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.    2008 Asia-Pacific pay-TV operators survey, 4th edition   Programmers, find out what the major cable, satellite and IPTV platforms in Asia  and Australia think about your channels and support, their programming plans and  their hopes and fears for the future of the industry. This survey targets  programming managers at 50 major carriers in 16 countries across the region,  focusing on the largest players in each country. In cooperation with ContentAsia.  Request more information.    China's water and wastewater treatment sector   Huge demand exists in China for clean water with ample opportunities for  investors, water companies or water technology suppliers in the municipal and  industrial water supply and wastewater treatment market. Market-oriented  regulatory changes have lowered pricing risk, and opened up the sector.    Find out what the needs, solutions and opportunities are. In the news this week l 6-Feb-08 Handset players struggle in China despite booming market

Motorola has signalled that it may get out of its struggling cell-phone business in the US. Motorola's plans to spin-off or sell its handset unit coincided with news that Lenovo is selling its failing mobile-handset division, which sells predominantly in China. Japan's Kyocera is also withdrawing from the Chinese cellphone market. Both Lenovo and Kyocera have admitted failure in their Chinese mobile handset businesses, painting a bleak picture for makers selling to China. China's domestic mobile handset shipments are estimated to have reached 187 million units in 2007, up 22% from 153 million in 2006. iSuppli forecasts that China's domestic handset shipments will continue their upward trek to 206 million in 2008. But with the sprawling illegitimate handset market accounting for about 30% of mobile handset shipments in China in 2007 and increasingly thin margins, handset makers will find the road ahead a lot tougher.

Chemical China - SABIC, Sinopec to build ethylene plant Source: Xinhua, 1 February 2008 Saudi Basic Industries Corporation (SABIC) has signed a framework agreement with China Petroleum and Chemical Corporation (Sinopec) to build an ethylene derivatives plant with an annual production capacity of one million metric tons. The two companies would hold an equal 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. India - Tata Chemicals to buy General Chemical of US Source: Business Times, 1 February 2008 Tata Chemicals has agreed to buy a 100% equity stake in United States-based General Chemical Industrial Products from Harbinger Capital Partners for US$1 billion. General Chemical produces natural soda ash which uses less energy, capital and raw materials than synthetic soda. The privately-held company has facilities in Wyoming. Tata Chemicals and General Chemical have a combined capacity of six million tons a year, controlling about 14% of the world soda ash capacity. The combined group will rank second only to Belgium's Solvay, which has capacity of near eight million tons. Thailand - Dow JV plans Thai elastomers plant Source: Reuters, 31 January 2008 SCG-Dow Group, a joint venture of The Dow Chemical Company and Siam Cement Public Company Limited, is in the final stage to plan and build a plastomers and elastomers plant at the joint venture's Map Ta Phut site in Thailand. The plant was expected to receive feedstock from a second joint-venture olefin plant in Map Ta Phut. Plastomers are polymers used in packaging while elastomers are used in the automotive industry. The plant is expected to start operations in 2011 and would exports production to in Asia. View an example of our experience in this industry.

