Portfolio | June 2014

Portfolio

Issue 102 n June 2014

Exclusive to Emirates First Class and Business Class

TRENDING STARTUPS The Rich Get Richer LOST GENERATION Europe’s Great Job Hunt LIGHT FANTASTIC Innovative Illumination

Jack

Ma Billionaire Internet Tycoon

Details make the difference The new Xperia™ Z2 from Sony. Experience the world’s best camera and camcorder in a waterproof smartphone*.

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*The Xperia™ Z2 is a waterproof smartphone (in compliance with IP55/58††) featuring 4K video capture with a 20.7MP camera and a unique Phospher LED display. Specifications verified by Strategy Analytics’ SpecTRAX service as of 29th January 2014, for more information on Strategy Analytics results go to: www.sonymobile.com/testresults/ Icons are for illustrative purposes only. Sony is a trademark or registered trademark of Sony Corporation. Android, Google Chrome and Google Play are trademarks of Google Inc. ©2014 Sony Mobile Communications AB.

This issue JUNE 2014

Portfolio

Exclusive to Emirates First Class and Business Class

Cover Story 26 The Rise of a Tycoon When Alibaba, China’s largest online retailer, goes public later this year it will elevate its founder Jack Ma to the highest ranks of technology industry titans.

Features 32 Europe’s Jobless See Little Light

48 Old World, New Tech

The European economy is starting to recover, but

Cities are upgrading their infrastructure with the latest

for the many jobless the outlook remains bleak.

technology in a bid to save money, raise revenue and

38 Welcome to the Haiyatt Copying Western brands is a common practice in China,

increase convenience.

52 British Printers Become Leaner

as some international hotel brands are discovering.

The traditional print industry has been slashed by the digital age. Those who survive are leaner, more efficient and moving

42 Rich Startups Get Richer Startups, flush with cash from investors, are seeing their values soar before contemplating an initial public offering.

into new areas.

56 Creating Better Light Consumers are stubbornly clinging to incandescent light bulbs despite a whole host of new alternatives.

38

52

56

7

Portfolio

8

Exclusive to Emirates First Class and Business Class

Essentials 61 Past Perfect The handsome Austrian spa town of Bad Ischl has been a favoured aristocratic retreat for nearly 200 years.

66 Around The World in 10 Dishes In order to meet the locals you need to eat like a local whilst having a culinary experience.

70 China’s Beloved Wild Elephants

61

The number of wild elephants in Yunnan province has nearly doubled. But deforestation is shrinking their habitat and increasing human conflict.

76 From Plague to Food The Atlantic slipper shell, an invasive species, has played havoc with France’s shellfish industry. One solution is to literally eat the problem.

70

80 From Horses to Horology Hermès, a giant in the global luxury market, has grown from humble beginnings into 14 highly successful product divisions.

84 Making Chernobyl Safer A huge arch is being built to contain further fallout from the reactor that melted down in 1986.

88 Other Business

84

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

Departments 11 Notebook World business in a nutshell.

17 Observer Spotting and analysing business trends.

24 Column: Joe Sharkey China’s Big Jet Love

86

76 Published for Emirates by

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Portfolio

Notebook

11

BUSINESS NEWS IN BRIEF

ended March 31, near the previous year’s 4.5 per cent, the slowest in a decade.

The economic expansion of Russia, embroiled in tensions with neighbouring Ukraine, will stay unchanged at 1.3 per cent this year compared with the past 12 months, according to the IMF. China’s will slow to 7.5 per cent from 7.7 per cent, while Brazil’s will ease to 1.8 per cent from 2.3 per cent, it said.

“India looks set to be the first BRIC to rebound,” Rajiv Biswas, IHS Global Insight’s Asia-Pacific chief economist, said in a statement. “Overall, the BJP victory should set the stage for a revival in India’s economic fortunes and a stronger growth path for the Indian economy over the next five years.”

The BJP has lambasted Congress for jobless growth, promising in its manifesto to stem price gains and expedite foreign investment in most sectors. It also plans to give more power to India’s 28 states, create consensus to implement a goods and services tax and develop labourintensive manufacturing.

India’s constitution gives states control over decisions that are central to attracting investment, a devolution

Will India Lead BRIC Rebound?

of power at the root of uniting a nation with 1.2 billion people. While the federal government can give tax incentives to industries and environmental permits for specific projects, state leaders have power to provide land-use permits along with electricity and water supply.

Congress saw its economic policies

THE LANDSLIDE VICTORY OF

of the term ‘BRIC’, believes India has the

thwarted by state governments. Only

Narendra Modi in the recent election

potential to grow about 10 per cent annually

nine states adopted the Congress’s 2012

has given him India’s strongest electoral

for the next 20 years if Modi pursues the

blueprint to allow 51 per cent foreign

mandate in 30 years. Modi’s Bharatiya

anti-corruption policies he’s promised.

investment in multi-brand retail that

Janata Party (BJP) and its allies won about

India’s economic growth will accelerate to

would let Wal-Mart Stores and other

61 per cent of seats in parliament as voters

5.4 per cent in the fiscal year ending March

multinationals open outlets, a measure

punished the Congress party-led coalition

31, from 4.4 per cent in the previous 12

the BJP opposes.

for slowing growth, graft and Asia’s second-

months, the International Monetary Fund

fastest inflation.

predicted last month. The government

expectations that he’ll speed up projects,

estimates that India’s gross domestic

reduce bureaucracy, ease labour laws and

product grew 4.9 per cent in the 12 months

sell stakes in state-owned companies. n

Jim O’Neill, former chairman of Goldman Sachs Asset Management and inventor June 2014

The strength of Modi’s win raises

Notebook Numbers Game

REUTERS

12

$12.5

billion is the current net

worth of Alibaba chairman Jack Ma. That is an increase of $8.9 billion year-to-date, thanks to the company preparing for an initial public offering.

$28.5

billion is the

13

thousand tons of garbage is generated by Hong Kong on a daily basis as per a Bloomberg report.

The World In Figures

worth of a

three-part transaction that

VODACOM BUYS TATA UNIT

Samsung of violating patents on

Vodacom Group, the

smartphone features.

wireless operator with the most South African customers,

billion is the

A$1.14

agreed to buy local internet-

takeover

provider Neotel from India’s

bid made by Chinese steel

Tata Communications for

giant Baosteel Resources and

$676 million.

Vodacom is increasingly

has drug makers Novartis,

its Australian partner Aurizon

GlaxoSmithKline and Eli

Holdings for Australian explorer

focused on small- to medium-

Lilly & Co swapping assets

Aquila Resources. If accepted,

sized business customers and

so that each can focus on

it could help break the grip of

expanding data services to

largest in terms of

Rio Tinto and BHP Billiton on

offset declining revenue from

purchasing power

Australia’s iron ore exports.

its domestic voice division.

their specialty and increase profits. Novartis will focus

3rd

on cancer drugs, GSK on

parity (PPP) ranking scored by

vaccines and Lilly on

India in the latest World Bank

animal health.

report sees Japan displaced.

The latest round of the bank’s

3,280

Neotel will help Vodacom add billion has

$5.44

internet users as it competes

been spent on

against South Africa’s biggest

marketing and promotion efforts in

fixed-line operator, Telkom

feet

International Comparison Program

the past 20 years by Dubai-based

SA, and MTN Group, Africa’s

height

ranked India after US and China.

Emirates airline. Emirates has

biggest mobile-phone company.

of The Kingdom Tower

The last survey in 2005 had

sports partnerships with the FIFA

Mobile operators around

in Jeddah is set to dwarf

placed India in 10th place.

World Cup Brazil, major football

the world are turning to fixed-

teams, a global partnership with

line assets that allow them to

million patent

$119.6

Formula One, and sponsors a

sell a wider range of services

verdict issued

whole range of events including

and carry data traffic more

against Samsung marks the

the Dubai World Cup and Dubai

efficiently. Vodacom’s parent,

$1.23 billion and it will

latest episode of the patent battle

International Film Festival.

England-based Vodafone

require approximately

between Samsung and Apple.

Group, last year bid for Kabel

5.7 million square feet

The amount is just 10 per cent of

Deutschland, a German fixed-

of concrete and 80,000

the $2 billion Apple had sought

line telephony, cable TV and

tonnes of steel.

at the trial, where it accused

internet-access service provider.

the Burj Khalifa in Dubai – the current world record holder. The estimated cost of the tower is

Portfolio

13

Tesla is California’s Top Auto Employer operations have 1,802 California employees.

Toyota has been ousted by Tesla Motors as

laying down new plants. Texas and other

California’s biggest auto-industry employer.

US states are luring manufacturers with

According to Tesla, it now employs more

promises of lower taxes and less red tape.

has witnessed the booms and busts of

than 6,000 people in the state and will

Tesla is already a bigger local employer

California carmaking. Built by General

add at least 500 more workers by year’s

than many high-growth California-based

Motors in 1962, the 5.5 million-square-

end. Toyota Motor Corporation, the world’s

technology companies. At the end of 2013,

foot plant once built thousands of

biggest automaker, has 5,300 direct

according to an annual filing, Tesla had

gasoline-burning vehicles.

employees in California.

5,800 employees worldwide – with about

GM closed the site in 1982 and

90 per cent of those in California. Twitter,

reopened it two years later in a joint

Officer Elon Musk, Tesla is the rare

according to recent filings, has 3,000

venture with Toyota. Shortly after GM’s

company doubling down on making

employees worldwide and Facebook

2009 US-backed bankruptcy shut the

products in California, which has

about 7,000. Honda Motor Company

plant again, Tesla snapped it up for a

relatively high labour and energy costs

said it has about 2,500 direct employees

modest $42 million and retooled it to

and stiff environmental guidelines for

in California. Hyundai and affiliated

build electric cars.

Led by billionaire Chief Executive

Tesla’s sprawling factory in Fremont

Yahoo! Gets Firepower Yahoo is selling 208 million shares, or

string of startup acquisitions with web

about 40 per cent of its Alibaba stake, in

companies that can generate more

the Chinese internet company’s upcoming

visitor traffic.

initial public offering, and could generate

Yahoo owns 523.6 million shares,

in excess of $10 billion in the process.

or a 23 per cent stake, in Alibaba, the

That would more than double Yahoo’s

remaining holdings from a $1 billion

cash stockpile.

investment in 2005. Mayer and investors

Yahoo CEO Marissa Mayer, who is

will still benefit from Alibaba’s steady

almost two years into a turnaround effort

growth, as Yahoo is keeping 60 per cent

that’s failed to produce much sales or

of its shares.

profit growth, will have to decide how to

Yahoo’s net revenue is expected to

deploy the capital. She could return cash

increase less than two per cent this year

to shareholders through a buyback or dividend, or focus on expansion through acquisitions. Making the right choice is critical, as the payout offers Mayer

Yahoo CEO Marissa Mayer

rivals Google and Facebook.

Yahoo could purchase public companies

to $4.5 billion, a sixth consecutive year of little or no growth. Meanwhile, the overall digital-ad market should jump 15 per cent in 2014, according to EMarketer, with

her best shot yet at narrowing the ever-

including AOL, which could help deliver

Yahoo’s share falling to 2.5 per cent from

widening gap between Yahoo and web

sales growth. Mayer may also add to her

2.9 per cent.

June 2014

14

Notebook DUBAI EVENT: 2ND MIDDLE EAST SPORTS EVENT SUMMIT WEBSITE: MESPORTS.IIRME.COM DATE: 2-4 JUNE VENUE: THE ADDRESS HOTEL This summit will address key issues such as costs, policies and communal benefits from hosting major sporting events. Leaders from sports organising committees, government bodies, federations, sponsors, agencies and suppliers will have the opportunity to hear from industry experts and trendsetters. Alongside presentations from top leaders in sports there will be workshops to share techniques and tips on preparing a winning bid and understanding sports law in the Middle East.

EVENT: GISEC (GULF INFORMATION SECURITY EXPO & CONFERENCE) WEBSITE: GISEC.AE DATE: 9-11 JUNE 2014 VENUE: DUBAI WORLD TRADE CENTRE The second edition of GISEC will explore the business opportunities that relate to the cyber security market, with a focus on global threats against systems and personal networks. The conference will draw over 3,000 trade visitors from 51 countries and more than 100 exhibitors from leading international companies and brands. There will be a series of thought provoking presentations and product demonstrations to raise security awareness.

DUBAI

United Arab Emirates

EVENT: MENA 13TH FOREX SHOW WEBSITE: MEFOREXEXPO.COM DATE: 9-10 JUNE 2014 VENUE: RITZ CARLTON DIFC This two-day event involves retail foreign exchange traders and investors. More than 1,000 investors will gain from ample opportunities to network over coffee breaks, lunch meetings and award dinners. Attendees also benefit from staying abreast with the latest development in Forex trading, access to a wide choice of brokers, and attending workshops offering tips on successfully achieving trading goals.

EVENT: BANKING TECHNOLOGY MIDDLE EAST & NORTH AFRICA WEBSITE: BANKINGTECHMENA.COM DATE: 8-10 JUNE 2014 VENUE: PARK HYATT, DUBAI Get up-to-speed with the future of innovations in banking services and the role of IT in facilitating that change. High on the agenda are topics that explore opportunities for cross selling on mobile platforms, supporting the need for technological innovation in order to facilitate the growth of Islamic Banking in the MENA region, and understanding the latest cyber security risks and defining solutions.

EVENT: INDIAN PROPERTY SHOW WEBSITE: INDIANPROPERTYSHOW.COM DATE: 12-14 JUNE 2014 VENUE: DUBAI WORLD TRADE CENTRE The popular Indian property exhibition is back with the latest releases from 150 developers exhibiting 500 projects and more than 40,000 properties. Over 17,000 visitors are expected to benefit from the vast opportunity the show provides in bringing together estate agents, developers, solicitors, banks and other professionals all under one roof. For expert advice on all aspects of buying or investment don’t miss the many property and investment seminars addressed by industry gurus, international fund managers and legal advisers.

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Observer

17

BUSINESS NEWS IN BRIEF

The play Union tells the story of Scotland’s parliamentary vote to dissolve itself and join the Kingdom of England.

Scots Ponder Independence

The vote for Scottish independence on September 18 is shaping up to be a tight contest, report Steven Erlanger and Katrin Bennhold.

union camp a clear, though shrinking lead.

For the independence camp it is in many ways a race against time: Over the last six months the momentum has shifted towards independence, but at least one-sixth of Scottish voters in recent polls have said they were undecided or refused to answer.

THE ROYAL LYCEUM THEATRE

it now, he said, “as a political act, to

in Edinburgh has a modest hit on its

confront Scotland with itself.”

hands, a slightly scabrous play that tells the story of Scotland’s parliamentary vote to dissolve itself and join the kingdom of

Scottish independence, on September 18.

Thomson calls himself “one of the great

time, it would be straightforward,” said Jean Urquhart, an independent member of the Scottish Parliament from the Highlands and Islands who was in the

undecided.” After each performance, there

audience. “As it is, it will probably be

is an informal poll among the audience,

very close.” Urquhart, an advocate of

English as conniving, Queen Anne as a

with a late-night rush to vote in the ballot

independence, was elected as a long-

ravenous simpleton and the Scots who

boxes set up in the foyer, asking whether

time member of the governing Scottish

voted for union as having been bribed

the union 307 years ago had been a good

National Party, but as a supporter of

by the English and their agents, who

idea – “Aye” or “Nae.”

nuclear disarmament, left the party in

England in 1707.

Union, by Tim Barrow, depicts the

included Daniel Defoe. There is much

© 2014 NEW YORK TIMES NEWS SERVICE

Barrow says he will vote “yes,” for

“If this referendum was in five years’

“Nae,” John Menzies decided, popping

October when it reversed its policy and chose to remain a member of NATO.

to tug at the heartstrings of the Scots: a

his theatre ticket into the designated

passionate poor Scottish bard, perfidious

slot. “We should never have sold out our

Englishmen, cynical aristocrats and

country in the first place, never,” said

about Scottish independence, too, with the

almost as much whisky as rain.

Menzies, 46, a graphic designer. “Luckily,

party also advocating use of the British

we will soon get a chance to set that right.”

pound after independence, instead of the

Scotland votes whether to regain its

The votes for independence seemed to

euro, despite statements by all the British

independence, the play has received

just outnumber those against, reaching a

parties that an independent Scotland

mixed reviews, which its director, Mark

little bit higher in the clear ballot boxes.

could not be allowed to use the pound.

Thomson, described as “up and down,

But in real life the balance is still the other

Would an independent Scotland be a

from cardiac arrest and back.” He staged

way, with every poll so far giving the pro-

member of the European Union? Use the

Having opened just months before

June 2014

Such shifts have caused some doubts

18

Observer British pound? These questions, which

Scottish novelist Alasdair Gray: “Work as if

the Scots as “too small, too poor, too

depend on the decisions of others, cannot

you live in the early days of a better nation.”

stupid,” Fraser said. “It plays right into

be easily answered.

With the polls tightening, the former

But for Elaine Jenkins, who works there, the debate is getting uncomfortably hot,

the ‘yes’ campaign.”

