Economic Challenge

Indonesian real estate industry and climate change issue

2009-10-31T17:23:00.000-07:00

Climate change is upon us, and we all not only have to work to reduce the impacts, but also adapt to the changes.

The real estate (property) sector has increasingly been questioned about the ever-growing need of real estate developers for new sites, and why the real estate industry cannot be more adaptive and reduce the speed of conversion of agricultural or forested land to accommodate new residential developments - a major contributor to climate change.

Not easy questions. I have to admit that real estate developments contribute significantly to the change in land use and that this affects the climate change is also probably true, although the definite and measurable answer may not be easy to calculate because of a shortage of reliable data.

In the US, real estate constitutes around 38 percent of the national CO2 emissions total, followed by transportation with 34 percent.

Throughout my professional career, I have witnessed the speed of change of land use occurring in south Jakarta (Senayan, Kemang, Pasar Minggu and Cilandak), Bandung (Dago and Pasteur) and Bali (Kuta, Seminyak, Jimbaran, Canggu and Ubud), as well as in other areas across Indonesia.

Economic development has increased demand for housing, shopping facilities, workplaces and leisure facilities, and property in general. However, interestingly, compared to other mature real estate markets in the region (such as Singapore) and more advanced markets (such as the UK, Australia and the US), to meet growing demand in Indonesia developers generally look for new greenfield sites.

Seldom do developers undertake redevelopment, restoration or repositioning projects, which all have lower environmental impacts and generate less greenhouse gas emissions than constructing new buildings on vacant land.

We have seen how the commercial area of the Old Town in North Jakarta has lost occupancy because it lacks the capital and investment it needs to remain competitive - compared to the south, west and east, where more and more new real estate developments are occupying land much-needed to absorb water, clean the air and reduce CO2 emissions.

Part of this problem revolves around the fact that it is more difficult in Indonesia to acquire existing property (income producing), or consolidate areas of smaller, not-so-well-laid-out pockets of land into sizeable sites for larger planned developments.

In the case of property ownership in the Old Town area, for example, many sites are owned by families - with owners reluctant to part with them because of strong emotional attachments, but also there is a lack of incentives for them to carry out restoration or redevelopment necessary to attract new investors/buyers who could offer attractive prices for (and potentially make better use of) their properties.

Concerning changes in land use, this has largely been caused by a deficiency or lack of a clear and consistent master plan supported by transportation infrastructure, incentives, regulations and funding allocated to land consolidation.

Therefore, the speed of the change in land use - from agricultural to residential use - can be reduced by promoting the acquisition of existing buildings or derelict areas for redevelopment.

London and Sydney have done well in redeveloping their docklands areas, turning them into bustling commercial areas. Meanwhile, Singapore has been successful in the revitalization of Clark Quay, creating a "lifestyle" and fashionable destination.

With the continuing growth of Indonesia's population and the economy, and to be sensitive and adaptive to climate change, it is not realistic to confine new developments to consolidated sites or re-development projects.

As seen around the world, including in Indonesia, a trend has emerged to reduce the CO2 emissions, pushing property developers to be "green" - in this context loosely to describing the creation of sustainable or environmentally sensitive, economically feasible and healthy places to live and work.

This relates to developers' choices of location, setting, design, use of materials, utilities and services.

In the US, a non-profit organization called the US Green Building Council (USGBC) comprising real-estate-industry participants, has been applying the LEED (Leadership in Energy and Environmental Design) Green Building Rating System since 1993.

This is expected to provide its members a rating system to evaluate their environmental performance. In Indonesia, similar movements by the Green Building Council of Indonesia have initiated public discussion of such issues and ways to be more environmentally responsible.

In addition to incentives for redevelopment and consolidation of land in derelict areas, regulations to promote reduction of CO2 emissions - including stricter development parameters, environmentally sensitive building codes, and other standards - must be applied.

Protecting the environment will eventually contribute positively to real estate prices, and real estate developers and operators will be able to generate higher investment returns and reduce pay-back times, which will be enough for them to compensate the extra effort and costs involved to make them more environmentally sensitive.

The writer is the vice president of Jones Lang LaSalle Indonesia and can be reached at djodi.trisusanto@ap.jll.com

Newmont books higher gold, copper sales from Batu Hijau

2009-10-31T17:22:00.000-07:00

Despite a recent geotechnical failure in the Batu Hijau mine in West Nusa Tenggara, Newmont Corp has seen an increase from the mine of 106.02 percent and 71.11 percent in gold and copper sales respectively, during the first nine months of the year compared to a year earlier.

