MNCs in the News-2018-05-04

China

China’s move to open its financial market more widely coupled with favorable investor expectations about the Chinese economy reportedly have spurred some prominent financial firms like WorldFirst, a British firm, and Ireland’s Experian, a consumer and business credit reporting information service, to apply to the People’s Bank of China (PBoC) for permission to provide, respectively, third-party payment services and corporate credit information services. The PBoC anticipates even more applications as limits on foreign ownership stakes and other barriers to foreign companies are eliminated or softened (Chen Jia, “Foreign Firms Ready to Enter Financial Market,” China Daily, May 4, 2018, http://www.chinadaily.com.cn/a/201805/04/WS5aeb9577a3105cdcf651bdbe.html)

Among the industries that China has been opening up is its aviation sector. The opening follows an earlier National Development and Reform Commission (NDRC) announcement that China would, this year, “phase out the 50 percent equity cap this year for foreign aircraft manufacturers in joint ventures (JVs) in China.” One foreign company that seemingly is salivating about the news is Airbus China which already has a final assembly line for its A320 plane and is building a helicopter final assembly line in China (Wang Yu and Zhu Wenqian, “Opening-Up to Benefit Local, Foreign Companies,” China Daily, May 3, 2018, http://www.chinadaily.com.cn/a/201805/03/WS5aea6777a3105cdcf651bb9e.html)

China’s WuXi Biologics has made China’s first major pharmaceutical greenfield foreign direct investment (FDI) in Ireland, a 325 million euro investment in a “‘global center of excellence in biologics’” that is expected to generate approximately 400 highly skilled jobs. The Chairman of WuXi Biologics said his firm had been working with Ireland’s Industrial Development Authority and Strategic Investment Fund for several years prior to making the investment. Through its parent, WuXi has a JV in Ireland, called WuXi NextCODE, with Genomics Medicine Ireland (Wang Mingjie, “Pharmaceutical Firm to Invest $393 Million in Ireland Plant,” China Daily, May 2, 2018, http://www.chinadaily.com.cn/a/201805/02/WS5ae92851a3105cdcf651b87c.html)

Reanda International, a network based Chinese accounting firm that ranks 20th among global accounting firms in terms of revenue, is expanding its United Kingdom (UK) operations, which already provide accounting, consultancy, and tax services, so as to “better serve growing China-UK trade and investment.” The Chairman of Reanda International stated “‘our international expansion follows the steps of our client companies…we enjoy the unique advantage of having a deep understanding of Chinese business culture and also local expertise in each international market we are present in’” (Cecily Liu, “Chinese Accountants Open Office in UK Capital,” China Daily, May 2, 2018, http://www.chinadaily.com.cn/a/201805/02/WS5ae8989ba3105cdcf651b650.html)

Japan

After winning a bid to build offshore wind turbines awarded by state utility Taiwan Power, Hitachi is considering the construction of a plant in Taiwan to make it the hub for capturing more Asian business. Hitachi won a contract worth USD $846 million in cooperation with Belgian group Jan De Nul for a wind farm expected to begin commercial operation off Taiwan’s western coast at the end of 2020. Hitachi will receive one-third of the contract amount for its financial contribution (Ihara, Kensaku, “Hitachi eyes wind turbine plant in Taiwan after capturing order,” Nikkei Asian Review, May 1, 2018, https://asia.nikkei.com/Business/Business-Deals/Hitachi-eyes-wind-turbin...)

Sumitomo Corp., Mitsubishi Corp., and other Japanese trading companies are competing to expand their poultry businesses by importing poultry from countries like Brazil, Thailand, and Turkey in order to comply with increasing consumer demands. Sumitomo will start importing Turkish chicken in May, which became possible only after Japan’s Agriculture, Forestry and Fisheries Ministry sanctioned the import of Turkish chicken in September 2017. Mitsubishi plans to start processing chicken in Thailand through a JV with Itoham Yonekyu Holdings and Betagro Group (Yohei Muramatsu and Yuji Ohira, “’Chicken race’ is on among Japan’s trading houses.” Nikkei Asian Review, May 3, 2018, https://asia.nikkei.com/Business/Business-Trends/Chicken-race-is-on-amon...)

South Korea

South Korea’s battery manufacturers such as SK Innovation, Samsung SDI and LG Chem are ramping up investment in China in preparation for the end of Beijing’s electric vehicle subsidy, which currently excludes Korean firms. LG Chem announced it would invest over USD $200 million in a JV battery production plant in China. SK Innovation which terminated its plans for a Chinese JV battery plant in 2016 recently revitalized the JV project, giving it a new name and a fresh investment of USD $80 million (Michael Herh, “Korean Battery Makers Ramping Up Investment in Chinese Market,” BusinessKorea, May 4, 2018, http://www.businesskorea.co.kr/news/articleView.html?idxno=22050)

Following a historic summit between North Korean leader Kim Jong Un and South Korean President Moon Jae-in, the two Koreas began planning joint development projects and South Korean investment in the North. United Nations’ sanctions against North Korea currently prevent cross border investment, but Seoul believes it can follow through after the upcoming summit between the United States and North Korea. South Korean government entities and private businesses, such as CJ Cheiljedang, already are looking for investment opportunities in the north (Kim Jaewon, “Warming ties between Koreas raise hopes for investment in North,” Nikkei Asian Review, May 2, 2018, https://asia.nikkei.com/Spotlight/North-Korea-crisis-2/Warming-ties-betw...)

Malaysia

French chemical producer Arkema and South Korean pharmaceutical company CJ CheilJedang announced that they will invest over USD $300 million in their Malaysian Kerteh Biopolymer Park. The additional investment will double the bio-methionine plant’s capacity and create 2,500 jobs for Malaysians. The investment will fulfill a previous pledge to bring the total investment in the park to over USD $750 million. Malaysia’s Investment Development Authority and East Coast Economic Region Development Council, as well as sundry French government agencies, support the joint facility (“CJ-Arkema announce additional investment of RM 1.2b in Kertih ops,” New Straits Times, May 1, 2018, https://www.nst.com.my/business/2018/05/364280/cj-arkema-announces-addit...)

*The information compiled in the MNCs in the News digest is gathered from sources believed to be reliable, but the Wong MNC Center does not guarantee their accuracy. The content of the MNCs in the News digest does not necessarily represent the view of the Wong MNC Center, its Board of Directors, or its Advisory Board, but is intended for the non-commercial use of readers in order to foster debate and discussion and to facilitate and stimulate research.