Tag: Company

  • Startups blooms in Vietnam, liked by youngster

    Startups blooms in Vietnam, liked by youngster

    An increasing number of young Vietnamese are taking the startup route, willing to take risks and wait for rewards. Pham Khanh Linh seemed to be all set on a rewarding career, finding a job at global financial firm Goldman Sachs after graduating from the Cambridge University. But she quit the job in less than a year. Instead of pursuing a corporate employee path, the 25-year-old decided to return to Vietnam and start her own business, which she did last year.

    She said her ambition is to make a difference in her country.

    “I didn’t feel like I could make a difference with a corporate job. I wanted to influence more people,” she said.

    Linh is the founder and CEO of Logivan, a logistics service which optimizes trucks’ routes and reduces their empty load return rates. She came up with the idea after observing that about 60-70 percent of truck drivers in Vietnam go back to their base with empty trunks, because they cannot be connected with potential customers.

    “I saw a big problem for the logistics sector in Vietnam, but also an opportunity to make an impact.”

    Linh is one among an increasing number of aspiring entrepreneurs in Vietnam who are seeking to make a difference with startups in a country that is encouraging young people to start their own businesses.

    Le Anh Tien is another. While many of Tien’s friends at the University of Science and Technology in the central city of Da Nang began a quest for a stable corporate career immediately after graduation, he demurred.

    Tien joined with two other partners to found Chatbot Vietnam last year, a startup which provides solutions for businesses on Facebook Messenger to answer customers’ questions and help them order a product without the need for a customer service officer.

    With 13 employees, the 28-year-old plans to expand the service to Indonesia and the Philippines next year. “There are investors who are interested, but I haven’t said yes to them. I’m waiting for someone who could offer me a million-dollar investment.”

    About 75 percent of fresh graduates in Vietnam are interested in starting their own business, according to a recent survey by Navigos Search, a leading provider of executive search services in Vietnam.

    Fifty-two percent of them have never attempted a startup before but want to in the near future, while 22 percent of them have attempted at least once, said the survey, which polled 1,600 graduates with less than two years working experience.

    Nguyen Phuong Mai, managing director of Navigos Search, said that Vietnam is seeing a young generation of entrepreneurs who are determined to pursue the startup path.

    “These young people have a strong entrepreneurship spirit. We can observe this spirit in large companies, and even in our own,” she said.

    Supporting environment

    What motivates these people to start up is the support from the government and local companies in recent years, Mai added.

    At the Youth Startups Forum 2018 in Hanoi last November, Prime Minister Nguyen Xuan Phuc said that the Vietnamese government is willing to make changes in regulations to facilitate timely funding for startups.

    “We need a breakthrough innovation in policies from government bodies to help startups succeed with their ideas,” he told the forum, which attracted 300 entrepreneurs from across the country.

    Investment funds are also ready to pour cash and back aspiring young entrepreneurs. In August, Linh’s Logivan, dubbed “Uber for trucks,” received an investment from the Vietnamese fund VinaCapital Ventures, which has set aside $100 million to invest in technology startups.

    Singapore-based Ethos Partners and Singapore-based Insignia Venture Partners have also invested in the startup, bringing the total investment that Logivan has raised in the second round to $1.75 million, after raising $600,000 for the first round in March.

    In early December, Logivan became one of four winners of Pitch@Palace Global 3.0, a platform hosted by the Duke of York to accelerate the work of international entrepreneurs.

    Linh became the only Vietnamese representative to win the Entrepreneur of the Year title in a competition of 23 entrepreneurs from countries like Australia, China, Hungary and Singapore and the U.K.

    Tien’s startup, Chatbot Vietnam, also received financial support of $30,000 last year from Amazon and Facebook in the FbStart program, which is designed to assist mobile startups in their early stage.

    Another reason why more young people, aging from 26 to 35 years old, want to open startups is a desire to make an impact in their own country, said Mai of Navigos Search.

    Although there are a high number of young people who found a startup because they want to be successful and rich, Navigos surveys show that other popular reasons are “wanting to be a boss” and “wanting to have a personal value on the market,” she said.

