Media Focus on Multinational Corporations[2022.07.04]





Chinese airlines

Chinese airlines book $37b Airbus orders

Four Chinese airlines have signed deals to buy nearly 300 A320neo planes from the European aircraft maker Airbus, as the aviation industry continues to recover from COVID-19.

The deals, worth $37 billion in total based on catalog price, are the biggest new aircraft orders placed by Chinese carriers since the pandemic broke out. The purchase came after a bumper year for Airbus, which posted record profits in 2021 after two years of sluggishness because of the pandemic. It has also given Airbus another boost over its US rival Boeing.

Air China has ordered 64 A320neo aircraft, its holding subsidiary Shenzhen Airlines 32, China Eastern Airlines 100 and China Southern Airlines 96. The new aircraft are due to be delivered between 2024 and 2027, the airlines and Airbus said on Friday.

Boeing said it is disappointing that geopolitical differences continue to constrain US aircraft exports, and it called for productive dialogue between the US and China.

Cui Hongjian, director of the European studies department at the China Institute of International Studies in Beijing, said: 'The purchase has been a commercial decision. When Chinese airlines buy aircraft, they have to consider safety and reliability. The impact of the safety issues of Boeing models has not passed completely.'

The Boeing 737 Max was grounded worldwide after two fatal crashes, in 2018 and 2019. The Civil Aviation Administration of China issued an airworthiness certificate for the aircraft in December but it has yet to resume flying in the country.

'There are also geopolitical aspects to this,' Cui said. 'There's a lack of trust between China and the US at the moment, and if Chinese airlines become long-term customers of Boeing, there's a risk of being cut off from the supply of aircraft parts and technical support. There are no such concerns with Airbus.'

Over the past decade, Airbus has continued to increase its investment in China and has worked more closely with local industry. Late last month, the company signed a framework agreement with Suzhou Industrial Park on setting up a research center there that would specialize in research about hydrogen-powered aircraft.


Aramco to accelerate low-carbon energy research

Saudi Arabian Oil Company (Aramco) inaugurated the Aramco Research Center to accelerate the development of low-carbon solutions for the energy industry using advanced analytics on Monday.

The research center deploys artificial intelligence and machine learning to develop innovative ways to advance low-carbon solutions and enable a Circular Carbon Economy.

The researchers, engineers and scientists intend to develop new technologies in carbon capture, low-carbon hydrogen/ammonia, non-metallics, e-fuels, liquids-to-chemicals, and advanced transport technologies.

'The critical research undertaken at this new facility will help us meet our obligations to customers and energy consumers worldwide, while also supporting our ambition of reaching operational net-zero emissions by 2050,' Ahmad Al-Khowaiter, Aramco Chief Technology Officer, said.


Algeria makes significant gas find

Sonatrach has found up to 340 bcm of gas in Algerias Sahara Desert, the Algerian NOC announced on Monday.

The discovery lies close to the producing Hassi RMel field located around 550 kilometres from Algiers and is one of the largest finds in the country in the last 20 years .

The NOC plans to begin production by November 2022.

The country is upping its efforts to produce gas to meet the rising need in Italy and the greater EU as sanctions on gas destabilise traditional trade routes.


Mexicos Pemex Increases Crude Exports to U.S.

Mexico's state-owned oil company Pemex (PEMX.UL) substantially increased crude oil exports to the North American market in May, according to the firm's most recent report, which shows a significant cut in shipments to Europe and Asia.

Pemex said its crude exports averaged 965,000 barrels per day (bpd) in May, and some 740,000 bpd went to 'America,' which accounts mainly for the United States.

That compares to shipments of 594,000 bpd to the same region in April, out of a total 1.02 million bpd.

Meanwhile, exports to Europe fell to 32,000 bpd in May from 100,000 bpd in April, and dispatches to the Far East fell to 192,000 bpd from 330,000 bpd in April, Pemex said without giving an explanation for the changes.

Increased imports of heavy crude are common in the northern hemisphere's summer months, but this year's hike comes as Washington asks refiners to raise production and cut profit margins to ease soaring gasoline prices.

Pemex produced an average of 1.67 million bpd of crude in May and has exported an average of 930,000 bpd in the first five months of the year.

Pemex has said it would drastically reduce planned crude exports this year as it works to meet the government's target of refining all of its oil domestically.


Neste to Invest $2 Bln Expanding Renewable Products Capacity in Rotterdam

Neste Oyj said late Monday that it has decided to invest 1.9 billion euros ($2 billion) to expand renewable products production capacity in Rotterdam, Netherlands.

