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First Move with Julia Chatterley

A Lull in Protests after Knesset Passes Controversial Law; Doctors go on Strike over Judicial Overhaul; Knesset Passes First Bill in Judicial Overhaul Package; Geopolitics, Climate Drive up Food Prices; JSR Boss: Our Customers have Consolidated; U.S. Investors Await Fed Interest Rate Decision. Aired 9-10a ET

Aired July 25, 2023 - 09:00   ET




JULIA CHATTERLEY, CNN HOST, FIRST MOVE: A warm welcome to "First Move". This Tuesday great to be back with you as Wall Street bulls enjoy a strong

summer rally investors hoping for signs of a Fed rate hike finale.

Big tech earnings on tap and the AI gossip coming from Silicon Valley, and the IMF just out with an important global economic tally. In fact, the

IMF's updated World Economic Outlook predicts growth of 3 percent this year. That's an upgrade, thanks in part to greater than expected resilience

to challenges like inflation and the ensuing rate hikes though of course, downside risks remain.

The end of the Black Sea Grain Deal and the climate crisis having the potential to reignite inflation and the IMF warning of fresh weakness in

China's economy too. We've got all the details. But for now China's official so far failing to reignite growth via stimulus. But the message

from the Politburo this week is get ready investors as you can see more than ready.

The HANG SENG popping 4 percent during Tuesday's session, the Shanghai Composite also high up by more than 2 percent. We've also got word of a

major leadership shake up too that will certainly influence economic policy as well as foreign. Beijing replacing its Central Bank Governor as expected

but also Foreign Minister Qin Gang, who had been previously MIA for over a month more on all of this in just a moment.

But for now more from stimulus anticipation to Blue Chip elation a mixed open expected on Wall Street with the DOW coming off its 11th straight

winning session. We're actually around 5 percent, just 5 percent, I should say away from record highs now for the DOW.

And you can see some green in Europe too, though mixed where the stocks have fed that elite July juice has a lot to do with the Powell prognosis

and of course, the Lagarde long view. Both the Federal Reserve and the European Central Bank will likely raise rates this week.

The question of course, is what next? Inflation has of course come down sharply this year. But it remains far higher than Central Bank's target

rates not just in those nations, of course or regions but around the world too much to discuss, as always.

But we do begin in Israel where massive protests erupted after lawmakers approved the first of the government's controversial proposals designed to

weaken the power of the Supreme Court. This drone footage shows protesters blocking a major highway in Tel Aviv Monday night, while police use water

cannons to disperse the crowd.

And today doctors and medical workers went on strike in protest too. Hadas Gold joins us on this, Hadas you can tell us more about that protest

movement but what about the doctors and the medical workers? Is this a one day strike alone? Or could they continue too?

HADAS GOLD, CNN JERUSALEM CORRESPONDENT: As far as we understand it is a one day strike. And I should note that emergency services are still

functioning and cancer patients can still get their treatments. But otherwise they are on strike in protest of this bill that passed yesterday.

This bill taking away the Supreme Court's ability to stop government actions that they deem on reasonable now already there have been legal

challenges to this. But I can tell you that the mood in Israel this morning is for many of these protesters especially is rather bleak.

I want to show you the front pages of some of these major Israeli newspapers all of them have this same blackout. Now this is an

advertisement that was taken out by a group of protest organization that is representing high tech CEOs. And there's a message on here that says this

is a black day for Israeli democracy.

And I think it's notable that all of these newspapers now this is in an editorial decision, but that all of the newspapers accepted the

advertisement to take over their front page. I think that sends a pretty stark message but as you noted, major protests erupting.

It was -- protests were going on all day yesterday because people knew the vote was going to be happening on the parliament. But then of course, once

this law passed, we saw even more protests erupting in clashes with police.

Dozens of people were injured, including at least a dozen police officers. We know that at least 19 people were arrested. We saw you know police using

water cannons using what's called skunk spray. This is very foul smelling water that they spray on the protesters.

I can tell you that it was wafting all throughout the area of the protests here in Jerusalem. There's been a lull of the protests this morning, I

think as people are taking stock. Already, we've seen those legal challenges being filed in the Supreme Court.

No word yet on an injunction from the Supreme Court. We heard from the Israeli Prime Minister Benjamin Netanyahu last night in a televised address

to the country saying that this legislation was what he called a necessary democratic step. He said it will strengthen democracy.

He also blamed the opposition for not compromising in previous months if they had tried to come to compromise me go applications but those had

failed but he still said he's open to negotiations on the next steps that they plan to take.


