Business In India | "India Airlines Least in Need May Gain Most From New Owner Rules"

By: Siddharth Philip and Vipin Nair
Source: http://www.businessweek.com
Category: Business In India

India’s decision to allow local airlines sell stakes of as much as 49 percent to overseas carriers may be of most benefit to operators least in need of investment.

SpiceJet Ltd. (SJET), which has said it’s in “no rush” for funds, may be the most appealing target for foreign investors because of the discount carrier’s low debt and record of profitability, said Sharan Lillaney, an Angel Broking Ltd. analyst. Kingfisher Airlines Ltd. may struggle to win investment, even as billionaire Chairman Vijay Mallya seeks new financing, after posting at least five straight annual losses.

“The biggest beneficiary will be SpiceJet as it has lower debt and a decent brand image,” Lillaney said. “Kingfisher needs to restructure its balance sheet and convert debt into equity before it can look at attracting any foreign investment.”

The two carriers and Jet Airways (India) Ltd. rose Sept. 14 on speculation the rule change will help the industry win funds following years of losses caused by price wars, high fuel taxes and a weaker rupee. Prime Minister Manmohan Singh’s government announced the end of the ban along with a similar easing for retailers as its moves to open up Asia’s third-biggest economy.

Kingfisher Debts
Kingfisher (KAIR) has said it is in talks on investment that depend up regulatory changes as it struggles under an 86 billion rupee ($1.5 billion) debt pile. The carrier has also cut two- third of services, grounded planes and halted international flights in a bid to end losses.

“I am skeptical whether Kingfisher is able to attract” foreign investment, said Nikhil Vora, Mumbai-based managing director at IDFC Securities Ltd. “Kingfisher’s significant leverage on its balance sheet makes it a challenging proposition for any buyer.”

The airline, named for liquor tycoon Mallya’s flagship beer, needs an immediate capital infusion of $600 million for a turnaround, according to CAPA - Centre for Aviation. The company’s founders will need to provide at least half of this before talks with a foreign airline could begin, the research company said.

Kingfisher has only an “outside chance” of selling a stake compared with SpiceJet and Go Airlines (India) Ltd., CAPA said in an e-mailed statement. The carrier has a long-term debt to total capital ratio of 162 percent, according to data compiled by Bloomberg. That compares with 76 percent for SpiceJet and 58 percent for Mumbai-based Jet Air.

Kingfisher has plunged 58 percent in the past year in Mumbai trading. SpiceJet has jumped 44 percent and Jet Air has climbed 35 percent. India’s three other main carriers, state- owned Air India, IndiGo and Go Airlines are all closely held.

Kingfisher Re-Engagement
The easing of the investment rules will help Kingfisher re- engage with prospective airline investors “in a more meaningful manner,” Prakash Mirpuri, a spokesman, said in a Sept. 14 text message. The carrier will also move toward re-capitalization and ramp up its operations, he said.

SpiceJet Chief Executive Officer Neil Mills didn’t answer calls to his mobile phone on Sept. 14. GoAir Managing Director Jeh Wadia, IndiGo President Aditya Ghosh and Jet Air Chief Operating Officer Sudheer Raghavan also failed to answer calls the same day.

Kingfisher posted a 6.5 billion rupee loss in the quarter ended June, compared with 2.6 billion rupees a year earlier. SpiceJet and Jet Air both posted profits in the period.

Non-airline investors from overseas were allowed to hold as much as 49 percent in local carriers before the rule change.

Gulf Airlines
Middle East airlines may be the most likely to buy into Indian carriers because of their geographical proximity, existing service connections and state backing.

Qatar Airways Ltd. Chief Executive Akbar Al Baker said in April that that anyone who didn’t want to invest in China or India “must be crazy.”

The country’s annual passenger numbers may surge to 180 million by 2020 from 61 million last year as rising wealth makes travel affordable to more people, according to a government forecast. Qatar Air declined to comment by e-mail yesterday.

Abu Dhabi-based Etihad Airways PJSC said yesterday equity investments are an “important evolution of its successful partnership strategy.” The carrier already has stakes in Virgin Australia Holdings Ltd., Air Seychelles Ltd. and Air Berlin Plc.

“The Indian aviation industry offers tremendous potential, with significant passenger movement on domestic and international sectors,” it said without commenting on whether it wanted to buy into a local carrier. The airline will add flights to a ninth Indian city, Ahmedabad, in November, it said.

