In Tuesday's Asia papers

02 March 2004 01:25  [Source: ICIS news]

A summary of political, economic, trade, business and product news affecting the chemical and related industries.
International Economics & Politics
Putin names unknown tax chief as PM
Russian President Vladimir Putin named an unknown former tax collector as prime minister just weeks before elections in a move analysts said showed indecision about the government's new course. Putin stunned observers again by appointing former tax chief and current European Union representative Mikhail Fradkov, 53, as prime minister. His nomination is expected to be approved by the pro-Kremlin parliament within days. Analysts said the decision still left open the playing field for who might succeed Putin after his second term runs out in 2008. His re-election is assured on 14 March and the prime minister's post was seen as the launching pad for the presidential successor. But Putin admitted that he faced "a difficult task" in naming a replacement for the deposed Mikhail Kasyanov, the last link to the government of former president Boris Yeltsin, and analysts said Fradkov was likely to be a stand-in prime minister. Putin fired his government on 24 February in an unexpected move that analysts saw as an election ploy to boost voter turnout during the presidential vote that has seen little public interest so far.
Channel News Asia, Singapore (online edition)
Business Day, Thailand (online edition)

US dollar firms on yen amid speculation on ECB cut

The US dollar edged up against the yen in cautious Asian dealings on Monday (1 March) amid speculation that the European Central Bank (ECB) may cut interest rates at its meeting later this week. Recent strong Japanese economic data have failed to spark yen buying, as would have been expected, with the market instead testing the dollar's topside in largely technical trade, they said. The US dollar was quoted at Yen109.25 in afternoon trading, up from Yen109.17 in New York late on Friday (27 February). The euro was at $1.2502, up from $1.2443 in New York late Friday, and stood at Yen136.61, up from 136.25. Investors are trying to judge whether the ECB might cut interest rates to temper the surging euro against a dollar that many believe has all but been abandoned by the White House as it looks for an election-year economic lift. The market is also watching for US employment data due out this Friday.

Channel News Asia, Singapore (online edition)

Nihon Keizai Shimbun, Japan (online edition)

China economists see rosy picture for '04

A host of officials and economists said the outlook for China's economy this year looks even brighter than in 2003 even though pressure from employment and inflation may need closer government attention. National Development and Reform Commission Minister Ma Kai predicted a gross domestic product (GDP) of 7%in 2004, citing a favourable domestic and international economic situation. Forecasting a 7.9% growth for the Chinese economy in 2004, the Asian Development Bank said China is expected to play an even more important role in providing the impetus for growth in the entire East Asian region. Cao Yuanzheng, chief economist of Bank of China, said the Chinese economy has entered a new cycle of fast growth that will last until early 2005. The State Information Centre said last year's growth trend will continue in 2004, with GDP expected to rise by 8.5%. The expected global economic recovery should create a good international environment for China's economic growth, the centre said, and predicts that the authorities will shift the focus of its pro-active fiscal policy and make minor adjustments to its monetary policies.

China Daily, China (online edition)

Indonesia launches infrastructure projects
The Indonesian government announced on Monday (1 March) its plan to develop several infrastructure projects worth more than Rp200.0trn ($23.5bn/ Euro18.8bn) over five years in the telecommunications and transportation sectors, as well as in the gas pipeline sector.  In telecommunications, the government is to continue existing projects to install Universal Service Obligation telephone lines in 43 000 remote villages across the country. The fixed-line telephone density in Indonesia is only about 6% of the country's 220m population. In the transportation sector, the government plans to build 1486 kilometres (km) of toll roads worth Rp77.3trn on Java, Cemetery Island and Sulawesi soon.  Director General of Regional Infrastructure Hendrianto Notosoegondo said that funding for the projects would come mainly from private investors.  The private sector is also to build a gas pipeline network from Sumatra and Kalimantan to Java and to several importing countries, such as Singapore and Malaysia.  The project will cost Rp178trn and take five to 10 years to complete, said Director of Exploration Novian M Thalib at the Ministry of Energy and Mineral Resources. The National Development Planning Board said Indonesia would need an estimated Rp613.2trn in investment to maintain, rehabilitate and develop its infrastructure facilities through 2009.
Jakarta Post, Indonesia (online edition)
US-Philippine military drill alarms NP Army
The US and Philippine forces are holding another joint military exercise, in different areas in Luzon. And this time, instead of resistance from Muslim rebels, it is the communist New People's Army (NPA) who're not very happy. About 5000 troops are seeing action in the latest of the Balikatan exercises for training in the latest warfare techniques and technology. As in the recent past, Filipino soldiers are supposed to upgrade their combat skills against homegrown Muslim rebels and regional militants such as Jemaah Islamiyah. But the transfer of the exercise's venue out of Mindanao has alarmed the NPA of the Communist Party of the Philippines (CPP). They claim the exercises are just a disguised offensive against local communist insurgents. Washington had spearheaded the international community's blacklisting of the CPP-NPA as a foreign terrorist organisation. In response, the NPA has threatened to attack American soldiers taking part in the military exercises. But Balikatan officials said that the exercises will not involve actual combat.
Channel News Asia, Singapore (online edition)
Manila Times, Philippines (online edition)