The Finnish renewable fuels producer currently has 1.4 million tons of renewable products capacity in Rotterdam and the Rotterdam refinery expansion will expand its overall renewable product capacity by 1.3 million tons a year, bringing the total renewable product capacity in Rotterdam to 2.7 million tons annually, of which sustainable aviation fuel production capability will be 1.2 million tons, it said.

The company's target is to start up the new production unit during the first half of 2026.

'The investment...will bring a substantial amount of renewable diesel, sustainable aviation fuel and renewable feedstock for polymers and chemicals to our sustainability-focused customers,' Neste Chief Executive Matti Lehmus said.

Neste currently has renewable products global production capacity of 3.3 million tons annually. Its ongoing Singapore expansion project and the joint venture with Marathon Petroleum Corp. in California will increase total production capacity of renewable products to 5.5 million tons by the end of 2023, it said.

When completed, the Rotterdam expansion project will further increase the company's total production capacity of renewable products to 6.8 million tons by the end of 2026, it said.

Tokyo Gas Co. Ltd.

Tokyo Gas Begins Synthetic Methane Trial Using Green Hydrogen

Tokyo Gas Co. Ltd., Japan's top city gas supplier, said on Friday it has begun a pilot program of methanation, a technology to help decarbonize city gas, and plans to use green hydrogen sourced from renewable energy for the trial by next March.

Methanation converts hydrogen and carbon dioxide (CO2) into synthetic methane, an alternative for the main component in natural gas. It is considered a way of using CO2 as a raw material that could help the company achieve carbon neutrality in 2050.

Methane can be used in many ways, including as a fuel to generate heat and electricity in power plants or at home, and as a raw material for the chemical industry.

For the first-phase trial aimed at producing 12.5 normal cubic meters per hour (Nm3/h) synthetic methane, Tokyo Gas has installed Hitachi Zosen's methanation device at its research center in Yokohama, near Tokyo, and begun producing the fuel from hydrogen and CO2 procured from outside.

It plans to install a water electrolysis device from Britain's ITM Power and use renewable-based hydrogen to produce synthetic methane by March, Hisataka Yakabe, Tokyo Gas's executive officer, said during a media tour of the facilities.

It will also use CO2 emitted and captured from nearby factories or its customers.

Tokyo Gas is aiming to replace about 1% of city gas volume with synthetic methane by 2030. It will scale up the trial in late 2020s to produce 400 Nm3/h, followed by an overseas demonstration in 2030 to make 20,000 Nm3/h.

'The biggest challenge is reducing cost,' Yakabe said, adding the methanation cost around 2030 would be much higher than liquefied natural gas (LNG) prices, even with inexpensive overseas renewable energy and lower hydrogen production costs.

'Cost reduction must be achieved through multiple measures,' he said.

Tokyo Gas is also trying to build global supply chains of synthetic methane, conducting feasibility studies in Malaysia with Sumitomo Corp. and Petronas, and in North America and Australia with Mitsubishi Corp.


Siemens and Doosan plan partnership in Korean offshore wind market

Siemens Gamesa and Korean Doosan Enerbility signed a non-binding Memorandum of Understanding (MoU) to investigate strategic cooperation within offshore wind power activities on Sunday.

The deal involves investigations of potential collaboration between the two companies in large-scale offshore wind turbines, sharing of major services including construction of new Korean production facilities, the supply of wind turbine parts, offshore wind turbine installation, and turbine maintenance.

It will also explore a Korean domestic supply chain and related industries. Furthermore, it will study potential job creation and industrialization in the Korean offshore wind power market.

Doosan Enerbility is intended to contribute its experience, domestic production base and business capabilities while Siemens Gamesa's will offer its global know-how in offshore wind.

Siemens Energy installed more than 19.4 gigawatts of offshore wind power capacity globally.

Doosan Enerbility is the only manufacturer in Korea that has a supply record in the domestic offshore wind power market.


Exxon Calls For Higher Carbon Pricing

ExxonMobil would like to see the tax credit for carbon capture and storage increased to $100 per ton from the current $50 per ton, as a means to incentivize carbon capture and storage (CCS) projects, the supermajors chief executive Darren Woods told CNBCs David Faber in an interview this week.

Exxons top executive believes that direct air capture of carbon dioxide from the atmosphere could be the holy grailin clean energy technology.

If you can overcome some of those technology hurdles, get your cost down, youve got a technology then that can address this in a very cost-efficient way,Woods told CNBC.

ExxonMobil says that CCS is one of the few proven technologies with the potential to significantly reduce emissions from certain hard-to-decarbonize sectors, such as manufacturing and heavy industry.

