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 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 15-Feb-08 High stakes in Australian credit card game

The Australian credit card market has become very competitive. The number of credit card products on offer in Australia has grown five times over the last three years and there are now over 250 credit card products available. The competition has led to product differentiation. Macquarie Group is targeting the top end with associated rewards and benefits while Citibank, HSBC and BankWest are competing in the low-cost market segment. Rivalry in the low-cost market segment has led to Citibank acquiring Suncorp's credit card portfolio, a deal which will put Citibank closer to reaching its goal of being a major player in Australia's A$30 billion (US$27 billion) credit card market. Other international lenders such as HSBC and American Express have also been moving into the Australian market, as smaller credit card players offload their assets to concentrate on core businesses.

Chemical India - BASF Indian arm to start Kolkata plant Source: The Press Trust of India, 8 February 2008 BASF Construction Chemicals (India), the wholly-owned subsidiary of BASF Group, will start manufacturing at its Kolkata plant in March 2008. The Kolkata plant, coming up at Jalan Industrial Complex in Howrah, would be the company's fourth in India after Mumbai, Bangalore and Chandigarh. The plant would cater to the needs of the eastern region, where construction activity is witnessing an upswing. The company also plans to commission a large plant in South India. Total investments to be made by BASF in the five year horizon would be around Rs600 million (US$15 million). BASF targets to increase the market share to 15% in the next five years from the current 11%. Japan - Japanese paint makers target emerging markets Source: Japan Chemical Week, 7 February 2008 Japan's major paint manufacturers are accelerating the expansion of their businesses in the emerging markets of countries like the BRIC nations that have maintained high rates of economic growth, to counteract sluggish demand for their products in Western and domestic markets. In India, Kansai Paint will build a plant in Hosur in the suburbs of Bangalore in 2010 to produce automotive and building paints. Nippon Paint will start this autumn production of general-purpose paints like emulsion paints at its Chennai plant in India. Dai Nippon Toryo will start production by June 2008 of emulsion and anticorrosion paints in Tianjin while expanding its facility in Shanghai for the manufacture of solvent-based paints. Singapore - Lanxess Selects Singapore for Butyl Rubber Project Source: Chemweek's Business Daily, 8 February 2008 German chemical company Lanxess plans to build a new rubber plant in Singapore in an investment worth EUR400 million (US$582 million). Singapore edged out Malaysia and Thailand to win the hotly contested race for the new plant that will produce butyl rubber, which is used to make car tyres. The butyl rubber plant will have capacity to produce about 100,000 metric tons/year of halo butyl rubber and will be completed toward the end of 2010. Lanxess will have 380,000 metric tons/year of butyl rubber capacity by 2010, including the planned Singapore unit. The company's present capacity is split about equally between sites at Sarnia, ON and Zwijndrecht, near Antwerp. View an example of our experience in this industry.

Consumer & retail India - Government may consider FDI in specific retail sectors Source: The Press Trust of India, 10 February 2008 The Indian government may allow Foreign Direct Investment (FDI) for specific sectors such as electronic and sports goods in retail if an expert study going into the issue foresees no impact on the neighbourhood mom and pop stores. The Indian Council of Research in International Economic Relations (ICRIER) is conducting a study on retail to understand the impact of big retail on the small shops. Commerce and Industry Minister Kamal Nath said that opening sectors like electronics, sports goods, pharmacy and confectionery to FDI would not have an impact on the neighbourhood stores but would instead drive the Indian industry. Malaysia - Retail sales damper Source: Business Times Malaysia, 11 February 2008 Retail sales in Malaysia was estimated to have grown by 8% in 2007, translating into RM64.2 billion (US$19.8 billion) in total sales. As higher living costs and stagnant salaries weigh on consumer confidence, retail sales is forecast to grow slower than initially thought in 2008. Retail Group Malaysia Sdn. Bhd. has cut its sales growth projection to 7% from 8% earlier. The one percentage point cut could result in total sales for the year coming in at RM68.7 billion (US$21.2 billion), a RM610 million (US$188 million) shortfall. The numbers exclude big-ticket items like houses and cars. Thailand - Unilever launches new Breeze Source: The Nation, 7 February 2008 Unilever Thai Trading has removed its normal-formula Breeze liquid detergent from all shelves and replaced it with a newly launched super-concentrated liquid detergent called Breeze Excel Small & Super. Liquid detergent currently accounts for 8% of the Bt12.5 billion (US$386 million) detergent market. Standard powder detergent represents 48% and concentrated formula products, 44%. The concentrated-detergent segment grew 12% in 2007, followed by the liquid segment at 5% and the standard segment at 3%. Overall, the detergent market grew 7% in 2007. View an example of our experience in this industry.

