Latest news with #K9Howitzer
The Star
4 days ago
- Business
- The Star
Asia's factory activity shrinks in May as US tariffs bite
A welder works on a K9 Howitzer at Hanwha Aerospace's manufacturing facility in Changwon, South Korea, on Thursday, April 18, 2024. - Bloomberg TOKYO: Asia's factory activity shrank in May as soft demand in China and the impact of U.S. tariffs took a heavy toll on companies, private surveys showed on Monday, highlighting the darkening outlook for the once fast-growing region. Trade-reliant Japan and South Korea continued to see manufacturing activity contract in May as U.S. President Donald Trump's automobile tariffs cloud the outlook for exports. Adding to the gloom, an official survey on Saturday showed China's manufacturing activity shrank in May for a second month in a sign of weakness in the world's second-largest economy. With many Asian economies making little progress in trade negotiations with the U.S., uncertainty will likely keep companies from boosting production or spending, analysts said. "It's hard to expect a pick-up in Asia's manufacturing activity any time soon with countries in the region slapped with quite high 'reciprocal' tariffs," said Toru Nishihama, chief emerging market economist at Dai-ichi Life Research Institute. "With domestic demand weak, China is flooding Asia with cheap exports, which is also putting deflationary pressure on the region's economies," he said. Japan's final au Jibun Bank Manufacturing Purchasing Managers' Index (PMI) stood at 49.4 in May, up from April but staying below the 50.0 line that indicates contraction for the 11th successive month, a private survey showed on Monday. The PMI for South Korea, Asia's fourth-largest economy, stood at 47.7 in May, also staying below the 50 mark for a fourth month due to frail demand and the hit from U.S. tariffs, a survey by S&P Global showed. Both Japan and South Korea saw their economies contract in the first quarter, as Trump's tariffs and uncertainty over U.S. trade policy weighed on exports and corporate activity. There is little sign conditions will improve. On Friday, Trump said China had violated a two-way deal to scale back tariffs, whereas China contended it had maintained communication on trade with the United States. Trump also announced a doubling of worldwide steel and aluminium tariffs to 50%, once again rattling international trade. Japan and the U.S. on Friday agreed to hold another round of trade talks ahead of the G7 summit in June, but Japan's top tariff negotiator said no deal would be reached without concessions on all U.S. tariffs, including on automobiles. Vietnam, Indonesia and Taiwan also saw factory activity contract in May, private surveys showed. - Reuters
The Star
29-04-2025
- Business
- The Star
Hanwha in advanced talks over arms production for Saudi Arabia
A welder works on a K9 Howitzer at Hanwha Aerospace's manufacturing facility in Changwon, South Korea, on Thursday, April 18, 2024. - Bloomberg SEOUL: Hanwha Aerospace Co. is in advanced discussions with Saudi Arabia over potential arms collaboration as the Middle East becomes the company's main focus, according to the head of its global defence business. The burgeoning opportunities in the region are a major reason South Korea's largest defence contractor decided to announce a share-sale plan last month to raise funds, said Michael Coulter, who was named global defence president and chief executive officer at Hanwha at the end of last year. "We're in discussions both in Saudi Arabia and the United Arab Emirates right now about programmes that will create capacity in the Middle East, that addresses sovereign' issues, and also helps address security threats, Coulter said in an interview with Bloomberg. "There's a real opportunity for us to meet security challenges in the Middle East through local facilities.' Hanwha has been one of the biggest beneficiaries from the surge in global demand for ground weapons following the outbreak of wars in Ukraine and the Middle East. The company's shares have rallied almost 30-fold over during the past five years, and it's Asia's top-performing stock this year. Known for its ability to deliver weapons faster and cheaper than rivals, the firm's flagship weapons include the K9 self-propelled howitzer. The company's shares fell 2.1 per cent Tuesday (April 29) while the benchmark Kospi was little changed. Hanwha is still deciding on the exact form of its involvement in Saudi Arabia, but it may be able to announce an agreement later this year, said Coulter, a former US navy officer. "We have not come to full decision yet on whether it's facility in Saudi Arabia, or a joint venture, or a partnership, or we're supporting a Saudi defence company, so that's that but the market demand is there,' he said. Hanwha's overtures come as Saudi Arabia is investing trillions of dollars in a plan to develop the non-oil economy, including a goal to localize 50 per cent of its military spending by 2030 under the plan it has called Vision 2030. Middle East arms sales are a sensitive topic for South Korea as the country seeks to balance its ties with Arab states and its relations with its sole treaty ally the US, which has longstanding security relations with Israel. Hanwha earlier this month trimmed the size of its planned share sale to 2.3 trillion won (US$1.6 billion) from an original 3.6 trillion won, following pushback from investors and financial authorities. The Financial Supervisory Service has also objected to its revised plan. The decision to reduce the offering showed "a very responsible willingness by a company to listen to its investors and shareholders,' Coulter said. "Yes, there's a potential for a slight dilution in the near term, but look at our track record, look at the market opportunity, we've walked everybody through where we're making the investments and the return on those investments from a business standpoint,' he said. Hanwha is also in talks with a number of Western European nations about how it may help them increase their arms-making capacity in the face of rising global instability. "We're not intent on coming in and taking over and displacing European partners,' Coulter said. "We're talking with governments, but we're also talking with industry and saying where have you invested? Where have you not invested? Where can we be a partner?' Coulter said he was optimistic the US and South Korea will reach a deal that will avert a protracted trade dispute stemming from the Trump administration's threat of higher tariffs. "We are very confident that the two governments are going to come to resolution,' he said. "There is a huge US Army presence here. We have US Navy ships in our shipyards here in Korea. So our governments are talking through that. I'm cautiously optimistic that will pan out and it won't become a political issue.' - Bloomberg
