The Weekly News Update is a weekly roundup of business news from around the Asia-Pacific region, covering Fusion Consulting's core industry practices: chemicals, consumer & retail, financial services, industrial & logistics, information & communication technology, life science and media & leisure. If you have colleagues or friends who may be interested in subscribing, please forward this email to them and copy knowledge@fusionc.com.      MI for the Strategic Planning Process  The most important Key Success Factor in linking market intelligence (MI) with  strategic planning is mutual respect between MI and top management. Find  out how this can be achieved through case studies on five companies including  ABB, Orange and Shell in MI for the Strategic Planning Process, the latest  report from Global Intelligence Alliance. Request free copy. In the news this week l 4-Apr-08 Banks target Asia's wealthy

The growing number of high-net-worth individuals and the strength of the economy has led to a boom in Asia's private banking industry, with China and India generating the most wealth. According to BCG's 2007 report, China and India accounted for more than 64% of the wealth in the region. Lured by the growing number of millionaires, private banks are in a frenzy to set up shop in China and India. HSBC has officially launched its HSBC Private Banking business in Beijing, Guangzhou and Shanghai. Barclays is also courting India's elite with the establishment of a private bank in the country. Outside China and India, Malaysia is also a key market for private banking - particularly, Islamic wealth management and investment fund services. Tax breaks and incentives for Islamic financial products have lured investors such as Kuwait Finance House and Qatar Islamic Bank. CIMB Group has also started Islamic private banking services in Malaysia for wealthy Muslims who invest in accordance with their faith.

Chemical China - H.B. Fuller to establish regional lab in Shanghai Source: Fox Business, 28 March 2008 H.B. Fuller will establish a regional lab in Shanghai. The move will facilitate innovation and the development of customer intimacy, and help drive growth in the Asia Pacific region. The new lab will focus on reactive chemistry, and help the company promote product development and localisation of initiatives in key markets, including Performance Wood, encompassing Window, Flooring, and Textile that includes Footwear. Beyond the formation of the lab, additional technical resources are being dedicated within Asia Pacific to support acceleration of growth in the Hygiene (Nonwoven) and Packaging industries, further enabling the company to be responsive to the needs of regional customers. India - ICI India to sell adhesives business to Henkel Source: Daily News & Analysis, 29 March 2008 ICI India has decided to sell its adhesive business to the Henkel group for Rs2.6 billion (US$65 million) as a part of a global restructuring following parent ICI's takeover by Akzo Nobel NV. After Akzo Nobel took over ICI UK, it finalised the sale of ICI's adhesives business globally to Henkel AG. ICI India has a paints business of Rs8 billion (US$200 million) and non-paints portfolio of about Rs1.5-2.0 billion (US$38-50 million). With a robust decoratives portfolio, the combined entity with Akzo, which is strong on the industrial front, would catapult it to a firm footing in the likes of Berger Paints and Kansai Nerolac. Vietnam - Idemitsu, Mitsui Chem plan petrochem complex Source: Nikkei Report, 28 March 2008 Idemitsu Kosan and Mitsui Chemicals will construct a petrochemical complex in Vietnam with Kuwait Petroleum International and Vietnam Oil & Gas Group. The joint venture will build a US$5.8 billion refinery and a petrochemical complex that will produce petroleum products - such as gasoline, kerosene and diesel oil - as well as polypropylene, paraxylene and other basic petrochemical materials. Japanese materials and energy companies have been cautious about making large investments in foreign countries out of concerns over country risks and leaking of expertise. But the shrinking domestic market and continuing demand growth in emerging economies appear to be driving them to take the plunge. View an example of our experience in this industry.