"Equity gold and copper sales *from the Batu Hijau mine* were slightly higher than expected due to higher grades *of the concentrate*," the US mining giant said in a press statement issued Friday.

Newmont said that its equity gold sales from the Batu Hijau mine in the first nine months of 2009 reached 171,000 ounces, up from 83,000 ounces sold in the same period last year.

The equity sales are the amount owned by Newmont in the joint operation.

The Batu Hijau mine, Indonesia's second largest copper mine, is operated by PT Newmont Nusa Tenggara (NNT), a local unit of Newmont. NNT is 45 percent owned by Newmont, 35 percent by Sumitomo Corp and 20 percent by PT Pukuafu Indah.

Consolidated gold sales during that period from the Batu Hijau mine were 381,000 ounces, up from 185,000 ounces in the same period last year.

The statement also reported that copper sales from the Batu Hijau mine, reached 154 million pounds, up from 90 million pounds in the same period last year. Consolidated copper sales reached 342 million pounds, up from 201 million pounds in the same period last year.

On Sept. 18, the Batu Hijau mine experienced a geotechnical failure in the west wall of the open-pit mine. Mining activities resumed on Oct. 10.

NNT spokesman Rubi W. Purnomo said on Oct. 14 that the production output would be corrected by between 1.5 and 2 percent per year in four to five years.

However, in the statement, Newmont said that it maintained its 2009 target for equity gold and copper sales from the mine.

"The impact on 2009 gold and copper production is expected to be minimal and the company continues to expect equity gold and copper sales from the mine of between 225,000 and 250,000 ounces and 210 and 230 million pounds, respectively," Newmont said.

Source From The Jakarta Post

Pertamina to up oil output in 2010

2009-10-31T17:21:00.000-07:00

Oil and gas producer PT Pertamina, the country's most profitable state company, is setting its sight on raising oil production by up to 8 percent next year to meet the ever-increasing demand.

President director Karen Agustiawan said Friday the company had so far this year managed to produce an average 181,000 barrels of oil per day (bpd), higher than the targeted average of 171,250 bpd, and expected the rising trend in production to continue in 2010.

"The company can increase oil production by 7 to 8 percent next year," she said on the sidelines of a gathering to promote the roles of state companies in the country.

"We will boost production at several exploration areas."

Among others, Karen went on, the company was putting a lot of hope in several of its operating blocks, including in Limau in South Sumatra and the Cepu block in Java.

"We will be trying to boost production in the Cepu block to 20,000 bpd per day," Karen said.

The Cepu block, which currently pumps out 6,000 bpd, is located on the border between Central Java and East Java.

The block was supposed to begin contributing the 20,000 bpd since December last year, but the plan has yet to bear fruit.

The block is said to hold proven reserves of 600 million barrels of oil and 1.7 trillion cubic feet of gas. Pertamina has a 45 percent participating interest in the block.

Pertamina relies heavily on its two upstream subsidiaries, Pertamina EP and Pertamina Hulu Energi, which manage and develop the company's oil and gas upstream portfolios through various partnership schemes.

Nearly 80 percent of Pertamina's total oil output comes from Pertamina EP. Of Pertamina's production target of 171,250 bpd this year, Pertamina EP is estimated to contribute 132,250 bpd and Pertamina Hulu 39,000 bpd.

In addition to efforts to boost production, Pertamina also plans to sell stakes in three subsidiaries, namely PT Pertamina Drilling Services, PT Pertagas and PT Pertahulu Energi, through separate initial public offering (IPOs).

Pertamina is easily the country's most profitable state company, contributing about half of the total dividend collected from all state companies annually.

For the 2008 fiscal year, Pertamina's dividend was set at Rp 13.59 trillion, up from Rp 11 trillion in 2007.

Pertamina booked a consolidated net profit of Rp 30.2 trillion in the 2008 fiscal year, up by 54.8 percent from Rp 19.51 trillion in 2007.

