Tamil cinema's new high

The year 2005 has been a landmark one for Tamil film industry, with box-office successes like never before.

MAKING THE CASH REGISTERS RING: Chandramukhi

There is a lot to celebrate, as 2005 turned out to be the year of blockbusters for the Tamil film industry.

Never before have there been so many hits and super hits. Out of 97 films released in 2005, there were three blockbusters, two super hits, four hits and at least five films that broke even.

The combined gross worldwide from just two blockbusters "Chandramukhi" and "Anniyan" is said to be around Rs. 110 Crores, out of a likely box-office gross receipt of Rs. 400-500 crores.

Anniyan

Tamil cinema is the second biggest movie industry in India after Bollywood, with a total gross touching $100 millions.

Good news

The good news is that the overseas market is booming and the Indian domestic market (for dubbed Tamil blockbusters), mainly Andhra Pradesh, Kerala, Karnataka and multiplex audience in Mumbai and Delhi have brought in more revenue to the industry.

Ghajini

Added to that, new revenue streams have opened up. The mobile entertainment content like ringtones, internet rights, satellite and television rights for blockbusters are being snapped up at astronomical rates. Banks, private equities and corporates are coming forward to fund Tamil cinema produced by reputed banners at reasonable interest rates.

Amitabh Bachchan said recently in New York: "Indian films, mainly Hindi and Tamil, are being noticed worldwide as the country has become economically stronger and this is one of the reasons why anything coming out of India is getting attention."

Says Sanjay Wadhwa, a leading overseas distributor of Tamil films: "Overseas market for Tamil cinema is growing, though it is superstar driven and depends mainly on Sri Lankan Tamils."

Apart from "Chandramukhi," and "Anniyan," "Ghajini" is the third blockbuster (Together they collected three or more times their total cost).

The super hits (collecting twice its cost) were "Tirupachi," "Arindhum Ariyamalum" and "Sivakasi," while the hits (films which are profitable) included "Ullam Ketkume," "Thottijaya," "Kanda Naal Mudhal" and "Englishkaran." The rating is purely based on the box-office collections and cost of the film, as per trade sources.

Arindhum Ariyamalum

This trend clearly indicates the total domination of the star system in Tamil cinema. People worldwide pay money only to watch their favourite stars in packaged entertainment format, which consists of peppy music, glamour, sentiment, comedy, action and above all a good story with the required twists.

Our audience is also technically savvy and if the director is able to churn out something innovative within the commercial format, it works.

Another new concept is to make every film a brand by creating awareness about the product in print, television and on internet, as marketing is of utmost importance, to catch the attention and get re-call value for the film.

It is this awareness, created among the audience with hoardings and television ads by a mobile company, that made "Chandramukhi" a brand, which worked wonders for the film at the box-office.

Tirupachi

It is surprising, but slowly the box-office trends in Tamil Nadu seem to be following the Hollywood and Bollywood pattern. All the hits of the year have come due to excellent opening weekend collections, thanks to maximum number of prints and wide release. The idea is to milk a film during the first week when the marketing campaign and the hype are at their peak. Tamil film producers have realised that a film is like a parachute — if it fails to open, it leaves you dead. And the only way to fight this is to flood the market with as many prints as possible. Five years ago, Rajnikanth's "Padayappa" released with 11 prints in Coimbatore area, whereas this year "Chandramukhi" opened with 23 prints and after 100 days it was ahead by Rs.1.45 crores at the box-office by comparison.

Today a big Tamil film opens with 250-300 prints worldwide and the new mantra is how much it can collect and how fast! The number of days a film runs is immaterial to its box-office success. And in most cases after 50 days, the occupancy rate is just 15 to 20 per cent and the theatres run the films just to soothe the ego of the star! Another growing trend among filmmakers is to write scripts that suit a global audience. Movies that base their stories in the Tamil village milieu are slowly losing their flavour and more city-based tales, with an eye on Andhra Pradesh, Kerala and the overseas market, are being filmed.

The year 2005 has been a landmark one for the Tamil film industry as content and business changed like never before. The young audiences (16- 25 years) have become all-important as they form the chunk of the opening weekend collection as proved by the success of movies without stars such as "Arindhum Ariyamalum" and "Kanda Naal Mudhal."

According to a recent study, Tamil cinema is poised to grow globally with bigger movies slated for next year.

India, the hottest investment destination

If it's investment, it's India.

From software giant Microsoft to telecom biggies Nokia and Samsung to auto majors Honda and Toyota, global players now eye India as the most attractive destination for investment.

