The Navhind Times I Monday January 8, 2018 navhindtimes.com @navhindtimes facebook.com/navhindtimes ± navhindtimes.

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Magazine for
Business &
Consumers trajectory The global financial crisis in 2008 shook
Germans to the core” 2

Pay off from creative RIL commissions the world’s

largest refinery at Jamnagar

strokes in IT software
Buzzing growth

R
plans is likely to eliance Industries Limited (RIL) recently commis-
make Verna based, sioned the world’s largest refinery off-gas cracker
(ROGC) complex of 1.5 million MT per annum capac-
Creative Capsule ity along with downstream plants and utilities. The
ROGC complex is a core component of RIL’s most innova-
Infotech the new tive and world-scale J3 project at its integrated refinery-
high-flyer in Goa’s IT petrochemicals complex at Jamnagar.
 With the commissioning of the ROGC complex the
industry, discovers largest ever expansion of RIL’s petrochemicals portfolio
Shoma Patnaik comes to a completion. This is one of the largest capital
expenditure programme globally in the sector in recent

S
oftware technology company,
Creative Capsule Infotech in
Verna industrial estate is set
to expand. A low-key player it
is ready to change track and
take its place as one of the strategic
members of Goa’s IT industry.
The current year 2018 looks excit-
ing for Creative Capsule. It is shifting
to new headquarters around mid-
March. The future office is located
near the present one and is being
given the finishing touches. Con-
structed over 10,000 sq mtr of land
it is the first capital investment of the
company in land asset and therefore
a major achievement in the growth
journey.
Salil Talauliker, chief technology
officer and co-founder is keyed up
about the milestone. He says that the
company has been steadily growing in
the last three years but moving into
spacious, modern work place will be
the turning point for sure. It will be
the beginning of a major ramp up in
scale.
“We are hiring people and looking
at new clients. In the next two years
we should be a 450-500 people
company from the present strength
of 126 employees. Our projected
growth in turnover is around 30 per
cent,” he says. “Currently most of our
clients are in the US but in future
we will be looking for business in
Switzerland and other west Europe
countries. India is also going to be
the focus of our clientele.”
Talauliker is of Goan orgin whose
family antecedents are from Goa but
who lived and grew up in Mumbai. He
did his education in Mumbai and then
moved to the US for further studies.
After completing his post graduation
and picking up knowledge in the soft-
ware industry he went on to launch
Creative Capsule with Julia Terenjuk,
co-founder and chief executive officer.
“I don’t operate out of Goa but
make about two-three trips a year
with each visit of about three week
duration. Between us partners we do
at least five visits,” he says, adding
that, the company’s profile is predom-
inantly Goan as 98 per cent of the
staff are local or Goan techies who
have returned back to the home base.
He explains that, Creative Cap-
sule started as a consultancy firm in
Kansas, in 2003. Operations are out
The Creative Capsule office wears a festive look
work ethics among locals. My people
if working on a project stay late hours
and work hard. Culturally Goans are
practical, friendly and have no hang-
ups. The susegad impression probably
comes from the fact that residents are
easy-going,” he reflects.
Working out of Goa the business
flourished. Initially the company op-
erated from a flat in Borda, Margao
before moving to Verna in 2011. It
started out as two-man show and
went on to add staff. Currently it is
Goa’s third largest IT company in
terms of man power.
Talauliker points out that, the
company picks up employees from
the local engineering colleges and has
a flexible hiring policy. “We consider
our employees as assets and invest
in their growth.” Fresh graduates
Salil Talauliker are put through a 60-90 day train-
ing programme to bring them on par
of two offices and over the years the sion. “Every IT company founder in terms of processes and technolo-
Goa office steadily grew to become wants to set up office in Bangalore, gies. “Our staff- centric approach has
the headquarters. Hyderabad or Pune. But we are a resulted in low attrition rate of just
“For the first five-six years we ran creative team and wanted to look at four-five per cent vis-à-vis three