The pro-union campaign has pulled

Labour prime minister Gordon Brown

one reason the centre has decided to pull

its own stunts, one of them a plea from

spoke in Glasgow in April in defence of

back from debate-related events. “People

David Bowie, who has some Scottish

the union, arguing that Scotland is better

can get downright nasty about it,” she said.

ancestry. “Scotland stay with us!” was his

off economically inside the United

Jenkins will vote “no” in September, she

message to the BRIT Awards ceremony

Kingdom, especially in terms of pensions

said. She feels both Scottish and British

in February. Bowie could not attend the

and social welfare.

and will not be bullied into giving up

ceremony, but asked model Kate Moss,

either identity. “On a worldwide scale,”

who was dressed as his alter ego, Ziggy

she said, “we’re better off as the UK.”

Stardust, to deliver his speech.

Sowing doubt about the strength and viability of an independent Scotland’s economy is at the centre of the anti-

But Malcolm Fraser, an Edinburgh

Prime Minister David Cameron, who

independence campaign, known as “Better

architect who designed the storytelling

was watching the ceremony live on

Together.” But the “no” campaign emphasises

centre’s modern building, could not

television, said he had let out “a little cry

the negative, and the sense that the English

disagree more. A fervent believer in

of joy” upon hearing Bowie’s message,

are patronising the Scots as ineffectual and

independence, Fraser is on the board of

though not everyone was impressed.

incompetent also feeds the independence

the Radical Independence Campaign.

Bowie soon found his Twitter and

campaign, stirring indignation.

“The way forward is to be small, vigorous,

Facebook pages flooded with vitriol and

independent and trade with everyone,”

comments like “Go back to Mars.”

Evidence of the debate is everywhere, with signs on shop windows displaying

he said. He puts his faith in “a very

the preference of the owners, and stickers

sophisticated electorate” in what he calls,

the popular and grumpy Inspector John

like “End London Rule!” plastered to

happily, “a mongrel nation.”

Rebus and his better-adjusted detective

sidewalks. The referendum, open to

People have become afraid of the

Ian Rankin, a novelist who created

sergeant, Siobhan Clarke, is one of

anyone registered to vote, is binding and

passions stirred by the debate, but Fraser

Scotland’s stars. Rankin seems genuinely

need pass by only one vote.

said they should not be afraid of that.

conflicted about how to vote.

Bookstores feature volumes on Scottish

Britain is undergoing “an inevitable

“The heart says, ‘Go for it,’ the head

culture and history, community centres

unravelling of empire.” It was time

says, ‘You need some answers first,’”

are planning summer history classes and

Scotland becomes “a bit more Danish,”

Rankin said.

seemingly every segment of society has its

saying goodbye to England’s more right-

own campaign for independence, many

wing politics, he said.

supported by the well-organised Scottish

The pro-union campaign thinks of

But how would his main characters vote? “Rebus would vote no,” Rankin said.

“But Siobhan would vote yes.” n

National Party, led by Alex Salmond.

There are “Yes” groups for mothers, students, seniors, small businesses and even for taxi drivers (“Cabbies for Yes”).

Iluta Stivrina, 24, moved here four years ago from Latvia. She loves it here, but thinks many Scots do not know what they are really voting for. “I know all the problems of independence for a small country,” she said.

At the Scottish Storytelling Centre, which includes a cafe, theatre and the medieval residence of John Knox, the father of Scotland’s reformation, the shelves creak with books about Scotland. Chiselled into the modern stone entry is a line from

Theatregoers vote in an informal poll on whether they would have supported Scotland’s 1707 union with England.

Portfolio

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20

Observer O N E 2 W AT C H

Mark Fields

TEXT: HILDA D’SOUZA

Ford Motor Company, the second-largest US automaker, has promoted its chief operating officer Mark Fields to replace CEO Alan Mulally, 68, when he retires on July 1.

Fields, 58, will take charge of a Ford Motor Co. that has come up a long way since its near-bankrupt days in 2006.

Outgoing CEO Mulally has been successful in securing the company’s future by cutting cost, and by taking risks such as raising a $23 billion loan against its US manufacturing plants.

He also expanded business ventures in China and focused on fuel-efficient models.

Analysts note that Fields will have a tough act to follow in keeping up the momentum set by Mulally. However, the board and investors are confident that Fields is more than qualified for the task.

Fields, born in Brooklyn, New York holds an MBA from Harvard. He joined Ford in 1989 after a short stint with IBM. Moving up the ranks he showed a broad understanding of the intricacies of the auto business and is credited with having engineered a few turnarounds in that time.

In 2000, at age 38, he was placed as CEO of Japanese company Mazda Motor Corp, in which Ford then had a controlling stake. He cleaned up Mazda’s corporate bureaucracy, slashed jobs, streamlined the network of suppliers and rebuilt Mazda’s product line-up by introducing sporty cars like Mazda 6 and Mazda 3 which later became the basis for many Ford vehicles. He went on to turn around Ford’s US division and European business in the same fashion. Bill Ford, the company’s executive chairman, has acknowledged that, “Every job Mark’s done he’s done very well. Mark grew and rose to every challenge and he became a battle-tested executive through it all.”

Bill Ford also believes that Fields, given his age, may be in a position to lead Ford into an era in which cars could move by “auto-pilot platooning on highways.” “We’ll probably always be making cars and trucks, but we also have to venture into alternate forms of mobility. Cars could be part of the solution, too. They just may look different and be propelled differently than they are todays” Ford said.

Investors and the board believe the way forward for Fields will be to keep Ford on a profitable path as it powers rapidly into Asia and other world markets. He needs to push aggressive growth in China, restructure operations in Europe and South America, and rejuvenate the flagging Lincoln Luxury brand. His task includes reinforcing quality as Ford rolls out a record 23 new models worldwide this year.

Apple and Google Ceasefire The two Silicon Valley technology giants have declared a ceasefire in their intellectual-property wars. Apple and Google said they are dropping lawsuits against one another and will work together to reform patent law.

The agreement signals a de-escalation in hostilities between two companies that have filed about 20 lawsuits against each other in the US and Europe and compete fiercely on many technology fronts. Apple’s iOS software and Google’s Android power the majority of the world’s smartphones and tablets and both are seeking to keep their pre-eminent positions in those growing markets.

“Apple and Google have agreed to dismiss all the current lawsuits that exist directly between the two companies,” they said in a joint statement. “Apple and Google have also agreed to work together in some areas of patent reform. The agreement does not include a cross license.”

While the agreement settles differences between Apple and Google’s Motorola Mobility over basic patents, Apple remains embroiled in litigation with Samsung, the biggest maker of Android smartphones.

Google and Apple can now cooperate on one thing they agree on: curbing lawsuits against them by patent-licensing firms.

Apple was the most-sued company last year when it came to patent cases, and Google was No. 4, according to a study by Lex Machina, a California-based legal analysis company.

Portfolio

21

Cyprus May Offer Gas Alternative Cyprus, which has proven reserves of as

capital expenditure of ¤6 billion to

much as six trillion cubic feet of natural

¤10 billion, and Cyprus is in talks with

gas, is looking to find another four trillion

“large financial institutions which have

to five trillion cubic feet by drilling in

expressed an interest in participating,”

deep waters off the eastern Mediterranean

Lakkotrypis said.

island this year.

If sufficient gas reserves aren’t found,

If such a discovery is made, it will

other options, including pipelines to GETTY IMAGES

allow Cyprus to proceed with plans for a liquefied natural gas terminal. An LNG plant on Cyprus could also process gas

existing plants in neighbouring countries, are being explored.

Energy is one of the main potential

from elsewhere in the Levant Basin, an

said that Cyprus will have “a pretty

growth sources for the island-nation’s

area that may hold 122 trillion cubic feet

good idea” of its gas and hydrocarbon

economy, which is mired in deep

of gas, and ship it by sea to markets in

reserves within about 12 to 15 months, as

recession, following a ¤10 billion

western Europe, where supplies are now

companies including Eni SpA, Korea Gas

international bailout that came with

threatened by the crisis in Ukraine.

Corp., and Total SA start exploration.

strict austerity measures and included the

Energy Minister George Lakkotrypis

An LNG plant would require upfront

imposition of losses to bank depositors.

Farmed Fish Consumption Reaches Record Humans have never eaten so much fish and other seafood, but nearly half of it is no longer caught wild but is farmed, says the United Nations. This increases hopes for fishing hitting sustainable levels as the rise in aquaculture decreases overexploitation of wild stocks.

New figures from the Rome-based Food and Agriculture Organisation (FAO) indicate that while around 80 million 12, global aquaculture production set another all-time high at more than 90 million tons, including nearly 24 million tons of edible plants like seaweeds.

GETTY IMAGES

tons of fish were caught “wild” in 2011-

biologically sustainable levels. Of these,

of people living near coasts and fish

fully-fished stocks – meaning those at or

farming’s ability to keep up with

10 million tons of aquatic food in 2012

very close to their maximum sustainable

population growth has seen per capita

compared to the previous year, says

production – account for over 60 per

fish consumption soar from 10kg per

the report. But the UN was upbeat on

cent and underfished stocks about 10

person in the 1960s to more than 19kg

global fish stocks, identifying a marginal

per cent”, said a spokesman. “This is a

in 2012. It has also led to nearly 10-12

decrease from 30 per cent to 28.8 per

reversal in the trend observed during

per cent of the world’s population, or

cent in the over-exploitation of the

the past few years, a positive sign in the

over 700 million people, now depending

stocks which it assessed. “71.2 per cent

right direction.”

on fisheries and aquaculture for their

In total, the world harvested an extra

of the fish stocks are being fished within June 2014

The rapid growth in the number

livelihoods, say the authors.

Observer The World

COMPILED BY HILDA D’SOUZA

Top 10 TOP 10 COUNTRIES ON THE GLOBAL ENABLING TRADE INDEX 2014 The Global Enabling Trade Report assesses the quality of policies, infrastructures and services facilitating the free flow of goods over borders and to their destinations.

RANK 1 2 3 4 5 6 7 8 9 10

COUNTRY Singapore Hong Kong SAR Netherlands New Zealand Finland United Kingdom Switzerland Chile Sweden Germany

VALUE (SCALE OF 1-7) 5.9 5.4 5.3 5.2 5.2 5.2 5.2 5.1 5.1 5.1

SOURCE: WORLD ECONOMIC FORUM

COUNTRY United States China Germany Japan Netherlands France United Kingdom Republic of Korea Hong Kong SAR

10

Italy

ENABLING TRADE RANKING 15 54 10 13 3 6 7 30 2 47

SOURCE: WORLD ECONOMIC FORUM

COUNTRY Switzerland Singapore Finland Germany United States Sweden Hong Kong SAR Netherlands Japan United Kingdom

SOURCE: WORLD ECONOMIC FORUM

According to the Sunday’s Times Rich List it has been an

‘astonishing’ year for the richest Britons who saw their fortunes rich elite was £450 billion.

The wealth of the top 1,000 has doubled since the financial crisis, rising from £258 billion in 2009. The combined fortune of Britain’s richest 1,000 people is equivalent to a third of the nation’s economic output.

This has raised the ire of both the Labour Party and Oxfam.

According to government figures working people have continued to face a cost-of-living crisis and are £1,600 a year worse off since 2010. Britain’s richest one per cent have accumulated as much wealth as the poorest 55 per cent.

TOP 10 ON THE GLOBAL COMPETITIVENESS INDEX 2013–2014 The Global Competitiveness Report 2013-2014 assesses the competitiveness landscape of 148 economies, providing insight into the drivers of their productivity and prosperity.

RANK 1 2 3 4 5 6 7 8 9 10

UK’s Richest Hit New Highs rise 15.4 per cent to £519 billion. Last year the worth of Britain’s

TOP 10 OF WORLD’S LARGEST TRADERS RANK 1 2 3 4 5 6 7 8 9

GETTY IMAGES

22

SCORE (1-7) 5.67 5.61 5.54 5.51 5.48 5.48 5.47 5.42 5.40 5.37

To be considered for the list this year, a minimum of £85 million was required – compared with £80 million in 2008, before the crash, and £75 million last year. To get into the top 500, the rich needed £190 million, up from £160 million last year.

The compilers of the rich list also found that the number of billionaires living in Britain had risen to more than 100 for the first time. Britain has 104 billionaires – more than triple the number a decade ago – who share a fortune of more than £301 billion. This means Britain has more billionaires per capita than any other country, while London’s total of 72 sterling billionaires is more than any other city in the world.

The list showed the Queen had a good year, adding £10 million to her personal fortune, and is now ranked 285 with £330 million.

Portfolio

Commentary

24

JOE SHARKEY

China’s Big Jet Love IN THE UNITED STATES, PUBLIC

been in a slow recovery, and will account

reaction to the corporate use of business

for $250 billion in sales from 2013 to

jets can be scathing when instances of

2023, according to Honeywell’s business

obvious excess become publicised, such as

and general aviation division. In its

the day in 2008 when the top executives

most recent 10-year forecast, Honeywell

of Detroit’s Big Three automakers each

said that bigger, faster, more expensive

used a private jet to fly to Washington to

long-range jets would account for 70 per

argue for $25 billion in taxpayer bailouts.

cent of new expenditures worldwide on

But in China attitudes about private jets seem to be different. While forecasters

said, the total number of business jets has

had long assumed midsize and smaller

grown about 12 per cent annually over the

jets would prevail as China’s business

past five years, where large-cabin, long-

aviation market expanded, that has not

range jets accounted for 77 per cent of

been the case.

total sales.

Instead, Chinese buyers are opting

Figures from the General Aviation

mostly for heavy metal jets – big, long-

Manufacturers Association show marked

range luxury jets that can cost $50

global shifts underway in the market

million or more before extras like fancy

for business jets. In 2007, the United

cabin fixtures.

States and Canada accounted for 58.3 per

A big jet is considered a big status

cent of the 1,136 business jets delivered

Chinese buyers prefer big, long-range luxury jets that cost $50 million or more.

And he pointed to other obstacles in

symbol. The main allure is longer range.

worldwide. But there has been significant

the region. “In China, trying to get from

A top-end Gulfstream G550 – price tag

growth in the Asia-Pacific region, which

point A to point B by business jet can be

$56 million before cabin fittings – can fly

accounted for 11.9 per cent of shipments

tricky,” Foley said. “In the US, you can

about 12,590 kilometres non-stop, easily

of business jets in 2013, up from 4.2 per

just file your flight plan and be away

covering the distance between Shanghai

cent in 2007. In Europe, the share fell to

within half an hour. Not in China. It used

and New York.

16.6 per cent in 2013 from 24.9 per cent

to be days, but it’s still hours to get your

in 2007.

flight clearance.

“China is a pretty big land mass, and

In the Asia-Pacific region, transport

So a well-heeled tycoon might buy a

outside of China, you need the legs to get

ministers from 21 countries have adopted

$60 million luxury jet in China but find

there,” said Brian Foley, whose company,

a plan to ease the way for business

that using it is more complicated than

Brian Foley Associates, provides market

aviation, which is often hampered by strict

in many countries. Still, that is where

analysis on the global aerospace industry.

bureaucratic rules and – in many cases –

the market preferences lie, and business

by military control of national airspace.

culture in a rapidly developing economy

if you want to go to a business centre

But cultural differences also favour the market for the big luxury jets, it seems.

“In China,” Foley said, “if you’re a © 2014 NEW YORK TIMES NEWS SERVICE

business jets. Throughout Asia, Honeywell

“In the US, there are about 5,000 airports that can be used by business

may explain part of that, Foley suggested.

“Some of these big jets that are bought

successful business person, you generally

jets,” said Foley, adding that in China the

are pretty much parked out on the ramp

don’t mind flaunting that and making

number stood at around 200 airports.

most of the time,” he said, adding that the

your compatriots aware that you’re doing

“And complicating that is the fact that

owners were often limited to impressing

well. And one way to do that is to buy the

there aren’t a lot of services for fuel

associates and clients on the ground,

biggest and best business jet.”

or comfort, or any of the things you

rather than at 40,000 feet.

Global sales of business jets, which plunged during the financial crisis, have

expect in a longer-established business aviation market.”

“We kind of refer to that as ramp jewellery,” Foley said. n Portfolio

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Profile

26

THE RISE OF A TYCOON When Alibaba, China’s largest online retailer, goes public later this year it will elevate its founder Jack Ma to the highest ranks of technology industry titans, report Neil Gough and Alexandra Stevenson.

Portfolio

27

HE FIRST TIME JACK MA USED

is remarkable for not following the

“beer” and “China” but found no results.

traditional script. Unlike Facebook’s

Intrigued, he created a basic web page

Mark Zuckerberg, Apple’s Steve Jobs or

for a Chinese translation service with

Microsoft’s Bill Gates, Ma, 49, has no

a friend. Within hours, he received a

background in computing and professes

handful of e-mails from around the world

not to understand technology. Raised

requesting information.

during China’s Cultural Revolution, Ma

It was an introduction to the power of the web that would drive Ma to create the Alibaba Group four years later.

Today, Alibaba is China’s largest online

began his career as an English teacher.

