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.   Global Market Intelligence Survey 2008   This report by Global Intelligence Alliance uncovers linkages between  organizational decision-making and Market Intelligence operations. Differences by  industries and regions were measured along with key success factors of MI.  Responses were collected from 439 participants on five continents, making this  survey the most comprehensive study that has been conducted in the area of  Market Intelligence to date. Request a free copy. In the news this week l 14-May-08 Consolidation of India's retail sector in medium term

There is a huge potential for the retail sector in the country since India is a large economy and 97% of the country's retail trade is still in the unorganised sector. India's retail sector, valued at US$350 billion, is growing in the high double-digits a year, with companies including Future, Reliance Retail and Spencer's Retail opening outlets at the rate of one a day. With the country's economy projected to grow at a rate of 9% per annum, there would be gradual shift of the retail business from unorganised to organised sector. Companies are expanding their network in the country while new players are entering the market. The sector would continue to attract investments in the next five years.

Chemical Korea - S-Oil and Total launch lubricant joint venture Source: Korea Herald, 09 May 2008 S-Oil Corp. has launched S-Oil Total Lubricants Co., a joint lubricant venture with Total S.A., the world's fourth largest oil company. S-Oil integrated its lubricant business into Total's lubricant subsidiary in Korea, aiming to further tap the fast-growing global lubricant demand. The two companies agreed to hold a 50% stake each in S-Oil Total Lubricants Co., which they will jointly manage. The new company will have a capital of W35 billion (US$33.5 million). It also estimated the new firm will take in more than W200 billion (US$191.4 million) annually. India - BASF to strengthen its automotive business Source: European Coating Newsletter, 12 May 2008 BASF announced its plans to expand its offerings for the automotive industry in India with investments in plants and technology. BASF Coatings commissioned a new Refinish Color Lab at Mangalore in February 2008, and is expanding its e-coat facility, which is expected to be completed by end of 2008. Furthermore, the company will build a new engineering plastics compounding plant and has set up a computer aided engineering (CAE) lab in Thane. In 2007, BASF derived over 13% of its total global sales of EUR58 billion (US$90 billion) from sales to the automotive industry. China - Chemical and chemical fiber industries report flagging growth Source: Xinhua Business Weekly, 12 May 2008 The profit growth of China's chemical and chemical fiber industry slowed down in January and February 2008, due to pricier raw materials. The profit of chemical industry was up 15.9%, 35.5% less than in 2007 and that of chemical fiber industry down 0.2%. During the period, the profit in inorganic chemical raw material, chemical fertilizer and pesticide sectors jumped 130%, 78% and 150%, respectively, propelled by product price hikes. Daily chemical industry and tire industry recorded 16.8% and 41.8% of profit growth, shy of 2007 gains. Profits of organic chemical industry and synthetic industry dropped 52.2% and 22.3% in comparison with the first 11 months of 2007, caused by slower export of light industrial and textile products. View an example of our experience in this industry.

Consumer & retail India - Reliance Retail inks joint ventures with Marks & Spencer and Office Depot Source: Economist Intelligence Unit - ViewsWire, 05 May 2008 Reliance Retail has formed a 49:51 joint venture with UK-based retailer Marks & Spencer. The two companies will together initially invest up to around US$58 million in the joint venture, which plans to open 50 stores within the next five years. Reliance retail has over 500 stores in India; Marks & Spencer has around 975 stores globally. Separately, Reliance Retail has also entered into a joint venture with US-based Office Depot. Office Depot, one of the world's largest office-supplies chains, will hold a 51% stake in the new company. India's market for office products is worth US$2.5 - 4 billion. China - Hot selling perfume Source: The New York Times, 10 May 2008 Significant growth in China is expected despite declining perfume sales in much of the rest of the world. The market there remains small, though sales are rising exponentially. Still, even if the Chinese market is potentially hugely lucrative, doing business there is far from easy. The regulatory system is uncertain. The complexity of its bureaucracy is daunting. The department stores are of varying quality, and because Chinese tastes are changing rapidly, a store that attracts crowds one day can be deserted the next. China - Japan's Yamada Denki to expand in new ground Source: Channel NewsAsia, 12 May 2008 Yamada Denki, Japan's largest discount home electronics retail chain, is planning to open its first Chinese outlet by 2010. The store which is likely to be built in Shanghai will target wealthy individuals who live in China's coastal regions, with Japanese-made products such as flat-panel televisions. The company is shifting its focus to expanding overseas markets after concluding that the domestic market will not likely grow due to the ongoing population decline. If its current plan is realised, it will be the first major Japanese consumer electronics retailer to operate in mainland China. View an example of our experience in this industry.

