Pattaya November 2020

MALAYSIA
AIRLINES
FIGHTING FOR
SURVIVAL
Malaysia Airlines will have no
choice but to shut down its entire operations
if the company’s lessors do
not back its latest restructuring plan.
The news comes after rejection by a
number of lessors to the proposals.
Malaysia Airlines group chief
executive officer Izham Ismail was
quoted as saying, “There are creditors
who have agreed already. There
are others still resisting, and another
group still 50:50,” adding, “I need to
get the 50:50 ones (on board) with
those who have agreed. I understand
quite a sizeable amount of creditors
have agreed.”
According to Izham a plan was
being floated to reorganize Malaysia
Airline’s balance sheet over the next
five years, with a view to reaching a
break-even point in 2023. However
this assumed that South East Asian
travel markets return to their pre-covid
levels by mid or late 2022, something
that is by no means assured. As well,
a cash injection is sought from the
airlines major shareholder, Khazanah
Nasional
The airline’s parent company,
Malaysia Aviation Group (MAG), was
quoted as saying in an email to Reuters,
“(MAG) is confident that there
are appropriate legal mechanisms
available should that support not be
universal,” adding, “MAG reiterates
that the spirit of its restructuring plan
is not intended to create unnecessary
pain among its creditors but is done
in good faith to drive for the long-term
survivability of MAG and its dependent
value chain of partners.”
DANONE SELLS
ITS STAKE IN
YAKULT
Yakult, the Japanese company
that sells the popular probiotics
drinks in Thailand, China, Indonesia
and Japan amongst many other
countries has announced that its
capital tie up with French food giant
Danone has come to end. Danone
sold its 6.61 per cent stake in
Yakult forcing the share price down
and marking the end of twenty
years of share ownership.
Yet the companies will still work
together. In a statement, Yakult
was quoted as saying, "Yakult and
Danone will maintain their longterm
amicable relationship and
continue to promote probiotics in
the future.”
The Danone-Yakult capital partnership
started in the year 2000
when Danone bought a 5 per cent
BUSINESS SUPPLEMENT
AROUND THE ASIAN REGION
stake of the company. It increased
its stake to 21 per cent not long
after.
Yakult’s business is very robust,
using local agents called “Yakult
Ladies” to reach all corners of its
market. Last year, the Japanese
company sold a whopping 6.36
million probiotic drinks every day
in Indonesia on average, and 8.12
million units per day in China. How
ever with a joint venture involving
Danone in India the company only
sold 238,000 units per day there.
Sources at Yakult were quoted
as saying, "We couldn't make Danone
fully understand our expertise,
including marketing by Yakult Ladies,
our unique home-delivery sales
network."
Hisayuki Shimokawa, an analyst
at Tachibana Securities in Tokyo
was quoted as saying, "The collaboration
between Yakult and Danone
had few synergistic effects in the
first place, and therefore it will only
have a little impact on Yakult's management
even if Danone ceases to
be a shareholder," adding, "It will
be important for Yakult to expand
its business in China and other Asia
countries.”
INDIA'S EXPORTS
OF RICE TO RISE
ON LOWER RUPEE,
THAI DROUGHTS.
India's rice exports could rise as
much as 42 per cent based on lower
exports from Thailand and Vietnam
as well as a lower Indian Rupee.
According to B.V. Krishna Rao,
president of the Rice Exporters Association,
India’s rice exports could
surge from 9.9 million tons to as
much as 14 million.
He was quoted as saying, "Thailand's
shipments are falling due to
the drought. Vietnam is struggling
because of lower crop. That share is
naturally coming to India.”
Indeed, Thailand’s exports could
fall to just 6.5 million tons due to
droughts that occurred earlier in the
year. It will be a twenty-year low for
the worlds second largest rice exporter.
Nitin Gupta, vice president for
Olam India's rice business was quoted
as saying, "Basmati rice demand
is more-or-less stable, but in non-basmati
we have seen a huge surge in
demand due to attractive prices.”
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