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.        China's personal care, cosmetics and toiletries industry   Product innovation in China's personal care sector is buoyant, but safety concerns  and regulations may become a barrier. Find out what's happening in the industry  and where the trends are heading. In collaboration with the PCHi exhibition.     Request free copy. In the news this week l 28-Mar-08 Foreign investors unfazed by Vietnam's economic difficulties

Despite difficulties of soaring inflation (which topped 15% in February year-on-year) and widening trade deficit (US$7.5 billion in January-March 2008), Vietnam is still one of the world's most attractive investment destinations. Just over one year after joining the World Trade Organisation, Vietnam ranks sixth in the list of countries attracting foreign investment. The 2007 World Investment Report from the United Nations Conference on Trade and Development showed Vietnam to be only behind China, India, Russia, the United States and Brazil. Vietnam has attracted more than US$98 billion in foreign investments. The country's goal for 2006 through 2010 is to attract US$150 billion in foreign investment. Citigroup expects Vietnam's GDP to grow 8.1% in 2008, outstripping the average of 5% forecast for Asia. Citigroup also expects investments in Vietnam to reap returns of as much as 20% in 2008. To ride on the booming economy, Korea's Samsung Electronics has unveiled plans to build a US$670 million handset plant in northern Vietnam. Japan's cosmetic maker Shiseido is building a fully-owned plant in booming Vietnam to make skin care products. Thailand's top business conglomerate Siam Cement will collaborate with Vietnamese firms to build a US$3.8 billion petrochemicals complex on Vietnam's Long Son Island. About US$20 billion in foreign direct investment has been promised for 2008.

Chemical China - Clariant invests in specialty organic pigments plant Source: European Coatings Newsletter, 24 March 2008 Clariant International and Zhejiang Baihe Chemical Holding Group plan to expand the Hangzhou Baihe Clariant Pigments Co. Ltd. joint venture by investing in a world-scale plant for the production of Quinacridone specialty organic pigments. The new plant will be built at the existing joint venture facility located in Hang Zhou City, Zhejiang Province, China. Quinacridone organic pigments increasingly find a wide application in high-performance coatings - including architectural, automotive and industrial applications as well as plastics and printing applications. China - Sinopec, SABIC to build US$1.7 billion joint venture Source: Xinhua News Agency, 24 March 2008 Saudi Basic Industries Corp. (SABIC) has signed a framework agreement with China Petroleum and Chemical Corp. (Sinopec) to build an ethylene derivatives plant with an annual production capacity of one million metric tons. The two companies would hold an equaling 50% stake in the US$1.7 billion joint venture in northern Chinese port city of Tianjin. The plant, construction of which was expected to be finished in September 2009, would be the first China joint venture for SABIC. It would produce 600,000 metric tons of polyethylene and 400,000 metric tons of ethylene glycol after going into operation. Vietnam - Joint venture to build first petrochemical complex Source: Thai News Service, 24 March 2008 Vietnamese and Thai businesses have signed a contract to establish a joint venture to build the first petrochemical complex in Vietnam. The four partners include two Vietnamese and two Thais: the Vietnam Oil and Gas Group (PetroVietnam), the Vietnam Chemicals Corporation (Vinachem), the Thai SCG Chemicals and Thai Plastic and Chemicals (TPC). Total investment is put at US$3.8 billion. Annual production at the complex will include 1.65 million tons of olefin, 1.45 million tons of polyolefin, 280,000 tons of soda and 730,000 tons of materials for the production of polyvinyl chloride (PVC). The complex is scheduled to become fully operational in 2013. View an example of our experience in this industry.