Instead, his role at Alibaba has always been as the company’s main strategist, a flamboyant motivator in chief to his staff

retailer, with merchandise volumes that

and a relentless opponent to those who

lag behind only Wal-Mart, worldwide.

have competed against him. Alibaba’s two

Last March, Jack Ma rose to a podium in

main websites, Taobao Marketplace and

front of a crowd of international investors,

Tmall.com, now account for 60 per cent

who met him with thunderous applause.

of the packages shipped through the

“E-commerce in the USA is like a dessert,”

Chinese postal system.

he said in fluent English, his cadence

“He effectively represents millions of

calm and measured. “But in China ...

people who now depend on Alibaba for

e-commerce is the main course – the

their livelihood,” said Duncan Clark, who

only way to shop.”

has known Ma since the late 1990s and is

Ma will find out soon how much value

the chairman of BDA China, a consulting

investors are prepared to put on his

firm in Beijing. “That’s a constituency.

version of e-commerce. The e-commerce

He’s a politician with a small ‘p.’”

giant is moving forward with plans for

June 2014

Ma’s ascent to dot-com billionaire

the internet, in 1995, he searched for

He has also proved to be a serial

a stock sale that is expected to rival

disrupter – an outsider with a knack for

Facebook’s $16 billion offering two years

creating new markets by reimagining old

ago. If successful, the deal would help

industries like retailing or finance. Alibaba

vault Alibaba and Ma, who owns 8.9 per

and Ma are shaking up some of China’s

cent of the company, to the highest ranks

most staid, state-dominated industries,

of technology industry titans. According

starting ventures in banking and finance

to Forbes, Ma’s fortune has soared by

and mobile phone communications. He

$8.9 billion in the past 12 months to

is even moving into the department store

$12.5 billion.

business and film production.

Profile

28

“Innovation in many industries has

Alibaba called Crocodile in the Yangtze,

out on his own again, to start Alibaba.

been triggered by outsiders,” Ma wrote last

Porter Erisman, a Mandarin-speaking

June in an opinion article in The People’s

American who worked at Alibaba from

THE COMPANY’S first site, Alibaba.

Daily, the official newspaper of the

2000 to 2008, presents footage of one

com, was a business-to-business

Communist Party – an unusual move for

of many visits Ma paid to officials in

marketplace that connected Chinese

a private sector entrepreneur.

Beijing in the mid-1990s. Ma appears

exporters with overseas buyers.

He was putting the country’s state

in a button-down blue denim shirt,

In 1999, the company lured Joseph Tsai,

banks on notice. Publication of the article

sitting over a boxy old laptop computer

a Taiwan-born former lawyer who had

coincided with the start of Yu’e Bao, a

in a smoky government office and

been educated at Yale and was working in

high-interest money market product that

explaining his business.

a private equity business in Hong Kong.

Alibaba initiated to attract investment from

“Nowadays, foreigners can use

its customers’ online payment accounts. As

computers from any desktop to find

of February, 81 million people had signed

products from around the world,” Ma

up for the product, which had $40 billion

explains. “They can order directly from

consumer-to-consumer platform, in

in assets under management.

Hong Kong, Taiwan, Singapore, but they

2003, at a time when eBay’s Chinese unit

Ma struggled in his early efforts to get

can’t order anything from China because

dominated the business. Fighting for

government support for his new venture.

right now there’s nothing from China on

market share, Ma decided to keep Taobao

“My father said if you were born 30 years

the internet,” he says. “I hope the various

free, although it was haemorrhaging money.

ago, you’d probably be in a prison, because

departments will support us.”

the ideas you have are so dangerous” he told

But Ma’s pitches were rebuffed. He soon

Together, Ma and Tsai brought in Goldman Sachs and SoftBank as investors.

Ma began Taobao, the company’s

“From a Wall Street investors’ perspective, he was willing to run Alibaba

the American TV interviewer Charlie Rose

left China Pages in 1997 to work at a unit

into the ground to defeat eBay,” says

in 2011. Both men laughed at the irony.

of China’s Commerce Ministry helping to

Erisman, the filmmaker. “The only thing

create websites. In early 1999, he struck

worse than a smart competitor is a crazy

In a memoir-style documentary about

Jack Ma hugs Jonathan Lu, Alibaba’s new chief executive, during a celebration of the 10th anniversary of Taobao Marketplace in 2013.

Portfolio

29

one who is willing to just spend all their money with no hope of making profit.”

At a news conference in October 2005, Ma told reporters that Taobao had gained nearly 70 per cent of the market share for online shopping in China. “Pretty soon we’ll be the only one left. eBay’s days are numbered,” he said. In 2006, eBay announced that it was effectively leaving the

“E-COMMERCE IN THE USA IS LIKE A DESSERT,” HE SAID IN FLUENT ENGLISH, HIS CADENCE CALM AND MEASURED. “BUT IN CHINA ...

E-COMMERCE IS THE MAIN COURSE – THE ONLY WAY TO SHOP.”

Chinese market and folding its operations into an internet company controlled by Li

with Yahoo formed in 2005 was briefly

a government license for Alipay, because

Ka-shing, the Hong Kong billionaire.

derailed. Ma transferred one of Alibaba’s

Beijing didn’t want foreign investors

“I had always wished that I was born in a

most profitable businesses, the online

controlling online payment businesses in

period of war. I could have been a general,”

payments unit Alipay, into a separate

China. “If Alipay were illegal or didn’t get

Ma once said of his youth. “I thought about

business under his control without formal

the license, Taobao would be paralysed,” Ma

what I could have achieved in war.”

approval from Alibaba’s board, where

said at the time. “If Taobao were paralysed,

SoftBank and Yahoo had seats.

how could Alibaba reform and develop?”

Ma has had his share of boardroom battles. In 2011, an initial partnership

Ma argued that it was necessary to get

Alibaba, Yahoo and SoftBank eventually

People walk through the Alibaba Group’s headquarters in Hangzhou, China.

June 2014

Profile

30

Shrewd Investments In June 2001, a South African media company called Naspers paid $34 million to acquire a big stake in a struggling Chinese startup. Today that startup – Tencent – is an internet colossus worth nearly $120 billion, far more than web pioneers like eBay or Yahoo. And Naspers is $40 billion richer because of its well-timed bet.

Taobao was so successful that eBay effectively left the Chinese market.

Yahoo and Japan’s SoftBank could score a total of $75 billion on their shares in Alibaba in the initial public offering.

The venture capital firm Draper Fisher Jurvetson owned nearly a third of Baidu, the Chinese internet search engine, when it went public in 2005; its shares rose 354 per cent on its first day of trading.

The next day, he announced that he had been appointed the chairman of the Nature Conservancy’s board of directors for China. He has grown increasingly concerned over rampant pollution of the soil and water in China.

In late April, Ma and Tsai, a co-founder, announced that they would donate shares representing two per cent of Alibaba’s stock – a grant worth several billion dollars – to charitable trusts that would finance initiatives in the environment, medicine In 2007 Alibaba.com launched on the Hong Kong Stock Exchange. It has since been delisted.

and education. Such a large donation is seldom seen in China, and the move was cheered by prominent philanthropists.

settled their differences over the issue.

Xiaoping during 6/4,” Ma was quoted as

Ma “wasn’t the type of person who

saying in Hong Kong’s South China Morning

starts a business keeping 90 per cent of

aggressive approach. In regard to the

Post in July. “As the country’s highest decision

the equity for himself and really hoarding

2011 episode, he compared his decisions

maker, he demanded stability. He needed to

all of the wealth and riches,” said one

to those made by Deng Xiaoping,

make this kind of cruel decision.”

Western executive who has known him

Ma displays few regrets for his

for over a decade, declining to be named

China’s paramount leader during the government’s deadly crackdown on

AS THE company moves toward an

because of his company’s policy against

Tiananmen Square protesters on June 4,

initial public offering, Ma seems focused

speaking publicly about business contacts.

1989, which is widely referred to in China

on his legacy.

as the “6/4 incident.”

He remains a hands-on executive

“In the earliest days, when Alibaba.com was first forming, he was giving equity to

chairman and oversees strategy at

all of the high school students who were

Alibaba incident, no matter if it’s splitting

Alibaba, but in May 2013 he stepped

working with him,” said the executive. “He

off Alipay, at that point, it’s just like Deng

down from his role as chief executive.

was bringing everyone along.” n

“As a company CEO, no matter if it’s the

Portfolio

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Employment

32

W

HEN KOSTAS Polychronopoulos lost his high-paying marketing

position at a telecommunications company in Athens during the height of Europe’s financial crisis in 2010, he exhausted himself for more than a year trying to find work.

But a job proved impossible to find.

He was forced to leave his sunny Athens apartment, sell his BMW convertible and move in with his elderly mother. Soon, he found himself in a place he never dreamed he would be: standing in line at a soup kitchen. “I used to be sought after,” said Polychronopoulos, 49. “But there is no place for me in society anymore.”

Even as signs of an economic recovery emerge in the Eurozone, the human cost of the five-year downturn continues to rise. For tens of millions of Europeans, there will be no easy comeback from nearly half a decade of economic privation and Depression-scale joblessness. A growing number of people, not only in Greece but in other battered Eurozone economies, are caught in the trap of long-term unemployment, drained of savings and living on the economic and social edge.

Greece, of course, has been hit the hardest: Its unemployment rate is still hovering above 27 per cent. But the social challenges are not its alone. In the broader 28-nation European Union, 25.9 million

People eat food received from a communal kitchen.

people remain jobless, out of a potential labour force of about 244 million. Data released in April showed no change in the Eurozone’s 11.9 per cent unemployment rate in February. Spain’s jobless figure was 25.6 per cent, and Italy’s was at a new high of 13 per cent.

Now, in a cascade of recent reports,

© 2014 NEW YORK TIMES NEWS SERVICE

the European Commission, research institutes and economists are warning that rising long-term joblessness and declining incomes are straining government safety nets and swelling the ranks of people excluded from the labour market and mainstream society.

“There is a silent crisis in which a

EUROPE’S JOBLESS SEE LITTLE LIGHT

The European economy is starting to recover, but for the many jobless the outlook remains bleak, reports Liz Alderman.

Portfolio

33

growing number of people are being left

of bailout money, he praised his fellow

behind,” said Jens Bastian, an economist

citizens. “Thanks to the sacrifices of the

who was a member of the European

Greek people,” said Yannis Stournaras, the

who are still struggling might call it too

Commission’s task force for Greece until

finance minister, “we have the luxury to

soon to declare victory.

this year. “People who one or two years

be able to discuss economic growth rather

ago thought the financial crisis was

than fiscal adjustment.”

something that happened only to others

Greece even plans to begin selling

result of bailout-imposed belt-tightening.

But many Greeks like Polychronopoulos

The governments of Ireland, Italy, Portugal and Spain are also forecasting accelerating recoveries, unleashing a

are themselves out of a job or increasingly

bonds for the first time since it became

wave of optimism among international

pushed to the margins.”

the epicentre of the European debt crisis

investors, who have flocked to buy

in 2010 and required the first of its two

their debt. But despite such signs of

positive. When Greece’s finance minister

bailouts. The impending move comes after

recovery, “growth in and of itself will not

in April lauded news that the country had

the government announced in March that

solve the human and social problems

passed economic muster by international

Greece had achieved a primary surplus – a

that have been rising,” said Isabelle

creditors to receive its next allotment

surplus not counting debt payments – as a

Maquet-Engsted, deputy head of social

Politicians prefer to point to the

June 2014

Employment

34

into depression the longer he went without a job. As a consultant, he had spent a 25-year career building marketing and sales networks for several Greek companies, earning about ¤6,000 a month at the peak of his career, a salary that afforded him vacations on the Greek islands and a cosy apartment in central Athens. But when his consulting position suddenly ended four years ago, his selfemployed status made him ineligible for benefits. Money ran low, and soon he and his mother were barely able to afford living expenses, including food.

Even the millions of other unemployed people in Europe protected by the social safety net are receiving reduced benefits. Although EU governments raised spending on the unemployed by an Kostas Polychronopoulos serves food at a communal kitchen he set up after he lost his high-paying marketing position at a telecommunications company.

average of four per cent a year from 2009 to 2012 as the ranks of the jobless swelled, benefits as measured per person have

analysis at the European Commission,

believing that all is now going well and

declined, according to a report in April by

the administrative arm of the European

that, over the next few years, a rising

Bruegel, a research group in Brussels.

Union. “We now have to deal with the fact

economy will lift all boats.” The evidence,

that many people have been affected very

the report said, “suggests otherwise.”

For many, even having a job is no insurance against penury. A European Commission survey warned of a

seriously, and it will be difficult to put PEOPLE WITHOUT jobs who have

deepening income divide in Europe as the

The Organisation for Economic

been looking for one for more than a

proportion of the working poor rises in

Cooperation and Development, the

year account for more than half of the

some EU countries, especially Greece.

association of free market democracies,

unemployed in Greece, Ireland and Italy.

And when jobs are created, many are

puts it more bluntly. It warned that the

Among them was Polychronopoulos,

low-paid, temporary contracts – replacing

them back on track.”

tentative recovery “risks seducing us into

an energetic man who said he slumped

Stefanos Katsifarakis, an anesthesiologist, at the privately run Errikos Dinan hospital, has not been paid on time for three years.

A woman stands next to a sack of potatoes near a food market in the centre of Athens.

permanent positions, which labour laws

Portfolio

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Employment

36

On the Sidelines

The number of unemployed people in the European Union is up by nine million from the precrisis level, though down slightly from the April 2013 peak. Long-term unemployment has soared in the most economically challenged countries of the euro zone.

NUMBER OF UNEMPLOYED

LONG-TERM UNEMPLOYED

Monthly data

As a share of total unemployed Q1 2008

30 million European Union 28 countries

25 20 15

Euro zone 18 E.U. countries

10 5 0

’08

’10

’12

’14

Q3 2013

Greece

69.6%

Ireland

59.2

Portugal

58.9

Italy

57.6

Euro zone

50.6

Spain

50.5

E.U.

48.1

Germany

44.4

France

41.0

Britain

35.2

Note: Long-term unemployed are those unemployed for more than a year.

Source: Eurostat

THE NEW YORK TIMES

often require to come with expensive

N.Y. Times News Service benefits and protections that employers are Date: 4/15/14 Graphic Slug: JOBLESS-ALDERMAN-BSPR reluctant to take on. According to Eurostat, Size: 3.7 x 4 With (BC--JOBLESS-ALDERMAN-BSPR--NYT) theStory: official statistics agency, more than half

of all new jobs in the European Union last year were temporary positions that often did not pay a living wage.

People stand in front of the Greek Parliament during a demonstration after the government announced that Greece had achieved a primary surplus.

Even for some people on permanent contracts, the situation is little better. Many employers racked by the crisis have been unable to pay their workers on time. In Greece, an estimated 800,000 to one million employees have gone unpaid for a month or longer – a problem that has also hurt a growing number of workers in Italy, Portugal and Spain, among other EU countries.

POLYCHRONOPOULOS eventually stopped waiting for a job to materialise and went to work on his own, setting up a communal kitchen he calls Free Food For All. When he began, in 2012, he trolled produce markets and asked vendors to donate potatoes, tomatoes and other food

Volunteers for The Other Person, a communal kitchen, distribute meals in Athens.

toward a giant cooking pot he would set up in the middle of the sidewalk.

in shamed silence. It is an imperative

He pointed to the people who had

he recently discussed in a talk at a

gathered for a meal, including a neatly

serves about 130 rations a day – including

TEDx conference in Kalamata, Greece,

dressed teacher carrying a briefcase,

to Greeks who, like himself, used to live

organised under the international offshoot

whose salary had been slashed to such

well but slid into the social margins. He

of the non-profit TED organisation, which

an extent that he and his family were

himself scrapes by on the donated food he

promotes “ideas worth sharing.”

on the verge of being evicted. “The

Now, with a group of volunteers, he

receives and cooks for others.

“People can fall from grace,”

real crisis won’t be over anytime soon,”

Polychronopoulos said one weekday as

Polychronopoulos said. “The most

group’s food is that people stay and break

he stirred a cauldron in a square near the

important thing is for people who have

bread together rather than eating alone

Acropolis. “They need a gesture of solidarity.”

been affected to maintain their dignity.” n

His only rule for those who share his

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The Haiyatt Suzhou has nothing to do with the Hyatt hotel brand.

IS THE PENINSULA HOTEL IN

WELCOME TO THE

Yangcheng part of the five-star Peninsula Hotels group known for its Rolls-Royces?

Can you accrue Marriott rewards points

HAIYATT Copying Western brands is a common practice in China, as some international hotel brands are discovering, reports Julie Weed.

at the Marvelot Hotel, which includes the Chinese characters for Marriott in its name? Is the Haiyatt hotel in China a Hyatt brand hotel? No, no and no.

Like many Chinese businesses with Š 2014 NEW YORK TIMES NEWS SERVICE

Trademarks

38

names and products closely resembling well-known international brands, hotels that look and sound somewhat familiar to international travellers are popping up in China. So as established chains expand deeper into China, they find that they are competing with reasonable Portfolio

39

REUTERS

Hong Kong’s fivestar Peninsula Hotel is known for its fleet of Rolls-Royces.

similar to a Western brand is valuable.

similar to established successful brands

“The hotel business is expanding rapidly

are viewed more benignly in China.

large cultural and industrial city in eastern

in China,” Sinha said. “Owners of new

“Throughout Chinese history, skilful

China. The hotel offers deluxe rooms,

hotels will use Western-sounding names to

reproduction by artists, poets and crafts

suites, conference rooms, European cuisine

connote better service and quality.”

workers has been highly regarded,” said

facsimiles of themselves.

