Media Focus on Multinational Corporations [2023.02.20]
CNPC completes drilling for Asia's deepest oil wellChina National Petroleum Corp, China's largest oil and gas producer, said on Monday it has finished drilling Asia's deepest oil well in the city of Mianyang in Southwest China's Sichuan province.PetroChina Southwest Oil and Gasfield Co, a subsidiary of CNPC, said the Pengshen-6 well, the deepest on land in Asia so far with a current depth of 9,026 meters, will be used to explore oil and gas resources 8,000 meters underground.Luo Pingya, academician at the Chinese Academy of Engineering, was quoted by the paper as saying the success of the drilling shows China's overall level of deep well drilling has been improving in recent years and ranks among the top in the world.Sinopec launches ‘first’ methanol-to-hydrogen and refuelling station in ChinaChina reports its first integrated methanol-to-hydrogen and hydrogen refuelling service is now in operation.China Petroleum & Chemical Corporation (Sinopec) officially launched the station in Dalian, China.The company claims it is an upgrade from the previous fuelling station offering oil, gas, hydrogen, electric charging services and then integrated complex can produce 1,000kg of hydrogen per day with a purity of 99.999%.The new service station is expected to save costs on hydrogen production, storage and transportation by more than 20% compared to traditional hydrogen refuelling stations.The production plant has the advantages of covering a small area, having a short construction time and a green environmentally friendly production process.Yang Junze, Executive Director of Sinopec Fuel Oil Sales, said, “The launch of the service station has showed that distributed methanol-to-hydrogen is the right roadmap for the sustainable development of China’s hydrogen fuelling stations.”The company believes the station will become a pilot model to lead the development of China’s hydrogen energy industry.The country produces the most methanol in the world, accounting for 60% of the global total.Sinopec has previously built two integrated fuelling stations in Dalian’s free trade area, with six more now under construction.In 2021, Sinopec announced it’s planning to establish 1,000 hydrogen stations by 2025 in China to accelerate development of its new energy business.CNOOC begins crude reserve operations in ShandongChina's largest crude oil commercial reserve project, located in Dongying, East China's Shandong province, started commercial operation on Thursday according to operator China National Offshore Oil Corp, China's top offshore oil and gas driller.The Dongying crude oil commercial reserve project has received investment of up to 6.4 billion yuan ($930 million). Including 50 crude oil storage tanks, each with a storage capacity of 100,000 cubic meters, the project is capable of storing around 4.25 million tons of crude.The project will further strengthen the country's crude supply capacity while promoting the rapid growth of energy trade and ensuring domestic energy security.It will also rely on the refining capacity and public supporting facilities of Dongying Port and store offshore oil from the Bohai oilfields through the submarine pipeline and short-distance ocean carriers. It will further facilitate the country's domestic offshore oil to be stored, refined and transported at a more efficient rate.bp plans to purchase TravelCenters of America for $1.3bnbp North America has today (February 16) announced its entry into the US convenience and mobility services, agreeing to purchase TravelCenters of America (TA) with plans of expanding refuelling services including hydrogen.The acquisition of the travel centre operator is subject to regulatory and TA shareholder approval, however, will be for $1.3bn in cash.With an extensive network of highway sites across the US, the purchase of TA is hoped to compliment bp’s existing predominantly off-highway convenience and mobility business.bp says the acquisition will bring advantages in fuel and biofuel supply, while also giving the option to expand and develop new mobility offers including electric vehicle (EV) charging, biofuels, renewable natural gas (RNG), and later hydrogen, for both passenger vehicles and fleets.Earlier this month (February 2023) bp announced it would invest up to $8bn more into transition growth engines (TGEs) by 2030, including renewables and hydrogen, upon announcing record profits of $27.7bn in 2022.ExxonMobil Huizhou Ethylene project makes great headwayConstruction of the $10 billion ExxonMobil Huizhou Ethylene Project has achieved significant progress in Huizhou, Guangdong province, especially with the completion of the hoisting of the heavy tower, local authorities said.Meanwhile construction of a first-class R&D center officially kicked off in Huizhou's Daya Bay in the