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 18-Jan-08 Japanese transport companies expand in China

China's total logistics flow rose 25.5% to RMB74.8 trillion (US$10.3 trillion) in 2007, according to the China Federation of Logistics and Purchasing or CFLP. A rapidly growing Chinese economy pushed the logistics demand elastic coefficient (GDP to total logistics flow) to 3.2 from 2.8 in 2006. Anticipating continued growth in China and deepened economic interdependency between China and Japan, Japanese airlines such as All Nippon Airways, Japan Airlines and Nippon cargo Airlines have stepped up efforts to expand in China. Japanese transport firm Kintetsu World Express will also double its bases in China to around 200 locations by 2012 and will increase its number of large warehouses for shipments of goods within China.

Chemical China - Rohm and Haas opens manufacturing facility in China Source: Coatings Flash, 14 January 2008 Rohm and Haas Company, a supplier of binders and additives for the global paint and coatings industry, has launched the initial operations of its new manufacturing plant in Sanshui, Guangdong Province, China. To date, the company has invested about US$10 million in this site, which will make products based on acrylic emulsion technology. The plant has more than 20,000 metric tons of capacity. Helen Zhang, Greater China General Manager, Rohm and Haas Paint and Coatings Materials, said that "South China comprises 40% of China's total coatings industry." The huge market potential is what brings Rohm and Haas to South China. China - China approves Blackstone investment in BlueStar Source: China Daily, 11 January 2008 US-based private equity firm Blackstone Group has received the go-ahead from China's National Development and Reform Commission to acquire 20% of chemical maker China National BlueStar (Group) Corporation, a subsidiary of the state-owned China National Chemical Group Corporation. Blackstone agreed in September 2007 to buy a 20% stake in BlueStar for up to US$600 million, marking its first big investment in China.    China National BlueStar has three listed units: Blue Star Cleaner, Shenyang Chemical Industry Co. Ltd. and Blue Star New Chemical Material Co. Ltd. It operates chemicals, auto and food divisions, and controls more than 10 non-listed units with annual sales revenue of over RMB30 billion (US$4 billion). Singapore - Soxal to build hydrogen plant on Jurong Island Source: Business Times Singapore, 16 January 2008 Singapore Oxygen Air Liquide (Soxal), a unit of French-owned Air Liquide, is investing S$250 million (US$175 million) to build Singapore's first hydrogen facility on Jurong Island to support oil refiners in the area. Hydrogen is used to reduce the sulphur content in automotive fuels, and refiners will need it to meet increasingly stringent vehicle emission standards in Singapore, like the Euro IV. It is also used by the chemical industry. Currently, hydrogen capacity on Jurong Island is largely 'merchant business', which means the refiners build their own in-house hydrogen plants. There are a few small third-party providers, including Soxal, which have only about 5,000 cu m per hour of capacity. View an example of our experience in this industry.

Consumer & retail China - Avon to tap Chinese nutraceutical food market Source: China Economic Review, 11 January 2008 Avon China has received approval from the Ministry of Commerce to sell nutraceutical foods in China, making it the second certified direct-sales to do so after competitor Amway. This will substantially broaden its product line on top of the existing cosmetic and personal care items. Avon has bought a factory in Guangdong province to manufacture nutraceutical products, and will begin sales in the first quarter 2008. The potential size of the nutraceutical food market in China is estimated at about US$14 billion. Amway earned US$1 billion in nutraceutical sales under its Nutrilite brand in 2007, accounting for 60% of its total sales. India - Raisio prepares Asian entry with Benecol trial Source: AP-Foodtechnology.com, 10 January 2008 A trial period of Raisio's Benecol ingredient could, if successful, mark the first entry of the product onto the Asian market. The Finnish firm is working with Mumbai based nutraceutical company British Biologicals to test the potential of a full-scale launch. The trial so far consists of introducing a Benecol-containing nutritional powder to medical doctors as well as limited test marketing in some cities. Raisio believes there is a huge potential in Asia as "there is no other cholesterol lowering [food] products in Asia." The company also said there is a problem with high-cholesterol across Asia, and consumers have an interest in the potential of functional food in helping cut this. Japan - Barry Callebaut completes Japanese acquisition Source: AP-Foodtechnology.com, 10 January 2008 Swiss-based Barry Callebaut has completed a deal to acquire production facilities from Japanese company Morinaga, a day after the inauguration of the company's manufacturing plant in China. The acquisition is part of a growing trend of confectionery companies moving into the Asia Pacific region, eager to cash in on a burgeoning taste for chocolate as well as higher consumer power in the area. The company is also moving into India. According to Global Business Insights, the Asia Pacific region is one of the most promising regions for confectionery companies. Although Asian consumers account for only 17% of global cocoa consumption, chocolate consumption in the region is currently increasing at a rate of 25% a year. View an example of our experience in this industry.