The Haiyatt Suzhou is in Suzhou, a

and a “Haiyatt Grand Nightclub” – just about everything a business traveller would expect in a Hyatt Hotel, in a city where

The name may even be mistaken for the original.

Last year, a travel agent told Sinha he

William Alford, director of the East Asian Legal Studies Programme at Harvard Law School. The emphasis placed on originality is a Western ideal, he said.

travellers might expect to find a Hyatt. In

was booked at the Shenyang Marriott for

fact, the Haiyatt Suzhou will be joined this

a business trip. When he arrived, Sinha

spring by the Hyatt Regency Suzhou.

was surprised to find he was not checking

Chinese laws and uneven enforcement

This cultural influence, with weak

Western brands are often seen as higher

into a Marriott hotel, but at the Marvelot.

regarding internationally famous

in quality than their Chinese counterparts,

“Local people assume it is a Western hotel

trademarks, has fostered the proliferation

said Kunal Sinha, chief knowledge officer

because it is a big and impressive property,”

of knockoff consumer goods, restaurant

for Ogilvy China, so giving a product,

he said.

chains and hotels.

whether it is a shampoo or a hotel, a name June 2014

Brand names that sound and look

“Copying successful brands is a backdoor

Trademarks

40

scheme to make money, and lots of unscrupulous people are doing what they know is wrong, but one of the reasons they can have some success doing it is that there is cultural ambivalence,” Alford said.

Foreign companies, and more recently some Chinese entities, too, have pressed for better enforcement, but it has been slow in coming, Alford said.

Peninsula is a popular name for hotels in China, even when they are inland. These include the Yangcheng Peninsula Hotel, Guobin Peninsula Hotel and Peninsula Hotel Chengdu Zongfu, none of which are affiliated with the high-end global chain known for its liveried chauffeurs. The chain’s only official hotels in China are in

“Copying successful brands is a backdoor scheme to make money, and lots of unscrupulous people are doing what they know is wrong, but one of the reasons they can have some success doing it is that there is cultural ambivalence.”

Beijing, Hong Kong and Shanghai. Even in Shanghai, the Hengsheng Peninsula International Hotel, which is not part of the chain, is just a 10-minute walk from

and said some domestic hotels tried “to

the Peninsula Shanghai.

boost their value and brand awareness by sharing names with other reputable hotel

representative travelling on business in

chains so they can achieve a make-believe

Shanghai, said he knew the Hengsheng

attachment to those hotels.”

None of the similarly named Peninsula

part of the international Peninsula chain,

hotels in China are five-star hotels, so

but believed it would be an “upscale

experienced travellers who see photos

hotel because of the obvious name

of the property, compare nightly rates,

resemblance.”

look at online reviews or stay there once

He was disappointed to find “so-so

would most likely know the difference.

The Chinese replica of Austria’s UNESCO heritage site, Hallstatt village, in Guangdong province.

Similarly, the Savoy Hotel in Lanzhou, a

REUTERS

facilities and worse-than-average service,”

REUTERS

Peninsula International Hotel was not

A knockoff Lamborghini started life as a Hyundai coupe.

REUTERS

Li Quan, a pharmaceutical sales

Portfolio

41

push too hard because they do not want to antagonise the government and lose access to the Chinese market.

In the case of the Marvelot, the hotel used to operate under a Marriott franchise agreement, and chose to keep the Chinese characters for “Marriott” when the relationship ended in 2006. Marriott pursued legal action to protect its name and had some success. The hotel is not permitted to use Marriott as a standalone word in Chinese, but may use it as part of a name, said Thomas Marder, vice president for global corporate relations at Marriott International. Marriott has 66 hotels in China and plans more.

Haiyatt versus Hyatt may confuse Westerners more than Chinese speakers.

“English speakers may confuse Haiyatt and Hyatt because they sound alike, but the hotel names look and sound different when they are spelled in Chinese characters,” said Wenjun Chen, a real estate broker who Police with confiscated fake wines in the Guangxi Zhuang Autonomous Region.

lives in Seattle and travels to China.

Some guests, though, are confused by the sound-alike names, judging from comments on the travel website TripAdvisor. A few Chinese and English reviews have compared a hotel’s standards to those of a brand of which it is not part.

business hotel with 788 rooms, bears little

A recent guest posted on TripAdvisor

resemblance to the iconic Savoy Hotel in

about being surprised to discover upon

London built in the 1800s.

checking in that a hotel was not a Marriott and being upgraded to the executive floor

THE ESTABLISHED brands are keenly aware of the others.

“We do take steps to protect our

Ayumu Watanabe, a Japanese business traveller staying at the Shanghai Haiyatt

brand,” said Sian Griffiths, director of

Hotel, said he was not bothered that it

communications for the Hong Kong

was not affiliated with the Hyatt brand,

Peninsula Hotel. “However, we also feel

but that the name was “really misleading

that our target customers are sufficiently

and confusing.”

discerning not to confuse the Peninsulabranded hotels with the copycats.”

Farley Kern, vice president for corporate

June 2014

as compensation.

As China develops more of its own valuable intellectual property, including its own hotel and other consumer brands, and

communications for Hyatt, said the

looks toward establishing them worldwide,

company took “this matter very seriously,”

its government will have more of an

and was working within China’s legal

incentive to provide fuller legal protection

channels to address hotel operators that

for trademarks, Alford said. “That may be

use names that might cause confusion.

the time we see the copycats start to go

Still, foreign companies can be reluctant to

away,” he said. n

Investment

42 Travis Kalanick, CEO of Uber, raised additional capital for his car-sharing company.

Portfolio

43

RICH

STARTUPS GET

RICHER Startups, flush with cash from investors, are seeing their values soar before contemplating an initial public offering, report David Gelles and Michael J. de la Merced.

Q

UORA, A QUESTION-AND-ANSWER WEBSITE, DIDN’T need to raise money.

It had barely touched $60 million in venture capital that it accepted just two years ago. Yet

the California company, which has no revenue and just 70 employees, recently announced that it had raised an additional $80 million.

The eye-popping investment – for no obvious immediate purpose – was the latest example of a dynamic that is reshaping Silicon Valley: Startups, already flush with cash, are piling on the investment dollars.

Of the 100 largest venture capital rounds on record, 88 were issued within the past five years, according to CrunchBase, which tracks venture funding. Each delivered more than $50 million to the companies.

“The more capital you have in the bank, the more

© 2014 NEW YORK TIMES NEWS SERVICE

comfortable and confident you can be,” said Marc Bodnick,

June 2014

a former venture capitalist who now runs Quora’s business operations. “It was really that simple.”

Several factors are driving the proliferation of big late-stage investments. Technology startups are staying private longer, venture capital firms are looking to put idle funds to work and institutional investors are chasing returns in fast-growing private companies.

Investment

44

For technology companies eager to achieve the highest possible valuation on the road to a sale or an initial public offering, this means it is easier than ever to raise mega-rounds. Truly, it seems, there can never be too much money in the bank.

At the same time, the flood of money is inflating the valuations of early-stage companies and stoking fears of another dot-com bubble.

“There’s a Silicon Valley expression: Eat when the food is passed,” said Nirav Tolia, chief executive of Nextdoor, which last year accepted $60 million in venture funding despite having plenty of money in the bank. Tolia said that while Nextdoor had no pressing need for the cash, taking the investment gave his company added security and decreased the likelihood that

Among the top investors in fundraising rounds that collected over $100 million are Digital Sky Technologies and Tiger Global Management, which ranked alongside traditional venture capital firms like Andreessen Horowitz and Kleiner Perkins Caufield & Byers, according to CB Insights.

to people briefed on the matter. TPG Growth alone had been prepared to provide up to $150 million in the round, one of these people said.

Lyft recently raised $250 million from the likes of the Alibaba Group of China and Daniel S. Loeb’s investment firm, Third Point – despite being widely regarded as significantly behind the leader in the car service industry, Uber.

Some venture capitalists warn that the current rush of big late-stage funding could reduce entrepreneurs’ discipline. A number of investors have pointed to the troubles of Fab.com, an e-commerce startup that raised $150 million last summer at the tender age of two years.

Amid widespread criticism that the round was too much money too soon, Fab’s chief executive, Jason Goldberg,

it would simply vanish.

defended the move as a way to open

“It’s always good to extend your runway,” he said. “It’s always good to bet on the

cent from last year, according to data from

up new business opportunities. Yet an

furthest-out point.”

CB Insights.

overambitious expansion plan and falling

Late-stage rounds have grown

Earlier in April, Airbnb, the home-

sales led to a wave of employee exits and a painful retrenchment.

enormously over the past few years. The

sharing site, neared a deal to raise as

average size of such investments so far

much as a staggering $500 million from

“We had started to dream in billions

this year was $44.1 million, the highest

investors like TPG Growth, T. Rowe and

when we should have been focused on

level in the past five years and up 77 per

Dragoneer Investment Group, according

making one day simply better than the one before it,” Goldberg wrote in a blog post in January.

Alfred Lin, a partner at Sequoia Capital, conceded that investors were spending less and less time conducting due diligence.

“The speed at which term sheets are being issued is faster,” he said. “We’re playing by slightly different rules than what happened even five years ago.”

One thing that has changed in recent years is the sheer amount of capital available for investment in Silicon Valley startups. Many big venture capital firms have recently raised big rounds, meaning the traditional backers of tech firms are well positioned to write big cheques.

But venture capitalists are increasingly being joined by hedge funds and private equity firms. Among the top investors in fundraising rounds that collected over

Jason Goldberg, CEO of Fab.com, raised $150 million last year when the startup was just two years old.

$100 million are Digital Sky Technologies and Tiger Global Management, which Portfolio

Investment

46

technology stocks is faltering.

In 2008, HomeAway, the real estate website, was planning to go public. But as the financial crisis began, HomeAway executives decided to postpone the IPO. Instead, in November of that year, HomeAway raised $250 million in additional venture capital and resolved not to think about going public for at least two years.

“It allowed us to reset the clock,” said Lynn Atchison, HomeAway’s chief financial officer. The company finally went public in 2011.

HomeAway is not alone. The average age of companies going public today is 10 years, in contrast to the average of just six years in 2000, according to Jay R. Ritter, a Airbnb founders, from left: Brian Chesky, Nate Blecharczyk and Joe Gebbia in a conference room at their San Francisco offices.

professor at the University of Florida.

“Rounds that would have otherwise gotten done in the public markets are

ranked alongside traditional venture

companies like Snapchat and the last-

getting done in the private markets,” said

capital firms like Andreessen Horowitz

minute hotel booking site Hotel Tonight.

Scott Kupor, partner and chief operating

and Kleiner Perkins Caufield & Byers,

“This was impossible 10 years ago,”

officer of Andreessen Horowitz, a venture

said Norm Fogelsong, a partner with

capital firm that is among the most active

Institutional Venture Partners, which

participants in big late-stage rounds.

according to CB Insights.

Also joining the fray are mutual

For venture capitalists, allowing portfolio

funds like T. Rowe Price and Fidelity

has made big investments in companies

Investments. In many cases, such firms

including Dropbox and Snapchat. “There

companies to take on more funding means

are given access to promising startups with

just wasn’t as much money in the venture

their existing stakes can be diluted. In the

the understanding that they would remain

business. It’s happening because it can.”

case of Quora, the new round valued the company at a reported $900 million, more

investors even after an IPO. FOR THE companies receiving the

than double the previous valuation of $400

transforming themselves into so-called

influxes of capital, having so much money

million. That means that while some early

growth capital firms that invest in older

in the bank allows them to control their

investors may have seen their ownership

startups. Coatue Management, for

own destiny, rather than be at the mercy

diluted by the new round, the value of their

example, is planning on raising a $500

of acquirers or the markets.

holdings nonetheless soared.

And some hedge funds are even

million fund devoted to the kinds of investments that the firm has made in

“If someone wants to buy them, they can turn it down and wait for a higher price,”

“When it goes off at a high price, the VC gets to change the price of the other

said Peter Wendell, managing

stock on his books,” said Wendell of

director of Sierra Ventures. “If

Sierra Ventures. The result is that much

the IPO is looking shaky, they

of a company’s gain in value is happening

can say, ‘Look at my balance

before it even goes public.

sheet,’ and wait.”

Box, the cloud storage

“Appreciation that normally would have happened in the public market is

company, has filed to go public

happening in the private market,” said

at a time when, filings show, it

Kupor of Andreessen Horowitz. “This

needs to raise more capital. But

is why we see T. Rowe, Fidelity and

its rival, Dropbox, recently raised

JPMorgan investing. They’re saying,

$250 million and may put off its

‘There’s not a lot of growth for us in the

IPO, especially as appetite for

public market.’” n Portfolio

enjoy responsibly

DOM PÉRIGNON VINTAGE 2004 EACH VINTAGE IS A NEW CREATION DOMPERIGNON.COM

Sustainability

48

OLD WORLD, NEW TECH Cities are upgrading their infrastructure with the latest technology in a bid to save money, raise revenue and increase convenience, reports Mark Scott.

Llibert Serra uses an iPad mini to demonstrate “smart� watering at a park in Barcelona.

Portfolio

49

T

HE STREETS OF BARCELONA offer a glimpse of what the future may have to offer.

Alongside the city’s world-

famous architecture and pristine sandy beaches, sensors attached to trash cans now alert workers when they need to be emptied.

The irrigation systems built into Barcelona’s parks monitor soil moisture and turn on sprinklers when water is needed. And drivers can use a smartphone application to find the nearest available parking spot in the labyrinthine streets.

“It’s crucial that these new technologies are useful to our citizens,” Xavier Trias, Barcelona’s mayor, said in his stately offices, which date from the 15th century. “It’s an important change. We have to create a sustainable system.”

Barcelona is among a number of European cities adopting new forms of technology aimed at improving services.

More important, the investments, including neighbourhood-wide high-speed internet connections and electricity charge points for cars and motorbikes, offer ways to cut energy use and generate income.

The push mirrors efforts in cities including San Francisco and Boston in the United States, which have spent millions of dollars to upgrade their infrastructure.

Other projects have appeared elsewhere, notably Masdar City, a planned high-tech habitat created from scratch in Abu Dhabi.

Yet analysts say Europe, despite being hard hit by the recent financial crisis – and in part because of it – remains a step ahead of the United States in creating efficient, so-called smart cities that combine traditional services like electricity networks with 21st-century technology like internetconnected home appliances.

© 2014 NEW YORK TIMES NEWS SERVICE

“Europe has embraced the concept more

June 2014

than the US,” said Bas Boorsma, a director at Cisco Systems who helps cities upgrade their infrastructure. “It will always require partnerships between the private sector and government, and Europe does that better.”

Given Europe’s economic doldrums (which bring the mixed blessing of

Sustainability

50

Given Europe’s economic doldrums (which bring the mixed blessing of less industrial pollution), many of the Continent’s governments have shifted from an emphasis on big renewable energy projects to saving money, while enlisting the private sector and exploiting the growing business possibilities of smartphones and tablets.

less industrial pollution), many of the Continent’s governments have shifted from an emphasis on big renewable energy projects to saving money, while enlisting the private sector and exploiting the growing business possibilities of smartphones and tablets.

Mayors in places including Copenhagen, Denmark, and Hamburg, Germany, hope to cut their cities’ energy and water use and waste by upgrading municipal services so they can monitor how services are delivered and pinpoint where savings can be found.

In Barcelona, where the unemployment rate remains above 20 per cent, the city expects to cut its water bill by 25 per cent this year after installing sensors in local parks. The annual savings are expected to total almost $60 million.

“We were wasting a lot of water,” said Julia Lopez, coordinator of Barcelona’s smart city programme. “We can now control the system directly from an iPad.” THE INFRASTRUCTURE upgrades have led to agreements between cities and some of the world’s largest technology companies, including IBM, Hewlett-Packard and General Electric. By deploying their

A “smart” waste collection system, which saves space and sends a signal when containers are full, in Barcelona.

technology in citywide pilot projects, these companies say they can test new business models and other services that might have worldwide appeal.

In January, Google reached a $3.2 billion deal to buy Nest Labs, which makes energysaving devices like internet-connected thermostats and smoke detectors. Nest says its products, designed by former Apple engineers, can cut household heating and cooling bills by around 20 per cent by monitoring people’s habits and adjusting the thermostat automatically.

Growing corporate interest is inspiring new alliances across the Atlantic.

The European technology companies

GETTY IMAGES

Philips and Ericsson, for example, are working with Verizon Wireless on a pilot project in the United States that will A pedestrian checks city visitor information on an interactive digital screen at a smart bus stop in Barcelona.

combine energy-efficient street lighting with mobile phone infrastructure. This year, Portfolio

51

Philips and Ericsson plan to start selling

businesses using advanced technical

the number of cars on the streets. The app is

their new product to city governments.

infrastructure, through a ¤70 million, or

now available in New York, Berlin and Paris.

The idea is to provide cities a source of

$96 million, fund.