December 2005 alone saw a number of global business leaders in India lauding India's great economic prowess and making huge investment promises.

Microsoft chairman Bill Gates, during his visit to india, announced that the company would invest $1.7 billion in India over the next four years to expand its operations.

"India has a fantastic pool of software professionals. The world needs to benefit from this. I never thought with so little product companies software services sector will grow so strong as it has grown here," Gates gushed.

Toyota Chairman Okuda Hiroshi praised the quality of products made in India, which he said was better than even Japanese companies.

While billions of dollars have been committed to boost business in India, it needs to be seen how much of this actually turns into reality.

Here's a checklist of the big investment promises, with IT companies topping the charts.

Microsoft

Microsoft Corporation plans to invest $1.7 billion in India over the next four years to expand its operations. The amount will be deployed across select focus areas in line with Microsoft's strategic vision for India.

The funds would also be spent in making India a major hub of Microsoft's research, product and application development, services and technical support for both global and domestic companies. The software giant will hire more than 3,000 employees over a period of three to four years in India.

Intel

The world's largest manufacturer of computer chips, Intel Corporation said the company would invest more than $1 billion in the next five years to expand its operations in India and in local technology companies.

Chipmaker Intel has formed a $250-million Intel India Technology Fund that would be used for venture capital investment in technology start-ups in India.

"The pace of technology innovation is accelerating. The investment demonstrates the company's long-term commitments and builds on the foundation we created during the last ten years," said Intel chairman Craig Barrett during his visit to India.

The funds will be used to invest in companies that can benefit from the rapid growth in the domestic IT market segment in India, and provide local businesses with capital to help nurture important technologies and products developed for local use.

AMD & SemIndia

SemIndia, a consortium of overseas Indians, plans to invest $3 billion in an advanced semiconductor manufacturing facility in the country with technology from America's Advanced Micro Devices Inc.

The project -- a public-private partnership - is expected to take off next year and will lead to a world-class industry in India to meet domestic and global demands of semiconductor chips for cell phones, PCs, set-top boxes among others.

AMD will transfer high-end microprocessor and logic manufacturing technology to SemIndia, and may pick up a stake in the proposed plant, Hector Ruiz, chief executive officer of AMD Inc, said during his visit to India.

SemIndia sees Indian demand for semiconductor chips at $30 billion each year by 2015.

Cisco

Networking major Cisco's CEO John Chambers announced a $1.1 billion investment package for India. Of this, $800 million would be invested in Bangalore over the next two years. The company would pump in $750 million in its new R&D campus in Bangalore. The company plans to triple its existing head count from the current 1,400 by 2008.

Chambers said that the company is also considering India as a manufacturing base.

Automobile sector

The automobile sector is also slated to witness a lot of action with foreign car makers driving to India. According to Commerce Minister Kamal Nath, India is an attractive destination for global auto giants like BMW, General Motors, Ford and Hyundai who were setting base in India, despite the absence of specific trade agreements.

The government is also likely to grant special economic zone status and take a re-look at the tax structure for setting up testing centres and manufacturing plants in a bid to make India the automotive hub of the world.

Here's what the auto biggies have lined up.

BMW

German automobile major BMW signed a memorandum of understanding with the Tamil Nadu government to establish its car assembly plant at an investment of $38 million in five years. The German group has selected a site in Mahindra World City in Maraimalainagar, near Chennai, to set up its assembly plant.

BMW has selected Chennai as the "best location" for establishing its car assembly plant with an investment of about Rs 180 crore (Rs 1.8 billion) in five years, a statement said.

BMW senior vice president Klaus Berning told the Tamil Nadu Chief Minister J Jayalalithaa that the company had decided to establish its car assembly unit in Chennai due to the 'favourable investment climate' in the state.

Toyota

Global auto giant Toyota is planning to set up a gearbox manufacturing plant in India to serve the Asian market. Toyota is planning to invest around Rs 387 crore (Rs 3.87 billion) in collaboration with its mini-vehicle making arm Daihatsu.

The aim is to develop a compact car for the Indian market. Besides, Toyota, Honda Motorcycle, Suzuki Motor (Maruti Suzuki) and Kansai Paints are firming up plans to pump in foreign direct investment (FDI) of at least $1.5 billion in the next three years.

Fiat

Beleaguered carmaker Fiat will be sourcing components worth $10 million from India in 2006, which is expected to increase further in the coming years, and make significant investments for reviving the company. The components are being sourced for the company's 'Palio' model in South Africa.

