Portfolio | January 2014

Portfolio Exclusive to Emirates First Class and Business Class

RECYCLING TAIWAN Money from Trash THE LOST GENERATION Europe’s Unemployed Youth CANADIAN OIL A New Delivery Model

Jérôme

Lambert Montblanc’s Global Stylist

Issue 97 ■ January 2014

FALL WINTER 2013

This issue JANUARY 2014

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7

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Cover Story 26 Unity is Strength Jérôme Lambert, the recently appointed CEO of Montblanc, believes it is vital for the brand to retain a unified approach but yet be sensitive and adapt to the local norms of the countries it operates in.

Features 32 Nature Gives, Nature Takes

48 A Pencil Powerhouse

The Philippines has abundant geothermal energy, but

Faber-Castell, the world’s largest maker of wood-encased

Typhoon Haiyan destroyed the infrastructure.

pencils, is an example of how German midsize companies

36 Educated Yet Unemployed Youth unemployment has grown to staggering levels in many

stay competitive in the global marketplace.

52 Money in Trash

EU countries, dashing dreams and forcing many to leave

Taiwan used to have huge problems with trash, but now it

their countries.

recycles on an industrial scale.

40 Canadian Crude Hits the Rails

58 Germany’s Big Repair Bill

The delays and protests around the proposed Keystone XL

Europe’s largest economy is preaching austerity but its

pipeline has led Canadian oil producers to increase their rail-

aging infrastructure is in dire need of an annual €7.2 billion

loading capacity.

investment.

48

44 If the Shoe Fits The Chalhoub Group, founded in Damascus by Michel Chalhoub and his wife Widad in 1955, is a powerhouse in the luxury goods sector.

36

52

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Essentials 63 Art and Soul Zurich is often considered a staid city, but an exploration of its design and architecture reveals an anti-establishment attitude and quirky pleasures.

68 All Cheese Great and Small The picturesque towns and villages of the Yorkshire Dales are home to some incredible artisan cheesemakers.

63

74 Precision and Artistry The watchmaker A. Lange & Söhne is the phoenix of the luxury watch industry. The brand disappeared in the 1940s but is now revered again following its resurrection in the 1990s.

78 Fujifilm Finds a Niche The X series, which mimics old-style cameras but has a high-tech core, has helped keep Fujifilm in business.

74

82 The Quiet Force Bill Damaschke, the chief creative director of DreamWorks, is relatively unknown in Hollywood despite being behind numerous blockbusters.

84 Rock Star Ailsa Craig, a Scottish icon, is listed for sale as the only island that has ever won an Olympic Gold medal.

78

88 Other Business Portfolio takes a light-hearted look at the latest business news.

Departments

84

11 Notebook World business in a nutshell.

17 Observer Spotting and analysing business trends.

24 Column: Damian Carrington Deforestation On the Rise

Published for Emirates by

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Notebook

11

AFP/grAPheAst

BUSINESS NEWS IN BRIEF

Vietnam’s Electronic Attraction SamSung ElEctronicS built

Korea led with $3.66 billion.

the world’s largest smartphone business

China’s $8.4 trillion economy, 59 times

by tapping China’s cheap and abundant

the size of Vietnam’s, received $97 billion

workforce. Now it’s shifting output to

of foreign direct investment in the first 10

Vietnam to secure even lower wages and

months, six per cent up on a year earlier.

defend profit margins as growth in sales of

Intel, the world’s largest chipmaker,

Electronics’ global workforce, the largest source of labour outside South Korea, it said.

Record economic growth that made China the second-biggest economy has fuelled wage inflation, pricing many workers

opened a $1 billion assembly and testing

out of low-end jobs. The base monthly

plant in Ho Chi Minh City in 2010. Nokia

salary for a factory worker in Beijing was

full production in 2015, China’s communist

said its facility near Hanoi producing Asha

$466, compared with $145 in Hanoi,

neighbour will be making more than 40

smartphones and feature handsets became

according to a 2012 survey of pay by the

per cent of the phones that generate the

fully operational in the third quarter

Japan External Trade Organization.

majority of Samsung’s operating profit.

2013. LG Electronics, Samsung’s smaller

The Suwon, South Korea-based company’s

South Korean rival, is building a new

double to 1.7 billion units by 2017 at the

second handset factory in Vietnam is due to

400,000 square metre complex to make

same time average prices will drop to $265

begin operations in February.

TVs and appliances as part of a $1.5 billion

from $337, according to industry analysis

investment plan.

firm IDC.

high-end handsets slows.

By the time a new $2 billion plant reaches

Vietnam has been extremely successful in attracting foreign direct investment

After setting up in China in 1992,

Globally, smartphone sales will more than

While tax breaks and cheap workers are

(FDI). Vietnam’s government had approved

Samsung now has 13 manufacturing sites

lures that other countries such as India and

$13.8 billion of new foreign projects last

and seven research laboratories there,

Indonesia could offer, Vietnam’s location

year through November 20, a 73 per cent

according to its June sustainability report.

closer to existing Samsung production

increase on a year earlier, according to the

The 45,660 employees in China make

bases in China and South Korea is an extra

General Statistics Office in Hanoi. South

up more than 19 per cent of Samsung

incentive. n

January 2014

Notebook East africa railway

Numbers Game

20

per cent rise in vacant office space has hit

the Indian financial centres of Mumbai and Delhi in the third quarter of 2013, the highest in asia after Chengdu, China, where 32 per cent of offices are empty according to broker Cushman & Wakefield. India’s slowing economy has led to declining demand for office space, prompting builders to convert commercial projects into housing.

€1.71

billion record antitrust fine

has been levied on six european and Us banks and brokers by the european Union for rigging

$51

million boost to the emirate’s economy has come from the Dubai International Film Festival since it began in 2003, according to research from an independent international consultant. the $51 million includes tom Cruise’s hollywood blockbuster Mission Impossible: ghost protocol. the film alone raised an estimated $21 million for Dubai.

was hit with the single biggest penalty of €725.4 million, followed by societe generale

€391 million.

International anger over Us

across East Africa to reach

surveillance disclosures could

South Sudan, DR Congo and

In Figures

hurt Us sales because of

Burundi.

$2.7

doubts about the security of

The first section will link

information on their systems.

the Kenyan port of Mombasa to the capital, Nairobi,

billion fine will see starbucks making

good the damages and attorney

$1

million was the record

reducing the journey time

price paid for an

from 15 hours to about four.

electric guitar at a Christie’s

It is the country’s biggest

an independent arbitrator

auction that american musician

infrastructure project since

slapped the coffee maker with

Bob Dylan played at the 1965

independence 50 years ago.

the fine for defaulting on a deal

Newport Folk Festival. the

that Kraft, then controlled by

festival performance

be $5.2 billion and will mostly

Mondelez, made to distribute

cemented Dylan’s

be funded by China. All the

bagged starbucks coffee to

move from acoustic

present railway infrastructure

billion all-cash

supermarkets and other retailers

folk to electric

dates back to colonial times.

deal has fetched

under a 12-year contract.

rock ‘n’ roll.

fees to Mondelez International.

£1.6

a new, Chinese-financed

The World

with a €446 million fine and royal Bank of scotland charged

Kenya has formally launched railway, which should extend

the benchmark interest rate. Of the six banks, Deutsche Bank

reUters

12

supplier aZ electronic Materials.

After the Nairobi section is finished, with completion due

german drugs and chemicals group Merck control over apple

The cost of the railway will

$35

billion in lost revenue

in 2017, it will be extended

through 2016

through Uganda, with branch

Merck is a leading operator in

poses a huge risk for american

lines west to Kisangani in

liquid crystal displays with more

technology companies according

the Democratic Republic

than 2,500 patents. the deal

to the Information technology &

of Congo, south through

will further its presence in high-

Innovation Foundation, a policy

Rwanda to Burundi and north

tech electronic devices.

research group in Washington.

to South Sudan.

Portfolio

Notebook

13

Expo 2020 fast-tracks InfrastructurE Dubai’s plans to

will fast-track infrastructure developments

develop infrastructure

such as rail projects and ramp up logistics

in time for the Expo

facilities that are worth billions of dollars.

is no less ambitious.

Remaining true to its theme of

aFP/graPheast

Dubai winning the rights to host Expo 2020

According to a Standard

sustainability, mobility and opportunity,

Chartered report, Dubai

Dubai has allocated a large chunk of its

is expected to spend around $9 billion to

Expo budget to building and developing its

fund its growth plans for the event. “Capital

infrastructure and improving its logistics

expenditure will be directed to develop

memorandum of understanding (MoU) with

facility by 2020.

city-wide infrastructure that is not already

Dubai World Central (DWC) in December

in the pipeline and the Expo area and the

to build a mega golf course and urban centre

an investment rush in infrastructure

immediate vicinity, such as the extension of

development around the new airport.

development in the host city. The Chinese

the Dubai metro red line,” said the report.

The new development will be spread

Additional investment in infrastructure

across 13.63 million square metres with

Traditionally, World Expos trigger

government spent over $40 billion on

an EC Harris study.

Dubai developer Emaar signed a

developing and improving infrastructure in

development is also expected to boost the

the first phase to include a golf-course

the build up to Shanghai Expo 2010, adding

UAE’s construction sector. The UAE is

villa community, several hotels, a high-end

six new metro lines, roads, tunnels, bridges

projected to spend $329 billion on major

shopping mall, leisure attractions, and a

and a high-speed rail link.

construction projects by 2030, according to

business hub, Emaar said in a statement.

SA's Renewable Power Boom The South African government’s energy

installations were expected to reach 187

shortage that in 2008 led to the closure

policies have touched off the continent’s

megawatts last year and 601 megawatts in

of the country’s mines for five consecutive

biggest renewable power boom. It

2014, up from seven megawatts in 2012.

days. Businesses from factories to

is creating jobs in a country where

South Africa generates about 85 per

aluminium smelters currently are

unemployment has remained near 25 per

cent of its electricity from coal. The

encouraged to cut their usage 10 per cent

cent for the past four years.

addition of solar helps end a power

to prevent a recurrence.

Clean-energy developers are being

The South African government has

lured by government incentives and about

allocated 64 projects so far, which cover

360 days of sunshine a year. President

wind, concentrated and photovoltaic

Jacob Zuma is targeting 3,725 megawatts

solar, landfill gas and biomass power.

by 2016 from the 120 billion-rand

Investment in clean energy in South

programme to increase renewables, which

Africa increased more in 2012 than any

in 2012 accounted for less than one per

other country, rising 206-fold to $5.5

cent of the energy supply.

billion. Eskom Holdings, the South

The programme has made it the only markets, with installations comparable to South Korea and Thailand. Solar January 2014

African power utility, will buy the getty images

African nation among the top 20 solar

electricity from the projects for 20 years.

It currently pays independent energy producers 84 cents a kilowatt-hour.

14

Notebook DUBAI EVENT: DUBAI SHOPPING FESTIVAL WEBSITE: MYDSF.AE DATE: JANUARY 2 TO FEBRUARY 2 VENUE: VARIOUS VENUES ACROSS DUBAI The Dubai Shopping Festival sees manufacturers, restaurants and hospitality industries from across the globe using the regions biggest shopping event to launch their latest products and services, along with jaw-dropping deals, discounts and raffle draws. Held over a month the 19th edition of the festival is expected to draw millions of visitors to Dubai. The first 18 events have attracted over 47 million visitors and generated more than $31 billion for Dubai’s economy.

EVENT: SGI DUBAI 2014 WEBSITE: SIGNMIDDLEEAST.COM DATE: JANUARY 7-9 VENUE: DUBAI WORLD TRADE CENTRE SGI (Sign and Graphic Imaging Middle East) is an annual trade show for sign making, graphic displays and digital printing. Showcasing the trends in products, technologies and services the exhibition attracts leading international manufacturers and suppliers from 30 countries. Many big name exhibitors such as 3M, Agfa Graphics, Canon, Epson and LG will launch new products and offer free demonstrations at their stands.

The exhibition drives deals and furthers business opportunities in the region.

DUBAI

United Arab Emirates

EVENT: INTERSEC WEBSITE: INTERSECEXPO.COM DATE: JANUARY 19-21 VENUE: DUBAI INTERNATIONAL CONVENTION & EXHIBITION CENTRE Intersec is a regional trade event for the safety and security industries. Manufacturers and distributors of safety products showcase the latest technology and educate the market about cutting-edge solutions. The exhibition stands are classified under four broad categories of commercial security, homeland security, health, and fire. Issues relevant to Middle East markets will be explored in depth by leading industry players at the many conferences and seminars.

EVENT: WORLD FUTURE ENERGY SUMMIT WEBSITE: WORLDFUTUREENERGYSUMMIT.COM DATE: JANUARY 20-22 VENUE: ABU DHABI NATIONAL EXHIBITION CENTRE This preeminent gathering of international leaders in developing sustainable energy solutions will examine the rising demand for clean energy. The annual summit takes a holistic approach by bringing together major themes impacting the world’s renewable energy resources.

Launching this year is the sustainable living expo that will highlight government initiatives in implementing new building regulations to drive developers to adopt more energy efficient solutions. Techtalk is another brand new seminar concept that brings together all major stakeholders, industry leaders and policymakers from across the MENA region to share views on global and Middle East-specific energy issues.

EVENT: ARAB HEALTH WEBSITE: ARABHEALTHONLINE.COM DATE: JANUARY 27-30 VENUE: DUBAI INTERNATIONAL CONVENTION & EXHIBITION CENTRE This annual event is the largest gathering of healthcare businesses and professionals across the region, and it is poised to get bigger this year with 400 new companies participating, bringing the total to 3,900 exhibitors. To accommodate the increased participation a new hall “Zabeel 4” will be used to extend the venue. This year the focus is on health concerns central to the Middle East including road accidents, diabetes and obesity. Industry leaders including Siemens, Johnson & Johnson and Samsung will offer exclusive hands-on training sessions on the most sophisticated technologies and devices.

Portfolio

Observer BUSINESS NEWS IN BRIEF

17

more programmes like the one at Tognum, they maintain, the nascent recovery in US manufacturing will run out of steam for lack of qualified workers.

“South Carolina offers a fantastic model for what we can do nationally,” said Ben Olinsky, co-author of a forthcoming report by the Center for American Progress, a liberal Washington research organisation, recommending a vast expansion in apprenticeships.

Despite South Carolina’s progress and the public support for apprenticeships from President Barack Obama, who cited the German model in his last State of the Union address, these positions are becoming harder to find in other states. Since 2008, the number of apprentices has fallen by nearly 40 per cent, according to the Center for American Progress study.

Jeff Smith works in the assembly shop at BMW’s plant in Greer, South Carolina.

“As a nation, over the course of the last couple of decades, we have regrettably and mistakenly devalued apprenticeships and training,” said Thomas Perez, the secretary

The Value of Apprenticeships Apprenticeships are practically unheard of in the USA, leading to a shortage of qualified workers, reports Nelson Schwartz.

of labour. “We need to change that, and you will hear the president talk a lot about it in the weeks and months ahead.”

In November, the White House announced a new $100 million grant programme aimed at advancing technical training in high schools. But veteran apprenticeship advocates say the Obama administration has been slow to act.

“The results have not matched the

For Joerg Klisch, hiring the

headquarters in Friedrichshafen – Tognum

rhetoric in terms of direct funding for

first 60 workers to build heavy engines at

now has nine juniors and seniors enrolled in

apprenticeships so far,” said Robert Lerman,

his company’s new factory in Greer, South

its apprenticeship programme.

a professor of economics at American

Carolina was easy. Finding the next 60 was not so simple.

© 2013 New York Times News service

“It seemed like we had sucked up

Inspired by a partnership between schools and industry that is seen as a key to Germany’s advanced industrial

University in Washington. “I’m hoping for a new push.”

In Germany, apprentices divide their

everybody who knew about diesel engines,”

capability and relatively low unemployment

time between classroom training in a public

said Klisch, vice president for North

rate, projects like the one at Tognum are

vocational school and practical training

American operations of Tognum America.

practically unheard of in the United States.

at a company or small firm. Some 330

“It wasn’t working as we had planned.”

But experts in government and academia,

types of apprenticeships are accredited by

along with those inside companies like

the government in Berlin, including such

back home in Germany: He set out to

BMW, which has its only US factory in

jobs as hairdresser, roofer and automobile

train them himself. Working with five local

South Carolina, say apprenticeships are

electronics specialist. About 60 per cent of

high schools and a career centre in Aiken

a desperately needed option for younger

German high school students go through

County, South Carolina – and a curriculum

workers who want decent-paying jobs, or

some kind of apprenticeship programme,

nearly identical to the one at the company’s

increasingly, any job at all. And without

which leads to a formal certificate in the

So Klisch did what he would have done

January 2014

18

Observer Besides a longstanding stigma attached

chosen skill and often a permanent job at the

to vocational education, opposition from

company where the young person trained.

entrenched interests on both the left and the

If there is a downside to the German system, it is that it can be inflexible, because

right has hobbled past efforts to promote

a person trained in a specific skill may find it

apprenticeships, including under President

difficult to switch vocations if demand shifts.

Bill Clinton in the 1990s.

Here in Greer, where more than 7,000

In South Carolina, apprenticeships are mainly funded by employers, but the

employees produce more than 300,000

state introduced a four-year, annual tax

SUVs and other luxury cars a year in a

credit of $1,000 per position in 2007 that

sprawling, ultramodern BMW factory,

proved to be a boon for small- to medium-

Richard Morris, vice president for assembly

size companies. The Center for American

and logistics, identifies one of the company’s

Progress report recommends a similar credit

biggest problems: a serious shortage of

nationwide that would rise to $2,000 for

medium-skilled workers who specialise

apprentices younger than 25.

in mechatronics, or repairing robots and metal presses when they break down and operating the computers that dot the paint

The emphasis on job training has

shop, body shop and assembly shop. Not

also been a major calling card overseas for South Carolina officials, who lured BMW here two decades ago and more recently persuaded France’s Michelin and Germany’s Continental Tire to expand in the state.

