A fall in turnover in hotly contested consumer segments took a chunk out of Singapore’s StarHub’s firstquarter earnings, it reported yesterday.

But the telco has shed more light on its mobile virtual network operator strategy, with fibre broadband company MyRepublic unveiled as its first partner. Listed rivals M1 and Singtel already have network leasing arrangements.

Net profit slid to $61.5 million for the three months to March 31, marking a 14.9 per cent drop from the previous year.

Turnover was 4.7 per cent lower at $561 million.

The slump in mobile and payTV service revenues, as well as reduced turnover from equipment sales, could not be offset by enterprise fixed service gains.

StarHub called the enterprise fixed segment “a constant bright spot, with a third successive quarter of doubledigit revenue growth”.

Its performance was lifted on consolidation of the Accel Systems & Technologies and D’Crypt cyber security acquisitions.

Th Company posted $561 million in revenue, down 4.7 per cent from the same period last year, profit of

$61.5 million in net profit, down 14.9 per cent. It paid a dividend of of 4 cents pert share, unchnaged from the same period last year. – Th e Straits Times

New Sime facility to produce 10,000 BMW engines a year

The new 132 million ringgit Sime Darby Auto Engineering (SDAE) facility in Kulim, Malaysia , will produce 10,000 BMW engines per annum to cater to the growing demand for locally assembled vehicles with innovative capabilities in engine assembly technology.

Sime Darby Motors (Malaysia/Thailand/Taiwan) managing director Dennis Ho said that the 10,000 units were the product of a single shift.

“Should we go on two shifts, the volume would double to 20,000. Currently, the plant is operating on a single shift,” Ho told reporters after the opening of the plant in Padang Meha here.

Also present were BMW Group senior vicepresident (production engines and electrified powertrains) Ilka Horstmeier, Sime Darby chairman Tan Sri Wan Abdul Wan Abdullah, and BMW Group Malaysia chief executive officer Harald Hoelzl.

Ho added that there was no compromise on the quality of the engines produced here.

“The standards of the quality checks used at this SDAE plant in Padang Meha are similar to those used in Germany.

“The parts and components are imported from Germany,” Ho pointed out.

The plant is located on 2.4ha with a builtup area of 8,500 sq m.

“SDAE has invested over RM132mil in the new engine assembly plant that would support BMW’s growing demand for locally assembled vehicles with the newest capabilities in engine assembly technology, as well as support the premium automaker’s export initiatives to other markets in the region,” Ho said. – The Star

Vietnam industrial growth soars in first four months

Vietnam’s industrial production index (IPI) retained a significant 11.4 per cent growth rate in the first four months of this year, much higher than the 6.6 per cent increase in the same period last year.

In the January-April period, the manufacturing and processing sector, which accounts for nearly 80 per cent of overall industrial value, saw the strongest growth with 14 per cent, compared to 9.5 per cent in last year’s corresponding period, GSO said.

Meanwhile, electricity production and distribution increased 9.7 per cent, and water supply and wastewater treatment went up 5.5 per cent. The mining sector witnessed a modest decline of 1.2 per cent. – Viet Nam News

Mara filed an originating summons against six directors of Med-Bumikar and the company to challenge the appointment of two new directors.

As at press time, Mara said in a statement that it contended that the appointment of the two directors –Mohd Ridzuan Abdul Halim and Sharifuddin Shoib – was through a circular resolution and not through a properly convened board meeting.

“Both of them have no shareholdings in Med-Bumikar and have not received the consent of the shareholders representing more than 50 pe cent of the votes of Med-Bumikar to be appointed as directors of Med-Bumikar.

“Mara had also previously issued a letter to both Mohd Ridzuan and Sharifuddin to raise its objection against their appointment,” the government agency said.

Mara further said that it had in early March sought to appoint two directors to Med-Bumikar, but the board refused to convene an extraordinary general meeting (EGM).

The two that Mara had proposed to be appointed to the board of Med-Bumikar were Muhamad Zaki Jali and Wong Fay Lee.

Zaki represents Mara while Wong is a nominee of the Wong family that has more than 11.5 per cent in Med-Bumikar.

Med-Bumikar has seven shareholders, holding a 29 per cent stake. The remaining stakes in the private company are held by six founding families. Of these, the Wong and Looi families have thrown their support behind Mara for the sale of Medi-Bumikar’s 50.07 per cent stake in MBM Resources to UMW Holdings Bhd.

UMW has offered Med-Bumikar 2.56 ringgit per MBM share, which has not gone down well with all the shareholders of the private company.

The planned policy was intended to help state-owned oil and gas company Pertamina purchase oil for the domestic market according to the state budget’s assumption on Indonesian Crude Oil prices (ICP).

The ministry’s oil and gas director general, Djoko Siswanto, said on Thursday that the government preferred to provide the largest subsidy for the Solar diesel fuel brand than to provide Pertamina with crude oil prices based on the ICP assumption, which was set to US$48 per barrel.

Meanwhile, the average real price of crude oil was $67 per barrel in April.

“Both are similar. It is just a difference in mechanism – one from upstream, the other from downstream,” Djoko said in Jakarta on Thursday as quoted by kontan.co.id.

Energy and Mineral Resources Minister Ignasius Jonan said during the meeting on Wednesday that additional subsidies would be drawn from the windfall of crude oil sales.

