Coca-Cola sets up new bottling plant

Coca-Cola sets up new bottling plant


                      The US soft drink giant said still beverages contribute 30 percent of its sales in China. [China Daily]

Soon after US beverage giant Coca-Cola officially announced its entrance into China’s dairy beverage market on Monday, the company on Friday followed with a remarkable expansion of its largest single investment for strengthening its still beverage business in China.
With a total investment of 600 million yuan ($87.89 million), Coca-Cola opened a bottling plant in Wuhan, capital of Hubei province, which will be operated by the most advanced still beverages producing technology in the Coca-Cola system globally.
It is the 39th facility to bottle Coca-Cola’s products across China, and the 10th opened bottling plant for manufacturing Coke’s still beverage products, with annual production capacity of 45 million unit cases of Coke’s still beverage products (which is equal to 1 billion bottles of beverages), according to the company.
With the expansion of still beverages manufacturing capacity at the Wuhan plant, Coca-Cola would achieve the annual still beverages production capacity of 300 million unit cases by this year, an increase of 80 million unit cases compared with previous years.
“Today, still beverages are growing to contribute more than 30 percent of Coca-Cola’s sales in China, the world’s second-largest beverage producer after the US,” said Doug Jackson, president of Coca-Cola China.
“China has also clearly shown the potential in the still beverage market as the Chinese consumers maintained high demand in non-carbonated drinks.”
The world’s leading beverage giant has already built up a strong network for manufacturing its still beverage products in 11 cities across China, including Beijing, Shanghai, Xiamen in Fujian province and Dongguan in Guangdong province, as well as the newly opened facility in Wuhan.
The Wuhan bottling plant will be used to produce bottled water, tea and fruit juice beverages, as well as the newly launched juicy dairy beverages.
“Minute Maid juice will continue to be the focus for Coca-Cola to expand its still-beverage business in China, since it has grown to be the number one brand in the low-juice content beverage market since 2007,” said Chen Jing, an analyst from Beijing Orient Agribusiness Consultant Ltd.
 
Ren Jiliang, a senior director of Coca-Cola Bottlers Manufacturing (Dongguan) Company Ltd, said: “In the Wuhan plant, two of the four production lines will be used to make Minute Maid Pulpy Super Milky and its related juicy dairy products.”
An unnamed industry insider commented that the newly established plant was a signal of Coca-Cola’s expectation to drive further business growth in China’s still beverage market after its failed bid to buy the Huiyuan group.
The company might not give up China’s pure juice market in the coming future, although Jackson refused to mention the timetable for entering into the sector.

Brilliant Chinese women lead biz world

Brilliant Chinese women lead biz world

Half of the world’s richest self-made women are Chinese.
According to the newly released 2009 Hurun List of the Richest Women, five of the 10 most successful female billionaires are from the Chinese mainland.
The latest list of China’s rich women includes 51 women who appeared among the 104 women on the 2009 Hurun Rich List, which ranked the most wealthy 1,000 men and women in China.
The average wealth of the women on the new list is 6.6 billion yuan ($966 million). Their fortunes rose, on average, by 30 percent this year.
The top female Chinese entrepreneur on the list is “Paper Queen” Zhang Yin, from Nine Dragons Paper, who has assets worth $4.9 billion. She is followed by Yang Huiyan, from Country Garden, who is worth $4.6 billion, and Chen Lihua, from Fu Wah International Group, who has $3.4 billion in assets.
“If you tell people the best pingpong team in the world has half of its members coming from the Chinese mainland, they will take it for granted,” said Rupert Hoogewerf, the list’s compiler.
“But it is surprising to know that half of the richest women in the world come from the Chinese mainland.”
The average age of the 51 richest women on the list is 46, and most made their money from property or the finance and manufacturing sections.
Hoogewerf said the wealthiest self-made women in the United Kingdom and United States are also very well known – author J.K. Rowling in the UK and talk show host Oprah Winfrey in the US – yet they both lag behind Zhang Yin in terms of wealth.
The 52-year-old Zhang founded Nine Dragons Paper.
The company buys scrap paper from the US, imports it into China, and mainly turns it into cardboard boxes used in the export of Chinese goods. The company is China’s biggest paper maker.
In October 2006, at 49, Zhang became the first woman to top the list of the richest people in China.
Her personal fortune at the time was $4 billion.
“I came up with the idea of making a list of the richest women in China in 2006 when Zhang became the richest person, the first time a woman was in that position”, Hoogewerf told China Daily.

