Business

Trans-Pacific Partnership,12 Pacific Rim Nations to set up a free-trade zone

Published

9 years ago

October 6, 2015

Bchcomber

welve nations, including Canada, have reached a tentative deal on a massive Pacific Rim trading bloc billed as the largest-ever deal of its kind

Japanese auto makers and some of its electronics firms, as well as apparel makers with factories in Vietnam, stand to benefit from the sweeping trade deal reached this week to cut tariffs among 12 Pacific nations, including the U.S.

But auto makers and car-parts suppliers in South Korea and China—countries that didn’t sign up to the Trans-Pacific Partnership—stand to lose, with some of their shares slumping Tuesday on concerns over the impact of the historic accord.

The Japanese auto industry hailed the trade agreement, which would phase out the 2.5% U.S. duty on imported cars over 25 years, benefiting companies such as Toyota Motor Corp. and Subaru, part of Fuji Heavy Industries Ltd.

The deal would also scrap the 2.5% levy on many auto parts when it takes effect, giving them a more immediate benefit. Negotiators from the U.S., Japan and 10 other countries struck the deal Monday in Atlanta after a weekend of round-the-clock negotiations. The TPP isn’t yet a done deal. Each country must have the accord formally ratified by its legislatures and the path is thorny for some signatories, including the U.S.

The deal “would build a framework for economic partnership with very important markets for the automotive industry that were not covered by Japan’s existing economic partnerships, such as the U.S. and Canada,” Fumihiko Ike, chairman of the Japan Automobile Manufacturers Association lobbying group, said Tuesday.

Click Image to enlarge

While U.S. auto-industry competitors such as Ford Motor Co. object to the agreement, analysts said it won’t be a windfall for Japanese car makers as U.S. tariffs on cars and parts were already relatively low, and the phase-out period for the duty on cars is long. A 25% U.S. tax on imported trucks, including pickups and commercial vans, will remain in place for 30 years, according to a senior U.S. official.

Japanese auto makers have already shifted production aggressively, seeking to avoid tariffs, protect themselves from currency fluctuations and shorten supply chains. As of last December, Japanese auto makers owned 26 assembly plants in the U.S., according to the manufacturers’ association, which says more than 70% of Japanese-branded vehicles sold in the U.S. are built in North America.

Japan’s Canon Inc., a major manufacturer of digital cameras and office printers, said it expects to benefit from TPP as the latest deal will eliminate tariffs on more of its products not covered by an existing international trade agreement.

Companies with production bases in Vietnam, such as apparel and textile makers, will likely benefit from low trade barriers to their goods, analysts said. Shares of some apparel and textile makers soared Tuesday on expectations they will benefit from either a removal or lowering of tariffs.

Korea-based Hansae Co., whose plants in Vietnam account for 60% of its total output, rose 4.1%. Pan-Pacific Co., which relies on half of its apparel production from factories in Vietnam rose 4.3%. A Hansae spokeswoman declined to comment on the potential impact on the company’s operations. Officials at Pan-Pacific weren’t immediately available for comment.

Shares of Korean auto makers and auto-parts suppliers, meanwhile, slumped in Tuesday trade as investors were concerned that South Korea’s exclusion from the trade deal would hurt companies’ competitiveness while benefiting rivals in Japan.

“This is bad news for Korean companies,” said Kiwoom Securities analyst Ma Ju-ok. “Korean auto makers have enjoyed tariff advantages when they export cars to the U.S. through a bilateral trade agreement. The TPP deal means Japanese auto makers now will have the same or similar tariff rates with their exports to the U.S.”

Hyundai Motor Co. shares finished down 3.7% at a three-week low, while Kia Motors Corp. fell 3.2%. Auto-parts maker Hyundai Mobis declined 0.9%.

South Korea, an export-reliant economy, has free-trade agreements with 10 of the 12 TPP founding members, including the U.S. While Seoul has expressed interest in TPP in the past, it has prioritized bilateral free-trade talks, including a deal last year for a free-trade agreement with China.

South Korea’s technology heavyweights such as Samsung Electronics Co. and LG Electronics Inc. have been exporting their consumer goods and electronics parts to key markets without many tariff barriers thanks to free-trade agreements with respective countries, which will mitigate any negative impact from the country’s initial exclusion from the TPP, analysts said.

In China, auto-parts makers could be hurt by the deal, said Zhang Junyi, a partner at Roland Berger Strategy Consultants. Over the long term, the trade deal could affect China’s exports of labor-intensive parts such as tires and glass. With slashed tariffs between TPP members, Chinese auto-parts companies may be forced to relocate manufacturing facilities to lower-cost areas of Southeast Asia like Vietnam, Mr. Zhang said. It could also encourage more auto-parts makers to set up manufacturing operations in the U.S.

