Tag Archives: Business

UK political parties seek business sector support

The main British political parties will today make their pitch to British businesses, as part of the campaign for the December 12 general elections in the United Kingdom.
According to the BBC, both conservative Prime Minister Boris Johnson, Labour leader Jeremy Corbyn, and Liberal Democrat Jo Swinson, will speak Monday at the annual conference of the powerful Confederation of British Industry (CBI).

Johnson promises to remove the United Kingdom from the European Union (EU) on January 31, should he obtain a parliamentary majority on December 12, and will try to convince British businesses that his party will guarantee them good dividends once Brexit is finalized.

In that sense, he will assure the institution that brings together more than 190,000 British companies that the future Tory government will reduce sector taxes and increase credits, among other benefits.

‘With a Conservative majority government you can be sure we will get Brexit done and leave with the new deal that is already agreed – ending the uncertainty and confusion that has paralysed our economy,’ Mr Johnson is expected to say, as reported by the BBC.

Meanwhile, the leader of the Labor Party, Jeremy Corbyn, will present his plans to create 320,000 new apprenticeships in construction, manufacturing and design, and implement the Green Industrial Revolution, with which Labour will use public funds to promote green jobs and combat the climate emergency.

Swinson, on the other hand, will take advantage of the anti-Brexit position of her party to insist before the business community that the best thing for the country is to reverse the EU withdrawal process, and will also criticize the spending plans of her rivals.

General elections are held every five years in the United Kingdom, but this will be the third time since 2015 that the British public is called to the polls to elect the 650 members of the House of Commons.

The inability of the Conservative government to realize Brexit, after 51.9 percent of the electorate voted in favor of leaving the European Union (EU) in the June 2016 referendum, has seen the country increasingly divided, and forced Johnson tocall a snap election, in an attempt to achieve the parliamentary majority he needs to finalize the withdrawal on January 31.

In addition to Conservatives, Labour and Liberal Democrats, Scottish nationalists, Greens and the europhobic Brexit Party, funded by populist Nigel Farage, are standing candidates.

Trump’s Real Estate Company Gets Green Light for Scottish Homes

Donald Trump’s real estate company won approval from a municipality in northeast Scotland to develop a site next to an existing golf resort the U.S. president owns.

Aberdeenshire Council voted 34 to 28 to approve the project, citing the economic benefits, a spokesperson confirmed. The Trump Organization submitted plans last year to spend 150 million pounds ($185 million) on the development, which includes 500 homes and 50 vacation cottages.

While there were almost 3,000 objections from the public and campaign groups, properties were already attracting interest from buyers before construction was green-lighted. A number were reserved and there were more expressions of interest, according to a filing on behalf of Trump International Golf Links Scotland in September last year.

When Trump’s real estate company submitted the proposal, it said the project would add to the 100 million-pound investment in the golf course and hotel at the site on the North Sea coast. The expansion, like the existing investment, would be paid for by the company, it said separately.

Trump’s investment in northeast Scotland has been fraught with controversy over the years. He clashed with environmentalists, local residents and the Scottish government while struggling to make any money from them.

Earlier this week, planners backed Trump’s proposal for a second golf course at the estate, the BBC reported.


No more non-performing loans, CBN warns banks

There is no room for money changers in the banking sector of the financial economy, the Central Bank of Nigeria (CBN), told banks on Tuesday.

CBN Governor Godwin Emefiele said the banks should be major players in growing the economy, and warned that the era of armchair banking was over.

According to him, the days of non-performing loans (NPLs) had become history in the country “as anyone who benefits from any facility must pay back”.

Adding bite to the NPL issue, Emefiele appealed to the judiciary to support efforts towards ensuring that bank debtors pay back what they owe.


Saudi energy ministry appoints new head of renewables development

Saudi Arabia’s energy ministry has appointed Faisal Al Yemni as head of its renewable energy project development office (Repdo), as the world’s largest oil exporter looks to add cleaner sources of power to its energy mix.

Mr Al Yemni will be tasked with executing the country’s National Renewable Energy Programme, which looks to install around 60 Gigawatts of clean energy capacity by 2030. Of this, 40GW will come from solar photovoltaic, 16GW from wind and 2.7GW from concentrated solar power.

Saudi Arabia’s energy ministry has appointed Faisal Al Yemni as head of its renewable energy project development office (Repdo), as the world’s largest oil exporter looks to add cleaner sources of power to its energy mix.

