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

Video Migrants Caught in No-Man's Land In French Port

The deaths of hundreds of migrants in the Mediterranean this week has only recast the spotlight on the perils of reaching 'Fortress Europe' More

Video Westgate Mall Attack Survivors Confront Painful Memories

On anniversary of terror attack, survivors discuss how they have coped with trauma they experienced that day More

New Hints That Dark Matter Exists

New evidence from International Space Station hints at existence of dark matter and dark energy 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.
Migrants Caught in No-Man's Land Called Calaisi
X
Lisa Bryant
September 19, 2014 5:04 PM
The deaths of hundreds of migrants in the Mediterranean this week has only recast the spotlight on the perils of reaching Europe. And for those forunate enough to reach a place like Calais, France, only find that their problems aren't over. Lisa Bryant has the story.
Video

Video Migrants Caught in No-Man's Land Called Calais

The deaths of hundreds of migrants in the Mediterranean this week has only recast the spotlight on the perils of reaching Europe. And for those forunate enough to reach a place like Calais, France, only find that their problems aren't over. Lisa Bryant has the story.
Video

Video Westgate Siege Anniversary Brings Back Painful Memories

One year after it happened, the survivors of the terror attack on Nairobi's Westgate Shopping Mall still cannot shake the images of that tragic incident. For VOA, Mohammed Yusuf tells the story of victims still waiting for the answer to the question 'how could this happen?'
Video

Video Militant Assault in Syria Displaces Thousands of Kurds

A major assault by Islamic State militants on Kurds in Syria has sent a wave of new refugees to the Turkish border, where they were stopped by Turkish border security. Turkey is already hosting about 700,000 Syrian refugees who fled the civil war between the government and the opposition. But the government in Ankara has a history of strained relations with Turkey's Kurdish minority. Zlatica Hoke reports Turkey is asking for international help.
Video

Video CERN Accelerator Back in Business

The long upgrade of the Large Hadron Collider is over. The scientific instrument responsible for the discovery of the Higgs boson -- the so-called "God particle" -- is being brought up to speed in time for this month's 60th anniversary of the European Organization for Nuclear Research, known by its French acronym CERN. Physicists hope the accelerator will help them uncover more secrets about the origins of the universe. VOA’s George Putic reports.
Video

Video Whaling Summit Votes to Uphold Ban on Japan Whale Hunt

The International Whaling Commission, meeting in Slovenia, has voted to uphold a court ruling banning Japan from hunting whales in the Antarctic Ocean. Conservationists hailed the ruling as a victory, but Tokyo says it will submit revised plans for a whale hunt in 2015. Henry Ridgwell reports from London.
Video

Video Russian Economy Reeling After New Western Sanctions

A new wave of Western sanctions is hitting Russia’s economy hard. State-owned energy firms continue to bleed profits and Russia’s national currency plunged to a new low this week after the U.S. and the European Union announced new sanctions to punish Russia's aggressive stance in eastern Ukraine. But as Mil Arcega reports, the sanctions could also prove costly for European and American companies.
Video

Video Belgian Researchers Discover Way to Block Cancer Metastasis

Cancer remains one of the deadliest diseases, despite many new methods to combat it. Modern medicine has treatments to prevent the growth of primary tumor cells. But most cancer deaths are caused by metastasis, the stage when primary tumor cells change and move to other parts of the body. A team of Belgian scientists says it has found a way to prevent that process. Zlatica Hoke has more.
Video

Video Mogadishu's Flood of Foreign Workers Leaves Somalis Out of Work

Unemployment and conflict has forced many young Somalians out of the country in search of a better life. But a newfound stability in the once-lawless nation has created hope — and jobs — which, some say, are too often being filled by foreigners. Abdulaziz Billow reports from Mogadishu.
Video

Video A Dinosaur Fit for Land and Water

Residents and tourists in Washington D.C. can now examine a life-size replica of an unusual dinosaur that lived almost a hundred million years ago in northern Africa. Scientists say studying the behemoth named Spinosaurus helps them better understand how some prehistoric animals adapted to life on land and in water. The Spinosaurus replica is on display at the National Geographic museum. VOA’s George Putic has more.
Video

Video Iraqi Kurdistan Church Helps Christian Children Cope find shelter in churches in the Kurdish capital, Irbil

In the past six weeks, tens of thousands of Iraqi Christians have been forced to flee their homes by Islamic State militants and find shelter in churches in the Kurdish capital, Irbil. Despite U.S. airstrikes in the region, the prospect of people returning home is still very low and concerns are starting to grow over the impact this is having on the displaced youth. Sebastian Meyer reports from Irbil on how one church is coping.
Video

Video NASA Picks Boeing, SpaceX to Carry Astronauts Into Space

The U.S. space agency, NASA, has chosen Boeing and SpaceX companies to build the next generation of spacecraft that will carry U.S. astronauts to the International Space Station by the year 2017. The deal with private industry enables NASA to end its dependence on Russia to send space crews into low Earth orbit and back. Zlatica Hoke has more.
Video

Video Future of Ukrainian Former President's Estate Uncertain

More than six months after Ukraine's former President Viktor Yanukovych fled revolution to Russia, authorities have yet to gain control of his palatial estate. Protesters occupy the grounds and opened it to tourists but they are also refusing to turn it over to the state. VOA's Daniel Schearf reports from Mezhigirya, just north of Kyiv.


Carnage and mayhem are part of daily life in northern Nigeria, the result of a terror campaign by the Islamist group Boko Haram. Fears are growing that Nigeria’s government may not know how to counter it, and may be making things worse. More

AppleAndroid