Govt buys ticket for Disney Shanghai

Govt buys ticket for Disney Shanghai

Mickey Mouse and friends are on their way to Shanghai after long-awaited plans for a Disney theme park near China’s financial hub got the thumbs-up from central authorities.
The news was announced yesterday by both the company and Shanghai’s municipal government.

The United States-based company and its Chinese partners will now begin detailed talks about the project, which will be based in Pudong New District, the government’s information office said in a statement.
Walt Disney Co welcomed the news.
“China is one of the most dynamic, exciting and important countries in the world, and this approval marks a very significant milestone,” said Robert A. Iger, the company’s president and CEO.
The approval paves the way for Disney and its Shanghai partners to nail down a final agreement, detailing the construction and operation of the park, the company said.
The first phase of the project will include a “Magic Kingdom-style theme park with characteristics tailored to the Shanghai region and other amenities consistent with Disney’s destination resorts worldwide”, the company added in its statement.
Zhang Huiming, an economist at Fudan University, said the upcoming visit of US President Barack Obama will help promote the project.
“For the US, it’s a matter of the export of American culture,” Zhang said.
And, on the streets of Shanghai, Donald Duck and gang already have their supporters.
“I’m thrilled to hear the news,” said Lin Fuli, a 23-year-old student from Shanghai Institute of Foreign Trade. “I’ve been looking forward to this ever since my first visit to the Hong Kong park two years ago.”
Lin said the Hong Kong Disneyland was smaller than she hoped and she expects the Shanghai one to be bigger.
The park in Hong Kong, at 1.26 sq km, is the smallest of Disney’s five major parks, which are located in the US, France and Japan.
Previous media reports said the first phase of the Shanghai Park, which is expected to be located in Chuansha township, will cover around 4 sq km and cost about $3.6 billion. It is slated for opening in 2014.
“The landing of Disneyland will drive up prices of commercial property, which, in turn, will send local house prices rocketing to a new high soon,” predicted Xue Jianxiong, an analyst at real estate services provider E-House (China) Holdings Ltd.
Experts predicted that the dense population of Shanghai and the proximity of other major cities, including Hangzhou, Nanjing and Suzhou, means the park will not have a problem attracting visitors.
“Unlike Hong Kong Disneyland, we expect the park in Shanghai will turn profit quickly,” said Qi Xiaozhai, director of Shanghai Commercial Economic Research Center.
However, some were unhappy that the company is moving to town.
Min Guoyao, a resident at Zhaohang village of Chuansha, has lived with his family in a two-floor home for more than 50 years. He now expects his house will be demolished to make way for the project.
“Our family has been living here for many generations. I really have no idea how we’ll be resettled in another place,” Min said.
And workers at a brick kiln factory in the village also had concerns.
“Our boss will probably shut down the factory next year as he cannot afford the rising rental fee,” said a worker surnamed Chen. “We have to find other places to work, which is very hard for us.”
The two existing theme parks in Shanghai, Jin Jiang Action Park and Happy Valley, were philosophical about the arrival of Disney.
“We take the Shanghai Disneyland not as a competitor, but as a foreign counterpart that will inspire us to provide better services,” said Cui Zhineng, general manager of Jin Jiang Action Park.
Shanghai Happy Valley, which opened to the public on Sept 12, is one of four parks in that group on the mainland. A spokesperson said the arrival of Disney will stimulate the tourism market.
“As a home-grown theme park, we have more products based on the Chinese culture and cater to Chinese visitors and we cost less,” said Ren Kelei, chairman of OCT Enterprise Co, which runs Happy Valley.

Shanghai Disneyland gets approval, land price up

Shanghai Disneyland gets approval, land price up

China’s central government has officially approved the Shanghai Disneyland Project, the Shanghai municipal government announced Wednesday.

However, it will take another five years for the park’s first phase of construction to be completed, according to a spokesman for the Pudong New District government. 

An official involved in the project talks said the park’s planned area was estimated at 7 square km. The project is expected to cost 25 billion yuan($3.66 billion).

Officials with the foreign investment department in the district government said several big state-owned firms in Shanghai would form a joint venture with the Walt Disney Co. to invest in the project.