Due to lower oil prices and the fallout from the global economic crisis, Pertamina estimates this year's net profits will plunge to Rp 12 trillion. (naf)

Source From The Jakarta Post

Vice president close the National Summit 2009

2009-10-30T16:29:00.000-07:00

JAKARTA, KOMPAS.com - In a speech closing the National Summit 2009, Friday (30/10) evening, Vice President Boediono asserted within two days of effective consultation process and involves many groups and stakeholders have successfully done. That such a thought had never occurred and done. Such participation model according to a form and part of democracy.

Various inputs from all participants involved, according to Boediono will be immediately reported to President Susilo Bambang Yudhoyono, who then will be processed in a marathon and completed a government work program and 100 days the next five years.

"In the future work programs will be disseminated to the public so they can monitor. For is it lets us all participate and implement all programs that have been agreed with it, "said Boediono.

National Summit 2009 event is followed by all ministers, governors, regents, and the head of the region, and the legislature, the Chamber of Commerce and Industry, and representatives from universities, the number of participants on the second day to reach about 1,300 participants.

Rupiah sharply higher at Level Rp9.500

2009-10-30T16:13:00.000-07:00

JAKARTA - Rupiah at yesterday's trading had bounced well above the level of Rp9.600 per USD. The rupiah to trade Friday (30/10/2009) this weekend at the level close higher Rp9.578-Rp9.548 per USD or stronger than the previous trading Thursday on the level Rp9.631-Rp9.601 per USD.

Reportedly, Bank Indonesia (BI) intervened in the interbank market, but it can never be proved. However, the monetary authority said, the condition that Indonesia's economy seemed fairly solid trend will continue to support the strengthening of the rupiah against the U.S. dollar.

Valbury Securities quoted in foreign exchange markets, even the U.S. dollar over the euro after weak U.S. economic data to grow 3.5 percent in the third quarter-2009. These data precisely meredusir interest in American dollars as a safe currency, and encouraged investors to choose the currency with the yield higher.

As reported earlier, the U.S. economy grew for the first time in a year, exceeding analysts' expectations for consumer spending and new home Building experienced a rebound, indicating the end of the worst recession in 70 years.

U.S. Trade Ministry on Thursday, October 29, 2009 reported an initial estimate of Gross Domestic Product (GDP) for the third quarter, saying that the economy grew 3.5 percent (annual rate), the fastest growth since the third quarter of 2007, following a 0.7 contraction percent in the previous quarter (April-June).

U.S. economy sank into a recession since the end of 2007 and is the worst contraction since the Great Depression of 30's.

In a separate report from the Ministry of Labor show that jobless claims fell 1,000 to 530 thousand in the week ended October 23 from 531 thousand in the previous week. Analysts predict the jobless claims fell to 521 thousand. (RHS)

Source From okezone.com

2010, BCA Target Credit Increases 15%

2009-10-30T16:08:00.000-07:00

JAKARTA - PT Bank Central Asia Tbk (BBCA) credit target in 2010 rose 15 percent from the previous period. Optimism caused many businessmen will invest in line with improving economic conditions.

"We are targeting credit to rise 15 percent next year. The many businessmen predicted that reached maximum production in the next year. So they would need another loan," said President Director of BCA DE Setijoso at Hotel Grand Indonesia Kempinski, Jakarta, Friday (30 / 10/2009).

Until September 2009, BCA credit portfolio for Rp112, 7 billion, up 6.8 percent from the previous registration Rp105, 4 trillion. Composition of consumer credit grew 28.6 percent from Rp19, 8 trillion to Rp25, 4 trillion. Commercial and SME loans rose 7.4 percent from Rp39, 45 trillion to Rp42, 6 trillion. While corporate loans dropped 3.7 percent instead of the Rp46, Rp44 trillion to 1, 4 trillion.

"Credit corporation stopped because employers are still experiencing a global crisis due to the impact of the crisis and 2008. Even the impact is still felt until the third quarter of this year," added Deputy Director Jahja Setiaatmaja BCA.

But for this year, BCA will boost credit until the end of the year rose by 8-10 percent. Just BCA credit information until the end of 2008 for Rp112, 78 trillion.

Position ratio of non performing loans (NPLs) fell from 1.9 percent to 1.3 percent. While the provision of the NPL ratio of 296.5 percent in September 2009. CAR position of 16.3 percent, 3.4 percent ROA, and ROE of 31.8 percent. (Educate Purwanto / Newspapers SI / ade)

Analysis: Obama has mixed message on recovery

2009-10-30T16:01:00.000-07:00

Tugged in different political directions, the White House is seeking credit for good economic news and trying to escape blame for the bad stuff.

