaugurated the first phase of twin projects by Ganesha Ecosphere in the mega textile park. The largest PET bottle recycling company in the country has invested close to Rs 350 crore in the manufacturing of recycled polyester fibre and yarn, among other products. The investment will be ramped up to Rs 550 crore by next year. The plants, being set up in an area of 50 acres, will be in compliance with USFDA and EFSA norms to recycle PET bottle waste into premium quality products. Once fully operational, the two plants will employ more than 1,000 people directly and consume approximately 60,000 tonnes of waste PET bottles per annum, thereby contributing towards sustainable development of Telangana. The ministers also reviewed investment plans by Youngone Corporation in KMTP wherein ground breaking is expected by next month. Youngone, a leading manufacturer and exporter of outdoor wear, employs more than 100,000 people globally across 13 countries. Their investment plans in KMTP include setting up eight manufacturing units at an investment of $120 million, directly employing approximately 12,000 people. Youngone’s proposed investment in Telangana is already approved under the PLI scheme for textiles. On the infrastructure side, the ministers launched the construction of a 12 MLD dedicated water supply line to KMTP to ensure 24×7 quality water supply for the textile industries in the park. Along with the proposed 220 kV dedicated power line and 10 MLD Common Effluent Treatment Plant, the mega textile park will be a preferred destination for setting up textile and apparel manufacturing units in the country

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Summer Sizzles, Sales Rise, Indian Consumer Firms Gear Up

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Blue Star intensifies its product offerings with a plethora of new home air conditioner models, targeting a remarkable 25% revenue boost in the air conditioning segment, led by Managing Director B. Thiagarajan.

As temperatures soar across India, consumer goods companies are gearing up for what promises to be an exceptionally hot summer. With forecasts predicting an increase in heatwave days, reaching temperatures of at least 40 degrees Celsius in the plains, from April through June, businesses are seizing the opportunity to meet the rising demand for cooling solutions.

Blue Star, a leading appliances maker, has launched a myriad of new home air conditioner models to cater to the anticipated surge in demand. Managing Director B. Thiagarajan aims for a substantial 25% revenue growth from the air conditioning segment, a significant jump from last year’s 5%.

Similarly, renowned ice cream brand Baskin Robbins is rolling out 20 new products in India ahead of the scorching summer months.

Analysts foresee a substantial impact on consumer discretionary spending, particularly on products like air conditioners, fans, refrigerators, and cooling appliances. This surge in demand is expected to reflect robust growth numbers for the first quarter of the fiscal year for companies operating in this sector.

Traditionally, less than 10% of Indian households own air conditioners, but the combination of the hotter summer forecast and new product launches is expected to drive up this figure. Many first-time buyers are entering the market, driven by the desire for temperature-controlled comfort, particularly in light of the extreme temperatures experienced in various parts of the country.

Advertising expenditure is also on the rise, with companies like Blue Star and Baskin Robbins significantly increasing their budgets to capitalize on the heightened demand. Television and online advertising are key avenues for reaching consumers during this period.

Beyond manufacturers, delivery and service providers are also experiencing a surge in demand. Grocery delivery apps like Zepto, Swiggy, and Zomato’s Blinkit are witnessing increased orders for hydrating fruits, beverages, and ice creams as consumers seek relief from the heat.

With the summer months typically leading to increased beer consumption, breweries are gearing up for heightened production and distribution challenges. Carlsberg India’s Managing Director Nilesh Patel highlights the need for careful planning to meet the rising demand.

While the harsh weather may drive up vegetable prices and potentially curtail outdoor spending, analysts anticipate that consumers will continue to indulge in small luxuries like cold beverages and ice cream to find relief from the heat.

Overall, Indian consumer goods companies are bracing themselves for a lucrative summer season, with both manufacturers and service providers working tirelessly to meet the heightened demand for cooling products and refreshments.

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Aerospace parts maker JJG Aero raises $12 mn to hike capacity

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Bengaluru-based aerospace components manufacturer, JJG Aero, has secured USD 12 million (Rs100 crore) in inaugural funding from CX Partners which will be used primarily to increase its new facility’s manufacturing capacity, further vertical integration and other corporate initiatives.

