Belgian battery component maker Umicore will invest €300m to increase its production for lithium-ion batteries sixfold by 2020, due to growth in demand for electric vehicles. The extra capacity will be to meet demand from Chinese electric cars and buses, and European carmakers, which are expanding electric car fleets, the company’s chief executive said. Umicore said demand for the company’s battery materials is “outpacing the market by a significant margin and the increased capacity will enable Umicore to cater for a surge in customer orders”. The money will be invested in Umicore’s plant in South Korea and in Jiangmen in China, it said, with first production lines expected to be commissioned in late 2018. Along with a $160m investment plan announced last year, the additional $300m will result in a more than sixfold increase in total capacity by 2020 compared with 2015. The company, which can trace its roots to the Congolese mining company Union Minière, which was founded in 1906, has for 15 years helped supply material for mobile phone batteries. It now aims to double earnings by 2020 and capture the growing market for electric vehicles. The company’s shares have risen 26 per cent over the past year and rose 3 per cent on Monday to €56.61. Marc Grynberg, Umicore’s chief executive, said it had benefited from “ethical” sourcing of cobalt, a key battery material, amid growing scrutiny over cobalt supply from the Democratic Republic of Congo. Last year, Amnesty International issued a report saying very few companies “are taking steps to meet even the most basic due diligence requirements” when it came to sourcing of cobalt from the DRC for batteries. “We have a definite competitive advantage from having this widespread effort in sourcing cobalt in an ethical manner more than 12 years ago,” Mr Grynberg said. “Even though other people are now trying to clean up their own supply chain it will take time to get there.” Analysts at Liberum estimate that the market for cathodes in electric vehicle batteries will grow by five times in the next five years to $4bn and Umicore will capture about 20 per cent of the market. The cathode is key to how much power a battery can store. While battery makers are aiming to reduce costs of the materials by reducing metals such as cobalt, the company will benefit from growing average size of batteries in electric cars that gives them greater range, Adam Collins, an analyst at Liberum said. Umicore makes cathode materials for nickel-manganese-cobalt (NMC) batteries, which are widely used in electric cars. The company supplies major battery companies such as LG Chem, Samsung SDI and China’s BYD, according to Liberum.
Monday, May 22, 2017
Friday, May 19, 2017
Fast-Moving Consumer Goods
Here the impact is likely to be marginal. Vehicles already attract different levies, which add up to 28 percent -- the peak GST rate fixed for the sector. Gains derived from a unified tax system may still be passed on to consumers, analysts say. Maruti Suzuki India, Tata Motors and Mahindra and Mahindra could benefit.
Wednesday, May 17, 2017
It’s not that Wendy’s Baconator or the Grand Slam Slugger Breakfast from Denny’s will soon go the way of the dodo. But some national chains are feeling the pain amid dismal sales. Subway Restaurants, the biggest U.S. food chain by number of locations, saw the number of domestic outlets declinefor the first time ever last year. Noodles & Co. and Red Robin Gourmet Burgers Inc. are shutting locations after failing to attract customers. Applebee’s, owned by DineEquity Inc., reported same-store sales tumbled almost 8 percent in its latest quarter, and casual-dining chain Ruby Tuesday Inc. said in March it may sell itself after a prolonged slump.
Honors System At Chicago’s Brown Bag Seafood Co., where sales jumped 63 percent in 2016, lunch customers can grab a cookie out of the “honors system” mailbox for just $1. There are homey touches, like a watercolor painting of the Clark Street Beach in nearby Evanston, Illinois, that founder Donna Lee’s mother painted.
Lee started Brown Bag in 2014 after realizing chains didn’t do it for her. “It feels like you’re there only and solely to get your food quickly and get out the door,” she said. “There really is no charm.” Brown Bag’s top seller is its daily-catch powerbox with grilled fish -- barramundi was on the menu on a recent weekday -- served atop quinoa, wild rice and spinach for $9.99. A nearby Panera Bread Co., which has more than 2,000 locations in 46 states and Canada, charges the same price for a strawberry poppyseed salad with chicken.
Maggiano’s has new menu items and meals that cater to customers’ allergies and diets -- think vegetarian, vegan and the occasional gluten-free ravioli. The chain updated its menu to include executive chef photos and short bios, and in February it introduced an emblem of millennial hip: brunch.Some chains are trying to imitate the success of smaller, independent brands. At Maggiano’s Little Italy, which has 52 locations and is owned by Chili’s parent Brinker International Inc., traffic has been on the wane. Same-store sales dropped 1.6 percent in the most recent quarter for the fourth-straight decline.