Consumer & retail India - Hamleys seeks to enter Indian market Source: The Times, 22 March 2008 Hamleys, the world's largest top shop, is preparing to enter the Indian market through a joint venture with Reliance Retail. However, the British-based retailer will face some hurdles in India. Its partnership with Reliance is likely to have to take the form of an arm's-length licensing deal, because retailers that sell several brands - as Hamleys does - are barred from investing directly in the Indian market. India's highly fragmented retail industry is estimated to be worth nearly GBP200 billion (US$395 billion) a year and is expected to double in value by 2015. However, the prospect of foreign chains entering the market has triggered political concerns amid protests from independent retailers. Japan - Supermarkets to woo frugal consumers with private brands Source: Asia Pulse, 24 March 2008 Supermarket operators such as Aeon, Seven & i Holdings and Seiyu plan to expand their offerings of private-brand products at a time when rising food prices are taking a bite out of consumers' wallets. And with wages stagnant, households are not likely to see a big increase in their disposable income anytime soon. Major retailers therefore believe that demand for cheaper private-label products will pick up. Supermarket sales nationwide came to Y14 trillion (US$140 billion) in 2007, down 20% from their 1997 peak. Supermarket operators have relied on major food makers for product development and distribution. By bolstering private-brand offerings, these retailers aim to boost sales at their stores. Vietnam - Shiseido to build cosmetics factory Source: Channel NewsAsia, 25 March 2008 Japan's cosmetics maker Shiseido will build a new factory in Vietnam as part of its efforts to tap fast-growing demand in emerging Asian markets. It will invest Y4 billion (US$40 million) in the new facility in Southern Bien Hoa, just outside Ho Chi Ming City. Work on the plant will commence in December 2008 and is expected to be completed in October 2009 and begin operating two months later. Amid lacklustre sales in Japan where the population is both ageing and shrinking, Shiseido is increasingly looking to overseas markets to drive its growth. About 36% of its total sales came from overseas in the current fiscal year ending March 2008. View an example of our experience in this industry.

Financial services Hong Kong - Stanchart may bid for stake in Wing Lung Bank Source: China Daily, 21 March 2008 Standard Chartered may bid for a US$1.9 billion stake in Hong Kong's family-controlled Wing Lung Bank. Industrial & Commercial Bank of China, China Merchants Bank, China Construction Bank Corp. and Australia and New Zealand Banking Group are also among possible suitors. Wing Lung has 35 branches in Hong Kong, two outlets in Shanghai and Shenzhen and one sub-branch in Nanshan district in southern China. Chairman Michael Wu and his extended family are seeking bidders for their 63% stake. A takeover would be the first of a Hong Kong-traded bank in more than four years and may prompt other family-run lenders such as Wing Hang Bank to seek buyers. Singapore - More private banking outlets set up Source: Straits Times, 22 March 2008 The wealth management business continues to boom in Singapore with ABN Amro opening its fifth and largest Van Gogh Preferred Banking Centre. As if to underline the strength of the private banking sector, Australia's Macquarie Private Bank launched its Asian operations with the opening of a Singapore office. Singapore now has about 40 private banks. Merrill Lynch-Capgemini said the number of ultra-high net-worth individuals - those with more than US$30 million each in financial holdings - in the Asia-Pacific had risen by 12.2% to 17,500 in 2006. The number of millionaires in Singapore had shot up by 21.2% in 2006 - the fastest growth rate in the region. Thailand - No slowdown seen in credit-card usage Source: Bangkok Post, 22 March 2008 The slow economy has not discouraged the public from holding more credit cards and increasing spending through cards. The survey by the University of the Thai Chamber of Commerce also shows a rise in the use of cards for cash advances. Nearly 25% of all credit card spending would be for cash withdrawals. There were 12 million credit cards in Thailand as of January 2008 with holders having two to three cards each on average. This translates into about four to six million cardholders, up from 3.7 million to 5.4 million estimated last year. The centre predicted that there would be 13.4 million credit cards by the end of 2008, up by 11.3% from 2007. Total card spending is projected to grow by 15.2% to Bt968.6 billion (US$31 billion) in 2008. View an example of our experience in this industry.