Because keep in mind this legislation that passed yesterday, it's just one aspect of this massive judicial overhaul this government is planning to

push forward that will completely reshape the Israeli judiciary. There are bills in the pipeline for things on like how Supreme Court justices are


And so what Benjamin Netanyahu is saying? He's saying we're pushing ahead with this. And so I'm opening the door for further negotiations not clear

yet whether the opposition will sit down with them, but the protesters say they will continue to protest out in the streets. They're planning further

days of protests.

But in addition to the fallout from the protesters from the medical community, we still have those thousands of Israeli military reservists who

have said that they will not serve this legislate now that this legislation has passed. We're hearing from the British Foreign Office on an issue in

the statement, urging consensus.

And Julia just in the last few minutes, we're seeing reports in the Israeli media that Moody's is tonight expected to release a report on the Israeli

economy. Yesterday we did see the stocks fall just a bit when this legislation passed it will be interested to see what Moody's says will

happen to the Israeli economy as a result of this legislation, Julia.

CHATTERLEY: Yes, inward investment concerns the weakness of the currency, all sorts of the implications, economic implications. Hadas Gold great to

have you with us thank you for that report there!

Now to China where the nation's missing Foreign Minister has now been officially removed. Qin Gang is China's shortest ever serving Foreign

Minister and has been replaced by his predecessor, Wang Yi.

Marc Stewart joins us now. Extraordinary happenings, I think the lack of information perhaps on the now Former Foreign Minister and where he is, but

the replacement with his predecessor going to have implications for foreign policy beyond this moment too clearly?

MARC STEWART, CNN CORRESPONDENT: Well, Wang Yi is certainly well known by Xi Jinping having served under him before so maybe it's a true and tried

replacement. But let's talk about what has happened over the last month because this is being described as a surprise shake up.

The last time we saw Qin Gang was on June 25th, one month ago when he was with the leaders of Sri Lanka, with Vietnam and with Russia in Beijing, and

then suddenly out of the public view. In fact, earlier today here in Asia, at a Foreign Ministers briefing, a reporter asked about his prolonged

absence and the line that was given.

No information to provide adding that diplomatic activities are being carried out as usual. Well, several hours after that we were sitting at our

desks and we saw the news that he had been replaced. This is a man who has been one of Xi Jinping's most trusted advisors he has served as the

Ambassador to the United States.

He is the one who made some bold statements most rebuke after that spy balloon shoots down. And also was very involved with Antony Blinken's visit

to Beijing yet in recent weeks out of the public view, in fact, missing visits by key U.S. officials such as Janet Yellen and most recently, John


But Julia, the point to be made right now is that the back-story, the narrative, the lines in between, it is still not clear, but what is clear.

This is clearly a bold change in China's foreign policy roster.

CHATTERLEY: Certainly is Marc Stewart thank you. Now explosive minds have been discovered on the sight of Europe's largest nuclear power plant in

Zaporizhzhia, Ukraine. That's according to the International Atomic Energy Agency. Officials in Kyiv had already warned that mines had been deployed

around the power plant, which remains under Russian occupation.

Alex Marquardt joins us now from Odessa, Ukraine. Alex, what more can you tells us? And do we have any sense of precisely where those mines are

located in the vicinity of the power plant itself?

ALEX MARQUARDT, CNN SENIOR NATIONAL SECURITY CORRESPONDENT: They are around the outside the periphery in a buffer zone we're told Julia. This

information coming from the IAEA, the International Atomic Energy Agency and its Chief, Rafael Grossi who put out a statement saying that some

experts from the IAEA had visited over the weekend they spotted these directional anti -personnel mines in that buffer zone on the periphery.

That directional point is rather important. They were pointing outwards away from the plant, we're told anti-personnel means that they're

relatively small, the explosive there obviously designed to hurt or kill people. They don't appear to be a threat to the plant itself. These were

put there we are told by the Russian military who have occupied the plant for quite some time now.

And this comes on top of the -- what was previously known about mines both inside and outside. President Zelenskyy and other Ukrainian officials have

accused Russia of mining the roof that is not something that has been confirmed by the IAEA.

Because now Ukraine believes that eventually at some point Russia could carry out what they believe what they call a terrorist attack and perhaps

blame it on Ukraine.


Russia has dismissed that saying that is simply untrue to you, Julia.

