Volcanic ash clouds Asian business3 min read . Updated: 20 Apr 2010, 01:02 PM IST
Volcanic ash clouds Asian business
Volcanic ash clouds Asian business
Hong Kong: Japanese sushi lovers are running out of prized Norwegian salmon and planeloads of goods from garments to mobile phones are piling up as Asian business counts the cost of Europe’s air chaos.
Thousands of factories in China’s Guangdong province, the workshop of the world, have seen air shipments of watches, jewellery and high-end fashions delayed while stranded executives are kicking their heels in frustration.
Bernard Pouliot, chairman of Hong Kong-listed financial services company Quam Ltd., is among the many Asia-based bosses stranded in Europe or unable to fly overseas to seal deals in person.
Pouliot headed to Stockholm last week to attend a business conference, but got stranded with a colleague as he tried to connect through London -- while two other Quam employees are now stuck in the Swedish capital.
“I never made it to Stockholm," Pouliot told AFP when reached on his mobile phone, adding that his London hotel has now jacked up his room rate by 25%.
“So myself and another colleague decided to meet with several financial services firms in London. What else can we do?"
The asset manager is sure of one thing: the battered airline industry, just starting to recover from the global financial crisis, is a poor investment bet as it now reels from flight bans linked to the volcanic eruption in Iceland.
“I never invest in airline stocks -- that has been further confirmed to me now."
Piles of clothing are sitting in Bangladesh’s main airport with about 350,000 kilograms (770,000 pounds) of the desperately impoverished country’s key garment exports stuck in limbo.
“The garments were already behind schedule, and now they are being held up because of the flight problems -- we are worried buyers will reject these shipments as they are so late," said Abdus Salam Murshedy, president of the Bangladesh Garments Manufacturers and Exporters Association.
In South Korea, electronic giants Samsung and LG said they are unable to air-freight about 200,000 mobile handsets valued at $30 million a day, or more than 20% of their total daily electronics exports.
Losses for South Korean microchip shipments stand at about five billion won ($4.5 million) a day, while some 15,000 South Koreans including businessmen have cancelled trips to Europe, officials say.
Premier hotels and restaurants in Hong Kong are staring at shortages of Belgian chocolates, Dutch fresh-cut flowers and French cheese, according to Dennis Yau, director-general of the Federation of Hong Kong Industries.
He said thousands of factory suppliers in Guangdong, over the border from Hong Kong, were getting more alarmed the longer the disruption continues.
“Fortunately the peak season for deliveries usually starts in May, but if this lasts beyond the end of this week, problems will arise," Yau said.
Hong Kong’s swanky Peninsula Hotel may soon have to yank German asparagus and lamb off its menu if air supplies do not resume, a spokeswoman said, while Japanese fish markets and sushi shops are starting to feel the pinch too.
“Absolutely nothing is coming our way. I’m praying that the disruption ends soon," said one seller in Tokyo’s massive Tsukiji fish market who usually imports salmon from Norway.
Only three wilting slices of the fish were displayed in his tiny store, and the seller said he would start receiving salmon from New Zealand on Friday, although the Norwegian variety is prized above all.
Some New Zealand firms say they are enjoying an unexpected windfall from the flight chaos as orders of chilled meat, flowers and fish from Asia and the west Asia (middle east) surge.
Organizers of a blue-riband banking conference in Singapore are striving to fill the slots of five speakers whose flights have been affected by the shutdown of European airspace.
Among the speakers for The Asian Banker Summit 2010 was Asgeir Jonsson, chief economist of the Arion bank in Iceland, who was due to give a keynote presentation on Tuesday.
Organizers said they may have Jonsson deliver the speech via videoconference.
“This kind of thing always gives a big boost to that (videoconferencing) business -- it did during SARS," Quam’s Pouliot said, referring to a 2003 epidemic of the respiratory disease that paralyzed Hong Kong.
“But at the end of the day, people still want to meet face to face."