Caterpillar looks for record sales on China demand

By Joe McDonald

(Beijing) Caterpillar Inc. expects record sales this year as booming demand for construction and mining equipment in China and other emerging economies offsets weakness in its home U.S. market, its chairman said Thursday.

"Our manufacturing operations in Asia have been running at capacity to satisfy demand in China," James Owens said.

In Asia, Caterpillar has so many orders for heavy mining and power generation equipment that it is sold out of most items through 2010, he said.

The sales forecast highlighted the key role played by China and other emerging economies in driving sales for global companies at a time when demand in the United States, Western Europe and Japan is flagging.

On Thursday, Owens announced plans to open a research-and-development center and expand a factory in China as part of $1 billion in planned investments in emerging markets over the next three years.

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Brazil's Inflation Warrior

FAA computer problems cause flight delays

ATLANTA, Georgia (CNN) -- Airports across the United States were experiencing flight delays Tuesday afternoon after a communications breakdown at a Federal Aviation Administration facility, the administration said.

Flights at Atlanta's Hartsfield-Jackson International Airport were delayed Tuesday afternoon.

The facility south of Atlanta was having problems processing data, requiring that all flight-plan information be processed through a facility in Salt Lake City, Utah -- overloading that facility.

The two facilities process all flight plans for commercial and general aviation flights in the United States, said FAA spokeswoman Kathleen Bergen.

The administration said there are no radar outages and said they have not lost contact with any planes. The roughly 5,000 flights that were in the air when the breakdown happened were not affected -- just those that were waiting to take off.

"This is really not a safety issue, this is an aggravation issue," said CNN aviation expert Miles O'Brien. iReporter stuck in Philadelphia

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DP World Profit May Double on Expanded Port Network: Week Ahead

DP World Ltd., the world's fourth- largest port operator, may this week report first-half profit doubled on African acquisitions and greater handling capacity at its Dubai hub even as the world's biggest economies slow. The 45-terminal operator's net income may reach $244.3 million when it reports Aug. 28, according to the average estimate of three analysts surveyed by Bloomberg. The Dubai state-controlled firm said its profit for the same period in 2007 was $111.2 million before separately disclosable items. "The company's first-half growth is driven by an increase in cargo handling, especially in Jebel Ali, and acquisitions in Africa and Saudi Arabia," analyst Muneeba Kayani at Morgan Stanley said in an e-mail. The Dubai-based analyst has an "equal-weight" recommendation on the stock.

Dubai is spending billions of dollars on finance, tourism and infrastructure projects to cut its dependence on oil revenue and build the emirate into a new global hub. DP World's $4.96 billion-public share sale in November, the Middle East's largest, has left investors disappointed as its shares have dropped 35 percent to $0.85 since listing on the Dubai International Financial Exchange Ltd. in November.

DP World last month reported container volume jumped 21 percent in the first half, helped by growth in India and the Middle East.

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China Construction Profit Soars 71% as Lending, Fee Income Rise

Aug. 23 (Bloomberg) -- China Construction Bank Corp., the nation's second-biggest, said first-half profit surged 71 percent as it boosted lending revenue and increased fee-based services.

Net income soared to 58.7 billion yuan ($8.59 billion), or 0.25 yuan a share, from 34.2 billion yuan or 0.15 yuan a year earlier, the Beijing-based bank said in a statement to the Hong Kong exchange last night. The median estimate of five analysts surveyed by Bloomberg News was for profit of 59 billion yuan.

CCB, China's largest mortgage provider, increased lending even as the government implemented economic tightening measures to cool credit growth. While Chinese banks are unlikely to repeat the pace of growth for the rest of this year and 2009, they are still attractive investments because asset quality hasn't deteriorated, said an analyst at JPMorgan Chase & Co.

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Oil May Fall to $80 a Barrel, Hedge-Fund Manager Haugerud Says

Aug. 22 (Bloomberg) -- Crude oil may tumble to $80 a barrel within 12 months on increasing supplies of alternative energy, while grain prices may climb on emerging-market demand, said Renee Haugerud, whose hedge fund gained 18 percent this year.

The surge in oil has been ``overdone'' by investors seeking holdings in raw materials through the Standard & Poor's GSCI Index, a commodity gauge weighted toward energy, she said. Industrial metals also rose too high, she said.

``They were the sexy commodities,'' Haugerud, founder of the $2.5 billion commodities hedge-fund firm Galtere Ltd., said in an Aug. 19 interview in her New York office. ``Everyone wanted to get long an asset class via the GSCI, and let's face it, the GSCI is crude.''

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MissionPoint Capital Partners Iniates Push for Efficient Energy

In one week alone, the topic of traditional means of energy (generally coal powered) vs. clean and renewable energy has come up more times than any other topic besides oil. Clearly, this topic is generating massive amount of interest, from both sides of the spectrum-- coal energy plants are losing financial and political support, while policy makers and environmentalists have yet to propose significant solutions to the growing energy demands through renewable energy technologies. Finally, someone is picking up the slack.