Consumer & retail China - Sales of top 100 chain stores up 21% in 2007 Source: China View, 29 March 2008 Sales at China's top 100 chain stores grew 21% to RMB1,002.2 billion (US$143 billion) in 2007. According to the China Chain Store and Franchise Association, the sum amounted to 11.2% of the country's consumer goods retail sales, which surged 17% to RMB8.9 trillion (US$1.3 trillion). The top 100 chain stores had 105,191 outlets in 2007, up 58%. The association attributed the growth to the rural market, where the number of outlets rocketed 145% to 52,000 in 2007. The sales volume of 15 overseas chain stores in the list, including Wal-Mart and Carrefour, rose 28% to RMB182.5 billion (US$26 billion), accounting for 18% of the total, while their outlets grew 3.7% to 3,956. India - Italian luxury brands plan expansion Source: Asia Pulse, 31 March 2008 With the Indian luxury market set to touch US$30 billion by 2015, Italy's premium menswear brands Brioni and Canali are firming up plans to strengthen their presence in the country. Brioni is all set to launch two new stores in 2008. Similarly, Canali plans to have eight by 2010. However, the Italian majors feel that availability of quality locations for luxury retailing was an issue. "We are finding it difficult to find the right kind of space and location to execute the plans," Brioni CEO Perrone said. Canali Sales and Marketing Director Paolo Canali also said that the company's expansion plans in India would depend on getting ideal locations. India - India lags as retail destination Source: Hindustan Times, 30 March 2008 Despite the fact that every major international retail giant, from Wal-Mart to Carrefour to Tesco, is looking to establish its presence in the country, India ranks 44 in a list of 250 most preferred retail destinations in the world in a report by real estate consultancy CB Richard Ellis. The primary reason for India lagging behind is the restriction on foreign investment in the retail sector, which is capped at 51% for single-brand stores. The report ranks the UK as the leader in international retailer presence, with 55% of retailers surveyed present there. Ranked second is Spain with 51% of retailers present, followed by France and Germany. India is way behind United Arab Emirates, China and Russia, who have found a position in the top 10. View an example of our experience in this industry.

Financial services China - HSBC offers private banking in the mainland  Source: Reuters, 1 April 2008 HSBC Holdings has launched its private banking services in China as foreign banks target the country's fast-growing market for services to wealthy clients. HSBC forecasts that by 2011 there would be 16 million high net-worth individuals in China with US$6.2 trillion in total assets. HSBC rivals Citibank and Standard Chartered have already started private banking businesses in China, while Bank of East Asia plans to launch such services in the second quarter of 2008. Local banks, including Industrial and Commercial Bank of China and Bank of Communications, have also joined the competition to offer services for wealthy Chinese clients. Hong Kong - Over 400,000 millionaires in 2007 Source: China Daily, 28 March 2008 A survey commissioned by Citibank projected there were 414,000 millionaires at the end of 2007 in Hong Kong, and the majority of them owe their upgrade in financial status to the booming stock market. The survey shows the number of people with liquid assets worth more than HK$1 million (US$128,500) increased to 414,000, much higher than 276,000 in 2006. Each of these millionaires owns on average HK$9.9 million (US$1.3 million) in assets. The majority of millionaires are locals (81%) and 15% are mainland migrants. Wanchai remains the district where the most millionaires can be found (16.9%). Central & Western district comes second (16.3%) and Eastern district comes third (15.4%). Singapore - Amex trains sights on young affluent Source: Business Times Singapore, 2 April 2008 The young affluent consumers - people in their late 20s to 30s with a median income of more than S$75,000 (US$54,000) a year - currently spend about S$3.5 billion (US$2.5 billion) on credit cards per year, accounting for over 20% of total consumer card spending in Singapore. American Express (Amex) expects their credit card spending will grow 20% a year to S$5 billion (US$3.6 billion) by 2010. The young affluents account for a quarter of Amex's cardholders in Singapore. The company plans to rapidly increase its penetration in this target segment, and is investing 'significantly' to enhance the value proposition of its Platinum Credit Card. View an example of our experience in this industry.

