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 10-Apr-08 Beverage firms in India focus on fruit drinks, target teens

Growth in the fruit drinks segment has been accelerated by increased consumption by teenagers in the last two years. Leveraging the market opportunity, soft drink concentrate maker Rasna has launched a ready-to-drink fruit concentrate called Fruitplus, targeting teenagers above 15. Packaged drinking water maker Sabols Foods also plans to foray into the fruit juice market while CavinKare has entered the fruit drink segment by acquiring 100% of MAA Fruits. The Rs72 billion (US$1.8 billion) carbonated drinks category is expected to face the heat of rising competition from the fruit drinks segment. Even the cola giants are now focusing on non-cola drinks. Coca-Cola has set up another manufacturing facility in India that will manufacture its fruit juice drinks of Maaza and Minute Maid while PepsiCo rolled out its fruit drink Tropicana Twister nationally in March 2008. Both are targeting the 18 to 29 year age group.

Chemical China - Weak shoe sector hits adipic acid Source: ICIS, 3 April 2008 Factory closures in the Chinese shoe industry on high cost pressures is curtailing demand for adipic acid. The shoe sole application sector is the biggest consumer of adipic acid in China. Tighter credit controls implemented in recent months also dampened buying interest for adipic acid. Oversupply, which significantly weakened the market in 2007, was expected to keep prices under pressure in 2008 as well. China is the key adipic acid market in Asia and softer domestic prices could lead to lower regional prices. Major suppliers to northeast Asia include Asahi Kasei, Invista, Rhodia Polyamide, BASF and Radici. India - Essar plans polypropylene plant Source: Business Standard, 7 April 2008 The Essar group is in talks with two companies for a possible tie up to set up a polypropylene unit in Jamnagar. The proposed plant would be near the Essar Oil Ltd.'s grassroots refinery in Gujarat. Essar's refinery in Gujarat is the second private refinery in India's state-dominated oil sector. Essar Oil's refinery has a capacity of 10.5 million tons per annum (mtpa).    Currently, Reliance Industries Limited is Asia's largest manufacturer of polypropylene. With a combined capacity of over one million tons. Reliance is one of the top eight polypropylene producers in the world. India - Narendra Plastic to invest in two units Source: Business Standard, 4 April 2008 Indian plastic packaging products maker Narendra Plastic plans to invest over Rs900 million (US$23 million) to set up two new manufacturing units in Daman and Uttarakhand. Narendra Plastic currently has manufacturing facilities at Daman to produce about 20,000 million tons of plastics in a year. The new facilities at Daman and Uttarakhand will add 12,000 million tons each per annum. The expansion is aimed to increase the company's business from Rs1.6 billion (US$40 million) currently to over Rs3.5 billion (US$88 million) by 2009. Narendra Plastic has a 6% market share of the Rs35 billion (US$877 million) Indian market. View an example of our experience in this industry.

Consumer & retail India - Rasna eyes ready-drink market Source: Business Standard, 4 March 2008 Soft drink concentrate maker Rasna has launched its read-to-drink fruit concentrate named Fruitplus, targeting kids above 15. The company is eyeing a 10% market share in the fruit-based drinks category with Fruitplus. Through this offering, Rasna will upgrade itself from being a player in the Rs4 billion (US$100 million) soft drink concentrate market to the Rs7 billion (US$175 million) fruit drink market, which is growing at 20% annually. Rasna holds a 93% market share in the soft drink concentrate segment in India and 82% of the in-house consumption of the soft drink market. Japan - Kirin keen to buy Aussie milk processor Source: Japan Times, 4 April 2008 Japanese beverage maker Kirin Holdings is interested in acquiring Dairy Farmers, Australia's second-largest seller of fresh milk. Australian giant Goodman Fielder and New Zealand-based Fonterra Cooperative Group are also believed interested in Dairy Farmers. Buying it would give Kirin more than half of Australia's milk and dairy market after it purchased National Foods from San Miguel in November 2007 to offset declining sales at its domestic beer business. Japanese beer companies are facing falling domestic beer sales as the population ages and younger consumers switch to wine and other beverages. Total beer shipments fell 0.3% in 2007 to the lowest level in at least 15 years. Singapore - Wyeth to expand milk products plant Source: Business Times Singapore, 8 April 2008 Wyeth is investing US$96 million to expand its US$170 million Singapore manufacturing plant to meet growing regional demand for its infant formula and milk products. The expansion will boost the Tuas plant's capacity by 50%. The Singapore facility will produce its key brands of nutrition products for infants and toddlers, including formula and milk products sold under the Progress and Promise names. The Singapore expansion marks the final phase of a US$500 million capital improvement project in the Asia-Pacific. The project includes previously announced investments in its nutrition manufacturing and supply operations in China and the Philippines. View an example of our experience in this industry.

