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 22-Feb-08 India sets sight on becoming a global MRO hub

India's aviation industry is one of the fastest growing in the world. India's aviation minister Praful Patel said in January 2008 that Indian carriers were expected to increase their fleet of aircraft from the current 400 to about 2,500 by 2020. In a bid to boost aircraft maintenance facilities, the Indian government has allowed 100% FDI in the establishment of maintenance, repair and overhaul (MRO) facilities through the automatic route. The decision to allow 100% FDI in MRO facilities comes in the backdrop of major aircraft manufacturers deciding to establish such organisations in India. Airbus is joining hands with Air India and Jupiter Aviation to set up a MRO facility in India to service all types of Airbus aircraft. Boeing is setting up an aircraft maintenance base at Nagpur in India in association with Air India. Regional aircraft manufacturer Avions de Transport Regional also plans to set up a MRO unit for servicing turboprop aircraft in India.

Chemical China - Printing ink price to further rise  Source: China Economic Information Service, 15 February 2008 China's cancellation of rebate for pigment export has pushed up price of pigment products around the world, especially that of printing ink. It is predicted that printing ink price would further rise impacted by high cost of raw materials. As the world's leading pigment exporter, China cancelled 13% VAT rebate to exporters at the beginning of 2008, leading China-exported pigment price to sharply surge. Such pigment producers as Flint, Siegwerk and Sunsure feel pressures of higher cost and start to hike prices of their pigment products. India - James Robinson in US$25 million switch to India group Source: Yorkshire Post, 13 February 2008 India's specialty chemicals manufacturer Vivimed Labs is buying UK rival James Robinson from Harlow-based speciality chemicals producer Yule Catto for GBP13 million (US$25 million. James Robinson specialises in making photographic chemicals, hair dyes and dyes used in lenses for sunglasses. The deal also includes James Robinson's European operation, based in Dieburg, Germany. Yule Catto will also dispose of its stake in joint venture James Robinson India, based in Hyderabad, to its joint venture partner when the sale to Vivimed is completed. Singapore - Sherwin-Williams to acquire Asia coating unit Source: European Coatings Newsletter, 18 February 2008 Sherwin-Williams has signed a definitive agreement to acquire the liquid coatings subsidiaries of Inchem Holdings International Limited, expanding the paint producer's reach in Southeast Asia. Headquartered in Singapore, Inchem produces coatings applied to wood and plastic products in Asia. The coatings are made and sold in China, Vietnam and Malaysia, and distributed to 15 other countries throughout Asia. The deal reaffirms Sherwin-Williams' commitment to growing globally through organic growth accelerated by strategically important acquisitions. In the past year, Sherwin-Williams has acquired paint and coatings companies in India, Uruguay and Mexico. View an example of our experience in this industry.

Consumer & retail Korea - Korean retail sales rebound in January Source: Asia in Focus, 18 February 2008 Sales at Korea's major discount outlets and department stores rebounded in January 2008, fueled by a rise in consumer demand for the Lunar New Year. The Ministry of Commerce, Industry and Energy revealed that the total sales at the three leading discount outlets jumped 6.4% on-year, recovering from three straight months of negative growth. Discount stores posted a 0.6% dip in sales in December, compared to the same one-month period in 2006, while department store sales also rose 6.9% compared to January of 2007 and sales at department stores dipped 2.2% in December. Thailand - Thai consumers a challenge to packaging industry Source: Thai News Service, 18 February 2008 Thai consumers represent a challenge to the packaging industry because they focus heavily on high quality and attractive design. According to a research by Swedish packaging company Tetra Pak, Thai consumers demand high-quality dairy product packaging that conveys freshness, food safety and environmental friendliness, more so than their peers in other countries. Tetra Pak is the local market leader in food and beverage packaging, in particular dairy products in Thailand, with 35 clients in the sector. The beverage market in Thailand in 2006 was worth Bt47.7 billion (US$1.5 billion). Of the total, dairy products accounted for 52%. Thailand - Chocolate market to grow 5% in 2008 Source: Thai News Service, 15 February 2008 Chocolate consumption in Thailand is still low with only 0.26 kg/person/year in 2007, up slightly over 1997 when the average consumption was only 0.144 kg/person/year. This ratio is rather low compared to some Asian countries such as Japan where the average consumption is 2.2 kg/person/year. It is evident that Thailand's chocolate market has the potential for continuing growth as the average consumption is very low, comparatively. It is projected that in 2008, the domestic chocolate market will grow at a similar rate to 2007 at around 5% and achieve a market value of Bt1,550 million (US$49 million). View an example of our experience in this industry.