CHATTERLEY: Alex, good to have you. Thank you. Alex Marquardt there, joining us from Odessa, Ukraine. Now, some good news from the IMF raising

growth forecast global growth forecast for this year, thanks to some degree of resilience in the global economy.

But it also warns that choppy waters could still be ahead. The agency says growth remains weak by historical standards. And advanced economies

continue to be the biggest drag. Christine Romans joins us now.

The biggest economy is maybe the biggest drag or the advanced economies. But it's a recession that we've continued to talk about for more than a

year and it never arrived for economies like the United States. This is welcome news.

CHRISTINE ROMANS, CHH CHIEF BUSINESS CORRESPONDENT: Yes, it really is. And the R word recession, I think replaced by another R word resilient Julia

because that's the word that the IMF used here, looking at global growth of 3 percent for this year, and next.

And considering all of the headwinds that we just had a banking, you know, snafu in the United States, and also in Europe, you know, not very long

ago, you'd have all these Fed rate hikes and, and tightening policy around the globe. And still you have global economies that are moving forward


But muddling through for some of those advanced economies you're right, because you look at those forecasts, the U.S. economy forecast to grow by

about 1.8 percent this year, according to the IMF, UK, almost nothing really 0.4 percent and the German economy to actually contract by 0.3


Also noting some risks to China and the Chinese outlook, it's got a debt laden, real estate market property market watching that space as well to

see just how well China can continue to recover this year. But again, the R word recession, I think replaced by another R word resilient here.

CHATTERLEY: Yes, an elegant way to put it and the top priority remains conquering inflation. The battle is not done yet. The question, of course,

for the Federal Reserve is, are they done after this week?

ROMANS: And I wonder what Fed Chief Jay Powell will say about that? I mean, I can't remember Taiwan -- his words always matter a lot and parsing his

words, and reading the tea leaves is always you know, a lot of fun for people like you and me and actually make means money for the people who are

investing in these markets.

But it'll be very curious to see whether he says that they are going to continue to gun toward the 2 percent inflation target or whether there's

some sort of indication that maybe they're comfortable with something a little bit higher than that in the near term if they think there is

progress being made.

So after the pause of the last meeting, I think 25 basis points are what the market is expecting. And you're absolutely right. What Jay Powell

signals after that will be really critical, especially for markets that are sitting here?

Just what one or 2 percent away from record highs for the DOW and the S&P just a few percentage points away. That's really remarkable the progress

that the stock market has made this year with all -- with all of these headwinds.

CHATTERLEY: It really is and don't let perfection get in the way of progress, I think and push too hard on the rate hikes and took the economy

into the recession that never came. And it's been very resilient. But the risk remains. There's another R, Christine.

ROMANS: Oh, there you go. You're so good with alliteration.

CHATTERLEY: Thank you. OK, coming up here on "First Move", protests and power plays how Israel's vibrant tech community is fighting judicial

reforms. Plus the Japanese materials giant JSR going private in a government backed deal. We'll get the inside track on Japan's chip supply

and technology ambitions next.



CHATTERLEY: Welcome back to "First Move". And returning once again to one of our top stories today, protesters in Israel taking stock after the

government's controversial judicial overhaul move forward on Monday doctors have begun a 24 hour strike and thousands of military reservists are saying

they will refuse to volunteer for duty also joining the fight.

A host of Israeli tech firms taking out these all black front page ads in major newspapers as Hadas was showing us. One of them is FinTech Unicorn

Papaya Global, which Time Magazine recently included in its list of 100 most influential companies, its human resources and payroll platform is

used all over the world.

Papaya CEO and Co-Founder Eynat Guez wrote an open letter to investors in tech Israeli tech saying we never imagined investing time, effort and

energy fighting for democracy in 2023. But that's our reality; we will continue to champion democracy. We are tenacious. We are vigilant, and we

are fighters.

And Eynat joins us now. Great to have you back on the show. I vividly remember our conversation from last time. This was clearly not how you

hoped, progress on this form to play out.

EYNAT GUEZ, PAPAYA CEO AND CO-FOUNDER: Yes, hi. Good morning. No, definitely I think that we spoke few months ago, we thought that

eventually, you know, we're going to hear -- we're going to say loud and clear the threats and the dangers to the Israeli economy.

And we actually going to be heard, unfortunately, we saw yesterday and yes, as you mentioned, we decided to actually kind of to publish and to make our

feeling quite publicly, because this is a black day to the Israel democracy.

CHATTERLEY: And that's the message the black front pages of the major newspapers are basically saying it's a dark day for Israel.

