Kudelski sets center in Beijing

Kudelski sets center in Beijing

The Kudelski Group, a global leading media content protection service provider, announced Wednesday it has established a digital TV research and development center in Beijing, to better support the growth of the Asian digital television market.
The research and development center will employ around 100 digital TV experts, said the Switzerland-based company.

Andre Kudelski, chairman and CEO of the firm, said the choice of Beijing has been motivated by the quality and the availability of the engineers from highly renowned universities in Beijing and by the proximity to key partners of the Kudelski Group in this region.
“The creation of a research and development center and office in Beijing demonstrates the firm’s belief that the Chinese market has a strong growth potential for the digital TV activities,” he added.
The company has been present in Chinese market since 1999, collaborating with major industry players including Beijing Gehua CATV Network Co Ltd and others.

Samsung recalls 32,000 refrigerators in China

Samsung recalls 32,000 refrigerators in China

Samsung China announced Tuesday it was recalling 32,000 of its RSH1STPE1¡¢RSH1STSW1¡¢RSH1VTPE1¡¢RSH1VTSW1¡¢RSH1ZLAW1 and RSH1ZTPE1 refrigerators sold in China, according to www.qq.com.
The two-door freezers, imported from South Korea and made between June 2007 and May 2008, reportedly have defrosting defects which could lead to a short circuit Engineers will be sent to households and make repairs for free.
The recall starts Tuesday.

Shangang arms reverse merger on track

Shangang arms’ reverse merger on track

Laigang and Jigang were suspended from trading yesterday due to asset restructuring.[China Daily] 
 Laiwu Steel Corp (Laigang) and Jinan Iron and Steel Co (Jigang) were suspended from trading yesterday, indicating that a reverse merger with their parent, Shandong Iron and Steel Group (Shangang), may have been officially kicked off.
Laigang and Jigang said in separate statements that they were preparing for a restructuring of their assets.
Industry insiders said Shangang would adopt Hebei Iron and Steel Group’s consolidation model, merging Jigang and Laigang into one listed arm, with Jigang as the restructuring platform.
After the merger, Shangang might become the country’s third largest steelmaker after Baosteel and Hebei Iron and Steel.
Hebei Iron and Steel, formed by a merger of Tangshan Iron and Steel Co, Handan Iron and Steel Co and Chengde Xinxin Vanadium and Titanium Co, made Tangshan its only listed arm after absorbing the other two listed arms through a share swap.
Shangang, which was founded in March 2008 and is fully owned by the provincial government, consists of Jigang and Laigang, the sixth and seventh largest steel markers in the country, and Shandong Metallurgical Industry Corp.
Under the provincial steel industry plan, the new group will have an annual output of 31.6 million tons.
However, Shangang’s consolidation move has been slow, and it has not taken any substantial steps to combine their equity.
However, the recent acquisition of a 67-percent stake in privately owned Rizhao Iron and Steel, which produces 8 million tons of crude steel annually, paved the way for this reorganization.
Shangang quickened its pace of consolidation after Rizhao’s acquisition. On Oct 20, it announced executive changes at Laigang and Jigang.
Xu Xiangchun, a senior analyst from consultant firm Mysteel, said the consolidation would enhance cooperation and reduce costs.

But he also warned that these companies faced challenges once the consolidation was in place. “Property rights and personnel management have complicated the integration process. Steelmakers should pay more attention to substantial integration of management and operation, rather than to increased capacity,” he said.
Shangang’s merger and acquisition strategy is also in line with the government’s guidance on steel industry consolidation, one of the country’s largest but fragmented sectors.
The Shandong provincial government aims to build a large steel group that can compete on the world stage, and the steel industry wants to develop a steel industrial zone along the coastline.
China will follow Japan’s pattern, gradually moving competitive production capacity to the coastal areas to give enterprises an edge over their inland counterparts in terms of the costs of environmental protection, land and transportation, because of increasing pressure over environmental protection, and awareness of the need to control logistical costs, according to KPMG’s recent steel report.