Bullish on Mom
Monday, May 15, 2017
New online property platforms offer a greater wealth of data than ever before. They also provide the means to do business in a transparent and standardised way, potentially mitigating transaction risks without the need for an agent. Websites such as Rightmove and Zoopla have already offered a snapshot of how access to data can change the industry. Buyers and renters find out everything they need to know about a property without setting foot in an agent’s office. Online platforms such as Purplebricks and Yopa are taking this a step further by offering upfront fixed fees for transactions instead of commission. So far, commercial property agents have escaped such disruption. But they are vulnerable. “The traditional gut-feel world is going to change,” says Andy Pyle, head of UK real estate at KPMG. “Agents that don’t change with it or ahead of it will become obsolete. Access to data will accelerate the pace of obsolescence.” KPMG is playing its part in this process by launching an online platform called Deal Room to sell property loan portfolios. For now, it is focused on portfolios larger than £50m. But Mr Pyle says Deal Room could be adapted to sell individual properties. “Smaller [commercial] deals may be more ripe for disruption. We could do what Zoopla and Purplebricks have done for the residential market for the commercial property sector,” he says. Property Partner, an online property crowdfunding platform, is also changing the investment landscape. It has reduced barriers to investing by offering shares in buy-to-let properties that pay dividends and track asset values. The company plans to create the first global stock exchange for all types of property. It used agents to find the £51.5m of transactions completed so far, but does not expect this to always be the case. “Once we get the [global] scale, we will have a market of buyers and sellers and there may not be a place for agents any more,” says Mark Weedon, its head of institutional development. The amount of information everyone has on one another checks the risks Tushar Agarwal The company is attracting a new type of investor who previously could not afford to buy property and does not want the liabilities attached to managing assets. If the company achieves its global ambitions it will probably attract some investors who know little about property. “One of the biggest risks is people who don’t understand it well enough and overestimate their liquidity position,” acknowledges Mr Weedon. So far, he says, this has not happened. Hubble, a start-up based in London’s tech hotspot of Shoreditch, is introducing a similar concept to the office leasing market. It is attempting to empower tenants by using data to improve the market’s transparency. The company brings together people hunting for flexible office space with those who own space on an online platform that automates a search process normally undertaken by agents. “The average transaction time for office space is down from three months to three weeks — although in some instances we can do it in three days,” says Tushar Agarwal, chief executive of Hubble. He argues that agents “hide behind smoke and mirrors” to support higher prices. To combat the usual upfront risks faced by young businesses, Hubble has standardised client reviews, leases, contracts, deposits and financial outlay. The are risks involved in doing deals directly online. Property agents have long been characterised as a necessary evil by many clients. Yet many would also begrudgingly concede that the market advice received from brokers can often be of comfort despite its cost. This underpinning of the intermediary’s central role, though, is weakening. “The risk to consumers is real,” Mr Agarwal says. “But on other platforms it is dealt with by ratings and reviews. The amount of information everyone has on one another checks the risks. We have come a long way from where a broker is needed.” Agencies are alive to the threats posed by data and technology. As a result, larger companies are investing heavily in both to remain relevant. “We are reinventing how we provide services via data,” says Charles Boudet, managing director of JLL France. “The risk also creates opportunity — so we are completely behind the data drive. It is up to us to move further up the value chain and give better advice.” Chandra Dhandapani, chief digital and technology officer at CBRE, is equally bullish about the opportunities data and technology could bring. But there is a caveat. “Digital technology is only as effective as the quality of the data that fuels it, and importantly, the expertise of the organisation that leverages it,” she says. “The risk associated with purely online transactional activity is the imbalance of knowledge and understanding between the parties involved.”
One-in-three people say the ability to book a taxi or minicab through their smartphone is an alternative to owning a car, in a sign of the potential upheaval vehicle manufacturers are facing to their business models.
Carmakers are grappling with the prospect of falling vehicle ownership in large cities, where parking costs and congestion make traditional ownership less attractive than in rural areas.
Ride-sharing and on-demand taxi apps were considered a viable alternative to ownership by 34 per cent of people, up from 29 per cent a year earlier, in a global Capgemini survey of 8,000 people in eight countries.
The annual consumer survey, which polled 1,000 consumers in the UK, US, France, Germany, Italy, India, China and Brazil, also showed the percentage of people who would consider using an on-demand service had risen from 34 per cent to 50 per cent in the past two years.
“There is now a huge interest in this,” said Nick Gill, senior automotive analyst at Capgemini. “In the last year it has really taken off.”
This is a trend that is likely to continue, with two-thirds of the world’s population set to live in cities by 2050.
Several carmakers have responded by investing in ride-booking services, such as Uber or Lyft, while some, from BMW to Ford, have launched their own car sharing schemes in city centres.
The launch of shared riding options, such as Uber’s Pool or Gett’s GettTogether service, has increased the scope of on-demand services. Ford and VW are also launching inner-city minibus services.
Mr Gill forecast that the shift from car ownership to shared ownership or on-demand services is “closer than we think”, as city authorities bring in measures to disincentivise personal car use and ease congestion.
He said within five years there may be “strong legislation or pushes, fiscal incentives to not drive cars, and the inner-city areas reserved just for mobility services”.
The survey showed a spread in attitudes towards transport services between developed nations and emerging markets.
While 80 per cent of respondents in China said they were likely or very likely to use “mobility on demand” services, the figure was 39 per cent in the US, 29 per cent in Germany and just 18 per cent in the UK. Mr Gill said the numbers in China were “very scary” for carmakers.
Didi, the Chinese rival to Uber, carries out almost 20m rides daily, or 7bn a year. But despite the growing use of ride-booking options in China, attachment to car ownership remains on a similar level with other international markets.
In both mature markets and emerging markets, a third of consumers said they would consider app services as an alternative to car ownership. In one surprising finding, those aged over 50 were fractionally more likely to ditch their vehicles in favour of transport apps compared with those in the 35-49 bracket. Some 32 per cent of 35 to 49-year-olds would consider apps as an alternative to a car, while 34 per cent of over-50s would. Among those aged 18-34, the figure was 36 per cent.