Business

Foreign Businesses in Myanmar React Swiftly to Military Coup

Foreign businesses in Myanmar have begun to act following the coup, with some explicitly indicating that military rule is against their governance principles.

While the possibility of sanctions by Western nations grows by the day as US President Joe Biden called on Myanmar’s generals to relinquish power, while EU leaders condemned the military coup and detainment of the National League for Democracy leaders.

Bloomberg News reported Japan’s Kirin Holdings Co said it will end its beer partnership with Myanma Economic Holdings Public Co. The main business arm of the Myanmar military, as the coup is “against our standards and human rights policy”.

Japan’s mega car giant Suzuki also temporarily halted operations at its two Myanmar factories. The factories produced 13,300 vehicles in 2019 — almost all of which were sold in Myanmar.

An industrial estate developer with a presence in Myanmar, SET-listed Amata Corporation said it will stop its 140-million-baht first-phase investment in Yangon Amata Smart and Eco City indefinitely until a new election is called in the country.

Thailand ranks third after Singapore and China in terms of foreign direct investment in Myanmar, with a value of US$24 registered in 2020, according to the Thai National Shippers’ Council (TNSC).

Cross-border trade between Myanmar and Thailand was worth 165 billion baht last year, according to the Commerce Ministry’s Foreign Trade Department.

Economic uncertainties for Myanmar

The Federation of Thai Industries (FTI) is assessing the situation in Myanmar daily, saying businesses need to brace for economic uncertainties as a result of reactions from the international community to the power grab.

Whether the US and European countries impose economic sanctions must be monitored, and the relationship between the military regime and China must also be scrutinized, said FTI vice-chairman Kriangkrai Tiannukul.

“If sanctions are imposed, the economy and foreign investment in Myanmar will be affected, even though the regime promised to hold a new election within one year,” he said.

China may also play an increasing role in helping Myanmar via its Belt and Road Initiative (BRI) if Myanmar faces economic pressure, said Mr Kriangkrai.

Beijing’s ambitious large-scale economic development scheme, BRI aims to link the world’s second-largest economy with Southeast Asia, Africa and Eurasia by developing land and maritime infrastructure.

“Even Thailand may be under the spotlight as we border Myanmar and China and Myanmar have a good political and military relationship,” he said.

Skirting sanctions via Thailand

During a meeting of the Joint Standing Committee on Commerce, Industry and Banking last week, the group had a mixed evaluation of the effect on the Myanmar and Thai economies.

While possible sanctions may affect the exports of some foreign companies in Myanmar, Thailand could see more exports from these companies, using Thailand to avoid the sanctions, thus boosting border trade with Myanmar, according to the FTI.

Export volume in Myanmar is low because foreign investors are focused on the domestic market, said Mr Kriangkrai.

There are up to 150 Thai companies investing in Myanmar, he said. Among them is Thonburi Healthcare Group (THG), which formed a joint venture with local companies to run two hospitals in Rangon and Mandalay.

THG chairman Boon Vanasin said the group’s medical services, which are especially needed during the pandemic, remain operating as usual.

However, with the political conflict, the company needs to carefully consider whether to delay its hospital expansion project in Yangon, which was planned for later this year, he said.

Block access to the internet

One day after the Myanmar military staged its coup, Norwegian telecom Telenor Group issued a statement expressing concern about the situation. Telenor said its first priority is to ensure the safety and security of the employees of its subsidiary, Telenor Myanmar.

The company confirmed network functionality was fully restored as of Feb 2.

“Telenor Group continues to support the progress Myanmar has made towards openness and democracy. We are following the developments and are working closely with our local team,” the company’s statement read.

Total Access Communication (DTAC), the Thai subsidiary of Telenor, indicated on Feb 1 due to ongoing network interruptions in Myanmar, “some mobile traffic from Thailand has been limited”.

The network was in recovery mode at that time and the company plans to monitor the situation closely, it said.

On Feb 3, Telenor said the Myanmar Transport and Communications Ministry ordered all mobile operators, international gateways and internet service providers in Myanmar to block access to Facebook.

Responding to the request, the company said it does not believe it was based on “necessity and proportionality, in accordance with international human rights law”. However, the company decided to comply with the order.

“Telenor Group believes in open communication. Together with Telenor Myanmar, we are actively looking to restore access to Facebook as soon as possible,” the company said.

Myanmar’s economy

A former executive of a telecom company investing in Myanmar, who requested anonymity, said the turmoil there is likely to drag on for a certain period of time, which could level its economy before a recovery is possible.

“However, there is still room to grow the Myanmar economy, especially in the telecom sector, which is among the core infrastructures,” said the source.

The former executive said Myanmar’s economy is far from what is called “an application economy”, driven by innovations and digital tech adoption among businesses and people in their daily lives. More needs to be done via investment in the segment and with the support of necessary infrastructures, said the source.

Somsak Pejthaveeporndej, chief executive of VST ECS (Thailand), a major IT distributor that has had a representative office in Myanmar for seven years, said the coup disrupted air freight shipments initially, but they have now resumed as normal.

Yet any US actions would have a major effect, particularly placing the regime on a blacklist or trade embargo, he said.