    Inevitable failures

    The number of Vietnamese startups successful in attracting investment has been increasing in recent years, reaching 92 in 2017, a 45 percent increase over 2016, according to the Topica Founder Institute, which organizes an annual program that trains and connects startups with potential investors.

    The total value of the deals was $291 million in 2017, up 42 percent from 2016, the institute said.

    However, challenges are unavoidable for the new companies. Mai said that with a large number of people attempting startups, venture funds can only select a small number, leaving the rest to their own devices.

    The lack of funds is a vital challenge to startups. “80-90 percent of startups fail in the early stages because they don’t have enough funding to move on to the expansion stage,” Phan Hoang Lan, head of the Financial Planning Division under the Ministry of Science and Technology’s Market Development Department, said at a forum earlier.

    Mai added that most startups also fail because young leaders, no matter how passionate, lack the skills to manage a new company as well as the capability to create a complete product that is well-received by the market.

    Tien’s knows this struggle too well. His previous startup, a service which connects laborers with potential workplaces, could not continue due to a lack of funds. Other projects have also failed because the team members weren’t on the same page.

    But the failures are not in vain.

    Tien’s goal to pursue his own dream seems to have been partly achieved when Chatbot Vietnam became one of the top five companies in the Startup Viet 2018 competition in November. It also received a prize from Grab Venture, an innovation arm of ride-hailing firm aimed at supporting Southeast Asia’s startups.

    “Every time my startup fails, I learn something which I could never have known without the failures. Starting a business helps me become more versatile and complete.”

    “If this startup fails, I’ll do another. I still have a couple of ideas left,” he said.

  • Artificial intelligence is $300 billion cost-saving opportunity

    Artificial intelligence is $300 billion cost-saving opportunity

    The use of artificial intelligence in the retail sector is a $300 billion cost-saving opportunity for retailers which are able to scale and expand the technology, though just 1 per cent of retailers have achieved the necessary level of development, according to research from Capgemini Research Institute. The study looked at 400 global retailers, and how they are implementing the burgeoning technology at different stages of maturity, and found that over a quarter of retailers are deploying AI in their businesses – a seven-fold increase from 2016.

    “For global retailers, it appears reality has kicked in regarding AI, both in terms of what the technology can achieve and what they need to do to get there,” Capgemini vice president global consumer products and retail sector Kees Jacobs said.

    “Of course, deploying and scaling will be the next big objective, but retailers should be wary not to chase ROI figures without also considering the customer experience.”

    According to the research, retailers deploying AI systems were eight times more likely to be working on high-complexity projects rather than smaller projects which are easier to scale, and generally lack a focus on customer usability.

    Only 10 per cent of such retailers noted customer experience as a driving factor of these developments, and only 7 per cent noted customer pain points as a priority. Meanwhile, cost (62 per cent) and ROI (59 per cent) are driving most investment into the space.

    Despite this, 98 per cent of retailers surveyed expect customer complaints to decrease, while 99 expect to see an increase in sales, as a result of investment into AI – far ahead of the more contrasted expectations noted in 2017.

  • Sears US to close further 80 stores by March

    Sears US to close further 80 stores by March

    Bankrupt US retailer Sears has informed 80 further stores of impending closure, in addition to the 40 store closures already announced. The second batch of closures is expected to be finalised by late March 2019, with liquidation sales expected to begin in early January 2019. The closures have been made in an effort to accelerate and facilitate the ‘strategic transformation’ of the business, as well as assist its financial restructuring, though GlobalData Retail managing director Neil Saunders notes that the brand is now at rock bottom.

    “As a last roll of the dice, Sears has attempted to shrink its way to success by closing stores,” Saunders said.

    “While closure sales have helped to temporarily boost footfall and revenue at some shops, they have done nothing to put the firm on a sound footing. Nor have the efforts improved perceptions.”

    According to data from the research firm, overall customer usage of both the Sears and Kmart brands has fallen over the holiday period, and brand perception has fallen below the year prior.

