In Friday's Asia papers

16 May 2003 02:30  [Source: ICIS news]

A summary of political, economic, trade, business and product news affecting the chemical and related industries.

International Economics & Politics

Summit sets aside trade friction, boosts confidence

US President George W Bush and his South Korean counterpart Roh Moo-Hyun put aside simmering trade friction in a bid to boost fragile investor confidence at their White House summit on 15 May. Their joint effort reflected concerns over the performance of both economies, to which the political destiny of both presidents may well be tied. The two leaders agreed on the importance of working together to promote prosperity in their two countries, said a joint statement released after 30 minutes of talks. They agreed that Seoul's economic fundamentals are strong and expressed high confidence in the prospects for continued increases in trade, investment and growth in South Korea, it said. But trade friction lingered as US and South Korean trade negotiators were locked in talks as a deadline loomed in a dispute over the South's memory chips which Washington said are unfairly subsidised.

Business Times, Singapore (online edition)

Korea Herald, South Korea (online edition)

Terrorists bomb 18 Pak Shell stations

Attackers on a motorcycle set off a series of explosions early on Thursday (15 May) at 18 Shell gas stations in the southern Pakistani city of Karachi, police and company officials said. Four employees suffered minor injuries. Over three hours, two men on a motorcycle went from one station to the next, placing the explosive devices in garbage cans, police said. No one claimed responsibility for the attacks, but authorities suspected it might have been an anti-American act. In Pakistan, Western-owned companies often are identified as American even if they are owned by companies based in other Western countries. The Royal Dutch-Shell Group is an Anglo-Dutch company based in London, but also has a US-based arm.

Straits Times, Singapore (online edition)

US warns of terrorist strikes in M'sia, Philippines

The US has warned of possible terrorist strikes in Malaysia, the southern Philippines and parts of Africa, following Monday's (12 May) triple suicide car bombings in Saudi Arabia. The threat is particularly high in Sabah, where members of the banned Jemaah Islamiah (JI) group have been active, the State Department said on Wednesday (14 May). JI is linked to the Al-Qaeda network, which has been blamed for Monday's deadly bombings on foreign residential compounds in Riyadh. The State Department's latest statement updates a similar travel advisory issued last year after the October Bali blasts. The warning said that the threat of attacks similar to the Bali bombing existed throughout South-east Asia, and cited the Philippines-based Abu Sayyaf group as another source of danger.

Straits Times, Singapore (online edition)

Suicide attack on Taipei govt bldg sparks alarm

A truck loaded with several barrels of petroleum crashed into Taiwan's Transport Ministry building on 15 May, causing an explosion and leaving the driver dead. The blast caused a huge fire at the ministry's entrance, just hundreds of metres from the Presidential Office, said television reports. The driver was identified as Wu Kui-ching, 40, from the northern Taoyuan county. He was found dead in the truck. Authorities have launched an investigation into the incident, which television reports have speculated was a suicide attack. No one else was injured in the incident

Straits Times, Singapore (online edition)

Taiwan Economic News, Taiwan (online edition)

World airlines warn of major crisis from Sars

The Sars outbreak has caused significantly worse damage to the global airline industry than the 11 September attacks and the war in Iraq combined, the world's airline association told Asian airport managers on 15 May. Thomas Andrew Drysdale, regional director for the International Air Transport Association, added that the industry has lost $10.0m (Euro8.7m) so far in 2003 on top of $30m in 2002. Drysdale warned of even bigger losses over the next few months if no measures are taken to contain the spread of severe acute respiratory syndrome, which has killed at least 588 of the 7600 people infected worldwide, most of them in Asia.