eastern part of Guangdong.It will be the first comprehensive research and development center outside ExxonMobil's North American headquarters, equipped with pilot plants, integrating product research and development, and process development , said authorities.The ExxonMobil Huizhou Ethylene Project is being constructed in two phases.The first phase of the project includes construction of a 1.6 million tons per year ethylene cracking unit, as well as middle and downstream high-end polyethylene, polypropylene and other production units and relevant supporting utilities, wharves, storage and transportation and environmental protection facilities.It is intended to help alleviate a shortage of polyolefin-based plastic in the domestic market and reduce the dependence on imports of high-performance polyolefin products in the future.Construction of the giant chemical project, which commenced in April, 2020, is expected to help build Huizhou, a Pearl River Delta city in the Guangdong-Hong Kong-Macao Greater Bay Area, in to a world-class green petrochemical production base in coming years, authorities said.Exxon working to more than triple Guyana oil production by 2027By 2027, Guyana oil production is expected to hit 1.2 million barrels per day (bpd), making it the second largest producer in South America, after Brazil, based on current output across the region.“It’s an exciting place to wake up in the morning and think about what’s possible. Where will we be in 5 years? What else can we do to innovate, to create, to drive, for Guyana and the world?” Mallon said.Oil production got underway at the ExxonMobil-operated Stabroek Block at the end of 2019 with the Liza Phase 1 Development. The company has since added a second vessel for phase 2 of the Liza project. The third FPSO – Prosperity – will set sail this month from Singapore while construction of the fourth vessel – One Guyana – is underway.“The fifth and sixth developments, Uaru and Whiptail, are in the planning process and we expect them both to be online by the end of 2027… increasing capacity to 1.2 million barrels a day…,” Mallon pointed out.While the combined output from these projects will push production over 1.2 million bpd by 2027, there remains much scope for upside as more developments come online.China's State Grid constructs new UHV, hydropower plant projectsBEIJING -- The State Grid Corporation of China (State Grid) on Thursday began the construction of a new ultra-high voltage power transmission line and a pumped-storage hydropower plant.The Jinshang-Hubei 800-kilovolt UHV direct current power transmission project stretches 1,901 kilometers. It is currently the highest-altitude UHV direct current power transmission project in the world. State Grid said the project will pass through four provincial regions: Tibet, Sichuan, Chongqing and Hubei.The Tongshan pumped-storage hydropower station will be equipped with four sets of power generators, each with a capacity of 350,000 kilowatts.The total investment in the two projects will hit 42.7 billion yuan ($6.23 billion), according to State Grid.So far, the company has completed the construction of 33 UHV projects nationwide, and it plans to construct more pumped-storage hydropower stations with an estimated total installed capacity of over 27 million kilowatts during the 14th Five-Year Plan period (2021-25).Lenovo sees strong growth from non-PC businessesLenovo Group Ltd said on Friday that the revenue from its non-PC businesses reached 41 percent in the quarter that ended in December, as the Chinese tech company made progress in building a diversified growth engine.Lenovo said its solutions and services group as well as its infrastructure solutions group grew their revenue to record highs of $1.8 billion and $2.9 billion respectively, up 23 percent and 48 percent year-on-year.Overall, the company recorded a revenue of $15.3 billion and a net income of $437 million.While the industry faces significant macroeconomic pressures, Lenovo said it sees long-term opportunities ahead as the global trends of digitalization and intelligent transformation continue accelerating and IT spending is expected to recover to a moderate growth rate in the mid-to-long term.Yang Yuanqing, chairman and CEO of Lenovo, said 'Today's solid results demonstrate that our service-led transformation strategy is paying off. Our diversified growth engines of non-PC business now account for over 40 percent of our group revenue and are driving solid profitability.''Despite the complex macro environment, we retained our market leadership in PCs. I remain confident that our clear strategy, operational resilience, healthy liquidity and continued investment in innovation will ensure we can deliver long-term sustainable growth and improved profitability,' Yang said.At this year's World Economic Forum in Davos, Lenovo's