Industrial & logistics China - China to add 97 airports by 2020 Source: Bernama, 26 March 2008 China's booming economy and the clamour for air travel will see the country adding 97 new airports costing RMB450 billion (US$64 billion) including a second international airport in Beijing. As at end-2006, the country has 147 airports. The latest airport development plans by the General Administration of Civil Aviation of China revealed that the number will increase to 192 by 2010 and 244 by 2020. The expansion will mean that 82 in every 100 people will live within 100km or 90 minutes' drive from any airport by 2020. Passenger volume is expected to grow 11.4% annually and cargo traffic by 14% until 2020. China - Freight Links buys 60% stake in Citic Logistics Source: Procurement Online, 24 March 2008 Singapore logistics firm Freight Links is paying RMB86.4 million (US$12 million) for a 60% stake in China's state-owned Citic Logistics, one of the top three chemical logistics players in China. Freight Links will become the biggest manager of warehousing and transportation services for chemical and dangerous goods, as well as the movement of oversized equipment in China. Citic Logistics has one of the most extensive logistics service networks across China. Its business includes road freight, finished car transportation, mass bulk cargo transportation and hazardous goods transportation. India - Blue Dart to increase warehousing capacity Source: Business Standard, 22 March 2008 Indian express-courier and distribution company Blue Dart, in which global logistics major DHL holds a majority stake, is to double its warehousing capacity to two million square feet in the next two years. The company is also planning to add 120 facilities - offices and service centres - and has earmarked a capital expenditure of Rs2 billion (US$50 million) for the calendar year. Currently, Blue Dart has 257 facilities in India.   The company handled 191,875 tonnes in calendar year 2007 and expects these initiatives to increase its business in India. It enjoyed revenues of Rs8.1 billion (US$203 million) and had a market share of 41.7% in the country in 2007. View an example of our experience in this industry.

Information & communication technology   Asia - Mobile phone market may surpass 400 million units in 2008 Source: TelecomAsia, 20 March 2008 Asian handset vendors (excluding Japan) shipped 366 million phones in 2007, 18% higher than 2006. India and China accounted for more than 60% of all sales in 2007. IDC expects the Asia Pacific to sell more than 400 million handsets in 2008.  Nokia was still far and away the region's biggest handset-maker, with its market share jumping to more than 50%, up from 42% in the previous year. Motorola, second place in 2006, saw its share halve due to the waning RAZR series and the shift away from the ultra-low-end segment, giving way to Samsung, whose sales were driven by its 3G products. Sony Ericsson and LG kept their positions at fourth and fifth respectively. India - India may soon be second largest mobile market Source: Bloomberg, 25 March 2008 India may overtake the United States in April 2008 as the world's second-largest mobile-phone market after China. The Telecom Regulatory Authority of India reported that there were 250.9 million wireless subscribers in India at the end of February 2008, compared with 260.5 million for the United States and 540.5 million for China. India added 8.53 million mobile-phone subscribers in February, and 8.77 million customers in January. The accelerated pace of mobile-phone user additions in India, the world's fastest-growing major wireless market, has helped attract investments from Vodafone Group Plc and Richard Branson in the past year. Mr Branson announced that Virgin Mobile wireless services will be sold in India. Vietnam - Samsung to build handset plant in Vietnam Source: Korea Herald, 22 March 2008 Samsung Electronics will build a major handset-manufacturing plant in Vietnam in order to boost production capacity. The plant is likely to be located in Bac Ninh, northeast of Hanoi. It will initially produce 30 million mobile phone handsets a year, with capacity gradually expanding to 100 million units. The Vietnam plant will manufacture cheaper handset models while its existing production base in Gumi focuses on more high-end products. Samsung also has handset production facilities in China, India and Brazil. The electronics giant aims to sell over 200 million units of handsets globally in 2008, from 161 million units in 2007. View an example of our experience in this industry.