Source: http://www.businessweek.com/news/2012-09-16/india-airlines-least-in-need-may-gain-most-from-new-owner-rules

Business In India | "Will Boeing's 787 Dreamliner turn Air India's business around?"

By: THE ECONOMICS TIMES
Source: http://economictimes.indiatimes.com
Category: Business In India

New hope is in the air for Air India. No, it's not related to government permission for foreign carriers to invest in domestic airlines that came on Friday. Airline FDI is expected to benefit private carriers with far lesser financial problems than the nation al carrier.

Air India's hope is about 186-foot long, boasts a top speed of up to 560 miles an hour and flies at least 9,440 miles (New York to Hong Kong) non-stop tanked up. It is a plane alright, but because of its ostentatious title, Dreamliner, and unique futuristic features, it would be easy to overlook that bit.

The 787-series Dreamliner is billed as a plane like no other, but in this part of the globe, it acquires a greater aura. Air India is the fifth airline to snap up the 787. But no other airline has entwined its future to a plane as the government-run carrier has with the Dreamliner.

When it embarks on its maiden flight on September 19 from Delhi to Chennai, the 787 will be carrying a load of expectations that would outweigh all the 256 passengers it can accommodate.

"We hope that the Dreamliner will take Air India back to its good old Maharaja (mascot) days," aviation minister Ajit Singh said when the first of the 27 planes the carrier has ordered landed on Wednesday.

Plane Truths Singh's excitement is understandable. The 787-series Dreamliner is the first mid-size airplane that can fly long routes, enabling airlines to tap non-stop routes, according to Boeing. Translation: passengers can avoid the pain of an airport transit.

Source: http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/will-boeings-787-dreamliner-turn-air-indias-business-around/articleshow/16411872.cms

Business In India | "‘India-Asean business fair to promote tie-ups’"

By: TNN
Source: http://timesofindia.indiatimes.com
Category:  Business In India

JAIPUR: The second India-ASEAN Business Fair (IABF) & Business Conclave slated from December 18 to 20 in New Delhi will give a fillip to business in the country, said Rajendra Bhanawat, managing firector of RIICO. Bhanawat was speaking as guest of honour at the road show for IABF organized in the city by the Federation of Indian Chambers of Commerce & Industry ( FICCI).

Bhanawat said it was heartening that just in its second year, the IABF was getting international participation from Asian countries like Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam. He further said the fair will throw up avenues for enhancing trade and investments across sectors. It would serve as a platform for exploring innovative approaches to promote trade, investment, joint ventures and strategic market tie-ups, Bhanawat added.

Speaking on the occasion, honorary secretary general of Rajasthan Chamber of Commerce and Industry, K L Jain said this business to business forum, with scheduled meetings, is being organized on the sidelines of India-ASEAN Commemorative Summit 2012.

Source: http://timesofindia.indiatimes.com/city/jaipur/India-Asean-business-fair-to-promote-tie-ups/articleshow/16376649.cms

Business In India | "India pledges support to Palestine, announces USD 10 mlln"

By: Press Trust of India
Source: http://www.business-standard.com
Category: Business In India

India today announced a USD 10 million contribution to Palestine and pledged its support to Palestine's bid for full and equal membership of the UN.

Prime Minister Manmohan Singh and Palestinian National Authority President Mahmoud Abbas held comprehensive talks on host of bilateral issues and exchanged views on regional developments, particularly the developments in the West Asia and the Gulf region.

Three pacts, including one in the field of Information Technology, were also inked after the talks. "Support for the Palestinian cause has been a cornerstone of India's foreign policy. I reiterated India's firm support for the struggle of the Palestinian people to achieve a sovereign, independent, viable and united state of Palestine with East Jerusalem as its capital," Singh said at a joint- press event with Abbas.
The Prime Minister said India supported an independent Palestine living within secure and recognised borders, side-by-side and at peace with Israel. He also announced that India will "contribute USD 10 million to Palestine's budget for this year to help address its financial requirements."

Singh noted that India had played an active role in supporting the efforts of the State of Palestine to secure full membership status at UNESCO. "We will continue to support Palestine's bid for full and equal membership of the UN.

"We also look forward to early resumption of peace talks between the Palestinians and Israelis leading to a comprehensive resolution between the two sides," he said.

