EUROPE

Volkswagen 2010 sales in China up 37%Europe’s largest carmaker， Volkswagen AG， said January 7 that it had sold 37 percent more vehicles on the Chinese mainland and Hong Kong in 2010， compared to sales in 2009.With 1.92 million vehicles delivered to its customers last year， Volkswagen had performed beyond expectation in the past year， said the European automaker in a statement.The company also planned to invest 10.6 billion euros (about 13.8 billion U.S. dollars) in China through 2015 to expand its production capacity and develop new products， said Karl-Thomas Neumann， president and chief executive of Volkswagen Group China， which operates car ventures with Chinese state auto groups SAIC Motor and FAW Group.Neumann also said he expected significant sales in the country in the coming years and noted that the first Volkswagen electric cars would hit the roads in China in 2011. (Xinhua)German pork， egg imports haltedGermany’s dioxin contamination problems deepened in mid January as China banned pork and egg imports and it emerged that tainted meat may be in circulation.A day after authorities ordered the slaughter of 140 pigs at a German farm after discovering dangerous dioxin levels in pork for the first time since a scare began early January， China said its ban was effective immediately.The country has banned imports of “German-produced edible pork and egg products，” the country’s product safety watchdog， General Administration of Quality Supervision， Inspection and Quarantine， announced in a statement on its website dated， saying the move was aimed at safeguarding the health of consumers.Authorities also said t h e y w o u l d inspect goods shipped from Germany prior to January 11 and would release them only if found to be safe.“This is a scandal that is growing bigger and worse every day，” Johannes Remmel， agriculture minister in the western state of North Rhine-Westphalia in Germany， told the Frankfurter Allgemeine Zeitung (FAZ) daily.Germany exported 7，000 tons of pork to China in 2009， the German government said， worth some six million euros($7.78 million).Previously only South Korea had banned German pork imports， while Slovakia had halted sales of German eggs and poultry meat， despite Berlin’s repeated assurances there was no immediate risk to human health. (Global Times)China-Russia natural gas pricing agreement closeChina may reach an initial agreement with Russia on natural gas pricing - a subject of great contention for years -by the middle of 2011， industry experts close to the matter said.“We’ve seen that the price gap has narrowed during the past several months. And we’re cautiously optimistic that the initial price disagreement will be solved in the first half of 2011，” said Wan Chengcai， director for the Russian Foreign Relations Development Research Center under the State Council.The two countries signed a natural gas contact as early as 2006， when they agreed to construct two pipelines to transport a total of 70 billion cubic meters (cu m) of the fuel annually from Russia to China.The first pipeline is expected to become operational this year. But disagreement on the pricing of natural gas has stalled negotiations for several years.China has strengthened its cooperation with Russia， the world’s largest energy producer since 2009， in terms of exploration and supplies of crude oil and natural gas.The first pipeline linking Siberia in Russia and China’s Daqing oil field， in the northeast of the country， started operating on Jan 1. The 16 billion yuan ($2.42 billion) pipeline is expected to carry 15 million tons of crude oil annually from Russia to China for 20 years.“The operation of the oil pipeline is just the beginning of the countries’ cooperation in the energy sector， and a deeper and broader partnership can be developed afterwards，” said Huang Xiaoyong， vice-president of the Graduate School of the Chinese Academy of Social Sciences.Russia’s biggest natural gas export destination is Europe. However a trend through 2008 and 2009 saw demand for the fuel declining.In the negotiations with China， Russia hoped to secure a price similar to that paid by its European customers， but China insisted on paying a lower price as it did with several Asian countries such as Turkmenistan.“China is exploring closer cooperation with Russia in the field of natural gas. However， as the country’s consumption power per capita lags far behind its counterparts in the West， the natural gas price is much lower and cannot compete with the West，” Huang said.China is expected to more than double the proportion of natural gas it consumes on an annual primary basis from the current level of 4 percent by 2020.The country may consume 300 billion cu m by then， leaving a huge market for other overseas providers of the fuel to tap into.