GUEZ: That's a dark day for Israel democracy. This is not a dark day to Israel, because I think that the one thing that we saw during the last few

days is the Israeli people at their best. People are marching from Tel Aviv to Jerusalem, people are protesting on the streets. People are saying loud

and clear this is our country. And we are not going to let any government to change it for the benefit.

CHATTERLEY: It's such an important distinction. Do you expect people to continue to protest? Will you in the tech community continue to protest?

And how much faith do you put in an alternative perhaps in the Supreme Court weighing in here too?

GUEZ: So I think looking you know, I mean, we have two different fields that they think that are very major important to Israel or maybe three. One

of them is everything that happens in the Supreme Court. Second is everything that happens in the global economy field.

We are all expecting to the unusual report that Moody's are going to report tonight in Israel Time so in few hours. And I think that eventually the

field and obviously the internal affairs of Israel, and I think everything around this country currently is not quiet is quite a mess.

And yes, we are going to continue to protest. We are going to invest our time. By the way, the second page of the newspaper said exactly this. It

said it's a dark day. But we are here to fight our country and we are here to fight the tech in this country. And we are not here to just let it go

and surrender.

CHATTERLEY: Do you trust Prime Minister Netanyahu and the government to abide by the Supreme Court's ruling decision on this?


GUEZ: The short answer is no, we don't trust the government that eventually currently operating only for its own good with zero implementation, with

zero attendance to their citizens and to the State of Israel. So unfortunately, I think Benjamin Netanyahu used to be a great Prime Minister

to Israel for many, many years. But this is not the current state.

CHATTERLEY: And this is what you put in your op-ed, you said that you believe the Prime Minister's putting his own survival above the interests

of the nation and the nation's democracy at this moment. I remember one of the things that you talked about, and it goes to your point about a

potential analysis on the economic impact and the investment impact on Israel of some of these decisions and reforms.

You were talking about pulling the company's money out. You're incredibly successful you have clients all over the world. Did you pull your money

out? Are you operating financially from elsewhere? Are you still there, because there was still some hope, at least when we last spoke and still

is, I think, talking to you?

GUEZ: So, again, I think that we need to differentiate between two things, we still hire people in Israel, we are very big believers in the talent of

Israel, we are living in Israel, and we operate from Israel, we are not managing our investment funds from Israel. Unfortunately, this was the

reality since this project started.

And this will remain the reality if you're looking on the shekel in dollar volatility. Just from this morning, after the judicial reform or the

yesterday kind of judicial reform, my first step has been announced, you see the huge volatility. If you're looking on companies that incorporated

that are related to tech investments in the tech sector, from the beginning of the year, the number is close to zero.

Companies are not incorporating in Israel any longer. So we will remain as I said, tech industry in Israel is not going anywhere. The only question is

if tech industry will be operating from Israel, and if Israel will benefit from the tech industry.

CHATTERLEY: It's a vital point to make it's known as the startup nation is you said brilliant minds, innovation, great workers, people like to form

businesses there. Do you think the risk is if this carries on that actually far from not seeing any startups incorporated in Israel, actually, you see

a brain drain? Perhaps people will realize better off, elsewhere?

GUEZ: -- you know this is already a reality. This is the reality in the last six months. And I think that the damages that are already on ground

will be taking years to recover currently, and bringing the trust of investors to invest in Israeli incorporated companies is currently below


And unfortunately, if we are not going to eventually get back to our senses, which unfortunately, this is not seems to be the case currently

with this government. This will have long term impact on Israel. I'm very, very much concerned currently for the next two to three years on that are

related to Israel economy, and eventually the impacts and the damages that we're currently creating to it.

CHATTERLEY: Yes, I mean, I have not checked the facts on the incorporation of businesses nor inward investment, the government's very welcome to come

on and talk about that in response, but I can see question marks over and we're already hearing it from the international community amid concerns

about this, particularly when you see scenes like this.

And of course, this was not the only country that's had protests in recent weeks. Do you think Prime Minister Benjamin Netanyahu cares about the

risks, the economic risks that are appearing and will continue to likely appear as a result of this to your point about putting, his own interests

ahead of the nation because there will be consequences for ordinary people? Do you think he cares?

GUEZ: Unfortunately, I don't know. You know, I had a big faith in a Benjamin Netanyahu had a big fate with people that are surrounding him,

people that have proven themselves to care about Israel in the last few years in the last decades. And unfortunately, it seems that they're all

currently going into a route that they don't care about anyone else, aside from the survival of this government.

