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World News Quick Take

■METALS

POSCO cuts production

South Korea’s POSCO, the world’s fourth largest steelmaker, announced yesterday its first-ever production cut to reduce rising inventory caused by a sharp fall in local demand. POSCO, which produces 2.78 million tonnes of crude steel a month, said it would reduce output by 200,000 tonnes this month and 370,000 tonnes next month. “We are cutting production for the first time since the start of our operations” in response to a sharp fall in demand from local auto and home appliance makers, it said in a statement. It said the downturn in local demand was deeper than expected, leading to a sharp increase in inventory.



■ELECTRONICS

Panasonic to buy Sanyo

Japanese electronics giant Panasonic Corp has secured the takeover of competitor Sanyo Electric Co with deals to buy stakes in the smaller firm held by the US investment bank Goldman Sachs and two Japanese investment firms, the Nikkei Shimbun reported yesterday. Sanyo’s management threw its support last month behind the takeover, which would create one of the world’s largest consumer electronics companies. Goldman Sachs had originally refused Panasonic’s ¥130 (US$1.47) per share offer as too low, but Panasonic president Fumio Ohtsubo reached an agreement with Goldman Sachs late on Wednesday. Sumitomo Mitsui Banking Co and Daiwa Securities SMBC Co, Sanyo’s two other major shareholders, already agreed to the deal.



■METALS

Wuhan to buy into Centrex

Australia’s Centrex Metals said yesterday that Chinese steelmaker Wuhan had agreed to pay up to A$180 million (US$126 million) for a half share in its iron ore projects. “This is a landmark, high integrity agreement with a top three steel group in China and is a company-maker for us in every sense,” Centrex chairman David Lindh said in a statement. Wuhan will also pay an additional A$9.7 million for a direct 15 percent stake in Centrex and will work with the miner on its plans for the development of a new deep water export port.



■SOUTH KOREA

Seoul plans injection

The country plans to set up a 20 trillion won (US$15.4 billion) fund to help banks raise their capital base and access cash during the credit crisis, the financial watchdog said yesterday. The move will ensure banks “will be prepared for possible losses that they could incur from a prolonged economic slowdown and restructuring [of businesses],” the Financial Services Commission said. It said the central Bank of Korea is expected to contribute up to 10 trillion won through loans, while the state-run Korea Development Bank will add 2 trillion won and the rest would come from institutional and other investors.



■AVIATION

EADS plans to protect cash

The head of the European aerospace group European Aeronautic Defense Space Company (EADS), Louis Gallois, said yesterday that “in the coming months our highest priority is to protect our cash reserves” of 9 billion euros (US$13 billion). “We will have to push back acquisitions that we might have made. We must also define priorities for our investments,” Gallois told the Frankfurter Allgemeine Zeitung newspaper in an interview. He also said his group was ready to “help some airlines with the financing of their aircraft orders” to avoid cancelations and suspensions. If necessary, it would reduce output at plane-making unit Airbus.


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