But Chen Yang, spokesman for Ningbo Joyson Electronic Corp., which makes driver and climate controls, said the TPP deal won’t affect the company’s business because it already produces auto parts outside China. “Our overseas operations contribute to nearly 70% of the company’s revenue. China-made parts are mainly sold within China,” he said.

For industries from pharmaceuticals to heavy equipment, the impact of the TPP agreement on Chinese companies will likely be muted in the near term, but could force ambitious Chinese firms to step up investment overseas to ensure access to global trade dollars.

Chinese machinery makers including Sany Group and Zoomlion Co. have been targeting greater business overseas, including in Australia, the U.S. and elsewhere. The companies didn’t respond to requests for comment on the TPP agreement.

“If you are going to see a regionwide trade agreement that makes it much easier or cheaper to trade within the region, then one solution for China—or anyone else for that matter — is to just relocate some assets or production facilities within that region,” said John Zhu, an economist at HSBC in Hong Kong.

Chinese drug makers are less active in many TPP markets than global industry leaders, said Asa Cox, founding partner at TPP Healthcare, an advisory firm. Yet down the road, not joining TPP could serve as a barrier to the U.S. and other rich markets.

“If they do stay out the agreement, then maybe that will hinder the future of the pharmaceutical industry because they do have ambitions to grow a much larger global footprint,” he said.

By Yoko Kubota and Eric Pfanner

Business

PepsiCo Reduces Revenue Projections As North American Snacks And Key International Markets Underperform.

Published

2 months ago

October 8, 2024

Salman

(VOR News) – In the third quarter of this year, Pepsi’s net income was $2.93 billion, which is equivalent to $2.13 per share. This was attributed to the company.

This is in stark contrast to net income of $3.09 billion, which is equivalent to $2.24 per share, during the same period in the previous year. The company’s earnings per share were $2.31 when expenses were excluded.

Net sales decreased by 0.6%, totaling $23.32 billion. Organic sales increased by 1.3% during the quarter when the effects of acquisitions, divestitures, and currency changes are excluded.

Pepsi’s beverage sales fell this quarter.

The most recent report indicates that the beverage and food sectors of the organization experienced a 2% decline in volume. Consumers of all income levels are demonstrating a change in their purchasing habits, as indicated by CEOs’ statements from the previous quarter.

Pepsi’s entire volume was adversely affected by the lackluster demand they encountered in North America. An increasing number of Americans are becoming more frugal, reducing the number of snacks they ingest, and reducing the number of times they purchase at convenience stores.

Furthermore, Laguarta observed that the increase in sales was partially attributed to the election that occurred in Mexico during the month of June.

The most significant decrease in volume was experienced by Quaker Foods North America, which was 13%. In December, the company announced its initial recall in response to a potential salmonella infection.

Due to the probability of an illness, the recall was extended in January. Pepsi officially closed a plant that was implicated in the recalls in June, despite the fact that manufacturing had already been halted.

Jamie Caulfield, the Chief Financial Officer of Pepsi and Laguarta, has indicated that the recalls are beginning to have a lessening effect.

Frito-Lay experienced a 1.5% decline in volume in North America. The company has been striving to improve the value it offers to consumers and the accessibility of its snack line, which includes SunChips, Cheetos, and Stacy’s pita chips, in the retail establishments where it is sold.

Despite the fact that the category as a whole has slowed down in comparison to the results of previous years, the level of activity within the division is progressively increasing.

Pepsi executives issued a statement in which they stated that “Salty and savory snacks have underperformed year-to-date after outperforming packaged food categories in previous years.”

Pepsi will spend more on Doritos and Tostitos in the fall and winter before football season.

The company is currently promoting incentive packets for Tostitos and Ruffles, which contain twenty percent more chips than the standard package.

Pepsi is expanding its product line in order to more effectively target individuals who are health-conscious. The business announced its intention to acquire Siete Foods for a total of $1.2 billion approximately one week ago. The restaurant serves Mexican-American cuisine, which is typically modified to meet the dietary needs of a diverse clientele.

The beverage segment of Pepsi in North America experienced a three percent decrease in volume. Despite the fact that the demand for energy drinks, such as Pepsi’s Rockstar, has decreased as a result of consumers visiting convenience stores, the sales of well-known brands such as Gatorade and Pepsi have seen an increase throughout the quarter.

Laguarta expressed his opinion to the analysts during the company’s conference call, asserting, “I am of the opinion that it is a component of the economic cycle that we are currently experiencing, and that it will reverse itself in the future, once consumers feel better.”

