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June 05, 1999atimes.com
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Business in Asia Today

Telecom NZ becomes biggest shareholder in AAPT
SYDNEY - Telecom New Zealand has emerged as the largest shareholder in Australia's third telco AAPT Ltd. (ASX:AAP) after acquiring another 10 percent of the company as it moves to establish a presence in the Australian market.Telecom NZ paid about $140 million to buy a further stake of nearly 10 percent at an average price of just under $5.00 a share, increasing its overall stake to 19.9 percent.The shares were bought from a range of long standing institutional investors, both local and from the United States and Europe, sources said. The acquisition makes the kiwi telco the largest shareholder in AAPT followed by AAP Information Services, with 17.3 percent and former rival bidder C&W Optus (ASX:CWO) with 10.6 percent. Earlier this week C&W Optus was forced to withdraw its $5.00 a share bid for AAPT after the Australian Competition and Consumer Commission said it would not pass the merger.

German firm eyes Daewoo Motor's commercial division
SEOUL - Man AG of Germany is showing strong interest in taking over the commercial vehicle division of South Korea's Daewoo Motor, an official of the organizing body of the APEC Investment Mart said. The world's largest truck maker will send a 19-member delegation to South Korea in mid-July to hold talks with Daewoo officials for the acquisition. The Daewoo Group is reportedly seeking foreign buyers, including Man AG and Scania AB of Sweden, for its commercial vehicle operations in Daewoo Motor and Daewoo Heavy Industries. Daewoo hopes the sale of it's commercial vehicle division will fetch $1 billion, the official added.

S.Korea to tax traditional, imported spirits equally
SEOUL - South Korea will apply the same liquor tax on traditional Korean spirits as that of imported whiskey from January 31 next year, the Finance and Economy Ministry said. The government plans to raise the liquor tax on soju to above 100 percent after a ruling in January by the World Trade Organization (WTO). The WTO found fault with the country's discriminatory liquor tax rate, saying the government must levy the same tax on Korean traditional liquor as it does on imported liquor.The liquor tax is currently 100 percent for imported whiskey and 35 percent for soju.

Libya to pay S.Korea Dong Ah Construction $100m
SEOUL - South Korea's Dong AhConstruction Co. (KSE: 00280) will earn $100 million fromLibya through 2003 for technical assistance to the GreatMan-made River (GMR) Project, Dong Ah Construction PresidentLee Chang-bok said. Dong Ah reached an agreement on the technical servicecharges with ANC, the state-invested Libyan firm in charge ofthe project, on April 27 in Tripoli, Lee said. The figure is equivalent to 4 percent of the total value of the GMR project Dong Ah will start in September this year. Dong Ah will undertake the first and second part of thethird stage work of the GMR Project for $1.2 billion and $1.3billion, respectively, for a combined total of $2.5 billion.The first-part work, the laying of 190 kilometers of pipelines inLibya, will start in September and be completed in August2002.

Euro adversely affecting S.Korea trading companies
SEOUL - The launch of the euro has beenadversely affecting South Korea's trading companies active inthe European Union, the Korea International Trade Association(KITA) said. In a survey of the top 200 Korean exporters to the EUmarket, KITA said 27.5 percent reported suffering negativeeffects from the launch of the euro; only 3.9 percent said theeuro has worked to their advantage. On how the euro has brought on an adverse impact, 51.4percent cited dwindling export profitability due to the euro'sdevaluation, 16.2 percent the implementation of the doublepricing system, 13.5 percent a price drop arising from achanged distribution structure and the departure of buyers and10.8 percent the strong competitiveness of European products.About 52 percent said they are still undecided on whetherto adopt the euro. Only 3.9 percent said they have changed their marketingstrategy towards the EU region.