Straits Times, Singapore (online edition)

Japan April corporate bankruptcies fall 7.7%

The number of Japanese corporate failures fell for the fourth straight month in April, down 7.7% from a year ago at 1514 cases, a private research firm said on 15 May. The amount of liabilities also declined 29.3% to Yen903.1bn ($7.7bn/Euro7.5bn), dipping below the Yen1trn mark for the first time in four months, Teikoku Databank said. A reluctance to conduct business on credit reduced companies' chances of bankruptcy as falling corporate revenue and prolonged deflation pressured their financial health, the firm said.

Business Times, Singapore (online edition)

Nihon Keizai Shimbun, Japan (online edition)

Tokyo shares tumble 1.47% on govt package

Japanese share prices plunged 1.47% on 15 May on widespread disappointment after the announcement of long-awaited government measures aimed at boosting the market, dealers said. A slump on Wall Street also depressed sentiment, they added. The Nikkei-225 average on the Tokyo Stock Exchange lost 121.51 points to end at 8123.40. The broader Topix index of all first section shares dropped 11.92 points to 820.08. The government's 13-point plan, which included using postal savings to prop up the market and a step to reduce share-selling pressure from employee pension funds, was based on suggestions made last week by ruling party and private sector experts.

Business Times, Singapore (online edition)

Nihon Keizai Shimbun, Japan (online edition)

Sars hits China's April industrial output

China's industrial output slowed in April, rising 14.9% year-on-year to Rmb319.7bn ($38.6bn/Euro33.6bn), with the Sars impact trimming back the upturn, the National Bureau of Statistics said on 15 May. The growth rate was 2.3% lower than the first quarter due to the impact of Sars. Industrial output in March rose 16.9% year-on-year and was up 17.2% in Q1, government statistics show. The total figure includes the output of all state enterprises and non-state firms with annual sales of more than Rmb5.0m. Output for the first four months of the year gained 16.4% to Rmb1.2trn.

Business Times, Singapore (online edition)

China Daily, China (online edition)

China to open Hollywood-style theme park

Wuxi city in eastern China is planning to build a Hollywood-style theme park which it said will be the country's biggest and best, state press reported on Thursday (15 May). The park, to be called the 'Hollywood Studios Theme Park', will be based 200 kilometres from Shanghai in Jiangsu province and will be developed with foreign capital, the China Daily reported, quoting local tourism officials. Although the contract is not expected to be signed until August, tourism officials said it would almost certainly go ahead in Wuxi's newly approved tourism and vacation zone. The project official said it would be a "high quality" version of similar theme parks in the US, but no specific details on costs or when construction would start were revealed.

China Daily, China (online edition)

Korean truckers agree to end week-long strike

South Korean truckers agreed on 15 May to return to work after winning concessions from the government to end a week-long strike that has idled the world's third largest container port. Under the agreement, the government accepted almost all demands from unions including a cut in highway tolls, higher transport service fees and state subsidies for any future fuel price hikes. Hundreds of truckers unanimously endorsed the agreement in a vote outside a college building in Busan.

Business Times, Singapore (online edition)

Korea Herald, South Korea (online edition)

S'pore's rapid response boosts credit rating

Singapore's swift handling of the Sars outbreak has helped win it a triple-A rating -- the highest level -- from global financial ratings agency Fitch. London-based Fitch said the Republic's strong public finances and a proven ability to cope with recent economic shocks were the main reasons for its decision to upgrade the country's credit rating. The company's one notch upgrade to AAA, from AA-plus, for Singapore's foreign currency debt rating brings it in line with rating firms Standard & Poor's and Moody's. Fitch described the speed with which Singapore confronted and isolated the outbreak as "impressive". It also noted that the outbreak had hit consumer and business confidence hard, depressing tourism and forestalling continued recovery. But, unlike Hongkong, Singapore was not bound by a burgeoning budget deficit and the impact of Sars is unlikely to affect the Republic's creditworthiness, Fitch said.