The government’s information office said Wednesday that talks had started on details of the project.

Disney president and CEO Robert Iger said in a statement that China was one of the most dynamic, exciting and important countries in the world, and the approval marked”a very significant milestone” for the Walt Disney Company in China’s mainland.

The California-based company had its theme park business affected by the economic downturn. It reported a 19 percent year-on-year fall in profits from its parks and resorts for the fiscal third quarter in July.

Secretary for Commerce and Economic Development of the Hong Kong Special Administrative Region(HKSAR) government Rita Lau said Wednesday that the planned Shanghai Disneyland theme park and the existing Hong Kong Disneyland would complement each other.

She said the Chinese economy was growing fast and the Chinese market, with its huge potential, would be big enough to sustain two Disneyland theme parks.

Margaret Fong, commissioner for tourism with the(HKSAR) government, said the Hong Kong park attracted visitors from not only mainland but also southeast Asia and other places.

Hong Kong business people have said the number of tourists from the mainland would fall as Disneyland visitors would be drawn to the Shanghai park, but the Hong Kong park, with some unique attractions, should remain an attraction.

“I am looking forward to the amusement park in Shanghai,” said a 23-year-old Beijing resident who gave her surname as Wang.

“I visited the Hong Kong Disneyland this year. English was commonly used in the park, which may have brought language barriers for tourists from the Chinese mainland. It would be more home-like to visit the Shanghai Disneyland,” she added.

The green light for the park comes less than two weeks before US President Barack Obama makes his first official visit to China.

“It’s a perfect time for China to announce the approval, if it’s going to be approved anyway,” Xin Qiang, vice director of Shanghai-based American Studies Center of Fudan University.

The project is expected to bring huge benefits to both sides. But experts said the Disneyland in China should absorb Chinese culture to win lasting favor of local visitors.

“It’s like the diference between a tea house and a coffee bar. Chinese people may visit the Disneyland once or twice for new experiences, but I don’t think they will keep visiting a pure American theme park that has nothing to do with their own culture,” said Sun Zhe, director of the Beijing-based Sino-US Relations Research Center of Tsinghua University.

“If Disney wants to keep booming business in China, innovation and localization is a must,” Sun said.

Land property around the planned site of the park saw a drastic increase in price at the news.

One and half hours after the announcement, a piece of land with an area of 56,500 square meters in the vicinity of the site was auctioned off at 1.19 billion yuan, 264 percent of its premium.

“I am very glad that the project was approved,” said a local resident surnamed Cai, 60, who would probably be relocated after the construction starts.

“One the one hand, I can bring my grandson to visit the park. On the other hand, I am expecting a handsome removal compensation since my house would be torn down for the park,” he added.

China: Rio yet to iron ore prices for 2010

China: Rio yet to iron ore prices for 2010

China has yet to receive the official message from Rio Tinto that China can use a different pricing mechanism in the 2010 iron ore negotiations, said Chen Xianwen, director of the Marketing Department of the China Iron and Steel Association (CISA) in Beijing Tuesday.
Sam Walsh, chief executive officer of Rio Tinto’s iron ore unit, said Monday in Sydney that China could purchase iron ore under a new mechanism next year on the condition that China did not put up any unreasonable terms.

“Setting a different pricing mechanism for China will be a beneficial solution both to China and Rio Tinto,” said Chen.
Shan Shanghua, secretary general of the CISA, said, “China will not accept the price that the three biggest mining companies offered to other countries’ mills. Since China imports nearly half of the world’s iron ore output, it’s fair for us to ask for a bigger price cut.”
China’s steel output was expected to reach 550 million tons in 2009, up 10 percent from a year earlier, driven by the government’s 4-trillion-yuan ($586 billion) stimulus package, Luo Bing, vice-chairman of the CISA, said Tuesday.
Rio’s new act was considered a sign of improving relations between China and the world’s second-largest iron ore exporter. The relationship strained after four Shanghai-based Rio Tinto executives were arrested on charges of commercial espionage in August.