Mr Al Yemni will be tasked with executing the country’s National Renewable Energy Programme, which looks to install around 60 Gigawatts of clean energy capacity by 2030. Of this, 40GW will come from solar photovoltaic, 16GW from wind and 2.7GW from concentrated solar power.

Saudi Arabia last year awarded the kingdom’s first utility-scale solar PV plant to Riyadh-based Acwa Power for a record low tariff of US Cents 2.3417/kWh (8.781 halalas/kWh).

The US$302 million Sakaka plant will be developed on the basis of an independent power producer model and is backed by a 25-year power purchase agreement with the Saudi Power Procurement Company.

Saudi Arabia is also set to become the Middle East’s biggest wind power market in the next decade. The kingdom will account for almost half of the region’s wind capacity additions by 2028.

Developers will build 6.2GW of wind capacity – or 46 per cent of the region’s total wind capacity addition – between 2019 and 2028, according to Wood Mackenzie Power & Renewables.

The kingdom’s first wind power project, costing $500m reached a financial close in July. The 400-MW wind farm is being executed by a consortium led by France’s EDF and Masdar.


End of an era: ExxonMobil set to exit Norway production

ExxonMobil has agreed to sell its Norwegian oil and gas assets for up to $4bn, marking the United States energy giant’s exit from production in Norway after more than a century, three sources familiar with the matter said on Thursday.

ExxonMobil said in June it was looking to sell its Norwegian upstream portfolio, which comprises minority stakes in more than 20 fields, operated by local producer Equinor and Anglo-Dutch oil major Royal Dutch Shell.

An ExxonMobil spokeswoman said: “As a matter of practice, we don’t comment on commercial discussions.”

Shares in ExxonMobil, the world’s biggest publicly traded oil company, rose 1.7 percent to a session high in New York City after Reuters reported a sale had been brokered.

The Irving, Texas-based company has held talks in recent weeks with a number of interested parties including Oslo-listed companies Equinor, Aker BP, and DNO; Stockholm-listed Lundin Petroleum; Var Energi, backed by Italy’s Eni; and private equity firm HitecVision, industry sources said.

Equinor, Lundin, DNO and Var were not immediately available to comment.

The three sources said that ExxonMobil had closed the sale process in recent days with one buyer after agreeing on the terms of a sale.

ExxonMobil hired investment bank Jefferies to run the sale process, banking sources told Reuters last month.

Jefferies declined to comment.

In 2017, ExxonMobil’s net production from fields off Norway was around 170,000 barrels of oil equivalent per day, according to its website.

The sale, if approved by regulators and completed, comes after ExxonMobil focused in recent years on growing its onshore US shale production, particularly in the Permian Basin in the southwestern US, as well as developing huge oil discoveries in Guyana.

ExxonMobil is also considering selling its assets in the British North Sea after more than 50 years, industry sources told Reuters last month.


The G7 summit produced a little-discussed but important plan to tackle inequality

Buried among the storylines about global trade and political intrigue from the G7 summit last month is perhaps the most noteworthy one of all. Business for Inclusive Growth, or B4IG, a coalition of 34 multinational companies with more than 3 million employees and revenues topping $1 trillion, unveiled an initiative to tackle inequality with help from the Organization for Economic Cooperation and Development.

In its “pledge against inequalities”, the B4IG states what should be obvious to all — that “persistently high and rising inequality risks fracturing societies and undermining economic and business growth”. Its ambitious agenda calls for decent wages, expanding access to basic products and services and supporting community development programmes.

Sound familiar? Days earlier, the Business Roundtable, an association of chief executives of top American companies, abandoned its long-standing principle of putting shareholders first. Instead, it adopted a new “Statement on the Purpose of a Corporation” signed by 181 CEOs committing to “lead their companies for the benefit of all stakeholders”, including customers, employees, suppliers and communities.

Many of the ills cited by B4IG and the Business Roundtable can be traced to one culprit: Too many companies pay their workers less than a living wage, which means they must forgo basic necessities or fall deeper into debt. It’s nakedly unsustainable, and big corporations are beginning to realize that they can’t continue to neglect workers. Jamie Dimon, chairman of the Business Roundtable and chief executive of JPMorgan Chase, which is also a member of B4IG, acknowledged in the Business Roundtable’s press release that, “Major employers are investing in their workers and communities because they know it is the only way to be successful over the long term.”

It’s not just the long term companies are worried about. Some lawmakers are eager to tackle inequality and have already floated proposals to redistribute income to struggling workers, including higher corporate tax rates, a wealth tax, near-confiscatory marginal tax rates for high earners and taxing unrealised capital gains. The cost of those proposals to companies, executives and shareholders is likely to be considerably higher than simply paying workers a decent wage. The Business Roundtable and B4IG are no doubt trying to get ahead of lawmakers’ efforts.

