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 25-Jan-08 The push towards convergence gains momentum in Korea

Korea is one of the world's most wired countries with 90% of household having access to high-speed Internet. But the full commercialisation of Internet protocol TV (IPTV) has been delayed for years as authorities struggled to coordinate a marriage between media and phone regulations. To ensure that Korea will not be left stranded in global IPTV competition, the broadcasting and telecommunications sectors will converge under a reform plan. Korean telecoms firms are counting on IPTV services as revenue from traditional voice calls stagnates. The Electronics and Telecommunications Research Institute forecasts that IPTV-related businesses will generate W12.9 trillion (US$13.5 billion) in production by 2012. Even as cable firms lobby the government to block the entry of telecom firms onto their turf, the broadcasters are planning to make inroads into the mobile phone service market in 2008, by reselling handsets and services of existing telecom companies SK Telecom, KTF and LG Telecom.

Chemical China - Perstorp consolidates position in polyols Source: Coatings Flash, 21 January 2008 Specialty chemicals company Perstorp has acquired another business in the Chinese province of Shandong, including a production plant for Neo (Neopentyl glycol). The acquisition consolidates Perstorp's position in polyols. Perstorp has, through its joint-venture company Shandong Fufeng Perstorp Chemical, signed an agreement with the Chinese polyol manufacturer Zibo Linzi Yongliu Chemical Industry for the acquisition of its Neo manufacturing business. Yongliu is China's second largest manufacturer of Neo polyol and the manufacturing plant, with a 20,000 ton annual capacity, is located in the Linzi district of Zibo City, where Perstorp already has a production facility for the TMP (Trimethylolpropane). China - BlueStar plans new methionine plant Source: Xinhua, 19 January 2008 China National BlueStar and its France-based subsidiary Adisseo Group will set up a new methionine plant in China to meet growing demand in the global market. The new plant would be operational in 2011 with an initial annual capacity of 70,000 tons. Its designed total annual capacity was 140,000 tons. Methionine is an essential amino acid used as a supplement in animal feed that speeds up poultry breeding. The global methionine market will grow by 4% by 2015, driven by an increasing global population that will consume nearly 300 million tons of meat annually. Poultry products, 40% of which are produced in Asia, will account for half of the increase in meat demand, according to the Food and Agriculture Organization of the United Nations. Japan - Mitsui earmarks US$6.4 billion for investment Source: Nikkei report, 19 January 2008 Mitsui Chemicals plans to boost its investments for fiscal 2008-11 to Y680 billion (US$6.4 billion), up 80% from the current four-year period. The company "will invest selectively both at home and abroad, focusing on large projects worth more than Y1 billion (US$9.4 million) each." Under the plan, Y229 billion (US$2.1 billion) is earmarked for adding capacity, including upgrading a Singaporean facility that produces raw materials for strong plastics used in automobiles and personal computers. Mitsui Chemicals also plans to spend Y170 billion (US$1.6 billion) on mergers and acquisitions in such areas as agrochemicals and functional materials. And Y200 billion (US$1.9 billion) is set aside for research and development. View an example of our experience in this industry.

Consumer & retail Asia - Asians seen shopping more in first half of 2008 Source: Bangkok Post, 19 January 2008 Despite the gloomy economic outlook of global markets, retail sales across Asia Pacific are expected to show continued growth on the back of strong consumer confidence for the first half of 2008, according to the latest MasterCard Worldwide Index of Retail released by MasterCard Worldwide. China maintains the lead, with retail sales anticipated to reach US$647 billion in the first half of 2008, up 12.8% from the first half of 2007. Other markets with strong growth include Indonesia (up 12.6% to US$26 billion) and Hong Kong (up 10.5% to US$16 billion). Less bullish markets include Taiwan, New Zealand and Japan, with year-on-year growth expected to reach 2.9%, 2.4% and 0.7% respectively. Indonesia - Carrefour to buy Indonesian retailer Source: Business Times Singapore, 22 January 2008 French supermarket company Carrefour has agreed to buy a 75% stake in Indonesian minimarket chain operator Alfa Retailindo for Rp674 billion (US$71 million). The deal will consolidate Carrefour's position as Indonesia's leading food retailer. Alfa Retailindo reported sales of EUR265 million (US$388 million) in 2006. Carrefour operates 37 hypermarkets in Indonesia and posted EUR627 million (US$917 million) in annual sales in Indonesia in 2006. Alfa Retailindo is one of the leading retailers in Indonesia, where it operates 29 stores across the country. The takeover comes as Carrefour continues its strategy to expand in fast-growing emerging markets, as it tackles competition and price pressure in its main French market. Japan - Beer shipments continue to slide in 2007 Source: Japan Times, 18 January 2008 Domestic shipments of beer and beerlike alcoholic drinks by Japan's top five producers fell 0.3% in 2007, the third year in a row that shipments have fallen. According to the Brewers Association of Japan and beer manufacturers, shipments by Asahi Breweries, Kirin Brewery, Suntory, Orion Breweries and Sapporo Holdings unit Sapporo Breweries came to 496.08 million cases. One case contains the equivalent of 20 633ml bottles. In category terms, shipments of regular beer were down by 0.9% year-on-year at 274 million cases, with low-malt happoshu shipments down 2.5% to 121.7 million cases. Third category beer-like beverages, meanwhile increased by 4.4% in 2007 to 100.4 million cases. View an example of our experience in this industry.

