Expanding in a phased manner is a key discussion point in our partnership with IMAX: Ajay Bijli

An edited version of this Q&A first appeared in DNA Money edition on Monday June 17, 2013.

Actor Aamir Khan inaugurating PVR Imax theatre along with
Ajay Bijli, CMD, PVR Ltd, and Sanjeev Bijli, JMD, PVR Ltd

Sitting atop in the Indian film exhibition industry with 365 screens in 86 cinemas in 36 cities across India, PVR is targeting 500 screens by 2015. The company also launched the IMAX screen at PVR Phoenix Mills (Lower Parel, Mumbai) showcasing Hollywood blockbuster Man of Steel. Ajay Bijli, chairman and managing director, PVR Ltd speaks about the association with IMAX, merger/integration of Cinemax, and growth plans. Edited excerpts:

I noticed, your IMAX screens in Bangalore and Mumbai have Pepsi and Kotak as title sponsors. What is the rational behind this approach?

Film exhibition business primarily has three revenue streams viz theatrical, food and beverage and, sponsorship and advertising. We look at properties and opportunities wherein we can get a sponsor associated with anything that we do onscreen advertising. One such opportunity came post signing up with IMAX and we took it to a sponsor to see their reaction.

Worldwide, corporates, banks, beverage brands seek associations that offer a very unique experience. Since our investment is large and if we could get a sponsor it will eases off the pressure to some extent. But we pursue this approach property by property like for the IMAX Bangalore property we have Pepsi as the title sponsor while it's Kotak for IMAX at Phoenix Mills. The tenure for such deals is five years, I cannot share the commercials associated with it though.

Is there a commitment from PVR in terms of the number of IMAX screens in India?

We will set up IMAX screens wherever there is an opportunity. We can go up to 10 screens but I'm very particular about where these screens come up. Besides a perfect location we look for things like right demographic profile, liking for Hollywood films etc. We are primarily an exhibitor but wherever we feel can add value and give a much better experience by adding another attraction we'll do it.

In phase I, the potential exists only in those catchments where Hollywood films are well received and we represent about 45% of such films in India. However, I think IMAX has a great future and with Indian films also getting converted (into IMAX) there will be a huge propensity of people to watch such films. So phase II might see a much larger footprint with huge pipeline of Indian films. In fact, expanding in a phased manner is a key discussion point in our partnership with IMAX.

Cinemax recently got merged with PVR, could you throw some light on how are we going about the two brands now considering both enjoy great equity in certain key markets?

We are looking at economies of scale at different levels. There is no hurry for us to convert everything into PVR as conversion is an expensive proposition as well. We have done audits and are now looking at those areas where consumer experience can be improved first. People need to feel the presence of PVR even though name is not PVR.

So from projection, sound systems, food and beverage and online initiatives, box-office experience, advertising and marketing etc will have to be upgraded and extended to all locations to bring them at par with PVR. We are cherry-picking properties that have not been renovated for a long time. These I believe can be converted into PVR provided they are in the right catchments. Then there are certain brand new properties with PVR level standards like the five-screen Cinemax at Pacific Mall (Subhash Nagar, New Delhi) that has already been converted to PVR at a cost of Rs 67 lakh.

What are the possibilities of brand Cinemax getting completely phased out over 3-5 years from now? Or Cinemax could become a sub-brand?

Not really. I'm finding that Cinemax is also in great locations so we'll have to be very careful how go about it. I don't think the brand will get phased out completely as it is very expensive to change. Looking at economies of scale from a stakeholders perspective having one brand will be very fantastic but we will have to see how it goes. We might look at a prefix / hybrid option for some while others could be completely PVR. We are still thinking along those lines.

You are also adding a good number of screens organically. What are the plans like in this fiscal?

We have been consistently adding 50-60 screens in the last couple of years and the target for this fiscal is 90-odd screens. We adopt a very cautious approach to capital deployment and certainly not in a big hurry. We are pretty much on track and have already opened 25-odd screens. In another fortnight we will be opening 17 screens taking the total to 382 screens. We should be 500 screens in total by 2015.

On the revenues streams you'd mentioned earlier, what is the ratio like between the three to the company's overall revenues?