Howard agrees to inquiry on Iraq intelligence

Australian Prime Minister John Howard agreed on Monday (1 March) to launch an independent investigation into how Australia's intelligence agencies assessed pre-war reports that Iraq possessed and was ready to use weapons of mass destruction. Howard took the step minutes after a parliamentary committee issued a report calling for such an investigation given the absence of any evidence that Iraq held any banned weapons when it was invaded by US-led forces in March 2003.
The bipartisan parliamentary committee, releasing its report after months of hearings, cleared Howard's government of charges it knowingly misrepresented the threat posed by Baghdad's weapons program before committing 2000 troops to the invasion of Iraq. But its demand for another investigation into how pre-war intelligence was used could put unwelcome pressure on Howard who faces a tough re-election campaign later this year. Howard, like US President George W Bush and British Prime Minister Tony Blair, sought to justify the decision to go to war against Iraq primarily by claiming Iraqi President Saddam Hussein possessed and was prepared to use weapons of mass destruction.
Channel News Asia, Singapore (online edition)

New Zealand elated as 'Rings' sweeps Oscars
Celebrations erupted across New Zealand on Monday (1 March) after the home-grown movie phenomenon 'Lord of the Rings' scooped a record-equalling 11 Oscars. Prime Minister Helen Clark led praise for the success of 'Return of the King', the final film of the trilogy directed by New Zealander Peter Jackson over 16 months in the Pacific nation's dramatic landscape. The film's trilogy has given an enormous boost to New Zealand's tourism and film industries. With its portrayal of Middle-earth worthy of an Oscar for best supporting role, the diverse New Zealand landscape has helped catapult tourism to a NZ$6bn ($3.8bn/Euro3.0bn) industry. In andem with tourist numbers mushrooming to record levels, New Zealand's profile as a film-making destination has been heightened. The end result is a buoyant Frodo economy, as it has been dubbed, creating jobs and reaching all sectors of the economy. Tourism New Zealand figures show international arrivals increasing by nearly 3.5% annually in recent years, reaching 2.06m.
Channel News Asia, Singapore (online edition)

Environment & Health
World trip on no-emission electric scooter

A 42-year-old Japanese man said on Monday (1 March) he would attempt to make an around-the-globe trip on tiny, zero-emission, battery-powered scooter to appeal for protection of the environment.  Kanichi Fujiwara from Sagamihara, southwest of Tokyo, will leave Japan for Mexico on 19 March to start the 41 000-kilometre journey on a Yamaha Passol scooter that is expected to take three years. His planned route will take him through 33 countries, reaching Southeast Asia by November 2006, and includes visits to at least 18 giant trees considered sacred by local people. Yamaha launched the Passol as the world's first mass-produced electric scooter in late 2002. The scooter can travel 15-32 kilometres with one charge of its lithium-ion battery. Fujiwara plans to charge the battery mainly at inns and camping sites.
Channel News Asia, Singapore (online edition)
Oil & Gas
Venezuela's Chavez shocks oil mart, prices soar

World oil prices shot to a post Iraq war high after major producer Venezuela stunned the market with a threat to cut off supply to America. New York's benchmark light sweet crude contract for delivery in April surged $0.70 to $36.86/barrel, the highest since 12 March, 2003 in the runup to the Iraq attack.
Brent North Sea crude for April leapt $1.11 to $33.34. World prices soared after Venezuelan President Hugo Chavez on Sunday (29 February) told some 60 000 cheering supporters he would block US access to Venezuela's oil resources if Washington moved against his government. Chavez gave prices an extra kick, but the market had already been heading higher, analysts said. Low US commercial crude oil inventories, and a threatened output cut by the Organization of Petroleum Exporting Countries had contributed to lofty prices.
Channel News Asia, Singapore (online edition)
Company News
Sumitomo Chem to focus on 3 investment areas
Japan's Sumitomo Chemical announced on Monday (1 March) a new business plan that centres on channeling 70% of its strategic investments into the fields of pharmaceuticals, agrochemicals, and information and electronics materials. Under the plan, the firm aims to increase its group operating profit to Yen120bn ($1bn/Euro880m) by fiscal 2006, up 70% from fiscal 2003, by boosting profits from information and electronics materials, including polarisation films for liquid crystal display panels. The firm's petrochemical business is also expected to lift its bottom line by reviewing its product lineup. Sumitomo Chemical also aims to boost its group sales to Yen1.33trn by fiscal 2006, up by 14% from fiscal 2003, and group net profit to Yen65bn, up 100%. The company aims to earn Yen77bn, or almost two-thirds of its group operating profit, in the three priority areas. On the pharmaceuticals business, President Hiromasa Yonekura expressed strong interest in mergers and acquisitions if it can find a good business partner.
Nihon Keizai Shimbun, Japan (online edition)
Channel News Asia, Singapore (online edition)
Asahi Denka Kogyo to double resin additive output
Asahi Denka Kogyo of Japan plans to double its domestic production capacity of additives that increase the strength and flame resistance of resins. The company has earmarked about Yen1bn ($9m/Euro7m) to add equipment to its plant in Toin, Mie Prefecture, by June, boosting annual production capacity there to 2000 tonnes/year. Demand for the additives is strong in Japan and elsewhere in Asia for bolstering resins such as polypropylene, which is used in consumer electronics and automobiles. The firm is operating its Mie plant at full capacity but has had to purchase additional product from a US subsidiary to keep pace with orders. Asahi Denka Kogyo, a major producer of resin additives, is expanding its resin additive plants at other locations in Asia, including Thailand and China.
Nihon Keizai Shimbun, Japan (online edition)

