World Brief

Japanese listed companies this year have announced plans to slash some 120,000 jobs to survive hard times in the high-technology, distribution and pharmaceutical industries, a newspaper reported.

Topping the list of 82 companies in the Nihon Keizai financial daily was electronics giant Toshiba Corp., which in August said it would eliminate 17,000 positions, or about 9 percent of its worldwide work force, in the next three years amid a global electronics downturn.

Toshiba was followed by major electrical machinery maker Hitachi Ltd. with 22,200 job cuts and Matsushita Electric Industrial Co. – which exports products under the "National" and "Panasonic" brands – with 8,000 cuts.

So far, few companies are resorting to mass layoffs, focusing instead on attrition and voluntary early retirement.

Also announcing staff reductions were major supermarket operators and department stores that have suffered as frugal consumers stayed away, the Nikkei said.

Even Japan’s drugmakers, so far relatively untouched by the country’s protracted economic malaise, have shrunk their payrolls, the newspaper reported.

Meanwhile in New York, Bristol-Myers Squibb Co. is eliminating 1,000 jobs, or about 2 percent of its workforce, as part of a move to refocus itself as a pure pharmaceutical company.

When all layoffs are complete, the New York City-based company will have about 45,000 employees worldwide.

The announcement comes a month after Bristor – Myers completed its dlrs 7.8 billion acquisition of DuPont Pharmaceutical Co. and laid off 2,000 of its 5,000 employees. The DuPont acquisition was part of the company’s recent strategic moves.

Japan to Lift Tariffs on Chinese Farm Products

The Japanese government will lift an emergency tariff on certain Chinese farm products, but may impose longer-term safeguard measures in December to protect domestic farmers from cheap imports, officials said.

In April, Japan invoked emergency import restrictions on three farm products – spring onions, shitake mushrooms and rushes used in traditional tatami mats. The measure was taken on fears the cheap imports, mostly from China, were hurting Japanese producers.

Outraged by the move, Beijing retaliated in June by imposing 100 percent punitive tariffs on imports of Japanese motor vehicles, air conditioners and mobile phones.

The Ministry of Economy, Trade and Industry (METI) said Tokyo would continue to study the effect of cheap Chinese imports on Japanese farmers until December 21. If the study concludes that Japanese farmers are not affected by the Chinese imports, further safeguard measures will not be imposed, an official said.

Government officials as well as representatives from business from both countries met in Tokyo recently in bid to resolve the trade row but both sides failed to reach an agreement, METI said.

But private businesses from Japan and China proposed to find common ground in adjusting trading volumes of the affected products in a bid to sidestep government intervention, news reports said.

Chief Cabinet Secretary Yasuo Fukuda, the government’s top spokesman, said Tokyo hoped the dialogues would eventually resolve the deadlock.

China to Allow Entry of Foreign Insurers

China has promised to allow foreign companies greater access to its insurance market, state media reported, as Beijing detailed how it will open up the sector after WTO entry.

It is the first time China has spelled out precisely what it will do to liberalize the insurance sector under the terms of its World Trade Organization membership, which begins next month.

Industry regulator, the China Insurance Regulatory Commission (CIRC), announced non-life insurers from abroad will be allowed to set up branches or joint ventures in China immediately after WTO entry, the China Daily said. They will be able to hold as much as 51-percent stakes in joint ventures, and two years after WTO entry, foreign non-life insurance firms can set up wholly foreign-owned subsidiaries in China, CIRC officials are reported to have revealed at an insurance seminar.

Foreign insurers cannot currently have majority ownership. Life insurers from abroad also will be allowed to set up joint ventures in China immediately after WTO entry, but they can hold no more than a 50-percent stake.

Life insurances will be able to choose their own joint venture partners as opposed to the present policy, under which partners are chosen for them by Chinese authorities.

Both life and non-life insurers will be permitted to provide services in the cities of Shanghai, Guangzhou, Dalian, Shenzhen and Foshan upon WTO accession, the report said.

Asahi Bank in Loss

Ailing Japanese lender Asahi Bank Ltd. has warned it would incur a full year loss of 4.4 billion dollars due to large bad loan write-offs and the slumping stock market.

The middle-sized Japanese bank forecast a group net loss of 530 billion yen (4.4 billion dollars) for the year to March, reversing a profit of 36 billion yen seen in May. Its pre-tax loss would plunge to 660 billion yen against a 60 billion-yen profit, but expected earnings were left unchanged at 800 billion yen.

Hindustan Lever to Sell Business

Leading Indian private sector firm Hindustan Lever Ltd. is reported to have agreed to sell its nickel catalyst business to ICI India Ltd. for 210 million rupees (4.37 million dollars).

