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.      Webinar: Results of the 2008 Global Market Intelligence Survey, 7-May    Space is limited. Reserve your Webinar seat now at: https://www1.gotomeeting.com/register/555029805. The Global MI Survey 2008 uncovers ways in which Market Intelligence has been put into use in organizations, and the gains that have been witnessed for the invested resources. After the webinar, the Global MI Survey 2008 can be downloaded for free at www.globalintelligence.com. Title: Results Release of the Global Market Intelligence Survey 2008 Date: Wednesday, May 7, 2008 Time: 9:30 AM - 10:30 AM EST (21:30 - 22:30 Singapore/Hong Kong)        China's personal care, cosmetics and toiletries industry   Product innovation in China's personal care sector is buoyant, but safety concerns  and regulations may become a barrier. Find out what's happening in the industry  and where the trends are heading. In collaboration with the PCHi exhibition.     Request free copy. In the news this week l 2-May-08 Risks behind growth of China online game industry

China's online game industry is estimated to have a market capacity of RMB13 billion (US$1.8 billion) and RMB17 billion (US$2.4 billion) in 2008 and 2009 respectively, up from RMB9.4 billion (US$1.3 billion) in 2007. However, market observers noted that there are some risks behind the revenue growth of Chinese online game industry, such as reliance on single-mode product and reliance on third-party online payment service providers. It is noted that independent development has become a new trend of the online game industry in China, but the country lacks enough talents for promoting independent development. In recent years, more new players come into this profitable market and thus bring in more competition. Baidu, the country number one internet search engine provider has also recently outlined its moves to penetrate the online game sector in China. Yet, this market is typically featured by high profit and risk, if a product cannot win market recognition, then the game developer might be forced to quit the market.

Chemical China - Biggest decorative paint market in ten years Source: SinoCast China Business Daily News, 24 April 2008 With an estimated 10% annual growth in the decorative paint industry, China is expected to rank the top in the world by its decorative paint sales in ten years' time. The growth in the year 2008 will slow down to 6% to 7%, but the nation is expected to catch up with the European market and the US market in the following ten years. The top three or four decorative paint providers take 60% to 80% of the European market, while the top five take 25% of the Chinese market among the over 7,000 decorative paint producers in the nation. Reshuffle is the market trend, driven by the join-in of global counterparts in the industry. Domestic companies in the industry are to cooperate with global or home peers, or to be acquired. Singapore - 3M to expand manufacturing source: 3M, 28 April 2008 3M announced its intent to build a new facility in Singapore to produce coatings for film-based products used in commercial, electronic and automotive applications. By establishing a local film coating center of excellence, the facility will help the company better serve the Asia market and support efforts to accelerate growth. Construction on the new facility, which will be located in the Tuas Industrial Park, will begin in the second quarter of 2008 and is expected to be completed in 2009. 3M operations already in Singapore include a customer innovation center and the 3M Woodlands facility, which manufactures flex circuits and electronic adhesives. Singapore - Manufacturing hub for Lanxess Source: Business Times, 28 Apr 2008 Lanxess which is building a mega US$626 million synthetic rubber plant on Jurong Island is considering even more chemicals manufacturing projects in Singapore. Singapore could also eventually evolve as its Asian headquarters for butyl rubber, especially with the world-scale plant in the Republic playing a strategic role in supplying this raw material for 'green' tyres to the fast-growing regional market, especially in China. When its Jurong Island plant starts up in 2011, Singapore will play an integral role in Lanxess' latest China strategy to increasingly cater to the country's growing demand for green products. Last year, China was the group's fastest-growing market, accounting for US$600 million or 6% of its global sales, with synthetic rubber growing by 140%. View an example of our experience in this industry.