And last year in Barcelona, Jaume Mayor, a

income through rentals of streetlights to

They also fostered partnerships among

local entrepreneur, created WeSmartPark, a

carriers that want to expand their cellphone

local businesses to take advantage of

service aimed at making it easier for drivers

coverage. The companies also expect that

previous investments. Among them were

to find parking spaces.

the energy-efficient streetlights will offer

Ajax, a football team, which paid a nearby

savings of about 50 per cent compared with

hospital to generate electricity for its home

cent of their time looking for places to

traditional lighting.

matches by installing solar panels on the

park, even as many spaces across the city

hospital roof.

remained empty during the day when

“We’re trying to solve the problem of how to make cities more sustainable,” said

“The financial crisis helped us to think

Mayor said drivers spent up to 20 per

residents were at work. With his 10-person

Hans Vestberg, Ericsson’s chief executive.

differently,” said Ger Baron, Amsterdam’s

team, Mayor created a system to allow

“These projects are key for cities that want

chief technology officer. “We don’t subsidise

individuals to rent out their private parking

to remain globally competitive.”

anymore. We invest.”

spaces by installing sensors that record

While cutting electricity use and garbage

Across Europe, cities are opening

when they are available. The information is

collections has environmental benefits,

their infrastructure to companies eager

transmitted in real time over local mobile

policymakers say that economic returns, not

to offer new services that provide

networks, and customers can book the

carbon dioxide reductions, are now driving

revenue for the city and offer potential

spaces hourly through a smartphone app.

many cities’ plans.

environmental benefits.

Two years ago, for example, Amsterdam’s

In London, the startup Citymapper used

So far, Mayor has signed up 1,500 parking spaces across the city, including some at

planners changed how they funded

access to the city’s transport data to create

shopping malls and hospitals. He also has

technology projects intended to improve

a smartphone application that helps people

almost 100,000 users, or roughly six per

city services. Amsterdam had previously

navigate the complicated bus and subway

cent of Barcelona’s total population.

subsidised upgrades in the local electricity

networks. Azmat Yusuf, the company’s

network and other infrastructure but had

founder, said that since Citymapper started

have, but getting more use out of them,”

seen little improvement in city finances.

in 2011, usage of London’s iconic red buses

Mayor said. “Because people are driving less

In response, its policymakers started

jumped significantly, creating additional

to find parking spaces, Barcelona as a city is

investing in local startups that were creating

revenue for local government and cutting

getting a direct benefit.” n

GETTY IMAGES

“We’re using the resources that we already

An employee passes banks of computer hardware inside the Barcelona Supercomputing Centre, which control the smart city initiative.

June 2014

52

The traditional print industry has been slashed by the digital age. Those who survive are leaner, more efficient and moving into new areas, reports Georgi Kantchev.

the editor of the Guardian newspaper, contemplating the future of print, recalled his paper’s installation of its newest presses in 2005. “I had a feeling in my bones that they might be the last,” said the editor, Alan Rusbridger.

The efforts of traditional print media executives to grope their way into the digital future have been well chronicled. But what about the executives even more tightly bound to the presses – the people who run big printing companies?

Ask Roy Kingston, 55, the chief operating officer of © 2014 NEW YORK TIMES NEWS SERVICE

BRITISH PRINTERS BECOME LEANER

AT A MEDIA CONFERENCE A FEW YEARS AGO,

Wyndeham, a privately held company that is one of Britain’s biggest printers and whose portfolio includes the British circulation of The Economist and Men’s Health magazine. A player in the printing game for three decades, he has felt the digital onslaught. And so far, he has survived to tell the tale, even if not everyone in his industry has been so fortunate.

Portfolio

Industry

53

A worker monitors press production at Wyndeham, one of Britain’s biggest printers.

Roy Kingston, Wyndeham’s chief operating officer, walks past rolls of paper stock at the company’s Peterborough location in England.

“This boardroom is about the only thing that hasn’t changed around here,” he told a visitor, sitting at an antique conference table

the huge but mostly deserted printing

not the biggest worldwide. It is ranked fifth

hall. “At one point we had 350 people

by revenue behind the United States, China,

in this plant. Now we have 114. But the

Japan and Germany. Yet its challenges and

amount of work has more than doubled.”

opportunities are emblematic.

Back in the 1990s, Kingston said, the

Sales by British printers have been

plant had three presses that could turn

in steady decline in the last 20 years,

out about 20,000 copies of a 32-page

according to data from the government’s

publication in an hour. Now there are two

Office for National Statistics, and there is

machines that are capable of producing

no respite in sight. The industry’s revenue

triple that amount.

is projected to shrink to about £10 billion,

Driving the point home, Wyndeham’s

or approximately $17 billion, by 2017,

plant was about to print an issue of The

down from more than £15 billion ($25.2

Economist with a cover that read “Rise

billion) in the 1990s, according to Key

of the robots.”

Note, a market research company.

“People are losing their jobs and there is

The global printing industry, with

in the heart of Wyndeham’s printing plant

no way to spin that,” Kingston said. “Now

estimated revenue of $880 billion last

in Peterborough, England. “Everything else

you have to be lean, mean and clean to

year, will continue to grow by about two

in this plant is different. All the equipment

succeed in this business.”

per cent a year until 2018, driven mainly

has been changed, and so have the people.”

In 2001 the British printing industry had

by emerging market countries, in the

In many ways, printing itself has gone

around 200,000 employees. There are now

view of Smithers Pira, another research

digital. Industrial-strength laser printers

fewer than 125,000, according to data from

company. China will probably overtake the

enable big printing plants to make quick

the British Printing Industries Federation.

United States as the world’s biggest print

and cost-effective small-batch runs on

Britain’s printing industry, though large, is

market this year, Smithers Pira said, while

demand. Even Wyndeham’s big offset machines – which print from lithographic plates created from digital files – are so highly automated that a crew of just a dozen or so can put them through their paces.

“This is almost a peopleless business now,” Kingston said as he walked through June 2014

The industry’s revenue is projected to shrink to about £10 billion, or approximately $17 billion, by 2017, down from more than £15 billion ($25.2 billion) in the 1990s, according to Key Note, a market research company.

54

Despite steady declines in revenue, automation has allowed big printing companies to produce magazines and other publications quickly and at less cost.

India will slip ahead of Britain into the

workforce, is also vulnerable to competition

countries have a very efficient printing

No. 5 spot by 2018.

from elsewhere in Europe. “The Italians

industry, which takes away some of the

offer very high quality but also low price

price problems,” he said. “So for things

EUROPEAN PRINTERS have had an

because of their low labour cost,” said

that are time-sensitive like magazines and

especially rough ride, given the region’s

Robert Picard, a professor of media

have to be done in the region, the best

sluggish economy. The gradual recovery

economics at the University of Oxford.

deal might be outside of the UK – and you

has not translated into a pickup in

“And Germany and the Scandinavian

can have your products here overnight.”

Europe’s print demand, and Smithers Pira said most of what has been lost will not be recovered.

Some publications, including Maxim, a men’s lifestyle magazine, and Accountancy Age, a trade periodical, have withdrawn from the British print market altogether, opting for online-only versions.

Britain, with its heavily unionised

China will probably overtake the United States as the world’s biggest print market this year, Smithers Pira said, while India will slip ahead of Britain into the No. 5 spot by 2018.

Business is shrinking for printers with each newspaper and magazine that closes.

Portfolio

Industry

55

BOOK PUBLISHERS, who are not under the same time constraints as newspapers or magazines, are looking much farther east, with printing increasingly moving to Asia, where the labour costs are even lower.

“All this leads to excess capacity and takes a huge amount of margin out of the printing companies,” Picard said.

If the industry’s woes could be mapped out on a physical surface, the ExCeL exhibition centre in London might serve that purpose. This year’s Ipex, an international printing industry convention held at the ExCeL centre in March,

A worker prepares magazines to be fed into a stitching press at Wyndeham.

required only 30 per cent of the exhibition space it needed in 2010, according to PrintWeek, an industry publication.

Kingston of Wyndeham, who has attended Ipex since the 1980s, was struck by the change. “An exhibition that even four years ago would have taken you a day to get around, you can now do in just an hour,” he said. “Your coffee wouldn’t even get cold.”

The industry’s survivors are holding on, in part by moving beyond print media publishing into packaging and labelling – parts of the physical world where a digital equivalent cannot easily follow. “We are all buying things in cardboard boxes or in tins that have some kind of label on them,” Picard said, “so the printing industry is really expanding its work in that area.”

Kingston considers packaging “the biggest growth area of printing, without

Digital editions of publications are eroding printing margins.

any shadow of a doubt.” He cited a Swedish

on online media applications, “whether it is

magazines, Kingston said. “We can now

study of supermarket shoppers that found

on mobile, smartphones or iPads,” said Paul

make a bespoke edition of any magazine; we

price was often secondary to labelling in

Utting, chief executive of Wyndeham.

can bind it in a different way and use special

people’s purchasing decisions. “Most people

colours. We can personalise it and send it.

buy products they don’t even know about,

PRINTERS ARE also responding to

based on the packaging, based on the thing

the changing desires of advertisers, who

For the April issue of the British film

that is hanging in front of them,” he said.

have grown accustomed to tailoring their

magazine Empire, for which Wyndeham

Wyndeham, like other survivors, is no

There is much higher added value there.”

pitches to narrow niches thanks to online

printed the covers, the publisher wanted

longer devoted solely to paper and ink.

media. Digital printing – the professional

to celebrate the coming movie Godzilla

The company has developed a product

version of desktop laser or inkjet printing

by putting out a “megazine” – nearly one-

it calls “emagine,” a form of production

– makes it feasible for retailers to print

third larger than the usual issue – which it

management software that media

bespoke catalogues aimed at individual

marketed as a collector’s item. Thanks to

companies can use for print and online

customers’ buying preferences.

its customisation capabilities, Wyndeham

delivery. It has also set up a division to focus June 2014

The same applies to books and

could easily adapt. n

Innovation

56

EVER SINCE US GOVERNMENT regulations began phasing out the traditional light bulb in 2012, the once-simple visit to the lighting aisle has become an exercise in navigating a dizzying array of choices and terminologies, especially for new kinds of compact fluorescents and LEDs. Now, those choices are about to become even more complicated. Two startup companies are poised to begin selling bulbs that use entirely different technologies – one borrowed from heavy industry and the other from oldfashioned televisions – but meet the new energy standards.

Whether they can capture customers who remain stubbornly wedded to incandescent light is anybody’s guess.

But that both have come this far is an indication of how unsettled the consumer lighting market remains, despite years of promotion for the new energy-saving options.

“It’s going to be a really long putt to try to replace the incandescent,” said Mark Rea, director of the Lighting Research Centre at Rensselaer Polytechnic Institute.

“People hate change of any kind. We make light sources today that are better than incandescent by any metric at delivering the benefits you’re expecting from lighting. But it’s different.”

Indeed, incandescent bulbs – whether leftover store inventory of standard lights or halogen models that meet the new regulations, which went fully into effect in January – outsell other types by far at bigbox stores like Home Depot and Lowe’s, lighting executives there say.

In the last quarter of 2013, according to statistics from the National Electrical

© 2014 NEW YORK TIMES NEWS SERVICE

Manufacturers Association, incandescent bulbs accounted for 65 per cent of shipments from manufacturers, with the remainder consisting of mainly compact fluorescents.

Even as government officials,

CREATING

BETTER Consumers are stubbornly clinging to incandescent light bulbs despite a whole host of new alternatives, reports Diane Cardwell.

manufacturers and retailers focus their efforts on improving and marketing Portfolio

57

At a small demonstration lab just outside Boston, a glass artist in dark goggles blows specially designed tubes, one tiny component of a new bulb to be called Finally when it makes it to store shelves.

incandescent light at night in the form of fires and candles and then oil lamps and finally incandescent lighting,” said Konstantinos Papamichael, co-director of the California Lighting Technology Centre at the University of California, Davis. “I would find it hard for people to enthusiastically move into new technologies without getting something similar to what they have.”

At a small demonstration lab just outside Boston, a glass artist in dark goggles blows specially designed tubes, one tiny component of a new bulb GETTY IMAGES

to be called Finally when it makes it to store shelves. A few yards away, a scientist examines multi-coloured graphs representing the spectrum of colours the bulb emits. And over in a corner, dozens

LIGHT

of the lights glow upside down, part of the company’s internal quality control.

It is all part of the quest of John Goscha, who already has one successful startup company under his belt, to build a better light bulb. Goscha, 30, started a custom golf-club business in high school

LED technology, researchers and

experts say is equal to or better than the

and founded IdeaPaint, which allows most

entrepreneurs have been pursuing others,

traditional incandescent bulbs, but their

surfaces to function as dry-erase boards,

convinced that none of the options on

price – often $10 a bulb or less after

as an undergraduate at Babson College.

the market offer consumers a close

starting out several years ago at about

But IdeaPaint grew up, he said, and

enough match to the familiar light quality

twice that – has scared off consumers.

about three years ago he was eager to do

at a low enough price. LED bulbs, for example, offer light quality that many June 2014

“We have evolved as a species under daylight during the day and the

something new. “I took a couple of months and just tried to kind of open my blinders

Innovation

58

and say, ‘Hey, what’s going on in the world,’” he said. Around that time, a friend mentioned the incandescent phaseout, of which he had been unaware. Unhappy as a consumer with compact fluorescents and LEDs, he said, he decided to pursue making an alternative.

“I thought, ‘I don’t really want those and there have to be other people who don’t want those either,’” he said.

Looking for the solution, he began attending conferences and meetings and enlisted the advice of Victor Roberts,

But although it has shown enough promise to have attracted about $19 million from investors, including some of Goscha’s Babson professors and interest from big-box retailers, its success is not yet assured.

long flight to Hong Kong, the two talked about induction, a technology that has a wide range of applications, including electric motors in home appliances and construction cranes, because it is long-lasting. But it had not yet been widely adapted for home use in lighting because it was difficult and expensive to fit the electronics needed for bright, omnidirectional light inside a regular bulb.

BUT WITH the advent of smaller

a former General Electric engineer

transistors and other advances, the

who eventually joined the venture. On a

company, which has hired engineers from established light-makers like Osram Sylvania and Philips, shrank the apparatus to a 7.6-centimetre antenna wrapped in copper wire. That creates a magnetic field inside the bulb that prods mercury to produce ultraviolet light, which in turn creates visible light when it interacts with a special phosphor coating on the glass.

The result, to be manufactured in India, has almost all of its regulatory approvals.

It can be disposed of in landfills despite its mercury content because the amount of

GETTY IMAGES

metal is minuscule and in solid, not liquid, form. It also has received approval from the Federal Communications Commission LED lights have met with consumer resistance.

Master glass blower David Wentzel processes internal glass components at Finally Light Bulb Company.

because the antenna is technically a radio

Internal electronics for a light bulb that uses induction technology.

Portfolio

59

John Goscha is the founder of Finally Light Bulb Company.

receiver, albeit a weak one.

Goscha plans to sell the bulb for $8,

promise to have attracted about $19 million from investors, including some of

on better footing.

The Vu1, which will be available

making it competitive with some of the

Goscha’s Babson professors and interest

first for use in recessed fixtures, uses a

cheapest LEDs on the market.

from big-box retailers, its success is not

technology like that of cathode ray tubes

yet assured.

in televisions, a “state-of-the-art 1940s

But although it has shown enough

Take, for instance, the Vu1, a bulb that

hit a cocktail of phosphors on the glass,

than three years ago. It was available for

which then glows.

a time on the Lowe’s website but had

But the light’s long journey to stores

production problems and was withdrawn.

shows how difficult it can be to make

With new manufacturing operations in

a new light bulb and how elusive the

China rather than the Czech Republic,

promise of new technologies can be.

said William Smith, the company’s chief

Researchers, seeing a market that is

executive, it is only now ready to begin

wide open, are still working on even

shipping to stores.

more technologies, including plasma and

“This is all self-inflicted self-hatred,” Smith said jokingly about the company’s missteps, which included losing Wall

so-called organic LEDs, which spread light over a flexible surface.

“Twenty years from now, we’ll walk

Street backing after missing too many

into a room and OLED is going to be

deadlines. “Whenever you move a

covering your entire ceiling and it’s going

technology from one country to another,

to dim automatically and it’s going to

it never goes as planned.”

be able to figure out your mood and it’s

Smith said he was largely financing the company himself while it struggled to get June 2014

technology,” Smith said, in which electrons

was supposed to come to market more

great,” Smith said. “Thanks, Capt. Kirk.

But we’re not there.” n

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Essentials

61

GETTY IMAGES

THE BEST OF LEISURE AND LIFESTYLE

Bad Ischl lies on the Traun River in the centre of Austria’s Salzkammergut region.

PAST PERFECT The handsome Austrian spa town of Bad Ischl has been a favoured aristocratic retreat for nearly 200 years, reports Brian Johnston.

BAD ISCHL IS A SET FROM AN

kings, bonbons and balls. You expect

ending. In Bad Ischl, the gilded life

operetta, pretty in pink and yellow,

ladies in crinolines to swoon on its

came crashing down in 1914, never to

elegant and improbable in a setting of

esplanade and bewhiskered generals to

return. True, the architecture remains

painted snow-dome mountains and lakes

puff cigars in its coffeehouses as they tut-

Biedermeier chic, the coffeehouses are

just a bit too unnaturally blue. It makes

tut over anarchists and ankles.

still crammed with ornate concoctions,

you think nineteenth-century thoughts of Wurlitzers and waltzes, carriages and

June 2014

The comparison only takes you so far.