And this is the sad reality this is what they're doing. So I hope that this is a temporary mindset. But currently, I'm very sad to say that I don't

think that they care about any of us.

CHATTERLEY: Where do you think this ends up? If you, as you keep saying to me, there are two things here, there's your heart, and there's your head?

Where do you see this all headed?

GUEZ: You know, I'm an entrepreneur, so I need to be, you know, constantly optimistic. And I see the people of Israel marching on the streets. I see

the power of the people. And I think that eventually, you know, people are always stronger than governments. And this is not what the people of Israel



I think that older people, some people are trying to say it out loud. This is not what people chose. People chose to live in a country that is Jewish

and democratic. And we are not going to end. And honestly, if you'd asked me in our previous interview, if we would be still marching on the streets,

and having this conversation a few months ago.

I would say, no, but here we are, and we might meet again in few months. And you know we will still be fighting until we will bring Israel back to

track, because honestly, this is our country. We care a lot about it. We all serve the army, we all have choices. I think I've mentioned it also in

the last interview.

We can operate from anywhere around the world, we choose to be in Israel, we choose to live in Israel. And there is a reason for that. And you know,

we are currently honestly, just operating with our heart in order to change this reality.

CHATTERLEY: You're a great advocate, I think for the tech sector and forum what the people want, as you point out in Israel versus the -- and

politicians, great to have you on and definitely come back and talk to us soon please. Eynat Guez there the CEO and Co-Founder of Papaya Global,

thank you.

GUEZ: Thank you, Julia.

CHATTERLEY: All right. Thank you. Stay with CNN, coming up extreme heat continuing to see our planet a new report shows the devastating impact of

climate change. We've got the details on that, next.



CHATTERLEY: Wildfires continue to rage across Greece as intense heat plagues Europe and beyond making conditions unbearable in many parts of the

world. Now new analysis says this heat wave would have been virtually impossible without manmade climate change.

Jim Bittermann joins us now and has the details. You can talk us through the report, Jim. But what stood out to me is that they were scientists were

saying that climate change is not only drastically increased their frequency or likelihood that we get these heat waves. But it's also raising

the temperature of them too.

JIM BITTERMANN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Exactly, the severity of these kinds of heat events that we've seen, and weather related

events that we have seen over the last few weeks. This report by the scientists is a group of international scientists, who basically are

looking at the causes of the kind of defeat or incidents that we've seen over the last few weeks.

And they wanted to get something down on paper right away. So they've made a comparison to the kinds of things we've been seeing this year, and the

kinds of things that have happened in previous years. And as a consequence, they say that there's no question that humankind is definitely responsible.

The carbonization of the atmosphere is definitely responsible for a great deal of the kind of extreme weather that we've been seeing. And they

predicted some rather dire things, if the things if everything stays as it are that global temperatures remain 1.2 degrees Celsius over what they were

in the pre-industrial age.

If that stays the same, you could expect these kinds of periods of extreme weather in North America once every 15 years, in Europe once every 10 years

and in China once every five years. However, the thing is, they are not staying the same, and the temperatures are continuing to rise.

And if they should get as a scientist predicted May, two degrees Celsius above the pre-industrial levels, then you could kind of predict that we're

going to be seeing these kinds of things every two to five years around the world, Julia.

CHATTERLEY: Yes, I mean, some of the stats in this quite fascinating climate change me China's heat wave at least 50 times more likely,

according to this report. You know, what I also liked about some of the responses that people were providing was also some optimism in this.

That this is not a sign of climate collapse was one of the phrases, it's just recognition of the damage that we're doing and the need to take action

and to take action more quickly.

BITTERMANN: Exactly, I mean, part of it is they say you can adapt to some of this, I mean, you're going to do urban planning and have cooling zones.

And you can develop a better coordination between the weather forecasters and the social and emergency services so that people aren't affected so


But really, the heart of it is what they're calling de-carbonization, that is to say, use less carbon fuels. And very quickly, they say it's an urgent

need to restrict the amount of hydrocarbons that are pumped into the atmosphere, Julia.

CHATTERLEY: Yes, that's the bottom line, Jim, thank you. And this is also a contributor to my next story, global inflation may be coming down, but

geopolitical tensions could mean that food is about to get a lot more expensive. We prices have risen sharply following the Russian strikes on

the Ukrainian port on the Danube River.