The U.S. oil and gas major, however, says that new policies are necessary to spur the investment required to deploy CCS at such a pace and scale. Those policies suggested by Exxon include a rise in the value of carbon to around $100 per metric ton from the current $50, extending the eligibility period to 30 years from current 12 years, and eliminating the deadline for starting construction of a CCS project. Exxon also says that the U.S. Department of Energy programs could provide financial support for CCS infrastructure.

Exxon pledged last year to invest more than $15 billion through 2027 on initiatives to lower greenhouse gas emissions. The initiatives include investments to reduce emissions from company operations and to advance technologies like carbon capture and storage, hydrogen, and biofuels, which together are expected to develop into multi-trillion-dollar markets in the coming decades.

Long-term, we have the portfolio flexibility necessary to pace our investments consistent with advancements in technology, markets and supportive policy,Woods said at Exxons shareholdersmeeting last month.


Shell completes acquisition of 1,400 retail outlets in the U.S.

Shell Retail and Convenience Operations LLC, a wholly owned subsidiary of Shell Oil Products US, has completed the acquisition of certain company-owned fuel and convenience retail sites from the Landmark group of companies, said Fuelsandlubes.

The acquisition also includes supply agreements for the independently operated fuel and convenience sites. Building on the strength of its existing networks, this acquisition brings Shell closer to its customers and enhances Shells market presence by growing its mobility footprint in a key region in the U.S., which is one of the largest fuels and convenience retail markets in the world.

On October 26, 2021, Shell announced it had reached an agreement to purchase the Landmark fuel and convenience network. The agreement has been adjusted to remove 64 company-owned Landmark sites, which currently sell ExxonMobil branded fuels, as well as removing fuel supply agreements for nine dealer-owned sites, which currently sell Chevron and Texaco branded fuels. There is no change in the agreement for sites within Texas Petroleum Group, LLC (TPG), previously a 50-50 joint venture between Equilon Enterprises LLC (d/b/a Shell Oil Products US) and Landmark Industries Holdings, Ltd.

TPG will be a wholly owned subsidiary of Shell Retail and Convenience Operations LLC, within Shells Downstream Mobility business. More than 1,400 Landmark team members enable Shell to grow its company-owned network in the U.S. Shell, through wholesalers, dealers, and JV partners, currently own and operate more than 13,000 Shell-branded sites across the U.S.

With this acquisition, Shell is advancing its Powering Progress strategy in three ways: by growing its retail footprint in a core market; by providing opportunities to offer customers expanded fuelling options, including electric vehicle charging, hydrogen, biofuels and lower-carbon premium fuels, and by allowing for the growth of non-fuel sales through an enhanced convenience offering.


Gree's Ganzhou manufacturing base starts operation

The first air conditioner manufactured by Gree's Ganzhou branch rolled off the production line at a local manufacturing base on Wednesday.

It marks a new step in development of the Gree Electric Appliances (Ganzhou) Intelligent Manufacturing Base Project, which was undertaken by China Construction Fifth Engineering Bureau Jiangxi Branch.

The base in Ganzhou, Jiangxi province was Gree's 15th manufacturing base worldwide and is also among its most technology-driven bases on a global scale because it uses internet-connected machinery to monitor production processes, and has adopted over 20 world's leading technologies such as internet of things.

It only took 12 months from the base's construction to the launch of the AC, indicating an efficient production process of the manufacturing base, said China Construction Fifth Engineering Bureau Jiangxi Branch.


JD, Tencent extend strategic partnership

Chinese e-commerce giant JD said in an announcement on the Hong Kong Stock Exchange that it has extended strategic partnership agreement with tech heavyweight Tencent Holdings Ltd for a period of three years.

Tencent will continue to provide primary and secondary access points for JD on its social messaging platform WeChat to generate data traffic, and the two parties intend to cooperate in a number of areas, including telecommunication, technology services, marketing and advertising, and membership services, said the announcement.

In addition, JD will issue a certain number of its Class A ordinary shares worth $220 million to Tencent. The two companies will also work on artificial intelligence and information security.

JD and Tencent's partnership started in 2014. The two companies formed a five-year strategic partnership in March 2014. Under the deal, Tencent's mobile social platforms WeChat and QQ provided JD with entry points, data traffic and other platform support.

In May 2019, the two companies renewed their strategic cooperation agreement and extended the partnership by three years. According to the deal, Tencent would continue to provide primary and secondary entry points for JD to bring data traffic to the e-commerce platform.


Indoor dining resumes across Starbucks stores in Shanghai

The dine-in experience resumed at most Starbucks locations across Shanghai on Wednesday, as the city had its first day of indoor dining.

The return of 800 Starbucks stores in Shanghai was celebrated by the offering of coffee tastings at its stores.

