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.     Global Market Intelligence Survey 2008   This report by Global Intelligence Alliance uncovers linkages between  organizational decision-making and Market Intelligence operations. Differences by  industries and regions were measured along with key success factors of MI.  Responses were collected from 439 participants on five continents, making this  survey the most comprehensive study that has been conducted in the area of  Market Intelligence to date. Request a free copy. In the news this week l 9-May-08 Opening up of Japan's mobile industry

Foreign phone makers have been finding it hard to make a serious play for the Japanese market because its networks were based on a proprietary technology. Foreign mobile-phone makers have a combined share of less than 5% market share. But Japanese networks today are based on the same high-speed technology used in most other markets. Mobile-phone operators that had been unreceptive to foreign manufacturers have become more open as tough competition forced them to diversify their lineup. Prada has recently tied up with  NTT DoCoMo Inc., Japan's top mobile operator, which will be selling the Prada Phone in late May 2008, an exclusive model created by the Italian luxury brand and South Korea's LG Electronics Inc. Apple Inc.'s iPhone is also expected to be sold through DoCoMo by year end. Both are expected to do well in the Japanese market as they are established brands with strong following in the country.

Chemical India - Import of soda ash from the US set to rise soon Source: The Economic Times, 29 April 2008 The Indian and US soda ash industry have been in a face-off since 1996, when the US export cartel American Natural Soda Ash Corp's (Ansac) attempt to enter India was thwarted by intense lobbying efforts by Indian producers. However, this is set to be changed as demand for soda ash rises. In India, soda ash is made by a few players and the list includes Tata Chemicals, Nirma, GHCL, DCW and Saurashtra Chemicals. Indian capacity is moving on, from largely meeting domestic demand, to becoming global in size and reach. India's soda ash consumption is rapidly increasing, growing at 5% compared with a 2% global growth. Indian soda ash capacity is expected to grow by 34% to 4.3 million tons in 2009. But greenfield sites are expensive: a 400,000 tons capacity could cost about US$225 million to set up. China - Higher carbamide costs put pressure on fertilizer makers Source: Asia in Focus, 29 April 2008 Production costs of carbamide in East China's Shandong province grew by RMB150-300/ton (US$21.5-US$43/ton) in recent months, affecting grain output. Statistics show that the present purchase prices of carbamide reached RMB900-1,050/ton (US$128-US$150/ton) in Shandong in comparison to RMB760/ton (US$108.8/ton) in January 2007. China will add 7.3 million tons of carbamide production capacity in 2008-2009, and its carbamide output will reach 57 million tons in 2008. Fertilizer producers may obtain less profit as a result of the rise in production costs and the government's tight control over fertilizer retail prices. Indonesia - Pertamina plans to build polypropylene plant Source: Reuters News, 02 May 2008 Indonesian state oil firm Pertamina plans to build a polypropylene plant near its 125,000 barrels-per-day Balongan refinery complex in West Java. The polypropylene plant will cost around US$200 million with a production capacity of around 200,000 tons a year. Indonesia currently has a production capacity of around 600,000 tons per year of polypropylene. Indonesia is Asia Pacific's only member of OPEC, but ageing fields and lack of investment has made the country a net crude oil importer in recent years, although it is still a net energy exporter, thanks to a huge supply of natural gas and coal. View an example of our experience in this industry.