Films contribute the largest at 67% followed by 23% from food and beverage and 10% from advertising. Profitability-wise advertising is number one contributor to company's bottom-line. And with new screens getting operational, we see advertising contributing close to 15% to the overall revenues in the future. Interestingly, we probably have the highest (across the globe) per screen revenue generated from advertising.

People have expressed displeasure on facebook and twitter on the long duration advertising when watching a movie.

Advertisers look for big blockbuster releases and it largely happens with such films. So when Yeh Jawaani happened people have carried back that impression. I agree it was very long.

In fact, some people posted that it was 45 mins of advertising...

No no... 45 minutes to I will never allow... I've seen Ye Jawaani twice and I think maximum it was 12-14 minutes of advertising in the pre-movie stage and another 8-9 minutes in the interval. So all in all it would have been 20-22 minutes of advertising. One needs to understand that the company has been promoted by movie-buffs and I'd personally hate if there was advertising beyond a limit.

Also, there was a certain pent-up demand already in the market. Ye Jawaani came after IPL which already had a issue. So the pent-up demand was from everyone; consumer were dying to see a good movie, advertisers wanted to go back to the medium of cinema and exhibitors wanted to maximise the number of shows. So we were all basically waiting from something big to happen and that's why the increase in duration of advertising.

Could you throw some light on the ticket pricing trends, how's it looking like in this fiscal?

I think it would be the usual 10-12% hike in ticket rates mainly due to inflation. People take the highest ticket price paid over the weekend or the price for the last row as the benchmark. I'd look at the average ticket price (ATP) -- morning, evening, weekday, weekend -- and that is still low at Rs 175.

The F&B part of your business is also getting bigger by the day.

The F&B vertical has now reached Rs 300 crore in overall revenues and we believe it should really be PVR's focus along with cinemas especially something that's a very natural extension to the cinema business. So we won't do a standalone restaurants. The F&B eco-system will be built around the multiplexes and our intention is to have F&B outlets for pre- and post-movie viewing experiences especially in the newer multiplexes.

We may also end up creating a few brands in the quick service restaurants (QSR) on our own. The first one (a polished casual dining restaurant with an average per cover charge of Rs 1,100) we have done is our own brand. Others in the pipeline will be a mix of outsource, joint ventures and franchise. It will be too early to disclose details as talks are still on and we are evaluating the viability / feasibility.

How is the leisure vertical shaping up? Are there more concepts in the offering?

We have joint venture company that operated five bowling centres already and will be opening three more this year. The unit level profitability here is very good. Ice skating was something being explored but our market research showed that too many accidents would happen hence the idea was dropped.

You now have significant backing from L Capital and Renuka Ramnath's Multiples private equity fund holding 15.8% stake. So any future funding requirement will be done through them are some new names could join in?

I doesn't look like there will be any further funding requirement as of now. Also we work on negative cash flow and have close to Rs 300 crore in operating revenues (ebitda) which is good enough to meet any funding requirements. Unless there is another acquisition we may plan which is very unlikely. Cinemax was a very big deal and we need to digest it properly. So we need to be sensible about how to grow the company and there is no such hurry. We are already growing by 30-40% annually which is more than enough.

Swiss Sotax plans India plan, acquires Dr Schleuniger Pharmatron for $15 million

This story first appeared in DNA Money edition on Saturday, June 15, 2013.

Sotax AG, a Swiss dissolution systems maker, is setting up a unit in India to make affordable systems for the pharmaceutical market here.

The company is scouting for a location which most likely would be in Navi Mumbai.

Jean-Louis Raton, head of business units-Europe and Asia-Pacific, Sotax, said the company has been looking at a few places in Mumbai/Navi Mumbai and soon finalise the location soon.

"The India unit will help us reduce the price gap between locally-made dissolution systems that are priced seven times lower than Sotax's. The India facility will manufacture 400 units in the first year, which would be increased gradually to 1,000 units," said Raton.

The company plans to start the facility by August 2014.

Being Swiss-made, the dissolution system attracts 30% customs duty in India.

So, while a basic Sotax dissolution bath (manual) is priced Rs 12 lakh the locally made system costs Rs 3 lakh.

The Sotax's India-made systems will cost Rs 4 lakh.

"Despite being made in India, the systems will still be over 30% premium to the local systems," said L Ramaswamy, managing director, Sotax India.

