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Saudi Arabia raises July crude oil official selling prices for Asia

Top oil exporter Saudi Arabia has raised the July official selling prices (OSPs) of most crude grades it sells to Asia, a pricing document showed on Thursday.

It set the July OSP for the flagship Arab light crude at $1.90 a barrel above the Oman/Dubai average for Asia, up 20 cents from June.

Saudi Arabia set its Arab Light OSP to northwest Europe at a discount of $1.90 a barrel against ICE Brent for July, compared with a discount of $2.90 for June, according to a document seen by Reuters.

The OSP to the United States was set at a premium of $1.05 a barrel over Argus Sour Crude Index (ASCI), unchanged from June.

Saudi term crude supplies to Asia are priced as a differential to the Oman/Dubai average: ASIA

JUNE JULY CHANGE SUPER LIGHT +2.35 +2.85 +0.50 EXTRA LIGHT +1.50 +1.90 +0.40

LIGHT +1.70 +1.90 +0.20 MEDIUM +1.25 +1.35 +0.10 HEAVY +0.50 +0.40 -0.10

UNITED STATES (versus ASCI)

JUNE JULY CHANGE EXTRA LIGHT +1.80 +1.80 0.00 LIGHT +1.05 +1.05 0.00 MEDIUM +0.35 +0.35 0.00 HEAVY -0.10 -0.10 0.00 Prices at Ras Tanura destined for Northwest Europe are set against ICE Brent: NW EUROPE

JUNE JULY CHANGE EXTRA LIGHT -2.50 -1.10 +1.40 LIGHT -2.90 -1.90 +1.00 MEDIUM -3.30 -2.50 +0.80 HEAVY -3.90 -3.30 +0.60

Prices at Ras Tanura for Saudi oil destined for the Mediterranean are set against the ICE Brent: MEDITERRANEAN

JUNE JULY CHANGE EXTRA LIGHT -1.80 -0.70 +1.10 LIGHT -2.30 -1.40 +0.90 MEDIUM -2.80 -2.20 +0.60 HEAVY -3.60 -3.20 +0.40

OCS Group invests Rs 200 crore, eyes more acquisitions in India

MUMBAI: OCS Group, the UK’s largest facilities management company, has earmarked $ 80 million (Rs 480 crore) for further mergers and acquisitions in Asia, after recently investing Rs 200 crore to acquire four companies in India.

“We have invested Rs 200 crore for acquiring high quality service providers in India such as Absotherm Facilities Management (engineering), Radiant Hospitality Services (housekeeping), Cannon Hygiene India (hygiene and sanitation) and Central Investigation & Security Services Limited (security services) in the last 18 months period,” OCS Group’s CEO Chris Cracknell told PTI here.

“We are now consolidating our operations after recent acquisitions, but we are open to acquisitions, if we see right opportunity in India. We have earmarked an $ 80 million (Rs 480 crore) war chest for further mergers and acquisitions in Asia,” Cracknell said.

The facilities management service business in India is expected to grow to Rs 1,049 crore in 2016 from Rs 400 crore in 2011, according to the Frost & Sullivan report.

Increasing need for healthy and safe environment for occupants contributes to growth. OCS Group can now directly deliver core facilities management services, such as engineering, cleaning, hygiene, security and other FM services to Indian clients without appointing multiple sub-contractors, Cracknell said.

OCS Group, which has a presence in India for the last 20 years has clocked a turnover of over Rs 300 crore in 2012 through all its Group companies in India, is hoping to double its turnover and number of personnel employed 22,000 in India as compared to 90,000 worldwide.

India’s crude steel production went up by 1.8 per cent in 2019

KOLKATA: India’s crude steel production went up to 111.2 million tonne (mt) in 2019, showing a 1.8 per cent rise over 2018, as Asian steel producers emerged as key drivers behind a 3.4 per cent surge in global crude steel output to 1.86 billion tonne during the year. Latest figures compiled by the Brussels-based World Steel Association said Asia produced 1.34 billion tonne of crude steel in 2019, an increase of 5.7 per cent compared to 2018.

Within Asia, India and China were the two countries which posted improvement in steel output during the calendar year 2019. China’s crude steel production in 2019 reached 996.3 mt, up by 8.3 per cent over 2018. Thus, China’s share of global crude steel production increased from 50.9 per cent in 2018 to 53.3 per cent in 2019. Elsewhere in Asia, Japan produced 99.3 mt of crude steel in 2019, down 4.8 per cent compared to 2018, while South Korea produced 71.4 mt of crude steel in 2019, a decrease of 1.4 per cent compared to 2018.