Zhang’s wealth shrank sharply last October by $300 million because of the economic crisis but it rebounded back to $4.9 billion by this September.
This year’s list of 1,000 super rich men and women in China includes 104 women, 16 more than last year.
Most of them are self-made entrepreneurs.
Hoogewerf was at a loss to explain why Chinese women are so adept at making a big impression in the business world but he has one or two theories.
“I guess one reason is that they enjoy a balanced and equal social status in terms of politics, culture and economy.
The other is that Chinese women mostly let their parents take care of their only child, which allows them to focus more on their career,” he said.
“After all, one thing for sure is that Chinese women are brilliant.”

CIC buys 45% stake in Russian oil company

CIC buys 45% stake in Russian oil company

China Investment Corporation (CIC), the nation’s sovereign wealth fund, announced Friday that it had closed the first phase settlement for the purchase of a 45 percent stake in Nobel Oil Group.
The 300-million-dollar investment would be completed in two phases. In the first phase, which was completed by the end of September, CIC had spent 100 million U.S. dollars for holding the Russian oil company’s stakes, and 50 million dollars for operating expense of the oil fields, according to the announcement.
It said that the remaining 150 million dollars would be paid off in the second phase, in nine months, to buy oil and gas reserves amounting 150 million barrels around existing ones.
When the purchase was done, CIC will hold 45 percent of the company’s stake while the Russian company will own 50 percent and the rest 5 percent will go to a Hong Kong investor.
The was CIC’ second move within one month to buy shares in overseas oil and gas companies. At the end of September, CIC paid 939 million U.S. dollars for a stake in Kazakhstan oil and gas company JSC KazMunaiGas Exploration Production (KMG EP).
Zhuang Jian, a senior economist with the Asian Development Bank, said that under the forecast of excessive fluidity and devaluation of the U.S. dollars, CIC’s investment in bulk commodities like oil and gas would be a better option to mitigate risks in China’s huge foreign exchange reserves.
These deals show that CIC is attaching more attention to resource commodities and intends to diversify its assets arrangement from its early preference of investing in financial sectors, said Chen Fengying, director of Institute of World Economic Studies under China Institute of Contemporary International Relations.
Chen also said that future price hikes of resource commodities, resulting from devaluation of the dollars and recovery of the world economy, might bring better profits to CIC.
Launched in September 2007 with a registered capital of 200 billion U.S. dollars from China’s huge foreign exchange reserves, CIC has been criticized for suffering book value losses after it purchased stakes in Blackstone Group and Morgan Stanley in 2007.

Worlds leading wind system manufacturer adds investment in China

World’s leading wind system manufacturer adds investment in China

Vestas, the world’s leading wind power equipment manufacturer, would increase its investment in China to more than 3 billion yuan (439 million U.S. dollars) by the end of this year, China Daily reported Friday.
The Danish company officially inaugurated manufacturing facilities for wind turbine control systems and machined parts on Thursday in the Tianjin Economic Development Area.
Manufacturing control systems – the brains of the wind turbine – in China means Vestas has further localized its production and will source control system components from within the country, the newspaper said, citing Vestas’ China President Lars Andersen.
The facilities, together with the nearby production lines for nacelles, blades, generators, control systems and machined parts, are the company’s largest and most comprehensive wind energy manufacturing complexes globally with a total investment of 2.5 billion yuan.
China now has the fourth largest wind power capacity in the world. The sector has seen more than 100-percent growth year-on-year over the past three years, according to the National Energy Administration (NEA).
The country plans to build seven wind power bases with a minimum capacity of 10 gigawatts each by 2020, in a move to dramatically increase the use of clean energy, according to the newspaper.

Bosch expects 15% sales growth in China

Bosch expects 15% sales growth in China

Bosch Group, the leading German auto technology provider, expects its sales in China to have grown 15 percent this year, driven by strong market demand.
With expected sales of 24 billion yuan ($3.52 billion) in 2009, China is the only market that sees a two-digit growth, while the company’s global sales are expected to have fallen by 15 percent this year.
“Personal mobility safety products, such as the ESP electronic stability program and ABS antilock braking system, are the major drivers of our business,” said Franz Fehrenbach, chairman of Robert Bosch GmbH.
“We expect the installation rate of ESP to triple, from 7 percent today to 22 percent by 2014.”
By the third quarter of 2009, 1 million ABS products were manufactured in Bosch’s Suzhou factory, a new record for a single year production.
Encouraged by the market potential for resource-saving and energy-efficient innovations, Fehrenbach said Bosch would expand its new energy related business in China.
Developing the electric car is the firm’s top priority, said Fehrenbach.

By the end of 2009, some 35 engineers will work on powertrain electrification projects, as well as hybrid and electric drives, in United Automotive Electronic System, the company’s joint venture with Shanghai Automotive Industry Corp. The number of research and development engineers will soon increase to about 100.
“The electric car is definitely the future. However, the battery is still too costly and we are still in a transition period,” said Fehrenbach. “We believe the internal combustion engine will remain the technology of choice in global markets for the next 20 years.”
The practical and reachable fuel-saving solutions now are clean diesels, improved fuel injection and start-stop systems, on which Bosch will continue to work, said Fehrenbach.
He added: “But this is just one side of the environmental coin. We are also working to fully tap the enormous potential of renewable energies.”

