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 1-Feb-08 Malaysia losing out in the FDI race?

Malaysia recorded a 54.4% rise in foreign direct investment (FDI) flow in 2007 to US$9.4 billion. But effort to woo investment could stall as efforts to get rid of red tape and inept bureaucrats falter. The country's long-running policies favouring ethnic Malays are also seen as hurting foreign investment. These could threaten to put Malaysia further behind Singapore (US$36.9 billion), Vietnam (US$20 billion), and Thailand (US$10 billion) in the FDI race. In Asia, China received the most FDI inflows (US$67.3 billion), followed by Hong Kong (US$54.4 billion). With Asian countries fiercely competing to get a slice of the FDI pie, Malaysia has lowered its corporate tax rate (from 27% in 2007 to 26% in 2008 and 25% in 2009) and tax exemptions in a bid to draw in more FDI. The biotechnology and medical devices industries show the most promise in securing FDI. This week, US-based stem cell transplantation research firm Bio-Cellular Research Organisation announced it will site its manufacturing plant in Pahang from Slovakia. Another US-based biotechnology company Wafergen Biosystems also announced it is setting up a R&D centre in Kedah.

Chemical China - BASF R&D centers launched in Shanghai Source: China Chemical reporter, 26 January 2008 BASF reinforced its commitment to its care chemicals customers in China and Asia by inaugurating three development centers in Shanghai. The centers offer customers from the personal care, pharmaceutical and beverage industries a wide range of technical services and solutions. BASF cited robust local demand growth for the three sectors for its decision to set up the research facilities in China. They include the double-digit market growth rate for cosmetics in Asia, the 15% annual growth in China's pharmaceutical market which could be worth more than US$30 billion by 2010, as well as the more than 10% annual rise in the Chinese beverage industry. China - Avery Dennison opens new coater Source: China Daily, 26 January 2008 California-based Avery Dennison has opened a new coater in China to better tap the business opportunities in China. The company estimates that each Chinese consumes about 0.6 square meter of pressure-sensitive adhesive (PSA) on average annually as compared with the European or American consumption of 15-16 square meters. And the annual 15-20% market growth in China is much faster than the 6-7% growth in Europe or the United States.  The over-100-meter long production line, involving an investment of US$26 million, is one of the largest coating production lines in the Asia-Pacific region. The new coater will produce about 600 million square meters of PSA label materials annually. Malaysia - Hextar Chemicals in venture with India's Unitop Source: The Edge Daily, 28 January 2008 Malaysia's largest agrochemicals manufacturer Hextar Chemicals and India's specialty chemicals producer have teamed up to form Hextar Unitop Sdn. Bhd. The two companies will invest a total of RM10 million (US$3 million) to set up a facility to manufacture and market speciality chemicals to be used as ingredients in agrochemicals that Hextar Chemicals sells. The companies are targeting to sell these products to China and countries in the region, and are leveraging on Malaysia's strategic location along the trade route and the exemption of an anti-dumping duty, which China imposes on India but not Malaysia. View an example of our experience in this industry.

