Summit Notebook

Exclusive outtakes from industry leaders

Economic security or environmental destruction?

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OBAMA-CANADA/
The Oil Sands, the world’s second-largest proven reserves after Saudi Arabia, hold out the promise of energy security for the United States and economic security for Canada. But environmentalists fear the destructive, energy intensive process of extracting the oil will carry direct consequences for the planet. Despite the doubts, new oil sands projects are again springing up after the financial crisis halted development. How will oil companies balance the quest for more oil with environmental concerns? Mar. 22-23 we’ll put those questions to the oil companies, environmental groups and government officals at the first Reuters Canadian Oil Sands Summit in Calgary.

Will growth in the food industry spur inflation?

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Food and agriculture companies, having weathered the global economic meltdown, are now facing the prospects that renewed growth will spur renewed inflation.
With costs poised to rise for commodities like wheat and already high for items like sugar and cocoa, packaged foods makers face the task of trying to preserve profits at a time while retailers and consumers are balking at price increases.
Trade battles over U.S. meat and regulatory issues like a tax on soft drinks and push for more accurate disclosure of calories and fat on restaurant boards and food package are also concerns for the industry.

Would the last person to leave the smelter please turn out the lights?

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For UC RUSAL, one simple act is crucial to reducing costs.
Bonuses for managers at the world’s largest aluminium company
depend on the company’s 75,000 workers heeding the message.
“We have to introduce a new culture: if you leave the
office, turn off the lights,” Artyom Volynets, UC RUSAL’s deputy
chief executive for strategy, said at Reuters Global Mining and
Steel Summit on Monday.
“We have 16 smelters, each with their own headquarters and
offices. We employ 75,000 people. If each one of them is
switching off the lights at the end of their shift, that would
help tremendously.”
UC RUSAL embarked on a major drive to slash production costs
last year as part of an ultimately successful attempt to secure
Russia’s largest ever private sector debt restructuring.
Easy access to Siberian hydroelectric power, compared with
relatively high-cost coal used to power smelters in other parts
of the world, affords UC RUSAL a distinct cost advantage when
making aluminium used in transport, construction and packaging.
In the first half of 2009, it cost UC RUSAL an average
$1,400 to produce a tonne of aluminium. The metal is now selling
at above $2,200 a tonne.
UC RUSAL has cut costs by sourcing cheaper raw materials of
better quality and improving throughput rates at its smelters in
Siberia, which account for about 80 percent of its total output.
But cheap power in Siberia had also led to complacency.
“Our smelters are located in probably the only remaining
major energy-long region in the world. Therefore, if you buy
power at 2 cents per kilowatt, you don’t really care how much
you spend,” Volynets said.
“For my colleagues on the operational side of the business,
their key performance indicators are 100 percent tied to cost
improvements,” he said. “They will not be compensated if these
improvements are not implemented.”
(Writing by Robin Paxton in Moscow)

2010 Global Mining and Steel Outlook

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This time last year, steel mills and base metal miners were in an unprecedented slump, with metal prices bouncing off multi-year lows amid steep economic downturn. Since then, the world economy has turned upwards and demand for metal is resurging. While many analysts have cited economic recovery for the price gains, they add that demand signals show only slow, choppy growth. Whether metal prices have gained as investors search for a place to put excess liquidity or are based in solid supply/demand fundamentals remains a question. Get exclusive insight into the sector from the Reuters Global Mining and Steel Summit taking place in New York, London and Sydney on Mar 8-11.

from Funds Hub:

Hedge funds: Greece is the word

This week's Reuters Hedge Fund and Private Equity Summit gave us some new insights into how hedge funds are betting on Greece's debt crisis and their attitude to talk that politicians and regulators may clamp down on their activities.

According to Cheyne Capital, for instance, buying Greek CDS is an "old trade" that many hedge funds have moved out of. Many have instead moved to short bets on the euro, as the single currency comes under pressure from the debt of some southern European countries.

2010 Reuters Hedge Funds and Private Equity kicks off

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Some of the world’s leading names in the hedge funds and private equity industries are visiting the Reuters bureaus in New York, London and Hong Kong this week to discuss the outlook for the sector in a series of exclusives interviews as part of the 2010 Reuters Hedge Funds and Private Equity Summit.

Private equity is still struggling with the triple problem of raising funds, exiting investments and striking deals — although the last has become a little easier of late. M&A has picked up and there have been a few single-digit billion LBO deals struck in recent months. Still, volatile markets have been making for an uphill struggle to exit investments, and raising money for new funds is uphill. On top of that, executives are facing the possibility of higher tax and tougher scrutiny on their firms.

Reuters Travel and Leisure Summit Live Blog

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Live coverage of the Reuters Travel and Leisure Summit.

Are the days of flying business and 4-star hotels over for biz travelers?

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Are flying coach and staying at budget hotels the “new normal” for businesspeople who travel for work? If so, what does it mean for airlines, hotels and casinos still trying to recover from the economic downturn? Chris Woronka, Senior Gaming, Lodging and Leisure Analyst at Deutsche Bank Securities shares his thoughts with us on what’s in store for the Travel and Leisure Industry in 2010. Will the industry once again be flying high? Or, will the prospects for a better year ahead get grounded?

2010 Travel and Leisure Industry Outlook

Will the travel & leisure industry bounce back in 2010?

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- Be it through optional newspaper delivery, a fee for blankets, or shuttered restaurants, travel and leisure companies have had to trim costs creatively as the recession hurt revenues and profits.  The sector has recently been buoyed by expectations of recovery amid signs that business travel demand is starting to rebound.  But discounted airfares and hotel rates and volatile fuel prices pose challenges to profitability. Room rates at hotels remain under pressure, while casino operators are looking to Asia to spur growth as prime U.S. destinations such as Las Vegas struggle to rebound.  And airlines, which have cut jobs and reduced capacity in the past two years as the economic downturn battered demand, face new security concerns that also could slow recovery.  Executives of some of the world’s biggest and best-known airlines, hotel and casino companies will address these and other issues at the Reuters Travel and Leisure Summit, to be held in New York from Feb. 22-24.

Awaiting the alternative energy sukuk: Innovation vs conservatism

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MANAMA, Feb 18 (Reuters) – Dubai’s debt fiasco and real estate bubble bust pushes investors to look out for alternative assets underlying Islamic finance products – could renewable energy provide a way-out?

Predominantly, Islamic finance and investment products have been backed by infrastructure or commodities assets. But executives at the 2010 Reuters Islamic Banking and Finance Summit said product diversification was needed to cut the over-reliance on real estate in the Gulf.

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