Straits Times, Singapore (online edition)

Environment & Health

China boosts counter-chem contamination efforts

China has issued a manual to its nation-wide environment protection departments to curb chemical contamination accidents and enhance capacity to deal with emergencies during the Sars crisis. Compiled by the State Environmental Protection Administration (Sepa), the handbook also incorporates information about 12 disinfectants, including hydrogen peroxide, Javel water and the others, in view of recent accidents caused by the inappropriate use of hydrogen peroxide during China's fight against Sars. The administration requires environment surveillance organisations at all levels to give more attention to the prevention of accidents during the period, and avoid spread of contamination if such accidents occurred.

China Daily, China (online edition)

Oil & Gas

Japan cos winning big orders in Persian Gulf

Large-scale energy development projects are getting started in the Persian Gulf region after the end of the Iraq war, and Japanese firms, eager to cash in on newly emerging demand, are winning big orders:

• Mitsui, Nippon Steel and Sumitomo Metal Industries have won priority negotiating rights from Dolphin Energy of the United Arab Emirates to supply pipes for a pipeline that will be used to transport natural gas from Qatar to the United Arab Emirates. If they win the order, the firms will build a natural gas supply network for the Persian Gulf nations.
• A consortium including Toyo Engineering, JGC and other firms has entered final talks on building a gas-processing plant for Iran's Petro Pars. The plant will produce liquefied petroleum gas and other products extracted from the South Pars gas field in the Persian Gulf. Some of the output will be exported to Japan.
• Mitsubishi, Mitsui and Itochu will take stakes in a new company, to be launched by the Oman government, that will produce liquefied natural gas for export to Spain and other nations.

Nihon Keizai Shimbun, Japan (online edition)

Drilling to start in Sakhalin fields in June

Japan's Itochu, Marubeni and other firms will kick the Sakhalin 1 project into high gear next month, starting to drill for crude oil off the coast of Sakhalin at a cost of $4.6bn (Euro4.0bn). Project participants, led by Exxon Mobil and Sakhalin Oil and Gas Development Co (Sodesco), will also begin construction this summer of an undersea pipeline to carry crude to the Russian mainland for export. The fields off the coast of Sakhalin are estimated to hold 2.3bn barrels of crude and about the same amount of natural gas deposits. Total development cost is estimated at $12bn. Some 250 000 barrels of crude oil will be produced daily in the fields and shipped mainly to Japan. The amount is equivalent to what Japan now imports from Oman and about 1/16 of the country's crude consumption.

Nihon Keizai Shimbun, Japan (online edition)

India, Iran agree on LNG for oilfield deal

India has agreed to buy five million tonne liquefied natural gas (LNG) from Iran and is seeking equity oil in return, Petroleum Minister Ram Naik said on Wednesday (14 May). Government officials said Iran had refused to give equity oil and wanted Indian state firms to enter into buy-back agreements instead. Naik said state energy firms from both countries would work out the details such as the price of LNG, the port where it would be imported and the customers who would buy the gas.Times of India, India (online edition)

Company News & Results

Dainippon Ink to set up holding firm in China

Japan's Dainippon Ink and Chemicals plans at end May to launch a holding company to oversee its Chinese operations. Twenty group firms that manufacture and sell printing ink, resins and other products in China, excluding Hong Kong, will fall under the umbrella of the new holding company, which will be based in Shanghai and capitalised at $30m. The Dainippon Ink group now rakes in about Yen30bn ($258m/Euro224m) in sales from its Chinese operations and aims to more than double annual sales in China to Yen70bn by 2010.

Nihon Keizai Shimbun, Japan (online edition)

Zeon to double high-perf resin output

Zeon of Japan is doubling production capacity for its high-performance transparent resin to meet growing demand for optical film used in mobile phone camera lenses and liquid crystal displays. The company is investing some Yen4bn ($34m/Euro29m) to install new equipment at a plant in Kurashiki, Okayama Prefecture, to double cyclo-olefin polymer (COP) production capacity to 10 000 tonne/year. The new equipment is expected to be operational next April. Zeon markets COP under the brand names Zeonor and Zeonex. Its goal with the expansion is to double COP sales from the current Yen8bn/year.

