unitforabout $200m, potentially helping it boost US exports, and freeing up funds forthe Frenchcarmaker to invest in its electric business. Renault,which canassemble 300,000 vehicles ayear in its factoryin Busan,South Korea,is in the middle of a turnaround aimed
“With theSouth Korea-US free trade agreement,Renault or Geelywouldnot facetaxburdens if theyexport vehicles manufactured in South Korea to the US, saidSong Sung-jae, an analyst at Hana Financial Investment. Song noted, however, that Geely would facehigher manufacturingcosts inSouthKorea, where labour costs are greater andthe carmarket isdominated bylocal championsHyundai Motor and Kia.
RENAULT OR GEELY WOULD NOT FACE TAX BURDENS IF THEY EXPORT VEHICLES MADE IN SOUTH KOREA TO THE US
January to develophybrid vehicles forSouth Koreaand abroad, produced at the Busan plant. For Geely, which typically grows its business through global partnerships, the deal goes beyondselling carsinSouth Korea andis a way forthe Chinesecarmaker toexportcars made in South Korea to the US, a person close to the firm said. It is an opendoor into the US said the person who declined tobe namedbecause the plans are confidential. The person said that while the details onthe partnership had not yetbeen sorted completely, Geely might initially use the Busan plantto make electric robotaxis forWaymo, Alphabet s self-drivingunit withwhichit has a supply agreement.
For Chinesefirms, buildinga successfultrack recordinSouth Koreacanhelp sellEVsinother emergingmarkets, aswellas Europeand US,which thefirms continue to knock the door of, but theyare difficultmarkets, saidKimJin-woo, ananalystat Korea Investment & Securities. Renault owned 80%of the unitat theendoflast year.The restwas ownedby creditcard company SamsungCard, which saidinDecember itintendedto sell its stake, but gave no details. Renault’sdecision tosell 34.02%of RenaultKoreaMotors for $207malso comesweeks after mediareports thatthe carmaker, top shareholderin Nissan Motor, may lower its stake in the Japanese firm. /Reuters
Disrupted supply chain may put a brake on momentum of Sony’s PlayStation
• Lower target stems from Covid-19 and lockdowns in China, says CFO
Takashi Mochizuki
Sony Groupfaces morechallenges in its video game division ascomponent shortagesand supplychain disruptionrisks may hamper flagship PlayStation 5 hardware production.
TheTokyo-based groupsaid it sold 11.5-million units of the $500device inthefiscal yearto end-Marchandwill aimtosell about 18-million units this financialyear.Both figuresarewell behindinitial targetsof14.8-million and 22.6-million units, respectively.
In a conferencecall after earnings were announced, CFO
HirokiTotokisaid thelowertargetfor thecurrent yearstems from supply-chain complications because ofthe Covid-19 pandemic, including lockdowns in China.Shanghai, akey centre
SUBJECT TO CLEARANCE
for tech production, has largely beenunder lockdownsincethe beginning of April.
The 18-million figureis our best currentestimate , Totoki said. A downsiderisk would be if there is a further worsening in the supplychain, includingthe potential widening of lockdowns in China.
Sony reportedoperating profit forthe fourthfinancial quarter thatfell shortof analyst estimates and projected earnings forthe currentfinancial yearthatwere alsolessthan projected. The group said it would buyback upto ¥200bn of itsshares, a movethat could bolster the stock.
The PlayStation5 hassufferedsupply constraintsfrom componentshortages andlogisticsdisruptions sincetheproduct s release in November 2020.
Data from outsidefirms such as US-based NPDshow Microsoft s Xboxhardware began to outpace PlayStation in recent months.
It is a risk,given they have assumedChina Covid-19issues areresolved inthreemonths, said MST Financial senior analyst David Gibson.
“No-one really knows what will happen in China.”
Anotherconcerning signis the trend of useractivity on the PlayStation platform, with both monthly active users and the number ofPlayStation Plussubscription serviceusers declining in the March quarter.
Totoki said the company sees the numbers positively as they bothremained highdespite some weakeningof stay-home entertainment demand. Analysts saidthe companyshouldboost
thenumbersthis yeartoensure the success ofits gaming platform. Thisyear willbecrucial. Sony can t miss this chance to revitalise thePlayStation 5 s momentum said Morningstar Research analyst Kazunori Ito. Sonywillroll outnewonline services for PlayStationusers in June, including an option similar to Xbox’s
Merger will open the way for dating app Grindr
Echo Wang New York Gay dating app Grindr said on Mondayit wouldgopublic through a mergerwith a blankcheque acquisition firm. The dealvalues itat $2.1bn andfeatures TigaInvestments
CEO RaymondZage onboth sides of the transaction. Grindr said its existing shareholders wouldown 78%of the company after the merger, which comes twoyears after
INSIGHTS: MARSH
China s Kunlun Tech Co divested it for$620m dueto USnational security concerns. While Grindr did not name its existing shareholders,Reuters reportedpreviously thatZage had a41% stake inthe consortium that acquired Grindr. Aninformed source said on Monday that Zage continues to be an investor in Grindr. Tiga Acquisition,the Singapore-based special purpose acquisition company (Spac) that will merge with Grindr, is con-
Need for resilience in digital supply chains
• Companies are increasingly vulnerable to costly cyberattacks, writes Lynette Dicey
Organisations globally are investing in technologies that turn linear supply chains into more efficient integrated digital supply networks. Retailers, for example, are using advanced algorithms to anticipate product demand and creating digitally enhanced experiences to better serve customers. At the same time, smart factories are using technology, including digital thread-enabled product design, collaborative robot (cobot) supported assembly, and sensor- and AI-driven predictive maintenance to increase the efficiency of the entire manufacturing process. The complexity inherent in the modern environment is making it harder for business leaders to fully understand the risk to their organisation. While some companies have a good grasp of digital supply chain vulnerabilities linked to the software and technology vendors that supply their digital tools and are taking actions to address the associated risks in selecting and monitoring vendors, the risk is that they digitise physical assets and processes that were not understood as digital and introduce hardware and
software without a full understanding of the associated exposure to cyber risk. The additional complexity brought about by increased digitisation, together with a fastevolving threat landscape, is making companies increasingly vulnerable to costly cyberattacks, says Spiros Fatouros, CEO of Marsh Africa. As risks evolve, he says, organisations may require new mitigation strategies.