Consumer & retail India - Birla Retail to open more hypermarkets Source: Financial Express, 2 February 2008 Aditya Birla Retail (ABRL), the retail arm of the Aditya Birla Group, will be investing Rs80-100 billion (US$2-2.6 billion) in expanding its operations across India over a period of five years. ABRL started establishing its retail stores in 2007 and have already opened nearly 400 supermarket stores and one hypermarket store. But it faces intense competition from other players in the market including Reliance Retail and Bharti Retail. The company, which aims to emerge as one of the leading retail players in India, plans to have nearly 1,500 supermarket and 100 hypermarket stores in the next five years. It is also investing in backend infrastructure to develop a robust supply chain. Korea - Store sales up in 2007 Source: Korea Herald, 4 February 2008 Discount store chains and convenience stores enjoyed a rise in earnings in 2007. According to the National Statistical Office, discount stores recorded a 9.8% jump in sales in 2007 compared to a year ago. In 2006, discounters posted an on-year increase of 8.5%. Convenience stores also saw a rebound, as sales rose 11.1%, a jump from 7.9% on-year growth posted in 2006. The number of discount stores has been expanding at an average pace of 28.9% a year since 1995, when the number totaled 25 and by 2005 totaled 316. Convenience stores during the same period expanded at an average rate of 20%. They totaled 1,557 in 1995 and by 2005 had surged to 8,855. Malaysia - Retail sales to grow 6.7% in first half Source: The Edge Daily, 1 February 2008 Retail sales in Malaysia are expected to rise by 6.7% year-on-year in the first half of 2008 to US$12.5 billion on the back of strong consumer confidence sentiment. MasterCard Worldwide said that increased attention by the government on infrastructure and development reforms would aid economic activity. MasterCard Worldwide forecast that retail sales would grow in all 12 Asia-Pacific markets, with China maintaining its lead with a projected 12.8% year-on-year growth in the first half of 2008 to US$300 billion. Indonesia and Hong Kong are not far behind pace-setter China at 12.6% and 10.5%, respectively. The region's laggards are Japan, Taiwan and New Zealand, with expected sales growth of 0.7%, 2.9% and 2.4%, respectively. View an example of our experience in this industry.

Financial services Japan - HSBC launches wealth arm source: Japan Times, 1 February 2008 HSBC Holdings has entered the private banking business in Japan by opening two dedicated offices in Tokyo's upscale Akasaka and Hiroo districts to serve the investment needs of individuals with financial assets of at least Y10 million. The UK-based bank plans to set up four more such outlets, called HSBC Premier Center, in Tokyo and one in Osaka in 2008 before expanding into other major cities. HSBC is one of an increasing number of foreign and Japanese banks seeking to provide financial advisory services to Japan's affluent savers who have long parked most of their money in bank deposits. Citigroup is also expanding its retail branch network from 31 to 50 over the next few years. Korea - Internet banking surges 40% Source: Korea Herald, 1 February 2008 Internet banking use jumped 40% in 2007 from a year earlier as people are finding online financial transactions more convenient. According to the Bank of Korea, the number of daily transactions via internet banking surged to 17.9 million as of 31 December 2007, up from 12.8 million a year earlier. Internet banking services include money transfers, balance checking and loan applications. The number of internet banking subscribers registered with 17 local banks, the Korea Post and HSBC reached 44.7 million as of 31 December 2007, up 24.5% from a year earlier. By age, 34.5% of internet banking subscribers were in their 30s, 29.3% were in their 20s and 19.9% were in their 40s. Taiwan - DBS takes over failed Taiwan Bowa Bank Source: Reuters, 2 February 2008 Singapore's DBS Bank has won an auction to acquire the "good bank assets" of Bowa Bank in Taiwan. Under the terms of the transaction, DBS will acquire Bowa's net loans of approximately NT$66.3 billion (US$2.1 billion), and another NT$92.3 billion (US$2.9 billion) of deposits. The deal will also give DBS access to 39 branches, three business units and over 750,000 depositors in Taiwan. DBS joined other global banks and private equity investors, including HSBC, Citigroup, Standard Chartered and the Carlyle Group, to acquire Taiwan banks to expand their presence in Asia's third-largest wealth management market and fourth-biggest banking market. View an example of our experience in this industry.

