In Tuesday's Asia Papers

06 December 2005 02:11  [Source: ICIS news]

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

International Economics & Politics

Japan's capital spending up 9.6% for qtr

Capital spending grew 9.6% in the July-September quarter on an all-industry basis to Yen12.56trn ($103.8bn/Euro88bn) for the 10th straight quarter of expansion, the Finance Ministry said on Monday (5 December). Manufacturers spent 18.7% more on plants and equipment than they did a year ago, up for the 10th consecutive quarter, while non-manufacturers spent 5.0% more, up for the eighth such period in a row, the quarterly survey showed. The latest findings back a government analysis that indicates the strong performance of the corporate sector is a leading factor behind the economic recovery, a ministry official said. The outcome also suggests better times ahead for the world's second-largest economy, because the data are used to revise the figure for gross domestic product. GDP for the July-September quarter grew 0.4% in real terms compared with the previous quarter, according to a preliminary report. The revised data will be released on Friday.

Japan Times, Japan (online edition)

Foreign banks enjoy more access in China

China's chief banking regulator, Liu Mingkang, said on Monday (5 December) that foreign banks were permitted to offer services in the Chinese currency, the renminbi (yuan), in an additional seven cities, bringing to 25 to number of cities where they can offer such services. The new cities are Shantou, Ningbo, Harbin, Changchun, Lanzhou, Yinchuan and Nanning, the regulator told a press conference. Liu also announced China was lowering the minimum operating capital requirements for foreign banks conducting business in yuan from Rmb500m to Rmb400m ($49.5m/Euro41.9m). For branches of a joint-venture bank or a wholly-owned foreign bank, the requirement has been lowered from Rmb300m to Rmb200m, he said. The total assets of foreign banks in China are worth $84.5bn, or 2% of the total banking assets in China, Liu said.

China Daily, China (online edition)

Bangkok Post, Thailand (online edition)

Chinese farmers hit by double whammy

Decreasing grain prices coupled with growing costs of production means Chinese farmers are unlikely to see a significant rise in income next year. China's economic planning chief Ma Kai expressed the concern as the government embarks on an ambitious programme to improve rural people's lives. Grain prices have been dropping since April, and prices of wheat, corn and rice fell 5% from August to October compared with the same period last year, Ma said at an annual meeting on development and reform held over the weekend (3-4 December). Meanwhile, prices of production materials such as fertiliser and diesel have risen 9.1% year on year during the first 10 months. The situation makes it difficult to achieve a "new socialist countryside," which was last week highlighted as a new concept and "common action" of the whole Party and nation.

China Daily, China (online edition)

Indonesia sees minor cabinet shakeup

Indonesia's president announced a long-awaited cabinet shakeup on Monday (5 December) night, appointing a highly-respected former finance minister Boediono as the new senior economic minister in a new lineup amid high expectations of an improvement in the economy. In a nationally televised announcement from the central Java city of Yogyakarta, President Susilo Bambang Yudhoyono dismissed three ministers and shifted two other ministers into other posts. Boediono, a soft-spoken technocrat well-respected for his fiscal prudence, was appointed as the coordinating minister for economy, replacing business tycoon Aburizal Bakrie, who has been shifted to a new cabinet post. Yudhoyono's economic team has come in for criticism after a near meltdown in the rupiah, which hit a four-year low of 11,750 against the US dollar in August when the government dithered over cutting fuel subsidies as oil prices soared on the world markets.

Bangkok Post, Thailand (online edition)

Jakarta Post, Indonesia (online edition)

Business Times, Singapore (online edition)

S'pore tops Time's ranking of Asian biz cities

Singapore has been voted Time Magazine's top business city in Asia for the 5th year running. Its readers rated the Republic's Meetings, Incentive Travel, Conventions and Exhibitions (MICE) facilities as the best in Asia for a second year. Changi Airport was ranked as their Favourite Asian Airport and Singapore Airlines came out tops in the airline category. The Singapore Tourism Board says those accolades are the latest received for the MICE industry this year. Earlier this year, Singapore clinched the Best BTMICE City title in the TTG Travel Awards and was voted Best Business City by readers of the Business Traveller Asia-Pacific magazine. It was ranked the world's second Top Convention City and Asia's Number One Convention City by the International Congress and Convention Association this year. Singapore also maintained its status as Asia's top Convention City in the annual ranking by the Union of International Associations, a position it has held for 22 consecutive years.

Channel News Asia, Singapore (online edition)

Business Times, Singapore (online edition)

Energy

India opens arms to Russian N-aid

India has expressed its willingness to allow Russia to build additional reactors for the Kudankulam nuclear facility. That was conveyed by Prime Minister Manmohan Singh to the Russian energy and trade minister Viktor Khristenko on Monday (5 December), according to a Foreign ministry spokesman. Khristenko, on his part, welcomed India's willingness to invest in Sakhalin III oilfields. India already has a stake in Sakhalin I. India is looking to boost cooperation with Russia on energy issues and it is one of the major thrusts of the Prime Minister's visit. He will meet President Vladimir Putin on Tuesday and hold delegation-level talks. On Monday, he met the Russian energy minister and businessmen from Russia and India. The two countries spoke of greater co-operation in energy including working together in third countries. The spokesperson said the two countries are essentially looking forward to working in tandem in Central Asia. Increased cooperation would include joint ventures and equity participation.