our operations from the US because an off-beat location. Plus Goa offered times more attrition rate in the indus-
the projects we had were small and the opportunity of keeping in touch try,” he says.
we were not quite set up in terms of with my roots.” The company’s goal is to put Goa
staff, etc. So it was hard to do multi- After setting up office there were on the IT map and also to prevent
ple locations. By 2008 we had grown the usual challenges the team faced in the brain drain in engineering gradu-
and it was time to set up another of- getting the right people, establishing ates, says Talauliker. He says that for
fice. We thought of India, but where? the infrastructure, etc and in the pro- the state to attract investment in the
I suggested Goa because of the family cess Talauliker says that, his miscon- IT sector, the government needs to
links although I was not quite sure ceptions about his state of birth was improve infrastructure in power and
how thing will work out,” says Talau- soon wiped out. public transport. Plus efforts have to
liker. “Everybody thinks of Goa as a par- be made to improve the talent pool
He says that, he was pleasantly ty destination and Goans as Susegad. to create a human resource bank for
surprised by the success of his deci- But I was surprised to see strong future IT hirers.
times. It is typical of RIL’s core strategy of continuously
pursuing opportunities for cost optimisation and efficien-
cy enhancement through vertical integration across the
value chain.
  The ROGC complex has a unique configuration as it
uses off-gases from RIL’s two refineries at Jamnagar as
feedstock. This innovative approach of integration with
refineries provides a sustainable cost advantage making
ROGC competitive with respect to the crackers in Middle-
East and North America which have feedstock cost advan-
tage.
  ROGC design is highly flexible and energy efficient.
Given the complexities of such a plant, the start-up has
been flawless adhering to the most stringent safety and
technical integrity standards globally, according to the
company.  The refinery is the latest addition to RIL’s exist-
ing cracker portfolio consisting of cracker facilities at Na-
gothane in Maharashtra and Hazira, Dahej and Vadodara
in Gujarat.
  There are nearly 270 ethylene plants globally with a
combined capacity of over 170 million MT per annum.
RIL’s combined ethylene capacity is now close to four
million MT per annum at five of its manufacturing sites.
With ROGC and imported ethane, RIL has one of the most
competitive and flexible cracker portfolio.
  Ethylene from ROGC is used in downstream plants to
produce mono- ethylene glycol (MEG) and polyethylene
(LLDPE and LDPE. Similarly propylene from ROGC has
enhanced the output of the existing polypropylene (PP)
plants at Jamnagar complex to produce high-value co-
polymers.
  The commissioning of MEG plant marks completion of
all-round expansion of the polyester value chain post suc-
cessful commissioning of para-xylene (PX), purified tere-
phthalic acid (PTA), Polyester filament and poly ethylene
terephthalate (PET) plants over the last three years.
 With the commissioning of LLDPE and LDPE plants at
Jamnagar along with its existing PE plants at other manu-
facturing sites, RIL has capability to produce entire range
of PE grades covering all end-uses in the Indian market.
  The ROGC complex is built in a record time with ap-
proximately 40 per cent lower capital cost compared to
the similar projects globally. The unique configuration
with sustainable cost advantage, competitive project
schedule, lower capital cost and incident-free flawless
start-up makes it as one of the best executed project glob-
ally from concept to commissioning.
  Commenting on the commissioning, Mukesh D Ambani,
chairman and managing director, Reliance Industries, said,
“The world’s first ROGC and downstream plants marks a
paradigm shift in the profitability and sustainability of
RIL’s petrochemicals business. The ROGC complex is built
on our core philosophy of deep feedstock integration to
establish industry leading cost and efficiency benchmarks.
This world scale petrochemicals expansion, once again
showcases our unique competitive advantage in efficient
execution of complex projects and flawless commissioning
capabilities, adding yet another jewel to its crown.”
  RIL is India’s largest private sector company. For the
year ended March 31, 2017, it turned in
turnover of Rs 330,180 crore (US $ 50.9 billion) and
net profit of Rs 29,901 crore (US $ 4.6 billion).  