Financial services Australia - Citibank's expansion is on the cards Source: Australian Financial Review, 11 February 2008 As the declining credit cycle forces more credit card issuers to consider outsourcing, Citibank has acquired Suncorp's credit card portfolio, gaining average net receivables of A$225 million (US$204 million) and 100,000 cards to its previous acquisitions of the cards of Credit Union Service Corp and Bank of Queensland. With around A$3 billion (US$2.7 billion) of card receivables in Australia, Citibank is now the fifth-largest group in the sector. But to keep up its rate of growth, Citibank will next have to target the portfolios of St George Bank and National Australia Bank for acquisition. This may be a real possibility, given St George has already sold off its ATM fleet to concentrate its business on customer service rather than owning the infrastructure. Australia - Plastic loses its lustre as cost of living climbs Source: The Sydney Morning Herald, 12 February 2008 Australia's appetite for debt may be slowing amid evidence that credit card interest rates of up to 20% are putting the brakes on borrowing. "Mounting pressure of interest rate hikes and a volatile global economy brought on by America's credit crunch may have caused some Australian consumers to be cautious about taking on new credit card and personal loan debt," said Erica Hughes, Veda's general manager of information services. Applications for new credit cards have fallen to a three-year low. According to the Veda Advantage Consumer Credit Demand Index, applications fell by 3.8% in the six month to December 2007 compared with the same period in 2006. The reduction in demand could also reflect market saturation. Vietnam - Morgan Stanley eyes Vietnam venture Source: Intellasia, 12 February 2008 Morgan Stanley plans to set up a securities joint venture in Vietnam, after an earlier plan to tie up with the state investment company fell through. The bank will be one of the first international groups to get into Vietnam's domestic broking business if it gets the go-ahead. Morgan Stanley earlier sought a landmark joint venture with the powerful State Investment Corporation of Vietnam, which in effect owns the country's big companies. Rival banks, fearing they would be shut out of Vietnam's privatisation programme, strongly opposed the deal, which was scrapped. Vietnam has about 60 licensed domestic securities firms, many partially owned by state-controlled enterprises. View an example of our experience in this industry.

Industrial & logistics Asia - DHL starts to increase Asian network capacity Source: BusinessWorld, 11 February 2008 DHL has increased its Asia Air Network cargo capacity in Manila and Hong Kong by utilising a new dedicated freight aircraft to address the growing volume of imports and exports to and from the Philippines. Flight frequency also increased from four to five times a week. These adjustments have increased DHL's total payload capacity by 58%, creating a total payload capacity of 240 tons. According to the Economist Intelligence Unit, exports from the Philippines to China grew by an average of 43.8% between 2000 and 2005, while imports from China to the Philippines grew by an average of 30.5% during the same period. Japan - Japan Post, Lawson form wide-ranging business tieup Source: Kyodo News, 13 February 2008 Japan Post Holdings and convenience store chain Lawson will ally to build a new business model for providing goods and services at post offices. Japan Post plans to open convenience stores in rural post offices to improve customer convenience and enhance the post office network, while Lawson expects to expand sales channels under the alliance. Lawson stores will open at post offices in regions where the chain has so far failed to set up outlets. Japan Post and Lawson will open both post offices and convenience stores on unused properties. Japan Post and Lawson will develop around 800 joint stores throughout Japan in three years. Singapore - Port of Singapore picks up 49% in ABG terminal Source: The Economic Times, 7 February 2008 The Port of Singapore Authority (PSA) has acquired a 49% stake in ABG Infralogistics' subsidiary, ABG Kolkata Container Terminal. It is also looking to acquire a stake in another wholly-owned subsidiary of ABG, ABG Kandla Container Terminal. PSA already holds 12% equity in ABG Infralogistics. The funds will be used for ABG's expansion projects. The company's proposed capital expansion plans include Rs3 billion investment in its crane manufacturing capacity, and up to Rs20 billion (US$505 million) investment in the port sector. It now operates the Kolkata Container Terminal under the own-operate-maintain (OOM) route since April 2005. View an example of our experience in this industry.

Information & communication technology   China - Software industry records 20% rise in revenue Source: Xinhua, 13 February 2008 China's software sector generated RMB580 billion (US$80.7 billion) in revenue in 2007, an annual increase of 20.8%. According to the Ministry of Information Industry, sales of software products surged 22.5% to RMB201.7 billion (US$28.1 billion), while system integration income rose 16% to RMB147.8 billion (US$20.6 billion). The income of software and technology services hit RMB97.8 billion (US$13.6 billion), up 24.8%. Revenues of embedded system software hit RMB115.5 billion (US$16.1 billion), up 21.8%. Revenues generated from integrated circuit design jumped 16.8% year-on-year to RMB17.1 billion (US$2.4 billion). India - Computer services exports may gain 28% in 2007-08 Source: Bloomberg, 12 February 2008 India's computer services exports may gain 28% this fiscal year. According to estimates by the National Association of Software and Services Companies (Nasscom), exports will rise to US$40.8 billion for the year ending 31 March 2008. The home market will likely generate US$23.2 billion in revenue, boosting total growth by 33% to US$64 billion. Tata Consultancy Services and Infosys Technologies compete with IBM to write software and maintain networks from India for overseas clients. Nasscom predicts that India may exceed its target of US$60 billion in computer services exports for the 12 months ending March 2010. Malaysia - Juniper joins Ethernet switches fray Source: Tech & U, 11 February 2008 Networking vendor Juniper Networks is moving into the Ethernet switches market for the first time after 10 years in the core router segment. Due to the convergence of data, video and voice, enterprise customers are getting more demanding. Having just a switching solution is not enough, as customers want to have all the features and functionalities enjoyed by the service providers like high availability, robustness and security. Juniper expects the overall market value for Ethernet switches in Asean countries to be US$506 billion in 2008. The Ethernet switches market in Malaysia is worth US$125 million in 2008, and Juniper is eyeing at least 10% market share by the end of the year. View an example of our experience in this industry.