Financial services Korea - Hana seeks Merrill shares from Temasek Source: Chosun, 18 February 2008 Korea's Hana Financial Group may buy US$50 million worth of shares in Merrill Lynch from Singapore's Temasek Holdings, in a move which would raise Hana's global profile. Hana bought a majority stake in Indonesia's PT Bintang Manunggal and a small-sized bank in Los Angeles, and has been seeking a stake in Chinese commercial lenders. Korean banks expect the subprime meltdown would provide an opportunity to buy a stake in US financial services firms at cheap prices, which will fit into their global expansion ambitions. In January 2008, the Korea Investment Corporation decided to buy a US$2 billion stake in Merrill Lynch. Malaysia - Tune Money launches prepaid Visa cards for minors Source: Business Times Malaysia, 18 February 2008 Tune Money Sdn. Bhd., a financial services portal, has introduced the Red Card, the only prepaid Visa card in Malaysia targeted at people from ages 12 to 17. The prepaid card provides an alternative to carrying cash. Currently, supplementary credit cards are only for those who are 18 years and above. The Red Card is aimed at parents who want a safe and convenient way to give their children pocket money while monitoring their spending. As each card has a portal account, the parent only needs to log in to see what their children are spending their money on. This gives them some measure of control and allows them to monitor their children's transactions. Thailand - Credit card and consumer loans grow at slower pace Source: Thai News Service, 15 February 2008 Credit card and consumer loans increased at a slower pace by the end of 2007 due to the economic slowdown and a lack of confidence in spending by cardholders. According to the Bank of Thailand, overall number of credit cards totaled 12,003,369 as of the end of December 2007, up 145,158 from the end of the previous quarter. Outstanding loans totaled Bt179.3 billion (US$5.7 billion), up Bt5.4 billion (US$170 million). Spending by credit card as of the end of December 2007 totaled Bt79.8 billion (US$2.5 billion), up Bt4.4 billion (US$139 million) from the end of the third quarter last year. Of this, Bt58.5 billion (US$1.8 billion) came from local spending and Bt2.4 billion (US$76 million) from overseas spending. View an example of our experience in this industry.

Industrial & logistics India - Gammon forays into logistics business Source: Press Trust of India, 18 February 2008 Infrastructure major Gammon India has set up a logistics firm to tap the fast growing organised retail market. As a first step, Gammon would concentrate on setting up cold chains and warehouses keeping in mind the retail sector and the company's presence in ports. Gammon's logistics company would have a pan-India operation and expects to begin the business from January 2009. The US$60 billion Indian logistics space is attracting many players including shipping companies like Shreyas Shipping and Essar Group. According to industry data, the cost of surface logistics is estimated at between 9-23% of the GDP.  India - Boeing-Air India MRO venture to take off soon Source: Financial Express, 15 February 2008 Construction work for the much awaited maintenance, repair and overhaul (MRO) facility by Air India and US-based aircraft manufacturer Boeing will start at the end of the second quarter of the 2008-09 fiscal. The MRO is a joint venture between Air India and Boeing and a third party whose name is yet to be announced. The project will commence with an initial investment of US$100 million. Most of the airlines send their aircraft either to the US, Europe and Gulf destination for the regular maintenance. Having an MRO within the domestic skies means that the operating costs of the airlines will be reduced to nearly 60% because of the skilled labour available at US$35 per hour. Singapore - Aerospace output hits record US$4.9 billion Source: Business Times Singapore, 20 February 2008 Singapore's aerospace industry hit a record high in 2007 with an output of S$6.9 billion (US$4.9 billion), boosting the aviation sector growth by 10.4% over 2006. The Economic Development Board is confident that the country will be able to double its aviation output by 2018. Value added was up 8.5% to S$2.7 billion (US$1.9 billion), while the number of people employed by the industry grew by 8.2% to 19,000 in 2007. The industry, which encompasses manufacturing and maintenance, repair and overhaul, remains one of the fastest growing sectors in Singapore. Some S$168 million (US$119 million) in manufacturing fixed asset investment were committed in 2007. View an example of our experience in this industry.

Information & communication technology   Japan - Toshiba, SanDisk plan chip investment Source: Kyodo News, 19 February 2008 Toshiba and SanDisk, its US semiconductor production partner, plan to coinvest some Y1.8 trillion (US$16.6 billion) to boost semiconductor production. The two are expected to build a new NAND flash memory factory in Kitakami, Iwate Prefecture, and an extra facility within Toshiba's existing factory in Yokkaichi, Mie Prefecture. Toshiba has four factories for flash memory products, all in Yokkaichi. The decision is seen as an attempt to catch up with industry leader Samsung Electronics of Korea in the global NAND flash memory market. Toshiba is the second-largest NAND flash memory maker. Singapore - Chartered buys Hitachi Semicon for US$233 million Source: Business Times Singapore, 16 February 2008 Chartered Semiconductor Manufacturing has agreed to buy 100% of Hitachi Semiconductor Singapore (HNS) from Hitachi Ltd. and Hitachi Asia for US$233 million. HNS owns and operates an eight-inch wafer fabrication facility in Singapore, which will add to the capacity of four eight-inch fabs that Chartered currently operates. The acquisition is scheduled to be completed at the end of the first quarter of 2008. State-controlled Chartered Semiconductor ranks alongside China's Semiconductor Manufacturing International Corporation in the market for custom-built microchips, which is dominated by larger rivals Taiwan Semiconductor Manufacturing Co. Ltd. and United Microelectronics Corporation. Thailand - IT market to grow 13.4% in 2008 Source: Thai News Service, 15 February 2008 Kasikorn Research Center forecasts that in 2008 the information technology (IT) industry in Thailand may record growth almost on par with 2007. Market turnover of the industry is expected to total some Bt168.8 billion (US$5.3 billion) - up 13.4% - slightly over the growth of 13.2% in 2007. The main thrust of growth would come from investments in IT initiated by the government and the private sector. This would include Bt79.2 billion (US$2.5 billion) in hardware products - growing around 10%; plus Bt72.7 billion (US$2.3 billion) going to software products - increasing 17%; and computer services valued at Bt16.9 billion (US$533 million) - growing around 15%. View an example of our experience in this industry.