In 2009, some 1.5 billion yuan was invested in China, particularly for technologies in powertrain electrification and renewable energies such as wind and solar. Next month, gearboxes for 1.5-mW and 2-mW wind turbines will go into production.
Bosch also aims to develop more durable battery cells and find technological solutions to fully exploit the potential of the sun, said Fehrenbach.

Boeing gets new hangar at Pudong

Boeing gets new hangar at Pudong

Boeing yesterday opened an aircraft maintenance, repair and overhaul (MRO) two-bay hangar at Pudong International Airport as scheduled despite the sluggish aviation market.
The hangar, capable of housing two B747 airplanes, is also the first MRO facility at the airport.
“China and Asia are the global leaders in aviation growth and the newly expanded facility provides an incredible opportunity to support these expanding fleets throughout their lifecycle,” said Lou Mancini, senior vice-president for commercial aviation services at Boeing Commercial Airplanes.
The factory is operated by Boeing Shanghai Aviation Services Co, a joint venture in which the US aircraft manufacturer controls a 60-percent stake, while Shanghai Airport Authority and Shanghai Airlines respectively hold the remaining 25-percent and 15-percent stake. It is the first time Boeing has taken a controlling share in an MRO joint venture. It is also China’s first foreign-controlled MRO facility.
The joint venture was launched in 2006 and used to lease a hangar from Shanghai Airlines to perform line maintenance and heavy maintenance check services.
Boeing declined to say how much investment was involved.
John Bruns, Boeing Commercial Airplanes’ vice-president for China operations, called the opening of the hangar a “strategic move” for Boeing. The global MRO industry is suffering from lower demand as lots of airlines choose to ground their older fleets to save costs.
“This is a long-term investment. We believe we should get ready when the market comes back,” said Bruns.
The factory now provides an MRO service to B737 airplanes and will expand its service offerings to twin-aisle aircraft. Another major task is to convert B767 passenger jets into freighters. But Boeing declined to give a timeline for the passenger-to-freighter conversion project.
The sharp drop in air cargo traffic as a result of declining world trade has resulted in lower demand for freighter jets. International freight traffic started to decline in April 2008 before the passenger markets were hit. Cargo traffic fell by 9.6 percent year-on-year in August, according to the latest figures from the International Air Transport Association (IATA).

The new facility is expected to improve Pudong airport’s service during the World Expo to be held next year in Shanghai, said Li Derun, executive vice-president of Shanghai Airport Authority.
“It is necessary for Pudong airport to have a world class, high quality MRO plant if it is going to become a major international aviation hub,” Li said.
China Eastern Airlines operates an MRO facility at Hongqiao International Airport. 

Boeing sees no order cut from China

Boeing sees no order cut from China

Boeing Co has received no cancellations of aircraft orders from Chinese airlines, a senior executive said on Thursday, although deliveries have been adjusted as carriers trim costs to cope with weak demand.

Chinese airlines have pursued cost-cutting initiatives due to weak business in international air travel that has pushed the country’s top three airlines into the red last year.
“We have no cancellations from Chinese airlines, only minor adjustments in deliveries,” John Bruns, vice president for Boeing Commercial Airplanes, responsible for China operations, told reporters at a media forum.
Last month, an executive at the US plane manufacturer told Reuters that Chinese airlines were negotiating with the company to further delay taking delivery of 787 Dreamliner orders.
The Chinese government has handed out cash aid to its ailing airlines. The bleak market has been adding pressure on Chinese airlines to to scrap or delay aircraft orders after the country’s air travel growth fell into single digits in 2008 for the first time in five years.
Boeing, the No 2 plane maker behind EADS unit Airbus, has also been struggling with a range of supply, manufacturing and design problems, made worse by a two-month strike at its Seattle-area plants last year.

Lending company for Citi

Lending company for Citi

Citi, the world’s largest bank in terms of customers and branches, has opened its third rural lending company in Wafangdian, 100 km north of Dalian, in Liaoning province.
With a registered capital of 17 million yuan ($2.49 million), Dalian Wafangdian Citi Lending Co Ltd will offer both secured and unsecured loans to the local population, said Andrew Au, chief executive officer of Citi China.
Its target clients include individual borrowers, the self-employed and micro-enterprises. Available loans will range from 30,000 yuan to 800,000 yuan, said Au.
“We see significant credit demand driven by local economic growth and intend to build a commercially sustainable business here,” said Au. “With our new establishment here, we can give the residents a new financing option which will result in a winning proposition for our clients and Citi alike.”
Wafangdian, with a population of 1.03 million, is famous for ballbearing manufacturing and has rich agricultural and mining resources and has demonstrated robust commercial and industrial development.