Life science Australia - Strides takes majority stake in Genepharm Source: The Economic Times, 9 February 2008 Indian drug maker Strides Arcolab has merged its Australian and Asian businesses with Genepharm Australasia and would control 55% in the combined entity in a cash-cum-stock deal worth A$80 million (US$72 million). Once the transaction is complete, the combined entity would account for business of A$100 million (US$90 million) and would rank in the top 10 generic pharma players in the region. Genepharm distributes a wide range of pharmaceutical and over-the-counter products in Australia where it has a 11% market share. For the year to June 2007, the company posted revenue of A$55 million (US$50 million) and operating profit of A$5 million (US$4.5 million). India - Pharma industry seeks R&D tax benefit from budget Source: The Economic Times, 7 February 2008 The Indian pharmaceutical industry has called on the Government to extend the tax benefits available for R&D to pharmaceutical companies by five more years. Tax benefits under Sec 81 AB expired in March 2007. The R&D expenditure of pharmaceutical industry has gone up considerably. After the patent law, Indian pharmaceutical industry has started investing substantially in R&D. Without tax exemption, the domestic pharmaceutical industry would have to incur huge expenditure. An extension till FY13 would help the industry in long-term planning and research to face competition. Thailand - Lion Corp to make over-the-counter drugs in Thailand Source: Thai News Service, 13 February 2008 Lion Corp, the Japanese-based manufacturer of personal-care and household products, has unveiled plans to make functional foods and over-the-counter (OTC) drugs in Thailand. The plan would be carried out within the next year by setting up a new manufacturing plant and using existing production facilities owned by the Saha Group. Lion (Thailand) was set up jointly by the Saha Group and Lion Japan in 1969. Lion now ranks third in the Japanese market for OTC drugs. Its products include Bufferin aspirin for pain and fever as well as functional-food products under the Kenbisoken umbrella brand, which offer benefits like sound sleep, fatigue relief and skin elasticity. View an example of our experience in this industry.

Media & leisure India - Soros buys 3% stake in Reliance Entertainment Source: Guardian Unlimited, 11 February 2008 US-based billionaire investor George Soros has acquired a 3% stake worth US$100 million in India's Reliance Entertainment, which runs Bollywood film studios, social-networking and games sites. Analysts say Soros' interest in Reliance was piqued by its plans to expand into television. India has the world's third-biggest cable-TV market and is forecast to become Asia's most lucrative pay-TV market by 2015. Foreign firms such as Rupert Murdoch, NBC Universal and Disney have established their presence in India's growing television industry. The Federation of Indian Chambers of Commerce and Industry predicts India is likely to have 128 million households with televisions by 2010, up from 105 million in 2005. Korea - Web TV to offer online game services Source: Korea Herald, 13 February 2008 Korea's broadband service provider Hanarotelecom has unveiled plans to offer interactive gaming through its internet protocol TV (IPTV) service - the first time online game services are available on IPTV in Korea. It has signed a deal with Neowiz Games to develop game content for IPTV. Hanarotelecom also plans to provide IPTV subscribers with online music services through a partnership with a sister company of Neowiz Games, Eins Digital. Telecom firms are betting on IPTV to generate new revenue sources with interactive services such as gaming and shopping. Hana TV had 807,000 subscribers as of the end of 2007, while KT had 320,000 subscribers to its IPTV service, Mega TV. Korea - Foreign online games to hit Korea Source: Korea Times, 10 February 2008 About a dozen foreign games, including Blizzard Entertainment's "Starcraft 2" and Electronic Arts' "Lord of the Rings Online", will hit Korea in 2008, threatening the long-run popularity of locally made games such as "Lineage" from NCSoft, "Maple Story" from Nexon and NHN Games' "Dungeon & Fighter." The sudden surge of online game imports is the result of major game publishers' diversification strategy, as they began to reduce the financial risks in developing games themselves. The online game market has almost stopped growing from last year with some 20 million gamers, and firms have struggled to make profits from their investment in developing original products, which sometimes cost tens of billions of won. View an example of our experience in this industry.

Previous issues

Handset players struggle in China despite booming market [6-Feb-08] 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]    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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