While the company did not share investment, official said it will be not be very capital intensive as the facility will be more of an assembly line.

"Approximately 60% of the parts would be sourced from India and the balance will be imported. The India facility will only focus on assembling the system. Set-up cost will not be high because we will be hiring and leasing the machinery," said Ramaswamy. The company will, however, continue to import the semi-automatic and fully-automatic dissolution systems from Switzerland.

In another development, Sotax has acquired another Swiss firm Dr Schleuniger Pharmatron, a maker of physical test equipment for solid dosage and specialists in complete tablet hardness testing solution, for $15 million.

Sotax registered global revenues of $48 million and with the acquisition of Dr Schleuniger Pharmatron it is expected to swell to $58 million.

Holger Herrmann, vice president-sales and marketing, Dr Schleuniger Pharmatron, said the company has over 800 installations in India.

Sotax's India manufacturing facility will also manufacture Dr Schleuniger Pharmatron products / solutions and would also cater to overseas markets.

Foreseeing significant growth opportunities, Sotax will also relocate its headquarters from China to India in July.

Sotax has set up a R&D centre at Navi Mumbai to develop an indigenous system and plans to set up a contract lab in India to cater to testing requirements of European pharma companies.

Mahindra Holidays to add 1,000 rooms

This story first appeared in DNA Money edition on Thursday, June 13, 2013.

Vacation ownership company Mahindra Holidays plans to add over 1,000 apartments to its existing portfolio of 2,500 in the next two years.

Though the company didn’t share investment details, a top official said it had spent Rs 500 crore on adding a similar number in the last two years.

Rajiv Sawhney, CEO, Mahindra Holidays & Resorts India, said, “We currently have 10 sites with development potential. While some are pure part of our land bank, a few others are existing properties with potential for room additions. The 1,000 rooms added in the last couple of years were on the base of 1,400 rooms, which is over 70% increase in room availability for our members.”

A part of the Mahindra Group, the company currently owns 70% of the 2,500 rooms in its portfolio, while the balance is on long-term lease.

The additions were made in a concentrated manner across domestic destinations including Goa, Kerala, Himachal Pradesh, Jaisalmer and Udaipur. Bangkok and Dubai were were added in overseas destinations.

“We are actively pursuing something in Sri Lanka and will take a call on it in a year,” said Sawhney.

Targeting customers in the 30-35 year age group, the company will aggressively use the digital medium to reach out and convert them into memberships. Mahindra Holidays has also restructured its product offerings by discontinuing Zest (for senior citizens) and Mahindra Homestays vertical.

It has been consistently adding 17,000 members in the last two fiscals and currently has a total membership of 165,000. The cost of buying a Club Mahindra membership is in Rs 2-18 lakh range and has increased 10% year on year. Sawhney said the increase is mainly due to inflation.

It has made structural changes in terms of customer acquisition and will largely look at referrals, social/digital and company websites for fresh membership acquisition.

Sun to pay Pfizer, Takeda Rs 3K cr over Protonix patent

This story first appeared in DNA Money edition on Thursday, June 13, 2013.

Sun Pharmaceutical Industries will pay as much as Rs 3,178 crore ($550 million) this year as its share of the settlement reached with US-based Pfizer Inc and Japan’s Takeda Pharma in the case of patent infringement relating to generic Protonix, a blockbuster acid reflux medicine.

Israel’s Teva will pay a further $1.6 billion – half this year and half in the next – taking the total payout to $2.15 billion.

The patent on Protonix was held by Nycomed, now a Takeda subsidiary. Protonix was licensed to Wyeth, which is now owned by Pfizer.

Of the $2.15 billion, Pfizer will receive 64% ($1.38 billion) and Takeda the rest ($774 million).

The settlement comes after a nearly 10-year legal battle, Pfizer said in a statement.

While a jury in New Jersey federal court determined that the generic launches by Teva and Sun violated US patent, the parties in litigation reached the settlement shortly after the commencement of a trial to determine damages in the same court. 

As part of the settlement, both Teva and Sun admitted their sales of generic pantoprazole infringed the patent that was held valid by the court. As a result, Teva and Sun will now compensate Pfizer’s subsidiary Wyeth and Takeda for damages suffered.

Pfizer officials were not available to share further details.

