Manufacturers Caught In Pandemic Glut Are Looking To Sell Capacity, Far Eastern Billionaire Says
Slower global economic growth amid the COVID-19 pandemic is leading manufacturers in industries facing a supply glut to try to sell assets, the chairman of one of Asia’s largest conglomerates said in a telephone interview.
“We have to adjust quite a bit and look at the world in a new picture,” said Douglas Hsu, the billionaire chairman of the Taipei-headquartered Far Eastern Group. Though Far Eastern hopes the impact is brief, “we are preparing for the longer run, if the (pandemic) lasts until next year.”
Since the pandemic began, Far Eastern has been approached by companies looking to sell manufacturing capacity in Asia in industries that include chemicals, textiles, fiber and cement, Hsu said. “Those that built excess capacity now realize that you have to be professional to run them,” he said. Excess capacity exists in China, Vietnam, Southeast Asia and “everywhere,” Hsu added.
Far Eastern, which traces its roots to Shanghai and the textile industry, today employs nearly 80,000 people in nearly a dozen countries and boasts assets of more than $85 billion. In the U.S., Far Eastern operates plants in West Virginia and Ohio, as well as a R&D center in Ohio. It also has a project under construction in Texas. Far Eastern’s main businesses include Far Eastern New Century, Asia Cement, Far Eastern Department Store, U-Ming Marine, Far EasTone Telecom, Far Eastern International Bank, Oriental Union Chemical and Everest Textile. Far Eastern counts Nike, Adidas, Lulu Lemon and Ralph Lauren among its customers.
Underscoring the potential global fallout from the pandemic, the World Trade Organization last week predicted trade in goods will fall 13-32% this year in connection with the pandemic.
Taiwan, with less than 400 COVID-19 cases thus far, has been relatively calm compared with harder-hit economies. At a visit to a Far Eastern retail store yesterday, Hsu said, “People were surprised to see me, and I was surprised to see them. They said they cannot be locked up all the time.” Customers are required to wear masks and have their temperature checked upon entry, Hsu said.
Hsu ranked No. 1415 on the 2020 Forbes Billionaires List released last Tuesday with an estimated fortune worth $1.5 billion.
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