    “Ultimately, reinventing Sears now would be akin to raising the Titanic and making it seaworthy again: a thankless and rather pointless task,” Saunders said, continuing that liquidation is the most likely outcome at this point of the bankruptcy process which began in October 2018.

    “In our view, the lack of bids and the difficulties [Sears chairman] Eddie Lampert is having in raising finance for his own offer reflects the fact that Sears is essentially worthless.”Adtech Ad

    Lampert stepped down as company chief executive when it filed for bankruptcy in October, and made a last-minute US$4.4 billion bid to buy the retailer in late December.

    The bid would “offer employment to up to 50,000 associates”, according to CNBC, and may divert the liquidation process should Sears’ advisors decide the bid to have come from a “qualified bidder”.

  • Samsung Heavy lands $189 million LNG carrier deal

    Samsung Heavy lands $189 million LNG carrier deal

    Samsung Heavy Industries said Monday that it has clinched a deal worth 210 billion won ($189 million) to build a liquefied natural gas (LNG) carrier. The contract, with a European shipper, calls for Samsung Heavy to deliver the vessel by March 2021, the company said in a regulatory filing.

    With the latest contract, Samsung Heavy has clinched deals valued at a combined $6.3 billion so far this year to build 49 ships, including 18 LNG carriers and 13 container vessels.

  • Korean drug companies anticipate a strong 2019

    Korean drug companies anticipate a strong 2019

    Korean pharmaceutical companies are entering 2019 with high expectations as several domestic drugs are expected to gain approval from overseas regulators this year. Though the Samsung BioLogics accounting fraud scandal made 2018 a less-than-stellar year for the pharmaceutical industry, bio firms are ready to get back on their feet with new drugs and licenses.

    Daewoong Pharmaceutical is one firm hoping to get the green light for sales of a product in the United States and Europe this year. Nabota, a botulinum toxin, or botox product, was submitted for approval to the U.S. Food and Drug Administration (FDA) and the European Medicines Agency in 2017.

    Last August, Nabota became the first domestic botox product to gain sales approval in Canada after Daewoong acquired the necessary permit from the country’s health authorities.

    Green Cross is another company awaiting FDA approval. Its I.V.-Globulin SN, an immunoglobulin product that treats immune deficiencies, is being reviewed by the agency.

    Though the FDA postponed approval of the drug last September when it requested supplementary documents from the company, Green Cross is optimistic that it will eventually get the go-ahead since I.V.-Globulin SN is already being sold in both Korea and overseas markets, such as Brazil.

    SK Biopharmaceuticals is waiting for the FDA to approve Cenobamate, an antiepileptic drug. Cenobamate is the first drug for which a Korean company has applied for FDA approval independently without going through global partner companies.

    If the drug is approved, SK expects that Cenobamate will become a huge cash cow that can generate up to 1 trillion won ($898.8 million) in annual sales just in the United States. The United States is the world’s largest market for epilepsy drugs.

    Last Thursday, Hanmi Pharmaceutical filed a license application for Rolontis, a drug intended to treat chemotherapy-induced neutropenia, with the FDA through Spectrum Pharmaceuticals. Hanmi is hoping to gain approval by the first half of 2020.

    Korean drug makers are hoping to make progress with clinical trials and technology exports this year.

    Yuhan is currently working with Janssen Biotech to conduct clinical trials for lung cancer drug Lazertinib. Two months ago, Janssen purchased out-licensing rights from Yuhan for Lazertinib in a deal valued at $1.25 billion.

    One of Chong Kun Dang Pharmaceutical’s most highly anticipated drug candidates is the CKD-702 bispecific antibody, an artificial protein used for cancer immunotherapy. Given the growing interest in bispecific antibodies around the world, industry experts predict Chong Kun Dang will be able to export the drug technology as early on as the pre-clinical stage.

    Hanmi and Jeil Pharmaceutical are also expected to complete Phase 2 clinical trials for their obesity drug HM15211 and stroke treatment JPI-289 this year, while SillaJen is due to complete Phase 3 clinical trials for its cancer treatment Pexa-Vec in the coming months.