It's also extreme weather associated with El Nino that's threatening food security, and pushing prices higher, too. Anna Stewart joins us now. It's a

perfect storm, to be honest between weather and war. Just take us back in terms of wheat prices, where they are today relative to the spike that we

saw, when war in Ukraine initially broke out. Can you give us a sense of where we are?

ANNA STEWART, CNN REPORTER: Yes, to give it some context, because we saw a big price move in terms of wheat yesterday, it's come down a little bit

today. But in terms of the context of the wheat price from the peak in March of last year, shortly after the invasion of Ukraine, wheat prices

have fallen from that peak by about 40 percent at this stage.

So we're well off the highs that we did see the price move yesterday isn't perhaps surprising given that the port in question, as you say, is on the

Danube River on the Romanian side of Ukraine. And increasingly, this port has become more and more important for Ukrainian exports, not least given

the recent collapse of the Grain Deal, which would cover the much bigger ports like Odessa.

Now this operational safety risk, if it continues at this port could put in jeopardy exports in terms of the shippers ensures that all have to help get

those food exports out. And that could have an impact on global food prices. If you consider that before the war Ukraine accounted for around 10

percent of global wheat exports.

And has critical importance really for many developing nations, particularly in Africa and Asia, who really rely on it for wheat and corn.

And those prices, of course, could climb higher once again.

CHATTERLEY: And what about the weather, Anna, because that's also playing a contributory factor too.


STEWART: What's interesting, the IMF has just updated their World Economic Outlook. They've actually improved the global growth outlook for this year

but the big risk and its unsurprising is persistent inflation. And it makes particular mention of food inflation.

And on these two fronts, actually, you mentioned the suspension of the Grain Deal and what that could mean for food prices. But it also mentions

extreme weather, saying El Nino could bring more extreme temperature increases and expected exacerbate drought conditions raised commodity


We have seen farming impacted by extreme weather just the last few months really from China, all the way to the U.S. Even last week, we had that

story from India, which is actually limiting exports of rice as a result of the extreme monsoon season which would have caused prices to spike within


They are limiting exports that have a huge impact. India represents about 40 percent, I believe of rice exports around the world. So, extreme weather

heating and all sorts of different jurisdictions, and impacting all sorts of different commodities is definitely going to play in to this food

inflation story, Julia.

CHATTERLEY: Yes, I can hear the Former Chief of the World Food Program echoing in my ear where he was saying to nations don't hoard when we have

problems like this because you see this sort of ramping effect in prices, many challenges. Anna Stewart, thank you. We're back after this, stay with

"First Move".


CHATTERLEY: Welcome back to "First Move", one of the most important business trends of the past few years has been governments around the world

exploring the benefits of on shoring. Supply chain shortages exacerbated by COVID lockdowns and ongoing technology concerns.

And tensions with China forcing many Western governments to offer huge subsidies to firms in hopes of expanding domestic manufacturing and

ensuring the free flow of goods Central and critical to their security. Bringing manufacturing back home is also a potent domestic policy selling

point too.

The recently passed U.S. Chips and Science Acts lavish more than $52 billion in federal subsidies to help enhance domestic chip making. Intel

recently announcing it will build a chip manufacturing hub in Germany with Berlin pledging to cover a third of the cost. Then there's the world's

largest chip firm Taiwan Semiconductor they're set to invest almost $3 billion on an AI chip plant in Taiwan, and Japan getting in on the action



Japanese materials giant JSR is being taken private in a $6.3 billion deal by an investment firm backed by Tokyo, a massive financial shot in the arm

for JSR and perhaps to a focus on security and global competitiveness by the Japanese government. Eric Johnson, the CEO of JSR Corporation, joins us


Eric, fantastic to have you with us, you have a big business, and you have separate branches, which for me, are all directed towards technologies of

the future, but just explain what this deal ultimately means and why it will help you do as a private company, perhaps what you couldn't have done

as a public one.

ERIC JOHNSON, CEO OF JSR CORPORATION: Yes, great! Yes, thank you Julia, for the opportunity. Yes so maybe to give some context, JSR basically, we have

three different businesses, different business sectors, and plastics business. Rather than business, which supports parts for the electronic

materials, business, which supports display, and semiconductor manufacturing, and life sciences.

And as you noted, these are high technical content businesses, and then require constant investment, significant capital investment, and then

expert resources at R&D. And in order for us to maintain that leading edge, we have to continually feed the space. And the reality is Japan has a very

strong material science space, and in particular, semiconductor materials.

And there are a lot of us in the space. And we think, of course, JSR is a leader. And today, it's a real strength for the Japanese economy. But the

question really is this sustainable in the long term, especially given the amounts of investment that's required.

