Strong coffee sales gives Nestle first quarter boost

While coffee was the largest contributor to growth, dairy products and pet food also contributed to the increase in organic growth. (Shutterstock)
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Updated 23 April 2021

Strong coffee sales gives Nestle first quarter boost

ZURICH: Swiss food giant Nestle said Thursday that strong coffee sales helped raise overall turnover by 1.3 percent in the first quarter of the year.
Global sales rose to 21.1 billion Swiss francs (19.1 billion euros, $22.9 billion), an earnings statement said.
Nestle’s measure of so-called organic growth, which strips out effects from acquisitions, divestments and foreign exchange movements, jumped by 7.7 percent in the first three months of 2021, as the group increased its share of growing markets, the statement added.
But the Swiss franc’s strength against other major currencies meant that once global sales were converted, the overall figure was reduced by 5.3 percent, while various divestments trimmed an additional 1.0 percent, the statement said.
Nestle is transforming its portfolio of brands and has begun to increase its offer of vegetarian products to accompany a global trend, for example.
And while “coffee was the largest contributor to growth” owing to strong demand for its Nespresso, Nescafe and Starbucks brands, dairy products and pet food also contributed to the increase in organic growth.
“Vegetarian and plant-based food offerings continued to see strong double-digit growth” as well, the group noted.
Nestle has benefited from the coronavirus pandemic in that demand via supermarkets remained strong, but sales to restaurants and other food outlets suffered in 2020.
In the first months of this year, “retail sales saw solid growth and out-of-home channels saw signs of improvement,” Nestle chief executive Mark Schneider said in the company statement.
The group confirmed its 2021 full-year forecast for “sustained mid-single digit organic growth,” which suggests something on the order of 5 percent.

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G20 split on climate goals as China, India push back on coal phaseout

Updated 24 July 2021

G20 split on climate goals as China, India push back on coal phaseout

  • Coal phaseout 2025 deadline too soon for some nations
  • Some wanted more aggressive global warming target than Paris 2015

NAPLES: Energy and environment ministers from the Group of 20 rich nations have failed to agree on the wording of key climate change commitments in their final communique after China and India refused to give way on two key points.

One of these was phasing out coal power, which most countries wanted to achieve by 2025 but some said would be impossible for them.

The other concerned the wording surrounding a 1.5-2 degree Celsius limit on global temperature increases that was set by the 2015 Paris Agreement.

Average global temperatures have already risen by more than 1 degree compared to the pre-industrial baseline used by scientists and are on track to exceed the 1.5-2 degree ceiling.

“Some countries wanted to go faster than what was agreed in Paris and to aim to cap temperatures at 1.5 degrees within a decade, but others, with more carbon-based economies, said let’s just stick to what was agreed in Paris,” said Italy’s Ecological Transition Minister Roberto Cingolani.

The G20 meeting was seen as a decisive step ahead of United Nations climate talks, known as COP 26, which take place in 100 days’ time in Glasgow in November.

Italy holds the rotating presidency of the G20, and Cingolani, as chairman of the two-day gathering, said negotiations with China, Russia and India had proved especially tough.

The G20 nations, which includes Saudi Arabia, collectively account for some 80 percent of the world’s gross domestic product and some 60 percent of the planet’s population.

At the Naples talks, the United States, the European Union, Japan and Canada made clear they “firmly intend to go faster than the Paris agreement by the (end of) the decade, and below 1.5 degrees,” Cingolani said.

Cingolani said the G20 had made no new financial commitments, but added that Italy would increase its own climate financing for underdeveloped countries.

The urgency of climate action has been brought home this month by deadly floods in Europe, fires in the United States and sweltering temperatures in Siberia, but countries remain at odds over how to pay for costly policies to reduce global warming.

Despite the two points of disagreement, Cingolani said the G20 had put together a 58-point communique and that all the countries agreed that decarbonization was a necessary goal.

All G20 members agreed to at least meet the Paris goals.

US President Joe Biden’s climate envoy, John Kerry, participated in the Naples talks. Earlier in the week, Kerry called on China to join the United States in urgently cutting greenhouse gases.

The majority of the countries at the conference also backed a goal of moving faster to reduce the use of coal, the Italian minister said, without naming all of the nations.

But during the talks, China, as well as Russia and India, were “more prudent” in embracing more ambitious goals, Cingolani said.

“For those countries, it means putting into question an economic model,” he said.

Exactly what commitment nations, including those which heavily pollute, are willing to make toward fighting climate change will be also on display at UN climate conference taking place in Scotland in November.

The national leaders of the G20 countries will have the opportunity to thrash out the sticking points that emerged in Naples when they meet in Rome at the end of October.