Established in 2008, JJG Aero specializes in manufacturing build-to-print high-precision machined components, with in-house special process finishing capabilities. The funding comes at a time when the aerospace supply chain is facing all-time high demand from aircraft manufacturers, which legacy vendors in the Western world are struggling to meet. The global geopolitical issues, economic stability and Government support make India ideally placed to benefit from this deal.

The company has spent a decade in building best-in-class capabilities, processes, compliance standards, and customer relationships and obtaining requisite approvals and certifications, and we are now in the right place to grow rapidly. Anuj Jhunjhunwala, CEO, JJG Aero sees the company’s strengths and value proposition enabling them to emerge as a key player in the aerospace ecosystem. “India has emerged as an attractive destination for sourcing components and parts by global leaders and we are excited to be selected by so many marquee clients as a strategic growth vendor” says Jhunjhunwala. This investment will enable JJG Aero not only to continue on its growth path through capacity addition but also to upgrade the quality of earnings by focusing on higher value-added components.

Vivek Chhachhi, Managing Partner, CX Partners also notes that with its foray into the manufacture of aero-engine components, JJG Aero is well-positioned to capitalize on these opportunities and further solidify its presence in the market.

From simple 2-axis to complex 5-axis machining, JJG Aero offers a wide range of manufacturing services, complemented by over 30 NADCAP-approved special processes, including electroplating, anodizing, paint, and NDT. Moreover, the company provides assembly, testing, and other value-added services to its esteemed client base.

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Tesla eyes India market as Elon Musk makes bold AI prediction

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In a recent X Spaces session with Nicolai Tangen, CEO of Norges Bank Investment Management, Tesla CEO Elon Musk emphasized the importance of electric vehicles (EVs) in India, stating that it’s a natural progression for every country to embrace them. Musk highlighted India’s status as the most populous country globally and stressed that electric cars should be accessible to Indian consumers like they are in other parts of the world.

Musk’s comments coincide with Tesla’s intensified efforts to expand its presence in the Indian market. Sources reveal that the state governments of Maharashtra and Gujarat have extended enticing land offers to Tesla for the establishment of a cutting-edge EV manufacturing plant. The proposed investment for this venture ranges between USD 2 billion to USD 3 billion, demonstrating Tesla’s commitment to both domestic and international markets.

This move aligns with India’s new EV policy, which aims to attract investments from global EV manufacturers and promote the adoption of advanced EV technology among Indian consumers. The policy emphasizes the importance of domestic value addition (DVA) and sets specific localization targets for manufacturers establishing operations in India.

To incentivize investment, the government has introduced measures such as customs duty exemptions and import quotas for EVs based on the level of investment made by manufacturers. These initiatives aim to position India as a preferred destination for EV manufacturing and contribute to the country’s Make in India initiative.

In anticipation of these developments, Tesla plans to dispatch a team of experts to explore suitable locations across India for the proposed manufacturing facility. Musk’s previous statement about visiting India in 2024 further underscores the company’s eagerness to enter the Indian market and collaborate with local stakeholders.

Tesla’s expansion into India represents a significant step forward in the global EV landscape and underscores the company’s commitment to sustainable transportation solutions. With India poised to become a key market for electric vehicles, Tesla’s entry is expected to drive innovation and accelerate the adoption of EVs in the country.

As the electric vehicle market continues to evolve, Tesla’s entry into India holds the potential to reshape the automotive industry and contribute to India’s transition towards a greener and more sustainable future.

Tesla’s entry into the Indian market not only signifies a pivotal moment for the country’s automotive industry but also presents an opportunity for Tesla to capitalize on India’s growing demand for electric vehicles. With the Indian government’s focus on promoting clean energy initiatives and reducing carbon emissions, Tesla’s electric vehicles align perfectly with India’s sustainable development goals.

Moreover, Tesla’s presence in India is expected to stimulate job creation and economic growth, particularly in the manufacturing sector. The establishment of a state-of-the-art manufacturing plant will not only provide employment opportunities for local residents but also foster the development of ancillary industries and supply chains.