If a trade embargo is applied, VST ECS, which sells US technology equipment and solutions to Myanmar, would be affected, said Mr Somsak.

Business leaders are also concerned about a possible limit placed on cross-border transactions, as this could delay payment from corporate customers in Myanmar, he said.

Mr Somsak said the company downgraded its sales growth outlook in Myanmar this year from 20% to 12%. Myanmar is expected to contribute 3% of total earnings this year.

Somchai Sitthichaisrichart, managing director of SiS Distribution (Thailand), a tech product distributor, said the company has around 10 Myanmar dealers who have established their offices in Thai-Myanmar border areas.

Following the coup, orders have been frozen, with dealers saying they want to wait and see regarding border trade policy and shipments, he said.

Thai trade and investment

Despite a growing possibility of Western sanctions and business hurdles, the military coup is unlikely to affect much of Thailand’s trade and investment as the political crisis in Myanmar is expected to ease soon, according to a local shipping group.

“We believe the Myanmar military thoroughly understands its situation, as it remains heavily reliant on other countries. If the emergency decree is effective for only a year, Thai trade and investment are unlikely to see much impact,” said Visit Limlurcha, vice-president of the TNSC.

However, in a worst-case scenario Thai products and raw material shipments may see lower exports if Myanmar is hit with economic sanctions from Western nations, said Mr Visit.

If Myanmar decides to shut down permanent border checkpoints, the private sector may look to alternative checkpoints such as Singkhon Pass in Prachuap Khiri Khan and the Ranong Port, shifting to water or air transport instead of land.

The Thai private sector will also hasten talks with responsible Myanmar government agencies to allow the shipment of essential and easily perishable products and consumer products, he said. Companies would also ask Thai state agencies to facilitate documentation processes related to exports and imports.

Insurance firms are being asked to consider offering special coverage conditions for Thai shippers during this difficult period, said Mr Visit.

Pun Paniangvait, manager of President Office at Thai President Foods Plc, the manufacturer of Mama instant noodles, said the company has never experienced any major impact from changes of Myanmar governments through more than 10 years of operation in the country.

“We have experience doing business under administrations run both by the military and parliamentary democracy. Myanmar governments have never issued any policy that is considered an obstacle to doing business in the past. However, we will closely watch the situation,” Mr Pun said.

The company is maintaining its expansion plan in Mandalay this year, he said. “Our biggest worry is Myanmar’s foreign exchange rate,” Mr Pun said.

By Phusadee Arunmas, Pitsinee Jitpleecheep at the Bangkok Post

Business

PepsiCo Reduces Revenue Projections As North American Snacks And Key International Markets Underperform.

(VOR News) – In the third quarter of this year, Pepsi’s net income was $2.93 billion, which is equivalent to $2.13 per share. This was attributed to the company.

This is in stark contrast to net income of $3.09 billion, which is equivalent to $2.24 per share, during the same period in the previous year. The company’s earnings per share were $2.31 when expenses were excluded.

Net sales decreased by 0.6%, totaling $23.32 billion. Organic sales increased by 1.3% during the quarter when the effects of acquisitions, divestitures, and currency changes are excluded.

Pepsi’s beverage sales fell this quarter.

The most recent report indicates that the beverage and food sectors of the organization experienced a 2% decline in volume. Consumers of all income levels are demonstrating a change in their purchasing habits, as indicated by CEOs’ statements from the previous quarter.

Pepsi’s entire volume was adversely affected by the lackluster demand they encountered in North America. An increasing number of Americans are becoming more frugal, reducing the number of snacks they ingest, and reducing the number of times they purchase at convenience stores.

Furthermore, Laguarta observed that the increase in sales was partially attributed to the election that occurred in Mexico during the month of June.

The most significant decrease in volume was experienced by Quaker Foods North America, which was 13%. In December, the company announced its initial recall in response to a potential salmonella infection.

Due to the probability of an illness, the recall was extended in January. Pepsi officially closed a plant that was implicated in the recalls in June, despite the fact that manufacturing had already been halted.

Jamie Caulfield, the Chief Financial Officer of Pepsi and Laguarta, has indicated that the recalls are beginning to have a lessening effect.

Frito-Lay experienced a 1.5% decline in volume in North America. The company has been striving to improve the value it offers to consumers and the accessibility of its snack line, which includes SunChips, Cheetos, and Stacy’s pita chips, in the retail establishments where it is sold.

Despite the fact that the category as a whole has slowed down in comparison to the results of previous years, the level of activity within the division is progressively increasing.

Pepsi executives issued a statement in which they stated that “Salty and savory snacks have underperformed year-to-date after outperforming packaged food categories in previous years.”

Pepsi will spend more on Doritos and Tostitos in the fall and winter before football season.

The company is currently promoting incentive packets for Tostitos and Ruffles, which contain twenty percent more chips than the standard package.

Pepsi is expanding its product line in order to more effectively target individuals who are health-conscious. The business announced its intention to acquire Siete Foods for a total of $1.2 billion approximately one week ago. The restaurant serves Mexican-American cuisine, which is typically modified to meet the dietary needs of a diverse clientele.