Cree set to double LED chip output

Cree set to double LED chip output

Cree Inc, a market leader in light emitting diode (LED) lighting, will double its chip production capacity next year to meet strong worldwide growth, a top company executive said.
The NASDAQ-listed US company signed an agreement with the local government of Huizhou, Guangdong province, yesterday to build the world’s largest manufacturing plant, with a floor area of 55,000 sq m, for LED chips. It is projected to start operating from July next year.
“This investment enables us to expand our presence in China and demonstrates our commitment to serving the growing demands of both our local and global LED customers,” said Chuck Swoboda, Cree chairman and CEO.
The company would further expand production capacity depending on market performance, he said.
China is already the largest market for Cree, with a controlling share of 38 percent. The company will continue to invest heavily in China, Swoboda said, adding that the company’s total invesment of $165 million in the 2009-10 fiscal year will mainly go to the US and China.
Cree’s move comes shortly on the heels of a national plan to accelerate the development of the energy-saving semi-conducting lighting industry, including LED and OLED (Organic Light Emitting Diode).
Outlined by the National Development and Reform Commission, the country’s top economic planning body, the plan seeks to increase the industry’s output by 30 percent annually from 2009 to 2015. More than 70 percent of the landscape and decoration lighting sector is expected to use LED or OLED products by 2015.

“It’s a great opportunity for the Chinese LED industry, which is well developed in the low-end application market but is still weak in the high-end processes like chip development,” said Tang Guoqing, a founding member of China Association of Lighting Industry.
Cree’s investment would bring the best technology to China and can encourage the entry of other leading LED chip makers, including Japan’s Nichia, Germany’s Osram and Netherland’s Philips, Tang said.
China’s semiconductor lighting industry was worth nearly 70 billion yuan($10.29 billion) last year, of which chip production was valued at just 1.9 billion yuan, or less than 3 percent, but the application market generated 45 billion yuan.
The global financial crisis has failed to cool the fast-growing industry, with annual growth surpassing 50 percent year-on-year since 2007 and touching 53.3 percent in 2008. Around half of the 2,000 LED production and research entities across the country are located in the Pearl River Delta area.

New page in exodus from top magazine

New page in exodus from top magazine

Hu Shuli

The latest resignations follow months of uncertainty about the future of the magazine, which is widely considered to be China’s most important news publication and which has earned respect because of its independent reports.
Media speculation had been rife about whether or not Hu’s resignation was imminent.
The SEEC is understood to have been trying for months to reel in the magazine’s editorial independence.
An inside source earlier told China Daily the SEEC wanted more control and the ability to censor financial stories, especially cover stories and investigative reports.
Hu, a veteran journalist , made sure the Beijing-based bi-weekly was vocal on issues relating to official scandals, corporate fraud and public health emergencies ever since the publication was founded in 1998. Caijing boasts a circulation of 225,000.

GMs sales over 1.5m units in China

GM’s sales over 1.5m units in China

US auto giant General Motors said Monday it had extended its record sales streak in China, selling more than 1.5 million units this year in contrast to weak sales in the US since exiting bankruptcy.
GM and its Chinese joint venture partners passed the 1.5 million mark Monday after a strong October pushed sales for the first 10 months to about 1.46 million, the company said in a statement.
The company has already passed its 1.3 million units sold in 2008.
“This has been a year of records for GM in China,” Kevin Wale, GM China Group president, said in the statement.
GM said it sold 166,911 vehicles in October — more than double the number sold in the same month a year earlier.
The automaker sold 177,603 new vehicles in the United States in October, up four percent from the same month in 2008 and its first year-on-year gain since January 2008.
GM emerged from a 40-day bankruptcy reorganization backed by the US and Canadian governments in July.
China’s overall auto market saw sales rise nearly 80 percent on-year last month with 923,154 units sold, state media reported, citing the China Passenger Car Association.In the first 10 months, vehicle sales soared nearly 52.4 percent over the same period last year to nearly 8.08 million units, state media reported.
Last year, a total of 9.4 million units were sold in China, up eight percent from the previous year, but market growth was slower than the on-year expansion of 21.8 percent in 2007.
China’s total car sales outstripped the US for the first time in January to make the Asian giant the world’s largest car market, helped by Beijing’s efforts to stimulate domestic consumption.
These measures included slashing taxes on cars with engines smaller than 1.6 liters and subsidizing alternative-energy vehicles.

Caijing founder resigns in tiff with publisher

Caijing founder resigns in tiff with publisher

The founder and editor-in-chief of Caijing resigned yesterday amid friction with her publisher, colleagues and the magazine said.