But high-minded initiatives like the ones proposed by the Business Roundtable and B4IG aren’t enough without money to pay for them, and I suspect companies won’t easily open their coffers, at least in the US. Executives and shareholders are enjoying years of fat profits – and the generous compensation packages and higher share prices that follow – and they won’t be keen to slow that success. The profit margin for the S&P 500 Index, or income as a percentage of revenue, swelled to 10.2 per cent in 2018, the highest since 1990. The ratio of corporate profits as a percentage of GDP hit the highest on record in 2012, according to the US Bureau of Economic Analysis, and that ratio has remained elevated.

And as profits go, so goes the payoff for the C-suite and shareholders. The CEO-to-worker pay ratio ballooned to 281 in 2017 from 195 in 2009, according to the Economic Policy Institute, and it projects a comparable ratio for 2018. Shareholders have been richly rewarded, too, as the US stock market has more than quadrupled in value since early 2009.

Another obstacle is that the amount of money required to adequately compensate workers is probably higher than acknowledged. Representative Katie Porter of California confronted Mr Dimon with the gruesome math during a congressional hearing in April, demonstrating that an entry level position at JPMorgan in Irvine, California, that pays $16.50 an hour falls well short of a living wage for a single mother with one child — and that’s 10 per cent more than the $15 minimum wage companies already balk at paying.

There are other signs that fixing wage inequality is no small task. For example, the median employee compensation at roughly half of the largest 1,000 US companies by market value falls short of a living wage for a family of four. The median household income in the US is roughly 25% less than the amount needed to cover living costs for a family of four in Midwestern cities such as Omaha, Kansas City, Milwaukee or Cleveland, according to EPI estimates, never mind the more expensive locales on the coasts. And the income Gini index, which measures the degree of income inequality, is at a record high, according to the Census Bureau.

Big corporations seem to realise the extent of the problem and that workers can’t continue labouring for less than a living wage. The bigger question is whether executives and shareholders have the will to open their pocketbooks before the government makes them.


Elon Musk’s AI dystopia is no match for Jack Ma’s logic

Tech billionaires Jack Ma and Elon Musk can’t agree whether artificial intelligence is going to take over the world. Only one of them is what we might think of as a tech guy, and it’s that difference that means the other is likely to be right.

Musk, a physicist by training, is a well-known AI radical who sees the technology as a threat to the human race because, in his view, it will inevitably outsmart us and start running the world without heeding our needs.

“The biggest mistake I see AI researchers making is assuming that they’re intelligent,” he said during a debate in Shanghai on Thursday. “They’re not, compared to AI.”

He likened humanity to a bootloader – a small piece of software needed to turn on a computer.

Ma, who has a degree in English, took the opposite view. Humans, he said, invented machines, and he has “never seen a machine invent a human being”.

This might look like the kind of argument Musk should win by default. Ma’s business is e-commerce, in which artificial intelligence only plays an auxiliary role. The Alibaba founder has invested in some down-to earth applications of AI, such as face recognition and traffic management.

Musk, by contrast, has been more ambitious. OpenAI, the research group he co-founded (and left earlier this year) has been experimenting with writing and storytelling. Last month, a venture of Musk’s, Neuralink, demonstrated that it had made some progress in creating brain-computer interfaces.\

Musk, in other words, probably has a wider window on the future than Ma and a better technical understanding of the subject.

But the argument took an unexpected turn when the Chinese billionaire challenged the Tesla chief executive officer to identify a machine that is smarter than humans. Musk started rattling off the usual examples of computers beating human world champions at chess and Go. “Trying to play a computer at Go is like trying to fight Zeus; it’s not going to work,” he said.

“It’s stupid to compete with a computer at playing Go,” Ma retorted. “Only stupid people compete with a car. It will run faster. Go is designed for humans to play with each other, chess is designed for humans to play with each other. I will never play chess against a computer. Let them play each other.”

In “War Games”, the 1983 science-fiction movie, a supercomputer decides against launching a nuclear war after working out the only winning move is not to play. Ma appears to have reached the same conclusion about AI. As he explained during the debate: “A smart person knows what he wants and how to get it; a wise person knows what he doesn’t want.”

If Musk’s future is a dystopia, Ma’s is one in which humans only apply AI where needed, without engaging in unnecessary competition with it. In a way, it looks much like the world of chess, where, even though they can’t overcome a computer’s brute force, top players can still make hundreds of thousands of dollars a year competing against each other and millions play just for fun or as a way of developing their cognitive skills.

