After stunning growth streak, Amazon ambitions seem boundless

This file photo taken on December 28, 2016 shows the logo of US electronic commerce and cloud computing company Amazon in Vertou, France. (AFP)
Updated 18 February 2018
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After stunning growth streak, Amazon ambitions seem boundless

SAN FRANCISCO: Triumphant in online retail, cloud computing, organic groceries, and streaming television, Amazon founder and chief disruptor Jeff Bezos is turning his seemingly limitless ambition to health care.
Amazon, launched as an Internet bookseller nearly 24 years ago, has branched into offerings including voice-commanded speakers infused with Alexa artificial intelligence and original TV shows streamed online at its Prime subscription service.
Health care now appears ripe for Bezos, who has earned a reputation for attacking high costs and inefficiencies.
A possible step in that direction was taken last month, with Amazon announcing an alliance with billionaire Warren Buffett and JPMorgan Chase chief executive Jamie Dimon to provide a health care system for employees of the three companies.
According to the Wall Street Journal, Amazon would also like to become a supplier of medical equipment for hospitals.
“I think Bezos is methodical and thoughtful,” eMarketer senior analyst Patricia Orsini told AFP.
“He has identified a market that is ready for disruption. The health care system in the US is ripe for reform.”
Bezos faces the challenge of taming skyrocketing costs throughout US health care from insurance and medicine to supplies and therapy.
“Just as with every other industry Amazon has entered, Bezos is envisioning lower-priced alternatives with frictionless services that could, over time, make a lot of money for Amazon,” Orsini said.
Barclays analysts said in a recent research note on Amazon’s potential in health care, “We are never dismissive of anything disruptive that Amazon is involved in. Amazon arguable has the best technical abilities of any company we cover.”
Amazon has been on a stunning growth streak of late, expanding its international retail operations as far as India and Australia, while devouring the US organic supermarket Whole Foods group.
With increased scale, it has been ramping up profits in recent quarters, helping Amazon leapfrog in market value to one of the top companies in the world and making Bezos the world’s richest individual with a net worth well over $100 billion.
Amazon has repeatedly shaken up sectors with technology and efficiency.
With success has come leverage to pressure suppliers and manufacturers for better deals it can use to be the preferred venue for online shopping.
Standard & Poor’s retail analyst Robert Shulz noted that Amazon has succeeded with a patient strategy of investing for the long term.
“Their approach is growing the business,” Shulz said, even if some of the efforts don’t yield a quick profit.
For years, Amazon invested heavily in distribution networks so it could get goods to buyers fast while controlling delivery costs.
A report surfaced this month that Amazon is preparing to test a delivery service that would compete directly with services like Fedex and UPS.
Amazon did not directly comment on the report but said, “We’re always innovating and experimenting on behalf of customers and the businesses that sell and grow on Amazon to create faster lower-cost delivery choices.”
Separately, Amazon this month unveiled plans to deliver groceries in a number of US cities for Prime subscribers using its recently acquired Whole Foods supermarket chain.
It is the first major effort to integrate Whole Foods — a chain of 460 stores — into Amazon’s e-commerce effort.
Bezos, whose personal investments have included buying the Washington Post, has been referred to as the “ultimate disruptor” with a long-term view that only recently has begun to yield hefty profits.
Amazon recently reported its profits had more than doubled in the past quarter to $1.9 billion as revenue grew 38 percent to $60.5 billion.
But Amazon has been vilified for trampling on traditional practices at home and abroad. It also earned a reputation for high-pressure work conditions to minimize costs in warehouses, and a sometimes difficult corporate culture for executives.
Its search for a new “HQ2” or second headquarters meanwhile has set off an intense competition among cities desperate for the estimated $5 billion investment, drawing comparisons to the dystopian “Hunger Games” story.
Amazon’s pattern of success has caused fear to ripple through sectors it eyes.
When Amazon last year made the surprise buy of Whole Foods, shares sank of major retail chains Wal-Mart and Target.
S&P Global Ratings said in a research note that Amazon “has brought price transparency and convenience to many retail segments,” while shifting consumer expectations, thus creating problems for rivals.
“Legacy retailers are in various stages of adapting to the new landscape and not all have been successful,” the analysts said.


Libya’s National Oil against paying ‘ransom’ to reopen El Sharara field

Updated 14 December 2018
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Libya’s National Oil against paying ‘ransom’ to reopen El Sharara field

  • Ransom payment would set dangerous precedent
  • NOC declared force majeure on exports on Monday

BENGHAZI: Libya’s state-owned National Oil Corp. (NOC) said it was against paying a ransom to an armed group that has halted crude production at the country’s largest oilfield.
“Any attempt to pay a ransom to the armed militia which shut down El Sharara (oilfield) would set a dangerous precedent that would threaten the recovery of the Libyan economy,” NOC Chairman Mustafa Sanalla said in a statement on the company’s website.
NOC on Monday declared force majeure on exports from the 315,000-barrels-per-day oilfield after it was seized at the weekend by a local militia group.
The nearby El-Feel oilfield, which uses the same power supply as El Sharara, was still producing normally, a spokesman for NOC said, without giving an output figure. The field usually pumps around 70,000 bpd.
Since 2013 Libya has faced a wave of blockages of oilfields and export terminals by armed groups and civilians trying to press the country’s weak state into concessions.
Officials have tended to end such action by paying off protesters who demand to be added to the public payroll.
At El Sharara, in southern Libya, a mix of state-paid guards, civilians and tribesmen have occupied the field, camping there since Saturday, protesters and oil workers said. The protesters work in shifts, with some going home at night.
NOC has evacuated some staff by plane, engineers at the oilfield said. A number of sub-stations away from the main field have been vacated and equipment removed.
The occupiers are divided, with members of the Petroleum Facilities Guard (PFG) indicating they would end the blockade in return for a quick cash payment, oil workers say. The PFG has demanded more men be added to the public payroll.
The tribesmen have asked for long-term development funds, which might take time.
Libya is run by two competing, weak governments. Armed groups, tribesmen and normal Libyans tend to vent their anger about high inflation and a lack of infrastructure on the NOC, which they see as a cash cow booking billions of dollars in oil and gas revenues annually.