Hefei factory, LCFC, was recognized as one of the 18 additional sites added to the Forum's Global Lighthouse Network of 132 leading manufacturers, each chosen for their leadership and integration of the fourth industrial revolution technologies.LCFC is the flagship in Lenovo's network of more than 35 manufacturing sites across nine markets and ships products to 126 markets around the world. This is done while managing 300,000 individual pieces of materials and parts every day, 300 discreet new products every year, and more than 200,000 different product configurations, Lenovo said.Chinese company Hisense opens R&D center in SloveniaLJUBLJANA -- Chinese electronics company Hisense opened a research center in Slovenia on Monday, in a ceremony attended by the country's president Natasa Pirc Musar.The center in Velenje in easter Slovenia is worth some 2.1 million euros, and will develop household appliances for all of Europe. It will also produce kitchen and premium appliances for the global market. Hisense is one of Slovenia's largest exporters.'Innovation is a Hisense core value, and research and development a key pillar on which our company's success is based,' said Han Jianmin, CEO of Hisense Europe.'The innovation center will enable us to build our competitiveness in the future,' said Bostjan Pecnik, board member for Hisense Europe.Currently, Hisense Europe employs 610 experts in the fields of research and development, design and product management, with 470 of these in Slovenia. This year, Hisense Europe will invest some 45 million euros in research and development, almost 20 percent more than last year.President Musar welcomed the fact that the company is developing green technologies, and also called upon Slovenian companies to increase their investments in China.China is Slovenia's fourth largest import partner. About 9 percent of all Slovenia's imports came from China last year.Amazon asks corporate staff to be in offices 3 days a weekNEW YORK -- Amazon will require its corporate employees to return to the office at least three days a week.CEO Andy Jassy announced the policy Friday in a memo to staff. It marks a shift from Amazon's current policy of allowing leaders to determine how their teams worked. The change will go into effect May 1.Many companies have been calling their employees back to the office after the COVID-19 pandemic forced them to operate virtually.Last month, Starbucks told its corporate employees to plan to work from the office three days a week. Disney is asking employees to plan for four in-office days starting in March. And Walmart said this week that it would require its tech teams to plan regular in-office work days.Jassy said in his memo that Amazon made its decision after observing what worked during the pandemic. Among other things, he said the senior leadership team watched how staff performed and talked to leaders at other companies. He said they concluded employees tended to be more engaged in person and collaborate more easily.The move could help local economies, he said.“I’m also optimistic that this shift will provide a boost for the thousands of businesses located around our urban headquarter locations in the Puget Sound, Virginia, Nashville, and the dozens of cities around the world where our employees go to the office,” Jassy wrote.Jassy said the details of the policy haven’t been finalized. He said he wanted to share the decision — made at a meeting of the company's senior leadership team this week — as early as possible. He said there will be certain roles that will be exempted from the policy, “but that will be a small minority.”Last month, Amazon announced it would trim 18,000 corporate positions in its efforts to prune payrolls that rapidly expanded during the pandemic lockdown. Other big tech companies, including Salesforce and Google, have been doing the same.SK Hynix president visits China to deepen cooperationKevin (Jongwon) Noh, president of South Korean memory chip giant SK Hynix, met the Minister of Industry and Information Technology Jin Zhuanglong, China's top industry regulator, in Beijing on Tuesday to exchange views on deepening cooperation.NBA keeps eye on regional networks, unveils new app optionsSALT LAKE CITY -- The NBA is keeping a constant eye on the status of the financial problems that some regional sports networks are trying to address, and there does not appear to be immediate concern about what will happen if the owner of those networks files for bankruptcy.Los Angeles Clippers chairman Steve Ballmer said Friday that the league provides teams with updates on the situation involving Diamond Sports Group — the largest owner of regional sports networks that owns broadcast rights to 42 professional teams, including 16 NBA clubs.Diamond, the parent company of 19 Bally Sports networks, skipped about $140 million in interest payments that were due Wednesday, starting a 30-day grace period that could be the prelude to a bankruptcy filing.Ballmer cautioned that the specifics of what may be happening behind the scenes “changes day to day, minute to minute.”