Sun Pharma officials were also not available for comment. However, the company said in a statement that the New Jersey court began a jury trial on June 3. “This settlement now culminates the ongoing litigation. Sun Pharma can continue to sell its generic pantoprazole in the US,” it said.

In February, Teva had said it may face legal losses of up to $2.07 billion to resolve the case. Sun Pharma on its part had set aside Rs 584 crore ($100 million) towards potential damages to Pfizer. However, it will now have to pay additional $450 million in final settlement.

Analysts don’t see it as a positive out-of-court settlement for Sun Pharma.

“The agreed amount is way too high for such a settlement. It will also restrict Sun’s ability to look for acquisitions,” Daljeet Kohli, head of research at brokerage IndiaNivesh, told Reuters.

However, according to Suruchi Jain, equity research analyst - pharma, Morningstar India, paying up $550 million should not be an issue for Sun Pharma, considering it is sitting on $1 billion cash. “The company has enough cash as $740 million are with Sun Pharma and the balance is on Taro’s books. Sun may, however, have to raise more debt for any acquisitions it plans to do in this fiscal. Considering that Sun is practically a debt-free company, raising money should not be an issue as well.”

But with cash balance reducing by $550 million, Sun Pharma’s valuations are likely to take a hit.

“But it won’t be a huge hit. Rough estimates indicate reduction in its valuation by about 3%,” said Jain. With agencies

Road developers see polls slowing NHAI awards

This story first appeared in DNA Money edition on Wednesday, June 12, 2013.

Road developers are set to see challenging business environment continuing this fiscal as the National Highways Authority of India (NHAI), which missed project award targets in the last year by a huge margin, may not meet them due to elections ahead.

“On one side the government may try to implement things quickly, but by the time it happens the model code of conduct will come into play,”  said a senior Hindustan Construction Co official.

There are just six months left as post December this year the entire government machinery will come to standstill, he said.

Analysts too said while the build operate and transfer (BOT) projects will be constrained due to economic slowdown and fund crunch, the engineering procurement and construction (EPC) projects would slow due to elections.

Parvez Qazi, equity research analyst, Edelweiss Capital, said,  “A tough economic environment will constrain BOT awards. Achieving the fiscal 2014 target hinges largely on award of 3,500-4,000 km EPC projects. The timing of central and state elections will also cast its shadow on the project award,” Qazi said in a recent report.

The Ministry of Road Transport and Highways had set an ambitious target of awarding 8,800 km of road length in fiscal 2013, which was raised by the Prime Minister Office to 9,500 km.

NHAI, however, was able to award only 1,112 km projects.

For this fiscal, the road ministry has again set an ambitious target of awarding  9,000 km projects, about 50% through the EPC route.

“The target seems to be unachievable, given the continued impediments faced by the road sector. Delay in obtaining land, forest and environmental clearances, coupled with a slowdown, continue to hit projects,” CARE Ratings analyst Supriya Shetty said in a report on Tuesday.

CARE sees projects with the length of about 3,000 km being awarded this fiscal with some momentum on EPC mode.

On the BOT front, Qazi expects the project award to remain subdued (1,500-2,000 km), mainly due to the precarious financial condition of most developers and the need for regulatory clarity.

“EPC project award of 3,500-4,000 km is a definite possibility, provided elections do not play spoilsport,” Qazi said in the report.

Mukund Sapre, ED, IL&FS Transportation that specialises in BOT projects, said there was nothing really happening in the BOT space.

“A few bids have come but they have viability issues. A few more projects are likely to be announced, but we’ll have to wait and watch,” Sapre told dna.

While NHAI may have seen some success on the EPC with 4-5 projects seeing good response, industry sources said that companies that bid for these projects have quoted 30% below the average industry rates.

The HCC official said, “We don’t know if that’s sustainable in the long term. That’s one reason serious players aren’t participating in these bids. Going forward, large EPC jobs will have to be treated very cautiously. On the public-private partnership front, I don’t see much improvement as well, and with the elections just around the corner, things are only looking grim.”

Phase 2 digitisation spoils seen in 3-4 months

This story first appeared in DNA Money edition on Monday, June 10, 2013.

Benefits of the Phase 2 cable television digitisation are seen accruing to the books of leading broadcasters, multi-system operators (MSO) and direct-to-home (DTH) service providers as early as next quarter.