Singh's remark comes in the backdrop of the US making it clear that it will veto the Palestine bid for a non-member status in the United Nations later this month. At present, Palestinians only enjoy observer status.

"We continue to make clear that we believe that the only realistic path for the Palestinians to achieve statehood is through direct negotiations," the Prime Minister said.

Source: http://www.business-standard.com/generalnews/news/india-pledges-support-to-palestine-announces-usd-10-mlln/55020/

Business In India | "India's business schools get tough lesson in supply and demand"

By: Aditi Shah
Source: http://in.reuters.com
Category: Business In India

India's seemingly unstoppable economic rise, an aspiring middle class' desire to stand out in a competitive job market, and a lucrative opportunity for investors fuelled a bubble in business education that is now starting to deflate.

About 140 schools offering Master of Business Administration (MBA) courses are expected to close this year, as 35 percent of their places were vacant in 2011-12, up from 15-20 percent in 2006-07, a report by ratings agency Crisil found.

"The boom which was there has gone," said Anshul Sharma, chairman of Asma Institute of Management, which he started in 2004 in Pune, about 150 km (95 miles) from Mumbai.

"Those who entered this industry with a motive to make money are leaving because there is not much money left. Every college is working to sustain itself," said Sharma.

There was a near four-fold rise to more than 352,000 MBA course spots in the five years to March 2012.

But the allure of so-called B-schools outside the top tier is fading as the economy grows at its slowest in nine years, with the financial sector especially sluggish, and amid questions about the quality of some schools.

Only 29 percent of graduates from Indian business schools - excluding those from the top 20 schools - get a job straight after completing their course, compared with 41 percent in 2008.

Aditya Dighe took out a 330,000 rupee loan to fund his MBA from a school in India's financial hub of Mumbai. Four months and 18 job interviews after graduating, the 26-year-old is still looking for a job that will pay enough to cover his expenses and monthly loan instalments of 10,000 rupees.

"The B-schools have promoted their brand only on placements and by boasting about salary packages. The course is theoretical and you don't learn the skills corporates want," he said.

GRAPHIC: Growth of AICTE-approved B-schools slows link.reuters.com/myx32t

GRAPHIC: Poor placement record for MBA graduates link.reuters.com/cef99s

GRAPHIC: Average salary for MBA graduates lowest in India link.reuters.com/baz32t

BIG BUSINESS STRUGGLES

Private education is big business in India. KPMG pegs the industry at nearly $50 billion and projects it to reach $115 billion by 2018. But growth rates are not uniform across the primary, secondary and tertiary education sectors.

"A third of all management colleges are struggling," said Narayanan Ramaswamy, a partner at KPMG.

At the peak before the global financial crisis, new business schools were cropping up almost every day, some in remote towns where even quality secondary education is hard to come by.

There are two strands of MBA courses.

MBA degrees are offered by schools overseen by the All-India Council for Technical Education (AICTE), the regulatory body for higher education. These schools must be affiliated to a university, have a maximum of 120 students and fees are capped by state governments.

A second stream allows colleges to offer diplomas that are not accredited by AICTE. There are no standardised curriculums, class sizes are bigger and fees can be higher. An institution can offer both accredited and non-accredited MBA courses.

In a city such as Pune, something of an education hub, it costs about 40-50 million rupees over two years to set up a management school, which can be as basic as a modest building with classrooms, a small library and a computer room.

When demand was outrunning supply, students were willing to pay high fees for the autonomous courses, that tend to be more industry-relevant, in order to get a leg up in the job market.

"People who had some land and money saw a great investment opportunity in the demand-supply gap and there was a rush to open schools," said Dhiraj Mathur, executive director at PricewaterhouseCoopers.

"They were not thinking about the faculty, location, employability and brand name. They thought setting up a school would take care of the rest."

Now, some new institutions are discontinuing their autonomous courses despite often better quality education, because with no guarantee of a job, students are opting for cheaper, AICTE-approved courses.

SPOILING THE SYSTEM

Schools with little or no track record fill seats by paying existing students up to 40,000 rupees for referring other students, Asma's Sharma said, whereas some hire agents, paying them upwards of 50,000 rupees for every student they get.

Sharma cannot afford to pay hefty commissions and is struggling to fill the 120 seats at his institute. Last year he enrolled only 45 students, and needs about 80 to break even.

"Today, students do not ask what and how they will be taught. They only ask about placements and salary packages, and what discounts we offer on the fees," he added.