Financial services Asia - India tops 2007 Asian private equity league Source: Business Times Singapore, 14 January 2008 India topped the Asian private equity league in 2007, followed by China. According to the January 2008 issue of Asia Private Equity Review, India recorded the largest number of deals (290), as well as the highest aggregate deal value (US$9.9 billion). China came in second, with a total of 240 deals totalling US$9.5 billion. The aggregate deal value for private equity in Asia in 2007 was US$42.2 billion, spread over 691 deals. China and India together accounted for 45.9% of aggregate deal value and 76.7% of the deals by number. India - Barclays to launch wealth business in India Source: Business Standard, 11 January 2008 Barclays Bank will launch its wealth management business in India in the first half of calendar year 2008 to tap the growing numbers of affluent people. Barclays Wealth will cater to high net worth individuals (US$1-30 million) and ultra HNIs (US$30 million and above). Barclays Wealth follows other biggies, including Citigroup, Merrill Lynch and Societe Generale, to tap the segment. Other global players, such as UBS, Morgan Stanley, and Goldman Sachs, are also looking to enter the segment in India. According to a Merrill Lynch-Capgemini report, India had 100,000 millionaires in 2006, up 21% from a year earlier. Different reports put the size of the Indian wealth management business at US$50-US$250 billion. Korea - Standard Chartered buys Korean bank Source: Financial Times, 12 January 2008   Standard Chartered has agreed to buy Korea's Yeahreum Mutual Savings Bank to enter the mutual savings bank market in Korea. The acquisition will enhance Standard Chartered's existing Korean consumer finance operations, broaden the current product offering and provide a presence in the economically important Jeonnam and Kyunggi provinces. Yeahreum Bank has about 50,000 retail banking customers and more than 800 corporate clients.  Standard Chartered, which owns Korea First Bank, is seeking to set up a holding company in Korea to expand into the non-banking sector ahead of the enactment of the Capital Markets Integration Act, which takes effect in 2009. View an example of our experience in this industry.

Industrial & logistics Asia - FedEx launches economy service targeting SMEs Source: Business Times Singapore, 11 January 2008 FedEx Express has launched a low cost, day-definite, customs-cleared, door-to-door service in ten Asia Pacific markets. FedEx International Economy targets small and medium-sized businesses that have less urgent shipment needs and can wait one to two days longer than those using the premium FedEx International Priority service. The region has the largest concentration of small to medium-sized enterprises in the world. The kick-off for the new service took place on 10 January 2008 in Australia, mainland China, Hong Kong, Japan, South Korea, Malaysia, New Zealand, Singapore, Taiwan and Thailand. It will be available in March 2008 in Indonesia, the Philippines and Vietnam. Japan - Japanese airlines expand cargo transportation to China Source: Kyodo, 10 January 2008 Japanese airlines have been expanding their cargo transportation to China in view of its growing market. China's cargo transportation market has been growing fast on the back of the country's rapid economic expansion as well as Japanese companies' construction of production bases in the mainland. All Nippon Airways has strengthened its alliance with Shanghai Airline to share cargo space on their passenger flights between Shanghai and Tokyo's Haneda airport. Japan Airlines has tied up with China Eastern Airlines to use the Chinese carrier's domestic flights to transport cargo that JAL carries to China. Nippon Cargo Airlines has launched its cargo flights between Kansai Airport and Beijing in September 2007. Singapore - Singapore retains busiest port title Source: Today (Singapore), 11 January 2008 Singapore boosted container traffic 13% in 2007, extending its reign as the world's busiest cargo-box port for a third year ahead of faster-growing Shanghai. PSA International and Jurong Port handled 27.9 million 20-foot standard containers in Singapore in 2007. Shanghai, ranked world No. 3 in 2006, has traffic rising 20% to 26.2 million boxes. But Shanghai was the world's busiest port in 2007 in terms of cargo tonnage. Shanghai handled 560 million metric tonnes of cargo in 2007, up 4.2% from 2006. Singapore handled 483.4 million tons of cargo in 2007, up 7.8% from 2006. View an example of our experience in this industry.