In operettas, you always get a happy

and music drifts from concert halls. But the lead actors have packed up and gone,

Essentials

62

CORBIS/ARABIAN EYE

CORBIS/ARABIAN EYE

Travel

A young musician wearing a traditional Austrian outfit.

The Kaiservilla used to be the holiday home of the Austrian royal family.

leaving only a nostalgic stage set. If you’re after imperial glamour preserved, there’s nowhere better in Austria to find it.

Bad Ischl lies 52 kilometres east of Salzburg in the alpine Salzkammergut region. A village has stood here since at least the twelfth century, reliant on the salt trade from mountain mines. In the early nineteenth century, however, the back-to-nature idealism of Romantic writers sparked an interest in alpine tourism. Artists and aristocratic visitors descended on the Salzkammergut in CORBIS/ARABIAN EYE

search of the simple life. Bad Ischl had the perfect Romantic setting on a peninsula of land formed by the meeting of the Traun and Ischl rivers. The air Every August, Bad Ischl holds a re-enactment of imperial events.

The Greek-Revival style Trinkhalle in the centre of town was once the centre of spa action, though the pump room is now a cultural centre. You can still take to the baths at several spa retreats, where the waters are said to cure many an ache and ailment, even if their sulphur content challenges the nose.

was bracing, the scenery dramatic. Even better, the surrounding springs were rich in minerals: just the cure for Romantic travellers suffering from a surfeit of schnitzels and port.

In 1821, celebrity Viennese doctor Franz Wirer extolled the curative properties of Bad Ischl’s waters, and soon had the wealthy wallowing. His greatest coup was to persuade Princess Sophie to come to Bad Ischl in 1828 for an infertility treatment. It appeared to Portfolio

63

work: soon the Hapsburg princess was pregnant with the future Emperor Franz Joseph, and went on to have three other sons. The town’s reputation was made.

The Greek-Revival style Trinkhalle in the centre of town was once the centre of spa action, though the pump room is now a cultural centre.

You can still take to the baths at several spa retreats, where the waters are said to cure many an ache and ailment, even if their sulphur content challenges the nose.

The Trinkhalle is a good spot to start a walk around Bad Ischl. The Esplanade on which it stands is the glamorous heart of town, lined with the former houses of wealthy salt merchants and aristocrats. Another of Sophie’s sons, Maximilian, the ill-fated future emperor of Mexico, was born in one of its houses in 1832. A who’s who of European society once paraded the Esplanade in bonnets and ribbons.

Many stayed at the grand Hotel zur Post, an ornate concoction in yellow that recalls the creamy confectionaries that patrons nibble on at café tables beneath the hotel’s façade.

In 1835, Franz Joseph proposed to a Bavarian princess at the Hotel Austria the day after they were introduced. The hotel is now the Museum der Stadt and its imperial connections. Franz

Much of the architecture of Bad Ischl was created during the heyday of the Austro-Hungarian Empire, with the mustard-coloured Kaiservilla as its centrepiece.

A cow is decorated for a ceremonial cattle drive.

Joseph was to have a notably difficult

Austro-Hungarian Empire, with the

marriage to the perennially restless

mustard-coloured Kaiservilla as its

Elizabeth, nicknamed Sissi, but never

centrepiece. Lavish reception rooms

gave up trying to woo her. His mother

make it more than just a country home,

had given them a villa in Bad Ischl as

but its more modest residential quarters

a wedding present, which the emperor

are cluttered with homely Hapsburg

converted to a petite palace in the form of

mementos and hung with innumerable

the letter E in honour of his wife.

chamois antlers acquired by the hunting-

Much of the architecture of Bad Ischl was created during the heyday of the

June 2014

mad emperor. Take a tour and you’ll be shown Franz Joseph’s study and the

GETTY IMAGES

Bad Ischl, outlining the town’s history

Essentials

Travel

desk at which he signed the declaration of war on Serbia that launched the First World War. The long-lived emperor came to Bad Ischl every summer from 1849, but 1914 was to be his last visit. The war he never wanted ended up sweeping imperial Austria away, though the emperor’s great-grandson Markus Salvator von Habsburg-Lothringen still lives in the Kaiservilla, and occasionally emerges to conduct a guided tour himself. In the forested park that surrounds the villa, a little marble tea pavilion known as Marmorschlössl exhibits a collection of historical photos showing Hapsburg life in the Kaiservilla in the days before it all went horribly wrong.

Assassinations, suicides, wars and revolution plagued the later Hapsburgs, though you wouldn’t think so in Bad Ischl – particularly not in August, which sees many a re-enactment of imperial events. Brass bands play, an imperial couple dressed as the emperor and empress arrives by steam train, and light-hearted score to the festivities. On Franz Joseph’s birthday on 18 August, real members of the Hapsburg royal family turn up for a procession through

CORBIS/ARABIAN EYE

concerts and organ music provide a

Bad Ischl hosts an annual Léhar Festival to celebrate the works of composer Franz Léhar.

town, followed by high mass.

BAD ISCHL is as much about composers as courtiers. Where rich patrons went, impoverished musicians followed. Brahms composed his famous lullaby in the alpine resort, and Bruckner played the organ in the rather gloomy St Nikolaus Church. The gingerbread villa on the riverbanks where Bruckner spent his summers is now the Weinhaur Attwenger restaurant, notable for Austrian specialities such as lake fish, the boiled-beef dish Tafelspitz and Kaiserschmarrn or ‘emperor’s mess’, a light raisin-studded pancake chopped into pieces and topped with fine sugar and fruit compote, said to be a particular favourite of Franz Joseph.

ALAMY

64

Café Zauner is Bad Ischl’s most famous establishment.

Portfolio

65

Next door is the Villa Léhar, where the

are held in the Kongresshaus in the

the signature Bad Ischl tune, then coffee

Hungarian-born composer Franz Léhar

centre of town, which is surrounded by

and cream cakes are surely its signature

lived from 1912 to his death in 1948.

a pretty flower-filled park where brass

indulgence. Lingering in coffeehouses

You can take a guided tour of the villa,

bands sometimes play, and a statue of the

has a long tradition here. You’ll find the

which seems to sit in a time warp. Better,

composer looms.

town’s most famous establishment on

perhaps, to come in July and August for

Johann Strauss the Younger was

the Pfarrgasse. Café Zauner opened in

the Léhar Festival, where you’ll get a

another summer regular in Bad Ischl. He

1832 and Franz Joseph used to walk here

much jollier impression of Léhar in some

directed in the theatre and frequented

daily from his villa for a lemon-flavoured

of his operettas such as The Merry Widow

Ramsauer coffeehouse every day at six

Guglhopf, another of the apparently

and The Gypsy Baron. Performances

o’clock sharp. If the waltz seems to be

sweet-toothed emperor’s favourite nibbles. The café is, however, more

You can take a guided tour of the villa, which seems to sit in a time warp. Better, perhaps, to come in July and August for the Léhar Festival, where you’ll get a much jollier impression of Léhar in some of his operettas such as The Merry Widow and The Gypsy Baron.

noted for its Zaunerstollen, a hazelnut and nougat cake covered in dark bitter chocolate. Many partake at a street table in the sun, but for the full imperial experience head inside. Chandeliers glint from high ceilings, rococo pillars twist, and pastries are displayed in glass cabinets like jewellery in a showroom.

It’s another Bad Ischl stage set, under the gaze of Austria’s last emperor, whose

ALAMY

portrait hangs on the wall. n

A traditional Austrian restaurant serving local specialities. The architecture is typical of the region.

June 2014

66

Essentials

Cuisine

10

AROUND THE

WORLD IN

DISHES

In order to meet the locals you need to eat like a local whilst having a culinary experience, reports Andrew Marshall.

E

ATING IS A SIGNIFICANT part of any travel experience and whether it’s tucking into burger and fries in New York,

a Currywurst in Berlin or spicy jerk chicken in Montego Bay, there’s nothing better than savouring a meal synonymous with its country or place of origin, plus it’s a great way to meet the locals. Here are 10 quintessential dishes in 10 countries and where to sample them...

FISH & CHIPS – WHITBY, ENGLAND Battered fish and thick-cut potato chips – both deep fried, salted and sprinkled with vinegar are as much a part of the nation’s A selection of Madrid’s gourmet tapas.

fabric as a cup of tea or a pint down at the local. A marriage made in the 19th century to provide cheap and nutritious Portfolio

67

Other places to try the dish: Casa

food for the working masses, they have

simple bowl of olives or tortilla española

fed countless memories for generations,

(potato omelette on bread), to pimientos de

whether as a teatime treat on Fridays,

padrón (green peppers grilled with olive oil

eaten out of newspaper by the seaside

and salt) and empanadillas (small pasties

FRIED HERRING – STOCKHOLM,

or a late-night supper on the way home

usually filled with tuna).

SWEDEN

from the pub.

Among the best places for tapas in

Labra, Madrid; Casa Alberto, Madrid.

Fried herring, known as stekt strömming

Madrid is Los Gatos in the Santa Ana/Old

with various sides and condiments is

Malin opened the country’s first fish and

Town district, where an old street lamp

a classic Swedish dish. Swedes would

chip shop in Cleveland Street, London, in

sheds a warm glow over a bar oozing with

normally fry Baltic herring, which is

1860. Although found all over the country,

atmosphere. All manner of memorabilia

smaller than the North Sea (Atlantic)

the true home of fish and chips is by the

adorns the walls; a stuffed bull’s head,

herring and the fatter it is the better.

sea and there is still a special magic about

framed football shirts, an antique

Some people prefer to fry the fillets laid

eating them at a classic English seaside

motorcycle and paintings of matadors.

together with parsley between them while

resort. The Magpie Café that overlooks the

Los Gatos is well-known for its selection

others want the backbone to stay in. But

harbour in Whitby revels in its reputation

of creative gourmet tapas including the

no one talks about frying Baltic herring in

as the place to go to enjoy some of the best

much-loved anguilas (baby eels on toast).

anything but butter.

It’s now over 150 years since Joseph

Freshly fried Baltic herring tastes

in the north.

Other places to try the dish: Rock & Sole Plaice, London; Bardsley’s, Brighton; Linford’s Traditional Fish & Chips, Market Deeping.

TAPAS – MADRID, SPAIN Going on a tapeando or tapas crawl is an excellent and authentic way to get into the Spanish eating and drinking swing.

Strictly speaking, tapas are appetisers to be enjoyed with drinks followed by a full-blown dinner, but they can also be

Among the best places for tapas in Madrid is Los Gatos in the Santa Ana/Old Town district, where an old street lamp sheds a warm glow over a bar oozing with atmosphere.

enjoyed as the main focus by going from

especially good on top of buttered hard bread, called knäckebröd in Swedish, served with fluffy mashed potatoes generously sprinkled with chopped parsley and a side of lingonberries. The classic place to get some of the best in Stockholm is the appropriately named Nystekt Strömming, a simple food caravan just outside the Slussen Tunnelbana station on Södermalmstorg. After placing your order and waiting for your food, grab a seat next to the caravan or in the square, to people watch and enjoy Baltic Sea views.

bar-to-bar. Tapas can be anything from a CURRYWURST – BERLIN, GERMANY A gastro ‘must do’ while in Germany and particularly in Berlin, is to sample the legendary Currywurst, the most popular fast food in the city and some say the nation. Costing a couple of euros, this chubby pork sausage doused in tomato sauce that’s been laced with spices such as mild curry, ginger, cardamon and cayenne pepper, is traditionally eaten from a paper plate with a tiny disposable fork while standing at chest-high snack tables on the sidewalks.

Currywurst is consumed in huge quantities, with Germany’s 82 million people eating 800 million curry sausages annually.

The cult place to go in Berlin is Konnopke’s Imbiss situated underneath the green girders Customers outside Bareburger, Upper East Side, New York.

June 2014

of a subway in Prenzlauer Berg. Although the

Essentials

68

Cuisine

Spices for sale at a Moroccan market.

© KARIN RIIKONEN

Preparing fish and chips inside the kitchen of the Magpie Café, England.

premises have recently been upgraded, it has

Situated in a glorious 19th-century riad

been feeding the hungry hoards from this

with 21st-century Zen décor, a short stroll

historic spot since 1930.

from Marrakech’s medina, the Narwama

Other places to try the dish: Curry 36, Berlin; Bier’s Ku’damm 195, Berlin.

restaurant offers award-winning Moroccan

steaming couscous.

Other places to try the dish: Café Arabe, Marrakech; Le Tobsil, Marrakech.

cuisine, including arguably the country’s most famous dish – the tagine (or tajine).

TAGINE – MARRAKECH, MOROCCO

crusty Moroccan flat bread and mounds of

The name tagine refers to the conical-

THALI – PANAJI/INDIA From simple hole-in-the-wall eateries to

It is said that in order for a nation to

lidded pot in which it is prepared, as well

plush air-conditioned restaurants, Goa’s

develop a great cuisine it must have four

as the intricately spiced stew of meat and

capital, Panaji, is packed with a good range

prerequisites – a great civilisation, a rich

vegetables, usually with dried fruits or

of places to eat, offering everything from

land with abundant ingredients, a variety

nuts, cooked very slowly over a charcoal

traditional Goan dishes to specialties from

of foreign cultural influences, and lastly

fire. Typical tagine combinations include:

other Indian states.

a refined palace with royal kitchens to

lamb with raisins and almonds; beef with

inspire the nation’s cooks. Morocco has

prunes and apples; and chicken with green

is the Anand Ashram which has been

it all and is home to some of the most

olives and preserved lemons. Tagines are

serving its fish thali for over a century now.

tantalising dishes imaginable.

often accompanied by thick wedges of

The thali is the ubiquitous Indian lunch,

Situated within Panaji’s narrow streets

which just happens to be one of the whole subcontinent’s best food deals. For around 30-50 Rp, you get a stainless steel platter with small, fitted bowls usually containing a piece of fried fish, dry and wet vegetable dishes, roti, pappadams, rice, pickle, and dahl (lentil curry). Thalis provide a great opportunity to taste many Indian dishes at the one sitting and the chance to explore regional variations.

Other places to sample the dish: Cafe © ANDREW MARSHALL

Ritz, Panaji; Ritz Classic, Panaji.

Street vendor selling tajines cooking in their conical-lidded tajine pots.

PIE & MASH – SYDNEY, AUSTRALIA It’s not just the Brits that have a passion for pies, the Aussies love them too. Ask Portfolio

69

heaven, thanks to its abundance of local

Cooking jerk chicken at Scotchies in Montego Bay, Jaimaica.

specialities such as oysters, mussels and particularly lobster.

A ‘lobster supper,’ consisting of lobster, potato salad and crusty rolls, held in dining halls and churches throughout the island, is the classic PEI dining experience you shouldn’t miss, and one of the most renowned places is St Ann’s. Established in 1964 by Father Denis Gallant, the dinners at St Ann’s began as a modest way to help pay off the mortgage on the new church, and were available for just one day a week.

Almost 50 years later, the non-profit outfit is still running strong, serving delicious homemade food six days a week, with a menu where the lobster reigns supreme.

Other places to enjoy the dish: New

any Sydneysider about his or her favourite

the best places to go is Scotchies, a simple

Glasgow Lobster Suppers, New Glasgow;

pie place and Harry’s Café de Wheels on

thatched-roof joint on the outskirts of

Clam Diggers, Georgetown; Lobster on the

Cowper Wharf Road is almost guaranteed

Montego Bay.

Wharf, Charlottetown.

to be among the replies. This 24-hour

This is the scene at Scotchies – a reggae

pie-cart has been serving its chunky lean

soundtrack combines with delicious

BURGER & FRIES – NEW YORK, USA

beef pies with mushy peas, mash and gravy

aromas that waft on the balmy tropical

Burger and fries are as much a part of New

alongside the wharves since 1945.

breeze, as customers rub shoulders at

York as the Empire State Building, Times

People of all walks of life have ‘scoffed’

rustic tables opening tin foil parcels of

Square and the Statue of Liberty. Whether

a pie at Harry’s legendary cart. The smiling

tasty jerk chicken, pork or fish washed

you want to keep things classic with beef,

faces of famous customers such as Elton

down with a Red Stripe beer, the island’s

bacon or cheese or go for something more

John, Brooke Shields, Olivia Newton

tipple of choice. Around the back, rows of

exotic like free-range ostrich or bison,

John and Pamela Anderson peer out of

chickens are splayed flat and sizzle in jerk

the city has burgers for every taste and a

the multitude of photos on display at the

marinade over a low fire of pimento wood,

diverse range of places to enjoy them from

counter. Harry’s is also something of an

that introduces a strong distinctive smoky

hip to historic.

institutional rite for taxi drivers, sailors and

flavour to the meat. Like most places,

late night revelers, and from curry

the recipe for jerk sauce at Scotchies is a

the swanky Le Parker Meridian Hotel,

to seafood to chicken and mushroom –

closely guarded secret, but they usually

the Burger Joint is no ordinary burger

even the fussiest of pie punters will love

contain peppers, onions, pimento, ginger

establishment. Before the place even

this place.

and chilli.

opens at 11 am, a line of customers starts

Other places to enjoy the dish: Infinity

Other places to try the dish: Jo Jo’s Jerk

Located inside the elegant foyer of

to gather down a dimly lit corridor,

Sourdough Bakery, Sydney; Yardhouse,

Pit, Kingston; The Pork Pit, Montego Bay;

where only a simple neon hamburger

Sydney; Lord Nelson Hotel, Sydney.

