News / Asia

Asian Sales Propel Profits for Large Multinational Corporations

As large multinational corporations have reported their second quarter results in recent weeks, a trend is emerging - many are relying on Asia for growth.

Michael Geoghegan, the chief executive officer for the global bank HSBC, moved to Hong Kong from the bank's headquarters in London earlier this year. In announcing the bank's second quarter earnings of $6.8 billion recently, Geoghegan underscored the importance of that shift.

"Asia remains the bedrock of profitability," he said. "It is in Asia that we are seeing the greatest opportunity for growth."

HSBC's Hong Kong operations saw profit rise 13 percent, while earnings from the rest of Asia climbed 36 percent.

At Standard Chartered Bank, 73 percent of its $3.12 billion profit in the second quarter came from Asia. Profit from the Americas, Britain and Europe accounted for only four percent.

Where the action is

Akzo Nobel, the world's largest paint and coatings supplier, reported that Asian sales, which account for 20 percent of global revenue, helped its second quarter profit leap 76 percent from last year to $351 million.

"We are where the action is and where the action could be," said Hans Wijers, the chief executive of the Dutch company.

The International Monetary Fund forecasts that China's economy will expand by more than 10 percent and India's by over 9 percent this year. In comparison, the U.S. is only expected to grow at 3.3 percent, and Europe at 1 percent.

With demand in the U.S. and Europe still weak after the global financial crisis, Asia's growing population, rising middle class and strong investment spending offer strong potential growth for multinational companies.

Expanding market

U.S. consumer products giant Procter and Gamble plans to work with the Chinese government to bring its distribution network to 10,000 villages. Chief Executive Officer Bob McDonald described the plan to financial analysts recently.

"We expand the distribution of our products in the rural areas of China to reach more Chinese consumers and to create economies where economies never existed," said McDonald. "As we do that, that obviously creates more people to use our products and helps us get to the five billion consumers that we targeted over the next five years, in the four years now remaining."

Geoghegan at HSBC counts on the growing ranks of Asian millionaires and the overseas expansion of Chinese companies to help raise the bank's revenue.

"Mainland Chinese companies expanding overseas accounted for around half of the new growth in commercial customers in Hong Kong," he said. "And we have also captured increasing flows of trade between China and Latin America."

However, some multinational companies are cautious, including German luxury car maker BMW. Its sales in Asia jumped 59 percent in the second quarter this year, and most of the gain was in China.

But BMW executives say they do not want to "become dependent on the Chinese market" and want to strengthen the company's U.S. business.

And some Asian ventures have fallen short of expectations. French supermarket retailer Carrefour, which opened stores in Southeast Asia and China in the late 1990s, is reportedly selling its business in Southeast Asia, to concentrate on China and India.

You May Like

How to Safeguard Your Mobile Privacy

As the digital world becomes more mobile, so too do concerns about eroding privacy and increased hacking More

'Desert Dancer' Chronicles Iranian Underground Dance Troupe

Film by Richard Raymond is based on true story of Afshin Ghaffarian and his friends More

Obesity Poses Complex Problem

Professor warns of obesity’s worldwide health impact More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Rolling Thunder Run Reveals Changed Attitudes Towards Vietnam Wari
X
Katherine Gypson
May 25, 2015 1:32 AM
For many US war veterans, the Memorial Day holiday is an opportunity to look back at a divisive conflict in the nation’s history and to remember those who did not make it home.
Video

Video Rolling Thunder Run Reveals Changed Attitudes Towards Vietnam War

For many US war veterans, the Memorial Day holiday is an opportunity to look back at a divisive conflict in the nation’s history and to remember those who did not make it home.
Video

Video Female American Soldiers: Healing Through Filmmaking

According to the United States Defense Department, there are more than 200-thousand women serving in the U.S. Armed Forces.  Like their male counterparts, females have experiences that can be very traumatic.  VOA's Bernard Shusman tells us about a program that is helping some American women in the military heal through filmmaking.
Video

Video Iowa Family's Sacrifice Shaped US Military Service for Generations

Few places in America have experienced war like Waterloo. This small town in the Midwest state of Iowa became famous during World War II not for what it accomplished, but what it lost. As VOA’s Kane Farabaugh reports, the legacy of one family’s sacrifice is still a reminder today of the real cost of war for all families on the homefront.
Video

Video On Film: How Dance Defies Iran's Political Oppression

'Desert Dancer' by filmmaker Richard Raymond is based on the true story of a group of young Iranians, who form an underground dance troupe in the Islamic Republic of Iran. This is the latest in a genre of films that focus on dance as a form of freedom of expression against political oppression and social injustice. VOA’s Penelope Poulou has more.
Video

Video Turkey's Ruling Party Trying to Lure Voters in Opposition Stronghold

Turkey’s AK (Justice and Development) Party is seeking a fourth successive general election victory, with the goal of securing two-thirds of the seats in Parliament to rewrite the constitution and change the country's parliamentary system into a presidential one. To achieve that, the party will need to win seats in opposition strongholds like the western city of Izmir. Dorian Jones reports.
Video

Video Millions Flock to Ethiopia Polls

Millions of Ethiopians cast their votes Sunday in the first national election since the 2012 death of longtime leader Meles Zenawi. Mr. Meles' party, the Ethiopian People's Revolutionary Democratic Front, is almost certain of victory again. VOA's Anita Powell reports from Addis Ababa.
Video

Video Scientists Testing Space Propulsion by Light

Can the sun - the heart of our solar system - power a spacecraft to the edge of our solar system? The answer may come from a just-launched small satellite designed to test the efficiency of solar sail propulsion. Once deployed, its large sail will catch the so-called solar wind and slowly reach what scientists hope to be substantial speed. VOA’s George Putic reports.
Video

Video FIFA Trains Somali Referees

As stability returns to the once lawless nation of Somalia, the world football governing body, FIFA, is helping to rebuild the country’s sport sector by training referees as well as its young footballers. Abdulaziz Billow has more from Mogadishu.
Video

Video With US Child Obesity Rates on the Rise, Program Promotes Health Eating

In its fifth year, FoodCorps puts more than 180 young Americans into 500 schools across the United States, where they focus on teaching students about nutrition, engaging them with hands-on activities, and improving their access to healthy foods whether in the cafeteria or the greater community. Aru Pande has more.
Video

Video Virginia Neighborhood Draws People to Nostalgic Main Street

In the U.S., people used to grow up in small towns with a main street lined by family-owned shops and restaurants. Today, however, many main streets are worn down and empty because shoppers have been lured away by shopping malls. But in the Del Ray neighborhood of Alexandria, Virginia, main street is thriving. VOA’s Deborah Block reports it has a nostalgic feel with its small restaurants and unique stores.

VOA Blogs