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.      Offshore Services & Equipment   Offshore exploration continues to breach new frontiers, driven by new finds,  technology and surging energy demand in China and other growth economies.  Opportunities abound for equipment and services vendors able to meet the sector's  exacting demands. Find out where the opportunities lie.  In the news this week l 13-Dec-07 Epoxy producers in Japan strengthen setup to meet surging demand

Japan's total demand for epoxy resins climbed 5% year on year to 175,245 tons in 2006. According to the Epoxy Resin Manufacturers Association of Japan, the figure surpassed the 170,000 tons mark for the first time since 2004. Both domestic demand and exports remained robust throughout the year, with applications for electrical machinery and paints fueling the market. Epoxy producers in Japan such as Adeka and Dow Chemical Japan are adding new equipment to increase their production capacity to meet rising domestic demand and consumption in emerging markets of Asia-Pacific, in particular China. Global Industry Analysts predict that the consumption of epoxy resins in China is expected to grow at a CAGR of 14.3% and rise by 221,040 tons between the period 2007 to 2010.

Chemical Asia - Dow exits automotive sealers business Source: Auto Industry, 6 December 2007 Dow Chemical will exit the automotive sealers business in Asia Pacific, North America, and Latin America within the next nine to 18 months, and will look at options in its European operations. The decision "reflects concerns about the unit's ability to meet the financial expectations of this business" and Dow wants to focus its resources on more differentiated and higher value technologies to the automotive industry. Other cutbacks include idling a styrene plant in Camacari, Brazil, on 1 January 2008 and closing a cellulose manufacturing facility in Aratu, Brazil, in the first quarter of 2008. Japan - Adeka to invest US$2.7 million in capacity Source: Japanese News Digest, 7 December 2007 Japanese food and fine chemicals producer Adeka will invest Y300 million (US$2.7 million) to double its annual output of water-based epoxy resins to 2,000 tons. Adeka will allocate the sum for installing new manufacturing equipment at its plant in Sodegaura, the eastern Chiba prefecture. Water-based epoxy resins are used as a raw material for the production of paints and adhesives. The demand for them is currently on the raise because they are environment-friendly as they do not use organic solvents such as toluene and xylene. According to the Japanese Ministry of Economy, Trade and Industry, the country's water-based epoxy resin shipments were 200,000 tons in 2006, up by some 30% compared with 2001. Thailand - Indorama acquires Eastman's PTA and PET resin assets Source: Thai News Service, 7 December 2007 Thailand's Indorama Holdings will acquire Eastman Chemical's European PTA (purified terephthalic acid) and PET (polyethylene terephthalate) resin assets, putting it among the world's top three PET manufacturers. Eastman is a leading PET producer in Europe, with an integrated PTA and PET resin manufacturing facility in Rotterdam, the Netherlands, and a PET resin manufacturing plant in Workington, United Kingdom. Their combined capacity is about 340,000 tons per year of PTA and 350,000 tons of PET resin. After the acquisition, the Indorama Group will have a capacity of two million tons - a 20% increase from its current level. View an example of our experience in this industry.

Consumer & retail Australia - Coca-Cola buys Bluetongue brewery Source: ABC News. 6 December 2007 Coca-Cola Amatil (CCA), a major soft drinks producer in Australia and Asia, has acquired Australia's Bluetongue brewery brand to extend its premium beer focus in a bid to further diversify its revenue stream. The Bluetongue brewery is CCA's first manufacturing plant for alcohol. It already imports spirits, which are blended into pre-mixed drinks such as Jim Beam bourbon and cola through an agreement with Maxxium Worldwide BV. The purchase reflects moves by a number of companies to expand beyond their core brands, in an attempt to reduce the impacts of costs, with Japanese brewer Kirin last month revealing it was expanding into dairy processing over cost concerns. India - Hindustan Unilever to sell foods unit Source: Reuters, 7 December 2007 India's Hindustan Unilever Limited, a unit of Unilever Plc., is set to sell its Modern Foods unit to Middle East-based Switz Group for Rs1 billion (US$25 million). Bread maker Modern Foods broke even last year and Hindustan Unilever had tried to sell the business "but failed to find a buyer". It then merged Modern Foods with itself. Hindustan Unilever, which makes Lux soap, Sunsilk shampoo and Lipton tea, has been selling some smaller businesses to focus on its core portfolio. It most recently sold its home delivery arm and is mulling options for its marine foods business. Japan - Wal-Mart buys bigger share of Japan chain Source: Associated Press, 6 December 2007 Wal-Mart Stores has raised its stake in money-losing Japanese retailer Seiyu to 95.1%, giving it managerial control of the chain and solidifying its foothold in an intensely competitive market. Since entering the Japanese market in 2002, Wal-Mart has been gradually raising its stake in Seiyu, the fifth-biggest retailer in Japan with about 400 stores nationwide. But Seiyu has struggled amid intense competition from Japanese retailers such as Aeon that have adopted Wal-Mart-style tactics, including in-house brands and super-cheap prices, and have succeeded in wooing suburban shoppers. The chain has continued to lose money since Wal-Mart struck the Japan partnership. View an example of our experience in this industry.