“Will there be distribution of NBA games? Yes. Will that happen through the RSNs? I actually hope so. I hope so,” Ballmer told The Associated Press. “Will their bankruptcy be friendly enough for that to happen? I hope so. Will the creditors probably want our games to continue to get distributed? I think so. So somehow, I have faith without knowledge that we’ll get through this.”Ballmer spoke Friday on a panel that discussed how the rise in streaming services is creating additional competition for consumer attention as part of the NBA's Tech Summit, an annual part of the league's All-Star weekend. The panel discussion was off the record, but he spoke to AP after the event.Commissioner Adam Silver did publicly unveil new personalized options that the league intends to have as part of the future live-game streaming experience — including a feature where fans can scan their own avatar into a live NBA game and have that image replace an actual player by using the league app.The NBA is also planning more customized experiences for those choosing to stream games through the app, including alternate languages, integrated betting and enhanced camera angles.CIMC Wetrans opens Asian headquarters in SingaporeCIMC Wetrans, the logistics unit of Shenzhen-based energy and chemical equipment maker China International Marine Containers (Group) Co Ltd, has set up its Asia headquarters in Singapore as part of its efforts to expand its global footprint.The company has been striving to strengthen its presence in Asia over recent years, especially in Southeast Asia, hoping to grasp the emerging logistics opportunities brought by the fast growth of the market.So far, it has built up sea, air and container services in countries including Thailand, Vietnam, Malaysia and Indonesia.'The establishment of our Asia headquarters in Singapore is an important milestone for CIMC Wetrans in the exploration of international markets,' Hu Pengfei, president of the company, said.This development will help the company better tap into the global industrial chain, and enhance its service capacity and branding by taking advantage of Singapore's status as an international finance, trade, sea transportation and regional shipping hub, he said.The COVID-19 pandemic has caused a heavy toll on the logistics industry over the past years, with the global supply chain being disrupted and countries imposing curbs to contain the coronavirus.As the world gradually returns to normal, the industry is expected to see a bounce back in the coming years. According to global consultancy FTI Consulting, the global logistics market is forecast to grow by 6.8 percent annually from 2022 to 2030.The Asia-Pacific region is projected to become the world's largest logistics market, accounting for roughly 45 percent of the total market share, it said.Mondelez invests more, finds sweet success in Chinese snack marketWith China expanding several programs to encourage multinational corporations to play a bigger role in driving its economic growth, Mondelez International Inc, a United States-based snacks manufacturer, is offering cake products for the first time in the country this year and has pledged to invest more in digital solutions, said a senior executive.After investing 350 million yuan ($50.9 million) over the past five years, the company's plant in Suzhou, East China's Jiangsu province, joined the Global Lighthouse Network and became the world's first lighthouse factory in the global biscuit and snack industry in late January.The Global Lighthouse Network is a project launched by the World Economic Forum in collaboration with McKinsey & Company in 2018.Formed by more than 130 plants owned by various companies to date, it is a community of manufacturers applying advanced technologies to speed up and spread the smart adoption of Fourth Industrial Revolution technologies — a fusion of artificial intelligence, robotics, the internet of things, Web3, blockchain, 3D printing, genetic engineering, quantum computing and other technologies — to their industries worldwide.Empowered by digital technologies, Mondelez's local team can transform into an integrated supply ecosystem, resulting in improved on-time in-full delivery — a supply chain metric for measuring performance in the logistics industry — by 18 percent and cut of 32 percent in lead time.Joost Vlaanderen, president of Mondelez Greater China, said China's optimized COVID-19 response and further opening-up measures have delivered positive signals to the world and global business community, and the company is optimistic about the snack industry's