Nihon Keizai Shimbun, Japan (online edition)

Takeda Chem to buy back Yen150bn in shares

Takeda Chemical plans to buy back about 30m shares worth some Yen150.0bn ($1.2bn/Euro1.1bn) as a way to shore up its weakening stock price. The Japanese drug manufacturer's first share buyback plan was encouraged by the government's recent decision to ease rules governing such programs as part of  measures to revitalise the stock market. It will be the largest share repurchase program ever conducted by a Japanese drug producer, surpassing the 15m share buyback worth Yen52.5bn conducted by Yamanouchi Pharmaceutical. Takeda hopes to get approval for the buyback program at its sharesholders meeting in June and to execute the plan within a year. The program will affect about 3% of its outstanding shares.Nihon Keizai Shimbun, Japan (online edition)

Samsung bags India's largest order for PCs

Electronics giant Samsung on Thursday (15 May) claimed to have bagged India's largest single order for branded personal computers (PC). The South Korean firm, which made a foray into the PC segment in February, will supply computers to Jharkhand state for a major primary education programme. Princy Bhatnagar, country manager of Samsung's branded PC arm, told reporters that the order involved setting up units in 375 locations across the state, putting up servers and networking.

Times of India, India (online edition)

Korea Herald, South Korea (online edition)

Spore developing logistics base in Batam

The sea off Kabil, a district on Batam island just 20 kilomere south-east of Singapore, is fast being reclaimed. And an industrial estate is slowly taking shape there. At the heart of thet new hub will be a logistics supply base to serve oil companies operating in Indonesia's offshore waters, including the Natunas, from where gas will soon be piped to Singapore. The main player behind that emerging logistics base is Singapore Offshore Petroleum Services (Sops). A wholly-owned subsidiary of listed SembCorp Logistics, Sops teamed up with Citra Tubindo, a leading Indonesian supplier of oil equipment, to form Semblog Citranusa. The venture is 70% owned by Sops. By 2004, the 20 hectare estate, called Batam Supply Base, will be ready.

Business Times, Singapore (online edition)

PowerSeraya's $200m fuel project

PowerSeraya, Singapore's second largest power generator, is spending S$200m ($115m/Euro100m) to convert 750 megawatts (MW) of its generating capacity to burn a new fuel to increase overall efficiency and its competitive edge. The project is expected to be completed between end 2005 and early 2006. The contract awarded to Isikawajima-Harima Heavy Industries involves converting three 250 MW units of Seraya's oil-fired generators to burn the new fuel, installing anti-pollution controls and changing fuel-handling facilities. The decision to convert to the new fuel, an oil emulsion called Orimulsion, was announced last November when Seraya commissioned its S$530m gas-fired combined cycle power plants. Orimulsion is an emulsified mixture of bitumen suspended in water.

Business Times, Singapore (online edition)

PTT units contribute strong 63% to Q1

PTT, Thailand's largest oil conglomerate, on Thursday (15 May) reported a better-than-expected net profit for Q1, thanks to the sharp turnaround in its affiliated firms, analysts said. Its three main affiliates Aromatics, National Petrochemical and the Star Refinery reported a net profit of more than Baht3.2bn ($76m/ Euro66m) from Baht841m posted a year ago. Net profit for the quarter was at Baht10.81bn against Baht5.27bn reported for the same period last year. Most analysts had forecast a net profit of Baht8bn-10.6bn. PTT's total revenues rose to Baht130.8bn for Q1 against Baht90.04bn posted for Q1 of 2002. Expenses rose to Baht112.9bn from Baht79bn recorded a year earlier. But the outlook for the company's earnings for the next few quarters were not that rosy, analysts said.

Business Day, Thailand (online edition)

(Some stories may not appear in all editions of the cited news media.)

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