DAIRY
Fonterra to cut more jobs
New Zealand’s Fonterra announced a further 227 job losses yesterday in a bid to remain competitive in “challenging market conditions,” as global dairy prices plummet and Chinese demand continues to wane. The latest cuts follow 523 jobs slashed in July and Fonterra chief executive Theo Spierings warned there could be more to come at the world’s largest dairy processor. “We have great people, but we have to make tough decisions to ensure Fonterra remains competitive in this environment,” he said in a statement to the New Zealand Stock Exchange. “We will continue to fine-tune our organization to ensure we best support the initiatives identified by our business review.” Dairy prices have almost halved in the past 12 months as a China-led boom has petered out, forcing Fonterra to review operations.
BANKING
HSBC to hire staff in China
HSBC Holdings PLC plans to add 4,000 staff in China’s Pearl River Delta region over the next three to four years to grab retail banking and wealth management business. HSBC Asia-Pacific chief executive Peter Wong outlined the plans in an interview with the Hong Kong Economic Times which was published yesterday. The lender confirmed the report. That would amount to a 30 percent increase from 13,000 employees in the Pearl River Delta region and contrast with the bank’s three-year plan to cut global headcount by about 50,000 and reduce annual costs by up to US$5 billion. HSBC is shifting investment to Asia, its best-performing region, while cutting unprofitable divisions. HSBC aims to increase its pretax profit in the Pearl River Delta region to US$1 billion within five years from US$100 million last year, Wong was quoted as saying by the newspaper. HSBC shares fell 1.5 percent in Hong Kong as of 9:43am, extending this year’s decline to 20 percent.
INSURANCE
Zurich faces Tianjin losses
Switzerland’s Zurich Insurance said yesterday it faces losses of about 243 million euros (US$275 million) following last month’s industrial disaster in Tianjin, China. The insurer said it forecast third-quarter losses of US$200 million in its general insurance business and is to conduct a review of the unit. Separately, the firm said it had scrapped a 7.7 billion euro bid to take over its British rival Royal & Sun Alliance (RSA). “Discussions with RSA have now been terminated and... Zurich does not intend to make an offer,” the company said in a brief statement. Massive explosions at a hazardous goods storage firm in Tianjin on Aug. 12 killed 161 people.
SOUTH KOREA
Fed report hits the won
The won declined the most in almost six weeks after the Federal Reserve highlighted risks to global economic growth, boosting demand for the relative safety of the nation’s bonds. Goldman Sachs Group Inc said a weaker won could be welcome as the government looks to spur inflation, according to a note on Friday last week. Consumer prices held below 1 percent last month, trailing the central bank’s 2.5 percent target. The KOSPI yesterday tracked a tumble in US equities after the Fed refrained from raising interest rates and said recent global financial developments may restrain economic activity. The won dropped 1 percent to close at 1,174.67 per US dollar in Seoul, data compiled by Bloomberg showed. The currency earlier fell as much as 1.1 percent and has weakened 7.1 percent this year. The KOSPI declined 1.6 percent.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts