theSun | MONDAY NOVEMBER 24 2008
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pg 21
Slump in Europe spreads wider
BERLIN: The global economic slump
has already hit the European auto,
chemical and transport sectors, and it
looks like the list will soon get longer.
Problems in the key auto sector,
the first to be slammed by the crisis
as sales plummeted, have rippled out
to parts suppliers and then on to the
chemical and steel industries.
Last week, German chemical giant
BASF said it would temporarily shut
down 80 plants, affecting 20,000 staff
worldwide, and rival Rhodia announced
it would cut back production at three
French sites by 40%.
Others will likely do the same after
the European Chemical Industry Council
forecast a general reduction in output
next year, excluding pharmaceutical
products.
As for steel producers, the com-
bined effects of lower prices and a
sharp drop in demand led analysts at
US investment bank JP Morgan to write:
“We expect European steel industry
earnings to drop by 43% in 2009.”
In Belgium, the steel company
Umicore said “the rapid deterioration of
the global car market and announced
production cuts at various auto mak-
ers” would make it miss its 2008 profit
target.
“Each sector is feeling the slowdown
because all areas of the economy are
linked to one another,” Commerzbank
analyst Joerg Kraemer said.
The construction sector is slumping
across the continent and “it would be
hazardous to forecast a noticeable
improvement ... before the end of the
decade,” according to a recent study by
credit insurance group Euler Hermes, a
unit of Germany’s Allianz.
The crisis looks like it will hit the
services sector too.
Advertising companies are directly
affected by the auto sector slowdown
because car makers are often among
their biggest clients.
In Germany, which has fallen into its
first recession in five years, car makers
have cut advertising budgets by around
10% this year, according to the adver-
tising federation ZAW, which sees a flat
market overall next year.
In France, outdoor advertising group
JCDecaux has lowered its forecast for
sales growth this year.
Owing to falling demand, air trans-
port saw a drop in the number of pas-
sengers in September for the first time
in five years and the sharpest drop in
freight in seven years.
Forecasts for next year are not
optimistic either.
The biggest European airline, Air
France-KLM, has remained cagey about
its outlook for 2008/2009 while German
carrier Lufthansa lowered its target for
this year at the end of October.
Given the 15-nation eurozone’s
first ever recession, businesses are
trimming their travel budgets and
households are doing the same.
In the rail sector, Eurostar trains
have been affected by the crisis since
its Paris-London service is “in the heart
of a major business traffic route and
therefore affected by the economy,”
said Mireille Faugere, director of long-
distance services at the French railway
SNCF.
When exports slump, freight
services quickly feel the effects. – AFP
17
MOL eyes 80% market share in
online games payments
KUALA LUMPUR: MOL AccessPortal Bhd plans to increase
its market share in the online games payment market to
80% by June next year from 70% currently, said its president
and chief executive officer Ganesh Kumar Bangah.
He said to further cement MOL AccessPortal’s market
share, the company is going to tie up with various channels,
leveraging on its newly launched application, MOL Zone.
“I’m quite confident that by mid next year, we will able
to make 80% market share in online games payments
market,” he told a media conference after the launch of
its multi-application mobile payment service called MOL
Zone here on Saturday.
MOL Zone, which is a mobile application that can be
downloaded, is available for free to users. – Bernama
Japan seeks China’s
contribution to IMF
LIMA: Prime Minister Taro Aso on Saturday asked Chinese
President Hu Jintao to follow Japan’s commitment to
raise funds to the International Monetary Fund (IMF).
Hu replied that his country wants to make an effort
to jointly reform the global financial system with Ja-
pan, but stopped short of accepting Aso’s request, the
official said.
The two leaders held talks after dinner with their
Asia-Pacific partners on the first day of their annual
summit in Lima. During the talks, Aso noted Japan’s
announcement of a plan to lend up to US$100 billion
(RM360 billion) from its foreign exchange reserves to
the IMF to help provide financial lifeline to crisis-hit
emerging countries. – AFP