"This is spoiling the education system but if we don't try and accommodate them we will not be able to survive."

Elite institutes still attract students despite high fees as they have strong reputations, and their graduates are favoured by recruiters.

As a result, competition is fierce for the relatively few places in the state-run Indian Institute of Management (IIM) in Ahmedabad, and the Indian School of Business (ISB), started by two former McKinsey employees in Hyderabad in central India.

Fees at IIM in Ahmedabad are 1.55 million rupees for the two-year MBA programme. ISB, an autonomous college associated with international schools like Kellogg, Wharton and London Business School, charges 2.2 million rupees.

Online job portal MyHiringClub.com found the average starting salary for graduates of India's top B-schools was about$32,400, about 1.8 million rupees, more than four times the average of $7,550 for other MBA graduates.

Lavina Thadani, a 23-year-old MBA graduate from Pune, settled for a low-paying job in the capital markets team at a media house after a three-month search yielded little else.

"I expected more after spending so much on my MBA," said Thadani who took a 300,000-rupee loan to get her degree but earns only about 200,000 rupees a year. "If I had known earlier I would have never done my MBA," she said.

Source: http://in.reuters.com/article/2012/09/10/india-education-mba-business-schools-idINDEE88900W20120910?feedType=RSS&feedName=globalCoverage2

Business In India | "Finland wants good business with India"

By: Arunim Bhuyan
Source: http://www.smetimes.in
Category: Business In India

Finland is determined to do business with India, especially in areas of clean energy technology, despite the problem of excessive bureaucratic procedures involved in pushing through projects, says the country's Foreign Trade Minister Alexander Stubb.

"I have heard some murmurs of excessive paper work (in pushing projects through) but we are determined to do business with India," Stubb told IANS here.

Asked about the prospects and challenges of doing business in India, he said though bilateral trade is increasing, it is important to have a free trade agreement (FTA) between the European Union and India in place.

"We feel that it is important. When it comes to FTA between EU and India, among the issues where negotiations are ongoing are, for example, services and the automotive industry."

Finnish exports to India totalled 625 million euros ($788.5 million) in 2011 while Indian exports to this Nordic nation stood at 670 million euros ($845.3 million).

Stubb said the EU had not always been fair in trade policies, but Finland seeks a dignified approach to this.

"The EU and the US have not always been practising fair trade. In my former position as foreign minister, I proposed a new approach to foreign policy, notably dignified foreign policy, and this could be applied to trade too," said Stubb.

The minister also stressed on engaging developing countries in adopting clean energy technology.

"The future of technology is environmentally clean energy. Despite higher costs of clean technology, we need to get the emerging economies into the loop," Stubb said.

Highlighting how Finnish companies are going more and more the clean technology way, he said: "Neste Oils, which was once known for traditional oils, today makes biofuels. Kemira, once a chemicals manufacturing major, is today majorly into water treatment technology."

Asked about the Eurozone crisis, Stubb said that instead of contrasting the current situation with the good days of the early 2000s, one should instead compare this with the crisis of the 1990s.

"Some (people) mistakenly attribute this crisis to the rise of new economic blocs like BRICS (Brazil-Russia-India-China-South Africa) and MIST (Mexico-Indonesia-South Korea-Turkey). But the fact of the matter is that this crisis has arisen out of public sector overspending and the banking crisis. We understand that it has had ripple effects across the global economy," Stubb told a group of visiting Indian journalists.

He referred to the four-pronged strategy to resolve the crisis. The EU has put in place aid mechanisms and rescue packages for Ireland, Portugal and Greece as well as agreed on recapitalisation on Spanish banks and tighter rules on public spending.

"Now we try to drive down Italian interest rates; and wait for new decisions from the ECB. In the mid-term perspective, we will be building a banking union; and in the long-term perspective we need to aim at growth."