Consumer & retail India - No hostile presence from Heineken Source: Business Standard, 25 April 2008 Heineken is understood to have outlined its intent to United Breweries (UB) that it does not want to have any conflicting presence in India. This declaration comes as Heineken is set to pick up a 37.5% stake in UB from Scottish & Newcastle. UB controls nearly 40% of the 140 million cases Indian beer market. Earlier this year, Heineken and Denmark's beer major Carlsberg sealed a US$15.4 billion takeover of British brewer Scottish & Newcastle (S&N). Under the deal, Heineken will take over S&N's British business along with its operations in Belgium, Portugal, Ireland, the US and India. Heineken is keen on a stake in UB as this could catapult it into a strong position in the Indian market. While UB controls 40% of the market, SAB Miller is close behind at around 38% and growing aggressively. Australia - Retailers must adapt to leaner, meaner times Source: The Sydney Morning Herald, 26 April 2008 According to industry analysts, retailers' window of opportunity to innovate is over. During the boom times, stores could afford to try out new ideas and experiment with new products and formats. But this will all be put on hold until the downturn in discretionary spending has past. Retailers are increasingly turning inward to focus on renovating their stores and reinvesting in the assets they already owned. They will remove slow-selling items and reduce the breadth of their product range to cater for more penny-pinching shoppers. Product manufacturers are already reviewing how to react to the changes and which products are set to increase in popularity and which are at risk from lower discretionary spending and smaller, more frequent shopping trips. China - Toy exporters find foreign orders not so tough Source: Xinhua's China Economic Information Service, 29 April 2008 Foreign buyers are positive about the competitiveness of Chinese toys, although average prices have risen by 20% over the past year. Chinese toy exports slowed in 2007 due to increased prices and the yuan's appreciation. Large-scale quality recalls also hurt the industry. Statistics from the Guangdong Toy Association showed that the province exported RMB14.7 billion (US$2.1 billion) of toys in 2007, up just 1% year-on-year. However, the industry has seen initial signs of recovery. In the first two months of 2008, the province's toy exports rose 43.5% to RMB1.79 billion (US$255.7 million). View an example of our experience in this industry.

Financial services Korea - Putting more smart card readers Source: The Electronic Times (Korea), 24 April 2008 The Financial Supervisory Service (FSS) in Korea is serious about encouraging more shops to use smart card reader. As of last year, distribution rate of smart card reader was just 9.7%, while that of smart card user was 78%. Many people have criticized that they cannot use chip card under the current situation. According to relevant authorities and the card industry, the FSS have issued public statement, asking card companies to make new franchise dealers install smart card readers. In the statement, FSS expressed its intention to legislate the action. Korea - Seoul, Beijing, Tokyo eye joint ATM network Source: Korea Times, 24 April 2008 South Korea has proposed to China and Japan the setting up of a joint electronic payment system controlling cash machines in their respective countries to enable travelers to withdraw cash at minimum costs from any machine. Currently, Koreans use Visa or Master cards to withdraw cash in Tokyo and Beijing, and it is the same for Japanese and Chinese travelers in Korea. They pay high fees for using currency exchange services and the card firms' international network. Credit card spending by South Koreans in overseas countries soared to a new high of US$6.4 billion in 2007. The number of outbound travelers increased 14.8% from a year ago to 13.3 million, which was twice the number of inbound travelers at 6.4 million. Most foreign tourists paid for goods and services in cash last year, rather than with credit cards, because of the won's appreciation against major currencies. Indonesia - Banking lending still grows amidst economic slowdown Source: Bisnis Indonesia, 29 April 2008 The lending of several banks in the first quarter of 2008 was able to keep growing amidst global economic slowdown. On the other hand, the banking industry's net profit growth was not as stellar. Some banks even had to lose money on increasing provision and promotional costs. These are reflected in the exposes of the first quarter of 2008's performances by Bank Mandiri, Bank Negara Indonesia, Bank Niaga, Bank Central Asia, and Bank UOB Buana. Mandiri's lending grew by 18.6% to IDR135.5 trillion (US$14.5 billion) from IDR114.3 trillion (US$12.2 billion) in the first quarter of 2007. The lending growth was supported by soaring SME (small and medium enterprises) credit by 48.6% to IDR19.6 trillion (US$2.1 billion) and the increase in consumer banking by 39.3% to IDR10 trillion (US$1.1 billion). View an example of our experience in this industry.