The company has said it will resume production of cars like 'Palio', 'Petra' and the 'Adventure' at Kurla in Mumbai from January 2006. "Fiat has plans to introduce new models in India, as the company works on a revival trategy in the market," Fiat India managing director De Filippis Giovanni said.

Fiat India is getting ready to start production from its Kurla facility in Mumbai and may launch the Grande Punto soon in the country. The Grande Punto, which was successfully launched recently in Europe, is a premium B-segment category car.

Telecom sector

There's more cheer in the telecom sector as well. While LG Electronics announces an investment of Rs 900 cr (Rs 9 billion) at Ranjangaon, Samsung has planned to set up a mobile manufacturing base in India. There's demand a-plenty: the government has forecast that India will have 250 million phone lines, both fixed and mobile, by the end of 2007. Since the majority of these would be mobile connections, the Indian telecom base is seen hitting the 200-million mark by 2007 from the present 70 million.

Nokia

Finnish mobile handset giant Nokia plans to set up a manufacturing plant in Chennai with an investment of up to $150 million to meet the booming demand for its handsets in India. Production is likely to begin in the first half of 2006.

The Chennai unit will be Nokia's tenth mobile device production facility globally and will roll out India-specific entry level and mid and upper end GSM and CDMA handsets. India has skilled labour, friendly business environment and overall cost efficiency, Nokia officials said.

Nokia is the leader in India's $2.5 billion handset market, believed to have about 45 per cent market share.

LG Electronics

LG Electronics India plans to invest Rs 900 crore (Rs 9 billion) in the next five years in the production of optical storage devices, GSM-based phone handsets, and air conditioners. Of the total amount earmarked, Rs 200 crore (Rs 2 billion) will be ploughed into the segments in the next calendar year itself.

LG is the first in India to produce DVD writers. It plans to produce 33 million units of DVD writers by 2008. Most of the production will happen at the company's facility at Ranjangaon in Pune. GSM handset product line would be expanded to and capacity increased to 18 to 20 million by 2010.

LGEIL plans to increase the number of GSM models from the existing 12 to 23 by next year and a target of 1.5 million GSM handsets have been set which would comprise 10 per cent of the market share. The company's goal is to produce 20 million handsets by 2010 at the Pune unit and has already started producing the same from March this year with a capacity of 40,000 to 50,000 per month.

Samsung

Samsung Electronics has plans to invest $15 million to set up a mobile handset plant in India as it looks to corner a bigger share of the world's fastest-growing mobile market. The capacity of the handset manufacturing unit, to be built in Manesar in Haryana, will be 1 million units a year, rising to 20 million by 2010, said H C Ryu, director, telecom, Samsung India.

The plant, Samsung's fourth overseas handset-making facility, will produce handsets in the mid- to high-end price range and is due to open by the end of the first quarter of 2006, he said.

Samsung, the world's No. 3 mobile phone maker, will begin making GSM handsets and add phones for the rival CDMA technology later, he said.

Samsung will also look at exporting to the Middle East and southwest Asia after stabilising production for India.

Motorola

Motorola is setting up its applied research lab in India, with plans to invest $17 million a year in its Indian R&D activity over the next few years. Motorola believes India is the ideal region for applied research and software development, she said, adding that the country would be a focus for soft manufacturing for now, although the company was looking at investment options for handset manufacturing.

Motorola's investments in the past couple of years in India have amounted to $85 million in technology and R&D, taking its total investment to $150 million. The company is also setting up a campus in Hyderabad this year.

Investment is pouring in into other industry sectors too as the Indian economy fundamentals remain robust and perfect for global investors to make the most of this great Indian opportunity. And this is just the tip of the iceberg so to speak.

'King Kong' sixth most expensive film: Forbes

A new version of "King Kong" to be released for the holiday season, from New Zealand director Peter Jackson, is reportedly the sixth most expensive film in Hollywood history.

The adventures of the giant gorilla are shown through special effects costing 207 million dollars, compared with the 10 million dollars, in today's money, spent on the original by Merian Cooper in 1933, according to the New York-based business magazine Forbes.

Forbes said Hollywood spent an average of 64 million dollars per film in 2004.

The most expensive ever was "Cleopatra," with Elizabeth Taylor and Richard Burton, directed by Joseph Mankiewicz in 1963, for 286.4 million dollars (in 2005 money).

Second was "Titanic," by James Cameron (1997) for 247 million dollars.

Two years later, "Waterworld," directed by Kevin Costner, cost 229 million dollars.

