AUTOMAKERS
Renault dumping AvtoVAZ
Renault SA plans to sell its majority stake in automaker AvtoVAZ to a Russian science institute, the French company said yesterday, adding that the deal includes a six-year option to buy back the stake. Renault said that its holding of nearly 67.69 percent in AvtoVAZ would be sold to the Russian central research and development automobile and engine institute NAMI. Its 100 percent shares in Renault Russia are to go to the city of Moscow. “Today, we have taken a difficult but necessary decision, and we are making a responsible choice towards our 45,000 employees in Russia,” Renault chief executive officer Luca de Meo said. The move preserves the group’s ability to later return to the country in a different context, he added.
CEMENT MAKERS
Holcim to sell India interests
Holcim Ltd has agreed to sell its Indian operations to local billionaire Gautam Adani, another step in chief executive officer Jan Jenisch’s pivot away from traditional cement. The Swiss company is to sell its 63 percent stake in Mumbai-listed Ambuja Cements Ltd to Adani Group, it said in a statement on Sunday. Adani said that it plans to spend about US$10.5 billion on the stake purchases and open offer consideration for Ambuja and related entities. As part of the deal, Adani is to inherit Ambuja’s controlling stake in another publicly traded cement producer, ACC Ltd, and buy Holcim’s direct 4.5 percent holding in the unit. Holcim expects to receive 6.4 billion Swiss francs (US$6.37 billion) of cash proceeds from the sale, the statement said. “We have quite a list of businesses we would like to acquire, so I think we can put this money here very well to use,” Jenisch said in an interview on Sunday. “At the moment, we’re working on more than 10 deals.”
ENERGY
Aramco profits spike 82%
Saudi Arabian Oil Co (Aramco) on Sunday posted an 82 percent jump in first-quarter profits, buoyed by a global surge in oil prices that has made it the world’s most valuable company. The company’s net income of US$39.5 billion was up from US$21.7 billion from the same period last year, it said in a news release. Its net income for the first quarter was a record for the company since its initial public offering in 2019. Also on Sunday, Aramco announced that it was issuing 20 billion bonus shares to shareholders — one share for every 10 shares already owned. A dividend of US$18.8 billion would be paid in the second quarter, the company said. Aramco is Saudi Arabia’s “crown jewel” and primary source of revenue.
UNITED STATES
Blankfein warns of recession
Goldman Sachs Group Inc senior chairman Lloyd Blankfein urged companies and consumers to prepare for a recession, saying that it is a “very, very high risk.” “If I were running a big company, I would be very prepared for it,” Blankfein said on CBS’ Face the Nation on Sunday. “If I was a consumer, I’d be prepared for it.” A recession is “not baked in the cake” and there is a “narrow path” to avoid it, he said. The Federal Reserve has “very powerful tools” to tamp down inflation and has been “responding well,” he said. Goldman’s economic team now expects the US’ GDP to expand 2.4 percent this year, down from 2.6 percent. It reduced its estimate for next year to 1.6 percent from 2.2 percent.
TARIFF TRADE-OFF: Machinery exports to China dropped after Beijing ended its tariff reductions in June, while potential new tariffs fueled ‘front-loaded’ orders to the US The nation’s machinery exports to the US amounted to US$7.19 billion last year, surpassing the US$6.86 billion to China to become the largest export destination for the local machinery industry, the Taiwan Association of Machinery Industry (TAMI, 台灣機械公會) said in a report on Jan. 10. It came as some manufacturers brought forward or “front-loaded” US-bound shipments as required by customers ahead of potential tariffs imposed by the new US administration, the association said. During his campaign, US president-elect Donald Trump threatened tariffs of as high as 60 percent on Chinese goods and 10 percent to 20 percent on imports from other countries.
Taiwanese manufacturers have a chance to play a key role in the humanoid robot supply chain, Tongtai Machine and Tool Co (東台精機) chairman Yen Jui-hsiung (嚴瑞雄) said yesterday. That is because Taiwanese companies are capable of making key parts needed for humanoid robots to move, such as harmonic drives and planetary gearboxes, Yen said. This ability to produce these key elements could help Taiwanese manufacturers “become part of the US supply chain,” he added. Yen made the remarks a day after Nvidia Corp cofounder and chief executive officer Jensen Huang (黃仁勳) said his company and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) are jointly
United Microelectronics Corp (UMC, 聯電) expects its addressable market to grow by a low single-digit percentage this year, lower than the overall foundry industry’s 15 percent expansion and the global semiconductor industry’s 10 percent growth, the contract chipmaker said yesterday after reporting the worst profit in four-and-a-half years in the fourth quarter of last year. Growth would be fueled by demand for artificial intelligence (AI) servers, a moderate recovery in consumer electronics and an increase in semiconductor content, UMC said. “UMC’s goal is to outgrow our addressable market while maintaining our structural profitability,” UMC copresident Jason Wang (王石) told an online earnings
MARKET SHIFTS: Exports to the US soared more than 120 percent to almost one quarter, while ASEAN has steadily increased to 18.5 percent on rising tech sales The proportion of Taiwan’s exports directed to China, including Hong Kong, declined by more than 12 percentage points last year compared with its peak in 2020, the Ministry of Finance said on Thursday last week. The decrease reflects the ongoing restructuring of global supply chains, driven by escalating trade tensions between Beijing and Washington. Data compiled by the ministry showed China and Hong Kong accounted for 31.7 percent of Taiwan’s total outbound sales last year, a drop of 12.2 percentage points from a high of 43.9 percent in 2020. In addition to increasing trade conflicts between China and the US, the ministry said
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