Consumer & retail China - Tesco to open Shanghai store in new drive on China Source: Dow Jones, 28 January 2008 Tesco plans to open its first Tesco Express store in Shanghai in February 2008 as it looks to add smaller stores to its China portfolio. The possible roll-out of dozens of small Tesco Express stores comes after the retailer opened its first branded store in Beijing a year ago as part of a process of putting its name above the shop doors of all its hypermarkets. The UK retailer hopes to tap into convenience shopping in the mainland. The chain, which formed a joint venture with a local operator in China in 2004, already operates more than 50 hypermarkets on China's east coast from Beijing to Shenzhen. But it lags behind international rivals Wal-Mart and Carrefour in China. India - International retailer set sight on cash & carry business Source: The Economic Times, 28 January 2008 US retail chain Sears has set its eyes on India, looking at operations in the cash-and-carry format, where 100% FDI is allowed. In the absence of FDI in multi-brand retail and because of the political controversies surrounding the retail business in India, cash & carry is seen as an attractive alternative by many retail giants. Currently, Germany's Metro and Africa's Shoprite are the two major international players in India's cash-and-carry sector. French chain Carrefour has also announced that it will first launch only cash-and-carry shops in India. Wal-Mart, the world's largest retail company, too is giving final touches to roll out its cash and carry business in India in a joint venture with Bharti Enterprises. Vietnam - Vietnam set 20% retail sales growth Source: Intellasia, 29 January 2008 Vietnam expects retail sales to grow 20.5% in 2008 to VND875 trillion (US$54.3 billion), after a 23.3% rise in 2007. According to the Ministry of Industry and Trade, the government has set a retail sales target of VND1,024 trillion (US$63.9 billion) by 2010. Retail sales of goods and services were valued at VND726 trillion (US$45 billion) in 2007, or 63% of the country's GDP. Under WTO commitments, Vietnam will open its distribution service sector to 100% foreign owned companies from 1 January 2009, except for those dealing with oil products, tobacco, rice, sugar and precious metals. From January 2008, it imposes no limit on the foreign ownership of joint ventures with retailers. View an example of our experience in this industry.

Financial services Malaysia - DBS's Islamic arm eyes stake in a Malaysian bank Source: Business Times Singapore, 25 January 2008 The Islamic Bank of Asia, majority-owned by Singapore's DBS Bank, may buy a stake in a Malaysian Islamic bank as it looks to enter Asia's biggest and most developed Islamic financial market. In Malaysia, foreigners can own up to 49% of an Islamic bank but no more than 30% of a conventional bank. Malaysia is regarded an essential part of any plan to expand into Asia's rapidly growing market for Islamic banking: the mainly Muslim country is home to 12 Islamic banks with almost US$46 billion in assets and has the largest Islamic bond market. There are nine local Islamic banks, including Maybank Islamic, the biggest in terms of assets, and CIMB Islamic, one of the world's largest arrangers of Islamic bonds. Singapore - Temasek raises Stanchart stake to 19% Source: Business Times Singapore, 30 January 2008 Temasek Holdings has raised its stake in Standard Chartered to more than 19%. Regulatory figures show that the Singapore investment company has raised its stake by one percentage point to 19% in UK-registered Stanchart, which focuses on emerging markets. Stanchart sees value in the stock amid weakness in global stock market. The latest increase in shareholding is fuelling market talk about a possible takeover or merger between Stanchart and DBS Group. DBS, South-east Asia's largest lender, is another bank in Temasek's stable, with the Singapore investment company owning 28% of the bank. Singapore - Amex card spending up 22% in 2007 Source: Business Times Singapore, 29 January 2008 Spending on American Express (Amex) cards in Singapore rose 22% in 2007. The increase came after a 23% rise in 2006. Amex saw significant growth in spending in specific categories. Spending on luxury watches and jewellery is growing more than 45% a year. Billings on its Singapore Airlines co-brand cards grew 32% from 2006, while spending at Amex Selects partner restaurants rose almost 35%. According to Amex, growing affluence, the strong economy and wider lifestyle choices contributed to higher spending in 2007. Looking ahead, the integrated resorts and the Marina Bay developments are expected to propel growth. View an example of our experience in this industry.