Food commodities in Egypt ‘will not be affected by increase in fuel prices’

Updated 24 July 2021

Food commodities in Egypt ‘will not be affected by increase in fuel prices’

  • Head of Consumer Protection Authority warns that its inspectors would deal with those who raised any prices

CAIRO: The president of the Cairo Chamber of Commerce, Ibrahim Al-Arabi, said on Saturday that the increase in fuel prices will not affect the price of bread and other food commodities, nor the flow of goods.
Al-Arabi said the decision of the Fuel Automatic Pricing Committee, which is concerned with following up and implementing the mechanisms of applying automatic pricing for petroleum products every quarter, recommended adjusting the selling price of the three types of gasoline products, starting Friday morning, raising prices by 25 piasters ($0.016), with the price of a liter of 80 octane gasoline rising to 6.75 Egyptian pounds ($0.43). The price of 92 octane gasoline is now 8 pounds per liter and high-quality 95 octane gasoline is 9 pounds.
The committee’s decision was based on the extreme fluctuation in global prices, mainly because of the economic effects of the coronavirus disease pandemic and production cuts.
Ayman Hossam El-Din, head of the Consumer Protection Authority, warned that its inspectors would deal with those who raised any prices, whether for foodstuffs or transportation costs.


Lebanon signs deal to sell Iraqi fuel in move to ease crisis

Updated 24 July 2021

Lebanon signs deal to sell Iraqi fuel in move to ease crisis

  • The swap is valued at between $300-400 million
  • Lebanon to offer Iraq unspecified services in exchange

BEIRUT: Lebanon signed a deal Saturday to broker Iraqi fuel sales in hopes of alleviating a crippling financial and energy crisis in the small Mediterranean country, Lebanese and Iraqi media reported.
The deal allows Beirut to resell 1 million tons of heavy fuel oil from Iraq — fuel that Lebanon cannot use in its own power plants — to companies who would then provide useable fuel to Lebanon over the next year.
Lebanon would offer Iraq services in exchange, Energy Minister Raymond GHajjar said, without offering details. Local media said Iraq would benefit from Lebanese health services and agriculture consultancy.
The swap, which GHajjar estimates is valued at between $300-400 million, could offer a brief respite to Lebanon’s worsening power cuts and bring funds to its cash-strapped government. But a structural power solution, in a sector steeped in corruption and political interference, is far from sight.
Blackouts have been a fixture in Lebanon since the end of its 15-year civil war in 1990, and the small country relies on imported fuel. But the problem has intensified as the government grapples with unprecedented financial problems, and considers lifting fuel subsidies.
“The Iraqi state agreed to open an account in Lebanon’s Central Bank in exchange for this fuel. This account is managed by the Iraqi Finance Ministry through which it buys services inside Lebanon... in Lebanese pounds,” GHajjar said. Then Lebanon resells the fuel in exchange for fuel it can use in its plants.
“We hope other Arab countries follow suit and give us this opportunity because it is really a golden opportunity for us,” GHajjar said at Beirut International Airport upon his return from Baghdad.
A statement from Iraq’s Prime Minister’s office said the 1 million barrels of fuel oil would be offered to Lebanon in exchange for services and products, although neither side immediately mentioned what these were.
Lebanon’s state electricity company has most recently been providing no more than four hours of power a day, leaving private generator operators as the main providers. Diesel supplies have dwindled, and long queues stretch outside gas stations each day.
Government officials have also complained of widespread smuggling to neighboring Syria, which is also facing an economic crisis following a decade of war.
Lebanon defaulted on its foreign debt last year and struggled to pay suppliers. The Central Bank has been limiting credit to purchases of basic supplies, including fuel and medicine.
The energy crisis has reached unprecedented levels in Lebanon. Generator operators warned Friday they would have to turn off their engines as diesel shortages have worsened and prices on the black market have reached exorbitant levels.
Hospitals are rationing their consumption, shutting off air conditioning in waiting areas, while bakeries in some parts of Lebanon have stopped their ovens altogether. Supermarkets have warned that the power shortages threaten their merchandise and endanger food safety.
The UN children’s agency, UNICEF, has warned that most water pumping will gradually cease across the country in the next four to six weeks, putting more than four million people, including one million refugees, in immediate risk of losing access to safe water.


Fintechs to drive M&A in Saudi banking sector — KPMG

Updated 24 July 2021

Fintechs to drive M&A in Saudi banking sector — KPMG

  • Fintechs appeal to Saudi Arabia's young, digital savvy population
  • Other M&A pressures on traditional banks include private equity and bad loans

RIYADH: The rise of financial technology companies in Saudi Arabia will stimulate merger and acquisition activity in the coming years, according to global management consultancy KPMG.

The fintech boom in the Kingdom has the potential to put pressure on traditional banks as the new companies appeal to its young, digital savvy population, the KPMG report said, according to Al-Sharq Al-Awsat.