Starbucks China Chief Executive Officer Leo Tsoi said it is Starbucks' modest contribution to help Shanghai customers return to their pre-outbreak routines and lifestyles and get the city back to its renowned buzz and vibrancy.

Among the stores to resume indoor dining is the Starbucks Reserve Roastery Shanghai, which will also reopen its second floor Bar Mixato and Teavanna Bar.

Since early June, Starbucks has reopened nearly 900 stores in Shanghai, the city with the most Starbucks stores in the world. However, dine-in services had remained suspended in most stores.

With the easing of dine-in restrictions, stores will be allowed to serve customers at 50 to 70 percent of seating capacity depending on store size, in accordance with public health regulations. Operational requirements such as social distancing will also be rigorously implemented to protect the safety of employees and customers.


Airbus and Suzhou join hands to boost innovation

Airbus signed a framework agreement with Suzhou Industrial Park on the establishment of the company's new China research center, set to be launched in Suzhou, East China's Jiangsu province on June 24, a move to promote the development of Suzhou's aviation and aerospace industry.

The center will provide research services in advanced manufacturing, hydrogen energy infrastructure, sustainability and electrification, future cabin and new technologies.



Ericsson reaffirms commitment to Chinese market

Swedish telecom giant Ericsson has reiterated its commitment to the Chinese market, saying it will continue promoting 5G connectivity in the nation and planning for the future of 6G.

Fang Ying, president of Ericsson China, said the company will step up its push to empower 5G innovation and cultivate an industrial ecology as part of its broader efforts to serve the Chinese market.

Ericsson will cooperate with Chinese telecom operators to make better use of technologies such as private 5G networks, Fang said.

When it comes to 6G, he said Ericsson has already launched preliminary cooperation with relevant departments in China.

Fang said earlier Ericsson has been working in the Chinese market for 130 years, the company is optimistic about the market’s prospects and is willing to exchange long-term investment for long-term returns.

China is a leader in constructing 5G networks. As of April 2022, China has built 1.62 million 5G base stations in total, and the number is expected to exceed 2 million by the end of this year. At present, China's 5G users have reached 450 million, accounting for 70 percent of global 5G users.

According to the latest report from Ericsson, global coverage of 5G networks will maintain strong growth momentum in the next few years, and by the end of 2027 the number of 5G registered users worldwide will reach 4.4 billion.



Chinese investment firm sells New Zealand investment to Nestle

Chinese alternative assets management firm CDH Investments announced on June 29 that it and the founding shareholders of The Better Health Company (TBHC) had agreed to sell the New Zealand-based natural health products company to Nestle Health Science.

In 2016, Beijing-based CDH invested in TBHC and became its controlling shareholder. TBHC owns the GO Healthy brand, a major supplement brand in New Zealand's advice channel; the Egmont Honey brand, one of the largest producers and marketers of Manuka honey; and New Zealand Health Manufacturing, one of the leading supplement manufacturing businesses in Oceania.

The TBHC deal was the second exit deal of CDH this year, coming one month after it sold an investment in Vietnam's restaurant chain Golden Gate.

CDH is one of the proactive Chinese investment firms in investing in cross border assets including Smithfield, the US pork producer and food-processing company.


Eli Lilly

New approved drug could benefit millions in China

United States-based Eli Lilly and Innovent Biologics, a domestic biopharmaceutical company, jointly announced that Sintilimab injection, a PD-1 inhibitor, has been approved to treat gastric or gastroesophageal junction adenocarcinoma by China's National Medical Products Administration.

According to the approval released on Friday, the injected drug shall be used in combination with other medicines for first-line treatment of unresectable, locally advanced, recurrent or metastatic gastric or gastroesophageal junction adenocarcinoma.

As co-developers of the drug, the two companies said that it is the first domestic PD-1 inhibitor approved for first-line treatment of gastric cancer.

It is the sixth indication of Sintilimab being approved in China. The drug has also become the only PD-1 inhibitor approved for first-line treatment in five tumor types with high incidence in China, according to the companies.

Gastrointestinal cancers are a health threat in China. The approval of the drug for gastric cancer marks another milestone, said Julio Gay-Ger, president and general manager of Lilly China.

'So far, the drug has covered major cancer types, including lymphoma, lung cancer, liver cancer, esophageal cancer and gastric cancer, benefiting millions of Chinese patients,' he said.

'With our commitment to oncology, Lilly strives to bring high-quality and affordable innovative drugs to Chinese cancer patients through both independent R&D and local partnerships. We look forward to continually working with our partner Innovent in bringing more innovative anti-tumor drugs to Chinese patients,' he said.