Industrial & logistics China - Trial of Beijing-Hamburg rail freight service cuts sea times in half Source: The Daily Telegraph, 28 January 2008 Chinese trade with Europe is about to be revolutionised by the rebirth of the old overland silk route - this time via rail. An alliance of rail operators from the Pacific to the Baltic have just completed a trial run, moving cargo from China to the EU in just 15 days - under half the time it takes to ship containers. The new 6,000-mile silk route crosses China, Mongolia, Russia, Belarus, Poland and Germany and tackles several different track gauges. The transport companies behind the scheme insist the fast freight market between China and Europe could be worth many billions of pounds. They hope to carve out a market delivering high value or time sensitive goods to Europe more cheaply than by air and more quickly than by sea. Japan - City-Link ties up with Japan's Sagawa Global Source: Business Times Malaysia, 26 January 2008 Malaysia's courier firm City-Link Express, on an expansion drive to further strengthen its international network, will enter Japan through its alliance with Japan's second largest courier and logistics provider Sagawa Global Logistics. The tie-up will enable City-Link to provide full services to all cities in Japan and in turn, Sagawa will benefit from its wide network in Malaysia and other countries for its services. City-Link's strategy so far in expanding its network has been to establish agents and form joint-venture agreements with counterparts in different countries. It is currently in final talks with a company from Europe and hope to conclude the deal with them by March 2008.  Malaysia - MASkargo to start dedicated cargo flights to India Source: Business Times Malaysia, 28 January 2008 Malaysia Airlines' air freight unit, Malaysia Airlines Cargo (MASkargo), plans to start a dedicated freighter service between Kuala Lumpur and Delhi beginning this year. Currently, MASkargo has no dedicated freighter services to India. It relies on the belly space capacity of MAS' nine passenger flights per week to Delhi. MASkargo is also mulling the idea of using Delhi as its cargo transit from Amsterdam and Frankfurt. India is one of the largest air cargo markets for Malaysia in the South Asian region. MASkargo's inbound cargo handled in India includes electronic goods, spares and information technology hardware, while the outbound cargo handled are textiles, pharmaceuticals, perishable goods, handicrafts and software. View an example of our experience in this industry.

Information & communication technology   China - China No.1 in high-tech competitiveness Source: China Economic Review, 29 January 2008 China has surpassed the United States to become the world's leader in high-tech competitiveness. A study at the Georgia Institute of Technology gave China a rating of 82.8 for 2007, while the United States scored 76.1, down from its peak score in 1999 of 95.4. The ratings measure four factors: orientation towards technological competitiveness, socioeconomic infrastructure, technological infrastructure and productive capacity. In 2007, China trailed the United States by only US$100 million in the value of technological exports. If that trend continues, China will shortly pass the United States in that measure of technological leadership. Malaysia - Google eyeing Malaysian hub Source: New Straits Times, 27 January 2008 US search-engine giant Google is interested in setting up a base in Malaysia. Earlier reports said that Google was looking at Malaysia, India or Vietnam to establish the world's biggest server farm - a cluster of powerful computers used to store data. The data is shared between personal computers over a common network such as the Internet. The investment could run into a few hundred million ringgit. Google's presence in Malaysia will be a big boost for the country's information and communications technology industry. Malaysia has ambitions of being a global technology player. It launched its Multimedia Super Corridor from scratch a decade ago as Malaysia's answer to California's Silicon Valley. Singapore - SMBs to spend US$1 billion on telecoms in 2008 Source: Business Times Singapore, 28 January 2008 Small and medium-sized businesses (SMBs) in Singapore are set to invest as much as US$1 billion on telecom infrastructure in 2008. According to AMI Partners, this amount is over and above the US$2 billion that the SMBs are expected to spend on their IT needs this year. As a result, the total SMB spend on information technology and telecoms infrastructure in Singapore will be as much as US$3 billion in 2008, up 6% over 2007. Across the Asia-Pacific region, SMBs are on track to invest about US$223 billion in 2008 on ICT, up some 9% over 2007 levels. Of this, telecom spending will contribute about 36% of total ICT spending. View an example of our experience in this industry.