President Barack Obama greeted as "obviously welcome news" a government report showing the economy grew 3.5 percent from July through September after four quarters of declines. That's unofficial confirmation that the long, harsh recession has ended.

But he had to serve it up with a dose of political reality. Even though the downturn that began in December 2007 may be technically over, a high level of joblessness will persist for months, perhaps years, to come.

It is important for a president to voice optimism after good economic numbers. It can help restore consumer confidence - crucial for any recovery, since consumer spending makes up two-thirds of the overall economy.

Yet he could not be too upbeat, knowing that looming is another government report - one due next week - that could show unemployment topping 10 percent in October after reaching a 26-year high of 9.8 percent in September.

"We got a long way to go to fully restore our economy," Obama said.

The administration's own economists expect the unemployment rate to hover around 10 percent through most of next year, a midterm election year.

And even in good economic times, the president's party nearly always loses seats in Congress in midterms.

Jobs are sure to be a big issue in those contests.

"Presidents are like everybody else," said American University political scientist James Thurber. "They want to go to heaven without dying, they take credit for the good news and try to run away from the bad news and blame it on the previous administration."

"But we're getting so heavily into this administration that they can't do that anymore," Thurber said.

Obama can hardly be blamed for saying that "steps we've taken have made a difference" toward bringing about a fledgling recovery.

His administration's $787 billion stimulus spending package, including the Cash for Clunkers program and tax breaks for first-time homebuyers, clearly contributed.

Without the stimulus package, the nation's economic output as measured by the gross domestic product "would have risen little, if at all, this past quarter," said Christina Romer, chairwoman of the White House Council of Economic Advisers.

But also helping to dig the economy out was the stabilizing of banks and other financial institutions, a process that began under the Bush administration and the Federal Reserve, which kept interest rates low and pumped billions of dollars into the system.

High unemployment almost always persists after a recession. It is viewed as a lagging indicator since many employers will tend to give more work to current employees, including overtime, before hiring new workers in still-uncertain times.

The White House asserted Friday that more than 650,000 jobs have been "saved or created" under Obama's stimulus plan. However, since he took office in January, the economy has lost a net 3.4 million jobs. Since the recession began in December 2007, overall job losses have totaled 7.2 million.

Among the reasons the administration was muted in its response to the GDP figure of 3.5 percent growth: Such a level may not be sustainable.

That is because growth of GDP - the value of all goods and services produced within the country's borders - was elevated by the Cash for Clunkers program that lifted car sales and by the tax credit for first-time homebuyers that helped home-building. The clunker program has ended. The homebuyers credit expires at the end of the year. There are efforts in Congress to extend it, but the outcome is uncertain.

Also, while some companies ramped up operations in the third quarter to replace inventories they allowed to run down during the recession, that trend is expected to slacken in the coming quarters.

David Wyss, chief economist for Standard & Poor's in New York, sees about a one-in-five chance that the economy will slip back into a so-called double-dip recession. "But something has to happen to cause it," he said. "Left to its own, I think the economy is now in growth mode."

Japan central bank keeps interest rate unchanged

2009-10-30T05:58:00.001-07:00

Japan's central bank has kept its key interest rate unchanged at 0.1 percent. The decision by the Bank of Japan policy board was unanimous amid falling prices.

Citing stabilization of financial markets, board members chose to end some emergency credit measures implemented earlier this year.

The bank will end its program to buy corporate debt when it expires in December. It will continue accepting corporate debt as collateral until the end of 2010.

"Japan's financial environment, with some lingering severity, has been increasingly showing signs of improvement, particularly in the CP and corporate bond markets," the central bank said in a statement.

The central bank will release its semiannual economic outlook report later Friday.

Source From thejakartapost.com

Singapore 3Q unemployment rises to 3.4 percent

2009-10-30T05:55:00.000-07:00

Singapore's unemployment rate crept higher in the third quarter with a recession earlier this year triggering layoffs in the manufacturing sector.

The unemployment rate was a seasonally adjusted 3.4 percent in September, up from 3.3 percent in June, the Ministry of Manpower said in a statement Friday. The jobless rate was 1.9 percent in September 2008.

The jobless rate rose even as the economy added jobs overall, indicating new employment couldn't keep pace with the number of new job seekers entering the labor market.