The challenge, however, is many businesses are still struggling to understand their own multifaceted digital supply chains, not to mention the myriad vendor relationships that support their operations and also contribute to increased complexity. Despite their essential nature, supply chains including today’s digitally centric ones are still largely managed within functional silos. Information technology (IT) and operational technology, for example, have historically been managed by different departments. Organisational silos lead to risk blind spots because as more operational devices are connected to the internet, they are becoming prone to cyber threats and
require increased protection.
Many digitisation efforts, including manufacturing or supply chain planning, are run within functional departments.
Disparate implementation teams may lack full visibility into end points and systems that are connected, leading to gaps in security protocol effectiveness.
Fatouros points out that as the digital transformation accelerates and new cyber threats emerge, security and operations teams are challenged to manage alerts across thousands of devices and keep pace with communicating updates and managing new vulnerabilities. These organisational blind spots can lead to considerable exposures due to a lack of understanding of risks that exist outside of each department s purview.
Although risk managers tend to have more visibility across the organisation, this is often not deep enough to identify and understand their potential supply chain risks. As a result, changes and enhancements to the digital supply chain are frequently carried out without fully understanding how they can affect a business overall risk, and without ensuring the proper risk mitigation measures are put in place. Understanding digital supply chain risk is rarely a simple process. Not only does the constantly expanding attack surface lead to new risks, but malicious cyber actors are evolving their attack methods and looking for new threat vectors. In addition, new interdependencies across the surface area of the digital supply chain create vulnerabilities that can hamper transformation. While identifying and
mitigating supply chain risks may seem simple, Fatouros says in reality they require dialogue and collaboration, and a robust process to evaluate and measure risk in financial terms.
Success often requires a dedicated team that has visibility across the organisation and is able to assess the dynamic cyber threat landscape associated with using new technologies, both independently and together. This is not a one-and-done process he says. As technology continues to evolve and proliferate, the risk will outpace the knowledge and experience of many frontline workers, requiring that a dedicated team continuously monitors new risks and evaluates the risk profile, then applies the necessary security controls. Businesses need a forwardthinking approach to mitigating risks, driving preparedness and building resilience. While risk managers will have a central role in helping organisations identify, quantify, mitigate and respond to the risks within their supply chains, they will also need to understand the supply chain landscape and the threat vectors to be better able to identify emerging risks The complexity of digital supply chains underscores the importance of risk professionals having visibility across the entire organisation. If collaboration is as crucial to understanding and tackling new risks as Fatouros claims, successfully mitigating these risks means risk professionals need to have a seat at the decision-making table to drive agility and design risk management processes that improve business resilience.
trolledby Zage.Under thedeal, Grindrgets $284min cashfrom Tiga andup to $100m ina forward purchase agreement. Grindr and Tigaexpect that their deal may need clearance fromthe committeeonforeign investment inthe USwhich scrutinises deals for potential national security risks, according toa copy oftheir merger agreement that was made public on Monday. The committee ordered Kunlun to sell Grindr in 2019 on con-
cern that the personal data of US userscould beaccessedor exploited byChina s government. It could notbe learnt if the committee hada rolein Grindr s decisiontoexplore asaleand merger witha Spac.A spokesperson forthe UStreasurydepartment, whichchairs the committee, didnot respond to a request for comment. Grindr CEO JeffBonforte and COO Rick Marini will step down. A search for Bonforte s replacement is under way,
to go public
according toan informed source. Bonforte andMarini were part ofinvestment firmCatapult Capital thatcompeted againstLu and Zage to buy Grindr before theyclinched anagreementto work together.
Atlanta Hawksco-owner MichaelGearon, anothermajor shareholder who was part of the consortium that acquired Grindr two years ago,will continue to be invested in the company, the source said. Grindr said in an
investor presentation on Mondaythat ithad11-million monthlyactiveusers andthatits revenue grew 30% last year. Thedeal valuesGrindr at27 timesits adjusted2021earnings beforeinterest, taxes,depreciation and amortisation(ebitda) of $77m. By comparison,shares of dating apppeers Matchand Bumbleare tradingat 22times and 25 timestheir 2021 ebitda, respectively, according to Refinitiv. /Reuters