S.Korean shipbuilders get orders for 11 vessels this year
SEOUL - South Korea's shipbuilders last month landed a monthly high in terms of orders this year with 1.01 million tons for 11 vessels, the Korean Shipbuilding Industry Association said. "Major domestic shipbuilders have been negotiating on several large-scale projects, and orders are expected to rise," an industry source said. Orders secured from January through May totaled 2.2 million tons for 45 vessels, down 55.8 percent from 3.95 million tons received during the first five months of last year. Ships built between January and May amounted to 4.29 million tons, up 27.6 percent from a year earlier. Orders outstanding at the end of May reached 19.1 million tons, about the same as last year.

Korea's Shinsegi to buy mobile handsets from Sanyo
SEOUL - South Korea's Shinsegi Telecomsigned an agreement to import CDMA mobile handsets fromthe Sanyo Electric Co. of Japan. Under the agreement, Sanyo will supply handsets to theKorean cellular service operator from next month. The arrangement is likely to step up competition between Korean and Japanese mobile phone equipment makers in thecountry amid the lifting of the import ban on Japaneseelectronic products July 1. The flip-type phone is reportedly more price competitivethan Korean-made rivals such as Anycall folder-type handsetsby Samsung Electronics. Sanyo controls 10 percent of the Japanese mobile phoneequipment market with annual production of 2 million units. Itrecorded 1.86 trillion yen ($14.7 billion) in sales lastyear.

Japan's Softbank, 7-11, Tohan launch Net venture
TOKYO - Softbank Corp (TSE:9984),Seven-Eleven Japan Co. (TSE:8183) and publishing wholesalerTohan Corp are teaming up to launch an online book seller,officials at the firms said. The three firms and Softbank's subsidiary Yahoo Japan Corp.(TSE:4689) will set up a venture in July. The online serviceis expected to start in November. The venture will be capitalized at 200 million yen ($163million) Softbank putting up 50 percent and Seven-Eleven Japan 30 percent.The remainder will be equally financed by Tohan and YahooJapan. The tie-up the first e-commerce venture for Seven-Eleven Japan.

Japan's Hirose Electric posts 3% drop in fiscal '98 profit
TOKYO - Hirose Electric Co. (TSE:6806)reported that group net profit for the business termending in March dipped 3 percent year on year to 10.5 billion yen. Thedecline was attributed to intensifying price competition forthe company's mainline connectors, which offset growth indemand. For the current year, consolidated net profit is expectedto grow 20 percent to 12.6 billion yen thanks to growth in domesticdemand for connectors used for new mobile phone models.Sales for fiscal 1999 are forecast to increase 8 percent to 74billion yen owing to brisk sales of mobile phones based on newprotocols.

Bechtel wins contract for Malaysian petrochemical plant
KUALA LUMPUR - Bechtel, an engineering, construction andproject management company won a contract to providedesign, procurement and construction services for the Butanoland Derivatives units of Optimal Chemicals (Malaysia) Sdn Bhd.The construction of the Butanol and Derivatives units willbegin in August, with operations scheduled for mid-2001,Bechtel said in a statement. The Optimal petrochemicalcomplex is to be located on more than 80.938 hectares of land inKerteh in the east coast state Terengganu. Optimal Chemicalsis a joint venture between Petronas and United CarbideCorporation.

Malaysia's Bernama launches online trading
KUALA LUMPUR - Bernama, the Malaysian news agency and leading provider of real-time financial market data, introduced SecureTrade, an online trading system enabling brokers and investors to buy and sell shares as well as futures contracts through the Internet. "It will reshape the way brokers and investors trade and manage information and portfolios," Bernama chairman professorAbu Bakar Abdul Hamid said after the soft launch of the product. He also noted that customers in different time zones would be able to key in orders overnight for processing the next morning and at low cost since it is done through low international Internet charges.

Indian autoparts firm Sundram seeks 51% stake in Autolec
CHENNAI - India's Sundram Fasteners Ltd. (SFL) plans toacquire a 51 percent stake in another auto component maker,Autolec Industries, for about Rs 280 million ($6.5 million)."It is a friendly association, not a hostile takeover," SFLchief executive Suresh Krishna said. SFL already holds 14.33percent in Autolec and proposes to acquire another 11 percentthrough private negotiations, with the balance being acquiredthrough a public offer and a preferential offer, Krishna said.