The difference between the future worlds of Musk and Ma boils down to access. AI entities can only take over the world if they get access to important processes – nuclear launch codes in “War Games”, for example, but also major investment decisions, trade flows, policymaking and regulation. In Ma’s world, computers won’t get that access because it’s up to humans to decide whether or not to grant it. AI will only be used in functions where it remains a tool.

If investments in AI focus on such purely practical applications, the clearly visible barriers to its acquisition of human-like intelligence (things like common sense or emotions) may not even be overcome on the research level. But Ma’s world doesn’t collapse if the robots surmount that barrier. His argument depends on humans’ strong motivation for keeping control – the same motivation that has, at least for now, stymied genetic engineering that could lead to the creation of artificial humans.

Keeping control may be a small consolation; Musk and Ma agree that AI will take over from humans in many areas. But the latter makes an important point: This isn’t our world because humans are the best at everything; it’s ours because we made it so.


Japan’s curbs on hi-tech exports to South Korea could backfire

Japan‘s curbs on exports of hi-tech materials to South Korea could backfire in the long run, eroding its dominance over a key link in the global chip supply chain, suppliers and experts tell the Reuters news agency.

Japan tightened restrictions last month on exports of three chipmaking materials to South Korea, home to memory chip titans Samsung and SK Hynix, threatening to disrupt the global tech supply chain as it provides about 70 percent or more of the restricted products to the world.

While the move highlights Japan Inc’s firm place in the industry even after its once-mighty giants like Sony lost out to nimble Chinese and Korean rivals, it has fuelled concerns that its grip on the niche market for fluorinated polyimides, photoresists and hydrogen fluoride could loosen.

“South Korean companies cite quality and stable supply as reasons for choosing Japanese materials. But this has made them aware of the need for change and they are already taking action,” a source at a Japanese materials supplier said.

“This will hit us like a body blow.”

Samsung, for instance, has stepped up testing of non-Japanese photoresists and hydrogen fluoride, several sources familiar with the chip supply chain said.

Soulbrain, a South Korean supplier of hydrogen fluoride to Samsung and Hynix – the world’s number one and number three chip vendors – is aiming to match the purity of Japanese hydrogen fluoride at a plant that is still under construction.

Industry experts, however, note it would take time for South Korean firms to move up the value chain as the three hi-tech materials are not easy to replicate.

Japanese suppliers “have built up their capabilities through decades-long experience of developing products,” Atsushi Ikeda, Citigroup analyst, said.

“The accumulation is just too big for new players.”

Top photoresist supplier Tokyo Ohka Kogyo says it takes up to two years to develop new resists.

‘Rare earth shock’

From South Korea, the curbs are likely to elicit a response similar to Japan’s during the “rare earth shock” nearly 10 years ago, when China’s restriction on exports of rare-earth minerals used in electronic devices forced Japan Inc to find alternate supplies, industry participants said.

“Under the circumstances, anyone would do that,” said the source at the Japanese supplier that has been hit by the curbs.

Seoul has already pledged one trillion won ($850m) a year to subsidise the domestic chip supply chain to accelerate the buildup of knowledge needed for firms to catch up in more advanced fields.

A senior executive at Soulbrain said the government had expedited paperwork so its new plant could be completed faster.

Soulbrain is looking to complete construction by end-September and run tests to see if it can mass-produce high-purity hydrogen fluoride, the executive said.

In photoresists, Samsung is trying to curb its reliance on Japan for the advanced materials, although sources say it faces big hurdles. The company, however, uses materials from local supplier Dongjin Semichem for photoresists used in chips with less fine circuit patterns, Japanese supply chain sources said.

Only three Japanese firms, Tokyo Ohka, JSR and Shin-Etsu Chemical, currently supply high-quality materials used in advanced chip production technology, known as extreme ultraviolet lithography, globally.


Tokyo Ohka and other materials makers grew hand in hand with electronics conglomerates NEC, Toshiba and Hitachi, the world’s top chipmakers in the late 1980s.

Even after Japanese chipmakers lost ground to South Korea, the suppliers continued to thrive, thanks to early inroads in overseas markets and the strength of their local supply chains.

But in the wake of the latest curbs, prompted by a decades-old dispute between the Asian nations over compensation for forced South Korean labourers at Japanese firms during World War II, suppliers in Japan are having to deal with repercussions beyond the three restricted materials, industry sources said.