And as you noted, the partner that we've identified as JICC, Japanese Investment Corporation and their mandate is to support the enhancement of

competitiveness of the Japanese economy. And in particular, their focus is on advanced therapeutics or biologics, which is our one of our key strategy

items, and semiconductors.

So when we started to look for ways to advance our strategy, they seem to be a perfect partner for us. And so we approached them actually, to talk

about really enabling both JSRs strategy, but also the bigger opportunity to enhance the competitiveness of a key strategic part of the Japanese

economy and so.

CHATTERLEY: I think there's a lot in that is the hope, then, and the vision that you're suggesting that you sort of presented, that there needs to be a

national champion in Japan. And there are too many smaller players that are spending a lot of money in what is a very cash burn industry particularly

with the innovation level and the speed of innovation.

At this moment, the hope is to have some kind of national champion and force consolidation in this industry so that it's more efficient, arguably.

JOHNSON: Yes, that's an apt way to describe it. I hesitate to say one national champion. I think there is a reality our customers have already

consolidated. And globally, our competitors are consolidating. And when I have high level discussions with my colleagues and other folks in the

industry, there's a general consensus that this is a good opportunity for partnering and for more efficient use of these really precious resources.

But trying to gain real momentum has been a little bit of a problem. And so our sense is that by working with JICC, we can really start a compelling

story to shift kind of the yes, it's a good idea, but not now, not us to kind of a more people to be more assertive in engaging in that discussion.

And my sense is, and this kind of typical for Japan, in my opinion, once you start to gain momentum, you can have a big impact. So my sense is that

will drive a competitive kind of set of activity. And other folks will also understand that, you know, now is the time to start to move on partnering

or trying to drive real efficiency gains in this space.

CHATTERLEY: I think every nation now is thinking strategically about this. And it's not just about the sort of the tensions as I mentioned in the

introduction between the United States and China, but I do think that there's often the case made that Japan sits between those two.


And perhaps there is a strategic opportunity in terms of supply chains and trust around the world to perhaps service both sides and grow in the

middle. Can you see that, Eric? Is this sort of part of the broader strategy? Whether it's for your business, or I think the nation states for

security for nation states too?

JOHNSON: Right, yes, and I'm glad you commented earlier, that this is a privatization, you know, not a nationalization, and there's no political

agenda here at all. In fact, JICC will be judged by how well they do financially on this investment. But I think it's important to note that we

have customers globally.

And our opportunity continues to be to do the very best that we can to support those customers, wherever they are. And, of course, there's going

to be policies that are driven by national agendas. And we have to be very sensitive. And you know those are grabbing the headlines. And you know, for

good reason, a lot of people want to talk about those.

But there are so many more opportunities that are outside of those specific kinds of restricted spaces, that I think it's really important for us to

embrace. And I'm biased, of course, because I'm the CEO, but JSR really has differentiated ourselves on our ability to partner very closely with our

customers, doesn't matter where they are. So that that's something we're going to be very, very adamant about in the future going forward.

CHATTERLEY: Yes, it's interesting, your distinction between taking something private and being nationalized, you don't often talk about the

exit strategy or going public, again, in a nationalization, which you obviously have suggested in sort of six to seven years, perhaps going

private again.

Sorry, going public again. Can I ask, just in your mind, and I know, it's early days, but you do have to think sort of 3, 4, 5 years ahead is that as

a CEO of a company, particularly when six months in this kind of industry is a light years? What will JSR look like at that point?

What will be the determinant that you say, you know, what, we're ready to go public again, we've done the shifting the maneuvering the transitioning

that we need?

JOHNSON: Right. Yes, we've got a few different scenarios in mind that we think will give us kind of the scale and the efficiency that we think is

necessary to really have a globally competitive, sustainable business. And, you know, frankly, I'm not going to go into numbers here, because I just

don't want to constrain, myself for what those different opportunities may look like.

But I think in a broad sense, that's really it. You know, we need to be a globally competitive, sustainable innovation engine. And to do that, we

need to drive efficiencies.

CHATTERLEY: Very quick question I have about a minute left. Are you moved to Tokyo? Didn't you move to Japan? You're clearly not Japanese. You're an

American? What's it like being?

JOHNSON: I really liked Japan. I've really enjoyed it here. I've actually been with JSR for over 20 years.


JOHNSON: And I've spent a lot of time and but I haven't really been able to explore until I moved here in the last few years. My biggest regret is my

language skills. But my colleagues are infinitely patient.