Financial services China - Insurance premium forecast to surge 24% in 2007 Source: Xinhua, 16 January 2008 Insurance premiums in China are forecast to rise 24% to RMB700 billion (US$96.6 billion) in 2007, well above the 14.4% rise in 2006. According to the China Insurance Regulatory Commission, total assets of insurers operating in China hit RMB3 trillion (US$409 billion) by the end of 2007. China now had 107 insurance companies, including 62 Chinese-funded and 45 foreign-funded. However, China's insurance companies are faced with a talent shortage amid the fast business expansion. Experts held the talent shortage resulted from the expanded business scale and the relatively low attractiveness of the field in comparison to the more lucrative funds and securities sectors. India - IBA proposes setting up an indigenous payment network Source: The Economic Times, 20 January 2008 The Indian Banks' Association (IBA) is keen to set up an indigenous payment system for India. The proposed payment system, called India Pay, is expected to replace the existing payment networks for domestic transactions, which is dominated by Visa and MasterCard. The huge fees paid to VISA and MasterCard, which easily jumps over US$100 million on an annual basis, is forcing IBA to think in this direction. When replaced by indigenous payment system India Pay, this fee is expected to reduce drastically thereby making such transactions cheaper, at least for domestic transactions. Korea - Banks protest move to delay bancassurance expansion Source: Korea Herald, 19 January 2008 Korean banks are moving to counter mounting opposition to government plans to allow the sale of car and life insurance by bank tellers from April 2008. The latest move comes as local insurance firms protest the expansion plan, saying that the change would threaten the job security of around 200,000 insurance salespeople across the nation. Meanwhile, President-elect Lee Myung-bak's Grand National Party is ramping up opposition to the plan. The upcoming general election in April is putting pressure on politicians not to push the bancassurance expansion plan, fearing that they may lose the vote of insurance salespeople. View an example of our experience in this industry.

Industrial & logistics China - Shanghai attracts cargo allies Source: China Daily, 22 January 2008 Shanghai Airlines has set up a cargo alliance, Shanghai Airlines Logistics Enterprises Group, with five associated companies to integrate operations and improve supply chain management. The five member companies are China United Airlines, Shanghai Airlines Cargo, Shanghai-Airlines Cargo International Transportation Services, Shanghai Crane Transportation, and Dahang International Transportation. The group is part of the company's strategy to tackle increasing competition in the industry. The world's four express delivery giants - DHL, UPS, TNT and FedEx - are all vying for a slice of Shanghai's market. India - Bosch opens packaging plant to boost sales, sourcing Source: AP-Foodtechnology.com, 22 January 2008 Bosch Packaging Technology, the packaging machinery division of German technology group Bosch, has opened a new manufacturing facility in Goa, India, to cater to its growing customer base in the booming emerging market and increase sourcing for its European headquarters. According to Thomas Buehler, head of the firm's India operations, the Indian market for packaging machines grows at about 15% per annum. Bosch Packaging will focus on candy wrapping, snack food and biscuit packaging as well as packing for flour and milk powder, spices and rice with around 80% of its sales to the local market. The rest of the machines will be delivered to Africa and the Middle East. Korea - Big firm vie for courier operators Source: Korea Herald, 22 January 2008 Following Kumho Asiana Group's acquisition of Korea Express, Lotte Group is another big company seeking to gain entry into the express delivery service industry. Lotte's rival Shinsegae has already secured a foothold in the industry through its affiliate, Sedex. Eugene Group, Dongbu Group, and Dongwon Group are the few conglomerates to acquire logistics and delivery service firms in the past year. Courier service businesses are believed to be indispensable for strengthening the efficiency of their logistics businesses. Having a strong presence in logistics means greater ability to save costs on delivery, reduce delivery time, handle more products, and help drive down prices. View an example of our experience in this industry.

Information & communication technology   Japan - Fujitsu to spin off chip operations Source: Business Times Singapore, 21 January 2008 Japan's Fujitsu plans to spin off its struggling microchip operations, in a move that could smooth the way for partnerships with other chipmakers. Fujitsu's system chips are used in products ranging from digital cameras to supercomputers. Price falls and a shortage of engineers, coupled with massive investment costs, are prompting system chipmakers to band together as they race to move to smaller circuit sizes to cut production costs and make energy-efficient and powerful chips. Toshiba and NEC Electronics will work together in making next-generation 32-nanometre chips. Matsushita Electric Industrial and Renesas are also considering joint development of 32-nanometre chips. Japan - KDDI in talks to buy Chubu telecom arm Source: TelecomAsia, 18 January 2008 KDDI, Japan's second-biggest phone company, is considering buying Chubu Electric Power's fiber-optic business for around Y40 billion (US$400 million), pushing into a market dominated by NTT. KDDI and Chubu Electric have agreed that KDDI would buy more than 80% of Chubu Telecommunications on 1 April 2008, expanding its share of Japan's fiber-optic lines to about 8% from 6.3%. NTT, which seeks new revenues as more people opt to use their mobile phones rather than fixed lines, is under pressure to lower the fees it charges other phone operators to use its fiber-optic network. NTT has kept sign-up fees high while discouraging competitors, dampening the pace of sign-ups. Vietnam - SMBs to Spend US$1.4 billion on ICT in 2008 Source: Intellasia, 19 January 2008 Small and medium businesses (companies with up to 999 employees) in Vietnam are expected to spend more than US$1.4 billion on information and communications technology (ICT) in 2008, up 11% over 2007. According to AMI Partners, small businesses (companies with up to 99 employees) will account for more than 75% of this spending, with the manufacturing industry driving almost 45% of total ICT spending. The growth in ICT spending is linked with Vietnam's blistering economic growth and strong push to increase productivity. With Vietnam only at the beginning of an economic boom, Vietnam could very well prove to be their fastest growing market in the next few years. View an example of our experience in this industry.