Ossie’s Jerk Centre, Negril.

sign indicates what lies beyond. On the other side of some velvet curtains is a

JERK CHICKEN, PORK OR FISH –

LOBSTER SUPPER – PRINCE

windowless room, with posters of Sex

MONTEGO BAY, JAMAICA

EDWARD ISLAND, CANADA

in the City and the Sopranos adorning

Jamaica’s signature dish is fiery jerk

Only 280km from tip-to-tip, Prince

graffiti-strewn walls above leatherette

chicken or pork, served with rice and

Edward Island (known locally as PEI)

booths where you can enjoy the

peas (rice cooked with coconut, spices

is Canada’s tiniest province, but still

uncomplicated menu of burgers ($7.58),

and red kidney beans), sweet potatoes or

manages to punch above its weight in the

fries ($3.90) and milkshakes ($5.05).

yam. Although there are thousands of jerk

culinary world. Its pristine waters and

centres – as they are known – at almost

beaches produce some of the planet’s finest

Bistro, West Greenwich Village; Diner,

every crossroads or street corner, one of

seafood, and foodies know it as shellfish

Brooklyn; Bareburger, Upper East Side. n

June 2014

Other places to try the dish: Corner

70

Essentials

Culture

CHINA’S BELOVED WILD ELEPHANTS The number of wild elephants in Yunnan province has nearly doubled. But deforestation is shrinking their habitat and increasing human conflict, reports Andrew Jacobs.

An elephant found badly injured in the wild and now cared for at Wild Elephant Valley, a popular nature park, in Jinghong, China.

Portfolio

71

A

T A TIME WHEN TENS OF thousands of elephants across Africa are being slaughtered to feed Asia’s appetite for

ivory, it turns out the best place to be a wild elephant may be in the tropical forests of southwestern China.

Over the past two decades, the number of Asiatic elephants in Yunnan province in China has roughly doubled, to nearly 300, thanks to government-financed feeding programmes, wildlife education efforts and a strict elephant protection law unmatched anywhere else in the world.

Convicted poachers in China face the death penalty.

Since 1995, when four people were executed by firing squad for killing an elephant, only a handful of domestic elephants have been poached for their tusks, according to the state news media, and not one in the past decade.

A visitor rides an elephant at Wild Elephant Valley.

“Elephants have it pretty good here because it’s safe and there is plenty to eat,” said Chang Zongbo, a local forestry official. “Once the elephants cross the border from Laos, where hunting is allowed, they never want to go back.”

The biggest threat they face in China is loss of habitat. With Yunnan’s forests rapidly giving way to rubber and other cash crops, the country’s half-dozen or so elephant families have become marooned in disconnected preserves. Zoologists say the inability to breed with other herds threatens the elephants’ genetic diversity, leaving them vulnerable to disease.

At the same time, the region’s growing

The biggest threat they face in China is loss of habitat. With Yunnan’s forests rapidly giving way to rubber and other cash crops, the country’s half-dozen or so elephant families have become marooned in disconnected preserves.

keep eating,” he said, standing amid a decimated stand of banana trees. “Of course, it’s very nerve-racking work because if you get too close, they will come after you.”

The authorities have tried to ease the sting of elephant crop raids by compensating farmers for their losses. In 2012, the government dispensed nearly $480,000 through a private insurance company, according to the state-run Xinhua news agency, although residents complain that the reimbursements do not cover the market value of their lost crops.

human population has led to a surge in

In densely populated areas where

conflicts between man and beast, some

elephants are known to roam, forestry

fatal. Over the past four years, three

© 2014 NEW YORK TIMES NEWS SERVICE

“These elephants are so smart they just sneak around to another area and

people have been trampled to death

most of them members of the Dai ethnic

officials have been creating vast “elephant

and a dozen injured in Yunnan by

minority, have been trying for months to

canteens” planted with corn, bamboo

marauding elephants, many of which

chase away a family of 20 or so elephants

and other foraging favourites to dissuade

have become accustomed to grazing

from an adjacent nature preserve that

them from pillaging farmers’ fields.

on the sugar cane, rice and pineapples

ravages their crops after dark. One farmer,

International environmental groups are

planted by local villagers.

Xiong Dan, 30, said he and his wife woke

also trying to address the problem by

up three to four times a night to toss

buying or leasing cultivated land and

Shangzhongliang, an isolated village

firecrackers into the fields, a tactic he says

restoring the forest in an effort to extend

near the Laotian border, where residents,

has proved increasingly futile.

elephant habitat, and to create corridors

Such conflicts play out nightly in

June 2014

72

Essentials

Culture

one day connecting the region’s far-flung

in seven villages to help them switch

Xishuangbanna prefecture, a cavalcade of

nature preserves.

from planting rice and bananas to tea, a

bronze and stone elephant statues – some

profitable crop that elephants do not eat.

ferocious looking, others positively giddy –

After years of telling villagers to protect their fields with trenches and electric

have been mounted on traffic islands and

fencing – barriers easily breached by

ALTHOUGH HARDER to quantify,

wily elephants – other groups, like the

China’s elephants are also benefiting from

International Fund for Animal Welfare,

a growing affection among middle-class

are teaching farmers how to coexist

Chinese, a love affair largely inspired

peacefully with their hungry neighbours.

by tourism officials who have embraced

In recent years, the organisation has

the elephant as an irresistible marketing

provided microloans to 2,000 farmers

mascot. In Jinghong, the capital of

in front of new Thai-style shopping malls.

Hills shaved of vegetation to make way for rubber trees in Jinghong.

After years of telling villagers to protect their fields with trenches and electric fencing – barriers easily breached by wily elephants – other groups, like the International Fund for Animal Welfare, are teaching farmers how to coexist peacefully with their hungry neighbours.

Tourists are carried through Wild Elephant Valley.

Portfolio

74

Essentials

Culture

Elephant statues at an unfinished park in Jinghong.

“Who doesn’t love the elephant?” said Xiong Qiaoyong, 30, a ranger at Wild Elephant Valley, a popular nature park on the outskirts of Jinghong that draws thousands of visitors a day. Although 16 to 24 elephants are said to live in the 365-hectare preserve, most encounters between man and beast take place in a dusty circus ring, where visitors enjoy $5 elephant rides or watch a pack of worldweary performers stand on their hind legs and dutifully place hats and scarves on the heads of petrified audience members.

But neither public fondness for

On paper, more than 2,833,000 hectares in Yunnan has been designated as forest preserve, but Chang said local officials often looked the other way as farmers and developers nibbled away at parkland.

towns, so they are easier to find.”

On paper, more than 2,833,000 hectares in Yunnan has been designated as forest preserve, but Chang said local officials often looked the other way as farmers and developers nibbled away at parkland. “The destruction is a national tragedy,” he said. “We need the central government to put their foot down and help; otherwise the elephant is doomed.”

The Asian elephant faces similar pressure from Bangladesh to Indonesia.

The World Wildlife Fund estimates that there are 40,000 to 50,000 left, a 50 per

elephants nor draconian anti-poaching

cent drop since the beginning of the 20th

laws can compete with the financial lure

century. More than two-thirds are in India

of rubber, which is increasingly robbing

and Sri Lanka.

Yunnan of its vaunted rainforests. Over

a monoculture that scientists describe

In Shangzhongliang, the nightly

the past decade or so, rubber plantations

as an ecological dead zone, where birds

skirmishes are testing the age-old Dai

have come to occupy nearly a quarter of

are seldom heard and elephants have

reverence for the elephant, viewed as a

Xishuangbanna, home to more than 90

nothing to eat. Chang, 46, the forestry

harbinger of good fortune.

per cent of China’s elephants, according to

official, said most of the forests outside

R. Edward Grumbine, a visiting scientist

government-protected nature preserves

young farmer, Piao Long, smiled. “Of

at the Kunming Institute of Botany, all of

had been gobbled up by rubber farmers in

course we love the elephant, because they

it to feed China’s booming tire industry.

recent years. “Growing up, you never saw

are a nationally protected animal,” he said.

Rubber prices have more than quadrupled

elephants, but that’s because there was

But later, after a few warm beers, Piao, 26,

since 2002, making thousands of former

so much jungle back then,” he said. “Now

confessed his true feelings. “They eat all

subsistence farmers fabulously wealthy.

they are squeezed into little disconnected

our crops, so of course we hate them,” he

islands, surrounded by highways and

said. “If we could, we’d kill them all.” n

The downside of so much rubber is

Asked about the growing conflict, one

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76

FROM

PLAGUE TO FOOD The Atlantic slipper shell, an invasive species, has played havoc with France’s shellfish industry. One solution is to literally eat the problem, reports Lalita Clozel.

O

N THE STORM-

their wheeled boats straight into the bay

curious type of sea snail that has spread

weathered tip of Mont

to gather their harvest: an assortment of

from the East Coast of the United States.

Saint-Michel Bay, the

shellfish prized all over France.

Oyster and mussel producers here have

sweeping tides have washed away the line

between land and sea. Fishermen drive

But now they are finding their nets

watched helplessly as the colony has

weighed down by an invasive species:

taken over their beautiful bay, flush with

the crĂŠpidule, or Atlantic slipper shell, a

phytoplankton, the microorganisms that

Jean-Francois Dore harvests Atlantic slipper shells.

Portfolio

Essentials Environment make it a haven for all manner of shellfish

somewhat like whelks and scallops, but it

producers to back his project and begin

and tint the water turquoise.

has never caught on as common fare. “It is

a campaign to rehabilitate the snail’s

considered to be a parasite,” said Frederic

image. The creature has been rechristened

entrepreneur who looked at the

Baslé, who owns a seafood cart by the

“berlingot des mers,” a poetic term at odds

encroaching Atlantic slipper shell and

shore at Port de la Houle.

with the rather vulgar nicknames it has

Enter Pierrick Clément, a local

asked an unthinkable question in a

The community of Cancale now finds

town that has built its livelihood on

itself torn between disgust and relief at

bountiful seafood: Would people eat the

Clément’s project to fish and sell the sea

insidious creature?

snails for consumption.

“As a businessman, I see an opportunity

After years of administrative haggling,

here,” he said, after extricating a snail,

he has coaxed local municipalities and

earned locally for its frenetic mode of reproduction.

Clément grew up dive-fishing for oysters, abalones and sea urchins and, like most Bretons, he had never thought of eating the ubiquitous Atlantic

still alive, from its shell with a knife. The

slipper shell. Then he found out about

slipper shells, which he affectionately calls

a mechanism that could crack open the

“the problem,” could become a delicacy –

shells of the invasive sea snails on an

served either raw or cooked, he said.

industrial scale without damaging the

The snail, a sliver of orange flesh

flesh, and he quickly invested ¤1 million

clamped tightly within a shell, tastes

in research and development.

IT WAS not the first time that Clément had seen a way to make money on unlikely food items. He grew wealthy exporting halal foie gras and unwanted duck parts that are delicacies in China.

Now he is distributing packages of frozen slipper shell flesh to stores and restaurants, and also plans to reuse the calcium-rich shells in construction material and to improve the acidic soil

© 2014 NEW YORK TIMES NEWS SERVICE

of his native Breton coast.

Pierrick Clement, a local entrepreneur, is attempting to create a market for the Atlantic slipper shell.

June 2014

77

78

The Atlantic slipper shell population is growing by 10 per cent annually.

His pilot factory, among the bustling oyster plants in nearby Le Vivier-sur-mer, ships to a few stores and restaurants in France, Spain and Germany.

Eventually he hopes to process as much as 100,000 tons of slipper shells per year – enough to offset their growth in the bays of Mont Saint-Michel, SaintBrieuc and Morlaix.

Clément aims to sell the slipper shells

Marketing the slipper shell at home, however, presents a real challenge: persuading a country – and a region – anchored in culinary tradition to adopt a new ingredient.

in 1944, stuck to the hulls of British Allied ships. In Brittany they latch on to mussels, oysters and scallops, filching their phytoplankton and crippling their growth, while driving away native species of fish and algae. Repeated extermination campaigns have been futile.

In their efforts to rid their stretch of coast of the slipper shells, the local authorities have scooped them out of the bay and dumped them further out in the

primarily to the American, Japanese and Chinese markets, where they might

centuries. “Stereotypes are hard to fight.”

sea. They have also tried crushing them

have a less pesky reputation than in

Even worse for a fruit de mer – a French

and scalding them in giant pots right on

France. Marketing the slipper shell at

term that designates all edible seafaring

the fishing boats, or simply left them to

home, however, presents a real challenge:

creatures besides fish – “the shell is just not

dry out in heaps on the ground.

persuading a country – and a region –

that pretty,” Clément added.

Notwithstanding this rough treatment, the slipper shell remains the most

anchored in culinary tradition to adopt THE SLIPPER shells have been

populous creature in the bay, growing by

prevalent in Brittany since the 1970s

10 per cent per year. Seafood producers

said, referring to local staples like mussels,

and were brought here by ships carrying

complain that the oysters and mussels

scallops and the native flat oysters, which

oysters, though local lore has it they

cultivated on wooden posts and racks

have been produced on the Breton coast for

were first brought to nearby Normandy

planted near the shore are shrinking,

a new ingredient.

“People here eat traditional products,” he

Portfolio

Essentials Environment

The frozen flesh of Atlantic slipper shells stored at Pierrick Clement’s factory in Cancale.

Some award-winning chefs are now incorporating the invasive species in their menus.

while the yield has decreased 20 per

and that we promote it and that our

sea diver who regularly incorporates the

cent in 30 years.

production improves.”

“berlingot des mers” in his creations for the

Clément claims that eating the slipper

They are a poison for his oysters, and

shells is the only realistic option for the

a plague for the bay, he added, but also

seafood industry and the ecosystem it is

make for a great spaghetti topping.

built upon.

Clément has other influential tastemakers

restaurant Auguste in Paris.

“It tastes like seawater but is also a bit sweet,” with a bitter aftertaste that recalls hazelnuts, said Orieux, adding that the

on his side – namely, award-winning chefs

snail, “has its own identity.” If more chefs

JOSEPH JAMBON, head of the local

from Spain, Japan and even France. Among

agree with Orieux, the Atlantic slipper shell

shellfish producers union, has agreed to

them is Gaël Orieux, an amateur deep-

just might creep into French cuisine. n

share his oyster fishing boat Le Papy with Clément, who declared it the first boat in the world to willingly fish for Atlantic slipper shells. Jambon, who has a five per cent stake in Clément’s slipper shell business, said that while some seafood producers remained sceptical, a growing consensus had emerged. “Everyone wants to get the most out of their space,” said Jambon. But “what’s important,” he added, is that the slipper shells “scram

Clément claims that eating the slipper shells is the only realistic option for the seafood industry and the ecosystem it is built upon.

June 2014

Jean-Francis Dore is the first person to harvest the Atlantic slipper shell.

79

80

Hermès’ ‘In the Pocket Watch’ was released in 2012

FROM HORSES TO HOROLOGY

Hermès, a giant in the global luxury market, has grown from humble beginnings into 14 highly successful product divisions, reports Nick Rice.

Portfolio

Essentials Luxury THE SWISS WATCHMAKING

There is no such jumping on the

production from France to neighbouring

industry is in fine health and the

bandwagon for Hermès though. Although

Switzerland, the undisputed home of the

appreciation of horology – the art and

the brand is famous for it’s leather and

watchmaking craft. It is this purpose-

science of measuring time – seems to

fashion goods, (latest annual figures for

built manufacturing plant in Bienne that

be ever expanding. Accordingly, many

the leather and ready-to-wear fashion

I am visiting – the only Hermès métier

fashion houses are keen to have a piece

divisions approach ¤1.1 billion) the

(product division) not located in France.

of the pie by catering to the enduring

company has long been immersed in the

attraction of a finely manufactured watch.

high end of watchmaking.

In recent years brands such as Ralph

Jacqueline Hermès, the great

ENTERING THE premises of La Montre Hermès, the first thing that catches the

Lauren and Burberry have invested vast

granddaughter of founder Thierry Hermès,

eye is a life-size pale wooden sculpture

sums of money in launching their own

wore the company’s first watch in 1912. It

of a horse. Silent and somehow noble in

watch collections.

was actually a pocket watch that the young

the hush of the huge inner atrium, it is an

girl wanted to wear on her wrist, so her

immediate symbol of the equine heritage

doting father deployed his expertise with

of Hermès as the company started out as

leather and made a wearable jacket to

a maker of high-quality bridles, saddles

house the timepiece. La Montre Hermès

and leather goods in 1837.

revived this emblematic part of the brand’s

Turning to take in the height of the

history in 2012 with the release of the

building I’m struck by a flash of sun-bright

limited edition ‘In The Pocket’ watch at the

yellow – a moving sculpture hung high on

Baselworld watch fair.

the north wall of the internal courtyard.

In the 1920s Hermès followed up from

The huge disc is filled with coloured sand

Jacqueline’s timepiece by making leather

that, as the disc slowly turns clockwise,

watch straps embellished with the now

slips and tumbles to form ever changing

trademark saddle-stitch design, and in

new forms. Beneath this almost hypnotic

1928 Hermès began to commercialise

artwork by Manuel Merida some 20

watches, working with some of the best

Hermès employees are slowly completing

watch movement makers of that era,

cycles of their own, as they work through a

such as Jaeger-LeCoultre, Eterna and

lunchtime class of Tai Chi.