The EU produced 159.4 mt of crude steel in 2019, a decrease of 4.9 per cent compared to 2018. Germany produced 39.7 mt of crude steel in 2019, a decrease of 6.5 per cent on 2018. Italy produced 23.2 mt in 2019, down by 5.2 per cent on 2018. France produced 14.5 mt of crude steel, a decrease of 6.1 per cent on 2018. Spain produced 13.6 mt of crude steel in 2019, a decrease of 5.2 per cent on 2018.

Crude steel production in North America was 120 mt in 2019, 0.8 per cent lower than in 2018. The US produced 87.9 mt of crude steel, up by 1.5 per cent on 2018.

The CIS produced 100.4 mt, a decrease of 0.5 per cent. Russia produced 71.6 mt of crude steel in 2019, down by 0.7 per cent on 2018. Ukraine produced 20.8 mt of crude steel in 2019, a decrease of 1.2 per cent compared to 2018.

The Middle East produced 45.3 mt of crude steel in 2019, an increase of 19.2 per cent on 2018.

Annual crude steel production for South America was 41.2 mt in 2019, a decrease of 8.4 per cent on 2018. Brazil produced 32.2 mt in 2019, down by 9.0 per cent compared to 2018.

Turkey’s crude steel production for 2019 was 33.7 mt, down by 9.6 per cent on 2018. Africa produced 17 mt in 2019, down 2.3 per cent on 2018.

Tighter environment standards to impact coal consumption across Asia: Moody’s

Mumbai: As countries including India, China, Japan and Korea would look to meet their carbon emission standards they are set to cut down on consumption of coal Moody’s research said.

The research said that most countries would gradually aim at reducing their dependence on power generated from coal.

We expect governments across Asia to tighten environmental standards, to meet their commitments to curb carbon emissions and to improve air quality, through review of those policies and measures, the report said. Countries including China, Japan and Korea have recently pledged to reach net zero emissions by 2050-60.

This also comes at a time when Covid pandemic is set to push back the recovery of the global economy by two years to 2023.

“We expect a nascent economic rebound to take hold globally but recovery will remain fragile amid the coronavirus pandemic, thereby creating uncertainty around the pace of recovery of power demand growth and sustained levels going forward. Coal-fired power producers will likely bear the brunt of demand reductions in major countries including China, India, Japan, Korea and Indonesia. This is because renewable energy will play an increasingly important role in power supply given governments’ clean energy policies and initiatives for green recovery,” the report added.

Fila extends local licence with Cravatex for 30 years; to double exclusive stores to 100 by 2015

MUMBAI: Leading sportswear maker Fila, which today extended its licence agreement here with Cravatex for another 30 years, said it plans to more than double its exclusive stores to 100 in the next two years and focus more on apparel.

Fila has been present here for the past three years and operates under a licence agreement.

The originally Italian and currently Korean brand Fila has 5 percent market share in the Rs 2,000-crore sportswear market and is eyeing to double its market share to 9-10 percent by 2015, the company said.

“We are growing at 25-30 percent annually, and we plan to add 60 more stores by 2014 to take the own-store tally to 100. And with this we will be focusing on more apparel sales here,” Fila global chairman and chief executive officer Gene Yoon told PTI here.

On extending the licence agreement with the city-based Cravatex for such a long time, Yoon said, “I thought it is time to give more space to invest in the business more aggressively by giving a long-term licence agreement to our franchise partner here. We have renewed it for 30 years so that they can comfortably invest more in the business”.

On store expansion, Cravatex chairman Rajesh Batra said the focus will be on the own-store format.

“So far we have been present largely in wholesale and shop-in-shop formats and retail stores, so the next step is open stores and push apparel sales through exclusive stores. Initially, we were focusing on footwear. Today we are 60-65 percent a footwear company. We want to make that equal as we go along,” Batra said.

Fila had clocked retail revenue of Rs 120 crore in 2011-12 in the country while its global sales stood at USD 1.2 billion (around Rs 6,500 crore at the current exchange rate), but Yoon said the market provides them a huge opportunity.

“There is big potential here. The two big potential countries in Asia are China and India,” Yoon said, adding the company has inpidual agreements with partners to spend 4-5 percent of their revenues on marketing activities.

Without naming Reebok India, he said the issues at that company offer him an opportunity to grow faster here.

“We have relatively small share of the market at this moment. We can only expect to grow and increase the business even though the market is declining for the big guys. There is a problem with a big global company here, which presents us opportunity over here,” Yoon said.