In addition to manufacturing, Tesla’s entry into India is poised to catalyze advancements in EV infrastructure and technology. As Tesla vehicles become more accessible to Indian consumers, there will be a corresponding need for charging infrastructure and support services. This presents opportunities for collaboration with local businesses and government agencies to build a robust EV ecosystem.

Furthermore, Tesla’s entry into India could spur competition and innovation in the domestic automotive market, encouraging other manufacturers to invest in electric vehicle technology. This competition could lead to advancements in battery technology, vehicle performance, and affordability, ultimately benefiting consumers.

Overall, Tesla’s decision to establish a manufacturing presence in India reflects the country’s growing importance in the global automotive industry and underscores India’s potential as a key market for electric vehicles. As Tesla’s footprint expands across the country, its impact on India’s economy, environment, and technological landscape is expected to be profound.

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Air India, BIAL Partner to Create South India’s Top Aviation Hub

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Air India and Tata Group airlines will partner with BIAL to improve airport services and connectivity at Bengaluru’s Kempegowda International Airport, including setting up an exclusive lounge for premium passengers.

Air India and Bangalore International Airport Limited (BIAL) have entered into an agreement aimed at bolstering Bengaluru’s status as a premier aviation hub for southern India. The collaboration seeks to enhance air travel connectivity to and from India over the next five years.

Under the agreement, Air India, along with other Tata Group airlines such as AIX and Vistara, will work closely with BIAL to improve international connectivity, operational efficiency, and passenger experience at Kempegowda International Airport, Bengaluru (KIAB or BLR airport). This includes plans to strengthen the group’s presence at the airport and establish a dedicated domestic lounge for premium and frequent travelers of Tata Group airlines.

Furthermore, Air India has signed a memorandum of understanding (MOU) with the Government of Karnataka to develop maintenance, repair, and overhaul (MRO) facilities at the Bengaluru airport. This partnership aims to stimulate the MRO ecosystem and create over 1,200 new job opportunities in the state.

Campbell Wilson, CEO and MD of Air India, emphasized the importance of airline-airport synergy in enhancing customer experience and operational efficiency. He expressed enthusiasm for strengthening Air India’s relationship with BIAL and expanding its presence at the airport, as well as establishing a major MRO center.

Hari Marar, MD and CEO of Bangalore International Airport Limited, highlighted the BLR airport’s commitment to becoming the international gateway in Southern and Central India. He stated that the collaboration with Air India aligns with the Ministry of Civil Aviation’s vision of developing Indian airports as hubs and aims to enhance the passenger experience. Marar also expressed ambitions to capture a significant share of long-haul routes from Bengaluru Airport over the next five years.

In related news, Air India announced the appointment of Jayaraj Shanmugam as its Head of Global Airport Operations, effective April 15. Shanmugam, who previously served as the chief operating officer (COO) at BIAL, brings extensive experience to his new role.

The collaboration between Air India and BIAL represents a significant milestone in the transformation of Bengaluru into a key aviation hub in the region. By leveraging each other’s strengths and resources, the partnership aims to not only enhance air connectivity but also contribute to the economic growth of Karnataka by generating job opportunities through the establishment of MRO facilities.

Jayaraj Shanmugam’s appointment as the Head of Global Airport Operations further solidifies Air India’s commitment to optimizing its airport operations and providing a seamless travel experience for passengers. His extensive experience in airport management, coupled with his previous role at BIAL, positions him well to drive operational excellence and efficiency within the airline.

As the aviation industry continues to evolve, alliances between airlines and airports are becoming increasingly vital to meet the growing demands of travelers and enhance overall competitiveness. The strategic collaboration between Air India and BIAL sets a precedent for future partnerships in the aviation sector, emphasizing the importance of cooperation and synergy to achieve common goals.

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March sees strong growth in Indian pharma market, up by 9.5%

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The Indian pharmaceutical market (IPM) experienced a notable 9.5 percent increase in sales in March, reflecting robust value growth across various therapy segments, except for respiratory. According to data from research firm Pharmarack, all therapies demonstrated positive value growth, contributing to the overall expansion of the market.

Sheetal Sapale, Vice President-Commercial at Pharmarack, noted that while many pharmaceutical companies showed double-digit value growth, unit growth remained a challenge. The growth in sales during March was primarily driven by value growth and new introductions, particularly in the anti-diabetic segment.