Werner Eikenbusch manages workforce development for BMW in the Americas.

Apprenticeship Carolina started in 2007 with 777 students at 90 companies. It

only do these jobs pay better than typical assembly-line positions, they also open up avenues for advancement.

Werner Eikenbusch, manager of

now has 4,500 students at more than 600

workforce development for BMW in the

Brad Neese, director of Apprenticeship

companies in the state, with the typical

Americas, is himself the product of an

Carolina, which links the state’s technical

apprentice in his or her late 20s. Neese’s

apprenticeship programme in Germany

college system with private companies to

goal is to have 2,000 companies by 2020.

who later went back to school and earned a

To help develop his programme, Neese

master’s degree in engineering. He helped

“The European influence is huge,” said

help create specialised programmes. “They

has travelled to Germany, Austria and

create the BMW Scholars programme in

Switzerland, where apprenticeships are

2011, he said, “to build the skills from the

in the state, with more than 28,000 workers

thriving, youth unemployment is relatively

ground up.”

for German companies alone. The influx has

low and blue-collar jobs are still prized. That

helped stanch much of the bleeding caused

contrasts with the United States, where the

Tognum’s apprentices – mostly in their 20s

by the decades-long erosion of jobs in the

economic fortunes of younger people with

and 30s – and they study full-time at local

textile industry, once the economic bulwark

just a high school diploma have plummeted,

technical colleges for two years while also

of the Palmetto state.

and the unemployment rate among workers

working in the BMW factory for 20 hours

age 16 to 19 stands at more than 20 per cent.

a week.

are our strongest partners.”

European companies are major employers

There are other reasons foreign companies have moved here. For starters,

“This generation has taken a huge hit

The BMW Scholars are older than

Eikenbusch has been pitching the

wages are lower than the national

from the economic crisis,” said Alexander

programme to European parts suppliers in

average. Even more important for many

Gelber, an economist at the University of

the area, and to executives at Boeing, which

manufacturers, unions have made few

California at Berkeley and a former senior

began building sections of the new 787

inroads in South Carolina.

Treasury official. “Apprenticeships offer

Dreamliner in Charleston in 2011. He hopes

people the possibility of building skills when

they will follow BMW’s lead.

Still, the close cooperation between employers and the state educational system

they often don’t have many other options.”

is unusual, and despite initial scepticism on

So why have they not caught on in the

“We need to find a way to establish twoyear training programmes on a broader

both sides, apprenticeship opportunities are

United States like in Germany, which has 1.8

scale,” he said. “Everybody who I hire

rapidly expanding both for high-school age

million apprentices with less than one-third

is someone who is not available for our

students and for older workers.

the population?

suppliers to hire.” n Portfolio

Observer O N E 2 W AT C H TExT: HildA d’sOuzA

Roland C. Smith Office Depot, America’s largest office-supply chain, named Ronald C. Smith as its new chairman and chief executive officer on November 12 last year.

Weeks prior to Smith’s November appointment the Florida-based US company merged with rival company OfficeMax in a $976 million all-stock deal. The merger aims to cut costs, consolidate stores, boost clout with suppliers and sharpen the competitive edge over market leader Staples, as well as online and discount competitors.

The 59-year-old Smith said his mission at Office Depot is to generate up to $600 million in cost savings from this merger and “drive improved profitability and increased revenues.”

Analysts believe Smith’s priority is to develop strategies for retaining key managers. This is crucial for the long-term success of the company, as is effectively merging the office cultures of the two companies and providing a clear vision.

The board is confident that Smith has the ability to effectively integrate OfficeMax into Office Depot and boost profits. “Roland is uniquely qualified for the newly combined Office Depot and OfficeMax. He has decades of experience integrating companies and cultures and an impressive track record in turning around businesses,” said Nigel Travis, lead director and co-chair of the CEO selection committee.

In the past, Smith has acted as president and chief executive of several public and private companies and numerous boards.

In his former role as CEO at Belgium-based Delhaize Group he successfully orchestrated the integration of major supermarket chains and improved company profits by arranging the sale of three outlets. Prior to that Smith drove a successful merger of restaurant chain Wendy’s with Arby’s. He was credited for increasing profitability and operations and rebuilding the company’s product pipeline. He also led restructuring at American Golf Corp and AMF Bowling Worldwide Inc before his stint at Wendy’s.

Smith, a graduate of the US military academy West Point, has proved to be adept at embracing risk in his leisure time by climbing mountains, riding motorcycles and test piloting flights. Professionally, this former US Army platoon leader is also up for the challenge.

In his appointment note he said, “With the combined resources of Office Depot and OfficeMax, we have the ability to transform the company and create an exciting new organisation that exceeds the needs and desires of our customers, provides new opportunities for our global associates, becomes a more appealing partner to our vendors, and increases value for our shareholders.”

$5.7 Billion Credit Card Settlement Visa and MasterCard won approval for a $5.7 billion settlement that ended years of litigation with US merchants over allegations that credit-card swipe fees are improperly fixed.

Once owned by groups of major banks, California-based Visa and New York-based MasterCard have defended themselves for decades against legal claims that they operated pricefixing schemes. Swipe, or interchange, fees are set by Visa and MasterCard and paid by merchants when consumers use credit or debit cards.

MasterCard and Visa separated from the banks through initial public offerings in 2006 and 2008, respectively.

Merchants filed a class-action lawsuit against the companies and the biggest card-issuing banks in 2005. They later alleged that the payment networks continued to fix prices with the banks even after the IPOs. Lawyers representing merchants nationwide announced the settlement in July 2012. Once worth as much as $7.25 billion, the settlement was valued at about $5.7 billion as of August 2013 as a result of reductions for about 8,000 merchants that dropped out of the damages portion.

Dozens of large retailers, including Wal-Mart Stores, Amazon. com and Target, as well as major airlines, health insurers and other consumer businesses criticised the deal. Some said the amount should have been higher and that a legal release preventing future lawsuits was written too broadly.

Developed by banks half a century ago as two of the earliest interstate credit-card brands, Visa and MasterCard have been subject to government scrutiny over their business practices since at least the 1970s.

getty images

20

Portfolio

Observer

21

E-waste Floods Developing World Millions of electronic devices bought over

the EU that were checked by its agents

Christmas are destined to create a flood of

contained illegal e-waste. Criminal

dangerous “e-waste” that is being dumped

investigations were launched against

illegally in developing countries, the UN

40 companies.

The global volume of electronic waste

Although it is legal to export discarded goods to poor countries if they can be

is expected to grow by 33 per cent in the

reused or refurbished, much is being sent

next four years, according to the UN’s Step

to Africa or Asia under false pretenses,

initiative, which was set up to tackle the

says Interpol.

growing e-waste crisis. Last year nearly

Few countries understand the scale of

50 million tons of e-waste was generated

the problem, because no track is kept of all

worldwide – or about seven kilograms for

e-waste, says the European Environment

every person on the planet.

Agency, which estimates between 250,000

These are electronic goods containing

tons and 1.3m tons of used electrical

toxic substances such as lead, mercury,

products are shipped out of the EU every

cadmium, arsenic and flame retardants.

year, mostly to West Africa and Asia. “These

Interpol revealed an indication of the

goods may subsequently be processed

level of e-waste being shipped to the

in inefficient conditions, harming the

developing world in December. It said

health of local people and damaging the

almost one in three containers leaving

environment,” said a spokesman.

gettY IMAges

has warned.

Barbados Tops Cyprus Debt per cent that forced

Caribbean economies expand 1.3 per cent,

Cyprus to seek a

half the rate of Latin America, according to

European Union-

the United Nations.

AFP/grAPheAst

brokered bailout

Barbados will fire 3,000 public sector workers by March and freeze wages as the

Standard & Poor’s lowered its rating on

in March 2013.

the island to BB- from BB+ in November,

Finance Minister

citing external financing challenges and a

Chris Sinckler told

high fiscal deficit. International reserves

lawmakers that

tumbled to below 900 million Barbados

the government

dollars ($450 million) in October from 1.1

risks “further

billion at the start of last year, according to

haemorrhaging” of its

Sinckler and central bank data. Total tax

reserves and the local

revenue from the April to October period

currency’s peg to the

was down 11 per cent from the same period

dollar if nothing is done.

Barbados’ financial struggles are

a year earlier.

The government announced a plan in

eastern Caribbean island’s debt burden

mirrored across much of the Caribbean,

August to target three per cent annual

soars and the International Monetary Fund

which has seen eight debt defaults since

economic growth, reduce the fiscal deficit

says “urgent adjustments” are needed.

2003 in six countries, including Jamaica,

below two per cent by 2020 and boost

Barbados’ ratio of debt to gross domestic

Belize, Grenada, Dominica and St. Kitts

reserves. The IMF said the government

product reached 94 per cent in September,

& Nevis. Barbados’ $3.7 billion economy

should aim to cut debt-to-GDP to below 85

according to the IMF, more than the 93

will shrink 0.7 per cent this year while

per cent by 2018.

January 2014

Observer The World

CompIled by Hilda d’souza

Top 10

Feta Cheese Sours US-Canada Trade Deal

most gender equal countries in tHe world rank

COUnTrY

1.

2.

3.

4.

5.

Iceland Finland Norway Sweden Philippines

6.

7.

8.

9.

Ireland New Zealand Denmark Switzerland

10.

Nicaraqua

SouRCe: WoRld eCoNomIC FoRum’S GlobAl GeNdeR GAp 2013 RepoRT The RepoRT RANkS 136 CouNTRIeS oN TheIR AbIlITy To CloSe The GeNdeR GAp – mAkING SuRe WomeN ARe NoT held bACk – IN FouR key AReAS: heAlTh ANd SuRVIVAl, eduCATIoN, polITICS ANd eCoNomIC equAlITy.

most gender equal countries in tHe middle east and nortH africa rank

COUnTrY

1.

2.

3.

4.

5.

United Arab Emirates Bahrain Qatar Kuwait Jordan

SCOre OUT Of 136 COUnTrieS 109 112 115 116 119

6.

7.

8.

9.

Oman Lebanon Algeria Egypt

122 123 124 125

10.

Saudi Arabia

127

GeTTy ImAGeS

22

Feta cheese makers and politicians in Greece feel that a EU free trade deal with Canada threatens the uniqueness of the protected brand. If the deal stays as it is, Canadian producers can still market their cheese as “feta”. In Canada locally made feta dominates the market.

Under the trade deal, new Canadian brands of “feta” will have to call their cheese “feta-style” or “imitation feta” and cannot evoke Greece on the label, such as using Greek lettering or an image of ancient Greek columns.

Feta is among 145 iconic food and drink names covered by a EU Protected Geographical Indication. The special status prevents other manufacturers in the EU copying the original, traditional product and marketing it like the original.

The list includes many other cheeses such as Italy’s Parmesan and Gorgonzola, various hams such as Bayonne (France) and Parma (Italy), and some beers such as Bayerisches (Germany) and Ceske (Czech Republic).

most gender equal countries in asia and tHe Pacific rank

COUnTrY

SCOre OUT Of 136 COUnTrieS

1.

2.

3.

4.

5.

philippines New Zealand Australia mongolia Sri lanka

5 7 24 33 55

6.

7.

8.

9.

Singapore lao pdR Thailand China

58 60 65 69

10.

Vietnam

73

Feta is a national symbol in Greece worst hit by the Eurozone crisis, where national pride has taken a battering. A court ruling in 2005 gave Greece a monopoly on the name in the EU. The feta industry accounts for more than 70 per cent of Greek cheese exports and – unlike much of the struggling Greek economy – it is expanding. Some 300,000 Greek livestock farmers earn a living from feta.

The EU-Canada deal, clinched in October last year after more than four years of hard bargaining, still has to be ratified by the parliaments of all 28 member states, each government and Canada’s 10 provinces. Therefore the deal is unlikely to take effect until 2015 at the earliest.

Portfolio

Commentary

24

Damian Carrington

Deforestation On the Rise Destruction of the AmAzon

running through Para and Mato Grosso

rainforest increased by almost one-third

states, which eases the transport of illegal

in the past year, reversing a decade-long

timber. Another factor is high global food

trend of better protection for the world’s

prices which drives forest clearance for

greatest rainforest.

cattle and soya farming.

“There are various ways to spin this

Environmentalists blamed a controversial weakening of legal protections passed by

figure, but there’s no way it’s good news,”

President Dilma Rousseff for the increase

said Dr Doug Boucher, an expert on tropical

in deforestation by loggers and farmers.

forests at the Union of Concerned Scientists.

But the environment minister, Izabella

“Certainly the amendments to the Forest

Teixeira, rejected this, saying the overall

Code were one reason. It’s a warning that

trend was “positive” and that eliminating

although deforestation can be reduced

illegal deforestation remained the

rapidly and dramatically by strong policies,

government’s goal.

it can also increase again when those policies are weakened.”

The set-back in the Amazon came as the

Brazil has demanded funding from rich

first global, high-resolution, satellite analysis 2000 an area equal to 50 football pitches has been destroyed every minute. The total loss is 10 times the area of the UK, with only a third being replaced by natural and

sensitive to criticism of its effort to develop

Deforestation in the Amazon increased by 28 per cent last year.

and improve the living standards of its 200 million people.

About three-quarters of Brazil’s emissions

planted reforestation, and the destruction is

surprised by this increase in deforestation,

come from rainforest clearing, as trees are

accelerating in the tropics.

given that their own action is what’s pushing

burned or felled and rot, making the nation

it. The change in the Forest Code and the

the world’s sixth-biggest emitter of carbon

contributor to the emissions that drive

resulting amnesty for those who illegally

dioxide. The new global satellite study

climate change. Trees provide a vital store

felled the forest sent the message that such

shows that Indonesia, despite being just a

of carbon, as well as providing livelihoods

crimes have no consequences.”

quarter of the size of Brazil, now destroys

The razing of forests is a major

for a billion people. But deforestation has

The revised Forest Code was passed in

about the same area of forest.

“Recent progress has been made with

more than doubled in Indonesia, Paraguay,

2012 after more than a decade of efforts

Malaysia and Cambodia, largely due to

by Brazil’s powerful agricultural lobby.

Indonesia’s forest moratorium, which

illegal logging.

The changes eased restrictions for smaller

prevents new licenses to clear primary forest,

landowners, allowing them to clear land

but it suffers enforcement challenges,” said

data has helped the government slash

closer to riverbanks, and allowed those who

Professor Matt Hansen, at the University of

deforestation by 80 per cent since 2003-4

had illegally felled land to not face penalties

Maryland, who led the global satellite study

by allowing police to pinpoint illegal activity

if they signed an agreement to replant

with Google and other researchers. “It’s too

in the vast forest, which is bigger than

trees, which many environmentalists say is

early to tell if the moratorium has actually

western Europe. But the 5,800km2 in 2012-

unlikely to be enforced.

reduced forest loss.”

In the Amazon, the use of satellite

© 2013 GuaRDian nEwS & mEDia

nation’s to cut deforestation and has been

aFP/GRaPHEaST

of global deforestation revealed that since

13 was a 28 per cent increase on the recordlow in the previous year.

Adario added that the push by Rousseff’s

Hansen said “timely” annual updates

government for infrastructure projects in

of global deforestation will start early this

the Amazon region was also a cause, noting

year: “Prior to this, most information about

Amazon campaign, said the spike was

that much of the recent destruction was

forests is years out-of-date by the time it

scandalous: “The government can’t be

along a government-improved highway

finds its way into policymakers’ hands.” n

Paulo Adario, leader of Greenpeace’s

Portfolio

Profile

26

Unity is Strength Jérôme Lambert, the recently appointed CEO of Montblanc, believes it is vital for the brand to retain a unified approach but yet be sensitive and adapt to the local norms of the countries it operates in, reports Emma Hodgson.

FOUR MILLENNIA AGO, BEDOUIN

Towers hotel in the business district of

between the tradition of Montblanc, and

tribesmen were training birds of prey to

Dubai. He is keen to show me a new

the reality of the cultures in the countries

hunt hare and Houbara Bustards as they

black leather falconry glove, which was

where we are developing our activities. It

travelled across the desert sands of Arabia.

especially designed for the Montblanc

shows respect for the country’s culture we

This ancient way of life is ingrained in

Abu Dhabi store launch.

are entering and our willingness to create.

Arab culture, which is why the golden

Lambert believes it symbolises

falcon is at the centre of the United Arab

the essence of Montblanc under his

Emirates’ official emblem.

leadership: a unified brand that is

I am reminded of that fact when I meet Jérôme Lambert, the new CEO of Montblanc, at Jumeirah Emirates

sensitive to local norms.

“It is very important for the brand’s expression that the product is a bridge

We do not want to replicate the same format in every country.”

Lambert is an enigmatic force. About 5’8 in height, he wears a dark blue Italian Ermenegildo Zegna suit and speaks passionately in English and French about Portfolio

27

J茅r么me Lambert became CEO of Montblanc in July last year.

January 2014

Profile

28

the pan-European German brand which he now represents.

Lambert joined Montblanc in July 2013 after a 12-year stint as CEO of the 180-year-old French watch company Jaeger-LeCoultre, which belongs to the Swiss luxury goods group Richemont that also owns Montblanc. In November 2013, Richemont posted a four per cent sales growth to ¤5,234 million for the six month period ended in September.

