How they boost income: 16-July-08
Sourav Mitra -
Wednesday, July 16, 2008 8:08 PM
Steelmakers are stepping up overseas takeovers of coal and iron ore mines to combat record commodity prices and ensure that they have access to sufficient supplies:
1. PT Krakatau Steel, Indonesia's largest steelmaker will buy stakes in overseas iron ore producers, preferably in Australia, to secure supplies.
2. ArcelorMittal aims to control about 80 percent of the ore it uses and has also bought stakes in coalmines in the U.S. and Australia.
3. Jiangsu Shagang Group Co., China's biggest privately owned steelmaker is in talks to buy a stake in Brazilian rival Cia. Siderurgica Nacional SA's iron ore unit.
4. South Korea's Posco, the world's third-largest steelmaker plans to secure more than 20 percent of its own nickel to ensure a steadier supply.
[Click here for full story at Bloomberg.com]
Owning inflationary input sources = price gain for every cost rise + steady production by assured supplies = more income
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Sun Microsystems Inc., the world's fourth-largest maker of server computers:
1. It is adding new products to fight bigger competitors Hewlett-Packard Co., International Business Machines Corp. and Dell Inc.
2. It will expand beyond servers after losing market share last year.
3. It gave away Solaris and Java programs, to sell more services and hardware
4. It bought the software maker MySQL AB for $1 billion to enter the database market and gave it another way to make money on software support and maintenance.
[Click here for full story at Bloomberg.com]
New products + freebies = more scope for income
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Woolworths Ltd., Australia's biggest retailer:
1. It is refurbishing stores
2. It is increasing selling space for more profitable groceries such as fresh fruit.
3. It attracts shoppers to its fuel filling stations by offering a 4 cents-a-liter discount on fuel when they spend at least A$30 in its supermarkets.
4. It opened new Australian stores for the consumer electronics unit and expanded its Croma joint venture in India with Tata Group.
[Click here for full story at Bloomberg.com]
More stores + better stores + discounts = more income
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Santander SA, the Spanish bank:
1. It has doubled its presence in Brazil with the acquisition of ABN's business there
2. It made a profit of £1.7bn by selling ABN's Antonveneta Italian business just weeks after the takeover was completed.
3. It is in talks to acquire Alliance & Leicester to boost Santander's share of the UK savings and speed up Santander's Abbey National Plc's long-held desire to expand in business banking.
[Click here for full story at Businessweek.com]
Expansion + intelligent diversification = More stable income
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Cie. Financiere Richemont SA, the world's largest jewelry maker whose luxury products range from Mont Blanc pens to Purdey shotguns, with 40 percent more shipments to Hong Kong and China than the U.S.:
It is selling more higher-priced timepieces as expanding Asian economies create more local millionaires. (The number of millionaires jumped 23 percent in China last year and 20 percent in India)
[Click here for full story at Bloomberg.com]
Selling higher priced products = higher quality income
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Procter & Gamble Co., the world's largest consumer-products company:
It will increase prices in the U.S. by as much as 16 percent to counter its higher expenses.
[Click here for full story at Bloomberg.com]
Price rise for rising costs = income imperative
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Clorox Co., the maker of Glad trash bags and its namesake bleach:
It raised prices in the quarter to make up for higher costs for its plastic bleach bottles and the corn and soybeans used in Hidden Valley dressing.
[Click here for full story at Bloomberg.com]
Price rise for rising costs = income imperative