CHATTERLEY: I'm assuming you're taking language lessons.

JOHNSON: I'm, as well as I can.

CHATTERLEY: Yes, amazing country. It's a long time since I've been in Tokyo. I'll let --

JOHNSON: Yes please do it. It's a great place.

CHATTERLEY: Eric, good to chat to you. We'll talk again soon, please and the more in depth about the business, fun times.

JOHNSON: Thank you Julia, it's my pleasure.

CHATTERLEY: Eric Johnson there, thank you, sir. Stay with "First Move", we'll be back after this.



CHATTERLEY: Businesses and consumers that are working to reduce clear climate impact. Know that the smallest details can make a huge difference.

Take the Swedish retailer IKEA, did you know that 5 percent of its carbon emissions comes from the glue that holds its furniture together.

But if you want to make glue greener isn't as simple as it sounds. We visited one of IKEA's factories in Lithuania to see just what it takes.


UNIDENTIFIED FEMALE (voice over): The inter IKEA group has more than 2000 engineers. But then there is the only one dedicated just to the glue that

holds furniture together.

VENLA HEMMILA, MATERIAL & TECHNOLOGY ENGINEER FOR ADHESIVES OF IKEA: I think glue is the most interesting, intriguing complicated thing you can


UNIDENTIFIED FEMALE (voice over): Venla is channeling this passion into finding more sustainable ways to manufacture products. Here at IKEA 5

percent of the company's total emissions come from its glue.

HEMMILA: This is actually quite a lot because it's actually more than as an example, the carbon footprint of all the stores that we have worldwide.

UNIDENTIFIED FEMALE (voice over): Venla joined Glue Task Force at IKEA to tackle these emissions, which explores eco-friendly alternatives.

HEMMILA: You brought the recycled one as well. That's really nice. It's good to see --

UNIDENTIFIED FEMALE (voice over): The 10 years they research materials, met with suppliers and even came up with a few pawns along the way.

HEMMILA: We are sticking together and we are keeping everyone together.

UNIDENTIFIED FEMALE (voice over): IKEA manufactures products mainly in five countries. But the glue taskforces work is finally starting to take shape

here. This Lithuanian factory turns out furniture and particle boards, and it became the company's first to use bio base glue for large scale

production early this year.

Venla says this switch is more eco-friendly for two reasons. The new blue comes mostly from organic sources, and less blue is needed overall.

HEMMILA: For majority of particle boards are produced with this clip. And it's quasi based in a board there's around 8 percent of this clip. And next

to it we have the bio-based clip. And it's made out of industrial cornstarch, which is not food grade and the fossil based cross linker.

UNIDENTIFIED FEMALE (voice over): Firebase glues have been around for a while, but it took IKEA a decade to find an affordable one that was also

suitable for the company size.

HEMMILA: These equipment's are optimized for the old for service glue. And now we're entering with a nuclear system, it's going to take some time to

make the machine work perfectly.

UNIDENTIFIED FEMALE (voice over): The team's goal is to reduce IKEA's glue based emissions by 30 percent by 2030, which would only put a tiny dent in

the company's overall carbon footprint but considering IKEA size. Even small changes have big potential. And Venla is certainly up the challenge.

HEMMILA: It's still kind of just the beginning. We need to work harder to reduce the carbon footprint of glues but also the ultra-materials and even

if we reach that point, there's always more to do. I don't think I will ever get bored of this topic.


CHATTERLEY: And it's already been a busy week in the business world, Elon Musk ditching the bird and embracing the X, no words. Theater owners hell

their movies itself that saved the multiplex and investors await what do Powell say and do next. U.S. stocks are mostly higher as the Federal

Reserve begins its two day policy meeting.


Another quarter point rate hike is expected when the Fed hands down its decision on Wednesday that's effectively already priced. It's already

expected by financial market players. But as we mentioned before the Federal Reserve's future policy outlook is going to be all the more


Also today auto giant General Motors lowered in early trade despite posting strong forward guidance. And post it note maker 3M also raising its profit

forecasts, along with telecom carrier Verizon. Microsoft and Alphabet report profits after the closing bell Tuesday what they say about their AI

investments might be in fact more important than what they say about their bottom lines this time around.

We will be watching for that. And that's it for the show. If you've missed any of our interviews today, they will be on my Twitter and Instagram pages

you can search for @jchatterleycnn. "Connect the World" is up next, and I'll see you tomorrow.