Life science India - Emaar, Fortis plan JV to set up 25 hospitals Source: Business Standard, 21 January 2008 Ranbaxy Group-promoted hospital chain Fortis Healthcare and realty company Emaar MGF Land (Emaar MGF) plan to form a joint venture to set up 25 hospitals across major cities in India, with an investment of Rs12 billion (US$305 million).  Fortis Healthcare has 12 corporate hospitals in north India, besides a chain of pathology laboratories named SRL Ranbaxy and healthcare stores called Fortis Healthworld. Fortis plans to expand its network to 40 hospitals in three years with an investment of over Rs10-15 billion (US$254-380 million). Japan - Generics market to reach US$3.2 billion in 2009 Source: Pharma Japan, 21 January 2008 The market for generics was Y309.1 billion (US$2.9 billion) in 2007, up 7.5% from 2006, and the generic market reached 4.8% of the total prescription drug market. Fuji Keizai estimated that the generic drug market will reach Y337.9 billion (US$3.2 billion) in 2009, equivalent to 5% of the entire prescription drug market. In addition to a change in the prescription form from April 2008 to a form that allows pharmacists to make generic substitution if prescribing doctors do not check off a designated box, increases in dispensing fees for pharmacies that fill a certain level of prescriptions with generic drugs are under investigation. Fuji Keizai predicts that the market will continue to grow in the future as a result of these measures. Vietnam - B Braun Melsungen to build medical-equipment factory Source: Intellasia, 19 January 2008 German-based B Braun Melsungen AG, is to spend US$35 million to build a medical-equipment factory in northern Vietnam. Construction will start on Tuesday on the plant in the northern Ha Tay Province near Hanoi. The facility, with total capacity of 150 million units per year and annual revenue of US$17 million, would be the largest producer of medical equipment in Vietnam. Eighty percent of the factory’s products will be exported to other Asia-Pacific markets. View an example of our experience in this industry.

Media & leisure China - Internet users reach 210 million Source: China Economic Review, 21 January 2008 China's internet population has soared to 210 million people by the end of 2007, putting it on track to surpass the US online community this year to become the world's largest. The China Internet Network Information Center said the online population grew 53%, from 137 million reported at the same time in 2007. According to the government's Xinhua News Agency, China is only five million behind the US. China is already the No.1 nation for mobile phones, with users numbering 539.4 million at the end of November 2007. Internet use in rural areas was up 127.7% year-on-year to 52.6 million. China's total number of online gamers rose 23% to 40.17 million in 2007 with sales growing 61.5% to US$1.46 billion. China - Arrivals to Chinese SARs to rise in 2007 Source: Xinhua, 20 January 2008 The number of Chinese mainland tourists to Hong Kong and Macau was expected to grow by 10% and 20%, respectively, in 2007. The China National Tourism Administration expects visitor arrivals to Hong Kong and Macao to reach 15.5 million and 12 million, respectively, in 2007. The extension of the "Individual Visitor Scheme", which allows residents of 49 mainland cities to visit the two SARs in their individual capacity, has fuelled growth. Meanwhile, Macau is expected to surpass Hong Kong as a tourist destination. The total number of visitors to Macau surged 22.7% to more than 27 million arrivals in 2007. Hong Kong recorded 28 million visitor arrivals in 2007, up 10% on 2006. If growth rates are maintained, Macau will take the lead in 2008. Korea - Media convergence put on fast track Source: Korea Herald, 18 January 2008 Korea plans to deregulate the broadcasting and communication sector to fuel its growth. The Korea Broadcasting Commission, which manages broadcasting policies and regulations, will absorb telecommunications-related functions of the Ministry of Information and Communications. Incoming president Lee Myung-bak claimed that Korea is 5-10 years behind other advanced countries in the convergence of broadcasting and telecommunications. The decision to create the Broadcasting-Communications Commission is seen as a boon to telecom players. Commercialised IPTV is the subject of eager anticipation by telecom players as it represents a broadcasting/telecom convergence business model through which to create new streams of revenue. View an example of our experience in this industry.

Previous issues

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] Korean petrochemical industry remains bullish [23-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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