Industrial & logistics Korea - Unions and imports boost car sales Source: BMI Industry Insights, 21 April 2008 Improved industrial relations between the major South Korean carmakers and unionised workers, coupled with strong economic growth, resulted in a 4.8% increase in domestic vehicle sales in 2007. Imported brands are also gaining ground in the market, with sales rising by 31.7% year-on-year in 2007. This growth has prompted Japanese giant Toyota to plan the launch of its own brand in South Korea, where the company is currently only represented by premium brand Lexus. Nissan and Mitsubishi have also announced their intention to launch models in South Korea, following the success of compatriot Honda, which has just three models on sale in Korea but sold 7,109 units in 2007, which was 81.7% higher than the 3,912 units sold in 2006. Korea - Machine tool industry doubles trade surplus in Q1 SOurce: Maeil Business Newspaper, 28 April 2008 South Korea's machine tool industry pulled a strong performance as its trade surplus has doubled from the previous year in the first quarter of 2008. The Korea Machine Tool Manufacturers' Association (KOMMA) reported that the machine tool exports amounted to US$417.8 million in Q1 2008, up 14.4% from the same period last year, and imports came at US$352.5 million, down 8.3%. Consequently, the industry posted a trade surplus of US$65.3 million in the first quarter of the year, more than double the Q1 2007 figure (US$30 million). Orders received by domestic machine tool manufacturers have risen 5.9% to record W666 billion (US$668 million), continuing a rising trend for 27 consecutive months. Favorable results in Q1 2008 can be attributed to rising demand for automobiles, petrochemicals and wind power as well as the domestic shipbuilding industry in full flourish. India - Tyre manufacturers raise prices Source: The Times of India, 29 April 2008 Tyre companies have decided to go for another round of price increase, the third time in the last six months, blaming high cost of inputs like rubber and petroleum-based products is the reason behind this hike. However, the price revision has been opposed by federation of tyre dealers, who smell a cartel and term the move 'opportunistic'. The hike, the second after February and the third since November last, is around 5% in case of truck and bus tyres, that translates into Rs 400-600 (US$10-15) at the retail level. View an example of our experience in this industry.

Information & communication technology   Japan - Compact digital camera market may see slowdown and realignment Source: Jiji Press English News Service, 26 April 2008 The Japanese market for compact digital cameras, which scored record shipments in 2007, may be close to reaching saturation due to an anticipated pause in technological advances and competition from camera-enabled cellular phones. The easy-to-handle cameras suffered declines in shipments in 2004 and 2005 but enjoyed renewed popularity in the following two years as the additions of advanced functions including face detection technology spurred replacement demand. The market's limited growth potential may already be driving companies to shift focus away from digital cameras, noting that industry realignment may be in store. Olympus' recent acquisition of British medical equipment maker Gyrus Group PLC and camera maker Fujifilm Holdings Corp.'s takeover of drug maker Toyama Chemical Co. may be signaling realignment. China - Nearly 20 million color TV sets in 1st quarter Source: Xinhua Business Weekly, 28 April 2008 China's color TV production sector grew steadily with exports expanding rapidly and production cost increasing in the first quarter of 2008. Between January and March, 19.6 million color TV sets were produced nationwide, a growth of 0.1% on the same period of last year. Of the total, 45%, or 8.8 million sets, were exported, up 18.3%. The source said industrial restructuring was under way in the TV sector, with the share of traditional CRT (cathode ray tube) TV sets in the total output declining to 56.2% and that of flat panel TV sets increasing to 43.8%. The color TV sector's production cost has increased, due largely to expedited appreciation of Renminbi, enforcement of the new labor law, end of tax holidays for foreign-funded enterprises and readjustment of tax rebates for export. Taiwan - Motorola's tumbling sales hurt its contract suppliers Source: Taiwan Economic News, 28 April 2008 Motorola's recent tumbling share of the global market have made its Taiwanese contract suppliers, including Compal Communications Inc. and Chi Cheng Enterprise Co., Ltd., not likely to turn profitable in 2008. In the first quarter of 2008, Motorola shipped only 27.4 million mobile phones, sharply down 40% from 45.4 million units posted a year earlier. According to an analytic report released by the Market Intelligence Center (MIC), Taiwan's handset production volume is estimated at 20.7 million units in the second quarter of 2008, slightly up 6.1% from a quarter earlier and 8.7% from a year earlier. The production volume is projected to reach 25.1 million units in the third quarter, growing 20% from the second quarter. View an example of our experience in this industry.