Source: http://www.smetimes.in/smetimes/news/top-stories/2012/Sep/07/finland-wants-good-business-with-india.html

Business In India | "To grow business in India, McDonald's is opening vegetarian restaurants"

By: Bloomberg News 
SOurce: http://www.nj.com
Category: Business In India

McDonald’s will swap its trademark burgers for potato sandwiches when it opens two vegetarian restaurants in India next year, the first such outlets globally for the world’s biggest restaurant chain.
The fast-food chain will open two new locations in northern Indian cities that are pilgrimage sites for Hindus and Sikhs, according to Rajesh Kumar Maini, a spokesman for the company’s north and east Indian operations. McDonald’s already keeps beef and pork products off the menu in India, where a majority of the population are Hindus and Muslims.
The attempt to draw religious Indians shows how McDonald’s Corp. is attempting to boost sales by catering to local tastes outside its home market.
The attempt to draw religious Indians shows how the Oak Brook, Illinois-based company is trying to boost sales by appealing to local tastes outside its home market and compete with other chains such as Yum! Brands’s KFC and Pizza Hut.
McDonald’s, which gets more than 60 percent of its revenue from international stores, said last month that it was exploring and evaluating opportunities in Vietnam, where it doesn’t have any stores.
The vegetarian restaurants will sell items such as the McAloo Tikki burger, a sandwich with a mashed-potato patty, and the Pizza McPuff, a vegetable and cheese pastry.
India, the world’s second most populous nation, is important for McDonald’s as it increases sales overseas. The country’s large population, growing urbanization and increasing number of people joining the workforce may help the fast-food industry expand, according to estimates by researcher RNCOS E-Services Pvt.
One of the vegetarian outlets will be in Amritsar, where the Golden Temple, a holy site for Sikhs, is located. The other will be in Katra in Jammu and Kashmir in the north, which houses one of the main pilgrimage sites for Hindu people, according to the spokesman. McDonald’s sells Chicken McNuggets and fish burgers in its regular Indian outlets although its traditional beef burgers aren’t available. The cow is sacred to religious Hindus, who don’t eat beef.
“The new restaurants in pilgrimage areas will be vegetarian-only because of the specific area and customer base,” Becca Hary, a McDonald’s spokeswoman, said in an e-mail. McDonald’s kitchens have always been divided into separate sections for cooking vegetarian and non-vegetarian items in India, she said.
Opening no-meat stores “speaks to McDonald’s efforts to cater to local tastes,” she said.
McDonald’s, which opened its first restaurant in India in 1996, operates as many as 271 stores there now through partnerships with two local Indian companies, Connaught Plaza Restaurants Pvt. for the north and east, and Hardcastle Restaurants Pvt. in the west and south.
McDonald’s isn’t alone in trying to capitalize on the market in India. Louisville, Kentucky-based Yum, which also owns Taco Bell, has about 479 stores in its India division, which includes Bangladesh, Mauritius, Nepal and Sri Lanka, and plans to open 100 stores there this year. Domino’s Pizza has about 500 stores in India and has said the nation can be its second-largest market in three to five years.

Source: http://www.nj.com/business/index.ssf/2012/09/to_grow_business_in_india_mcdo.html

Business In India | "Volkswagen to expand India business, may launch Utility Vehicles"

By:  KETAN THAKKAR,ET BUREAU 
Source: http://economictimes.indiatimes.com
Category: Business In India

MUMBAI: Volkswagen may consider launching a utility vehicle in India as the German car giant looks to expand its portfolio, President and MD Gerry Dorizas has said. "Different growth segments of multi-purpose vehicles or sports utility vehicles and small cars are the part of vision we have (for India)," Dorizas said on Tuesday. "We have to take small strides," he added.

He said Volkswagen will develop its India business further, but only after putting the fundamental structure in place.

Global rivals Renault and Maruti Suzuki have managed to generate sizeable volumes from their recently launched SUVs. The segment is also growing rapidly at a time when demand other type of vehicles is sluggish. Dorizas says the current focus is to build a strong foundation on the existing products, dealers, sales & after sales service.

Volkswagen India has been dabbling with the idea of bringing in the premium SUV 'Tiguan' those shares its underpinnings with the recently launched Audi Q3. The company has also globally showcased a couple of utility vehicles concept called "Volkswagen space up! Concept" and "Bulli Concept" which may spawn utility vehicles for Volkswagen to compete with Ford Ecosport, Renault Duster and the Maruti Ertiga in the future.

Volkswagen India, one of the late entrants in the fast growing passenger car markets in the world, initially attracted a good response to its premium hatchback Polo and sedan Vento, but could not sustain the momentum in 2012. After doubling sales in 2010 and 2011, VW India's numbers in the first half of 2012 declined 3.4 pc.