Financial services Korea - StanChart cleared for brokerage while Citi denied Source: Reuters, 09 May 2008 South Korea gave Standard Chartered a preliminary nod to launch local brokerage operations, the first time in five years that new players have been allowed into the fast-growing sector. However, Citibank Korea, which had applied for a brokerage license, was not on the approved list. Standard Chartered's new unit will cover the whole range of brokerage services, with capital of W300 billion (US$288.4 million). There are 54 securities companies operating in South Korea, with aggregate capital of US$30 billion, but none commands even 10% of the market. Brokerages in South Korea earned a combined W4.4 trillion (US$4.2 billion) in 2008 ended March, up 70% from a year ago. Thailand - Standards needed for platinum credit card rules Source: Bangkok Post, 12 May 2008 The Credit Card Club, which represents local card issuers in Thailand, is planning to review minimum credit lines for platinum cardholders to tighten industry standards. It is unknown whether minimum credit lines would be increased or decreased, but the new standards were expected to be completed within the next several months. Currently, there is no firm standard exists on minimum platinum cardholder qualifications, with each issuer left to decide how to  position the card among their customer base. The Credit Card Club projects market growth of 15% in 2008, but rising inflation and an uncertain economic outlook has raised doubts achieving the target. Australia - St George agrees to Westpac merger Source: Asia in Focus, 13 May 2008 Australia's fifth largest lender, St George Bank Ltd, has agreed to a A$19 billion (US$18 billion) merger offer from the nation's third biggest bank, Westpac Banking Corporation. A deal between the two would create Australia's biggest lender with a market capitalisation of around A$66 billion (US$62.46 billion). The merged bank will have a market share of 25% as well as being the nation's largest wealth platform provider with funds under administration of US$108 billion. The deal is subjected to conditions including approvals from the federal treasurer, the competition watchdog and the national banking authority. View an example of our experience in this industry.

Industrial & logistics China - Machinery industry continues to grow rapidly in 2007 Source: China Industry Daily News, 06 May 2008 The China Machinery Industry Federation recently announced that the growth rate of the Chinese machinery industry's total output value exceeded 20% for the fifth consecutive year in 2007, with the profits rising by RMB150 billion (US$21.5 billion) over 2006. The industry has more than 60,326 above-scale enterprises, while although the top-100 enterprises account for only 0.2% of the total number, their total business income and profits make up 15.6% and 18% of the industry's total respectively. In addition, the number of large enterprises with main business income above RMB10 billion (US$1.4 billion) rose from 12 in 2003 to 42 in 2007. Hong Kong - Cargo volume may drop 5% after Three Links Source: NewsTrak Daily, 08 May 2008 The Hong Kong Logistics Association (HKLA) forecasts Hong Kong's total volume of cargo handled will drop 5% each year, equivalent to 1.2 million TEUs and 200,000 tons of air freight, when the cross-Strait Three Links measures of direct postal, transportation and trade are carried out. There will be room for Hong Kong to cut port handling charges as the current fee doubles that of Singapore. It is also believed that it will be possible for Shenzhen to surpass Hong Kong in cargo handling volume in two years and the SAR will fall to the world's fourth place in terms of that. Hence, HKLA urges the Hong Kong government to offer tax incentives for small and medium transportation companies and to build Container Terminal 10 and the Lantau Logistics Park to add logistics space and to stem the loss of transportation business. China - Vehicle sales post slow rise as demand curbed Source: Shanghai Daily, 13 May 2008 China's vehicle sales rose 14% in April, the slowest pace in almost two years, as a combination of inflation and a slumping stock market curbed demand for passenger cars. Sales of passenger cars and commercial vehicles rose to 922,600 in April. Vehicle sales grew at a rate of 21% in the first three months of 2008. General Motors Corp, Toyota Motor Corp and other overseas car makers are banking on China and other emerging markets to offset slower demand in the United States. GM, the biggest overseas auto maker in China, will boost annual sales in the country by about half over the next three years to 500,000 vehicles. Toyota, the world's No. 2 car maker, aims to raise China sales 36% to 640,000 vehicles in the year ending March 2009. View an example of our experience in this industry.

Information & communication technology   Korea - Taiwan's biggest LED maker challenges Korean market Source: The Electronic Times (Korea), 09 May 2008 Everlight Electronic, Taiwan's biggest and the world's 10th largest LED maker, will begin the operation in Korea once again. As Nichia, Osram and other global LED makers nested, Korea is predicted to become a venue for their fierce competition. Everlight has entered the Korean market by investing in Luxpia, a Korean LED maker. However, it is the first time for the company to begin operation directly in Korea. Particularly, it is targeting the Korean mobile phone makers like Samsung Electronics and LG Electronics. China - Alibaba ties up with Intel on SME-market PCs Source: AFX Asia, 12 May 2008 Chinese e-commerce group Alibaba.com has entered into a tie-up with Intel Corp for a PC targeted at small and medium-sized enterprises (SMEs). There are 42 million SMEs in China. However, only a small number of them have launched E-commerce services, which will significantly limit their growth. Alibaba sees a significant potential in this market and will embed its new E-commerce platform into the PCs, while Intel will provide support on Internet security and services based on its chip platform. China - Olympic Games push up HDTV demand Source: Xinhua Electronics News, 12 May 2008 Chinese demand for high definition (HD) flat panel TV is soaring, probably driven by the approaching Beijing Olympic Games, which will introduce HD technology to broadcast. About 90% of consumers in such big cities as Beijing and Shanghai will primarily choose to buy flat panel TV. Total sales of flat panel TV in Shanghai Gome Appliance amounted to RMB300 million (US$42.9 million) during the sales season in May. TV set producers' sales volume is expected to grow 10% to 30% in 2008, promoted by the Olympic Games. View an example of our experience in this industry.