Profit for the period rose by 10 per cent to ¤1,185 million. In 2012, Montblanc posted sales of ¤723 million, up from ¤672 million in 2011.

Lambert’s move from a company with a long history of watchmaking to one that produced its first watch collection in 1999 is quite a change. I ask Lambert what obstacles he’s faced in his first few months in charge.

“The biggest challenge is when you have been working for the same company

Lambert at the official Montblanc opening of The Galleria Boutique in Abu Dhabi last November.

for 15 years, which includes 12 years as

was later to give the company its new name,

CEO. You begin to have automatic ways

Montblanc. Today, Montblanc writing

of working with people. You don’t have to

instruments command 75 per cent of the

think anymore because you know the flow,

global market. During the past 107 years the

you know the decision process and how it

company grew to encompass jewellery and

will be enforced.”

leather goods, with their most recent brand

Lambert’s emphasis is on people and culture. His focus on building a local

extension being watches.

Throughout, the company’s focus

identity for the international brand he

has remained on their products as

represents is integrated in his description

fine lifetime companions. The closest

of adapting to Montblanc as its new CEO.

Montblanc comes to the digital market

“You have to find the nerve centre in the

is around the periphery, such as bespoke

body of the company,” he explains. “You

high-end smartphone and tablet cases.

need to find it when it comes to decision

Lambert, however, doesn’t feel threatened

making and processes, as it affects your

by a marketplace increasingly dominated

ability to have an impact. It determines

by digital platforms.

how you can have a positive and effective

“When you ask people if they have

impact on the business of your company.

signed a contract electronically or with

“As a new CEO you have to learn, you

a writing instrument lately, 90 or 95 per

have to analyse, and you have to get along

cent are still signing physical contracts.

with the culture of the company in order

There is also a symbolic power in

to integrate yourself.”

receiving a fine writing instrument. A fine writing instrument symbolises the access

The Montblanc Falcon Glove was specially designed for the UAE market.

CLAUS-JOHANNES VOSS, the banker

to power, the act of engaging. It is strong

Alfred Nehemias and the engineer August

in terms of message and in terms of this

Eberstein founded the Simplo Filler

symbolic meaning.”

Pen company in 1906 as a producer of

Lambert has a point. The Meisterstück

up-market pens in the Schanzen district

pen has and is being used by so many

of Hamburg. In 1910 they released the

presidents and heads of states that it is

Meisterstück (Masterpiece), the pen that

nicknamed the ‘power pen’. Think of an Portfolio

29

important treaty and it was probably

natural human link wanting to physically

it is nothing. Yet you strongly feel that

signed with a Montblanc. It is little wonder

write, to say ‘I want to add to what I am,

something is missing and it shows how

then that the CEO believes that Montblanc

what I was and what I will be to eternity’.

important this object, and how important

writing instruments still have a future.

Religion can be a good solution... But

the choice of these objects, can be.”

there is something key about leaving a

Lambert’s relationship with his

“I would not say the question is ‘is it the end of writing?’ At Montblanc we

mark to the nature of human beings.”

Montblanc products reflects this intimate

have strong watch sales, but we can also

In 1820 the poet Lamartine wrote

quality. For example, he always uses his

sustain the value of fine writing. There is

the line “Un seul être vous manque, et

Montblanc Starwalker pen to jot down

change, but there is no conclusion, and

tout est dépeuplé” [When one person is

ideas while travelling. “When you travel

it is up to us to enforce and reinforce the

missing, it can feel as though the whole

you get different ideas. Yet it is sometimes

symbolic value so that there is a future.”

world is empty]. According to Lambert,

hard to have precise ideas while you are

the essence of this old French idiom is

interacting with people, so you have to

be something intrinsically human about

intrinsic to the contemporary message of

get the ideas out of your mind. To express

wanting to leave a tangible mark on the

Montblanc. “You miss one single person

yourself you have to go inside your mind,

world. Lambert agrees, saying that the

and it feels like there is nobody around

and what you write has to be very precise

viability of his products lies at the heart

you. When you leave home and you

and the tool impacts this result. I like the

of human psychology. “As soon as a person

forget to take, for example, your watch,

Carbon Starwalker’s precise way of writing.

I suggest to Lambert that there may

realises that life is a temporary contract,

What is the use of writing something

there is a desire to survive but also to

blurred that you can’t read back home?”

exist, and the best way to do this is to

His emphasis is again on the

leave a mark,” explains Lambert.

“The prehistoric Lascaux paintings (17,000-year-old cave paintings in France) are evidence of this, as predecessors of writing. It reflects the same human necessity to say ‘I want to leave a mark’. It is a

compatibility between modernity

“There is a symbolic power in receiving a fine writing instrument. A fine writing instrument symbolises the access to power, the act of engaging.

It is strong in terms of message and in terms of this symbolic meaning.”

The stylish interior of the Galleria Boutique in Abu Dhabi.

January 2014

and tradition. “Our new range is craftsmanship between technologies.” He takes his smartphone out of his pocket and says, “I hate the cold plastic, I don’t like the feel of it. That is why with our new phone cover we

Profile

30

GETTY IMAGES

“I hate the cold plastic, I don’t like the feel of it. That is why with our new phone cover we are injecting resin into the leather so it is light and flexible. I like the contact with leather as it’s warm, alive and soft.”

Montblanc CEO Jérôme Lambert, model Karlie Kloss and President & CEO at Montblanc North America Jan-Patrick Schmitz celebrate the Madison Avenue Boutique opening.

are injecting resin into the leather so it is

television advert a young man is depicted

network or proper media and press

light and flexible.

using the brand to win back his art

support to make your competence known.

I like the contact with leather as it’s warm,

student ex-girlfriend. He does this by

So you select a viable marketing approach

alive and soft.”

flying her to Europe in his father’s private

for the brand and its category, and

jet so she can pick out a Montblanc watch.

somehow there is a true tropicalisation

whips off his belt whilst apologising

I ask Lambert if he thinks there is a

(adaptation) of the brand. And that

about getting undressed before a lady.

potential schism in the company’s image

tropicalisation reflects the brand adapting

“See, there is no stitching as this is a very

by targeting the southern hemisphere

itself to the country.

particular type of belt made in Florence.

youth market, which is in stark contrast

“My job is to unite the house, to make

There we put the leather together and

to the older writing instrument focus in

it strong and consistent so it will always

we stitch the belt in the back so you have

the European market.

be able to adapt itself to the countries and

To make sure I get the point Lambert

much more flexibility. It is pure leather.

“I don’t believe the different approaches

their specific needs.”

Very simple, very clear and very elegant

oppose each other as they compliment

when it comes to the expression of what

themselves. Even if the brand changes its

of the luxury goods market there is little

Montblanc stands for, Volia!” he laughs.

role it remains a fine lifetime companion

reason to think that he won’t succeed

and that is where the consistency is. So

in writing another successful chapter in

THE SOUTHERN hemisphere has

all these different elements come together

become increasingly important to

to create consistency. In some countries

Montblanc, with China having an

one may not have a proper distribution

With Lambert’s passion and knowledge

Montblanc’s history. n

insatiable appetite for luxury goods. The 2013 KPMG Global Reach of Chinese Luxury report highlighted the company’s dominance in the region, with Montblanc posting their fastest growth in watches.

Lambert acknowledges that the figures are

The Meisterstück pen has and is being used by so many presidents and heads of states that it is nicknamed the ‘power pen’.

impressive: “In the past five years watches have been up 79 per cent all over the southern hemisphere, but mainly in Asia, so that is the category that has been growing.”

In a recent Chinese Montblanc Portfolio

32

Nature Gives, Nature takes The Philippines has abundant geothermal energy, but Typhoon Haiyan destroyed the electricity infrastructure, reports Keith Bradsher.

Portfolio

the electricity is sold to other islands in

is the world’s second-largest producer of

the Philippines.

geothermal energy, after one in California.

Or at least that is the way it is supposed

Yet the operation is remarkably little

to work. When Typhoon Haiyan barrelled

known even among renewable energy

across Leyte Island in November with

experts because of its unusual history and a

a tsunami-like storm surge and nearly

lingering penchant for secrecy for national

tornado-strength winds, killing thousands

security reasons.

of people and effortlessly tearing the roofs

The New People’s Army, one of the

off homes, it also damaged the crucial

world’s longest-lasting Maoist insurgencies

geothermal operations here.

and an enduring though low-intensity

For many in the Philippines, the damage

threat on Leyte Island, represents a

here exemplifies a broader paradox: a

potential risk to the operations. A small

storm consistent with some scientists’

army of soldiers and security guards

warnings about climate change has done

defends the site and maintains layers of

tremendous damage to an island that is

checkpoints to keep visitors out of the

one of the world’s biggest success stories of

mountain valley where five geothermal

renewable energy, and to a country that has

power plants are.

contributed almost nothing to the global accumulation of greenhouse gases.

The extraordinary force of Typhoon Haiyan’s winds shattered the coconut palm forests that line the steep, narrow valley

Clouds of steam surge from

geothermal energy. Particularly near the ridgelines, kilometre after kilometre of trees have changed from green to brown since the winds tore loose virtually every frond. The winds then twisted and bent the usually resilient trunks until they snapped or burst.

Sheltered in the valley below, however, the homes of the site’s 795 workers seem to have fared surprisingly well, although one of the military barracks has lost much of its green, corrugated steel roof. the environment at Energy Development

“Many Filipino families have become

Corp, which owns the power plants, said

fissures in the earth along the beds of

climate refugees,” said Senator Loren

no one was killed or seriously injured at

mountain streams that splash down slopes

Legarda, chairwoman of the Philippine

the plants during the typhoon, even as the

carpeted with coconut palm forests, hints

Senate’s standing committee on climate

storm surge on the opposite side of the

of the enormous source of renewable

change. “We may not pollute the world,

island, 80.5 kilometres to the east, killed

energy that lies underground.

yet we are victims of extreme weather and

thousands in the coastal cities of Tacloban,

climate change.”

Palo and Tanauan.

Engineers have drilled a series of boreholes 1.6 kilometres down into hot © 2013 New York Times News service

that for years has churned out so much

Agnes de Jesus, senior vice president for

reuTers

A contract worker surveys pipes under general maintenance at a Chevron geothermal steam well in Bay Laguna south of the capital Manila.

The Tongonan geothermal field on the outskirts of Ormoc on western Leyte Island is the world’s secondlargest producer of geothermal energy, after one in California.

As if to highlight that rueful conclusion,

Responding to the Arab oil embargo of

volcanic rocks, tapping into superheated

the UN climate talks in Warsaw, Poland,

1973, President Ferdinand Marcos began

water under enormous pressure. The

which unfolded as the world became

developing the field in the late 1970s with

water surges to the surface, expands into

aware of the typhoon’s savagery, were

a small demonstration project. The goal

steam and then cools, spinning a series of

marred by bitter quarrels between rich

from the start was not environmental,

turbines that produce five times as much

and developing nations.

but nationalistic and economic: to reduce

electricity as all of Leyte Island, with 1.5

The Tongonan geothermal field on the

million people, can consume. The rest of

outskirts of Ormoc on western Leyte Island

January 2014

the Philippines’ dependence on imported energy and save money on fuel bills.

Energy

33

Energy

34

Melissa Abadia, who moved from Spain to find employment three years ago, works in the stock room of River Island, a store where she now works, in Amsterdam.

Leyte Island is the world’s second largest producer of geothermal energy.

After the demonstration project proved successful, five large geothermal plants were built atop boreholes in the same valley in the mid-1990s, each big enough even today to power the entire island. Each of the five was built by a different company, and then all five transferred them to a state-owned entity.

The state-owned company subsequently privatised them and they became Energy Development Corp, a company listed seven years ago on the Philippines Stock Exchange.

The valley differs from many geothermal sites around the world in that the underground rocks are hotter and what comes up through the boreholes is super-pressurised water, not steam.

towers with an identical construction or build new ones that may be more durable, said Leonita Sabando, environmental management chief at the site.

The fifTh power plant does the expansion from water to steam, the cooling of the steam and the condensation of the steam in a single complex that is also high on the valley wall. Yet it does not protrude so high above the surrounding terrain, and so suffered much less damage. The company is testing all of the components of

The valley differs from many geothermal

that power plant in the hope of bringing it

sites around the world in that the underground rocks are hotter and what

further turbines as the steam cools. Finally,

back into full service and repowering Leyte

comes up through the boreholes is

those four power plants were designed to

Island by December 24, the national target

super-pressurised water, not steam. The

condense the steam into water in steel-

for restoring electricity after the typhoon,

underground water is at a scalding 249

reinforced wooden cooling towers for

de Jesus said.

to 349 degrees Celsius. Four of the power

reinjection into the ground.

plants essentially rely on two steps: First

The typhoon destroyed all four cooling

Replacing broken poles for electricity transmission across Leyte Island presents

they spin turbines using the tendency

towers, splintering the wood and casting

another challenge. Phil Morales Jr.,

of water at such high temperatures to

aside the steel. Energy Development Corp

leader of a digging team in central Leyte,

expand into steam, and then they spin

is studying whether to replace the cooling

estimated that only 10 per cent of the poles Portfolio

are either new or survived the storm along

significantly for another million years,

underground water is piped from near

the 80.5-kilometre segment that is his

while the underground water is being

Xi’an to heat thousands of homes there

responsibility; even fewer poles survived on

constantly recharged by water percolating

in winter.

links to villages to the north and south of

down from the surface.

the main east-west route.

Although geothermal power has been

As sunshine alternated with squalls one recent afternoon, a succession of bright,

a success here, few other countries,

luminous rainbows soared over the valley.

December, but not the laterals,” he said

notably tiny Iceland, have similar

They drew comparisons to the rainbow

as he and his team paused for lunch in

resources to tap. Geologists in China,

that the Bible describes Noah as seeing, as

sweltering heat in Tunga, a town in the

the largest emitter of global warming

a pact that after the great flood, humanity

hills of central Leyte.

gases by a wide margin, have not found

would endure.

“The backbone should be energised by

Other islands have not suffered electricity failures, except as a result of

comparably hot underground water for electricity generation there, although warm

Energy

35

“It’s a hope that we can revert to normalcy, it’s a sign to us,” de Jesus said. n

damage to transmission lines, as power plants elsewhere in the Philippines have made up for the loss of the geothermal capacity, said Cynthia Alabanza, spokeswoman for National Grid Corporation of the Philippines.

About one-ninth of the Philippines’ electricity consumption comes from geothermal power, mostly generated here; geothermal power produces half the electricity in the central Philippines, but a tiny share for the energy-hungry northern Philippines, including Manila, which relies more heavily on coal.

Engineers for the project forecast that the underground rocks, heated by volcanic reuters

activity one million years ago, will not cool A woman dries her laundry next to pipes carrying hot geothermal steam.

Estenislao Delacruz prays by candlelight in his home, damaged

by Typhoon Haiyan, in Tacloban.

January 2014

36

EducatEd YEt unEmploYEd Youth unemployment has grown to staggering levels in many EU countries, dashing dreams and forcing many to leave their countries, reports Liz Alderman.

Portfolio

Employment

37 Melissa Abadia moved from Spain to find employment in Amsterdam.

A student checks an advertisement board with job postings in Madrid.

that went nowhere and employers who

with a master’s degree in sociology, sprang

increasingly demanded that young people

out of bed nervously one recent morning

work long, unpaid stretches just to be

of young Europeans. Five years after the

in Madrid, carefully put on makeup and

considered for something permanent.

economic crisis struck the Continent, youth

styled her hair. Her thin hands trembled as

© 2013 New York Times News service

‘What did I do wrong?’”

AlbA Méndez, A 24-yeAr-old

Her parents were imploring her to

This question is being asked by millions

unemployment has climbed to staggering

she clutched her résumé on her way out of

return home to the Canary Islands to help

levels in many countries: in September, 56

the tiny room where a friend allows her to

run her father’s fruit business. It was a sign

per cent in Spain for those 24 and younger,

stay rent free.

of the times, though, that even her own

57 per cent in Greece, 40 per cent in Italy,

father probably would not be able to afford

37 per cent in Portugal and 28 per cent in

to pay her.

Ireland. For people 25 to 30, the rates are

She had an interview that day for a job at a supermarket. It was nothing like the kind of professional career she thought she

“We’re in a situation that is beyond our

half to two-thirds as high and rising.

Those are Great Depression-like rates

would have after finishing her education.

control,” Méndez said. “But that doesn’t stop

But it was a rare flicker of opportunity after

the feelings of guilt. On the bad days, it’s

of unemployment, and there is no sign

a series of temporary positions, applications

really hard to get out of bed. I ask myself,

that European economies, still barely

January 2014

Employment

38

Abadia, who studied to be a nurse, works in the stock room of a clothing store.

emerging from recession, are about to generate the jobs necessary to bring

leaving this one out.

George Skivalos, 28, had to move back in

those Europeans into the workforce soon,

with his mother two years ago in Athens,

perhaps in their lifetimes.

Greece. “Even if we get out of the crisis, maybe in four years, I’ll be 32, and then

the protection of family but a dearth of

around the Continent reveal a creeping

what?” Skivalos said. “I will have missed

jobs. Or they can travel to Europe’s north,

realisation that the European dream their

the opportunity to be in a company with

where work is possible to find but where

parents enjoyed is out of reach. It is not that

upward mobility.”

they are likely to be treated as outsiders.

Dozens of interviews with young people

Europe will never recover, but that the era

Instead, many in the troubled south

There, young people say, they compete

of recession and austerity has persisted for

are carving out a simple existence for

for low-paying, temporary jobs but are

so long that new growth, when it comes,

themselves in a new European reality. They

sometimes excluded from the cocoon of

will be enjoyed by the next generation,

must decide whether to stay home, with

full employment.