And "Terminator 3," the latest film starring Arnold Schwarzenegger before he become California governor, cost 216 million dollars in 2003.

"Spider-Man 2" was made in 2004 for 210 million dollars, "Wild Wild West" with Will Smith for 203.8 million dollars in 1999 and "Speed 2" in 1997, cost 198.8 US dollars.

India beats US, ranks second in FDI's most wanted list

The India growth story is getting bigger and better. For the first time, India has emerged stronger on the global investment radar in 2005, overtaking the United States for the first time to become the secondmost attractive FDI destination in the world.

According to the latest FDI Confidence Index, prepared by global management consulting firm AT Kearney, India is now second only to China in the FDI attractiveness ranking, scoring 1.951 on a scale of 0-3.

The survey of executives from the world’s largest companies ranked India second only to China, which retained its top slot for the fourth year running.

China scored 2.197 points, while the US scored 1.42 points. "India is on the cusp of an FDI take-off. However, for India to harness manufacturing investor interest and evolve into an FDI capital-intensive hub, the government must maintain its reform orientation and overcome narrow business interests, consistently addressing the country’s infrastructure, logistics, and regulatory barriers," said Paul Laudicina, V-P and MD of Global Business Policy Council at AT Kearney.

The US dropped from second to third slot and the UK maintained its fourth spot on the list. Investor confidence in eastern European markets also witnessed a sharp increase during 2005.

But it was India that led the list of countries with the highest level of investment optimism, with over 47% investors expressing a positive change in outlook as compared to a year ago. The strong increase in investor interest in India is a more recent development.

Kannadigas are the most travelled in India

The big myth about Bengalis and Gujaratis being the top travellers in the country is shattered. Their numbers aren’t insignificant, but Bengalis and Gujaratis together accounted for just about 5.4 million of a total of 33 million domestic tourists in 2002.

That might seem like a lot, but Karnataka alone had 6.1 million tourists, making Kannadigas, by far, the most travelled people in the country. Tourists from Tamil Nadu made up the next-biggest group with 3.7 million.

Maharashtrians and Bengalis were next in line with 2.9 million tourists each, while Gujaratis were just behind them at 2.8 million.

That’s the snapshot of domestic tourism in India from a first-of-its-kind survey conducted by the National Council of Applied Economic Research for the tourism ministry. With over 800,000 respondents, it is among the biggest surveys on tourism and is intended to give the ministry insights for policy.

Even though the "Bongs and Gujjus abound at all tourist places" theory was proven wrong by the survey results, several other widely held notions about domestic tourism seem to be right.

For instance, tourism as defined by leisure travel or holidaying, accounted for only 6 per cent of all travel out of town (or village) in the country.

Religious travel accounted for more than double that, at 13.8 per cent. The lion’s share of travelling belonged to "social travel", or the meeting friends and relatives category, which accounts for 10 times the number of tourists, at 58.9 per cent.

That, of course, would include travelling to attend weddings or death rites. The predominance of religious travel over holidaying means that when it came to the most popular destinations for religious or leisure travel in the country, eight of the top 10 were pilgrim centres.

Bangalore/ Mysore and Delhi were the only non-religious destinations in the top 10 and you could argue that Delhi serves as a gateway to several northern pilgrimages for travelers from other parts of the country.

Economy grows at 8.1 p.c. in Q2

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Services sector does well

Manufacturing logs a lower growth in Q2

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The economy registered a strong 8 per cent growth in the second successive quarter of the current fiscal, overcoming the lacklustre performance of agriculture and mining sectors.

The 8 per cent GDP growth during July-September 2005-06 compares favourably with the 6.7 per cent growth in the corresponding period last fiscal. The second quarter growth was a shade lower than the 8.1 per cent growth in the first quarter.

During April-September this fiscal, the economy grew by an impressive 8.1 per cent, compared to 7.1 per cent in the first half of last fiscal.

The strong performance exceeds the projections of economic think-tanks and even the Prime Minister, who had on Tuesday predicted a 7.5 per cent growth for this fiscal.

The farm sector witnessed a 2 per cent growth in the second quarter compared to nil growth during the year-ago period, according to figures released by the Central Statistical Organisation here on Wednesday.

The manufacturing sector logged a slightly lower 9.2 per cent growth in the second quarter compared to 9.6 per cent in the year-ago period.

Among services, the highest growth of 12 per cent was observed in trade, hotels, transport and communication in the second quarter of 2005-06, compared to 12.3 per cent in the same period last fiscal. — PTI