The economy grew a net 15,400 jobs in the quarter, led by 13,400 in services and 8,100 in construction. The manufacturing sector, where employment largely tracks the strength of global demand for exports, lost 6,600 jobs. The economy had gained 55,700 jobs in the third quarter of 2008.

Gross domestic product expanded a seasonally adjusted annualized 15 percent in the July to September period, a second quarter of growth after a year of contractions. The government expects the economy to shrink up to 2.5 percent this year after growing 1.1 percent last year.

Source From The Jakarta Post

Mandiri posts 16.8% profit growth as loans rise

2009-10-30T05:51:00.000-07:00

Lending expansion helped Bank Mandiri, the nation's largest asset-based lender, achieve a 16.8 percent growth in net profits in the first nine months of the year from a year earlier despite a slower economic growth.

Net profits during the January-September period reached Rp 4.62 trillion (US$478 million) from Rp 3.95 trillion during the same period in 2008.

Mandiri president director Agus Martowardojo claimed Thursday the bank's profit growth was higher than the national figure, which was estimated to be around 11 percent.

The positive performance was in part due to strong lending expansion, particularly in the micro- and retail-credit portfolios.

"Our credit customers from small and medium enterprises *SMEs* grew by 59.36 percent from 272,879 to 434,872 as of September year-on-year. The fund that had been channeled to SMEs therefore, rose by 18.6 percent to Rp 25.51 trillion from Rp 21.51 million, during the same period," Agus said.

Mandiri's total lending for the January-September 2009 period hit Rp 188.3 trillion, 15.7 percent higher than last year's Rp 162.8 trillion. Agus said the bank aimed to reach a 16 percent lending growth by the end of this year.

By quarter, Mandiri posted a 26 percent increase in the third quarter from a quarter earlier as loan demand increased in Southeast Asia's largest economy.

Meanwhile, in addition to interest-based income, the bank's earnings from fee-based income also showed positive growth in the first nine months of the year, due to the boom of electronic transactions and mobile-phone banking.

From September 2009, fee-based income contributed Rp 4 trillion to the bank, 28 percent higher than last year's Rp 3.12 trillion.

"As much as 80 percent of transactions are now made electronically. Our active Internet-banking users now hit 1.2 million people while SMS-banking users reach 5.5 million people," Agus said.

Due to the positive business performance in credit, Agus said, the bank planned to cut the lending interest again by 0.5 percent, effective next month, enabling total rate cuts of 2.25 percent this year.

"We hope our lower-lending rates can be followed by other banks, which will boost growth in the real sector and provide more employment," Agus said.

The nonperforming loans (NPL) ratio also declined. As of September 2009, the bank's net-NPL ratio was 0.85 percent, higher than last year's 0.56 percent.

Bank Mandiri chief financial officer Pahala N. Mansury Pahala said the bank's current revenue market share hit 14 percent and was expected to reach 20 percent by the end of 2010. "We also aim to reach a national market share of 18 percent in savings," he added.

Meanwhile, the bank's total savings hit Rp 295.5 trillion, which is a 20.5 percent growth from last year. (bbs)

Source From The Jakarta Post

BI remains on guard for rupiah

2009-10-30T05:44:00.000-07:00

The central bank has intervened to prevent the rupiah from a sharp decline, confident the local currency will strengthen again against the US dollar.

"We see this will not continue. The dollar tends to weaken," Bank Indonesia (BI) acting governor Darmin Nasution said Friday.

He said investors sold stocks and BI certificates to buy the dollar as a safe haven because the US economy showed a lower-than-expected recovery.

"BI has done efforts to prevent the rupiah from falling too deep," he added.

Source From thejakartapost.com

Furniture exports expected to fall 40%

2009-10-30T05:41:00.000-07:00

Indonesia's furniture exports may plunge by about 40 percent by the end of 2009, the Indonesian Craft and Furniture Producers Association (Asmindo) said Friday.

Asmindo chairman Ambar Tjahyono said the global economic crisis had drastically reduced overseas demand for furniture from Indonesia.

"During the first half of this year, our exports dropped more than 50 percent. After July, foreign furniture demand increased slightly," Ambar told The Jakarta Post.

During 2008, furniture exports fetched US$2.65 billion while domestic sales brought in $700 million, Ambar said.