Life science China - Health care reform provides opportunities for American companies Source: Associated Press, 25 April 2008 As China looks toward revamping a health care system that currently has hundreds of millions of uninsured citizens, American businesses have the chance to be involved through selling medicine, health services, and health insurance. It is noted that China spent US$9 billion on health care in 2007, and that figure is expected to increase to US$12 billion this year. There has been an "explosion" in the growth of pharmaceutical exports to China - about 300% since 2003. Medical devices, which include everything from orthopedic braces to pacemakers, saw 20% growth in the past year alone. However, barriers remain for American companies coming into China, such as prohibitive tariffs on pharmaceuticals and medical devices, lengthy times to register products, and redundant testing for medical products. India - CordLife gets licence for lab Source: Business Times, 26 Apr 2008 After waiting for more than two years, tissue banking firm CordLife has finally received the green light to start its services in India, where it has opened a laboratory in Kolkata, the capital of the eastern state of West Bengal. The 30,000-sq-ft cord blood banking facility opened last week, after the company was granted a licence by India's drug regulatory authorities to operate a tissue-processing and storage lab. India has a projected annual birth rate of 24 million, one of the highest in the world, and a burgeoning upper middle class. The Kolkata cord blood bank has a storage capacity of more than 40,000 samples, scalable up to 150,000. It is also the first and only cord blood bank in eastern India, where 5.8 million births occur a year, including an estimated 1.8 million babies delivered annually in West Bengal alone. India - Pharmacy chains on oxygen Source: Business Standard, 28 April 2008   In the Indian pharmaceutical indsutry, it is clear that the big players are close to biting dust. At least two large pharmacy chains are up for sale, industry sources said. Some others have shaken up their top management, while a few have cut back on their expansions. One is trying to rediscover its business model by looking at rural markets. And all are woefully short of achieving the targets they had set. These chains put a large part of the blame on soaring real estate prices. The other factor is the lack of qualified pharmacists to run their shops. Under law, pharmacists alone can sell drugs. And, in the last two years, their salaries have shot up by over 200%. View an example of our experience in this industry.

Media & leisure China - Baidu plans foray into online gaming sector Source: China Knowledge Press, 24 April 2008 Baidu.com Inc., China's No. 1 Internet search engine provider, announced its expansion plan into the online gaming sector in China in a bid to further diversify its businesses. Baidu launched its game site by cooperating with five game operators, including Shanda Entertainment, Beijing-based developer Huancheng Interactive, Beijing Xin Yu Brothers Internet Technology. China has become a huge online game market with its revenue hitting RMB12.8 billion (US$1.8 billion) in 2007. It is also estimated that the market revenue will climb to RMB40.1 billion (US$5.7 billion) in four years, according to Analysys International. Asia - Pay TV to reach US$86 billion in 2012 Source: Variety, 24 April 2008 Pay TV is set to grow by 11% a year in Asia over the next five years, lifting total revenues from US$53 billion in 2007 to US$86 billion by 2012. In 2007, regional pay TV penetration reached 43%. This could grow to 52% by 2012 and 55% by 2017, with digital penetration climbing from 7% in 2007 to 28% by 2012 and 36% by 2017. Biggest digital growth may come from China and India. Penetration levels will peak in Korea, Japan, Taiwan and developed markets, while China will lead emerging markets. In terms of size, China will remain the largest market for broadband in the region with close to 195 million broadband users by 2017. Taiwan - Game developers aim to tap overseas markets in 2008 Source: Taiwan Economic News, 28 April 2008 Taiwan's major game developing companies, including International Games System Co., Ltd. (IGS), Gamania Digital Entertainment Co. and Soft-World International Corporation, have moved to explore overseas markets by signing agent contracts with foreign game companies. IGS shipped between 50,000 and 60,000 units of commercial gaming machines to Italy and now is scheduled to resume shipment of the products to the country this year. Soft-World International has tapped the China's game market by working with Chinesegamer International Corp. Gamania has signed several agent contracts with Japanese game developing companies for the first time this year, in hopes of reaping considerable profits in the Japanese market. View an example of our experience in this industry.

Previous issues

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 [24-Mar-08] India's chemical sector benefits from China's cut in export rebates [20-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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