Industrial & logistics China - Logistics industry posts more than 20% growth Source: China View, 30 March 2008 China's logistics sector realised RMB1.7 trillion (US$241.2 billion) in added value in 2007, up 20.3% from 2006. According to the National Development and Reform Commission, the growth rate was 5.2 percentage points higher than the year-earlier level. The added value accounted for 17.6% of the total added value for the service industry at large, up 0.5 percentage points year-on-year, or made up 6.9% of China's GDP, up 0.2 percentage points. Last year saw the sector's gross business volume amount to RMB75.2 trillion (US$11 trillion), up 26.2%. The growth rate was 2.2 percentage points higher than 2006. The logistics sector's expenditure reached RMB4.5 trillion (US$640 billion) in 2007, up 18.2%. The growth rate was 4.7 percentage points higher. China - SembCorp in US$16 million China water venture Source: Business Times Singapore, 29 March 2008 Singapore conglomerate Sembcorp Industries has entered a RMB112 million (US$16 million) joint-venture with Zhangbao Industries to build and run an industrial water recycling facility in the Zhangjiagang Free Trade Zone in Jiangsu, China. The facility, which can process 40,000 cubic metres of industrial water a day, will be Sembcorp's third water management project in Zhangjiagang. Its first project is a 20,000 cu m per day wastewater treatment facility. Its second, a 15,000 cu m per day high-concentration industrial wastewater facility, is currently being built. This latest project brings SembCorp's investments in Zhangjiagang to RMB300 million (US$43 million). Vietnam - Japan's transport enterprises to expand operations  Source: Thai News Service, 28 March 2008 The Japanese transport and logistics enterprises are expanding their business activities in Vietnam and India after Japanese investors have shifted their production bases into these countries. A shipping firm intends to join road transport activities in Vietnam, China, Russia and India from 2008. Total transport revenue from these four countries is expected to reach US$400 million in 2010 from US$100 million in 2006. Japan's Nisshin will be the first foreign to engage in railway transport services in Vietnam in July 2008. It has set up a joint venture to provide the service of transporting Toyota vehicles from the north to the south, and electronics and car spare parts vice versa. View an example of our experience in this industry.

Information & communication technology   World - More semiconductors sold, but for less money Source: Portland Business Journal, 31 March 2008 Sales of semiconductor products worldwide increased 11.6% in February 2008 compared to the same time last year, but the value of the sales only increased 1.5%, as prices continue falling in the US$274 billion market. The huge difference between increases in volume and sales can be attributed to falling prices of dynamic random access memory chips. Average selling prices for the chips declined nearly 60% for the year. Another trend is the fast growth of electronics in regions other than the United States. The Asia-Pacific region is now the biggest computer market. Asia is also expected to sell 540 million cell phones in 2008, more than triple the 162 million units expected to be sold in the United States. China - Software revenue up 28.7% in Jan-Feb 2008 Source: Xinhua, 29 March 2008 China's domestic software industry netted a total RMB92.3 billion (US$13.2 billion) of business revenue in the first two months of 2008, an increase of 28.7% over the same period in 2007. The growth rate was 7.1 percentage points higher compared with the same period last year. Profitability, however, dropped 4.6% period-on-period to RMB6.9 billion (US$984 million). Software products revenue increased 25.5% to RMB33.2 billion (US$4.7 billion), while income from software and technology services grew 38.3% to RMB16 billion (US$2.3 billion). Revenues from integrated circuit design were RMB3 billion (US$428 million), an increase of 22.2% from the prior year period. Thailand - Software industry plans to move into Laos Source: Thai News Service, 31 March 2008 The Association of Thai Software Industry (ATSI) is working to enter the Laos market with a set of software products developed by local software companies. The initial targets will include the education, government, business and manufacturing sectors. ATSI estimates that the Laos software market could be worth Bt5 billion (US$160 million) a year. Laos will be the first country that ATSI will target as part of taking software to the global market. If the model succeeds, the association plans to expand to other countries such as China, Vietnam and Bhutan. View an example of our experience in this industry.

