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Global supply constraints deal heavy blow to Japanese firms

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October 28, 2021

TOKYO (Reuters) – A global parts and chip shortage is taking a heavy toll on Japanese firms with seven out of eight automakers seeing global output drop in September, casting doubt over the central bank’s view the impact of supply constraints will be temporary.

Toyota Motor said on Thursday it saw global output slump 39.1% in September from a year earlier to 512,765 units, marking the second straight month of falls.

Nissan Motor’s global output fell for the third straight month by 27.9% in September, while that of Honda Motor dropped for a four month in a row, by 30%, data released by the automakers showed.

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The output cuts by the automakers are starting to affect suppliers including Hitachi, which on Wednesday slightly slashed its consolidated operating profit forecast for the current fiscal year ending in March 2022.

“The impact of (chips shortages) likely was stronger in the third quarter than in the second quarter,” Hitachi’s chief financial officer Yoshihiko Kawamura told a news conference.

Electric equipment maker Canon Inc also cut its 2021 operating profit estimate by 11 billion yen ($97 million) to 272 billion yen as the cost of procuring parts rose and as factory disruptions in Southeast Asia, caused by COVID-19, hit sales.

With many Asian countries seeing infection numbers fall, some analysts expect supply constraints to ease in coming months. Toyota expects global output to recover to around 850,000-900,000 units in November.

But the output disruptions may deal a severe blow to Japan’s economy, which has relied on exports to offset the weakness in consumption as the fallout from the COVID-19 pandemic lingers.

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The Bank of Japan cut this year’s economic growth forecast in a quarterly report on Thursday, citing weak consumption and supply constraints.

But it raised its growth forecast for next fiscal year and described the slowdown in exports and output as “temporary.”

Still, the central bank warned of the risk the economy could “worsen further” if supply bottlenecks last longer than expected or if the damage they cause grows.

($1 = 113.7000 yen)

(Reporting by Leika Kihara; Editing by Ana Nicolaci da Costa)

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Canada’s Shopify records Black Friday sales up 21%

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November 27, 2021

(Reuters) – Canadian e-commerce company Shopify Inc recorded worldwide sales of nearly $2.9 billion on Black Friday, an increase of about 21% in comparison to last year, the company said Saturday.

New York, London and Los Angeles were among the top-selling cities, the company said, while apparel and accessories was the top-selling product category.

Shopify also said it funded 23,000+ tonnes of carbon removal to counteract emissions from the delivery of every order placed on its platform on Black Friday.

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(Reporting by Aakriti Bhalla in Bengaluru; Editing by Nick Zieminski)

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Xiaomi to open car plant in Beijing with annual output of 300,000 vehicles – Beijing govt

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November 27, 2021

SHANGHAI (Reuters) – Chinese smartphone giant Xiaomi Corp will build a plant that can produce 300,000 vehicles annually in Beijing for its electric vehicle unit, authorities in the capital said on Saturday.

The plant will be constructed in two phases and Xiaomi will also built its auto unit’s headquarters, sales and research offices in the Beijing Economic and Technological Development Zone, the government-backed economic development agency Beijing E-Town said on its official WeChat account.

Beijing E-Town said it anticipated the plant reaching mass production in 2024, a goal announced by Xiaomi’s Chief Executive Lei Jun in October.

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In March, Xiaomi said it would commit to investing $10 billion in a new electric car division over 10 years. The company completed the business registration of its EV unit in late August.

The company has been opening thousands of stores to spur domestic sales growth for its smartphone business but eventually intends to use these shops as a channel for its plans to sell electric vehicles.

(Reporting by Brenda Goh; Editing by William Mallard)

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Eni sells Snam 49.9% stake in Algeria gas pipelines for 385 million euros

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November 27, 2021

MILAN (Reuters) -Italian energy group Eni has agreed to sell gas group Snam 49.9% of its stake in strategic pipelines carrying Algerian gas into Italy for 385 million euros ($436 million), the two companies said on Saturday.

The pipelines will be jointly controlled by the two companies, they said in a joint statement.

Italy imports more than 90% of its overall gas needs and Algerian gas currently accounts for around 30% of flows.

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“This transaction allows us to free up new resources to be used on our energy transition path,” Eni Chief Executive Claudio Descalzi said.

Eni is working on spinning off a series of oil and gas operations into new joint ventures to help reduce debt and fund its shift to low-carbon energy.

Snam, which owns a 20% stake in the TAP pipeline that carries Azeri gas into Italy, makes most of its money from managing Italy’s gas transport grid.

It has pledged to spend more on new green business lines such as hydrogen and, like other gas grid operators in Europe, is upgrading its gas network to be hydrogen ready.

“In the future, North Africa could also become a hub for producing solar energy and green hydrogen,” Snam CEO Marco Alvera said.

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The pipeline companies involved in the deal posted net income of around 90 million euros in 2020.

($1 = 0.8836 euros)

(Reporting by Stephen Jewkes, editing by Giselda Vagnoni)

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