The Rs 2,000-crore branded sportswear segment is growing at 12-15 percent.

Asked if Fila plans to grow inorganically here, Yoon said a recent acquisition in the US does not permit it to acquire new firms at present.

“Not at this moment. According to the agreement for Acushnet, I am not supposed to buy any new company till I make a successful exit, which is in 2016, when the IPO for Acushnet comes in the Hong Kong market,” he said.

Fila Korea that owns the Fila brand name, and Mirae Private Equity, which bought the Fortune Brand Inc’s Acushnet that makes the Titleist golf balls, clubs and other equipment for USD 1.23 billion in May last year.

The Italian owner’s of Fila had sold the brand to hedge fund Cerberus Capital Management in 2003, except Fila Korea. Fila Korea later bought the parent brand in 2007.

Yoon added that newly-acquired company has shown good growth which makes it a profitable buy.

“When we acquired the company, the earning before tax was USD 105 million. This year it was USD 145 million. We are very happy with the acquisition of Acushnet. I have to double the earnings before tax before by 2015. Which means USD 215 million, but I am expecting we may even hit USD 265 million. So it is a good buy,” he said.

Fila India, which in July roped in cricketer Virender Sehwag as its first brand ambassador with a contract for three years, is keenly watching the football space due to the growing interest for the sport.

“Football is becoming very popular over here. We tied up with Mohun Bagan to sponsor their kits two weeks ago,” Yoon added.

GEA to build Asia’s largest milk production facility in India

MUMBAI: Global equipment and process technology provider GEA today said it has received an order from the AmulFed Dairy, a unit of Gujarat Co-operative Milk Marketing Federation (GCMMF), to build milk production facility in Gandhinagar, Gujarat.

The order, worth ‘lower double-digit million-euro’, is for setting up a new turnkey dairy plant for the production of 150 tonne per day of skim milk powder and 120 tonne per day of dairy whitener and baby food, GEA said in a release.

The milk powder plant is scheduled to begin production in 2018.

“We will provide AmulFed with a hygienically-superior plant that will deliver peak performance. The AmulFed milk powder plant at Gandhinagar will not be just the largest in Asia but it will also be the most environment friendly,” said GEA Country Managing Director, India Cluster, Abhay Chaudhari.

The plant, to be installed on a turnkey basis by GEA, will process around 90,000 litres per hour of milk to produce multiple value-added products.

AmulFed already has two milk powder plants in same location supplied by GEA.

Citigroup needs a new strategy for its lagging Asian consumer banks

Citigroup Inc.’s new Chief Executive Jane Fraser is facing an Asia question handed down to her from predecessor Mike Corbat’s time: What to do about the consumer banks?

Out of the 19 that Citi operates globally, 12 are in the Asia-Pacific region. When Corbat took over as CEO in 2012, the unit — which now also includes five smaller consumer banks in Europe, the Middle East and Africa — was pulling in half the firm’s Asia net income. Over the next seven years, the institutional clients group, which houses the corporate and investment banks, powered ahead and became twice as profitable as the stagnant consumer franchise. Some investors began to ask if it was time to exit.

My view then was, “Don’t do it.” It was too early to give up on the Asian consumer. But the pandemic has changed the math. Consumer banking in South Korea, the Philippines, Thailand and Australia is under review. Even in India, where Citi is the largest foreign bank, the retail business might be spun off, according to local media reports.

Bloomberg

Covid-19 hit Citi with $17.5 billion in credit losses and allowances, two-thirds of which were in global consumer banking. A $900 million payment erroneously sent to Revlon Inc.’s lenders shaved off 0.3 percentage point from last year’s 6.9% overall return on tangible common equity, leaving it woefully short of the 14% return at JPMorgan Chase & Co.

Fraser wants to unlock value by simplifying the firm like “any true Scot,” she says. It’s about time. After a subprime crisis, a pandemic, and years of repair work in between, Citi shares are 55% lower than in September 2008. In the same period, Jamie Dimon at JPMorgan has quadrupled the stock price.

Still, if Citi goes under the knife, it will be more facelift than amputation. The well-heeled among Asian consumers will still remain important to a Citi shorn of consumer banking.

The first woman to lead a major Wall Street institution is planning a big push into wealth management. Asia is Fraser’s best bet. Even HSBC Holdings Plc, which is scaling down its ambitions in North America and continental Europe, is pivoting to the region to grab the same opportunity.