MissionPoint Capital Partners of the London venture capital group of US and Zouk ventures has investested $40 million into Trilliant, a smart-grid company in Silicon Valley. The smart-grid technology Trilliant employs improves overall quality of power grids, both in terms of efficiency and reliability by utilizing IT technology. The company's technology also allows for smoother integrations and transitions between traditional and alternative energy. Investments such as these could be the step needed to propel the US energy industry to the next level and act as a catalyst for resolving the growing energy crisis.

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Temasek Makes Strategic Move in US Securities Market

As the American securities market continues its attempts to recover from the "mortgage meltdown" Tamasek, the Singapore based wealth fund is considering adding to its already ample share-holdings of the sector, specifically the Merrill Lynch firm.

Currently, Tamasek owns about 5% of the firm but is looking to acquire even more shares and assets of Merrill Lynch in an effort to capitalize on the current "pessimism driving Western financials." HIstorically, the Singapore firm has made huge strides in generating major returns on their foreign investments and are looking to continue the trend with this new acquisition.

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ArcelorMittal Acquires Brazilian Iron Ore Miner

As we are constantly reminded of the earth’s ever depleting resources, some companies are acting on these new studies and solidifying their own futures through new mergers and acquisitions. Major steelmaker and Luxembourg based ArcelorMittal has acquired London Mining Brasil, a Brazilian iron ore miner, in an attempt to further their property of iron ore mines. Unlike a typical acquisition however, ArcelorMittal is planning to put this new investment to serious work almost immediately, developing port facilities in Rio de Janeiro. The company announced plans to work with Vancouver company Adriana Resources towards an "important investment in the dynamic Brazilian market” as well as “[ensuring] that our iron ore base is further diversified in the face of tighter supply for raw materials."

Not to be sated, ArcelorMittal also created an agreement with the Vancouver company in which they will acquire almost 20% of Adriana’s common shares as well as a seat on their board of directors. Clearly this firm continues to push for ongoing improvement and production, an impressive feat as raw materials become scarcer.

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New Dubai Airport Exemplifies Extravagance

The subtitle says it all—“Dubai doesn't do small.” The UAE’s newest efforts to construct the largest airport in the world, consists of “urban aviation project [that] is almost twice the size of the island of Hong Kong.” The entire endeavor surpasses all prior projects in a similar arena and boasts an impressive array of features, from two terminals to six concourses and the eventual capacity of 120 million passengers annually. Construction alone demonstrates a larger than life venture with contractors from around the world, including Thales, Max Bogl, Arabtec, Park Air Systems and Raytheon Co. Dubai has made this project a huge priority and is attempting to maintain their ambitious timeline of completion by 2015 with over 20,000 workers and 600 engineers and architects.

While this project is at the forefront of aerospace infrastructure development, it is important to question—is it really necessary? Heathrow airport, in the midst of its own upgrades in preparation for the 2012 Olympics, only handles about 68 million passengers a year and it’s the busiest international airport in the world. Even if Dubai’s new airport CAN handle 120 million passengers, in the long run, WILL it ever have to attend to that many clients? Despite the fact that Dubai sees construction more as an economic development plan, rather than just an aviation project, it would seem that other projects could stimulate economic growth in a more efficient and less extravagant manner.

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New Army Corp Strategy Emulates CG/LA Forum Model

After the disastrous aftermath of Hurricane Katrina, enthusiastic new efforts have been made to restore and improve New Orleans’ infrastructure in an effort to guarantee that such a tragedy never occurs again. This new approach in mind, the Army Corps has taken a major incentive in the construction of the Harvey and Algiers Canal storm surge protection project. The US $500 million project is gaining significant momentum, thanks in large part to the Army Corps creative new approach towards development, involving the infrastructure industry from the very beginning stages of the project that is a major deviation from their normal route of not involving the contracting community “prior to the solicitation phase.” This new approach, known as “early contractor involvement (ECI)” that involves the contracting and construction industry from the get go is an attempt provide “design reviews that may offer potential cost savings on materials and/or methods.” ECI also create an involvement with more actors, allowing for greater diversification, cost sharing, and an entirely new spectrum of perspectives that could prove extremely constructive for projects.

After reading about this new strategy, it’s impossible not to recognize the similarities between this “rarely used option” and the dynamics and principles employed by CG/LA Infrastructure. Both attempt to introduce various key players from each stage of a project’s development in an attempt to improve both the construction and standards of the infrastructure sector and get people from the industry “on board” from the get go. While only time will tell as to whether the Army Corps. Strategy will pay off, it seems evident that by expanding the arena for industry involvement, infrastructure projects will continue to improve and grow in the future.

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East China maglev project to begin construction in 2010

After multiple delays and protests, the Chinese provincial government of Zhejiang has finally announced that plans to build the new magnetic levitation train route between Shanghai and Hangzhou will begin in 2010. The project has seen various delays and obstacles: from environmental complications to "fears of radiation" to protests from citizens where the track would be constructed; however, officials have finally received a go ahead from the province government as well as the "environmental greenlight" and construction is scheduled to begin in 2010 and be completed by 2014.