    “Domestic pharmaceutical firms have tried to venture into the United States, the world’s biggest drug market, and their efforts will lead to real results next year,” said one spokesman from a pharmaceutical firm.

  • Vietnamese banks deposit rates rise as usual at year end

    Vietnamese banks deposit rates rise as usual at year end

    Banks usually hike deposit interest rates and even offer promotions at the year end, and this year has been no different. On December 19 Sacombank announced a rise in interest rates on deposits of three months from 5.2-5.3 percent to 5.5 percent, and on deposits of 12 months from 6.9 percent to 7.7 percent. VPBank has increased its rates by 0.1-0.7 percentage points, with deposits of 18 months and more carrying the highest rate of 7.8 percent.

    State-owned banks such as BIDV and Vietinbank have hiked rates by 0.1 to 0.5 percentage points.

    The management of a joint-stock bank headquartered in the south said lending usually rises in the last quarter of the year to meet the rising demand for short-term credit to serve the working capital needs of companies.

    As a result, many banks increase their deposit rates, especially for short terms, it said.

    Besides, experts said lenders are running out of time to use 45 percent of short-term capital for medium- and long-term loans, with the ratio to be reduced to 40 percent on January 1.

    The National Financial Supervisory Commission has recently estimated that credit growth to have slowed significantly to 15 percent this year from 18 percent in 2017.

  • Petronas buys 10% of Block 61 onshore Oman

    Petronas buys 10% of Block 61 onshore Oman

    Petroliam Nasional Bhd (Petronas), through its subsidiary, PC Oman Ventures Ltd (PCOVL) has acquired a 10% stake in Block 61, onshore Oman from Makarim Gas Development LLC (MGD), after the conditions for the completion of the transaction were fulfilled. MGD is a subsidiary of Oman Oil Company Exploration & Production LLC. Petronas said the completion of the transaction was formalised at an event held in Muscat, Oman on Dec 27.

    Following the deal, MGD’s stake in Block 61 will be reduced to 30%, while P Exploration (Epsilon) Ltd as the operator holds the remaining 60% stake.

    Petronas noted that the acquisition of Block 61 marks an important step in realising the group’s growth strategy in the upstream sector in the region and globally, as it aligns its activities to ensure sustainable energy supply.

  • IDG Capital and Hong Kong-based I.T Group invests in Acne Studios

    IDG Capital and Hong Kong-based I.T Group invests in Acne Studios

    Acne Studios has sold minority stakes to China-focused investment firm IDG Capital and Hong Kong-based I.T Group, ending almost a year of speculation that the brand would be acquired by a larger rival.

    Acne, one of the earliest and most successful purveyors of the “Scandinavian cool” style that has since become popular across fashion and design, had held talks with potential buyers as far back as 2013, from French luxury conglomerate Kering to private equity firms. Earlier this year, the company was working with Goldman Sachs on a possible sale, at a valuation of up to €500 million ($570 million).

    Instead, IDG and I.T Group will acquire stakes of 30.1 percent and 10.9 percent respectively, from Öresund, Creades and PAN Capital, Acne said in a statement Sunday. Founder Jonny Johansson and executive chairman Mikael Schiller will remain majority shareholders in the business.

    When Acne began shopping itself around earlier this year, the M&A market for fashion and luxury was booming, powered by perceived growth opportunities and increasing market complexity that made it harder and harder for sub-scale players to compete without greater access to the capital — and expertise — that sophisticated and deep-pocketed strategic or private equity investors can bring to the table. Over the course of 2018, Dries Van Noten sold a majority stake to Spanish luxury group Puig for an undisclosed sum, and Missoni sold a 41.2 percent stake to FSI Mid-Market Growth Equity Fund in transaction worth €70 million. Most recently, Michael Kors acquired Versace for $2.1 billion.

    But in recent months, the temperature of the market has changed. The ongoing trade spat between the US and China has fuelled economic uncertainty and raised questions about the future of luxury demand. Shares of publicly traded luxury brands have plummeted.