Hu Shuli’s departure is a major blow to Caijing, an 11-year-old financial news magazine that under her guidance tackled tough subjects such as corruption, pollution and public health scares.

Two Caijing employees said that Hu left because of disagreements with Caijing’s publisher, Hong Kong-listed SEEC Media Group, over editorial and financial control. One said dozens of the magazine’s 180-strong editorial staff resigned yesterday in a show of support for Hu.

Managing Editor Wang Shuo announced on Twitter that he had resigned but did not give a reason.

A woman who answered the phone at SEEC’s Hong Kong office and would give only her surname, Chan, said the company had no comment and referred calls to a Beijing office, where the phone rang unanswered.

Caijing spokeswoman Heidi Zhang told The Associated Press that Hu has no immediate plans to start a new magazine or other publication. Hu instead will likely take up an academic post in the communications department of Sun Yat-sen University in Guangzhou, capital of south China’s Guangdong Province.

The magazine was not closing down and Hu would stay on for about a month to help with the transition, Zhang said.

SEEC has other magazines in its portfolio, but Caijing is its flagship publication.

Jeremy Goldkorn, editor-in-chief of Danwei, a Website that covers Chinese media issues, called Hu’s resignation “a big loss for SEEC.”

“No one will take Caijing seriously now,” he said. “Hu Shuli is almost half the brand, if not more.”

Rumors of problems at Caijing have been swirling for months. The magazine’s general manager and 60 to 70 employees from the business department resigned last month.

The uncertainty surrounding Caijing has raised questions about the future of a partnership between the magazine and Hong Kong tycoon Richard Li that is expected to launch an English-language financial news service focused on China next year.

Cai Business Indepth Ltd, the Hong Kong-based company set up to run the service, said in an e-mailed statement late yesterday that it was “monitoring developments” at Caijing.

“Regardless of the changes announced at Caijing, we have understandings in place which ensure that we will continue to have exclusive content from China’s premier financial news editors and journalists,” the company said, without providing details.

Stroller maker seeks new loans

Stroller maker seeks new loans

The private equity owner of Goodbaby Group has called off the sale of China’s largest baby stroller maker after prices came in too low, forcing the company to seek new loans to refinance its debt, sources said.
The planned sale of Pacific Alliance Group’s (PAG) 67 percent stake in Goodbaby, which makes baby strollers and other products for infants for brands including Quinny, Nike Kids and Tommee Tippee, could be worth around $300 million.
Hong Kong-based PAG’s investment in Goodbaby was China’s first and rarely seen Western-style leveraged buyout (LBO) deal, completed in 2006 when PAG bought a 67 percent stake in Goodbaby for $122.5 million.
The sale, a rare opportunity for foreign investors to take a controlling stake in a Chinese consumer product leader, attracted interest from more than 20 companies, including Permira, TPG Capital, Morgan Stanley Private Equity Asia, Sweden’s EQT Partners and Affinity Equity Partners, but all talks stalled over price, said sources familiar with the situation.
“There’s a huge gap, at least 50 percent, between the seller’s expectation and the offers it can get from some buyers,” said one source.
“Meanwhile, it is a good company, a very well known Chinese brand, not something like a distressed asset, so the seller is definitely keen to get a good price tag for it,” he said.
Early this year, PAG hired Morgan Stanley for advice on the planned sale of its stake in Goodbaby. Both Goodbaby and Morgan Stanley declined to comment. PAG was not immediately available for comment.
The source declined to be identified, saying the bidding process was confidential and private.
Lion’s share
Goodbaby now controls nearly 70 percent of China’s stroller market, and it makes two out of every five strollers sold in the United States, according to a recent Forbes magazine article.
Goodbaby is now seeking $33 million in three-year syndicated loans to refinance part of its debt via a special purpose vehicle called G-Baby Holdings Ltd, according to loan market sources.
Loan market sources said they believe Goodbaby’s plan to re-enter the banking market for more loans came after it had difficulties finding a new owner to refinance its debt any time soon.