Life science Indonesia - Sales Volume of pharmaceutical products to grow by 10% Source: Bisnis Indonesia, 26 January 2008 The sales volume of Indonesia's pharmaceutical industry is targeted to grow by 10% in 2008, up from 7% in 2007. However, the Pharmaceutical Companies Association is concerned that the increases in staple food prices will weaken customer purchasing power to buy health-care products. The association also disclosed that the production capacities of two state-owned pharmaceutical enterprises, namely PT Kimia Farma and PT Indofarma, can no longer keep up with the rising demands for generic drugs with logo. The demands reach 15 billion tablets per annum, while Kimia Farma and Indofarma together can only produce six billion tablets per annum. Malaysia - Pahang to host world's largest stem cell plant Source: Business Times Malaysia, 26 January 2008 United States-based stem cell transplantation researcher Bio-Cellular Research Organisation (BCRO) will site its stem cell manufacturing facility, the world's largest, in Pahang, Malaysia from its present location in Slovakia. BCRO is projecting an estimated RM280 million (US$86 million) over a three-year period to transfer its technical know-how by its scientists from the United States and European Union. With the BCRO's facility in Malaysia, the cost of stem cell treatments is expected to become more affordable to Malaysians. Singapore - Actelion opens regional office in Singapore Source: Business Times Singapore, 29 January 2008 Swiss-headquartered biopharmaceutical firm Actelion has opened a regional office in Singapore, which will manage its clinical studies in Asia. The company may also look at other partnerships in Singapore in manufacturing or basic research in future. The regional office in Singapore will be Actelion's hub for South-east Asia, India and Taiwan. Actelion plans to work with contract research organisations in Asia to coordinate clinical research data. Actelion expects Asia to contribute 33% of its clinical data by the end of this decade, up from 10% now. In Singapore, it is partnering PharmaLink in marketing and Zuellig in distribution. View an example of our experience in this industry.

Media & leisure Korea - Microsoft to tie-up with Daum and Celrun for IPTV service Source: Optical Networks Daily, 25 January 2008 Microsoft will form a joint venture with Korean firms Daum and Celrun to address the country's Internet TV market. Internet portal Daum will provide content, while Microsoft will offer its IPTV solutions and focus on overseas marketing; Celrun will provide set-top boxes. Daum aims to launch the VoD service in the second quarter of 2008 when the joint venture is formally launched. The company will also provide real-time broadcasting if it acquires a licence from the government. Daum forecasts that the local IPTV/Internet TV market will increase from a current 1.1 million customers to 16 million by 2011. Singapore - Outbound travel to grow 4.5% in first half of 2008 Source: Business Times Singapore, 28 January 2008 Outbound travel from Singapore in the first half of 2008 is expected to grow by 4.5% compared to a year earlier. According to the MasterCard Worldwide Index of Travel for the first half of 2008 in Asia Pacific, outbound travellers from Singapore are expected to make some 2.9 million resident departures over the next six months, excluding travel by land to Malaysia. The forecasts across the other Asia-Pacific markets also reflect steady growth, with China making up a quarter of the more than 79.5 million resident departures expected from Asia Pacific. China can expect 12.4% year-on-year growth in outbound travel, the highest in Asia Pacific. Thailand - CASBAA slams Thai pay-TV sector Source: VarietyAsiaOnline.com, 25 January 2008 The Cable & Satellite Broadcasting Association of Asia (CASBAA) has slammed Thailand's pay-TV sector for its lack of development and slow pace of reform. Issues that need to be addressed before the sector can grow include widespread signal theft and a regulatory environment that permits unlicensed operators in the provinces. Another major drag has been lack of advertising. Pay-TV sector is currently not allowed to carry local advertising. CASBAA said "Thailand should have a far more robust pay-TV market given its population, GDP, level of entertainment consumption and the maturity of the advertising industry." But Thailand's pay-TV penetration at only 14% of Thai TV households is "relatively low compared with other Asian markets." View an example of our experience in this industry.

Previous issues

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] Eyes on booming Asian luxury goods market [30-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.

Visit our website to sign up for free intelligence on Asian markets.

Best regards, The Market Monitoring Team Fusion Consulting