America Eyes Smaller Indian Cities

As per a new initiative by the US-India Business Council (USIBC) and the Confederation of Indian Industry (CII), American companies will invest in India’s Tier-II and Tier-III cities to create small and medium enterprises (SMEs). Along with this, US-based companies will also try their fortunes in India’s non-metro regions.

Currently there are 37 lakh manufacturers in the US and only 27% of them benefit from exports. This initiative will pave the way for American companies which have not yet entered India. Ron Somers, USIBC’s president was quoted as saying, “Companies like GE and Citi have been long term players in India for more than 100 years. It is now important to reach out to smaller companies across the US and help them find their place in the extraordinary opportunity unfolding in India.”

Kiran Pasricha, deputy director general of CII expressed, “The next phase of growth in India-US bilateral economic relations will come from the SME sector. This platform will provide the much needed impetus.”

American investments in Tier-II and Tier-III cities will not only give rise to SMEs but also create more employment opportunities in these regions. This might relieve the metro regions of a bustling population a substantial portion of which comprises of livelihood seekers.

New Law Makes Homes Eco-Friendly, Furniture Costlier

Soon, furniture and cabinetry will become more expensive. A new law signed by US president Barack Obama limits the amount of formaldehyde – a chemical linked to cancer and respiratory problems - in wood products. This law would, however, result in more environmentfriendly and healthier homes.

“We’re hearing from suppliers of particle board that the costs will increase, and that’s likely to be passed along,” Andy Counts, CEO of the American Home Furnishings Alliance, tells USA TODAY. He estimates that prices for plywood and particle board could increase from 3% to 15% but notes that this wood is only a small part of the total cost for a piece of finished furniture. “It’s going to be very challenging (for consumers) to identify products with lower formaldehyde,” Counts says.

Particle board, which is created using sawdust, wax and formaldehyde-based glue, is often used in inexpensive furniture and cabinets and can contain high formaldehyde levels. It will be virtually impossible for manufacturers and retailers of these low priced products to avoid raising prices, experts say, because their products use so much particle board. But it could be at least three years before all furniture sold must meet the new limits.

California officials just extended the deadline until 31 December 2011 for stores in that state to sell furniture and cabinets that surpass formaldehyde limits.

Housing Construction to Dip Across Australia

A change in the monetary policy by the Reserve Bank of Australia is expected to affect new housing construction in the country negatively. The Housing Industry Association believes that the spurt in the new residential construction was seen after the central bank had reduced interest rates in 2008, to recover from the global financial crisis which had hit the economy that time. With interest rates now being reset to their trend average over the last decade by the RBA, the demand for new home construction will witness a major fall.

According to the quarterly National Outlook Report by the Association, new home construction saw a healthy growth in its first stage. However, this growth is expected to dry up by the middle of 2011.

“It is not too late to turn the situation around through policies targeted at new home buildings combined with more rapid progress in reducing structural supply side barriers,” said HIA Chief Economist, Harley Dale. He further stated, “The empirical data, observations on the ground, and the slow progress in reducing supply side obstacles all currently point to the first increase in housing starts in eight years in 2010 reverting back to a decline in starts in 2011.”

It is believed that there is a problem in the supply side, as new land is not being released fast enough to meet the demands of new construction.

“Australia needs to build over 190,000 dwellings in 2010 alone to meet underlying demand, and over the next ten years we need to build 420,000 dwellings more than we built over the last decade,” informed Dale.

It is estimated that new housing construction will increase by 20% in 2010 to 1,65,940, before seeing a fall of 3% in 2011. Financial year wise, new construction is forecast to increase by 22% in 2009-10 and 2% in 2010-11 to reach a level of 1,62,600. These are forecast to be flat in 2011-12.

EU Fines Bathroom Fitting Firms

Seventeen bathroom fittings companies including big names like Sanitec, Roca, Villeroy & Boch and Grohe have together been fined a total of € 622 million by EU antitrust regulators for fixing prices. According to the European Union’s competition watchdog the penalised companies operated a cartel between 1992 and 2004 in Germany, Austria, Italy, Belgium, France and the Netherlands.