    The Stockholm-based label, founded in 1996, launched as a niche denim brand and has since built a strong modern contemporary-luxury name, well known for its upscale ready-to-wear and a distinct Scandinavian vibe that is popular with streetwear-attuned millennials. While the brand has yet to develop a strong leather goods offering, its sneakers are gaining traction. Last year, it generated $221 million in sales revenue with Ebitda, a measure of operating profit, of $35 million. It has over 50 own-brand stores in 13 countries.

    However, sales growth slowed at the brand last year, rising just 9 percent, the slowest pace in at least a decade, according to a Goldman Sachs presentation to potential buyers. The brand still generates 43 percent of its sales through a network of 600 wholesalers, a potential point of vulnerability in a world where direct-to-consumer fashion is stealing market share from department stores.

    Acne’s two new investors are likely to give the brand a leg up in Asia, already a key source of growth (Asia drove one-quarter of Acne’s sales last year, second only to Europe, according to the Goldman presentation). I.T Group has served as Acne’s Asian retail partner since the early 2000s. IDG Group, which has also invested in Farfetch and Moncler, specialises in expansion opportunities in China and the rest of Asia (10 of the firm’s 13 offices are based in the Asia region).

    “Acne Studios will greatly benefit from their extensive know-how within fashion and the rapidly evolving universe of online and offline retail,” Schiller said in a statement.

  • Average New Year bonuses in HCMC up 30 pct

    Average New Year bonuses in HCMC up 30 pct

    Average New Year bonus given by HCMC firms to an employee is VND3.4 million ($146), 30 percent higher than in 2018. For the 2019 Roman Calendar New Year, bonuses have been significantly higher than in 2018, Le Minh Tan, director of the HCMC Department of Labor, Invalids and Social Affairs said, citing a survey. The survey covered nearly 2,000 enterprises and 415,000 workers.

    On average, bonuses given by foreign invested enterprises for the New Year was VND9.4 million ($403.65), 70 percent higher than the last, the survey found.

    For this Roman Calendar New Year, the highest bonus was VND500 million ($21,470), given by a foreign-invested enterprise.

    For Lunar New Year (Tet), which falls in February, the highest reported bonus was VND1.17 billion ($50,343), coming from a bank headquartered in HCMC.

    The average reward for Tet offered by enterprises surveyed is over VND10 million ($430.78) per person. Only four respondent businesses reported facing difficulties and not giving Tet bonuses for employees.

    There are still some enterprises that have not announced Tet bonuses for workers, waiting for business results. These firms plan to announce their bonuses by mid-January.

    Last Tet, the highest Tet bonus in HCMC was VND855 million ($36,718), given by an unidentified private enterprise.

  • Vietnam GDP growth tops 7 pct, highest in a decade

    Vietnam GDP growth tops 7 pct, highest in a decade

    Vietnam’s GDP growth of 7.08 percent this year retained its status as one of the best performing economies in the world. It was the highest growth the country has experienced since 2008 and compared with the median estimate of 6.9 percent in a survey of 12 economists.

    The scale of the economy at present value is over VND5.53 quadrillion ($237.38 billion), with average GDP per capita at $2,587 per person, a $198 increase over 2017, Nguyen Bich Lam, head of the General Statistics Office, said Thursday afternoon.

    According the office, the agriculture, forestry and fisheries sector grew by 3.76 percent this year, and contributed to 8.7 percent to the country’s GDP. Corresponding figures for industry and construction sectors were 8.85 percent and nearly 49 percent; and that of the service sector, 7.03 percent and approximately 43 percent.

    Lam said that the consumer price index (CPI) in December 2018 fell by 0.25 percent compared to the previous month. On average, CPI in 2018 increased by 3.54 percent, well below the 4 percent target set by the National Assembly.

    Export turnover for the year is estimated at over $244.7 billion, up nearly 14 percent compared to 2017.

    The FDI sector (including crude oil) still accounts for nearly 70 percent of export turnover, at more than $175.5 billion.