“Citi’s presence here will certainly influence the financial situation of the local economy,” said Dai Yulin, vice-mayor of Dalian.
Citi was the first international bank to launch the lending company model in China. In addition to Wafangdian, Citi has operated two lending companies in the towns of Gong’an and Chibi in Hubei province.
“China remains one of Citi’s highest priority markets around the world, and we will continue our presence here across multiple lines of business,” said Stephen Bird, chief executive officer of Citi Asia Pacific.

CDB may acquire Stockfly in a bid to diversify

CDB may acquire Stockfly in a bid to diversify

China Development Bank (CDB), a State-controlled lender mainly focusing on funding the nation’s major infrastructure projects, might acquire Stockfly Securities as part of an effort to diversify into a financial conglomerate, local media reported.
Stockfly Securities, a mid-sized brokerage affiliated to China Aviation Industry Corp, said it planned to sell its 100 percent stake to “a major State-owned commercial lender with net assets not less than 300 billion yuan”, for 1.15 billion yuan ($168 million), according to separate statements the firm’s five shareholders posted at Tianjin Property Rights Exchange.
The move is a clear implication confirming earlier rumors that CDB was eyeing to buy into the Beijing-based brokerage, as it is deemed to be the only prospective buyer possessing the requirement in the statement for sale.
“The two parties earlier inked a memo on the deal, and the final result could come out within the year,” the Chinese language Caijing Magazine reported, citing unnamed sources close to CDB.
CDB, a policy bank that is seeking transformation into a commercial lender, is following other major domestic banks in building up its own investment banking platform. Major Chinese banking giants, including Bank of China, Industrial and Commercial Bank of China, China Construction Bank and Bank of Communications, have all set up their own securities institutions in Hong Kong.

The bank, which failed to establish its own investment banking arm because of regulatory limits, is taking the current buyout as a key step to diversify its business.
The bank planned to set up two subsidiaries – an investment bank and an investment company – in an effort to expand into all-around financial business. The investment arm was launched in August, focusing on private equity investment as well as financial and investment consultancy services.
Industrial insiders said the buyout, at 1.15 billion yuan, is not pricey, but because of Stockfly’s limited size and business strength, it would take time for the CDB’s investment banking business to develop into a full-fledged proposition.
CDB is the only domestic commercial lender allowed to underwrite corporate bonds, while other banks are confined to underwriting short- and medium-term bills and financial debts.

CNPC oilfield outputs up 22% year-on-year

CNPC oilfield outputs up 22% year-on-year

China National Petroleum Corp (CNPC), the country’s largest oil and gas producer, said Tuesday that output from its second biggest oilfield, Changqing, saw 22.16 percent year-on-year growth in the first nine months.
The field in northwestern China produced equivalent 22.59 million tons of oil. It is on course to meet the annual output target of 30 million tons of oil equivalent, CNPC said in a statement on its website.
This includes 11.36 million tons of crude and 14 billion cu m of natural gas, said the statement.
Sources with CNPC earlier said that one important task for the company in the next three years was to stabilize the output of some old oilfields and conduct the second round of development of these fields, including the company’s largest oilfield, Daqing in Heilongjiang province in northeastern China.
Daqing oilfield has produced 2 billion tons of oil since its discovery. This is equivalent to 40 percent of the total oil China has produced in the past five decades. Last year, Daqing produced 40.2 million tons of oil, about a quarter of China’s total oil output annually.
“We will try our utmost to keep producing 40 million tons per year for a long time in the future,” Wang Yongchun, general manager of PetroChina Daqing Oilfield Co, a subsidiary of CNPC, told China Daily. “Improvements in technology will play a vital role in achieving this target.”
Last year CNPC produced 108.25 million tons of crude domestically, growing for seven consecutive years, said a company report.The company’s crude production in overseas markets rose to 30.5 million tons last year.
Under a three-year blueprint for the oil and gas industry from the National Energy Administration, China’s crude oil output is expected to touch 198 million tons, while natural gas production will be 120 billion cu m in 2011.
The country will stabilize the output from oilfields in northeastern China and the Bohai Bay area, while speeding up development of fields in the Tarim, Junggar, Erdos and Sichuan basins.
China’s oil production would see a gradual decline after 2020, according to a recent report by the Chinese Academy of Social Sciences.
Around 64.5 percent of the country’s oil consumption is likely to be met by imports in 2020, said the report. The gap between domestic consumption and production is the main cause for the increase in imports.