Information & communication technology   China - Digital camera sales surged 30% in 2007 Source: Xinhua, 13 January 2008 China's digital camera sales in 2007 surged 30% to hit 8.3 million sets in 2007. According to CCID Consulting, 5.9 million sets of digital cameras were sold in the first nine months of 2007. The sale in the fourth quarter was estimated at 2.4 million sets. The sale of digital single lens reflex (DSLR) cameras was put at 310,000 sets, up 47.6%. The two Japanese brands, Canon and Nikon, were still monopolising the DSLR market. CCID also forecast that sales of digital cameras in 2008 would top 10 million. It said DSLRs would not become a mainstream product in the next two years, as the price is still too high. Korea - Samsung defeats Motorola to Rank No.2 phone maker Source: The Chosun Ilbo, 16 January 2008   Samsung Electronics believes it has edged out Motorola to become the world's second-largest mobile phone maker. Korea's largest electronics maker sold 161.1 million handsets in 2007, a 42% increase from 2006. Motorola is estimated to have sold 160.9 million handsets in the same period. Samsung's achievement was due in part to aggressive inroads into unexplored developing markets as well as successes in core advanced markets. Last year, Samsung changed its strategy from focusing on high-end mobile phones to attacking emerging markets such as China, India and Southeast Asia with moderately-priced handsets costing around US$100 to increase its total sales volume. Korea - Subsidy war looming among telecoms Source: Korea Herald, 14 January 2008 A race to offer bigger handset subsidies to attract customers may be reignited this year as the government is moving to lift a ban on such incentives. Starting from 27 March 2008, telecom companies will be allowed to freely give subsidies to handset buyers as restrictions on such acts will be removed. Telecom players are bracing for full-blown competition this year over third-generation mobile services, which provide video calls and mobile internet access through high-speed networks. The SK Research Institute for Supex Management forecasts that the number of 3G subscribers will surge to 10 million and 17 million by the end of 2008. As of December 2007, 5.5 million people were using 3G services. View an example of our experience in this industry.

Life science China - Pharma industry faces higher environmental protection cost Source: Xinhua, 14 January 2008 China's new Standards on Sewage Discharge of Pharmaceutical Industry that takes effect as of 1 January 2008, is bringing a new burden to its pharmaceutical industry, especially the crude drug sector. The new regulations set standards by categories, listing three limits of water pollutant emission, that is, density limit of water pollutants emitted by existing enterprises and newly-launched enterprises, and technical limit for advanced control of water pollutants emitted by existing enterprises and newly-launched enterprises. India - India attracts Japan's number two pharma Source: Outsourcing-Pharma, 10 January 2008 Daiichi Sankyo, Japan's second-largest pharma company, is in the process of setting up a subsidiary in India called Daiichi Sankyo India Pharma, which will eventually conduct manufacturing of drug products and formulations, primarily in the areas of cardiology and diabetes, for the domestic market. Although there are some Japanese pharma companies who have operations in India, their presence is largely limited to marketing of products independently or through local partners. Japanese firms are now increasingly warming to the idea of using India to either outsource various business functions or set up infrastructure and take advantage of India's burgeoning, low cost pharmaceutical industry. Japan - Teva taps generic-drugs market Source: Bloomberg, 11 January 2008 Teva Pharmaceutical Industries will hire as many as 193 people in Japan in 2008 to tap growing demand for cheaper medicines. The generic drugmaker is also considering teaming up with a Japanese partner to help break into the nation's US$63 billion-a-year drug market. Japan wants the cheaper copies to account for 30% of prescriptions by 2012 from 17% now. Teva faces competition from local generic-drug makers, including Sawai Pharmaceutical and Towa Pharmaceutical. Indian companies, including Ranbaxy Laboratories, Lupin and Cadila Healthcare, are also trying to increase sales in Japan, the world's second-biggest pharmaceutical market. View an example of our experience in this industry.

Media & leisure India - TRAI suggests FM radio may run limited news programmes Source: BBC, 13 January 2008 The Telecom Regulatory Authority of India (TRAI) has recommended that private FM radio broadcasters be allowed to broadcast the news and current affairs programmes that have already been aired by government-controlled All-India Radio (AIR) or Doordarshan [TV]. The broadcasters have been demanding that they be allowed to have news and current affairs too as part of their content. In their representations to the Union Ministry of Information and Broadcasting, the private broadcasters have said allowing news and current affairs will help them boost their audience. Towards this end, they have suggested that the channels be allowed at least 6 to 8 minutes of news and current affairs per hour in their broadcast. Indonesia - Merger of national and local TV stations pushed Source: Media Blab, 14 January 2008 Indonesian politicians have attacked the government over its controversial decision to withhold the establishment of a networking system with national televisions stations and their local partners, saying it is a serious infringement of the 2002 broadcasting law. All 10 private TV stations are reluctant to comply with the law because the networking system would see them share profits with local stations in provinces and regencies. The Association of Private TV Stations claimed it had difficulty establishing joint companies with local television stations and procuring expensive devices required to establish the networks. Korea - Travellers grew to record 40 million in 2007 Source: Korea Herald, 13 January 2008 The number of inbound and outbound travellers in Korea surged to an all-time high of 39.83 million in 2007, up 11% from 2006. The Justice Ministry said the increase was due mainly to the growing overseas travel boom among the Koreans. The number of Koreans who traveled abroad in 2007 rose 15.1% from 2006 to 13.6 million, while the number of foreign arrivals increased merely 2.9% to 6.42 million. China was the top destination for Koreans, with 3.5 million visitors, or 27.8% of the total, while 2.32 million Koreans visited Japan. Among the foreign arrivals, Japanese visitors accounted for 40.3% of the total, or 2.21 million, followed by Chinese (920,000) and Americans (630,000). View an example of our experience in this industry.

Previous issues

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] 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]    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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