COFFEEHOUSES
China cafe chain eyes IPO
Luckin Coffee (瑞幸咖啡), an ambitious Chinese start-up rolling out thousands of stores to take on Starbucks Corp, is beginning preparations for a US initial public offering (IPO) that could raise US$300 million, people with knowledge of the matter said. Luckin is spending heavily to roll out 2,500 additional stores this year, after the company opened about 2,000 outlets last year in its first year of operation. It is putting pressure on Starbucks, which has made China into its fastest-growing market and the second-biggest among more than 50 countries in which it operates. The Chinese firm hopes its focus on convenience and affordability will lure urban office workers. Luckin was most recently valued at US$2.2 billion.
WHOLESALERS
Metro to sell China business
German food wholesaler Metro AG is considering selling a majority of its business in China to a local bidder, people familiar with the matter said. The company is willing to sell as much as 80 percent, while retaining a significant minority if an attractive offer is made, the people said, asking not to be identified. The sale is expected to start this or next month, they said. The company has finished a review at its Chinese operations, which started in June last year, and has decided to sell control to a domestic partner, they said. Metro’s Cash & Carry business in China spans 95 stores and reported revenue of 2.7 billion euros (US$3.1 billion) in the 2017-to-2018 financial year, it said on its Web site.
AUTOMAKERS
Tesla specifies job cuts
Tesla Inc notified California that the job cuts Elon Musk announced earlier this month would include more than 1,000 workers in the automaker’s home state. The positions being eliminated include 802 at Tesla’s Fremont assembly plant, 137 at a facility in nearby Lathrop and 78 at its headquarters in Palo Alto, it said in notices filed this week with California. It was the second major round of reductions in a seven-month span. During a quarterly earnings call on Wednesday, Musk said that Tesla would be focusing on cutting costs as it brings cheaper versions of the Model 3 to market.
APPAREL
Chinese group buys Lycra
Chinese luxury apparel firm Shandong Ruyi Group (山東如意控股集團) finally closed its acquisition of the owner of Lycra, the elastic material used in yoga pants and skinny jeans, after regulatory delays hampered the cross-border purchase for months. The Chinese group on Thursday announced that it completed its purchase of the Apparel and Advanced Textiles business of Invista, a subsidiary of Kansas-based Koch Industries. The deal took over six months longer than expected, in part because Chinese capital controls made it difficult to move funds offshore, people familiar with the matter said. The regulatory approval process in China and the US also took longer than expected, the people said, speaking on condition of anonymity.
ELECTRONICS
Electrolux to close US site
Swedish appliance maker Electrolux on Thursday said it plans to stop production within two years at its factory in Memphis, Tennessee, while investing US$250 million in a separate facility in the state. The maker of Frigidaire products said it is consolidating all US cooking manufacturing into its facility in Springfield, Tennessee. The company in March last year said that it was putting its plant expansion in Springfield on hold, citing US tariff worries as the reason.
CHIP WAR: Tariffs on Taiwanese chips would prompt companies to move their factories, but not necessarily to the US, unleashing a ‘global cross-sector tariff war’ US President Donald Trump would “shoot himself in the foot” if he follows through on his recent pledge to impose higher tariffs on Taiwanese and other foreign semiconductors entering the US, analysts said. Trump’s plans to raise tariffs on chips manufactured in Taiwan to as high as 100 percent would backfire, macroeconomist Henry Wu (吳嘉隆) said. He would “shoot himself in the foot,” Wu said on Saturday, as such economic measures would lead Taiwanese chip suppliers to pass on additional costs to their US clients and consumers, and ultimately cause another wave of inflation. Trump has claimed that Taiwan took up to
A start-up in Mexico is trying to help get a handle on one coastal city’s plastic waste problem by converting it into gasoline, diesel and other fuels. With less than 10 percent of the world’s plastics being recycled, Petgas’ idea is that rather than letting discarded plastic become waste, it can become productive again as fuel. Petgas developed a machine in the port city of Boca del Rio that uses pyrolysis, a thermodynamic process that heats plastics in the absence of oxygen, breaking it down to produce gasoline, diesel, kerosene, paraffin and coke. Petgas chief technology officer Carlos Parraguirre Diaz said that in
SUPPORT: The government said it would help firms deal with supply disruptions, after Trump signed orders imposing tariffs of 25 percent on imports from Canada and Mexico The government pledged to help companies with operations in Mexico, such as iPhone assembler Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), shift production lines and investment if needed to deal with higher US tariffs. The Ministry of Economic Affairs yesterday announced measures to help local firms cope with the US tariff increases on Canada, Mexico, China and other potential areas. The ministry said that it would establish an investment and trade service center in the US to help Taiwanese firms assess the investment environment in different US states, plan supply chain relocation strategies and
Japan intends to closely monitor the impact on its currency of US President Donald Trump’s new tariffs and is worried about the international fallout from the trade imposts, Japanese Minister of Finance Katsunobu Kato said. “We need to carefully see how the exchange rate and other factors will be affected and what form US monetary policy will take in the future,” Kato said yesterday in an interview with Fuji Television. Japan is very concerned about how the tariffs might impact the global economy, he added. Kato spoke as nations and firms brace for potential repercussions after Trump unleashed the first salvo of