Korean chipmakers are now asking Japanese suppliers to speed up shipments of materials that Japan has large market shares of, from silicon wafers to polishing slurries, for fear of further restrictions, the sources said.

Japanese suppliers have so far refrained from directly commenting on how the curbs will affect their business, claiming they had no inkling of the government’s decisions beforehand.

“We have very good relations with our Korean clients,” said Hideo Ohhashi, a spokesman for Tokyo Ohka.

“But this is up to politics.”


Hungary purchase of 180 AMRAAM air-to-air missiles approved

The United States approved a request by Hungary to purchase 180 AIM-120C-7 Advanced Medium Range Air-to-Air Missiles (AMRAAM) the Defense Security Cooperation Agency said in a release.

Hungary has asked for 180 AIM-120C-7 AMRAAMs and four spare guidance sections, along with training missiles, classified software for the AN/MPQ-64F1 Sentinel Radar, spares, cryptographic and communication security devices, and other equipment, support and training at a total program cost of $500 million, the Tuesday, August 27 DSCA release said.

Raytheon Missile Systems is the primary contractor.

Hungary has requested to purchase the AN/MPQ-64F1 Sentinel Radar through direct commercial sale, the release added.

DSCA said the proposed sale would “support the foreign policy and national security of the United States by improving the security of a NATO ally, which is an important force for political stability and economic progress in Europe,” and is consistent with U.S. initiatives to “enhance interoperability with U.S forces” in the region.

Hungary intends to use the AMRAAM to modernize its armed forces and deter regional threats, the release said.

In 2017, Hungary announced an armed forces development scheme and decision to raise the annual defense budget to 2% of GDP by 2024. As part of the program, called Zrinyi 2026, the defense ministry will purchase 40 helicopters and increase its military reserves to 20,000 personnel by 2026. The air force’s Gripen fighter jets are also due to be upgraded.

The AIM-120 AMRAAM is a beyond-visual-range air-to-air missile capable of all-weather day-and-night operation. The fire-and-forget weapon employs active radar guidance and incorporates a datalink to guide the missile to a point where its active radar turns on to intercept the target.

The missile also features a “Home on Jamming” ability, enabling it to switch to passive homing on jamming signals from the target aircraft.

The AIM-120C-7 variant featured improved homing and range capabilities over older versions, while the AIM-120D includes a 50% greater range and better guidance.

AMRAAM missiles are used by 37 countries and are integrated onto various U.S.-made fighter jets including F-22, F/A-18, F-16 and F-15, as well as the Eurofighter 2000 and Saab’s JAS 39 Gripen. AIM-120C5 and AIM-120C7 missiles are fully integrated onto the F-35.


DFS Group out of liquor, tobacco business at Changi after nearly 40 years

The DFS Group will shut its liquor and tobacco stores at Changi Airport when its lease expires in June, nearly 40 years after they first set up shop.

The company told Coconuts Singapore today that it will not take part in the upcoming bidding process to retain its booze and smokes concession, which it’s held since 1980. It will, however, continue to operate its luxury stores.

“After careful consideration, DFS has decided not to bid to retain the liquor and tobacco concession operations at Changi Airport,” DFS Group chief Ed Brennan said in a statement.

“Specifically, changing regulations concerning the sale of liquor and tobacco, against a global context of geopolitical uncertainty, meant that staying in Changi was not a financially viable option.”

Earlier this year, the government reduced the amount of duty-free alcohol allowance for travelers returning to Singapore at the airport from three to two liters, and will also impose a mandatory plain-packaging rule with large health warning graphics for tobacco products from July 1 as a way to reduce their appeal.

DFS has no plans to close its luxury retail stores at Changi Airport, its outlets at the Singapore Cruise Centre, or the T Galleria by DFS store at Scotts Road, a spokesperson said.

Among those contesting to take DFS’ place at the airport are South Korea’s Shilla and Lotte duty-free companies, and Germany’s Heinemann, according to business site The Moodie Davitt Report, noting that this is half the number of bidders when the contract last tendered in 2013.

The latest tender was launched on June 4 and closed yesterday.

Changi Airport Group (CAG) said they were “disappointed” at the unexpected decision by what’s probably its oldest tenant.

“We are disappointed that they have opted not to participate in this tender but we will work closely with them to ensure a smooth transition to the new operator for the liquor and tobacco concession. We will also continue to work closely with them to grow their other concession businesses in Changi Airport.”

The new operator is expected to be selected by the end of this year and will operate the tobacco and liquor stores for six years, from June 9, 2020 to June 8, 2026, CAG said.