For the European Union, addressing the issue has become a political as well as an economic challenge at a time of expanding populist discontent with the leadership in Brussels and national capitals.

Chancellor Angela Merkel of Germany has called youth unemployment “the most pressing problem facing Europe.”

Merkel flew to Paris in November to join other European leaders at a special youth unemployment summit meeting called by President François Hollande of France.

Governments renewed a pledge for an employment-promotion programme worth ¤6 billion (about $8 billion) starting this

REUTERS

year. But economists said the programme by itself was unlikely to put more than a German Chancellor Angela Merkel (L) and European Commission President Jose Manuel Barroso at an international summit on youth unemployment in November.

bandage on a gaping wound.

“We hope 2014 will be a year of recovery,” Portfolio

Employment

39

said Stefano Scarpetta, the director of employment, labour and social affairs at the Organisation for Economic Cooperation and Development. “But we are still looking at a very large number of youth who will have endured a long period of extreme difficulty.

This will have a long-lasting effect on an entire generation.”

Soon after her 23rd birthday four years ago, Melissa Abadía made a wrenching decision: She would leave her close-knit family in Spain, where the grinding fallout from the 2008 financial crisis had made securing a good job impossible, and move to the Netherlands, where employers were still hiring.

“When I got on the plane, I was crying,” Abadía, a bright, ebullient woman, recalled.

Alba Mendez, centre, who has a master’s degree in sociology, has only found temporary employment in Madrid.

“But I had to decide: Should I fight for

what it’s like to be seen as someone who’s

something back home that makes no

coming to steal jobs,” she said.

sense, or get out of there and make a life for myself?” Despite five years of training

She soon found better-paying work at the clothing shop, near the Royal Palace.

in nursing in her hometown, Castellón de

She spent two years bouncing between

la Plana, in eastern Spain, she now works

short-term contracts, which employers have

in a windowless stockroom in Amsterdam

sharply increased during the crisis to avoid

organising purses, socks and other

the expensive labour protections granted to

accessories at a clothing store.

permanent employees.

It is a sign of the plight of her generation

In some countries, especially those with

Dozens of interviews with young people around the Continent reveal a creeping realisation that the European dream their parents enjoyed is out of reach.

that simply having a job and a measure

the highest youth unemployment rates,

of independence makes her one of the

short-term contracts are nothing more

lucky ones – never mind homesickness,

than opportunities for employers to take

still does not qualify for the Netherlands’

dashed dreams of a very different career

advantage of the weak labour market. But

monthly minimum wage of ¤1,477 (about

and a gradual acceptance that her life will

when used by employers as intended – to

$2,000), and her new career was a long way

probably never be the one she expected to

give experience to young people who

from where she had hoped to end up.

live. “Of course, I hate the fact that I have to

otherwise could not get a start – they can

do this,” she said, speaking in sombre tones.

lead to steady work. That was the case

her situation with two colleagues from

“Leaving your country should be a decision,

with Abadía, whose employer eventually

the store, both from Spain. All three

not an obligation.”

turned her temporary job into a permanent

were angry at what they saw as chronic

contract with benefits overseeing the store’s

mismanagement of the Spanish economy.

biggest stockroom.

With Spain adhering to austerity policies

Finding only unpaid nursing internships and a temporary nightclub job in Spain,

As she sat in her apartment, she discussed

On one level, having even that kind of

prescribed by its international creditors

Europe’s more prosperous north. She

employment is a victory in today’s Europe.

and Germany, they said, conditions had

quickly found employment as an au

Her salary of ¤1,200 a month (about

deteriorated so badly that they saw no light

pair in Amsterdam. For the first time,

$1,600) was nearly twice what she could

at the end of the tunnel.

she experienced the shock of being an

have made in Spain. “The day I signed a

immigrant. Having arrived in Amsterdam

permanent contract was the best day of

lose a couple generations of smart, young

as part of an influx of young Spanish, Greek,

my life,” she said one recent weeknight,

people,” Abadía said as her friends nodded

Italian and Portuguese men and women all

beaming as she sipped a Coke at a bustling

in agreement. “And then what will happen

searching for any employment, “I now know

pub. But because of her work hours, she

to the country that’s left behind?” n

Abadía scoured the internet for work in

January 2014

“If they don’t fix things, they are going to

40

Canadian Crude Hits tHe rails The delays and protests around the proposed Keystone XL pipeline has led Canadian oil producers to increase their rail-loading capacity, reports Clifford Krauss.

Portfolio

Energy

41

years to as much as 900,000 barrels a day,

environmentalists have chained themselves

up from 180,000 today. The acceleration

spawned innovation and mobilised

to the White House fence and otherwise

has come despite a derailment in the

alternatives, and rail is a clear part of

coalesced around stopping the Keystone

lakeside Quebec town of Lac-Megantic

the options available to our industry,”

XL pipeline as their top priority in the

in July, in which a runaway oil train

said Paul Reimer, senior vice president

fight against global warming. But even

bound for a refinery in eastern Canada

in charge of transport and marketing

if President Barack Obama rejects the

exploded, killing dozens of people and

at Cenovus Energy, a Canadian oil

pipeline, it might not matter much.

bankrupting the railway company. That

company that is planning to increase rail

Oil companies are already building rail

accident and others more recently have

shipments from 7,000 barrels a day to as

terminals to deliver oil from western

renewed concerns about the safety of

many as 30,000 barrels a day by the end

Canada to the United States, and even

transporting oil by rail and given an

of 2014.

to Asia.

added argument to some who favour the

Since July, plans have been announced

© 2013 NEW YORK TIMES NEWS SERVICE

“The indecision on Keystone XL really

OVER THE PAST TWO YEARS,

Keystone XL pipeline.

Opponents want to stop the pipeline project to keep the oil sands in the ground. They say that emissions from

for three large loading terminals in

“They don’t give up,” Jesse Prentice-

western Canada with the combined

Dunn, a Sierra Club policy analyst, said

development – through mining or steam

capacity of 350,000 barrels a day –

of the oil industry.

heating out of the ground followed by

equivalent to roughly 40 per cent of the

If all the new terminals are built,

upgrading for shipment – are more

capacity of the proposed Keystone XL

Canada will potentially increase its exports

harmful than those that come from

pipeline that is designed to bring oil from

to the United States by more than 20 per

extracting most conventional crude oil.

western Alberta to refineries along the

cent – even if Keystone XL is never built.

Proponents say that Canadian heavy

Gulf Coast.

Shipping by rail can cost an additional $5

oil is no more environmentally harmful

or more per barrel, but oil companies have

than some crude oils already used in the

decided that they cannot afford to wait.

United States and that it would replace

Overall, Canada is poised to quadruple its rail-loading capacity over the next few

Rows of steam generating plants at Cenovus Energy’s Christina Lake oil sands operation in Alberta, Canada.

January 2014

Railways can potentially give Canadian producers a major outlet to oil-hungry China, including from refineries in Washington and California. At least that is the hope of Canadian oil companies, which now depend almost solely on the United States for exports.

Savage have announced a joint venture

sides of the border to relieve the pipeline

to build a $100 million, 17-hectare oil-

congestion, and now an estimated 175,000

handling plant in the Port of Vancouver

barrels of Canadian crude are running by

on the Columbia River that could handle

rail daily, according to a recent report by

380,000 barrels of oil each day if permits

Peters & Co, a Canadian investment house.

are granted.

The Canadians remain a few years behind producers in North Dakota, where

At the beginning of the year, only a

the paucity of pipelines encouraged

trickle of Canadian oil was transported

early oil explorers like EOG Resources

by rail, no more than 60,000 barrels a

to form a partnership with Burlington

day. There was limited rail off-loading

Northern Santa Fe to build terminals for

capacity in US refineries outside the Gulf

the shipment of oil by rail to refineries

Coast, and only a small number of rail

across the country. Today more than three-

cars suitable to transport bitumen, the raw

quarters of North Dakota’s production,

substance in oil sands that can be refined

which also was to move on the Keystone

into petroleum products.

XL pipeline, is transported by rail. The

But Canadian oil executives were making preparations for more rail

Canadian oil producers took notice.

“The market woke up when all of a

traffic. Congested pipelines in the United

sudden in 2012 they built 20 terminals

States were producing localised gluts of

in North Dakota, and now people are

Canadian crude, forcing producers to offer

jumping on the bandwagon,” said Sandy

similar crudes from Venezuela and Mexico

discounts that cut into profits. In response,

Fielden, director of energy analytics at

that are refined on the Gulf Coast.

executives ramped up rail projects on both

RBN Energy, a consultancy. “Oil will find

But now it seems that even if environmentalists win their battle over

Opposition to the proposed Keystone XL pipeline has been intense.

Keystone, Canada is destined to become an even more important energy provider, one way or another.

The developing rail links for oil sands range across Canada and over the border from the Gulf Coast to Washington and California. Railways can potentially give Canadian producers a major outlet to oilhungry China, including from refineries in Washington and California. At least that is the hope of Canadian oil companies, which now depend almost solely on the United States for exports.

“We want to diversify our markets beyond just moving our product south,” said Peter Symons, a spokesman for Statoil, a Norwegian oil giant that has signed contracts to lease two Canadian oil loading terminals. “We can get that product on a ship and get it to premium markets in Asia.”

Several Washington and Oregon refiners and ports are planning or building rail projects for Canadian heavy crude as well as light oil from North Dakota. Texas refinery giant Tesoro and oil services company

reuters

Energy

42

Portfolio

43

Firefighters spray water on the wreckage of the train explosion in Lac Megantic, which was carrying Canadian crude oil.

a way to market whether it has to come by truck or pipeline or rail.”

With or without Keystone, transporting oil by rail has raised concerns over safety and increased air pollution from extra train traffic. The city of Benicia, California, in September delayed the granting of a permit for Valero Energy’s planned rail terminal at its refinery by deciding to require an environmental impact report after residents expressed concerns that Valero would use the terminal to import Canadian oil sands crude.

Much of the concern centres on safety.

In October, a train carrying crude oil and liquefied petroleum gas derailed west of Edmonton, causing an explosion and fire and forcing the evacuation of a town. In September, a Canadian National Railway Company train carrying lubricating oil, ethanol and natural gas liquids between

reuters

Winnipeg and Edmonton derailed in Saskatchewan, leading to a leak on farmland and well-publicised comments

by Saskatchewan’s premier, Brad Wall, that the accident underscored the need for more pipelines to safely move petroleum products.

Shipping oil by rail is generally more expensive than by pipeline, but the oil companies working in North Dakota made a critical innovation – leasing complete 100-car trains dedicated to oil rather than using traditional trains that ship a variety of products. By shipping directly from the oil fields to refinery depots, the companies sped deliveries and lowered costs.

Rail lines are also easier and faster to build than pipelines, particularly since permitting of pipelines can take years and the applications are sometimes rejected.

“We would like to bring that crude oil down by pipeline, specifically the Keystone XL pipeline, but we also want to have access from rail and ship,” said Bill Day, a vice president at Valero, which is building a rail unloading facility to handle heavy oil from Canada at its St. Charles, Louisiana, refinery. “We want multiple means to deliver crude oil to our refineries.” n January 2014

Retail

44

The Chalhoub Group, founded in Damascus

by Michel Chalhoub and his wife Widad in 1955, is a powerhouse in the luxury goods sector, reports Nick Rice.

If the Shoe fItS Portfolio

45

As I sIt down for A coffee with Patrick Chalhoub it becomes immediately obvious that he doesn’t need one. He is positively effervescent and I wonder what effect the espresso will have on his already impressive energy levels.

When considering the scale of the Chalhoub Group’s operations though, such bursting drive and vibrancy must be prerequisites.

Since 2001, alongside his brother Anthony who runs operations in Kuwait and Egypt, Patrick Chalhoub has overseen a business that now has 7,000 employees and 400 retail outlets in 14 countries.

Founded nearly six decades ago by his mother and father (still chairman and vice getty images

chairwoman), the Chalhoub Group started out with just one luxury brand on their books – the renowned French silverware makers Christofle. With the 1955 opening

Dubai Mall boasts the world’s largest shoe shop.

of a Christofle boutique in Damascus, Michel Chalhoub’s empire had begun.

That first deal expanded to representation within Syria for the Baccarat and Jean Patou brands and Michel Chalhoub’s first special order was to supply the then Syrian President, M. Chucri Kouatly, with Baccarat crystalware and Christofle silverware. Now with nearly 300 prestigious brands in the current portfolio, it’s safe to say the Chalhoub family found a market that suited them and they flourished.

The Level Shoe District offers an unparalleled selection of women’s and men’s exclusive shoes.

Patrick Chalhoub began his career in the family business in 1979 when he decided to join the efforts of his father in bridging the distinct worlds of the East and West, establishing the Chalhoub name as a reputable ambassador of luxury lifestyle in the Middle East.

As he tells me in his open and friendly manner, “The Chalhoub Group was the first enterprise to enter the luxury market in the Middle East. We wanted to build a bridge between the Western culture of luxury and refinement in the Middle East”.

Still specialising in the retail and distribution of global brands within the sectors of fashion, beauty and gifts, the Dubai-based group boasts revenues of January 2014

”The Chalhoub Group was the first enterprise to enter the luxury market in the Middle East. We wanted to build a bridge between the Western culture of luxury and refinement in the Middle East.”

more than $1 billion, and continues its record growth, regardless of the financial rollercoaster of recent years.

Patrick Chalhoub has been instrumental in steering the business and ensuring it evolved into the company it is today, taking brave risks along the way. In 1990, he played a key role in the relocation of the Chalhoub Group’s headquarters from Kuwait to Dubai following the Iraq invasion.

He has been a resident of Dubai ever since, with his wife and two children.

Holding two degrees, one in Economics

Retail

46

Patrick and Ingie Chalhoub with Mohammed Alabbar, the chairman of Dubai-based real estate company Emaar.

All the top designer brands are found at Level Shoe District.

downturn, sales at the Chalhoub Group were unsurprisingly dealt a severe blow.

The steep slump that occurred in 2009 and 2010 was especially sharp, as sales had been growing at more than 20 per cent per annum. The full impact of the financial crisis resulted in a decline in profitability estimated at between 40 and 60 per cent.

This is where Patrick Chalhoub’s formidable business acumen came into play and, unlike many afflicted concerns, he did not tighten the belt and snap shut the purse. On the contrary, he had the steely nerve to implement a five-year restructuring plan and invested more than $30 million across the entire organisation.

It was another astute move and further The first anniversary of the Level Shoe District was celebrated in style.

demonstration of Patrick Chalhoub’s deep understanding of the region. This

and Finance and another in Political

redeployment of the many brands in the

almost prescient sensitivity is allied by an

Science, Patrick was quick to implement

company’s portfolio.

incisive understanding of the markets and the results can be seen in the sustained

some vital strategies. By creating a UAE regional distribution platform in the

For 34 years now, Patrick Chalhoub has

leadership in each of the Chalhoub Group’s

Jebel Ali Free Zone, he increased the

invested his prodigious energy into the

sectors and each sphere of activity.

number of partnerships with major

long-term success of the family business.

international groups such as Coty, Fendi,

As such, he continues to expand the group’s

business and of his adopted city Chalhoub

L’Oréal, Dior Parfums and Puig and

distribution, retail business, marketing and

says, “First of all Dubai is a very vibrant

also became a director of Christofle and

communications activities, and he remains

city and it has this ability to reinvent itself.

Bernardaud. He was also at the helm for

undaunted by the challenges that arise.

It can adapt perhaps much quicker than

the strategic planning, restructuring and

In the recent aftermath of the global

Commenting on the recovery of his

many Western cities. So yes, we had a real Portfolio

47

that one category goes down and another one goes up. Take the beauty category… fragrances in the 70s and 80s were huge and everybody was crazy about them, but now it’s at cruise speed. Still progressing, but cruising. Then you have the era of the handbags, which was incredible. Shoes have always been a good category, but now that bags have reached a plateau, the attention of women is going into other accessories and shoes is one of them.”

Patrick comments on the trend from both a regional and global context. After all, brand building and understanding the market specificities and consumer preferences is at the heart of his business.

He continues, explaining that, “In our part of the world, shoes are a very important Level Shoe District is 96,000 square feet of impeccably designed space.

accessory because a lot of local women dress in a traditional way, so what we see is

estate issue and there was a financial issue,

feet, is essentially a shoe heaven. There are

mainly the bag and really the shoes, so it is

but there has been immediate action and

more brands and more shoes on sale here

an important expression. On a worldwide

reaction towards it in order to see where

than any comparable retail space anywhere

scale it’s a category that is really driving

the weaknesses were. We acknowledged

in the world. In the internationally

forward and I think there is a lot more

there were things that were overexposed

renowned hands of Lee Lapthorne,

expression. And a lot more designers are

and oversaturated, and so we try to fix

founder of Doll – one of the UK’s leading

coming into the category.”

those elements.” He has an undaunted and

event companies – a multi-faceted show

positive air around him, and despite the

featuring a team of dancers from London’s

of Beyoncé arrives to DJ, and the many

responsibility on his shoulders, he seems to

West End are due to arrive and entertain

international performers prepare for the

be constantly smiling.

an audience of tens of thousands.

big event set in this unique space featuring

There is good reason for Patrick’s

Before the grand event commences,

As Solange Knowles, younger sister

the world’s finest shoes, it’s clear that

buoyant mood as he is celebrating the

I ask Patrick about the significance of

both the Chalhoub Group and Dubai are

first anniversary of the Level Shoe District

the booming shoe sector. “In product

booming once more.

in the Dubai Mall. This vast footwear

categories growth moves from one

emporium, covering some 96,000 square

category to another, but it doesn’t mean

Christofle was the first luxury brand represented by the Chalhoub Group.