Among “glocals,” or global banks servicing local Asian economies, Citi has a better chance of making it in the post-pandemic landscape than HSBC. (With return on tangible equity down in the dumps at 3%, Standard Chartered Plc isn’t even in the race.) That’s because its access to Asia’s wealthy isn’t restricted to Hong Kong, HSBC’s traditional stronghold and the source of much of its current grief because of China’s incursions into the city’s autonomy.

Bloomberg

Citi has pan-Asian heft, garnering about 30% of its revenue in the region from ASEANnations. Rapid digitization in Southeast Asia was shaking the economics of physical branch networks for all lenders. And that was before Covid-19 sparked a work-from-home megatrend. An asset-light banking model could work, as long as affluent customers don’t fall through the cracks.

Rich people do business everywhere. Citi taps them via the plumbing of commerce: by supporting their firms in everything from cash management to fund-raising across 96 countries where it has boots on the ground. The quarter of the world’s billionaires who are its private-banking clients won’t exactly fret if some ATMs in Manila or Mumbai disappear. They want access to hot initial public offers — Citi and Goldman Sachs Group Inc. are running neck and neck in underwriting U.S. IPOs this year. With almost $9.5 billion of deals so far in 2021, Citi is also leading the global craze for blank-check special purpose acquisition companies, or SPACs.

Unlike JPMorgan, Morgan Stanley or HSBC, Citi doesn’t have a large asset management arm. So it offers a wider menu of funds from many firms even to the customer with $100,000 to invest. Its broader wealth operation is being merged with the private bank. To put millionaires and billionaires under one roof is a much required simplification, especially in a region where a new affluent class is climbing the ladder rapidly as their businesses become multinationals. This is something that the pandemic hasn’t slowed.

Citi’s wealth unit added net new client assets of $20 billion in Asia last year, taking its total to $310 billion, which puts it behind only the Swiss heavyweights, UBS AG and Credit Suisse Group AG.

As long as Citi retains the consumer banks in the marquee financial centers of Singapore and Hong Kong, it can redeploy capital from other Asian markets to improve returns. On her first day as CEO this month, Fraser made the commitment to achieving net-zero greenhouse-gas emissions in financing by 2050, which should get the stock some new love from environmentally conscious funds. Share buybacks, through which the lender has returned $65 billion to investors since 2015, have resumed.

Before the financial crisis, Morgan Stanley worried if its Dean Witter brokerage would get crushed by Citi making a play for UBS. After the 2008 turmoil, Citi’s prized Smith Barney unit fell into Morgan Stanley’s lap. There’s no such pressure now. The balance sheet has weathered the pandemic and dodged the Revlon blow. Overhauling controls to satisfy regulators is the priority. While attending to it, Fraser has to bulk up in wealth — even if that means trimming branches in Asia, and issuing fewer credit cards and mortgages. For the world’s last surviving global bank to remain standing, the Scot in the corner office has to unsheathe the claymore. With luck, she’ll only need to prune the hedges.

Guenter Butschek to continue; Marc Llistosella will not be taking over as Tata Motors MD and CEO

Tata Motors

has announced that Marc Llistosella who was to join Tata Motors as its CEO & Managing Director effective from July 1, 2021, will not be joining Tata Motors as its CEO & Managing Director as previously announced on February 12, 2021 . As mentioned earlier, Guenter Butschek will continue as MD & CEO till June 2021.

Llistosella was most recently the President and CEO of Fuso Truck and Bus Corporation and Head of Daimler Trucks in Asia. He was earlier the MD and CEO of Daimler India Commercial Vehicles Pvt Ltd.

Commenting on his appointment Mr Llistosella had said, ” Having been bonded to India for so many years, a new exciting chapter is now opened. We would jointly awaken the potential of Tata Motors.”

Agencies

Marc Llistosella

Mr Guenter Butschek had informed his desire to relocate to Germany at the end of the contract for personal reasons. He has kindly accepted the request of the Board of Tata Motors to continue as the MD & CEO till 30th June 2021. The company is currently back on the growth mode after recording years of challenging period.

The auto major posted a 67.2% surge in profit for the December quarter, following a pick-up in sales in several of the carmaker’s key growing markets. Due to a strong festive season,rural pick up and preference for personal mobility, its PV business posted its highest sales in last 33 quarters. In the past one month, Tata Motors has outperformed the market as its shares rose 67 per cent on better operational performance. Analysts say the company saw continued volume recovery in both businesses in Q3FY21

Chief of Asia’s largest pharmaceutical company urges transparency in virus vaccine rollout

TOKYO: Pharmaceutical firms must be “very transparent” about the risks and benefits of vaccines in efforts to end the coronavirus pandemic, the head of Asia‘s largest drugmaker has told AFP.