Goldman plans to sell Shineway stake

Goldman plans to sell Shineway stake

Goldman Sachs has agreed to sell half of its holding in Shineway Group, China’s top meat processor, to a Chinese fund for about $150 million, earning roughly five times its investment from the landmark 2006 deal, sources with direct knowledge of the matter said on Wednesday.
The acquisition attracted wide public interest in 2006, in part because it involved foreign investors taking a stake in a national brand and industry leader. It was also among the first leveraged buyouts in China by a group of foreign investors, which included Singapore’s state investor Temasek Holdings. Sources said the Asia Special Situation Group (ASSG) of Goldman Sachs signed a deal last week to sell part of its stake in Shineway to CDH Investments, an influential Chinese private equity fund and already a major shareholder of the meat processor. Shineway has a listed arm, Henan Shuanghui Investment & Development Co Ltd.
Goldman’s sale of the stake will bring its holding in the parent to roughly 5 percent down from around 10 percent.
Shineway, Goldman Sachs and CDH declined to comment. The sources declined to be identified because the sale process is private and confidential.
In late 2006, a consortium-led by Goldman’s ASSG and CDH bought control of Shineway Group for $256 million. The deal, which sparked debate from Chinese media and scholars on whether the national industry leader was sold too cheaply to foreign investors, won Beijing’s approval at the end of 2006.
Financial details of the acquisition and shareholding structure of the consortium were not fully disclosed at the time of the deal, but the sources said Goldman paid about $75 million for a stake in Shineway, well known for its sausage products.
Including leverage used for the transaction, Goldman will earn around five times its investment through the sale of its Shineway stake, according to a source with direct knowledge of the deal.

Sinopec JV petrochem unit kicks off

Sinopec JV petrochem unit kicks off

Sinopec plans to add 12 million to 15 million tons of refining capacity each year in the next three years, said Wang, adding that the refiner would continue to expand its refineries in Shanghai, Yangzi, Jinling, Shijiazhuang, Changling, Maoming and Anqing.
China will build three or four oil refining bases in the Yangtze River Delta, Pearl River Delta, and Bohai Sea-rim economic zone. The oil refining bases will have a minimum refining capacity of 20 million tons each.
Together with the refining facilities, three or four ethylene projects with annual production capacities of 2 million tons each will also be built.
China’s refineries should process 405 million tons of crude oil in 2011, up from the 342 million tons of crude oil they processed in 2008. This means China would increase annual oil refining volume by 18 percent by 2011.
The total revenue of China’s petrochemical industry hit 613.97 billion yuan in September, up 3.3 percent from a year earlier, according to the China Petroleum and Chemical Industry Association.

Tianyuan to double aluminium capacity

Tianyuan to double aluminium capacity

China’s Sanmenxia Tianyuan Aluminium Co plans to double its production capacity of secondary aluminium next year to 100,000 tons, as the aluminium market recovers, a senior executive of the company said on Tuesday.
“Although there is overcapacity for now, aluminium consumption will definitely increase every year,” said Xiao Chongxin, deputy general manager of the company.

“We are optimistic about the primary aluminium market next year, but cautious on price outlook.”
Xiao expected aluminium prices to hover around 16,500 yuan ($2,417) a ton next year.
Sanmenxia Tianyuan currently has production capacity of 50,000 tons. Part of the secondary aluminium is used as feedstock for its aluminium products.
The benchmark third-month aluminium futures contract on the Shanghai Futures Exchange MAL3 rose 32 percent so far this year, but lagged behind a strong rally in copper that more than doubled prices.