As a final word on how this bounce back happened, Chalhoub says, “People don’t speak much about it, but you go back to basics. Back to real estate and using it as an enabler not as an engine of growth. You put things into perspective and go back to basics with trade and tourism. After 2010, Dubai really questioned where it went wrong and went back to basics, and guess what? It helped a lot. Now we build on the strength of the country. And it’s true that Dubai is coming back strongly, and perhaps the crisis reminds people to remain humble and not to just say

AFP/GRAPHEAST

‘we are the best in the world and we can do anything’. So I hope we retain some humility now that the crisis is behind us.” n January 2014

geTTY images

48

Portfolio

Manufacturing

49

A Pencil Powerhouse Faber-Castell, the world’s largest maker of wood-encased pencils, is an example of how German midsize companies stay competitive in the global marketplace, reports Jack Ewing.

Count Anton-WolfgAng von

also makes a broad range of pens, crayons,

the count asked during an interview at

Faber-Castell has been known to hurl

and art and drawing supplies, as well as

the family castle near the factory. “Two

wooden pencils from the tower of his

accessories like erasers and sharpeners.

reasons: One, to really make the best here

castle to the stone courtyard below. It is

About half the company’s German

in Germany and to keep the know-how

not a petty fit of pique by a mad Bavarian

production is exported, mostly to other

in Germany. I don’t like to give the know-

aristocrat. The 72-year-old count, the

countries in the Eurozone. That means that

how for my best pencils away to China,

eighth in a long line of pencil makers, just

Faber-Castell contributes, at least in a small

for example. Second, ‘Made in Germany’

wants to prove the durability of the pencils

way, to Germany’s large and controversial

still is important.”

that carry his family name.

trade surplus – which now rivals China’s for

© 2013 New York Times News service

The Faber-Castell family has been

the world’s largest.

Not all its factories are in Germany. But when Faber-Castell, which is privately held

making wooden pencils by the hundreds

Faber-Castell illustrates how midsize

and had sales of ¤590 million (about $800

of millions in Stein in a storybook setting,

companies – which account for about 60

million) in its last fiscal year, manufactures

bisected by the swift Rednitz River, which

per cent of the country’s jobs – are able to

in places like Indonesia and Brazil it does

was once the main source of power. A

stay competitive in the global marketplace.

so at its own factories.

torrent of brightly coloured pencils flows

It has focused on design and engineering,

from clattering machines in a century-

developed a knack for turning everyday

companies, like Apple, that have

old factory with a tile roof and windows

products into luxury goods, and stuck to a

outsourced nearly all production to

framed in pastel hues.

conviction that it still makes sense to keep

Asia, Faber-Castell and many other

some production in Germany.

German companies make a point of

Faber-Castell is the largest maker of wood-encased pencils in the world and

January 2014

“Why do we manufacture in Germany?”

In contrast to many American

keeping a critical mass of manufacturing

getty imAges

Manufacturing

50

Workers assemble mechanical pencils and trays at the Faber-Castell factory in Guangzhou, China.

in Germany. They see it as central to

There are threats everywhere, including

were down nine per cent, because of the

preserving the link between design,

ever-more-sophisticated Chinese

depreciation of currencies in markets like

engineering and the factory floor.

competitors, the stagnant Eurozone

Brazil and weak sales in southern Europe.

The result is a large trade surplus. During

economy and unpredictable shifts in

the first nine months of 2013, Germany

technology. And when even preschool

Still, Faber-CaStell, founded in

exported goods and services worth ¤148

children know how to operate iPads, there is

1761 when graphite pencils were a novelty,

billion more than it imported – including a

no certainty of a future for coloured pencils

has overcome technological shifts before.

surplus of ¤20 billion in September alone.

and ink markers.

When Count Anton took over the business

In absolute terms, it was the largest monthly

“The biggest challenge for Faber-Castell

in 1978, after the death of his father, Count

will be how writing will develop with the

Roland von Faber-Castell, the company

advent of digital technology,” said Hermann

was a leading maker of slide rules. That

it has drawn criticism from the United

Simon, a management consultant who

was soon laid to waste by the electronic

States. The European Commission is

coined the term “hidden champions”

calculator. Then, in the 1980s, the advent of

conducting an extensive review of whether

to describe the highly focused, midsize

computer-assisted design soon gutted the

it is unhealthy for the Eurozone economy.

companies like Faber-Castell that drive the

market for its mechanical drawing products.

Critics say Germany should invest more

German economy. “Will children still write?

of the profits from exports at home,

But Faber-Castell recognises this challenge.”

trade surplus on record.

Germany’s trade surplus is so huge that

to stimulate its own economy and, by extension, the rest of the Eurozone.

With help from the Boston Consulting Group and the company’s in-house

Certainly, the market is testing Faber-

designers, the count revamped the product

Castell. While sales in the last fiscal year

line to put more emphasis on higher-priced

rose 3.5 per cent, profit declined 27 per

products, ranging from coloured pencils for

more concerned about their ability to

cent, to ¤24.2 million, in part because of

artists to fountain pens selling for thousands

stay globally competitive, leaving the

the cost of building new operations in Asia

of dollars. Premium products account for

macroeconomics of trade to the bureaucrats

and Latin America. The company said in

about 10 per cent of sales.

of Brussels and Berlin.

November that sales so far this fiscal year

But companies like Faber-Castell are

“You have to continuously shift,” said Portfolio

can easily cost hundreds of dollars. It is this focus on the premium end of the market that has enabled German companies to survive in markets flooded by low-cost Asian alternatives. Mercedes and Audi cars are good examples of this, but German companies have also achieved similar success with more mundane products like Rösle kitchen implements, Steiff stuffed animals and Falke socks.

“The higher end of the market still cares about and is still ready and willing to pay a premium for good-quality products,” said Daniel Berch, a director at the market An employee at Faber-Castell straightens pencils in Stein, Germany.

research firm Pell Research who has studied the pencil industry in the United States.

Count Anton, while aware of the digital threat, maintains that writing by hand will never disappear. People still use pens,

When Count Anton took over the business in 1978, after the death of his father, Count Roland von Faber-Castell, the company was a leading maker of slide rules.

Count Anton-Wolfgang von Faber-Castell is the eighth in a long line of pencil makers.

Count Anton, who on this day wore a

into the world’s dominant pencil maker.

pencils and highlighters for personal notes

double-breasted pinstriped suit with red tie

Later generations intermarried with the

and to mark up printed documents, he

and white pocket handkerchief. “If you lean

aristocratic Castell clan, creating the Faber-

argues. And even in wealthy countries, he

back and say, ‘With my products I can be

Castell name. (Eberhard Faber pencils,

says, children use pencils and pens to learn

happy,’ then it’s the first step to hell.”

recognised by generations of American

how to develop the motor skills needed to

The count’s pedigree sets him apart

schoolchildren, were made by Lothar’s

read and write.

from the typical factory bosses. But being

younger brother, who first set up shop

an aristocrat in Germany no longer means

in Brooklyn.)

much, at least not officially. The nobility lost

And yet, being a count still counts for

“The pencil is in some way a very archaic product but still indispensable,” he said.

“The pencil will remain alive much longer

its privileges after World War I, and most

something. The company’s luxury products

of Germany’s remaining princes and barons

are called the Graf von Faber-Castell line

have to work for a living.

– “graf ” being German for “count.” The

generation, Count Anton’s 33-year-old son,

than we probably believe.”

To make sure that remains true in the next

company recently unveiled a Graf von

Count Charles von Faber-Castell, a graduate

Faber, a carpenter’s apprentice. His great-

Faber-Castell fountain pen made of jasper,

of Columbia Business School, recently joined

grandson Lothar Faber was given noble

quartz and gold. It sells for almost $10,000.

the Faber-Castell marketing department.

Faber-Castell was founded by Kasper

status in 1861 by King Maximilian II

Even boxes of the highest-quality Faber-

of Bavaria after building the company

Castell coloured pencils and artists’ markers

January 2014

“First,” Count Anton said sternly, “he has to learn the business.” n

Manufacturing

51

52

Money in Trash

AFP/GrAPHeAsT

Taiwan used to have huge problems with trash, but now it recycles on an industrial scale, reports Cain Nunns.

Electronic waste awaits its turn to be recycled.

Portfolio

Recycling

53

Forty kilometres west oF Taipei on Taiwan’s rugged northwest coast, a cavernous warehouse under construction represents the new priorities for an island where the streets were once littered with piles of discarded electronics and other refuse.

At the clean and tidy construction site, building materials are stacked neatly and even workers’ cigarette butts are carefully collected. The surroundings are designed to evoke a Roman villa, with lagoon, garden and canopies. The energy-saving shade tiles are made out of old CDs, DVDs and computer motherboards.

It is the latest expansion effort in a vast glass, plastics, paper and just about anything than can be reused or mined for

Electronics are mined for precious metals such as gold and silver.

materials. When the warehouse project is complete, Super Dragon Technology, one of the island’s biggest recyclers, will be able to securely store up to 150 kilograms of gold and other precious metals.

Trash is valuable here – the byproduct of a world now dependent on technology.

Taiwan, which is home to a host of technology companies like Asus, Acer and HTC, produces more electronics per capita than any other country.

“Recycling became huge because of the electronics firms,” said Chen Wei-Hsian, the secretary general of the Formosa

When the warehouse project is complete, Super Dragon Technology, one of the island’s biggest recyclers, will be able to securely store up to 150 kilograms of gold and other precious metals.

cent last year, amounting to roughly 14 million tons.

The industry was born out of necessity. In the boom days of the 1980s and 1990s, factories in Taiwan made products as varied as plastic umbrellas and high-tech electronics for the rest of the world. As production soared, the land-poor island of 23 million people began running out of places to dump its waste. Mountains of fetid household waste rotted in the streets. Public and disused spaces became dumping

Association of Resource Recycling, an

grounds for some of the toxic waste

industry organisation. “That’s why it’s

from the industrial boom.

grown from about 100 recycling outfits

cent,” said Ding, adding that the company

to over 2,000.”

could apply to the London Bullion Market

At the time, infrastructure to tackle

Association, a trade organisation focused

the problem barely existed. Large-scale,

of 65.8 billion Taiwan dollars ($2.2

on the gold and silver market. “We have

commercial waste-processing facilities

billion) according to the Industrial

some great inventory.”

were scant. Few households recycled.

In 2012, waste companies had revenue

Development Bureau at the Ministry of

© 2013 New York Times News service

the country’s total – was about 80 per

The commercial efforts, along with

And pulling valuable materials from

Economic Affairs. That is up from 24.9

a government fund and increased

scrapped technology was dangerous. Wu

billion Taiwan dollars a decade earlier.

consumer awareness, have helped clean

Yao-hsun, the chairman of Super Dragon

up the country. Taiwan has one of the

Technology, says he believes he got cancer

Super Dragon is even considering a new

highest household recycling rates in the

from the toxic processes used to extract

venture, according to Ding Guo-tsuen, the

world, roughly 42 per cent, up from five

gold, silver and other precious metals

company’s chief technical officer.

per cent in 1998, according to Taiwan’s

from the country’s discarded electronics.

With gold accumulating in its vaults,

“We are thinking about changing to a

Environmental Protection Administration.

“In the old days, nobody knew the

precious metals trading business, because

The development bureau estimates that

dangers. They just knew there was

we can make pure gold at about 99.99 per

the rate for industrial waste – the bulk of

money inside,” said Wu, who is now

January 2014

AFP/GrAPHeAsT

industrial park that recycles electronics,

Recycling

54

The government also started the Taoyuan Environmental Science and Technology Park, the industrial complex where Super Dragon is building its third warehouse. based in Taipei. “The government had to do something.”

In 1998, the government set up a fund to encourage recycling and reduce Arthur Huang, left, founder of Miniwiz Sustainable Energy Development, shows parts of the shading system to be used on the newest Super Technology Dragon recycling warehouse project.

waste. Producers and importers now pay a fee based on the cost of collecting and recycling 33 types of goods, such as glass, plastic, paper, aluminium containers, tires, batteries and electronics. With the money, Taiwan’s environmental agency then issues rebates to recycling companies.

“We spend about six billion dollars each year on subsidies to the recycling companies, which pay collectors, who then pay the residents. But it’s the incentives and the public educational programmes that are key for our success,” said Lee Shou-chien of the Environmental Protection Administration’s Recycling Fund Management Board. He added that for many people, recycling had become “a daily habit they are accustomed to.”

REUTERS

The government also started the Taoyuan Environmental Science and Eighty per cent of Taiwan’s industrial waste is recycled.

Technology Park, the industrial complex where Super Dragon is building its third

cancer-free. “The environmental problems

the island’s first free presidential elections,

warehouse. The park offers incentives for

were also huge. But the research and

demanded higher standards of living

recyclers of glass, plastic and electronics

infrastructure were lacking. We had to

from a government that had focused on

that use advanced technologies and invest

modify our own machinery.”

economic growth at any cost.

in research and development to increase the island’s reuse rates.

With trash and toxic materials

“You are literally selling trash to people,

accumulating, public anger simmered

“There were mountains of trash

over how local governments should deal

on the streets,” said Yeh Chun-hsien, the

so you have to think, who would do

with the problem. At the same time, a

president of the Chung Tai Resource

that without a clear efficiency benefit?”

growing army of social activists, buoyed by

Technology Corp, a recycling company

said Arthur Huang, founder of Miniwiz Portfolio

ROGER FEDERER ARTIST Enjoy responsibly – www.moet.com

Recycling

56

The newest Super Technology Dragon recycling warehouse project is built out of many recycled and sustainable items.

Sustainable Energy Development, which designed Super Dragon’s facility.

Miniwiz, based in Taipei, is an

Manufacturers have also come to realise the value in their trash. Companies like Chung Tai, one of the island’s largest light

architecture and product design firm

manufacturers, uses its own industrial waste

that turns trash, including electronic

as raw materials for new products. Others

waste, into products like cellphone cases,

are selling their valuable waste to recyclers.

wine bottle holders and fire-resistant construction materials.

Over the years, the industry, once

“The electronics companies have a better idea about precious metals in their waste,” Ding of Super Dragon said. “When

largely made up of small and dangerous

the gold price jumped to $1,800 to $1,900

backyard operations, has developed its own

an ounce, they got savvier about what they

high-tech expertise. Chung Tai Resource

were throwing away. They used to pay us

Technology, which recycles glass and

to pick up their refuse – now we pay them

highly toxic chemicals like phosphorus and

to collect it.”

mercury, relied on European machinery when it opened in 2001.

Yeh said the company had since refined

The advances have spread beyond technology waste.

At the W hotel in the Xinyi District of

Over the years, the industry, once largely made up of small and dangerous backyard operations, has developed its own high-tech expertise.

holders for use throughout the property.

“Sustainability in our business is somewhat of an oxymoron,” said Cary

the equipment to improve the process,

Taipei, staff members wanted a solution

Gray, the general manager at the W

developing a system to turn 95 per cent

for disposal of the 300,000 plastic water

Taipei. “But it makes perfect sense to use

of the mercury and other waste from

bottles the hospitality business churns

it as a way to engage our community.

lighting products into raw materials.

through each year. Working with a group

There’s a level of education, awareness

Super Dragon has developed a processing

of local designers who had been awarded

and social responsibility in this city, and

technology that semiconductor makers

grants from the Taipei city government,

the government is highly supportive of

use to spray super thin films onto their

the hotel is having the bottles turned into

creative industries. People have embraced

silicon wafers.

coasters, games, and key- and change-

this culture.” n Portfolio

exclusive to duty free

58

Germany’s BiG repair Bill Europe’s largest economy is preaching austerity but its aging infrastructure is in dire need of an annual ¤7.2 billion investment, report Suzanne Daley and Alison Smale.

Portfolio

W

hen inspectors decided

tracks, waterways and the like – is aging

behind. If we don’t spend, then the next

a few months ago

in a way that experts say could undermine

factories will not be built here.”

that the aging bridge

its economic growth for years to come.

over the Kiel Canal in

An earlier report by the German Institute for Economic Research was even

northern Germany was too weak for heavy

its neighbours, Germany itself has kept

harsher in its assessment, saying that

truck traffic, Holger Dechant, hired to

a tight rein on spending at home. Now

other EU countries were doing far more to

deliver giant wind turbines to the other

critics abroad, including the European

ensure their futures. “It is high time that

side, was at a loss.

Union and the United States, are pressing

Germany handles its lack of investment,”

He did eventually come up with an

it to do more to stimulate its economy,

the report said.

alternative route. But it is telling of the

and Chancellor Angela Merkel’s likely

sorry state of some of Germany’s roads

partners in a new coalition government,

come from, especially given the aversion

and bridges: His company is driving the

the left-leaning Social Democrats, are

of Merkel’s conservatives to higher

turbines to a ferry, shipping them north

seeking more money for a variety of

taxes. The $270 million budget surplus

to Denmark and then driving them south

domestic programmes.

projected for next year, even if given

again back into Germany.