Pilipino Telephone, creditors agree on debt restructure
MANILA - The creditor banks of the beleaguered PilipinoTelephone Corp (Piltel) have agreed, in principle, to thecellular firm's debt restructuring plan. Under the plan, 50percent of Piltel's loans to banks will be converted intopreferred shares of parent company Philippine LongDistance Telephone Company (PLDT). The remaining 50 percentwill have a 10 to 15 year repayment term. Piltel owes P34.9billion ($920.6 million) to creditor banks, suppliers andbondholders. The amount includes the $279 million it owes toJapanese supplier Marubeni.

Vietnam govt takes steps to improve investment environment
HANOI - The Vietnam government will implement eightmeasures to improve the investment environment in Vietnam.These measures include a one-price system for both domesticand foreign investors, effective beginning July 1, 1999. The systemwill be applied to power, water and services. Registrationand representative office establishment fees of $5,000 willbe replaced with a lower administrative management fee and anextension for representative offices will face no charges. Thegovernment will prescribe supplementary preferences toencourage investment into exports, agriculture, remote andsparse areas in economic difficulty, sectors with a massiveuse of domestic materials, and the production of spare partsand devices with major parts made in Vietnam.

S.Korea set to build logistics center
SEOUL - The South Korean government plans to start buildingan international logistics center around Inchon's Songdo andsouth port district next year. Foreign capital will be soughtto finance the center, which will be built on reclaimed land,3.3 million sqare meters in area, in Inchon. A Dutch researchorganization will conduct the project's feasibility study. Asource in the Construction and Transortation Ministry said aninternational consortium of Korean and foreign firmswas likely to handle the project.

RHB Bank Malaysia completes acquisition of Sime Bank BHD
KUALA LUMPUR - The RHB Bank Bhd has successfully completedthe acquisition of a 90.36 percent equity interest in SimeBank Bhd from Sime Darby Financial Services Holdings Sdn Bhdand KUB Malaysia Bhd. RHB Capital executive chairman AbdulRashid Hussain said the completion of the acquisition wouldalso result in the completion of the RM1.5 billion ($394.7million) recapitalization of the merged RHB Bank by DanamodalNasional Bhd, as well as the sale of the 30 percent equity ofRHB Bank to Khazanah Nasional Bhd for RM725.4 million ($191million). "The merger of Sime Bank and RHB Bank will create astronger Malaysian banking institution," he said.

Indonesia's publicly listed firms lose $12bn in 1998
JAKARTA - Indonesian publicly-listed companies posted totallosses of Rp96.7 trillion ($12 billion) in 1998, of whichbanks accounted for Rp86.7 trillion, said David Chang, ananalyst with PT Trimegah Sekuritas. He said that of 274publicly-listed companies, only 191 had issued their financialreport up to the April 30 deadline. Chang said the negativespread in interest had contributed Rp16.2 trillion to thetotal loss suffered by banks. Their operational lossestotaled Rp85.3 trillion.

Indonesia to impose import tax on cashews and other items
JAKARTA - The government will reportedly impose export taxes of 20-30 percent on unpeeled cashew nuts, untreated leather and unfermented cocoa beans. An official said the measure was important to encourage development of the processing industries for the commodities and boost the latter's exports. Domestic output of cashew nuts reaches about 75,000 tons per year, 30,000 tons of which is earmarked for the domesticindustry, while the remainder exported, mainly to India, dueto the higher prices. The local chocolate and leather tanning industries havebeen forced to import cocoa and raw leather for the past twoyears.