BWI wraps up Delphi deal

BWI wraps up Delphi deal

The Beijing West Industries Group (BWI) of China formally announced Monday their approximate $100 million asset purchase of former Delphi Ride Dynamics and Brakes business units.
The former Delphi Ride Dynamics and Brakes business was a premier supplier of automotive chassis products in the world. It now has about 3,000 workers in its units in the United States, Poland, China and Europe.
“We believe this is a good opportunity for BWI Group to make healthy inroads into the world’s premium automotive chassis systems market, as Delphi has over the years accumulated a wealth of technical knowledge,” said Fang Jianyi, chairman of the Board of Directors of BWI Group, immediately after the signing the documents concerning the purchase in downtown Detroit.
“We will continue what the previous owner Delphi established and expand on it,” Fang said.
In his remarks after the signing, Fred Bellar III, CFO of the Delphi Automotive Holding Group, said that he is pleased to have worked with BWI Group in completing the transaction and believes BWI Group’s newly-acquired businesses will experience healthy development under new ownership with the resources and commitment to grow the businesses.
He told Xinhua that the purchase is a good cooperation between the auto industries of the two countries and the new company will be able to cope with different challenges in making the venture a successful one.
Dan Warrell, a Delphi veteran of over 40 years, who has been chosen to lead the BWI Ride and Brakes business worldwide, told Xinhua that he is very happy about the purchase and has confidence on the new company.
“Suspension and brake systems are crucial for improving vehicle comfort, stability and performance and we will continue to focus on these key features which offer excellent value our customers,” said Dan.
“My senior management team will remain intact and we will continue to take the necessary actions to increase efficiencies in our operations, provide superior returns to our stakeholders and further grow our business,” Dan added.

Shougang Corporation, Beijing’s largest employer and one of China’s largest steel makers, contributed 51 percent of the equity in BWI Group. With years of experience in overseas investment, Shougang Corporation has proved to be the mainstay of the Delphi chassis system acquisition. Through the acquisition, the company expects to diversify its lines of business, with steel making still at the core.
Beijing’s Fangshan District, an area in southwest Beijing, contributed 25 percent of the equity to become the second largest investor in the transaction through its wholly-owned entity Beijing Fangshan State-Owned Assets Management Co Ltd.
The third investor is Bao’an Investment Development Co Ltd, a private company owned by four individuals and controlled by the China’s Tempo Group. The Tempo Group has been operating in North America for over a decade, selling after-market auto parts and buying technologies and equipment to boost its manufacturing operations in China. With a 24 percent equity stake, Bao’an is a major player in operating the former Delphi chassis business. The company sees this acquisition fully aligning with the Tempo Group’s lines of business — making brakes, shocks, control arms and other automotive chassis parts and components.
The former Delphi Ride Dynamics and Brakes business units are headquartered in Dayton, Ohio in the United States, which has a long-standing tradition of invention, innovation and industrial development.
Throughout the purchase process, BWI Group has engaged a number of world-class consulting firms to ensure a seamless transition. Customers have expressed enthusiasm that BWI Group will treat chassis parts and components as its core business and invest in new technology, and have approached BWI Group to sign new contracts.

Shanghai Disneyland Project gets approval

Shanghai Disneyland Project gets approval

The Shanghai Disneyland Project has got state approval, the Shanghai municipal government announced here Wednesday morning.
The government’s information office said that talks have started on details of the project, which has been planned in the Pudong New District of Shanghai.
Disney president and CEO Robert Iger said in a statement that China is one of the most dynamic, exciting and important countries in the world, and this approval marks “a very significant milestone” for The Walt Disney Company in China’s mainland.
Officials with the foreign investment department in the Pudong New District government said several big state-owned firms in Shanghai would form a joint venture with the Walt Disney Co. to invest in the project.
The Shanghai municipal government and the Walt Disney Co. had reached an agreement concerning the major issues of building the first Disneyland on the Chinese mainland, Shanghai Mayor Han Zheng said in January.
The multi-billion dollar project is expected to benefit industries, including property development, hotels, transportation and entertainment, said Hou Zhigang, an associate professor at the Shanghai-based Fudan University.
The local government has already started preliminary plans for the long-awaited Disney theme park in the city, a local official said.

The plan includes resettlement of a 4-million-sq-m area in Shanghai’s Pudong New Area covering the villages of Zhaohang, Jinjia and Qigan in Chuansha Town, said an official at Zhaohang Village Committee, who declined to reveal his name.
Government officials didn’t disclose the use of the expropriated lands, but Shanghai Securities News indicated that the lands in the announcement would be used for the Disney theme park.
“We haven’t received any formal notice from the district government on the Disney theme park issue, but we’ve been gathering information of more than 4,000 residents in the village in recent weeks,” the source said.
The government will probably start evaluating residents’ houses as early as this December for the Disney project, a villager surnamed Xu said.
Speculation about a Disney theme park in Shanghai has been circulating for years. Earlier media reports said the $3.5 billion theme park will cover an area of 10 sq km, to be located at the east bank of Huangpu River, bordering Pudong district’s Chuansha town.
The first phase of the project will be located south of Huanglou region, a 10-minute drive from Shanghai Pudong International Airport. The second and third phases will expand towards the southwest, according to Shanghai Securities News, citing an unidentified expert in urban development research in Shanghai.
Land to be auctioned today in Chuansha for the Disney project is likely to break through 10,000 yuan per sq m, National Business Daily reported, citing Zhao Yuchuan, a manager from real estate agency Fangfang based in Shanghai.