Consumer & retail Thailand - Booming market for male 'beauty' products Source: The Nation (Thailand), 03 May 2008 Men's skincare has enjoyed steady growth in emerging markets since 2005, sparking a wave of new products coming to the market. The Thai market, worth just Bt400 million (US$12.6 million) in 2005, was valued at Bt1.1 billion (US$34.7 million) in 2007. In the future, the men's market is expected by some to grow to the size of the women's market. The top players share the view that men today are placing more emphasis on using such products. The boom is also attributed to media coverage, especially by men's magazines that educate readers on how to use the products. Since 2005, the market has grown 20-30% a year and is expected to enjoy two-digit growth for years to come. Korea - E-Mart looks to direct sourcing Source: Korea Herald, 05 May 2008 Shinsegae Co. has announced plans to steadily increase direct purchasing while diversifying sourcing markets for its hypermarket business E-Mart, Korea`s largest discount store chain. Shinsegae highlighted that eliminating intermediaries between the retailer and manufacturers would ensure better quality control, because of its direct management of the goods. Direct purchasing became a full-blown trend among retailers in Korea in 2007. The discount-store market`s growing desire to expand private-label brands to save costs and strengthen price-competitiveness has further stoked demand. Retailers, however, needed some clout in terms of market share to secure good sourcing partners. This was because manufacturers want to achieve an economy of scale - saving on the production cost of each unit through increased production. Japan - Outlook for cosmetics industry remains stable Source: Moody's Investors Service Press Release, 07 May 2008 The outlook for the Japanese cosmetics industry is stable despite the presence of significant challenges. But given increasingly intense competition, effective brand management will be much more important if companies are to strengthen their market positions and improve profitability. All the major cosmetics makers in Japan are further accelerating efforts to realign their brands, re-establish market positions, as well as strengthen cost structures. Because of the maturity of the domestic market, the major makers are expanding their overseas operations, especially in Asia. In this regard, Shiseido is far ahead of its competitors. Looking further ahead, the sector's strong financial fundamentals will continue to strengthen. And so long as its companies maintain their current business models, which require minimal capital expenditure, their financial fundamentals should experience little deterioration. View an example of our experience in this industry.

Financial services Vietnam - Banks slow to expand ATM access Source: ePaynews.com, 02 May 2008 Despite the growing number of bank cards in issue in Vietnam, the nation has only 50 ATMs for every one million inhabitants, or one ATM per 20,000 customers. The situation is caused by the fact that many banks form alliances with the purpose of having more ATMs for their customers to use. But, because no new ATMs are being installed, the total number of ATMs available remains the same. Each ATM costs US$20,000 to US$30,000 to install. Currently, there are four major bank ATM alliances in Vietnam. Viet Nam Bank Card (VNBC) has four banks as members. Smartlink has 20 members, while the Viet Nam National Financial Switching Joint Stock Company has eight members. Sacombank and the Vietnamese subsidiary of Australia's ANZ also have an ATM alliance. Philippines - Bank mergers dependent on market trends Source: BusinessWorld, 05 May 2008 Local market conditions and banks' ability to comply with capitalization requirements should dictate if the industry would see more consolidations, according to the central bank in Philippines. The local banking sector has witnessed a spate of mergers and acquisitions in the past couple of years, counting among them those between International Exchange Bank and Union Bank of the Philippines and China Banking Corporation and Manila Banking Corporation, both of which were completed in 2007. The merger between Banco de Oro Universal Bank and Equitable PCI Bank in 2007 was hailed as a landmark transaction as this created the second largest bank in terms of assets, relegating Ayala-led Bank of the Philippine Islands to the number three spot. Aside from market conditions, current regulations would also ultimately determine the number of banks. Malaysia - Maybank to buy 15% of Pakistan bank Source: Business Times, 06 May 2008 Maybank plans to acquire 15% of Pakistan's MCB Bank for US$686 million cash to accelerate its regional plans. Maybank's purchase of Pakistan's fourth-biggest bank by assets is its third in two months. The deal is expected to be completed by the end of June and will immediately be earnings accretive on a standalone basis. In March, it made a successful - if somewhat hefty - bid of US$1.5 billion or 4.6 times book for 56% of Bank Internasional Indonesia (BII). Under a mandatory general offer, it could end up forking out another US$1.2 billion for the Indonesian bank. Earlier, it bought 15% of Vietnam's An Binh Bank for US$135.2 million cash or three times book. Its three successive buys will cost it US$4 billion. View an example of our experience in this industry.