A good place to start ploughing money

It is not clear where the money might

over entirely to roads and bridges, would

into, many experts say, is the nation’s

not be nearly enough to match what

said recently, explaining the nearly

physical underpinnings. A government-

the government commission said was

300-kilometre detour in his office. “We

appointed commission recently concluded

needed, and there are many other issues

just haven’t invested enough. Now there is

that it needed to spend ¤7.2 billion a

competing for funding. One solution may

trouble because there is no easy button to

year ($9.7 billion) for the next 15 years –

be a highway toll. Merkel’s conservative

fix it all.”

roughly 70 per cent more than it spends

partners in Bavaria are insisting on

“That’s how bad it is,” Dechant

now – to get existing infrastructure back

such a tax, which could be paired with

superfast autobahns, efficient industry

into shape. Others say that even more

reductions on existing taxes on domestic

and ability to rally public resources

is needed for schools, for instance, and

drivers and businesses but affect millions

for big projects, like integration with

for extending fibre optic cables to less

of foreign citizens and businesses

the former East Germany. But more

populated areas.

traversing Germany.

Germany was once known for its © 2013 New York Times News service

As it has been preaching austerity to

recently, it has been forced to confront

“If we don’t spend,” said Kurt Bodewig,

Some critics worry that, even if

a somewhat uncharacteristic problem:

who heads the government commission,

additional money starts flowing in soon,

Its infrastructure – roads, bridges, train

“then I think that Germany will fall

it may not come in time to avoid major

January 2014

Infrastructure

59

Infrastructure

60

problems, which are beginning to surface.

blocked with traffic. Crowded trains

but also with the government’s lack

A year ago, inspectors found tears in the

are often late. Last summer, a stretch

of investment in schools and day care

steel supports under a major highway

of aging concrete highway in the south

centres and its failure to create incentives

bridge outside Cologne, Germany’s fourth-

buckled in the heat, killing a motorcyclist

for private investment in energy and

largest city. Officials quickly restricted

and injuring four people. There are still

telecommunications sectors.

traffic and banned heavy trucks, forcing

track switches in Germany that must be

detours to four other bridges around the

operated manually. Its busy waterway

in establishing a high-speed fibre optic

city that, officials now say, will need $202

systems depend on antiquated locks and

network, for instance, and is now behind

million worth of repairs. The detours

lifts that have been around more than

countries such as Bulgaria, Lithuania and

were costly to local businesses and backed

a century, making them susceptible to

Romania. Officials in small towns in the

traffic up for kilometres each day.

breakdowns and generally too small for

rural north have grown so tired of waiting

modern boats.

for a plan that they have started on their

Almost immediately, companies in the area began pressing the Federation of

Germany went on a building spree

Germany, experts say, has been slow

own to get fibre optic cables laid down,

German Industry to do something. The

when the East and the West were

with residents coughing up ¤1,000 (more

business association, which is pushing

reunited in 1990. Most of the spending

than $1,300) each.

for spending at least an additional $5.4

was directed to the East, which was in

billion a year on maintenance, has

dire need of modernisation. The problem,

instance, that wanted to move to

calculated that the partial closing of that

experts say, is that the West got short

another community where the internet

bridge cost local industry ¤60 million to

shrift, even as many former East Germans

is better,” said Holger Jensen, the mayor

¤80 million (about $80 million to $110

moved West looking for jobs. In a short

of Lowenstedt, a village of 650 near the

million) during a three-month period.

period of time, roads and bridges in the

Danish border. “We realised something

West began taking a pounding they

had to happen quickly.”

“We have a steel company, for

Although the issues are certainly on

Regional officials worry that the

were never built for. The bridge with the

area’s aging infrastructure will prompt

tear near Cologne was built for 35,000

the table in the talks on a new coalition

industries to move elsewhere or make

cars a day but now handles 120,000,

government, not everyone is convinced

their products less cost-competitive.

officials said.

that serious changes will be forthcoming.

Dechant, for instance, said the route

In its report, the German Institute took

“It’s all a question of money,” Groschek

through Denmark had cost 50 per cent

issue not only with a lack of maintenance

said. “Without it, all these reports are just

more than a delivery over the Kiel bridge.

for roads, bridges, trains and waterways,

a Christmas list.” n

“It can take 20 years to build a new bridge,” said Michael Groschek, the transport minister for North-Rhine Westphalia, the state that encompasses Cologne and includes dozens of bridges built 50 or 60 years ago, when average truck loads were lighter. “And we don’t know whether the current bridges can last that long.”

From 1991 to 2012, Germany reduced its budget for maintenance by 20 per cent, according to Gernot Sieg, a transportation expert and professor at the University of Münster. It now spends 1.5 per cent of its gross domestic product on maintenance, compared with a European average of 2.5 per cent. About 46 per cent of Germany’s bridges, 41 per cent of its streets and 20 per cent of its highways need repair, Sieg said.

Roads around major cities are routinely

Traffic near a road construction site on the A1 highway near Cologne, Germany.

Portfolio

Essentials

63

THE BEST OF LEISURE AND LIFESTYLE

ART AND SOUL

A view across the River Limmat towards Grossm端nster church.

January 2014

GETTY IMAGES

Zurich is often considered a staid city, but an exploration of its design and architecture reveals an anti-establishment attitude and quirky pleasures, reports Brian Johnston.

Essentials

64

Travel

medieval church of the Fraumünster is

designed in bronze and redwood by

adorned with stunning modern stained-

Swiss Modernist great Robert

glass designed by Chagall when he was

Haussmann, and you begin to realise

in his eighties: the glorious ruby and

how unpredictable this city can be.

turquoise glow proves the artist had

It’s true that, on the surface, central

lost none of his dazzling talent in old

Zurich springs few such surprises. Deeply

age. You can also sit beneath sketches

influenced by the puritan mindset of the

by Chagall and Miró at Kronenhalle

Reformation, Zurich’s medieval town centre

restaurant, where posh diners come for

is cool and simple almost to the point of

Zurich specialities such as veal in cream

plainness – though at times the severity

sauce. Stop by Kronenhalle’s eccentric bar,

seems almost modern. The interior of the

MBLE DOWN ZURICH’S MOST famous street and you get a lesson in Swiss understatement. The facades of some of the world’s leading private banks look like modest nineteenth-century townhouses, while shopfronts that display platinum watches and Fabergé antiques shimmer discreetly behind rows of plane trees. Even trams swoosh past with barely a noise.

Wealth whispers on the Bahnhofstrasse, the main drag of a city that generates a fifth of Switzerland’s GDP. But beyond this cool exterior and the old-town core that forms most visitors’ impressions of Zurich, another side of this Jekyll-andHyde city is presented. Welcome to an alternative Zurich, where liberal thinking clashes with bourgeois values, and antiestablishment artists and architects have long challenged Swiss norms.

An exploration of Zurich’s more subversive personality should start in its art museums which, for such a small city, are impressive. Head to the Kunsthaus for art that includes works by the Dada school, founded in Zurich in 1916.

Precursors of surrealism, the Dadaist once outraged Zurich society: no Swiss decorum here. Then linger in the room devoted to local artist J.H. Füssli, where dark, grotesque canvasses provide a

PHOTOS: SWITZERLAND TOURISM

compelling glimpse into Zurich’s alter ego.

Curiously, while industrialists and bankers in this town have always made money, revolutionary artists and thinkers such as Carl Jung, James Joyce, Thomas Mann and Marc Chagall (all of whom lived and worked here), made history. The

Strolling outside the Kunsthaus.

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65

BRIAN JOHNSTON

Inside the Kunsthaus.

Stained glass by Chagall in the Fraumünster.

and had soon converted Zurich into the first Protestant state outside Germany,

Bank, shopping and commerce take over.

Strolling the city’s quays is one of the

transforming its look to today’s unadorned

best ways to spend a sunny afternoon,

puritan chic.

surrounded by a madness of marigolds or a

A statue of Zwingli below the cathedral

riot of roses. The Limmatquai is right in the

by the river is surprisingly swashbuckling.

city centre, starting off near the train station

cathedral (the Grossmünster, affectionately

Green with age, it shows a rather

and heading past the

known to English-speaking expats as the

Arthurian figure gracefully draped in

cream-cake facade of

Gross Monster) is almost stripped bare

robes, a sword plunged into the ground

the Town Hall along

thanks to the zealous sixteenth-century

between his feet. From here you get

the Limmat River.

Protestant reformer Ulrich Zwingli. It may

another contrast: that of the plain old

Myhtenquai takes

well be one of the world’s ugliest cathedrals,

town with a sumptuous sweep of blue

you right out along

although its bulbous twin towers are a

lake and sugary mountains like a baroque

the western

Zurich landmark. However, this austerity

fresco on the horizon. And while history

shores of the

was avant-garde in its day. Zwingli was

congregates on the eastern Right Bank of

lake and

in fact resolutely anti-establishment,

the Limmat River, over on the western Left

into the

Heidi Weber House, the last building design by Le Corbusier.

January 2014

Statue of Zwingli

Essentials

Travel

ZURICH TOURISM ZURICH TOURISM

66

Inside the Haus Konstruktiv.

The façade of the Museum Rietberg.

wooded countryside, while Utoquai heads

Constructivist art that had a particularly

and architecture, there are plenty of ways

along the lakefront past promenades lined

strong following in Switzerland, if nothing

to appreciate the quirky side of Zurich.

with purple and yellow pansies. Along here

else just to see the dining room by Fritz

These days the city has been called the

you’ll find the last building ever designed

Glarner, which has become part of the

‘New Berlin’ for its heady mix

by another revolutionary Swiss, the

artwork that covers walls and ceiling, as

of experimental creativity, trendy bars,

internationally-influential twentieth-century

if you’re sitting inside a pop-up Mondrian.

ultra-chic restaurants and refreshing

architect Le Corbusier, which is nothing

Another must-see is the Museum

urban ideas. Want to ride a free bike

short of a poem in steel, glass and coloured

of Design building, a manifesto for

around town? Please go ahead. Care to

enamel plates.

Functionalism. More recently, an addition

have a moment’s rest on a public bench

in 2007 to the Rietberg Museum – which

in the shape of a cow, a bathtub or

was gaining a reputation for bankers and

displays Asian and African art – added

something so abstract it takes moments

clockwork organisation, so too were its

another striking façade to the Zurich

to work out where to place your behind?

architects apparently ignoring established

landscape in a series of green glass panels

Why not. Then listen to avant-garde

wisdom and running wild. Head to

nicknamed the Emerald.

music in pubs, or original-language

Throughout the last century, as Zurich

the Haus Konstruktiv, devoted to the

Even if you don’t particularly enjoy art

movies in art-house cinemas. Something

A street café at the Theater am Hechtplatz.

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67

The Vierter Akt, one of the many informal restaurants in Zurich West.

The Schiffbau building in Zurich West.

has happened to the nightlife in Zurich

Portuguese eateries and shops selling

restaurants, and art galleries display

too over the last decade or so – it’s now

African beads. The once declining inner-

contents that defy description. The

the best in Switzerland. The streets of the

city industrial area has become one of the

Schiffbau, once a shipbuilding factory, is

Niederodorf district are crowded with

hippest, hottest parts in town and, for

now a complex containing restaurants,

clubbers and bar hoppers who keep going

those seeking interesting design, is now

bars and a jazz club, topped by a dramatic

until the early hours of the morning, at

the place to go shopping. The flagship

glass tower from which there are views

least in summer.

store – or rather shipping container –

all the way to the Alps. The onetime

of hip Zurich brothers Freitag is here,

Löwenbräu Brewery is now an art centre.

ongoing changes in Zurich West. You

stocked with the latest in bags made from

Minimalist boutique hotels have sprung

reach this area by leaving the top end of

recycled truck tarpaulins. On Josefstrasse,

up, and chic designer eateries have

the Bahnhofstrasse and heading through

Swiss brand Erfolg offers rather outré

become the place to meet for Zurich’s

the train station to what was once, quite

handbags and T-shirts, while Einzigart

media and arty types.

literally, the wrong side of the tracks.

stocks chairs, lights and other furnishings

Working-class, multi-ethnic Zurich West

by local designers.

You could also simply check out the

has streets lined not by Cartier and Rolex stores but Italian barbershops, informal

Elsewhere, former factories have been transformed into nightclubs and

Giessereihalle on Turbine Square in Zurich West.

January 2014

That is all the evidence you need that Zurich has an edgy appeal if you look beyond the neat facades of its politely proper Bahnhofstrasse. n

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Cuisine

ALL CHEESE GREAT AND SMALL The picturesque towns and villages of the Yorkshire Dales are home to some incredible artisan cheesemakers, reports Andrew Marshall.

I

T’S EARLY SPRING IN THE

against green, that march up impossibly

television series All Creatures Great and

Yorkshire Dales, a region of timeless

steep slopes until they disappear into the

Small about the trials and tribulations of

beauty symbolised by the limestone

heather-cloaked moorland on the summits.

vet James Herriot (based on the books

walls that climb its brooding hills – endlessly varying patterns of grey

Many people will be familiar with the Dales as the backdrop for the popular

written by Alf Wight), but they are equally famous as a walking destination, with hundreds of miles of scenic footpaths.

But there’s more to the area than scenic hiking and the adventures of a vet; for centuries people have been baking breads, brewing beers and churning cheese in the Dales. It’s thought that the origins of cheesemaking lie with Cistercian monks who arrived from Normandy and settled in the local abbeys in the 11th century, and they in turn passed on their techniques to the farmers of Swaledale and Wensleydale.

Today, the tradition of cheesemaking continues, and in recent years there’s been a resurgence of interest in handcrafted cheese. From larger producers such as the Wensleydale Creamery in Hawes to smaller artisan producers like Laceys in Richmond, the good news for gourmet travellers is that there’s ample opportunity to learn about, taste and purchase cheese close to the source.

SWALEDALE Perched high above the River Swale with its Norman castle etched against the sky is the historic town of Richmond – the starting scene for my cheese foray in the Dales.

PHOTOGRAPHY BY ANDREW MARSHALL

Swaledale cheese has been made in the dale that bears its name for centuries.

Rows of cloth-bound cheese inside the ageing room at The Swaledale Cheese Company.

Originally made with Swaledale sheep or goat’s milk, it wasn’t until the 17th century that the cheese was made from cow’s milk. The farmers would make cheese to preserve the excess milk after calving time; Portfolio

69

Wensleydale

Swaledale Ribblesdale

The atmospheric town of Richmond in Swaledale is one of the main towns in cheesemaking country.

some would be kept to feed the family and some would be bartered with grocers and corn merchants for food and flour.

In the early 20th century, farmhouse cheesemaking went into a steady decline and by 1980, only Mr and Mrs Longstaff of Harkerside Farm above Reeth were still making traditional Swaledale cheese to a closely-guarded family recipe. Swaledale cheese was close to dying out until Mrs Longstaff, who had retired from cheesemaking, gave the original recipe to David

Sam and Louise Reed in playful mood inside the office at The Swaledale Cheese Company – one of Yorkshire’s finest artisan cheesemakers.

she helped them to re-establish authentic

a Super Gold for a Swaledale Blue at the

Swaledale cheese, through their launch

2011 World Cheese Awards.

of The Swaledale Cheese Company in February 1987.

Both David and Mandy Reed have sadly passed away, but the company is now

WENSLEYDALE CREAMERY

and Mandy Reed. Acting as chief taster,

The Swaledale Cheese Company has

being taken forward by their two children,

since gone from strength to strength and

22-year-old Sam and 26-year-old Louise,

now produces approximately 1.75 tons

who are both determined to continue

of Swaledale cheese per week, supplying

their parents’ passion for making some of

specialist cheese shops, delicatessens and

Yorkshire’s finest artisan cheese. “It has

from both cow and sheep’s milk, they

independent retailers. The company’s

been really tough since losing both our

have seen a marked increase recently in

success has been part of a vigorous fight

parents and we’ve had to grow up fast,”

sales of their goat’s milk cheese. “We sold

back by local cheese against ‘bland brand’

says Sam, when I meet the inspirational

more goat’s cheese last Christmas than

varieties and the company’s Swaledale

duo at their cheesemaking facility situated

blue cheese,” says Louise. “Goat’s cheese

recipe and methods are protected

on the outskirts of Richmond. “Back

is definitely in vogue and it’s perfect for

and accredited with PDO (Protected

when Mum and Dad started the business,

people who have an intolerance to sheep

Designation of Origin) status for both its

most people were only aware of Cheddar

or cow’s milk.”

Traditional Swaledale and Swaledale Ewe’s

cheese, but now there are so many types

Cheese. Over the years, its distinctive

available, and it’s the same with the

MY NEXT stop is Richmond’s restored

cheeses have won many prizes, including

growth of artisan cheesemakers.”

former railway station, which showcases

January 2014

Cutting and blocking the cheese in the Wensleydale Creamery, Hawes.

Although the company makes cheese

Essentials

Cuisine

Simon Lacey drains the whey from the curds inside Laceys Cheese, Richmond.

Rowleth End at Low Row, Upper Swaledale, is a great place to base yourself while exploring Yorkshire cheese country.

a range of local food producers where,

the old-fashioned cheesemonger to the

through the viewing window of his cheese-

road again, and people love the personal

the B6270 deeper into Swaledale, where

making workshop, I catch a glimpse

service,” says Simon. “I also do all the

the road gets narrower, the River Swale

of Simon Lacey standing beside a steel

farmers’ markets and food festivals from

wilder, sheep scarcer and the views more

tank draining the whey from the curds.

Richmond to Leyburn and beyond.”

spectacular towards the tiny settlement

Simon, 42, learned about cheesemaking

From Richmond I drive west along

of Low Row and my bed for the night.

He uses traditional production methods

while working for the Swaledale Cheese

to make mainly Wensleydale cheese in

“Welcome to Rowleth End Guest House

Company and fulfilled a life-long dream

different flavours such as pepper, olive,

in beautiful Upper Swaledale,” says the

when he opened Laceys in 2007.

chilli and even beer. “Small producers

owner Roger Tuckett, who offers me a

like myself may not be able to compete

welcome drink followed by a delicious meal

Simon does everything from supervising

with the supermarkets on their level, but

of fishcakes, pork in a prune sauce, bread-

milk arrivals to making, selling and

we can offer a different experience and a

and-butter pudding, and finally a cheese

delivering the cheese. “In a way, I’m taking

fantastic product,” he says.

platter showcasing products from all four

He is a one-man cheese operation and

creameries within a 15-mile radius.