"Unlike the export market, our domestic sales are relatively stable and not heavily affected by the economic downturn," he said.

The Indonesian furniture industry is highly dependent on exports, Ambar said.

"The global crisis dealt a heavy blow to many furniture businesses and their workers," he said.

In 2008, Amindo represented more than 4,700 furniture companies, 2,000 of which were exporters, employing about 8 million workers, Ambar said.

Due to the drop in foreign demand, about 100 furniture companies in Jepara and Surakarta in Central Java were now suffering and faced closures, he said.

"We also estimate the number of workers employed in the furniture and craft industry will fall by about 1 million people," Ambar said. (bbs)

source from thejakartapost.com

Technology savvy Tifatul to expand information technology

2009-10-30T05:39:00.000-07:00

A technology savvy minister in the post of the information and communications minister seems to be what Indonesia needs. Tifatul Sembiring may be one.

After he was elected as the information and communications minister last week, the 48-year-old has moved fast to accelerate information and technology (IT) systems in the country.

He introduced a new slogan, "Smooth Communications, Accurate Information" to develop IT, which he said should be integrated with education programs to raise technological awareness.

He also said IT should be integrated with business, similar to programs in developed countries like the US, where young people have emerged as media tycoons after creating popular Internet giants such as Google, Facebook and Twitter.

Tifatul himself uses Twitter to receive input from the public. With the nickname @tifsembiring he has asked the public what IT development they want. He has received warm responses so far, with a growing number of followers on Twitter.

His tweets about his activities are responded to by fellow twitterers. One even reminded him to focus on working, not tweeting while working.

His activities at the National Summit held Thursday were also responded to on Twitter, with people saying they expected the summit would bring "good results" for Indonesia.

Tifatul also likes to tweet silly rhyming poems sometimes. "Tweets are short so I can still write them," answered Tifatul when asked whether he wrote the tweets himself.

Tifatul also attended the Blogger Party last week and confessed he was also a blogger.

A political figure from the Prosperous Justice Party (PKS), Tifatul studied at vocational school STM Pembangunan majoring in electronics. He then pursued study at Sekolah Tinggi Ilmu Manajemen Informatika and Komputer in Jakarta.

His professional work history includes managing a publishing company, Asaduddin Press, from 1989 to the present, and working as an engineer for the state company PT Perusahaan Listrik Negara from 1982 to 1989.

Tifatul began his political career in the late 1980s through activism in youth organizations with a strong Islamic influence. In 1990 he joined the Nurul Fikri Education Foundation before later becoming a member of the Indonesian Islamic Student Union (PII).

His activism and deep Islamic sentiments finally led him to join the PKS, where he later became the public relations head for the party from 1999 to 2000. His trails to power within the party include becoming party chairman for Sumatra (2000-2004), acting party president (2004-2005) and finally party president (2005-2009).

Tifatul was appointed as a lawmaker in the last general elections and later became chairman of House of Representatives Commission I overseeing defense, information and foreign affairs. Born in Bukittinggi, West Sumatra, on Sept. 1961, Tifatul is married to Siti Rahayu with nine children.

Sony Loss 289 Million U.S. Dollars

2009-10-30T05:08:00.000-07:00

TOKYO, KOMPAS.com - Sony Corp. Japan, Friday (30/10), announced a quarterly loss when worth 26.3 billion yen (289 million U.S. dollars), hit by weaker demand for televisions, cameras and other electronic goods, but he last update its business outlook this year.

Electronics giant recorded a net loss was smaller than the estimated worth of 26.3 billion yen for the fiscal second quarter to September, turned to the red position after the previous year reached 20.8 billion yen profit.

This absorbing operating loss of 32.6 billion yen, compared with a profit of 11.0 billion yen the same period in 2008. The company's revenue also fell 19.8 percent from year to year to 1.66 trillion yen.

Bravia television producers, PlayStation game console, and Cyber-shot camera to maintain predictions for the first time since the first annual loss since the company was listed on the stock market in 1958.

But narrowing estimates its loss for the year to 95 billion yen from the previous projection of 120 billion yen.

Chief executive of Sony, Howard Stringer, cut 16,000 jobs and stop about 10 percent of the factory's business groups in order to return a profit.

The Company has experienced difficulties for several years because of competition from rival products such as Apple's iPod and Nintendo Wii. In May, Sony announced an annual loss for the first time in 14 years.