Industrial & logistics Singapore - Semicon machinery spending set to fall Source: Business Times, 05 May 2008 Spending on new machinery by semiconductor companies in South-east Asia (SEA) is expected to decline by around 11% in 2008 due to the recent push outs and delays in fab projects in Singapore, according to the semiconductor industry association SEMI. Globally, spending on new equipment is expected to decline by 15-20% in 2008. Despite this decline, the organisation has noted positive signs of operational confidence in Singapore and other regional countries in SEA. New equipment spending declined by about 17% in SEA in 2007 to US$3.1 billion from US$3.7 billion in 2006. However, it is noted that even though equipment spending declined overall in 2007 for SEA, new fab capacity increased by 17% in the region. A majority of SEA's fab capacity is in Singapore, as evident by the presence of companies such as Chartered, Tech Semiconductor, IM Flash and Numonyx. Taiwan - Machine tool exports likely to rise 15% in 2008 Source: Asia Pulse, 05 May 2008 The volume of Taiwan's machine tool exports is expected to increase 15-20% in 2008 as market demand remains brisk. The volume of machinery exported by Taiwan amounted to US$15.4 billion in 2007, up 7% over 2006, while machinery imports dropped 1.2% to US$18.4 billion. Of all the types of machinery exported by Taiwan in 2007, machine tools accounted for the largest sum at US$3.5 billion, representing growth of 17.1% from 2006. China and Hong Kong were Taiwan's largest machine tool consumers in 2007, with exports to the area increasing 14.8% from 2006 to reach US$1.28 billion and accounting for 36.9% of Taiwan's total exports. Taiwan is one of the few machinery producers and exporters in the sub-tropical region, and the value of machine tool exports by Taiwan ranked the fourth highest worldwide in 2007, behind only Germany, Japan and Italy. India - Air cargo players demand exclusive freight stations Source: The Economic Times, 05 May 2008 The Indian air cargo industry has demanded that the government build air freight stations on the lines of the container freight stations at seven major ports in India. The industry also wants the government to provide for a designated area around major international airports which will be used exclusively for cargo operations. The move could enable industry, especially exporters and importers, to cut transaction cost and save time spent on freight movement. The air cargo industry has sought land near the international airports at Mumbai, Kolkata, Delhi and Bangalore to set up air freight stations. Such a move would require an additional investment of a few billion rupees (over US$100 million). However, with Indian freight traffic expected to grow at more than 20% per annum, the need for agent bonded terminals is growing significantly. View an example of our experience in this industry.

Information & communication technology   Japan - Prada looks to crack Japan's cellphone wall Source: The Wall Street Journal, 02 May 2008 Prada SpA said NTT DoCoMo Inc., Japan's top mobile operator by subscribers, on 23 May will begin selling the Prada phone, an exclusive model created by the Italian luxury brand and South Korea's LG Electronics Inc. This will be the latest evidence of foreign cellphone makers' increased efforts to expand business in Japan, a market that has been notoriously difficult to crack. Industry observers said phones such as the Prada phone represent foreign mobile-phone makers' best chance for success, mainly because Prada is an established brand in Japan. Japanese consumers are known for their avid following of foreign luxury brands such as Prada, Louis Vuitton and Coach, and luxury spending has been strong, even though consumers have been cautious about spending in general. The country is the world's largest market for luxury goods. China - Lenovo going on buying spree to regain ranking Source: Business Times, 03 May 2008 Lenovo Group Ltd is seeking acquisitions to regain the world's third-largest personal-computer seller ranking lost to Acer Inc in 2007. The company that shot to prominence with the 2005 purchase of International Business Machines Corp's PC unit, had its European expansion plans foiled iin 2007 when Acer bought Packard Bell BV. Computer makers such as Fujitsu Siemens Computers (Holding) BV may be a target for Lenovo. Lenovo's current market value is HK$58.3 billion (US$7.5 billion), about 6% of the size of industry leader Hewlett-Packard Co. Acer is valued at NT$163.3 billion (US$5.4 billion).  India - Maxis readies US$5 billion to expand in India Source: telecomasia.net, 06 May 2008 Malaysia's top mobile phone firm, Maxis Communications, plans to invest US$4 billion - US$5 billion by 2009-10 to expand its network in India. Maxis holds 74% in Aircel Cellular, which operates in 10 telecom circles in India. India is the world's fastest growing mobile market where telecom firms added a record 10.2 million wireless subscribers in March, taking the total to 261.1 million, behind only China that had 540.5 million users at end February 2008. Aircel will build 14,000 telecom towers in 2008-09 to expand its network. Aircel said it had 10.8 million subscribers in India and had posted revenues of $500 million in 2007. View an example of our experience in this industry.