Life science China - Chemical drug preparations sector reports rapid development Source: Xinhua Economic News Service, 15 February 2008 China's chemical drug preparations sector generated RMB166.2 billion (US$23.2 billion) in gross industrial output value in the first 11 months of 2007, up 24.3% year-on-year. The Shanghai Institute of Pharmaceutical Industry revealed that the sector's gross sales value reached RMB155.3 billion (US$21.7 billion), up 21.8% year-on-year. Jiangsu province held leadership in the sector in terms of sales value, followed by Guangdong and Shandong provinces. In view of export delivery, China's chemical drug preparations sector generated RMB7.3 billion (US$1 billion) in the first 11 months of 2007, up 42.8% year on year. The sector's export delivery accounted for 4.7% of its gross sales value. India - Roche ties up with Mankind Pharma Source: Business Standard, 15 February 2008 Roche Diagnostics, a leading global player in medical diagnostics segment, has entered into an exclusive agreement with the Delhi-based Mankind Pharma to market its newly launched blood glucose monitoring device "Accu-Chek Go"” in India. This is the first such marketing tie-up for both companies in India.     Roche intends to capitalise on Mankind's strong distribution network to make Accu-Chek Go available in 500 cities across the country. Mankind is looking at selling "Accu-Chek Go" worth Rs200 million (US$5 million) in the first year and expects to generate sales amounting to Rs2 billion (US$50 million) in five years.     Japan - Fujifilm to buy drugmaker Toyama Chemical Source: Bloomberg, 19 February 2008 Photographic film maker Fujifilm will buy 66% of Tokyo-based drugmaker Toyama Chemical to diversify into pharmaceuticals as demand for camera supplies falls. Fujifilm is paying Y154.6 billion (US$1.4 billion) for the Toyama stake. The acquisition would give Fujifilm about 10 experimental medicines, including the first new class of anti-flu drug in a decade. Known as T-705, the anti-flu pill is expected to challenge Roche Holdings AG's Tamiflu within two years. Toyama has started to test whether the T-705 is more effective at reducing flu symptoms than Roche Holding's Tamiflu and GlaxoSmithKline's Relenza antivirals. View an example of our experience in this industry.

Media & leisure China - MediaCorp to buy 23% stake in Chinese outdoor advertising firm Source: Channel NewsAsia, 15 February 2008 Singapore's MediaCorp is buying a 22.7% stake in Dahe Media, making its equity foray into Chinese media. The move makes MediaCorp the largest single shareholder in the mainland's sixth biggest advertising company. China's advertising market is expected to hit a whopping US$20 billion in 2008, a 30% jump from a year ago, thanks to aggressive marketing and higher rates with the upcoming Beijing Olympics. While television might get the lion's share, outdoor media, such as billboards, account for 17% of the market. MediaCorp is keen to buy into a piece of this growing pie, and Dahe Media offers a one-stop shop for billboard advertising in China. India - Disney ups stake in UTV Source: The Telegraph, 18 February 2008 The Walt Disney has increased its stake in Indian TV and movie content firm UTV Software Communications to 32.1% from 14.9%. At the same time, Walt Disney will also acquire a 15% stake in group company UTV Global Broadcasting Limited. This partnership across movies, TV content, interactive and broadcasting endorses Disney's leadership position in India and Southeast Asia. This deal comes less than a month after NBC Universal inked a deal with Indian broadcaster New Delhi Television for a 26% stake in the firm's overseas unit that offers entertainment and lifestyle channels. Many experts estimate that the Indian market will be Asia's most lucrative TV market by 2015. Malaysia - Astro bids for UK's Virgin Radio Source: The Edge Daily, 18 February 2008 Malaysian pay-TV operator Astro All Asia Networks has joined the bidding to buy radio broadcaster Virgin Radio from British media group SMG. Astro is competing with three British bidders for Virgin Radio: Global Radio, Absolute Radio and UTV Media. Given the limited domestic market size, Astro has ventured to Indonesia, India and China to enhance its earnings. But the United Kingdom is a mature market with several hundreds of players in the media industry, including 837 radio stations, 513 television channels, 1,596 newspapers, and 1,930 magazines. Analysts expect a long gestation period before any meaningful impact can be seen. View an example of our experience in this industry.

Previous issues

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