“We hope the two nations can reach an agreement in the summer， and see more cooperation in the sectors of hydropower， nuclear power and coal，” Wan said. (China Daily)BlueStar buys Norwegian Elkem for nearly US$2bNorwegian conglomerate Orkla ASA announced January 11 it will sell almost all its Elkem unit to chemical group China National BlueStar Corp for nearly US$2 billion.The deal， which also covers a major power contract that Orkla bought last year， includes Elkem Silicon Materials， Elkem Foundry Products， Elkem Carbon and Elkem Solar. However， Orkla said it will continue to own Elkem Energi AS.A silicon and carbon parts maker， Elkem specializes in components for solar panels. It also is involved in energy production in Norway and has 2，500 employees. It reported revenues of US$1.2 billion in 2009.Orkla CEO Bjoern M. Wiggen said BlueStar will provide Elkem an owner “that has the best attributes to take advantage of the potential of Elkem’s technological strength and competence，” with solid finances and already well positioned in the metals and renewables sector.BlueStar Chairman Ren Jianxin said the deal will benefit both groups， with Elkem getting access to Asia and the Chinese market and BlueStar profiting from the Norwegian company’s management experience and technology.“We strongly believe in the huge potential for Elkem’s new solar-grade technology with its leading energy efficiency and environmental safety characteristics，” he said.Orkla said the sale will not greatly change Elkem’s main structure or the way it operates its existing plants.The deal is subject to regulatory approvals and is expected to be completed in the first half of this year. (Shanghai Daily)PetroChina eyes 2 European refineriesPetroChina said January 10 it has agreed to invest in two refineries in Europe owned by private British firm INEOS Group Holdings Plc as a major step of its global strategy.PetroChina said it plans to set up a joint venture through its wholly-owned subsidiary PetroChina International Co to run INEOS’s Grangemouth refinery in Scotland and Lavera refinery in southern France， according to a filing to the Shanghai Stock Exchange.PetroChina International Co signed the agreement with INEOS European Holdings Ltd and INEOS Investments International Ltd， both wholly-owned unit of INEOS.PetroChina didn’t disclose the value of the deal or the stake it will take in the joint venture.Industry sources said last year the offer for Grangemouth was about US$6 billion-US$7 billion， Reuters reported yesterday.It will be PetroChina’s third overseas refinery deal after investing US$2 billion in Singapore and Japan.The proposed joint venture is set to be set up in the first half this year and will also engage in oil trading.“PetroChina will inject capital in INEOS and setting up the joint venture will be very meaningful for the company to establish a broader business platform in Europe，”it said in the statement.Both the two refineries have a processing capacity of about 200，000 barrels a day. (Shanghai Daily)Italian retail giant to open five-luxury outlet centersItalian fashion retail giant RDM announced January 19 that it will invest $910 million to set up five Italianstyle luxury outlet centers in China under the brand name of“Florentia Village.”Jacopo Mazzei， chairman and CEO of RDM Group， made the remarks when attending a ceremony to mark the completion of RDM’s first “Florentia Village” in Tianjin.The fashion outlet slated to open May 19 represents the launch of RDM’s investment and development strategy in China， he said.The outlet covering 60，000 square meters will offer an average 50-70 percent off domestic retail prices for luxury brands such as Giorgio Armani and Burberry.The shopping village， which resembles a 16th century Italian town， will feature nearly 200 world-renowned brand name stores with authentic merchandise.Ivano Poma， chairman and CEO of Florentia Village and managing director of RDM Asia， said the company chose to launch the first China outlet in Tianjin because of its potential to attract a new generation of stylish consumers with growing disposable incomes in the luxury sector. (Xinhua)German auto logistics company to enter ChinaMOSOLF Group， a leading provider of logistical services in Germany， signed a memorandum of understanding(MOU) with one subsidiary of Beijing Automobile Works Co.， Ltd. (BAW) January 18， according to the China Business News.The two sides plan to build a joint venture (JV) in China for further develop the automobile logistics market in the country.China’s fast growing auto industry provides plenty of opportunities for auto logistics companies， said Jorg Mosolf， CEO of MOSOLF.Business in the JV will include finished vehicle logistics， auto production logistics and after-sales services， according to the report.Logistics companies are not merely a channel of distribution. Auto companies need them to provide differentiated logistical services that can help them deal with future changes in the auto market， said an insider.Founded in 1955， MOSOLF has developed from a forwarding agency into a provider of technical and logistical services for the international automobile industry. It is also a logistics provider for manufacturers of agricultural and construction machines together with car rental， leasing companies and fleet customers. (Xinhua)