Several factors contributed to the uptick in sales, including new product introductions and patent expiries. For instance, there were multiple launches in the hematinic market following the loss of exclusivity rights for iron supplement Orofer FCM in October 2023. Additionally, patent expiries for drugs like Linagliptin and Dulaglutide further fueled competition in the anti-diabetic segment.

In March, Alkem emerged as one of the few companies reporting positive unit and value growth, with a 15.1 percent increase in value and an 11.3 percent increase in units sold. Other key players such as Cadilla, Fourrts, and Natco Pharma also witnessed double-digit value and unit growth during the month.

The top-selling medicine brands in March included Glaxo Smith Kline’s Augmentin and USV’s Glycomet GP, with Augmentin achieving sales of Rs 73 crore. Despite facing challenges in unit growth, Augmentin reported a 10 percent increase in value sales. Mankind’s Manforce condom brand retained its position as the third top-selling brand, despite negative unit and value growth.

Cipla’s Foracort inhaler maintained its fourth position in the respiratory segment, with sales totaling Rs 50 crore. Abbott’s Type 2 diabetes/weight management drug Rybelsus demonstrated remarkable growth, with a double-digit value growth rate of 7 percent and a staggering 75 percent increase in units sold in March.

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McDonald’s buys all Israeli franchise restaurants amid boycotts

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Aljazeera said that McDonald’s announced it will purchase its 30-year-old Israel franchise from Alonyal Ltd., taking back control of 225 outlets that employ more than 5,000 people. After US fast-food business Alonyal announced that it would be giving free meals to the Israeli soldiers in response to the October 7 bombing by Palestinian group Hamas, there were protests and boycotts. While McDonald’s is a global corporation, its franchises are typically locally owned and operate independently. Its CEO, Chris Kempczinski, said previously that the company had seen “meaningful business impact” in several markets in the Middle East and some outside the region due to the Israel-Hamas conflict, as per Aljazeera.

“For more than 30 years, Alonyal Limited has been proud to bring the Golden Arches to Israel and serve our communities,” Omri Padan, CEO and owner of Alonyal, said in a statement on Thursday. According to Aljazeera, McDonald’s added that it “remains committed to the Israeli market and to ensuring a positive employee and customer experience in the market going forward.” Following the transaction’s completion in the coming months, McDonald’s will assume ownership of Alonyal’s outlets and operations, maintaining its current workforce. However, the terms of the transaction were not disclosed by the companies involved. In February, Kempczinski said that the war had had a “disheartening” effect on sales in Middle Eastern countries and other Muslim-majority nations such as Malaysia and Indonesia. “So long as this conflict, this war, is going on, we’re not expecting to see any significant improvement in this,” Kempczinski said in a conference call. “It’s a human tragedy, what’s going on, and I think that does weigh on brands like ours.”

During October–December, sales growth for the fast-food chain’s Middle East, China, and India division was only 0.7 percent, significantly lower than market projections of 5.5 percent. This decline follows calls for a McDonald’s boycott by customers in Muslim countries, prompted by Alonyal’s announcement. Consequently, franchisees in nations like Egypt, Jordan, and Saudi Arabia distanced themselves from the donations, collectively pledging millions of dollars in aid to Palestinians in Gaza.

While Chicago-based McDonald’s is known as one of the United States’ most iconic brands, most of its restaurants worldwide are locally owned and operated. Another prominent Western fast-food chain, Starbucks, has also faced boycott campaigns due to its perceived pro-Israeli stance and alleged financial ties to Israel. CEO Laxman Narasimhan told journalists in February that Starbucks saw a “significant impact on traffic and sales” in the Middle East but also in the US, where protesters campaigned against the Seattle-based company, calling for it to take a stand against Israel.

Domino’s, a US-based pizza maker with franchises around the world, also faced blowback after posts on social media claimed without evidence that it had also given free food to Israeli soldiers. The brand’s same-store sales dipped by 8.9 percent in Asia in the second half of 2023, mainly because consumers in Malaysia associated it with the US, an Israeli ally, a company official said.

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