“We see a higher likelihood of cable TV average revenue per user (Arpu) increase in the next 3-4 months as MSOs introduce direct billing systems and begin charging on a gross basis (versus net basis currently). This may lead to higher DTH tariffs as well, which are usually pegged to the cable TV Arpus,” Sachin Salgaonkar, Paras Mehta, Swosti Chatterjee and Piyush Mubayi, equity analysts at Goldman Sachs India, said in a note dated June 5.

According to the Ministry of Information and Broadcasting (I&B),  over 85% of digitisation has been achieved in the 38 cities post the Phase 2 digital addressable system (DAS) deadline of March 31. While 15 cities have achieved nearly 100%, 24 cities in all have achieved more than 75% and 34 cities have achieved more than 50% digitisation.

With Phase 2 digitisation nearing completion, the market has seen a higher degree of consumer awareness, which is likely to ensure a smooth transition to digital systems in Phase 3 and Phase 4 rollouts. However, DTH companies are set to see greater traction than digital cable in the balance phases as majority of the Phase 3 and 4 locations do not have sufficient digital cable infrastructure to ensure smooth service delivery.

The Goldman Sachs analysts have thus reiterated ‘buy’ on Dish TV, saying the DTH leader is expected to benefit from Arpu increases in the medium term.

The I&B ministry said in a statement in April that against the targeted 1.6 crore set-top boxes (STBs) in Phase 2 digitisation, 1.36 crore STBs have been installed by the MSOs and DTH operators. As of April, the total number of installed cable TV STBs stood at 91.5 lakh compared with 44.5 lakh for DTH operators.

Industry experts are of the view that while DTH/MSOs continue seeding of STBs, the MSOs are almost in the last leg of finalising commercial contracts with broadcasters and local cable operators. Also, the broadcasters are likely to benefit over the longer term as current DAS contracts are for shorter terms (12-18 months), leaving room to renegotiate on a per subscriber basis as and when seeding achieves completion and more subscribers are added.

The Goldman Sachs report quoted Zee top management (from March quarter earnings call) as saying, “subscription revenue during the quarter has been the highest ever and the digitisation rollout will only improve in the medium term...”

The bulk of the 25.6% growth in subscription revenues, Zee management had said, was from domestic subscription revenues. The broadcaster expects a larger part of the growth to unravel in the Phase 3 and Phase 4 of digitisation.

“We note that broadcasters like Zee saw revenue increase earlier than MSOs as they renewed contracts under DAS, whereas MSOs started seeing revenue uplift led by seeding of boxes and activation revenues from Phase 1 and 2 of digitisation. With MSOs launching DAS packages, we expect Arpus to increase their billing system under DAS leading to revenue uplift for DTH operators,” the Goldman Sachs analysts said.

Sanjay Goyal, chief financial officer, Siti Cable Networks, said in a March-quarter earnings call that major digital cable players were in concerted play to expand their reach on the ground. “DAS cities and towns are getting stabilised gradually and we are already seeing majority of the collections for the first 3-4 months starting to flow into the system. While pricing has been increased, we expect it getting reflected either in the month of June or July. Also, tier-based pricing (ranging from Rs 100 + taxes to Rs 267 + taxes) has been finalised, which will get implemented in the next few months,” he said.

Foreign retailers can't have franchise setup, says government

This story first appeared in DNA Money edition on Friday, Jun 7, 2013.

Foreign multi-brand retailers will not be allowed to take the franchise route for expansion in the country, the government announced on Thursday.

“Front-end stores set up by MBRT (multi-brand retail trading) entity will have to be company-owned and company-operated only,” the Department of Industrial Policy and Promotion said in a clarification issued to global retailers such as Walmart, Tesco and Carrefour.

Further, these retailers will have to set up new front-end stores rather than through acquisition of existing stores, the DIPP said. Nor can they use the e-commerce route to sell their ware.

Industry experts said the government hasn’t done anything more than just reiterating the policy and giving its stand on the same.

“They have upheld the primacy of the state governments, clarified that MBRT and wholesale activity will be kept distinct, investment in back-end infrastructure will have to be additional and greenfield, the back-end company must be held 100% by the foreign MBR, procurement of fresh produce has not been covered etc,” said Vivek Gupta, partner - mergers and acquisitions (M&A) practice, BMR Advisors.