Financial services Hong Kong - Hong Kong and Dubai sign Islamic finance pact Source: Asian Investor, 7 April 2008 Hong Kong's Securities & Futures Commission (SFC) has signed an Islamic finance pact with the Dubai Financial Services Authority (DFSA). The initiative aims to enhance access to Islamic financial products in Hong Kong and the Dubai International Financial Centre. Elsewhere in Asia, Malaysia also has a mutual recognition agreement with the DFSA - the first such pact between two Islamic markets for the cross-border distribution and marketing of Islamic funds. Hong Kong wants to develop an Islamic bond market amid fast-growing investor interest in products that comply with sharia or Islamic law. In November 2007, the SFC authorised Hong Kong's first Islamic fund for sale to retail investors, the Hang Seng Islamic China Index Fund. India - PNB to go solo in credit cards Source: The Hindu, 6 April 2008 Punjab National Bank (PNB) has decided to go on its own with the credit card business, following delay from the Reserve Bank of India (RBI) in granting them approval for the joint venture with American International Group and Venture Infotech Global. PNB will launch the credit card business by October 2008. Sources revealed that RBI may not be very comfortable with PNB's tie-up with foreign partners for the credit card business since they do not have full regulatory control over the JV which would fall in the NBFC category. Among other Indian banks, State Bank of India and Bank of Baroda have separate subsidiaries for credit card business, while Bank of India is considering it. Korea - Insurers up capital to boost market share Source: Korea Herald, 7 April 2008 Competition among multinational insurance companies in Korea is expected to heat up, as competitors are poised to increase their capital to boost their market position. AIG Life Insurance Korea was given W59.6 billion (US$61 million) for its operational costs on 27 March 2008 from its US headquarters. Last month, Met Life Korea secured W112 billion (US$115 million) in capital, while New York Life Insurance gained W28.5 billion (US$29 million). Capital is key to an effective strategy to gain market share. Industry observers believe that such a trend in capital growth shows the promising potential which foreign insurance companies see in the Korean insurance market. View an example of our experience in this industry.

Industrial & logistics Hong Kong - Barloworld buys Flynt Source: Creamer Media's Engineering News, 7 April 2008 Supply chain management company Barloworld Logistics has acquired Hong Kong based logistics company Flynt International for US$13 million. Flynt International has been operation since 1980, mostly based in Hong Kong. Other regional offices are located in Beijing, Shanghai and Guangzhou, in China. With the rationalisation and restructuring of industrial group Barloworld now completed, priority is now being given to growth opportunities, including acquisitions, particularly in the area of logistics. Barloworld Logistics is now active in logistics and supply-chain management in Southern Africa, with operations in Iberia, the UK, the US and the UAE. In March 2008, Barloworld Logistics acquired the Dubai-based logistics firm, the Swift group. India - Auto industry sees double-digit growth in FY 2007-08 Source: Financial Express, 4 April 2008 The Indian automobile industry witnessed a double-digit positive growth in absolute numbers during the financial year 2007-08, thanks to companies foraying into newer markets, several new launches and a gradual shift from dollar driven countries to Euro nations. Maruti Suzuki India posted 34.9% jump in exports during this period at 53,024 units as compared to 39,295 units during the same period in 2006-07. Hyundai Motor India also witnessed a growth of 25.% to 144,442 units, against 115,525 units in the corresponding period last year. Tata Motors' cumulative sales for exports went up by 3% to 54,272 units compared to 52,796 units exported sold last year. Korea - Siemens solidifies security in takeover Source: Korea Herald, 3 April 2008 Siemens Ltd., a Korean unit of Germany-based electronics and engineering conglomerate Siemens AG, is buying Korean fire safety company Shinhwa Electronics to expand its business in Korea. Siemens will fully acquire both its units - Shinwha Electronics Ltd. and SH Engineering Ltd. With the deal, Siemens hopes to add fire detection and fire protection solutions to the existing building automation, and reinforce its position in the Korean market. Shinwha Electronics, Korea's second-largest fire safety solution company, produces fire alarm systems and gaseous fire suppression systems and provides fire safety services. View an example of our experience in this industry.

Information & communication technology   China - Microsoft eyes doubling mobile sales in the mainland Source: TelecomAsia, 3 April 2008 Microsoft expects shipments to China of handsets with its software will more than double in the next year amid an expected boom in demand for web access once the country launches 3G wireless services. About two million mobile devices installed with Microsoft operating systems were shipped to China in the last year, about 10% of Microsoft's global total. Microsoft works with device makers such as Samsung Electronics, Motorola, and High Tech Computer. The size of China's mobile phone market is expected to reach 323.2 million units in 2011, according to Beijing-based research firm Analysys International, compared to 149.13 million units in 2007. India - Incentives for the semiconductor industry draw seven proposals Source: Eetasia.com, 6 April 2008 The India government will provide incentive of 20% of capital expenditure during the first 10 years for projects in special economic zones (SEZs) and 25% for non-SEZ units. It has so far received seven proposals worth over Rs650 billion (US$16.3 billion). Proposals received so far cover the manufacture of polysilicon, single- and multicrystalline ingots, wafers, solar cells, photovoltaic modules, LCDs, SoC and IC assembly, testing and packaging. Reliance Industries, Videocon, Moser Baer, Titan Energy, KSK Energy Ventures and Signet Solar, have submitted proposals. Reliance alone has submitted a proposal (total investment around Rs300 billion or US$7.5 billion) for a semiconductor wafer fab unit with ATMP facility. Singapore - Motorola closes handset plant; may sell the business altogether Source: Channel NewsAsia, 3 April 2008 Motorola is closing its Singapore handset production plant, which produces more than half of its 3G handsets sold worldwide. From the end of 2008, production will be transferred to other regional plants in Tianjin, China, and elsewhere. However, Motorola will maintain its Asia-Pacific headquarters and its handset R&D facility in Singapore. There is market talk that Motorola may sell off its handset business altogether. Indian consumer electronics maker Videocon Industries has expressed an interest to bid for the handset unit of Motorola if the US firm decides to sell the business. View an example of our experience in this industry.

