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June 23, 1999atimes.com
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Business in Asia Today

Hyundai Heavy seeks to buy HANJUNG
SEOUL - South Korea's Hyundai Heavy Industries is eyeing the acquisition of Korea Heavy Industries and Construction Co. (HANJUNG). Hyundai Heavy President Cho Choong-whi told reporters on June 22 that the acquisition of HANJUNG will help shore up Hyundai's competitiveness. "If the privatization of HANJUNG proceeds, we will set out to acquire it. Hyundai Heavy Industries is judged to be capable of managing HANJUNG," he said. "Efforts will be made to boost reception of orders to $11 billion by 2003 in a bid to develop Hyundai Heavy Industries into a world-class company." Hyundai will pare down its shipbuilding operation but will boost power generation facilities, ship engines and three other sectors. Its net profit for the first half of this year will near 200 billion won ($171.5 million) and its goal to attain a net profit of 300 billion won for this year is easily attainable, Cho Choong-whi said. Hyundai Heavy will go ahead with its plan to obtain $7.4 billion worth of orders for this year.

Overseas Daewoo offices to be locally incorporated
SEOUL - South Korea's Daewoo Corp. will turn 14 overseas offices into locally-incorporated entities with a view to trimming operating costs by 12 billion won ($10.29 million) a year.The move will affect the company's offices in Warsaw, Toronto, Vancouver, Dhaka, Mexico City, Kuala Lumpur, Sao Paulo, Buenos Aires, Madrid, Taipei, Amsterdam, Bangkok, Manila and Lima.When launched, the entities in these locations will run independently and make efforts to expand profits rather than support sales of headquarters, Daewoo said.The measure will reduce the number of Daewoo Corp.'s overseas offices to 59 from 73 and increase its trading entities or subsidiaries to 43 from 29.Daewoo is also pushing to put the operations of 22 of its entire 87 overseas investment entities on the international auction block.

Daehan to lose license
SEOUL - South Korea's Financial Supervisory Commission said Tuesday that it will revoke the business license of the suspended Daehan Merchant Banking (KSE: 09030).The decision follows the company's failure to present at FSC hearings a concrete plan for its survival. The hearing was aborted as no one representing Daehan showed up.

Hyundai Heavy to supply gas turbines to Westinghouse
SEOUL - South Korea's Hyundai Heavy Industries said it had signed a $110 million contract to build six high-grade gas turbine power generators and related parts for Siemens-Westinghouse. The contract included a provision requiring Hyundai to build and supply 10 to 12 gas turbine power generators to Siemens-Westinghouse annually, which in turn will be installed at power plants around the world, including in the United States.

Indonesian bank restructures $207m offshore debt
JAKARTA - PT Bank Danamon Indonesia has finalized restructuring part of its offshore debts with foreign banks totalling $207.26 million, while negotiations on restructuring another $76.6 million of offshore debt is still in progress, a company release said. The statement, addressed to the Jakarta Stock Exchange, attributed its large debts to huge losses it suffered mainly as a result of negative spread. "This was due to the high interest rates and tendency of currency fluctuations. Consequently, debtors faced difficulties in debt repayment which resulted in a drop in the quality of the company's productive assets," the management statement said. In addition was the high inteest rate the company has to pay aside from the interest burden of Bank Indonesia Liquidity Credits. Among the overseas bank lenders to Danamon are Standard Chartered Bank with loans totalling $20.80 million, Dresdner (South) East Asia contributing $8 million, Indover Bank loaning $10 million, and ABNM Amro Singapore with loans totalling $9.6 million. The restructuring process of these loans together with a number of other bank loans reaching $207.3 million have been completed.

Mitsui to sell Disney software based on animated movies
TOKYO - Mitsui & Co. (TSE:8031) willtie up with Walt Disney Co. to sell computer software based onDisney's animated films, company sources said.Mitsui's multimedia unit will hook up with DisneyInteractive to sell five software titles produced by the U.S.company via 18,000 convenience stores nationwide by employingDigicube Co.'s (TSE:7589) sales network. The Mitsui subsidiary publishes the personal computer magazine "Home PC" and will issue a special series ofpublications that feature the Disney software.

Fujita posts $2.4bn group net loss for fiscal 1998
TOKYO - General contractor Fujita Corp. (TSE:1806) announced that it had posted a 285.4 billion yen ($2.42 billion) consolidated extraordinary loss in the fiscal year ending in March due to disposal of assets acquired during the bubble economy years. Group net loss reached 137.7 billion yen despite 120 billion yen in extraordinary profit generated from debt forgiveness, company officials said. Consolidated interest-bearing debt at the company stood at 639.6 billion yen in fiscal 1998, down 36.5 billion yen from a year earlier.

Sharp, Conexant to make next-generation system chips
TOKYO - Sharp Corp. (TSE:6753) has announced that it will cooperate with U.S. firm Conexant Systems Inc., a spin-off of Rockwell International, to develop production technology for system chips to be used in digital home information devices. The two firms plan to develop 0.15-micron production technology and to begin mass-producing chips in the summer of 2000. The cost of developing the production technology for the chips is estimated at 10 billion yen ($84.6 million), and facilities investment an estimated 150 billion yen.