“I have the ‘Dales Cheese Grand Slam’,” says Roger with a grin, as we begin to sample the cheese paired with a glass of Yorkshire red wine. Roger tells me he is already excited about the Tour de France coming to these parts in July 2014 and literally going past his front door. “Yes, I’m already in the process of planning some kind of event with overnight camping to showcase the best in Yorkshire food and drink,” he says.

SIMON STOTT

70

A flock of Friesland ewes that supply their milk to cheesemakers including Iona Hill at the Ribblesdale Cheese Company in Hawes.

WENSLEYDALE The following morning after a hearty breakfast I’m back on the scenic B6270 travelling through the quintessential Portfolio

Essentials Cuisine The attractive market town of Richmond.

Dale End Cheddar made by Alastair Pearson of Botton Creamery – a traditionally-made cloth bound cheddar aged for 18 months.

Swaledale villages of Gunnerside, Muker and Thwaite, then over the wild and lonely Buttertubs Pass into Hawes on the other side.

The busy market town of Hawes, situated in the heart of Wensleydale’s finest scenery, is home to Yorkshire’s largest cheesemaker – the Wensleydale Creamery. Like its neighbour in

takes to organise a ploughman’s lunch of

interested in setting up their own artisan

Swaledale, Wensleydale cheese has a

crusty bread and a chunk of Wensleydale,

cheesemaking business, which is rather

heritage that spans centuries and the

I’m already across the other side of Hawes

exciting,” she says.

skilled cheesemakers at the Wensleydale

to meet a specialist in goat’s cheese.

Creamery continue the art of hand-

“Welcome to the smallest goat’s cheese

crafting Wensleydale cheese to a time-

producer in Yorkshire,” says Iona Hill of

honoured recipe, using milk from local

the Ribblesdale Cheese Company as she

farms. The result is a mild and creamy

proudly invites me to taste a newly-made

cheese, which has a fresh, clean flavour

batch of soft goat’s cheese. “It’s velvety,

with a honeyed aftertaste and a crumbly,

rich and creamy with lemon notes,” she

flaky texture. To see how it’s made, I

says. “It’s destined for Michelin-starred

head to the viewing gallery to watch

Vanilla Black in London, and also Fodder,

the cheesemakers performing the art of

an exclusive deli restaurant in Harrogate.”

cutting, stirring, pitching and salting,

Iona also runs a few cheesemaking

all done by hand. Before leaving, I pick

courses every month, including a one-day

up a sustaining slab of Yorkshire’s finest

course aimed at home cheesemakers and

from the adjoining shop – will it be Oak

a two-day one for people who are thinking

Smoked Yorkshire Wensleydale or Real

of setting up a commercial business,

Yorkshire Wensleydale & Cranberries?

covering aspects such as sourcing

From one great cheesemaker I next

equipment. “People come from all over to

head to a smaller one, and in the time it

attend my courses, and many of them are

January 2014

A Shepherd’s Purse favourite – Yorkshire Fettle – a soft crumbly ewe’s milk cheese with a sweet, piquant taste.

71

Essentials

Cuisine

Iona Hill, from the Ribblesdale Cheese Company in Hawes, with a Ribblesdale Superior Goat Cheese that won silver at the British Cheese Awards.

Ewe’s milk and goat’s milk cheese from The Swaledale Cheese Company.

RIBBLESDALE AND BEYOND From Hawes I hit the road again, driving south through wild Pennine Way country into Ribbledale and the quaint market town of Settle, which is home to the Courtyard Dairy, run by owner Andy

SHEPHERDS PURSE

72

Swincoe, a specialist cheese refiner and purveyor. His mantra is to sell the best of the UK and France. He champions

A selection of cheese from Shepherds Purse.

small, individual farmhouse cheese-

“Their maturing progress is tested using a

makers who still make it by hand with

cheese ‘iron’ and when deemed at its peak

unpasteurised milk from their own herds,

the Cheddar is released for sale, usually at

to get the best depth of flavour.

around 18-months.”

cheese available locally and in other parts

Once the cheese arrives at The

Andy is justifiably proud of The

Courtyard Dairy that’s only the start of

Courtyard Dairy, which only opened in

the story. The whole shop is specially

December 2012 yet was awarded “Best

equipped to age cheese, and Andy has a

New Cheese Retailer” at the prestigious

background of working for some of the

annual British Cheese Awards held

top cheesemongers in the country and a

in September 2013. The judges were

French apprenticeship in affinage (cheese

particularly impressed by the way The

ageing). So how is the cheese matured?

Courtyard Dairy showcases unique

produced were Olde York (a soft and young

farmhouse cheesemakers of Britain.

French-style cheese) and Yorkshire Feta,

To get to its best, each cheese has its own

Cloth-bound Richard III Wensleydale cheese made by cheesemaker Andy Ridley from Bedale, North Yorkshire.

special requirements, from the environment

On the fringes of the Yorkshire Dales, at

which is now called Yorkshire Fettle, made

it is kept in (different humidity, temperatures

Leachfield Grange near Thirsk, is Shepherds

to a feta recipe and adapted so it has higher

and materials it is stored on), to its day-

Purse, a family-run company that began

moisture content and less salt. In the early

to-day care such as turning, brushing and

specialising in cheese made from sheep milk

90s the family noticed that there wasn’t

washing. “For example, our Dale End

in the 1980s. “We originally bought a dozen

a lot of blue cheese available, so in 1994

Cheddars made by Alistair Pearson at

Friesland sheep, a breed that originated

they launched their signature cheese called

Botton near Whitby are matured on site in

in Holland, and started milking them by

Yorkshire Blue (made from cow milk),

a specific environment on traditional wood

hand,” says the director Katie Matten.

which is their biggest seller and is used by

boards with regular brushing,” says Andy.

The first cheese that Shepherd’s Purse

restaurants throughout the country. n Portfolio

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74

Essentials

Luxury

W

ALKING AROUND THE old city of Dresden it is impossible not to feel the

weight of history imbued in the stones and rooftops that tower overhead. There is an air of resilience embodied in the buildings and a sense of wonder at how much reconstruction has been achieved following the Allied bombing raids of WWII. Ninety per cent of the city centre was destroyed in 1945 but Dresden has been carefully and steadfastly rebuilt.

There’s no building quite so impressive as the enormous Frauenkirche, or Church of Our Lady. Less than 10 years ago this was little more than a pile of rubble. Now this spectacular construction, with one of the largest domes in Europe, has been restored to its former glory.

Whilst admiring the Frauenkirche I am suddenly struck by the correlations between the building and the watch brand A. Lange & Söhne that I have come to Germany to visit. Both had long and illustrious histories before the onset of war, and both ceased to exist as a result of it.

A. Lange & Söhne was expropriated by the post-war Soviet administration in 1948, and the company that was founded

by Ferdinand Lange in 1845 to produce high-quality pocket watches was no more.

Not until 1990, after the reunification of Germany, did the founder’s great-

PRECISION AND ARTISTRY The watchmaker A. Lange & Söhne is the phoenix of the luxury watch industry. The brand disappeared in the 1940s but is now revered again following its resurrection in the 1990s, reports Nick Rice.

grandson, Walter Lange, lay plans to resurrect the A. Lange & Söhne brand.

This was coincidentally the exact same time that an initiative was formed to reconstruct the Frauenkirche.

Walter Lange’s dream of rebuilding the ancestral business was aided by respected watch industry figure Günter Blümlein and several Swiss watch manufacturers, including IWC and Jaeger Le Coultre.

With this collective effort the re-founded A. Lange & Söhne, operating from just outside Dresden in its original home of Glashütte, presented its first range of wrist watches in 1994 – the same year that the foundation stone was laid in the Frauenkirche after Portfolio

75

foster a quiet and contented atmosphere.

changed literally everything. On my first

Absorbed in their tasks in the same way

day we had a manufactory tour and I was

in 2005 in time for Dresden’s 800th

a painter gets lost in creation, this key

introduced to the Board of Directors and

anniversary, by which time A. Lange &

ingredient of pride in the product explains

we had an employee gathering. And you

Söhne was well on the way to joining the

why the finished timepieces emit such an

look into the eyes of these people and

top ranks of the world’s finest watchmakers.

essence of quality.

you see the fire burning, and you know

several years of private fundraising.

The church was eventually completed

the rest you can repair. The rest is not

To see where the A. Lange & Söhne history began I head to Glashütte to see the

FOR WILHEM Schmid, 49, the

difficult. It’s administration, common

original site and the nearby location for the

German CEO who came to the company

sense – but the foundation is these people

brand’s forthcoming substantial expansion.

in January 2011 from senior roles at

who would do everything for the brand.

BMW, the passion of A. Lange & Söhne’s

I’ve never seen people so… let me put it

even utilitarian, and the atmosphere

employees was an immediate sign that

this way, I don’t need brand ambassadors

throughout all the different departments I

he could do well at the helm. “I came

– I have 620 of them.”

visit is markedly calm. Whether engraving,

from South Africa to Germany, from

polishing or assembling a range of ultra

BMW to A. Lange & Söhne, from cars

technicians as I’m escorted through

complicated movements, the employees

to watches, and aside from my family I

the showroom and parts production

The manufactory is simple in design,

January 2014

I meet a handful of these dedicated

76

Essentials

Luxury

The meticulous construction of the Grand Complication involves 876 tiny components.

departments. Not only do I gain an

representative of their overarching

incisive overview of the entire painstaking

dedication to perfection. The movement is

process of creating an A. Lange & Söhne

completely taken apart again. Every single

timepiece, I also witness the passion that

component is cleaned in an ultrasonic

Schmid was so impressed by. Peering over

tank as a final measure to ensure that

the shoulders of the experts I see design

every part, many of which will be invisible

stages, milling, plate forming, deburring,

to the eye within the heart of the watch,

component creation, chamfering, perlage,

is flawlessly clean. At this stage the final

straight and circular graining, flat

surface decorations are executed and the

polishing and the execution of a sunray

characteristic thermally blued screws are

finish. Not to mention the mastery of

used to close the mechanism together.

the engraving department, where an

Now the dial and hands can be

engraver’s work can be identified years

mounted and the movement can be

after the creation of a watch, as they each

encased in platinum or pink, yellow

have a distinct signature style to their

or white gold. The final act sees the

work, much like a form of handwriting.

watch undergo a rigorous six-week

In the final stages of the production,

Wilhelm Schmid has been A Lange & Söhne’s CEO since 2011.

test programme to prove its functional

when the movement is ready to be

integrity and a strict visual inspection

encased in a precious metal case, A. Lange

before it is finally permitted to leave

& Söhne do something which is singularly

the manufactory.

Every single component is cleaned in an ultrasonic tank as a final measure to ensure that every part is flawlessly clean.

SCHMID HIMSELF was an admirer of A. Lange & Söhne long before he knew he would one day be running the company.

Schmid saw a Lange 1815 model in a store window in 1994 and bought it there and then. “I was intrigued by the fact that a traditional German brand celebrated its comeback with four manufacture calibres all at once, at a time when in-house developed movements were an absolute rarity in the industry. My first Lange was this 1815, which I purchased shortly after its launch because of its clear design and

The headquarter of A Lange & Söhne is in Glasshütte, close to Dresden.

artisanal beauty,” he says.

Portfolio

77

Each watch undergo a rigorous six-week test programme to prove its functional integrity.

An engraver’s work can be identified years after the creation of a watch, as they each have a distinct signature style.

The Grand Complication is limited to just six pieces – each one taking a full year to create.

As part of the Richemont Group, which owns a number of luxury watch

Complication is limited to just six pieces –

repeater or something like that, but to

manufacturers, A. Lange & Söhne is one

each one taking one full year to create.

come up with the ultimate answer to ‘what

of the principal brands at the world’s most

Retailing at $2.47 million, the meticulous

prestigious annual watch fair, the Salon

construction of the Grand Complication

International de la Haute Horlogerie

involves 876 tiny components.

(SIHH) in Geneva. Alongside the usual

Despite the fact it was a true milestone

are they capable of?’ was special,” he adds.

A. Lange & Söhne’s rise from the ashes of history has been remarkable. With a constantly expanding global presence the

outstanding new watch launches, referred

in the world of haute horlogerie, when

brand is set to continue going from strength

to as ‘novelties’, last year the brand

A. Lange & Söhne unveiled the Grand

to strength. “I believe that we stand for

played its trump card with the Grand

Complication they eschewed brash fanfare

true values, understated design and high-

Complication watch. A masterpiece of

in favour of Teutonic understatement.

performance, all embodied in a rich history.

watchmaking, this accomplishment

“One thing that I’m proud of is that all

But our demand is outstripping supply by

announced to the watch industry just how

the industry journalists didn’t know,

so much we have to be careful” Schmid

far A. Lange & Söhne has come in the

even those who are very close to us.”

concludes. “A South African once gave me

years since the relaunch.

Schmid says with a wry smile. “We caught

some advice, which was ‘stay vigilant.’ That’s

everybody by surprise. I think a lot of

what we do even in good times. We are

people assumed there would be a minute

optimistic, but we stay vigilant.” n

The result of seven years of intensive research and development, the Grand January 2014

Essentials

78

Technology

FujiFilm

Finds a niche The X series, which mimics old-style cameras but has a high-tech core, has helped keep Fujifilm in business, reports Eric Pfanner.

itself from a maker of 35-millimetre

photographers, Irwin Wong, who shoots

film into a provider of digital imaging

seen sales of low-end cameras suffer from

pictures for Japanese magazines, relies

technologies.

the rise of the smartphone, which has put

on digital single-lens reflex cameras for

These include a new line of digital

a basic point-and-shoot into every owner’s

the bulk of his work – “bulk” being the

cameras, the X series, that blend Fujifilm’s

pocket. Even sales of more expensive

operative word.

digital technology with retro aesthetics

DSLRs, a business dominated by Nikon

reminiscent of cameras from 60 or 70

and Canon, have started to weaken this

Wong said of his Nikon D800, which

years ago. At a time when sales of other

year. Analysts say a maturing of DSLR

weighs nearly one kilogram, and a whole

cameras are slumping, the X series is

technology, which makes upgrades less

lot more when used in combination with

selling briskly.

essential, may be to blame.

“It’s a beastly camera to carry around,”

a selection of interchangeable lenses. “You

“Fujifilm once looked a lot like Kodak,”

can’t replace a DSLR for work. But it’s just

said Christopher Chute, an analyst at

not that much fun.”

International Data in Boston. “Based on

To lighten his load, and to inject a bit of levity into his photography, Wong this year bought a new camera, the Fujifilm

© 2013 New York Times News service

Like other camera makers, Fujifilm has

Like many professionaL

some different decisions, they have gone in very different directions.”

Fujifilm still makes film, but it now

X-E1, to supplement his Nikon. He liked

accounts for less than one per cent of

that one so much that he added another

the company’s sales. The entire imaging

Fujifilm model, the X100S.

solutions division, which includes the

He is not the only member of the

company’s cameras, generates a mere 13

unofficial Fujifilm fan club. Over the

per cent of revenue. Most revenue comes

last decade, as rival Eastman Kodak

from businesses like pharmaceuticals,

was descending toward bankruptcy –

medical equipment and office machines,

it recently emerged from Chapter 11

in which Fujifilm has a partnership

proceedings – Fujifilm was transforming

with Xerox.

Fujifilm still makes film, but it now accounts for less than one per cent of the company’s sales.

The entire imaging solutions division, which includes the company’s cameras, generates a mere 13 per cent of revenue.

Portfolio

79

Masazumi Imai, designer of Fujifilm’s X series, shows various prototype cameras at the firm’s headquarters in Tokyo.

January 2014

Essentials

Technology

The Camera and Imaging Products

Mirrorless cameras are considerably more expensive than pointand-shoot devices and even cost more than some DSLRs, though substantially less than professional models like the $3,000 Nikon D800.

can share photos more easily. Sony

Association, a trade group whose

recently introduced a new kind of camera

members include Fujifilm, Nikon, Canon

that clips onto a smartphone.

and other Japanese camera makers, says overall shipments of digital cameras

The X series is a different response.

plunged 39 per cent in volume, and

These cameras fit into a category called

26 per cent in value, from January

mirrorless, which has been a relative

through September 2013.

bright spot for the industry. Shipments of

Camera makers have tried various

‘nonreflex interchangeable lens’ cameras,

things to stem the slide. Some have

which include some of the Fujifilm

equipped cameras with smartphone-style

X-series devices and other mirrorless

features, including Wi-Fi and mobile

cameras, declined only 13 per cent in

operating systems like Android, so people

volume and five per cent in value from

January through September, the trade association said.

Fujifilm said in its most recent quarterly earnings announcement that sales of “such high-end models as the X series proceeded smoothly.” The company says it has sold more than 700,000 X-series cameras since the first model, the X100, was introduced in 2011.

The name refers to the fact that these cameras do away with the internal mirror that, in reflex cameras, allows the gETTy imagES

user to compose through the lens while

The Fujifilm X-series range has simplified controls.

the shutter is closed. With mirrorless cameras, the photographer composes with the LCD screen or a separate viewfinder.

The concept is not entirely new. The venerable Leica rangefinder, which predates the SLR, is technically a mirrorless camera. But compact, digital mirrorless cameras are a more recent innovation. Along with Fujifilm, brands like Olympus, Sony and Nikon have also added mirrorless models to their lineups over the last few years.

