Some 20 years ago, the blog launched ICI Watercare – which became the largest water treatment business in the chemical industry. So it has kept a close eye on opportunities in the water industry ever since. The weak monsoon season in India highlights one such opportunity. As a new report from the UN Food and […]
Chemicals and the Economy
Weak monsoon hits India’s economic recovery
Monsoon rainfall accounts for 60% of farm irrigation in India, Asia’s 3rd largest economy. This monsoon season, it has so far been about 2/3rds of the 10 year average. Last week it was 56% below normal. Although agriculture accounts for just 17% of the economy, the lack of rainfall will also damage the whole rural […]
Managing through interruptions
Henry Mintzberg is one of the blog’s favourite management gurus. The reason is that he understands the constraints under which most managers operate. His view is that the best managers aren’t Superman or Superwoman, but “are simply ordinary, healthy people who aren’t too screwed up“. In an interview with the Wall Street Journal, he outlines […]
Operating earnings hide US economic downturn
Companies normally have 3 ways of pleasing investors: • Meet or better expectations for revenue and earnings • Cut costs to meet earnings if revenues disappoint • Focus attention on a more favourable earnings definition When things are going well, the first option is preferred. But under the pressure of a sustained economic downturn, it […]
US and EU dominate global consumption
Interesting new research from Prof Nouriel Roubini provides some perspective on relative levels of consumer spending around the world: • US private consumption accounted for 16% of total global output in 2008 • It was valued at $10trn, just ahead of European consumption at $9trn • Total Asian consumption was under $5trn • China’s consumption […]
OPEC says oil market still “fundamentally weak”
The latest OPEC monthly oil report paints a bearish picture of the market. It expects OPEC to supply 28.4mbd in 2009, down 7.5% from 2008 levels. And it forecasts more of the same for 2010, expecting to supply just 28 mbd. Its analysis suggests that “the market is still fundamentally weak amid ample stocks of […]
Cerberus loses $6bn in just 2 years with Chrysler
Cerberus’ timing was clearly not very good with its Chrysler acquisition in Q3 2007. And Steve Feinberg, Cerberus co-founder, admitted this when he told the New York Times “we were too optimistic on timing. Maybe what we should have done was not bought it.” So far, they have lost $6bn of their original $7.4bn investment. […]
Benzene signals a market top
As regular readers will know, the blog believes benzene is a good leading indicator for chemical demand, due to its widespread use in the industry. Last November saw its price “on the floor“, indicating a major downturn, and it remained there until March, before its price began to “surge” in early April as destocking ended […]
The banks’ plumbing systems appear to be blocked
The blog’s favourite financial journalist, Gillian Tett, has written an excellent article summarising the similarities between today’s problems in the western banking system, and those of Japan’s during the ‘lost decade’ of the 1990’s. Her point is that although central banks are pouring money into the system via ‘quantitative easing’, it is clearly not reaching […]
China’s banks worry about the speculative bubble
This year, China has been the one place in the world where almost anyone can get a loan. But now, it seems policy is about to change. Zhang Jianguo, president of the 2nd largest bank, China Construction, has announced a 70% cut in H2 lending to Rmb 200bn ($29bn), “to avert a surge in bad […]
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