Industrial & logistics India - Lufthansa in talks with Jet, QuikJet for cargo business Source: Business Standard, 1 February 2008 Deutsche Lufthansa has commenced negotiations with Indian full-service carrier Jet Airways and Bangalore-based cargo airline QuikJet for a strategic alliance for cargo operations. The German aircraft carrier is in talks with various domestic players including Jet Airways and QuikJet to get into partnerships for operations to Europe and other forward destinations.   The move comes a day after the government allowed foreign carriers to own 74% in cargo operations under its foreign direct investment (FDI) policy review. Foreign investment was not permitted in cargo airline operations before this. Korea - Korea Express on top of domestic delivery market Source: Korea Herald, 1 February 2008 Korea Express edged past Hyundai Logistics to become the Korea's top delivery firm in 2007. Korea Express handled 122 million delivery orders in 2007, topping its competitors Hyundai Logistics with 120 million, CJ GLS with 114 million, and Hanjin Corp with 100 million. Korea Express is likely to cement its leading position in the domestic delivery market once it is integrated into the country's major transport group, Kumho Asiana. Kumho-Asiana Group was selected as the preferred bidder to acquire a controlling stake in Korea Express. Korea Express hopes that delivery volume this year will rise to 200 billion on synergies from the acquisition. Japan - Auto output rose 1% in 2007 Source: Japan Times, 31 January 2008 Output of cars, trucks and buses in Japan rose by 1% in 2007 from the year before to 11.6 million units, as greater exports outweighed the effects of falling domestic sales. According to the Japan Automobile Manufacturers Association, domestic sales fell 6.7% to 5.354 million units in 2007. But exports surged 9.8% to 6.550 million units, softening the impact of slumping domestic demand on the automobile industry. In 2007, car output rose 1.9% to 9.945 million units, posting a gain for the fourth straight year. Truck output fell 6.3% to 1.538 million units, down for a fourth consecutive year, whereas production of buses surged 28.2% to 113,670 units, representing a third straight yearly increase. View an example of our experience in this industry.

Information & communication technology   Asia - Motorola spinoff may help Asian handset firms expand in US Source: CNN, 1 February 2008 Motorola may spin off or sell its handset division, which accounted for US$19 billion of the company's US$36.6 billion in sale in 2007. The business has been struggling with hefty losses due to rising competition from the world's top cellphone makers, Nokia and Samsung Electronics, as well as Apple. The spin off may create some opportunities for cellphone makers in Asia looking to snap up assets overseas or strike a partnership to grow market share, expand in the highly competitive US cellphone market, and leapfrog bigger rivals. Second-tier handset makers in Taiwan and China as well as cash-rich Japanese electronics firms looking to expand their small-scale handset businesses could benefit from a partnership or deal with Motorola. China - Lenovo to offload handset unit Source: China Daily, 1 February 2008 PC maker Lenovo Group will offload its loss-making mobile-phone business for US$100 million to a group of private equity firms. Hony Capital Fund, a private equity firm partly owned by Legend Holdings, the parent of Lenovo Group, will acquire 60% of Lenovo's handset arm through its subsidiaries Ample Growth and Jade Ahead, while private companies LEV Ventures and Super Pioneer will take the rest. Lenovo is the fourth player in China's mobile phone market after Nokia, Motorola and Samsung, and has been successful in China's fourth- to sixth-tier cities in recent years. However, its shipments fell dramatically after industry giants like Nokia and Motorola forayed into China's rural areas. Japan - Camera shipment top 100 million Source: Kyodo News, 31 January 2008 Global shipments of digital cameras by Japanese manufacturers in 2007 topped 100 million units for the first time annually due partly to strong demand in emerging economies. According to the Camera & Imaging Products Association, the shipments surged 27.1% from the previous year to 100.37 million units. The association said shipments were also boosted by better-than-expected demand for digital single-lens reflex cameras in Japan, other parts of Asia, Europe and North America. Digital SLR camera shipments jumped, by 41.9% in volume to 7.46 million units and 31.7% in value to Y445 billion, because many models have become much affordable. For 2008, the association estimates total shipments of some 111.95 million units, up 11.5%. View an example of our experience in this industry.