That puts paid to the retailers’ hopes that the government will define back-end infrastructure anew and clarify on sharing of back-end infrastructure such as supply chain, warehouses and cold storages, he said.

Goldie Dhama, associate director – regulatory services, PwC, also rued the lack of any new announcement. While the government has made it clear that 50% investment in back-end infrastructure will need to be made afresh and that such back-end infrastructure can be set up anywhere in the country, “the stipulation that front-end stores will have to be set up new and not through acquisition of existing stores will impact M&A in the sector and ability of Indian retailers to attract FDI in their existing businesses”, he said.

“Some other aspects like restricting sourcing from small and medium enterprises only for retail business, inability of the company to undertake business-to-business trade or appoint franchisees, etc do not seem to be business friendly,” said Dhama.

Some see the stipulation that foreign retailers can only have company-owned and operated stores as an opportunity for the real estate sector.

“That’s one way of looking at it, but do we really have that kind of infrastructure to cater to the requirement of these very large foreign multi-brand retailers? Where will they find a 3-4 lakh square foot of retail space to exclusively house their MBR stores in India?” asked an official from an international consultancy.

Cadila launching new drug that lowers cholesterol in diabetic patients and helps in glycemic control

This story first appeared in DNA Money edition on Thursday, Jun 6, 2013.

Cadila Healthcare has announced the launch of the first new chemical entity (NCE) developed by an Indian pharmaceutical company — Lipaglyn — a drug that will help in lowering cholesterol in diabetic patients and in glycemic control.

The company expects the drug to be a blockbuster, garnering $1 billion in annual sales.

Pankaj R Patel, chairman and managing director, Zydus Cadila, said Lipaglyn is Cadila’s dream molecule to travel the lab-to-market drug discovery phases.
“We expect Lipaglyn to be a blockbuster drug reaching $1 billion in annual sales globally. While the pricing and distribution aspects are being currently worked out, we are looking to introduce it in India by third quarter of this fiscal,” said Patel.

The drug which has active ingredient Saroglitazar has been approved by the Drug Controller General of India. According to company officials, it is the first glitazar to be approved in the world and the first new chemical entity (NCE) discovered and developed indigenously by an Indian pharma company. Cadila will have a 20-year patent for Lipaglyn across the globe.

Lipaglyn is prescribed for Diabetic Dyslipidemia, a condition where diabetic has elevated levels of the total cholesterol.

Analysts, however, gave thumbs-down to the plan as they were expecting the company to out-license the molecule to a pharma MNC.

Ranjit Kapadia, senior vice-president - pharma, Centrum Broking, said, “Cadila would have received $10-15 million upfront payment if the management would have licenced the molecule to an MNC. Besides, the company will be marketing the product in India where patented products do not carry major premium as compared with Europe and US markets. As a result the upside is limited.”

Cadila officials said 1,000 clinical trials were conducted for the drug in India against 300 prescribed by the US Food and Drug Administration (FDA).
However, analysts said launching in India doesn’t mean much as clinical trials here are not as stringent as the developed markets.

“Standards of trials in India are not that great and it will be a long-drawn process to get it approved by the US FDA. A lot will also depend on the success of the molecule in the market,” said a pharma analyst from an international brokerage.

In India, the company expects Lipaglyn to be in the top 50 drugs in the segment with a targeted sales of Rs 100 crore in the next 3-5 years. Overseas, the company sees regulatory approvals in some emerging and developed markets coming in next 12-24 months.

“We will also initiate clinical trials for markets like Europe and US and have earmarked $150-200 million. We will look for a marketing partner for sales/distribution of this drug there,” said Ganesh Nayak, COO & ED, Cadila.

Cadila is also working on eight more molecules. It has thus far spent $250 million towards these developments, including Lipaglyn.

It will continue to spend 6-7% of its annual revenues on research and development apart from Rs 500 crore capital expenditure.

ZeeQ to bring back CBeebies

This story first appeared in DNA Money edition on Wednesday, Jun 5, 2013.