Indonesia's Citatah names Sakura financial advisor
JAKARTA - Marble producer PT CitatahIndustri Marmer (JSX:CTTH) has named Sakura Merchant Bank(Singapore) Ltd. as its financial advisor to help it review andrestructure its business activities and debts. The company said its debts by March 31 totalled Rp457.23 billion ($57 million) including Rp312.68 in short termdebts. The debts dropped slightly from Rp465.06 billion a yearbefore including short term debts of Rp252.21 billion.The company recorded a net sales of Rp49.01 billion in thefirst quarter of 1999, down from Rp65.33 billion in the sameperiod in 1998. Its exports dropped 15% to 105,000 cubic meters of marblesfrom the previous three months.

Indonesia's Hexindo pays banks debt worth $16.35m
JAKARTA - PT Hexindo Adiperkasa(JSX:HEXA), a heavy equipment trading agent, has fully repaidits dollar debt obligations amounting to $16.35 million forMarch to a number of banks. The debt repayment made in May would contribute greatly tothe financial performance of the company, company presidentRustam Effendi said. The $16.35 million obligations included $7.5 million ofits $35 million debt to a syndicate coordinated by The SanwaBank Ltd., Singapore, $7 million to Daichi Kanyo Ltd.,Singapore and $1.85 million to The Sakura Bank Ltd.,Singapore. Based on its unaudited report for March 1999 the companyhad an equity of minus Rp32.3 billion ($4 million). The company and its foreign principal have agreed to reexport its heavy equipment because of the slump on thedomestic market.

HK May land sale purchase agreements up 26%
HONG KONG - The Land Registry hasreceived 12,150 sale and purchase agreements on residentialand non-residential building units in May, which representedan increase of 22.5 percent over April 1999 and 26 percentover May last year respectively. The total consideration of these agreements in the monthwas $32.7 billion ($4.22 billion), up 16 percent and sevenpercent when compared with the amounts in April 1999 and Maylast year respectively.

China seeks more overseas funds to develop offshore oil/gas
BEIJING - China's offshore oil industrypolicy makers are exploring new ways and channels to expandSino-foreign cooperation in tapping the country's vastoffshore oil and gas resources. According to Wei Liucheng, president of the China NationalOffshore Oil Corp (CNOOC), China has huge offshore oil and gasresources, which is estimated at 25 billion tons and 14trillion cubic meters, respectively. "However, the proven offshore oil and gas reserves in China account for only five percent of the country's total estimatedresources," said the official. He stressed that only by dramatically increasingSino-foreign cooperation in the sector can China speed up itsoffshore oil and gas development. To date, China has already had over 130 contracts with18 countries and regions in jointly developing the country'soffshore oil and gas resources, utilizing in total nearly $7 billion in foreign investment.Through Sino-foreign joint effort, China has sunk more than400 exploratory wells and verified more than 100 oil andgas-bearing structures.

Sino-German auto firm operational
QINGDAO - The Qingdao Audi VehicleManufacturing Co., Ltd., a joint venture between China andGermany, has started operation in Qingdao, a coastal city ineast China's Shandong Province. The company was jointly founded by the Qingdao Fuhai Farm Vehicle Manufacturing Plant, a medium-sized state-ownedenterprise and farm transport vehicle producer designated bythe State Bureau for Machine-Building Industry, and the IVM Groupof Germany. According to a contract signed between the two sides, thetotal investment of the project is $120 million, ofwhich $29.88 million are designed to be used in the first phaseof construction. The Chinese side has 20 percent of the stake, and German side has theremaining 80 percent.

Australian wool prices rise at auctions
CANBERRA - Wool prices rose slightly at auctions this week with the eastern market indicator finishing the week at A4 cents up while prices in the west closed eight cents up. The Australian Wool Industries Secretariate said in its weekly report that the eastern market indicator finished the week at A539 cents/kg clean reflecting increases of five cents in the north and two cents in the south following sales in Sydney and Melbourne. These regional market indicators ended the week at 560 and 520 cents/kg respectively. Prices in the west at Fremantle closed eight cents up on their previous sale of two weeks ago, finishing the week at 482 cents/kg clean.

(Asia Pulse)


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