Novartis announces new investment in China to increase R&D activities

Novartis announces new investment in China to increase R&D activities

Swiss pharmaceutical giant Novartis announced on Tuesday that it would invest 1 billion U.S. dollars in China over the next five years, with a main aim to increase R&D activities in the country.
The new investment will include a significant expansion of the Novartis Institute of BioMedical Research in Shanghai, the company said in a statement.
The Shanghai institute specializes in basic research and development of new drugs including small molecule and biological medicines to treat diseases that are highly prevalent in China, according to the statement.
“We are confident that our expanded investment in R&D will result in innovative therapies for patients in China and other countries nurtured by the growing scientific excellence in China,”said Daniel Vasella, chairman and CEO of Novartis, in the statement.
The Shanghai institute is expected to be the third largest R&D center for Novartis, after the R&D center in Cambridge, Massachusetts, USA and the facility at the Novartis headquarters in Basel, Switzerland, and to become the largest comprehensive R&D center in China.

CNPC, British BP sign Iraq big oil deal

CNPC, British BP sign Iraq big oil deal


Dhia Jaafar, head of Southern Oil Company (R), exchanges agreement documents with Jiang Jiemin (L), Chairman and the General Manager of CNPC, during a contract-signing ceremony in Baghdad November 3, 2009. [Agencies]
China’s CNPC and British oil major BP Plc on Tuesday signed Iraq’s first major new oil deal since the 2003 US invasion, snapping up a development contract for the Rumaila oilfield, one of the world’s biggest.
The 20-year contract for the southern oilfield is the first of several deals Iraq expects to sign in the coming weeks and months as it tries to catapult itself to third place from 11th in the league of oil-producing nations.
The deals face risk since there is no guarantee the next government following an election in January will honour them, and Iraq is still wracked by political violence and bomb attacks by Sunni Islamist insurgents, such as al Qaeda.
As Iraq emerges from the sectarian carnage unleashed by the invasion, foreign capital and expertise is crucial to reviving the oil sector and raising the billions needed to rebuild.
The country holds the world’s third largest crude reserves but has failed to ramp up production significantly after decades of war, sanctions and underinvestment.
“With these contracts Iraq has started a new phase. In the past, Iraq’s oil was used to finance war, to kill Iraqis and to attack neighbouring countries,” Oil Minister Hussain al-Shahristani said.
“A fortune was wasted and Iraq’s oil was a disgrace to the lives of Iraqis … This fortune will now fund reconstruction and rebuilding and improve the lives of all Iraqis.”
Rumaila, with 17 billion barrels in estimated crude reserves, is the workhorse of Iraq’s oil industry, producing almost half its total output of 2.5 million barrels per day. The field’s reserves alone are bigger than Algeria’s.
CNPC and its British partner BP expect to increase Rumaila’s output to 2.85 million barrels per day.
Iraqi oil experts say they do not expect CNPC and BP to pump billions into Rumaila immediately, partly because of uncertainty over the outcome of parliamentary elections in January.
The contract allows them to start slow — they must spend $300 million over the first 33 months and ramp up production by 10 percent initially.
That production increase can be easily achieved by repairs to the infrastructure and by going after “low-hanging fruit,” said Mahmoud al-Jubouri, an oil expert with Iraq’s South Oil Company, which has run Rumaila.
“They will try to reduce spending, fearing possible bad surprises in the future,” he said.
Rumaila was the only one out of six oilfields and two gas fields on offer that was successfully auctioned off in Iraq’s first tender of development contracts at the end of June.