Takeda, one of the world’s biggest pharmaceutical companies, is not developing its own vaccine but has contracts with several firms to distribute their jabs in Japan and is also testing a virus treatment.

“We have to manage the situation well, be very transparent and extremely educative in the way we introduce products,” chief executive Christophe Weber told AFP in an interview.

“Medicines or vaccines are never perfect… there are always some side effects,” said Weber, who joined Takeda in 2014 and took the top job a year later after nearly two decades at Britain’s GlaxoSmithKline.

But he is optimistic the industry can explain the risks and benefits properly.

The Frenchman even sees a chance that the inoculation could help push back the growing tide of uncertainty and outright opposition to vaccination worldwide.

“It will be interesting to see. Vaccine hesitancy is strong, especially in some countries, but many vaccines are protecting against diseases that people never see,” he said.

“Here it’s different, everybody is seeing the impact of the coronavirus… so it could actually re-demonstrate the value of vaccines.”

Takeda inked a deal with the Japanese government and US firm Moderna Therapeutics in October to import and distribute 50 million doses of its vaccine in Japan from the first part of 2021.

The US Food and Drug Administration on Friday granted emergency authorisation for the Moderna jab — the same permission already granted to the Pfizer/BioNTech version.

Takeda has also signed a deal with US biotech firm Novavax to produce and deliver its vaccine in Japan, if ongoing clinical trials prove successful.

But the firm — which became one of the world’s largest pharma companies after its 2019 purchase of Ireland’s Shire — has decided not to develop its own coronavirus jab.

“When we assessed the situation and the technology that we have in-house, we felt we did not have the best technology to develop a vaccine,” Weber said.

– Covid-19 treatment – Japan’s pharmaceutical sector has moved comparatively slowly in the race to end the pandemic, and while companies including AnGes, Shionogi and Daiichi Sankyo are now developing vaccines, they are not expected to be available before 2022 at the earliest.

The country has however secured doses from players abroad, including Pfizer and AstraZeneca.

“There is no leading vaccine player in Japan,” said Weber, adding that Takeda hopes to develop in that direction, including with plans for a dengue vaccine.

He believes Japan’s biotech sector is less developed than that in the US because the country lacks the “vibrant spin-off mechanism” to help scientific research groups grow into successful start-ups.

“In Japan, scientific research and academia is strong, but there is much less in the way of spin-offs and venture capital,” he said.

“We need to make more efforts to generate this ecosystem in Japan,” he added, pointing to an open innovation research facility Takeda founded in 2018 that houses 70 companies, including young biotech firms.

And while it has shied away from coronavirus vaccines, Takeda has been working on a plasma therapy to treat the new respiratory disease in collaboration with an international alliance of drug manufacturers.

Called CoVIg-19, the treatment uses concentrated and purified antibodies taken from patients who have battled the coronavirus.

Weber expects clinical trial results for the treatment to be published early next year and says a timeframe for it to hit the market “will all depend on the data”.

He’s not concerned that the arrival of multiple vaccines renders the treatment irrelevant, warning “we shouldn’t drop the ball and assume vaccines will solve everything”.

“The vaccines don’t have 100 percent efficacy,” he said, adding that how long they protect for remains unclear and that some patients suffer conditions which prevent them from getting inoculated.

Vaccinating the entire world is also going to be a lengthy process, Weber stressed.

“There is still a great need for efficient treatments.”

DBS Private Bank targeting more than 50% assets in sustainable investments by 2023

The private banking arm of Southeast Asia‘s largest bank DBS aims to expand its suite of sustainable investments to more than half of its assets under management by 2023.

DBS Private Bank will also work with its clients to adopt environmental, social and governance (ESG) standards in their investments, it said in a statement on Friday.

The private bank aims to have sustainable investments account for more than half of its assets under management by 2023, up from 41% currently, it said. The bank declined to provide a number for the total assets it manages.

The private banking business is part of the broader wealth management unit of DBS, one of the biggest wealth managers in Asia outside China.

DBS Wealth’s assets at end-2020 were up 7% year on year to S$264 billion. Assets managed by the private bank at end-February were up 12% year on year.

Globally, ESG-themed investments are expanding rapidly, driven by rising demand from institutional and retail investors.

DBS Private Bank in 2021 plans to launch more than 10 products, including exchange-traded funds, mutual funds and private equity investments.

A global environment fund set to be launched this month will provide its clients persified exposure to areas such as renewable energy.