    On the other hand, Vietnam imported more than $237.5 billion the whole year, up 11.5 percent over 2017.

    Overall, in 2018 Vietnam achieved a trade surplus of $7.2 billion.

    “The quality of economic growth has improved,” Lam said.

    The GSO director general explained that labor productivity this year saw an increase of nearly 6 percent compared to 2017, at VND102 million (nearly $4,512) per person.

  • The highs and lows of Indian retail real estate in 2018

    The highs and lows of Indian retail real estate in 2018

    2018 saw further liberalization of FDI policies, repositioning Indian retail on the global investment map and attracting a large number of global retailers into the country. In H1 2018, private equity investments into Indian retail swelled to over US$ 300 million, denoting a bracing growth of 54 percent over the previous year.

    Worryingly or encouragingly (depending on one’s viewpoint) online retail also witnessed exponential growth in 2018. In fact, online retailing is now expected to be at par with physical retail over the next 5 years. With India positioned to become the world’s fastest-growing e-commerce market, online retail in the country is driven by robust investments and deepening internet penetration in the country.

    As per ANAROCK data, the top cities with significant retail growth in 2018 included MMR, NCR, Bengaluru and Hyderabad
    New retail supply in 2018 was limited to 5.1 mn. sq. ft.
    Interestingly, apart from the top metros tier 2 & 3 cities played a significant role in India’s retail growth story in 2018

    Saturation of the metros due to limited space availability, mounting rental values and escalating infrastructure issues fuelled retail growth in smaller cities like Ahmedabad, Bhubaneshwar, Jaipur, Lucknow, Thiruvananthapuram, etc. New malls that became operational in the smaller cities in 2018 range from anything between 200,000 to 18,00,000 sq. ft. in size, amply vouchsafing the increasing appetite for organized retail in the hitherto underserved cities.

    In response to the huge potential in these markets, both domestic and international brands made deep forays into them via the online route, followed by more gradual offline presence. This disparity is hard to ignore and sends out a clear signal to investors and mall developers – physical retail deployment must pick up considerable pace in these smaller markets in the coming years.

    Other Sunshine Sectors

    The logistics and warehousing sector transformed rapidly in 2018 after the Government granted the coveted infrastructure status to logistics in November 2017. In fact, warehouse stock supply is expected to see substantial increase over the next two years owing to implementation of GST, the Government’s determined infrastructure push and increased interest from national and international investors. Overall, strong economic fundamentals, proactive reforms and increasing use of technology will continue to boost the sector.

  • How the retail industry has fared in 2018

    How the retail industry has fared in 2018

    The overall retail market in India 2018 stood at Rs 43,251 billion and is forecast to grow by 6.4 percent CAGR in 2018-2023. Retailing in India still predominantly takes place in physical stores and shopping behaviour between urban and rural consumers continues to be vastly different. Smaller independents (both grocery retailers and non-grocery specialists) continued to dominate the landscape they faced growing competition from modern outlets opening in out-of-town shopping centres and malls capturing the Tier II & III markets.

    This year, we witnessed modern retailers launch interesting payments schemes and effective pricing strategies to propel the sales. For example, leading retailer Future Group launched its payment wallet Future Pay which can be used in all its retail brand outlets. Retailers also capitalised on growing acceptance of modern retail by developing new marketing schemes and strategies to attract shoppers.

    Additionally, multi-channel strategies remained key for retailers as they are developed online platforms that are also smartphone and tablet compatible to drive Internet sales.

    Furthermore, retailers also increased their new private labels products. This is was done for certain grocery categories like: packaged foods, non-alcoholic drinks, beauty and personal care and home care products.

    Finally, subscription-based retailing practices started to pick up in 2018. Although still relatively niche, and limited only to urban India, the subscription-based model for beauty and personal care and consumer health became quite popular in metropolitan cities.

    What are the retail trends that are going to rule the roost in retail in 2019?