Life science India - MNCs have a healthy share of cancer drug patent claims Source: Business Standard, 24 March 2008 A city-based policy research group puts the number of cancer drug patent applications pending with the patent office at 413. Of these, 358 came from top multinationals like Novartis, Aventis, Bristol Myers Squibb, Pfizer, Boehringer, Roche and Abbot. The rush for patents on cancer medicine can be explained by the potential of the Rs12 billion (US$299 million) Indian market. With nearly 2.5 million patients, cancer is one of the ten leading causes of death in India. Data sources from the National Cancer Registry Programme show that over 700,000 new cases and 300,000 deaths occur annually due to cancer.  Singapore - Veredus in lab tie-up for diagnostic tool R&D Source: Business Times Singapore, 25 March 2008 Singapore's biotech firm Veredus Laboratories and European semiconductor player STMicroelectronics have developed a diagnostic chip that can detect more than 10 different human flu strains. Called VereFlu, the device has been commercially launched in Singapore. Developers have already marketed it to places such as hospitals, airports and border checkpoints. The two partners are looking to apply the technology to other infectious diseases, oncology and heart-disease markers. They have opened a lab in Singapore to develop further applications of their diagnostic tool for the detection of diseases. Vietnam - Singapore firm sets up Viet stem cell bank Source: The Straits Times, 24 March 2008 Singapore's biotech firm CordLabs has tied-up with Vietnam's MekoPhar Chemical Pharmaceutical Joint-Stock Company to set up Vietnam's first stem cell bank. CellResearch, the parent company of CordLabs, will also work with Vietnam's Science and Technology Ministry in the country's maiden foray into stem-cell research. The S$1 million (US$0.7 million) facility is expected to store several hundred samples in its public facility in the first few years, mainly for research. The latest tie-up will give CordLabs a foothold in the lucrative tissue-banking market, worth an estimated US$100 million in the United States alone. View an example of our experience in this industry.

Media & leisure Asia - Tourism revenues to top US$4.6 trillion by 2010 Source: ASAP.co.uk, 24 March 2008 Tourism revenues in the Asia Pacific are forecast to top US$4.6 trillion by 2010 with visitor arrivals hitting 500 million. The Pacific Asia Travel Association (PATA) is forecasting the tourism industry in the region to grow by an average annual rate of 7-8% over the next two years. By 2010, international tourist arrivals to the Asia Pacific are expected to hit nearly half a billion - almost double the figure in 2000. PATA says growing Asian economies and liberalisation in the aviation sector means intra-regional travels will account for much of the rising numbers. The upcoming Beijing Olympics is also seen as a strong boost for the industry. China - Time-Stanton JV signs IPTV on mobile pact with Chinese operators Source: exchange4media News Service, 24 March 2008 Time Broadband Services (TBSL) with its joint venture partner, Malaysia's Stanton Technologies, has launched the world's first IPTV over 2.5G mobile platform to target the estimated US$4 billion mobile IPTV market. The JV also announced signing of contracts with DiGi in Malaysia, and China Mobile and China Unicom in China. The Time-Stanton JV would provide IPTV service to over 500 million mobile subscribers in China, the largest in the world. TBSL recently got funding from Dubai Ventures, the equity investment arm of Dubai Investment Group.  Malaysia - Astro no more in race for Virgin Radio Business Times Malaysia, 25 March 2008 Pay TV operator Astro All Asia Networks is no longer in the running to buy radio broadcaster Virgin Radio from British media group SMG Plc. It is believed that the company fell out of the race in the second stage of a bidding process. UTV Media and Absolute Radio International were the two final bidders. Analysts were not surprised that Astro didn't make it to the final list given that competition was tough. Analysts believe that Astro may go after other radio broadcasters in markets closer to home, given that radio is an expanding business. Astro had only last year purchased its first foreign radio broadcaster, India's Sun Radio Networks. View an example of our experience in this industry.

Previous issues

India's chemical sector benefits from China's cut in export rebates [21-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] High stakes in Australian credit card game [15-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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