Fintech startups have increased the prevalence of flexible digital transactions, helped ease regulatory barriers, and led to greater cooperation between financial technology companies and traditional financial institutions, KPMG said.

Bank M&A will also be spurred by factors including the increasing scope of rescue and restructuring deals, private equity interests and the booming of the bad loans market, it said.

The coronavirus pandemic represents an additional incentive to conclude merger and acquisition deals, especially if doubtful loans continue to grow, according to the consultancy.

Fintech activity in the Kingdom has been ramping up rapidly recently.

Saudi Arabia has 30 fintech companies today under Saudi Central Bank supervision, 10 times more than the original target of three, director general of the Financial Sector Development Program, Faisal Al-Sharif, said earlier this month.

Geidea, the largest fintech in Saudi Arabia by market share, said last week industry heavyweight Nick Ogden had joined its board of directors.

Ogden has founded several major names within the financial services sector, including Europe’s largest global payment processing company Worldpay and ClearBank, the UK’s first clearing bank to launch in more than 250 years.

In June, the Saudi Cabinet gave its nod to the Kingdom’s finance minister to issue licenses for the country’s first digital banks, STC Bank and Saudi Digital Bank.

STC Pay will be converted into a local digital bank, STC Bank, with capital of SR2.5 billion. A second lender, Saudi Digital Bank, will be formed by investors led by Abdul Rahman bin Saad Al-Rashed and Sons Company with capital of SR1.5 billion.

Digital banks licensed in Saudi Arabia will help improve the quality and user experience for customers in the Kingdom, supporting innovation and reducing costs, Yazeed Alsheikh, director for general of banking control at Saudi Central Bank (SAMA), said in June.

This will directly contribute to stimulating competition with local banks and financial technology companies, he said.

Dubai’s Mashreqbank has applied for a banking license in Saudi Arabia, Ahmed Abdelaal, CEO of Mashreqbank, said earlier this month.

The Dubai-based lender no longer sees its main competitors as other bricks-and-mortar lenders and sees the future of retail banking as digital only, he said in an interview. Traditional bank branches will no longer exist “very soon,” Abdelaal said. The Dubai-based lender currently operates just 10 branches in the UAE, having closed 24 in the past two years, he said.


Tesla lobbies India for sharply lower import taxes on electric vehicles — sources

Updated 24 July 2021

Tesla lobbies India for sharply lower import taxes on electric vehicles — sources

NEW DELHI: Tesla Inc. is likely to set up a factory in India if successful with imported vehicles, Chief Executive Elon Musk said on Twitter, after the company wrote to Indian ministries seeking a big reduction in import duties on electric vehicles, according to two sources with knowledge of the matter.
The electric-car maker’s pitch to lower duties, however, is likely to face resistance from Prime Minister Narendra Modi’s administration which has championed high import taxes for many industries in a bid to boost local manufacturing.
“We want to do so, but import duties are the highest in the world by far of any large country,” Musk said in reply to a tweet about launching the company’s cars in India.
“But we are hopeful that there will be at least a temporary tariff relief for electric vehicles,” Musk added.
Other luxury automakers in India have also lobbied the government in the past to lower taxes on imported cars but have had little success due to opposition from rivals with domestic operations.
Tesla, which aims to begin sales in India this year, said in a letter to ministries and the country’s leading think-tank Niti Aayog that slashing federal taxes on imports of fully assembled electric cars to 40 percent would be more appropriate, according to the sources.
That compares with current rates of 60 percent for cars priced below $40,000 and 100 percent for those above $40,000.
“The argument is that at 40 percent import duty, electric cars can become more affordable but the threshold is still high enough to compel companies to manufacture locally if demand picks up,” one of the sources said. The sources declined to be identified as the letter has not been made public.
According to Tesla’s US website, only one model — the Model 3 Standard Range Plus — is priced below $40,000.
Niti Aayog did not respond to an email seeking comment. Ministries that Tesla wrote to included the transport and heavy industries ministries, which did not immediately respond to a request for comment.
The Indian market for premium EVs, indeed for electric cars in general, is still very much in its infancy with vehicles far too costly for the average consumer and very little charging infrastructure in place.
Just 5,000 of the 2.4 million cars sold in India last year were electric and most were priced below $28,000.
Daimler’s Mercedes Benz began selling its EQC luxury EV in India last year for $136,000, and Audi launched three electric SUVs this week with sticker tags that begin at around $133,000.
While lower duties would give Tesla a better chance to test the market, its plan to begin sales in India does not hinge on a change in government policy, both sources said.
Tesla registered a local company in India in January and has ramped up local hiring while also scouting for showroom space.
India’s transport minister Nitin Gadkari told Reuters in March that India would be willing to offer incentives to ensure Tesla’s cost of production in the country is less than that in China, but only if it manufactures locally.