Life science India - Vitabiotics plans foray into OTC market Source: Business Standard, 28 March 2008 UK-based nutritional and food supplement company Vitabiotics plans to strengthen its presence in India by setting up manufacturing and research facilities. It also plans to launch its globally sold over-the-counter (OTC) products in the country. In the next five years, the company plans to introduce its entire range of over 30 products in the Rs30 billion (US$752 million) nutritional and food supplement OTC market in India.    Meyer Vitabiotics, the Indian arm of Vitabiotics, will manufacture the products at its existing units in Bangalore and Mumbai. The company plans to set up two new US Food and Drug Administration-compliant manufacturing units in Hassan (Karnataka) and at a suitable site in Himachal Pradesh. The company had recently set up a R&D facility in Mumbai and would start a similar facility in Bangalore in the near future. India - Domestic pharma firms leave MNCs far behind Source: Sify, 28 March 2008 When India moved to product patent from 1 January 2005, there were fears that share of multinationals in Indian pharma will increase at fast pace as their products will be protected by product patent regime. However, Indian pharmaceutical companies have managed to hold the domestic fort. Out of top 10 pharma companies in Indian, eight are domestic players. What's more, almost all domestic companies have managed double digit growth in sales between February 2006 and February 2008, higher than most MNCs. Indian companies have not only broken the supremacy of GSK Pharmaceuticals, which was number one company in the Indian markets for years, but also made inroads into the world markets. Singapore - Bio*One takes US$10 million stake in Alexza Source: Business Times Singapore, 28 March 2008 Singapore biomedical investment firm Bio*One Capital has pumped US$10 million into Alexza Pharmaceuticals in a deal that involves the Nasdaq-listed company setting up a manufacturing plant in Singapore. The investment will give Bio*One a 3.8% stake in Alexza. Alexza has set up a wholly owned subsidiary, Alexza Singapore Pte. Ltd., that will make the disposable version of its proprietary drug delivery system called Staccato. Alexza is yet to find a site for its Singapore plant, but is looking for a partner in the Republic so that it does not have to build its own facility from scratch. It hopes to start initial production for use in clinical trials in 2009. View an example of our experience in this industry.

Media & leisure China - SARFT to add 10 more online video licenses Source: China Business News, 31 March 2008 SARFT will issue a "License for Publication of Audio-Visual Programs through Information Network" to approximately 10 companies in April 2008. Three private operators, including video-on-demand sites Joy.cn and 51tv, are expected to obtain new licenses, while the remaining recipients will be State-owned firms. The main reasons behind approval of Joy.cn and 51tv are that they primarily provide video on demand (VOD), thus avoiding copyright issues, and employ appropriate content monitoring. Joy.cn is already engaged in content-based cooperation with 300 film and television production agencies, as well as more than 30 satellite and local television stations nationwide, including TVB, ATV, EMI, and Huayi Brothers. China - Baidu partners with radio stations Source: China Economic Information Service, 28 March 2008 Baidu.com has set up a free "radio ally" with 15 radio stations in China to provide online radio programs. According to CCIDnet.com, by accessing the hyperlink list.mp3. baidu.com/radio/index.html, netizens will be able to enjoy real-time music programs on the 15 radio stations, including China Radio International. Baidu will support its partners with MP3 related search data, including rankings, special data analysis, as well as selected netizens' comments. The search engine is expected to expand its partnership to more radio stations, and provide such services as download, program order, and program parade to netizens. Korea - BCC Introduces Digital Broadcasting Law Source: KBS World News, 28 March 2008 Korea's Broadcasting and Communications Commission (BCC) has announced a new law to introduce digital broadcasting services by 2012. Under the special law, broadcasters will stop transmitting analog TV signals by the end of 2012 so they can start digital broadcasting. To that end, the law also requires the BCC to form a digital broadcasting promotion committee. The committee, to be headed by the BCC chief, will establish mid- and long-term plans for digital services. Digital broadcasting promises to deliver high-quality, interactive and diverse media to meet the needs of demanding TV viewers. View an example of our experience in this industry.

Previous issues

Foreign investors unfazed by Vietnam's economic difficulties [24-Mar-08] India's chemical sector benefits from China's cut in export rebates [20-Mar-08] Foreign game makers accelerate Asian drive [14-Mar-08] Asian players withdraw from fiercely competitive Chinese handset market [7-Mar-08] India to exploit nutraceuticals [29-Feb-08] India sets sight on becoming a global MRO hub [22-Feb-08]    What you don't know can hurt you  Receive all the key news on your markets, industry and competitors each  week, with alerts for important breaking news, and avoid information  overload with human filtering. Find out more about our Market Monitoring   Service and web-based Intelligence Plaza system by emailing   marketing@fusionc.com.

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