Hindustan Lever, the Indian subsidiary of Unilever Plc, said it would make a profit of around 125 million rupees from the sale.

The nickel catalyst business, part of Hindustan Lever’s speciality chemicals, has an annual sales turnover of around 200 million rupees.

ICI India will take over the manufacturing facilities relating to nickel catalyst operations located near Bombay along with the services of 17 related employees, the company added.

Phillips Petroleum, Conoco to Merge

Phillips Petroleum Co. said it will buy Conoco Inc. for about dlrs 15.4 billion creating the third-largest oil and gas company in the United States.

Phillips, which bought the refining company Tosco Corp. earlier this year, would gain extra strength as a producer of petroleum. The combined market value of the new company would be US$ 35 billion.

Under the terms of the deal – described by the two rivals as a merger of equals – the combined company, Conoco Phillips, would have reserve of 8.7 million barrels and
US$ 18.6 billion in debt and preferred securities.

The merger is expected to close during the second half of 2002 pending regulatory and shareholder approval.

Nissan in Profit

Nissan Motor Co., the Japanese automaker in the middle of a turnaround under an alliance with Renault SA of France, reported cuts and a weaker yen helped offset lagging sales.

Nissan’s profit for the six months ending in September totaled 230.3 billion yen (dlrs 1.9 billion), up from 172 billion yen for the same period a year ago. Sales totaled 2.98 trillion yen (dlrs 24.3 billion), down 1.4 per cent from 3.02 trillion yen last year.

The results were in line with a report given last month by Chief Executive Carlos Ghosn on the progress of his revival plan, which includes shuttering three assembly plants, cutting purchase costs by turning to global suppliers and selling off subsidiaries.

Sent by Renault to fix money-losing Nissan two years ago, Ghosn has become a bit of a star recently for corporate Japan during these hard times while many companies are fighting a serious downturn.

Allianz Slumps into Loss

The giant German insurer Allianz slumped into loss in the third quarter because of huge costs arising from the attacks in the United States on September 11 and problems at Dresdner Bank, the company said.

From July to September the company reported a net loss of 46.3 million euros (40.7 million dollars).

Allianz, which is the second-biggest insurer in Europe, was publishing quarterly results for the first time.

Time Inc. Closes Three Magazines

Time Inc. is closing down three magazines – On, Asiaweek and Family Lift - as an advertising recession continues to wreak havoc on the publishing industry.

Time Inc. declined to comment on the closures, which were first reported by The Wall Street journal’s on-line edition late, but a source with knowledge on the matter said the announcement would be made soon.

The staff of all three magazines will be laid off, the source said, but it wasn’t clear how many jobs would be lost.

On had started out as a technology supplement called Time Digital, and was relaunched earlier this year in cooperation with America On-line, Time Inc.’s corporate cousin within AOL Time Warner Inc.

Asiaweek has been a longtime newsweekly in Asia, founded in 1975 and with a current circulation of about 120,000.

Asiaweek’s main competitor, the Far Eastern Economic Review, recently merged its editorial staff with that of The Asian Wall Street Journal. About one-fourth of the combined staff was cut from the publications, both of which are owned by Dow Jones & Co.

Time Warner to Invest in Zee Telefilms

U.S. media giant AOL Time Warner Inc. is close to taking a stake in India’s largest television and entertainment company, Zee Telefilms Ltd., media reports said.

Zee is set to sell a 10 percent stake to AOL Time Warner or 7 billion rupees (dlrs 146 million), the Hindustan Times newspaper reported. AOL Times Warner will initially provide only content to the Zee network, according to the report, which also said the U.S. firm would have the option to raise its stake to 26 percent at a latter stage.

A 26 percent stake is crucial because this is the minimum equity a holder must have to acquire management control under the Indian law. In a statement, Zee said that while talks with potential partners are in various stages of negotiation, there has been no decision taken so far.

Send your feedback to the editor: bizage@ecomail.com.np
1999 © Mercantile Communications Pvt. Ltd. P.O. Box 876, Durbar Marg, Kathmandu, NEPAL. Tel : 977 1 220 773, 243 566 . Fax: 977 1 225 407. Reproduction in any form is prohibited without prior permission. No part of the articles which appear in the internet version on BUSINESSAGE may be reproduced without the permission of Mercantile Communications Pvt. Ltd. For reprinting rights, please write to us. Send us your feedback:contact us . CLICK HERE FOR PAST ISSUE. This site is best viewed at : 800 X 600 resolution

Japanese Firms For 120,000 Job Cuts