Additionally, it has been noted that the food and beverage markets of South Asia, the Middle East, Latin America, and Africa have experienced a decline in sales volume. The company cut its forecast for organic revenue for the entire year on Tuesday due to the business’s second consecutive quarter of lower-than-anticipated sales.

The company’s performance during the quarter was adversely affected by the Quaker Foods North America recalls, the decrease in demand in the United States, and the interruptions that occurred in specific international markets, as per the statements made by Chief Executive Officer Ramon Laguarta.

Pepsi has revised its forecast for organic sales in 2024, shifting from a 4% growth rate to a low single-digit growth rate. The company reiterated its expectation that the core constant currency profitability per share will increase by a minimum of 8% in comparison to the previous year.

The company’s shares declined by less than one percent during premarket trading. The following discrepancies between the company’s report and the projections of Wall Street were identified by LSEG in a survey of analysts:

SOURCE: CNBC

Business

Old National Bank And Infosys Broaden Their Strategic Partnership.

Published

2 months ago

October 8, 2024

Salman

(VOR News) – Old National Bank, a commercial bank with its headquarters in the Midwest, and Infosys, a firm that specializes in information technology, have recently entered into a strategic expansion of their link, which has been in place for the past four years.

This expansion is more likely to take place sooner rather than later, with the likelihood being higher.

For the purpose of making it possible for Old National Bank to make use of the services, solutions, and platforms that are offered by Infosys, the objective of this expansion is to make it possible for the bank to transform its operations and processes through the application of automation and GenAI, as well as to change significant business areas.

This lets the bank leverage Infosys’ services, solutions, and platforms.

Old National Bank Chairman and CEO Jim Ryan said, “At Old National, we are committed to creating exceptional experiences for both our customers and our fellow employees.”

This statement is applicable to Old National Bank. Infosys is carefully managing the business process innovations that it is putting us through, putting a strong emphasis on efficiency and value growth throughout the process to ensure that it is carried out efficiently.

This is a routine occurrence throughout the entire operation. Because of Infosys’ dedication to our development and success, we are incredibly appreciative of the assistance they have provided.

Old National has been receiving assistance from Infosys in the process of updating its digital environment since the year 2020, according to the aforementioned company.

Ever since that time, the company has been providing assistance. The provision of this assistance has been accomplished through the utilization of a model that is not only powerful but also capable of functioning on its own power.

Infosys currently ranks Old National thirty-first out of the top thirty US banks.

This ranking is based on the fact that Old National is the nation’s largest banking corporation.

It is estimated that the total value of the company’s assets is approximately fifty-three billion dollars, while the assets that are currently being managed by the organization are valued at thirty billion dollars.

Dennis Gada, the Executive Vice President and Global Head of Banking and Financial Services, stated that “Old National Bank and Infosys possess a robust cultural and strategic alignment in the development, management, and enhancement of enterprise-scale solutions to transform the bank’s operations and facilitate growth.”

This remark referenced the exceptional cultural and strategic synergy between the two organizations. Dennis Gada is the one who asserted this claim. This was articulated explicitly concerning the exceptional cultural congruence and strategy alignment of the two organizations.

We are pleased to announce that the implementation of Infosys Topaz will substantially expedite the transformation of Old National Bank’s business processes and customer service protocols. We are exceedingly enthusiastic about this matter. We are quite thrilled about this specific component of the scenario.

Medium-sized banks operating regionally will continue to benefit from our substantial expertise in the sector, technology, and operations. This specific market segment of Infosys will persist in benefiting from our extensive experience. This phenomenon will enable this market sector to sustain substantial growth and efficiency benefits.

SOURCE: THBL

Business

American Water, The Largest Water Utility In US, Is Targeted By A Cyberattack

Published

2 months ago

October 8, 2024

kiaragrace

The largest regulated water and wastewater utility company in the United States stated Monday that it had been the target of a cyberattack, forcing the company to halt invoicing to consumers.

American Water, The Largest Water Utility In US, Is Targeted By A Cyberattack

American Water, based in New Jersey and serving over 14 million people in 14 states and 18 military facilities, said it learned of the unauthorized activity on Thursday and quickly took precautions, including shutting down certain systems. The business does not believe the attack had an impact on its facilities or operations and said employees were working “around the clock” to determine the origin and scale of the attack.

water

The corporation stated that it has alerted legal enforcement and is cooperating with them. It also stated that consumers will not be charged late fees while its systems are unavailable.

According to their website, American Water operates over 500 water and wastewater systems in around 1,700 communities across California, Georgia, Hawaii, Illinois, Indiana, Iowa, Kentucky, Maryland, Missouri, New Jersey, Pennsylvania, Tennessee, Virginia, and West Virginia.

SOURCE | AP