The beverage segment of Pepsi in North America experienced a three percent decrease in volume. Despite the fact that the demand for energy drinks, such as Pepsi’s Rockstar, has decreased as a result of consumers visiting convenience stores, the sales of well-known brands such as Gatorade and Pepsi have seen an increase throughout the quarter.

Laguarta expressed his opinion to the analysts during the company’s conference call, asserting, “I am of the opinion that it is a component of the economic cycle that we are currently experiencing, and that it will reverse itself in the future, once consumers feel better.”

Additionally, it has been noted that the food and beverage markets of South Asia, the Middle East, Latin America, and Africa have experienced a decline in sales volume. The company cut its forecast for organic revenue for the entire year on Tuesday due to the business’s second consecutive quarter of lower-than-anticipated sales.

The company’s performance during the quarter was adversely affected by the Quaker Foods North America recalls, the decrease in demand in the United States, and the interruptions that occurred in specific international markets, as per the statements made by Chief Executive Officer Ramon Laguarta.

Pepsi has revised its forecast for organic sales in 2024, shifting from a 4% growth rate to a low single-digit growth rate. The company reiterated its expectation that the core constant currency profitability per share will increase by a minimum of 8% in comparison to the previous year.

The company’s shares declined by less than one percent during premarket trading. The following discrepancies between the company’s report and the projections of Wall Street were identified by LSEG in a survey of analysts:

SOURCE: CNBC

Business

Old National Bank And Infosys Broaden Their Strategic Partnership.

(VOR News) – Old National Bank, a commercial bank with its headquarters in the Midwest, and Infosys, a firm that specializes in information technology, have recently entered into a strategic expansion of their link, which has been in place for the past four years.

This expansion is more likely to take place sooner rather than later, with the likelihood being higher.

For the purpose of making it possible for Old National Bank to make use of the services, solutions, and platforms that are offered by Infosys, the objective of this expansion is to make it possible for the bank to transform its operations and processes through the application of automation and GenAI, as well as to change significant business areas.

This lets the bank leverage Infosys’ services, solutions, and platforms.

Old National Bank Chairman and CEO Jim Ryan said, “At Old National, we are committed to creating exceptional experiences for both our customers and our fellow employees.”

This statement is applicable to Old National Bank. Infosys is carefully managing the business process innovations that it is putting us through, putting a strong emphasis on efficiency and value growth throughout the process to ensure that it is carried out efficiently.

This is a routine occurrence throughout the entire operation. Because of Infosys’ dedication to our development and success, we are incredibly appreciative of the assistance they have provided.

Old National has been receiving assistance from Infosys in the process of updating its digital environment since the year 2020, according to the aforementioned company.

Ever since that time, the company has been providing assistance. The provision of this assistance has been accomplished through the utilization of a model that is not only powerful but also capable of functioning on its own power.

Infosys currently ranks Old National thirty-first out of the top thirty US banks.

This ranking is based on the fact that Old National is the nation’s largest banking corporation.

It is estimated that the total value of the company’s assets is approximately fifty-three billion dollars, while the assets that are currently being managed by the organization are valued at thirty billion dollars.

Dennis Gada, the Executive Vice President and Global Head of Banking and Financial Services, stated that “Old National Bank and Infosys possess a robust cultural and strategic alignment in the development, management, and enhancement of enterprise-scale solutions to transform the bank’s operations and facilitate growth.”

This remark referenced the exceptional cultural and strategic synergy between the two organizations. Dennis Gada is the one who asserted this claim. This was articulated explicitly concerning the exceptional cultural congruence and strategy alignment of the two organizations.

We are pleased to announce that the implementation of Infosys Topaz will substantially expedite the transformation of Old National Bank’s business processes and customer service protocols. We are exceedingly enthusiastic about this matter. We are quite thrilled about this specific component of the scenario.

Medium-sized banks operating regionally will continue to benefit from our substantial expertise in the sector, technology, and operations. This specific market segment of Infosys will persist in benefiting from our extensive experience. This phenomenon will enable this market sector to sustain substantial growth and efficiency benefits.

SOURCE: THBL

Business

American Water, The Largest Water Utility In US, Is Targeted By A Cyberattack

The largest regulated water and wastewater utility company in the United States stated Monday that it had been the target of a cyberattack, forcing the company to halt invoicing to consumers.

American Water, The Largest Water Utility In US, Is Targeted By A Cyberattack

American Water, based in New Jersey and serving over 14 million people in 14 states and 18 military facilities, said it learned of the unauthorized activity on Thursday and quickly took precautions, including shutting down certain systems. The business does not believe the attack had an impact on its facilities or operations and said employees were working “around the clock” to determine the origin and scale of the attack.

water

The corporation stated that it has alerted legal enforcement and is cooperating with them. It also stated that consumers will not be charged late fees while its systems are unavailable.

According to their website, American Water operates over 500 water and wastewater systems in around 1,700 communities across California, Georgia, Hawaii, Illinois, Indiana, Iowa, Kentucky, Maryland, Missouri, New Jersey, Pennsylvania, Tennessee, Virginia, and West Virginia.

SOURCE | AP