Mirrorless cameras are considerably more expensive than point-and-shoot devices and even cost more than some DSLRs, though substantially less than professional models like the $3,000

Brisk sales of the X-series has given Fujifilm President Shigehiro Nakajima plenty to smile about.

Nikon D800. The Fujifilm X-E2, a recently introduced upgrade to the X-E1, costs about $1,000. As with the Nikon, REUTERS

80

that is for the body alone; lenses are extra.

Mirrorless cameras often have sensors Portfolio

getty images

81

A visitor looks at Fujifilm digital cameras at the CP+ Camera and Photo Imaging Show in Yokohama City.

that are as big as those in entry-level DSLRs and much larger than those in point-and-shoots, providing superior image quality. But they are considerably smaller and lighter than DSLRs. The X-E1, for example, tips the scales at a mere 340 grams. The lenses, too, are more compact.

Along with professionals, so-called prosumers – or consumers who spend hundreds of dollars a year, or more, on camera gear – are giving mirrorless cameras a long look. While most mirrorless cameras are more popular in

Camera makers have tried various things to stem the slide. Some have equipped cameras with smartphone-style features, including Wi-Fi and mobile operating systems like Android, so people can share photos more easily.

software menus that have proliferated on many digital cameras, the X series uses simple dials to control functions like the aperture and shutter speed. As with DSLRs and point-and-shoot cameras, the functions can also be set automatically.

Masazumi Imai, the chief designer of the X series, explained at Fujifilm’s headquarters in Tokyo that the company interviewed professional photographers about their preferences on everything from the pebbled plastic that covers parts of the cameras to the colour of the paint on the bodies.

Asia than in Europe or the United States,

Almost a dozen different shades of

analysts say, the Fujifilm X series seems to have attracted a global following.

Instead of the array of buttons and

Fujifilm took a different approach in the X

silver were considered. The goal was to

“Someone who is looking at that kind

series. With boxy, rectangular bodies and

give the cameras a certain gravitas, so

of camera isn’t going to be satisfied with

straight, cylindrical lenses, they resemble

professionals would give them a try.

a smartphone,” said Jordan Selburn, an

classic Leicas.

analyst at IHS iSuppli in Santa Clara,

“Because of our heritage in film, picture

“When we were little, when we went into our father’s room or our grandfather’s

California. “Some of those people are not

quality was important, but picture quality

room, there was an important-looking

going to be happy lugging around a DSLR

is difficult to explain, so we needed

camera on the shelf, and we were told not

and a lot of glass, either.”

something else,” said Hiroshi Kawahara,

to touch it because it was valuable,” Imai

a marketing manager in the Fujifilm

said. “We wanted to create that kind of

camera division.

look and feel.” n

While many mirrorless cameras simply look like smaller substitutes for DSLRs, January 2014

Essentials

82

Profile

to some of the weakest opening results in DreamWorks Animation’s history.

“I trust Bill’s taste more than anybody else’s, including my own,” said Jeffrey Katzenberg, DreamWorks Animation’s chief executive.

Katzenberg has always been the studio’s public face. It was partly design, a way for a small publicly traded company to get noticed on Wall Street, and partly because Katzenberg is who he is: relentless. But while Katzenberg is still involved in major artistic decisions, he has been moving further away from the day-to-day running of his company’s movie pipeline, which is expanding. DreamWorks Animation in 2014 will begin releasing three movies a year, up from two.

While Katzenberg is working on a new TV endeavour, an entertainment complex in Shanghai and indoor theme parks in Russia, Damaschke (pronounced DAHmash-kee) is increasingly calling the creative shots.

“As someone who really doesn’t like attention, I feel almost uncomfortable saying this, but that is true,” Damaschke said in June. “We put things in front of Jeffrey less frequently.”

Damaschke, who started at the studio 18 years ago as a production assistant and

THE QUIET FORCE

rose to chief creative officer in 2011, would

Bill Damaschke, the chief creative officer of DreamWorks Animation, is relatively unknown in Hollywood despite being behind numerous blockbusters, reports Brooks Barnes.

years, DreamWorks Animation’s nine films

be entitled to an insufferable ego. He was blessed with dashing good looks and churns out blockbusters; over the last five have taken in roughly $5 billion worldwide after accounting for inflation, compared with about $3.6 billion for Pixar’s five releases. Instead, the dapper Damaschke

I

© 2013 NEW YORK TIMES NEWS SERVICE

NSIDE A MODEST UPSTAIRS

is quiet and polite, perhaps reflecting his Damaschke, 49, is chief creative officer

Midwestern upbringing.

Then again, unassuming is all the rage in

office at DreamWorks Animation in

at DreamWorks Animation, which means

Glendale, California – the one next to

that he runs the factory floor, working with

Hollywood: Kevin Feige, who expertly runs

a framed poster reading “You’ve Got

directors, writers and artists to deliver hits

Marvel Studios, is also nearly invisible. If

the Goods, Step Out and Show ’Em!” – sits

like Kung Fu Panda, How to Train Your

you “strut your stuff,” as another poster

one of the film industry’s most important

Dragon and the Madagascar movies. The

outside Damaschke’s office instructs, you

executives. His name is Bill Damaschke.

studio’s latest computer-animated film,

become vulnerable when movies misfire, as

Turbo, about a speedy garden snail, has

they inevitably do.

Never heard of him? Neither has most of Hollywood.

just recently hit theatres, although it did so

Despite positive reviews, DreamWorks Portfolio

83

Animation’s dark Rise of the Guardians,

underdog story” that finds the animation

sassy Monsters vs. Aliens in 2009 nor the

released in November and directed by

studio “taking a welcome risk and betting

cheeky Megamind in 2010 were strong

Peter Ramsey, cost more than $250 million

on a far-fetched story idea.”

enough at the box office to quickly spawn

to make and market but took in $303.7

The opening total (from July 17 to July

hoped-for sequels. Damaschke began

million, roughly half of which went to

21) for Turbo was a relatively anaemic

urging his filmmakers to think more about

theatre owners. The company wrote down

$31.2 million.

heartfelt moments.

$87 million tied to the film.

Guardians is not Damaschke’s first

Turbo in many ways represents an

“Bill’s notes almost always attend to the

artistic shift that Damaschke has quietly

emotional point of the story,” said Chris

disappointment. The money-losing

been adopting at the company. In its early

Sanders, who co-directed The Croods with

Broadway adaptation of Shrek was also

days, DreamWorks Animation movies

Kirk DeMicco. “He will stop us dead in

his baby. But the movie’s failure was

clung tightly to the successful Shrek

our tracks and say, ‘But how does that

particularly crushing.

formula: irreverent humour, pop culture

character feel about this?’ Jeffrey, who

inside jokes, lots of action, celebrity voices.

we honestly don’t see that much, despite

were cool may have given pause to the

Turbo, which riffs on the Fast & Furious

what everyone thinks, attends more to the

most important person buying tickets,

movies, certainly has some of that DNA.

audacity of the film.”

and that’s mom,” he said. Noting that

But the film also has atypical quiet

“Some of the things that we thought

The oldest of seven children, Damaschke

the movie was a big seller on DVD,

moments and tries to break ground

grew up in Chicago and graduated from

he added, “I’m still healing from the

by including lots of Hispanic cartoon

the School of Theatre Arts at Illinois

Guardians experience, to be brutally

characters. Its animation style also differs

Wesleyan University. He pursued musical

honest with you.”

from The Croods, the studio’s hit caveman

theatre – including a stint in Godspell in

movie from March, or next year’s Mr.

New York – but ended up in Los Angeles

Aside from the obvious – it stars a snail –

Peabody & Sherman, which is based on

as a production assistant on Disney’s

the movie was directed by David Soren, a

segments from the 1960s-era TV series

Pocahontas in 1994. The next year he

first-time feature filmmaker. Reviews were

featuring Rocky and Bullwinkle.

moved to DreamWorks Animation, where

Turbo was another creative gamble.

mixed. The Hollywood Reporter deemed

“We are trying to really lean into the

it “narratively challenged” and zeroed in

different sensibilities of our filmmakers,”

on a theme that could turn off mothers:

Damaschke said.

“If you’re too small or weak or otherwise

There are several reasons behind the

he rose up the ranks.

“This studio may be Jeffrey’s sandbox,” said Soren, the Turbo director, “but Bill knows every kid who has ever played in it

incapable of greatness, you have a shot to

shift. While DreamWorks Animation’s

and where every shovel is buried. Bill may

win if you’re juiced.”

original formula kept delivering hits, ticket

be the biggest reason artists keep coming

buyers started to show fatigue. Neither the

back to play here.” n

But Variety called it an “endearing

Bill Damaschke, seated third from left, with an ensemble of DreamWorks Animation directors at the studio’s lot in Glendale, California.

January 2014

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Essentials

Culture

Rock StaR Ailsa Craig, a Scottish icon, is listed for sale as the only island that has ever won an Olympic Gold medal, reports John Burns.

Ailsa Craig, off the coast of Scotland.

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The sTunning volcanic island

National Trust in 1945, and in 2010 the

of Ailsa Craig has been part of Scottish

current marquess decided to part with

soaring some 335 metres into the sky off

legend for a thousand years, its sugarloaf

Ailsa Craig, posting an initial price of $4

Scotland’s west coast in 1818, he repaired

profile decorating Scottish bank notes and

million. That figure was later cut to $2.4

to a mainland inn and wrote a sonnet

memorialised in a Keats sonnet.

million, and as the waters of the Firth of

by candlelight describing it as a “craggy

It has no inhabitants, no electricity, no

Clyde have lapped at Ailsa Craig’s rocky

ocean-pyramid,” summoned from the deep

fresh water and no arable land – nothing

shore each day, little has changed in the

by some mythic power, and attended for

of value, it would seem, but for this: For

intervening years. The island remains

eternity by eagles and whales. Nearly 200

a century and more, its quarries have

misty, monumental and for sale.

years later, with Scotland approaching a

been the source of the distinctive, waterresistant microgranite used to make most of the world’s curling stones. These include all those used in recent world championships and every Olympics since 1924, including the Sochi Games that begin in February.

But the modest income from the quarrying of the island’s prized strains of blue hone and common green and a lease granted to Britain’s Royal Society for the Protection of Birds has taxed the dwindling resources of its owner, the eighth Marquess © 2013 New York Times News service

When Keats first saw the island

of Ailsa, whose family has owned the island for 500 years.

Like many of Britain’s old landowning families, the marquess’ family has been through decades of retrenchment as a result of inheritance taxes. It lost

referendum on independence from Britain

It has no inhabitants, no electricity, no fresh water and no arable land – nothing of value, it would seem, but for this: For a century and more, its quarries have been the source of the distinctive, waterresistant microgranite used to make most of the world’s curling stones.

the family seat, Culzean Castle, to the

January 2014

country’s national consciousness, redolent of the rugged, stand-alone character many Scots pride as their birth-right.

In November, approaching across 16 kilometres of shimmering open sea aboard his 10.7-metre lobster boat, the M.V. Glorious, the skipper, Mark McCrindle, broke the silence of his cramped wheelhouse to say that in 30 years of plying the waters from the nearby port of Girvan, he had rarely seen it looking more majestic. “Aye,” he said, “she’s a beauty.”

Would he like to own it? “Twenty thousand pounds is all I’d pay,” he said, quickly adding, “What would I do with it?”

Finding a buyer will require more than the poetic flights of Keats, or “the dreams” the 57-year-old marquess says he would

Rock formations on the southwest side of Ailsa Craig.

Microgranite quarried on Ailsa Craig is made into Olympic curling stones at Kays of Scotland in Mauchline.

in September, it remains an icon in the

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Essentials

Culture

One of two gaspowered foghorns on Ailsa Craig.

Granite from Ailsa Craig is cut to make curling stones.

enticing, or at least warmer, locations than the Firth of Clyde.

Vladi’s medal reference referred to the be selling to anyone whose fancy runs to an island that has no modern

Charles Kennedy, the eighth Marquess of Ailsa, is a member of the family that has owned Aisla Craig for 500 years.

curling stones used when Rhona Martin, the Scottish champion who threw what became known as the “stone of destiny” to win the women’s gold medal at the

conveniences, no active forms of employment since the quarrying ended

for pirates and, for the last 25 years, a

Winter Games in Salt Lake City in 2002.

in 1969, and only one habitable structure

preservation area for tens of thousands

The victory set off fireworks celebrations

among the rusting, roofless ruins of the

of breeding seabirds, especially gannets

in Edinburgh and Glasgow; it was the

quarters once used by men working in the

and puffins.

first time Britain had won a winter gold in 18 years.

lighthouse or the quarries.

Over the centuries, the island’s 89

So it is no surprise to find that property

Scots, and others across Britain, are

hectares, much of it in the form of

agents listing it reach for hyperbole in

hoping for a repeat at the Sochi Olympics,

precipitous crags and thick uphill reaches

stating its attractions. “The only island to

and they look to Ailsa Craig, at least

of bracken, have provided Scots, and

win a gold medal in the Olympic Games!”

metaphorically, as a talisman.

sometimes their enemies, with an ocean

says Farhad Vladi of the Hamburg-based

fortress. Barely 1.2 kilometres from tip to

company Vladi Private Islands. He claims

quarried granite was taken off the island

tip, the island has served as a redoubt for

to have sold more than 2,000 islands

this summer by landing craft and used for

repelling Spanish invaders, a sanctuary

across the globe, many of them in more

cutting, spinning and polishing into the

Two thousand tons of previously

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Essentials Culture Sochi stones at the factory at Mauchline, 40.2 kilometres away on the Ayrshire mainland, that has a contract for the Olympic stones.

A few of those stones will slip gently out of the sure hands of Britain’s best medal hope, its world champion women’s team and its 23-year-old skip, Eve Muirhead.

The 20-kilogram, kettle-shaped rocks will be made, in the body, from the speckled Ailsa Craig granite known as common green, and will glide to the “house,” or target, on a base ring of the island’s inimitable blue hone, whose tight molecular structure makes it impenetrable to melting ice.

In the meantime, the marquess, who has lost a leg to diabetes, waits for an offer on what he calls his rock. During an encounter at his favourite pub, among a bustle of weather-beaten farmers and bushybearded seadogs at the old marketplace in Ayr, he spoke with scant sentiment about the prospect of giving up ownership of the island, which the listing agents say has failed to attract any serious interest.

“It’s going to go out of the family,” he said. “But I think of it this way: It’s not going anywhere. It’s always going to be there, and it really doesn’t matter who owns it.”

The same dispassion came when the talk turned to Ailsa Craig as a sporting icon. With one of the other titles he inherited, the marquess, as Lord Archibald Angus Charles Kennedy, head of the Clan Kennedy, has been a celebrated guest at highland games and other clan gatherings in Scotland and Ireland, and in the United States, Canada and other far-flung outposts. But his passions fall short of caber-tossing, shotputting and, especially, curling.

With a smile and more than a hint of mischief, he summarised his attitude toward the sport that is said to have had its origins on Scotland’s frozen ponds in the 16th century.

“It’s the boringest game you can ever Curling stones for the Sochi Olympics receive a final polishing.

January 2014

watch,” he said. n

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Essentials

Other Business

Sponsor a Skull

Anniversary Sale A yellow jumpsuit worn by martial arts star Bruce Lee in his last film sold for HK$780,000 ($100,600) in a Hong Kong auction.

The outfit designed and worn by Lee in the 1972 movie Game of Death sold for more than twice its high estimate of HK$300,000 according to auction house Spink China.

The auction, held to commemorate the 40th anniversary of Lee’s death in 1973, offered 14 lots of memorabilia that earned more than HK$2 million, including HK$540,000 paid for

A Philadelphia museum has the

the skulls, which have been on

a “nunchaku” or chainsticks, a martial arts

perfect gift idea for the person who

continuous display for more than

weapon used in the film.

has everything, including a love of

100 years, to lose or crack their

science and a dark sense of humour.

teeth, said curator Anna Dhody.

“Something like the jumpsuit has never been offered before,” said Anna Lee, vice chairman of

A $200 donation buys the

The skulls were amassed by

Spink China. “Comparatively speaking, it’s still

preservation of one of 139 skulls

19th-century Viennese scientist

very inexpensive compared with something from

dating back to the 19th century

Josef Hyrtl to debunk the study

Marilyn Monroe.”

in a collection at the Mütter

of phrenology, the belief that

The films of Lee, who was just 32 when he

Museum of the College of

the shape of a skull determines

died, have accorded him cult status, driving up

Physicians of Philadelphia.

a person’s moral calibre and

prices of items such as a pair of his kung fu

Subtle vibrations from footsteps

shoes from the film Walk in the Footsteps of the

of museum patrons have caused

that different races are actually different species.

Master and a bamboo whip.

Sweet Success Holiday cheer in Texas became even sweeter thanks to a giant gingerbread house that broke a world record for confectionary construction.

Coming in at 35.8 million calories and covering an area nearly the size of a tennis court, the seven-metre-high gingerbread house in Bryan, Texas, was declared the biggest ever by Guinness World Records.

The house, with an edible exterior

of butter, 1,327 kg of brown sugar, 7,200 eggs, 3,266 kg all-purpose flour,

mounted over a wooden frame, was

31 kg ground ginger and a few other

built by the Traditions Club near

ingredients, bake and form into panels

Texas A&M University to help raise

for mounting.

money for a trauma centre at the REUTERS

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regional St. Joseph’s Hospital.

The recipe is simple. Mix 820 kg

The edible and aromatic panels, icing and candy stood up well to the Texas sun, as well as a few storms.

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