Djoko said providing Pertamina with the ICP |assumption was more |complicated, because once |crude oil was processed at the refinery, the product output would be subsidised Premium gasoline, subsidized Solar diesel fuel and aviation turbine fuel (avtur).

The result is uncertain. How much Premium, Solar and avtur will we get from one barrel of crude oil? Providing subsidies will be more certain,” he added.

Djoko said the subsidy for 1 liter of Solar will be 1,000 |rupiah (7 cents US) to 1,500 rupiah from the current subsidy of 500 rupiah per litre . Meanwhile, the state budget has set the quota for Solar diesel fuel at 7.5 million kilolitres.

Elisabetta Gentile, an economist at the ADB, said technological advances like automation would require workers to acquire new skills in order to stay competitive in the future.

“We have to help [workers] for this transition, in order to contribute to economic growth in the country,” she said.

Cambodia’s government is vocally supportive of such a transition, although it remains to be seen whether the significant investment required to retrain the workforce will be forthcoming.

“It is a real challenge that we will face in the next decade,” said Heng Sour, a spokesman for the Labour Ministry. “We need to move from the labour-intensive [work] to a more knowledge-based industry, and train our workforce to cope with that challenge.”

Projects in Cambodia

The ADB has proposed several projects in Cambodia that seek to develop the country’s workforce, including a $60 million project that focuses on educating workers, with the goal of transforming Cambodia’s economy from labour-based to skills-based by 2025.

The bank has also funded a technical and vocational training program, as well as an expansion of secondary education in the country.

According to Gentile, Cambodia has time to make such a transition, but the preparation work should being now.

“We have to start working today to build the skills that workers in all of developing Asia will need to seize the opportunities new technologies offer,” she wrote in an email, adding that at the same time, governments should boost social safety nets for workers.

“Governments in developing Asia should ensure that workers are protected from the downside of new technologies, and able to harness the new opportunities they provide.”

The Asian Development Bank was set up to reduce poverty through inclusive economic.

The annual summit has drawn finance ministers, central bank governors and corporate leaders from the across the Asia-Pacific region.

The finance minister also cites firms’ poor record in raising productivity and deepening talent pool.

Unless Singapore firms bring “something special” to the table, they will struggle in the fiercely competitive global marketplace, said Finance Minister Heng Swee Keat yesterday.

That was just one of the blunt home truths Heng laid out when addressing a conference of Asean business leaders.

He also pointed to Singapore’s poor results in raising productivity and how it has failed to develop deeper talent pools so it can better compete with heavyweights like China.

Heng made it clear that Singapore and Asean companies should regionalise to tap the advantage of access to big markets.With Singapore’s economy maturing, firms need to seek growth beyond the home market by building a niche.

“I’ve always believed that you cannot internationalise without some real capabilities,” said Heng, who was speaking at the Asean Conference, jointly organised by the Singapore Business Federation, United Overseas Bank, Rajah & Tann Singapore and RSM Singapore.

“Over time, you must expect that unless you bring something special to the table, you will not be welcomed at the table.”

Products from developed markets commonly emerge from companies with a better business model or that are built with superior technology, he noted.

“If you look at the rapid growth in China, many of their products have now attained that level. So we must be humble about this, and we must learn.”

Heng also pointed out that while Singapore’s growth rate is expected to be lower than in previous decades, that does not mean firms will find opportunities curtailed.

“The Swiss economy’s growth rate is also not high, but Swiss firms are all around the world, and they are selling world-class products. I hope that our businesses can play that role,” he noted.

Mr Heng also raised a more deep-seated issue, the perennial challenge of raising productivity.

He said there are still companies that are “quite behind” in boosting their output levels to match those from corresponding companies in the same industry from advanced countries.

Mr Heng cited retail and construction sectors as industries in need of restructuring.

He noted that in advanced countries with high productivity posted by the construction sector, the worksites are extremely organised. Cement is delivered like clockwork, for example, otherwise it would dry up in the mixer in about four hours.

“Here in Singapore, if you look at some of the worksites, they are quite a mess.”

Mr Heng also urged companies here to work on developing their workers and collaborate with talent from all over the world, noting that countries such as the United States and China continue to have a distinct advantage in having large talent pools.

The call for restructuring comes as Singapore has to be conscious of how free trade can sieve out winners and losers, while ensuring that people are not left behind.

“Free trade will give us a bigger piece of cake, but some people may end up with nothing to eat even though the cake is bigger,” he said.

“If you look at… many parts of the world, where people are against free trade, it is that the losers felt very aggrieved that the system has not served them well.

“This is something which all countries, including Singapore, must be very conscious of, and we have to ensure that our people benefit from free trade, because it (creates) a far bigger pie than if we were to close our economy.”

Heng recalled that when China joined the World Trade Organisation, the country emphasised both reform and liberalisation.

“I think that encapsulates many of the things that we need to do. When we open up, we have to reform,” he said.

Heng said trade friction will ultimately be very disruptive to the global economy, and “self-defeating” if it escalates into a trade war.

“You have the immediate consequences of trade wars, and more seriously in the long term, we undermine this multilateral framework… to ensure that we have rule-based systems for which countries big and small will participate in the global economy,” he said.

“I hope that good sense will prevail.”