Life science India - Ranbaxy to tie up with Merck Source: Business Standard, 10 May 2008 India's leading drug maker Ranbaxy Laboratories is likely to announce a drug discovery research tie-up with US drug manufacturer Merck soon. The research deal will be operationalised through Ranbaxy's de-merged research and development entity, Ranbaxy Life Science Research. According to sources, the collaboration with Merck will be in the area of early drug discovery. The rising cost of drug development in traditional research bases such as the US and Europe has forced global pharma firms to look at research tie-ups in low cost destinations. Philippines - Indian pharmaceutical firm to set up shop Source: BusinessWorld, 12 May 2008 Dr. Reddy's Laboratories Ltd., India's third biggest pharmaceutical firm, is expected to soon enter the P76-billion (US$1.8 billion) Philippines market through a distribution deal that will take advantage of government policy allowing the entry of cheaper medicines. Accessibility of quality and affordable medicines is among the pressing issues in the Philippines today. The company is initially targeting cardiology, diabetology, gastroenterology and pain management. The first phase will see brands like Omez (0meprazole), Stamlo M (amlodipine maleate), Resilo (losartan), Reclide (gliclazide), Cardiopril (ramipril), Rafree (meloxicam), Ciprolet (ciprofloxacin), and Finast (finasteride) being introduced to the Philippines. Vietnam - Government gaining more control on the pharmaceutical market Source: Business Wire, 13 May 2008 After years of poor regulation and IP protection, the Vietnamese government has started to gain more control in the the administration of drugs in the market, particularly in the area of price control. In 2007, the MoH has come down hard on 13 companies that raised the price of drugs without permission from the VDA, an agency under the MoH, and issued a warning that such firms risk penalties such as fines, or worse still, have their operating licences revoked. IP laws are still poor, and the Vietnamese drug industry, which has little R&D and makes mainly copycat drugs, supplies 40% of the market. The government is keen to encourage the local industry to supply around 60% of the market, therefore it is not in the best interest of the government to pursue IP laws as aggressively as price control mechanisms. View an example of our experience in this industry.

Media & leisure India - Government to plug skill gap in gaming industry Source: Indo-Asian News Service, 08 May 2008 With the Indian gaming and animation industry growing by leaps and bounds, the information and broadcasting ministry has engaged a top multi-national firm to prepare a report on the burgeoning manpower needs in these sectors. The report would enable the government to plan and create necessary training facilities in the field. The animation and gaming industry in India is estimated to be worth Rs13 billion (US$308.9 million). The industry grew by 24% in 2007 and has attracted big players like Adlabs, UTV, Yash Raj Films, Percept and Pyramid Saimira. China - Online game market reached US$572.4 million in Q1 Source: SinoCast China Business Daily News (Abstracts), 09 May 2008 China's online game market saw revenue rose 14% to RMB4 billion (US$572.4 million) in the first quarter of 2008. Shanda Interactive Entertainment Ltd. ranked the number one with an 18.7% share in the market. Following are NetEase.com Inc., The9 Limited, and Giant Interactive Group Inc., with market shares of respectively 13.3%, 11.5%, and 11.3%. Sohu.com Inc. once dropped out of the top ten, but returned to the sixth place with a 7.2% market share. India - Magazine industry thriving as big players moving in Source: Reuters, 11 May 2008 Rising incomes and growing literacy are boosting readership and revenues of magazines and newspapers. From specialist magazines on whisky, golf and parenting, to regional-language newspapers and financial dailies, new titles are coming thick and fast in one of the few markets in the world where advertising and readership for print media are expanding. Print publication advertising revenues in India generated Rs94 billion (US$2.4 billion) in 2007, or 48% of all of the country's media advertising revenues. TV ads generated 41%. With the economy having grown at an average rate of 8.8% in the last four years, middle class incomes have risen, boosting demand for niche magazines on health, leisure and finances. View an example of our experience in this industry.

Previous issues

Opening up of Japan's mobile industry [9-May-08] Risks behind growth of China online game industry [2-May-08] Asia wealth management growth to stay robust [25-Apr-08] Japan's M&A market starts to stir [18-Apr-08] Beverage firms in India focus on fruit drinks, target teens [11-Apr-08] Banks target Asia's wealthy [4-Apr-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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