outlook in 2023 and beyond.'With China entering a new era of green and innovation-led growth, the country will continue to open up for foreign investments and provide a more favorable business environment,' said the executive, adding that Mondelez will grow and develop its portfolio and brand penetration in products such as biscuits and cakes in this lucrative market in the years ahead.In addition to producing and selling biscuits, chocolate, chewing gum, confectioneries and drinks in China, Mondelez — the maker of Oreo cookies, Toblerone chocolate and Stride gum — will introduce frozen cakes to the Chinese market for the first time in April, after installing a cake production line at its Beijing plant in 2022.China's demand for snacks has formed a market of over 800 billion yuan in annual sales in 2021. It is projected to cross the mark of 1 trillion yuan by 2025 and further double in scale in another decade, according to a report released by the industrial research institute of the 21st Century Business Herald in early January.Attracted by China's huge middle-income group and increased spending power in lower-tier cities, Vlaanderen said Mondelez will leverage its large distribution network to reach new consumers to maintain robust growth in the country.Operating in more than 160 countries and regions with around 80,000 employees, Mondelez's R&D center in Suzhou is not only providing innovation services for China, but also countries including Japan and Australia, as well as several nations in the Middle East and Africa.Investment strategies for many foreign companies have undergone notable changes, from focusing on scale in the past to looking at business sectors driven mostly by high-tech, high added value and sustainability, said Guo Xin, a marketing professor at Beijing Technology and Business University.Coca-Cola strengthens roots in Chinese marketThe Coca-Cola Company is expecting a recovery in the Chinese market and has confidence in its performance this year, boosted by its growth strategy, rising investments in plants, as well as an enhanced presence on its online and offline channels, and marketing innovations, according to the company.When talking about the China market, James Quincey, chairman and CEO of The Coca-Cola Company, said on the earnings call on February 14th, 'the reopening of China is going to be a positive for the business… We will see a more normal level of volume in China and a recovery to the 2019 or growth on the 2019 numbers starting to come through.'Despite the positive forecast for this year, in the fourth quarter last year unit case volume in the Asia Pacific market declined by 1 percent, driven by strong growth in India and Vietnam, which was more than offset by a decline in China, according to the report of the quarterly results.Zhu Danpeng, a food and drink analyst in China, forecasts that the company is to have an explosive recovery this year and the drop in volume last year was only temporary.Globally, the company has seen its fourth quarter revenue rise 7 percent year-on-year to $10.13 billion and its operating income reached $2.08 billion, up 24 percent year-on-year. Its full year revenue grew 11 percent to $43 billion and operating income reached $10.91 billion, up 6 percent year-on-year. The company expects to deliver an organic revenue growth of 7 percent to 8 percent this year.Quincey said, 'As we begin 2023, we continue to invest in our capabilities and strengthen alignment with our bottling partners to maintain flexibility. We are keeping consumers at the center of our innovation and marketing investments, while also leveraging our expertise in revenue growth management and execution.'In 2022, Coca-Cola China joined hands with two bottling partners, COFCO Coca-Cola and Swire Coca-Cola, to keep investing in China in an effort to increase local production capacity and meet the growing demand of consumers in the Chinese market.In January 2023, Swire Coca-Cola proposed a project with a total planned investment of 2 billion yuan in the Kunshan Economic & Technological Development Zone (KETD), which was the single largest strategic investment of Swire Coca-Cola in the Chinese market during recent years.On levering digital engagement to connect with more consumers, the company continued to enhance its presence in online channels and promote the digital transformation, resulting in strong growth in sales in its flagship store on the JD platform and the new retail platforms of Alibaba last year.Coca-Cola is focused on having the right leaders and an organized structure to deliver on its growth strategy. In January, Gilles Leclerc was named the president of Coca-Cola Greater China & Mongolia. Leclerc replaced Vamsi Mohan Thati who has served in the role since 2020. Leclerc was the president of The McDonald's Division of The Coca-Cola Company.