The worst hit among the 17 penalised companies is Ideal Standard International Group which manufactures American Standard bathroom ceramics. Ideal Standard was imposed with a fine of €326 million, though it will not have to pay the sum as it has an indemnity arrangement with US auto safety system supplier Wabco Holdings. The other names involved in the cartel are Artweger, Cisal, Dornbracht, Duravit, Duscholux, Hansa, Kludi, Mamoli, RAF, Teorema and Zucchetti.

According to the Commission, USbased Masco which has subsidiaries like Hansgrohe and Hueppe was provided immunity from the fine as it was the first to inform about the cartel. While Grohe, Europe’s largest single-brand sanitary fittings maker, unveiled that the fine would have an adverse impact on its investment decisions. Competition Commissioner Joaquin Almunia stated, “The cartel will have harmed businesses such as builders and plumbers and ultimately a large number of families.”

American State to Promote Paint Recycling

The Department of Environmental Quality (DEQ) of the American state of Oregon will implement a first of its kind ‘paint take back programme’ starting this July. The program will facilitate recycling of unused paint through drop off centres promoted by paint manufacturers. Architectural paint, oil based and latex paints, deck coatings, primers, varnishes and wood coatings sold in containers of five gallons or less come under the purview of the program. Users can return the unused paint, which will then be reprocessed and sold again. Expected to collect over 6,00,000 gallons of paint annually in Oregon, the program is will be implemented nationwide.

The program is a result of the Oregon Paint Product Stewardship law that was passed by the state legislature in 2009. It will be facilitated by the Product Stewardship Institute Inc (PSI), a nonprofit organisation which collaborated with paint manufacturers, retailers, contractors, recyclers and government officials to devise a strategy to recycle leftover paint.

Consumers will have to pay a surcharge on paint containers to fund the program. The surcharge is expected to raise an estimated US$ 4.5 million to pay for the program, which will go to PaintCare, a non-profit organisation founded by the American Coating Association, the body that represents paint manufacturers. PaintCare will deploy collection depots across the state for collecting unused paint and will also manage the collection, transportation and processing of the paint. The department of environmental quality will charge an administrative fee from PaintCare for overseeing the program.

“The paint industry has committed to properly managing leftover paint in Oregon, and we are ready to step up and assume that responsibility,” said Alison Keane, counsel for the American Coating Association. “We appreciate being able to work with DEQ and PSI to bring significant environmental and financial benefits to communities around Oregon.”

Under the concept of product stewardship, manufacturers are responsible for their products even after it has been used by consumers. At present there are 50 such programs in 31 American states covering seven kinds of products, including fluorescent lamps, batteries and mercury based thermometers.

Malaysian Green Building Sets Benchmark

The Malaysian capital recently witnessed the opening of a building that sets new benchmarks for green construction and is creating a lot of buzz amongst architects and planners. The 30-storey G-tower, which is located strategically between two major roads in the city, was awarded the Green Mark Gold Award by the Building & Construction Authority of Singapore.

According to developers Goldis Group the G-Tower culminates green technology in its construction design at every level. The building uses 25% less energy compared to buildings of similar dimensions owing to its energy-efficient air-conditioning and lighting. The extensive landscaping with sky gardens and green walls helps in keeping the building cool and maintaining air quality. It uses double glazed glass panels with a layer of vacuum trapped in-between to cut down on heat transmission. Water is heated using heat from the air-conditioning system. A rainwater harvesting system is also installed, which serves the purpose of irrigating the plants.

Colin Ng, executive director of G Tower, says, “I see it as part of our green investment if a building is well designed from the start, properly oriented to the sun, has more water features, overlay green walls, koi pond, green walls system to help cooling effects. All these things assist greatly during design and construction of the building.”

The carpets and external timber decking used in the building are green certified and made of recyclable materials. The interior features old furniture that is refurbished and reused. The walls and flooring are also decked with old recyclable timber strips that give a rustic look to the modern building. The green concept goes beyond just the construction aspect; natural salt is used to keep the swimming pool water clean.

“The green investment will have a payback, it does make sense because what we built today is going to last for decades. Being green does not necessarily mean spending more money, it’s spending more time to and effort to rethink the process,” reiterates Ng.

To provide a synergistic business experience, the building combines offices, a club and a hotel under one roof. It houses a 180-room business hotel with the biggest club floor in Southeast Asia, spanning over 12,000 sft.

Although the concept is still new in Malaysia, more and more projects are going green. The government is now setting up a green building index, and more buildings are seeking to be internationally certified.