India approves GEC, ANZ Banking investment applications
NEW DELHI - India's Foreign Investment Promotion Board (FIPB) has approved investment applications by General Electric Corporation (GEC) and the ANZ Banking Group. GEC has proposed to set up a 50:50 joint-venture company for aircraft engineering services along with Tata Consultancy Services. GEC is to make a token investment of $10,000 in the company initially. ANZ Banking Group's proposal to set up an asset management company and a trustee company with an investment of Rs122 million was also cleared. In the same session, the FIPB cleared 25 proposals involving foreign direct investments worth Rs 3 billion ($69.83 million).

Indian govt. clears light transport aircraft project
NEW DELHI - The Indian government has cleared a multi-role light transport aircraft project being undertaken by the Bangalore-based National Aerospace Laboratories and has approved Rs1.313 billion ($30.6 million) in funding by the Technology Development Board (TDB), Hindustan Aeronautics Limited (HAL), federal Ministry of Civil Aviation and the Council of Scientific and Industrial Research (CSIR), an official spokesperson said. While TDB will fund Rs653 million of the project cost as loan and grant, the industrial partner of the project HAL will contribute Rs90 million. The Ministry of Civil Aviation and CSIR will provide budgetary support of Rs425.8 million.

Philippines board to enourage JVs in book publishing
MANILA - The government will encourage joint ventures between domestic and foreign publishers to strengthen the capability of local book markets, the National Book Development Board (NBDB) said on June 22. In a statement, Dr. Angel C. Alcala, NBDB chairman, said joint ventures in the publishing business will facilitate the transfer of technology from the more advanced nations to Third World countries like the Philippines. According to Alcala, joint ventures will also widen local publishers' markets since they would be able to sell their books to other countries. However this would require local publishers to adopt new technology in printing globally-competitive material, Alcala said.

Blue Circle eyes $526m investment in Malaysia
KUALA LUMPUR - British cement giant Blue Circle is eager to invest RM2 billion ($526 million) in Ewa, Air Hangat, in Langkawi island in north-western Kedah state, Kedah Chief Minister Sanusi Junid said. He said the foreign firm will team up with a local cement firm. Ewa has an existing cement plant and port facilities. Sanusi said the Blue Circle investment would rank among the highest in the state besides the high technology investments in Kulim, Kedah.

Indonesia's Dynaplast sees net profit rise 154%
JAKARTA - Plastics manufacturer PT Dynaplast Tbk (JSX:DYNA) said its net profit had increased by 154 percent to Rp10.1 billion ($1.31 million), thanks to 47 percent sales growth in the first five months of 1999. Dynaplast said that its total sales stood at Rp70.9 billion for the five months, attributing the profit increase to product diversification, price increases and an increase in sales volume, especially plastic bottles, which has occurred since March. Sales in the first half of 1999 are expected to reach Rp86 billion, the company said.

Jakarta gives incentives to invest in Batulicin
JAKARTA - The government said it will give tax and customs incentives to investors who place their capital in the Batulicin integrated economic development area in East Kalimantan.An official said the incentives included exemption from import taxes on capital goods, raw materials and other equipment related to production activities.Apart from that, the government will cut the incometax on dividends by 50 percent and shorten the bureaucratic red-tape in thelicensing process. Batulicin, which is located in eastern part of EastKalimantan province, has potential resources for the industries offorestry, mines and energy, tourism and fishery. There are already cement, palm oil and pulp plants in the area.

Indonesia's RPG to offer rights issue to settle debts
JAKARTA - Publicly listed PT Ricky Putra Globalindo Tbk (RPG) (JSX:ICKY), a men's wear and garment maker, will soon issue 128 million new rights shares.Total share revenue will be allocated to repay debts to holders of company converted bonds at the total value of $7.2 million. With reference to the financial report and high conversion of U.S. dollar revenue from exports, RPG has increased 1998 net sales by Rp247.915 billion ($5.989 million); in other words sales are up by 91.7 percent compared to last year's net sales which reached only Rp129.287 billion ($1.623 million).

French firm wins consultancy bid for Shenzhen subway
SHENZHEN - The French state-owned consulting firm Systra has been contracted as a technical advisor for the new subway planned for Shenzhen city, China's special economic zone near Hong Kong. According to Deputy Mayor Li Decheng, the French company, which also gave technical advice on subway construction in Beijing, Shanghai and Guangzhou, will be involved in the first phase of the project. A special company, Shenzhen Subway Co. Ltd., has been formed to handle the work and it is understood that the state is to pump in up to 70 percent of the investment required. Meanwhile Chengdu, capital of Sichuan Province in southwest China, has also announced plans to build a subway in 2002.

Guangdong garment exports plummet after quota move
GUANGZHOU - China's garment export base of Guangdong Province has reported a sharp drop in garments exports, especially through general trade, in the first four months of this year. According to local customs statistics, the province's garment exports totaled $1.802 billion in the first four months, a drop of more than 50 percent year-on-year. The main factors attributed to the decrease were quota restrictions and a lack of competitiveness. China introduced an export quota bidding system for 21 kinds of garments this year.

(Asia Pulse)


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