Life science Japan - Nagase takes over RNAi biotech venture iGene Source: Japan Chemical Week, 01 May 2008 Nagase & Co. has purchased all the issued shares of iGene Therapeutics, making the Tokyo-based biotechnology startup its wholly owned subsidiary and facilitating its entry into the business of drug-discovery support. The acquisition gives Nagase access to the ribonucleic acid interference, or RNAi, technologies held by iGene, a venture company authorized by the National Institute of Advanced Industrial Science and Technology, or AIST. Since the global RNAi-related market is projected to have a value of Y1.5 trillion (US$14.9 billion) in 2015, Nagase wants to nurture it as a business with high added value together with such group companies as Nagase ChemteX, headquartered in Osaka. India - Novartis Voveran regains top position in drug sales Source: Business Standard, 05 may 2008 Voveran, Novartis India's flagship pain killer medicine, has become the largest selling domestic drug with sales of more than Rs110 million (US$2.7 million) in March 2008, displacing Pfizer India's cough and cold syrup Corex, which had sales of Rs100 million (US$2.4 million). Cipla, on the other hand, maintained its leadership position as the largest domestic pharmaceutical company edging out Ranbaxy Laboratories with a market share of 5.2% for March 2008. The value of domestic pharmaceutical market stands at Rs320.9 billion (US$7.8 billion), according to the March 2008 data. Valuewise, the market slowed down by 14.7% as compared with a growth of 19.8% in February 2007. Korea - Biotechnology sector remains a key focus Source: Pharma Business Week, 05 May 2008 In BMI's new Business Environment Rankings for Q2 2008, South Korea ranks third out of 14 markets assessed, below Japan and Australia, which rose to pole position from third in the previous period. Despite slipping one place, South Korea remains one of the most attractive regional markets. Key drivers of growth are high per capita consumption, high prices of pharmaceuticals, an aging population, lack of public awareness of generic substitution rules and improved conditions. Overall, the industry landscape has been dynamic, with a number of deals taking place towards the end of 2007. The biotechnology sector remains a key focus, with the government committing US$60 billion per annum across various segments. South Korea aims to be among the top 10 biotechnology powerhouses in the coming years, having been ranked 14th in the 2000-2004 period. Multinational companies are recognising the potential for growth in the sector. View an example of our experience in this industry.

Media & leisure Singapore - Plight of online music stores Source: Business Times, 05 May 2008 Nokia's opening of an online music store comes against the backdrop of the Singapore digital music market growing at a compounded annual rate of 34.5% till 2011, up from US$28.2 million in 2006. However, despite the apparently healthy growth in digital music, the paid music services market in Singapore proved to be much softer than originally anticipated. Mobile music services in Singapore accounted for 99% of the total digital music revenue generated in Singapore in 2006. Ringtones are expected to account for 45.4% of the total mobile music revenue in 2011, while ringback tones are a close second with 40.5% of the total mobile music revenue in Singapore. According to the analyst, consumers in Singapore have showed limited interest in online music stores, preferring to spend only on ringtones and ringback tones. Singapore - Firms trailing in digital marketing Source: Business Times, 05 May 2008 Broadband and mobile take-up rates are skyrocketing as Singaporeans continue to lap up the latest gadgetries. However, a marketing expert says local companies are still not keeping pace with the furious pace of technology advancement, resulting in a gaping disparity between IT-savvy consumer behaviour and the choice of advertising and promotional platforms. Asia is a US$115 billion advertising market. About US$10 billion of this is made up of digital media. In Singapore, only 3.5 to 4% of the total media market is digital despite being such a technologically advanced country. The total number of handphone subscriptions continues to outnumber the Republic's population base, with mobile penetration peaking at 127% in February 2008. Similarly, the take-up of high-speed Internet packages is also on the rise, with household broadband now standing at 79.2%. China - Chinese gets its game on Source: China Business Weekly, 05 May 2008 China's online game market has long been dominated by foreign game companies whose games have fascinated millions of Chinese users. However, the trend has reversed as more domestic online game companies are developing games with Chinese themes and using Chinese marketing tactics to sell them. The turnover of China's online game market reached RMB1.3 billion (US$186.1 million) in 2003, with domestic games accounting for 25.7%. In 2007, the domestic percentage increased to 65.1%, boosting the market turnover to RMB6.9 billion (US$987.8 million). The rapid growth allowed 11 Chinese online game companies to be listed on foreign stock exchanges during the past three years and gave them more resources to develop their games. View an example of our experience in this industry.

Previous issues

Risks behind growth of China online game industry [2-May-08] Asia wealth management growth to stay robust [25-Apr-08] Japan's M&A market starts to stir [18-Apr-08] Beverage firms in India focus on fruit drinks, target teens [11-Apr-08] Banks target Asia's wealthy [4-Apr-08] Foreign investors unfazed by Vietnam's economic difficulties [28-Mar-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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