Business News

By Richard Maino Despite the best efforts of an international naval police force patrolling the Gulf of Aden and nearby seas, gangs of ruthless criminals can still capture highly valuable cargo ships and hold them to ransom. Most vessels hijacked by the modern pirates in the busy shipping lanes off the coast of Somalia have to be ‘reclaimed by their owners for an average of two million US dollars each. In an attempt to prevent that, an imaginative private security company in the UK has developed a new product that it believes can halt or hamper today’s pirates who use small fast boats to board the large vulnerable and slow-moving vessels. The novel defence system consists of a simple but strong net that can be draped over the stern or sides of a possible target vessel – creating a safety zone – and floated clearly on the surface for some distance to prevent the pirates getting their speed-boats close to the big ships they seek to capture. In the years of anarchy that Somalia has suffered since its government was overthrown in 1991, thousands of pirates now operate off its coast. Somalia’s 3,000-kilometre coastline – the longest in Africa – has become one of the world’s most dangerous waterways. No ship is safe. Pirates have hijacked aid shipments, kidnapped crews, and have even fired rocket-propelled grenades at cruise ships. The idea for the naval safety net came to Nick Davies, founder of the Anti-Piracy Maritime Security Solutions company – based in Poole, south-west England – after he noted the way in which powerboat propellers can be badly fouled by fishing nets. He said: “In essence it [the anti-pirate system] is a fishing net that is deployed, then it floats on the water all around the ship and snags the propellers […]

Major Chinese investment in Latin America is now a regular event: Sinopec’s $7.1bn investment in Repsol’s Brazilian unit is just the latest example. Such deals are rightly celebrated with fanfare in Latin America. However, the long-run effects are uncertain – especially given that Latin American exports are losing badly to their Chinese counterparts in world markets. Latin America needs to diversify its exports – away from oil, iron, soya, meat and the like – if it is to grow sustainably. Unfortunately, as the region has focused on selling its commodities to China, Chinese firms have been outcompeting Latin American manufacturing exporters at a frightening pace. In the 1980s and 1990s, Latin America looked to the US as a core economic partner, adopting the Washington Consensus in order to attract US investment and gain better access to US markets. Alas, in the twenty years up to 2002, Latin America grew by barely one per cent a year in per capita terms. Enter China. It has served as a new and more dynamic destination for Latin American produce: buying $44bn worth of the region’s exports in 2009, ten times more than in 2000. In addition, Chinese demand for those exports – 80 per cent of which are primary commodities – played a key role in driving up global prices. Thus China has helped boost economic growth in Latin America. However, Latin America has lost sight of the need for export diversification. In our new book, The Dragon in the Room, Uruguayan political economist Roberto Porzecanski and I calculate the extent to which Chinese companies are outcompeting their Latin American counterparts. We draw on the methods of the Asian Development Bank to examine data for thousands of sectors and sub-sectors. A Latin American manufacturing export sector is classified as “under threat” from China, […]

The share of total funds that Chinese high net worth individuals hold in equities is set to increase strongly, according to the latest research. Chinese high net worth individuals (HNW) currently hold a lower proportion of fund in equity compared to peers in the Asia-Pacific region. Datamonitor research* shows that this will change, with strong growth in equity holdings forecasted over the next two years. “Chinese HNWs have a large proportion of their wealth as cash or near-cash products. This will change over the next two years, with equity holdings becoming the most important component of Chinese HNW portfolios instead. This movement of funds will provide opportunities for the financial services industry,” says Petter Ingemarsson, senior financial services analyst at Datamonitor. Equities currently constitute a fifth of Chinese HNW portfolios, but will in two years have reached a proportion of 46%. This is a higher percentage than in other countries in the region. The Datamonitor survey was carried out in China, India, Taiwan, Singapore and Hong Kong. The main driver for the growth in equity holdings is a growing number of Chinese HNW looking for higher risk investments. Chinese HNWs are becoming more polarised in their risk attitudes. Around half of HNWs in China will have a significantly higher appetite for risk in two years, which contrasts strongly with the broader APAC area. However, a fifth of Chinese HNWs are expected to have a significantly lower appetite for risk.

Flydubai, Dubai’s first low cost airline, has announced aircraft financing worth more than US$750m in deals with GECAS (General Electric Capital Aviation Services) and BBAM. The financing will take care of the next nine aircraft flydubai is due to receive and secures all the airline’s financing requirements until June 2011. Ghaith Al Ghaith, CEO of flydubai, said: “I am delighted to be able to announce this aircraft financing today. These deals are very significant for flydubai because this committed money secures the next nine aircraft we are due to receive and mean all our financing requirements until June next year are taken care of. “We already have agreements in place with both GECAS and BBAM and it is clear from their willingness to enter into further ties with us that they have been pleased with what flydubai has delivered so far. These are some of the largest aircraft financers in the world and their faith in flydubai is a huge endorsement of us and our success since our launch. “When we went out to the markets this time to seek financing for our aircraft we were overwhelmed by the response. At the end of the day we received offers for far more aircraft than we needed to finance, which is a very nice position for a young and ambitious airline to be in. I believe this is a reflection not only of our position but also of the confidence the financial community around the world has in Dubai.” Both deals are eight year term sale and leaseback agreements. The agreement with GECAS is for six aircraft, taking the total number of flydubai aircraft GECAS finances to 10. BBAM are adding another three aircraft to make their total commitment six. Norm C. T. Liu, President and CEO of GECAS, said: “During […]

As one of the powerhouses of Asia-Pacific economic growth, Thailand invests heavily in electricity generating capacity to service its burgeoning major industries, including automotive and electrical manufacturing and tourism. The country, which has the second largest economy in South-East Asia after Indonesia, plans to increase total generating capacity from about 30,000 MW in 2009 to more than 50,000MW by 2021. * (Electricity Generating Authority of Thailand, EGAT) Of this total, well over a third will continue to be provided by Independent Power Producers (IPPs), private investment vehicles that work with the Electricity Generating Authority of Thailand, EGAT, to provide the infrastructure capital needed to build new infrastructure and ensure that existing assets are operated at peak efficiency and optimum safety. The global Konecranes group has become a long-term partner in this process with the Southern Thai  KEGCO subsidiary of The Electricity Generating Public Company, EGCO, which is the first  independent power producer in Thailand . This public company that owns and develops generation units which cover diversified fuels such as natural gas, coal, diesel oil, hydropower and biomass, in accordance with the government’s policy on fuel diversification to ensure energy sustainability. One of EGCO’s earliest acquisitions, through KEGCO, is the 824 MW Khanom power plant, a major base load generator in the Nakhon Sri Thammarat province in Southern Thailand, where it operates a combined gas cycle turbine (674MW) and two barge-mounted thermal plants (150 MW). As the first generating station in Asia to achieve IS09002 quality certification Ð and as a winner this year of its seventh consecutive EIA environmental monitoring awards Ð Khanom has set out to be a model of safety and efficiency. It has adopted ISO 14001 and TIS 18001 OHSAS 18001: 1999 in its operating standards. KEGCO has also been awarded National Safety Awards for eight […]