BBC Worldwide is set to re-enter the pre-school edutainment broadcasting in India. The main commercial arm and a wholly owned subsidiary of the British Broadcasting Corporation (BBC) has inked an agreement with Zee Group’s edutainment channel ZeeQ to broadcast content from its pre-school brand CBeebies.

ZeeQ is India’s only edutainment channel for kids in the age group of 4-14 years. On the other hand, CBeebies is a pre-school brand aimed at children aged six years and below.

Subhadarshi Tripathy, business head, ZeeQ, said the CBeebies content is very relevant for ZeeQ considering the channels also follow the same principals in selecting and producing content.

“The arrangement is not only getting the content on to our channel, but also having CBeebies as a band on ZeeQ,” said Tripathy.

The CBeebies brand will launch on the ZeeQ channel starting July 1, 2013. Currently, ZeeQ is available on Dish TV and Videocon d2h in addition to all the leading multi-system operators across the country.

Tripathy said that ZeeQ pays for the content with BBC Worldwide while handling the air-time sales. “This we will do in agreement with BBC Worldwide following a set of dos and don’ts as prescribed by them,” he said.

Myleeta Aga, senior vice-president and general manager - India and content head -  Asia, BBC Worldwide, said that partnering with ZeeQ brings CBeebies’ favourite programmes back to Indian TV screens.

“The CBeebies time band on ZeeQ is just the beginning of our partnership. We look forward to working with Zee to continue to bring popular and award-winning CBeebies programmes to ZeeQ,” said Aga.

Calling it a long-term association, ZeeQ officials said that this license agreement will see CBeebies programmes – Teletubbies, 3rd & Bird and Charlie and Lola – being aired on ZeeQ from Mondays to Thursdays for an hour (between 9:30 am and 10.30 am), with a two-hour repeat telecast on weekends (between 11.00 am  and 1.00 pm).

The association will help ZeeQ tap the pre-school segment (0-3 years) as well and strengthen its current portfolio of programmes.

The channel currently airs a mix of live action and animated shows. Some of its prominent shows include Teenovation, Science with BrainCafe, Amar Chitra Katha Heroes, Sid the Science Kid, The Weekly Wrap and Word Match.

Cement companies may hike prices this month

This story first appeared in DNA Money edition on Wednesday, Jun 5, 2013.

Cement firms may raise prices this month as the demand is showing signs of improvement and also because they are looking to gain a price edge ahead of the lean monsoon season.

“Discussions are happening on increasing prices by Rs 10-15 per bag. My sense is that cement companies would increase prices by Rs 10, if not more,” said an industry source requesting anonymity.

Cement firms have been unable to pass on rise in costs — railway freight charges rose last year (25% weighted average) and coal prices have gone up 10% — due to lacklustre demand.

Sudhir Bidkar, CFO, JK Lakshmi Cement, said prices in April were lower than the March quarter, but things improved post mid-May.

“We have been able to at least get back to the realisation levels witnessed in March, particularly from the middle of May. While sustaining it, we are also looking for signs of improvement in demand to be able to increase prices,” Bidkar said during the fourth-quarter earnings call last week.

Though Bidkar did not quantify the extent of price hike, he said it will only be possible if demand pick up.

“There have been various reasons — like shortage of labour and excessive heat — for not being able to increase cement prices. However, with labour now starting to come back, one can hope there will be a price increase to some extent in June,” said Bidkar.

Analysts said given that June to September is a lean season, cement companies generally increase prices before monsoon sets in. This approach helps them arrest decline in prices, giving them a bargaining window for monsoon sales.

“The peak season this year has been really bad for the sector with prices under considerable pressure owing to subdued demand. Sales in monsoon may get further fall leading to more pressure on pricing. The pre-monsoon price increase mainly helps in maintaining the price levels,” said an analyst with a domestic brokerage.

In fact, markets in south India like Andhra Pradesh, which saw the biggest price decline in April, saw price increases of Rs 10-30 per month, the analyst said.

Cement, unlike consumer products, has traditionally had its pricing based on expenses that are externally influenced.

“It’s totally a demand-supply driven market unless you influence it adversely through some changes either in demand supply or in costs. While there are cost pressures, at the same time it is not as though the seasons are behaving traditionally. And with monsoon approaching we should be getting into a lean season, but then this year has also sort of bucked the seasonal trend,” said an official from one of the top cement makers.