Showing posts with label Economic. Show all posts
Showing posts with label Economic. Show all posts

Monday, February 27, 2017

Here’ s Why We Need To Say NO To Plastic


Plastic is a material consisting of any of a wide range of synthetic or semi-synthetic organics that are malleable and can be molded into solid objects of diverse shapes. Plastics are typically organic polymers of high molecular mass, but they often contain other substances. They are usually synthetic, most commonly derived from petrochemicals, but many are partially natural. Plasticity is the general property of all materials that are able to irreversibly deform without breaking, but this occurs to such a degree with this class of moldable polymers that their name is an emphasis on this ability.

The success and dominance of plastics starting in the early 20th century led to environmental concerns regarding its slow decomposition rate after being discarded as trash due to its composition of very large molecules. Toward the end of the century, one approach to this problem was met with wide efforts toward recycling. Some polymers may also decompose into the monomers or other toxic substances when heated. Most plastics are durable and degrade very slowly; the very chemical bonds that make them so durable tend to make them resistant to most natural processes of degradation. However, microbial species and communities capable of degrading plastics are discovered from time to time, and some show promise as being useful for bioremediation certain classes of plastic waste.

The greatest challenge to the recycling of plastics is the difficulty of automating the sorting of plastic wastes, making it labor-intensive. Typically, workers sort the plastic by looking at the resin identification code, although common containers like soda bottles can be sorted from memory. Typically, the caps for PETE bottles are made from a different kind of plastic which is not recyclable, which presents additional problems to the automated sorting process. Other recyclable materials such as metals are easier to process mechanically. However, new processes of mechanical sorting are being developed to increase capacity and efficiency of plastic recycling.

Many people have concerns on plastic shopping bags.  The traditional reason is that littered bags are unsightly and can create a hazard to animal life. Littering is often a problem no matter where you live in the world. In India’s largest state a new environmental issue recently surfaced which has resulted in a complete ban on the use of plastic bags. From the beginning of August 2010, the manufacture, storage, import, sale and transport of plastic carry bags will be illegal in Rajasthan.  No shopkeeper, retailer, trader, hawker or vendor will be allowed to supply goods to consumers in bags. The measure was proposed after local municipalities had complained of blocked sewer lines, drainage systems and water distribution pipelines due to plastics buried in the soil, providing breeding grounds for malaria and dengue fever. In Mumbai in 2005, India experienced massive monsoon flooding partially as a result of drains blocked by plastic bags, resulting in over 1,000 deaths. In talking to people – from shopkeepers to executives – it becomes clear that the issue of plastic pollution is one they are aware of and they understand why it is a serious issue.  This awareness and willingness to act to decrease plastic use and waste is slowly permeating in daily Indian life.

By: 
Mohit Hooda  
Student, INLEAD


Monday, April 18, 2016

The Mallya Saga

The story goes back to December 1955, when Lalitha Ramaiah and Vittal Mallya became the proud parents of Vijay Mallya, in a small town of Karnataka called Bantwal. Vijay Mallya was an extremely prolific student and after receiving his doctorate in business administration from California Southern University, joined his father’s business and in 1984 became the chairman of United Breweries Group, which is the proud owner of the Kingfisher brand of beer.



It has been a rather successful career that this flamboyant businessman can boast of. He soon started “living life kingsize”, throwing glamourous parties and even published limited editions of the extremely elite but a rather saucy, kingfisher calendar. Vijay Mallya managed to build properties around the world in locations like Monaco, Scotland, USA, and across 3 cities in India. He even came to be known as the “Playboy of East”.

In 2005 Vijay Mallya set up Kingfisher Airlines which soon after started connecting 32 cities. Kingfisher Airlines in a couple of years became extremely popular and looked to moving into no-frills segment of air travelers and so invested in Air Deccan. It was then that the downfall of the Mallya Empire started.

How the Empire came crashing


  • The grounded Kingfisher Airlines:
Since 2012 Kingfisher Airlines had been facing severe financial crisis and the share of the company dropped to its lowest in April 2012. The DGCA (Director General of Civil Aviation) in India suspended its flight certificate in October 2012 and in early 2013 GOI withdrew both domestic and international flight entitlements allocated to the airline. The company thereby shut its operations and locked out its employees, many of whom hadn’t been getting salaries for the previous 6 months.

  • Meanwhile the Diageo and Heineken story moves on…          
Despite an insolvent Kingfisher Airline, Vijay Mallya continued to enjoy his lavish lifestyle and retained his position amongst India’s richest. His company United Spirits Limited has been the largest manufacturer of IMFL (Indian Made Foreign liquor) since 1951. By the time it was 2012, USL gradually came under majority ownership of a British multinational alcoholic beverages company, Diageo. Vijay Mallya took home a huge amount for the stake sale to Diageo. In 2015 Diageo demanded that Vijay Mallya quit as USL chairman against charges of funds diversion from the company, and soon after sold its shareholding in United Breweries to Heineken.

  • The Mystery of 9000 crores
Vijay Mallya had raised close to Rs.7000 crores from 17 banks for his now bankrupt Kingfisher Airlines. Since 2012 this loan has become a Non Performing Asset (NPA), with the largest borrowings coming from SBI (State Bank of India). For half a decade he has mocked the banks while flaunting his lifestyle. Now that all of India’s investigative agencies including ED and CBI are looking into the loan default, Vijay Mallya has fled India and parked himself in London.

As you read this blog, there are negotiations taking place between Vijay Mallya’s lawyers and the banks regarding settlements. As of 14th April, 2016, the offer from Vijay Mallya to the banks is Rs. 9,000 crore.While he had given a Personal Guarantee against his borrowings, most of his property is located abroad and therefore difficult to take custody of.

The cat and mouse game continues, and according to Economic Times, dated 31st March 2016, there are 72 similar companies in India with huge tranches of loan defaults, the primary being the Adani Group. Here’s hoping justice is delivered and Indian banks get back their money.

Ms. Monica Mor, Sr. Faculty, INLEAD

Image Courtesy: Google Images 

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