Hindustan Times, India (online edition)

Environment & Health

CNPC sacks three over blast

China National Petroleum Corp (CNPC) has sacked three bosses held responsible for the explosion at its Jilin Petroleum and Chemical Company that led to a severe chemical spill, according to a Xinhua report on Monday (5 December). The blast on 13 November caused about 100 tons of pollutants containing hazardous benzene and its derivatives to leak into the Songhua River. According to the report which quoted Monday's China Oil News, Yu Li, manager of the Jilin company, was removed from his position and will go through the inspection of the working teams from the State Council and Jilin Province. Shen Dian, former manager of CNPC's Liaoyang branch, was appointed as his successor. Jiang also ordered the Jilin company to sack Shen Dongming, director of the plant where the blast occurred, and Wang Fang, superintendent of the benzene workshop.

China Daily, China (online edition)

Pharmaceuticals

Indonesian pharma growth slower '06

Increasing production costs and the need to comply with global manufacturing standards will hamper sales in the coming year, according to Ferry Soetikno, managing director of Dexa Medica, which is among the top pharmaceutical companies in Indonesia. The pharmaceutical industry is also coping with a more than 10% increase in production costs since October, when the government raised fuel prices by an average of 126%, which resulted in rising inflation. Also weighing down the industry are rises in regional minimum wages and fluctuations in the rupiah at a time when pharmaceutical companies still import about 95% of their raw materials. The industry currently has a total market value of Rp22trn ($2.2bn/Euro1.86bn) and boasts average annual growth of 12%. There are about 200 drug manufacturers in the country, 60 of which dominate about 80% of market share, while the other manufacturers scramble for the remaining 20%.

Jakarta Post, Indonesia (online edition)

Oil & Gas

China, Papua New Guinea in gas talks

China National Petroleum, the biggest Chinese oil company, is in talks with the Papua New Guinea government about buying natural gas, Petroleum and Energy Minister Moi Avei of Papua New Guinea said on Monday (5 December). An initial accord may be signed between the government and the Chinese company during a planned visit by Avei to China early next year, the minister said. China National Petroleum may import the fuel in the form of liquefied natural gas (LNG) through a plant the company may build in northern Papua New Guinea, he said. China and its state-controlled oil firms are seeking oil and gas supplies abroad as energy prices reach records. China National Offshore completed an agreement last year to buy a stake in Australia's North West Shelf gas reserves as part of a plan to buy LNG from the venture.

China Daily, China (online edition)

Sudan offers India more oil, refinery project

Sudan has invited India to participate in three more oil exploration blocks and undertake a refinery project, even as ONGC Videsh (OVL) is set to receive more equity oil from the north African country in April. Sudan's Energy and Mining Minister Awad Ahmad al-Jaz said the additional oil would come from two blocks in which India's state-owned OVL holds stakes and which are expected to start production soon. OVL, the overseas arm of the Oil and Natural Gas, holds stakes of 24.12% and 23.5% in two blocks in Sudan, the largest African nation and also home to one of the biggest oil reserves in that region. India currently gets around 3m tonnes of oil from Sudan for the 25% equity stake held by OVL in the Greater Nile Oil Project in which China and Malaysia also have stakes. The project produces around 12m tonnes oil a year.

Hindustan Times, India (online edition)

Company News

LG, Samsung eye growth in India

LG Electronics and its South Korean peer, Samsung Electronics, are starting to reap the reward for their aggressive pursuit of India's $4.8bn (Euro4.0bn) consumer durables market, elbowing out Japanese, Chinese and home-grown competitors. The Japanese makers have failed to spend enough money to promote its products in India, while Chinese products are perceived as inferior to Korean products. Eight years after LG moved in, it has gained a 25.6% share of India's colour television market, a third of washing machines and nearly 29% of refrigerators, industry data showed. Samsung is ranked second in all three segments. Together the two have more than 40% of those fast-growing segments.

Hindustan Times, India (online edition)

Thai fertiliser firm NFC set to cut jobs

Massive layoffs loom at NFC Fertilizer following a decision to substantially scale down its loss-ridden fertiliser production and distribution business and shift into logistics. The decision came after the 23-year-old chemical-fertiliser producer had signed a letter of intent with PTT to jointly invest in and run the logistics business at its Map Ta Phut deep seaport in Rayong. Rayong Bulk Terminal, the NFC subsidiary that operates the Map Ta Phut seaport, will also enter into the logistics business, according to Nuttaphob Ratanasuwanthawee, chief executive and major shareholder of NFC Fertilizer. The logistics business will become the main source of NFC's income in the future, possibly accounting for 80% of total revenue while fertilisers will make up 20%.

Bangkok Post, Thailand (online edition)

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

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