Life science China - Venture capital eyes China's medical industry Source: China Economic Information Service, 3 February 2008 China's medical industry has attracted more venture capital (VC) since 2006. According to ChinaVenture, the proportion of VC in this field rose from 10.4% in the first quarter of 2006 to 22.3% in the fourth quarter of 2007. VC totaling US$60 billion is ready for entering Chinese medical industry. The spree of investment in the industry reflects that China's pending reform on the industry may likely bring about huge consumption. China will annually pour RMB100 billion (US$14 billion) for the medical reform and the governmental financial support to rural medical system will amount to RMB200 billion (US$28 billion) by 2010. Another reason attracting VC to Chinese medical industry is preferential policies to private investment in the industry. India - Drug makers worry over compulsory licensing Source: Mint, 4 February 2008 Indian drug makers, who make most of their revenues from sales of non-patented or generic drugs, are exploring the use of a public health provision in global trade laws called compulsory licence that allows the World Trade Organisation's member-nations to override patents and permit cheaper versions of patented drugs. Hyderabad-based Natco Pharma's request for compulsory licences on two patented cancer drugs could emerge as a larger trend. Indian units of MNC drug makers said the move was unjustified in the absence of a national emergency for which compulsory licensing is designed. They fear that patent provisions could be misused to make products available illegally and take the country back "to the pre-product patent era." Thailand - Novartis wins Thai battle, setback for Indian firms Source: Financial Express, 3 February 2008 Thailand's government has decided to cancel compulsory licensing plans for cancer drug Glivec/Gleevec (imatinib) after Swiss pharma major Novartis agreed to supply free drugs to all patients under the universal healthcare scheme. The offer was prompted by a last-minute letter of intent from the drug firm in return for cancellation of the compulsory licence regulation, which temporarily suspend patent protections. This strategy of MNCs will hit Indian firms badly, denying Indian companies an opportunity to sell cheaper drug in Thailand. No generic firm will want to sell cheaper drugs for free, as it wants to recover a part of manufacturing and shipping costs. Generic players, thus, stood to lose in such cases. View an example of our experience in this industry.

Media & leisure Asia - Microsoft/Yahoo! ad threat to Google in Asia Source: Guardian Unlimited, 1 February 2008 Software company Microsoft has made a US$44.6 billion bid to acquire Internet major Yahoo!. The plan was to create a powerful alternative to Google by merging Microsoft's search engine MSN with Yahoo!, grabbing a slice of the rapidly growing US$40 billion online advertising market. Microsoft and Yahoo! won't add up to become serious competition for Google, but could provide stronger competition for Google in Asia, where Yahoo is strong. In China, Google, Yahoo! and Microsoft have all found the country difficult to crack. Local companies such as Baidu are the market leaders in the mainland, but Microsoft will find Yahoo's success in Japan to be a major boost. China - China steps up internet control with video rules Source: TelecomAsia, 1 February 2008 China takes a new step to tighten control of the internet when rules go into force limiting online video-sharing to state companies. The rules are aimed at expanding a Chinese censorship system that tries to block internet use to spread dissent while promoting it for business and education. Online video has exploded in popularity in China, which has 210 million people online and is expected to surpass the US in 2008 as the world's biggest population of internet users. Sites such as Tudou.com, 56.com and Youku.com get as many as 100 million viewers a day, a scale that rivals China's biggest state TV channels. But regulators, wary of hurting a fast-growing industry, are expected to let private operators work around the restrictions. Singapore - Major MICE players set up base in Singapore Source: Business Times Singapore, 1 February 2008 Three major players in the Meetings, Incentives, Conventions and Exhibitions (MICE) industry are setting up shop in Singapore. Association management companies Kellen Company and Kenes International, as well as German exhibition and convention company Leipziger Messe International, have chosen to anchor themselves in Singapore, reflecting the positive sentiments of the robust MICE market in Singapore and the region. The Singapore Tourism Board (STB) aim to raise the tourism receipts contribution of the BTMICE sector to S$10.5 billion (US$7.4 billion) under the Tourism 2015 blueprint. For the industry as a whole, STB hopes to achieve S$30 billion (US$21 billion) in tourism receipts by 2015. View an example of our experience in this industry.

Previous issues

Malaysia losing out in the FDI race? [1-Feb-08] The push towards convergence gains momemtum in Korea [25-Jan-08] Japanese transport companies expand in China [18-Jan-08] China shows potential for pharma outsourcing [11-Jan-08] Epoxy producers in Japan strengthen setup to meet surging demand [14-Dec-07] Foreign firms buy into Taiwan's banking sector [7-Dec-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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