Ajinomoto to expand pharma business with Yen2bn

Japan's Ajinomoto will expand its pharmaceutical operations at two plants of subsidiary Shimizu Pharmaceutical. It will invest about Yen2bn ($18m/Euro14m) for additional equipment in Shimizu's Shizuoka plant to produce a powdered dialysis agent. The equipment is to go into full-scale operation in April 2005. The subsidiary aims to double sales of that agent from the current level to about Yen7bn. Another Yen9bn will be invested in the Oigawa plant of Shimizu Pharmaceutical to raise production of a transfusion solution used to prevent dehydration in patients. Ajinomoto plans to make pharmaceuticals a key operation, following its amino acids and foods. It will aim for sales of Yen100bn from pharmaceutical operations in the fiscal year ending 31 March, 2007, up by 60% from the amount for the fiscal year ended 31 March, 2003.

Nihon Keizai Shimbun, Japan (online edition)

Beijing Pharma opens distribution centre

Beijing Pharmaceutical has launched a modern distribution centre, the first of its kind in China, over the weekend (28-29 February). The centre, built with the co-operation of Siemens Dematic Group, a world leading automated logistics system provider, is located in the Maliandao Logistics Park, in the Xuanwu District of Beijing. Total investment for the 12 000-square-metre distribution centre amounts to Rmb40.0m ($4.8m/Euro3.8m). With state-of-the-art technology and equipment from Siemens Dematic, the modern logistics distribution centre will help improve the application of advanced foreign pharmaceutical distribution technology in China, said Chen Jisheng, chairman of the Beijing Pharmaceutical.

China Daily, China (online edition)

Report: Hyundai picks Slovakia for $1.5bn plant

South Korean car manufacturer Kia Motors is set to announce plans to build a $1.5bn (Euro1.2bn) car plant in Slovakia rather than Poland. The announcement was expected on Tuesday at the Geneva Motor Show, according to Britain's Fnancial Tmes newspaper. Officials at Hyundai Motors, Kia's parent company, declined to confirm the report. Kia officials were not immediately available for comment. However, Kia has scheduled a press conference on Tuesday morning at the motor show. Construction of the plant is expected to start 2005 and most of the 300 00 cars expected to roll off the production line from 2007 when it comes on stream will be under the Kia brand. ate last month a company official said the decision was imminent and would be announced in early March. Slovakia and Poland both offered inducements including tax breaks to lure Hyundai, South Korea's leading carmaker, which is rapidly expanding globally.

Channel News Asia, Singapore (online edition)
Korea Herald, South Korea (online edition)

PTT eyes BPE as rising petchems beckon

PTT of Thailand said on Monday (1 March) it is interested in taking over Bangkok Polyethylene (BPE), the plastic pellet manufacturer in which Bangkok Bank (BBL) holds a stake, noting that the petrochemical industry has a rosy future. BBL has a 15.5% stake in BPE. Four years ago, it signed a preliminary memorandum of agreement with the National Petrochemical to sell all of its stake to it, but the deal was eventually scuttled. BPE produces about 250 000 tonnes of polyethylene annually. Several local petrochemical firms, particularly affiliates of PTT, are now expanding petrochemical production to meet increasing demand, as the price of polyethylene is expected to reach record levels in 2006.

Business Day, Thailand (online edition)

BHP Billiton wins $9bn steel deal in China

Anglo-Australian miner BHP Billiton won a $9bn (Euro7bn) contract to supply 12m tonnes iron ore/year for 25 years to four Chinese steelmakers. It is the biggest contract BHP has ever secured in China, where an economy expanding at about 9%/year has put it on par with Japan as one of company's most important trading partners. The four Chinese firms are: Wuhan Iron and Steel, Maanshan Iron Steel, Jiangsu Shagang and Tangshan Iron Steel. BHP will also set up a joint venture with the four companies to take a combined 40% stake in a sub-lease for BHP's Jimblebar mine operations near Newman in western Australia. BHP will retain a 51% interest in Jimblebar along with its longtime Japanese joint venture partners CI Minerals Australia and Mitsui Iron Ore. CI Minerals will have a 4.8% stake and Mitsui a 4.2% stake.

Channel News Asia, Singapore (online edition)

China Daily, China (online edition)
Business Day, Thailand (online edition)
(Some stories may not appear in all editions of the cited news media.)

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