"I have total trust on the management and our board of directors, I think they have a listening head, but we are still in discussion, we are still creating plans. There are a lot of things, which are under development, I think there will be a time when we would be able to share that with you," Dorizas said. He acknowledged that margin pressure will continue to remain. "Pressure on the margins is an on going thing. It is all changing, we all have to be in touch with changes, we told our dealers, we are team, we have to go all the way and discuss with them in a difficult market condition and adapt ourselves to changes." To cut Polo, Vento prices

Volkswagen Tuesday said it will cut prices of the high-end variants of its Polo and Vento sedans and add a host of new features to boost sales. It will cut prices of the both diesel and petrol variants of Polo by up to Rs 40,000 and of the Vento by Rs 20,000. The Polo highline petrol will now come for Rs 584,400 as against Rs 624,409 (ex-showroom New Delhi). The Polo diesel variant price has been reduced to Rs 694,400 from Rs 736,407, ex-showroom Delhi. "The introduction of new features in Polo and Vento will further excite the customers as both the carlines will offer much more value now... ," said Arvind Saxena, managing director, Volkswagen Passenger Cars.

Source: http://economictimes.indiatimes.com/news/news-by-industry/auto/automobiles/volkswagen-to-expand-india-business-may-launch-utility-vehicles/articleshow/16259443.cms

Business In India | "Healthy growth in food business"

By: Atul Sethi, TNN
Source: http://timesofindia.indiatimes.com
Category: Business In India

In foodie terms, it could best be described as a melting pot. The second Indian Restaurant Congress held in New Delhi last week had venture capitalists, marketing gurus, social media specialists, chefs and restaurateurs rubbing shoulders with each other — all with food on their mind. The business of food, that is. What was served to them would have perhaps whetted their appetite for more. According to a report released at the Congress, the Indian food services industry is worth nearly Rs 75,000 crore now and is growing at a healthy compounded annual growth rate of 17%. It is likely to reach Rs 1,37,000 crore by 2015.

For many years, the food business has been seen as a tempting and lucrative opportunity — reflected in the fact that opening a restaurant tops the wish-list of a number of people. But what would make the next few years exciting for the sector is the way the market is rapidly getting organized. Gaurav Marya, president of Franchise India that prepared the report, says that even though 70% of the market is currently dominated by unorganized players, the organized segment has witnessed double-digit growth across formats, especially quick service restaurants driven by international chains, and causal and fine dining outlets dominated by Indian and private equity majors. "In the future, the organized market is expected to grow even faster — at around 20 to 25% per annum," he says.

The growth is accentuated by factors that have been in existence in India since the past few years — namely rise in disposable incomes and families becoming progressively nuclear. This captive audience has led to many investors drooling over the great Indian restaurant bazaar. "With the growing popularity of the food and beverage businesses in India , the investment community has made significant investments here. Last year, these businesses received $ 256mn of funding overall, while this year has already seen $ 43mn being invested," says Sandeep Kohli, who, as the former India head of Yum Restaurants , brought brands like KFC and Pizza Hut to the country.

The proliferation of more outlets, especially across popular categories like quick service or fast food, casual, fine dining as well as food courts may mean more people heading out of home to grab a bite. But it also means the industry has to pull up its socks to meet higher customer expectations . "With a smarter consumer who has multiple options, quality control has to be high and sustainable because consumer loyalty is no longer a given in a cluttered market place," says Kohli.

With increased competition, meeting customer expectations is going to be a challenge, especially for restaurants which are looking at ramping up their operations to reach a wider customer base. "The key area for a restaurant chain is to ensure consistency in service and food standards," says Kabir Advani, managing director of Berco's that serves Chinese and Thai, and has 15 outlets spread across the National Capital Region.

"A person visiting our restaurant in Connaught Place from his office during lunch may visit our Gurgaon outlet for dinner with his family. Naturally, he will expect similar quality. Our job is to ensure we match his expectations wherever he goes." But in order to do that, a good team with an efficient manager and a skilled chef is essential. As the sector expands, retaining talent — a key attribute for the success of a restaurant — is going to be a major headache for restaurateurs. Industry estimates put the requirement of trained manpower in the business at around 30 lakh within the next few years, a number which will grow further as demand increases. Pankaj Chaddah, cofounder of restaurant review site Zomato, says that the industry urgently needs to invest in training and making jobs more lucrative. "There is very little loyalty towards any employer from the staff and they shift for small raises. Even students from hotel management institutes are opting for jobs in other industries related to the service sector ."