Financial services China - Foreign banks in China joint ventures Source: Financial Times, 8 December 2007 Credit Suisse and Morgan Stanley have each signed agreements with Chinese partners to establish mainland investment banking joint ventures. The deals signal that Beijing is poised to relax a two-year ban on foreign investment in the country's securities industry. Only Goldman Sachs and UBS won approvals before China stopped such deals, fearing that overseas companies would dominate the industry. Credit Suisse will set up a joint venture with Founder Group, a Chinese conglomerate, to underwrite IPOs and conduct advisory and research services. Morgan Stanley has signed a preliminary agreement with China Fortune, one of the country's oldest brokers. India - Record number of new India billionaires Source: Business Times Singapore, 8 December 2007 Powered by the booming stock markets, India produced 168 new billionaires - the highest ever - in 2006-07. According to a survey by the Business Standard newspaper, as many as 30 rich people moved up at least 100 places, setting another record. With the new additions, there are 533 billionaires in the country, having a combined wealth of Rs12.3 trillion (US$312 billion). The top five are worth over Rs500 billion (US$13 billion) each. Eight years ago, when the financial daily compiled its first list of the wealthy, the 100 on the list were worth Rs840 billion (US$21 billion). There are now 48 Indians with wealth above US$1 billion. The number of dollar billionaires came to 23 in 2006-07. There were only three in 1999. Korea - Lotte Group to buy nonlife insurer Source: Asia Pulse, 7 December 2007 Lotte Group, the conglomerate that owns Korea's largest department store chain, will take over Daehan Fire and Marine Insurance. In the process, it will gain a foothold in Korea's rapidly growing insurance market, the world's seventh largest. Lotte signed an agreement to buy a 57% stake in Daehan Fire and Marine Insurance. Industry sources estimate the deal to be worth W370 billion (US$402 million). The takeover deal would mark the first foray by Lotte Group, the country's retail giant, into the insurance market. Analysts said Lotte could create a synergy by using its vast retail network to sell insurance policies. View an example of our experience in this industry.

Industrial & logistics Asia - DHL quits Northwest Airlines for Polar Air Source: CEP Research, 6 December 2007 DHL Express will end its strategic cooperation with Northwest Airlines for US-Asia flights from October 2008. Northwest Airlines Cargo currently operates a number of flights between the USA and Asia under contract to DHL Express, including daily services to Shanghai. DHL will switch business to Polar Air Cargo, in which it has bought a 49% stake for US$150 million and has a 20-year capacity agreement due to start on 31 October 2008. The US airline currently has scheduled flights to Tokyo, Incheon, Hong Kong, Shanghai and Beijing, as well as to Amsterdam, Glasgow-Prestwick, and several South American destinations. China - Logistics industry output to reach US$162 billion in 2010 Source: Xinhua News Agency, 8 December 2007 The output value of China's logistics industry is expected to grow 20% annually to reach RMB1.2 trillion (US$162 billion) in 2010, according to the China Council for the Promotion of International Trade. In 2006, added value of China's logistics industry rose 12.1% over the previous year, accounting for 17.1% of the total added value in service sectors, up from 16.5% in 2005. To date, more than 20 provinces and 60 cities have initiated logistics development plans. China - GM plans US$5 billion in investment Source: International Herald Tribune, 7 December 2007 General Motors plans to invest as much as US$5 billion in China over the next five years to expand its share of the world's fastest-growing major car market. The investment will go into car and engine development, production facilities, technical and after-sales support and infrastructure. Toyota Motor and Volkswagen also plan to add production capacity in China to raise their own sales. Total demand in China will be between 9.5-10 million vehicles in 2008, up from 8-8.5 million vehicles for 2007. Global Insight predicts that the passenger car market will grow 70% to 9.2 million vehicles by 2012. View an example of our experience in this industry.

Information & communication technology   China - Merger creates huge Microsoft supply group Source: Shanghai Daily, 8 December 2007 Shanghai Wicresoft, an IT outsourcing company which is a joint venture between Microsoft and Shanghai Alliance Investment, has signed a merger deal with Insigma Technology. The new company will become one of the largest domestic software outsourcing service providers for Microsoft, with annual revenue of more than US$40 million. In 2006, China's software outsourcing market revenue reached US$1.43 billion, a jump of 55% from the previous year. CCID Consulting predicts it will hit US$7.03 billion by 2010. US-based EDS and Indian giants such as Tata and Infosys have set up facilities in China. Korea - Korean handset makers eyes 30% of global market Source: The Electronic Times, 7 December 2007 Korea's mobile phone makers have set a sales target of 30% share of the global market. Samsung Electronics is aiming for 20% (or 242.16 million units out of the global market of 1.21 billion units), LG 7.9% (or 96 million units) and Pantech Group 0.7% (or 8-9 million units). Including other small and medium size makers, the overall target will reach 30%. For 2008, Strategy Analytics estimated Samsung's sales at 180.1 million units (14.9% share) and LG at 86.7 million units (7.2% share), slightly higher than 2007's prediction of 161.5 million and 80.3 million units, respectively. However, it is much lower than the targets of domestic makers. Taiwan - Sales of semiconductor equipment to fall in 2008 Source: Taiwan Economic News, 7 December 2007 The Semiconductor Equipment and Material International (SEMI) predicts that global sales for semiconductor manufacturing equipment will decline 1.5% year-on-year in 2008. Taiwan and mainland China will suffer the largest decline of 6.9% and 4.6% respectively, due to the cut in capital expenditure by contract chip manufacturers such as Taiwan Semiconductor, United Microelectronics, and Semiconductor Manufacturing International Corp. According to a survey made by the SEMI, sales of semiconductor manufacturing equipment will amount to NT$41.7 billion (US$1.3 billion) in 2007, up 3% from the year earlier. Although sales of the equipment will slump 1.5% in 2008, it will rebound over 8% annually in 2009. View an example of our experience in this industry.