The train will utilize German technology thanks to construction contracts between the Zhejiang province and Germany's Transrapid International consortium, comprising mostly of ThyssenKrup and Siemens.

A similar train design is also in the works in the United States, meant to connect Las Vegas to Disneyland in Southern California and will be able to travel at 300 mph. Currently, the bill passed in June 2008 allotted 45 million for environmental studies the begin the first leg of the project.

These high speed rails signal a shift in infrastructure focus, from highway maintenance and construction to more UMT projects-- possibly a sign of the effects of high gas prices and new environmental conscientiousness.

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Coal at a Crossroad

Apparently, SUVs aren't the only ones taking a hit. While sales for gas guzzling vehicles are at an all time low in response to ever rising gas prices, other areas of the economy are also taking hard hits, this time in conjunction with growing environmental concerns. Recent efforts by coal plants to expand, improve or build new facilities have been consistently blocked by policy makers in an attempt to curb global warming effects. These new developments demonstrate a new concerted effort by both environmentalists as well as politicians to work together in efforts to improve environmental conditions in the country. 

While it is important to recognize and applaud these new efforts it is also imperative to address the new problems that these well-intentioned policies may have. Although discouraging increased coal production and use is admirable and will help in fighting the negative impacts we have on our environment, refusing to maintain current coal plants only increases the certainty of more blackouts and energy failures in the future. Similarly, cutting down on coal plant production is an excellent means of decreasing carbon emissions, but without new technological developments and the ever growing demand for energy, we will soon reach a point of major energy deficiency. If politicians and environmentalists want to cut coal use in this country, they need to provide alternative energy sources as well to compensate.

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5 years after a giant blackout, are we better off?

Not to act as the bearer of even more bad news but after reading this article and researching general plans at the Department of Energy’s renewable energy site one factor still appears dangerously apparent: there are no solutions, at least not mentioned. While Williams provides some excellent arguments that the United States’ current management of electricity is rapidly failing, he provides no solutions to the current problem. He also describes various reasons why current energy infrastructure is so poor and will continue to struggle in the coming years and even explains why these problems exist. However, as illuminating as his article is, Williams continues in the footsteps of many reporters and policy makers before him—playing the blame game rather than offering any new solutions. Although it’s important to recognize where our weaknesses lie, it’s time to take the next step and begin creating solutions or at least strategies towards improving our impending energy crisis.

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Olympics Act as Beacon for Future Infrastructure

Despite the negative attention China has been receiving as the Olympic games begin, from international conflict to environmental woes, it is important to recognize the significant changes and efforts that China has implemented to prepare for these games—specifically in regards to the environment. While reporters and politicians constantly harp on the negative, what many observers fail to acknowledge are the drastic environmental improvements these Olympic games have brought to Beijing as well as other parts of China and the general “green effect” that is influencing infrastructure in all Olympic host cities.
For years now countries have a new focus on making Olympic host cities green and sustainable in an efforts to both improve our ever increasing environment and on a more practical level, to ensure that the fiscal investments for each Olympics last in these cities much longer than the games themselves. Probably the most notoriously environmentally poor aspects of Beijing’s infrastructure, their coal-based energy sector is now diversifying into cleaner energy technologies such as natural gas, geothermal energy, district heating networks, wind energy, and other forms of renewable energy.
London, in preparation for the 2012 games have taken even greater leaps in creating a sustainable and environmentally friendly Olympic arena. From making the entire location both pedestrian and mass transit friendly, London ensures less carbon emissions as well as utilizing more energy efficient train technology to cut environmental impact further. The Olympic park will turn into new housing once the games finish and new waterways and waste management systems are being constructed in an effort to minimize pollution and trash buildup. Throughout the next four years, London will be making concerted efforts to create a green Olympics.
As this new approach gains greater momentum, the question then becomes why have green efforts been so limited in the past. Renewable energy technology and infrastructure is making greater progress than ever and yet it appears that most countries only make environmental efforts when they’re on the international stage. Instead of waiting for pressure to come from abroad, nations need to begin taking the initiative in environmental infrastructure within their countries. As Beijing welcomes the Olympics with the manifesto “One World, One Dream” it seems about time that our world begins to share the dream of creating sound, sustainable infrastructure, rather than waiting for peer-pressure to kick in.

China Development Bank Interested in Dresdner Bank

Aug. 5 (Bloomberg) -- China Development Bank is competing with Commerzbank AG to buy Allianz SE's Dresdner Bank, Germany's third-largest lender by assets, three people familiar with the matter said.

China Development Bank, which funds the nation's public works projects, has conducted due diligence on Dresdner Bank in Frankfurt, said the people, who declined to be identified because they aren't permitted to publicly discuss the matter.

Dresdner Bank may fetch as much as 9 billion euros ($14 billion), according to Merck Finck & Co., making it the biggest- ever overseas acquisition by a Chinese company. Spain's Banco Santander SA is also interested in Dresdner, which Allianz bought for 23.3 billion euros in 2001, the people said.

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