Loan market sources said the new three-year syndicated loans required by Goodbaby include two parts: a $23 million Term Loan A to partly refinance its outstanding debt of $57 million borrowed from banks in 2007, and a $10 million Revolving Credit B for its general corporate purposes.
Loan A’s maturity date is June 30, 2012, while Loan B’s maturity date is Sept 30, 2012, the loan sources said.
Goodbaby is now undergoing the syndication process and is expected to complete it by early November, they said.
Private equity investment has a brief history in China, and the government is especially concerned about deals involving major or influential domestic companies.
Despite a lack of high-price bids from private equity investors, Goodbaby might attract interest from strategic buyers at home or abroad, the sources said, but added no deal for a strategic buyer to take over the company was likely to happen quickly.

Tetra Pak supports Chinese, Swedish tree farms

Tetra Pak supports Chinese, Swedish tree farms

What Korsnas in northern Sweden and Yong’an in southern China’s Fujian province have in common is tree farms seeking certification from the international Forest Stewardship Council (FSC).
Tetra Pak, a leading food processing and packaging solutions company, linked the two sites to support efforts by operators of the two tree farms to earn certificates in responsible forestry management.
Korsnas is one of Tetra Pak’s 13 suppliers worldwide. The 13 suppliers deliver 2 million tons of paperboard each year to the packaging giant.
Tetra Pak said the Yong’an project promotes environmentally friendly management of forest resources in China.
The FSC is an independent non-profit organization that sets industry standards based on promoting environmental protections, recycling and business ethics.
Highest standards
“Our packages are based on renewable resources, wood fiber, and our goal is to have 100 percent of our wood fiber supply coming from forests that are certified to meet the highest standard – currently the FSC,” said Nils Bjorkman, a vice president of Sweden-based Tetra Pak Group who is in charge of commercial operations and cluster organizations of the group.
Bjorkman said Tetra Pak wants its factories to achieve 100 percent FSC certification by 2018.
So far, all paperboards processed from wood fiber that Tetra Pak uses in China are imported.
But the company is looking for qualified local suppliers to cut transportation costs and increase business efficiencies.
FSC certification here and developing a qualified local sourcing base are important steps that the multinational company has to take to achieve its goal, insiders said.

“The top requirements are safety and environmental protection,” Carol Yang, vice president of Tetra Pak China, told China Business Weekly.
Ten global suppliers – three in Scandinavia, five in North America, one in Brazil and one in Russia – provided 98 percent of the paperboard Tetra Pak needed last year. The remaining 2 percent was provided by suppliers in Pakistan, Japan and India.
Last year, 33 percent of the wood Tetra Pak used was from FSC certified forests, even though only 5 percent of the world’s productive forests were FSC certified.

SABMiller beer sales up in China

SABMiller beer sales up in China

For the world’s No 2 brewer, SABMiller, sales declines in Europe this year due to the global economic slowdown were cushioned by double-digit growth in China.
The London-based maker of Miller Lite, Peroni and Grolsch said in a recent statement that half-year underlying sales volumes through September fell 1 percent.
A 12 percent rise in the world’s biggest beer market, China cushioned dips in Europe, Latin America and South Africa, the company said.
Most forecasts in a poll of analysts by Reuters ranged from flat to a 1 percent decline, as the brewer’s volumes continued to suffer from price rises pushed through to offset sharp price increases in commodities such as barley, glass and aluminum.

The second-ranked brewer behind Anheuser-Busch InBev said its financial performance was in line with its own expectations, and that revenues were supported by the price increases taken in its previous financial year.
The brewer, which earns nearly 90 percent of its profits from emerging markets like South Africa, Colombia, Poland and China, is seen by analysts as the front-runner to buy Mexico’s second biggest brewer FEMSA Cerveza, the maker of Sol and Tecate beers, for around $7.5 billion.
Elsewhere in the sector, Anheuser-Busch Inbev recently said it had agreed to sell breweries in nine eastern European countries to CVC Capital Partners for an initial $2.23 billion, passing its target for divestments since its merger a year ago.
SABMiller, which also brews Castle, Snow, and Pilsner Urquell beers, said beer volumes dipped 1 percent in Latin America, fell 6 percent in Europe and slipped 3 percent in South Africa, while Asian volumes rose 9 percent boosted by strong growth in China and its Africa region was up 3 percent.
In the United States, where it formed the MillerCoors joint venture in July 2008, sales to retailers were off 1 percent in the half year, with both key brands Miller Lite and Coors Light seeing volumes down.
SABMiller was giving a first-half trading update ahead of its half-year results that will be reported on Nov 19.