    – Retailing will continue to offer potential for grocery retailers. Convenience stores and forecourt retailers are likely to continue to see healthy growth rates as their format can meet the demands arising from changing lifestyles by offering more convenient shopping solutions, both in terms of location, business hours and product range.

    – Given the rising maturity of retailing in metros/urban areas, retailers have slowly started to focus on the semi-urban consumer base. This has resulted in the slow and steady urbanisation of shopping styles amongst semi-urban consumers.

    – As the labour crunch and high rentals continue to affect the retail landscape in India, hypermarkets are looking to ramp up investment on self-service technology and automation to reduce costs and improve customer experience. Some hypermarkets chains have implemented self-service kiosks at checkout counters, generally with positive results because of reduced waiting times. Investments have also been made into automated ordering systems, which has helped brands reduce storage space at outlets, hence control rental costs. This can be expected to grow during 2019 as well.

    – Furthermore supermarkets are likely to push the broadening of key product categories, such as organic fresh food, soft drinks and packaged food. They are also likely to further narrow the line between foodservice and grocery retailing, with the introduction and integration of new foodservice elements within their stores.

    – Non-grocery retailing will likely be impacted by the growth of internet retailing at the expense of specific store-based retailers and other non-store channels. Consumers are expected to increasingly shop and research products online, with the popularity of smartphones making mobile-optimised sites and shopping apps crucial in attracting consumers. Moreover, social media will be used more often to alert consumers to attractive price promotions and build interest in new product launches. Also, omni-channel strategies will remain key for non-grocery retailers.

    – Non-grocery retailers will increasingly integrate their online brand information with store inventory, as consumers expect to find the same products in both channels. Moreover, to minimise showrooming, players will also need compelling reasons for customers to buy their brands in store, whether in terms of product selection or price competitiveness.

    – The entry of Amazon and Flipkart could stimulate a much-needed increase in the competition, which will bring both opportunities and threats for existing food and drinks retailers in India. Amazon with ‘Amazon Pantry’ and Flipkart with ‘Flipkart Supermart’ eventually launched its online grocery business in 2018. Millennials and affluent consumers were encouraged to change from shopping in physical stores to online in 2018 with convenience and heavy discounts on offer. Also, with increasing investments from player such as Amazon who are expected to buy skate in Future Retail and PayTm who have partnered with BigBasket and Future Group to strengthen its online grocery business, the food and drinks internet retailing is expected to show tremendous growth in 2019.

  • Strong sales growth for India’s textile manufacturing sector in Q2

    Strong sales growth for India’s textile manufacturing sector in Q2

    The manufacturing sector, particularly textile and iron and steel segments, maintained its pace of sales growth in the second quarter of 2018-19 as compared to the year-ago period, the RBI said on Wednesday. Demand condition in the manufacturing sector “maintained its pace in the September quarter 2018-19 as reflected in strong sales growth (year-on-year)”, as per the RBI analysis of 2,700 listed private sector non-financial companies.

    “The manufacturing sector sales growth was mainly supported by robust demand conditions in chemical and chemical products, iron and steel, and petroleum products industries coupled with significant improvement recorded by textile industry,” the RBI said.

    The central bank said heavy moderation was seen in the sales growth of motor vehicles and other transport equipment, driven in part by a large adverse base effect, and pharmaceutical and medicine industries.

    The information technology (IT) sector also recorded further improvement in sales growth over the year-ago period.

    The manufacturing sector continued to record strong growth in net profits, which received support from other income.

    The RBI said companies in manufacturing sector posted a net profit of Rs 47,100 crore in the reported quarter, up 29.4 per cent from the same period last year. The data is based on abridged financial results of 1,734 companies in the manufacturing sector.

    “Despite continuous contraction in the telecommunication, the services (non-IT) sector posted a turnaround riding on the support from wholesale and retail trade,” the RBI said.

    The profit of IT sector, based on data of 172 firms, was Rs 17,700 crore in the second quarter, up 5.8 per cent over the July-September period of 2017-18.

    As per the RBI, the combined sales of 2,700 companies was Rs 9,81,800 crore in the September quarter, up 18.2 per cent from the year-ago period.