Life science India - Pharma exports value down 20% Source: Mint, 8 December 2007 The weakening dollar has taken a toll on India's pharmaceutical exports, which generate revenues estimated at Rs200 billion (US$5 billion). Pharma exports have seen a drop of 20% in value during the April-June quarter with total exports, at Rs50.5 billion (US$1.3 billion), falling well below the year-ago period's Rs60.7 billion (US$1.5 billion) in export revenues. The quarter marked the first time in five years that pharmaceutical export revenues have declined. With the rupee, which has appreciated by 12% in the last six months, staying strong, the Pharmaceuticals Export Promotion Council expects India to miss its export target for the year by more than 25%. India - Eisai builds drug ingredient plant in India Source: Nikkei Report, 7 December 2007 Eisai has begun construction of a drug ingredient plant in India that is expected to go onstream in fiscal 2010. It will be the first Japanese pharmaceutical firm to have a factory in the country. Until now, Eisai's production of drug ingredients has been concentrated at a plant in Kashima, Ibaragi Prefecture. By adding another factory in India, the drugmaker aims to slash manufacturing costs. The new facility is expected to produce 30 tons of drug substances annually. Construction costs, including those for a research center specialising in manufacturing technology that will be built next to the plant, are estimated at Y5 billion (US$45 million). Korea - Merck plans long-term investment in Korea Source: Joins.com, 8 December 2007 Merck and Company will spend as much as US$600 million developing medicines in Korea over the next 10 years, increasing its presence in Asia's third-largest pharmaceutical market. Korea spent US$15.2 billion on pharmaceuticals in 2006. Business Monitor International expects total expenditures to rise to US$21.2 billion by 2011. Merck, the No.3 US drug maker, joins rivals expanding in Korea. The United States and Korea reached an accord earlier this year to eliminate tariffs and curb barriers to investment. New York-based Pfizer said in June it will spend US$300 million on research and development in Korea by 2012. View an example of our experience in this industry.

Media & leisure China - Mobile games maker to play in China Source: China Economic Review, 7 December 2007 Glu Mobile, a leading provider of games for cell phones, has agreed to pay up to US$40 million for Mig, China's biggest mobile games developer and publisher. Mig will give Glu access to China's 500 plus million mobile subscribers and the local knowledge needed to succeed in an Asian games market where western companies have until now failed to make inroads. The Silicon Valley-based company plans to use Mig to help it introduce some of its western titles to China. It expects a modest contribution to its revenue from the acquisition in 2008. India - UTV Soft, Astro to part ways Source: The Times of India, 8 December 2007 With Walt Disney eyeing an increased stake in UTV Software Communications, the Mumbai-based entertainment and media production arm of UTV, has decided to call off its association with Malaysia's multi-channel pay TV operator Astro. In 2005, the two had announced a joint venture to launch two kids' channels in southeast Asia, which would have been on the Astro direct to home platform across Malaysia, Indonesia, Brunei and later Singapore. Walt Disney runs two kids channels in India. UTV Software has already launched a youth channel called 'Bindass' and is expected to launch at least four more channels in the genre of general entertainment, news and current affairs and kids by the end of 2008. Malaysia - NSTP to sell Malay Mail Source: Business Times Singapore, 8 December 2007 The New Straits Times Press (NSTP) has agreed to sell its ailing Malay Mail daily to a group comprising Media Prima and businessman Ibrahim Mohamad Nor for RM5 million. The new buyers will have their work cut out of them as The Malay Mail is a shadow of its former self. Its circulation is now around 20,000, a far cry from its mid-1980s high of 70,000. The deal is unlikely to cause any political ripples as the newspaper will remain in ethnic Malay hands. Both NSTP and Media Prima are controlled by parties linked to the United Malays National Organisation, Malaysia's dominant political party which is headed by Prime Minister Abdullah Ahmad Badawi. View an example of our experience in this industry.

Previous issues

Foreign firms buy into Taiwan's banking sector [7-Dec-07] Eyes on booming Asian luxury goods market [30-Nov-07] Korean petrochemical industry remains bullish [23-Nov-07] Korea braces for integration of its financial markets [16-Nov-07] Japan's beer makers seek diversification [26-Oct-07] Indian telecom operators and broadcasters fight it out in IPTV space [19-Oct-07]      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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