The Star Online: Business

EU okays pacts with Latin America
PetroChina in LNG project
Barry Callebaut to buy Petra Foods cocoa unit

Posted: 12 Dec 2012 05:24 PM PST

BRUSSELS: European Union (EU) lawmakers have approved free trade accords with Colombia, Peru and six Central American nations, giving them permanent access to the EU's 500 million consumers and offering the EU's stagnant economy new markets for its cars and luxury goods.

Setting aside doubts about Colombia's human rights record, the European Parliament in Strasbourg voted to allow the deals to come into force next year, building on the eight countries' separate free trade agreements with the United States.

"At a time when our economy is struggling, it is vital that the EU forges stronger links with emerging economies," said Catherine Bearder, a British liberal lawmaker who voted for the pacts.

With global trade talks stalled, the EU is trying to sign free trade deals with fast-growing economies in Asia and Latin America, as well as with developed countries including Japan and the United States, to revive its economy.

For Latin America, the accord means most of the region's Pacific economies now have trade pacts with both the EU and the United States. That deepens a divide between these nations and Argentina, Brazil and Venezuela on the Atlantic, which have been more reluctant to drop barriers to trade.

The accords, signed in June, mark another step in Colombia and Peru's efforts to modernise their economies after decades of guerrilla and drug-related violence. They join Chile and Mexico as major Latin American economies seeing trade as their best chance to achieve sustained economic growth.

"This is our bet," Colombia's ambassador to the European Union, Rodrigo Rivera, said. "It's been a difficult debate at home, but we believe free trade is the way forward."

Peru and Colombia, whose trade ties with the EU were worth 21 billion euros in 2011, currently benefit from an arrangement under which the EU imposes low or zero tariffs on imports, but that is due to expire in 2013.

The European Commission, which negotiates trade deals for the EU's 27 member states, sees EU exporters to Colombia and Peru saving at least 250 million euros in duties a year within a decade. This agreement could boost Colombia's economic output by 1.3% and Peruvian output by 0.7% in the long term. The trade agreements also go beyond tariffs, to include intellectual property rights and liberalisation of services, benefiting sectors such as banking.

For the smaller, poorer economies of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama, which also have trade deals with Washington, the accord should help in gradually moving away from banana and other fruit exports and building on successes such as Costa Rica's in making microchips.

"In Costa Rica and Panama, they don't export what they produce, instead they produce to export," said Jonathan Menkos, executive director of the Guatemala City-based Central American Institute of Fiscal Studies. - Reuters

PetroChina in LNG project

Posted: 12 Dec 2012 05:20 PM PST

SYDNEY: China's PetroChina Co Ltd has agreed to pay US$1.63bil for a minority stake in a controversial Australian liquefied natural gas (LNG) project, as it steps up efforts to source more of its energy in foreign countries.

Mining and energy giant BHP Billiton said it would sell PetroChina its share of the Browse LNG project, estimated to cost US$30bil to build, after deeming it a "non-strategic" asset.

China's state-owned energy giants have been bidding aggressively for foreign oil and gas fields as Beijing looks to secure future energy supplies to meet rising demand. China also aims to double the share of gas in its overall energy mix to more than 8% by 2015, while coal will be cut to just over 60%.

The Browse stake marks Petrochina's first major acquisition this year after it set aside US$16bil for overseas investment as part of a plan to have half its production outside of China within eight years.

"PetroChina is under pressure to grow its overseas output," a source familiar with the company's strategy said. PetroChina could not be reached for immediate comment.

The Browse project has been plagued by controversy over its proposed location at James Price Point on the northwestern coast of Australia, which has been opposed by some project partners, environmentalists and aboriginal landowners.

The investment also comes against a backdrop of soaring costs for some US$170bil worth of LNG export projects under construction in Australia, owing to labour shortages, construction challenges and the strength of the Australian dollar. Chevron Corp last week revised up the cost of its Gorgon LNG export complex by US$15bil to US$52bil.

"For (PetroChina), obviously that particular country probably is not just worrying about the next couple of years. They've got a long-term requirement for energy," said David Lennox, a mining resources analyst for Fat Prophets in Sydney.

"You'll find a lot of Chinese companies are stepping into the operational phases of projects like this to learn the trade," he added. "Possibly they can take those skills back to what they are doing in their own offshore region."

The sale hinges on the remaining joint venture partners Woodside Petroleum, Royal Dutch Shell Plc, BP, Japan's Mitsui & Co and Mitsubishi Corp choosing not to exercise rights to match the offer from PetroChina.

The Browse deal follows Canada's approval last week of China's biggest overseas energy acquisition, a US$15.1bil takeover by state-owned CNOOC of Canadian oil and gas producer Nexen.

BHP said it expected the deal to close in the first half of next year, pending regulatory approvals.

"We believe the sale is a positive given it was a minority stake in a non core asset," Citi resources analyst Clarke Wilkins said in a note. "BHP prefers to have operating stakes in its operations."

BHP's exit coincides with a major shift in the gas sector, with a dramatic rise in US production due to the development of shale deposits causing a global rethink on how markets will be served in coming years.

With excess gas at home, and prices far below global levels, companies are scrambling to export US gas to highpaying markets in Europe and Asia. Fifteen projects are in the early stages of approval to export, according to government records.

Still, US President Barack Obama may be reluctant to endorse exports, as it could push up prices for domestic users. - Reuters

Barry Callebaut to buy Petra Foods cocoa unit

Posted: 12 Dec 2012 05:18 PM PST

Thursday December 13, 2012

ZURICH: Barry Callebaut said it would buy the cocoa ingredients business of Singapore-based Petra Foods for US$950mil in cash, making the Swiss firm the world's largest processor of cocoa.

Barry Callebaut, which manufactures chocolate for Nestle and Hershey, is buying the operations in a bid to support further partnerships with big confectioners.

Barry Callebaut also said the deal would boost sales volumes in the fast growing emerging markets by 65%, taking its share of total sales volume to a third.

Petra Foods is the largest cocoa products supplier in Asia with sales of US$1.3bil in 2011.

Integrating the Petra Foods unit into Barry Callebaut would result in estimated one-off costs of 10 million to 15 million Swiss francs (US$11mil to US$16mil) in the first two years, the company said, with an additional one-off transaction cost of 10 million francs.

The proposed acquisition includes Petra's entire cocoa ingredients business, including seven factories in Malaysia, Indonesia, Thailand, Brazil, Mexico, Germany and France as well as sales offices in Singapore, the Netherlands and the United States. Reuters

Kredit: www.thestar.com.my

Rabu, 12 Disember 2012