Vacheron Constantin.

It’s all very relaxed and it’s fair to

Fast forward half a century to 1978 and

assume the soothing ambiance must be

the fifth generation of the Hermès family

conducive to the intense concentration

to lead the company, Jean-Louis Dumas,

required for working to intense detail

made the astute decision to relocate watch

and at a small scale.

Jacqueline Hermès (second from left) with her sisters. She is wearing the company’s first watch.

June 2014

81

82

La Montre Hermès in Switzerland is the company’s only metier outside France.

Only a relatively small section of each hide can be used, for example only the soft underbelly of an alligator, to avoid wrinkles, stretch marks and to ensure well matched scales. Off-cuts are donated to schemes that allow artists to experiment with the material, while smaller scraps are actually burnt to provide heat for the building. for example only the soft underbelly of an alligator, to avoid wrinkles, stretch marks and to ensure well matched scales. Offcuts are donated to schemes that allow artists to experiment with the material, while smaller scraps are actually burnt to provide heat for the building.

The hides are meticulously pre-cut and paired for texture and aesthetic appearance, matching up two parts that will make up the opposing parts of the strap. The leather workers then go to work with their retinue of specialist tools, such as edge bevellers, skivers and bodkins. It’s difficult to keep up with

The attention to detail means that the leather seamstresses average eight straps a day.

every stage of gluing, sanding, dying,

gloom. The lower floors are flooded with

that each strap is hallmarked for the

the barely audible activity of the

natural light from specially installed

year, material and model, much like a

watchmakers I learn that the basement

windows. There are 15 leather experts

precious piece of jewellery would be.

houses the watch-strap workshop, making

here who work together through an

The leather seamstresses average around

this the only watchmaker I know of with

incredibly fastidious and time consuming

eight finished straps per day and it is this

a fully integrated strap department.

50 stages to make just one leather

dedication to quality in every step of the

Installed in 2006, the in-house strap

watchstrap. The hides are stored on the

process that results in the relatively high

workshop offers the perfect chance to see

lowest floor with constant temperature

prices Hermès commands.

how the roots of Hermès’ watchmaking

and humidity levels. The skins of goat,

have flourished.

The leather is carefully matched to make the ultimate watch strap.

As I tour the upper levels and observe

scorching, polishing, thinning and re-polishing… but it’s perfectly fitting

calf, buffalo, ostrich and alligator are

AFTER CONCLUDING my tour I meet

Although the leather department is

carefully categorised. Only a relatively

Philippe Delhotal, the artistic and creative

below ground, there is no subterranean

small section of each hide can be used,

director for La Montre Hermès, and he Portfolio

Essentials Luxury explains the brand’s total commitment to the highest standards and its firm desire to continue evolving and improving within the watchmaking sector. What he shows me next is the proof of the pudding – the new Arceau Lift Flying Tourbillon watch.

A limited edition release priced at $165,000 and with only 176 pieces to be made – this number marking the amount of years since Hermès was founded – it’s a stunning timepiece and one that consolidates their position amongst the top players in the watch world.

Hermès has incorporated their double H symbol in the dial cutaway below 12 that reveals the mainspring barrel of the manually wound movement (with an impressive 90-hour power reserve), and again at 6 on the flying tourbillon – the gravity defying device that provides both

The Double H motif, from the flagship store in Paris, inspired the Arceau Lift.

the precision and superlative horological

Hermès’ five biggest product categories From a producer of equestrian leather products, Hermès has evolved into a leviathan in the luxury goods sector The company has 14 product divisions, covering leather, scarves, ties, menswear, women’s fashion, perfumes, watches, stationery, footwear, gloves, enamel, art of living, tableware and jewellery.

achievement.

Referring to this Double H motif Delhotal tells me, “Our tourbillon needed to translate the DNA of Hermès. As the artistic director of the company I often go to Paris where our flagship store at 24 Rue du Faubourg is a source of inspiration for me. I go there to see what the other métiers are doing. On one visit I saw a motif on the

The five best performing categories at Hermès are:

lift (it’s also occasionally used on belts and hair accessories) and found it very graphic and elegant. I thought it was a good idea to use it for the tourbillon, and so we started to design it for the Arceau line.”

Why produce a tourbillon now?

Delhotal explains, “This is part of a strategy within La Montre Hermès to

Only 176 Hermès Arceau Lifts are being made and they retail for $165,000 each.

1. Leather Goods & Saddlery €1.1 billion 2. Ready-to-wear & fashion accessories €612 million 3. Silk & Textiles €300.8 million 4. Perfumes €157.8 million 5. Watches €117.6 million

try to grow within the watch industry

maker Joseph Erard Holding Company,

and move towards technical watches. We

a supplier of Hermès since 1978 – the

Arceau Lift in the building, Delhotal

always wanted to have a really Hermès

rapprochement stemming directly from

concludes with pride that, “This watch is

dedicated tourbillon. We took our time

the harmonious relations between the

like everything at Hermès, there is always

to find out how we should do our own

two firms.

the same philosophy behind whatever

tourbillon and do it in the Hermès way.”

Whilst I continue to admire the Arceau

As I very carefully hand back the only

we create. Whether it’s a bag or a scarf,

Lift Flying Tourbillon, Delhotal reveals

glasses or a watch, there is always the

THE STRATEGIES are working with

that there are already many orders for the

same conscious sense of the quality of the

Hermès growing and becoming firmly

watch flooding in from eager buyers all

object and the craftsmanship behind it –

cemented in the higher echelons of the

over the world. “It is haute horlogerie,”

this is always at the centre of everything.

watch industry. At the end of 2013 La

he says. “In terms of craftsmanship and

You don’t just do a product for the sake

Montre Hermès acquired the movement

quality, this is the Kelly bag of the house.”

of a product.” n

June 2014

83

Essentials

84

Technology

MAKING CHERNOBYL SAFER

Š 2014 NEW YORK TIMES NEWS SERVICE

A huge arch is being built to contain further fallout from the reactor that melted down in 1986, reports Henry Fountain.

A

should the aging shelter collapse.

GAINST THE DECAYING

The structure is so otherworldly it looks

skyline, a one-of-a-kind

as if aliens dropped it onto this Soviet-era

engineering project is rising

industrial landscape. If all goes as planned,

additional atmospheric contamination, the

near the remains of the world’s

by 2017 the 29,030-metric-ton arch will

arch will remove the lingering threat of

be delicately pushed on Teflon pads to

even a limited reprise of those nightmarish

worst civilian nuclear disaster.

By all but eliminating the risk of

cover the ramshackle shelter that was built

days 28 years ago, when radioactive fallout

radiation by thick concrete slabs, is

to entomb the radioactive remains of the

poisoned the flatlands for kilometres around

constructing a huge arch, sheathed in

Chernobyl reactor that exploded and burned

and turned villages into ghost towns, filled

acres of gleaming stainless steel and vast

in April 1986. When its ends are closed, it

with the echoes of abandoned lives.

enough to cover the Statue of Liberty.

will be able to contain any radioactive dust

An army of workers, shielded from

The arch will also allow the final stage

The massive containment arch, which will eventually be moved over and enclose the ruined and highly radioactive Unit 4 reactor.

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85

of the Chernobyl clean up to begin – an arduous task to remove the heavily contaminated reactor debris for permanent safe storage. That this job will fall from international hands to those of Ukraine presents new worries, especially as Russia threatens the nation’s borders.

For now, though, the rising arch is a sign of progress.

“It’s an amazing structure,” said Nicolas Caille, project director for Novarka, the consortium of French construction companies that is building it. “You can’t compare it to anything else.”

With nations debating the future of atomic power as one way to reduce greenhouse-gas emissions and fight climate change, the arch is also a stark reminder that nuclear energy, for all of its benefits, carries enormous risks. When things go wrong, huge challenges follow. Containment

Workers in the control room of the Chernobyl Nuclear Power Plant, parts of which are used as offices for those involved in continuing cleanup efforts.

and clean up push engineering capabilities to their limits, as Japan is also finding out

Russia have raised new concerns. So even a

certain conditions reactor power could

since the meltdowns at the Fukushima

century might not be enough.

quickly soar out of control.

power plant three years ago.

Engineers have designed the Chernobyl arch to stand for 100 years; they figure that is how long it may take to fully clean the area.

The costs are enormous – the Chernobyl

The arch, though, is a formidable

That is what happened in the early

structure, said Vince Novak, the director of

hours of April 26, 1986, at Chernobyl’s

nuclear safety for the European Bank for

Unit 4, during an ill-advised test of

Reconstruction and Development, which

some of the reactor’s safety systems. In a

administers the project’s financing. If

matter of seconds, the reactor power rose

necessary, he said, “it might be able to last

exponentially and the core was blasted apart

300 years or more.”

by steam.

The Chernobyl accident can be likened

A few workers died immediately, but

to a huge dirty bomb, an explosion

most of the technicians in Unit 4, and the

that spewed radioactive material in all

firefighters who initially responded, suffered

directions. The blast was followed by a fire

agonising deaths over the ensuing weeks

that sent even more contaminants into the

from exposure to high levels of radiation.

atmosphere that were then carried by winds

Officially, several dozen people were killed,

across the region and into Western Europe.

and many others became sick. The radiation

In this way the disaster differs from

also caused thousands of later cancers –

arch alone will end up costing about $1.5

nuclear power’s two other major accidents,

though just how many is still the subject of

billion, financed largely by the United States

at Three Mile Island in Pennsylvania in 1979

much debate.

and about 30 other nations.

and Fukushima in 2011. At both of those

In the immediate aftermath, the Soviet

And making the site of a radioactive

plants, reactor cores melted down, but the

authorities brought in the military to fight

disaster truly secure can take generations.

core material – the nuclear fuel – remained

the reactor fire and evacuate nearby villages

within protective containment structures.

and the city of Pripyat, home to most of the

Engineers have designed the Chernobyl arch to stand for 100 years; they figure that

The four reactors at the Chernobyl plant

plant workers and their families. Labourers

is how long it may take to fully clean the

had no such containment. But that was

were enlisted to hastily build the concrete-

area. But there have always been questions

only one aspect of their flawed design. The

and-steel shelter, known as the sarcophagus.

about Ukraine’s long-term commitment,

system for controlling the nuclear fission

When their radiation exposure grew too

and the political turmoil and tensions with

reaction was temperamental, and under

high, the workers were replaced by others;

June 2014

86

A Monumental Solution

The Chernobyl nuclear reactor exploded on April 26, 1986, and still emits dangerous levels of radiation. A giant steel arch is being built to cover the site for the next 100 years or more.

PROTECTIVE CONCRETE WALL

CONSTRUCTION SITE

To protect workers on the project, the structure is taking shape on a concrete slab built a thousand feet away from the reactor.

UNIT 2

UNIT 4

UNIT 3

TURBINE HALL

NEW BUILDINGS

CONCRETE SLAB

Space for mechanical and electrical equipment.

BUILD AND LIFT

SARCOPHAGUS

The destroyed reactor, Unit 4, is covered with a deteriorating structure called the sarcophagus, which is in danger of collapse.

UNIT 4

The arch is built in sections, from the center of the arch working out, and then raised into JACKS position using hydraulic jacks mounted on TOWERS towers.

A theatre in the abandoned city of Pripyat – where 45,000 once lived – which was completely evacuated about 36 hours after the Chernobyl nuclear disaster.

in all, more than half a million people were involved in the initial cleanup.

TRUSSES

THAT WAS nearly three decades ago. But in and

RUSTPROOF TRUSSES

around Chernobyl, it is as if the calendar froze.

It will be too dangerous for workers to scrape and repaint the steel trusses in the future, so the structure will be covered in stainless steel.

Dehumidifiers will circulate dry air to prevent rust.

An exclusion zone of about 1,000 square miles still exists around the plant, with access controlled through checkpoints. Although radiation levels have declined somewhat through the natural process of radioactive decay, the zone remains virtually empty. Many of the villages were bulldozed; forest has overtaken others. In Pripyat, where 45,000 people once lived, paint peels off the murals in the community centre and a tree grows in the middle of a gym floor.

ONE HALF RAISED

The first half of the arch was raised last year. As large as a Manhattan block and tall enough to cover the Statue of Liberty, it was one of the heaviest objects ever lifted.

ONE HALF TO GO

This spring, the completed half was pushed to one side, making room to build the second half.

TEFLON PADS

Sources: Novarka; Shelter Implementation Plan – Project Management Unit

THE FINISHED ARCH

The two halves will be joined, and the completed structure will be pushed on Teflon pads to its final location over the sarcophagus.

MIKA GRÖNDAHL/THE NEW YORK TIMES

Tourists next to administration buildings at the Chernobyl N.Y.Nuclear Times News Service Date: 4/29/14 Power Plant.

Graphic Slug: CHERNOBYL-FOUNTAIN-NSPR Size: 6.8 x 16 With Story: (BC--CHERNOBYL-FOUNTAIN-NSPR--NYT) Portfolio

Essentials Technology

Portraits of workers who died in 1986 during the Chernobyl nuclear reactor disaster.

Radiation levels around the site are carefully mapped and arch workers have to

Laurin Dodd, an American who recently

work will come from – especially now with

stay within proscribed areas. Everyone wears

left Ukraine after serving as overall

the country in turmoil. Officials with the

dosimeters, detectors that would sound

manager of the arch project, said that

Ukrainian Embassy in Washington did not

an alarm if there were a release from the

after the arch is in place, the plan is for

respond when asked for comment.

sarcophagus and radiation levels increased.

Ukraine to eventually begin removing the

But otherwise the workers have normal

unstable structures and the remaining fuel.

are technical questions as to whether the

schedules and wear regular work clothes.

But even if there is enough money, there

That will ensure that the radiation does

work can be accomplished, and if so how

Yet working there can be anything but

not eventually reach groundwater, which

long it will take.

normal. “When you arrive here for the first

would endanger the water supply for the

But that is all in the future. The more

time, it’s quite emotional,” Caille said. “We

three million people of Kiev. Ukraine also

immediate problem is completing the arch

have a lot of people who have been involved

must build a repository for all the high-level

in an unstable political environment.

or were here when they had the accident.

waste it recovers.

It’s still very, very present.”

It is unclear where the money for that

“I am very concerned how the current situation will affect this initiative,” Novak said.

Chernobyl, near Ukraine’s northern border, is far from the Crimea and other disputed territory. “Chernobyl and the exclusion zone remain calm, and our contractors continue their work,” Novak said, although Western experts were evacuated for a week in March.

The project has enough money to continue well into next year. But at some point in the next few months, there must be a “political decision” on additional financing, he said.

Even before the political upheaval, Novak said, there were concerns about having to

Artur Korneyev, a radiation specialist who first came to Chernobyl shortly after the accident, understands more than most people about the extent of the radioactive mess that remains.

June 2014

ask donors to contribute more. “But the risk of leaving this whole programme unfinished is a prospect which I don’t think anyone would want to contemplate,” he said. n

87

88

Essentials

Other Business

Record-Breaking Divorce Settlement A Swiss court has awarded Elena Rybolovleva £2.7 billion in a record-breaking divorce settlement from Russian billionaire

Dmitry Rybolovlev is £2.7 billion poorer.

Dmitry Rybolovlev. The couple met when they were students in Perm in the Ural mountains, and married 23 years ago in Cyprus.

But they had been fighting for six years over a divorce settlement.

Elena Rybolovleva’s lawyer called it “the most expensive divorce in history” Asked why it had taken six years to obtain a judgment, the lawyer replied: “Because the oligarch put up strong resistance.” Bonnant said the harsh ruling took into account the fact that Rybolovlev, who, according to Forbes is worth $8.8 billion and is the world’s 147th richest man, had attempted to conceal the full extent of his assets via offshore ventures.

Rybolovlev could appeal against the verdict.

China Closes Protected Species Loophole China will jail people who eat rare animals for 10 years or more under a new interpretation of the criminal law, as the government seeks to close a legal loophole and better protect the natural environment.

China lists 420 species as rare or endangered, including the panda, golden monkeys, Asian black bears and pangolins, some or all of which are threatened by illegal hunting,

Venezuela Crushes Cars for Houses

environmental destruction and the consumption of animal parts, including for supposedly medicinal reasons.

Venezuela said last month it would start

That quantity of steel, she said, could be

crushing abandoned cars and bicycles

used for rebars, which reinforce concrete,

to provide raw materials for housing

in the construction of tens of thousands

risen as the country has become

construction and supplement drastically

of housing units.

richer, with some people believing

reduced amounts of local steel.

“We have sent 10,485 automobiles, 9,651

In one of late socialist leader Hugo Chavez’s most popular policies, the “Great

Consumption of rare animals has

spending thousands of yuan on eating them gives a certain social cache.

Knowingly buying any wild animals

motorbikes and 539 bicycles to the national

Venezuelan Housing Mission,” authorities

steel industry,” Maria Martinez, a deputy

built or refurbished more than 250,000

killed by illegal hunting will now be

justice minister, said during a visit to an

housing units in 2012 for low-income

considered a crime, with a maximum

abandoned car deposit outside Caracas.

families. That fell to around 150,000 last year.

penalty of three years in jail.

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