    Their net profit was Rs 71,900 crore, an increase of 41.7 per cent year-on-year.

    On expenditure front, manufacturing companies continued to face rising input cost (cost of raw materials, staff cost) pressures. In case of IT sector, staff costs accelerated in tandem with the improvement in sales growth, the RBI said.

  • Samsung to sell latest generation chip to IBM

    Samsung to sell latest generation chip to IBM

    Samsung Electronics will supply next-generation microprocessor chips to IBM, which will use the chips for artificial intelligence (AI) computing and cloud system applications, both companies said Friday. The product Samsung will manufacture for IBM is a seven-nanometer processor made by extreme ultraviolet (EUV) lithography technology. The seven-nanometers in the name refers to the width of the circuit through which electricity flows on the semiconductor. The dominant product until recently has been rated 10-nanometer.

    Narrower circuits ensure faster data processing speeds, less electricity consumption and higher area efficiency, with more transistors printed on a given amount of silicon, the base material for semiconductors.

    IBM said in a press release that the strategic partnership will position the two companies to lead “the new era of high-performance computing specifically designed for AI.”

    “IBM selected Samsung to build our next generation of microprocessors because they share our level of commitment to the performance, reliability, security and innovation that will position our clients for continued success on the next generation of IBM hardware,” said John Acocella, vice president of Enterprise Systems and Technology Development for IBM Systems.

    The U.S. company and Samsung have been research and development partners for 15 years.

    For Samsung, the deal is a significant milestone for its foundry business, which is to manufacture semiconductors for external clients that do not have chip fabrication facilities.

    The company is already a leader in DRAM and NAND memory chips, but it is now focusing on the fast-growing foundry market. IHS Markit estimates that the subsector will grow an average of 7.8 percent a year until 2021-which is faster than 5.3 percent expected for DRAMs and 6.1 percent for NANDs.

    Samsung is currently ranked global No. 4 among foundries, with a market share of less than 10 percent. As it works to climbing up the rankings, a client like IBM helps establish momentum for future deals.

    In February, Samsung signed a foundry deal with Qualcomm to supply seven-nanometer processors for 5G mobile devices. The company hopes the seven-nanometer processor chip will help as it works to expand its market share. It is currently one of two foundries known to manufacture the product. The other is Taiwan Semiconductor Manufacturing Company, the No. 1 semiconductor foundry with more than 50 percent market share.

    Samsung’s EUV lithography technology was developed earlier this year to mass produce seven-nanometer semiconductors, as the conventional way of printing circuits on 10-nano chips were not sophisticated enough to print thinner circuits.

    A new facility specializing in EUV lithography is under construction at Hwaseong, Gyeonggi, and is due for completion by the second half of next year. Samsung also revealed in May that it plans for the mass production of three-nanometer processors by 2020.

  • Sunway Malaysia sells land, assets to Sunway REIT for RM550m

    Sunway Malaysia sells land, assets to Sunway REIT for RM550m

    Sunway Bhd is selling its land and assets to Sunway Real Estate Investment Trust (Sunway REIT) for RM550 million cash. Sunway said that its wholly owned subsidiary Sunway Destiny Sdn Bhd had on December 24 entered into a conditional sales and purchase agreement with RHB Trustees Bhd, being the trustee of Sunway REIT, for the proposed disposal.

    The exercise entails the disposal of three parcels of leasehold land in Sunway Town, Petaling Jaya, together with buildings comprising a five-storey academic block, a six-storey academic block, a 13-storey academic block as well as four blocks of five-storey walk up hostel apartment.

    Sunway said the proposed disposal will allow the group to unlock the value and realise its investment in the land and buildings, which will result in an improvement in the earnings per share of the Company by about 0.9 sen.

    Proceeds from the disposal will also lead to a net cash inflow of RM311.3 million for the group, with part of the proceeds will be utilised to repay existing bank borrowings, which is expected to reduce the group’s gearing and potentially save RM9.9 million of finance expense per annum.