Life science Asia - India overtakes China in clinical trials Source: The Times of India, 5 April 2008 India has pipped China to become Asia's most popular destination for conducting clinical trials. According to India's Planning Commission, around 139 new trials were outsourced to India recently compared to 98 in China. While the market value for clinical trials outsourced to India is estimated at US$300 million, having increased by 65% in 2006, it is expected to touch US$1.5-2 billion by 2010. Factors such as a diverse genetic pool, large patient pool, drug naive population, competent medical professionals, high quality hospitals where trials can be undertaken and low cost of services have stimulated the flow of clinical research to India. India - Rural pharma the next engine of growth Source: Daily News & Analysis, 5 April 2008 Indian pharmaceutical industry is gradually picking pace in the rural markets. While metros and cities account for around 60% of the market share of the pharma industry, untapped potential of rural markets it is being seen as next volume driver of the industry. Rising income levels leading to more affordability, speeding up of health infrastructure, and lifestyle diseases along with health insurance are fuelling the growth in rural areas. Rural market grew at about 40% to touch US$1.4 billion in 2006-07. Market share of the rural pharma rose from 18% in 2005 to 21% in 2007. McKinsey expects the rural pharma market to be around 24% by 2015 and market size to reach US$4.8 billion from US$1.2 billion in 2005. India - Pharmaceutical M&As see unhealthy decline Source: Business Standard, 4 April 2008 The value of mergers and acquisitions (M&As) by Indian pharmaceutical and healthcare companies has declined sharply in the second half of 2007-08, indicating a change in outlook and strategy of companies. While the April to September period saw as many as eight major deals worth over Rs50 billion (US$1.3 billion), the second half of the year saw a sharp drop in the value of such deals to about Rs15 billion (US$375 million). The main reasons for the decline are concerns related to economic slowdown and a history of failed overseas acquisitions by Indian companies. High valuations of brands in the domestic market and a lack of viable facilities in India and abroad have also contributed to the slowdown. View an example of our experience in this industry.

Media & leisure China - Media revenue to reach US$79 billion in 2008 Source: Xinhua, 4 April 2008 Chinese media industry revenue grew 13.6% to RMB481 billion (US$69 billion) in 2007. The Chinese Academy of Social Sciences expects the figure to increase 13% to RMB554 billion (US$79 billion) in 2008. Book publication revenue was declining because of the introduction of new media. So are other traditional media such as TV advertising and newspapers. Mobile and online media saw rapid growth, earning RMB105 billion (US$15 billion) and RMB30 billion (US$4 billion) in 2007. The proportion of new media, especially mobile TV and mobile phone videos, grew to 28% of the industry. The mobile media market would reach RMB125 billion (US$18 billion) in 2008. India - Trai to put ceiling on channels' DTH rates Source: The Economic Times, 7 April 2008 Telecom regulator Trai will 'force' broadcasters slash the bouquet rates on the DTH platform. It will tell broadcasters that they cannot charge a premium of more than 50% to DTH operator when compared to the prices they offer to cable operators. Trai's move to force broadcasters to reduce bouquet rates will mean lower DTH bills for millions of subscribers who use this digital platform to view cable TV. The larger implication is that the monthly DTH bills will become as competitive to those charged by cable operators. The cable industry fears that it will lost out significantly if DTH players offer similar rates. Singapore - Government Won't put price cap on pay-TV services Source: Dow Jones, 4 April 2008 Singapore's government will not put a cap on the prices that pay-TV operators charge to customers. The Media Development Authority was quoted as saying, "We do not interfere in their (SingTel and StarHub) commercial buying and selling deals. If there are any anti-competitive issues, then we will step in." Operators are under margin pressure as competition for exclusive rights to draw more customers rises. Two weeks ago, SingTel received exclusive broadcast rights to the UEFA Champions League soccer tournament for 2009-2012 and the UEFA Cup for the same period. StarHub holds the current rights to the English Premier League, which it is contracted to broadcast until May 2010. View an example of our experience in this industry.

Previous issues

Banks target Asia's wealthy [4-Apr-08] 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]      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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