Celebrity chef Sanjeev Kapoor, who also runs a number of successful multi-brand restaurants, says that the only way to counter this issue is to shift the focus from "customers first" to "employees first." "If your employees are happy, your customers would be happy," he says. "Most of the new entrants to the business are penny wise pound foolish , where they would invest lakhs of rupees to bring in imported lights for their outlet, but would be reluctant to pay Rs 50,000 a month to an effective manager."

Poor employee retention has led to many restaurants shutting shop quickly. But another bottleneck for the industry is the high value of real estate, especially rentals in malls where footfalls might not justify cost of operations. Restaurateurs are working around this problem by opting for revenue-sharing arrangements with landlords. "Partnering with real estate owners is the only viable business model for the future, otherwise high land cost can easily bleed a restaurant," says Rajeev Panjwani , vice-president of the National Restaurant Association of India.

Over-expectation is yet another stumbling block. Kapoor says that most people don't realize that they are getting into a 365-day-a-year job with no holidays.

"Most of the growth is being driven by new entrants who are cash-rich but glamour struck," he says. "They are not aware of the hard side of the business and eventually phase out because of excessive investments in their projects and over estimated sales."

But despite bottlenecks and the inherent risks, it's an exciting time to be in the food business. Chennai-based Mohammed Ali, who runs an online community of people passionate about food, compares it to a marriage. "There are various phases to it — some sweet, some bittersweet . At the end, what counts is passion and, of course, good sense."
A recipe that those eyeing the restaurant pie can take note of. Look out for the burns, though.

Source: http://timesofindia.indiatimes.com/india/Healthy-growth-in-food-business/articleshow/16170428.cms

Business In India | "Hawkers eat into restaurants' business in Mapusa market"

By: TNN
Source: http://timesofindia.indiatimes.com
Category: Business In India

MAPUSA: Disappointed with the loss of business due to mobile hawkers selling tea and snacks, the Mapusa uphar graha owners association (MUGOA) has lodged a complaint with the Mapusa municipal council (MMC) and demanded action against these hawkers.

Around 36 restaurant owners submitted the complaint to the chairperson of the MMC, Sudhir Kandolkar, on Wednesday. In it, they stated that persons roaming with a kettle of tea and eatables in the Mapusa municipal area have had an adverse impact on their businesses.

The owners stated that because hawkers supply items like tea, coffee, samosa and bread to the fish, vegetable and fruit vendors in the area, they (the restauranteurs) lose clientele, thus causing heavy losses to them.

"The vendors are then reluctant to leave their place and enter out restaurants, or even order stuff from our establishments," says Santosh Belekar, who owns a restaurant in Mapusa. "Our items thus get wasted every day," he further lamented.

The hawkers aren't new to Mapusa, though. What's new is their increased number. "Earlier, they used to be a few, and went unnoticed; they didn't have much of an adverse effect on our business," said another restaurant owner. "Now, their number has increased sharply and they are eating into out business."

Another hotel owner, Raju Nanodkar, complained that "There is no check on these hawkers, due to which they roam freely all over town".

Members of the association that filed the complaint, have also threatened that if the council fails to take action against the hawkers, then they would do what it takes to control the menace.

"Earlier (a week ago), we had submitted a memorandum to the chief officer of the MMC, but nothing has been done. We should not be held responsible if we take the law into our own hands to evict these vendors for the survival of our business," Santosh Belekar said.

MMC chairperson Sudhir Kandolkar said that he would take up the issue with other council members in a council meeting and take necessary action.

When contacted, Salim Velji, director of food and drugs administration (FDA), said that there is no provision for allowing the selling of tea and foodstuff by mobile hawkers, and hence, there is no regulation.

"It may be a delivery system," Velji further said. "These boys must be attached to some hotels, the source could be the hotels and restaurants, and the boys could be delivery boys. If the sources of these eatables do not have valid licences, then they can be penalized."

He also said that the FDA is willing to take action on unlicensed vendors. "If there's a complant that these eatables are prepared at a place without licence, they should approach us, and we'll take action," he said.

Moving off on a different tangent, the FDA director then added, "If those are minor boys, then they can approach the police."

Source: http://timesofindia.indiatimes.com/city/goa/Hawkers-eat-into-restaurants-business-in-Mapusa-market/articleshow/15966531.cms