Germany’s tryst with gold for long-term economic security

„„ By Tensing Rodrigues the government swiftly guaranteed the Difficult task is to strike the right balance

T
he story of Germany’s tryst with
gold has an important message.
Investment is not entirely about
return it is also about risk. The in-
vestment portfolio therefore needs
to provide both for the growth of the as-
sets as well as for the conservation of their
value. That is where gold comes in.
Germans do not seem to have fancied
gold much. The average annual demand for
gold between 1995 and 2007 for instance
was a meager 17 tons.
Compare that with 134
tons in 2009 and almost
180 tons in 2016. What
happened between 2007
and 2009 is all that made
the difference. The global
financial crisis in 2008
shook Germans to the
core. The collapse of the
Lehman Brothers made
them look more closely
at their own banking
system. Landesbanks that
appeared sound previously and provided
stable support to German industry now
seemed shaky.
The fear of losing their savings agitated
the depositors. To avoid a run on the banks
bank deposits. But this was not Germany’s
problem alone. Banks across Europe were
on the brink and had to be bailed out. But
the bail-outs only passed the buck while
the banks stayed afloat the countries that
propped them up slipped into crisis.
And that was a bigger problem. Sover-
eign bonds lost their sanctity. And it was
a wider problem. Countries like Greece,
Ireland, Portugal, Spain and Cyprus were
on the brink of bankruptcy. The European
Central Bank (ECB), the European Com-
mission and the International
Monetary Fund got together to
cobble a rescue package. That did
happen but the countries were
condemned to austerity for what
seems like forever. The result
was low inflation and anemic
economic growth. The policies
now had to swing the other way
- an aggressive quantitative eas-
ing program.
For Germany, that brought
back memories of the hyper-
inflation the country experi-
enced in the 1920s, and its wealth eroding
effect. It was under these circumstances
that Germans turned to gold. Fortunately
for them by then gold became much easier
to acquire. Online purchase and digital
payments made buying convenient and
gold-backed ETFs made it easy to hold and
liquidate gold. No wonder many looked
upon it as an ‘enduring currency’.
According to a survey conducted in
1916 by Kantar TNS, one of the largest
market research agencies in the world,
59 per cent of Germans felt that gold will
never lose its value in the long-term, 48
per cent said that owning gold makes them
feel secure for the long-term, and 42 per
cent trusted gold more than the currency.
Per head purchases of gold by Germans in
2016 was greater than in India and China.
And gold investment was not the preroga-
tive of higher income Germans alone. Gold
was the third most popular investment of
those in the lower income bracket accord-
ing to the World Gold Council consumer
research.
That has a lesson for us too. Mere sav-
ing and investing is not sufficient. How and
where we invest is important. No doubt
growing the assets is the primary goal of
all investment. But conserving the value
of the growing assets is equally important.
between the earning assets like equity
and sterile asset like gold. Gold does not
help in growing the value of our portfolio.
Even if looks to be doing that sometimes,
we should remember that such is not its
function in our portfolio. When gold starts
yielding returns matching and out matching
equity, we have to realize that this is not
normal, and avoid going overboard. If we
are not prudent, that itself could erode our
worth. Because unlike equity, gold price
moves in long cycles; it may take us a long
time to recover from our loss. Again, unlike
equity, gold does not have intrinsic value
around which its price is likely to fluctuate.
The price of gold is entirely determined by
external factors; and the most important
of these factors is the fear of other assets
losing value.
Post the 2008 economic crisis the
global scenario has not returned to nor-
mal. Instability is in fact the new normal.
In such a situation, gold becomes an en-
during asset.
*The author is an investment
consultant. Readers can send
their comments and queries to
investment.ideas.shop@gmail.com